TOPIC THREE: COMPUTER SOFTWARE

Introduction
Welcome to topic one. This topic three is aimed at introducing you Types of
computer software, Information Systems Spheres/categories of Influence and
methods of acquiring software. Also the aimed is to introduce you to keys
considerations when acquiring software and methods of acquiring software.
The topic is, therefore, designed to prepare you to have a clear understanding
of the step used in evaluating purchased or commercial software.
Topic Time
 Compulsory online reading, activities, self-assessments and practice
exercises [3 hours]
 Optional further reading [1.5 hours]
 Total student input [4.5 hours]
Topic Learning Requirements

 Participation in one chat (at least 5 entries)

 At least two elaborate contributions to the discussion topic. You may also
start your own discussion thread.

 Timely submission of the assignments

Learning Outcomes

By the end of this topic you should be able to:

a) Define computer software

b) State types of computer software and functions
c) Discuss information systems spheres/categories of Influence
d) Explain methods of acquiring software
e) Outline keys consideration when acquiring software
f) Discuss steps used in evaluating purchased or commercial software

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Topic Content
3.1 Introduction
Software is a set of programs, which is designed to perform a well-defined
function. A program is a sequence of instructions written to solve a particular
problem.
3.2 Types of Softwares
There are two types of software −
 System Software
 Application Software
System Software
The system software is a collection of programs designed to operate,
control, and extend the processing capabilities of the computer itself.
System software is generally prepared by the computer manufacturers.
Information Systems Spheres of Influence
1. Personal: Individual users (personal productivity)
2. Workgroup: Two or more people who work together to achieve a
common goal
3. Enterprise: An entire company interacting with customers, suppliers,
government, etc.

Personal Workgroup Enterprise

Systems PC and Work Network Midrange and
Software station operating Mainframe OS
Operating systems
systems
Application WP, DB, E-Mail, Accounting
Software Sprdsheet, Group Order
graphics (Pers Scheduling, entry,
Prod) Workflow Payroll, HR

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Software Issues and Trends
1. Software Licensing: Protection by software vendors to prevent
unauthorized use.
 Software keys
 Multi-user licenses
 Software Publishing Association
2. Software bugs: program defects that prevent proper performance
3. Open source software: freely available and modifiable
4. Software Upgrades
 A revised version of software that usually includes fixes of known
problems, plus enhancements to existing capabilities
3.2.1 Systems Software
System software is generally prepared by the computer manufacturers.
These software products comprise of programs written in low-level
languages, which interact with the hardware at a very basic level. System
software serves as the interface between the hardware and the end users.
Some examples of system software are Operating System, Compilers,
Interpreter, Assemblers, etc. Prominent features of a system software −
 Close to the system
 Fast in speed
 Difficult to design
 Difficult to understand
 Less interactive
 Smaller in size
 Difficult to manipulate
 Generally written in low-level language

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Role of Systems Software e.g Operating System
Functions of Operating System
 Control the computer hardware and act as an interface with
applications programs.

a) Perform common computer hardware functions (e.g. I/O)

b) Provide a user interface
c) Provide a degree of hardware independence
d) Manage system memory
e) Manage processing tasks
f) Provide networking capability
g) Control access to system resources Manage files
User Interface
A function of the operating system that allows individuals to access and
command the computer.
1. Text-Based User Interface (e.g. DOS)
 Requires text commands be given to the computer to perform
basic activities.
2. Graphical User Interface (GUI)
 Uses pictures (icons) and menus displayed on the screen to send
commands to the computer system.
1. What the GUI Advantages
Hardware Independence
Provides a layer between the application software and the hardware.
 Application Program Interface (API)

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  Same software can be used on various hardware; the OS makes
adjustments
 Changes in hardware may not require a change in application
software
Memory Management
Controls how memory is accessed and maximizes available memory and
storage.
 Translates logical addresses to physical addresses
 Protects memory used for OS
 Provides virtual memory
Virtual Memory
a) Virtual Memory: Memory that allocates space in secondary storage to
supplement the immediate, functional memory capacity of RAM.
b) Paging”A function of virtual memory that allows the computer to store
currently needed pages in RAM while the rest of these programs wait
in secondary storage.
c) Invalid Page Fault: The operating system cannot find the data
requested
Processing Tasks
a) Multitasking: A processing activity that allows a user to run more
than one application at the same time. E.g running spreadsheet
application, wed application, word processing at the same managed by
OS
b) Multithreading: The ability of a program to manage its use by more
than one user at a time without having to have multiple copies of the
program.
c) Time-sharing: Multiple users simultaneously using the resources of a
single processor (scalability).
d) Multi-User Tasks

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 Network capability
• Aids in connecting the computer to a network.
Access to system resources
• Provides security for unauthorized access.
File management
• Ensures that files in secondary storage are available when
needed, and they are protected against unauthorized usage.
2. Give examples of OS. Compare command based and GUI OS
Network Operating Systems
 Windows NT Server
 Windows 2000 Server
 Up to 32 processors
 Novell Netware
3.2.3 Utility Programs
Utility Programs: Programs used to merge and sort sets of data, keep track of
computer jobs being run, compress files of data before they are stored or
transmitted over a network, check for viruses, and perform other important
tasks. (Examples?).
3.2.4 Application Software
Application software products are designed to satisfy a particular need of a
particular environment. All software applications prepared in the computer
lab can come under the category of Application software. Application
software may consist of a single program, such as Microsoft's notepad for
writing and editing a simple text. It may also consist of a collection of
programs, often called a software package, which work together to
accomplish a task, such as a spreadsheet package.
Examples of Application software are the following −
 Payroll Software
 Student Record Software

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  Inventory Management Software
 Income Tax Software
 Railways Reservation Software
 Microsoft Office Suite Software
 Microsoft Word
 Microsoft Excel
 Microsoft PowerPoint
Features of application software are as follows −
 Close to the user
 Easy to design
 More interactive
 Slow in speed
 Generally written in high-level language
 Easy to understand
 Easy to manipulate and use
 Bigger in size and requires large storage space
Types of Application Software
1. Proprietary Software
 Designed to solve a unique and specific problem.
 In-House Developed or Contract
2. Off-The-Shelf Software
 An existing software program that can be used without considerable
changes expected.
3. Customized Package
 Blend of off-the-shelf software and internal/contract software
development.
 Application Service Provider
4. Source Code?
What are Pros & Cons of Proprietary?

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A. Personal Application Software
1. Object Linking and Embedding (OLE)
 A software feature that allows you to copy, link or embed objects
between one program and another program or document.
 Server application supplies
 Client application accepts
 Object = picture, graph, text,
 Spreadsheet, etc.
 Copy
 Copy data from server application and place it in client
application.
 Data must be changed on server application and re-copied.
 Link
 Create a link in the client application to an object in the server
application.
 Changes must be made in server application.
 Any changes made to the server object will automatically appear
in all linked client objects.
 Embed
 An embedded object becomes part of the client document
 Double-clicking opens server application
 The server document is no longer needed.
2. Dynamic Data Exchange (DDE)
Enables DDE-compatible Windows applications to share data easily
with other compatible applications.
B. Workgroup Application Software
GroupWare: Software that helps groups of people work together more
efficiently and effectively
 E-Mail

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  Group Scheduling (PIMs)
 Contact Management
 Lotus Notes (workflow, threaded discussions)
Three C’s for Groupware
1. Convenient
 If it’s hard to use, it doesn’t get used
2. Content
 Constant stream of rich, relevant and personalized content
3. Coverage
 Accessible any- time from anywhere
C. Enterprise Application Software
Enterprise Application programs that aim to improve the cooperation
and interaction between all departments such as product planning,
purchasing, manufacturing, sales and customer service
 Often industry-specific
 SAP, Oracle, PeopleSoft, Baan
Benefits of Enterprise Application Software
a) Eliminate inefficient systems
b) Improved data access for decision making
c) Facilitate the adoption of improved work processes
d) Supply chain management
Downside of Enterprise Application Software
a) Costly
b) Changed business processes
c) Employee resistance
Examples of common Enterprise Application Software
Databases Software
There are four main types of database management systems (DBMS) and
these are based upon their management of database structures. In other

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words, the types of DBMS are entirely dependent upon how the database is
structured by that particular DBMS.
1. Hierarchical DBMS
2. Network DBMS
3. Relational DBMS
4. Object-oriented DBMS
Hierarchical DBMS
A DBMS is said to be hierarchical if the relationships among data in the
database are established in such a way that one data item is present as the
subordinate of another one or a sub unit. Here subordinate means that items
have "parent-child" relationships among them. Direct relationships exist
between any two records that are stored consecutively. The data structure
"tree" is followed by the DBMS to structure the database. No backward
movement is possible/allowed in the hierarchical database.
The hierarchical data model was developed by IBM in 1968 and introduced in
information management systems. This model is like a structure of a tree with
the records forming the nodes and fields forming the branches of the tree. In
the hierarchical model, records are linked in the form of an organization chart.
A tree structure may establish one-to-many relationship.

`
Network DBMS
While the hierarchical database model structures data as a tree of records,
with each record having one parent record and many children, the network

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model allows each record to have multiple parent and child records, forming
a generalized graph structure. This property applies at two levels: the schema
is a generalized graph of record types connected by relationship types (called
"set types"), and the database itself is a generalized graph of record
occurrences connected by relationships "sets types"). Cycles are permitted at
both levels. The chief argument in favour of the network model, in comparison
to the hierarchic model, was that it allowed a more natural modeling of
relationships between entities. The network model is a database model
conceived as a flexible way of representing objects and their relationships. Its
distinguishing feature is that the schema, viewed as a graph in which object
types are nodes and relationship types are arcs,

Relational DBMS
A DBMS is said to be a Relational DBMS or RDBMS if the database relationships
are treated in the form of a table. There are three keys on relational DBMS:
relation, domain and attributes. A network means it contains a fundamental
constructs sets or records sets contains one to many relationship, records
contains fields statically table that is composed of rows and columns is used
to organize the database and its structure and is actually a two dimension
array in the computer memory. A number of RDBMSs are available; some

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popular examples are Oracle, Sybase, Ingress, Informix, Microsoft SQL
Server, and Microsoft Access.
Object-oriented DBMS
Able to handle many new data types, including graphics, photographs, audio,
and video, object-oriented databases represent a significant advance over
their other database cousins. Hierarchical and network databases are all
designed to handle structured data; that is, data that fits nicely into fields,
rows, and columns. They are useful for handling small snippets of information
such as names, addresses, zip codes, product numbers, and any kind of
statistic or number you can think of. On the other hand, an object-oriented
database can be used to store data from a variety of media sources, such as
photographs and text, and produce work, as output, in a multimedia format.
 Object-oriented databases use small, reusable chunks of software called
objects. The objects themselves are stored in the object-oriented
database. Each object consists of two elements: 1) a piece of data (e.g.,
sound, video, text, or graphics), and 2) the instructions, or software
programs called methods, for what to do with the data. Part two of this
definition requires a little more explanation. The instructions contained
within the object are used to do something with the data in the object.
For example, test scores would be within the object as would the
instructions for calculating average test score.
 Object-oriented databases have two disadvantages. First, they are more
costly to develop. Second, most organizations are reluctant to abandon
or convert from those databases that they have already invested money
in developing and implementing. However, the benefits to object-
oriented databases are compelling. The ability to mix and match
reusable objects provides incredible multimedia capability. Healthcare
organizations, for example, can store, track, and recall CAT scans, X-
rays, electrocardiograms and many other forms of crucial data.

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DB Terms
A primary key is a field in a table which uniquely identifies each row/record
in a database table. Primary keys must contain unique values. A primary key
column cannot have NULL values. A table can have only one primary key,
which may consist of single or multiple fields. When multiple fields are used
as a primary key, they are called a composite key.
A Foreign Key (FK) is a column or combination of columns that is used to
establish and enforce a link between the data in two tables. You can create a
foreign key by defining a FOREIGN KEY constraint when you create or modify
a table. In a foreign key reference, a link is created between two tables when
the column or columns that hold the primary key value for one table are
referenced by the column or columns in another table. This column becomes
a foreign key in the second table. E.g

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A foreign key constraint does not have to be linked only to a PRIMARY KEY
constraint in another table; it can also be defined to reference the columns of
a UNIQUE constraint in another table. A FOREIGN KEY constraint can contain
null values; however, if any column of a composite FOREIGN KEY constraint
contains null values, verification of all values that make up the FOREIGN KEY
constraint is skipped. To make sure that all values of a composite FOREIGN
KEY constraint are verified, specify NOT NULL on all the participating columns.
Data redundancy is a condition created within a database or data storage
technology in which the same piece of data is held in two separate places. This
can mean two different fields within a single database, or two different spots
in multiple software environments or platforms. Whenever data is repeated,
this basically constitutes data redundancy. This can occur by accident, but is
also done deliberately for backup and recovery purposes.
Data inconsistency exists when different and conflicting versions of the
same. Data appear in different places. Data inconsistency creates unreliable
information, because it will be difficult to determine which version of the
information is correct. (It's difficult to make correct - and timely -decisions if
those decisions are based on conflicting information.). Data inconsistency is
likely to occur when there is data redundancy. Data redundancy occurs when
the data file/database file contains redundant - unnecessarily duplicated -
data. That's why one major goal of good database design is to eliminate data
redundancy. Data redundancy is where there is duplication of data in a
database. When this happens, anyone who has to make updates to a table in
a database (that is, make changes to the database) will have to change that
particular data that has-been duplicated so many times in so many places.
This creates a problem and itis not always going to be possible for a person to
change everything correctly. This therefore leads to inconsistencies in the
database.
3.3 Methods of acquiring software

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During software acquisition there is need to examine software alternatives and
select an overall strategy for the proposed system to prepare for the transition
to the systems design phase following prescribe steps by organization or
particular user.
Steps involved when examining software acquisition
a) Planning
b) Analysis
c) Make or build/ Purchase ( in- house, customized and purchase
packaged software
d) Implementation
Some businesses consider that their processing requirements are specific to
their own organization and they have the application software developed
specifically.
 In-house Development – Employing programmers and analysts and
setting up an internal IT group.
 Contract an External Software – The Company could use the
services of a computer bureau or software house, especially if it is a
small organization which couldn't afford a fulltime development team.
 The resultant software is known as Custom-developed or Tailor-
made Software since it exactly fits the requirements of the
organization, just as a tailor-made suit exactly fits the purchaser.
a) In-house Development
Employing programmers and analysts and setting up an internal IT group to
develop software. Companies choose in-house development to:
Reasons for In-House Developing
Companies and organization choose in-house development to:
a) Satisfy unique business requirements: No commercially available
software package can meet their unique business requirements.
b) Minimize changes in business procedures and policies

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 While installing new software package almost always requires some
degree of change in how a company does business. If the installation
of a purchased package will be too disruptive, then the organization
might decide to develop its own software instead.
c) Meet constraints of existing systems: Any new software installed
must work with existing systems. Ensure that the new system will
interface with the old system.
d) Meet existing technology: Another reason to develop software in-
house is that the new system must work with existing hardware and
legacy systems.
e) Develop internal resources and capabilities: Many firms feel that
in-house IT resources and capabilities provide a competitive advantage
because they can respond quickly when business problems or
opportunities arise.

b) Custom Developed Software

Custom Developed Software is where by a user or organization modify existing
software to suit their needs.
Acquire a package that can be customized to meet the needs of an
organization. Purchase a basic package that vendor will customized to suit
your needs. Negotiate directly with the software vendor to make
enhancements to meet your needs by paying extra charge. Purchase the
package and make your own modification.
Advantages Custom Developed Software
The advantages of this type of custom developed software is the resultant
program will exactly fulfill the processing requirements

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Disadvantages of Custom Developed Software
a) Higher Cost: The cost of producing tailor-made software is high, just
as tailor-made clothing is expensive. This is because the costs of
developing the software are entirely borne by the one organization
instead of them being borne by many organizations.
b) Software Defects: It is very unusual for software to be perfect when
the programmers have finished. There is typically a period when the
software is first operated where faults, or bugs, become exposed and
have to be corrected. This can often cause serious inconvenience to the
end-user and, in terms of lost time and efficiency, increases the overall
cost of the software.

c) Purchase or commercial package software

Reasons for Package Purchasing
a) Lower Costs: Because many companies use software packages,
software vendors spread the development costs over many customers.
b) Less Time to Implement: When you purchase a package, it already
has been designed, programmed, tested, and documented.
c) Proven Reliability and Performance Benchmarks: If the package
has been on the market for any length of time, any major problems
probably have already been detected and corrected by the vendor. If
the product is popular, it almost certainly has been rated and evaluated
by independent reviewers.
d) Less Technical Development Staff: Companies that use commercial
software packages often are able to reduce the number of programmers
and systems analysts on the IT staff.

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 e) Future Upgrades provided by the Vendor::Software vendors
regularly upgrade software packages by adding improvements and
enhancements to create a new version or release.
f) Other Companies as Resources: Using a commercial software
package means you can contact users in other companies to get their
impressions and input about the software package.
Advantages of Packaged Software
a) Lower Cost: The most obvious and important advantage is that
packages are significantly cheaper to buy than custom-developed
software. ‹This is because package is sold to a large market and the
development costs can be spread among a large number of purchasers.
b) Less Software Defects: Given the large market to which packages are
sold, most of the problems which commonly beset new software have
been ironed out prior to the introduction into the market place. ‹It is
good policy, however, to avoid pioneering by buying new software. ‹It
is always better to purchase software that has been available for some
time and will be well tried and tested.
c) Better documentation: Given the scale of the applications package
market, it is more feasible for the producers to provide good
documentation to accompany the software. ‹Clearly, this will make the
package easier to use, which will make it more attractive to the market
and therefore easier to sell.
d) Training easily available: The ease of use is also improved by the fact
that it becomes viable for consultants and training organizations to offer
training courses in using it.
Disadvantages of Packaged Software
a) May not meet all requirements: The facilities that are offered by a
package are not as specific to a business as tailor-made software and
might not quite satisfy the processing requirements of the business.

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 b) Less efficient: Since the system is designed for more general purposes
than the tailor-made software, the design may be less efficient. For
example, a user may have to go through some unnecessary steps in
processing which cannot be avoided.
Other Software Alternatives
Other possibilities include using an application service provider, outsourcing,
and developing end-user applications.
a) Application Services Providers
b) Outsourcing
c) User Application
a) Application Service Providers (ASP)
An ASP delivers applications, or access to applications, by charging a usage or
subscription fee. An ASP provides more than a license to use the software; it
rents an operational package to the customer. The service that the ASP
provides is called Application Hosting.

Outsourcing
Outsourcing is the use of outside companies called Service Providers to handle
a portion of a company’s IT workload on a temporary or long-term basis. Many
firms outsource IT work as a way of controlling costs and dealing with rapid
technological change.
User Applications.
User applications utilize standard business software, such as Microsoft Office,
which has been configured in a specific manner to enhance user productivity.
For example, to help a sales respond rapidly to customer price requests, an IT
support person can set up a form letter with links to a spreadsheet that
calculates incentives and discounts.

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3.4 Steps followed in Evaluating and Purchasing Software Packages
i) Evaluate the Information System Requirements
 Identify the system’s key features
 Estimate volume and future growth
 Specify any hardware constraints
 Prepare a request for proposal or quotation
ii) Identify Potential Software Vendors
iii) Evaluate Software Package Alternatives
iv) Make the Purchase
v) Install the Software Package
Step 1: a) Evaluate the Information System Requirements
Based on your analysis of the system requirements
 Identify the system’s key features
 Estimate volume and future growth
 Specify any hardware constraints
 Prepare a request for proposal or quotation
b) Evaluate the Information System Requirements

Identify the Key Features of the System by

 Evaluating system requirements involved highlighting any critical
features the system must have.
c) Evaluate the Information System Requirements
Estimate Volume and Future Growth
 Know the current volume of transactions and processing
 Forecast changes over a three-to-five-year period.
d) Evaluate the Information System Requirements
Specify any Hardware Constraints
 The software must run properly on your current or proposed
hardware platform

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 e) Evaluate the Information System Requirements
Prepare a Request for Proposal or Quotation:
 Prepare a Request for Proposal (RFP) or a Request for
Quotation(RFQ) to obtain the information for making
decision.
 Request for proposal (RFP) is a written list of features and
specifications given to prospective vendors when not
identified a specific product or package to use.
Step 2: Identify Potential Software Vendors
The next step is to contact potential vendors. Preparing an RFP will help
the vendor’s sales representatives identify possible solutions. Identify
popular products and strategies by contacting software vendors, industry
sources, and IT consultants.
Step 3: Evaluate Software Package Alternatives
After identifying possible software packages, compare them and select
one to fit the company’s needs. Obtain information about the packages
from as many sources as possible (vendor presentations and literature,
product documentation, trade publications), and companies that perform
software testing and evaluation. Obtain information from existing users,
test the application, and benchmark the package if necessary.
Step 4: Make the Purchase
When you purchase software, usually you do not own it – what you are
buying is a software license that gives you the right to use the software
under certain terms and conditions. Although most software packages
are purchased, some vendors offer leasing as a financial alternative.
Another alternative is to investigate whether the package is available
through an ASP for a rental of subscription fee.
Step 5. Install the Software Package

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 After purchasing the software package, the final step is installation.
Installation strategy should be planned well in advance, especially if any
disruption of normal business operations is expected. If the software
package is customized, then the task will be more complex and difficult.
Before the use of new software package, all implementation steps must
complete, including loading, configuring, and testing the software,
training users; and converting data files to the new system’s format.
In summary, you learned computer software and methods of acquiring
software:-
g) Types of computer software
i) System software
ii) Application software
iii) Utility software
h) Information Systems Spheres/categories of Influence
i) Personal software
ii) Workgroup software
iii) Enterprise software
i) Methods of acquiring software
i) In –house software development
ii) Customized software development
iii) Commercial or purchased package software
j) Keys consideration when acquiring software
i) Planning for software
ii) Analysis of software
iii) Acquire the software ( make, build or purchase)
 In- house software
 Customized or tailored software
 Purchase software
iv) Implementation of software

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 k) Step used in evaluating purchased or commercial software
i. Evaluate the Information System Requirements
ii. Identify Potential Software Vendors
iii. Evaluate Software Package Alternatives
iv. Make the Purchase
v. Install the Software Package
Glossary
Software is a set of programs, which is designed to perform a well-defined
function.
A program is a sequence of instructions written to solve a particular problem.
Systems Software: Programs that coordinate the activities and functions of
the hardware and various other programs.
Application Softwares: Programs that help users solve particular computing
problems.
Utility Programs: Programs used to merge and sort sets of data, keep track
of computer jobs being run, compress files of data before they are stored or
transmitted over a network, check for viruses, and perform other important
tasks.
Enterprise Application are programs that aim to improve the cooperation
and interaction between all departments or sections or many users within
organization.
A primary key is a field in a table which uniquely identifies each row/record
in a database table. Primary keys must contain unique values.
A Foreign Key (FK) is a column or combination of columns that is used to
establish and enforce a link between the data in two tables
Data redundancy is a condition created within a database or data storage
technology in which the same piece of data is held in two separate places
Data inconsistency exists when different and conflicting versions of the same.

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In-house software development: Employing programmers and analysts
and setting up an internal ITgroup to develop software.
Custom Developed Software is where by a user or organization modify
existing software to suit their needs
Purchase or commercial package software is software developed for
commercial purpose.
Further Reading
Joseph Farrell, &Carl Shapiro, The Economics of Information Technology: An
Introduction (Raffaele Mattioli Lectures) Cambridge University Press, 2016
H. L. Capron and J. A Johnson, Computers: Tools for an information age, 12th
Edition, Prentice Hall 2018
TOPIC ACTIVITIES
There are many types of computer software in the market. List ten types of
system software and application software. Give justification of acquiring open
source software as opposed to commercial software.
Assignment
a) What is system software? State the most commonly used system
software. Explain any two main objectives and how these objectives are
achieved
b) Depending on its intended use, operating system wills just one user
running one program or thousands of users running multiple programs.
These capabilities of operating systems are describe as multithreading,
virtual memory and paging. Discuss the meaning of each term briefly.
c) There has been a trend where many clients’ process data using database
management systems (DBMS) rather than the traditional file based
systems. Discuss the benefits and drawbacks of database management
systems (DBMS).
d) Using illustration to outline steps that should be followed in evaluating
software alternatives

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e) There are various methods used in acquiring softwares.
i) State any two methods of acquiring softwares
ii) Explain one advantage and disadvantage in each method in (i)
f) Outline steps used in evaluating and purchasing software packages

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 TOPIC FOUR: EXPLORATION OF NATURE OF INFORMATION
Introduction
Welcome to topic one. This topic is aimed at introducing you on exploration of
nature of information and categorization of information. You will learn nature
of Information, sources of information, levels of information, timing of
information, frequency of information and use of information forms of
information. The topic is, therefore, designed to prepare you to have a clear
understanding of types of Information as well as characteristics of information.
Topic Time
 Compulsory online reading, activities, self-assessments and practice
exercises [3 hours]
 Optional further reading [1.5 hours]
 Total student input [4.5 hours]
Topic Learning Requirements
 Participation in one chat (at least 5 entries)

 At least two elaborate contributions to the discussion topic. You may also
start your own discussion thread.

 Timely submission of the assignments

Learning Outcomes

By the end of this topic you should be able to:

a) Explain exploration of nature of information

b) Discuss categorization of information under the following
i. The nature of information
ii. Sources of Information
iii. Levels of Information
iv. Timing of information
v. Frequency of Information
vi. uses of information

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 vii. Forms of Information
viii. Types of Information
c) Characteristics of information
Topic Content
4.1 Introduction
Data, Information and Knowledge
IT management deals with both the technology and its content. Storage,
processing and communication are what the technology is all about. Data,
information, and knowledge, are associated to distinct maturity steps. Less
mature firms deal only with data. More experienced firms are able to create
information out of data.
Example: Using a mobile service (SMS) to obtain student’s fee balance from
an student management system.
The INPUT (data) would be the registration number and any other instructions
entered via a keypad. The PROCESS will be the computer doing a search (and
possibly a calculation) to ascertain the student's balance. The OUTPUT
(information) would be the fee balance, which will either appear on the screen
or be printed on a slip of paper (or both).
Data
Data is a set of discrete, objective facts about events. In an organizational
context, data is more usefully described as structured records of transactions.
Data is created with facts and is the building blocks of meaning. It has no
context except for its relationship to other bits of data. Without further
context, data is meaningless as the user cannot determine where it came
from, why it is being communicated, etc. Examples of data are lists of
temperature, scores, and bits of news.
Information

27
Information is data that has been processed and given a context. Information
has meaning to a decision maker in a business context. Information is
valuable because it reduces uncertainty.

Knowledge
Knowledge is a fluid mix of framed experience, contextual information, values
and expert insight that provides a framework for evaluating and incorporating
new experiences and information. Notice that there are two parts to their
definition: First, there is content: "a fluid mix of framed experience, contextual
information, values and expert insight." This includes a number of things that
we have within us, such as experiences, beliefs, values, how we feel,
motivation, and information. The second part defines the function or purpose
of knowledge, "that provides a framework for evaluating and incorporating
new experiences and information." Thus knowledge entails an understanding
of rules. For example, revising hard means you stand a better chance of
passing exams. Knowledge generates appropriate actions by serving as a
background for articulating possible courses of action (articulation), for
judging whether courses of action will yield the intended result and for using
this judgment in selecting among them (selection), for deciding how actions
should be implemented and for actually implementing actions
(implementation).
Humans have an endless thirst for knowledge, but how do we obtain
knowledge? - We can read books and magazines, - study course materials,
and of course we can gain knowledge - from watching TV and listening to the
radio. From information and we use that information to make decisions.
Information can be converted into knowledge about historical patterns and
future trends. For example, summary information on retail supermarket sales
can be analyzed in light of promotional efforts to provide knowledge of
consumer buying behavior. Thus, a manufacturer or retailer could determine

28
which items are most susceptible to promotional efforts. - Repeated use of
information by decision makers in an action-learning environment creates
knowledge, in the form of models which map situations to decisions.
Knowledge occurs within human minds, although firms do attempt to codify it
through business policies and knowledge representation systems.
Intelligence implies the use of knowledge to transform the organizational and
business context in the direction of purpose (business objectives). Data and
information are closer to the technological means, whereas knowledge and
intelligence are much closer to the human being and its social, economic and
political context. Some people propose a fifth maturity step: wisdom.
Knowledge can be split into two categories: explicit and tacit.
Explicit knowledge is rules or processes or decisions that can be recorded
either on paper or in an information system.
Tacit knowledge exists inside the minds of humans and is harder to record.
It tends to be created from someone’s experiences, so again it is based on a
set of rules or experiences
The relationship between management levels, data, information,
knowledge wisdom and tasks
Level in Organization Data Scope of Example
hierarchy Tasks
position

Executive level: Wisdom Being able to abandon

Highly (why?) apply anunprofitable
unstructured knowledge line and
activities using introduce a new
highly abstract one
information

29
Senior management Knowledge Understanding Analysing the
level: (how?) the trends shows
loosely structured information that a particular
data, fairly line is no
structured tasks longerProfitable
Line management Information Data processed Summarized
level: (what?) insuch a way as quarterly data
Summarized data, obscure trends expressed in
fairly chart form
Structured tasks
Operative level: Data Raw, Daily cash
No summarized data, (What?) unprocessed entries
highlystructuredtasks entries spreadsheet
relating tosales
lines

4.2 Categorization of information

Information can be categorized under many headings that help to determine
its overall usefulness. The main categories are Nature, Source, Level, Time,
Frequency, Use, Form and Type.
4.2.1 Nature of Information
Formal information
This involves presenting information in a structured and consistent manner. It
is usually defined, within an organisation, as the main way of communicating
between and within parts of the organisation. It is also usually the main way
of communicating externally from an organisation. The main methods of
formal communication are still the formal letter, properly structured reports,
writing of training materials, etc. Formal information is communicated in
sound, well-structured language.

30
Informal information
This describes less well-structured information that is transmitted within an
organisation or between individuals who usually know each other. It tends to
be categorised as ‘unofficial’ information, and is communicated by casual
conversations, e-mails, or text messages between colleagues. The language
used is less well-structured than formal communication and tends to include
colloquialisms and shorthand; and spelling is less important.
4.2.2 Sources of Information
Primary information
A primary source of information is one that provides data from an original
source document. This may be as simple as an invoice sent to a business or
a cheque received. It may be more complex, such as a set of sales figures for
a range of goods for a tinned food manufacturer for one week, or it may be a
set of sales figures over several weeks and several locations. There are many
examples of primary sources in many walks of life, but generally a primary
source is defined as being where a piece of information appears for the first
time
Secondary information
A secondary source of information is one that provides information from a
source other than the original. Secondary sources are processed primary
sources, second-hand versions. Examples of secondary sources could be an
accounts book detailing invoices received, a bank statement that shows details
of cheques paid in and out. Where statistical information is gathered, such as
in surveys or polls, the survey data or polling data is the primary source and
the conclusions reached from the survey or the results of the poll are
secondary sources.
Internal information
All organizations generate a substantial amount of information relating to their
operation. This internal information is vital to the successful management of

31
the organisation. The information may be available from a number of sources
within the organisation, for example: Marketing and sales information on
performance, revenues, markets shares, distribution channels; Production
and operational information on assets, quality, standards; Financial
information on profits, costs, margins, cash flows, investments; Internal
documentation such as order forms, invoices, credit notes, procedural
manuals.

External information
An external source of information is concerned with what is happening beyond
the boundaries of the organisation. This covers any documentation relating to
a subject area produced as a summary or detailed report by an agency
external to an organisation. Such information may be obtainable from
government agencies or private information providers. Examples might
include: census figures, telephone directories, judgments on court cases,
computer users’ yearbook, national opinion polls, trade journals, Ordnance
Survey maps etc.
4.2.3 Levels of Information
Within an organisation planning, control and decision-making is carried out at
various levels within the structure of the organisation. The three levels at
which information can be used are strategic, tactical and operational and there
is a direct correlation between the levels of importance of individuals or groups
within an organisation and the level of information that is being
communicated.
Strategic information
Strategic information is used at the very top level of management within an
organisation. These are chief executives or directors who have to make
decisions for the long term. Strategic information is broad based and will use
a mixture of information gathered from both internal and external sources. In

32
general a timescale may be from one to five years or even longer depending
on the project. Some oil related projects are planned from the outset to last
for 25 or more years. A supermarket building a new superstore will look at a
timescale of 20 years or so, whilst even a small business may have a five-year
strategy. Strategic plans will have little or no detail in them and more detailed
strategic plans will be made slightly lower down the managerial ladder. A
good strategic plan will be easier to flesh out lower down than a poor or vague
strategic plan. Similarly, well-constructed and more detailed plans will be
easier to implement than poorly constructed plans.

Tactical information
The next level down is the tactical level, and tactical planning and decision-
making takes place within the guidelines set by the strategic plan. Tactical
information will be mostly internal with a few external sources being used.
Internal information is likely to be function related: for example, how much
‘down time’ a production line must allocate for planned maintenance. Tactical
information is used by middle management (employees) when managing or
planning projects. The timescale is usually at least between 6 months and 5
years (depending on the scale of the strategic project). Circumstances vary
but a small project may have a tactical timescale of between one and six
months. Tactical plans have a medium level of detail and will be very specific;
they deal with such matters as who is doing what and within what specific
budgets and timescales. These plans have medium scope and will address
details at the operational level. They will generally have specific objectives
and be geared towards implementation by operational level employees.
Operational information
The lowest level is operational and operational planning takes place based on
the tactical plans. The lowest level of management or workers in an
organisation implements operational plans. These may be section leaders or

33
foremen in a large organisation or workers such as shop assistants, waiting
staff, and kitchen staff, etc., in smaller businesses where there is no
supervisory layer. The timescale is usually very short, anything from
immediately, daily or at most a week or month. Results of operational work
will usually be passed upwards to let the tactical planners evaluate their plans.
4.2.4 Time
Historic information
This is information gathered and stored over a period of time. It allows
decision makers to draw comparisons between previous and present activities.
Historic information can be used to identify trends over a period of time

Present information
This is information created from activities during the current workwindow
(day, week or month). In real-time systems this information would be created
instantly from the data gathered (for example, the temperature in a nuclear
power plant turbine), giving accurate and up-to-date information

Future information
This is information that is created using present and historic information to try
to predict the future activities, trends and events relating to the operation of
an organisation. An example would be sales figures for a company: if the sales
figures are up 10% from those recorded this time last year it might be
anticipated that next month’s sales figures will also be up by 10%.
4.2.5 Frequency of Information
Continuous
This is information created from data gathered several times a second. It is
the type of information created by a real-time system. For example, sensors
may be set up to collect temperature and humidity readings in a large

34
commercial greenhouse. It will be important for that information to be
collected constantly because any variation in either the temperature or the
humidity could point to the failure of some machinery and an alarm could be
sounded to alert the staff. A very important system exists on modern aircraft
where the navigation and flight-control systems are continuously monitoring
and making adjustments; another is on a computerised production line where
constant monitoring allows the system to correct faults. Obviously many other
types of real time systems exist but a feature of them all will be that they
check data continuously.
Periodic information
This is information created at regular timely intervals (hourly, daily, monthly,
annually). Different examples of information generated by an organization are
needed at specific periods of time.
 Annually – On an annual basis a company must submit its report and
accounts to the shareholders.
 Monthly – Banks and credit-card companies produce monthly
statements for the majority of their customers.
 Daily – A supermarket will make daily summaries of its sales and use
the product information to update its stock levels and to reorder stock
automatically.
 Hourly – A busy call centre will often update totals for each operator on
an hourly basis and give the top employee for the hour some reward.
4.2.6 Use of Information
Planning
Planning is the process of deciding, in advance, what has to be done and how
it is to be done. Planning should be based on good information. Planning is
not an end in itself; its primary purpose is to provide the necessary structure
for decision-making and resulting actions throughout the organisation. The
process of planning provides an opportunity to construct a sequence of actions

35
that, when executed, will achieve the required aims and objectives. Basically,
planning means decisions by management about:
what is to be done in the future
 how to do it
 when to do it
 Who is to do it?
An objective is something that needs to be achieved and a plan contains the
activities or actions required to achieve the objective.
Control
Control can be defined as the monitoring and evaluation of current progress
against the steps of a pre-defined plan or standard. If these tasks are not
proceeding in line with expectations then action is taken to bring the project
back in line with what had been planned. Control is carried out at strategic,
tactical and operational levels. The type of control changes according to the
level of management as does the amount of time spent on control. At an
operational level the majority of the time of the manager or supervisor will be
spent on control activities where the work of staff is compared to very specific
financial or quantifiable terms (e.g. how many boxes have been packed). At
higher levels, planning and control are more closely linked, with management
being concerned with the monitoring of progress against the plan, assessing
the suitability of the plan itself and predicting future conditions. Organizations
and individuals must plan in order to operate effectively. Likewise they must
also operate controls to ensure that progress is being made against the plan.
These controls are needed because unexpected events can cause actual
results to change from the expected planned results. Control activities
attempt to keep the organization in line with the original plan or to enable the
organization to change to meet the new conditions. Unexpected events range
from short delays in the completion of an element of a plan – which may be
relatively minor – to major disturbances such as a large new competitor

36
entering the marketplace. Control measures actual progress against what is
expected and provides information upon which remedial action can be taken,
if required, either to change performance in order to conform to the original
plan or to modify the plan.
Decision-making
Decision-making is the process of selecting an action or actions from those
possible based on the information available. Decision making involves
determining and examining the available actions and then selecting the most
appropriate actions in order to achieve the required results. Decision-making
is an essential part of management and is carried out at all levels of
management for all tasks. All decisions are arrived at in the same way. The
manager must choose, by some means, the result or results that s/he wishes
to achieve and do some form of appraisal of the situation. Decision-making is
made up of four phases:
 Finding occasions for decision making
 find possible courses of action (i.e. what choices are available)
 choosing among these courses of action
 Evaluating past choices.
Better information should lead to better decision making and informed choice.
Information helps to reduce the level of uncertainty and to give some estimate
of the probability of a particular consequence. In contradiction too much
information can result in no decision, faulty information lead to wrong
decisions, and information with unknown bias lead to disaster.
4.2.7 Forms of Information
Written
The vast majority of information created within an organization is in the
written form. This can include hand-written or word processed information and
information in e-mails as well as reports produced from different classes of
software, both general-purpose packages and bespoke software solutions.

37
Examples of written information are reports, memos and tables, receipts,
invoices, statements, and summary accounting information. The list is almost
endless and different businesses will produce their own type of written
information.
Aural
Another common form of information is aural, which is information presented
as sound. The commonest form of aural information is of course speech and
examples of this would be formal meetings (where minutes are taken),
informal meetings, talking on the phone and voice-mail messages. Nowadays
many organisations will have employees giving a presentation or talk to a
group where there may be use made of music and sound effects as well as
speech.
Visual
This form of information includes when pictures, charts and graphs are used
to communicate information. Again, many presentations will make use of data
projectors and presentation software that will include text, graphics and
animations. Full video can also be projected via a data projector, and
presentations can use video filmed with a digital video camera and then edited
on a computer and distributed via internet, cloud and other storage devices
are quite common.
4.2.8 Types of Information
Detailed
Detailed information might be an inventory list showing stock levels, actual
costs to the penny of goods, detailed operating instructions, and so on. This
information is most often used at the operational level within an organization.
Sampled
This information usually refers only to selected records from a database: for
example, only selected customers from a company’s full customer list. In a
supermarket this may be product and sales summaries given to departmental

38
managers (bakery, fruit and vegetables, etc.). Sampled information is often
used at a tactical level within an organization. Depending on the size of the
organization it may also be relevant at a strategic level.
Aggregated
This is information that consists of totals created when detailed information is
collated. An example of aggregated information is the details of all purchases
made by customers totalled each month and displayed in a chart showing total
sales for each month over a year.
In order to show all three types of information, here is an example that some
of you should be familiar with. In a league of teams who play each other twice
in a season, the detailed information would be the score line for each game
played by all the teams in the league. Sampled information would be the
details for a team in the league relating to their performance. Aggregated
information would be the goals for, goals against and goal difference for a
team in a league.
4.3 Characteristics of Information
Good information is that which is used and which creates value. Good
information is relevant for its purpose, sufficiently accurate for its purpose,
complete enough for the problem, reliable and targeted to the right person.
It is also communicated in time for its purpose, contains the right level of
detail and is communicated by an appropriate channel, i.e. one that is
understandable to the user. Details of these characteristics related to
organizational information for decision-making are as follows:
Availability/accessibility
Information should be easy to obtain or access. Information kept in a book
of some kind is only available and easy to access if you have the book to hand.
A good example of availability is a telephone directory, as every home has
one for its local area. It is probably the first place you look for a local number.
But nobody keeps the whole country’s telephone books so for numbers further

39
afield you probably phone a directory enquiry number. For business premises,
say for a hotel in London, you would probably use the Internet. Businesses
used to keep customer details on a card-index system at the customer’s
branch. If the customer visited a different branch a telephone call would be
needed to check details. Now, with centralised computer systems, businesses
like banks and building societies can access any customer’s data from any
branch.
Accuracy
Information needs to be accurate enough for the use to which it is going to be
put. To obtain information that is 100% accurate is usually unrealistic as it is
likely to be too expensive to produce on time. The degree of accuracy depends
upon the circumstances. At operational levels information may need to be
accurate to the nearest cent – on a supermarket till receipt, for example. At
tactical level department heads may see weekly summaries correct to the
nearest Kshs10000, whereas at strategic level directors may look at
comparing stores’ performances over several months to the nearest Kshs100,
000 per month. Accuracy is important. As an example, if government
statistics based on the last census wrongly show an increase in births within
an area, plans may be made to build schools and construction companies may
invest in new housing developments. In these cases any investment may not
be recovered.
Reliability deals with the truth of information or the objectivity with which it is
presented. You can only really use information confidently if you are sure of
its reliability and objectivity. When researching for an essay in any subject,
we might make straight for the library to find a suitable book. We are
reasonably confident that the information found in a book, especially one that
the library has purchased, is reliable and (in the case of factual information)
objective. The book has been written and the author’s name is usually printed
for all to see. The publisher should have employed an editor and an expert in

40
the field to edit the book and question any factual doubts they may have. In
short, much time and energy goes into publishing a book and for that reason
we can be reasonably confident that the information is reliable and objective.
Compare that to finding information on the Internet where anybody can write
unedited and unverified material and ‘publish’ it on the web. Unless you know
who the author is, or a reputable university or government agency backs up
the research, then you cannot be sure that the information is reliable. Some
Internet websites are like vanity publishing, where anyone can write a book
and pay certain (vanity) publishers to publish it.
Relevance/appropriateness
Information should be relevant to the purpose for which it is required. It must
be suitable. What is relevant for one manager may not be relevant for
another. The user will become frustrated if information contains data
irrelevant to the task in hand. For example, a market research company may
give information on users’ perceptions of the quality of a product. This is not
relevant for the manager who wants to know opinions on relative prices of the
product and its rivals. The information gained would not be relevant to the
purpose.
Completeness
Information should contain all the details required by the user. Otherwise, it
may not be useful as the basis for making a decision. For example, if an
organization is supplied with information regarding the costs of supplying a
fleet of cars for the sales force, and servicing and maintenance costs are not
included, then a costing based on the information supplied will be considerably
underestimated. Ideally all the information needed for a particular decision
should be available. However, this rarely happens; good information is often
incomplete. To meet all the needs of the situation, you often have to collect
it from a variety of sources.
Level of detail/conciseness

41
Information should be in a form that is short enough to allow for its
examination and use. There should be no extraneous information. For
example, it is very common practice to summarise financial data and present
this information, both in the form of figures and by using a chart or graph.
We would say that the graph is more concise than the tables of figures as
there is little or no extraneous information in the graph or chart. Clearly there
is a trade-off between level of detail and conciseness.
Presentation
The presentation of information is important to the user. Information can be
more easily assimilated if it is aesthetically pleasing. For example, a marketing
report that includes graphs of statistics will be more concise as well as more
aesthetically pleasing to the users within the organization. Many organizations
use presentation software and show summary information via a data
projector. These presentations have usually been well thought out to be
visually attractive and to convey the correct amount of detail.
Timing
Information must be on time for the purpose for which it is required.
Information received too late will be irrelevant. For example, if you receive a
brochure from a theatre and notice there was a concert by your favorite band
yesterday, then the information is too late to be of use.
Value of information
The relative importance of information for decision-making can increase or
decrease its value to an organization. For example, an organization requires
information on a competitor’s performance that is critical to their own decision
on whether to invest in new machinery for their factory. The value of this
information would be high. Always keep in mind that information should be
available on time, within cost constraints and be legally obtained.

42
Cost of information
Information should be available within set cost levels that may vary dependent
on situation. If costs are too high to obtain information an organization may
decide to seek slightly less comprehensive information elsewhere. For
example, an organization wants to commission a market survey on a new
product. The survey could cost more than the forecast initial profit from the
product. In that situation, the organization would probably decide that a less
costly source of information should be used, even if it may give inferior
information. In summary, you learned exploration of nature of information by
covering the following these key sub topics.
a) Data, Information and Knowledge
b) The relationship between management levels, data and tasks
c) Categorization of information
i) Nature of Information
ii) Sources of Information
iii) Time
iv) Frequency of Information
v) Use of Information
vi) Forms of Information
vii) Types of Information
d) Characteristics of Information

Glossary
Data is a set of discrete, objective facts about events. In an organizational
context, data is more usefully described as structured records of transactions.
Information is data that has been processed and given a context.
Information has meaning to a decision maker in a business context.

43
Knowledge is a fluid mix of framed experience, contextual information,
values and expert insight that provides a framework for evaluating and
incorporating new experiences and information.
Planning is the process of deciding, in advance, what has to be done and how
it is to be done.
An objective is something that needs to be achieved and a plan contains the
activities or actions required to achieve the objective.
Control is defined as the monitoring and evaluation of current progress
against the steps of a pre-defined plan or standard.
Decision-making is the process of selecting an action or actions from those
possible based on the information available.

Further Reading

James F. Kurose and Keith W. Ross. Computer Networking: A Top-Down

Approach, 5th edition, Addison-Wesley, 2010, ISBN-10: 0136079679, ISBN-
13:9780136079675.
Andrew S. Tanenbaum and Maarten Van Steen. Distributed Systems:
Principles and Paradigms. 2nd edition, Prentice Hall, 2007, ISBN-10:
0132392275, ISBN-13: 9780132392273
TOPIC ACTIVITIES
Use examples of organization structure of high school hierarchy to show
relationship between management levels, data and tasks.
Tips
Identify the roles of each staff in the school in relationship to management
levels, data and tasks.
Assignment
a) Briefly discuss the categories knowledge
b) Information is categorized under many headings that help to determine
its overall usefulness. Explain briefly nature of information

44
c) Discuss how value and cost are classified as characteristics relating to
information for decision-making in achieving organizational objectives
and goals.
d) Being an expert equipped with information technologies skills advice the
company the on levels of information citing examples depending data
and specified tasks.
e) Good information is that which is used and which creates value. Good
information is relevant for its purpose, sufficiently accurate for its
purpose, completes enough for the problem, reliable and targeted to the
right person. It is also communicated in time for its purpose, contains
the right level of detail and is communicated by an appropriate channel.
Details of these characteristics related to organizational information for
decision-making. Briefly explain good information characteristics.

45
 TOPIC FIVE: CREATING INFORMATION AND ECONOMICS OF
INFORMATION
Introduction
Welcome to topic one. This topic is aimed at introducing you to topic fivethat
covers the concept of transforming data to information, to knowledge, to
wisdom.You will also learn the relationship between data, information,
knowledge and wisdom.
The topic is, therefore, designed to prepare you to have a clear understanding
of economics of information, information as resource, information as
commodity as well as information as constitutive force.
Topic Time

 Compulsory online reading, activities, self-assessments and practice

exercises [3 hours]
 Optional further reading [1.5 hours]
 Total student input [4.5 hours]
Topic Learning Requirements

 Participation in one chat (at least 5 entries)

 At least two elaborate contributions to the discussion topic. You may also
start your own discussion thread.

 Timely submission of the assignments

Learning Outcomes

By the end of this topic you should be able to:

a) Explain how to transform data to information, information to

knowledge and knowledge to wisdom.
b) Discuss relationship between data, information, knowledge and
wisdom.
c) Explain economics of information
d) Discuss information as

46
 i. Resource,
ii. Commodity
iii. Constitutive force.
Topic Content
1.1 Introduction

Data, Information, Knowledge, and Wisdom

The concept of transforming Data, to Information, to Knowledge, to Wisdom

has been utilized in numerous studies and by industries. However, we can
take this concept and use it for the research and development of Policies,
Processes, and Procedures.

Researching and developing Policies, Processes, and Procedures requires

transforming data to information, to knowledge, and then to wisdom.
Through this progression, understanding is increased. As you perform the
research and development phases, you will transform the data into
information, knowledge, and wisdom for users and the enterprise.

The goal is for the Policies, Processes, and Procedures to be clear, concise,
complete, and correct™. Understanding the relationship and progression
between data, information, knowledge, and wisdom helps you assess where
you are within the Understanding scale during the research and development
phases; and whether you are properly positioned to develop and test the
documentation. If you build Policies, Processes, and Procedures before you
are at the proper point on the scale, they will be fragmented and incomplete.

As you progress through the scale from data through wisdom,

understanding increases; and the Policies, Processes, and Procedures will
be clearer, more concise, more complete, and more correct. We refer to
this as the Understanding Scale

47
Relation graph between data, information, knowledge and wisdom

Concise, complete, and correct

Knowledge

Information

Data Understanding

Understanding Scale.

Data
Data is a fact that alone is not significant, as is doesn’t relate to other data.
Data may answer a very basic what question; such as a glossary definition,
directory entry, or code listing. However, a definition or code may require
knowledge, if the definition or code is complex.
Information
Information is data that is related and is therefore in context. It can then be
transformed into a Process or Procedure, making it useful. Information is data
that relates who, what, where and when to each other, providing a
baseline for a Process (i.e. control point, cycle time) or a Procedure (i.e. date,
code, screen description).
While information may become input for a Process or Procedure, the level
of understanding may limit that Process or Procedure to an individual or

48
department level. Enterprise and more complex Processes and Procedures
require Knowledge.
Knowledge
Knowledge is the application of information. Knowledge addresses how and
why, in addition to who, what, where and when. The knowledge links all
the information together to produce a comprehensive Policy, Process or
Procedure.
Knowledge allows management to gain an accurate and complete
picture of the enterprise Policies, Processes, and Procedures. The
Policies, Processes, and Procedures become transformed into an
enterprise asset.
Wisdom
Wisdom is complete understanding of the effects and outcomes of
Knowledge. Wisdom addresses how and why, in addition to who, what,
where and when at the Enterprise level. Enterprise Policies, Processes, and
Procedures must be at this understanding level to be considered permanent,
otherwise the Policy and Process may be considered Conditional.
Having clear, concise, complete, and correct™ Policies, Processes, and
Procedures, an enterprise may now assess best practices and compliance
issues. Wisdom allows for Policies, Processes, and Procedures to be modified
so they reflect the strategic vision, functional alignment, best practices and
operational objectives of the enterprise. Management is able to standardize
Policies, Processes, and Procedures across enterprise locations, business
units and departments.
Policies, Processes, and Procedures become a tool for others within the
enterprise for remodeling and initiatives; in that they reflect the goals,
guidelines and functions of the enterprise. They can also be referred to as a
map to the organization.

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Understanding
Understanding is what increases and supports the transition from data, to
information, to knowledge, and to wisdom.
5.2 The Economics of Information
Information is that property of data that represents and measures effects of
processing of them.
 Processing includes data transfer, selection, structuring, reduction, and
conceptualization.
 In that definition, ‘data’ is taken as equivalent to physical “recorded
symbols”, exemplified by printed characters; by binary characters in
magnetic, punched or optical form; by spoken words; by images.
 Whatever the physical form may be, it becomes a recorded symbol when
it is interpreted as representing something.

Physical & Symbolic – Processes & Entities

PROCESSES
ENTITIES Physical Symbolic
Agriculture Data Input
Physical Manual Labour Data Storage
Personal Services Data Output (e.g., Reports)
Sports Intellectual Games
Symbolic Performance Arts Writing & Composing
Classroom lecturing Programming& Mathematics

Table 1:Physical & Symbolic

5.2.1 Economic roles of information
 Information is used to influence and persuade.
 Information is essential in education, serving the process of learning,
supplementing interaction with teachers, and providing (in books,
media, and databases) much of the substance.
 Information may be an educational objective in itself, since among
things to be learned are the tools for access to and use of information.

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  Information is the substance of cultural enrichment, entertainment, and
amusement.
 Information can be a product, a commodity — something produced as
a package.
 Information can be a service. Indeed, the majority of ‘business services’
(the national economic account that includes consulting) are information
based.
 Information can be a capital resource, especially for companies that
produce information products and services.
 Encourage entrepreneurship
 Shift from low technology to high technology
 Shift from production of physical goods to information goods
 Encourage effective use of information in business
 Provide incentives for information industries
 Develop information skills
 Management of Information Enterprises
o Establish technical information skills
o Develop information support staff skills
 Better workforce, better trained and more capable of dealing with
problems.
 Better product planning and marketing, based on more knowledge about
consumer needs.
 Better engineering, based on availability and use of scientific and
technical information.
 Better economic data, leading to improved investment decisions and
allocation of resources.
 Better management from improved communication and decision-
making.
5.3 Information as Resource

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Information is a resource on its own, as well as an asset to others. Information
follows as the organized form of data. Knowledge is then the organized
information which is internalized by its user and integrated with other bits and
fields resulting from experience, study, or intuition. The final step is the
integration of the knowledge into wisdom, which is information which has been
made useful by theory relating the bits of knowledge to each other.
Characteristics of information as a resource
a) Information is expandable: it is recognized that for specific purposes
information may deplete, but in general, the more we have, the more
we use, and the more useful it becomes.
b) Information is compressible: It is possible to concentrate, integrate, and
summarize information for easier handling.
c) Information is substitutable: Information can and does replace land,
labor, and capital. It is the use of computers and telecommunications
that aids in this phenomenon.
d) Information is transportable: Information can be tapped into just about
anywhere; this has led to the idea of being remote as much more
difficult to achieve since people and information can be taken to the
remotest of places.
e) Information is diffusive: There tends to be an ability for information to
leak. This leakage allows us to have more, and more of us to have it.
f) Information is shareable: No exchange transaction of information can
take place, only sharing transactions, and this leads to an entire sharing
environment.
5.4 Information as commodity
a) Information is also valuable commodity to everyone.
b) Information can bought as it can be sold.

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c) It is an indispensable raw material for decision makers for taking raw
material for decision makers for taking right decisions. To information
has a right decisions.
d) To information has an economic value also in transforming all economic
value also in transforming all natural resources of any country into
finished natural resources of any country into finished products.
e) Marketing of information is done products. To marketing of information
is done due to its significance and importance. It is due to its significance
and importance.
f) It is being demanded as information products and being demanded as
information products and services.
Properties that make information as commodity.
a) Supply of information Commodities: The information commodities
are produced on a given price
b) Demand of information: The demand for a good or service is the
quantity a consumer or consumers are willing to purchase at a given
price
c) Cost of information: To produce output an organization must
purchase and combine inputs. The cost of producing a unit of output
is the combine costs of the inputs as follows
i) fixed costs
ii) variable costs
iii) Marginal costs
iv) Average cost
v) Total cost.
d) Price of information: The price of information products/service are
determined by supply and demand of determined by supply and
demand a product or service

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 e) Market of information: Market is a place where consumers and
producers come together to buy and sell on agreed Price Market
Equilibrium
f) Information is a Public: Good Information can be modeled as both as
public and commodity good. When buyers and sellers exchange
information service or products in market, information is a private
good or commodity. Market, information is a private good or
commodity. Information services or products can also be Information
services or products can also be public goods. Books sold to libraries,
newspapers shared by co-workers, computer software networked
shared by co-workers, computer software networked among several
work stations, a library journals among several work stations, a library
journals subscription and a telephone network are the subscription
and a telephone network are the examples of information as a public
good or services. Examples of information as a public good or
services.
5.5 Information as constitutive force
a) Access to good information bring about change to communities if there
are good decision makers
b) useful information leads to significant social benefit because information
reproduction is productivity to communities
c) Decisions about information provision are in practice decisions about the
way communities are to be shaped. One example of this can be seen in
the deliberations over the naming of a web portal for the use of tele-
centres situated throughout the global.
d) The naming of the website represented an important project as it ideally
should represent the essence. This account provides a simple example
that demonstrates the value of information-as-constitutive force

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 e) As one moves to more socially integrated definitions of information
decisions about ICT systems become increasingly tied to changes in
established patterns of behavior in order to create better socio-economic
outcomes.
In summary, you learned creation of information and economics of information
by covering the following:-
a) Data, Information, Knowledge, and Wisdom
b) Relationship between data, information, knowledge
and wisdom
c) Scale of understanding and contributing attributes
d) The economics of information
e) Information as resource
f) Information as commodity
g) Information as constitutive force
Glossary
Data is a fact that alone is not significant, as is doesn’t relate to other data.
Data may answer a very basic what question
Information is data that is related and is therefore in context. It can then
be transformed into a Process or Procedure, making it useful. Information is
data that relates who, what, where and when to each other, providing a
baseline for a Process or a Procedure.
Knowledge is the application of information. Knowledge addresses how and
why, in addition to who, what, where and when.
Wisdom is complete understanding of the effects and outcomes of
Knowledge. Wisdom addresses how and why, in addition to who, what,
where and when at the Enterprise level.

Understanding is what increases and supports the transition from data, to

information, to knowledge, and to wisdom.

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Economics of Information since normally used to influence, persuade,
serve on the process of learning, substance of cultural enrichment, product,
service, capital resource, encourage entrepreneurship and shift from low
technology to high technology e.t.c
Information as resource since Information is a resource on its own, as well
as an asset to others.
Information as commodity since Information is valuable commodity to
everyone, can be bought as well as it can be sold at cost.
Information as constitutive force since information bring change to
communities if there are good decision makers leading to significant social
benefit because information reproduction is productivity to communities.

Further Reading
Joseph Farrell, &Carl Shapiro, The Economics of Information Technology: An
Introduction (Raffaele Mattioli Lectures) Cambridge University Press, 2016
H. L. Capron and J. A Johnson, Computers: Tools for an information age, 12th
Edition, Prentice Hall 2018
TOPIC ACTIVITIES
‘Data’ is taken as equivalent to physical “recorded symbols”, exemplified by
printed characters; by binary characters in magnetic, punched or optical form;
by spoken words; by images. Whatever the physical form may be, it becomes
a recorded symbol when it is interpreted as representing something. Used a
table to show relationship between physical, symbolic, processes and entities
in education sector.
Tips
Used example given in table 1 in this topic
Assignment

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a) Using a graph to explain the relationship between data, information, and
knowledge, wisdom and scale of understanding showing all contributing
attributes.
b) The subjective nature of knowledge is problematic from management
point of view. Discuss three main reasons.
c) Discuss briefly four characteristics of “information as a resource” in
productivity economy citing practical examples.
d) Explain briefly four properties that make “information as a commodity”
in productivity economy.
e) Explain how information technology has been accepted as a tool of
accessing information and classified as “information as a constitutive
force”

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