The Impacts Of Management Information Data Information Technology Essay

Managing strategic information has increasingly become very important in organisations today. Getting the right information to the right person in the right format at the right time can support management in making effective decisions. The aim of this report is to look at how management information informs and supports strategic decision-making. It consists of four parts. The first part studies the impact of management information on decision making. The second part examines the importance of information sharing within the organisation. The third part investigates how information can be used to inform and support decision making. The last part looks at ways of monitoring and reviewing management information. This is followed by summing up the main themes of the report in a conclusion.

Task 1: Impact of management information on decision making

Identification and features of data and information

According to business dictionary (2009), data is information that is raw, in an unorganised form e.g. alphabets, numbers, symbols that ‘refers to or represent, conditions, ideas, or objects.’ Business dictionary (2009) refers to information as raw data that has been checked for its accuracy and timeliness, is precise, detailed and organised to satisfy a certain aim, is meaningful and relevant to a particular situation, results in enhanced understanding and lessens uncertainty. The value of information depends upon its ‘ability to affect a behaviour, decision, or outcome’ (Business dictionary 2009).

Data includes raw facts, figures, symbols which when processed in a particular way becomes information. Data is meaningless on its own while information is meaningful on its own. Data is obtained by researching events, people, places whereas information is obtained by analysing (using ways such as tabulation, statistical analysis) the collected data (differencebetween 2009).

Criteria for selecting data and information to support decision making

In a given situation, when all the data has been collected, management needs to assess its efficiency, effectiveness and cost-effectiveness to assist in making the final decision. Management can do this by asking questions and by examining the degree to which the information collected supports set objectives or help in meeting targets. How efficient is the information with regards to time and cost spent to acquire it? Are their any positive or negative results directly or indirectly associated with the collected information? Does it have the ability to adapt to the changing needs of the situation? Is the information complete or does the situation require more information? Is the information up-to-date and relevant to the situation? Has it been checked for its accuracy, reliability and usefulness? Does it meet the requirements of the situation? Is it structured appropriately? Is it easily understandable by its end users? (CMI 2009)

Management information must be relevant, up-to-date, accurate, cost and time effective. It must also be reliable, meet the needs of its target users, clearly presented and appropriate to the situation for which it has been prepared.

Impact of management information system to an organisation

An information system (IS) consists of interrelated components that work together to collect, process, store and disseminate information thus supporting decision making, coordination, control, analysis and visualization in an organisation. (Laudon 2004). Management information systems (MIS) are used in organisations with the main purpose of enhancing management’s effectiveness by satisfying the information needs of middle-level managers. The functions of MIS are to plan, control and make decisions by providing routine summary reports about business performance (Oz 2008).

The use of management information systems have had a tremendous impact in organisations. It has changed the way organisations think, believe, act and formulate their competitive business strategies. MIS have been seen to deliver many benefits to organisations in every industry. The development and use of MIS can help businesses to get a step ahead of their competitors. Management information systems act as tools that help organisations in getting a more informed understanding of the market and of the business itself (MIS 2009). Hence in this way, it assists businesses in getting a competitive advantage over their competitors.

MIS help in improving supply chain management by enhancing an organisation’s reporting of processes. This results in a more streamlined production process. By providing better information on the production process, MIS control the production process from ordering of materials to making them and distributing them. Hence MIS improve operational efficiency by providing timely information. MIS will also detect any problems that may arise at any stage in the production process. This helps management in making timely decisions to solve problems. Having an MIS makes managers more in control of the business processes (MIS 2009).

MIS provide information that aids strategic decision making, setting long term goals and business growth (ehow 2009). MIS provide management with data that is reliable, clearly presented and enhances data access. MIS make the reporting process faster and more efficient and reduce the risk of errors, information overload and of false information (Acevedo 2009).

The challenges of having an MIS are that they are costly to develop and install. They need to be carefully monitored and upgraded to ensure accurate results. The data being entered in the MIS needs to be regularly checked or else inconsistencies may arise in the quality of output being produced. If this happens, managers will not be able to plan and make accurate and timely decisions (ehow 2009).

MIS have their advantages and disadvantages. It is up to the management how they use the advantages to make effective decisions and reduce the effects of the disadvantages to gain competitive advantage in the market.

Task 2: Importance of information sharing within the organisation legal responsibilities in sourcing, sharing and storing information in an organisation

In today’s fast-paced and global economy, the sharing of information between businesses, individuals and governments has become very important. Today’s information economy needs quick, accurate and reliable information about buyers, sellers, products and services to help managers in making strategic decisions. Information sharing is important as it improves the productivity of the organisation and the economy. By sharing information, organisations can better understand and predict their customers’ needs and work at satisfying these needs quickly and efficiently. It allows customers to quickly know at reasonable costs the opportunities that are beneficial to them (Cate and Saten 2000).

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It encourages competition by helping companies to enter established markets and assists in making companies that produce specialised products to meet particular customer needs. It helps organisations in finding and preventing fraud and other crimes. It makes life easier for people as it offers wider access to a variety of reasonably priced products and services (Cate and Saten 2000).

Organisations in different sectors, industries, offering various products and services can share information as long as they comply with the laws and legislation regarding information sharing that is applicable to them.

The UK government is committed to sharing information with the aim of providing ‘better, more customer-focused services which will protect and support individuals and society as a whole.’ The UK government through the Data Protection Act, the common law duty of confidentiality, Human Rights Acts maintains the rights of individuals during information sharing in delivering better services (HM Government 2006).

The Data Protection Act 1998 provides a framework to protect the rights and duties of a person’s personal data. This framework serves as a balance between a company’s need to use and collect personal data for its own use or other use(s) against an individual’s right to respect the confidentiality of their personal data (ICO 2009).

Organizations operating in all sectors and industries have to store data by complying with the requirements of the relevant legislation governing their operations. The laws of every country are different. Regulations such as the Sarbanes-Oxley in the US, Basel II and MiFID in Europe now require companies to store their data for longer periods of time. Companies may need to store documents for many years. Also, companies must be able to retrieve the required information quickly to satisfy the regulators. Companies may also be required to prove to the regulators that the data is accurate and has not been changed. To meet this requirement companies must have systems and procedures to meet the requirements of the law (Condon 2007).

When information should be offered and access allowed within an organisation.

Information is the lifeblood of an organisation. It needs to be carefully handled, offered to and allowed access to the right people to prevent fraud, crime and misuse of confidential information. Every organisation needs to follow the laws regulating its operations.

To keep personal details of customers and to share these with partner agencies, organisations must follow the guidelines laid down by the Data Protection Act 1998. It says that personal details must be processed fairly and lawfully. Organisations must collect and use personal data for a lawful purpose. Personal data (information) collected must be used by its intended recipients within a given timeframe and must not ‘be kept for longer than is necessary for that purpose or those purposes.’ Information must be accessed by authorised users so that it is used for lawful purposes. If unauthorised users get it, then they may unlawfully process it, destroy it or damage it (CMI 220 2009).

Formats of information

Information can be offered in many different formats today as there are many different types of information available. Scholarly information can be offered in the form of books, articles in scholarly journals and websites. Professional trade information can be attained from trade magazines, journals and websites. Government laws information can be gotten from government publications and official government websites. Facts, definitions and statistics can be found from books and websites. Overviews of events and places can be found from encyclopedias, dictionaries, books and websites. Information about popular entertainment shows and activities can be found from magazines and websites. News about global events, people and places can be gotten by reading newspapers, news magazines and news websites. Information about special interests and opinions can be found from books, magazines and websites. Information is also available in audiovisual form (morainevalley 2009).

Firms can provide information by email, electronically and in hard copy. Information from CCTV security systems, internet telephony, voice conversations can be stored in digital form to be used in the future. Retailers use RFID (radio-frequency identifier) to keep records of goods in transit, on the shelves and through point-of-sale (Condon 2007).

Task 3: Using information to inform and support decision making

Patterns and trends of information

An effective decision making process necessitates managers to understand the patterns and trends of information. Patterns and trends can be researched qualitatively and quantitatively and do tend to change with time. Management information systems, decision support systems can be used with statistical analysis to identify the trends and patterns of information. From an organisational perspective, this information analysis can take place in the form of studying various factors such as dates, understanding consumer behaviour, sales figures, incurred costs, evaluating marketing campaigns or studying company’s competitors.

Patterns and trends in information can be found by using the process of data mining. Data mining is the process of analysing data by looking at it from different viewpoints and summing up the key points. This information can be used to plan strategies that will boost sales, revenues and reduce costs. Data mining helps organisations in examining data from many different perspectives, classifying it and then identifying the relationships that arise. It helps in uncovering correlations or patterns between many different fields in large relational databases. Companies specialising in retail, marketing, communications and providing financial services can use data mining to establish relationships between internal aspects e.g. price, and external aspects e.g. competition. It assists companies in establishing the influence of internal and external factors in sales, profits and customer satisfaction (Palace 1996).

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There could be countless possibilities for analysing information but the key is to focus on the relevant context in which it is being collected, its methods of analysis and the degree to which it is satisfying the needs of its target users. Thus, understanding information patterns and trends is a vital part for analysing information and making the best possible decisions in an organisation.

Tools and techniques of decision making

Decision making can be defined as an outcome of mental cognitive processes leading to the selection of a course of action among several alternatives to produce a final choice (Ras & Skowron 1999).

In an organisation, a decision maker is expected to make decisions which have a positive effect on the future. In the 21st century, the use of Management Level Decisions Support Systems enable corporations to take a future-oriented perspective where foundation decisions are made based on an analysis of external and internal trends and data (Reason 1990).

An organisation can follow the decision-making process consisting of seven steps to make a rational decision. The first step is to define the situation by stating the facts, issues and needs of the organisation. Second step is to define the stakeholders by stating the people who will be involved in the decision-making process and those who will be affected by the decision. Third step is to determine the guiding principles by defining the company’s values and principles, laws, relevant policies and the intent of these policies. Fourth step is to develop the possible solutions. Fifth step is to make the decision by carefully assessing the possible solutions against the guiding principles and by choosing among the alternatives. Sixth step is to implement the best solution. Seventh step is to follow up the decision by assessing whether the decision achieved the desired outcome (Boyes 2009).

Fig 1 illustrates the use of tools and techniques which can aid organisations to make planned and effective decisions. The use and adoption of these decision making tools and techniques will depend upon the complexity of the problem and the organisational environment.

Fig 1 Decision Making Tools and Techniques

Source: Idea Adaptation from Merlin Mann (2009) and Harris (1998)

Grid Analysis

Evaluation of numerous criterias and selecting the best derivatives

Paired Comparison / Decision Matrix

Table Compositions of studying comparisons and events

Pareto Analysis

80% of the effects come from 20% of the causes principle of factor sparsity

Force Field

Identifying forces against a theoretrical change. Useful in resources allocation and taking political decisions



Advanced form of a T-Chart where the positives and negatives aid in making the best possible decisions

Decision Trees

Whatif analytical options are used with an estimation of variables for each choice

Cost / Benefit

The analysis helps in analysing all costs weighed in with the benefits

Six Thinking Hats

A method for identifying issues recognised by six different factors in a team (eg analytically, creatively etc)

In large multinationals like Acer, Unilever, Comet, O2, Virgin, Tesco, Toyota and Woolworths, the formulation of plans for keeping together the aims of the company and understanding the information needed to support these aims is very essential.

For effective decision making, managers must be able to forecast the outcome of each option, and based on all these items, determine which option is the best for that particular situation.

Sources of analysing data and information

There are different sources where data and information can be acquired from to make decisions. Information to be analysed can be attained from primary and secondary sources. Primary sources of information include getting the information directly from a person, from interviews, receiving emails, through discussions, debates, surveys, observations, events and community meetings. Secondary sources of information include books, academic journals, encyclopedias, trade magazines, newspapers, videos, audios, television, CD Roms (Resources 2009). Printed government publications and official government websites are also valuables sources of information.

The ICC is UK’s leading business information provider. Today, due to intense competition to get the right information quickly, the ICC is looking at ways of using other sources of corporate data e.g. trading information to give clients a more current picture of a company. The companies house also provides business information. Other sources of company information consists of current and historical payment data, adverse financial information, non-financial items, e.g. county court, judgments, regional failure analysis and directors’ information (Perry 2008)

Task 4: Monitor and review management information, methods of evaluating management information in an organisation

Organisations must evaluate the management information that is being generated by their information systems. This is to ensure that management information is meeting the required needs of the company and to identify any improvements or changes in the information being generated. Depending on the organisation context, companies can study the three types of evaluations and adapt them to their own needs.

Goals-Based Evaluation stresses on meeting one or more detailed goals. These goals are key to achieving the targets of the organisation. This approach assesses the degree to which organisations are achieving their predetermined targets. Care needs to be taken to clearly define targets, set timeframes for task completion, ensure staff have the skills, resources to meet targets (McNamara 2008).

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Process-Based Evaluations focuses on the process of how a company produces and delivers its products. It helps in identifying any problematic areas where there are inefficiencies in delivering the product or service and require improvements. These assessments require clear communication of expectations between employees and staff. An analysis of staff strengths and weaknesses, customer expectations, reasons for complaints and ideas for improvements are essential for this assessment (McNamara 2008).

Outcomes-Based Evaluation emphasizes on doing the right activities to achieve the right outcomes that are required by customers. These outcomes are usually in the form of providing benefit to the client e.g. self reliance. For this approach to be successful, outcomes must be identified, prioritized, key performance indicators identified, information needs analysed, and suitably documented in a report (McNamara 2008).

In addition to the above, management information can be evaluated by analysing it against the features listed in fig 2.

Fig 2: Analysing Management Information

Attribute Feature


Strategic Level

(Application to case study)



Relatively old

Response Time
























Easily assessed



Source: Boyes (2009)

Organisation must regularly analyse the effectiveness of the methods they are using to review their management information to ensure that the information needs of the

organisation are being met. It is also to ascertain that management information is

correct and is leading to effective decision-making.

Processes for analysing impact of information on strategic decisions

The processes for reviewing the impact of information on strategic decisions can be examined by studying the ten steps of the evaluating process and their impact on decision making. The first step is to state, select, or change the goals to be achieved for which information is being collected. This helps in understanding the what, why and who the decision is being made for. The second step is to determine the performance measures to check the accuracy, relevance and reliability of information. This serves as a benchmark or identifies the measures that will be used to assess the success of the decision(s) being made. Planning the decision-making process is the third step. This identifies the main questions that need to be answered, available resources and knowledge base (Payne 1994).

The fourth step is to select or develop the methods to collect data and the fifth step is to gather relevant data. This process helps in understanding what information will be gathered, from whom, by whom and how it will be collected. The sixth step is to process, sum up and analyse the relevant data and the seventh step is to compare and contrast the collected data with the set assessment criteria. This helps management in identifying ways of analysing and interpreting the information (Payne 1994).

The eighth step is to report and feedback results which will assist management in deciding how, to whom and by when the result of the data collection will be communicated. The ninth step is to conduct a cost-benefit analysis to find out the benefits and the investment spent in making the decision. The tenth step is to assess the evaluation i.e. to examine the success/failure of the decision made. Also to review whether the company’s set objectives are being carried out according to predetermined goals (Payne 1994).

Whilst processing the information to make decisions, managers should avoid making the most obvious decision, allow a preconceived conclusion to influence the process, finding shortcuts if the decisions has extensive implications, allowing personal beliefs, choices and prejudices to influence the process, making the provisional decision the final one (CMI 015 2009).

Methods of developing information capture

One method of developing information capture is by drawing up a data flow diagram (DFD). A DFD is a two-dimensional diagram that describes the processing of data and its transfer in a system. It is a graphical illustration that recognises every data source and it interrelates with other sources of data to arrive at a common output. In making a DFD, care must be taken to; to clearly state the inputs and outputs, establish the relationships between the inputs and outputs, graphically show how the inputs and outputs are related and what results they lead to. DFD’s assist organisations in developing themselves and forecast how data is processed and flows throughout the organisation. It helps managers in pinpointing the areas that need improvement (businessdictionary (2009). A DFD in a surgery is shown in fig 3.

Fig 3: Data Flow Diagram

Source: Silva (2009)

The above DFD shows the flow of data i.e. of making, changing and cancelling patient appointments to generating billing information that is based on appointments and payment information. The payment is received from the patient’s insurance company. When a doctor runs management reports, he gets details of patients, appointments and finances from the database (Silva 2009).

Companies develop information capture systems to improve their operational efficiency. Robert Wiseman Dairies is Tesco’s and Sainsbury’s supplier of fresh milk developed an information capture system using Kofax Ascent to gather information on forms and documents and convert these into retrievable data that will be used for business applications and databases. The system has proved beneficial as it combines with the company’s core Movex ERP software, allowing users ‘to process documents from their desktop using all available applications’ (Computer Weekly 2005)


Strategically managing an organisations information resources has today become a source of competitive advantage. To stay competitive, organisations must abide by the relevant legislation, carefully select and analyse information to make strategic decisions and use appropriate methods and processes to evaluate their management information to make strategic decisions.

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