Describing various dimensions of information

1. Concept of information
Unit –II

2. Relation between data and
information
 Information can be defined as meaningfully
interpreted data. If we give you a number 1-212-290-
4700, it does not make any sense on its own. It is just
a raw data. However if we say Tel: +1-212-290-4700, it
starts making sense. It becomes a telephone number. If
I gather some more data and record it meaningfully like:
 Address: 350 Fifth Avenue, 34th floor New York, NY
10118-3299 USA Tel: +1-212-290-4700 Fax: +1-212-
736-1300 It becomes a very useful information - the
address of New York office of Human Rights Watch, a
non-profit, non-governmental human rights organization

3.  An Information System is a system
that gathers data and disseminates
information with the sole purpose of
providing information to its users.
 The main object of an information
system is to provide information to its
users. Information systems vary
according to the type of users who use
the system.

4. Information Vs Data
 Data can be described as unprocessed
facts and figures. Plain collected data as
raw facts cannot help in decision-
making. However, data is the raw
material that is organized, structured,
and interpreted to create useful
information systems.
 Data is defined as 'groups of non-
random symbols in the form of text,
images, voice representing quantities,
action and objects'.
 Information is interpreted data; created
from organized, structured, and
processed data in a particular context.

5. Continued……
 "Information is a data that has been
processed into a form that is meaningful to
recipient and is of real or perceived value in
the current or the prospective action or
decision of recipient.“
DATA PROCESSED
INFORMATIO
N

6. Information/Data Collection
Techniques
The most popular data collection techniques include:
 Surveys: A questionnaires is prepared to collect the
data from the field.
 Secondary data sources or archival data: Data is
collected through old records, magazines, company
website etc.
 Objective measures or tests: An experimental test is
conducted on the subject and the data is collected.
 Interviews: Data is collected by the system analyst by
following a rigid procedure and collecting the answers
to a set of pre-conceived questions through personal
interviews.


7. Characteristics of information
 Reliability - It should be verifiable and dependable.
 Timely - It must be current and it must reach the users well in time,
so that important decisions can be made in time.
 Relevant - It should be current and valid information and it should
reduce uncertainties.
 Accurate - It should be free of errors and mistakes, true, and not
deceptive.
 Sufficient - It should be adequate in quantity, so that decisions can
be made on its basis.
 Unambiguous - It should be expressed in clear terms. In other
words, in should be comprehensive.
 Complete - It should meet all the needs in the current context.
 Unbiased - It should be impartial, free from any bias. In other words,
it should have integrity.
 Explicit - It should not need any further explanation.
 Comparable - It should be of uniform collection, analysis, content,
and format.
 Reproducible - It could be used by documented methods on the
same data set to achieve a consistent result.


8. Types of information at different levels of
management
information used in business for decision-making is
generally categorized into three types:
 Strategic Information: Strategic information is
concerned with long term policy decisions that defines
the objectives of a business and checks how well these
objectives are met. For example, acquiring a new plant,
a new product, diversification of business etc, comes
under strategic information.
 Tactical Information:Tactical information is concerned
with the information needed for exercising control over
business resources, like budgeting, quality control,
service level, inventory level, productivity level etc.
 Operational Information: Operational information is
concerned with level information and is used to ensure
proper conduction of specific operational tasks as
planned. Various operator specific, machine specific
and shift specific jobs for quality control checks comes
under this category.

9. Following factors states needs and objectives of the
information Processing:
 Increasing impact of information processing for
organizational decision making.
 Dependency of services sector including banking,
financial organization, health care, entertainment,
tourism and travel, education and numerous others on
information.
 Changing employment scene world over, shifting base
from manual agricultural to machine-based
manufacturing and other industry related jobs.
 Information revolution and the overall development
scenario.
 Growth of IT industry and its strategic importance.
Objectives of the information processing

10. Continued………
 Need for sustainable development and quality life.
 Improvement in communication and transportation
brought in by use of information processing.
 Use of information processing in reduction of energy
consumption, reduction in pollution and a better
ecological balance in future.
 Use of information processing in land record
managements, legal delivery system, educational
institutions, natural resource planning, customer relation
management and so on.
 Information is needed to survive in the modern
competitive world.
 Information is needed to create strong information
systems and keep these systems up to date.

11. Sources of information
 External Sources : Information collected
from external environment of the business
organisation is known as external
information.
 External Sources of information lie outside
organisation.
 Examples of external Information :
◦ Government Policies
◦ Economic Trends
◦ Technological Changes

12. Continued……
◦ Competitors Activities
◦ Customer Reaction
 Internal Sources : The information
collected from internal sources is called
internal information .It is collected from
within the boundary of an organisation .
 Examples :
◦ Sales Forecast
◦ Financial Resources and plans

13. Continued….
◦ Avaliablity of internal Resources
◦ Budget allocation.
◦ Historical Data

14. Dimension of information
 Information may be understood to have
various dimensions. However, for our
purpose, the following dimension
of information will be of interest.
i) Economic dimension,
ii) Business dimension, and
iii) Technical dimension.

15. Continued…..
 Economic Dimension
This dimension of information refers to the cost of
information and its benefits.
Cost of information
It may include
i) Cost of acquiring data,
ii) Cost of maintaining data,
iii) Cost of generating information, and
iv) Cost of communicating information.
The cost is related to the response time required to
generate information and communicate it. For
systems with low response time, cost is high.

16.  Business Dimension
This dimension relates to the business
angle of information. Its value to the
organization, sustainability of getting the
information from a managerial standpoint,
accuracy and reliability of the information,
scope and appropriateness of the
information are the parameters for
understanding the business dimension of
the information. This dimension has got
more to do with the 'what' of the
information rather than the 'how'. Business
dimension of information can have the
following parameters

17.  Time dimension - information has to be timely to be of
any value. The basic utility of information within an
organization is in decision-making. If the information is
not timely then the decisions derived out of it will have
poor quality. Hence, time is an important dimension of
information.
 Accuracy dimension - information has to be accurate
to satisfy the user. Again this is an important
dimension as inaccurate information leads to bad
decision-making.
 Reliability dimension - information has to be reliable so
that users have confidence.
 Appropriateness dimension - information must be
relevant to the receiver. It must be appropriate to his
needs.
 Scope dimension - information should be within the
scope.
 Completeness of content dimension - information
should be complete and not in bits and pieces.

18.  The technical dimension relates to the information
gathering, summarizing, storing and retrieval, analysis and
cost aspects of information. It can have the following
parameters:
 1. Information gathering - the means of capturing the data
and storing it
 2. Analysis methodology - the data processing methodology
Costs of information –
 Cost of data acquisition - the cost of data acquisition from the
point of view of time and resource (technical) costs. A piece of
data is supposed to be costly to acquire if say, it is recovered
from a secondary source after processing it for a long time.
On the other hand the cost of acquisition of data is low for
such cases when (say), the customer is himself putting such
data into the system (like in the case of ATMs or online
banking, the systems cost of acquiring data is very low is
such cases)


19. Continued……
 Cost of data maintenance - is the cost of
maintaining the data in terms of technical
costs of space and efforts (technical) in
maintaining it. A data source that requires a
lot of technical efforts like indexing, etc., and
requires huge storage (for say storing
images, etc.), is said to be more costly.
 Cost of data access - is the cost in terms of
resource requirements (both processing and
network) for accessing the data. Data that
can be accessed after utilizing a lot
of CPU and network resources is said to be
costly to access.

20. Cost –Benefit analysis
 A cost-benefit analysis is a process by which business
decisions are analysed . The benefits of a given situation
or business-related action are summed, and then the
costs associated with taking that action are subtracted.
Some consultants or analysts also build the model to
put a dollar value on intangible items, such as the
benefits and costs associated with living in a certain
town, and most analysts will also factor opportunity
cost into such equations.
.

21. Continued……
 Prior to erecting a new plant or taking on a
new project, prudent managers conduct a
cost-benefit analysis as a means of
evaluating all the potential costs
and revenues that may be generated if the
project is completed. The outcome of the
analysis will determine whether the project
is financially feasible or if another project
should be pursued

22. The Cost-Benefit Analysis
Process
 The first step in the process is to compile a comprehensive
list of all the costs and benefits associated with the project or
decision. Costs should include direct and indirect costs,
intangible costs, opportunity costs and the cost of potential
risks. Benefits should include all direct and indirect revenues
and intangible benefits, such as increased production from
improved employee safety and morale, or increased sales
from customer goodwill.
 A common unit of monetary measurement should then be
applied to all items on the list. Care should be taken to not
underestimate costs or overestimate benefits. A conservative
approach with a conscious effort to avoid any subjective
tendencies when calculating estimates is best suited when
assigning value to both costs and benefits for the purpose of
a cost-benefit analysis.

23. Continued…..
 The final step is to quantitatively compare the
results of the aggregate costs and benefits to
determine if the benefits outweigh the costs.
If so, then the rational decision is to go
forward with project. In not, a review of the
project is warranted to see if adjustments can
be made to either increase benefits and/or
decrease costs to make the project viable. If
not, the project may be abandoned.


24. Limitation of Cost-Benefit
Analysis
 For projects that involve small to mid-level
capital expenditures and are short to
intermediate in terms of time to completion,
an in-depth cost-benefit analysis may be
sufficient enough to make a well-informed
rational decision. For very large projects with
a long-term time horizon, cost-benefit
analysis typically fails to effectively take into
account important financial concerns such as
inflation, interest rates, varying cash flows
and the present value of money.

25. Risk management
 Risk management is the process of
identifying, assessing and controlling
threats to an organization's capital and
earnings.
 These threats, or risks, could stem from a
wide variety of sources, including financial
uncertainty, legal liabilities, strategic
management errors, accidents and natural
disasters.

26. Continued…..
 IT security threats and data-related
risks, and the risk management
strategies to alleviate them, have
become a top priority for digitized
companies.
 As a result, a risk management plan
increasingly includes companies'
processes for identifying and controlling
threats to its digital assets, including
proprietary corporate data, a customer's
personally identifiable information and

27. What Is Risk Analysis?
 Risk Analysis is a process that helps
you identify and manage potential
problems that could undermine key
business initiatives or projects.
 To carry out a Risk Analysis, you must
first identify the possible threats that
you face, and then estimate the
likelihood that these threats will
materialize.

28.  Risk Analysis can be complex, as
you'll need to draw on detailed
information such as project plans,
financial data, security protocols,
marketing forecasts, and other
relevant information. However, it's an
essential planning tool, and one that
could save time, money, and
reputations.

29. Estimate Risk
 Once you've identified the threats you're
facing, you need to calculate out both the
likelihood of these threats being realized,
and their possible impact.
 One way of doing this is to make your
best estimate of the probability of the
event occurring, and then to multiply this
by the amount it will cost you to set
things right if it happens. This gives you
a value for the risk:
 Risk Value = Probability of Event x
Cost of Event

30. Types of Risk Analysis
 Risk analysis can be qualitative or
quantitative.[4]
 Qualitative risk analysis uses words
or colors to identify and evaluate risks
or presents a written description of the
risk.
 Quantitative risk analysis (QRA)
calculates numerical probabilities over
the possible consequences.

31. Difference between Qualitative
and Quantitative Risk analysis
 Qualitative Analysis is a preliminary step
while Quantitative Analysis is a climax
step.
 In Qualitative Analysis, each risk is
carefully analysed for all risk probabilities
and possible impacts. In Quantitative
Analysis, the filtered risks which are high
on impact or probability are analysed for
the proper risk analysis and assessment.
They are also studied for elimination, or
minimizing, or working with the risk

32. Continued…….
 Qualitative Analysis isn’t a mathematical
calculation but a probability rank. Quantitative
Analysis is a mathematical calculation.
 Qualitative Analysis is applied to each
possible risk. Quantitative Analysis is applied
to only high or high-medium probability or
impact risks.
 Usually a ranking of 0 to 1 is used for each
risk, 1 being high, during the process of
Qualitative Analysis. In Quantitative Analysis
though, detailed cost and time impact of the
risk, if it comes true, are studied.
 Qualitative Analysis is applied to most
projects while the lower or mid-level projects
may not have the application of Quantitative
Analysis at all times.

33. END OF Chapter