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Chapter 14

Chapter 14. Understanding Information and e-Business. Learning Objectives. Examine how information can reduce risk when making a decision. Discuss management’s information requirements. Outline the five functions of an information system.

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Chapter 14

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  1. Chapter 14 Understanding Informationand e-Business

  2. Learning Objectives • Examine how information can reduce risk when making a decision. • Discuss management’s information requirements. • Outline the five functions of an information system. • Describe how the Internet helps in decision making, communications, sales, and recruiting and training. • Analyze how computers and technology change the way information is acquired, organized, and used. • Explain the meaning of e-business.  • Describe the fundamental models of e-business. • Explore the factors that will affect the future of e-business.

  3. Information and Risk • Accurate/complete information = no risk • Decision without information = gamble • Information  = better decisions Information Rule: When research confirms the same results each time it studies the same circumstances

  4. Figure 14.1: The Relationship BetweenInformation and Risk When the amount of available information is high, managers tend to make better decisions. When the amount of information is low, managers have a higher risk of making a poor decision.

  5. Data …numerical or verbal descriptionsthat usually result from some sortof measurement.

  6. Information …data presented in a form that is usefulfor a specific purpose.

  7. Data Versus Information

  8. Data Versus Information (cont’d.)

  9. Knowledge Management …a firm’s procedures for generating, using, and sharing the data and information contained in the firm’s databases.

  10. Database …a single collection of data stored in one place that can be used by people throughout an organization to make decisions.

  11. Management Information System …a system that provides managers and employees with the information they need to perform their jobs as effectively as possible.

  12. Figure 14.2: ManagementInformation System (MIS) After an MIS is installed, a user can get information directly from it without having to go through other people in the organization.

  13. Purpose of MIS/IT • Distribute timely & useful information • From internal & external sources • To managers & employees who need it

  14. Information Technology Officer …a manager at the executive level who is responsible for ensuring that a firm has the equipment necessary to provide the information the firm’s employees and managers need to make effective decisions.

  15. Manager’sInformation Requirements • Managers • Plan for future • Implement in present • Evaluate the past • Areas of management needing information • Finance • Operations • Marketing • Human resources • Administration

  16. Administrative Managers Make Sure... • Information used in consistent manner • Managers/employees receive skills training for using MIS • Money available to update MIS when needed

  17. Size/Complexityof System Mistakes • Save on initial costs = system too small or overly simple • Too large/complex = unused capacity and complexity • Increased cost of owning & operating • Probably difficult to use

  18. Figure 14.3: Five Management Information System Functions Every MIS must be tailored to the organization it serves and must perform five functions.

  19. DataBank Should Include... • Past/current data • Relevant data • Accurate data • Internal sources • Managers • Employees • Company records & reports • Minutes of meetings • External Sources • Customers • Suppliers • Bankers • Trade/financial publications • Industry conferences • Online computer services • Government sources • Data-gathering organizations

  20. Data Cautions • Cost of obtaining data from external sources can be high • Outdated/incomplete data usually yield inaccurate information • Computers generally do not make mistakes but people who use them can

  21. Storing Data • Method depends on size of organization • Small: enter information directly to hard drive • Medium to large: larger system through network

  22. Updating Data • Ensure information is accurate, complete, and up to date • Frequency of update depends on speed of change and how often used • May be updated according to predetermined schedule

  23. Data Processing …the transformation of data into a form that is useful for a specific purpose.

  24. Statistic …a measure that summarizes a particular character of an entire group of numbers.

  25. Business Report • Introduction • Sets the stage • Describes problem • Identifies research techniques • Previews material • Body • Objectively describes facts • Is basis for conclusions/recommendations • Conclusions • Statements of fact on findings • Specific, practical, based on evidence • Recommendations • How problem might be solved • Specific, practical, based on evidence

  26. Visual Display …a diagram that represents several items of information in a manner that makes comparison easier.

  27. Figure 14.4: Statistics

  28. Figure 14.5: Typical Visual Displays Used in Business Presentations

  29. Making Smart Decisions • Decision-Support SystemProvides relevant data/information to help firm’s employees make decisions • Executive Information SystemFacilitates/supports decision-making needs of top managers by providing easy access to internal and external information • Expert SystemUses artificial intelligence to imitate human’s ability to think

  30. Helping Employees Communicate • GroupwareFacilitates management of large projects among dispersed employees + group activities: problem solving, brainstorming • Collaborative learning systemWork environment that allows problem-solving participation by all team members

  31. Customer- Relationship Management …programs focus on the special informational needs of sales personnel.

  32. Recruiting and Training Employees • Post employee needs on website • Reach potential candidates around the globe • Organize data in way most useful to the firm • Internet education delivery

  33. Table 14.2: Current BusinessApplication Software

  34. Information Society …a society in which large groups of employees generate or depend on information to perform their jobs.

  35. Internet, Intranet, and Networks • Internet: worldwide network of linked computers • World Wide Web: Internet’s environment of audio, visual, and text data • Internet Service Providers (ISPs) • Broadband technology • Intranet: small version of Internet used inside firm • Computer network: 2+ computers linked, sharing data/information

  36. Top Ten Countries in Percentage of Internet Users Source: “Top 20 Countries with the Highest Number of Internet Users,” Internet World Stats—Usage and Population Statistics, 6/30/08, www.internetworldstats.com/top20.htm.

  37. Computer Networks • Wide-Area Network (WAN): connects computers over a large geographic area • Local-Area Network (LAN):connects computers in close proximity to each other

  38. Internet Terms • Uniform Resource Locator (URL) • Web Browser • Hypertext Transfer Protocol: words or phrases highlighted or underlined on web page; link to other websites • Search Engine

  39. Table 14.3: Tips for Website Development

  40. e-Business …the organized effort of individualsto produce and sell, for a profit, theproducts and services that satisfy society’s needs through the facilities availableon the Internet.

  41. Outsourcing …the process of finding outside vendors and suppliers that provide professional help, parts, or materials at a lower cost.

  42. Assumptions forSatisfying Needs Online • Internet has created new customer needs • E-business can satisfy those needs and more traditional ones

  43. Figure 14.6: Combininge-Business Resources

  44. Revenue Stream …a source of revenue flowing into a firm.

  45. Online Revenue Streams • Reaching new customers • Intelligent information systems • Information for comparative shopping • Advertising & subscription fees • Sponsors

  46. Figure 14.7: Planning a New Internet Business or Online Presence for Existing Business

  47. Business Model …represents a group of common characteristics and methods of doing business to generate sales revenues and reduce expenses.

  48. Primary e-Business Models • Business-to-Business (B2B): firms conduct business with other businesses • Sales transactions between businesses • Bidding on products and services • Business-to-Consumer (B2C): firms conduct business with individual buyers

  49. Table 14.4: Other Business Models that Perform Specialized e-Business Activities

  50. Figure 14.8: Internal and External Forces That Affect an eBusiness

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