1. The Role of Information in Decision Making ITFM – Outcome 1

2. What is information? ITFM – Outcome 1

3. 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 decision- making and planning 3

4. 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 4

5. Sources of Information ITFM – Outcome 1

6. 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 6

7. Primary Information Strengths  Up-to-date  Know the source  Specific for the purpose Weaknesses  Expensive to collect eg using a market research common  Sample might be too small, or questions ambiguous or misleading  Respondents may lie  Researcher may be biased 7

8. Secondary Information Strengths  Wide range of potential sources  Relatively cheap to access Weaknesses  Could be out of date  Competitors have access too  Hasn’t been gathered specifically for the purpose 8

9. Internal Information Strengths  Easy to access  Shows past performance eg sales (targets and trends)  Benchmark for current performance Weaknesses  Good systems required for accurate data collection  Information systems need managed (training and salaries)  New companies are at a disadvantage (no info) 9

10. External Information Strengths  Easy to access  Relatively cheap  Provides information on PESTEC Weaknesses  May be out-of-date  Takes time to gather  Available to competitors  Potentially biased or unreliable 10

11. Types of Information ITFM – Outcome 1

12. 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 12

13. 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 13

14. Written Information Advantages  Re-read when necessary  Permanent Record Disadvantages  Takes time to produce (up-to- date?)  Difficult to get clarification 14

15. Oral Information Advantages  It is instantly received  Allows for discussion  Can ask questions/get clarification  Quick method of spreading information Disadvantages  Interpretations can be different: “But I thought you said…”  Easily forgotten  Should be backed up with written record 15

16. Numerical Information Advantages  Allows comparisons to be made  Useful for forecasting/projecting trends  Graphs can be produced Disadvantages  Many people find figures difficult to understand 16

17. Graphical/Pictorial Information Advantages  Often easier to remember than full notes  Graphs show trends/comparisons  Organisation charts show the structure of the organisation Disadvantages  Skill needed to produce an effective chart  Special equipment is needed to produce an image  Training staff can be costly 17

18. Features of Good Information ITFM – Outcome 1

19. 19 Features of Good Information Timely Accurate Appropriate Available Complete Concise Cost-effective Objective CccOAaaT

20. Types of Decision Making ITFM – Outcome 1

21. 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 21

22. 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, 22

23. 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) 23

24. 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 24

25. Impact of ICT on Workflow ITFM – Outcome 1