European Journal of Scientific Research - EuroJournals

433 Cihat Polat
Forecasting Solution: Estimating the competitors’ position and forecasting the time that it takes
to develop and market the products and services that a company produces.
As a further point the integration of the R&D and forecasting function can contribute to
creating distinctive competence in R&D area. The forecasting function contributes to determining to
what way to direct the R&D activities.
Information Systems (IS)
Information is a competitive resource that allows companies to function productively [Kim et al. 2003].
A company with a strong information system can exploit information-based competitive advantage in
many of the business functions [Hill & Jones, 1992: 139]. A well-developed information system is the
basic infrastructure for forecasting activities from data gathering and collection to forecast evaluation.
It enables company to manage its data sources (from different economical, geographical, and political
regions) easily, to obtain the information required easier, to have the required inputs (e.g. data and
information e.g. for judgemental forecasts) into forecasting system, and to have more accurate
forecasts available. That is why, it plays a crucial role in obtaining healthy and accurate forecasts that
may affect very major operational and strategic decisions as well as strategic information gathering and
processing.
The success of strategic decision-making and strategic management closely related to the
existence of IS and efficient use of IS and IT (Information Technology) in a company, where the
information itself has become a strategic tool. No method can produce higher quality of forecasts (e.g.
for market potential and sales) unless there are high quality of inputs, data (and information). A better
information system is a pre-condition for collecting and processing (e.g. cleaning) data in improving
the accuracy of forecasts. Higher quality of data is needed especially for the methods such as timeseries
and regression type methods, where the functional form rests, at large, in the quality of historical
data.
The collection, processing, production, distribution and utilisation of information all depend on
the availability of a well-organised IS, which is at the same time, one of the basic requirements of a
well functioning forecasting system. In other words, in order for a forecasting system to perform its
basic data gathering, processing, production, and utilisation activities for functional and strategic
decision purposes, a well-working and efficient IS are the basic necessity. Such an IS provides
effective communication within business units and a faster collection and utilisation of data. It also
avoids data and information losses based on the time and physical data collection and management
systems and, more importantly, avoids the erosion and losses in the value of data with the passage of
time, which may especially happen to the market data, of which value is subject to change or diminish
quickly. Therefore, the IS in a company creates a time advantage of data for strategic and functional
management.
In sum, an effective utilisation of information resources (gathered or produced) can be utilised
in critical decision situations, and the company can create information-based competitive advantage.
Other
It has already been stated that strategic decisions are mostly of higher costs. Location selection is one
of the most costly strategic decisions that can fully affect the whole business from many ways (e.g. its
market segment, production costs, marketing activities, and productivity). These types of decisions
generally require long decision-making processes, long investigations, and need feasibility works since
once a wrong decision is made and high volume of costs are yielded, the decision process is almost
impossible to take it back. Therefore, it is needed that such decisions are fully based on all the
available information, a lot of which can be produced by forecasting. For instance, in the determination
of a hotel or a warehouse location, or a distribution center location, say, the existence of sufficient
demand is crucially important for the investment decision. Forecasting can easily include the factors