Chapter 17 Managing Information MGMT Chuck Williams Designed & Prepared by B-books, Ltd Moore’s Law 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) Data versus Information • Raw data = facts + figures • Information = useful data that influences choices Strategic Importance of Information First-Mover Advantage Sustaining a Competitive Advantage First-Mover Advantage First-Mover Advantage The strategic advantage that companies earn by being the first to use new information technology to lower costs or to differentiate a product 1.1 Cable versus DSL Cable companies have invested $90 billion over the last decade to create a first-mover advantage in delivering highspeed Internet 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 Sustaining a Competitive Advantage NO Does Doesthe theinformation information technology technology(IT) (IT) create create YES value? value? Competitive Competitive Disadvantage Disadvantage NO IsIsthe theIT ITdifferent different across across competing competing YES firms? firms? Competitive Competitive Parity Parity 1.2 NO IsIsititdifficult difficult for another for anotherfirm firm to tocreate createor orbuy buy the theIT? IT? Temporary Temporary Competitive Competitive Advantage Advantage YES Sustained Sustained Competitive Competitive Advantage Advantage Characteristics of Useful Information • • • • • • • Accurate Verifiable Timely Organized Accessible Relevant Complete 10 Protecting Information • 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 19 Next Next Tips for Protecting Data Beyond the Book • 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 20 Accessing and Sharing Information and Knowledge Internal InternalAccess Access and and Information Information Sharing Sharing External ExternalAccess Access and and Information Information Sharing Sharing Sharing Sharing of of Knowledge Knowledge and and Expertise Expertise 21 Executive Information System (EIS) • Uses internal and external data • Used to monitor and analyze organizational performance • Must provide accurate, complete, relevant, and timely information to managers 4.1 22 Intranets • Private company networks • Allow employees to access, share, and publish information • A firewall permits only authorized internal access 4.1 23 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 24 Corporate Portals Corporate Portals A hybrid of executive information systems and intranets that allow managers and employees to use a Web browser to gain access to customized company information and to complete specialized transactions 4.1 25 External Access and Sharing Electronic Electronic Data Data Interchange Interchange Extranets Extranets Web Web Services Services Internet Internet 4.2 26 Benefits of External Access and Sharing Reduced Reduced costs costs Increased Increased productivity productivity Reduced Reduced data data entry entry errors errors Improved Improved customer customer service service Faster Faster communications communications 4.2 27 Electronic Data Interchange (EDI) Electronic Electronic Data Data Interchange Interchange When Whentwo twocompanies companiesconvert converttheir their purchase purchaseand andordering orderinginformation information to toaastandardized standardizedformat formatto toenable enable the thedirect directelectronic electronictransmission transmissionof ofthat that information informationfrom fromone onecomputer computersystem system to tothe theother other 4.2 28 Extranet Extranet Extranet Allows Allowscompanies companiesto toexchange exchange information informationand andconduct conducttransactions transactions with withoutsiders outsidersby byproviding providingthem themdirect, direct, Web-based Web-basedaccess accessto toauthorized authorizedparts partsof of aacompany’s company’sintranet intranetor orinformation information system system 4.2 29 Web Services Web Web Services Services Using Usingstandardized standardizedprotocols protocolsto todescribe describe data datafrom fromone onecompany companyin insuch suchaaway way that thatthose thosedata datacan canautomatically automaticallybe be read, read,understood, understood,transcribed, transcribed,and and processed processedby bydifferent differentcomputer computer systems systemsin inanother anothercompany company 4.2 30 Sharing Knowledge and Expertise Decision Decision Support Support System System Helps Helpsmanagers managersto tounderstand understandspecific specific kinds kindsof ofproblems problemsand andpotential potential solutions, solutions,and andto toanalyze analyzethe theimpact impactof of different differentdecision decisionoptions optionsusing using“what “whatif” if” scenarios scenarios Expert Expert System System An Aninformation informationsystem systemthat thatcontains containsthe the specialized specializedknowledge knowledgeand anddecision decision rules rulesused usedby byexperts expertsso sothat thatnonexperts nonexperts can candraw drawon onthis thisknowledge knowledgebase baseto to make makedecisions decisions 4.3 31 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 knowledge base— base— combined combined subject subject knowledge knowledge and and experiences experiences of of human human experts experts inference inference rules—set rules—set of of logical logical judgments judgments applied applied to to the the knowledge knowledge base base 32 Sharing Knowledge and Expertise • What is an example of an expert system? Step A user selects his or her gender Step Select the location on the body where the problem is being experienced Step Select the type of pain Step Review the possible diagnosis Step Select other information about the problem 33 ... information informationand andconduct conducttransactions transactions with withoutsiders outsidersby byproviding providingthem themdirect, direct, Web-based Web-basedaccess accessto toauthorized... automaticallybe be read, read,understood, understood,transcribed, transcribed,and and processed processedby bydifferent differentcomputer computer systems systemsin inanother anothercompany company 4.2... containsthe the specialized specializedknowledge knowledgeand anddecision decision rules rulesused usedby byexperts expertsso sothat thatnonexperts nonexperts can candraw drawon onthis thisknowledge knowledgebase