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Information Technology and E-Commerce: Managing Information,

Knowledge, and Business

Relationships

2007 The McGraw-Hill Companies, Inc., All Rights Reserved.McGraw-Hill/IrwinIntroduction to Business

Chapter Nine

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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.

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Informat ion T ec hnolo gy Computer and communications hardware and software combined with

The skills of the designers, managers, users

Applied to acquire, define, input, arrange, organize, manipulate, storeand transmit

Facts, data and information

To create business knowledge and promote organizational learning

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Managing Informat ion / IT Businesses have overwhelming amount of data and

information about customers, competitors, and their ownoperations

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 firms

business activities are linked to IT

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Char acteri sti cs of usef ul i nform ati onare

Complete Relevant

Timely

Accurate

Reliable

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IT Sys tems Appl icati ons 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

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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

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IT Sys tems Appl icati ons 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 andeffectiveness

Data communication networks, both public and private,carry streams of digital data

The largest public communications network, the Internet, isa gigantic network of networks linking millions ofcomputers offering information on business around theworld

The Net is the most important e mail system in the world

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Internet The World Wide Web is a system with universally accepted

standards for storing, formatting, retrieving, and displayinginformation

WWW provides common language that enables users

around the world to surf the Net using a common format

HTTP and HTML

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Intranets Intranets are private networks that any company can

develop to extend Net technology internally - transmittinginformation throughout the firm

Intranets are accessible only to employees, with access to

outsiders prevented by hardware and software security

systems called firewalls

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The Networked Organi zat ion 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

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The Ne tw orked Or ganiz at ion Operations are more flexible

electronic networks allow businesses to offer greater productvariety and faster delivery cycles.

intranets and the Internet allow greater collaboration amonginternal units and with outside firms

Geographic distance between workplace and office is more common

electronic linkages are replacing the need for physical proximitybetween the company and its workstations

Improved management processes

managers have rapid access to more information about the currentstatus of company activities

easier access to electronic tools for planning and decision-making

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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 toreduce operating costs and improve product quality

The main elements of an information system includehardware, software, data, and people

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Hardware Com ponents of E-Com merce 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

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Sof tware Component s of E-Com merce PC

operating system, applications Computer security software

firewalls

virus protection

Mobile computing software

browsers

e-mail

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Managi ng I T: 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

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Managi ng I T: Peopl e 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

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Managi ng I nform ati on Never before has IT become so important that people become

computer literate and develop the skills that will allow themto benefit from continuing advances in IT

Evaluate the role of the Louisville Slugger video and relate to

IT, E-Commerce and business relationships
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