Data, Information
and
Knowledge
Understanding Information
Introduction
After this lecture, you should be able to:
• distinguish between data, information and knowledge;
• describe and evaluate information quality in terms of its
characteristics;
• classify decisions by type and organisational level;
• identify the information needed to support decisions made at different
organisational levels;
• identify some of the tools and techniques used to help make
decisions.
Understanding Information
Managerial perspective
• Managers use information to make decisions.
• Information must also be managed.
• Managers therefore need to understand:
the importance of managing information and knowledge as a key
organisational resource;
the transformation process from data to information of high quality;
the process and constraints of decision making;
the different kinds of decisions that managers make and how these
affect the organisation.
Understanding Information
What is data?
• Data are raw facts or observations that are considered to have little or no
value until they have been processed and transformed into information.
• Example definitions:
a series of non-random symbols, numbers, values or words;
a series of facts obtained by observation or research and recorded;
a collection of non-random facts;
the record of an event or fact.
Understanding Information
What is information?
• Data that have been processed so that they are meaningful.
• Example definitions:
data that have been processed so that they are meaningful;
data that have been processed for a purpose;
data that have been interpreted and understood by the recipient.
• We can say that data is transformed into information
Understanding Information
The transformation process
• Examples of the transformation process:
Spreadsheet
Timetable
Recipe
Understanding Information
Types of Transformation
• Classification: placing data into categories
• Rearranging/sorting: data placed in a particular order e.g., highest
to lowest; A-Z.
• Aggregating: summarising data, e.g., calculating averages, totals,
etc.
• Performing calculations: e.g., calculating profit from data relating
to sales and cost of sales.
• Selection: choosing data based on some criteria, e.g., degree
classification (1st; Upper 2nd; Lower 2nd; 3rd class)
Activity
From your point of view, which of the following might be examples of
information? Which might be examples of data?
Today’s date;
a bank statement;
the number 1355.76;
a student ID number;
a balance sheet;
a bus timetable;
a car registration plate.
Understanding Information
Summarising what we know so far:
Information:
• involves transforming data using a defined process;
• involves placing data in some form of meaningful context;
• is produced in response to an information need and therefore serves
a specific purpose;
• helps to reduce uncertainty, thereby improving decision behaviour.
Understanding Information
Information value
• Tangible value:
Value of information – Cost of gathering information
• Intangible value:
Improvements in decision behaviour – Cost of gathering information
Activity
When information is used effectively, it can bring about many of the
improvements listed below. State and explain why each of the items
listed illustrates a tangible or intangible value of information.
improved inventory control;
enhanced customer service;
increased production;
reduced administration costs;
greater customer loyalty;
enhanced public image.
Understanding Information
Sources of information
• Sources relate to communication:
Formal communication: presenting
information in a structured way, e.g.,
reports, bank statements
Information communication: less well-
structured information, communicated by
informal means, e.g., conversations
Understanding Information
Information quality
Dimensions of information quality:
• Time - related to the time of collection and review
• Content - related to the scope and contents of the information
• Form - related to how the information is presented
• Others:
Confidence in the source
Reliability
Appropriateness
Received by correct person
Sent by correct channels
Understanding Information
Information quality - summary
Information - Task
Information value:
Using the internet as a resource, find three case
studies that show the value of information in the
context of a business organisation. As an example,
you might locate a news story in Computer Weekly
(www.cw360.com) describing the savings made as a
result of implementing a new stock control system.
State whether the information value is tangible or
intangible, and why.
Information Sources
The Business Environment
• Businesses operate within an environment which influences the way
they function.
• Businesses may also influence parts of their environment.
• To operate successfully within the environment organisations use their
business resources:
Tangible resources;
Intangible resources.
• BIS can be used to make best use of these resources.
• High quality information is therefore essential.
Information Sources
Business Resources - tangible
• Tangible assets (physical resources) - those assets that are
owned by the organisation, e.g.:
Money
Land
Buildings
Machinery (including computer hardware and software)
Labour
Information Sources
Business Resources - intangible
• Intangible assets (conceptual resources) – these support
an organisation’s activities, e.g.:
Experience
Motivation
Knowledge
Ideas
Judgement
Data and information
Information Sources
The Environment
• The businesses environment includes:
Social
Political
Legal
Other businesses (competitors, suppliers, etc.)
• Obtaining information about the business environment is an
essential part of managerial decision making .
The Business Environment
Factors influencing the organisation
Information - Summary
• Data is defined as a collection of non-random facts.
• Information is data that has been processed so that it is
meaningful to the recipient.
• The value of information may be tangible or intangible.
• Information quality can be described in terms of time, content
and form.
• Organisations operate in an environment.
• Collecting information about the environment is a vital part of
managerial decision making.
