Understand How Organizations Use Business Information
Types of information
● Quantitativea. Data or information which are measured numerically
b. Content of arsenic in water
c. Content of sugar in packed coffee
d. Prices of phones of having 1 gb ram
e. Number of attendees on seminar
f. Number of student who secured grade A
Types of information
● Qualitativea. Not numeric data or information based on quality of an item or object
b. Quality of food in restaurant eg : good, bad, awful etc
c. Forming opinion while testing something is qualitative information
Types of information
● Primarya. Information that you collect yourself
b. Any organization or person directly involved to gather information
c. More reliable and accurate
d. Obtaining primary information is more expensive
e. Needs to be collect store and analyse yourself
f. Carrying out the survey of your product
Types of information
● Secondarya. Information that you have collected from secondary source (outside your organization)
b. More risky than primary source as you are relying on external entity
c. Can be collected from reliable source : Governmental entity
d. If you are using web you may get false data or information
Purpose of Information
● Operational Support
● Analysis
● Decision Making
● Gaining Commercial Advantage
Purpose of Information
● Operational Support○ Organization uses information to support their operations and day to day activity
○ Uses operational support to monitor and control activity within business
○ Company can measure the style of jeans sell in different location
○ If particular item sells is high then it may maximize its supply on that location
○ Sales may change marketing strategy
○ Sales can also affect on stock item which may provide information to produce item
Purpose of Information
● To find Pattern or Trends○ By identifying patterns and trends companies are able to maximize profit and minimize
losses
○ Using wrapper instead of box while packaging goods may increase profit from every item
○ Suggesting people also buys in Amazon has increased sales a lot
Purpose of Information
● Decision Making○ Helps in different levels of organization: operation, tactical and strategic
○ Operation : People who involves in day to day activity eg Team Lead
■ Team Lead may approach to provide machine to developers
○ Tactical : Mid level manager eg : Development Managers
■ HOD may provide training to team about Agile Development
■ Decision making may need involvement of Executive Member
○ Strategic: Executive member
■ Long term plan
■ Particular company's goal may be to serve the client rather than going to build
product
Purpose of Information
● Gaining Commercial Advantage○ A company can merge another company which is going out of business before another
competitor.
○ Stocking a new tech item first by creating a partnership with the manufacturer and the
being the first business to sell in your area.
Sources of Information
● Internal○ Financial
○ Personnel
○ Marketing
○ Purchasing
○ Sales
○ Manufacturing
○ Administration
Internal Sources of Information
● Financial○ Information related to the company's performance, profit and loss
○ To monitor the financial statement need Financial controller(Accountant, Auditor etc)
○ Financial controller provides the information to ensure that the business continues to
operate and generate profit.
Internal Sources of Information
● Personnel○ Information related to person inside the organization
○ This should be freely available once any employee has requested
○ Time of performance appraisal, performance of employee, Job description, Insurance
policy, salary range, seminar, recreational events, holidays.
○ Duration of employee has worked in company at any positions
○ Productivity rate of an employee to provide bonus and appraisal
○ Company also need to get proof of qualification from employees to ensure that they are
suitably qualified for certain position on entry to company.
○ Employee can progress within the company after their information is updated with any
internal or external trainings programs that relate to their job.
Internal Sources of Information
● Marketing○ Marketing team identifies the success rate of certain product in market by gathering
information whether the user like or dislike the product
○ Marketing team gathers information related to product by the means of surveys or by
external means.
○ Marketing information can be used to streamline or improve your business and keep
customers happy
Internal Sources of Information
● Purchasing○ Purchasing department is responsible for keeping records of purchased product to run
day to day business
○ Responsible for the buying product in best deal to maximize the profits
○ Purchasing department needs to monitor the cost and quality of all purchased goods.
Internal Sources of Information
● Sales ○ Just like the purchasing information sales information needs to be monitored based on
the products or services offered by the company
○ Financial controllers needs to make sure that the product’s manufactured price should be
less than the sales price
○ If the sales of the certain product is less then, it needs to be notified to marketing team for
maximize the advertisement
Internal Sources of Information
● Manufacturing ○ Information about the cost of manufacturing goods within the company.
○ Machinery cost + wages paid to staff + raw materials = Manufacturing cost
Internal Sources of Information
● Administration ○ Administration information links very much with personnel information but also involves
communicating with external sources and storing information on customers to build
successful relationships with them
External Sources of Information
● Administration
● Government
● Trade Groupings
● Commercially Provided
● Databases and Research
External Sources of Information
● Government○ Reliable sources of information
○ Needs to up to date with the government rules and policy
○ Eg Government may have declared to certain wages range to employee then it changed.
Company should be aware of that.
○ If Government may provide business grants to open the manufacturing plants in the
region which have most unemployment rate, then company can install new plant in that
region to maximize the business.
External Sources of Information
● Government○ Reliable sources of information
○ Needs to up to date with the government rules and policy
○ Eg Government may have declared to certain wages range to employee then it changed.
Company should be aware of that.
○ If Government may provide business grants to open the manufacturing plants in the
region which have most unemployment rate, then company can install new plant in that
region to maximize the business.
External Sources of Information
● Trade Groupings○ Is a group of businesses that operate within the same sector and not within the same
location.
○ Tech companies would be part of the technical trade association
○ Farmers might be part of the Farming Association
○ As being member of trade groupings enables you to access information that helps you
run your business successfully.
External Sources of Information
● Commercially Provided○ Companies can use commercially provided information to help them make the correct
business decisions.
○ These decisions are made based on information made available to them from other
companies
○ Eg. Game company can decide which platform to target for new games according to the
sales of smartphone(Samsung S8 sales may be more than the IphoneX. Then Game
company can target game for S8).
External Sources of Information
● Database and Research○ Many company provides information based on the sector of business
○ Companies can research information that might help them increase the sales and level of
interest in their business.
○ The key things to researching information that helps run your business to ensure it is
accurate and reliable.
○ Some company sales the information related to the current marketing sales in particular
region.
Characteristics of good Information
● Valid
● Reliable
● Timely
● fit -for-purpose
● Accessible
● Cost-effective
● Sufficiently accurate
● Relevant
● Having the right level of detail
● From a source in which user has confidence
● Understandable by the user
Characteristics of good Information
● Valid○ Correct and can be used for the purpose that it is needed
○ Information supplied by governing body.
○ Tax rates provided by Inland Revenue Department Nepal is valid information
Characteristics of good Information
● Reliable○ Information that you can rely on as being correct
○ Information provided by the company's internal department is reliable source
○ Last month's sales in company provided by sales department
● Timely
○ Information from correct time period
○ If a company wants to analyse current profit and loss then they will need to access current
sales figures and not the sales figures from 10 years ago.
○ If manager needed to check the sales figures for today, timely information would be
information that they could print from a cash register immediately at any time during the
day.
Characteristics of good Information
● Fit for Purpose○ It is relevant to what you need it for
○ If any software company is trying to open offshore company where the operating cost is
low. Then the city who has lowest wages rate will be best fit rather than the Silicon Valley.
○ If you were opening a business in London then it would be advisable to look at the
population within the certain area beside where you wanted to open the business. Looking
at information about the population of Papua New Guinea would not really be fit for
purpose in this instance.
Characteristics of good Information
● Accessible○ Information that is stored in way that it can be easily accessed at any time.
○ If you need consensus about literacy rate of Nepal, it took 5 days to provide information
then it’s not easily accessible
○ As users needed to have information available to them as and when they need it
● Cost Effective
○ Information that is worth investing the time and money to get help make business
decisions.
○ If it the survey cost $1000 and using that information increased the sales by $1500 next
month would be seen as cost effective rather company invested $50K and next month
sales is increased by $100.
Characteristics of good Information
● Sufficiently Accurate○ Accurate information helps businesses make the correct decisions.
○ If the speedometer in your car was out by 20mph then this information may result in you
breaking the law.
○ If a sales department sent inaccurate sales figures to the finance department this might
result in incorrect tax calculations for the company that would put them in danger.
● Relevant
○ Information that is directly related to your business need.
○ If a business was looking to cut costs they might look at their electricity bill and try to see
where they could save money.
○ If a bakery was looking at the price of metal then this would not really be relevant
information to their business. Relevant information for a bakery would be looking at the
price of ingredients to use in their products.
Characteristics of good Information
● Having the right level of detail○ If someone requests information from you having the correct level of detail is very
important
○ If a manager wants the summary of sales figures for past 6 months, then the information
that has the right level of detail might show the overall sales figures for each month and
the grand total added together.
○ Giving the manager a complete list of all sales for every product you sold in the six month
period in a 1000 page report would be seen as having not right detail and would not really
be a summary.
○ When presenting information it is important to understand what exactly the person
requesting the information needs.
Characteristics of good Information
● From a source in which the user has confidence○ Information must be used from the reliable and trustworthy source.
○ Information about the consensus of Nepal got from wikipedia may not be exactly same
but from the Central Bureau of Statistics would be reliable and trustworthy source.
● Understandable by the user○ If financial person wants the total sales of this month of particular product then total
amount added and presented in tabular form would be understandable by the user.
Business Functional Areas
● Sales
● Purchasing
● Manufacturing
● Marketing
● Finance
● Personnel
● Administration
Information Flows
- Internal information flows
- Information Flows to External Body
Information flows
- Internal information flows- Upward Flows
- Originate at the lower levels of organisation and pass up to the higher levels.
- Downward Flows
- Flows reverse, with information originating at the management level and flowing to
the lower levels. Eg. Instructions from a manager on how a worker should prioritise
the various tasks to be completed
- Flows Across
- Flows across the organization stay at the same level but pass between staff, for
example in different departments.