Explain the business benefits of a data driven website

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section 6.1

Data, Information, and Databases

LEARNING OUTCOMES

6.1Explain the four primary traits that determine the value of information.

6.2Describe a database, a database management system, and the relational database model.

6.3Identify the business advantages of a relational database.

6.4Explain the business benefits of a data-driven website.

THE BUSINESS BENEFITS OF HIGH-QUALITY INFORMATION

LO 6.1: Explain the four primary traits that determine the value of information.

Information is powerful. Information can tell an organization how its current operations are performing and help it estimate and strategize about how future operations might perform. The ability to understand, digest, analyze, and filter information is key to growth and success for any professional in any industry. Remember that new perspectives and opportunities can open up when you have the right data that you can turn into information and ultimately business intelligence.

Information is everywhere in an organization. Managers in sales, marketing, human resources, and management need information to run their departments and make daily decisions. When addressing a significant business issue, employees must be able to obtain and analyze all the relevant information so they can make the best decision possible. Information comes at different levels, formats, and granularities. Information granularity refers to the extent of detail within the information (fine and detailed or coarse and abstract). Employees must be able to correlate the different levels, formats, and granularities of information when making decisions. For example, a company might be collecting information from various suppliers to make needed decisions, only to find that the information is in different levels, formats, and granularities. One supplier might send detailed information in a spreadsheet, whereas another supplier might send summary information in a Word document, and still another might send a collection of information from emails. Employees will need to compare these differing types of information for what they commonly reveal to make strategic decisions. Figure 6.4 displays the various levels, formats, and granularities of organizational information.

Successfully collecting, compiling, sorting, and finally analyzing information from multiple levels, in varied formats, and exhibiting different granularities can provide tremendous insight into how an organization is performing. Exciting and unexpected results can include potential new markets, new ways of reaching customers, and even new methods of doing business. After understanding the different levels, formats, and granularities of information, managers next want to look at the four primary traits that help determine the value of information (see Figure 6.5).

Information Type: Transactional and Analytical

As discussed previously in the text, the two primary types of information are transactional and analytical. Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support daily operational tasks. Organizations need to capture and store transactional information to perform operational tasks and repetitive decisions such as analyzing daily sales reports and production schedules to determine how much inventory to carry. Consider Walmart, which handles more than 1 million customer transactions every hour, and Facebook, which keeps track of 400 million active users (along with their photos, friends, and web links). In addition, every time a cash register rings up a sale, a deposit or withdrawal is made from an ATM, or a receipt is given at the gas pump, the transactional information must be captured and stored.