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Unit 3 (P1, P2, P3, M2): How Organisations Use Information

Explain how organisations use information (P1)

Types of information

Qualitative

Qualitative information is non-numeric information based on quality. An example of this would be if you were in a restaurant and the waiter asked you how good was your meal, then you would say that it is good or bad. Since different customers have different opinions then the information collected is not fact based, this is known as qualitative information.


Quantitative

Quantitative information is information that can be directly measured and can be seen as factual information rather than opinionated. An example of this is when in a restaurant and you are collecting data on how many customers turn up throughout the day to find out what times is most popular. The information collected is number based and provides hard facts on the amount of customers and the times they show up. It is harder to argue against quantitative information due to it is factual. Another example of quantitative information is that MegaMedia could ask their customers “How would you rate our services?” and there are 5 options to choose from, 1 being lowest and 5 being highest. Even though it may be opinionated whether a customer likes your service or not, it shows facts about how good your service is.


Primary

Primary data is data that you collected internally. Since you know where primary data came from then it can be seen as reliable and accurate if it has been collected together correctly. Obtaining primary data is more expensive as you need to collect, store and analyse the data yourself. MegaMedia can collect their data by visiting the manufacture of the product they are going to sell themselves. If MegaMedia want to sell the new Samsung Galaxy, then they can organise a meeting with Samsung to discuss information about the phone, get a hands-on experience and ultimately decide if they want to sell the product on their website.


Secondary

Secondary data is data that is collected externally outside of your business. Using secondary data is less reliable than primary data as you are relying on someone else to collect the data and you need to ensure that it is reliable source. A good source of secondary data would be trusted document such as an encyclopaedia. If you are collecting data from Wikipedia, then it may not be 100% accurate and should be cautious of using the data. If MegaMedia is unable to organise a meeting with Samsung to collect primary information about the new phone, then MegaMedia can look at their official website and collect the information they need.


Purposes of Information

Operational Support

Operational support means that businesses use information to monitor and control activity minute by minute or hour by hour decisions on a daily basis. By analysing information and identifying trends, businesses can use the information to figure out what products are selling the most and get them re-stocked to get more sales. This also can mean that the products are not selling too well, an example of this is that MegaMedia is still selling the iPhone 4 and the sales are dropping massively because there are newest releases of the phone and no one wants to get this anymore, which means MegaMedia needs to discontinue the product before they start to lose profit.


Analysis

Analysis is weekly sales and predicted sales patterns. If something has a higher sale rate at the weekend rather than during weekdays, then they will stock more of the product at the weekend for increased sales. This means they have enough time to restock other products if they sell better on the weekdays. If a product is not selling well on their website, then MegaMedia would decide to either put it on sale or remove it. If there are a lot of sales on a product, then MegaMedia would be wise to order more of that stock. If a product sells well on weekends and not weekdays then MegaMedia would need to order stock ready for the weekend.


Decision Making

Decision making are ad hoc decisions based on problems. When a problem occurs, it needs to be solved quickly. This might be that a staff member is not doing their job properly and having a bad reputation on the business. This needs to be addressed with the managers and they need to make a decision to fire that particular staff member and hire more staff on their team. If an staff member from MegaMedia is given a task to make a new product page on their website and has not done it by the deadline the MegaMedia would have to make a decision to fire him and hire anew employee which will follow deadlines.


Gaining Commercial Advantage

Gaining advantage is looking for opportunities to enhance sales. An example of this would be that Apple releases the new iPhone 6 and lots of people want it. MegaMedia could take this opportunity to get the iPhone 6 in stock and start selling it to make a huge profit. This is an opportunity because a new phone of the same brand usually releases once a year so they need to take advantage before the opportunity goes.

Sources of Information

Internal

Sales

Sales team is about providing a customer with a product in which they are charged money for and the business makes a profit. The sales team also organises their sales in particular groups such as male and females, time and day etc. They work with other functional areas within the business such as the finance team as they have to know how much money is available to spend on ordering new stock. MegaMedia would need a sales team to organise their website with different categories like phones, cameras etc. The MegaMedia sales team would also need to sell the product for the best price for both customer and for MegaMedia so they can make a profit.


Purchasing

This department role is to purchases the needed materials or equipment for their business. They are also in charge of continuously evaluating whether they are receiving the materials at the best possible price. They also look at delivery, availability, reliable and quality. The purchasing team for MegaMedia needs to keep a consistent stock of products so everything is available on their website so customers can order anything without having to wait extra time to be in stock again.


Manufacturing

The manufacturing team is involved in manufacturing goods and parts for their business. They are also analysing how efficient they are manufacturing and minimising wastage. They work with the sales team so they know how many more products they need to make. They also work with the finance team as they need to make sure the business has enough money to pay them once they have made all the products. MegaMedia would not need a manufacturing team as they are a supplier and not a manufacturing business.


Marketing

The marketing team focuses on the customers’ needs. They use this information to talk to the stakeholders to see whether it is appropriate to implement. They also monitor the competition, learning about their communications, customers and why their customers choose them. Marketing work with the finance team as they need to know how much money is available for them to spend on advertising. They also work with the sales team as they work on new promotions on products that are doing well. The marketing team for MegaMedia would need to work with the sales team to see what products are selling well so they can promote those products in advertisements on other websites. They would also look at MegaMedias’ competition to see what prices they have their products and what could MegaMedia do to beat them in sales.


Finance

The finance department takes responsibility for organising the financial and management accounting affairs. They keep records of purchases and sales within the business and how much is being spent. The finance team work with every other department as they are in charge of making sure every employee gets paid, they make sure the business is making profit and if not then they help work out how to make more profit. The finance team for MegaMedia finds out how much they are purchasing products for and works with the sales team to find the best price to maximise profit.


Personnel

The personnel look at the people they employ. They collect data on what hours the employees do, average staff wages and days off etc.


Administration

The administration team do a range of different jobs which include advertising new job vacancy’s and advertising new staff training. The administration for MegaMedia; they would need to write up reports on each department to see how efficient they are working and then send the report to the CEO to give out to the departments.


External

The external information source is information that has been obtained outside from the business or company. There are many categories of external information source which are:


Information relating to how a business should undertake activities

Business need to take and keep a record of peoples’ names, that way, they are aware of who they need to collect taxes from as part of the government. They would need to acquire regular information about the tax system.


Information about the markets in which a business operates

One of the examples would be that business would need to research about marketing. That way they would know how to gain an understanding of the customers’ needs and how to cut down the risks of products or business failure.


There are many more categories of external information such as:

  • News and weather sources (Print, TV, Radio and Online)

  • Social media (Twitter, Facebook)

  • National response organisation (e.g. FEMA)

  • State or provincial response organisations (e.g. State EOC, EMA)

  • Local response organisations (e.g. City or County EOC)

  • Local business continuity organisations (e.g. ACP, BRMA or Nedrix)

  • Commercial providers (e.g. ISOS and NC4)


Reliability of Data Source

In the world of the internet, there are a large number of data that can be seen as both bad and good depending on how you see and use them. It is very important for companies to understand how reliable their source of data can be and how dangerous it is if it got into the wrong hands. There are times when you or your company needs an external data so that they can use it to help them plan operations.

Characteristics of Good Information

Discuss the characteristics of good information (P2)

Valid

Valid information is information that is correct and can be used for any purposes that it is required. You know information is valid if it is acquired via primary sources or from the government. As stated before, MegaMedia can organise a meeting with Samsung for their new phone coming out. This meeting will discuss information about the phone and MegaMedia can get a hands-on experience on what the phone is like to make a decision on whether to sell it. The information supplied by Samsung about the phone is valid as you can trust the official manufacturer of the phone instead of some other suppliers.


Reliable

Reliable information is information that you can rely on as being correct. If you are not confident that the information is reliable, then there is no point using it. An example of this would be if that MegaMedia wants to find the specifications of the new iPhone 6, going to a forum post is not going to be reliable. The best place for MegaMedia to get the specification is from the creators of iPhone 6, which is Apple.


Timely

Timely information is information that is from the correct time period. If a company wants to analyse current profit and loss, then they will need to access the current sales figures and not the figures from 5 years ago. Also, timely information is information that is available as and when it is needed. If a new phone is coming out, then MegaMedia needs to collect that information in a timely manner so when the phone is released, MegaMedia is ready to upload the product page on their website.


Fit-For-Purpose

Information that is fit for purpose means that it is relevant to what you need it for. An example of this would be that if MegaMedia were advertising their website in a specific geographical area like Hertfordshire, it would be advisable to look at how many users MegaMedia has that live in Hertfordshire than looking at users that live in Bristol. This then would continue attracting customers to your site with good advertising deals.


Accessible

Accessible information is information that is stored in a way that it can be easily accessed at any time. If we refer back the example of looking at sales figures on a cash register at any time of the day having the feature of printing out current sales from the cash register means that the information is accessible. Accessible is an important characteristic of good information as users need to have information available to them as and when they need it. Since MegaMedia is an online website selling media related products like cameras, then the information is automatically accessible to not only the employees, but the customers too.


Cost-Effective

Cost effective information is information that is worth investing the time and money to get help make business decisions. If MegaMedia paid a company to do a survey for them and it cost £500 and MegaMedia were then able to use the information supplied by the survey to increase your profit by £1000 then this would be seen as cost effective.


Sufficiently Accurate

Accurate information helps the business make the correct decisions. An example of inaccurate information would be that if a sales department sent inaccurate sale figures to the finance department then this might result in incorrect tax calculations for the company and would put them in danger. This also relates to MegaMedia and that the company can lose money on miscalculations.


Relevant

Relevant information is directly related to your business needs. If MegaMedia wants to save money; they would need to look at information like sales to see what products are doing well and what are not, so they can make changes to their business and sell efficiently. If MegaMedia decided to look at the product description, then this information would not help MegaMedia save money as it is not relevant information.


Having the Right Level of Detail

If someone requests information from you having the correct level of detail is very important. An example of this is if a MegaMedia wants a summary of sales figures for the last year, then the information that has the right level of detail might show the overall sales figures for each month and the total sales added together.


From a Source in which the User has Confidence

Obtaining information for a business purpose means that you must obtain it from a reliable and trust worthy source. If you wanted information about the population of United Kingdom then using Wikipedia might not be seen as being reliable and you may not be confident using it. Same with MegaMedia; if they wanted to find information about any product they sell, then the first place to go is to the manufacturers’ website.


Understandable by the User

Information that is used for a business purpose needs to be understandable by the user. If a non-financial person wanted information about the sales for the last 3 years and MegaMedia presented them with a complex set of figures taken from a database with no clear totals then they would not understand it. So MegaMedia would need to simplify it so it is understandable by the user.

Issues Related to the Use of Information

Explain the issues related to the use of information (P3)
Assess how issues related to the use of information affect an organisation (M2)

Legal issues

Data Protection Act 1998

The Data Protection Act 1998 is a law designed to protect personal data stored on computers. Anyone who processes personal information must register with the DPA register and comply with eight principles. It also provides individuals the right to find out what personal information is held on computer and most paper records. MegaMedia must not use the customers’ information inappropriately and MegaMedia need to collect information from customers that are relevant to what they need. If not, then they are not abiding to the data protection act and breaking the law.


Freedom of Information Act 2000

The freedom of information Act 2000 deals with access to official information. It gives individuals or organisations the right to ask for information from any public authority. They then have 20 days to provide information after request. They may refuse if the information is exempt from the Act. If a customer requested information from MegaMedia about their purchase that they made, then they would need to show that information to them.


Computer Misuse Act 1990

The Computer Misuse Act of 1990 is a law that makes certain activities illegal, such as hacking into other people’s systems, misusing software, or helping a person to gain access to protected files of someone else's computer.


The Computer Misuse Act 1990 details three offences:

  • Unauthorised access to any computer program or data. Most common form of this is using someone’s user ID and password

  • Unauthorised access with intent to commit a serious crime

  • Unauthorised modification of computer contents. This means impairing the operation of a computer, a program or the reliability of data. It also includes preventing access to any program or data.


If MegaMedia gets’ attacked by a hacker, then they are able to use this act to sue whoever did it. On the other hand, if MegaMedia decides to use their computers to get someone’ username and password without permission then they are committing a crime.


Ethical issues

Codes of practice

Threatening or harassing emails are usually banned, as well as spamming. Furthermore, inappropriate websites, such as pornography or gambling, are usually banned, either by the code of practice or by filtering software. There might be a business that has its own web server and that there are often strict rules as to what can be posted to it. If a customer decides to register to get MegaMedia newsletters then MegaMedia should not spam their customers with their offers etc. MegaMedia should take cautions and send their newsletters on a daily basis on a reasonable schedule.


Whistleblowing

Whistleblowing is where someone within a business raises a concern about a wrong doing of something that happened within the business. The concern must be a genuine concern and there should be regulations within a business to deal with these sorts of situations. A regulation might be to keep the employee who raised the concern anonymous so no one can point fingers at each other and it can be dealt with in an organised manner.


Organisational Policies

Organisational policies may have a significant effect on how it treats information. MegaMedia may keep databases, files and email servers in a secure central data centre. MegaMedia IT staff may put in place strict controls on who can access or update this data.


Information Ownership

The department that produced the data should own every field of data in every record. They should have the responsibility for making sure that it is entered into the computer system in a timely way, that it is correct and that it is consistent.


Operational issues

Backups

It is good practice to make the frequent backups of information in case of physical or processing problems. This may be a full backup of all information or a partial backup of just the information that has changed since the last full backup. The IT department should occasionally practise a recovery or restore from the full backup of all the information. They should then apply any partial backup. Since MegaMedia is an online retailer that sells media products, it is important to them to make sure they have regular backups of their data several times a day just in case if anything happens then they are able to restore it and not lose a lot of data.


Health and Safety

Although information systems are relatively low risk, there are a few health and safety issues that must be addressed. There are regulations that apply to screens and monitors, their positioning and usage. Keyboards, mouse, chairs and tables must be appropriately positioned. Computer users should have breaks away from the computer. MegaMedia should take into consideration wires on the floor need to be covered so no one trips over.


Organisational Policies

Many organisations have policies for the use of information systems that their staff should follow. These may range from keeping information confidential within the company to the procedures to follow to correct any information that appears to be wrong.


Business Continuance Plans

Since IT is a crucial part of how a business operates and therefore should be an important part of any business continuance plans to plan how operations can continue if any major part of an IT system should fail. The IT department should have things set up so that if there is a major failure, they will be able to continue to provide a service, even though it may be a more limited one. A good example is to provide a dual network, attaching alternate terminals to each network. Then, if there is a complete failure of one network, half the terminals will continue to work.


The organisation needs to make decisions regarding their BCP. An example of this would be that a retailer may decide to have more tills or point of sale terminals than strictly necessary in order to allow for failure. They may also decide to have two servers in the back office driving the tills, rather than one, in case of server failure. However, do not expect the BCP to cover every eventuality.


Additional Resources

The introduction of a new system often entails the on-off costs of new equipment purchase and installation, and user testing and training. In the IT department there are often more resources needed and so there will be ongoing costs to run a new system.


Cost of Development

This is usually a large part of the budget for a new computer system. There will also be ongoing costs once the system is running for minor changes to keep the system in line with the organisation’s needs. MegaMedia needs to know what their budget is for maintaining their website and to make sure they reach and pay the amount each month to ensure it does not go down.


Trained Personnel

Users often need training in how to use the equipment, the basic computing features, and the processes brought in with a new computer system and the transactions, queries and reports that form the new system.


Complex Software

Modern development software hides a lot of complexity from the application builder. This means they can focus on the business problems that the new system will solve, and create overall better and more complex systems. However, when there are problems, it may need both a development software expert and a business software expert to work together to fix them.


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