Data consist of raw facts, such as customer names and addresses. Information is a collection of facts organized in such a way that it has more value beyond the facts themselves. For example, a database of customer names and purchases might provide information on a company’s market demographics, sales trends, and customer loyalty/turnover. Turning data into information is a process or a set of logically related tasks performed to achieve a defined outcome.
This process of defining relationships between various data requires knowledge. Knowledge is the body, or rules, guidelines, and procedures used to select, organize, and manipulate data to make it suitable for specific tasks. Consequently, information can be considered data made more useful through the application of knowledge. The collection of data, rules, procedures, and relationships that must be followed are contained in the knowledge base. The following contains characteristics of valuable information. Therefore, any information to be regarded as important should be:
- Accurate. Accurate information is free from error.
- Complete. Complete information contains all of the important facts.
- Economical. Information should be relatively inexpensive to produce.
- Flexible. Flexible information can be used for a variety of purposes, not just one.
- Reliable. Reliable information is dependable information.
- Relevant. Relevant information is important to the decision-maker.
- Simple. Information should be simple to find and understand.
- Timely. Timely information is readily available when needed.
- Verifiable. Verifiable information can be checked to make sure it is accurate.
Data Management
Data are organized in a hierarchy that begins with the smallest piece of data used by a computer for purposes of this discussion, a single character such as a letter or number. Characters form fields such as names, telephone numbers, addresses, and purchases. A collection of fields makes up a record. A collection of records is referred to as a file. Integrated and related files make up a database. An entity is a class of people, objects, or places for which data are stored or collected. Examples include employees and customers. Consequently, data are stored as entities, such as an employee database and a customer database. An attribute is a characteristic of an entity. For example, the name of a customer is an attribute of a customer. A specific value of an attribute is referred to as a data item. That is, data items are found in fields.
The traditional approach to data management consists of maintaining separate data files for each application. For example, an employee file would be maintained for payroll purposes, while an additional employee file might be maintained for newsletter purposes. One or more data files are created for each application. However, duplicated files result in data redundancy. The problem with data redundancy is the possibility that updates are accomplished in one file but not in another, resulting in a lack of data integrity. Likewise, maintaining separate files is generally inefficient because the work of updating and managing the files is duplicated for each separate file that exists. To overcome potential problems with traditional data management, the database approach was developed.
The database approach is such that multiple business applications access the same database. Consequently, file updates are not required of multiple files. Updates can be accomplished in the common database, thus improving data integrity and eliminating redundancy. The database approach provides the opportunity to share data, as well as information sources. Additional software is required to implement the database approach to data management. A database management system (DBMS) is needed. A DBMS consists of a group of programs that are used in an interface between a database and the user, or between the database and the application program. Other advantages of the database approach include the ability to consolidate data records and objects. This is very necessary for database management as it allows that data accessible by many different application programs for various purposes. Such data allows accountants to easily calculate pay for workers in the company. This is because the accountant and other users can easily access the information contained in this database.