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

3. Learning Objectives
Distinguish between data, information, and knowledge and identify the characteristics of useful information.
Explain the relationship between IT, competitive advantage, and profitability.
Discuss five major IT applications used by companies today to build competitive advantage.
Identify the major hardware and software components of IT and E-Commerce and describe how they have evolved over time.

4. Information Technology and Profitability
a set of data, facts, numbers, and words that has been organized in such a way that it provides its users with knowledge

5. Information Technology and Profitability
Knowledge
what a person perceives, recognizes, identifies, or discovers from analyzing data and information
Learning
an increase in the store or stock of people’s expertise or knowledge

6. Information, Knowledge, and Learning
Figure 9.1

7. Information Technology and Profitability
the many different kinds of computer and communications hardware and software and the skills of their designers, programmers, managers, and technicians who create and manage it

8. Question?
What is managing information to achieve a better fit between a company’s business model and the forces in its environment?
Organizational culture
Organizational learning
Erudition
Business model balancing
The correct answer is “B” – organizational learning. See next slide.

9. Information Technology and Profitability
Organizational learning
managing information and knowledge to achieve a better fit between a company’s business model and the forces in its environment

10. Useful Information and Knowledge
Complete
Accurate and reliable
Relevant
Timely

11. Characteristics of Useful Information
Figure 9.2

12. Useful Information and Knowledge
Information overload
a situation in which managers have to process so much information it actually reduces their understanding of a situation
Real-time information
information that is constantly updated

13. Gaining a Competitive Advantage with IT
Superior productivity
Superior quality
Superior innovation
Superior customer responsiveness

14. IT and Competitive Advantage
Figure 9.3

15. Major Information Technology Applications
Chief information officer
the top manager of a company’s IT function

16. Major Information Technology Applications
Transaction processing systems
Knowledge management systems
Expert systems and artificial intelligence
Enterprise resource planning systems
E-commerce systems

17. Five Major IT Applications
Figure 9.4

18. Transaction Processing Systems
an IT system designed to collect, record, and manipulate the data related to a company’s day-to-day business operations

19. Knowledge Management Systems
an IT system that analyzes the information collected from the TP system but filters and analyzes it to make it more useful to managers

20. Knowledge Management Systems
Best practices
the set of skill-based competencies that allow a particular function to perform at its optimal level
IT consultants
expert employees who use their knowledge and learning to solve their customers’ IT problems

21. Expert Systems and Artificial Intelligence
an advanced IT system that can reason through a company’s information, diagnose problems, and suggest solutions
Artificial intelligence
an IT system that reasons and learns like a human being

22. Enterprise Resource Planning Systems
multimodule applications software packages that coordinate all of a company’s functional activities

23. Primary and Secondary Value-Chain Functions
Figure 9.5

24. E-Commerce Systems E-Commerce
trade that takes place between companies, and between companies and individual customers via the Internet (or other IT systems)

25. Question?
What is a company’s internal system of computers and Web sites accessible only by its employees?
Web
Internet
Ethernet
Intranet
The correct answer is “D” – Intranet. See next slide.

26. E-commerce Systems B2B marketplace Intranet
an industry-specific trading platform set up to connect buyers and sellers using the Internet
Intranet
a company’s internal system of computers and Web sites accessible only by its employees

27. Types of E-Commerce
Figure 9.6

28. Hardware Components of IT and E-Commerce
Legacy systems
Mainframe computers
Microprocessors and personal computers
Network computers: servers and clients
The world wide web and the Internet
Wired and wireless broadband technology

29. Legacy Systems Legacy systems
the hardware and software components of a company’s IT system at any one point in time

30. The World Wide Web and the Internet
Router
hardware and software that electronically transfers data between networks to its intended destination, such as a specific web page or computer

31. The World Wide Web and the Internet
Ethernet
a local area communication technology that transmits information between computers at speeds of between 10 and 100 million MBPs using coaxial or fiber optic cable

32. Four Levels of IT and Computing
Figure 9.7

33. Wired and Wireless Broadband Technology
a type of communications hardware that allows for the rapid transmission of vast amounts of information
Wi-Fi
a type of Ethernet technology that allows computer users to access the Internet wirelessly

34. Software Components of Information Technology
PC software
Networking software
Computer security software
Wireless hand-held software
IT and business occupation

35. Software Components of Information Technology
Best-of-breed solution
the highest performing IT hardware or software application currently available for managing a particular information processing or multimedia task

36. PC Software Industry standard
a predominant type of technology used in an industry
other technologies must be compatible with the industry standard to be widely adopted

37. Computer Security Software
Firewall
software that gives a company’s computers safe access to the Internet but blocks computers from outside the firm from gaining access to the company’s intranet

38. Computer Security Software
Hackers
people who seek to invade a company’s databases and steal the information for malicious or illegal reasons

39. Protecting the Intranet by a Firewall
Figure 9.8

40. Computer Security Software
Computer virus
software code deliberately written to harm hardware and software and corrupt files and databases
See a current list of virus threats

41. Video: Hillerich & Bradsby
The company faced a crucial decision – to implement a system of connected stand alone computers or to start over moving toward supply chain management that integrated all functions within a central database.
Which of the major applications of information technology did Hillerich and Bradsby turn to? Why?