Question

• In any business, the quality of decisions is often related to the quality of information. For instance, effective product marketing entails combining the right offering (keeping in mind that products are bundles of attributes and different bundles, or combinations of attributes, will appeal to different prospective buyers) with the right target buyer group. Knowing what constitutes the right offering and the right prospective buyer group usually involves data analysis. In general, using data to shape or guide business decisions entails a progression along the continuum of data → information → knowledge.

• Determine the difference between data, information, and knowledge. Define the point at which data become information and information becomes knowledge.
• Explain why meaningful and correct data analysis—statistics—is important in using the volumes of available business data. Support your discussion with relevant examples, research, and rationale.

Answer 1

It has been a long-held belief by many philosophers that knowledge is power and that knowledge stems from understanding of information; information, in turn, is the assigning of meaning to data. Data becomes information and information becomes knowledge. Based on definition of data, information, and knowledge we can conclude that data is defined as a collection of text, numbers or symbols in raw or unorganized form. Data therefore has to be processed, or provided with a context, before it can have meaning. For example, 4,8,12, 16 or cat, dog, bird, bone. Information is data that has been processed and/ or grouped, normally by computer, to give it meaning and make it interpretable. Data on its own has no meaning. It only takes on meaning and becomes information when it is interpreted. Data consists of raw facts and figures. When that data is processed into sets according to context, it provides information. For example, when we said 4, 8, 12, 16 earlier, we provide information when we say are the first four answers in the 4 times table? Knowledge is defined as the acquisition by a person of information such as facts, or the understanding of information such as how to solve problems. When someone memorizes information, this is often referred to as learning by heart. We can then say that they have acquired some knowledge. Another form of knowledge is produced as a result of understanding information that has been given to us and using that information to gain knowledge of how to solve problems. There are two types of knowledge that is explicit knowledge and tacit knowledge. Explicit knowledge is knowledge that can be easily passed on to others such as a textbook. Tacit knowledge is knowledge that is difficult to pass on to another person just by writing it down. For example, stating Beijing is the capital of China but to speak a foreign language in Chinese takes additional information that has to be gained through experience. To put things into perspective we can continue with the example provided from Data which was 4, 8, 12, 16; include the information which was are the first four answers in the 4 times table; and providing knowledge that because the four times table starts at four and goes up in fours the four times table must start at four and go up in fours.

Data is at the core of nearly every business decision made. Data is at the core of nearly every business decision made. In fact, no business can survive without analyzing available data. role of data is to empower business leaders to make decisions based on facts, trends and statistical numbers. But with so much information out there, business leaders must be able to sift through the noise, and get the right information, so that they can make the best decisions about strategy and growth. The collection and analysis of large sets of data allow businesses an unprecedented level of insight into the behavior of their customers, and of entire markets.