3.4 How do businesses operate1 Unit 3.3/4.3 Information in Decision Making

In this unit you will learn … What Information is and where it comes from The importance of ICT in generating information What is good information How managers use information

By the end of the lesson, you will understand What are the different ways of presenting information How ICT has become so important in generating information and decision making 3.4 How do businesses operate3

Different ways of Presenting Information 3.4 How do businesses operate4 Information WrittenVerbal Graphic/ Pictorial NumericalElectronic

3.4 How do businesses operate5 Internal or External

Using ICT to Produce Information - Software Word processingSpreadsheet Database Desktop publishing Graphics software Internet website Presentation eg PowerPoint

Using ICT Hardware voic pager mobiles PDAs laptop fax Video- conferencing answering machine network

ICT in Different Functional Areas Functional Area ICT usedDecision OperationsWord document with request for 3 new workers Jobs advertised in local newspaper this week Sales/ Marketing Database used to create list of customers To send mailshot to all customers who haven’t bought anything this month FinanceSpreadsheet showing yearly profit figures Increase advertising budget to try to increase sales figures Human Resources from office manager about staff absences Decision to offer overtime to existing staff to help clear backlog of work

Using the Internet Easy to use menus Site search bar E-commerce – order and buy online Illustrations of products Contact us

Using the internet for research ADVANTAGES Convenient – readily available Fast – using search engines Quality –most websites well-presented Accurate and up-to-date – most web pages updated regularly so better than paper info Comparisons can be easily made DISADVANTAGES Info not always accurate Technical problems Too much info can cause difficulties Phishing and pharming Phishing – fraudsters using to get personal details from bank customers Pharming – hacker trying to redirect customer to fraudulent site

Features of Good Information FeatureDescriptionExplanation Timely Information should be available when required Eg Business final accounts must be prepared in time for shareholders meeting Accurate Information should be correct Eg accurate market research (field) required to make decisions on new products Relevant Information should relate to the decision being made Eg Prices of similar products may be used to help pricing decisions Complete All the information should be available to allow decision to be made Eg Information on all systems on the market should be available when deciding which new computers to buy Up-to- date Most recent information should be used Eg using up-to-date ferry timetables when planning business trip Cost Effective Information should not cost too much to gather Field research may be expensive. Desk research cheaper.

Evaluating Information Businesses must decide –What information is relevant –Which information is most important –What the information means –How it can be used to avoid problems in the future –How it can be used to ensure continued success

Information Managers use to help planning and decision-making AccountsComparing performance from one year to another; comparing with other companies; checking for fraud; monitoring sales Worker performanceAppraisals – to assess employee performance; are employees meeting targets, eg sales targets ProductionWere production targets reached – if not, why not; checking reasons for wastage of products (spoiled products; reasons for technical/mechanical problems Break-evenUsing break-even information to decide on selling prices and production levels Customer surveysUsing customer surveys to obtain feedback to improve quality of products and service received

Using Information to Monitor and Control Business Identify changes/problems as soon as possible Find out why the change has occurred Decide what action to take If everything is working well, do changes need to be made? If not working well, how can it be sorted? What constraints are there, ie are there limitations to what can be done (eg finance, staffing etc) Businesses should be constantly monitoring and controlling – keeping an eye on important information. This helps to