6.1. Describe the broad levels, formats, and granularities of information.
6.2. Differentiate between transactional and analytical information.
6.3. List, describe, and provide an example of each of the five characteristics of high quality information.
6.4. Assess the impact of low quality information on an organization and the benefits of high quality information on an organization.
Organizational information
- Information is everywhere in an organization.
- Employees must be able to obtain and analyse the many different levels, formats, and granularities of organizational information to make decision.
- information comes at different levels, formats, and granularities.
- Information granularities refers to the extent of detail within the information (fine and detailed or coarse and abstract).
- Employees must be able to correlate the different levels, formats and granularities of information when making decision.
- For example, a company might be collecting information from various suppliers to make needed decision, only to find that the information is in different levels, formats and granularities.
- successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing.
levels, formats and granularities information
Information type : Transactional and analytical information.
transactional information versus analytical information
- Transactional information encompasses all of the information contained within a single business process or unit of work.
- Its primary purpose is to support daily operational tasks.
- Organization need to capture and store transactional information to perform operational tasks and repetitive decision such as analyzing daily sales reports and production schedule to determine how much inventory to carry.
- Analytical information encompasses all organizational information,.
- Its primary purpose is to support the performing of managerial analysis tasks.
- Analytical information is useful when making important decision such as whether the organization should build a new manufacturing plant or hire additional sales personnel.
- Analytical information also makes it possible to do many things that previously were difficult to accomplish such as spot business trends, prevent diseases and fight crime
The value of timely information/ Information timeliness
- Timeliness is an aspect of information that depends on the situation.
- Real-time information means immediate, up-to-date information.
- Real-time systems provide real-time information in response to request. (many company need it)
- Many organizations use real-time systems to uncover key corporate transactional information.
The value of quality information/ information quality.
- Business decisions are only as good as the quality of the information used to make the decisions.
- Information inconsistency occurs when the same data element has different values.
- For example, the amount of work that need to occur to update a customer who had changed her last name due to marriage.
- Information integrity issues occur when a system produces incorrect, inconsistence, or duplicate data.
- Data integrity issues can cause managers to consider the system reports invalid and will make decisions based on other sources.
The characteristics of high-quality information include:
- Accuracy - Are all the values correct? for example, is the named spell correctly? is the dollar amount recorded properly?
- Consistency - Is aggregate or summary information in agreement with detailed information. For example, do all total fields equal the true total of the individual fields?
- Uniqueness - Is each transaction, entity, and event represented only once in the information? For example, are there any duplicate customer?
- Timeliness - is the information current with respects to the business requirements? For example, is information updated weekly, daily or hourly?
- Completeness - is a value missing from the information? For example, is the address complete including street, city, state, and zip code?
Understanding the Costs of Poor Information
- The four primary sources/reasons for low quality information are:
- - Online customers intentionally enter inaccurate information to protect their privacy.
- - Different systems have different information entry standards and formats.
- - Data-entry personnel enter abbreviated information to save time or erroneous information by accident.
- - Third-party and external information contains inconsistencies, inaccuracies, and errors.
Potential business effects resulting from low-quality information include:-
- Inability to accurately track customers.
- Difficulty identifying valuable customers.
- Inability to identify selling opportunities.
- Marketing to non-exist customers.
- Difficulty tracking revenue due to inaccurate invoices.
- Inability to build strong customer relationships.
Understanding the benefits of good information.
- High quality information can significantly improve the chances of making a good decision.
- Good decision can directly impact an organization's bottom line.
- High quality information does not automatically guarantee that every decision made is going to be a good one, because people ultimately make decisions and no one is perfect.
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