- Information as a commodity
Have you ever wondered why YOU in particular, or your family, are targeted for particular mail advertisements? Every time you make a credit card purchase, enter a competition or order goods by phone or mail, information about who you are and the products you bought goes onto a database. This information can be used to direct advertising to the people who are likely to be interested in particular products.
- Usefulness of data
Data is of poor ‘quality’ if it is out-of-date, inaccurate or incomplete. Companies who sell their products through direct mail, for example, need up-to-date lists of names and addresses of people who are likely to be interested in their products, and such lists are enormously valuable to them. But unless the list is kept up-to-date, it soon ceases to be of much value. People move away, grow old, die, or change their interests or purchasing habits.
Charities, for example, may sell their mailing lists to other charities, thus raising extra funds for themselves. Without knowing who on the list are regular donors and who is simply a ‘one-off’ donor of several years ago, the list is probably not very useful. The information can be ‘date-stamped’ by including for each person not only their address but the date of their last donation.
- Coding value judgements
What is a value judgement? The answer is, any description such as ‘tall’, ‘dark’, ‘handsome’, ‘green-eyed’, ‘old’. If you have ever filled in a questionnaire on which you were asked to tick a box rating something from ‘poor’ to ‘excellent’ you will know how difficult this is.
- The benefits of ICT
Information technology systems have become indispensable in many businesses today. The benefits include:
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Speed of processing. Modern banking systems, for example, could not function without information technology. An MICR reader can sort and process over 2,400 cheques per minute.
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Vast storage capacity. Hundreds of thousands of transactions can be stored on disk for processing and analysing in organisations such as banks, building societies, government departments, hospitals and retail stores.
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Ability to search and combine data in many different ways. Retail stores can analyse purchases to identify trends and preferences. The police computers can analyse thousands of different pieces of information to help catch criminals.
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Instant response. Real-time systems such as airline reservation systems can give an instant response to a query about seat availability, and update their information as soon as a booking is made. When a customer pays for their groceries or other goods using a credit or debit card, the information on the card can be captured and the status of the account checked almost instantly. If sufficient funds are available, the transaction will be accepted.
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Accurate results. A computer can calculate the company payroll or the electricity bills for thousands of people with 100% accuracy every time.
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Communication. Electronic mail can be used to keep people in different branches of an organisation in touch. Data and information can be sent from one branch to another.
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Improved company image. A company can use word processors, desktop publishing and presentation graphics to enhance its image.
- Case study: Ford and Microsoft invest in joint venture
- Limitations in the use of information technology systems
New systems nearly always have some drawbacks. These could include:
- Job losses among employees;
- Faults in the software may mean the new system does not work as planned, which may lead to chaos, loss of customers and low employee morale;
- Inadequate hardware may lead to bottlenecks in the flow of data around an organisation;
- Managers may be simply overloaded with information. It is not uncommon for an individual in an organisation to receive several hundred e-mails in the space of a week. If he or she goes away for a week’s holiday, it can be almost impossible to catch up with the backlog.
- It may be difficult to extract data from a system in the form required by a user. If the requirements of a new system has not been correctly specified it may not be possible to produce the information that management subsequently finds they need.
- The information can be as good as the data that is input – garbage in, garbage out, as the saying goes. If employees are not aware of how important it is to enter data accurately, or there are insufficient checks built in to the system to ensure accurate data entry, the information produced may be useless. The difficulty of coding value judgements and the problems of aging data are described above. Poorly designed data entry forms can also contribute to problems of inaccurate data entry.
- Exercises
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With the aid of an example, describe one problem, which may arise when coding a value judgement.
- A college maintains an extensive database of its full-time students. The database contains personal data, the courses students attend, and higher education or employment applications.
- Describe how the college might keep the personal data of the students up to date.
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The college wishes to sell the personal data to a local sports retailer. An agreement is to be written between the college and the retailer. Describe three issues, relating to the data that should be included in the agreement.
- A telephone company collects the telephone numbers of people who receive calls through a ‘Friends and Family’ scheme. Under this scheme, subscribers receive discounts on phone calls to numbers they dial most frequently. The customer has to inform the telephone company which numbers are to be included on their ‘Friends and Family’ list.
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Describe briefly one way in which the telephone company could use this data their advantage.
- How can the telephone company keep their data up-to-date and accurate?
- Low quality information can be misleading, distract or incomprehensible. This type of information is of little value to the decision maker. The output of good quality information is costly and dependent upon many factors.
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Identify three factors, which affect the quality of information.
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State two factors which affect the cost of providing good quality information.
Section 1 – Information: Nature, Role and Content
Rai Karra Page 4/20/2007