Information Systems
H/601/7256
LO1 – Understand how Organisations use Business Information
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P1 – Explain how organisations use Information
P2 – Discuss the Characteristics of Good Information
M1 – Assess the improvements which can be made to an identified organisation’s Business
Information Systems
P3 - Explain the issues related to the use of information
D1 – Compare Legal, Ethical and Operational issues that may affect organisations.
P4 – Describe the features and functions of Information Systems
P5 – Identify the information systems used in a specified organisation
M2 – Illustrate the input and output if Information within a specified functional areas of an
organisation
D2 – Analyse the legal and ethical implications of the illustrated inputs and outputs.
P6 – Select Information to support a business decision-making process
P7 – Use IT tools to produce management information.
M3 – Explain the value of a management information system.
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P1 - Evidence could be in the form of a report or presentation in which learners
must explain how organisations use information. They should include the
differences between qualitative and quantitative data as well as primary and
secondary sources of information, giving examples of each relating to a business
environment. Evidence of considering internal or external information flowing into
and out of an organisation must also be evidenced by the learner. Diagrams could
be used to evidence the flow of information which must be provided by the learner.
P2 - The learner must discuss the characteristics of good information to identify
what classes as “good” information. This may be a continuation of P1 as evidence
but should be a clear addition to it. The learner should consider the following:
validity, reliability, timeliness, appropriateness, suitability, accessibility, cost
effective, sufficiently accurate, relevant and could use examples of business
departments to apply these criteria based on the various types and purposes of
information available. This could alternatively be evidenced separately but must also
detail how information can be checked and identified as “good”.
M1 - The learner must demonstrate an understanding of the information systems of
a given specified organisation and must be able to identify improvements required
to include the characteristics they have already covered. This may be an extension of
P2. The learners must assess a range of areas for improvements from which at least
two improvements to business systems should be made with explanations and
examples. This could be in a report or presentation.
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Understand how organisations use business information
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The learners should firstly be introduced to the purpose of
information giving every day examples of information they have
access to, where it comes from and where it flows to. One example
could be the use of social networking where learners see a post and
pass the information seen on to others. Another example could be on
the news where a world event is reported.
The tutor discuss and explain primary and secondary sources of
information and in groups the learners should discuss and identify
examples which they would then place into the correct category. The
tutor should then extend the information the learners are working
with to identify the format providing examples of qualitative and
quantitative data.
Learners should then consider the purpose of information they are
discussing such as to inform (the news), educate (documentaries or
applications), sell (advertisements) etc.
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Learners should then be involved in discussion and exercises to specify the
information characteristics for the following:
◦ reliability of data sources
◦ validity
◦ relevance
◦ time frame
◦ accessible
◦ quality
◦ cost-effective
◦ level of source
◦ understandable by the user.
Learners can be assessed for knowledge and understanding using a quiz giving
scenarios and using a voting scheme.
Learners must then focus on an organisation and identify the types of internal or
external information which flows in and out of it and samples should be
prepared by the tutor for the activity. Organisations are broken down into many
departments and the categories of information from each is another
consideration and learners will need to be made aware of organisational
structures to enable them to understand the categories information contained
within those departments as well as their functions.
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LO1 Understand how organisations use business information
They say that information is key, the lifeblood of an organisation, without it a company works
alone, independent of the outside world, immune to trends, to sales projections, to the
changes in customers and opinions, to advances in technology. Information is power, and a
critical resource for performing within organisations. Business managers spend
most of their day in meetings, reading, writing, and communicating with other
managers, their staff, customers, suppliers, and other business associates via
telephone, in person, or by e-mail. The management function itself is information
processing. It involves gathering, processing, and disseminating information.
Managing information involves coping with a wide range of information sources
before finally making decisions about what to do with it.
A manager must track and react to information flowing from sources inside and
outside the business. The manager processes this river of information and
disseminates it in one of four ways: stores it, uses it, passes it on, and/or discards
it. For example, during the course of a normal business day, a marketing manager
for an IT company receives information in the form of e-mail, telephone calls,
letters, reports, memos, trade publications, and formal and informal
conversations. All these are used to benefit the company and they better they are
processes, the faster, the more usable and readable the format, the better the
business function.
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To this end a company will need to define what information is important to it and
what to discard. Everything is data, the customers reaction is data, happy or sad, the
voice on the end of the telephone is data, it can be read, it can be broken down, it
can be put into a category and suddenly it becomes information. The human brain
taken in m ore data than it can handle so it stores it away for interpretation.
Similarly companies gather more data than is necessary. But there are categories of
data they look for, this is called data gathering:
◦ Operational support (e.g. monitoring and controlling activity) - how well a
business functions, from the time it takes on a call to the ability of their staff,
this is operational data. If a customer complains it could because of the quality of
product or service, for instance all Broadband packages are the relatively the
same, prices are similar but customers have preferences. This is why companies
need to monitor and control their staff. Similarly the production process of
products needs to be monitored, staffing needs monitoring, speed of output and
quality of process needs controlling in order to benefit manufacturing.
◦ Analysis (e.g. to identify patterns or trends) – Most data is gathered to be
analysed, analysis generates patterns, trends, they are used by companies to
predict. All successful new products have gone through this process, analysing
what is happening, seeing a gap in the market or a demand and then filling that
gap. Analysing also gives feedback, what is going well, what is not working, what
needs more or less time or money. Data analysis is how successful companies
stay successful.
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◦ Decision making (e.g. operational, tactical, strategic) – Data is gathered by
some companies in order to make decisions, make a new product, drop an
old product, adapt the product lifecycle, change what is wrong or make
better what is working well. Knowing all the facts leads to better decisions.
Sony did not continue with the Minidisc when they saw that Apple was
entering the market, Toshiba dropped Beta when JVC adapted VHS, Nokia
sold to Microsoft when they saw their sales drop below 10% of the market.
You need Data to make these decisions, sales figures, customer preferences,
stock analysis etc. Every company who moves their manufacturing base does
so because the data told them that it was more cost effective.
◦ Marketing and sales – When is the best time to release the next game in a
series, marketing and sales will find out, what should be in the game,
marketing and sales can find out, how do you know what the reasons for
buying are, market and sales find out. All companies have someone who
looks at the sales figures and looks for trends, analyses the customer base.
This is few back to marketing who decide what to do, promote or withdraw,
push in a different direction or focus on one. From the Ice Cream Van
knowing where the customers are likely to be, to Audi knowing where to
place a showroom, these are all decisions made by analysing sales figures
and marketing strategies to know where and what the customers want.
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◦ Communication – “You’re call is important to us”. We hear this and ignore it but
companies do monitor calls, for training, for improvement, for legal reasons, to
find out opinions and what works well. Emails from customers are stored and
read, feedback is followed, opinions are measured to improve standards. We may
not see this in our day to day customer role but it does happen. Companies like
eBay follow up on emails to find out if the solutions work, you feel valued, you
will want to stay with them, you will think they care about you, about your
custom. Remember that every form of communication with the customer from
verbal to statistical is an information gathering exercise.
◦ Flow (e.g. internally and externally) – Companies like to improve efficiency,
efficiency increases sales. The quicker and more correct the information is
transferred from one source to another the more effective it is. Verbal is instant
but open to interpretation, written is more precise but less personal, email is
recorded but time consuming. External communications represent the company
so they have to be more formal, internal communications serve a purpose but are
less measured. Larger companies set up data structures to manage all
information where staff can feed from it, smaller companies have less distance
for the information to travel so it can be more personalised.
◦ Task 2 P1.2 - Explain the different purposes of data, with examples, and how
these forms can be used within a business context.
Operational Support
Analysis
Decision Making
Marketing and Sales
Communication
Flow
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There are different methods of data collection and different uses of information
within a company. Data is raw, unfiltered, distributed by a wide audience and
contains all the information the company needs. Sales figures are data, how that data
is broken down and used becomes information. Every department within a company
will receive data that needs to be interpreted, catalogued, reimagined, transformed
into useful chunks called information. A database takes in data and reports back as
information in terms of queries.
Task 3 – P1.3 - In computing terms, what is Data?
Task 4 – P1.3 - In computing terms, what is Information?
Local, National or
International
Social Networking Site
Commercial
eCommerce Business
Task 5 – P1.3 - Select a business of your choice, and identify the following: (with evidence,
where possible)
 Describe the type of business it is (in terms of Primary, Secondary or Tertiary)
 What is their customer base (geographic – National / International / Global/
Worldwide)
 What is the purpose of the business
 Who are their target audience
 Type of Data that it receives and from where (e.g. Sales, Suppliers, Trends,
Government Statistics, Surveys, Rivals)
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All organisations have functional areas or departments which work
independently but towards a common goal or goals as set out by the aims
and objectives
Sales
Finance
Marketing
Human Resource
Management
Research and Development
Administration
Operational
Production
Competitor Analysis
Purchasing
Task 6 - P1.4 – Describe with examples the different informational needs
within the functional activities above.
Task 7 - P1.5 – Describe the informational needs within the functional areas
that may be present within your chosen business.
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Sourced location of information can be split into two distinct places; internal and
external, both with their merits and issues. Companies will use both locations for
bets effect and few companies will work independently of both. Supermarkets have
suppliers as well as customers, factories are still the middle men for raw materials
and customers.
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Internal (e.g. financial reports, market analysis) These include:
◦ Financial Information: this is information related to the performance and profit and loss of
the company. This will include information on how much you pay for items, how much you
pay staff, the costs of rates and the taxes that you pay as a business.
◦ Personnel Information: This is information held by the company on their employees. This
information must be freely available to the employee any time that they request it.
◦ Marketing Information: this is used by the marketing team to identify what products or
services offered are most successful. They collect information from different departments
such as sales to promote certain products or services based on current success rates.
◦ Purchasing Information: this is collected by the purchasing department who are involved with
buying all of the products needed to run your business.
◦ Sales Information: this needs to be monitored based on the product or services offered by
your company. This information needs to be passed to ensure that the cost of your good or
service is less than the sale price.
◦ Manufacturing information: This is information about the cost of manufacturing goods within
the company and will normally include the running cost of all machinery, the wages paid to
production staff and the cost of raw materials used up in the manufacturing process.
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External: Examples of external information sources are: Government, trade groupings, commercially provided
information, database and research. If a company uses external sources of information then they must be sure
of the reliability of the data sources. Here are some examples of how the company could use information
supplies by external sources:
◦ Government: This comes from a reliable source as this is the governing body that they business operates
within. Companies need to use important legal information from the Government to help run the business
successfully and legally. For example, if the Government offered businesses grants for opening
manufacturing plants in areas of high unemployment a company might use this information to their
advantage to set up a new plant at a lower cost than in another area.
◦ Trade Groupings: This is a group of businesses that operate within the same sector and not within the same
location. For example tech companies would be part of the Technical Trade Association and Farmers part of
the Farming Association within a country or region. As a business being a member of a trade grouping
enables you to access information that helps you run your business successfully. For example, solicitors are
part of the legal trade and will have memberships that give them access to the latest laws that the must use
to support their clients in the best possible way.
◦ Commercially Provided: Companies can use this information to help them make the correct business
decisions. These decisions are made based on information made available to them from other companies.
For example, a hotel group might use the information about the number of flights to and from a number of
airports along with the information on the number of hotels beside each airport to make a decision on where
to open their newest hotel.
◦ Databases & Research: Companies can research information that might help them increase the sales and
level of interest in their business. The key thing to researching information that helps run your business to
ensure it is accurate and reliable. Some companies will pay to access commercially available databases that
offer a range of information directly based on their business sector.
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Sourced information can be split into two distinct categories; primary and secondary, both with their merits
and issues.
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Primary research (field research) involves the collection of data that does not already exist. This can be
achieved through numerous forms, including questionnaires and interviews. This is research the
company carries out itself, with its own staff, for its own purpose. There are obvious benefits to this kind
of research:
◦ Can be tailored to the companies needs
◦ Company can control the flow of information
◦ Can be adapted on the spot to gauge additional opinion
There are many pitfalls for this type of research:
◦ Could be very expensive because many people need to be contacted.
◦ Take a long time and be out of date when the research is complete.
◦ People may not reply if emails or letters used.
Secondary research (desk research) involves the summary or collation of existing research rather than
primary research, where data is collected from, for example, research subjects or experiments. Basically
using someone else’s primary research to aid your own research problem. The benefits include:
◦ Companies hired know what they are doing and where to look for information
◦ Companies hired can analyse information
◦ It is easier to get someone else to do the work
◦ Does not require additional staffing
Disadvantages include:
◦ Can be expensive
◦ Relies on the honesty of the external body
◦ Can be too specific and non adaptable.
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Sourced information can be split into two distinct types of response; qualitative and quantitative,
both with their merits and issues.
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Qualitative methods are ways of collecting data which are concerned with describing purpose
and meaning, reasons for things, rather than with drawing statistical responses. What
qualitative methods (e.g. case studies and interviews) lose on reliability they gain in terms of
validity. They provide a more in depth description, opinion based responses that can be used
to judge why rather than how many. Examples include Why, How, For what reason, In your
opinion etc.
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Quantitative methods allow for statistically reliable information obtained from numerical
measurement to be backed up by and enriched by information about the research
participants' explanations. They are results that can be calculated, formulated, put into Spread
sheets and drawn up, used as information that can be queried, sorted and defined against
previous and future information. Examples include Yes/No, out of ten, > or <. Even single
answer responses can be added up if there is a restriction on the possible responses.
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Task 8 - P1.5 - Describe the features of Information Sources and outline the advantages and
disadvantages of each.
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Task 9 – P1.5 – For your chosen company describe the Sources of information used with
evidenced examples.
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Task 10 – M1.1 – In terms of internal efficiency, suggest improvements you company could
make in terms of information gathering and dissemination.
Internal
Qualitative
Primary
External
Quantitative
Secondary
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Once the company receives its information in the form of raw data, it then transfers that
data into usable information. This is called Handling of Information. Different departments
within a company manage that information in different ways and interpret that information
for different purposes. For instance IT will transfer information onto the system without
the need to analyse it, Marketing will analyse specific parts of the information, sales will
analyse their parts, admin their section. But it all comes from one stored source.
Collection and Storage: A school will collect client information from Primary Schools in raw
format, all the next year’s students that are coming, their addresses, ages, learning
grades, medical information etc. The IT department school will put this onto the system as
one large data stream and store it. SIMS will then break down this information into year
groups and categorise the information. This is how it is collected and stored.
A school will also collect statistical information from exam results across the country and
store that as a saved database link as a separate data stream. This is different information
and saved in a different format. This is public information and therefor does not need to
be as securely stored.
They will collect funding information and store this as a separate data stream, this needs
to be as secure as the personal information of the students but is a separate data type.
And they will need contractual information from their staff and from suppliers, two
additional data types with different levels of security and structure. And then there are
other data streams, country, county and local statistics on SEN, statistics on EAL, FSM etc.
All these have their own methods of collection and methods of storage that have to be
taken into consideration before the school day can even begin.
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Manipulation – Once the information has been received it is then disseminated,
departments takes the information from a central source, usually just the
network but for a school this will be SIMS, and then use that information in their
own way. Warehousing will use purchasing order information for delivery and
collection, R&D use product and component pricing information for development
costs.
How the departments process that information is up to them, this could be in
the form of charts, tables, invoices, but it needs to be done in a way that can be
understood by that department. For a school the student data will be produced
into spread sheets generated from SIMS so they can use it in the classroom, staff
will manipulate the data into information that is useful for them.
Retrieval – The methods of retrieval needs to be in keeping with the staff and
their abilities in order for the function of the data to work. For most companies
the information needs to be at the end of a phone call or key press. When a
customer rings the bank and gives their account details and security measures,
the information should then be available to the person on the other end of the
phone, the quicker and more available this is, the happier the customer is likely
to be. Paper versions should be in the same room, invoices stored in folders in
the same way we would expect a student to be able to find their own files.
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Analysis - Information from one Data Source can be analysed and drawn into charts, tables, compared
and used, information from multiple data streams can be viewe3d against additional targets like
trends, upcoming problems etc. A successful company is a company that can analyse figures and make
preparations or predictions.
All information is affected by external sources of influence, falls in console sales happen in Summer
but sales in Sun Cream goes up. For any company, breaking down the statistics and comparing them
leads to a better understanding. In schools we compare grades against everything, EAL, SEN, G&T,
M/F, this allows us to adapt how we deliver lessons, how we track and monitor, then we review the
results again and see if it helps. Apple, Easyjet, and local Chip Shops do the same, analyse, prepare,
adapt, review, the four stages of business improvement.
Presentation – When the information is collated, prepared, analysed and reviewed, how it is then
presented to the next person will vary according to the job, nature and attributes of the target. A
statistical manager will produce tables of information but present charts to their managers. Marketing
will take sales information and present it in the form of proposals to managers, company directors
take all the information about values and present it to share holders in the form of finished analysis
and reports. There are many forms of presentation as there are different client and audience needs.
Task 11 - P1.6 - Describe the features of Data Handling and Management.
Task 12 – P1.6 – For your chosen company describe the how they handle data from various sources
with evidenced examples.
Task 13 – M1.2 – In terms of handling information, suggest improvements you company could make in
terms of information gathering and dissemination.
Collection and Storage
Retrieval
Analysis
Manipulation
Presentation
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The Standard of information used within a company is important, a lot of information from an
unreliable source is useless, detracting, whereas a small amount of information from a reliable
source, or a valid source, could be invaluable to a company’s finances and legal status.
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Reliability of data sources – Companies get into the habit of using the same sources of
information, Schools look at previous schools, Businesses use references, other companies
use Ombudsmen to source their information. A reliable source is a company who supplies on
time, in tact, detailed and useful information. There are no rules, news sources get it wrong
sometimes.
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Source reliability sometimes comes down to first hand or second hand sources, primary or
secondary, companies tend to limit down the possible risks by verifying sources. In standard
journalism like Television it is the policy to use three reliable sources before a news article
goes on the air. In printed materials from university quoted sources tend to be Primary.
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Validity – Unlike reliability which is a matter of opinion, validity means verified sources. Just
because the user trusts the sources (reliable) it might not be the best source for the material,
it might lack qualification, it might lack detail. Some people see Wikipedia as a reliable source
because a lot of people have read it and corrected it but not as a valid one. If a user can
change the information through opinion then it is no longer valid and Wiki is an opinion based
site.
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For website sources companies like http://whois.domaintools.com/ verifies the validity of a
site, age, hits, links, Dmoz and Yahoo counts etc. but this is still down to the user to confirm
that the information on the site is the best information for the purpose.
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Relevance – Information overkill, having too much information that gets in the
way of relating what needs to be said. The Data Protect Act stops companies from
gathering too much irrelevant information for a purpose but does not stop a
company from using too much irrelevant information to tell the customer what
they need to know. Companies prefer to have the answer asked rather than
additional information. This is the reason Secondary companies are hired to do
market research, they come back with the answers, not more questions.
Similarly the amount of information given to the customer is related to the
relevance of the information. We buy our mobiles knowing what pixel depth it is,
memory capacity, response speed and video transfer rate but we will only care
about one of these, the one that made us buy the phone.
Time frame - How long information is relevant for is down to the need for the
information and the content of the information. Schools need to keep student
information up to three years after they have left but Apple only need to know
what you liked about the iPhone 3 up to 3 months after the i{Phone 4 came out.
Likes change according to the user, age does not change more than once a year.
All information is relevant for the period of the informational needs, and by law
companies need to lose that information when it is no longer time relevant.
At the end of the day companies get to decide if the time frame has passed for
the usefulness of the information.
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Accessible – How accessible the in formation is can restrict a company from using it. The
Census takes place every 10 years, the information within it will change daily, access to more
up to date information related to the census can take time and needs to be funded privately.
For every piece of informational need there is, there will be a company who supplies it or one
who has already sought it. For some companies accessible can mean financial, if they cannot
afford it then they will do without it. Other restrictions in terms of access can include:
◦ Legal reasons – There might be copyright, an injunction, restricted to another country,
security restricted.
◦ Financial – might cost too much, might be a charge on use, might involve using too many
staff to get the information or an external company to source it.
◦ Time restricted – not supplied in time like a company report, not available to the new tax
year, in the process of updating
◦ Too Personal – under the Data protection Act, contains sensitive information, not the kind
of thing to ask
Quality – In terms of information gathering the quality of the information is as important as
time or relevance. Companies need the most up to date, most relevant and valid information,
these all add up to quality as well as the right information, using the right data, gathered and
worked out ion the right method, formulated and analysed. For a school we would expect all
the information from previous schools from attendance to behaviour, grades sporting
achievement, family information to learning needs. There is a lot of information in there about
each student and all useful to someone.
Quality of information for a school comes down to conciseness, compatibility, depth,
structure and consistency. For companies this might also include accuracy, detail,
relationships between information and industry relation.
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Cost-effective – You get what you pay for, this is true for information as well, the quality and standard of
the information is down to cost. Census information is free, local government information, certain
statistics are free, everything else costs. Companies work to a deadline and settle for the information they
have if time is running out. Companies set aside a budget for information gathering and manipulation,
every department works within that budget, Online surveys are free, computers can gather the results and
draw comparisons for free, they can be linked so all opinions on qualitative data is stored separately for
free but this still does not make it the best way to gather information. Companies choose their data
gathering tools for different reasons, cost is one of the larger more deliberate reasons.
Appropriate – They say they 49.99% of all adults are taller than average. They say that 22% of all statistics
are made up, just like this one. Surveys on the street are rushed, people rarely like being stopped on the
street to answer questions for they give false results to get through it. The solution is to ask more people,
if 1 person in 10 lies that is 10%, if 25 in 1000 like that is 2.5%. If the method of data collection requires
100 responses then this will give a more accurate response. Similarly if a survey is asking about shopping
habits and is done at 9.30 on a Tuesday morning, responses can be influenced, this is signing on day
when there are more unemployed people around to throw out the results. Asking about IT skills in an
online survey means the user will already have some skills already to be on the computer filling it out. The
appropriateness of the timing, the location, the kind of data responses all can have an impact on the data
gathering.
Task 14 – P2.1 - Describe the variance in the Standard of Information gathering.
Task 15 – P2.1 – For your chosen company describe the how they benefit from Standards awareness in
Data Gathering with evidenced examples.
Task 16 – M1.3 – Discuss the dangers to your organisation of integrating information that is unverified.
Task 17 – M1.4 - Suggest improvements your business could make in terms of securing information form
external sources.
Relevance
Reliability of Data Sources
Time Frame
Accessible
Quality
Validity
Cost-Effective
Appropriate
LO1
Scenario
Criteria
1
2
3
4
5
6
7
8
9
10
11
12
13
Assessment
Task 1 – P1.1 - Explain the different definitions for the forms of information
used within a business, with examples.
Task 2 – P1. 2 - Explain the different purposes of data, with examples, and
how these forms can be used within a business context.
Task 3 – P1.3 – In computing terms, what is Data?
Task 4 – P1.3 – In computing terms, what is Information?
Task 5 – P1.3 – Select a business of your choice, and identify the following:
(with evidence, where possible)
Task 6 - P1.4 – Describe with examples the different informational needs
within the functional activities above.
Task 7 - P1.5 – Describe the informational needs within the functional areas
that may be present within your chosen business.
Task 8 - P1.5 - Describe the features of Information Sources and outline the
advantages and disadvantages of each.
Task 9 – P1.5 – For your chosen company describe the Sources of
information used with evidenced examples.
LO1
Scenario
Criteria
1
2
3
4
5
6
7
8
9
10
11
12
13
Assessment
Task 10 – M1.1 – In terms of internal efficiency, suggest improvements you
company could make in terms of information gathering and dissemination.
Task 11 - P1.6 - Describe the features of Data Handling and Management.
Task 12 – P1.6 – For your chosen company describe the how they handle
data from various sources with evidenced examples.
Task 13 – M1.2 – In terms of handling information, suggest improvements
you company could make in terms of information gathering and
dissemination.
Task 14 – P2.1 - Describe the variance in the Standard of Information
gathering.
Task 15 – P2.1 – For your chosen company describe the how they benefit
from Standards awareness in Data Gathering with evidenced examples.
Task 16 – M1.3 – Discuss the dangers to your organisation of integrating
information that is unverified.
Task 17 – M1.4 - Suggest improvements your business could make in terms
of securing information form external sources.