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Chapter 7

Chapter 7. Information and Knowledge. Jawadekar : Management Information Systems, 3/e. Data to Knowledge to Intelligence. Data – No Character Information – Data with context Knowledge – Information backed by principles , practices & experience

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Chapter 7

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  1. Chapter 7 Information and Knowledge Jawadekar: Management Information Systems, 3/e

  2. Data to Knowledge to Intelligence • Data – No Character • Information – Data with context • Knowledge – Information backed by principles , practices & experience • Know how – Ability of applying knowledge to specific problems • Wisdom – Judicious Use of know how • Intelligence –Ability to develop new insight & then applying knowledge in a new situation

  3. Illustration • Rainfall statistics:Data • Analysis of data by seasons :Information • Developing a Rainfall pattern Model:Knowledge • Know-how:Ability to predict the rainfall • Intelligence:Knowledge & Models used for rain forecast • Dr. Govarikar’s forecasting Model:Intellectual capital

  4. Characteristics of Information • Improves representation of an entity • Updates the knowledge level of user • Has an element of surprise (value) • Reduces uncertainty • Supports strategic and tactical decision making

  5. Attributes of Information • Accuracy in representation • Complete in content • Form of presentation • Frequency of reporting • Scope of coverage • Sources of collection • Time dimension: Past, current & future • Relevance & utility for DM • On time when needed • Just in Time

  6. Measures of Quality • Utility:Form, Time, Availability, Access • Satisfaction:No of users using the information& have expressed satisfaction • Error:Data measurement, collection, processing, checking, verification, validation, presentation • Bias:Built by factors creating bias at the stages of collection, processing, presentation

  7. Parameters of Quality Improvement • Source of data:unbiased & authorised & valid • Impartial:Collection without pre conceived view, prejudice or with motive • Validity:Is data appropriate for its purpose of use or application? • Reliability:Data not coming from right source, doubtful on correctness, completeness and coverage. In short, bad raw data • Consistency:Source, period, coverage, processing method and presentation same • Age of information:Should be latest, current, real time

  8. Classes of Information • CurrentversusInformation of perceived value : Time • RecurringversusNon recurring: Frequency • InternalversusExternal: Source

  9. Class: Application of Information • Planning • Control • Knowledge • Decision induced information

  10. Class: By Users of information • Organization Information:Used by all • Functional Information: Used by business function managers • Status Information:Used by planning managers for strategic purpose • Operational Information:Used by staff & line managers • Performance Information:Used for strategic planning by Senior managers

  11. How to Judge the adequacy of Information? • Difficult to set a standard for adequacy • The degree of adequacy differs from person to person • The information could be adequate at a point of time • With time changes, information scope & content would change • Hence we need one measure of judging the adequacy of information

  12. Value of Information • The concept of value of information is linked to its impact importance on the decision making performance • If DM performance would improve significantly, the value is high • Actually, value is not measured in absolute terms but in incremental terms • What we seek is the value of additional information

  13. Illustration: value of additional Information • Your score in examination based on present level of subject information & knowledge is 80% @ the cost of Rs 100 thousand. The chance of admission in IIM is 20 % at this grade • If You join coaching class & expect to raise the score to 95% at the cost of Rs 200 thousand. Then chance of admission would raise to 98% • V1 = Rs 500 thousand, V2 = Rs 800 thousand C1 =Rs100 thousand, C2 = Rs200 thousand VAI = (800 – 500) – (200 – 100) = 200 Where V = value gain, C = Cost • Since, the difference is positive it is worth joining the coaching class to gain additional knowledge

  14. How to use the concept of Value of Information? • Present value of Information = V1 • The cost of generating the information = C1 • The cost of adding more information & value = C2 • The value of new information then is = V2 Hence value of additional information ( VAI ) is VAI = (V2 – V1) – (C2 – C1) If VAI > 0,& If VAI is significantly high then one should seek additional information

  15. Methods Of data collection for processing to generate information • Observation • Experiment • Survey • Estimation • Processing of data/transactions & extraction • Purchase • Publications: Govt & Private bodies

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