Content Publishing and Data Processing: Module 1: Information Technology
Data and Information:
Data - Data consists of numbers, letters, symbols, raw facts, events and transactions, which have been recorded but
not yet processed into a form that is suitable for making decisions.
Types of data:
• Quantitative data
• Qualitative data
Content Publishing and Data Processing: Module 1: Information Technology
Information is data that has been processed in such a way that it has meaning to the person that receives it, who
may then use it to improve the quality of their decision-making.
Information is vital to an organisation and is required both internally and externally .
This information will be used by various third parties;
• Shareholders or owners
• Customers and suppliers
• Employees
• Government agencies
Content Publishing and Data Processing: Module 1: Information Technology
Illustration 1: Illustration 2:
Simple information Detailed information
Content Publishing and Data Processing: Module 1: Information Technology
As information is so important to the business, it is vital that the business only relies on good information.
‘Good’ information helps in the decision-making process, is useful to the recipient and can be relied upon.
To be ‘good’, information should have the following characteristics (which you can remember using the acronym
ACCURATE).
Accurate – information should be sufficiently accurate for its intended purpose and the decision-maker should be able
to rely on the information.
Complete – the more complete information is, the more reliable it will be.
Cost – the information should not cost more to obtain than the benefit derived from it.
Understandable and user friendly information is much more readily acted upon.
Relevant – the information provided should concentrate on the essentials and ignore trivia.
Adaptable – information should be tailored to the needs and level of understanding of its intended recipients.
Timely – information that is out-of-date is a waste of time, effort and money.
Easy to use – information should be clearly presented and sent using theright medium and communication channel
Content Publishing and Data Processing: Module 1: Information Technology
Information technology and information systems:
Information systems (IS) refer to the management and provision of information to support the running of the
organisation.
Information technology (IT) describes any equipment concerned with the capture, storage, transmission or
presentation of data.
Types of Information Systems:
• Transaction processing system (TPS),
• Management information systems (MIS),
• Executive information systems (EIS),
• Expert systems (ES).
Content Publishing and Data Processing: Module 1: Information Technology
1. Transaction Processing System (TPS) :
• Transaction processing system (TPS) - A TPS records all the daily transactions of the organisation and
summarises them so they can be reported on a routine basis.
• Transaction processing systems are used mainly by operational managers to make basic decisions.
Examples include:
Sales/marketing systems – recording sales transactions and providing details
on marketing and promotional activities.
Manufacturing production systems – recording details of purchases,
production and shipping of goods.
Finance and accounting systems – maintenance of financial data in an
organisation.
Content Publishing and Data Processing: Module 1: Information Technology
2. Management Information System (MIS):
• Management information systems convert data from the TPS into information for tactical managers. This
information will be designed to help them monitor performance, maintain co-ordination and provide
background information about the organisation’s operations.
• The MIS will be used for both historic and current analysis of business performance, as well as to make
predictions about future operations.
Example:
A company that operates a chain of car showrooms could use a MIS for performance measurement.
The MIS could use the information from the sales TPS to generate reports such as:
Total sales for each type of car
Total sales made by each salesperson
Total sales by showroom or by geographic area.
This information could be extremely useful for control and performance appraisal purposes.
Content Publishing and Data Processing: Module 1: Information Technology
3. Decision Support System (DSS):
• A DSS is a computer system that helps decision-makers deal with semi- or unstructured decisions, where
there is a high degree of uncertainty, or unknown factors that may affect the decision.
• The DSS draws on both internal information about the organisation (from the TPS) and external
information (about the market, economic growth, etc).
• A DSS will be tailor-made to the requirements of the organisation.
Example:
Crabtree is a supermarket chain planning to start selling goods online, but is uncertain of whether it is
appropriate for the organisation.
A DSS would gather information about the company itself – does it have the resources to start selling online?
It will also provide information about the online groceries market, such as the size of the market and who
the competitors are.
The DSS will then present this information in a way that is easy to understand, helping the management to
make the decision.
Content Publishing and Data Processing: Module 1: Information Technology
3. Executive Information Systems (EIS):
• These systems provide strategic managers with flexible access to information from the entire business, as
well as relevant information from the external environment.
• The EIS enables senior management to easily model the entire business by turning its data into useful,
summarised reports.
• This information can then easily be distributed to key staff members.
Example:
A typical report from an
EIS would combine many
types of data on the
same screen and make it
easier for executives to
understand the
performance of the
business.
Content Publishing and Data Processing: Module 1: Information Technology
4. Expert System (ES):
• Expert systems hold specialist (expert) knowledge and allow non-experts to interrogate the system for
information, advice and recommended decisions.
• This is not part of the normal hierarchy of information systems and will be used by employees at all levels
of the organisation.
• Expert systems are widely used in technical or complex areas, such as:
law (e.g. conveyancing)
taxation (e.g. personal tax calculations)
banking (e.g. granting credit)
medicine (e.g. diagnosis of symptoms).
Example:
An accountant could use an ES to calculate a client’s personal tax liability.
The accountant will input the relevant information about the client’s circumstances. The ES will then access
its database of rules and regulations about personal tax, decide which rules apply to the client and then use
them to calculate a tax liability.
Content Publishing and Data Processing: Module 1: Information Technology
Software Applications:
• Software applications are computer programmes that are designed to help users with certain tasks.
• It is important that organisations are aware of the advantages and disadvantages of common software
applications to ensure that they choose the right application for the right task.
1. Spreadsheets:
Content Publishing and Data Processing: Module 1: Information Technology
2. Databases:
To store large amounts of raw data, it is best to use a database. This is especially true in circumstances
where two or more users share the information.
Content Publishing and Data Processing: Module 1: Information Technology
New Developments in IT:
Cloud computing:
Cloud computing is computing based on the internet. It avoids the need for software, applications, servers and
services stored on physical computers. Instead, it stores these with cloud service providers who store these
things on the internet and grant access to authorised users.
Cloud computing accounting software
Benefits of cloud computing to the organisation
• Store and share data
• • Reduce Maintainance
On-demand self-service
• • Back-ups
Flexibility
• • Better security
Collaboration
• More Competitive
Content Publishing and Data Processing: Module 1: Information Technology
New Developments in IT:
Artificial Intelligence (AI):
Artificial Intelligence is an area of computer science that emphasises the creation of intelligent machines that
work and react like human beings. Some of the activities that computers with artificial intelligence are
designed for include: voice recognition, planning, learning, problem solving, etc.
Examples:
Companies such as Apple and Amazon have developed and
marketed voice recognition systems, either to be built into
an existing product (such as Apple with its Siri system) or
developed new products whose main function is voice
recognition (such as Amazon and Alexa).
Content Publishing and Data Processing: Module 1: Information Technology
New Developments in IT:
Artificial intelligence and accountancy:
It will equip accountants with powerful new
capabilities, as well as enabling machines to
deal with an increasing amount of tasks and
judgements.
Examples:
• To code accounting entries.
• To forecast revenues with the use of predictive
models
Content Publishing and Data Processing: Module 1: Information Technology
New Developments in IT:
Big Data:
Big data is a term for a collection of data which is so large that it becomes difficult to store and
process using traditional databases and data processing applications.
Example: Bank transactions, Government documentations, Financial market data, etc
Content Publishing and Data Processing: Module 1: Information Technology
New Developments in IT:
Cyber Security:
Cyber security is the protection of internet-connected systems, including hardware, software and data, from
cyber attacks.
A cyber attack is a malicious and deliberate attempt by an individual or organisation to breach the information
system of another individual or organisation.
Key risks to data of cyber attacks:
Malware
Phishing
Denial of Service attacks
Man in the middle attacks