Mr C Johnston ICT Teacher BTEC IT Unit 03 - Lesson 02 Good Information & Business Functional Areas

Session Objectives Understand how organisations use business information.

Value of Information Information is an important resource for any business. It has monetary value and can be bought or sold. Good quality information can:  maximise sales  cut costs  develop new products  help make good management decisions.

Good Information Factors effort the quality of information Valid, Reliable, Timely, Fit-for-purpose, Accessible, Cost-effective, Sufficiently accurate, Relevant, Having the right level of detail, From a source in which the user has confidence, Understandable by the user ?

Factors Affecting Value The value of information depends on it being: Up-to-date Complete Fit for intended use (relevant) Accurate From a reliable source Comprehensible

Up-to Date Information Dated information may be worse than useless. Examples of time dependency include: brokers buying and selling shares need very up-to-date information because share prices change rapidly a holiday company using a 2 year old survey to pre-book next seasons hotel places may over or under book places due to changing customer tastes.

Complete Information Missing data may produce inaccurate information. Examples include: Sales data taken from only two quarters of the year may give a distorted picture of average business performance Analysis of national sales may give inaccurate results if only England and Scotland are included in the analysis

Intended Use and Relevance Information needs to be relevant to its intended use. Examples include: Market research survey results from the south of England may be accurate and up-to-date but not be relevant to the north because trends and spending habits are different A study of female buying habits can be irrelevant when targeting male customers

Accurate Information Incorrectly recorded stock levels may lead to empty shelves or over-ordering of new stock (both are BAD for the organisation). Economic forecasts for variables such as interest rates, exchange rates and the cost of raw materials need to be accurate if businesses are to plan effectively for the future.

The Source and Reliability of Information Organisations can obtain information from a number of internal/external sources, some of which are “free”, but there are still costs involved (overheads) in entering data and converting it into a usable format. A reliable source of information may mean the organisation doesn’t need to check the validity of information. Reliable sources may be re-used, reducing future time and costs.

Comprehensible Information Information should be in a format that the reader can understand quickly as they may need to make rapid decisions. A picture is worth a thousand words; summarised information can be valuable.

Overheads From Information These factors affect how costly information is to acquire and keep up-to-date: How it’s collected How it’s input How the information is processed Data maintenance or updating to keep relevant

Summary Information must be: Up-to-date Complete Fit for intended use (relevant) Accurate From a reliable source Comprehensible

Produce an A3 poster summarising the characteristics of good information. BTEC Book – Unit 03 p7/8 Good Information

Business Functional Areas Sales, Purchasing, Manufacturing, Marketing, Finance, Personnel, Administration Read Pages of the Unit 03 book

Work in a group to produce pages that can be used in a ring- binder describing the functional areas of a typical business organisation. Agree a common standard for the appearance of your pages, then divide production of the pages between members of the group. Each page needs to summarise what the department does and to give examples of how the information identified in each bullet on the worksheet might be used. BTEC Book – Unit 03 p8/9 Functional Areas