Transformation Processes
A number of transformation processes can be used to handle data, turning it into useful information:
Classification:
Involves placing data into categories.
Example: Categorizing expenses as either fixed or variable costs.
📊 Example: Categorizing employees based on departments.
Reordering/Sorting:
Organizing data so that items are grouped together or placed into a particular order.
Example: Sorting employees in a payroll system according to surname or ID.
🗂️ Example: Sorting products in a store by price or popularity.
Aggregating:
Summarizing data to provide useful insights.
Example: Calculating averages, totals, or subtotals.
📈 Example: Calculating total revenue by adding up daily sales.
Performing Calculations:
Executing algorithms to derive new values.
Example: Calculating employee salary by hours worked multiplied by hourly rate of pay.
🧮 Example: Computing taxes owed based on income.
Selection:
Choosing or discarding data based on specific criteria.
Example: Creating a list of potential customers by selecting those with income above a certain level.
🎯 Example: Selecting top-performing products for a special promotion.
Value of Information
The value of information can be classified into two key types:
Tangible Value:
Measured in financial terms, where the information directly leads to measurable benefits.
Example: Using inventory information to improve stock control procedures, resulting in cost savings.
💰 Example: Accurate sales forecasts reducing unnecessary production costs.
Intangible Value:
The benefit of information that is harder to quantify but still crucial, like improving decision-making.
Example: Information that helps managers make better strategic decisions.
🧠 Example: Enhancing customer satisfaction through timely feedback.
Sources of Information
Information can come from both formal and informal communication channels:
Formal Communication:
Presenting information in a structured and consistent way.
Examples: Reports, accounting statements, presentations.
📑 Advantages: More likely to provide a comprehensive view, often more accurate and relevant.
Informal Communication:
Less structured, typically more casual.
Examples: Conversations between staff members, informal meetings.
💬 Advantages: Offers flexibility and can be quicker, with more freedom to choose how information is presented.
These processes and sources help ensure that information is transformed efficiently and used effectively, whether for decision-making, strategy, or daily operations.
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