Managing Business Information

Learning Outcomes
This unit covers: Understand the importance of information to organisations. Know how organizations use business information. Be able to maintain an information system. Be able to produce information to support decision making in organizations.

The First Part of The ModuleTheory

The unit begins by looking at the types of information that businesses routinely collect and at the various sources of that information before examining the purposes to which information is put and the legal and ethical issues governing its use. This part will be assessed in the test and the final exam.

The Second Part of The ModulePractical

The second half of the unit introduces methods of inputting and manipulating data using spreadsheets and databases and ways of presenting information to support decision making. This part will be assessed in the assignment.

The importance of information to organizations

It is essential for an organization to keep track not only of information that it generates but also information that it gleans from the general environment. For better decision making, business information has to be up to date, accurate and valid and presented in a readily digestible format.

Importance of Information
Information has become a valuable resource, just as much as capital infrastructure and people.

Name some organisations where the collection of data is essential for their continued running?

Importance of Information
Information is collected on any amount and used by managers to make strategic decisions concerning the organisation.

Can you think of a situation where information was not used wisely and an organisation has suffered the consequences?

Importance of Information
Information technology is fundamental to the success of any business. Comment on this
statement.

The information that is collected and/or assembled in any business is as valuable a resource as capital or people. Comment on this
statement.

Information may cover:

Market trends Buying preferences Customer profiles

Importance of Information
It may be processed, summarised, and analysed by computers before being used by managers as the basis for decisionmaking As discussed earlier, information must be: Accurate Complete Up-to-date

The Value of Information

How does the following information have a value: a list of current account customers whose customers have a large credit balance, a list of customers who have bought new cars from a garage over the past three months, an on-line database of all the post-codes in the UK, a list of credit card customers who have not kept their accounts in order (late payers etc).

Information as a Commodity
Have you or your family been targeted for particular mail advertisements? Consider: making a credit card purchase, a mail order purchase, a telephone order purchase, information about you and the product you buy goes into a database. The information can be used to target you with advertisements on products that you are most likely to buy! Why may you get advertisements from many other different organisations?

Usefulness of Information
Companies that sell products by mail order need to keep up-to-date lists of name and addresses of customers who may be interested in making a purchase. This data is very valuable and can be sold to other like companies.

What would make this list become of little value?

Decisions and Decision Making

A decision is a choice made from available alternatives.
Decision making is the process of identifying problems and opportunities and then resolving them.

Types of Decisions
Programmed decisions situations that occur often enough to enable decision rules to be developed. Non programmed decisions are made in response to situations that are unique, are poorly defined and largely unstructured.

Decision Making Conditions

Certainty All of the information the decision maker needs is fully available. Risk A decision has clear goals and good information is available, but the future outcomes associated with each alternative are subject to chance..

Decision Making Conditions

(Contd)

Uncertainty Managers know which goals they wish to achieve. Information about alternatives and future events is incomplete. Managers may have to come up with creative approaches to alternatives.

Decision Making Conditions

(Contd)

Ambiguity The goals to be achieved or the problem to be solved is unclear Alternatives are difficult to define Information about outcomes is unavailable.

Conditions That Affect the Possibility of Decision Failure

Organizational Problem Low Certainty Programmed Decisions Problem Solution Possibility of Failure Risk Uncertainty High Ambiguity

Nonprogrammed Decisions

Five-Step Decision Process

Step 1. Gather Information Historical Costs Other Information Specific Predictions

Step 2. Feedback

Make Predictions

Step 3. Choose an Alternative

Step 4.Implement the Decision

Step 5. Evaluate Performance

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