Using information

How is data transformed to information?

How do companies use information? (P1,P2)

Companies use information in lots of ways, they can use it to find out more about their company and improve where they think it will be necessary. Within the company there will be different teams all with specific job roles, such as marketing,purchasing, sales, manufacturing, distribution and administration. These teams can use different types of information in order to carry out their jobs for example, the distribution team for a shop will get data about how many times a specific product has been sold and how many of that product the shop had in stock, this data can be turned into information that will be used by the distribution team so that they know what products to send into the shop.


Data will be as accurate as possible when it is put into a system in order for it to be transformed into good information that the company can use, the type of information will depend on what the company needs in order to get the most out of it. There are different types of information, Primary means that the information gathered was carried out by the company first hand this may mean doing research to get information using techniques such as questionnaires, surveys, observing and interviewing people. Secondary information is taken from other sources the most common types of secondary source are books and the internet. Other types of information are quantitative and qualitative which type the information is depends on what the data is. Quantitative data is data that is gathered using numbers or percentages this could be useful for the companies marketing, sales, finance, personnel and purchasing teams as they will be able to gather information regarding product sales, the hours of staff and popular lines across the store in order to make their jobs easier. The sales team will need to know what stock has sold in order for them to re fill it on the shelf, this could mean that they have a system set up that gathers information from the unique bar code on the till and every time the bar code is scanned it is sent back to a computer in the office in the form of information that the staff can check so they know what to re fill. Qualitative data is descriptive it will not be accurate but can still help the company as it means they will be able to gather information it is usually collected from observations and interviews. It will help the companies marketing team as they can watch their advertisements and talk to people to get information off them to see if the adverts promoted the company well.


Good information is all depends on the type of data that is gathered and who will be using the information as information that will be good for one team may not be good for another for example information about advertisements would not be useful for administration. Information should be reliable and accurate because if there is something wrong with it then resources could be used that are not necessary. The information should also be valid as sending information to the wrong place could cause the right place to not meet deadlines setting them back. The company should be trying to decide whether the information is cost effective as they don't want to spend money on information that will not be fit for purpose as the information could be expensive if they buy it from an external company then they need to decide whether it will be a reliable source, information could be more expensive depending on the source it is taken from. The information used should be easily accessible and should allow the user to be able to understand it thoroughly in order to get the best result when acting upon the information given using a shop as an example staff should be able to access information about sales easily so that they can act quickly and get other products out to ensure they are on sale all of the time.