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Information Systems H/601/7256

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1 Information Systems H/601/7256
Unit 02 Information Systems H/601/7256 LO1 – Understand how Organisations use Business Information

2 Assessment Criteria P1 – Explain how organisations use Information P2 – Discuss the Characteristics of Good Information M1 – Assess the improvements which can be made to an identified organisation’s Business Information Systems P3 - Explain the issues related to the use of information D1 – Compare Legal, Ethical and Operational issues that may affect organisations. P4 – Describe the features and functions of Information Systems P5 – Identify the information systems used in a specified organisation M2 – Illustrate the input and output if Information within a specified functional areas of an organisation D2 – Analyse the legal and ethical implications of the illustrated inputs and outputs. P6 – Select Information to support a business decision-making process P7 – Use IT tools to produce management information. M3 – Explain the value of a management information system.

3 LO1 – Assessment Criteria
P1 - Evidence could be in the form of a report or presentation in which learners must explain how organisations use information. They should include the differences between qualitative and quantitative data as well as primary and secondary sources of information, giving examples of each relating to a business environment. Evidence of considering internal or external information flowing into and out of an organisation must also be evidenced by the learner. Diagrams could be used to evidence the flow of information which must be provided by the learner. P2 - The learner must discuss the characteristics of good information to identify what classes as “good” information. This may be a continuation of P1 as evidence but should be a clear addition to it. The learner should consider the following: validity, reliability, timeliness, appropriateness, suitability, accessibility, cost effective, sufficiently accurate, relevant and could use examples of business departments to apply these criteria based on the various types and purposes of information available. This could alternatively be evidenced separately but must also detail how information can be checked and identified as “good”. M1 - The learner must demonstrate an understanding of the information systems of a given specified organisation and must be able to identify improvements required to include the characteristics they have already covered. This may be an extension of P2. The learners must assess a range of areas for improvements from which at least two improvements to business systems should be made with explanations and examples. This could be in a report or presentation.

4 LO1 - Assessment Criteria
Understand how organisations use business information The learners should firstly be introduced to the purpose of information giving every day examples of information they have access to, where it comes from and where it flows to. One example could be the use of social networking where learners see a post and pass the information seen on to others. Another example could be on the news where a world event is reported. The tutor discuss and explain primary and secondary sources of information and in groups the learners should discuss and identify examples which they would then place into the correct category. The tutor should then extend the information the learners are working with to identify the format providing examples of qualitative and quantitative data. Learners should then consider the purpose of information they are discussing such as to inform (the news), educate (documentaries or applications), sell (advertisements) etc.

5 LO1 - Scenario Learners should then be involved in discussion and exercises to specify the information characteristics for the following: reliability of data sources validity relevance time frame accessible quality cost-effective level of source understandable by the user. Learners can be assessed for knowledge and understanding using a quiz giving scenarios and using a voting scheme. Learners must then focus on an organisation and identify the types of internal or external information which flows in and out of it and samples should be prepared by the tutor for the activity. Organisations are broken down into many departments and the categories of information from each is another consideration and learners will need to be made aware of organisational structures to enable them to understand the categories information contained within those departments as well as their functions.

6 P1.1 – Definitions of Information
LO1 Understand how organisations use business information They say that information is key, the lifeblood of an organisation, without it a company works alone, independent of the outside world, immune to trends, to sales projections, to the changes in customers and opinions, to advances in technology. Information is power, and a critical resource for performing within organisations. Business managers spend most of their day in meetings, reading, writing, and communicating with other managers, their staff, customers, suppliers, and other business associates via telephone, in person, or by . The management function itself is information processing. It involves gathering, processing, and disseminating information. Managing information involves coping with a wide range of information sources before finally making decisions about what to do with it. A manager must track and react to information flowing from sources inside and outside the business. The manager processes this river of information and disseminates it in one of four ways: stores it, uses it, passes it on, and/or discards it. For example, during the course of a normal business day, a marketing manager for an IT company receives information in the form of , telephone calls, letters, reports, memos, trade publications, and formal and informal conversations. All these are used to benefit the company and they better they are processes, the faster, the more usable and readable the format, the better the business function.

7 P1.1 – Definitions of Information
There are different definitions of information and information comes in different forms. Each form has a level of acceptability depending on the nature of the information and the nature of the company. Written Communications - to express yourself clearly in writing Referring carefully to guidelines and planned activities Recording accurately achievements Writing to stakeholders/shareholders Reports, Letters, lists and results tables Images – Visual representation of information comes in many forms, images of marchers might tell the number or the temperament, describing something like lava flow and seeing an image of it, explaining graphics of a game or showing them, we react differently to visual stimulus, we can interpret our own meaning. Look at the image on the right, what do you see. Written Images (Static/Animated) Verbal Multimedia Diagrammatical (Flowchart) Symbolic Statistical

8 P1.1 – Definitions of Information
Verbal - Spoken and Non-Spoken Communication (able to express your ideas clearly and confidently) Body Language - using yourself and being sensitive to its use  eye contact / gestures / head nodding / smiling Listening - accurately hearing what people are saying and showing interest Motivating and Supporting - giving encouragement / giving thanks through praise or help / working well in a team Telephone Skills - being brief and keeping to the point / consider in advance what to say Gathering Information - ask open and probing questions to understand the views and feeling of others / clarify and summarise what others say. Giving and Accepting Criticism - saying ‘sorry’ in a genuine way, if required / allow disagreements to be brought into the open / be constructive if criticising Persuading and Negotiating - back up your points with facts and logic / be tactful if anyone disagrees with you Presenting - use a logical structure / be clear and concise / encourage questions for clarification Global Skills - be able to speak and understand other languages / appreciation of other cultures

9 P1.1 – Definitions of Information
Multimedia – When information changes quickly or the target audience is easily distracted, presenting information in the form of multiple stimulus can help get the point across. Television is an easy method to present information. PowerPoints for instance are created to engage, to show a small amount of information quickly, they are there to aid the presentation, not replace it. News readers still talk direct to the audience, but the eye is distracted by the other mediums. Our brain registers all the stimulus, re remember some of what we read, some of what we heard, some of what we saw, percentage wise this is more than a single medium. Diagrammatical (Flowcharts) – Visual representation of data is there for the specific target audience. Charts representing data are easier to understand at a glance, they are the 10second guide. Similarly flowcharts give us a path to a solution without explaining how or why it is the right path. Examples include: Charts and flow diagrams Representative maps Storyboards, log sheets, dope sheets and bar sheets. Mind Maps

10 P1.1 – Definitions of Information
Symbolic – When simple images or moving images do not tell the story, media companies often refer to symbolism to get their point across. The poster on the right was one of the most effective posters of the 1970’s. They would not tell the number of unemployed, or if Labour was responsible, or the reasons why these people were not working but the image evokes it’s own reactions, the snaking line, the long coats indicating it is in the North of England, Labour’s heartland. Similarly a doll in a war town city or a pram, a cigarette in a hand to represent cancer. Evoking emotion works when portraying the results of information, an easy method of replacing it. Statistical – Numerical information is there for a specific target audience, those who have time, those who can read information, those who can see patterns or changes, this is when information is at its most raw, broken down, categorised, not giving reasons juts allowing for conjecture. All companies receive this, sales figures, statistics, customer breakdowns, table analysis. For some people this is the end game, how they work, what they use, for others this is the beginning of interpretation. Task 1 – P1.1 - Explain the different definitions for the forms of information used within a business, with examples. Describe how can they can be used within a business context

11 P1.2 – Purpose of Data To this end a company will need to define what information is important to it and what to discard. Everything is data, the customers reaction is data, happy or sad, the voice on the end of the telephone is data, it can be read, it can be broken down, it can be put into a category and suddenly it becomes information. The human brain taken in m ore data than it can handle so it stores it away for interpretation. Similarly companies gather more data than is necessary. But there are categories of data they look for, this is called data gathering: Operational support (e.g. monitoring and controlling activity) - how well a business functions, from the time it takes on a call to the ability of their staff, this is operational data. If a customer complains it could because of the quality of product or service, for instance all Broadband packages are the relatively the same, prices are similar but customers have preferences. This is why companies need to monitor and control their staff. Similarly the production process of products needs to be monitored, staffing needs monitoring, speed of output and quality of process needs controlling in order to benefit manufacturing. Analysis (e.g. to identify patterns or trends) – Most data is gathered to be analysed, analysis generates patterns, trends, they are used by companies to predict. All successful new products have gone through this process, analysing what is happening, seeing a gap in the market or a demand and then filling that gap. Analysing also gives feedback, what is going well, what is not working, what needs more or less time or money. Data analysis is how successful companies stay successful.

12 P1.2 – Purpose of Data Decision making (e.g. operational, tactical, strategic) – Data is gathered by some companies in order to make decisions, make a new product, drop an old product, adapt the product lifecycle, change what is wrong or make better what is working well. Knowing all the facts leads to better decisions. Sony did not continue with the Minidisc when they saw that Apple was entering the market, Toshiba dropped Beta when JVC adapted VHS, Nokia sold to Microsoft when they saw their sales drop below 10% of the market. You need Data to make these decisions, sales figures, customer preferences, stock analysis etc. Every company who moves their manufacturing base does so because the data told them that it was more cost effective. Marketing and sales – When is the best time to release the next game in a series, marketing and sales will find out, what should be in the game, marketing and sales can find out, how do you know what the reasons for buying are, market and sales find out. All companies have someone who looks at the sales figures and looks for trends, analyses the customer base. This is few back to marketing who decide what to do, promote or withdraw, push in a different direction or focus on one. From the Ice Cream Van knowing where the customers are likely to be, to Audi knowing where to place a showroom, these are all decisions made by analysing sales figures and marketing strategies to know where and what the customers want.

13 P1.2 – Purpose of Data Communication – “You’re call is important to us”. We hear this and ignore it but companies do monitor calls, for training, for improvement, for legal reasons, to find out opinions and what works well. s from customers are stored and read, feedback is followed, opinions are measured to improve standards. We may not see this in our day to day customer role but it does happen. Companies like eBay follow up on s to find out if the solutions work, you feel valued, you will want to stay with them, you will think they care about you, about your custom. Remember that every form of communication with the customer from verbal to statistical is an information gathering exercise. Flow (e.g. internally and externally) – Companies like to improve efficiency, efficiency increases sales. The quicker and more correct the information is transferred from one source to another the more effective it is. Verbal is instant but open to interpretation, written is more precise but less personal, is recorded but time consuming. External communications represent the company so they have to be more formal, internal communications serve a purpose but are less measured. Larger companies set up data structures to manage all information where staff can feed from it, smaller companies have less distance for the information to travel so it can be more personalised. Task 2 P1.2 - Explain the different purposes of data, with examples, and how these forms can be used within a business context. Operational Support Analysis Decision Making Marketing and Sales Communication Flow

14 Local, National or International Social Networking Site
P1.3 – Information vs Data There are different methods of data collection and different uses of information within a company. Data is raw, unfiltered, distributed by a wide audience and contains all the information the company needs. Sales figures are data, how that data is broken down and used becomes information. Every department within a company will receive data that needs to be interpreted, catalogued, reimagined, transformed into useful chunks called information. A database takes in data and reports back as information in terms of queries. Task 3 – P1.3 - In computing terms, what is Data? Task 4 – P1.3 - In computing terms, what is Information? Task 5 – P1.3 - Select a business of your choice, and identify the following: (with evidence, where possible) Describe the type of business it is (in terms of Primary, Secondary or Tertiary) What is their customer base (geographic – National / International / Global/ Worldwide) What is the purpose of the business Who are their target audience Type of Data that it receives and from where (e.g. Sales, Suppliers, Trends, Government Statistics, Surveys, Rivals) Local, National or International Social Networking Site Commercial eCommerce Business

15 P1.4 - Functional Activities
All organisations have functional areas or departments which work independently but towards a common goal or goals as set out by the aims and objectives Task 6 - P1.4 – Describe with examples the different informational needs within the functional activities above. Task 7 - P1.5 – Describe the informational needs within the functional areas that may be present within your chosen business. Sales Finance Marketing Human Resource Management Research and Development Administration Operational Production Competitor Analysis Purchasing

16 P1.4 - Functional Activities
Even in the smallest business a number of key tasks, or functions, must be done regularly. Stock must be bought, bills must be paid, customers must be served and customer enquiries must be answered. In a small firm all these jobs may be done by one or two people. In a large organisation, people specialise in different tasks. Tesco and Sainsbury’s, for example, have buyers to purchase the stock, accounts staff to pay the bills, checkout staff to serve customers and customer service staff to answer queries. Functional areas in business In a large organisation, it is usually easier to identify separate functional areas because people work together in departments. Each department carries out the tasks that relate to its particular area.

17 P1.4 - Functional Activities
The purposes of functional areas The main purpose of functional areas is to ensure that all important business activities are carried out efficiently. This is essential if the business is to achieve its aims and objectives. In addition, specific areas will be responsibility for supporting specific types of aims and objectives, for example: sales and marketing will be involved in achieving targets linked to developing new markets or increasing sales human resources will be involved in arranging staff training activities and supporting the continuous professional development of all staff finance will be expected to monitor and support aims and objectives linked to keeping costs low to improve profitability production will be set targets relating to quality or meeting planned production schedules

18 P1.4 - Functional Activities - Administration
Administration is a support function required by all businesses – and this does not mean just doing keyboarding or filing. Senior administrators carry out a wide range of tasks, from monitoring budgets to interviewing new staff for their departments. Routine administrative tasks include opening the mail, preparing and filing documents, sending s and faxes. Others require more creativity and flexibility, such as arranging travel or important events, from staff meetings to visits by foreign customers. Most administrators also deal with external customers who judge the business on the way their enquiry is handled. Poor or sloppy administration can be disastrous for a company’s image and reputation. A lost order, badly typed letter, important message that is not passed on or wrong date scheduled for a meeting can cause problems and may lose customers. Efficient administration means that everything runs smoothly and managers can concentrate on the task of running the business. In a small organisation, an administrator is often a ‘jack-of-all-trades’ who can turn a hand to anything – from checking and paying invoices to keeping the firm’s website up to date. In a larger firm administration may be carried out in every department, rather than just one. A sales administrator may make overseas travel arrangements whereas an administrator in human resources would arrange job interviews.

19 P1.4 - Functional Activities - Administration
A summary of the range of tasks administrators carry out is given below. Collecting, distributing and dispatching the mail Storing and retrieving paper and electronic records Organising meetings and preparing meetings documents Responding promptly to enquiries Preparing documents using word processing, spreadsheet and presentation packages, such as PowerPoint Researching information Sending and receiving messages by telephone, fax and Making arrangements for visitors. Making travel arrangements Purchasing supplies of office stationery and equipment Making arrangements for events, such as interviews or sales conferences

20 P1.4 - Functional Activities - Purchasing
Purchasing means ensuring that goods, components and materials are received to the right place on time and in the right condition. Some companies, such as Amazon and Debenhams, deliver direct to the customer, particularly when goods are bought online. Other businesses, including B & Q and Sainsbury’s, hold stocks in giant regional warehouses, for delivery to stores around the area. Superstores may use special vehicles, which can also carry chilled or frozen items. Other businesses have to move more difficult loads or hazardous substances, such as large engineering parts, cars or chemicals. Purchasing involves more than just arranging for goods to be collected from suppliers. For it to be cost-effective, costs must be kept as low as possible. This means, for example: planning vehicle routes to avoid back-tracking - keeps fuel costs down and saves time ensuring that vehicles do not return empty. This is only possible if goods are both delivered and collected. Vehicles that only deliver goods normally operate on a regional or local basis to minimise ‘empty journey’ time. Working out the routes for many vehicles, with different loads – some urgent and some not – can be very complicated. Computer programs are used by staff skilled in logistics to work out the best routes.

21 P1.4 - Functional Activities - Purchasing
Many organisations outsource both storage and distribution to external contractors so purchasing involves multiple connections in the process. This means paying a specialist firm to do the work. This is often cheaper than employing experts in the business. Purchasing and Distribution functions Ensuring all goods are appropriately stored before dispatch Ensuring goods for dispatch are securely packed and correctly labelled Checking vehicle loads are safe and secure Ensuring goods are despatched at the right time Checking that all deliveries match orders precisely and notifying sales if there is a discrepancy Completing the delivery documents Planning and scheduling vehicle routes Notifying sales staff of delivery schedules so that customers can be informed Dealing with distribution problems, eg through bad weather or vehicle breakdown.

22 P1.4 - Functional Activities - Finance
Most entrepreneurs consider this is the most important function in the business. This is because all businesses need a regular stream of income to pay the bills. Finance staff record all the money earned and spent so that the senior managers always know how much profit (or loss) is being made by each product or each part of the business and how much money is currently held by the business. This enables critical decisions to be made rapidly and accurately because they are based on accurate information. In some cases, this can mean the difference between the success or failure of the business as a whole. In many large businesses, different types of financial experts are employed: Management accountants monitor departmental budgets and current income from sales, prepare cash flow forecasts and specialise in analysing day-to-day financial information and keeping senior managers informed. Financial accountants are concerned with the preparation of the statutory accounts. All companies must provide a Balance Sheet and Profit and Loss Account each year, and most produce a cash flow statement as well. A credit controller monitors overdue payments and takes action to recover bad debts.

23 P1.4 - Functional Activities - Finance
Finance staff support the accountants by keeping financial records, chasing up late payments and paying for items purchased. Today, virtually all businesses use computer accounting packages to record financial transactions and prepare their accounts as well as spreadsheets to analyse financial data. Some finance departments prepare the payroll and pay staff salaries, but other businesses outsource this to a specialist bureau. Finally, businesses will often need money to fulfil specific aims and objectives linked to growth, expansion or simply updating their equipment or machinery. These items may be bought from money held back (reserved) from past profits, but usually additional money will be needed. If the business needs to borrow money it will want the cheapest interest rates possible and also want good repayment terms. Deciding where to obtain these funds is a specialist job and normally the task of the senior financial manager.

24 P1.4 - Functional Activities - Finance
Finance functions Producing invoices, checking payments are received and chasing up overdue payments Recording money received Checking and paying invoices received Preparing the payroll and paying staff salaries Monitoring departmental budgets to check managers are not overspending Issuing regular budget reports to all departmental managers Producing cash flow forecasts and regular financial reports for senior managers Advising senior managers on sources of finance for capital expenditure. Producing the statutory accounts each year

25 P1.4 - Functional Activities – Human Resources
The human resources of a business are its employees. Wise organisations look after their staff on the basis that if they are well trained and committed to the aims of the business, the organisation is more likely to be successful. HR is responsible for recruiting new employees and ensuring that each vacancy is filled by the best person for the job. This is important because the recruitment process is expensive and time-consuming. Hiring the wrong person can be costly and cause problems both for the individual and the firm. Normally, new employees attend an induction programme which tells them about the business, their rights and responsibilities as employees, the company rules and the requirements of their new job. Arranging appropriate training and assisting with the continuous professional development of staff is another aspect of HR. Training may be carried out in-house or staff may attend external courses. HR aims to ensure that the business retains good, experienced staff. Analysing staff-turnover figures will show the rate at which people leave the organisation. If these are high, it is important to identify and remedy any problem areas. Whilst people may leave for justifiable reasons, such as moving to another area or for promotion elsewhere, dissatisfaction with the job or the company should be investigated. Some organisations hold exit interviews to find out staff views on the business when they leave.

26 P1.4 - Functional Activities – Human Resources
Employees normally have basic expectations of their employer. They expect to be treated and paid fairly, to have appropriate working conditions, to have training opportunities, which will improve their promotion prospects, and support if they are ill or have serious personal problems. They also want a varied and interesting job and praise when they have worked particularly hard or well. These factors help motivation, which means staff are keen to work hard – and this benefits everyone. HR can help this process by monitoring working conditions, having staff welfare policies and ensuring that company pay rates are fair and competitive. Many organisations have staff associations, which monitor the views and conditions of staff and make these known. In other businesses trade unions may represent the workers, especially on pay and conditions. Senior HR staff liaise with these organisations, keep them informed of changes and developments and are also involved in any negotiations with senior management. Today, all employees and employers have legal rights and responsibilities in relation to health and safety, data protection (which restricts the type of information which can be held on employees and customers and how it is used) and employment. HR staff must ensure that the business complies with current laws and stays up to date with legal changes and developments.

27 P1.4 - Functional Activities – Human Resources
Human resources functions Advertising job vacancies Notifying staff of promotion opportunities Receiving and recording all job applications, arranging interviews and notifying candidates of the result Sending a contract of employment and other essential information to new staff Arranging staff training and encouraging continuous professional development Monitoring the working conditions of staff Checking health and safety and keeping accident records Recording sick leave and reasons for absence Carrying out company welfare policies, e.g. long-service awards and company loans Advising managers on the legal rights and responsibilities of the company and its employees Keeping records of grievances and disciplinary actions and their outcome Monitoring the terms and conditions of employment, including wage rates Maintaining staff records Liaising with staff associations or trade unions which represent the workforce

28 P1.4 - Functional Activities - Marketing
Marketing is all about identifying and meeting customer needs. Many businesses consider this so important that they are said to be driven by marketing. Another way to understand marketing is through the marketing mix which consists of four Ps Product – Who are our customers? What do they want to buy? Are their needs changing? Which products are we offering and how many are we selling? What new products are we planning? In which areas are sales growing – and how can we sustain this? For which products are sales static – and how can we renew interest? Which sales are falling and what, if anything, can we do? Price – How much should we charge? Should we reduce the price at the start to attract more customers – or charge as much as we can when we can? Can we charge different prices to different types of customers? What discounts can we give? What services or products should we give away or sell very cheaply – and what benefits would this bring? Promotion – How can we tell people about our products? Should we have specialist sales staff? Where should we advertise to attract the attention of our key customers? How else can we promote the product – should we give free samples or run a competition? Where and how can we obtain free publicity? Should we send direct mail shots and, if so, what information should we include? Place – How can we distribute our product(s)? Should we sell direct to the customer or through retailers? Do we need specialist wholesalers or overseas agents to sell for us? What can we sell over the telephone? How can the Internet help us to sell more?

29 P1.4 - Functional Activities - Marketing
Marketing functions Carrying out market research to obtain feedback on potential and existing products and/or services Analysing market research responses and advising senior managers of the results and implications Promoting products and services through a variety of advertising and promotional methods, e.g. press, TV, online, direct mail, sponsorship and trade shows or exhibitions Obtaining and updating a profile of existing customers to target advertising and promotions appropriately Producing and distributing publicity materials, such as catalogues or brochures Designing, updating and promoting the company website

30 P1.4 - Functional Activities - Sales
Sales is a crucial function for all businesses. It is pointless having superb products or services if no one buys them. For that reason, most businesses have sales targets as part of their aims and objectives. Meeting these is the responsibility of the sales staff or sales team. The job of the sales staff varies, depending upon the industry. Shops that sell basic products, such as chocolates or magazines do not need to do much selling. Most customers call in to buy something, choose the goods they want, pay and leave. Customers expect more help and advice if they want to buy a complex or expensive item, such as a television or car. Stores which sell these types of products therefore need trained sales staff who are friendly, knowledgeable and can describe and/or demonstrate their products and link these to the customer’s specific needs. Business buyers also expect a high-quality service and in-depth advice and information. They may want to buy highly complex and expensive industrial equipment and need to negotiate special finance arrangements – particularly if they are overseas buyers. Business buyers will also expect discounts for bulk purchases. Sales representatives often travel to meet potential customers, as well as routinely visiting existing customers to ensure their needs are being met.

31 P1.4 - Functional Activities - Sales
Employing a skilled sales force is expensive, especially if they are paid bonuses / commission. However, there are many benefits as an effective sales person can convert many enquiries into firm sales and build strong links with customers to encourage repeat business. There are strong links between marketing and sales – and in many businesses this may be a ‘joint’ department. Sales can pass on important customer feedback to help marketing colleagues. All sales staff should know there are a number of laws that protect customers and understand which type of sales activities are legal and which are not. Sales functions Organising sales promotions Responding to customer enquiries Selling the product or service to customers, either over the telephone or face to face Preparing quotations or estimates for customers Negotiating discounts or financial terms for business customers Providing technical advice Keeping customer records up to date

32 P1.4 - Functional Activities - Manufacturing
Production refers to the manufacture or assembly of goods. Production staff must ensure that goods are produced on time and are of the right quality. Quality requirements can vary considerably. Whilst an error of 0.5 mm would not matter much for a chair or table, for an iPod or DVD player it would be critical. Checking quality does not mean just examining goods after they have been produced. Today quality is ‘built-in’ at every stage of the process, starting with the raw materials. Many buyers set down a detailed specification for the goods they order, such as Marks and Spencer which sets down precise standards for all its producers. For clothing, this includes the type and weight of material and the thread and fastenings too. Buying raw materials is done by specialist purchasing staff, who take out contracts with regular suppliers and make sure that the terms of the contract are met, in relation to delivery, cost, quantity and quality. They also ensure that all items are checked on delivery and refer any problems back to the supplier. The materials must be purchased at a competitive price. This is not necessarily the cheapest price, but takes account of other factors, such as the reliability of the supplier, the quality required and the delivery date.

33 P1.4 - Functional Activities - Manufacturing
Raw materials will be stored near to the production area in a separate area. If a manufacturer uses a large number of parts – such as a car producer – storage can be very expensive, in terms of the space required and the manpower to oversee the stock. For this reason, many manufacturers today operate a just-in-time (JIT) system. This involves having an agreement with specific suppliers to provide small quantities, quickly, when they are needed. This benefits both parties. The suppliers know that they have a regular buyer. The manufacturer no longer needs to store large quantities of goods or worry about having sufficient stocks on the premises all the time. Today, many production processes are automated. This means that machines or robots do all the routine or dangerous jobs. At a bottling plant, for example, the cleaning, filling and labelling of the bottles is all done as a continuous process by machines. Operators check that the production ‘line’ is functioning correctly by checking consoles and computer screens, as well as by watching the work as it progresses. Some industries use Computer Integrated Manufacturing, where the control of the process is done by computer. When a process cannot be automated, teams of operators may work together and take responsibility for a sequence of operations. This makes the job more interesting and makes it easier to ensure high quality. This system is also more flexible because changes can easily be introduced at any stage by giving instructions to specific teams. It is therefore used by many car manufacturers who often want to vary certain models.

34 P1.4 - Functional Activities - Manufacturing
The production function also includes all the following aspects of production: Production planning involves deciding what will be made, when, and which machines and operators will be used. A realistic timescale must be predicted, bearing in mind other jobs that are in progress Production control means constantly checking progress to make sure that production plans are met – and taking remedial action if problems occur. This could be because of machinery breakdown, substandard raw materials or labour shortages. Machine utilisation control is concerned with minimising problems by keeping all the equipment and machinery in good working order. This involves checking to ensure none is overloaded or overused, without being routinely maintained. This is important because if a machine malfunctions it may produce damaged goods. If it breaks down altogether then production of that product will cease. Because of its importance, many organisations have a maintenance plan, which shows the dates on which machines will be out of operation for servicing. These dates are then taken into consideration when production plans are made. Staff utilisation control concentrates on making sure all the staff are working effectively and efficiently and concentrating their efforts on key production areas and targets. This is very important in industries which are labour-intensive and use more people than machines, such as assembling circuit boards or sewing jeans. Final quality checks make certain that the product is of the correct standard. This can be done be examining by hand – or passed through a machine which checks that the size and tolerance is correct. Alternatively, items may be selected for inspection on a random sampling basis. This would be the case if a large number of identical items is being produced, such as cups or biros.

35 P1.4 - Functional Activities - Manufacturing
Production is also involved in preparing items for dispatch. This may involve simply packing the finished items – such as household goods or clothing – and transporting them to the dispatch section. In other cases, it may involve various finishing processes. For example, paper is produced in huge rolls. These may be transported intact but usually the paper is cut, boxed and packaged. It then looks like the paper you see in a stationery store. Production functions Ordering (often buying) stocks of raw materials from approved suppliers Storing and checking the stocks of raw materials Planning production schedules to maximise machine capacity and staff levels Producing or assembling the finished product Checking the quality of the product throughout the production process Checking production is on schedule and resolving delays or problems Packing and storing the final products before distribution Scheduling routine machinery inspections and maintenance Carrying out repairs to machinery and equipment as required

36 P1.4 - Functional Activities – Competitor Analysis
This function is concerned with watching what your competitors are doing, matching them and surpassing them as well as improvements to existing products or product lines in line with their changes. In many industries, it also links to product design as well. Improvements to existing products are often ongoing as a result of competitor analysis or customer feedback. You can see these improvements around you all the time – such as the move to touch screens on phones, the sudden surge in tablet manufacturers, the move towards e-books. New products may be developed because of scientific or technological scientific advances taken advantage of by competitors, such as mobile phones, new drugs, WiFi and satellite navigation systems. Or they may occur because some rival has had a good idea that is worth following along to – such as Google or the Apple iPod. Straight competitor analysis aims to help us to companies adapt to global changes. Applied competitor analysis is focused on R&D, looking and learning from research and using this to the companies advantage.

37 P1.4 - Functional Activities – Research and Development
R & D staff aim to work with designers to develop a usable product that can be manufactured at a reasonable cost, sold at a competitive price and is safe to use. The activities undertaken, however, can vary considerably, depending upon the industry. Trying to discover new, safe drugs is very different to improving car performance. For that reason, R&D attracts staff who are very experienced in their own industry and also in their own field – from software developers to food technologists. Many organisations aim to continually improve both product design and performance. Industrial design relates to the appearance of a product – from a computer to a car, or even the packaging of a standard product – from perfume to soap. Designers want their product to stand out from its competitors and to look attractive, such as the iMac. Today, most products are designed using Computer Aided Design (CAD) packages, which enable a designer to sketch a basic shape and then vary the dimensions, angles and sizes of certain parts. The product can even undergo stress testing by computer. Engineering design relates to product performance; for example, for a computer, this means more memory and greater operating speed.

38 P1.4 - Functional Activities – Research and Development
Technological advances through R & D not only affect our lives but also the ways in which businesses operate. New developments in computer software and hardware have changed the way all departments create, store and share data and communicate with their customers; and new types of machinery and equipment have revolutionised many production processes. R & D functions - Note that the exact activities will depend upon the industry. Pharmaceutical industry, scientists research and develop new medicines and drugs Food industry, technologists work with chefs to prepare new products such as ready meals, sauces or flavourings. Electronic and IT companies concentrate on new technology products and software, such as HD televisions, the X-box 360 and iPod accessories Aerospace and Car industries, engineers focus on improving performance and safety whilst reducing emissions or noise. Designers concentrate on the shape and look, both internally and externally

39 P1.4 - Functional Activities – Operational
Operational information incorporates all the internal communication a company produces to perform its business. This can be s, notes, memos, reports, pay slips etc. This is also the information that transfers between sections of the company like purchasing to suppliers, finance to payroll etc. Every method of communication and every person involved in that communication interprets that information on their own way and for their own purpose. Operational information is like a trail, it has strings and most DFD’s are based on the links that happen through the manipulation of information on an operational path. A customer buys a product, sales take the sale and process the money, finance gets involved, sales contact marketing indirectly, they get involved, they contact finance, Distribution needs to restock because the Epos system says there is one less product, they contact purchasing and finance, and all the time Human resources are involved because every one works for them. An interruption anywhere along the flow of information can cause the loss of a thread, stock not being supplied, marketing not knowing what is selling, goods not being paid for etc.

40 P1.4 - Functional Activities – Relationships between different functional areas
No functional area in a business organisation can work in isolation. In a small firm, links and interactions between people responsible for different functions are usually informal and continuous. Sales people know which customers still owe money and must not be sold any more goods on credit until a bill has been paid; the manager knows which members of staff are keen and hardworking, without being told, and a customer query can quickly be solved by asking everyone in the office for advice. The situation is different in a larger organisation because people may work in separate areas or departments and rarely meet each other. However, all areas still need information and support from each other for the organisation to operate effectively. Constant communication and cooperation is essential for the business to achieve its aims and objectives. This often means that joint decisions have to be made between departmental managers, or their staff, to take account of everyone’s needs.

41 P1.4 - Functional Activities – Relationships
Some of the reasons why departmental links are essential are shown in the table below, which identifies some of the key issues over which functional areas need to communicate. Functional Area Links Sales and Production Sales must know production schedules and agree delivery dates of orders with Production so customers are not promised dates which cannot be met. Production must tell Sales about production problems which will affect customers. Sales and Finance Finance must know about customer enquiries to check their credit rating before sales are made. Finance will be involved when discounts are agreed or when there are problems with customer payments. Distribution and Finance Finance must know when goods have been despatched so that invoices can be sent out. Distribution and Sales Sales must be able to inform customers when deliveries are due and be aware of any problems. Sales and Marketing Must liaise over sales promotions and adverts so that sales staff can expect/handle enquiries. Finance and other depts. Finance monitors departmental spending and the achievement of financial targets. Operational This is the main source of internal information and flows both ways, the veins of a company and includes all financial transactions, HR, manufacturing and stock control. HR and Finance Will liaise over salary increases and bonuses, work training, hiring and staffing issues with Finance. Customer Service, Sales and Marketing Customer Service must pass on customer feedback that could affect future product developments or future sales. Competitor Analysis Information can be hearsay or realised, both are valuable. Trend analysis is key to successful adaptation. The information is passed down to sales and marketing as well as R&D. R & D and Production Liaise over new product developments and methods of production. HR and other functional areas HR handles job vacancies, promotion opportunities, training courses and CPD for all areas/staff.

42 P1.5 – Sources of Information
Sourced location of information can be split into two distinct places; internal and external, both with their merits and issues. Companies will use both locations for bets effect and few companies will work independently of both. Supermarkets have suppliers as well as customers, factories are still the middle men for raw materials and customers. Internal (e.g. financial reports, market analysis) These include: Financial Information: this is information related to the performance and profit and loss of the company. This will include information on how much you pay for items, how much you pay staff, the costs of rates and the taxes that you pay as a business. Personnel Information: This is information held by the company on their employees. This information must be freely available to the employee any time that they request it. Marketing Information: this is used by the marketing team to identify what products or services offered are most successful. They collect information from different departments such as sales to promote certain products or services based on current success rates. Purchasing Information: this is collected by the purchasing department who are involved with buying all of the products needed to run your business. Sales Information: this needs to be monitored based on the product or services offered by your company. This information needs to be passed to ensure that the cost of your good or service is less than the sale price. Manufacturing information: This is information about the cost of manufacturing goods within the company and will normally include the running cost of all machinery, the wages paid to production staff and the cost of raw materials used up in the manufacturing process.

43 P1.5 – Sources of Information
External: Examples of external information sources are: Government, trade groupings, commercially provided information, database and research. If a company uses external sources of information then they must be sure of the reliability of the data sources. Here are some examples of how the company could use information supplies by external sources: Government: This comes from a reliable source as this is the governing body that they business operates within. Companies need to use important legal information from the Government to help run the business successfully and legally. For example, if the Government offered businesses grants for opening manufacturing plants in areas of high unemployment a company might use this information to their advantage to set up a new plant at a lower cost than in another area. Trade Groupings: This is a group of businesses that operate within the same sector and not within the same location. For example tech companies would be part of the Technical Trade Association and Farmers part of the Farming Association within a country or region. As a business being a member of a trade grouping enables you to access information that helps you run your business successfully. For example, solicitors are part of the legal trade and will have memberships that give them access to the latest laws that the must use to support their clients in the best possible way. Commercially Provided: Companies can use this information to help them make the correct business decisions. These decisions are made based on information made available to them from other companies. For example, a hotel group might use the information about the number of flights to and from a number of airports along with the information on the number of hotels beside each airport to make a decision on where to open their newest hotel. Databases & Research: Companies can research information that might help them increase the sales and level of interest in their business. The key thing to researching information that helps run your business to ensure it is accurate and reliable. Some companies will pay to access commercially available databases that offer a range of information directly based on their business sector.

44 P1.5 – Sources of Information
Sourced information can be split into two distinct categories; primary and secondary, both with their merits and issues. Primary research (field research) involves the collection of data that does not already exist. This can be achieved through numerous forms, including questionnaires and interviews. This is research the company carries out itself, with its own staff, for its own purpose. There are obvious benefits to this kind of research: Can be tailored to the companies needs Company can control the flow of information Can be adapted on the spot to gauge additional opinion There are many pitfalls for this type of research: Could be very expensive because many people need to be contacted. Take a long time and be out of date when the research is complete. People may not reply if s or letters used. Secondary research (desk research) involves the summary or collation of existing research rather than primary research, where data is collected from, for example, research subjects or experiments. Basically using someone else’s primary research to aid your own research problem. The benefits include: Companies hired know what they are doing and where to look for information Companies hired can analyse information It is easier to get someone else to do the work Does not require additional staffing Disadvantages include: Can be expensive Relies on the honesty of the external body Can be too specific and non adaptable.

45 P1.5 – Sources of Information
Sourced information can be split into two distinct types of response; qualitative and quantitative, both with their merits and issues. Qualitative methods are ways of collecting data which are concerned with describing purpose and meaning, reasons for things, rather than with drawing statistical responses. What qualitative methods (e.g. case studies and interviews) lose on reliability they gain in terms of validity. They provide a more in depth description, opinion based responses that can be used to judge why rather than how many. Examples include Why, How, For what reason, In your opinion etc. Quantitative methods allow for statistically reliable information obtained from numerical measurement to be backed up by and enriched by information about the research participants' explanations. They are results that can be calculated, formulated, put into Spread sheets and drawn up, used as information that can be queried, sorted and defined against previous and future information. Examples include Yes/No, out of ten, > or <. Even single answer responses can be added up if there is a restriction on the possible responses. Task 8 - P1.5 - Describe the features of Information Sources and outline the advantages and disadvantages of each. Task 9 – P1.5 – For your chosen company describe the Sources of information used with evidenced examples. Task 10 – M1.1 – In terms of internal efficiency, suggest improvements you company could make in terms of information gathering and dissemination. Internal Qualitative Primary External Quantitative Secondary

46 P1.6 – Handling of Information
Once the company receives its information in the form of raw data, it then transfers that data into usable information. This is called Handling of Information. Different departments within a company manage that information in different ways and interpret that information for different purposes. For instance IT will transfer information onto the system without the need to analyse it, Marketing will analyse specific parts of the information, sales will analyse their parts, admin their section. But it all comes from one stored source. Collection and Storage: A school will collect client information from Primary Schools in raw format, all the next year’s students that are coming, their addresses, ages, learning grades, medical information etc. The IT department school will put this onto the system as one large data stream and store it. SIMS will then break down this information into year groups and categorise the information. This is how it is collected and stored. A school will also collect statistical information from exam results across the country and store that as a saved database link as a separate data stream. This is different information and saved in a different format. This is public information and therefor does not need to be as securely stored. They will collect funding information and store this as a separate data stream, this needs to be as secure as the personal information of the students but is a separate data type. And they will need contractual information from their staff and from suppliers, two additional data types with different levels of security and structure. And then there are other data streams, country, county and local statistics on SEN, statistics on EAL, FSM etc. All these have their own methods of collection and methods of storage that have to be taken into consideration before the school day can even begin.

47 P1.6 – Handling of Information
Manipulation – Once the information has been received it is then disseminated, departments takes the information from a central source, usually just the network but for a school this will be SIMS, and then use that information in their own way. Warehousing will use purchasing order information for delivery and collection, R&D use product and component pricing information for development costs. How the departments process that information is up to them, this could be in the form of charts, tables, invoices, but it needs to be done in a way that can be understood by that department. For a school the student data will be produced into spread sheets generated from SIMS so they can use it in the classroom, staff will manipulate the data into information that is useful for them. Retrieval – The methods of retrieval needs to be in keeping with the staff and their abilities in order for the function of the data to work. For most companies the information needs to be at the end of a phone call or key press. When a customer rings the bank and gives their account details and security measures, the information should then be available to the person on the other end of the phone, the quicker and more available this is, the happier the customer is likely to be. Paper versions should be in the same room, invoices stored in folders in the same way we would expect a student to be able to find their own files.

48 P1.6 – Handling of Information
Analysis - Information from one Data Source can be analysed and drawn into charts, tables, compared and used, information from multiple data streams can be viewe3d against additional targets like trends, upcoming problems etc. A successful company is a company that can analyse figures and make preparations or predictions. All information is affected by external sources of influence, falls in console sales happen in Summer but sales in Sun Cream goes up. For any company, breaking down the statistics and comparing them leads to a better understanding. In schools we compare grades against everything, EAL, SEN, G&T, M/F, this allows us to adapt how we deliver lessons, how we track and monitor, then we review the results again and see if it helps. Apple, Easyjet, and local Chip Shops do the same, analyse, prepare, adapt, review, the four stages of business improvement. Presentation – When the information is collated, prepared, analysed and reviewed, how it is then presented to the next person will vary according to the job, nature and attributes of the target. A statistical manager will produce tables of information but present charts to their managers. Marketing will take sales information and present it in the form of proposals to managers, company directors take all the information about values and present it to share holders in the form of finished analysis and reports. There are many forms of presentation as there are different client and audience needs. Task 11 - P1.6 - Describe the features of Data Handling and Management. Task 12 – P1.6 – For your chosen company describe the how they handle data from various sources with evidenced examples. Task 13 – M1.2 – In terms of handling information, suggest improvements you company could make in terms of information gathering and dissemination. Collection and Storage Manipulation Retrieval Analysis Presentation

49 P2.1 – Standard of Information
The Standard of information used within a company is important, a lot of information from an unreliable source is useless, detracting, whereas a small amount of information from a reliable source, or a valid source, could be invaluable to a company’s finances and legal status. Reliability of data sources – Companies get into the habit of using the same sources of information, Schools look at previous schools, Businesses use references, other companies use Ombudsmen to source their information. A reliable source is a company who supplies on time, in tact, detailed and useful information. There are no rules, news sources get it wrong sometimes. Source reliability sometimes comes down to first hand or second hand sources, primary or secondary, companies tend to limit down the possible risks by verifying sources. In standard journalism like Television it is the policy to use three reliable sources before a news article goes on the air. In printed materials from university quoted sources tend to be Primary. Validity – Unlike reliability which is a matter of opinion, validity means verified sources. Just because the user trusts the sources (reliable) it might not be the best source for the material, it might lack qualification, it might lack detail. Some people see Wikipedia as a reliable source because a lot of people have read it and corrected it but not as a valid one. If a user can change the information through opinion then it is no longer valid and Wiki is an opinion based site. For website sources companies like verifies the validity of a site, age, hits, links, Dmoz and Yahoo counts etc. but this is still down to the user to confirm that the information on the site is the best information for the purpose.

50 P2.1 – Standard of Information
Relevance – Information overkill, having too much information that gets in the way of relating what needs to be said. The Data Protect Act stops companies from gathering too much irrelevant information for a purpose but does not stop a company from using too much irrelevant information to tell the customer what they need to know. Companies prefer to have the answer asked rather than additional information. This is the reason Secondary companies are hired to do market research, they come back with the answers, not more questions. Similarly the amount of information given to the customer is related to the relevance of the information. We buy our mobiles knowing what pixel depth it is, memory capacity, response speed and video transfer rate but we will only care about one of these, the one that made us buy the phone. Time frame - How long information is relevant for is down to the need for the information and the content of the information. Schools need to keep student information up to three years after they have left but Apple only need to know what you liked about the iPhone 3 up to 3 months after the i{Phone 4 came out. Likes change according to the user, age does not change more than once a year. All information is relevant for the period of the informational needs, and by law companies need to lose that information when it is no longer time relevant. At the end of the day companies get to decide if the time frame has passed for the usefulness of the information.

51 P2.1 – Standard of Information
Accessible – How accessible the in formation is can restrict a company from using it. The Census takes place every 10 years, the information within it will change daily, access to more up to date information related to the census can take time and needs to be funded privately. For every piece of informational need there is, there will be a company who supplies it or one who has already sought it. For some companies accessible can mean financial, if they cannot afford it then they will do without it. Other restrictions in terms of access can include: Legal reasons – There might be copyright, an injunction, restricted to another country, security restricted. Financial – might cost too much, might be a charge on use, might involve using too many staff to get the information or an external company to source it. Time restricted – not supplied in time like a company report, not available to the new tax year, in the process of updating Too Personal – under the Data protection Act, contains sensitive information, not the kind of thing to ask Quality – In terms of information gathering the quality of the information is as important as time or relevance. Companies need the most up to date, most relevant and valid information, these all add up to quality as well as the right information, using the right data, gathered and worked out ion the right method, formulated and analysed. For a school we would expect all the information from previous schools from attendance to behaviour, grades sporting achievement, family information to learning needs. There is a lot of information in there about each student and all useful to someone. Quality of information for a school comes down to conciseness, compatibility, depth, structure and consistency. For companies this might also include accuracy, detail, relationships between information and industry relation.

52 P2.1 – Standard of Information
Cost-effective – You get what you pay for, this is true for information as well, the quality and standard of the information is down to cost. Census information is free, local government information, certain statistics are free, everything else costs. Companies work to a deadline and settle for the information they have if time is running out. Companies set aside a budget for information gathering and manipulation, every department works within that budget, Online surveys are free, computers can gather the results and draw comparisons for free, they can be linked so all opinions on qualitative data is stored separately for free but this still does not make it the best way to gather information. Companies choose their data gathering tools for different reasons, cost is one of the larger more deliberate reasons. Appropriate – They say they 49.99% of all adults are taller than average. They say that 22% of all statistics are made up, just like this one. Surveys on the street are rushed, people rarely like being stopped on the street to answer questions for they give false results to get through it. The solution is to ask more people, if 1 person in 10 lies that is 10%, if 25 in 1000 like that is 2.5%. If the method of data collection requires 100 responses then this will give a more accurate response. Similarly if a survey is asking about shopping habits and is done at 9.30 on a Tuesday morning, responses can be influenced, this is signing on day when there are more unemployed people around to throw out the results. Asking about IT skills in an online survey means the user will already have some skills already to be on the computer filling it out. The appropriateness of the timing, the location, the kind of data responses all can have an impact on the data gathering. Task 14 – P2.1 - Describe the variance in the Standard of Information gathering. Task 15 – P2.1 – For your chosen company describe the how they benefit from Standards awareness in Data Gathering with evidenced examples. Task 16 – M1.3 – Discuss the dangers to your organisation of integrating information that is unverified. Task 17 – M1.4 - Suggest improvements your business could make in terms of securing information form external sources. Relevance Reliability of Data Sources Time Frame Accessible Quality Validity Cost-Effective Appropriate

53 Task List Task 1 – P1.1 - Explain the different definitions for the forms of information used within a business, with examples. Task 2 – P Explain the different purposes of data, with examples, and how these forms can be used within a business context. Task 3 – P1.3 – In computing terms, what is Data? Task 4 – P1.3 – In computing terms, what is Information? Task 5 – P1.3 – Select a business of your choice, and identify the following: (with evidence, where possible) Task 6 - P1.4 – Describe with examples the different informational needs within the functional activities above. Task 7 - P1.5 – Describe the informational needs within the functional areas that may be present within your chosen business. Task 8 - P1.5 - Describe the features of Information Sources and outline the advantages and disadvantages of each. Task 9 – P1.5 – For your chosen company describe the Sources of information used with evidenced examples.

54 Task List Task 10 – M1.1 – In terms of internal efficiency, suggest improvements you company could make in terms of information gathering and dissemination. Task 11 - P1.6 - Describe the features of Data Handling and Management. Task 12 – P1.6 – For your chosen company describe the how they handle data from various sources with evidenced examples. Task 13 – M1.2 – In terms of handling information, suggest improvements you company could make in terms of information gathering and dissemination. Task 14 – P2.1 - Describe the variance in the Standard of Information gathering. Task 15 – P2.1 – For your chosen company describe the how they benefit from Standards awareness in Data Gathering with evidenced examples. Task 16 – M1.3 – Discuss the dangers to your organisation of integrating information that is unverified. Task 17 – M1.4 - Suggest improvements your business could make in terms of securing information form external sources.

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