What is Information?

To understand information, we need to have a clear idea about data. It is viable to know that
Information is the product of data processing. So, what is this Data? Data is raw facts. Data is
like raw material. Data does not interrelate and it does not help in decision making. Data is
defined as groups of non-random symbols in the form of text, images, voice representing
quantities, action, and objects.

So precisely we can say that a data that is accurate and timely, specific, and organized for a
purpose, presented within a context that gives it meaning and relevance, and can lead to an
increase in understanding and decrease in uncertainty is termed as information. It is valuable
because it can affect behavior, a decision, or an outcome. For example, if a manager is told
his/her company's net profit decreased in the past month, he/she may use this information as a
reason to cut financial spending for the next month. A piece of information is considered
valueless if, after receiving it, things remain unchanged. For a technical definition of information
see information theory.

Characteristics of Information: The parameters of a good quality are difficult to determine for
information. Quality of information refers to its fitness for use, or its reliability. Following are the
essential characteristic features:

i) Timeliness: Timeliness means that information must reach the recipients within the prescribed
timeframes. For effective decision making, information must reach the decision-maker at the
right time, i.e. recipients must get information when they need it. Delays destroys the value of
information. The characteristic of timeliness, to be effective, should also include up-to-date, i.e.
current information.

ii) Accuracy: Information should be accurate. It means that information should be free from
mistakes, errors &, clear. Accuracy also means that the information is free from bias. Wrong
information given to management would result in wrong decisions. As managers decisions are
based on the information supplied in MIS reports, all managers need accurate information.

iii) Relevance: Information is said to be relevant if it answers especially for the recipient what,
why, where, when, who and why? In other words, the MIS should serve reports to managers
which is useful and the information helps them to make decisions.

iv) Adequacy: Adequacy means information must be sufficient in quantity, i.e. MIS must provide
reports containing information which is required in the deciding processes of decision-making.
The report should not give inadequate or for that matter, more than adequate information,
which may create a difficult situation for the decision-maker. Whereas inadequacy of information
leads to crises, information overload results in chaos.
v) Completeness: The information which is given to a manager must be complete and should
meet all his needs. Incomplete information may result in wrong decisions and thus may prove
costly to the organization.

vi) Explicitness: A report is said to be of good quality if it does not require further analysis by the
recipients for decision making.

vii) Impartiality: Impartial information contains no bias and has been collected without any
distorted view of the situation.

Furthermore, there are basically six types of information systems. They are:

1. Transaction Processing Systems (TPS) serve the people in the operational level of an
organization. It collects and stores information about transactions, and controls some aspects of
transactions. A sale of item in the store is an example of a transaction.

2. Knowledge work systems (KWS) is used by technical staff as model functions to convert design
specifications into graphical designs. It uses computer-aided design/manufacture (CAD/CAM).

3. Office automation systems (OAS) serve those that belong to the knowledge level of an
organization. The system helps individuals in the processing of personal and organizational data,
perform calculations, and create documents. e.g. word processing, spreadsheets, file managers,
personal calendars, presentation packages.

4. Decision-support systems (DSS) help the strategic management staff (senior officers) in making
decisions. The system uses information, models, or analysis tools for managers to make
simulations and predictions. Example of DSS is the 5-year investment plan.

5. Management information systems (MIS) serve the management level of the organization. The
system condenses and converts the TPS data into information for purposes of monitoring
performance and managing the organization. Transactions that were recorded in the TPS are
analyzed and reported by an MIS. Example of an MIS output is the budget report.

6. Executive support systems (ESS) serve the strategic level of an organization. A system provides
top-level executive of a readily accessible, interactive format to get the overview of the entire
organizations performance.