An Introduction to Information Systems - Principles of Information Systems - page 5

Information systems are
everywhere. An air traveler checks
in for a flight using a kiosk, which
sends the check-in information to a
network to verify the traveler's
reservation and flight information.
The terminal processes the infor-
mation and prints a boarding pass,
speeding airport check-in times.
(Source: Courtesy of Joshua Lott/
Bloomberg News/Landov.)

INFORMATION CONCEPTS

Information is a central concept of this topic. The term is used in the title of the topic, in
this section, and in almost every chapter. To be an effective manager in any area of business,
you need to understand that information is one of an organization's most valuable resources.
This term, however, is often confused with data .

Data, Information, and Knowledge
Data consists of raw facts, such as an employee number, total hours worked in a week,
inventory part numbers, or sales orders. 1 As shown in Table 1.1, several types of data can
represent these facts. When facts are arranged in a meaningful manner, they become infor-
mation. Information is a collection of facts organized so that they have additional value
beyond the value of the individual facts. 2 For example, sales managers might find that know-
ing the total monthly sales suits their purpose more (i.e., is more valuable) than knowing the
number of sales for each sales representative. Providing information to customers can also
help companies increase revenues and profits. According to Frederick Smith, chairman and
president of FedEx, “Information about the package is as important as the package itself…
We care a lot about what's inside the box, but the ability to track and trace shipments, and
therefore manage inventory in motion, revolutionized logistics.” 3 FedEx is a worldwide leader
in shipping packages and products around the world. Increasingly, information generated
by FedEx and other organizations is being placed on the Internet. In addition, many uni-
versities are now placing course information and content on the Internet. 4 Using the Open
Course Ware program, the Massachusetts Institute of Technology (MIT) places class notes
and contents on the Internet for more than 1,500 of its courses.

data
Raw facts, such as an employee
number, total hours worked in a
week, inventory part numbers, or
sales orders.

information
A collection of facts organized in
such a way that they have additional
value beyond the value of the indi-
vidual facts.

Table 1.1

Data Represented by

Types of Data

Alphanumeric data Numbers, letters, and other characters

Image data Graphic images and pictures

Audio data Sound, noise, or tones

Video data Moving images or pictures

Data represents real-world things. Hospitals and healthcare organizations, for example,
maintain patient medical data, which represents actual patients with specific health situations.
In many cases, hospitals and healthcare organizations are converting data to electronic form.
Some have developed electronic records management (ERM) systems to store, organize, and
control important data. However, data—raw facts—has little value beyond its existence. For
example, consider data as pieces of railroad track in a model railroad kit. Each piece of track
has limited inherent value as a single object. However, if you define a relationship among
the pieces of the track, they will gain value. By arranging the pieces in a certain way, a railroad