Data and Information:- Meaning,Importance,Difference, Sources,Relevance Assessing information needs, Cost Benefit and Choice of the System

1. Data and
Information
Made by Ankit
Subject :- MIS
Class :-B. Com(H)

2. Topics
The topics of this unit are :-
• Data :-Meaning and Importance
• Information :-Meaning and Importance
• Difference between Information and Data
• Source and Type of information
• Relevance of information in decision making
• Assessing Information needs of the Organization
• Cost benefit Analysis

3. Data :Meaning
• Data is the raw material from which useful information is derived.
• It is defined as raw facts or observations about the physical business
transaction.
• It is the objective measurement of attributes of entities (such as
people, place, things and events).
• Data is the collection of facts, which are unorganized but can be
organized into useful information.

4. Importance of Data
Data is essentially the plain facts and statistics collected during the
operation of business. They can be used to measure /record a wide
range of business activities –both internal and external.
While the data itself is not very informative ,it is the basis for all
reporting and as such is crucial for business.
Moreover in order to know about interaction with the consumer, we
need data.

5. Information :Meaning
Information is a processed data. Data that is accurate and timely,
specific and organized for a purpose presented within a context.
Information is valuable because it can affect behavior, a decision or an
outcome.
Information is meaningful and useful context for specific end users.
For e. g. If a manager is told his company ‘s net profit decreased in the
past month, he may use this information as a reason to cut financial
spending for the next month.
A piece of information is considered valueless if, after receiving it things
remain unchanged.

6. Importance of Information
Information in software is required in a business as it allows managers
to provide ready-made solutions.
For low level Managers:-Structure decision
For middle level Managers :-Semi structure decision
For top level Managers :-Unstructured decision
This Decision are taken by the use of information stored in
software.
The information is required in budgeting, analyzing business
operations.

7. Difference between Information and Data
DATA INFORMATION
RAW FACT PROCESSED DATA
UNORGANISED ORGANISED
ADD ANYTHING TO KNOWLEDGE ENHANCES THE KNOWLEDGE
BASE OF STARTING ANY ACTIVITY END PRODUCT OF AN ACTIVITY

8. SOURCES OF INFORMATION
SOURCES
PRIMARY
SECONDARY
EXTERNAL
INTERNAL

9. The sources of information can be primary, secondary, internal or external.
 PRIMARY :- The information that is created at the time at which event took
place is known as primary or first hand information. The various methods
employed for collecting the information are:-survey, interview etc.
SECONDARY:- This information is collected from external sources like television,
radio, internet etc.
 INTERNAL:- The internal information is generated with in the company . This
includes plan, information like strength and weakness etc.
EXTERNAL:- The external information is generated from the outside business
organization is known as external information. The data regarding industry sales
and trades may be collected through Chamber of Commerce is an external
information.

10. OTHER METHODS
• Some of the methods to collect information are as follows:-
Old files or historical record
Observations
Mass Media of Communication
Library Research
Government Agency
Meeting Seminar, Workshop, Conference etc.
Internet
Survey
Interview

11. RELEVANCE OF INFORMATION IN DECISION
MAKING
• The information is needed in an organisation up to the extent to which it is
appropriate for the decision making.
• Not only decision making but also in situation.
• Information is needed for the decision making for the assigned task .
• The decision making includes :-
1. PLAN
2. POLICY
3. STRATEGY
4. OBJECTIVE

12. ASSESSING INFORMATION NEEDS OF THE
ORGANISATION
• The information is assessed for the following factors:-
1) Environment
2) Size of an Organisation
3) Nature of business function
4) Level of Managerial decision

13. 1) Environment
• The environment includes:-
1. Government Policies:- Information about govt policies with regard to tax
benefits, Quota Concession.
2. Factor Of Production:- Information regarding various factors of production like
labour, capital, material about the sources and their availability.
3. Economic Trends:- It includes information relating to economic issues like
customer disposable income, financial policy.
4. Technological :- Information regarding the present and future technology
available, its impact upon firm and cost of acquiring it.
5. Sociology:- Information regarding society,taste,preferences.

14. 2) Size of an Organisation
• The next determinant of an information need is relative size of the
organisation.
• In the large organization there is greater need for systematically
managed data.
• It is generally assumed that greater the diversity in the organization
greater is the need for systematically controlled information system.

15. 3) Functional Level
• A business organization has many functional areas i.e marketing,
finance, production, R and D, personnel and so on.
• Each functional area has its own set of information needs.

16. 4) Levels of Managerial Decisions
The information is assessed for the managerial decision
• For low level Managers:-Structure decision
• For middle level Managers :-Semi structure decision
• For top level Managers :-Unstructured decision

17. Cost –Benefit Analysis
Any system in an organization should produce more benefit as compare
to the cost in order to make the organization survive. This is true for
the information system also.
Cost benefit analysis is a process that presents a piece of various costs
and benefits associated with an information system also.
It refers to the benefits that are derived from the information must
justify the cost incurred in producing that information.

18. PROCESS
Classification
of Cost And
Benefit
Evaluation of
Cost and
Benefit
Choice of the
System

19. Classification Of Cost and Benefit
• Here we will see the cost and compare it with the benefits but sometimes it is
difficult to quantify them.
• For e.g. Using new Information system enhances employees morale.
• Tangible Cost :- Purchase of Hardware and Software, Employee Training.
• Tangible Benefit:-Increased Productivity, Operating Cost, Reduced Workforce.
• Intangible Cost:-Cost of system breakdown
• Intangible Benefit:- System
• Fixed Cost:- System Analysis, Programming Cost
• Fixed Benefit:- Increased productivity

20. • Variable Cost:- Cost of computer forms
• Variable Benefit:-Reduced Workforce
• Direct Cost:- Cost of running Computer System
• Direct Benefit:- Increased Operations and Benefit
• Indirect Cost:- Insurance and Maintenance
• Indirect Benefit:- More timely Customer Service

21. Evaluation of Cost and Benefit
• There are criteria to evaluate it:-
• Discounted Cash Flow
• Not Discounted Cash Flow
• Here we can use net preservative, Internal rate of return, profitability index.
• In addition to these methods, we can use other methods like Portfolio Analysis,
Scoring Methods.

22. Choice of the System
• Normally the choice is
• subjective
• Experts
• Opinion
• influence of political parties
• organisation culture are considered.