Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 1

Moore’s Law

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 2

Data versus Information

Raw data = facts + figures

Information = useful data that influences choices

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 3

Strategic Importance of Information

First-MoverAdvantage

Sustaining aCompetitiveAdvantage

11

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 4

First-Mover Advantage

1.11.1

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 5

AOL User Interface

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 6

MSN Interface

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 7

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

Adapted from Exhibit 17.2

1.21.2

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 8

Accurate Complete Relevant Timely

Characteristics of Useful Information

22

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 9

Costs of Useful Information

Acquisition Processing Storage Retrieval Communication Costs

22

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 10

Doing the Right Thing

22

Recycling Computer Equipment

• An estimated 250 million computers will bediscarded over the next five years

• Computers and monitors contain hazardous materials, so tossing them in the trash is illegal

• Recycle appropriately, or donate old computersto individuals or charitable organizations

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 11

Capturing Information

ElectronicElectronic

ManualManual

Bar CodesBar Codes

Radio FrequencyIdentification Tags

Radio FrequencyIdentification Tags

Electronic ScannersElectronic Scanners

Optical Character Recognition

Optical Character Recognition

3.13.1

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 12

RFID Technology

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 13

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 14

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 15

Protecting Information

Authentication

Authorization

Two-Factor Authentication

Firewalls

Antivirus software

Data encryption

Virtual private networks

Secure Sockets Layer (SSL) Encryption

3.33.3

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 16

Doing the Right Thing

3.23.2

Password Dos and Don’tsPassword Dos and Don’ts

1. Don’t use any public information

2. Don’t use complete words

3. Use eight or more characters; include unique characters

4. Use longer, unique passwords

5. Consider passphrases

6. Don’t write your password

7. Change it every six weeks

8. Don’t reuse old passwords

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 17

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 18

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 19

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

Adapted from Exhibit 17.4

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

Sales tracking Easy-to-understand displays Time periods

4.14.1

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 20

Intranets

Private company networks

Allow employees to access, share, and publish information

A firewall permits only authorized internalaccess

4.14.1

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 21

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

Adapted from Exhibit 17.5

4.14.1

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 22

Corporate Portals

4.14.1

Corporate 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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 23

External Access and Sharing

Electronic Data InterchangeElectronic Data Interchange

ExtranetsExtranets

Web ServicesWeb Services

InternetInternet

4.24.2

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 24

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

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 25

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.

4.24.2

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 26

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

4.24.2

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 27

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

4.24.2

Chapter 17Copyright ©2007 by South-Western, a division of Thomson Learning. All rights reserved 28

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

4.34.3