1. Information and e-Business
Chapter Sixteen
Information and e-Business
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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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3. How Can Information Reduce Risk When Making a Decision?
Information produces knowledge and empowers managers and employees to make better decisions
The relationship between information and risk
DECISION W NO INFO IS A GAMBLE
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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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Data vs. Information
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 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 contained in the firm’s databases
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6. What is a Management Information System?
Management information system (MIS)
A system that provides managers 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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7. What is a Management Information System? (cont’d)
Managers’ information requirements
Summary of future possibilities
Summary of present situation
Summary of past performance
Information about 5 principal 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
MANAGERS NEED TO OVERLOOK : INVENTORY LEVELS, SALES LEVELS,COSTS AND RESOURCES AS WELL AS MANAGING THE 4 PS
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8. Management Information System (MIS)
MIS ALLOWS THE COORDINATION OF INFORMATION FROM EACH DEPARTMENTS
Source: Ricky W. Griffin, Management, 9/e (Boston: Houghton Mifflin Company, 2008). Reprinted by permission.
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9. Five Management Information System Functions
Every MIS must be tailored to the organization it serves and must perform five functions
EACH COMPANY IS UNIQUE TOWARDS THEIR MIS MODEL
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Collecting Data
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 financial publications, industry conferences, online computer services, firms specializing in gathering data
Cautions
The cost of obtaining data from external sources should be weighed against the benefits
Outdated data are likely to yield inaccurate information
Check data, especially computerized data, for accuracy
DATA INCLUDES:
SALES REPORTS, HR RECORDS, PAST AND PRESENT PRODUCTION PROJECTIONS, ACCOUNTING AND FINANCE DATA, PRIOR AND UPCOMMING MANAGERIAL DECISIONS
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Storing & Updating
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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Data Processing
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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13. Presenting information
Verbal information—list or paragraph form
A formal 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
HOW TO PREPARE AN ESSAY? INTRO BODY CONCLUSION
SAME WAY TO PRESENT INFORMATION
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14. Typical Visual Displays Used in Business Presentations
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15. Typical Visual Displays Used in Business Presentations (cont’d)
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16. Typical Three-Column Table
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17. Improving Productivity with the Help of Computers and Technology
Decision support system (DSS) is a type of computer program that provides relevant data and information to help a firm’s employees make decisions
Executive information system (EIS) is a computer-based system that facilitates and supports the decision-making needs of top managers and senior executives
An expert system is a type of computer program that uses artificial intelligence
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18. Improving Productivity with Computers
Helping employees communicate
& Texting—provides virtually instantaneous communication
Groupware—software that facilitates the management of large projects among geographically dispersed employees as well as such group activities as problem solving and brainstorming
Collaborative learning system—a work environment that allows problem-solving participation by all team members
Assisting the firm’s sales force
Customer-relationship management programs
Sales force automation programs
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19. Improving Productivity (cont’d)
Training employees
Reduced educational and training costs
Increased flexibility and availability of training
Faster transfer of information about changes in the firm’s policies and procedures
Recruiting employees
Provides for a global recruiting reach, especially for individuals with unique skills
Helps build a database of potential employees
Reduces recruiting costs for initial applications and screening interviews
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20. Current Business Applications Software Used to Improve Productivity
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21. Using Computers and the Internet to Obtain Information
Information society
A society in which large groups of employees generate or depend on information to perform their jobs
The Internet, the Intranet, and Networks
Internet
A worldwide network of computers linked through telecommunications; used for e-business, communication, information gathering
Internet service providers (ISPs) provide customers with a connection to the Internet through various phone plugs and cables
Intranet
A smaller version of the Internet for use only within a firm
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22. Using Computers and the Internet to Obtain Information (cont’d)
Networks
A group of two or more computers linked together to share data and information
WAN (Wide-area network)
A network that connects computers over a large geographic area
World’s most popular WAN is the Internet
LAN (Local-area network)
A network that connects computers that are in close proximity
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24. Using Computers and the Internet (cont’d)
Accessing the Internet
Standardization guidelines let products, services, materials, and processes achieve their purposes
Website addresses
URL—Uniform Resource Locator
http—HyperText Transfer Protocol
Web search engines
Software for creating web pages
Developing a website
Hosting a website
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25. Tips for Website Development
Develop a theme
Determine how much information to include on your site
Plan the layout of your site
Add graphics
Outline the material for each page
Develop plans to update the site
Make sure your site is easy to use
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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
e-Commerce—Buying/selling activities conducted online—Identifying suppliers, selecting products or services, making purchase commitments, completing financial transactions, and obtaining service
Outsourcing—The process of finding outside vendors and suppliers that provide professional help, parts, or materials at a lower cost.
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27. Combining e-Business Resources
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28. 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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29. Creating e-Business Profit
Revenue growth
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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30. Creating e-Business Profit (cont’d)
Expense reduction
Offering 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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31. Fundamental Models of e-Business
Business model
A group of common characteristics and methods of doing business to generate sales revenues and reduce expenses
Business-to-Business (B2B) model
Business-to-Consumer (B2C) model
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Planning for a New Internet Business or Building an Online Presence for an Existing Business
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33. Internal and External Forces That Affect an e-Business
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