The Importance of Data

Posted on in Information Systems

Information Tools

As fully vested members of the Information Age, we manipulate data everyday without really taking notice. Personal computers (PCs) are in our homes and personal digital assistants (PDAs) are in our pockets. These pieces of hardware were designed solely for the purpose of collecting and manipulating data. Hardware alone cannot manage data. Software running on these hardware platforms are the tools we specifically use to collect, monitor, manipulate, and process data as it arrives. Home users and business accountants use spreadsheets to track budgets, while college students and freelance writers use word processing software to write papers and articles. Hardware and software work together to provide the tools necessary to fuel the Information Age (Senn, 2004).



Data is the foundation upon which information technology is built. It is the raw numbers and facts collected from various systems. Once data is collected, it is turned into information by processed and organized into a format that is useful for the end-user. Finally, knowledge builds on the foundations of data and information by understanding what the information means and how it can be used. Companies use information systems to generate knowledge about their markets and competitors. Mastery of this knowledge can give a company the competitive advantage it needs to bring the right product to market at the right time (Senn, 2004).

Vital Information

Company X is interested in retaining information that relates to their business. This includes information regarding the inventory levels at each store and trends about those levels. Inventory tracking ties in neatly with accounting information in general. This information should definitely be centralized so that the executive management at Company X can get the total picture rather than collating data from the various stores. The same is true for sales information. This information is currently recorded at individual stores and mailed to a central location for processing. Data is frequently lost in transit. Finally, Company X needs to retain information regarding payroll and employee benefits. Since Company X sales personnel are paid commissions, this information is especially helpful in maintaining sales quotes.

Enterprise Resource Planning

SAP ERP has become the de facto solution in the enterprise resource planning (ERP) industry. Like many ERP solutions, SAP ERP uses modules to implement various functionalities on top of a monolithic framework. The SAP ERP End User Delivery module provides several tools to help managers utilize information stored with the system. Like traditional Transaction Processing Systems (TPS), End User Delivery allows users to generate reports and input information. SAP ERP Operations is a module that implements various Management Information Systems (MIS) functionalities such as inventory management and sales and service assistance. Finally, SAP ERP Financials provides tools that executives can utilize to get a high-level overview of company performance (Lombardi, 2008).


Lombardi, C. B. (2008). SAP ERP. Faulkner Information Services. Retrieved May 29, 2009.

Senn, J. A. (2004). Information technology: Principles, practices, opportunities (3rd ed.). Upper Saddle River, NJ: Pearson.

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