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©2004 by Nelson, a division of Thomson Canada Limited1

Chapter 5

Managing Information

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What Would You Do?

The PC industry is very competitive How can Dell and its suppliers

work more closely together? How can Dell handle all the

information it generates?

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Moore’s Law

Prediction that every 18 months, the cost of computing will drop by 50 percent as computer-processing power doubles.

Adapted from Exhibit 5.1

©2004 by Nelson, a division of Thomson Canada Limited 4

Learning Objectives:Why Information Matters

After reading this section, you should be able to:

1. explain the strategic importance of information2. describe the characteristics of useful information

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Strategic Importance of Information

First-mover advantage

Sustaining a competitive advantage

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Using Information to Sustain a Competitive Advantage

Does the information create value? Is the information different across

firms? Can another firm create or buy the

technology?

Adapted from Exhibit 5.2

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Characteristics of Useful Information

Accurate Complete Relevant Timely

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The Costs of Useful Information

Acquisition Processing Storage Retrieval Communication

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Learning Objectives:Getting and Sharing Information

After reading the next two sections, you should be able to:

3. explain the basics of capturing, processing, and protecting information4. describe how companies can share and access information and knowledge

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Capturing Information

Manual completing forms

Electronic bar code electronic scanner optical character recognition

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Advantages and Disadvantages of Different Kinds of Storage Devices

Paper Microfilm CDs DVDs Data storage tapes Hard drives RAID

Adapted from Exhibit 5.3

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Processing Information

Processing information transforming raw data into

meaningful information that can be used in decision making

Data mining process of discovering unknown

patterns and relationships in large amounts of data

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Data Mining

Data warehouse Two types

supervised unsupervised

association or affinity patterns sequence patterns predictive patterns data clusters

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Protecting Information

Protecting information Process of insuring that data are

reliably and consistently retrievable for authorized users only

firewalls virus data encryption virtual private networks

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Security Threats to Data and Data Networks Denial of service Web server

attacks Corporate network

attacks Unauthorized

access to PCs Viruses, worms,

Trojan horses

Malicious scripts and applets

E-mail snooping Keystroke

monitoring Referrers Spam Cookies

Adapted from Exhibit 5.4

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Accessing and Sharing Information

Communication Internal access and sharing External access and sharing Sharing knowledge and expertise

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Communication

E-mail Voice messaging Conferencing systems Document conferencing Application sharing Desktop videoconferencing

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Internal Access and Sharing

Executive Information System (EIS)

Intranets

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Executive Information System

Uses internal and external sources of data

Used to monitor and analyze organizational performance

Must be easy to use and must provide information that managers want and need

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Characteristics of Best-selling Executive Information Systems

Ease of use few commands, important views saved, 3-D

charts, geographic dimensions

Analysis of information sales tracking, easy-to-understand displays,

time periods

Identification of problems and exceptions compare to standards, trigger exceptions,

drill down, detect and alert newspaper, detect and alert robots

Adapted from Exhibit 5.5

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Intranets Private company

networks Allow employees

to easily access, share, and publish information using Internet software

Very popular

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Why 80% of Companies Now Use Intranets

Intranets: are inexpensive increase efficiencies and reduce costs are intuitive and easy to use work across all computer systems and

platforms can be built on top of existing

networks work with programs to convert

electronic documents to HTMLAdapted from Exhibit 5.6

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External Access and Sharing

Electronic Data Exchange

Extranet Internet

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Sharing Knowledge and Expertise

Knowledge is the understanding one gains from information.

Decision support systems (DSS) use models to acquire and analyze

information Expert systems

Replicate experts’ decisions

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What Really Happened?

Dell shares information with suppliers

Dell is on the cutting edge of technology

Dell uses information to determine actual sales