Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships

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

2. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships • 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. • Differentiate B2B commerce and B2C Commerce • Identify the major hardware and software components of IT and E-Commerce and describe how they have evolved over time.

3. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Information Technology • Computer and communications hardware and software combined with • The skills of the designers, managers, users • Applied to acquire, define, input, arrange, organize, manipulate, store and transmit • Facts, data and information • To create business knowledge and promote organizational learning

4. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing Information / IT • Businesses have overwhelming amount of data and information about customers, competitors, and their own operations • Thus, must manage information and IT • The ability to manage this input can mean the difference between success and failure • A secondary value chain function because all of a firm’s business activities are linked to IT

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

6. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT builds a competitive advantage • superior productivity • more data about business activities • superior quality • monitor processes better • superior innovation • faster product cycle times • superior responsiveness to customers • more detail about customers

7. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships IT Systems Applications • Transaction Processing (TP) • capture data about basic day-to-day business transactions • Knowledge Management (KM) • take information and knowledge from the TP system and make it more relevant to managers • Enterprise resource planning (ERP) • multi-module software that links all functional activities • Artificial intelligence (AI) • designed to imitate human behavior and provide computer-based assistance / advice in performing certain business activities

8. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships • TPs capture transaction data • accounting, purchasing, inventory, production, sales • from routine day-to-day activities • ERPs improve profitability by • speeding up product development, improving sales revenues • driving down operating costs while maintaining quality • improving customer satisfaction using customer relationship management (CRM) systems

9. Chapter 9Information 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 • Data communication networks, both public and private, carry streams of digital data • 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

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

11. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Intranets • Intranets are private networks that any company can develop to extend Net technology internally - transmitting information throughout the firm • Intranets are accessible only to employees, with access to outsiders prevented by hardware and software security systems called firewalls

12. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships The Networked Organization • Information networks are leading to leaner organizations • Fewer employees and simpler organizational structures • Because networked firms can maintain electronic, rather than human, information linkages among employees and customers

13. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships The Networked Organization • Operations are more flexible • electronic networks allow businesses to offer greater product variety and faster delivery cycles. • intranets and the Internet allow greater collaboration among internal units and with outside firms • Geographic distance between workplace and office is more common • electronic linkages are replacing the need for physical proximity between the company and its workstations • Improved management processes • managers have rapid access to more information about the current status of company activities • easier access to electronic tools for planning and decision-making

14. Chapter 9Information 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 • The main elements of an information system include hardware, software, data, and people

15. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Hardware Components of E-Commerce • Legacy systems • PCs, PDAs • Servers / clients • Internet • PCs, servers, routers, fiber optic cable, telephone lines, wireless / broadband technology • WWW • Content of Internet – web sites, web pages (HTML), web servers, web hosts

16. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Software Components of E-Commerce • PC • operating system, applications • Computer security software • firewalls • virus protection • Mobile computing software • browsers • e-mail

17. Chapter 9Information Technology and E-Commerce: Managing Information, Knowledge, and Business Relationships Managing IT: Control • Control is important • ensure that the system operates correctly • that data and information are transmitted through secure channels to people who really need them • aided by the use of electronic security measures, such as firewalls, that bar entry to the system by unauthorized outsiders

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

19. Chapter 9Information 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 • Evaluate the role of the Louisville Slugger video and relate to IT, E-Commerce and business relationships