Chapter Nineteen Understanding Information and e-Business

Copyright © Cengage Learning. All rights reserved. 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. 16 | 2

Copyright © Cengage Learning. All rights reserved. Learning Objectives (cont’d) 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. 16 | 3

Chapter 19 Outline –How Can Information Reduce Risk When Making a Decision? Information and Risk Information Rules The Difference Between Data and Information –What Is an Information System? Managers’ Information Requirements Size and Complexity of the System –How Do Employees Use an Information System? Collecting Data Storing Data Updating Data Processing Data Presenting Information –Using Business Research to Obtain Information Qualitative Research Quantitative Research Which Research Method to Choose Copyright © Cengage Learning. All rights reserved.16 | 4

Chapter 19 Outline (cont’d) –Improving Productivity with the Help of Computers and Technology Making Smart Decisions Helping Employees Communicate Assisting the Firm’s Sales Force Recruiting and Training Employees –Using Computers and the Internet to Obtain information The Internet, the Intranet, and Networks Accessing the Internet Creating Web Pages –Defining e-Business Organizing e-Business Resources Satisfying Needs Online Creating e-Business Profit Copyright © Cengage Learning. All rights reserved.16 | 5

Chapter 19 Outline (cont’d) –Fundamental Models of e-Business Business-to-Business (B2B) Model Business-to-Consumer (B2C) Model –The Future of e-Business: Growth, Opportunities, and Challenges Internet Growth Potential Environmental Forces Affecting e-Business Copyright © Cengage Learning. All rights reserved.16 | 6

Copyright © Cengage Learning. All rights reserved. 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 16 | 7

Copyright © Cengage Learning. All rights reserved. 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 16 | 8

Copyright © Cengage Learning. All rights reserved. How Can Information Reduce Risk When Making a Decision? (cont’d) 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 16 | 9

Copyright © Cengage Learning. All rights reserved. How Can Information Reduce Risk When Making a Decision? (cont’d) 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 16 | 10

Copyright © Cengage Learning. All rights reserved. What Is a Management Information System? Management information system (MIS) Information technology officer 16 | 11

Copyright © Cengage Learning. All rights reserved. What Is a Management Information System? (cont’d) Managers’ information requirements Size and complexity of the system 16 | 12

Copyright © Cengage Learning. All rights reserved. How Do Employees Use an Information System? Collecting data –Data should be relevant and accurate –Internal sources –External sources –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 16 | 13

Copyright © Cengage Learning. All rights reserved. How Do Employees Use an Information System? (cont’d) 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 16 | 14

Copyright © Cengage Learning. All rights reserved. How Do Employees Use an Information System? (cont’d) Processing data –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 16 | 15

Copyright © Cengage Learning. All rights reserved. How Do Employees Use an Information System? (cont’d) Presenting information –Verbal information—list or paragraph form –Visual displays –Tabular displays 16 | 16

Copyright © Cengage Learning. All rights reserved. Improving Productivity with the Help of Computers and Technology Areas of concern for a business include decision making, communications, sales, recruiting and training employees, and business software applications Making smart decisions –Three different applications can help to improve and speed the decision-making process for people at different levels within an organization 16 | 17

Copyright © Cengage Learning. All rights reserved. Improving Productivity with Computers Helping employees communicate – –Groupware –Collaborative learning system Assisting the firm’s sales force 16 | 18

Copyright © Cengage Learning. All rights reserved. Improving Productivity (cont’d) Training employees Recruiting employees 16 | 19

Copyright © Cengage Learning. All rights reserved. Business Applications Software Integrated software combines many functions in one package –Database management –Graphics –Spreadsheets –Word processing –Desktop publishing –Accounting –Computer-aided design (CAD) –Computer-aided manufacturing (CAM) –Computer-integrated manufacturing (CIM) 16 | 20

Copyright © Cengage Learning. All rights reserved.16 | 21 Using Computers and the Internet to Obtain Information Information society The Internet, the Intranet, and Networks –Internet –Intranet –Networks

Copyright © Cengage Learning. All rights reserved. Using Computers and the Internet to Obtain Information (cont’d) WAN (Wide-area network) LAN (Local-area network) 16 | 22

Copyright © Cengage Learning. All rights reserved. Using Computers and the Internet (cont’d) Accessing the Internet –Website addresses URL—Uniform Resource Locator http—HyperText Transfer Protocol –Web search engines Software for creating web pages –Developing a website –Hosting a website 16 | 23

Copyright © Cengage Learning. All rights reserved. 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 16 | 24

Copyright © Cengage Learning. All rights reserved. Defining e-Business e-Business (electronic business) e-Commerce Outsourcing 16 | 25

Copyright © Cengage Learning. All rights reserved. Satisfying Needs Online The Internet has created new customer needs E-business can satisfy those needs as well as traditional ones 16 | 26

Copyright © Cengage Learning. All rights reserved. Creating e-Business Profit Revenue growth Expense reduction 16 | 27

Copyright © Cengage Learning. All rights reserved. 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 16 | 28

Copyright © Cengage Learning. All rights reserved. The Future of e-Business: Growth, Opportunities, and Challenges The Internet will continue to expand along with related technologies Opportunity: Only 1.2 billion of the world’s nearly 7 billion people are online Americans comprise 17 percent of all users—the largest group online. Of the 300 million people making up the American population, 210 million use the Internet—140 million actively With approximately 70% of Americans already using the Internet, growth potential in the U.S. is limited Projections indicate worldwide users will exceed 2 billion by 2011 or | 29

Copyright © Cengage Learning. All rights reserved. Environmental Forces Affecting e-Business Globalization –Positive: Drawing people of the world together –Negative: A threat to national cultures, identities, languages, ways of life Convergence of technologies –The overlapping capabilities and the merging of products and services into one fully integrated interactive system 16 | 30