Upon successful completion of this chapter, you will be able to:
- describe the differences between data, information, and knowledge;
- define the term database and identify the steps to creating one;
- describe the role of a database management system;
- describe the characteristics of a data warehouse; and
- define data mining and describe its role in an organization.
You have already been introduced to the first two components of information systems: hardware and software. However, those two components by themselves do not make a computer useful. Imagine if you turned on a computer, started the word processor, but could not save a document. Imagine if you opened a music player but there was no music to play. Imagine opening a web browser but there were no web pages. Without data, hardware and software are not very useful! Data is the third component of an information system.
Data, Information, and Knowledge
Data are the raw bits and pieces of information with no context. If I told you, “15, 23, 14, 85,” you would not have learned anything. But I would have given you data.
Data can be quantitative or qualitative. Quantitative data is numeric, the result of a measurement, count, or some other mathematical calculation. Qualitative data is descriptive. “Ruby Red,” the color of a 2013 Ford Focus, is an example of qualitative data. A number can be qualitative too: if I tell you my favorite number is 5, that is qualitative data because it is descriptive, not the result of a measurement or mathematical calculation.
By itself, data is not that useful. To be useful, it needs to be given context. Returning to the example above, if I told you that “15, 23, 14, and 85″ are the numbers of students that had registered for upcoming classes, that would be information. By adding the context – that the numbers represent the count of students registering for specific classes – I have converted data into information.
Once we have put our data into context, aggregated and analyzed it, we can use it to make decisions for our organization. We can say that this consumption of information produces knowledge. This knowledge can be used to make decisions, set policies, and even spark innovation.
The final step up the information ladder is the step from knowledge (knowing a lot about a topic) to wisdom. We can say that someone has wisdom when they can combine their knowledge and experience to produce a deeper understanding of a topic. It often takes many years to develop wisdom on a particular topic, and requires patience.
Examples of Data
Almost all software programs require data to do anything useful. For example, if you are editing a document in a word processor such as Microsoft Word, the document you are working on is the data. The word-processing software can manipulate the data: create a new document, duplicate a document, or modify a document. Some other examples of data are: an MP3 music file, a video file, a spreadsheet, a web page, and an e-book. In some cases, such as with an e-book, you may only have the ability to read the data.
The goal of many information systems is to transform data into information in order to generate knowledge that can be used for decision making. In order to do this, the system must be able to take data, put the data into context, and provide tools for aggregation and analysis. A database is designed for just such a purpose.
A database is an organized collection of related information. It is an organized collection, because in a database, all data is described and associated with other data. All information in a database should be related as well; separate databases should be created to manage unrelated information. For example, a database that contains information about students should not also hold information about company stock prices. Databases are not always digital – a filing cabinet, for instance, might be considered a form of database. For the purposes of this text, we will only consider digital databases.