Data, Information, knowledge and IT
1 Data, information and knowledge
We now turn to look at the roles that information technology can play in modern businesses. First, we have to go through a number of definitions.
Data; data is raw fact. For example, a list of all the entries in the sales ledger, a list of all invoices, or a list of the heights of all people in a particular city is data. Generally speaking, data is not of itself particularly useful: it is not yet informative. It is not very accessible, there may be too much of it. Before it is made useful, normally some sort of processing has to be performed on it. The processing could simply be summarisation or it could be more complex processing.
Information. Data with meaning is known as information. So the receivables ledger total, the total for each customer, age listings, and average of the height for all the people in a particular city is information. We can probably do something with that information. In particular, we can probably use it to make certain decisions that would be difficult to make had the data simply remained as raw fact.
Knowledge. Although data might be processed into information that information could rest unseen in a file. If that’s all it happens to information it’s pretty useless. Before the information becomes really useful it has to get into people’s minds. People have to read it; they have to think about it. Then it becomes knowledge. Knowledge can be defined as information in someone’s mind.
1.1 There are two types of knowledge:
Explicit knowledge. Generally that’s the knowledge which is written down. We know where to find it, we know what it is. It has been captured.
Tacit or silent knowledge. Information that people might not even know they possess.
For example, a sales representative is likely to know who the important customers are and roughly what their turnover is in a year. The sales department will probably know their address and perhaps even their telephone number. All of that is explicit knowledge, and it is probably written down on a database somewhere. However, what makes a good sales representative as opposed to a merely average sale representative is the ability of that person to make additional sales and this is likely to rely upon tacit or silent knowledge. The salesman may know what that person has been planning. The salesman may know how to get on with a particular buyer in another business. The salesman may know what soccer team that person supports and this gives the sales representative a way of getting into a conversation in an informal way which can then later on be turned to the subject of placing an order. The salesman will know who likes to be phoned up out of the blue, and who doesn't like to be phoned up. The salesman will know who makes decisions quickly, who makes decisions slowly. None of that information is likely to be written down, but it’s very, very important. It’s what makes the sales representative particularly effective.
2 Knowledge management
The importance of knowledge, in particular tacit knowledge, has now been recognised. Knowledge management is the process of:
Uncovering or discovering knowledge
Recording it
Distributing it to those who may require it
Levering it, thus making knowledge acquired for one purpose useful for another purpose
Ensuring that the knowledge is updated and remains current.
When manufacturing was very important in most economies, products could be closely defined. The product and its make-up was essentially explicit knowledge. Now more and more of many economies depend on service industries, and capturing what makes a good service is much more difficult. How do we get on with clients and customers? What do they want? What do they appreciate? All of that is much more likely to be tacit knowledge than explicit knowledge. Furthermore, if there is greater staff turnover the chances are that staff will leave and they will take with them important tacit knowledge, thereby impoverishing the company they have left.
IT, for example intranets, can be important in knowledge management. But many experts will maintain that what is really effective in knowledge management and in particular uncovering tacit knowledge is the telling of anecdotes i.e. stories. It used to be 20 years ago, that most people would take a lunch hour and may well have gone to the staff canteen where they would sit with others and they would relate stories about their working day, about clients, about products.
Now, it is perhaps more common for people to spend their lunch hour at their desk with a sandwich. They don’t meet other people in a relatively informal atmosphere to exchange knowledge, and the best way to exchange tacit information is often by the relating of stories.
3 Infrastructures to support business information systems
3.1 Networks
Only the very smallest of businesses will have stand-alone computers ie computers not connected to other computers. Even in small businesses employees need to share data and very soon after personal computers were invented networks of computers were introduced. There are two main types:
Local area network (LAN): Here the network extends over only a relatively small area, such as an office, a university campus or a hospital. The small area means that these networks use specially installed wiring to connect the machines.
Wide area networks (WAN): Here the network can extend between several cities and countries. Each office would have its LAN, but that connects to LANs in other offices and countries using commercial, public communications systems. At one time this would have been done by the organisation leasing telephone lines for their private use to transmit data from office to office. However, this is expensive and inflexible and the common system now used is known as a virtual private network (VPN) . VPN’s allow data to be transmitted securely over the internet between any two locations.
Extranets are when your network can link to another organisation’s network for example, a supplier’s network to trigger deliveries.
Networks can be wired or can use WiFi or 4G mobile phone technology.
There are three essential steps in network security measures:
Access control and authentication this ensures that unauthorised users do not access the system. Typically this will be accomplished through a log-in procedure.
Confidentiality this ensures that data cannot be intercepted and read by a third party whilst being transmitted. This is achieved using encryption.
Data integrity this ensures that the data has not been altered or distorted whilst in transit. To ensure this, the message could have special check digits added to ensure that the data complies with a mathematical rule.
Cloud computing
In traditional client-server networks each client (the users’ machines on their desks) would have had a copy of, say, Word for Windows. Documents would have been downloaded from the server for local editing then saved back to the server. The disadvantage of this is that each machine in the network needs a copy of Word. Not only was this initially expensive, but if the company were upgrading its software all copies of the program had to be changed. Inevitably different machines ended up with different software versions.
Furthermore, all the client machines have to be powerful enough to run all applications – even if powerful computing were only needed occasionally.
With cloud computing, this approach has changed. There is only one copy of the software on the server within a web-based interface. Users log into the web system and their processing is then carried out on the server or a ‘cloud’ of servers. It appears to each user that they have a local version of the software, but what they are really seeing is the program operating in the server. As more processing is needed more cloud resources can be used and this gives users great flexibility.
Client machines can be ‘thin-clients’ (ie not powerful) as they do not have to store much data and software nor do they have to carry out much processing. Hardware, software and maintenance costs are greatly reduced, though the system is vulnerable to service disruption. For example, relatively simple machines, even laptops, can be used for highly demanding graphical work. The laptop acts as an interface, receiving commands from the operator and displaying results. However, all the very complex and power-hungry computing is done on a remote, cloud-based computer.
Hotmail and Gmail provide examples of cloud technology. Whenever you want to write an email you log into the web email account and the processing is carried by the system’s computer cloud – not your computer. All it has to do is to handle the interface.
Mobile technology
Not so long ago, the most mobile type of computer was a laptop. Whilst these are still important, many applications now make use of tablet computers (like the Apple iPad or Samsung Galaxy). The growing availability of WiFi and 5G mobile phone technology mean that we can be almost permanently connected to the Internet or other computers within the organisation.
Common applications of networked, portable computers are:
Restaurants: orders transmitted automatically to the kitchen and accounting process.
Sales representatives: customer orders are processed immediately placed by the customer at their premises. Also, the tablet can demonstrate products using photographs and video.
Pilots: instead of carrying large, heavy flight manuals and flight plans, tablets hold the vital information needed.
Convenient access to emails.
Tablets can also be made rugged so that they can be used in tougher environments such as out-doors on building sites (to check architectural drawings), warehouses, engineering workshops.
Smart technology and the Internet of things
The ‘Internet of things’ means that many devices are connected through the internet. For example:
You can use your phone to switch on your heating system when you come in and go out.
Smart locks on doors that you can unlock using an App.
Shops can message you asking for feedback after you visit them.
Inventory and deliveries can be tracked in real time using RFID tags (radio frequency identification tags).
Heating and air-conditioning in buildings can be made more efficient and sustainably eg by ‘learning’ or monitoring when people are present.
Monitoring delivery vehicles and giving customer regular updates about expected delivery times.