Chapter 17 Managing Information

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Chapter 17Managing Information

Designed & Prepared byB-books, Ltd.

MGMT

Chuck Williams

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Moore’s Law

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Why Information Matters

After reading these sections, you should be able to:

1. explain the strategic importance of information.

2. describe the characteristics of useful information (i.e., its value and costs).

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Data versus Information

• Raw data = facts + figures

• Information = useful data that influences choices

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Strategic Importance of Information

First-MoverAdvantage

Sustaining aCompetitiveAdvantage

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First-Mover Advantage

First-Mover Advantage

The strategic advantage that companies earn by being the first to use new information technology tolower costs or to differentiate a product.

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Cable versus DSL

Cable companies have invested $90 billion over the last decade to create a first-mover advantage in delivering high-speed Internet.

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Fast Facts on First Movers

First movers earn a 30% market share.

Later movers earn a 19% share.

Of market leaders, a whopping 70% were first movers.

ON AVERAGE:

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Sustaining a Competitive Advantage

CompetitiveDisadvantage

CompetitiveDisadvantage

CompetitiveParity

CompetitiveParity

SustainedCompetitiveAdvantage

SustainedCompetitiveAdvantage

TemporaryCompetitiveAdvantage

TemporaryCompetitiveAdvantage

Is it difficultfor another firmto create or buy

the IT?

Is it difficultfor another firmto create or buy

the IT?

NO YES

Does the informationtechnology (IT)

createvalue?

Does the informationtechnology (IT)

createvalue?

NO YES

Is the IT differentacross

competing firms?

Is the IT differentacross

competing firms?

NO YES

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• Accurate

• Verifiable

• Timely

• Organized

• Accessible

• Relevant

• Complete

Characteristics of Useful Information

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Costs of Useful Information

• Acquisition• Processing• Storage• Retrieval• Communication Costs

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Getting and Sharing Information

After reading these sections, you should be able to:

3. explain the basics of capturing, processing, and protecting information.

4. describe how companies can access and shareinformation and knowledge.

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Capturing Information

ElectronicElectronicElectronicElectronic

ManualManualManualManual

Bar CodesBar Codes

Radio FrequencyIdentification Tags

Radio FrequencyIdentification Tags

Electronic ScannersElectronic Scanners

Optical Character Recognition

Optical Character Recognition3.13.1

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Processing Information: Data Mining

SupervisedData Mining

SupervisedData Mining

Data Warehouse

Data Warehouse

UnsupervisedData Mining

UnsupervisedData Mining

DataClusters

DataClusters

SequencePatterns

SequencePatterns

PredictivePatterns

PredictivePatterns

AffinityPatterns

AffinityPatterns

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Unsupervised Data Mining

DataClusters

DataClusters

SequencePatterns

SequencePatterns

PredictivePatterns

PredictivePatterns

AffinityPatterns

AffinityPatterns

Three or more database elementsoccur together

Three or more database elementsoccur together

One of the elements precedes the other

One of the elements precedes the other

Helps identify database elementsthat are different

Helps identify database elementsthat are different

Two or more database elementsoccur together significantly

Two or more database elementsoccur together significantly

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Protecting Information

Authentication

Authorization

Two-factor authentication

Firewalls

Antivirus software

Data encryption

Virtual private networks

Secure Sockets Layer (SSL) encryption3.33.3

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Protecting Information

Firewall - Security system consisting of hardware and/or software that prevents unauthorized intrusion

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Protecting Information

• What is a biometric device?

Next

Authenticates person’s identity using personal characteristic Fingerprint, hand geometry, voice,

signature, and iris

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Protecting Information

Next

• What is encryption?

Next

Safeguards against information theft Process of converting plaintext (readable data) into ciphertext

(unreadable characters) Encryption key (formula) often uses more than one method To read the data, the recipient must decrypt, or decipher, the data

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Tips for Protecting Data

• Rule #1: Understand the real value of data (not just the value of the disk it’s on) and treat it accordingly.

• Encrypt data.

• Track data that you send to someone else.

• Use a coding system to label the value of a disk or a memory stick.

Source: B. Worthen, “Workers Losing Computer Data May Lack Awareness of its Value,” The Wall Street Journal, 27 November 2007, B3.

Beyond the Book

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Accessing and SharingInformation and Knowledge

Internal Accessand

Information Sharing

Internal Accessand

Information Sharing

External Accessand

Information Sharing

External Accessand

Information Sharing

Sharing ofKnowledge and

Expertise

Sharing ofKnowledge and

Expertise44

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Executive Information System (EIS)

• Uses internal and external data

• Used to monitor and analyze organizational performance

• Must provide accurate, complete, relevant, andtimely information to managers

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Intranets

• Private company networks

• Allow employees to access, share, and publish information

• A firewall permits only authorized internalaccess

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Why Companies Use Intranets

• Inexpensive

• Increase efficiencies and reduce costs

• Intuitive and easy to use

• Work across all computer systems

• Can be built on top of existing network

• Work with software programs that convert to HTML

• Software is available at no cost or is less expensive

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Corporate PortalsCorporate Portals

A hybrid of executive information systemsand intranets that allow managers andemployees to use a Web browser to gainaccess to customized company information and to complete specialized transactions.

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External Access and Sharing

Electronic Data InterchangeElectronic Data Interchange

ExtranetsExtranets

Web ServicesWeb Services

InternetInternet

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Benefits of External Access

and Sharing

Increased productivityIncreased productivity

Reduced data entry errorsReduced data entry errors

Improved customer serviceImproved customer service

Faster communicationsFaster communications

Reduced costsReduced costs

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Electronic Data Interchange (EDI)

ElectronicData

Interchange

ElectronicData

Interchange

When two companies convert their purchase and ordering informationto a standardized format to enablethe direct electronic transmission of that information from one computer system to the other.

When two companies convert their purchase and ordering informationto a standardized format to enablethe direct electronic transmission of that information from one computer system to the other.

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Extranet

ExtranetExtranet

Allows companies to exchange information and conduct transactions with outsiders by providing them direct, Web-based access to authorized parts of a company’s intranet or information system.

Allows companies to exchange information and conduct transactions with outsiders by providing them direct, Web-based access to authorized parts of a company’s intranet or information system.

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Web Services

Web ServicesWeb Services

Using standardized protocols to describe data from one company in such a way that those data can automatically be read, understood, transcribed, and processed by different computer systems in another company.

Using standardized protocols to describe data from one company in such a way that those data can automatically be read, understood, transcribed, and processed by different computer systems in another company.

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Sharing Knowledge and Expertise

DecisionSupport System

DecisionSupport System

Helps managers to understand specific kinds of problems and potential solutions, and to analyze the impact of different decision options using “what if” scenarios.

Helps managers to understand specific kinds of problems and potential solutions, and to analyze the impact of different decision options using “what if” scenarios.

Expert SystemExpert System

An information system that contains the specialized knowledge and decision rules used by experts so that nonexperts can draw on this knowledge base to make decisions.

An information system that contains the specialized knowledge and decision rules used by experts so that nonexperts can draw on this knowledge base to make decisions.

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• What is an expert system?

Captures and stores knowledge of human Captures and stores knowledge of human experts and then imitates human experts and then imitates human reasoning and decision makingreasoning and decision making

Captures and stores knowledge of human Captures and stores knowledge of human experts and then imitates human experts and then imitates human reasoning and decision makingreasoning and decision making

Consists of two componentsConsists of two componentsConsists of two componentsConsists of two components

knowledge base—knowledge base—combined subject combined subject

knowledge and knowledge and experiences of experiences of human expertshuman experts

knowledge base—knowledge base—combined subject combined subject

knowledge and knowledge and experiences of experiences of human expertshuman experts

inference rules—set inference rules—set of logical judgments of logical judgments

applied to the applied to the knowledge baseknowledge base

inference rules—set inference rules—set of logical judgments of logical judgments

applied to the applied to the knowledge baseknowledge base

Sharing Knowledge and Expertise

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• What is an example of an expert system?Step 1. A user selects his or her gender

Step 2. Select the location on the body where the problem is being experienced

Step 3. Select the type of pain.

Step 5. Review the possible diagnosis.

Step 4. Select other information about the problem.

Sharing Knowledge and Expertise