Chapter 8 Information technology and information system in business

Chapter 8 Information technology and information system in business
1.) Information technology and information system in business
Data
-something which have been recorded but not yet processed into form that is suitable for making decision
-continuous, quantitative, discrete, primary, secondary, qualitative.
Information
-data that has been processed in such way that use it to improve the quality of decision making.
-provide record, both current and historical
-to analyse what is happening within the business
-to provide the basis of decision making in short term and long term
-to monitor the performance of business by comparing actual results with plans and forecasts
Data processing
-conversion of data into information.
-data may be transformed into information by bringing related pieces of data together,sumarising data, basic processing of data,tabulation and diagrammatic techniques, statistical analysis, financial analysis.
Information technology – any equipment concerned with the capture, storage, transmission or presentation of information.IT is supporting hardware that provides the infrastructure to run the information system.
Information system – refer to the provision and management of information to support the running of the organization.
1.1 Deploying information system in the organization



INFORMATION SYSTEM

Produce output for:-planning-recording and processing transactions-monitoring and measuring performance-controlling-decision making

PROCESS DATA
STORE DATA AND INFORMATION
COMMUNICATE INFORMATION

1.2 The advantages computerization will bring to a company
Speed
-computers are ideal for dealing with repetitive processes
Accuracy
-in general computers do not suffer from errors, or lapses of concentration but process data perfectly
Volume
-computers work fast and do not need to rest,they can work 24 hours days, therefore able to handle vast volumes of data
Complexity
-once subsystems are computerized they can generally function more reliably than human beings. This makes it easier to integrate various subsystems.
Cost
-computers have become highly cost-effective providers of information, the process of substituting computers for human beings has revolutionized information-oriented industries such as accountancy, banking and insurance and this process is continuing.
Presentation
-displaying information in as ‘user-friendly ‘ a way as possible.

Judgement
-although it is possible to program limited reasonableness tests into computer systems, it is still very difficult to program judgement. The computer remain highly trained idiot, which is particularly apparent when a programming error is made or it is subject to a computer virus

2 The qualities of information
Accurate
-information should be sufficiently accurate for its intended purpose and the decision maker should be able to rely on the information
Complete
-the more complete information is , the more reliable it will be
Cost
The information should not cost more to obtain than benefit derived from it
Understandable
-much more readily acted upon
Relevant
-the information provided should concentrate on the essentials and ignore trivia
Adaptable
-information should be tailored to the needs and level of understanding of its intended recipients
Timely
-information that is out of date is a waste of time, effort and money
Easy to use
-information should be clearly presented and sent using the right medium and communication channel.
3 Management structure and information requirements
Strategic level of management
-requires information from internal and external sources in order to plan the long term strategies of organization. Internal information – both quantitative and qualitative – is usually supplied in a summarized form , often on an ad-hoc basis
Tactical level of management
-requires information and instruction from the strategic level of management together with routine and regular quantitative information from the operational level of management. The information would be in a summarized form , but detailed enough to allow tactical planning of resources and manpower
Operational level of management
-requires information and instruction from tactical level management.
-is primarily concerned with the day to day performance of tasks and most of the information is obtained from internal sources. The information must be detailed and precise.


Strategic
-Long term
-Aggregated/summarized
-Mainly external
-Uncertain
-Infrequent

Operational
-Immediate
-Highly detailed
-Internal
-certain
-frequent

3.1 the type
Strategic
· Expected government policy
· Overall profitability
· Competitor analysis
· Profitability of divisions/segments of the business
· Future market prospect
· Availability and cost of capital
· Total cash needs
· Resource levels
· Capital equipment requirementsof information used at each level of the organization

Tactical
· Productivity measurements
· Budgetary control reports
· Variance analysis
· Stock turnover
· Cash flow forecasts
· Short term purchasing requirement
· Labour turnover statistics within a department/factory

Operational
· Employee hours worked
· Raw materials input to a production process
· Hours spent on each individual job
· Reject rate
· Stock levels