Chapter 17
Managing Information
MGMT
Chuck Williams
Designed & Prepared by
B-books, Ltd.
1
Moore’s Law
2
Why Information Matters
After reading these sections,
you should be able to:
1. explain the strategic importance of
information.
2. describe the characteristics of useful
information (i.e., its value and costs).
3
Data versus Information
• Raw data = facts + figures
• Information = useful data
that influences choices
4
Strategic Importance of
Information
First-Mover
Advantage
Sustaining a
Competitive
Advantage
1
5
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
6
Cable versus DSL
Cable companies
have invested $90
billion over the last
decade to create a
first-mover
advantage in
delivering highspeed Internet.
7
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.
8
Sustaining a Competitive
Advantage
NO
Does the information
technology (IT)
create
YES
value?
Competitive
Disadvantage
NO
Is the IT different
across
competing
YES
firms?
Competitive
Parity
NO
1.2
Is it difficult
for another firm
to create or buy
the IT?
Temporary
Competitive
Advantage
YES
Sustained
Competitive
Advantage
9
Characteristics of Useful Information
•
•
•
•
•
•
•
Accurate
Verifiable
Timely
Organized
Accessible
Relevant
Complete
2
10
Costs of Useful Information
•
•
•
•
•
Acquisition
Processing
Storage
Retrieval
Communication Costs
2
11
Getting and Sharing
Information
After reading these sections,
you should be able to:
3. explain the basics of capturing, processing,
and protecting information.
4. describe how companies can access and share
information and knowledge.
12
Capturing Information
Manual
Bar Codes
Electronic
Radio Frequency
Identification Tags
Electronic Scanners
3.1
Optical Character
Recognition
13
Processing Information: Data Mining
Supervised
Data Mining
Data
Warehouse
Unsupervised
Data Mining
Affinity
Patterns
Sequence
Patterns
Predictive
Patterns
Data
Clusters
3.2
14
Unsupervised Data Mining
Affinity
Patterns
Two or more database elements
occur together significantly
Sequence
Patterns
One of the elements
precedes the other
Predictive
Patterns
Helps identify database elements
that are different
Data
Clusters
Three or more database elements
occur together
3.2
15
Protecting Information
 Authentication
 Authorization
 Two-factor authentication
 Firewalls
 Antivirus software
 Data encryption
 Virtual private networks
 Secure Sockets Layer (SSL) encryption
3.3
16
Protecting Information

Firewall - Security system consisting of hardware
and/or software that prevents unauthorized intrusion
17
Protecting Information
• What is a biometric device?
 Authenticates person’s
identity using personal
characteristic

Fingerprint, hand geometry, voice,
signature, and iris
18
Next
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 Access
and
Information Sharing
External Access
and
Information Sharing
4
Sharing of
Knowledge and
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 Data Interchange
Extranets
Web Services
Internet
4.2
26
Benefits of External Access
and Sharing
Reduced costs
Increased productivity
Reduced data entry errors
Improved customer service
Faster communications
4.2
27
Electronic Data Interchange (EDI)
Electronic
Data
Interchange
When two companies convert their
purchase and ordering information
to a standardized format to enable
the direct electronic transmission of that
information from one computer system
to the other.
4.2
28
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
29
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
30
Sharing Knowledge and Expertise
Decision
Support
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
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 base—
combined subject
knowledge and
experiences of
human experts
inference rules—set
of logical judgments
applied to the
knowledge base
32
Sharing Knowledge and Expertise
• What is an example of an expert system?
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.
33