Understanding Information and e-Business
Chapter
14
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 1
What Is a Management Information System?

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 2
Management Information System (MIS)
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 3
Management Information System (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 4
How Do Employees Use a Management
Information System?

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– Outdated or incomplete data usually yield inaccurate information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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 5

Every MIS must be tailored
to the organization it serves
and must perform five
functions
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 6
Class Exercise

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?
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 7
How Do Employees Use a Management
Information System? (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 8
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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 9
How Do Employees Use a Management
Information System? (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 10

Typical Visual
Displays Used
in Business
Presentations
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Chapter 14 | Slide 11
Typical Three-Column Table Used in
Business Presentations
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Chapter 14 | Slide 12
Seven Tips for Effective E-mail Communication
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 13
Improving Productivity with the Help of
Computers and Technology (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 14
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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 15
Tips for Web Site Development
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Chapter 14 | Slide 16
Top 10 Countries Ranked by
% of Internet Users
Top 10 Countries with Highest Number of Internet Users
#
1
2
3
4
5
6
7
8
9
10
Country or Region
China
United States
India
Japan
Brazil
Germany
Russia
United Kingdom
France
Nigeria
2011 Est.
Year 2000
Latest Data
(% Population)
% Users
1,336,718,015
22,500,000
485,000,000
36.30%
23.00%
313,232,044
95,354,000
245,000,000
78.20%
11.60%
1,189,172,906
5,000,000
100,000,000
8.40%
4.70%
126,475,664
47,080,000
99,182,000
78.40%
4.70%
203,429,773
5,000,000
75,982,000
37.40%
3.60%
81,471,834
24,000,000
65,125,000
79.90%
3.10%
138,739,892
3,100,000
59,700,000
43.00%
2.80%
62,698,362
15,400,000
51,442,100
82.00%
2.40%
65,102,719
8,500,000
45,262,000
69.50%
2.10%
155,215,573
200,000
43,982,200
28.30%
2.10%
Source: Internet World Stats - http://www.internetworldstats.com/top20.htm
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 17
Defining e-Business

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 18
Combining e-Business Resources
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Chapter 14 | Slide 19
Satisfying Needs

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 20
Creating e-Business Profit

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 21
Creating e-Business Profit (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 22
Fundamental Models of e-Business

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.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 23
Fundamental Models of e-Business (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 24
Planning for a New Internet Business or Building
an Online Presence for an Existing Business
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Chapter 14 | Slide 25
The Future of Computer Technology,
the Internet, and e-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.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 26
The Future of Computer Technology,
the Internet, and e-Business (cont.)

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 27
Using the Internet

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
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 28
Chapter Quiz
1. Data presented in a form useful for a specific
purpose is
A.
B.
C.
D.
E.
factual data.
information.
statistical data.
a computer information base.
a computer network.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 29
Chapter Quiz
2. A(n) ___________ is a smaller version of the
Internet for use within a firm.
2.
3.
4.
5.
6.
WAN
LAN
intranet
broadband
ISP
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 30
Chapter Quiz
3. The term that refers to buying and selling
activities conducted online is
3.
4.
5.
6.
7.
Internet business.
e-business.
online sales.
e-marketing.
e-sales.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 31
Chapter Quiz
4. Business firms that conduct business with
other business firms are using a(n)
4.
5.
6.
7.
8.
B2B approach.
B2C approach.
profit revenue stream.
marketing revenue stream.
economic benefit revenue stream.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 14 | Slide 32