Study Material:
1: Business Information Systems
University Technology of Sydney 2005
Information Systems
People require information for many and varied reasons. For instance, when you need
information about entertainment and enlightenment, you would seek that information through
television, seeing movies, browsing through the internet, listening to radio and reading
newspapers, magazines, and books. In business, however, people and organizations seek and
use information specifically for the purposes of sound decision making and problem solving
which are closely related practices that form the foundation of every successful company.
What is a problem? A problem is any undesirable situation. When you are stuck in the middle of
nowhere with a flat tire, you have a problem. If you know that some customers do not pay their
debts on time, but you don’t know who or how much they owe, your business has a problem.
You can solve both problems with information. In the first case, you can call a towing company,
which may use a computerized tracking system to send the tow truck closest to your location.
For the second case, a simple accounting software can be a good solution.
An organization or individual that finds more than one way to solve the problem must make a
decision. For example: the problem of “1+1=?” does not require decision making because it has
only one solution. However, as a business owner or manager, you may face another sort of
dilemma when you are faced with a problem about what is the best way to promote a company's
product or who is the best candidate for a certain position in the organization. These cases are
required for decision making.
Both problem solving and decision making require information. Gathering the right information
accurately and efficiently, storing it so it can be used and manipulated as necessary and using it
to help individuals or organizations achieve its business goals.
, Data vs. Information
The terms of the data and information do not mean the same thing. Data is the plural of the
Latin datum which means a “given” or fact, which may take the form of a number, a statement,
or even a picture. Data are the raw materials in the production of information. Information, on
the other hand, is data that has meaning within context. Information can be raw data or
manipulated data through tabulation, addition, subtraction, division or any other operation that
leads to greater understanding of a situation.
Data Manipulation
Simple example that demonstrates the differences between data and information. Assume that
you work for a car manufacturer. Last year, the company introduced a new vehicle to the
market. Because the management realizes that keeping a loyal customer base requires
continuous improvement of products and services, the company periodically surveys large
samples of buyers. It sends questionnaires that include 30 questions in several categories,
including demographic data (such as: gender, age and annual income) and complaints about
different performance areas (such as ease handling, braking, and the quality of the sound
system etc) features that satisfy buyers most and courtesy of the dealer’s personnel.
Reading through all this data would be extremely time consuming and not very helpful.
However, if the data are manipulated, they may provide highly useful information. For example,
by categorizing complaints by topic and the total numbers of complaints for each type of
complaint and each car, the company may be able to pinpoint a car’s weakness. The company
can then pass the resulting information along to appropriate engineering or manufacturing units.
The company could also have sufficient data on dealers who sold cars to the customers
surveyed, the car models they sold and the financing method of each purchase. But with the
survey results, the company can generate new information to improve its marketing. For
instance, by calculating the average age and income of the current buyers and categorizing
them by the car they purchased, marketing executives can better target advertising to groups
most likely to purchase each car. If the majority of buyers of a particular type of car do not ask
for financing, the company may drop this service option for that car and divert to another option
which suits best for the customers. In this way, the company generates useful information from
data.
1: Business Information Systems
University Technology of Sydney 2005
Information Systems
People require information for many and varied reasons. For instance, when you need
information about entertainment and enlightenment, you would seek that information through
television, seeing movies, browsing through the internet, listening to radio and reading
newspapers, magazines, and books. In business, however, people and organizations seek and
use information specifically for the purposes of sound decision making and problem solving
which are closely related practices that form the foundation of every successful company.
What is a problem? A problem is any undesirable situation. When you are stuck in the middle of
nowhere with a flat tire, you have a problem. If you know that some customers do not pay their
debts on time, but you don’t know who or how much they owe, your business has a problem.
You can solve both problems with information. In the first case, you can call a towing company,
which may use a computerized tracking system to send the tow truck closest to your location.
For the second case, a simple accounting software can be a good solution.
An organization or individual that finds more than one way to solve the problem must make a
decision. For example: the problem of “1+1=?” does not require decision making because it has
only one solution. However, as a business owner or manager, you may face another sort of
dilemma when you are faced with a problem about what is the best way to promote a company's
product or who is the best candidate for a certain position in the organization. These cases are
required for decision making.
Both problem solving and decision making require information. Gathering the right information
accurately and efficiently, storing it so it can be used and manipulated as necessary and using it
to help individuals or organizations achieve its business goals.
, Data vs. Information
The terms of the data and information do not mean the same thing. Data is the plural of the
Latin datum which means a “given” or fact, which may take the form of a number, a statement,
or even a picture. Data are the raw materials in the production of information. Information, on
the other hand, is data that has meaning within context. Information can be raw data or
manipulated data through tabulation, addition, subtraction, division or any other operation that
leads to greater understanding of a situation.
Data Manipulation
Simple example that demonstrates the differences between data and information. Assume that
you work for a car manufacturer. Last year, the company introduced a new vehicle to the
market. Because the management realizes that keeping a loyal customer base requires
continuous improvement of products and services, the company periodically surveys large
samples of buyers. It sends questionnaires that include 30 questions in several categories,
including demographic data (such as: gender, age and annual income) and complaints about
different performance areas (such as ease handling, braking, and the quality of the sound
system etc) features that satisfy buyers most and courtesy of the dealer’s personnel.
Reading through all this data would be extremely time consuming and not very helpful.
However, if the data are manipulated, they may provide highly useful information. For example,
by categorizing complaints by topic and the total numbers of complaints for each type of
complaint and each car, the company may be able to pinpoint a car’s weakness. The company
can then pass the resulting information along to appropriate engineering or manufacturing units.
The company could also have sufficient data on dealers who sold cars to the customers
surveyed, the car models they sold and the financing method of each purchase. But with the
survey results, the company can generate new information to improve its marketing. For
instance, by calculating the average age and income of the current buyers and categorizing
them by the car they purchased, marketing executives can better target advertising to groups
most likely to purchase each car. If the majority of buyers of a particular type of car do not ask
for financing, the company may drop this service option for that car and divert to another option
which suits best for the customers. In this way, the company generates useful information from
data.
