copyright ©2011 by cengage learning. all rights reserved 1 chapter 17 managing information designed...

Copyright ©2011 by Cengage Learning. All rights reserved

1

Chapter 17Managing Information

Designed & Prepared byB-books, Ltd.

MGMT3

Chuck Williams


2

Moore’s Law

Source: “Moore’s Law: Overviews,” © Intel Corporation, available online at http://www.intel.com/technology/mooreslaw/index.htm [accessed 10 September 2008]. Reprinted with permission of Intel Corporation.


3

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).


4

Data versus Information

• Raw data = facts + figures

• Information = useful data that influences choices


5

Biz Flix: The Good Shepherd

Take Two Video

Click

Beyond the Book

Which parts of this scene show data?

Which parts of this scene show information?


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Strategic Importance of Information

First-MoverAdvantage

Sustaining aCompetitiveAdvantage

11


7

First-Mover Advantage

First-Mover Advantage

The strategic advantage that companies earn by being the first to use new information technology to substantially lower costs or to make a product or service different from that of competitors

1.11.1


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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

1.21.2


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• Accurate

• Complete

• Relevant

• Timely

Characteristics of Useful Information

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Costs of Useful Information

• Acquisition• Processing• Storage• Retrieval• Communication Costs

22


12

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.


13

Capturing Information

ElectronicElectronicElectronicElectronic

ManualManualManualManual

Bar CodesBar Codes

Radio FrequencyIdentification Tags

Radio FrequencyIdentification Tags

Electronic ScannersElectronic Scanners

Optical Character Recognition

Optical Character Recognition3.13.1

© iS

tock

phot

o.co

m


14

10 Uses for RFID

• tracking computer equipment• security access for employees• EZpass on toll roads• instant credit card payments• cell phone SIM cards• shipping labels• preventing shrinkage• tracking files• collecting data on meeting participants• customer loyalty cards (instead of a stamp)

Source: “10 Business Uses for RFID,” Inc., available online at http://technology.inc.com/multimedia/slideshows/content/10-business-uses-for-rfid.html/


15

Beyond the Book

RFID in ActionWhile RFID technology has not yet gained traction in all areas of U.S. retail, it has proven beneficial in managing size complexities and out-of-stocks on certain items. American Apparel has achieved 94 percent stock accuracy when using RFID and has saved about 168 man-hours per month. At Nine West, sales clerks can use a handheld device to check whether a certain size of an item is in stock before going back to pick it up, which improves the conversion rate.

Source: C. T. Corcoran, “RFID: Will Fizzle Turn to Sizzle?”, Women’s Wear Daily, 19 August 2009. 11.


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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

3.23.2


17

Beyond the Book

SEC Uses Data MiningWith the recent insider trading scandal of Galleon Management founder Raj Rajaratnam, the Securities and Exchange Commission is finding success with new techniques. Informants and wire-taps were used extensively in the Galleon case. It is also using the Center for Enterprise Modernization to comb through the large quantities of tips it gets and create new digital tools to use in data analysis. The agency has used data-mining from the Financial Industry Regulatory Authority (FINRA) extensively to look for suspicious activities in trade records. The SEC is also looking increasingly toward cooperation and information sharing with other agencies such as the U.S. Attorney’s office.

Source: R. Farzad and T. Francis, “The SEC: To Catch a Cheat”, Business Week, 2 November 2009. 25.


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Beyond the Book

Data Mining and HRMAn emerging trend is using data mining in human resource management. Data miners can track the digital footprints of workers, and use these records to measure behaviors and productivity. They can create profiles of employees who are most likely to leave, and compare them to current employees. Currently only about 1% or 2% of large corporations are estimated to be using these methods. Tech companies like IBM, Microsoft, and Oracle have been at the forefront.

Source: S. Baker, “How Much Is That Worker Worth?”, Business Week, 23 & 30 March 2009. 46-48.


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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

3.23.2


20

Protecting Information

Authentication

Authorization

Two-factor authentication

Firewalls

Antivirus software

Data encryption

Virtual private networks

Secure Sockets Layer (SSL) encryption3.33.3


21

Beyond the BookHigher EducationLagging in Privacy Matters

While chief privacy officers have become common in the corporate world, few colleges have instituted these positions despite the amount of sensitive information they manage. Many institutions claim that existing information-technology security officers are sufficient. But while IT security officers may be sufficient to protect data that has already been collected, some argue that they aren’t always prepared to ask or answer the question of whether that data should have been collected and stored at all.

Source: L. Guernsey, “A Wealth of Data, and Nobody in Charge,” The Chronicle of Higher Education 55, no. 13 (21 November 2009). A1.


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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


23

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

4.14.1


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Characteristics of Best-Selling EIS

• Few commands to learn• Important views saved• 3-D charts• Geographic dimensions

Identification ofProblems and Exceptions

Identification ofProblems and Exceptions

Ease of UseEase of Use

Analysis of InformationAnalysis of Information

• Compare to standards• Trigger exceptions• Drill down• Detect & alert newspaper• Detect & alert robots

• Sales tracking• Easy-to-understand displays• Time periods

4.14.1


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Intranets

• Private company networks

• Allow employees to access, share, and publish information

• A firewall permits only authorized internalaccess

4.14.1


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Why Companies Use Intranets

• Let employees find information

• Enable collaboration and information sharing

• Automate business processes

• Reduce costs

• Provide secure, remote access to company data via the web

• Provide online training

4.14.1


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Corporate PortalsCorporate Portals

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

4.14.1


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External Access and Sharing

Electronic Data InterchangeElectronic Data Interchange

ExtranetsExtranets

Web ServicesWeb Services

InternetInternet

4.24.2


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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

4.24.2


30

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 company’s computer system to the other company’s computer system.

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

4.24.2


31

Web Services

Web ServicesWeb Services

Using standardized protocols to describe and transfer 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 and transfer 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.

4.24.2


32

Extranet

ExtranetExtranet

Networks that allow 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.

Networks that allow 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.

4.24.2


33

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 and experienced decision makers 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 and experienced decision makers so that nonexperts can draw on this knowledge base to make decisions.

4.34.3

copyright ©2011 by cengage learning. all rights reserved 1 chapter 17 managing information designed...

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useful data

data miningwith

informationraw data

data mining3

data analysis

processing information

information mattersafter

later movers