Chapter 5: Information and Technology

Question 1

What does data mean? (1)

Answer 1

Data consists of numbers, letters, symbols, facts and transactions which have been recorded but not processed into a form suitable for decision making.

Question 2

What does information mean? (1)

Answer 2

Information is data that has been processed so that it gives meaning to the user and can be used for decision making.

Question 3

Information is required internally and externally.

Why do management require information? (4)

Answer 3

1. To provide current and historical records.
2. To analyse what is happening in the business.
3. To provide the basis for short term and long term decision making.
4. To monitor the performance of the business by comparing actual results with plans and forecasts.

Question 4

An example of data and information: (1)

Answer 4

Question 5

What is information technology (IT)? (1)

Answer 5

Information technology describes any equipment concerned with the capture, storage, transmission or presentation of data eg servers, computers, laptops.

Question 6

What is the information system (IS)? (1)

Answer 6

Information systems refers to the management and provision of information to support the running of the organisation.

Question 7

What are the levels of management? (3)

Answer 7

1. The strategic level.
2. The tactical level.
3. The operational level.

Question 8

What is the strategic level and what information do they use? (2)

Answer 8

Strategic management uses information from internal and external sources to plan long term strategies (EIS).

Internal information uses qualitative and quantitative data summarised on ad hoc basis (when needed).

Question 9

What is the tactical level and what information do they use? (2)

Answer 9

Tactical management requires information from the strategic level and quantitative information from the operational level (MIC).

The information is summarised but gives enough detail to allow for the tactical planning of resources and manpower.

Question 10

What is the operational level and what information do they use? (2)

Answer 10

Operational management requires information from the tactical level (uses TIS).

It mainly relies on detailed and precise internal information and is focused on the business’ day to day performance.

Question 11

An example of information needed for plant and machinery:

Answer 11

1. Strategic= a long term strategy on the company’s market share which informs the production plan indicating how much investment is needed for plant and machinery in the long term.
2. Tactical= could include a short term 12 month budget of the machine hours for each item of plant
3. Operational= a report on the % capacity of the plant and machinery used each week.

Question 12

What is a TPS? (2)

Answer 12

A transaction processing system records all daily transactions and summarises them so they can be routinely reported.

A TPS is mainly used by operational management.

Question 13

What systems does a TPS include? (3)

Answer 13

1. Sales/ marketing systems= recording sales and providing details on marketing promotions.
2. Manufacturing production systems= recording details of purchases, production and shipping.
3. Finance/ accounting systems= maintenance of financial data.

Question 14

What is a MIS? (2)

Answer 14

A management information system converts TPS data into information which helps monitor performance, maintain coordination and contains background information about the organisation’s operations.

It uses historic and present data of the business’ performance to predict the future.

A MIS is mainly used by tactical management.

Question 15

What reports would a MIS generate for example in a car dealers? (3)

Answer 15

1. Total sales for each car type.
2. Total sales per car salesman.
3. Total sales per area of showroom.

Question 16

What is a EIS? (3)

Answer 16

An executive information system provides strategic managers with flexible access to information from the entire business and external environment.

Summarised reports are presented as dashboards showing multiple pieces of information at once which can easily distributed to staff.

Used by strategic managers.

Question 17

Computerisation is when data and processes are converted to a digital format.

What are the advantages of computerisation?

Answer 17

1. Speed= computers are ideal for repetitive processes, they are limited by the speed of input (eg typing) and the speed of output (eg printing).
2. Accuracy= the only errors a computer may suffer from are because of human error during the input stage.
3. Volume= computers can handle large amounts of data without the need for breaks.
4. Complexity= systems are more efficient than humans and can handle more complex tasks.
5. Cost= due to other advantages the computer is very cost effective.
6. Presentation= information is presented in a user friendly way eg graphs.

Question 18

What is cloud based computing? (1)

Answer 18

Cloud based computing is in the internet and avoids the need for software, applications etc to be stored on a physical computer.

Question 19

What are the benefits of cloud computing? (10)

Answer 19

1. Store and share data= more data can be stored in the cloud then on hard drives and shares be shared easily (regardless of location).
2. On demand self service= data can be accessed or downloaded on demand.
3. Flexibility= employees don’t need to be physically plugged in to access data.
4. Collaboration= multiple people can work on documents at once.
5. More competitive= smaller companies can afford the same tech as bigger companies so can compete with them.
6. Easier scaling= the system can grow with the company eg new employee can be given access quickly.
7. Reduced maintenance= the cloud provider cover maintenance and security rather then IT.
8. Backups= cloud data is automatically backed up removing the need for extra security.
9. Disaster recovery= due to cloud backups recovery after a disaster is faster and cheaper.
10. Security= cloud servers eliminate the need for information to be physically stored.

Question 20

What are the disadvantages of cloud computing? (3)

Answer 20

1. Reliance on the provider= the provider could suffer cyber attacks or server issues causing significant disruptions.
2. Regulatory risks= companies need to ensure the provider is following cyber security regulations.
3. Unauthorised access= the provider’s staff may access information without proper authorisation.

Question 21

What is AI and machine learning? (2)

Answer 21

AI is an area of computer science that emphasises the creation of intelligent machines that can react and work like humans.

AI uses machine learning to develop by learning patterns to make predictions.

Question 22

Where could machine learning be used in the accounting system? (4)

Answer 22

1. Code accounting entries.
2. Recognising what relates to normal activities in order to better detect fraud.
3. Forecast revenues.
4. Improve access to and analysis of unstructured data eg emails.

Question 23

What is big data? (2)

Answer 23

Big data is a collection of data so large that it becomes difficult to store and process using databases and apps.

It includes financial data and other unstructured organisation data.

Question 24

What are the features of big data? (4)

Answer 24

1. Volume= the significant amount of data that the organisation needs to store and process.
2. Variety= it can come from many sources eg customer’s browser, history etc.
3. Velocity= data changes and needs updating eg old customer leaves new customers join.
4. Veracity (truthfulness)= the organisation has to gather accurate data for analysis to be useful.

Question 25

What are the benefits of big data? (3)

Answer 25

1. Driving innovation= by reducing the time taken to answer key business questions and therefore make decisions.
2. Gaining competitive advantage= by identifying trends or information that competitors haven’t seen.
3. Improving productivity= by identifying waste and inefficiency or identifying improvements to working procedures.

Question 26

How might a delivery company use big data? (2)

Answer 26

The company could monitor its vehicle’s speed, direction, braking etc.

This data can optimise performance and routes leading to less idle time, fewer miles therefore saving fuel.

Question 27

What are the types of data analytics? (4)

Answer 27

1. Descriptive analytics= shows what happened in the past eg business performance using graphs, tables etc.
2. Diagnostic analytics= shows why something happened in the past.
3. Predictive analytics= predicts what is likely to happen in the future based on current data eg a sales forecast based on CY advertising costs.
4. Prescriptive analytics= recommends actions to affect the predicted outcomes eg increasing advertising and production as demand rises.

Question 28

What are the benefits of data visualisation? (4)

Answer 28

1. Accessibility= graphics and dashboards are more user friendly and intuitive than some reports.
2. Real time synchronising= real time data with real time visualisation gives up to numbers in a clear style.
3. Performance optimisation= clearer data leads to better decision making and more efficient use of resources.
4. Insight and understanding= clearer data leads to improved understanding offering fresh insights about performance.

Question 29

What is cyber security? (1)

Answer 29

Cyber security is the protection of internet controlled systems including hardware, software and data from cyber attacks.

Question 30

What is a cyber attack? (1)

Answer 30

A malicious and deliberate attempt to breach a system.

Question 31

What are the main methods used in cyber attacks? (4)

Answer 31

1. Malware= software designed to damage servers or networks using viruses, worms etc.
2. Phishing= deceptive emails used to trick targets into harmful actions eg downloading malware.
3. Denial of service attacks= overloading websites making them unavailable to users.
4. Man in the middle attacks= attackers position between the user and a web service eg setting up fake WiFi networks to capture user information.

Question 32

What is the solution to electronic eavesdropping? (1)

Answer 32

Data encryption= data is scrambled prior to transmission and recovered in a readable format when transmission is complete.

Question 33

What is the solution to human error? (1)

Answer 33

Adequate staff training and operating procedures.

Question 34

What are the solutions to natural disasters? (4)

Answer 34

1. Fire procedures eg alarms, staff training, insurance etc.
2. Location eg not in a place prone to flooding.
3. Environment eg dust control, air conditioning.
4. Backup procedures.

Question 35

What is the solution to computer malfunction? (1)

Answer 35

Network design (to cope with high volumes) and backup procedures.

Question 36

What are the solutions to computer viruses? (3)

Answer 36

1. Anti virus software should be run and updated regularly.
2. Formal security policies and procedures.
3. Regular audits to check for unauthorised software.

Question 37

What are the solutions to hackers? (2)

Answer 37

1. Firewall software to prevent authorised access to the system.
2. Usernames and passwords to limit authorised access.