Now that we have established the need, importance and criticality of information, we will look into ways of refining the data and getting the relevant information accurately and timely. Information processing is the acquisition, storage, organization, retrieval, display, and dissemination of information.

Few decades back, when the computers were not invented, data processing was done manually. But manual processing was good only when the amount of data to be processed was less. As companies grew, the amount of data to be processed increased thus increasing the number of the information processing staff. Earlier in this century, various means of mechanization were introduced and to make efficient use of them, the information processing work was split up into batches. For example, several hundred transactions may have been grouped into a batch; one function would be carried out on all transactions as a batch and then the next function and so on.

When punched-card accounting was introduced, it became economical to have very large batches. Many trays of cards could be fed through one machine before the set-up of the machine was changed for the next function. Similarly, with the use of magnetic tape on computers, large tape files would be processed with one program before the file was stored and made ready for the next operation. In working this way the flexibility of the old manual method was lost. It was no longer possible to give one transaction an individual treatment. It was no longer possible to give quick answers to inquiries like the status of an account, the credit worthiness of a customer or the amount of an item in stock. Another problem was that the answers did not reflect the current state of affairs, as it might be a week or more out-of-date.

Batch processing with data rigidly divided into separate files for each application was not the ideal way to operate. It would have been much more convenient for the management to have all the information about running their organization up-to-date and at their fingertips. Because of the nature of data processing (batch processing), the management was compromising on the timeliness and accuracy of the information.

Using a database is like having a superman who is incredibly fast and brilliant and keeps data for many applications. He organizes his data so that minimum writing is necessary so that he can search through the database very quickly to answer queries that may come along.

Schematic Representation of an Enterprise

Schematic Representation of an Enterprise

People often need information, which spans departments. For example, one may need to know the personnel implications of marketing decisions, or the impact of a new distribution strategy on production. In a system where each department has its own batch processing operations, the computer is of little value in answering such questions. However with a database approach, searching, collecting, correlating and collating data becomes easier. The structure of data that is stored is agreed upon centrally so that interdepartmental usage is possible.

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