INFORMATION CONCEPT

SYLLABUS

Data and information-meaning and importanceRelevance of information in decision makingSource and Type of informationCost benefit Analysis –Quantitative & Qualitative AspectAssessing information needs of the organization

Data :- is the raw material from which useful information is derived. The word data is the plural of datum. It is defined as raw facts or observations about the physical phenomenon or business transaction. It is the objective measurement of attributes (characteristics) of entities (such as people ,place ,things and events) . These measurement are usually represented by the symbols such as numbers, words, codes composed of a mixture of numerical, alphabetical and other character. Data is the collection of facts, which are unorganized but can be organized into useful information.

Information :- The data which has been converted into a useful and meaningful form is information.Information can be defined as data that has been converted into a meaningful and useful context for specific end users.

Characteristics of Information:-Information is processed data and serve current or prospective users. It reduces the uncertainty and enables informal decision making.There are four important characteristics of information :

•Quality•Timeliness•Completeness•Relevance

Quality:- Quality information is that which accurately represent reality. It is the quality or accuracy of information that makes the information system function properly. Quality of information is difficult to measure . The only way to measure the quality is to take the feedback of the users As per Roman R. Andrus information can be evaluated in terms of its utilities. There are four type of utilities:-Form Utility:- The closer the form matches the decision makers requirement, greater is its value.Place utility:- if it can be had or accessed easily, information has greater value.Time utility:- If information is available when needed , its value is greater.Possession Utility:- The processor of information influence its value by controlling its flow to the others in the organization.

Timeliness:- means that information is available when it is needed . Most managers function in a dynamic environment of change , demanding updated and current information. Computerized information system have the ability to gather ,sort, analyze ,store ,retrieve and transmit large amount of information in a very short period of time.

Completeness:- means the extent to which it is all there. Information that is complete means information that cover key issues and is sufficient to support the decision making situation at hand without critical omission.Care should be taken that extra information that is not required should not be included otherwise the recipient will suffer from information overload.

Relevance:- information relevance refer to the extent to which information is appropriate for the decision making situation facing the manager. Extraneous information distract the decision maker from the assigned task and information overload frustrate the decision maker and impairs the decision making process. Relevant information must pertain to problems, decisions and responsibilities of the recipient.

Data Information

1. Data is the raw facts Information is the processed data

2.Data is input Information is output

3. Data is unorganized Information is organized

4.Data can add anything to knowledge Information enhances the knowledge

5.Dat does not contain an element of surprise

Information contain an element of surprise.

6.Data is base of starting an activity Information is the end product of an activity

7.Data is unrelated & uninterpreted Information is related and can be interpreted.

8.Data cannot lead to an action Information lead to an action.

Source of information

Source of information

The source of information are broadly divided into two parts:-1.External Information2.Internal Information

External information:-The information generated from the outside business organization is known as external information.e.g. The data regarding industry sales and trends may be collected through the chamber of commerce.External information is further sub divided into two parts:-i.Environment informationii.Competitive information

Environment information:- Environment information includes:-1. Government policies:- Information about government policies with

regard to tax benefits, concessions quota’s etc.2. Factor of production:- information regarding various factors of

production like labour,capital,material about their sources and availability.

3. Economic trends:- It includes information relating to economic issues like customer disposable income, capital investment, monetary policy, Exim policy etc.

4. Technological information:- information regarding the present and future technology available, its impact upon firm and cost of acquiring it.

5. Sociological information:- Information regarding taste, preference and customer moments, customer value and norms of customers

6. Political information:- information regarding the political scene of the country , what is the political manifesto of the ruling party etc.

Competitive information:- Competitive information requirement can be described as follows:-1. Industry demand:- This refers to the demand forecast of the industry for the

product manufactured or about the area in which the firm is operating.2. Firms demand:- This implies the assessment of the firm’s capabilities , activities

and potential of the company to meet demand relative to the capabilities and action of competing firm.

3. Competition:- This include the information about competing firm for forecasting own product demand and making decisions and plan to achieve the forecast. Such information falls into the three categories:-

Past performance:- It encompasses the information concerning profitability ,ROI, market share etc. which provide the yardstick for setting performance objective for future.

Present activity:-It is concerned with competitors price strategies , advertising campaigns, product mix ,change in distribution channels etc. Which help to evaluate one’s own weakness or strength

Future plans:- It is concerned with the information regarding new products, R & D efforts, availability of raw material etc. Which help to decide the future.

Internal information:- The internal information is generated with in the company . It is the by

producte.g. Sales information retrieved through invoice data. Internal information

also includes the • information of the company like strength and weakness,• Its plan about finance, production etc.• Its policies to meet competitions• Pricing policy• Promotion policy• Personnel policy etc.

Classification of information

Type of information

On the basis of decision taken by managers at different level of management ,information is divided into 3 types:-

1.Strategic information2.Tactical information3.Operational information

Basic Classification

Basic Classification

Basic Classification:-The basic classification of information include classification of information as objective information also known as facts, subjective information also known as opinion , concepts,procedures,processes,principles,primary information ,secondary information.

Objective information:- Objective information is also known as facts. It refers to the information which is unique and true in nature. This type of information define all, aspects of an issue and helps in identifying an object, a person, a thing etc.

Type of informationStrategic Information:- Strategic information is used to make a choice among business options. Strategic information helps in evaluating these options so that manager can find alternative strength than his competitors. Strategic information is related to the top manager. Strategic information is predictive in nature and have long term prospective. It is not only from external source but to some extent internal resources are also explored.

Tactical Information:- this information relates to the middle level of managers. They require information for allocating resources and establishing control to implement the top level plan. It is partly historic and partly current which uses both internal and external resources of providing information.

Operational Information:- this information is required at lower level of management. This includes day to day operations like daily or weekly sales, day to day cash position. This information is repetitive in nature . Managers require low prediction to obtain this information as it is retrieved internally from previous and current performance.

Assessing information need of the organizationTo determine the need of an effective information system many factors have to be considered .Some factors are internal while others are external. There are 4 common factors that are to be considered while determining the information needs are-1.Environment2.Size3.Functional area4.Managerial level

Environment:- Every organization has two type of environment i.e. Micro and Macro environment.

Micro environment is inside the organization which comprises the values ,mission , goals etc .of an organization.It is unique in nature and every organization has its own value system.Macro environment:- it relates to external world. It comprises competitors ,political ,economic and technological environment.

The environment affects the operation of any business organization. There is greater need to formally organize and manage information system as the organization must operate in uncertain and complex environment.

EnvironmentEnvironment

Size:- the next determinant of information need is relative size of the organization . In the large organization there is greater need for systematically managed data. It is generally assumed that greater the diversity in the organization greater is the need for systematically controlled information system.

Functional Level:- a business organization has many functional areas viz. Marketing , finance ,production, R&D, personnel and so on. Each functional area has its own set of information needs.