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LECTURE 1
Basic concepts understanding information

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Learning objectives
After this lecture, 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; identify the information needed to support decisions made at different organisational levels.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Unit 5002 - Information Based Decision making

Specification split into: Data and Information Analysing and Presenting Information to support decision making Communicating the Results of Information Analysis and decisions

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Management Information System

Lucey, T. (2005) MIS p2
A system to convert data from internal and external

sources into information and to communicate that information, in an appropriate form, to managers at all levels in all functions to enable them to make timely and effective decisions for planning, directing and controlling the the activities for which they are responsible.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

Data?
Lucey, T. (2005) MIS p16

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Data are facts, events, transactions and so on which have been recorded. They are the input raw materials from which information is produced. Examples?
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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What is data?
Data are raw facts or observations that are considered

to have little or no value until they have been processed and transformed into information.
Example definitions:

(a) a series of non-random symbols, numbers, values or words; (b) a series of facts obtained by observation or research and recorded; (c) a collection of non-random facts; (d) the record of an event or fact.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

Information?
Lucey, T. (2005) MIS p16

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Information is data that have been processed and communicated in such a way that they can be interpreted and understood by the recipient. Examples?
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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What is information?
Information: Data that have been processed so

that they are meaningful. Example definitions:

(a) data that have been processed so that they are meaningful; (b) data that have been processed for a purpose; (c) data that have been interpreted and understood by the recipient.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Figure 1.1 Transforming data into information using a data process

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Another but similar view

Information is any thing which is meaningful and useful to the person receiving it. . if it is not meaningful or useful, then it is not information.
Palmer, S and Weaver, M, (1998) Information Management p1
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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So relevant information

Increases knowledge Reduces uncertainty

Is usable for the intended

purpose
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information
Why is the effective and efficient management of information important? 1. Expensive to provide 2. Time-consuming to provide 3. Must lead to correct decision making
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information summary
Information:
involves transforming data using a defined

process; involves placing data in some form of meaningful context; is produced in response to an information need and therefore serves a specific purpose; helps reduce uncertainty, thereby improving decision behaviour.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information classifications ?
By source By nature

By level
By time By frequency By use By form By occurrence By type

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information classifications
By source, for example Internal External Primary Secondary Government
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Primary source
Primary data is gathered by you (or

your team) for your own purposes. It could include survey results, commissioned reports and notes of meetings with consultants etc.

Specific examples?
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Secondary source (Desk research) Secondary data has been gathered by other people for their own purposes. It includes, among many other things, journals, published reports, internal sales figures and commercial databases. Specific examples?
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information classifications
By nature, for example Quantitative Qualitative Formal Informal Bring examples for next week!
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Is your data hard or soft?

Hard data, also known as quantitative data, tend

to make use of figures, such as statistics. Hard data are often collected in order to measure or quantify an object or situation.
Soft data, often known as qualitative data, tend to

focus on describing the qualities or characteristics of an object or situation. Interviews, for example, are often used to collect qualitative data related to a persons opinions or beliefs.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Quantitative information
Quantitative information involves

amounts, such as the average number of customers who come into a shop at various times in a day. This information is objective.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Quantitative
Adcock, D. et al. 1993 Marketing Principles and Practice, Pitman

..any information which can be

expressed using a numerical measure is considered quantitative. It include not only numerical data such as obtained from sales and accounting records but also the numerical aspects of other data such as opinion polls ..

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Qualitative information
Qualitative data involves descriptions, which may be

made by respondents in surveys, such as attitudes, opinions, reactions and suggestions.

This sort of information is more difficult to categorise/measure, and because it is based on thoughts it is subjective

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Qualitative
Adcock, D. et al. 1993 Marketing Principles and Practice, Pitman

Qualitative research describes

research that cannot be quantified or subject to quantitative analysis. designed to produce a depth of understanding, context and insight.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information classifications
By level, for example Strategic Long-term, Non-routine; Non-repetitive Tactical Medium-term, Non-routine, Non-repetitive Operational Short-term, Routine, Repetitive

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Management issues
From a managerial perspective, this session

addresses the following areas:

the importance of managing information and

knowledge as a key organisational asset; the transformation process from data to information of high quality; the process and constraints of decision making; the different kinds of decisions that managers make and how these affect the organisation.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

Where is the emphasis? Where should it be?

Information

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Technology
Technology

Information

The stress should be on the I rather than the T in IT (Davenport, 2000).

Peter Drucker stressed the importance of information to organisational competitiveness in 1993 when he wrote:

The industries that have moved into the centre of the economy in the last forty years, have as their business, the production and distribution of knowledge and information rather than the production and distribution of things.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Activity
What types of information processing are

involved when a national retailer summarises national sales formation nationally?

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Types of information processing

Classification: This involves placing data into categories, for example, categorising an expense as either a fixed or a variable cost. Rearranging/sorting: This involves organising data so that items are grouped together or placed into a particular order. Employee data, for example, might be sorted according to last name or payroll number. Aggregating: This involves summarising data, for example, by calculating averages, totals or subtotals. Performing calculations: An example might be calculating an employees gross pay by multiplying the number of hours worked by the hourly rate of pay. Selection: This involves choosing or discarding items of data on the basis of a set of selection criteria. A sales organisation, for example, might create a list of potential customers by selecting those with incomes above a certain level.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Activity 1.1 data versus information

From the point of view of a student at university,

which of the following might be examples of information? Which might be examples of data?
(a) the date (b) a bank statement (c) the number 1355.76 (d) a National Insurance number (e) a balance sheet

(f) a bus timetable

(g) a car registration plate

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information value
Tangible value:

Value of info Cost of gathering info

Intangible value:

Improvements in decision behaviour Cost of gathering information

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Activity 1.2 Tangible and intangible information

When information is used effectively, it can bring about

many of the improvements listed below. State and explain why each of the items listed illustrates a tangible or intangible value of information. (a) improved inventory control; (b) enhanced customer service; (c) increased production; (d) reduced administration costs; (e) greater customer loyalty; (f) enhanced public image.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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What is the importance of informal information?

Formal communication: Formal communication

involves presenting information in a structured and consistent manner.

Informal communication: This describes less

well-structured information that is transmitted by informal means, such as casual conversations between members of staff.

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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INFORMATION CRITERIA

Identify criteria of information

critical to sender and receiver Illustrate with examples

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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INFORMATION CRITERIA
RelevanceTimelinessAccuracyCurrency Applicability Is it what the recipient wants? Is it provided on time? Is the information correct? Is it current and up to date? Is it based on reality and is it useful? Completeness Is all the required information provided? Comprehensibility Is it easy to understand? Level of detail Is it in sufficient detail?
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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INFORMATION CRITERIA
Extra ones identified by Lucey: From a source in which the user has Confidence Communicated to the Right Person Communicated by an appropriate Channel of Communication
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information quality dimensions

Time Timeliness Currency Frequency Time period

Content Accuracy Relevance Completeness Conciseness Scope

Form Clarity Detail Order Presentation Media

Additional characteristics Confidence in source Reliability Appropriate Received by correct person Sent by correct channels

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Figure 1.2 The business environment of an organisation and the main factors that influence it
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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What is the relation between ebusiness and IT

When a business has fully integrated information

and communications technologies (ICTs) into its operations, potentially redesigning its business processes around ICT or completely reinventing its business model e-business is understood to be the integration of all these activities with the internal processes of a business through ICT. DTI Definition

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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How does information support managers?

Henri Fayol (18411925) devised a classic

definition of management that is still widely used in both industry and academia.
To manage is to forecast and plan, to organise,

to command, to coordinate and to control

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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The Managers Work Role! Henry Mintzberg - 1973

Interpersonal roles: (Leading) Figurehead Leader Liaiser Information role: (Administrating) Monitor Disseminator Spokesman
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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The Managers Work Role! Henry Mintzberg - 1973

Decision roles: (Fixing) Entrepreneur Disturbance handler Resource handler Negotiator

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Different decision types

Decision behaviour: Describes how people make

decisions and the factors that influence them. Structured decisions: Situations where the rules and constraints governing the decision are known. Unstructured decisions: Complex situations, where the rules governing the decision are complicated or unknown. Cognitive style: This describes the way in which a manager absorbs information and reaches decisions. A manager's cognitive style will fall between analytical and intuitive styles.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Decisions and management level

Decision Management level Strategic Tactical Operational Unstructured Structured Long Medium Short Type of decision Time scale Impact on organisation Large Medium Small Frequency of decisions Infrequent Frequent

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Figure 1.3 Levels of managerial decision taking

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Information characteristics by management level

Information Management level Strategic Tactical Operational Wide Narrow Infrequent Frequent External Internal Less certain Wide Summarised Time period Frequency Source Certainty Scope Detail

More certain Narrow Detailed

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Knowledge management
The European Guide to Best Practice in Knowledge

Management defines knowledge as:

The combination of data and information to which is

added expert opinion, skills and experience to result in a valuable asset which can be used to make decisions. It is the essential factor in adding meaning to information. Knowledge may be explicit and/or tacit, individual and/or collective Mekhilef et al., 2003
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Competitive intelligence
The Competitive Intelligence handbook

(www.combsinc.com) presents different definitions of CI, for example: The objective of competitor intelligence is not to steal a competitors trade secrets or other proprietary property, but rather to gather in a systematic, overt (i.e., legal) manner a wide range of information that when collated and analysed provides a fuller understanding of a competitor firms structure, culture, behaviour, capabilities and weaknesses.
Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing

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Activity 1.8 Competitive intelligence and customer knowledge

The marketing department of a construction company is planning the

creation of a competitive intelligence system. Its aim is to capture and disseminate information about 30 key competitors and also existing or potential customers served by account representatives. You are designing the system. Working in groups, agree on an approach for:
1. Capturing data (who is involved, what information they need to collect). 2. Entering data (who is responsible for this, how they evaluate and categorise the different types of information entered). 3. Output requirements. Using the framework for quality of information in Table 1.1, what are the requirements in terms of types of content, frequency, who can access the data and filtering according to different criteria? 4. What types of hardware and software may be required for the system (reference to later parts of the course may be needed to answer this)?

Lecture Slides for CMI Diploma unit 5002-Edited and prepared by Dave Dearing