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Information Systems

In this task I will be explaining how organisations use information, I will also be
discussing the characteristics of good information, I will be explaing the issues
related to the use of information, describing the features and functions of
information systems, identifying the information systems used in a specified
organisation, selecting information to support a business decision-making process
and finally using IT tools to produce management information.

Types of Information
Qualitative Data.
Qualitative data is descriptive information about quality, the information which isn't
measurable, such as the softness of your dogs fur, the colour of the wallpaper in
your office, the way an athlete runs, etc.

Quantitive Data.
Quantitative data is the information of values, or information which is measurable
and can be written down as a number, some examples of quantitative data include
how many hairs are on a dog, the dimensions of your office, how many yards an
athlete can run.

Primary Data.
A data you found yourself, by gathering your own information or such. If you are a
new teacher, and you seem like there is less people in the class than there is on a
register, you yourself would count them, and the value you get is primary data.

Secondary Data.
A data which is not found by you, is obtained by other sources or such. If you are
past a deadline on some coursework which was meant to be in a day ago for English
literature which is meant to be written by you, and instead you copy a friends work,
which is plagiarism and thus secondary data.

Purpose of Information
Monitoring Activity

Monitoring activity is the act of regularly checking and observing activities, to


provide useful information which can be used for feedback and making decisions to
improve performance, determining if the inputs are well utilised, identifying any
problems within the activity, etc.

Controlling Activity

To implement policies, rules, regulations, procedures, techniques and such sorts, you
should control activity, to help ensure risks which are monitored are changed and
then controlled, and finally reduced. Overall controlling activities are used to
minimise risk.

Identifying patterns or trends e.g. within stock.


Modern trend analysis usually relates to the science of studying changes in social
patterns, which can also include fashion, technology and consumer behaviour. In
regards to the stock market, before buying shares you should always analyse the
trend, and finally whether they will either increase or decrease, trends can move up
down and sideways, by studying prices and watching the slope and analysing the
trend, over a vast duration, you can indicate whether the price of the shares will
increase or will drop. The longer the trend is in force the greater the weight which is
carried.

Decison Making
When a good decision is needed to be made, you should compare the positive and
negative options and all the other alternatives, the make an effective decision you
should forecast all possible outcomes of each option and determine which option is
best for the particular situation. Depending on whether the decision is either positive
or negative, that is how to outcome will be.

Gaining commercial advantage


If an internal or external event occurs, the business will make a decision to positively
affect the company. For example, a store will increase the prices, put on a sale, or
have special offers on stationery in September when most schools, and colleges
open after holidays, and due to this they will maximise profits, and increase revenue.

Decision Making

Operational
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Operational decisions are the immediate plans for an organisation or a branch


of organisations. The plans can involve increasing the number of employees
to deal with increase in demand or to increase ssales to raise profits in all or
indiviual branches. These are decisions which occur on a regular basis, usually
if there is a risk to the business, the decisions can be executed quickly and
prevent any risk. Operational decisions are aimed to work towards a tactical
plan, that can benefit the business.

Tactical
Tactical decision making includes the short term plan for an organisation,
which is used to set out how an organisation can achieve its stragegic goals.
For example, deciding in which location to open a new branch first. This
decision is based on research on whether or not the organisation will do well,
and are there any similar organisations in the area that can reduce profits. A
tactical plans aim is to help towards a strategic plan.

Strategical
Strategic decision making is a long term plan for an organisation. It is one of
the essential parts of running a business, as it sets goals for the organisation,
and is the end goal for the forseeable future. For example, opening more
branches in other areas.

Sources of Information

Internal sources
- Financial
The department of financial information is authoritative for the monetary, accounts
and finance area of a business, The finance department deals with invoices, sale
invoice, VAT returns, payroll, NI pensions, and quantitative data.

- Personnel

The department of personnel deal with recruiting employees, and doing everything
to help recruit the best employees, such as organising interviews, writing job
descriptions, interview lists, etc.

Marketing

The marketing department is in charge of general marketing of the organisation, its


products, and advertisation of the company or business, to efficiently advertise they
usually design all advertising such as online ads, posters, leaflets, etc.

Purchasing

This department is in charge of buying goods, and providing services for the
company or business, before a department buys anything, it should go through the
purchasing department first which can use their full potential to negotiate business
contracts and also allow the company to get cheap deals.

Sales

The sales and customer service department should mainly have positive attitude, as
they will be dealing with all customers and maintain to keep them happy. The aim of
the sales team is to sell the company products and services to create a large
customer base.

Manufacturing

Manufacturing is legible only for companies or businesses which create products,


this department deals with designs, schematics, and records.

Administration

A lot of companies have a central system which controls smaller branches, and other
jobs such as drafting documents, answering telephones, and even project
management.

External
- Government
The government collects taxes and gives out legislation to which business must
comply to, they also calculate VAT, pensions, national insurance, etc.

Trade groupings

Many employees of companies and businesses are parts of trading groups or unions,
the groups will be related to the same sector of work the employees work in, and
they will try to raise the standard of the workers in the industry and negotiate with
all parties involved. Trading groups and unions also develop policies which give and
advantage to all those working in the industry.

Commercially provided

In many cases businesses and companies buy data or information from external
sources, many businesses also specialise in buying and selling data and information.

Databases

The data protection act of 1998 and the freedom of information act 2000 should be
complied with if businesses want to store information is a database, alot of
companies sell the customer information and data to other companies, which then
results in negative feedback from customers.

Research

Rather than buying customer information, many businesses do surveys, polls, and
research to gain data about their target audiences.

Good Information
Characteristics
- Valid
Valid information is accurate and reliable information in which the informer has
ensured no mistakes or misunderstandings are made or could occur.

Reliable

The sources of many informations are sometimes invalid and false, reliable
information should be sourced from a reliable source, and not from a place or person
which is known to spread unreliable information.

Timely

Information should be obtained and use in a punctual and timely order, to make sure
all decisions being made are made early as timely possible.

Fit-for-purpose

Information related to the audience should be given, information which suits the
audiences needs, for example Android users should be given Android information,
whereas Apple users should be given Apple information and not the other way
around.

Accessible

All information should be accessible for everyone to use incase they need it, this
could be useful as the informers should know the difference between the right and
wrong whereas without all the accessible information, it may bias their final decision.

Cost-effective

Before spending money, for example storing information on a database, the


informers should have a meeting to decide what is better for the company, and the
action plan which will be used, coming to a final result which is hopefully costeffective.

Sufficiently accurate

If the information is atleast sufficiently accurate it will be relevant to the employer,


the employee and the rest of the audience. Due to information being sufficiently
accurate therefore from a good source, it will make the information more useful to
the interested parties.

From a source in which the user has confidence

Information from a source in which the user has confidence is important, this
information can include trusted friends, other users in that industry, magazines, etc.

Understandable by the user

If information is presented to an audience which doesnt understand the information,


the information will be useless, thus the informer should present the information in a
way which is understandable by the user, an example of this is giving college
students doing a BTEC Level 1 English course a leaflet to read and analyse with A*
star A-level English.

Business Functional Areas

Sales
The sales department in in charge of keeping customers happy, gaining new
customers, and keeping the old ones. The sales department will take any orders
from the customers and get the data across to the manufacturing department
about what should be made for the customers. If there is already an ongoing line of
production then the sales department should make sure the available products are
ready to ship to the customer at a specific date.

Purchasing
The department of purchasing is in charge of goods and services needed to run
businesses, as they will be working with external companies and internal
departments, to find the best quality and most suitable products required. An
example of the duty which is carried out daily by the purchasing department is, that
the manufacturing department will send a list of materials which are needed to
make the product; produced by the business or company to purchasing department,
which the department will then continue to buy and then supply to the company or
business. Purchasing also needs to send information about the sources of the goods
which are bought, and thus the finance department can liaise with the
administration department to make sure the accounts are set up and all goods are
paid for.

Manufacturing

The department of manufacture usually communicates with the sales and


purchasing department to find out which products need to be produced, and which
materials are needed for the production. If the manufacturing department are short
of a specific material, they let the purchasing department know which product is
required. The manufacturing department would also need to reach out to the sales
and marketing department about products which are currently in stock, and thus
drive to sell the items, so the company has minimum stock regularly.

Marketing
The marketing department is all about identifying and meeting customer needs,
many companies and businesses consider this extremely important as they are
marketing-led. All personnel from the company is trained to put customers first, and
must respond to the enquiry promptly and accurately.

Finance
The department of finance needs to reach out to all departments in the company,
and recieve and give them information to make sure the business or company runs
as it should. The finance department is the most important department in the entire
company, as the need to make quick and right decisions in which the outcome
depends on how the company runs, they also make decisions in relation to the
financial departments which are sales and purchasing departments. If the
manufacturing of some products are too high to produce, the financial department
should inform the manufacturing department to cut costs; whilst working with
purchasing department to ensure the maximum price for a material is not higher
than the fixed price. Finance may also inform the personnel department to put
employees on shorter hours and send them home when they arent needed.

Personnel
The personnel department needs to keep regular and present information on all
employees for legal reasons. They will have their present address, bank details, etc.
so the employees are paid correctly. The personnel department will also closesly
work with the administration department to make sure all qualifications of
employees are correct and they do not have any previous criminal records, etc.

Administration
The administering department deals with the paperwork which is related to the
business of the company. The also work with the financing department to file
financial data about the business or company. They will also set up relationships
between customers and supplier through the sale and purchasing department of

the company. The administration department may act as personal assistants to


managers and support managment and certain people in a secretarial role.

Information Flows
Internal information flows
Information which flows inside a business between departments; it can flow
upwards, downwards or across. If the information flow diagram shows the
information flowing upwards, it shows that the workers at the bottom of the
company provide data to higher levels of the department; such as the research
department. This means that the lower departments provide information to higher
departments. The research department will then turn the sales data into information
and show how products are performing.
Furthermore, downwards information flow is where higher departments provide
information to the lower departments. An example of this is the administration
department giving employees working procedures manuals. If information flows
across a business this is the departments sharing information with each other; such
as ideas and reports, this can be between employees in the same department, or
departments on the same hierachical level. This can occur if an employee doesnt
know what to do with a specific idea, information can be given by an employee from
another department for assistance and guidance.

Information flows to external bodies


Some businesses may give their information to other businesses, which means they
will need to communicate with the suppliers. The purchasing department will give
the suppliers data about which stock should be ordered.

Information flow diagrams.


If businesses deal with trading services and goods they have multiple information
flows. An information flow inside the the business will have an external body in
which departments communicate with each other to show how the information flow
links to the customer and external bodies. An example of an information flow
diagram is provided below.

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This diagram shows that all the departments have an information line to the
administration department; which is the highest department. Information
through these departments flow up and down from the administration; so it
goes down to the administration and then up to the administration. The
diagram also shows that the information flows between the departments,
which will be tranfered and shared across with each other, alongside the
certain departments that have an external body (supplier). On the left, the
diagram shows the information flow of the administration and sales, in which
information such as sales reports will be transfered.

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How issues related to the use of information affect an organisation


There are three main issues I will be explaining in this report. These issues
relate to the use of information which affect an organisation.
Legal issues
Legal issues within an organisation are extremely significant, as they are able to
protect the organisation and its clients. There are two laws which allow personal and
client information to be shared with the organisation and its workers, they act as
guidelines and if breached, can result in a penalty or prosecution (it is a criminal
offence to violate these laws), the two laws are the Data Protection Act of 1998 and
the Freedom of Information Act 2000. A more detailed description of how companies
and organisations use these laws is written below.

Data Protection Act of 1998


Large online companies such as eBay and Shopify, must abide by the Data
Protection Act of 1998 as they hold thousands of users informations in their
databases. Online organisations like Amazon report to the Office of the Information
Commissioner to inform them they hold such data about individuals, which requires
them to pay a yearly fee to be granted approval to hold the information in their
databases. All information which is obtained by the company should be lawfully
obtained; the information which is obtained should be only held for lawful purposes,
and not for any excessive purpose; the information should be upto date and
shouldnt be kept longer than it is needed; all information should be in accordance to
the rights of the person whoms data it is; the information should be kept safe and
securely to make sure none is misused or disposed; and finally the data should
shouldnt be transferred from the EU unless the destination to which it is being
transferred has a legible level of data protection.

Freedom of information act 2000.

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For online organisations such as eBay, the Freedom of Information Act doesnt apply
to them directly, yet the law applies guidelines about their users which should be
followed when the information is requested. Within 20 days for the request of the
public a formal letter should be written which consists of the information which is
needed. An organisation is obliged to comply with guidelines to provide evidence for
individuals, this process applied to online companies. If individuals want to request
previous information they may not get the entire information they want. Regulated
data is restricted by the Data Protection Act of 1998, and will prevent certain
information being released about personal data.
Other legislation
Companies such as eBay have multiple people accessing internet at their offices
which could catalyse hacking of information. The simple definition of hacking is to
gain information from someone unlawfully and without their permission, hackers
could steal information unlawfully and/or corrupt data which could be sold to other
companies which find it useful, for example a small recruiting firm could unlawfully
hack a college database and take student information for their own benefit. There
are many ways hacking could be disadvantageous which includes stealing credit
card details, bank details, addresses, phone numbers, emails, or could simply be
used to cause damage, for example take down a website. Due to the Computer
Misuse Act 1990 it is a criminal offence and can lead to prosecution in a court of law.
Primary Electronic Communication Regulations 2003 regulates and has introduces
new laws to regulate uses of spam, cookies, location data, traffic data and publicly
available directories. Some companies which have started up newly or sell products
online spam people over the internet as an advertisation scheme. Due to the
Primary Electronic Communication Regulations 2003, information for other purposes
is looked upon kindly by the government and federal organisations within the
European Union, and can lead to sanctions.

Ethical issues
When running companies such as eBay, many ethical issues are in place for
individuals in the company and the company itself, many organisations and
institutes have their own organisational policies, which employees comply with and
may be sacked if they dont. In some cases the law can get involved and
prosecutions may take place. Organisational policies are usually set by external
bodies outside of an organisation such as the BCS to protect the company and its
interests, due to this if an indvidual was to breach the policy the individual would be
prosecuted in a court of law rather than the entire organisation.

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Use of Email
Employees in businesses should only use email services in relation to work, yet in
breaks can check personal emails, due to the code of conduct or organisational
policies of a company. To make sure employees are doing their work and not
procrastinating and sending emails which arent relevant to the organisation.

Internet
Many companies have organisational policies about which sites are inappropriate to
visit during work hours, such as social media sites. These activities decrease the
productivity of work

Whistleblowing
Whistleblowing is the act of complaining to a department which can be to superiors
of the company or to an external body such as the media about practices in the
company. The practices which take place can relate to criminal activity,
improfessional practice, danger to the customer or workers, and/or stakeholders in
the company or not, and etc.

Organisational Policies
An organisational policy is the rules and regulations which the company uses, A
company for example, Apple has a organisational policy which only allows the Apple
industry programmers to use Apple software to code, whereas Microsofts
programmers will only use Microsofts softwares. Other smaller companies may have
different organisational policies where they are only allowed to use one operating
system, or software from one company, the policy is used to choose the correct
software, operating system, etc in the organisation.

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Information Ownership
Whilst working any information which is created by you, you are held responsible for
and thus you are liable to protect the information and make sure it has high
accuracy, you are confident in it, it is valid, etc.

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How can an organisation improve quality of its business information


The quality of information used in the organisation can be improved, There are
several ways in which is can be done; ensuring the data is valid and has the other
characteristics of good information, ensure the type of data is suitable, ensure it fits
the purpose it is being used for and that it comes from a good source.
Valid
The validity of the information used in the organisation can improve the quality of
information. When information is collected, it has to be compaired to other types of
information to make sure it is correct and reliable. It can also be passed down
operational support systems to see if it is valid for its purpose. An example of this is
to improve the quality of information in the organisation, so they are more reliable.

Type of data/information
The type of data affects the quality of information, so the organisation need to
choose the right form of data according to the purpose. They then need to see if the
information has to be gained from a primary or a secondary source, ensuring it is the
right type of information as it improves the reliability and the validity of it. Higher
quality infromation is produced by primary data and quantitative data, as the data is
numerical and is collected by the company themselves. For example, if a group of
researchers use the wrong type of information in their questionnaire, the information
gathered will not be good quality information. However, if the right type of
information was used then the information gathered would be of good quality, as it
will help improve the organisation.

Purpose
The information gathered needs to be of purpose, in order for it to be good quality.
Having a purpose to gathering information makes sure that it is fit-for-purpose and
from a valid source. If the purpose is known then this ensures that the organisation
use the right methods and see which type of data is the easiest to get high quality
information from.

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Source

The decision of where to get the information is another way to improve the quality of
it. Primary sources are often more reliable and have valid data; the data would just
need to be analised, as it is a source of data that is collected by the team
researchers themselves. Secondary data can also improve the quality of the data,
however it needs to be closely checked that it is reliable, and up-to-date. If the
organisation has used invalid or incorrect information, the research can be affected.

References

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http://businesscasestudies.co.uk/npower/developing-people-through-decision-making/operational-decisions.html.
Last accessed 2nd June 2016.
Gregory Hamel. (Unknown). What is strategic decision making?. Available:
http://smallbusiness.chron.com/strategic-decision-making-23782.html. Last accessed 3rd June 2016.

Unknown. (Unknown). What is tactical decision making?. Available: http://www.ask.com/businessfinance/tactical-decision-making-ba05e6dcda169129. Last accessed 4th June 2016.

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Gassed Santos. (2014). Computer Systems. Available: http://btec-it-help-unit3.blogspot.co.uk/2014/10/p1explain-how-organisations-use.html. Last accessed 5th June 2016.
Ms Carol Carysforth, Mr Mike Neild (2006). BTEC First Business. 2nd ed. Unknown:
Heinemann Educational Publishers. p37-39.
Gassed Santos. (2014). Computer Systems. Available: http://btec-it-helpunit3.blogspot.co.uk/2014/10/p3-explain-issues-related-to-use-of.html. Last accessed 20th
June 2016.

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