Introduction of information systems Modelling & Design

What is Data ?

Data consists of raw facts or observations that hold minimal or no value until they are processed and converted into information.

Example definitions:

(a) a series of non-random symbols, numbers, values or words;
(b) a series of facts obtained by observation or research and recorded;
(c) a collection of non-random facts;
(d) the record of an event or fact.

What is information?

Information: Processed data that has been transformed into a meaningful form.

Example definitions:

a) data that have been processed so that they are meaningful;
b) data that have been processed for a purpose;
c) data that have been interpreted and understood by the recipient.

Data – Transformation Process – Information

Information Summary –

Information:

Reduces uncertainty, leading to improved decision-making.

Is generated by processing data through a defined method.

Provides meaning by organizing data within a relevant context.

Is created to fulfill a specific need and serve a particular purpose.

5 types of Information processing:

Performing Calculations: An example includes determining an employee’s gross pay by multiplying their hours worked by the hourly wage.

Selection: This refers to choosing or eliminating data based on specific criteria. For example, a sales organization might generate a list of potential customers by selecting individuals with incomes above a certain threshold.

Classification: This involves organizing data into categories, such as classifying an expense as either a fixed or variable cost.

Rearranging/Sorting: This refers to organizing data by grouping similar items or arranging them in a specific order. For example, employee records might be sorted by last name or payroll number.

Aggregating: This involves summarizing data, such as computing averages, totals, or subtotals.

Here’s how we can classify each item as either data or information from the perspective of a university student:

Data:
(a) The date – A raw fact with no specific context.
(c) The number 1355.76 – A numerical value without meaning unless placed in context.
(d) A National Insurance number – A unique identifier but not meaningful on its own.
(g) A car registration plate – A set of characters that identifies a vehicle but lacks immediate meaning.

Information:
(b) A bank statement – Processed data that provides financial details, making it meaningful.
(e) A balance sheet – A structured summary of financial data, serving a specific purpose.
(f) A bus timetable – Organized data that provides meaningful scheduling information.

Information Value

Tangible Value: The value of information minus the cost of collecting it.

Intangible Value: The enhancement in decision-making minus the cost of obtaining information.

Here’s an analysis of whether each item represents a tangible or intangible value of information, along with explanations:

Tangible Value:

These benefits can be quantified in financial terms.

(a) Improved inventory control – Efficient use of information helps in maintaining optimal stock levels, reducing waste, and minimizing storage costs, directly impacting profitability.

(c) Increased production – Better information flow leads to improved resource allocation, minimizing downtime, and optimizing efficiency, resulting in higher output.

(d) Reduced administration costs – Automation and streamlining of processes through effective information use decrease labor and operational expenses, yielding measurable cost savings.

Intangible Value:

These benefits are harder to measure in monetary terms but significantly impact business success.

(b) Enhanced customer service – Timely and accurate information enables businesses to respond better to customer inquiries and needs, improving satisfaction and experience.

(e) Greater customer loyalty – Consistently providing valuable and personalized information fosters trust and long-term relationships with customers.

(f) Enhanced public image – Using information responsibly and transparently can boost a company’s reputation, attracting more customers and improving brand perception.

Formal & Informal information

Formal Communication: The structured and consistent presentation of information.

Informal Communication: The exchange of less structured information through informal channels, such as casual conversations between staff members.

Information quality dimensions

Different decision types

Decision Behavior: Refers to how managers make decisions and the factors that influence their choices.

Structured Decisions: Decisions made in situations where the rules and constraints are clearly defined.

Unstructured Decisions: Decisions required for complex situations where the governing rules are unclear or difficult to define.

Cognitive Style: The approach a manager takes to process information and make decisions, ranging from analytical to intuitive.

Hard Data & Soft Data

Hard Data: Also called quantitative data, it primarily consists of numerical figures, such as statistics. Hard data are typically gathered to measure or quantify an object or situation.

Soft Data: Also known as qualitative data, it focuses on describing the attributes or characteristics of an object or situation. For instance, interviews are commonly used to collect qualitative data related to a person’s opinions or beliefs.

Levels of managerial decision taking

Decision characteristics and management level

Here’s the classification of each decision by type (structured, semi-structured, unstructured) and organizational level (strategic, tactical, operational):

Decision	Type	Organizational Level
a) At what level should we set the budget for next year?	Semi-structured	Strategic
b) Does this customer qualify for a discount on a large order?	Structured	Operational
c) How should we deal with a takeover bid?	Unstructured	Strategic
d) Should we employ more staff to cope with an urgent order?	Semi-structured	Tactical
e) Should we expand abroad?	Unstructured	Strategic
f) Should we launch an advertising campaign?	Semi-structured	Tactical
g) Should we take a short-term loan to help our current cash flow position?	Semi-structured	Tactical
h) What new markets should we move into?	Unstructured	Strategic
i) What should we do about a faulty machine?	Structured	Operational

Model of decision making

Business rules

A rule defines the action an organization should take when a specific situation occurs. For example, a bank may have a policy stating that loan applications will only be considered if the applicant has held an account for at least three years.

A business rule consists of an event that triggers it, test conditions that evaluate the situation, and predefined actions based on the outcome.

Knowledge management

Knowledge can be seen as the outcome of an individual’s experiences and the information they have.

Generally, knowledge is categorized as either explicit or tacit.

Explicit knowledge is easily captured and stored in documents or other forms of media. It tends to be highly detailed, formal, and organized, often stored in manuals, documents, procedures, and databases.

Tacit knowledge is defined by factors such as perceptions, beliefs, values, intuition, and personal experience. Because much of tacit knowledge is held unconsciously, it is challenging to express, describe, or document.

Competitive intelligence

Competitive Intelligence (CI) involves gathering data from various sources and transforming it into valuable information about an organization’s competitors.

This information is then used to support decision-making within the organization, enabling it to respond more effectively to competition.

Summary

• Data and Information
• Qualities of Information
• The Business Environment
• Managerial Decision Making
• Knowledge Management

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