Business information and ICT

Sources of information

Businesses need to know what is happening out in the world of consumers and competitors. Things do not always stay the same. People have tastes, trends and fashions that change over time or overnight. Companies have to gather information from various sources.

Primary information / field research

This is information gathered first hand by the business. This will be fit for purpose and up to date, but will be expensive to collect. Methods of collecting primary information include: surveys, interviews, observations, focus groups and hall tests.

Secondary information / desk research

This is information that has already been collected. This information is cheaper to find and will have many more sources. However the information gathered may not be appropriate or relevant to the organisation’s needs, and may be out of date. Methods of collecting secondary information include the internet, newspapers and magazines, market research reports such as MINTEL and Key Note, and government publications.

Internal information

This is information which is only available to the business. This information will be private and accurate. Internal information may take the form of sales figures, personnel records, customer records, and financial documents such as trading, profit and loss accounts and the balance sheet.

External information

This is information which comes from outside the business. This is gathered via mainly secondary information methods such as newspapers and magazines, the internet etc.

Types of information

In the modern 21st century business world information can be presented in different ways.

Oral information uses sound to convey information, eg a presentation, a speech or address, and music clips.

Written information uses words to describe or state facts. Letters, memos and business reports are examples of written information.

Graphical information depicts data in the form of graphs and charts. Graphs and charts are often used to present information more clearly.

Numerical information shows data in a number format or in a table, eg accounting documents such as the trading, profit and loss account or the balance sheet.

Pictorial information uses images, pictures or photographs to highlight information.

Quantitative information is information that is definable, measurable and is presented in a numerical format. Quantitative information can be gathered via observations, surveys and factual information such as sales figures.

Qualitative information is information which is more about attitudes, beliefs and feelings. It is descriptive. Qualitative information is usually gathered via focus groups, hall tests and surveys.

Value of information

Gathering information is crucial to the success of an organisation. However the information must be valuable. It must meet certain criteria:

Timely - the information must be at hand and up-to-date, as timing can be vital.

Objective - the information should be unbiased. Information could be gathered from someone with an ulterior motive which clouds the truth and will affect decision-making.

Accurate - the information must be correct and truthful.

Appropriate - the information must be fit for purpose. Sales data on all products may not be as valuable as sales data on a particular product which is underperforming in certain markets.

Available - the information should be easy to access.

Complete - the information should have no omissions.

Concise - the information should highlight the key points and not be verbose. Decision makers have busy schedules and do not always have time to read lengthy reports.

Cost effective - the information should provide value for money or else it is redundant.

Uses of information in business

Information collected and gathered by a business has different uses. It would be helpful for the information to be used in one of the following ways:

Monitor and control

Financial information such as sales fugures and budgets would be used in this way as it offers a way for a firm to take corrective action if there are issues or problems that may arise.

Assist decision making

When the decision makers in the business (the shareholders/owners and the managers) have to make an important decision, they need high quality information. This is true in many aspects of management such as developing a new product, entering a new market, deciding on equipment or software to purchase, or even when it comes to recruiting new staff.

Measuring performance

Are sales targets being met? If not where are the branches or stores that are not performing? Once these issues are highlighted there may be ways to turn these performance issues around. Performance will be compared with previous years and/or with companies of a similar size or in the same market. Ratios are useful for comparing performance.

Identify new business opportunities

Is there a gap in the market to be exploited? Information must be gathered constantly on customers and competitors to look for changes or trends in the market that the firm can target.

Information and communications technology (ICT)

Over the last 20 years many new technologies have entered the world of work which have had a significant impact on business.

Email

Email or electronic mail is a cheap way for people to keep in instant contact all over the world. An email is sent between two computers, and it has the added advantages of being able to send attachments such as documents or images to more than one recipient at the same time. However viruses and spam mail are downsides to email.

Videoconferencing

Videoconferencing uses webcams to hold meetings in different locations without the inconvenience and cost of having to travel. Many UK-based Australian companies such as the National Australia Bank use videoconferencing to hold meetings across the hemispheres. However technical issues and breakdowns can cause problems.

A network

This is a group of linked computers. A local area network (LAN) is a network of computers linked on one site such as a university or school, whereas a wide area network (WAN) involves machines linked up over many sites or even abroad.

The internet

The internet is a series of pages and message boards that can be accessed via dial-up or broadband by users all over the world. This involves a vast amount of information which is available, however the accuracy of information and authenticity of information can sometimes be called into question.

E-commerce

E-commerce is the act of buying and selling online. eBay is one of the most famous examples of e-commerce. Buying and selling via websites offers great advantages to both customers and firms as savings can be passed on to the people who buy the product making goods and services cheaper.

Laptops

These are portable PCs which offer all the functions of a desktop computer but smaller than the size of a briefcase. Laptops are sometimes plagued by short battery life which can be an issue for business travellers if unable to recharge. Wi-fi has also now enabled laptops to connect to the internet and allow remote working for employees.

Smart phones

Smart phones are mobile phones with advanced multi-function features such as internet access, email facilities, and camera. BlackBerry and iPhone are examples of popular smart phones. They have revolutionised modern office and business working, providing employees with a portable office.

Tablet PCs

A tablet PC is the latest entry into the competitive electronic computer market. Aimed as a halfway house between a smart phone and a laptop, Tablet PCs are the size of A4 paper and offer many facilities of phones such as being able to make calls and take pictures, allied to having the hard drive capacity of a laptop. The iPad is the best known example of the tablet PC but many other companies produce tablet PCs, such as Samsung, Nokia and HP.

Costs and benefits of ICT

Introducing ICT into a workplace will have many advantages to an organisation as it attempts to keep competitive in an ever global market. However there are some drawbacks also.

Drawbacks of ICT

Financial cost: The initial outlay of buying new equipment is normally expensive, as well as maintenance costs.

Demoralise staff: Employees' motivation may suffer if part of their job is replaced by ICT. This de-skilling of their job may make workers feel that they are vulnerable to being made redundant.

Breakdowns: Machinery and equipment may suffer breakdowns which will affect production.

Resistance to change: When introducing new technology employees may feel threatened or may not wish to learn something new. This can create tension. Also there will be training issues that need to be addressed.

Benefits of ICT

Productivity: With new technology, productivity should be increased as some activities will be speeded up.

Quality and accuracy: Machines are capable of producing the same standard of product over and over again, which reduces human error and therefore reducing waste or errors.

Lower labour costs: Machines and technology can replace some human tasks, and over time this will make some employees redundant. This saves the business paying wages for labour.

Communications: Through new technology such as email and video-conferencing, communications will be improved within a business and also to external customers. Communication between branches or even between countries will be improved.

Business software

Organisations use different software packages for a variety of tasks and activities.

Word processing is used in businesses to create and type up business letters, memos, and reports.

Spreadsheets are used to calculate financial information such as sales figures, cash budgets and also to create bar charts and graphs from such data to make any findings or results easier to understand.

Databases are used in organisations to keep records of employees such as their address, date of birth and medical information. Customer records may also be kept in order to build up a picture of what the customer orders and regularly buys. This could aid targeting of future products to appropriate customers. Also linking a database to a word document – mail merge – makes standard letters feel more customised and personal.

Desktop publishing software is used to create professional newsletters, staff magazines, books or other publications.

Presentation software is mainly used by business people to communicate or present information on new products or market research findings to customers, clients, employees or management. It can be used for training purposes also.

Uses of ICT

The applications of ICT in business can have positive effects on the operations of any organisation.

Decision-making. ICT aids decision making in that an often quoted saying is ‘knowledge is power’ so by having key information in the hands of managers and decision makers they can make informed decisions and ambiguity is lessened.

Provides information for staff. ICT helps employees and managers have information at the fingertips via business letters, reports and memos, or sales figure spreadsheets or customer databases.

Maintains business records. ICT can help keep updated records on employees, competitors and customers.

Provides effective communication. ICT and all the communication devices it offers allows people all over the world to keep in touch no matter location or time zone. This is the essence of the global market and the 24/7 world we live in.

Effects of ICT

Introducing ICT into modern businesses can have both a positive and negative impact on workers and the organisation itself.

For employees

Redundancy: ICT and machines can do many tasks or activities that employees can do, and they can work 24/7 without needing a break.

Retraining: New ICT that is introduced into an organisation will mean training for employees in how to use the new technology.

Flexible working: New technology offers the potential of homeworking or teleworking. This means employees may be able to work outwith their normal workplace but maintaining an ICT link with their supervisors.

For employers

Delayering: Departments may merge or be reduced, this added to a reduction in workers and promoted posts may end up restructuring the organisation and the removal of levels of management.

Decentralisation: Improved technology offers firms the opportunity to move decision making from headquarters to local branches, which normally results in being more responsive and being able to cater for local needs. This is especially important for multinationals operating in different countries with different customs, traditions and cultures:

Narrowing of span of control: With fewer employees, and therefore fewer subordinates, the span of control (the number of people who report to a manager) may narrow.