Unit 3 – Information Systems

Task 1, P1 - Types of information used by a business

Primary source
Primary source information is information that you have gathered yourself through methods
such as questionnaires or surveys. Primary source information can also be more trustworthy
than other methods of information gathering as you know all the data hasn’t been
tampered with.

Secondary source
Secondary source information taken from external sources who have gathered said
information .For example, a company could buy data that another company has gone out
and researched. However, there is an issue with secondary source information and that
issue is the reliability of the information as it could biased or the information could have
been tampered with making it faulty and you wouldn’t know

Quantative
Quantative information is information which can be measured usually by numbers making it
more of a piece of factual information than an opinion. As the information is factual, it
becomes much more reliable, making it better to use for research. An example of
quantitative data would be the height of a person as you use numerical measurements to
take the persons height. Quantative data is hard to dispute as numbers can’t be biased,
however, there is always the possibility of the method used to get the numbers being
wrong.

Qualitaive
Qunative information is data that cannot be measures making as it is used to describe
information, for example, if a questionnaire asked for your opinion on something, the
answer you give would count as the data. An example of this would be a bunch of different
people what their favourite food is, the results will be subjective and cannot be taken as
outright fact.

Purpose of Information
Operational Support
This is when a company monitors the activities within their business, including their
employees, to help in making decisions which will allow the business to run more efficiently.
By keeping xztrack of certain thinks like the stock of products, the company can take steps
to make sure the product is always in stock and on the shelves and when the stock is
running low
Operational support is when a business monitors activities within the business to make
decisions to help them run their business smoothly. Keeping track of all the products they
have and what they need to restock so they don’t run out. For example if a football match is
the shops will make sure they have enough drinks to supply their customers.

Analysis
Analysis data is used to identify trends and monitor the business. This shows the weekly
sales and costs report of the business. This will help the business identify if their profit is
increasing or decreasing. For example a restaurant will use analysis data to compare the
profits with other restaurant. Which they can then use to improve their restaurant.

Decision
Analysis data is used to identify trends and monitor the business. This shows the weekly
sales and costs report of the business. This will help the business identify if their profit is
increasing or decreasing. For example a restaurant will use analysis data to compare the
profits with other restaurant. Which they can then use to improve their restaurant.

Sources of information
Internal Information
This type of information is information which is collected internally by a company or
business. Internal information can benefit other sectors within the company so the business
will go to each sector/department and gather the information from about their staff, this
can then allow the information to be spread between the different departments. For
example, the information produced by financing will have the manufacturing department as
they will know how much money they will have in their budget.

External Information
Another type of information that can be useful to a business would be external information.
This type of information is information which is gathered from outside the company so
externally. External information can help provide business with information that may
otherwise be unavailable internally which can then aid the company is making decisions. An
example of external information would be research conducted by other companies which a
company can look at to help find a good target for their marketing.

Reliability of Data Source

As there are many sources of information a business can use, some of these are bound to be
false and therefore unreliable, which can be very bad for a company if they use this
unreliable information. It is important for a business to fact check information gathered
especially if it’s external and verify the integrity of the source of information. Verifying how
reliable the source of data is could help business understand if any of the information
gathered is biased. For example, if information was taken from a media outlet such as the
BBC, the business should keep in mind that the information could be biased or fake.

What Internal and External Information Types do Organisations Have?

For an organisation, internal information would be the information gathered from within
the different departments of the organisations. This could mean things like how many sales
the company is making daily

Business Functional Areas

Sales
The sales department for a company is a very important component in ensuring the
company’s success as they look into which of the products sold by the company are selling
and which are not, this can then allow them to make estimates on the earnings the
company may or may not make. Additionally, the sales department for a company can
monitor how much stock is left, depending on how much they’ve within a certain time
frame. For example, a sales department for something like a tech store can monitor how
many units of things like new phones, computers, accessories etc. have been sold
throughout the day. If the stock runs out for a certain type of product, then the sales
department should contact the management team for instructions on what to do.

Purchasing
The purchasing department for an organisation will be dedicated to ensuring that products
or other things the company may purchase are being fulfilled by the supplier. The
purchasing department will also try to find the best prices for quality when making purchase
for the organisation. For example, an company that has a lot of offices will have their
prcuhasing department purchase reliable office equipment that does not cost too much.

Manufacturing
The manufacturing department in a company is there to manufacture products as the name
implies. However, one of their main focus is centred on how effective they are in creating
the products. Evaluations on how effective their staff are and how effective their machinery
is in the terms of how effectively they can create products within the shortest amount of
time. For example, an effective manufacturing department will have be ability to create
quality products within a short amount of time whilst minimising things like waste produced
or injuries occurred during manufacturing.

Marketing
The marketing department for a company will be dedicated to doing things like market
research to see what is and isn’t popular right now so that the manufacturing department
can create products that will sell with what’s hot at the moment. The marketing department
also play a crucial role in selling the products a company offers, if a company’s marketing
department fails to bring attention to a new product that product will inevitably fail to meet
expect sales and become an overall loss for the company. For example, when a new product
has been created, the marketing company should create advertisements on different forms
of media to help bring attention to the product to aid in its sales. This way it will help the
product meet expected sales figures and make it a success.
Finance
The finance department for a company will play an important role in handling the
company’s funds, deals, transactions, wages, etc. The finance department will also tell other
departments how much of a budget they will have and whether they can be given additional
funds ontop. For example, a college’s finance department will keep track of all the money
they receive for funding and split it evenly for different departments in the college, they can
also receive whether the college can afford trips to different locations for the student’s
study.

Personnel
This is the department that will monitor and evaluate the performance of the employees
within the organisation. This can be done to track how an employee has improved which
can then qualify them things like a raise.

Administration
This department is responsible for creating and sorting reports given to the organization by
external factors or internal factors like other departments. The administration will help
improve other departments improve by analysing the reports and then recommending
changes in a report of their own and sending the report to the respective department. For
example, if one department is lacking equipment like computers, the administration will
then send a report detailing what needs to be acquired.

Information Flow
Internal Information Flow
Downwards
In an organization, often times any information generated within the organization
will need to be passed down from members of the senior management to the lower
ranking staff. This is called the downwards information flow from within the
origination and if often used to create changes within the business based on the
information passed down. For example, if a piece of machinery is broken within an
organization, the management team will pass down the information to warm the
employees about this avoiding the occurrence of an injury.
Upwards
Any information accumulated, especially if it is important, should up to senior
management so if any problems occur, they can handle it effectively. For example, if
two employees are having conflict, the information can be passed up to higher
management who can then help resolve the issue.
Across
An organisation will more than likely be made up of multiple departments or
sections, so it is inevitable that they will have to communicate and pass information
between them. Communicating information between the departments will be
 beneficial for them as they can assist each other with completing their tasks. For
example, the marketing department can communicate with the manufacturing
department to tell them to make changes to a product based on market trends.

External Information Flow

Task 2, P2 – Discuss crucial information and what qualifies as good

information
Useful Information
Characteristics – Valid
Valid information is information that can be considered, factual, from a verified
source and is most importantly, unbiased. This kind of information is good for an
organisation as it stops the spread of false information which can be very dangerous.

Reliable
Reliable information is information which comes from a trusted source; this may be
a source which is trusted by you or trusted in general. Reliable information is very
important, for example, if an originations that conducts research uses unreliable
information, it will not only ruin their reputation but get them in trouble for
spreading false information.

Fit for purpose

Information which is fit for purpose is, as the name suggests, is information gathered
useful for what it was gathered for? Also, is the information gathered enough and
about the intent subject? For example, if you were conducting a survey about the
favourite food of 500 people and the information gathered was from 200 people
about their favourite cars, that information would not be fit for the purpose.

Accessible
Accessible information is information which is easy for someone to obtain and
understand. For example, if you were to use a website to gather information all you
would need is an internet connection.

Cost Effective
Cost effective information would be information that does not cost a lot or anything
at all to obtain. For example, an organisation can hire a company to the research for
them, which is far cheaper to do than the organisation going out and doing it
themselves. They can also purchase information from a company that has already
done the research so long as the information is reliable and unbiased.

Sufficiently Accurate
 This kind of information is information which is accurate but does not have to be
completely accurate. For example, if a company is calculating their profits made
within a certain time span, they wouldn’t need the information to be completely
accurate as they can round the numbers up or down.

Relevant
Relevant information would be information that when gathered is relevant to the
subject which is information is for. For example, if a department in an organisation
want to gather information about how many sales the organisation made in one
week but ended up gathering information about the staff members favourite food,
the information would be irrelevant and of no use.

Having the right level of detail

This would be information that has enough detail what is required, so while there
may be additional information, that information can be ignored or condescend to
something smaller.

From a source in which users have confidence

This kind of information is information which when received by someone, the person
receiving it will consider the source of the information to be reliable or trustworthy.

Task 5, P3 Issues related to using information within an organisation

Legal issues
Data Protection Act
The data protection act is a law that was crated in 1998 with the intent of protecting
personal or sensitive data like banking details or other information that can be stolen which
is stored in computers. A company must make sure to follow this law as it can land them in
big trouble if they are caught braking it. For example, companies may require a customer to
input banking details to complete a transaction, once the transaction has been completed,
the company should remove the detail and should not do things like sell the information
online.
Freedom of Information Act
The freedom of information act was implemented in 2000 as means for the public to have
the right to attain information about what any form of public authority are doing. As the act
covers only public authority such as the government or government programs like the NHS,
Colleges and schools, private organisations are not really affected by this law.
Computer Misuse Act
The computer misuse act, which was introduced in 1990, is a law designed to minimise the
amount of cyber threats computer users receive. These cyber threats may include, hacking,
viruses, fraud, phishing, etc. The act applies to organisations as they must ensure that
people don’t gain access to their computers

Ethical issues
Use of Email
Email or electronic mail allows users to send messages to each other online. However, this
can be easily used to do other things like send spam which is lots of unwanted emails or
even harass another user through email. These things are generally frowned upon and so
organisations should see to it that they try their best to ethically use email without
pestering the people they are trying to reach.
Whistle Blowing
Whistle blowers are people who report wrong doings inside an organization to either the
higher management or external forces if it happens to be the management or highest level
of staff committing the wrong doing. These wrong doings can be anything from abusing
power to trying to sabotage vital components of the organisation.
Use of Internet
The internet features many inappropriate or not safe for work stuff such as gambling
websites, adult websites, etc. Because of this staff members must be trusted to not visit
these websites in work and especially during work hours. Organisations can also use an
internet filter to help stop employees from visiting these sort of websites. Internet filters
usually come with a premade list as to what can and can’t be accessed. However, an
organisation can add or remove from this list as they see fit.
Organizational policies
These are polices set by an organisation. They are often a set of rules and regulations on
how employees should behave within the work space. Different organisations will have
different polices depending on what they do

Operational issues
Security of Information
The security of information form an organisation will depend on its IT department to make
sure that the information kept on computers is secure. For example, a good IT department
will install different level of access to the computers such as read/write access, write or full
control. They should also ensure that all the computers are up to date along with their
security software.
Health and Safety
These are rules set by an organization which tell their staff how to do tasks or their job
correctly and safely. These are important rules for an organisation to communicate with
their staff as if they don’t and a staff member is injured the company can end up being sued.
Task 7, P4 Explain the features and functions of information system
Features of Information Systems
Data
Data must be entered inputted into an information system which then makes the data
manageable and processable. The end product of the processed information is the output.
Also, all data that is entered must be accurate, or the outputted information will be false. All
departments of an organisation will create data as they work, however, data can also come
from external sources to the originations
People
The data is obtained and processed by people in order to generate information that is
relevant for a specific purpose to the organisation. In order to get the most accurate and
reliable information, staff members should be trained accordingly to be efficient and
effective at collecting data from information systems.
Hardware
Organizations which use information systems often use software to process and manage the
data collected. Because of this, the hardware used must be able to handle the task of
running the software along with holding, processing and storing the large amount of data
gathered. To do all of this, it is important the hardware used is up to date, otherwise the
hardware could fail and cause data to be lost.
Software
The software used by organisation for information systems must have the correct features
and functionality in order to create and use the information produced by the organisation.
Software must also have the correct features to allow the staff to operate it, allowing them
to effectively do their job.
Telecommunications
When data is converted into information and outputted, it will need to be shared around
the organisation, as the information will be used for different things by different
departments; telecommunications is one way of doing this. Organisations
telecommunications must be effective and reliable to ensure that all the information once
processed can be transferred to the correct departments without any troubles along the
way such as data loss.

Functions of information Systems

Information systems perform many different functions, these functions include collecting
input data, storing data and processing the inputted data into outputted information.
Information systems will also control information flow, along with feedback loops and open
and closed systems.
Input
The input for information system can be broken down into two different parts. The first is
where detailed data is stored and processed and turned into information which is the
output. The other is when a user specifies what sort of analysis he wants the system to
perform.
Storage
When storing data, it is important that it is stored in it’s raw and most detailed form along
with being stored in many summaries of data to allow for easy use and consistency. It is also
important that all data is often backed up to avoid the risk of completely losing any of the
gathered data in case of things like power cuts, system crashes, file errors etc. A good way
to store data and keep it protected in the event of a disaster would be to have it stored in a
secure external site from where the organisation is located.
Processing
This is what turns inputted data into useful information; there are two types of processing,
simple and complex. Simple processing would be something adding up the individual items
sold by a tech store and creating a total by product, by time of day or other similar
classifications. Complex processing involves the use of complex calculations either
performed by a computer or human who will have to make estimation and assumptions for
any missing data along with choosing the criteria of data that will be included or excluded
from processing.
Output
There are two formats in which outputted data can be viewed in, these are graphical and
textual. Graphical outputs are often used to help see a bigger picture or help understand
current trends which can then be presented to management to aid them in making
decisions on what to do. Textual output is used to analyse and gather the very fine details of
the data which is represented in text, characters or numbers.
Control and Feedback Loops
Control and feedback loops occur in organisations once the data is processed and outputted
as from an information system. The information outputted will eventually feedback into
future inputs however it won’t have a very large effect on it.
Closed and Open Systems
There are two types of information systems which are defined as “closed systems” or “open
systems”. Closed systems mainly use graphical formats and do not give the user much
choice as to what is reported on. Additionally, closed systems are limited to a predefined
output format, making them easier to use than open systems. Closed systems are also
aimed at management as it used graphical formats to show information. Open systems are
different to closed systems as they offer the user much more leeway on what is reported on
and the format which the information outputted in. However, because they have more
flexibility, by allowing things like the use of both graphical and textual formats, they are far
more complex and require a lot of training to be effective. And unlike closed systems, open
systems are more targeted at analysts.

Transformation of Data into Information

Turning data into information has few steps, these steps are:

 Collecting the data – This it the first step when data is gathered from different
departments and made sure that it is relevant and suitable for use in the system
 Storing data – This follows the first step as once data is collected, it is stored in ir’s
most detailed form on things like cloud drives, servers, hard drivers and other such
storage devices or methods. The data is kept in storage until the organisation need
to use it.
 Processing data – this is what happens when the data is inputted into a system and is
then outputted as information. Information is just data once it has been processed
and given relevance or meaning.

Types of Information Systems

There are many different types of information systems which organisations can use to
collect, analyse, process and distribute data. Here is a list of the multiple types of
information systems:

 Executive Support Systems (ESS) – ESS are systems aimed at helping senior
management in the decision-making process by giving them all the relevant
information need to make the decisions.
 Management Information Systems (MIS) – This system is used for assisting
management in making decisions. It does this by asking repetitive questions which
help management track, analyse and make decisions daily. These sorts of systems
are very complex; however, the complexity is hidden away allowing it to be easily
used by management.
 Marketing Systems – These are systems used to help organizations identify what is
trending in the current market along with the ability to monitor the performance of
the organisations product in sales. Marketing systems also help an organisation
analyse profits/losses along with the sales performance of rival competition.
 Financial Systems – Financial systems are beneficial to an organisation as they allow
organisations to manage and monitor the finical aspects like income and revenue or
returns on investments made by the organisation.

Management Information System

Features
Since MIS is used to assist in decision making, the response given to an input into the system
is always pre-determined as it is used to ask the same question about different subjects. For
example, if a listing were to feature how many products a few different manufacturing
departments from different organisations made in one month, the department that
produced the most would be the clear winner. This can also be taken up a step by
comparing the amount produced over a few months to see which organization has the
average highest output.
Benefits
One benefit of MIS is that while it is complex, the system is designed in a way to be easy to
use as senior management will be using the results produced to make important decisions.
The results given by MIS are usually presented in tables/graphs and graphics which can be
made into spreadsheets to give a greater picture.
Effectiveness
The effectiveness of an MIS is measured by how accurate and available the information
produced is. An MIS must also be consistent to be considered effective and trusted by its
users.

Task 8, P5 Produce a Diagram Identifying and Illustrating the Information

Systems Used by OKS.
Information systems can be organised into four main category types. These types are:

 Executive information systems

 Decisions support systems
 Management systems
 Transaction processing systems
All these categories are based on the directories followed by an organisation.

Executive Information Systems

These are systems which are the top levels of an organisation and often make decisions for
the organisations and its employees. The information produced from these systems help the
directors and managers in analysing and making decisions to improve the company.
Decision Support System
These are information systems which help companies like OKS in decision making by
analysing inputted data presented by OKS and outputting information that aids in the
process of decision making. This is usually done by storing the data on a computer and
having a computer application analyse all the data and output it as information. For
example, the information outputted could be a comparison how many calls OKS received
asking for support with their technology within a certain time frame.
Management Information Systems
This system is used like many others for assisting companies like OKS in making decisions. It
is aimed at management as it makes gives them clear and easy to understand data which
aids in the decision-making process. MIS do this by asking repetitive questions which help
management track, analyse and make decisions daily. These sorts of systems are very
complex; however, the complexity is hidden away allowing it to be easily used by
management.
Transaction Processing Systems
These types of systems would be used by OKS during business transactions as it collects,
modifies and stores all transaction data. For example, this system would be used to track a
business transitions between OKS and another company. TPS also aid in providing very
important transaction information to OKS to support their operational services which have
an influence on decisions in the company like making purchases.