Octal is to the base 8. This means that a single digit can store 8 separate values (0,1,2,3,4,5,6 and 7). It does have its limited uses within computers but for the most part hexadecimal or binary is used. It takes three bits to store a single octal digital which is different from hexadecimal which uses 4 bits.

Let's consider the following 9 bit example

 

This gives us the result of 674 in octal. The process to convert to octal is very straight forward. You split the binary up into groups of 3 bits (starting from the right always). You then convert each group of 3 bits into denary. This will then give you the final octal answer. A common mistake is to add up the results of this (so 6 + 7 + 4 = 17). However this is incorrect