Business Policy & Strategy Chapter 12 Management Information Systems Murdick, Moor, Babson & Tomlinson Sixth Edition, 2000

Intellectual capital and Knowledge The Old Economy vs. the New Economy Transformation to factors of production Intellectual capital has become the primary input for business operations Toffler, Drucker, and Romer Engendered the notion of the “knowledge economy” Intellectual capital the major impetus of contemporary economic study Primary determinant of economic well-being

The Need for Knowledge Management Strategy for knowledge management is a primary implement for the fulfillment of the company’s vision and mission. Successful strategy is contingent upon the identification, capture, and dissemination of information to certain vital areas.

Knowledge Management and Processes Integrating knowledge management Knowledge management is inseparable from core processes Successful implementation involves suffusion throughout the organization Knowledge management serves to compliment overall strategy

Knowledge Management and Processes Knowledge Capture Surmounting obstacles of knowledge capture Focus on integral processes encumbers knowledge capture Isolation from key processes precludes effective identification Facilitating mechanisms

Knowledge Management and Processes Knowledge Life Cycle Knowledge captured from internal or external sources Knowledge is then classified, evaluated, and considered with regard to its usefulness and accessibility Potential improvements Obsolescence

Knowledge Management and People Knowledge Users Conflict of primary responsibilities and knowledge capture Incorporating knowledge capture as a norm Knowledge Managers Chief Information Officer (CIO) or Chief Knowledge Officer (CKO) Responsible for the overall knowledge assets of the company and promulgating areas into which the organization should evolve Implementing suitable technology infrastructure Coordination of cross-departmental knowledge sharing activities

Future Implications Knowledge Management continues to gain relevance Indispensable with regard to organizational success Progressing knowledge refinement Sharing of individual knowledge into organizational learning is the most difficult challenge facing leaders

Functions of MIS Data vs. Information Information Systems Collect data Store and update data Process data into information Present info. to users

Collecting Internal & External Data Data must be: Relevant Accurate Timely Obtained through: Internal sources External sources

Storing Data and Manual/Automatic Updating MIS must be: Capable of storing data until needed Able to update stored data regularly Data can be updated manually or automatically

Processing Data Assumption? Data is of use to managers Some data used in form which they are stored Avoid analysis paralysis with too much data not needed by employees and managers in circulation Some must be transformed into useful form called Data processing

Presenting Data and Information Useful forms: Tables, reports, graphs, charts Must be appropriate Sales Costs 100 50

Hardware and Software Hardware changes in that we no longer use huge mainframes in most businesses. Technology is feasible in terms of affordability of hardware for quick data processing speeds Software development database management graphics spreadsheets word processing desktop publishing accounting communications

Internet, Intranet, Extranet Internet – worldwide network Intranet – internet within a firm Extranets – use of internet for communication between organization and its specific members in its environment

REASONING AND DECISIONS DECISION SUPPORT SYSTEM (DSS) Enables Users to solve complex, unstructured problems Assists in design of: mergers, acquisitions, plant expansions, new product development, and investment management GROUP DECISION SUPPPORT SYSTEM (GDSS) Allows several people to simultaneously work on a file or database and work together on computer networks Facilitates: information exchange, group decision making, work scheduling, and other forms of group activity without requirements of face to face meetings

REASONING AND DECISIONS ARTIFICIAL INTELLIGENCE AND EXPERT SYSTEMS (AI) Attempts to give computers humanlike capabilities Using computer systems with capacity to reason and deal with difficult issues of judgment To offer consistent and expert advice for routine types of problems when managers may not be available 24 hours a day to make decisions

CONVERGING TECHNOLOGIES AND THE MANAGEMENT CHALLENGE Information technology involves more than just computers: faxing, television and television cable systems, satellites, etc Goes beyond providing information Managerial roles of planning, organizing, and controlling Handles interactions with customers, suppliers, business allies, and others outside the organization This has greatly reduced the need for managers in areas of routine analytical and control activities

CONVERGING TECHNOLOGIES AND THE MANAGEMENT CHALLENGE cont. Challenge for management is to stay on top of rapidly changing technology and to look ahead and forecast what is to be done for the organization Creating a MIS Checklist may help with challenges Does your firm audit the database to determine data that is now obsolete or has been modified?

Knowledge Management at work Acer Corp. ideas.com Askme Enterprise