sources of data and information

Data and information come from many sources - both internal (inside the business) and external. This revision note summarises the main sources:

Business data and information comes from multiple sources. The challenge for a business is to capture and use information that is relevant and reliable. The main sources are:

Internal Information

Accounting records are a prime source of internal information. They detail the transactions of the business in the past - which may be used as the basis for planning for the future (e.g. preparing a financial budget or forecast).

The accounting records are primarily used to record what happens to the financial resources of a business. For example, how cash is obtained and spent; what assets are acquired; what profits or losses are made on the activities of the business.

However, accounting records can provide much more than financial information. For example, details of the products manufactured and delivered from a factory can provide useful information about whether quality standards are being met. Data analysed from customer sales invoices provides a profile of what and to whom products are being sold.

A lot of internal information is connected to accounting systems - but is not directly part of them. for example:

- Records of the people employed by the business (personal details; what they get paid; skills and experience; training records)
- Data on the costs associated with business processes (e.g. costings for contracts entered into by the business)
- Data from the production department (e.g. number of machines; capacity; repair record)
- Data from activities in direct contact with the customer (e.g. analysis of calls received and missed in a call centre)

A lot of internal information is also provided informally. For example, regular meetings of staff and management will result in the communication of relevant information.

External Information

As the term implies, this is information that is obtained from outside the business.

There are several categories of external information:

- Information relating to way a business should undertake its activities

E.g. businesses need to keep records so that they can collect taxes on behalf of the government. So a business needs to obtain regular information about the taxation system (e.g. PAYE, VAT, Corporation Tax) and what actions it needs to take. Increasingly this kind of information (and the return forms a business needs to send) is provided in digital format.

Similarly, a business needs to be aware of key legal areas (e.g. environmental legislation; health & safety regulation; employment law). There is a whole publishing industry devoted to selling this kind of information to businesses.

- Information about the markets in which a business operates

This kind of external information is critically important to a business. It is often referred to as "market" or "competitive intelligence".

Most of the external information that a business needs can be obtained from marketing research.

Marketing research can help a business do one or more of the following:

1. Gain a more detailed understanding of consumers’ needs – marketing research can help firms to discover consumers’ opinions on a huge range of issues, e.g., views on products’ prices, packaging, recent advertising campaigns

2. Reduce the risk of product/business failure – there is no guarantee that any new idea will be a commercial success, but accurate and up-to-date information on the market can help a business make informed decisions, hopefully leading to products that consumers want in sufficient numbers to achieve commercial success.

3. Forecast future trends – marketing research can not only provide information regarding the current state of the market but it can also be used to anticipate customer needs future customer needs. Firms can then make the necessary adjustments to their product portfolios and levels of output in order to remain successful.

The information for marketing research tends to come from three main sources:

Internal Company Information – e.g. sales, orders, customer profiles, stocks, customer service reports

Marketing intelligence – this is a catch-all term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It can be obtained from many sources, including suppliers, customers and distributors. It is also possible to buy intelligence information from outside suppliers (e.g. Mintel, Dun and Bradstreet) who will produce commercial intelligence reports that can be sold profitably to any interested organisation.

Market Research – existing data from internal sources may not provide sufficient detail. Similarly, published reports from market intelligence organisations cannot always be relied upon to provide the up-to-date, relevant information required. In these circumstances, a business may need to commission specific studies in order to acquire the data required to support their marketing strategy.


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