Information System

Information is a data that has been formatted and processed to suit a particular purpose. The people are the clerks, operators, and analysts who work directly with the equipment and other members of staff, proved the task to be performed is not totally automated.

Important

Increasingly more organizations are realizing that the information in their databases is an important asset that must be protected. Like more tangible assets such as buildings and equipment, an organization's information assets have a present and future value and have costs associated with their acquisition, maintenance, and storage. Information is no longer thought of as a by-product of doing business, but rather as a key ingredient in both short and long range decision making. Just as many companies have consistently utilized product strategies, some companies are now developing information strategies that specify the types of information they want available for decision making.

Several factors have contributed to the increased need for timely and accurate information. Among these factors are expanded markets, increased competition, shorter product life cycles, and government regulation

An expanded market means that to be successful today, businesses must sell their products in as many markets as possible. Often this means national as well as international distribution of a product. Companies that produce a produce for local or regional use are at a disadvantage against companies that produce larger values of products for a wider distribution. When companies expand their markets, they must have more information about a larger number of potential selling areas and the different ways of getting their products to those markets. Automobiles are an example of this trend. The number of automobiles has decreased, and the surviving companies have moved to worldwide distribution of their products.

Increase competition means that competing companies are financially stronger and better organized. To compete successfully, it is important for an organization to have current information on how competitors are selling their products. Many companies now maintain large databases that include information of competitive product features, prices, and methods of distribution.

Shorter product life cycles mean that companies have less time to perfect a product. More often than not, the product has to be successful when it is first introduced because companies have less time to make corrections after a product is introduced. This means that before they introduce products, they must have accurate information about what the potential customers want. Shorter product life cycles have led to the increased use of test marketing. Company manages use the results of tests to decide advertising, packaging, and product features. Shorter product life cycles have also required companies to begin work earlier or next-generation products. To do this, managers must have information about existing products features that customers want changed and new features they want to be added.

Government regulation has also contributed to the need for more information. One good example of this is in human resource management. To comply with equal employment opportunity (EEO) guidelines and laws, organizations must keep detailed records on employee resting, hiring, and promotion practices. The employee database, one used almost exclusively for payroll purpose, has now been expanded to include valuable information on employee skill and education levels as well as the results of performance reviews. With this information, companies can documents their compliance with government regulations and guidelines.

Characteristics of Good Information

Good information is that which is used and which creates value. Experience and research show that good information has numerous qualities as follows:

Relevance: In effect this is the over-riding quality. Information must be relevant to the problem being considered. Too often reports, message tabulations and so on contain irrelevant parts, which makes understand more difficult and causes frustrations to be user. Relevance is of course much affected by many of the qualities below.

Accuracy: Information should be sufficiently accurate for it to be relied upon by the manager and for the purpose for which it is intended. There is no such thing as absolute accuracy and raising the level of accuracy increasing cost more does not necessarily increases the value of information. The level of accuracy must be related to the decision level involved.

Completeness: Ideally all the information required for a decision should be available. In the real world of course, this never happens. What is required is that the information is complete in respect of the key elements of the problem. Thus there must be close liaison between information provider and users to ensure that the key factor is identified. For example, a supermarket chain in making strategic decision whether or not to place a new superstore on the outskirts of a town would identify such things as population density.

Detail: Information should contain the amount of detail consistent with effective decision making. Every superfluous character means extra storage, more processing extra assimilation and possibly poorer decisions. The level of detail should vary with the level in the organization; the height or level the greater the degree of compression and summarization.