chapter 14 understanding information and e-business

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.


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


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.


Data

…numerical or verbal descriptionsthat usually result from some sort

of measurement.


Information

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


Data Versus Information


Data Versus Information (cont’d.)


Knowledge Management

…a firm’s procedures for generating, using, and sharing the data and information

contained in the firm’s databases.


Database

…a single collection of data stored in one place that can be used by people throughout

an organization to make decisions.


Management Information System

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


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.


Purpose of MIS/IT

Distribute timely & useful information

From internal & external sources

To managers & employees 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.


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


Administrative Managers Make Sure...

Information used in consistent manner

Managers/employees receive skills training for using MIS

Money available to update MIS when needed


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


Figure 14.3: Five Management Information System Functions

Every MIS must be tailored to the organization it serves and must perform five functions.


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


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


Storing Data

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


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


Data Processing

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


Statistic

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


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


Visual Display

…a diagram that represents several items of information in a manner that makes

comparison easier.


Figure 14.4: Statistics


Figure 14.5: Typical Visual Displays Used in Business Presentations


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


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


Customer- Relationship Management

…programs focus on the special informational needs of sales personnel.


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


Table 14.2: Current BusinessApplication Software


Information Society

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


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


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.


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


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


Table 14.3: Tips for Website Development


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.


Outsourcing

…the process of finding outside vendors and suppliers that provide professional help,

parts, or materials at a lower cost.


Assumptions forSatisfying Needs Online

Internet has created new customer needs E-business can satisfy those needs and more

traditional ones


Figure 14.6: Combininge-Business Resources


Revenue Stream

…a source of revenue flowing into a firm.


Online Revenue Streams

Reaching new customers

Intelligent information systems

Information for comparative shopping

Advertising & subscription fees

Sponsors


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


Business Model

…represents a group of common characteristics and methods of doing business to generate

sales revenues and reduce expenses.


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


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


Figure 14.8: Internal and External Forces That Affect an eBusiness


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


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


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


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


3. A(n)____________ is a smaller version of the Internet for use within a firm.

a) WANb) LANc) Intranetd) Broadbande) ISP

Chapter Quiz


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


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

chapter 14 understanding information and e-business

Documents

information slide

information data

copyright cengage learning

gamble information

understanding information

available information

way information

ebusiness slide