P1 explain how organisations use information

Data Vs Information

Information

Information is created from Data; it is numerical data that is manipulated so that the it makes sense. e.g bus timetables, the weight of the buses and the number of buses.

Data

Data’s just raw figures and facts that haven’t been processed yet, e.g numbers, times and weights. Data is numbers that have no meaning to them yet, whereas information has a meaning.

Primary

Primary data is data that you or your organisation gathers and manipulates itself. It is original as it is collected by you. Primary data is gained via interviews, taking measurements, surveys or any other method that gains the data straight from the source.

Secondary

Secondary data is data gathered from another source and manipulated in a different way to the original manipulation. Secondary data is gained via past documents like newspapers, journals or any other source that the data is not gained by you yourself or a member of your organisation such as getting feedback on bus services from a local newspaper.

Qualitative

Qualitative data is data that cannot be measured in the same way as Quantitative so it is presented in a narrative form. It can’t be measured it can only be observed with descriptions. For example a description or lengthy answer that describes the data such as ‘Some people use public transport but some walk’.

Quantitative

Quantitative data is data that can be measured numerically and then proven as fact. It is measured in numbers. For example numerical values and exact measurements such as ‘25% get the train, 40% get the bus, 30% drive and 5% walk’.

Purpose of information

Operational Support

This helps make timely decisions, a business can use operational support to control duties. This could be anything from reminding employees to send their work in at a specific time or telling a fast food restaurant when to defrost food.

Analysis

This is where businesses will analyse sales and other business data to see what progress the business is making. For example an increase or decrease in profits. They can compare this data with recent marketing schemes to see how certain marketing schemes have affected the company and then use this information to decide on whether to continue the scheme or not.

They can also analyse data to compare to similar stores and see how it is performing in comparison.

Decision Making

Information systems can aid in the making of important decisions by providing data that is essential when making decisions such as sales figures and costs. If a problem occurs then management will look at data and make a decision on the information available to them. For example if they want to close a store down they will look at sales figures and see which store makes the least money, they can use this information to make an informed decision.

Gaining Commercial Advantage

This is what a business will do if an internal or external event occurs, they will make a strategic decision that will positively affect the company. For example if a college is having an open day local businesses know lots of students will be coming, they also know that there will be more trade on that day so they can have special promotions or increase the number of staff in store on that day to maximise profits.

External Information

Government

Businesses must comply with legislation and must also collect and pay the correct taxes to the government. They must also calculate VAT, national insurance, pensions and the turnover of the business, these are all types of information and data.

Trading Groups

Businesses will have employees that are members of trading groups and trade unions, these trading groups will be relevant to the same sectors of work, they will work to try and raise better standards in the industry, set better prices for all parties involved in the industry and also develop policies that benefit everyone in the industry. For example trade unions for the oil trade will make sure that oil prices are linear for all countries.

Commercially Provided

Businesses will often buy information from external sources, there are also businesses that specialise in trading information, they may buy information and then sell it to other businesses.

Databases

If businesses want to store information in a database then they must comply with the correct legislation such as the Data Protection Act 1998 and also the Freedom Of Information Act 2000. Businesses can also sell their customer information to other businesses, this however creates negative customer feedback.

Research

In place of buying customer information businesses can instead do research and gain information about their target audience by research.

Internal Sources

Finance

The finance department is responsible for the monetary side of a company, they deal with accounts and finances. The accounts deal with purchase invoices and sales invoices, monitors, debtors, creditors and VAT returns. They also deal with payroll, national insurance, pensions. They deal with quantitative data.

Personnel

This area deals with recruiting and selecting employees, they also help organise interviews and write job descriptions. This deals with Qualitative data because they must write interview lists, job information and other descriptive writing.

Marketing

This deals with advertising and general marketing of the organisation and its products; to do this effectively they must also research the target audience and the market for their product. Because they deal with advertising they must also design any advertising such as posters or leaflets.

Purchasing

This area deals with the buying of goods and services for the whole company, if a department needs to buy something then it must go through Purchasing first, they also try to get the best prices. They also deal with negotiating business contracts.

Sales and customer service

Sales/Customer service is the frontline of a company and will be dealing with customers; they must keep customers happy and have a generally positive attitude. A sales team aims to sell the company’s products and services to potential customers thus creating a larger customer base. This area of a company will deal with product lists, questionnaires, product lists and brochures.

Manufacturing

Manufacturing is only possible for companies that create, manufacturing is creating a product from raw materials. This area would deal with schematics, designs, maintenance records and production records.

Distribution

This deals with the distribution of a company’s products or services, they deal with any information about transportation of products and services. For example delivery times and what each delivery is.

Administration

Some companies will have a central administration that controls other departments and will carry out administration tasks.

Research and development

This department will deal with improving existing products or creating completely new products. They make improvements based upon customer feedback and will adjust the product according with how the customers responded to the previous product. They work closely with the marketing department to promote upcoming products. They deal with information like customer feedback and product design information.