Transcript ITFM – Preparation for Prelim

The Role of Information in
Decision Making
ITFM – Outcome 1
What is information?
ITFM – Outcome 1
What is information?
 Information is the end-product of processed data
 Data: a collection of facts that has been interpreted and
organised in some way
 Information: data that has ben processed to help decisionmaking and planning
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The Data Processing Cycle
 Collecting: from various sources inc email, internet etc
 Checking: validity of source, currency and sufficiency of data
 Organising: sort/group with other information
 Analysing: summary calculations, comparisons
 Storing: file electronically or manually
 Distributing: send via email, publish on website etc
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Sources of Information
ITFM – Outcome 1
Sources of Information
 Primary: information collected first hand
for a specific purpose eg surveys, customer
focus groups
 Secondary: information collected from
existing sources eg newspapers,
government statistics
 Internal: information from within the
company eg sales records
 External: information from outwith the
company eg information from other
companies
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Primary Information
Strengths
Weaknesses
 Up-to-date
 Expensive to collect eg using
a market research common
 Know the source
 Sample might be too small,
 Specific for the purpose
or questions ambiguous or
misleading
 Respondents may lie
 Researcher may be biased
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Secondary Information
Strengths
Weaknesses
 Wide range of potential
 Could be out of date
sources
 Competitors have access too
 Relatively cheap to access
 Hasn’t been gathered
specifically for the purpose
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Internal Information
Strengths
Weaknesses
 Easy to access
 Good systems required for
accurate data collection
 Shows past performance eg
 Information systems need
sales (targets and trends)
managed (training and
salaries)
 Benchmark for current
performance
 New companies are at a
disadvantage (no info)
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External Information
Strengths
Weaknesses
 Easy to access
 May be out-of-date
 Relatively cheap
 Takes time to gather
 Provides information on
 Available to competitors
PESTEC
 Potentially biased or
unreliable
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Types of Information
ITFM – Outcome 1
Qualitative Information
 Information which is expressed in words
 Involves opinions or judgments
 Often used in customer satisfaction surveys
eg How do you rate customers service – excellent, good,
acceptable, poor, unacceptable
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Quantitative Information
 Information can be counted or measured
 Usually expressed numerically
 Used to identify trends and make forecasts
eg sales figures, exam results, number of staff
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Written Information
Advantages
Disadvantages
 Re-read when necessary
 Takes time to produce (up-to-
date?)
 Permanent Record
 Difficult to get clarification
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Oral Information
Advantages
Disadvantages
 It is instantly received
 Interpretations can be
different: “But I thought you
said…”
 Allows for discussion
 Can ask questions/get
 Easily forgotten
clarification
 Should be backed up with
 Quick method of spreading
written record
information
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Numerical Information
Advantages
Disadvantages
 Allows comparisons to be
 Many people find figures
made
difficult to understand
 Useful for
forecasting/projecting trends
 Graphs can be produced
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Graphical/Pictorial Information
Advantages
Disadvantages
 Often easier to remember
 Skill needed to produce an
than full notes
effective chart
 Graphs show
 Special equipment is needed
trends/comparisons
to produce an image
 Organisation charts show the
 Training staff can be costly
structure of the organisation
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Features of Good
Information
ITFM – Outcome 1
Features of Good Information
CccOAaaT
Accurate
Complete
Objective
Appropriate
Concise
Timely
Available
Cost-effective
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Types of Decision Making
ITFM – Outcome 1
Decision Making
 Management is about making decisions
 The decision can be routine or affect the long-term
direction of the company
 Decisions should be made to meet the objectives of the
business
Decision
making is about
a choice from
the different
options
available
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Strategic Decisions
 Made by senior managers for the long-term eg 5-10 years,
concerned with strategic aims
 The scope of the decisions is wide and far reaching
 Most of the information will come from external sources eg
competitors activities, financial institutions on investing
profits
 High risk decisions – takes a long time to implement and
costly to correct
 Examples: to expand the business or to improve profitability,
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Tactical Decisions
 Made by middle managers for the medium term
 Tactical decisions are about organising resources to achieve
strategic objectives
 Use information from weekly or monthly reports to monitor
activities and check that targets are being met.
 Medium risk decisions – poor decisions take time to change,
but won’t jeopardise the organisation
 Examples: to train staff to use more effective working
practices (in order to improve efficiency)
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Operational Decisions
 These are day-to-day decisions
 Usually made by Department Managers or Supervisors.
 The scope is limited to the immediate resolution of problems.
 Information will come from internal sources.
 Low risk decisions – wrong decision should be easy to fix, or not
take much time
 Examples: arranging temporary cover for an absent member of
staff
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Impact of ICT on
Workflow
ITFM – Outcome 1