Section E Impact of IT Systems

Question 1

Question: Evaluate how IT systems contribute to decision-making in organisations.

Structure:

Define decision making

Explain role of IT systems (data collection, analysis, presentation)

Impact of reliable data

Conclusion

Answer 1

Mark Scheme: Evaluating IT System Contribution to Decision-Making

Total Marks: 20

1. Define Decision-Making (2 marks):

• (1 mark): Correct definition of decision-making as a process involving choosing a course of action from available options. Must include a clear link to the organisation’s objectives.
• (1 mark): Brief explanation of the importance of the decision-making process within the context of an organisation, e.g., resource allocation, strategic planning.

2. Explain the Role of IT Systems (6 marks):

• Data Collection (2 marks):
  
  • (1 mark) Clear explanation of how IT systems facilitate data collection from various sources (e.g., sales figures, customer feedback, market research). Examples are required.
  • (1 mark) Explanation of different data types collected (e.g., structured, unstructured).
• Data Analysis (2 marks):
  
  • (1 mark) Explanation of how IT systems facilitate data analysis techniques (e.g., statistical analysis, data mining).
  • (1 mark) Examples of analyses carried out, linking them to specific business objectives.
• Data Presentation (2 marks):
  
  • (1 mark) Explanation of how IT systems effectively present the results of data analysis in a usable and understandable format (e.g., charts, graphs, reports).
  • (1 mark) Examples of visualisations used in different business contexts.

3. Impact of Reliable Data (6 marks):

• Accurate Decisions (3 marks):
  
  • (1 mark) Explanation of how reliable data leads to more accurate predictions and better decisions.
  • (1 mark) Explanation of how inaccurate data can lead to poor decision-making, with examples.
  • (1 mark) Discussion of the link between data quality and decision effectiveness.
• Improved Efficiency (3 marks):
  
  • (1 mark) Explanation of how IT systems speed up decision-making processes, highlighting time savings.
  • (1 mark) Explanation of how reliable data allows for quicker identification of trends and patterns.
  • (1 mark) Discussion of the impact of IT on resource allocation and cost reduction within the context of decision-making.

4. Conclusion (4 marks):

• Summary (2 marks): A concise summary of the key points discussed, drawing connections between IT systems and decision-making in an organizational context.
• Critical Evaluation (2 marks): A critical evaluation of the effectiveness of IT systems in supporting decision-making, acknowledging potential limitations (e.g., data security, bias in data, or the need for human interpretation).

Example Answer (Illustrative - not exhaustive):

Question: Evaluate how IT systems contribute to decision-making in organisations.

Answer:

1. Define Decision-Making: Decision-making is the process of selecting a course of action from multiple possibilities to achieve organizational objectives. Effective decision-making is crucial for resource allocation, strategic planning, and overall success.

2. Explain the Role of IT Systems: IT systems play a vital role in decision-making. Data collection can be achieved through customer relationship management (CRM) systems, e-commerce platforms, or sales databases. Sales data from online retail platforms provides valuable information about customer preferences. Data analysis tools like Excel or specific business intelligence software can help to identify trends, such as peaks and troughs in sales, leading to more informed product development decisions. Dashboards and reports visually present this data, making it easy to understand. For example, sales data can be displayed in bar graphs to visually show sales performance compared to targets.

3. Impact of Reliable Data: Reliable data fuels accurate predictions. Accurate sales forecasting allows for better inventory management, reducing waste and maximizing profits. Inaccurate sales figures could lead to overstocking or understocking, resulting in lost revenue. High-quality data enables efficient resource allocation. Consider the example of a manufacturing company; accurate production data allows for quicker identification of potential bottlenecks, optimizing production schedules and minimizing production delays. Real-time reporting allows for quicker identification of trends, resulting in more agile decision-making.

4. Conclusion: IT systems are critical for modern decision-making. Reliable, well-structured data leads to better choices, increased efficiency, and ultimately, greater success. However, the limitations of relying solely on IT systems need to be considered. Human judgment and interpretation remain important for contextualizing the data and addressing unforeseen circumstances. Ensuring data quality, security, and avoiding bias are crucial considerations in the use of IT systems.

Mark Awarded: (e.g., 17/20) - Examiners would justify the mark in the comments based on the criteria described above.