Understanding Information and e-Business

© 2013 South-Western, a part of Cengage Learning. All rights reserved. Chapter 14 | Slide 1

Understanding Information and e-Business

Chapter

14


Management information system (MIS)• A system that provides managers and employees with the

information they need to perform their jobs as effectively as possible

Information technology officer• A manager at the executive level who is responsible for

ensuring that a firm has the equipment necessary to provide the information the firm’s employees and managers need to make effective decisions

What Is a Management Information System?


Management Information System (MIS)


A firm’s information requirements• Summary of future possibilities• Summary of present situation• Summary of past performance• Information about five areas of management:

finance, operations, marketing, human resources, and administration

Size and complexity of the system• Must be properly sized to provide sufficient

information resources without being too simple or too complex to be useful

Management Information System (cont.)


Collecting data• Data should be relevant and accurate• Internal sources

– Managers and employees, company records and reports, minutes of meetings, accounting data, sales data, HR data, production data

• External sources– Customers, suppliers, bankers, trade and business publications,

industry conferences, online computer services, government sources, firms specializing in gathering data

• Cautions– The cost of obtaining data from some external sources

can be quite high– Outdated or incomplete data usually yield inaccurate information– Check computer data (or information) if you disagree with it

How Do Employees Use a Management Information System?


Every MIS must be tailored to the organization it serves and must perform five functions


When using a management information system, the first step is to collect the data needed to establish the firm’s database. What is the most appropriate source that could be used to answer the following questions?• How successful has the promotional campaign been?

• How much does a competitor charge for a particular product?

• What is the current population of the state of Arizona?

• How do customers view the new pricing policy?

• What is the average salary for employees in the shipping department?

Class Exercise


Storing data• An MIS must be capable of storing data until

they are needed

Updating data• Manual updating—employee inputs fresh data

into the database• Automatic updating—MIS updates itself as

data become available

How Do Employees Use a Management Information System? (cont.)


Processing data• The transformation of data into a form useful

for a specific purpose

• Statistics– A measure that summarizes a particular

characteristic of an entire group of numbers



Presenting information• Verbal information—list or paragraph form

– A formal business report typically includes an introduction, the body of the report, conclusions, and recommendations

• Visual displays– Graphs, bar charts, pie charts

• Tabular displays– Verbal or numerical information presented in

columns and rows



Typical Visual Displays Used in Business Presentations


Typical Three-Column Table Used in Business Presentations


Seven Tips for Effective E-mail Communication


Telecommuting, virtual offices, and technology Virtual office—allows employees to work any place where

they have access to computers, software, and other technology that enables them to perform their normal work activities• Benefits

– Higher job satisfaction and increased productivity– Greater independence and flexible work hours– No commuting saves costs and time– Lower employee turnover– New employment opportunities for people who can’t/won’t

commute• Challenges

– Feelings of isolation/exploitation– Working too many hours– Lack of support from managers– Inability to access needed information

Improving Productivity with the Help of Computers and Technology (cont.)


Using Computers and the Internet to Obtain Information (cont.)

Creating web sites• Reflects the company image• Should be kept current• Most companies manage their sites internally but some pay

an outside hosting service to provide site management


Tips for Web Site Development


Top 10 Countries Ranked by% of Internet Users

Top 10 Countries with Highest Number of Internet Users

# Country or Region 2011 Est. Year 2000 Latest Data (% Population) % Users

1 China 1,336,718,015 22,500,000 485,000,000 36.30% 23.00%

2 United States 313,232,044 95,354,000 245,000,000 78.20% 11.60%

3 India 1,189,172,906 5,000,000 100,000,000 8.40% 4.70%

4 Japan 126,475,664 47,080,000 99,182,000 78.40% 4.70%

5 Brazil 203,429,773 5,000,000 75,982,000 37.40% 3.60%

6 Germany 81,471,834 24,000,000 65,125,000 79.90% 3.10%

7 Russia 138,739,892 3,100,000 59,700,000 43.00% 2.80%

8 United Kingdom 62,698,362 15,400,000 51,442,100 82.00% 2.40%

9 France 65,102,719 8,500,000 45,262,000 69.50% 2.10%

10 Nigeria 155,215,573 200,000 43,982,200 28.30% 2.10%

Source: Internet World Stats - http://www.internetworldstats.com/top20.htm

http://www.internetworldstats.com/asia.htm%23cn

http://www.internetworldstats.com/america.htm%23us

http://www.internetworldstats.com/asia.htm%23in

http://www.internetworldstats.com/asia.htm%23jp

http://www.internetworldstats.com/south.htm%23br

http://www.internetworldstats.com/europa.htm%23de

http://www.internetworldstats.com/europa2.htm%23ru

http://www.internetworldstats.com/europa.htm%23uk

http://www.internetworldstats.com/europa.htm%23fr

http://www.internetworldstats.com/africa.htm%23ng

http://www.internetworldstats.com/top20.htm


E-business (electronic business)—the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs through the facilities available on the Internet

Organizing e-business resources• Resources may be more specialized than in a

typical business• Outsourcing—the process of finding outside

vendors and suppliers that provide professional help, parts, or materials at a lower cost

Defining e-Business


Combining e-Business Resources


Satisfying needs online• The Internet has created new customer needs• E-business can satisfy those needs, as well as

traditional ones– Global access to information and entertainment– Virtually unlimited selection of products– Opportunities for interaction– Individually custom-tailored content

Satisfying Needs


Creating e-business profit• Increasing sales revenue• Revenue stream—source of revenue flowing

into a firm– Sales of merchandise online– Intelligent information systems to suggest

purchases to repeat online customers– Increased sales in physical stores because of

product information available online– Advertising on web pages– Subscription fees charged for access to online

services and content

Creating e-Business Profit


Creating e-business profit (cont.)• Reducing expenses

– Offering online services that:– Reduce transaction costs– Provide information– Provide customer assistance

– Reduces the costs of dealing with customers– Reduces the need for as many physical store

locations

Creating e-Business Profit (cont.)


Business model• A group of common characteristics and methods

of doing business to generate sales revenues and reduce expenses

Business-to-business (B2B) model• Firms that use the Internet mainly to conduct

business with other businesses– Facilitate sales transactions between businesses– Elicit bids and offers from suppliers and potential

suppliers; learn about the customer’s rules and procedures. Expensive to start and maintain but savings are significant.

Fundamental Models of e-Business


Business-to-consumer (B2C) model • Firms that focus on conducting business with

individual consumers• Success comes from understanding how the

customer behaves online to build good customer relationships

Fundamental Models of e-Business (cont.)


Planning for a New Internet Business or Building an Online Presence for an Existing Business


The Internet and e-business will continue to expand along with related computer technologies.

Internet growth potential• Opportunity: only about 1.8 billion of the world’s nearly

7 billion people use the Web.• Americans comprise 12 percent of all users.• Internet growth potential in the U.S. is limited since

73 percent of Americans already use it.• Projections indicate worldwide users will exceed

2.1 billion by 2012.• Social network site—a Web site that functions like an online

community of Internet users who share personal information, messages, photos, friends.

The Future of Computer Technology, the Internet, and e-Business


Ethical and legal concerns• Essentially the Internet is a new “frontier” without

borders and without much control by governments or other organizations.

• Ethics and social responsibility– Spamming– Log-file records– Data mining

• Internet crime– Malware– Computer virus

The Future of Computer Technology, the Internet, and e-Business (cont.)


What do e-business players read to keep up to date on other people, ideas, and trends in the fast-paced world of e-business?

• Wired: www.wired.com• Fast Company: www.fastcompany.com• The Industry Standard: www.thestandard.com• CNET News: www.news.com• ZDNet: www.zdnet.com

Using the Internet

http://www.wired.com/

http://www.fastcompany.com/

http://www.thestandard.com/

http://www.news.com/

http://www.zdnet.com/


Chapter Quiz

1. Data presented in a form useful for a specific purpose is

A. factual data.B. information.C. statistical data.D. a computer information base.E. a computer network.


Chapter Quiz

2. A(n) ___________ is a smaller version of the Internet for use within a firm.

2. WAN3. LAN4. intranet5. broadband6. ISP


Chapter Quiz

3. The term that refers to buying and selling activities conducted online is

3. Internet business.4. e-business.5. online sales.6. e-marketing.7. e-sales.


Chapter Quiz

4. Business firms that conduct business with other business firms are using a(n)

4. B2B approach. 5. B2C approach.6. profit revenue stream.7. marketing revenue stream.8. economic benefit revenue stream.

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Understanding Information and e-Business