INFORMATION

- Need in An Organisation
Information
Difference Between Data & Information

3) Information is useful for decision

making but data has got no value.
4) Information brings clarity and creates
an intelligent human response in the
mind.
5) Information is like a finished product
whereas data is like raw material.
Characteristics of Information
 Improves representation of an entity
 Updates the level of knowledge
 Reduces Uncertainty
 Aids in decision making

Quality depends upon the mix of

these characteristics.
Quality of Information
Four Dimensions:
2. Utility
3. Satisfaction
4. Error
5. Bias
Organisation and Information

Low
External TOP
MGT

Source of MIDDLE
Information Structural
MGT Information

Internal OPERATIONAL High

MGT
Value of Information
For decision making under uncertainty, the decision maker
feels secured if additional information is received.

The information is called a perfect information, if it wipes

out uncertainty or risk completely.

 The value of additional information making the existing

information perfect (VPI) is:

VPI = (V2-V1)- (C2-C1)

Where V is the value of information and C is the cost of
obtaining the information
 SEQUENCE OF DEVELOPMENT OF M I S

 DATA
 Individual elements of a transaction
 INFORMATION
 Is data with meaning
 INFORMATION SYSTEM
 A set of procedures organized to generate information
that enables managers to review operational, tactical
& strategic planning activities
 MANAGEMENT INFORMATION SYSTEMS
 Designed to provide information for effective planning
& tactical decision making
 Use of MIS Value of Information
Key Very High, Meeting
Top Goal Setting, Policy Acc- High Risk and Un-
urate Uncertainty Struc-
Exec- Making, Strategic
Futur- Situation tured
utive planning
istic
Middle Decision making Unformatted,
Division Problem solving Precise, High, Meeting Regular but
Product Monitoring & Analytical Risk situation Modified
Managers Achieving Bus- Decision frequently
Iness Goals oriented
Problem Proccessed, Low, meeting
Supervisory, Given at fixed
solving summarised Near certainty
Jr.Managers, Interval, display
& Meeting And classified for situation
Supervisors & print
Targets Current period
Operational To know Detailed relating to Lowest Large Volume
Assistants The current period
Clerks Status Print
facts
Levels of Management Nature of Information Reporting media & Structure
System is a set of interacting or
interdependent entities, real or abstract,
forming an integrated whole.
SYSTEMS CONCEPTS IN
BUSINESS
 The systems approach is a way of analyzing business
problems
 This approach views the business organization as a
system of interrelated parts designed to accomplish
goals
 Each subsystem is a self-contained unit, but is also a
part of the whole system
 Managers need to understand the goals of the
business and design the functions of the subsystems
to achieve these goals
Market research subsystem
Input Process Output Customer
Manufacturing subsystem needs

Input Process Output

Finished
Marketing subsystem goods

Input Process Output

Product
Service subsystem in use

Input Process Output

THE FIRM’S SUBSYSTEMS
INFORMATION SYSTEMS
 An information system consists of
components that interact to achieve
the objectives of the business
 An information system contains
elements such as:
 Hardware
 Software (application s-ware & system s-
ware)
 Personnel
 Databases
 procedures
AN INFORMATION SYSTEM AS A
SYSTEM
 The major purpose of an information system is to
convert data into information
 The information system is a subsystem of the
business system of an organization
 Information systems that provide information on day
to day activities of a business are known as
operational systems
 Information systems that provide information to allow
the management to allocate resources effectively are
known as tactical systems
 Information systems that support the strategic plans
of a business are known as strategic planning systems
 Sales
listing
Sales
transactions
Reorder
Inventory report
Update

Old
Inventory New
master Inventory
master
An inventory update system
SUBSYSTEM INTERFACES
 Interfaces exist between a subsystem
and other subsystems
 Outputs of one subsystem become
the inputs of another subsystem
 If the outputs of one subsystem are
incorrect, the next subsystem will be
affected
.