chapter 14 understanding information and e-business
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Chapter 14
Understanding Information
and e-Business
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 2
Learning Objectives
1. Examine how information can reduce risk when making a decision.
2. Discuss management’s information requirements.
3. Outline the five functions of an information system.
4. Describe how the Internet helps in decision making, communications, sales, and recruiting and training.
5. Analyze how computers and technology change the way information is acquired, organized, and used.
6. Explain the meaning of e-business.
7. Describe the fundamental models of e-business.
8. Explore the factors that will affect the future of e-business.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 5
Data
…numerical or verbal descriptionsthat usually result from some sort
of measurement.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 6
Information
…data presented in a form that is usefulfor a specific purpose.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 7
Data Versus Information
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 8
Data Versus Information (cont’d.)
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 9
Knowledge Management
…a firm’s procedures for generating, using, and sharing the data and information
contained in the firm’s databases.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 10
Database
…a single collection of data stored in one place that can be used by people throughout
an organization to make decisions.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 11
Management Information System
…a system that provides managers and employees with the information they need to perform their jobs as effectively as possible.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 13
Purpose of MIS/IT
Distribute timely & useful information
From internal & external sources
To managers & employees who need it
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 15
Manager’s Information Requirements
Managers• Plan for future• Implement in present• Evaluate the past
Areas of management needing information• Finance• Operations• Marketing• Human resources• Administration
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 17
Size/Complexity of 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 18
Figure 14.3: Five Management Information System Functions
Every MIS must be tailored to the organization it serves and must perform five functions.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 19
Data Bank 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 21
Storing Data
Method depends on size of organization Small: enter information directly to hard drive Medium to large: larger system through network
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 23
Data Processing
…the transformation of data into a form that is useful for a specific purpose.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 24
Statistic
…a measure that summarizes a particular character of an entire group of numbers.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 26
Visual Display
…a diagram that represents several items of information in a manner that makes
comparison easier.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 27
Figure 14.4: Statistics
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 28
Figure 14.5: Typical Visual Displays Used in Business Presentations
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 31
Customer- Relationship Management
…programs focus on the special informational needs of sales personnel.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 33
Table 14.2: Current BusinessApplication Software
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 34
Information Society
…a society in which large groups of employees generate or depend on information to perform their jobs.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 39
Table 14.3: Tips for Website Development
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 40
e-Business
…the organized effort of individualsto produce and sell, for a profit, the
products and services that satisfy society’s needs through the facilities available
on the Internet.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 41
Outsourcing
…the process of finding outside vendors and suppliers that provide professional help,
parts, or materials at a lower cost.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 42
Assumptions forSatisfying Needs Online
Internet has created new customer needs E-business can satisfy those needs and more
traditional ones
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 43
Figure 14.6: Combininge-Business Resources
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 44
Revenue Stream
…a source of revenue flowing into a firm.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 45
Online Revenue Streams
Reaching new customers
Intelligent information systems
Information for comparative shopping
Advertising & subscription fees
Sponsors
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 46
Figure 14.7: Planning a New Internet Business or Online Presence for Existing Business
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 47
Business Model
…represents a group of common characteristics and methods of doing business to generate
sales revenues and reduce expenses.
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 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
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 49
Table 14.4: Other Business Models that Perform Specialized e-Business Activities
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 50
Figure 14.8: Internal and External Forces That Affect an eBusiness
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 51
The Future of e-Business: Growth, Opportunities, and Challenges
Internet, related technologies will continue to expand Opportunity: only 1.2 billion people of world’s nearly
7 billion are online U.S. = 17 percent of all users = largest group online Of 300 million U.S. population, 210 million use Internet;
140 million actively 70% of Americans using Internet; growth potential limited Projections: worldwide users to exceed 2 billion by 2012
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 52
Using the Internet
• What do e-business players read to keep up to date on people, ideas, and trends in this fast-paced world?
Wired: www.wired.com
Fast Company: www.fastcompany.com
The Industry Standard: www.thestandard.com
CNET News: www.news.com
ZDNet: www.zdnet.com
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 53
1. Data presented in a form useful for a specific purpose is
a) factual data.b) information.c) statistical data.d) a computer information base.e) a computer network.
Chapter Quiz
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 54
2. A type of software that facilitates the management of large projects among geographically dispersed employees is called
a) database management.b) a spreadsheet.c) CIM.d) groupware.e) networking.
Chapter Quiz
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 55
3. A(n)____________ is a smaller version of the Internet for use within a firm.
a) WANb) LANc) Intranetd) Broadbande) ISP
Chapter Quiz
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 56
4. The term that refers to buying and selling online is
a) Internet business.b) e-business.c) online sales.d) e-marketing.e) e-sales.
Chapter Quiz
Copyright © Cengage Learning. All rights reserved. Chapter 14 | Slide 57
5. Business firms that conduct business with other business firms are using a(n)
a) B2B approach.b) B2C approach.c) profit revenue stream.d) marketing revenue stream.e) economic benefit revenue stream.
Chapter Quiz
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