Getting the right information for strategic decision making is the most difficult part of strategic management. This is because of the fact that information requirement for strategic decision is qualitative and mostly non financial in nature. You may also want to read this article on difficulties in using and interpreting qualitative non financial information.
In this article, I have identified common external sources of information for strategic management. Just before the fun begins, I must warn you to be aware that information overload is a possibility when making strategic decisions.
Care should be taken to ensure that we are as lean as possible when using these external sources of information for strategic management.
15 external sources of information for strategic management
1. Academic and Professional journals: from time immemorial, academic and professional journals have always been a source of uncommon information. This will cost a bit to get access to but is worth it when used well.
2. Business directories: this is a pool of similar businesses with brief details about them. It can be online or offline. Your use of business directories will depend on the kind of information that you are after. A company that intends to know the number of companies offering a product or service that it intends to offer will be interested in the trend from this directory for example.
3. Databases (online and offline): the world that we now live in is not in short supply of databases that perfectly fits our need. Most times I start my information gathering by looking at EDGAR (Electronic Data Gathering, Analysis and Retrieval system). This database is freely available to the public as long as you have a reasonable internet connection.
4. Customers: customers are goldmine when it comes to getting information that can be used for strategic purposes. Why is profit seeking businesses set up if not to meet the demands of its customers? The good thing is that customers are ever ready to give free consulting on issues that they feel will affect them. Customers have realised that they have part to play towards the survival of a business and are gladly doing so.
5. Internet: the internet is a good external source of information for strategic management decision. The only problem with this source of information is that it has to be used with utmost caveat. Not all information found on the internet can be relied on.
6. Manufacturers and Suppliers: no one has more firsthand information than the manufacturers and suppliers of information. A manufacturer for example can provide information on the demand outlook of a particular product that a company is intending to use.
7. Associations: professional associations like ACCA and ISACA are source of valuable information that can be used for strategic decision. This however will require that the subscriber is a qualified professional with the professional body in question. I am a member of both ACCA and ISACA so I consider myself lucky. Valuable information does not only come from professional associations. You can also tap into the resource trade associations for these kinds of information.
8. Co-operative societies: these are less known source of vital decision making information. They are usually formed locally but with wide network.
9. Financial institutions: financial institutions provide valuable information about both macro and micro economic environment which companies usually feed into other variables for robust decision making.
10. Government agencies: government agencies like the national office of statistics or whatever name it is called in your country usually have information that strategic managers can leverage upon.
11. Market researches: market researches are those organized effort to gather useful information that can be used for arrays of purpose. This is a go external source of information for strategic management. A market research can be done about a product or on a prospective customer.
12. Consumer panels: consumer panels provide insight about markets and shoppers attitude. This is a very useful external source of information for strategic decision making. I have used this source of information to gain great insight about a product before we decide whether to launch it or not.
13. Data warehouses: data warehousing have gained a reputation for gathering of business intelligence environment. The fact that data warehouse gets its data from varying source makes it a useful strategic management tool.
14. Expert opinion: the opinion of experts on specialised matters is quite useful when making decisions on certain issues.
15. Harvesting big data: billions of both structured and unstructured information are generated every single day. That is the world that we now live in. With relatively inexpensive big data analytics tool, a business can easily gain tremendous insight that will be used to forecast the future to a reasonable extent. The technique of data mining has never been more useful when used on big data; make sure your company is not left behind.
Years back when I was in the University studying for both my Bachelors and Masters degrees in Accountancy, I always wondered how on earth a management accountant would be able to gather external information for strategic decision making.
We were told that it is important that a business operates in an open system so that external information can be gathered for strategic planning purposes but not much on the actual mechanics of sourcing the information (or maybe I wasn’t paying attention when that was taught).
My over ten years experience as an accountant has given practical and feasible ways of getting information from external sources which I have shared with you in this article on external sources of information for strategic management. I hope you enjoyed it.
Please leave any question that you may have in the comment section below. Thank you