1.4 The nature of data and information

As we saw in the previous section, data is the raw material entered into an information system. It is the input of the system. Data can be thought of as unorganised facts that mean little by themselves. Information is data that has been ordered and given some meaning. It is the output of the system. In an information system, information technology, participants (people) and information processes combine to transform data into information. This information may be used as the input for another information system. The distinction between data and information is important. It explains why it is possible for an information system to collect huge amounts of data but fail to satisfy an organisation’s information needs. For example, an organisation may perform thousands of transactions each day, and record them using an information system. Simply making a printout of every transaction, however, will not provide useful information for managers. The information processes of organising, analysing, processing and displaying help to convert data into information using methods such as: • choosing data pertinent to the problem • deleting irrelevant data • combining data • displaying data in an understandable way.

Data

Data is a vital ingredient of an information system. If the data collected is meaningless, the information presented will be meaningless. Organisations need to ensure that appropriate data is available at the correct time for processing. Data will be appropriate if it is: • relevant—useful to the purpose of the information system • accurate—collected from a dependable source and entered without errors • timely—current, and kept up-to-date • secure—protected from deliberate or accidental damage or loss. Data with the above characteristics needs to be entered into the information system in the correct form. This depends on the input device, the application software to be used to process it, and the type of information (output) that is required. When the data is entered into the information system it is organised as a particular data type. The data type describes the kind of data, such as images, audio, video, text or numbers. • Images are data in the form of pictures, such as drawings, paintings or photographs. They can be stored, edited and transferred in similar ways to text. The meaning of an image is determined by looking at the image and interpreting it. • Audio is data in the form of sounds. It may be a noise used to get a user’s attention or a voice to explain the operation of a piece of software. The meaning of audio data is determined by listening to and interpreting the sounds. • Video is data in the form of pictures and sounds combined and displayed over time. It may include text, graphics, animation and audio. The meaning of video is determined by watching and listening to it over a period of time.

Text is data in the form of letters, numbers and other characters whose meaning and format is not specified. For example, the characters entered into a word processor are text. The meaning of text is determined by reading and interpreting it. • Numbers are data in the form of predefined characters (usually numerals) whose meaning and format are specified. Calculations are often performed on this data type. For example, numbers may be defined as currency, date or time. A collection of data can contain a combination of different data types

Information Information is an important factor in an organisation’s current and future success. Companies require information on their products, employees, competitors and general operation. Information is an asset and there are substantial costs associated with its collection, maintenance and storage. However, organisations are prepared to make this investment because information is vital to their decision-making. Information will be valuable if it is:

• relevant—useful to the purpose of the information system

• accurate—verified to ensure it is correct

timely—appropriate and current

• organised—arranged to meet the purpose of the information system

• cost-effective—the benefit to the organisation is greater than the costs of producing it.

Information can have the above characteristics but unless it is appropriately presented it may not be effective. Information must be presented in a way that is attractive and easy to read. A format needs to be chosen that is appropriate for the end users of the information. For example, some people may understand information better if it is presented graphically, while others may understand it better in a table. Information technology makes it easy to present information in many different forms using one or more data types. For example, a multimedia document could use all of the data types in Table 1.1. Information can be displayed using a range of hardware devices, such as screens, printers and speakers. If possible, information should be tested with its end users to ensure that it is appropriate and achieving its purpose.

Case study

Big V Video is a video store that uses an information system. The participants of the information system are the manager and staff. The information technology consists of a personal computer and an electronic database. The database stores membership details, video details and all video transactions. When a new customer comes into Big V Video, they fill out a membership form containing their personal details. The member data consists of their family name, first name, address, phone number, age, sex, date of birth and work number. It is entered into a membership table. New customers select a personal identification number (PIN) and receive a membership card with a barcode. When a new video is bought, data is entered into a video table. The video data consists of an identity number, the title, the main stars, the rating and an entertainment category. The videos are also allocated barcodes for efficient processing. When a customer borrows a video, the membership and video barcodes are both scanned. This data is automatically inserted into the membership and video tables. The electronic database provides readily available information about the

business at any time. The type of information that is regularly required includes: • determining whether a particular video is in the store • listing all the videos available in a particular category • producing a list of overdue videos • finding a customer’s membership number if a card is lost • sending promotional material to valued customers.

The manager and staff at Big V Video are continually using information technology to carry out the following information processes:

• collecting—scanning the video and membership barcodes

• organising—ensuring the data is in the correct format to be used by the database

• analysing—searching and sorting the database to produce reports

• storing and retrieving—saving the database to a disk

• processing—calculating late fees on overdue videos

transmitting and receiving—transferring the data between peripheral devices

• displaying—obtaining a weekly report of all video transactions.

These processes are not necessarily completed in a particular order. The staff can move from organising the data to displaying the information. However, the rate at which these information processes are carried out is critical to the efficiency of the store. If the staff are not proficient in producing reports of overdue videos, the information system will not be operating efficiently.

Exercise 1.4 22 Information

Explain the difference between data and information.

2 Why is data a vital ingredient of an information system?

3 What are four characteristics of appropriate data?

4 Describe the five data types.

5 What type of information do organisations require for their current and future success?

6 What are five characteristics of valuable information?

7 Why must information be appropriately presented?

8

The following questions relate to the Big V Video case study.

a What information is stored in the database?

b List the items of data used in the member table, and their data types.

c List the items of data used in the video table, and their data types.

d Describe the procedures associated with borrowing a video.

e What information can Big V Video produce from its electronic database?

f The information system at Big V Video is very efficient.

Explain how the system is efficient in terms of effort, time and cost.

LEARNING ACTIVITIES
1 An information system for a fitness club ‘crashed’ and some membership data
was lost. Who or what do you think is responsible for the error? What could be
done to ensure the error does not happen again?

2 Data such as customer records, financial details and management plans are
targets for computer criminals. Why would they steal this type of data? How
could they get access to the data? List any security measures that would stop the
theft of data.

3 Choose a recent event that has been widely reported in newspapers and on TV,
radio and the Internet. Find three different data sources on this event and
compare the data in terms of accuracy, security, timeliness and relevance.
Determine whether the data from each source was complete and free from bias.

4 Managers can be daunted by the amount of information available from
information systems. This ‘information overload’ can increase managerial stress
and force managers to spend more time organising information rather than
making important decisions. How could information overload affect decisionmaking?
What could be done to reduce it?

5 Observe a large retail business and record the different types of data that is
collected. Which type of data would be used for decision-making? Why? Does
this retail business have a Web site? If so, does the business collect data from the
Web site? How is the Web site helping the business?