Chapter 17 Managing Information

1. MGMT Chuck Williams Chapter17Managing Information Designed & Prepared byB-books, Ltd.

2. Moore’s Law

3. Why Information Matters After reading these sections, you should be able to: explain the strategic importance of information. 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. First-MoverAdvantage Sustaining aCompetitiveAdvantage Strategic Importance of Information 1

6. 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. First-Mover Advantage 1.1

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

8. Fast Facts on First Movers ON AVERAGE: First movers earn a 30% market share. Later movers earn a 19% share. Of market leaders, a whopping 70% were first movers.

9. Does the informationtechnology (IT)createvalue? NO Is the IT differentacross competing firms? YES CompetitiveDisadvantage Is it difficultfor another firmto create or buythe IT? NO YES CompetitiveParity NO YES TemporaryCompetitiveAdvantage SustainedCompetitiveAdvantage Sustaining a Competitive Advantage 1.2

10. Characteristics of Useful Information • Accurate • Verifiable • Timely • Organized • Accessible • Relevant • Complete 2

11. Costs of Useful Information • Acquisition • Processing • Storage • Retrieval • Communication Costs 2

12. Getting and Sharing Information After reading these sections, you should be able to: explain the basics of capturing, processing, and protecting information. describe how companies can access and shareinformation and knowledge.

13. Capturing Information Manual Bar Codes Electronic Radio FrequencyIdentification Tags Electronic Scanners Optical Character Recognition 3.1

14. SupervisedData Mining Data Warehouse UnsupervisedData Mining AffinityPatterns SequencePatterns PredictivePatterns DataClusters Processing Information: Data Mining 3.2

15. AffinityPatterns Two or more database elementsoccur together significantly SequencePatterns One of the elements precedes the other PredictivePatterns Helps identify database elementsthat are different DataClusters Three or more database elementsoccur together Unsupervised Data Mining 3.2

16. Protecting Information • Authentication • Authorization • Two-factor authentication • Firewalls • Antivirus software • Data encryption • Virtual private networks • Secure Sockets Layer (SSL) encryption 3.3

17. Protecting Information • Firewall - Security system consisting of hardware and/or software that prevents unauthorized intrusion

18. Protecting Information Next • What is a biometric device? • Authenticates person’s identity using personal characteristic • Fingerprint, hand geometry, voice, signature, and iris

19. Protecting Information Next Next • What is encryption? • 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

20. Beyond the Book 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.

21. Internal Access andInformation Sharing External AccessandInformation Sharing Sharing ofKnowledge andExpertise Accessing and SharingInformation and Knowledge 4

22. 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 4.1

23. Intranets • Private company networks • Allow employees to access, share, and publish information • A firewall permits only authorized internalaccess 4.1

24. 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 4.1

25. 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. Corporate Portals 4.1

26. Electronic Data Interchange Extranets Web Services Internet External Access and Sharing 4.2

27. Reduced costs Increased productivity Reduced data entry errors Improved customer service Faster communications Benefits of External Access and Sharing 4.2

28. Electronic Data Interchange (EDI) Electronic Data 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. 4.2

29. Extranet Extranet 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. 4.2

30. Web Services Web 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. 4.2

31. Sharing Knowledge and Expertise 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. Expert 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. 4.3

32. Sharing Knowledge and Expertise • What is an expert system? Captures and stores knowledge of human experts and then imitates human reasoning and decision making Consists of two components knowledge base—combined subject knowledge and experiences of human experts inference rules—set of logical judgments applied to the knowledge base

33. Sharing Knowledge and Expertise 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. • What is an example of an expert system?