“You can have data without information, but you cannot have information without data.”
- Daniel Keys Moran (b.1962), American computer programmer and science fiction author

People often use the terms “data” and “information” interchangeably, but they actually mean different things. Data are raw facts or or statistics whereas information is the organization and interpretation of those facts or statistics from the given data. Data can come in the form of numbers, graphs, texts, figures, and images. It is a raw form of knowledge or information, so does not carry any real significance or purpose on its own, i.e. the data must be organized, processed, and interpreted to have any real meaning. There are two main types of data:

• Quantitative data - Refers to data in numerical form, such as prices, costs, and sales revenue.

• Qualitative data - Refers to data in descriptive (non-numerical) form, such as the name and residential addresses of employee or the opinions of customers.

Information is the knowledge gained through studying (analyzing) and interpreting data. Essentially, information is the interpretation or perception of data. Only when the data are collated and organized in a useful way can they provide information that is beneficial to managers and decision makers.

Table 1 - Differences between data and information

A database is a computerized system used by businesses to store, organize, search, select, process, and retrieve data and information. Databases can be small and stored on a local computer. Alternatively, they can be extremely large with networked facilities in physical data centres or as virtual cloud storage systems. It is possible to use databases to contain information on every aspect of the organization, such as sales reports, customer contact details, records of employees, and financial transactions.

Using a database enables businesses to organize and use data in more intelligent ways to facilitate decision making, such as devising marketing campaigns, managing the organization's finances, and to assist human resource planning. Furthermore, a database enables data and information to be accessed, managed, and updated quickly.

Typically, a business hires a database administrator who holds the position of managing the firm’s databases. The database administrator has the authority to determine the level of access rights of each employee to the data in the organization's databases. For example, the Human Resource Director will have access to the records of all employees,  in the organization, whilst the Chief Financial Officer will have access right to all financial data stored on the databases.

 Advantages of using databases

• A database manages data efficiently so that the required data or information can be easily searched and retrieved. This helps the business to function smoothly.

• Without an efficient database system, businesses risk losing any competitive advantage they might have as well as a data breach (the loss or theft of important data). This can therefore hinder the firm's operations and growth strategies.

• As with all aspects of an effective management information system, databases can improve a firm's operational efficiency, productivity, and decision making.

 Disadvantages of using databases

• Data can become overwhelming (data overload), which makes it more difficult and costly for businesses to organize, manage, and process.

• Not all managers understanding of the value of data in the decision making process so are unlikely to be able to manage data in the most efficient way.

• Databases are prone to cybercrime. This is the deliberate and malicious attack on computer hardware or software, including databases. The security of data stored in databases has become an increasingly important matter for businesses. Hence, firms need to spend more time and resources on data security (the protection of data against disclosure, damage, theft, or unauthorized access).

Watch this video to review your understanding of databases and how the information stored on databases can be used for data analytics.

 ATL Activity (Thinking skills)

In the context of a restaurant, distinguish between the use of data and information.

 Teacher only box

Possible responses could include:

Data

• Bills (the amounts spent by diners)

• Price and costs (of food supplies)

• Wages

• Tips

• Likes on social media

Information

• Which menu items are most (or least) popular?

• The level of customer satisfaction

• Feedback from customers, including areas for improvement

• Determining gaps (opportunities) in the market