Organizations capture and process data for a variety of
reasons. Accounting data areused to measure the financial health and
vitality of the enterprise: It is useful to internal corporate
management in keeping track of how the firm is performing; it is useful
to people outside the firm, such as investors interested in the firm’s
stock and bankers to whom the firm has applied for a loan. Records on a
host of other organizational entities, including employees, inventories,
customers, and suppliers, are required as well.
One of the main uses of data relates to making decisions. A manager
must decide, for example, on the price of the firm’s product or on how
many units of the product to produce. An investor must decide whether to
invest in a firm; a banker must decide whether to make a loan. The
Federal Reserve Board must decide whether to increase ordecrease
interest rates, or hold them stable. In all of these cases, it is
desirable to have reliable information on which to base the decision.
Information, and the data on which it is based, are valuable
organizational assets that warrant careful management.