Question

What is the relationship between data, information and an information system?

Answer 1

Data

All information systems require the input of data in order to perform organizational activities. Data, as described by Stair and Reynolds (2006), is made up of raw facts such as employee information, wages, and hours worked, barcode numbers, tracking numbers or sale numbers. The scope of data collected depends on what information needs to be extrapolated for maximum efficiency. Kumar and Palvia (2001) state that: “ Data plays a vital role in organizations, and in recent years companies have recognized the significance of corporate data as an organizational asset” . Raw data on it’s own however, has no representational value (Stair and Reynolds, 2006). Data is collected in order to create information and knowledge about particular subjects that interest any given organization in order for that organization to make better management decisions.

Information

Information is the interpretation of bits of data in order to form a greater picture of raw facts. True value is placed on data when it is organized in a meaningful way (Stair and Reynolds, 2006). However, it is important to consider that some information is more valuable than others. In their research paper, authors Khurana and Mandke (2009) describe that the value of information is based on its integrity; they write: “ Information integrity is dependability and trustworthiness of information and is a key factor determining strategic business advantage” Mandke and Khurana (2009) write that accuracy, consistency, and reliability are what make up the characteristics of information integrity. Stair and Reynolds (2006) define the value of information with the addition of the following qualities: flexibility, relevance, simplicity, timely, verifiability, accessibility, and security. Furthermore, Stair and Reynolds (2006) write that in order to be valuable information must be both complete and economical. The value of information can also be measured in dollars by calculating the net income the information has allowed the company to produce minus the cost of producing the information (Stair and Reynolds, 2006).Information systems are modernizing the way companies do business and are influencing organizations to move forwards.

Information systems can improve the way organizations achieve their goals by helping management carry daily operations, control and monitor progress (Stair and Reynolds, 2006). To fully benefit from information systems it is important to make distinctions and understand the differences between data, information and knowledge.