Communicating information to stakeholders - Lesson 10 Flashcards
Attributes of good quality information acronym
Accurate - free from errors
Complete
Cost-effective
Understandable
Relevant
Authoritative - the data should be from a reliable source
Timely
Easy to use
3 levels of management
Corporate/strategic, managerial and operational
Info at a corporate/strategic level
This is the highest level of management so will focus on longer-term decisions. Likely to rely on external factors such as economical factors. They will want to know the summarised info prepared by the lower levels of management. On an ad-hoc basis rather than regular.
Info at a managerial level
Responsible for how the firm will achieve it’s goals. Internally generated, regular info will be used to monitor progress such as budgets. Needs to be sufficiently detailed.
Info at an operational level
Internal, regular detailed information on past events such as production levels. For IMMEDIATE decisions.
Sources of big data
social - social media information to help marketing.
machine data - e.g scanners in hospitals
transactional data - daily sales and purchases
Characteristics of big data - the 5 Vs
Volume - amount
Velocity - how fast the data can be processed - e.g real-time is useful.
Variety - data from lots of different sources
Veracity - how accurate and truthful it is.
Value - to add value to the business
Benefits of using big data
Attract customers - by looking at data about their previous sales
Focused marketing - to look at trends and refine their marketing
These gain a COMPETITIVE ADVANTAGE over other businesses due to better decision-making
Faster innovation - with trends
Improved business processes - to reduce costs
Detect fraud transactions with machine data
Disadvantages of using big data
Skilled data professionals needed to analyse
Data analysis tools may be overwhelming if the data is from lots of sources.
Data protection - must adhere to DPP
Data security - must protect the data against hacks
What behaviour must be used when dealing with big data?
Professional Scepticism - be aware that not all big data could be accurate and trustworthy at face value.
Using external data analytics points
The people analysing the data may not have knowledge about the business. Would reduce costs but must rely on the external party to maintain the data security which may need permission.
What is a matrix (data visualisation)
Data from a table is summarised in icons, colours and pictures rather than the actual figures. This is visually appealing and the key data stands out. Main let down is a lack of detail.
Visual data
Must be easily interpreted by the user.
3 advantages of visual data
Easy to understand
Easy to identify trends and anomalies
Comparison of data is easier
Benefits of having a dashboard on software
Data is presented visually so easy for non-finance users to understand
Can be customised so relevant data is shown for the business
Data in real-time
Can be accessed anywhere with cloud-based with internet
