1. Is202
Chapter1

2. LEARNING OUTCOMES
• After reading this section, 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
• Discuss the information needed to support
decision making

3. Introduction
• Data and information
Managers in the work place use information to
make decisions and ensure that information
flows/ disseminates efficiently through the
organization

4. Data in the information technology
context!
• Data is a collection of raw facts or observations about an
organizations objectives. Data refers to the
measurement of the attributes ( characteristics of an
organization) such as daily sales figures, employee
attendance etc.
• Data on its own is not useful it must be analyzed and
compiled into meaningful information for example:
looking at a specific days sales is not helpful but when
the same days sales are compared to a previous period
it enables the manager to get information such as
• How much did sales increase by?
• What is the most popular product by sales? Etc.

5. Information : definition
• Information is processed data that yields a
meaningful context for the user. Data is then
subjected to the value added process where by
meaningful information is extracted from raw data
and compiled into reports for the end user.
• For example the daily sales for a firm is compiled
into a monthly sales report for the sales manager.
The data on its own does not hold much value but
when the data is processed it yields information
such as most popular product, frequency of
transactions per customer, peak and off peak times.
• The report allows the sales manger to identify these
trends.

6. Value of information
• Information value can be categorized into two classes
tangible and intangible value.
• It is often possible to measure the value of information
directly. The tangible value of information is often measured
in terms of financial value; an example can be the use of
inventory information to improve stock control procedures.
• VALUE OF INFORMATION – COST OF GATHERING
INFORMATION
• The intangible value of information is difficult or impossible to
quantify, an example can be attempting to measure the
extent to which information can improve decision behavior.
IMPROVEMENTS IN DECISION BEHAVIOUR – COST OF
GATHERING INFORMATION

7. • SOURCES OF INFORMATION
• Information can be gathered through both
formal and informal communication. Formal
communications can include reports and
accounting statements. Informal
communications can include conversations
and notes. Formal communication
• Formal communication involves presenting
information in a structured consistent manner.
• Information communication
• This describes less well-structured
information that is transmitted by informal
means such as casual conversations between
members of staff.

8. ATTRIBUTES OF INFORMATION
QUALITY
A group of characteristics by which the
quality of information can be assessed,
normally grouped into categories of time,
content and form.
MANAGERIAL DECISON MAKING
In order for an organization to function effectively all activities must be
planned and monitored by managers according to well-informed
decisions. The functions of management include forecasting, planning,
organizing and coordination and control. One of the key management
functions that information systems seek to support is managerial decision
making.
The way in which managers make decisions and the factors that influence
those decisions are often described as decision behavior.
Decisions can be classed as structured, unstructured or semi-
structured.

9. Types of Decisions
• Structured decisions
• Situations where the rules and constraints
governing are known, e.g. how would we
process a sales order?
• Unstructured decisions
• Complex situations where the rules governing the
decision are complicated or unknown, e.g. what
should our distribution channels be?
• Semi-structured decisions
• Many decisions fall somewhere in between the two
extremes, e.g. which foreign market should we
target?

10. LEVELS OF MANAGERIAL DECISION
MAKING
• Strategic level
• Managers are largely concerned with long term organizational
planning.
• Tactical level
• Managers are largely concerned with medium term planning.
• Operational level
• Managers are largely concerned with short term planning and
the day- to-day control of an organization's activities.

12. What is Knowledge?
• Knowledge can be thought of as the combined result
of a person‘s experiences and the information they
possess.
• Knowledge management (KM) is a fairly new term
that describes a range of activities intended to make
sure an organization uses its information resources
as effectively as possible. Applications of KM include
data mining, document image processing and
business intelligence.
• Competitive intelligence is an area of knowledge
management concerned with helping organizations
to respond effectively to competition by gathering
and analyzing information about competitors.