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350 The importance of information to organisations Before we even look at the importance of information in the business context we need

to make one very clear distinction. Although the words 'data' and 'information' are often used Interchangeably, they do not really have the same meaning. Raw data requires processing in order to become information. Data can, of course, come in many different forms, most commonly numbers, words and Symbols. Data represent facts, transactions and events. However, taken on its own, a simple list of numbers is not that useful, even if the numbers refer to the transactions carried out by a retail store on a specific day. If you were to purchase a product from a retail store the following data would be captured: the time, date and year of the transaction I the value of the transaction 1M details of the products or services bought and how many were bought 1 how you paid for the products or services I which employee in the store processed the transaction j whether any discounts were given to you 1 whether you had a loyalty card.

351 Businesses that sell products and services to customers find this one of the simplest sets of data to collect , of course, taken at the point of sale. The vast majority of

businesses have computerised till systems linked to a stock control system and a reordering database. From this raw data the store would be able to: obtain the total value of sales for a given day identify the busiest period of the day identify which employee processed the most sales identify the most popular products sold identify the most common form of payment.

Characteristics The data's source largely determines the data's characteristics, i.e. whether it is in the form of numbers, words or symbols or is a mixture. Initially, data is often generated in the form of an enormous disorganised list that has no apparent value until it has been processed. Importantly, the data collected should eventually provide the business with useful and actionable information It would therefore be of no use to a business that sells stationery items to collect data about whether or not people wear spectacles. As we will see, the data has to have a translatable value and it has to have relevance to the business that collects it. It may not be possible for the business to collect the data itself, in which case it may commission another company to collect the data on its behalf or it may purchase data from an external source. Qualitative and quantitative information The simple way of distinguishing between qualitative and quantitative information is to consider the difference between detail and bulk. Generally speaking, qualitative information is highly detailed and descriptive and because of the amount of detail there is neither the time nor the resources to collect huge amounts of it Quantitative information is numerical and does not contain a great deal of detail, but there is lots of it. Here is an example: A business has a limited budget to collect some research information about its customers. The basic choice is whether to collect qualitative or quantitative data. If the business opts for qualitative then it can afford to carry out 50 in-depth interviews with customers to find out about their backgrounds and buying habits. This should provide some valuable information. However, the problem is whether the 50 customers chosen will be representative of all the business's customers. The alternative is to opt for quantitative research. The business could, over a period of a month, log the number of customers going into and out of a retail store and

compare it with the number of individual sales made. This could show how many visitors to the store actually buy products. The problem here is whether this research would tell thebusiness very much about its customers' buying habits. In this situation, the business has to define precisely what it wants to find out and then select an affordable research method that would, hopefully, collect that information. In the example, quantitative data collection would provide very limited information about many customers. The business may wish more data had been collected on a wider variety of aspects. Qualitative data would provide detailed information about a relatively small number of individuals. To be cost effective the additional information should bring new ideas to the business. If qualitative research could provide the answers, there are sampling techniques that can be used to ensure that the customers chosen for interview are as representative as possible of the wider customer base. However, the comparatively small sample size will have to be taken into account when the results are evaluated. See pages 160-1 for information about types sampling techniques. Primary and secondary information In the example used to illustrate qualitative and quantitative data, the business was collecting the data that it needed directly from its customers in order to answer a specific question. It I was doing primary research. In primary research, data is collected for the sole purpose of the research task. Whether a business does its own data collection or employs a consultancy to collect data from consumers on its behalf, this is primary research. When collecting primary data, a business hopes to be able to frame the questions and design the research to provide it with the answers that it is seeking. Starting from scratch like this is. of course, complicated and expensive. The business may know what it wants to find out. But it may not know how to find that data It also needs to be assured that any data collection. 352

exercise is efficient, relevant and will provide accurate information that can be acted upon. The alternative is to use secondary data, wh.ch, as the term implies, is second-hand. Somebody else has collected it for another purpose. Typical examples are government statistics and marketing intelligence reports collated by marketing agencies. Me government or the marketing agency will have collected or collated its own primary data, which it will have processed and turned into information that it needs op that it perceives will be of value to others. However, there are problems with secondary data: Because the data has not been collected specifically to meet the business's needs, it ma

not necessarily answer all its questions. The data may have been collected several months previously. In some cases, the data

may have been collected years ago, and it may have taken a long time to process the data before presenting it in its current format. It may not be clear what research methods were used. The sample from which the data was collected may not have been representative The researchers may be making assumptions based on very little original data

Provided that businesses can afford to carry out primary research and are confident that the primary research will prov.de the data that is needed they tend to opt for this in preference to secondary research. Secondary data, however can be useful for providing clues or suggesting trends and fashions that a business can use as a base for its own research.

Quality of information

Quality criteria Explanation

Valid The validity of data underpins everything in the research process. A questionnaire or any other measuring tool is valid if it actually measures what it claims to be measuring. A business needs data that are directly useful and relevant, particularly in terms of the research questions that the business asks. What this means is that the research has to collect enough data from appropriate sources to make sure that the results are actually a true reflection of the situation. Complete Given that it is impossible for any business or government agency to collect every single piece of possibly relevant information from every single possible source the term complete'is'not a particularly good one to use. The information collected must, at the very least answer the basic questions posed by the business. If it can do this then at a very basic level the research is complete. Businesses will always wish to extend their understanding of a situation beyond what is absolutely necessary at the time. They may wish to ask more questions and delve deeper into situations. However, as far as answering key questions in a research project is concerned, the data needs to be complete only in so far as it does what it set out to do and nothing beyond that. Obviously, the more information that is collected, the longer it will take to process and probably the more complicated and confusing the results will be. Accurate Accuracy is a prime consideration when collecting data. There can be many sources of errors, which will lead to the feeling that the data is not as accurate as it could have been. At a very basic level, figures need to add up and all data that has been collected should be included in the sets of data processed and commented upon. It should be made clear where estimates or assumptions have been made. There should be spot checks of the data to make sure that there have been no data processing errors. A research project is rarely likely to produce absolutely perfect information; therefore the business needs to balance perfectly accurate information against the need to process the data as quickly as possible and provide the necessary information for the business to act upon.

352 Sources of information

Before a business embarks on any research-gathering exerc.se it will have to decide what kind of information ,t needs Many businesses begin by looking at information that has already been published. This secondary research material includes market reports, official statistics and trade publications. Some of the information is free, but information from some sources has to be paid for. Next the business will have to decide whether the information .s already to hand or if it will have to hunt for the data that ft needs. The first place to begin looking is inside the business itself. A business routinely collects an enormous amount of data but may not use it for any other purpose than its primary one: for example, sales figures may be routinely passed to the accounts department for analysis but may not be seen elsewhere in the organization. Whether the business is going to use internal sources of information or external ones, there are five key considerations for any type of data. Data checklist Trustworthiness - is the data credible, reliable and can it be confirmed? 4 Validity - can comparing it to the data from another source check the validity 4 of the data? Dependability - Will the users be prepared to depend upon the data, assuming 4 that they trust its source? Transferability - can the data that has been collected for one purpose be used for another with the minimum of effort? Confirmability - is there access to the raw data and is it clear how the data was 4 analysed? If spot checks can be made on this then more users will trust the data. Internal The term 'internal data' refers to all types of information that has been collected by the various parts of an organisation. Usually, the data is routinely collected by a particular department or division for its own specific purpose. For various reasons, the data may not be circulated around the whole organisation; some users within the organisation will, however, have access to the data when making decisions and solving problems. Access to these sources of information is often limited to key decision makers, as some of the information may be sensitive (e.g. personnel records) or of great commercial value to competitors .g. data concerning new products and services in development). The key sources of internal information are outlined in Table 26.2 .