Role of IT in Business

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Data is the raw facts that are collected so that we could produce useful information. To look at the examples of data , we may look at different source documents an organization prepares to capture data. These source documents include order form, invoices, receipts, GRN, and pay-in-slips etc.

Information is the processed form of data that useful for managers. Information is found in different managerial reports e.g. profits and loss account, balance sheet, cash flow statement, budget and variance analysis etc.

Managers need information for the following purposes:

PLANNING

We need future oriented information so that we could plan activities for futures.

DECISION MAKING

Decision making is best described as ‘choosing among alternatives’. We need information to first identify all available alternatives. After identification, we need information to analysis each of such option and finally on the basis of our analysis and information, we make the final choice.

CONTROL

Controlling business activities require availability of timely and update information. Delay in information causes control delay that causes further loss that could have been avoided had the information available on time.

PERFORMANCE APPRAISAL

For performance appraisal, we need correct information about the performance of employee/department/organization.

COORDINATION

Coordination is needed where different people, teams or departments are working on a project. In organizational context, coordination in needed among different departments and provision of required information is the key to such coordination. For example, a very attractive sales order is accepted by the sales department, to fill this order, purchase department should procure inventory in time, production department has to produce it to its specification, packing department has to pack as required and the whole consignment should be dispatched after due quality control checks well before the time so that it reaches its destination on time. This whole process require proper coordination and availability of information to each and every player and timely feedback to manager about any problem occurred.