Page 18 - Information Management 3rd Edition

Information Management
Figure 1.2 shows the different management levels of the business as a whole. However, the middle and lower levels consist of the different business functions such as marketing, operations, purchasing, human resources, financial and public relations. In each of these functional areas employees are executing their daily tasks, and it is here where data is captured and analysed internally.
The information needed by all these functional areas at the different levels must be gathered, processed, stored and distributed, communicated or shared when needed. Those businesses that are quickest at analysing and extracting relevant information to use in their decision-making process usually have a competitive advantage.
It is not always possible to gather information. Mostly, only data is gathered, but a business cannot learn much from pure data. For example, invoices containing figures, or a list of quantities cannot be used for decision-making purposes, because they do not mean anything on their own. However, information (converted data) such as the turnover figures for the past 12 months could be used by the relevant manager to make decisions.
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1.6 Requirements of useful information
Information must comply with the following requirements to be valuable to
decision- makers:
• Information must be correct and accurate to contribute to effective decision- making. If this is not the case, incorrect deductions and conclusions may be drawn.
• Information must be timely. If it is not available on time, it is worthless or it can delay decision-making. The longer it takes to trace a problem, the more difficult it becomes to correct. A fact yesterday may no longer be true today.
• Information needs to be complete. A compromise must be reached between copy
conciseness and completeness. It is therefore important to know what the
specific need is. Partial information can be very misleading.
• Information must be summarised, where possible, and presented in an acceptable form. Graphs and diagrams should be used wherever possible.
Decision-makers do not have time to work through long documents.
• Information needs to be relevant. A sifting process is necessary. Old information must be replaced by new information to keep up with changes. Never collect
unnecessary information. It must pertain to the problem at hand.
• Information needs to be clear, detailed or summarised as required, presented
in a predetermined sequence, in the required format.
• The cost of providing information must be relatively economical.
• Information must be collected from various quarters so that decisions can be
approached from various points of view.
Managers need such information. The information function ensures that the information is disseminated to the other functions in the business.
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