Chapter 9 - University of Hawaii at Hilo

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Chapter Nine

Information Technology
and E
-
Commerce

© 2007 The McGraw
-
Hill Companies, Inc., All Rights Reserved.

McGraw
-
Hill/Irwin

Introduction to Business


9
-

3

Learning Objectives

1.
Distinguish between data, information, and
knowledge and identify the characteristics of
useful information.

2.
Explain the relationship between IT,
competitive advantage, and profitability.

3.
Discuss five major IT applications used by
companies today to build competitive
advantage.

4.
Identify the major hardware and software
components of IT and E
-
Commerce and
describe how they have evolved over time.


9
-

4

Information Technology and
Profitability


Information


-
a set of data, facts, numbers, and words
that has been organized in such a way that
it provides its users

with knowledge



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5

Information Technology and
Profitability


Knowledge


-
what a person perceives, recognizes,
identifies, or discovers from analyzing data
and information


Learning

-
an increase in the store or stock of people’s
expertise or knowledge


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-

6

Information, Knowledge, and
Learning

Figure 9.1


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7

Information Technology and
Profitability


Information technology


-
the many different kinds of computer and
communications hardware and software
and the skills of their designers,
programmers, managers, and technicians
who create and manage it


9
-

8

Question?

What is managing information to achieve a
better fit between a company’s business
model and the forces in its environment?

A.
Organizational culture

B.
Organizational learning

C.
Erudition

D.
Business model balancing



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9

Information Technology and
Profitability


Organizational learning


-
managing information and knowledge to
achieve a better fit between a company’s
business model and the forces in its
environment


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-

10

Useful Information and Knowledge


Complete


Accurate and
reliable


Relevant


Timely


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11

Characteristics of Useful
Information

Figure 9.2


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12

Useful Information and Knowledge


Information overload


-
a situation in which managers have to
process so much information it actually
reduces their understanding of a situation


Real
-
time information


-
information that is constantly updated


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13

Gaining a Competitive Advantage
with IT


Superior productivity


Superior quality


Superior innovation


Superior customer responsiveness


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14

IT and Competitive Advantage

Figure 9.3


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15

Major Information Technology
Applications


Chief information officer


-
the top manager of a company’s IT function


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-

16

Major Information Technology
Applications


Transaction processing systems


Knowledge management systems


Expert systems and artificial intelligence


Enterprise resource planning systems


E
-
commerce systems


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-

17

Five Major IT Applications

Figure 9.4


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-

18

Transaction Processing Systems


Transaction processing systems


-
an IT system designed to collect, record,
and manipulate the data related to a
company’s day
-
to
-
day business operations


9
-

19

Knowledge Management Systems


Knowledge management systems


-
an IT system that analyzes the information
collected from the TP system but filters and
analyzes it to make it more useful to
managers


9
-

20

Knowledge Management Systems


Best practices


-
the set of skill
-
based competencies that
allow a particular function to perform at its
optimal level


IT consultants


-
expert employees who use their knowledge
and learning to solve their customers’ IT
problems


9
-

21

Expert Systems and Artificial
Intelligence


Expert systems


-
an advanced IT system that can reason
through a company’s information, diagnose
problems, and suggest solutions


Artificial intelligence


-
an IT system that reasons and learns like a
human being


9
-

22

Enterprise Resource Planning
Systems


Enterprise resource planning systems

-
multimodule applications software
packages that coordinate all of a
company’s functional activities


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-

23

Primary and Secondary Value
-
Chain Functions

Figure 9.5


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24

E
-
Commerce Systems


E
-
Commerce


-
trade that takes place between companies,
and between companies and individual
customers via the

Internet (or other IT

systems)



9
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25

Question?

What is a company’s internal system of
computers and Web sites accessible
only by its employees?

A.
Web

B.
Internet

C.
Ethernet

D.
Intranet


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26

E
-
commerce Systems


B2B marketplace


-
an industry
-
specific trading platform set up
to connect buyers and sellers using the
Internet


Intranet


-
a company’s internal system of computers
and Web sites accessible only by its
employees


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27

Types of E
-
Commerce

Figure 9.6


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28

Hardware Components of IT

and E
-
Commerce


Legacy systems


Mainframe computers


Microprocessors and personal computers


Network computers: servers and clients


The world wide web and the Internet


Wired and wireless broadband technology


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29

Legacy Systems


Legacy systems


-
the hardware and software components of
a company’s IT system at any one point in
time


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30

The World Wide Web

and the Internet


Router

-
hardware and software that electronically
transfers data between networks to its
intended destination, such as a specific
web page or computer


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31

The World Wide Web

and the Internet


Ethernet

-
a local area communication technology that
transmits information between computers
at speeds of between 10 and 100 million
MBPs using coaxial or fiber optic cable


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32


Figure 9.7

Four Levels
of IT and
Computing


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33

Wired and Wireless Broadband
Technology


Broadband technology


-
a type of communications hardware that
allows for the rapid transmission of vast
amounts of information


Wi
-
Fi


-
a type of Ethernet technology that allows
computer users to access the Internet
wirelessly


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34

Software Components of
Information Technology


PC software


Networking software


Computer security software


Wireless hand
-
held software


IT and business occupation


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35

Software Components of
Information Technology


Best
-
of
-
breed solution


-
the highest performing IT hardware or
software application currently available for
managing a particular information
processing or multimedia task


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36

PC Software


Industry standard


-
a predominant type of technology used in
an industry

-
other technologies must be compatible with
the industry standard to be widely adopted


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37

Computer Security Software


Firewall

-
software that gives a company’s computers
safe access to the Internet but blocks
computers from outside the firm from
gaining access to

the company’s

intranet


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38

Computer Security Software


Hackers

-
people who seek to invade a company’s
databases and steal the information for
malicious or illegal reasons


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39

Protecting the Intranet by a Firewall

Figure 9.8


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40

Computer Security Software


Computer virus


-
software code deliberately written to harm
hardware and software and corrupt files
and databases

See a current list of virus threats


9
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41

Video: Hillerich & Bradsby


The company faced a crucial decision


to implement a system of connected
stand alone computers or to start over
moving toward supply chain
management that integrated all functions
within a central database.


Which of the major applications of
information technology did Hillerich and
Bradsby turn to? Why?