chapter 06 understanding information and e business
TRANSCRIPT
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter SixUnderstanding Information
and e-Business
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PRIDE HUGHES KAPOOR
INTRODUCTION TOBUSINESS
ELEVENTH EDITION
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 computers and technology help improve productivity, in decision making, communications, sales, and recruiting and training.
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© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives (cont’d)
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.
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© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Introduction
To improve the decision-making process, the information used by both individuals and business firms must be• Relevant
• Useful to meet a specific need
Using relevant information results in better decisions
For businesses, better intelligence and knowledge that lead to better decisions are especially important because they can provide a competitive edge over competitors and improve a firm’s profits
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How Can Information Reduce Risk When
Making a Decision?
The Relationship Between Information and Risk
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Figure 6.1
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How Can Information Reduce Risk When
Making a Decision? (cont’d)
Information rules• Information rules based on situational experience
provide guidance in handling similar situations or circumstances
• Business research continuously looks for new rules since business conditions are always changing
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How Can Information Reduce Risk When
Making a Decision? (cont’d)
The difference between data and information• Data
- Numerical or verbal descriptions that usually result from some sort of measurement
• Information- Data presented in a form that is useful for a specific purpose
• Database- A single collection of data and information stored in one
place that can be used by people throughout an organization to make decisions
• Knowledge management (KM)- A firm’s procedures for generating, using, and sharing the
data and information
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© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What is a Management Information System?
Management information system (MIS)• A system that provides managers and employees with
the information they need to perform their jobs as effectively as possible
• Purpose: to distribute timely and useful information to the decision makers who need it
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
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© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Management Information System (MIS)
Source: Ricky W. Griffin, Management, 10/e (Mason, OH: Cengage Learning, 2011). Reprinted by permission.
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Figure 6.2
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
What is a Management Information System? (cont’d)
A firm’s information requirements• Summary of future possibilities
• Summary of present situation
• Summary of past performance
• Information about five areas of management: finance, operations, marketing, human resources, and administration
Size and complexity of the system• Must be properly sized to provide sufficient information
resources without being simple or too complex to be useful
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Five Management
Information System Functions
Every MIS must be
tailored to the
organization it serves
and must perform
five functions
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Figure 6.3
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How Do Employees Use a Management
Information System?
Collecting data• Data should be relevant and accurate
• Internal sources- Managers and employees, company records and reports, minutes
of meetings, accounting data, sales data, HR data, production data
• External sources- Customers, suppliers, bankers, trade and business publications,
industry conferences, online computer services, government sources, firms specializing in gathering data
• Cautions- The cost of obtaining data from some external sources can be
quite high
- Outdated or incomplete data usually yield inaccurate information
- Check computer data (or information) if you disagree with it
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More Computers in Record Numbers
Source: The Computer Industry Almanac, Inc. Web site at www.c-i-a.com, accessed May 25, 2010.
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© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
How Do Employees Use a Management
Information System? (cont’d)
Storing data• An MIS must be capable of storing data until they are
needed
Updating data• Manual updating—employee inputs fresh data into
the database
• Automatic updating—MIS updates itself as data become available
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How Do Employees Use a Management
Information System? (cont’d)
Processing data• The transformation of data into a form useful for a
specific purpose
• Statistics- A measure that summarizes a particular characteristic
of an entire group of numbers
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How Do Employees Use a Management
Information System? (cont’d)
Presenting information
• Verbal information—list or paragraph form- A formal business report typically includes an
introduction, the body of the report, conclusions, and recommendations
• Visual displays
- Graphs, bar charts, pie charts
• Tabular displays
- Verbal or numerical information presented in columns and rows
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Defining e-Business
e-Business (electronic business)—The organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs through the facilities available on the Internet
Organizing e-Business Resources
• Resources may be more specialized than in a typical business
• Outsourcing—The process of finding outside vendors and suppliers that provide professional help, parts, or materials at a lower cost.
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Combining e-Business Resources
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Figure 6.5
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Defining e-Business (cont’d)
Satisfying Needs Online
• The Internet has created new customer needs
• E-business can satisfy those needs, as well as traditional ones
- Global access to information and entertainment
- Virtually unlimited selections of products
- Opportunities for interaction
- Individually custom-tailored content
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Defining e-Business (cont’d)
Creating e-Business Profit
• Increasing Sales Revenue
• Revenue stream–source of revenue flowing into a firm
- Sales of merchandise online
- Intelligent information systems to suggest purchases to repeat online customers
- Increased sales in physical stores because of product information available online
- Advertising on web pages
- Subscription fees charged for access to online services and content
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Defining e-Business (cont’d)
Creating e-Business Profit (cont’d)
• Reducing expenses
- Offering online services that- Reduce transaction costs
- Provide information
- Provide customer assistance
- Reduces the costs of dealing with customers
- Reduces the need for as many physical store locations
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