Download Knowledge management systems

Chapter Nine
Information Technology
and E-Commerce
McGraw-Hill/Irwin
Introduction to Business
© 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
Learning Objectives
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. Identify the major hardware and software
components of IT and E-Commerce and
describe how they have evolved over time.
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Information Technology and
Profitability
• Information
- a set of data, facts, numbers, and words
that has been organized in such a way that
it provides its users
with knowledge
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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
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Information, Knowledge, and
Learning
Figure 9.1
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Information Technology and
Profitability
• Information technology
- 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
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Question?
What is managing information to achieve a
better fit between a company’s business
model and the forces in its environment?
A. Organizational culture
B. Organizational learning
C. Erudition
D. Business model balancing
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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
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Useful Information and Knowledge
• Complete
• Accurate and
reliable
• Relevant
• Timely
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Characteristics of Useful
Information
Figure 9.2
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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
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Gaining a Competitive Advantage
with IT
• Superior productivity
• Superior quality
• Superior innovation
• Superior customer responsiveness
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IT and Competitive Advantage
Figure 9.3
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Major Information Technology
Applications
• Chief information officer
- the top manager of a company’s IT function
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Major Information Technology
Applications
• Transaction processing systems
• Knowledge management systems
• Expert systems and artificial intelligence
• Enterprise resource planning systems
• E-commerce systems
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Five Major IT Applications
Figure 9.4
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Transaction Processing Systems
• Transaction processing systems
- an IT system designed to collect, record,
and manipulate the data related to a
company’s day-to-day business operations
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Knowledge Management Systems
• 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
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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
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Expert Systems and Artificial
Intelligence
• Expert systems
- 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
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Enterprise Resource Planning
Systems
• Enterprise resource planning systems
- multimodule applications software
packages that coordinate all of a
company’s functional activities
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Primary and Secondary ValueChain Functions
Figure 9.5
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E-Commerce Systems
• E-Commerce
- trade that takes place between companies,
and between companies and individual
customers via the
Internet (or other IT
systems)
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Question?
What is a company’s internal system of
computers and Web sites accessible
only by its employees?
A. Web
B. Internet
C. Ethernet
D. Intranet
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E-commerce Systems
• B2B marketplace
- 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
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Types of E-Commerce
Figure 9.6
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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
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Legacy Systems
• Legacy systems
- the hardware and software components of
a company’s IT system at any one point in
time
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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
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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
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Four Levels
of IT and
Computing
Figure 9.7
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Wired and Wireless Broadband
Technology
• 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
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Software Components of
Information Technology
• PC software
• Networking software
• Computer security software
• Wireless hand-held software
• IT and business occupation
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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
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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
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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
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Computer Security Software
• Hackers
- people who seek to invade a company’s
databases and steal the information for
malicious or illegal reasons
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Protecting the Intranet by a Firewall
Figure 9.8
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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
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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?
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