Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. McGraw-Hill/Irwin Introduction to Business Chapter Nine

9 - 3 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships 1.Distinguish between data, information, and knowledge and identify the characteristics of useful information. 2.Explain the relationship between IT, competitive advantage, and profitability. 3.Discuss five major IT applications used by companies today to build competitive advantage. 4.Differentiate B2B commerce and B2C Commerce. 5.Identify the major hardware and software components of IT and E-Commerce and describe how they have evolved over time.

9 - 4 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT - definition of The many different kinds of computer and communications hardware and software and the skills of the designers, managers, users to acquire, define, input, arrange, organize, manipulate, store and transmit facts, data and information to create business knowledge and promote organizational learning

9 - 5 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Businesses must manage information and IT because they are faced with an overwhelming amount of data and information about customers, competitors, and their own operations, the ability to manage this input can mean the difference between success and failure

9 - 6 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information The management of its information system is a secondary value chain function because all of a firm’s business activities are linked to it

9 - 7 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information New digital technologies have taken an integral place among an organization’s resources for conducting everyday business

9 - 8 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Characteristics of useful information are Complete Relevant Timely Accurate Reliable

9 - 9 Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT builds a competitive advantage when it results in; superior productivity superior quality superior innovation superior responsiveness to customers

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications Transaction Processing (TP) Knowledge Management (KM) Enterprise resource planning (ERP Artificial intelligence (AI)

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications Transaction processing (TP) systems are applications for basic day-to-day business transactions

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications. Knowledge management (KM) systems take the information and knowledge from the TP system and make it more relevant to managers

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications Enterprise resource planning (ERP) systems are multi- module applications software that links all functional activities

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications Artificial intelligence (AI) and expert systems are designed to imitate human behavior and provide computer-based assistance in performing certain business activities

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications According to Pareto's Rule if managers possess 20 percent of the necessary information, they can develop 80 percent of the knowledge they need to improve efficiency and effectiveness

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Applications Data communication networks, both public and private, carry streams of digital data (electronic messages) back and forth quickly and economically via telecommunication systems

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Applications The largest public communications network, the Internet, is a gigantic network of networks linking millions of computers offering information on business around the world The Net is the most important e ‑ mail system in the world

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Applications The World Wide Web is a system with universally accepted standards for storing, formatting, retrieving, and displaying information It provides the common language that enables users around the world to “surf” the Net using a common format

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Applications Intranets are private networks that any company can develop to extend Net technology internally— transmitting information throughout the firm

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Applications Intranets are accessible only to employees, with access to outsiders prevented by hardware and software security systems called firewalls

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Information networks are leading to leaner organizations—businesses with fewer employees and simpler organizational structures—because networked firms can maintain electronic, rather than human, information linkages among employees and customers

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Operations are more flexible because electronic networks allow businesses to offer greater product variety and faster delivery cycles. Aided by intranets and the Internet, greater collaboration is possible, both among internal units and with outside firms

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Geographic separation of the workplace and company headquarters is more common because electronic linkages are replacing the need for physical proximity between the company and its workstations

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Improved management processes are feasible because managers have rapid access to more information about the current status of company activities and easier access to electronic tools for planning and decision- making

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships B2B or B2C? E-commerce systems are either business to business (B2B) or business to customer (B2C) In B2B the value chains are linked and allows them to reduce operating costs and improve product quality

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships A very brief history of the computer The first modern computer, the UNIVAC was developed in 1951 and thirty years later IBM introduced the PC) and the laptop in the early 1990’s

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications The hardware and software components of a company’s existing IT system are called its legacy system The main elements of an information system include hardware, software, data, and people

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Control is important to ensure not only that the system operates correctly, but also that data and information are transmitted through secure channels to people who really need them

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Control is aided by the use of electronic security measures, such as firewalls, that bar entry to the system by unauthorized outsiders. The database is the organized collection of all the data files in the system

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information People are also part of the information system. IT knowledge workers include systems analysts who design the systems and programmers who write software instructions that tell computers what to do

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information System users, too, are integral to the system. Telecommunication components include multimedia technology that incorporates sound, animation, video, and photography along with ordinary graphics and text

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Electronic discussion groups, videoconferencing, are possible with communication devices (global positioning systems and personal digital assistants) and communication channels (satellite communications)

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information IT has had major effect on business occupations Not only has it created many new kinds of occupational specializations, it has also transformed many other kinds of business occupations

Chapter 9 Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information Never before has IT become so important that people become computer literate and develop the skills that will allow them to benefit from continuing advances in IT