Information Technology and E- Business Chapter 20

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 2 Technology and E-Business The strategic use of information technology is one of the defining aspects of organizational success in today’s world Many companies in industries from manufacturing to entertainment use IT to Get closer to customers Enter new markets Streamline business processes Manager’s Challenge: Bountiful Mazda

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 3 Technology and E-Business Management of information technology and e- business Basic information technology & information systems frequently used in organizations Fundamental strategies Management implications Recent information technology trends Topics Chapter 20

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 4 Information Technology The hardware, software, telecommunications, database management, and other technologies used to store, process, and distribute information

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 5 Data versus Information Data- Raw, non- summarized, and unanalyzed facts and figures Information- Data that have been converted into a meaningful and useful context for the receiver

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 6 Information and Management Challenge Increasing Challenge for Managers 1. Effectively identify needed information 2. Access useful information Magnitude of transforming data into useful information = introduction of chief information officer (CIO) position

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 7 Useful Information Characteristics Time Currency Time Period Content Accuracy Relevance Completeness Conciseness Form Clarity Detail Presentation Source: Adapted from James A. O’Brien, Introduction To Information Systems, 8th ed. (Burr Ridge, Il:Irwin, 1997),pp

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 8 Types of Information Systems Operations Information Systems  Transaction-processing systems  Process control systems  Office automation systems Management Information Systems

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 9 Types of Information Systems Management Information Systems  Information-reporting systems  Decision support systems  Groupware  Executive information systems Experiential Exercise: What is Your MIS Style?

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 10 Basic Elements of Management Information Systems Management Information Systems Reporting Systems Decision Support Systems Executive Information Systems Group Decision Support System Corporate and External Databases Source: Adapted from Ralph M. Stair and George W. Reynolds, Principles of Information Systems: A Managerial Approach, 4 th ed. (Cambridge, Mass.: Course Technology, 1999), 391. Operations Information Systems

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 11 Internet and E-Business Internet = global collection of computer networks linked together World Wide Web = (WWW) a collection of central servers for accessing information on the internet

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 12 Internet and E-Business E-business = any business that takes place by digital processes over a computer network rather than in physical space E-commerce = business exchanges that occur electronically

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 13 Internet Communication Systems Intranet = an internal communications system that uses the technology and standards of the Internet but is accessible only to people within the organization Extranet = external communicati0ns system that uses the Internet and is shared by two or more organizations

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 14 E-Business Strategies Strategy = Market Expansion ● Internet division allows a company to establish direct links to customers and expand into new markets ● Organization can provide access around the clock to a worldwide market and reach new customers Ethical Dilemma: Manipulative or Not?

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 15 E-Business Strategies In-House Internet Division Spin-Off Strategic Partnerships Strategy = Productivity and Efficiency

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 16 Strategies for Engaging Clicks with Bricks Competitive Business Environment E-Business Strategy Market expansion and revenue growth Increased productivity and cost efficiency Benefits Add new markets Integrate bricks and clicks Increase market size Immediate short-term effects Measurable productivity impact Driven by internal processes Implementation In-house division or partnership

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 17 E-Marketplaces Biggest boom in e-commerce is in business- to-business (B2B) transactions – $2.4 trillion and growing in 2004 – B2B marketplaces = intermediary sets up an electronic marketplace where buyers and sellers meet, acting as a hub for B2B commerce – online portal – Ebay has become a B2B portal

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 18 B2B Marketplace Model Online portal or “hub” for B2B marketplace Sellers Buyers Many sellers offer products and services through an intermediary to many buyers

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 19 E-Business Information Management ERP, integrate and optimize all the various business processes across the entire firm Enterprise Resource Planning Systems Top ERP vendors today host the applications themselves and offer their products through Internet portals Customers access the applications with standard browsers

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 20 Customer Relationship Management Systems that help companies track customers’ interactions with the firm and allow employees to call up information on past transactions

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 21 Knowledge Management Process of systematically gathering knowledge, making it widely available throughout the organization, and fostering a culture of learning

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 22 Knowledge Management Three Keys  Data warehousing  Business intelligence  Knowledge management portals

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 23 Management Implications of Information Technology Improved employee effectiveness Information overload Enhanced collaboration Empowered employees Increased efficiency

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 24 IT Trends Wireless Internet Peer-to-Peer File Sharing Blogs and Wikis Going International

Copyright © 2005 by South-Western, a division of Thomson Learning. All rights reserved. 25 Information Systems Today Information technology and e-business are changing the way people and organizations work Customer, partners, and suppliers are brought into the information network