This document discusses the importance and value of information. It notes that information is a valuable resource for organizations, just like capital and people. It is essential for organizations to collect and analyze information on things like market trends, customer preferences, and buying behaviors in order to make strategic decisions. For information to be useful, it needs to be accurate, complete, and up-to-date. Maintaining high quality information involves costs and overhead related to collection, storage, processing, and updating the data.

1. Value & Importance of
Information
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2. • Understand that information is a commodity and as such,
can have a monetary value, the level of which depends
on its accuracy, its potential use and its particular
intended use.
• Describe the overheads involved in ensuring that
information is up-to-date and of use to an
organisation/individual.

3. Importance
• Information has become a valuable resource,
just as much as capital infrastructure and
people. Name some organisations where the
collection of data is essential for their
continued running?
• Information is collected on any amount of
different items and used by managers to make
strategic decisions concerning the organisation.
• Can you think of a situation where
information was not used wisely and an
organisation has suffered the
consequences?

4. Examples
• Clico
• Diagnose with incorrect illness
• Add your experiences

5. Importance of Information
• Information technology is fundamental to the success of any
business
• The information that is collected and/or assembled in any
business is as valuable a resource as capital or people
• Information may cover:
– Market trends
– Buying preferences
– Customer profiles
• It may be processed, summarised, and analysed by
computers before being used by managers as the basis for
decision-making
• As discussed earlier, information must be:
– Accurate
– Complete
– Up-to-date

6. The Value of Information
• How does the following information have
value:
– a list of current account customers whose
account have a large credit balance,
– a list of customers who have bought new cars
from a garage over the past three months,
– an on-line database on CD ROM of all the
post-codes in the UK,
– a list of credit card customers who have not
kept their accounts in order (late payers etc).

7. Information as a Commodity
• Have you or your family been targetted for
particular mail advertisements?
– Consider: making a credit card purchase, a
mail order purchase, a telephone order
purchase, information about you and the
product you buy goes into a database. The
information can be used to target you with
advertisements on products that you are most
likely to buy!
• Why may you get advertisements from many
other different organisations?

8. Usefulness of Data
• Companies that sell products by mail order need
to keep up-to-date lists of name and addresses
of customers who may be interested in making a
purchase. This data is very valuable and can be
sold to other ‘like’ companies. What would
make this list become of little value?
• What could be added to the data so that it
can be kept up-to-date?
• Is the cost of keeping data up-to-date,
accurate, and complete worthwhile to the
company?

9. Overheads
• Collecting the data
• Data conversion / input into a database
• Frequency of collection / up to date
• Control, protection and secrecy
• Validation checks and manual entry
• Frequency of processing
• Output lists, use of paper and ink.

10. Quality Of Data
• To be useful, data must be:
– Accurate
– Up-to-date
– Complete
• How can data held be accurate?
• How can data be kept up-to-date?
• How can it be known that data is complete?
• Data held by organisations has been collected
using time and money, how can they know that
the data collected will be relevant tomorrow?
• Would it be sensible to date stamp every entry?

11. The benefits of ICT
• Speed of processing
• Vast storage capacity
• Ability to search and combine data in many
different ways
• Instant response
• Accurate results
• Communication
• Improved company image

12. Limitations of ICT
• New systems nearly always have some drawbacks.
These could include:
– Job losses among employees
– New or redesigned accommodation may be needed for
the setup
– Faults in the software may mean the new system does
not work as planned
– Inadequate hardware may lead to bottlenecks in the flow
of data around an organisation
– Hard to extract information in the right form
– Output only as good as input
• (GIGO – Garbage In Garbage Out) **important jargon