The concepts of ‘data’, ‘information’ and ‘knowledge’ and hierarchy among them are fundamental in understanding IT environment and IT management. Achieving superior levels in the chain of these terms is closely linked with higher level of understanding and connectedness.
Data is defined as raw facts which may exist qualitative or quantitative forms and are meaningless by themselves. To illustrate, the data concerning the customers in an IT application will not provide information about how successful the enterprise is without being processed.
Information is organized form of data and described as “data that are endowed with meaning and purpose”.
Knowledge is “the value added to information by people who have the experience and acumen to understand its real potential” and is a function of people, information and significance.
Overall, business processes create data increasingly by the help of IT environment and transform them into information and knowledge and eventually add value to the enterprise. The data, information and knowledge is always interlinked with the concepts of information technology and information systems.
Information technology versus information systems
Information technology and information systems which have different meanings despite often being used interchangeably help organisations manage information at all hierarchical levels.
Information technology is computer hardware, software, communications technologies, data and core applications applied in digital computing.
An information system is a chain of information services involving inquiring, data storing, transmitting, decoding and deciding. In the course of time, the concept of information system has evolved from being a sole electronic data processing service to a broader understanding of managing information to add value to the business. According to another definition, information systems are composed of hardware, database, application(s), procedures, human resource and elements of a system and serve to continuously and regularly collect, process, transfer, and achieve data and/or information in order to support strategic decision making in an organisation. Information systems, as computer-based systems, help organisations manage information in order to solve some task automatically or to support people at operational or management levels.
Role of information systems
The journey toward digitalization of information in an organisation is described with four steps: Managing paper, managing automated technologies, managing corporate information resources, and lastly, managing the strategic use of information. In today’s business environments, organisations produce enormous amount of data/information in each and every point of business work-flows by means of extremely complicated business applications and information communication and technology (ICT) infrastructure.
The ultimate decision-takers require timely, continuous and reliable information about all resources and business processes so as to enhance strategic decision-making practices within organisations. More and more pervasive use of ICT helps organisations not only improve capacity, efficiency, productivity, quality, standardization competitiveness and functionality but also decrease costs and time in both private and public sector.