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ICT: The Difference Between Data and Information: Use Description

Data refers to raw facts and numbers without context, while information is data that has been processed and organized to be meaningful and useful. Information is created by processing data in a way that is relevant to the recipient. Businesses rely on different types of information for planning, recording transactions, controlling resources, measuring performance, and decision-making at strategic, tactical, and operational levels. Key uses of information include planning, recording, controlling, measuring performance, and strategic, tactical, and operational decision-making.

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61 views2 pages

ICT: The Difference Between Data and Information: Use Description

Data refers to raw facts and numbers without context, while information is data that has been processed and organized to be meaningful and useful. Information is created by processing data in a way that is relevant to the recipient. Businesses rely on different types of information for planning, recording transactions, controlling resources, measuring performance, and decision-making at strategic, tactical, and operational levels. Key uses of information include planning, recording, controlling, measuring performance, and strategic, tactical, and operational decision-making.

Uploaded by

blueboy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ICT: The difference between data and

information
When studying ICT it is important to understand the difference between "data" and
"information". This study note tells you what the differences are and outlines the main types
of information.

Data

Think of data as a "raw material" - it needs to be processed before it can be turned into
something useful. Hence the need for "data processing". Data comes in many forms -
numbers, words, symbols. Data relates to transactions, events and facts. On its own - it is
not very useful.

Think of the data that is created when you buy a product from a retailer. This includes:

- Time and date of transaction (e.g. 10:05 Tuesday 23 December 20X3)


- Transaction value (e.g. £55.00)
- Facts about what was bought (e.g. hairdryer, cosmetics pack, shaving foam) and how
much was bought (quantities)
- How payment was made (e.g. credit card, credit card number and code)
- Which employee recorded the sale
- Whether any promotional discount applied

At its simplest, this data needs processing at the point of sale in order for the customer to
receive a valid receipt. So the data about the transaction is processed to create "information"
- in this case a receipt. You can imagine that the same data would also be useful to the
manager of the retail store. For example, a report showing total sales in the day, or which
are the best-selling products. So the data concerning all shop transactions in the day needs
to be captured, and then processed into a management report.

Information

The above example demonstrates what information is.

Information is data that has been processed in such a way as to be meaningful to the
person who receives it.

Note the two words highlighted in red - "processed" and "meaningful". It is not enough for
data simply to be processed. it has to be of use to someone - otherwise why bother?!

Uses of Information in a Business

Businesses and other organisations need information for many purposes: we have
summarised the five main uses in the table below.

Use Description
Planning To plan properly, a business needs to know what resources it has (e.g. cash,
people, machinery and equipment, property, customers). It also needs
information about the markets in which it operates and the actions of
competitors. At the planning stage, information is important as a key ingredient
in decision-making.
Recording Information about each transaction or event is needed. Much of this is required
to be collected by law - e.g. details of financial transactions. Just as importantly,
information needs to be recorded so that the business can be properly managed.
Controlling Once a business has produced its plan it needs to monitor progress against the
plan - and control resources to do so. So information is needed to help identify
whether things are going better or worse than expected, and to spot ways in
which corrective action can be taken
Measuring Performance must be measured for a business to be successful. Information is
used as the main way of measuring performance. For example, this can be done
by collecting and analysing information on sales, costs and profits
Decision- Information used for decision-making is often categorised into three types:
making
(1) Strategic information: used to help plan the objectives of the business as a
whole and to measure how well those objectives are being achieved. Examples
of stategic information include:

- Profitability of each part of the business


- Size, growth and competitive structure of the markets in which a business
operates
- Investments made by the business and the returns (e.g. profits, cash inflows)
from those investments

(2) Tactical Information: this is used to decide how the resources of the


business should be employed. Examples include:

- Information about business productivity (e.g. units produced per employee;


staff turnover)
- Profit and cash flow forecasts in the short term
- Pricing information from the market

(3) Operational Information: this information is used to make sure that


specific operational tasks are carried out as planned/intended (i.e. things are
done properly). For example, a production manager will want information about
the extent and results of quality control checks that are being carried out in the
manufacturing process.

Summary

This revision note has outlined the main kinds of information. It is important that you
understand the difference between data and information, explain the role that information
plays in a business, and distinguish between the main kinds of information.

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