07 Managing Technology and Information 11 - 14

Business Essentials
Twelfth Edition
Topic 7
Managing
Technology and
Information
Copyright © 2019, 2016, 2013 Pearson Education, Inc. All Rights Reserved.
Learning Objectives (1 of 2)
1. Discuss the impacts information technology (IT)
has had on the business world.
2. Identify the IT resources businesses have at
their disposal and how these resources are used.
3. Describe the role of information systems, the
different types of information systems, and how
businesses use such systems.
Learning Objectives (2 of 2)
4. Identify the threats and risks information
technology poses on businesses.
5. Describe the ways in which businesses protect
themselves from the threats and risks information
technology poses.
• Businesses invest in IT to achieve six important business
objectives.
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival
Operational Excellence
• Improved efficiency results in higher
profits.
• Information systems and technologies
help improve efficiency and productivity.
 Example: Wal-Mart
▪ Power of combining information systems and best business practices to
achieve operational efficiency—and over $400 billion in sales in 2008
▪ Most efficient store in world as result of digital links between suppliers

and stores
New Products, Services, and Business
Models
• Information systems and technologies enable

firms to create new products, services, and
business models.
• Business model: how a company produces, delivers,
and sells its products and services
• Example: Music industry

• Drastic changes in business models in recent years
• Apple: Successful innovations—iPod, iPhone, and so
on
Customer and Supplier Intimacy
• Customers who are served well become repeat
customers who purchase more.
• Mandarin Oriental hotel
• Uses IT to foster an intimate relationship with its customers, keeping track of
preferences, and so on
• Close relationships with suppliers result in

lower costs.
• JCPenney
• IT to enhance relationship with supplier in Hong Kong
Improved Decision Making
• If managers rely on forecasts, best guesses,
and luck, they will misallocate employees,
services, and inventory.
• Real-time data improves ability of managers to
make decisions.
• Verizon: Web-based digital dashboard to update
managers with real-time data on customer complaints,
network performance, and line outages
Competitive Advantage
• Often results from achieving previous

business objectives
• Advantages over competitors:
• Charging less for superior products, better performance,
and better response to suppliers and customers
• Toyota: uses TPS (Toyota Production System) to
achieve high levels of efficiency and quality
Survival
• Businesses may need to invest in information
systems out of necessity; simply the cost of
doing business.
• Keeping up with competitors
• Citibank’s introduction of ATMs
• Federal and state regulations and reporting
requirements
• Toxic Substances Control Act and the Sarbanes-Oxley Act
IT Impacts (1 of 4)
• Information Technology (IT)
– various appliances and devices for creating, storing,
exchanging, and using information in diverse modes,
including visual images, voice, multimedia, and
business data
• E-commerce
– use of the Internet and other electronic means for
retailing and business-to-business transactions
IT Impacts (2 of 4)
• Creating Portable Offices
– providing remote access to instant information
• Enabling Better Service
– coordinating remote deliveries
• Creating Leaner, More Efficient Organizations
– allowing more work and customer satisfaction to be
accomplished with fewer people
• Enabling Increased Collaboration
– using collaboration software and other IT
communication devices
IT Impacts (3 of 4)
• Enabling Global Exchange
– fostering collaboration on a worldwide scale
• Improving Management Processes
– using enterprise resource planning (ERP) to change
the nature of the management process
• Providing Flexibility for Customization
– creating new manufacturing capabilities that offer
customers greater variety (mass customization) and
faster delivery cycles
IT Impacts (4 of 4)
• Providing New Business Opportunities
– creating entirely new businesses where none existed
before
• Improving the World and Our Lives
– advancing medical and diagnostic techniques
– Internet
Hardware and Software
• Hardware • Software
– physical components of – programs that tell the
a computer network, computer how to
such as keyboards, function, what
monitors, system units, resources to use, how
and printers to use them, and
application programs
for specific activities
Productivity and Business Software (1 of 7)
• Lets you perform various tasks required at home,
school, and business
– Proprietary (Microsoft Office and Apple iWork)
– Installed: Open Source (LibreOffice)
– Web-Based (Microsoft Office Online, Google Docs, Zoho,
and ThinkFree
Productivity and Business Software
Productivity Software (2 of 7)
• Word processing software
– Create and edit
documents for:
▪ Research papers
▪ Class notes
▪ Résumés
– Program Examples
▪ Microsoft Word
▪ Writer
• Spreadsheet software
– Performs calculations and numerical analyses
▪ Text
▪ Values and dates
▪ Formulas
▪ Functions
– Examples
▪ Microsoft Excel
▪ OpenOffice Calc
• Presentation software
– Tips for designing good
presentations
▪ Use images
▪ Be careful with color
▪ Use bullets for key points
▪ Consider font size and style
▪ Keep animation and background audio
to a minimum
• Database software
– Store and organize data
– Fields -> Records -> Tables
• Note-Taking software
–OneNote
–Evernote
• Personal Information Manager Software
– Manage e-mail, contacts, calendars, and tasks
– Web-based PIMs
▪ Yahoo!
▪ Google
– Other options
▪ Toodledo
▪ OmniFocus. Mac version
Information Systems: Harnessing the
Competitive Power of IT
• Information System (IS)
– system that uses IT resources to convert data into
information and to collect, process, and transmit that
information for use in decision making
• Data
– raw facts and figures that, by themselves, may not
have much meaning
• Information
– meaningful, useful interpretation of data
Leveraging Information Resources: Data
Warehousing and Data Mining
• Information Systems Managers
– managers who are responsible for the systems used
for gathering, organizing, and distributing information
• Data Warehousing
– the collection, storage, and retrieval of data in
electronic files
• Data Mining
– the application of electronic technologies for searching,
sifting, and reorganizing pools of data to uncover useful
information
Information Systems for Knowledge
Workers
• Knowledge Information System
– information system (IS) that supports knowledge
workers by providing resources to create, store, use,
and transmit new knowledge for useful applications
Information Systems for Managers
• Management Information System (MIS)
– computer system that supports managers by providing
information—reports, schedules, plans, and budgets—
that can be used for making decisions
• Decision Support System (DSS)
– interactive system that creates virtual business models
for a particular kind of decision and tests them with
different data to see how they respond
IT Risks and Threats (1 of 3)
• Hacker
– cybercriminal who gains unauthorized access to a
computer or network, either to steal information,
money, or property or to tamper with data
– DoS attacks, wireless mooching
• Identity Theft
– unauthorized use of personal information (such as
Social Security number and address) to get loans,
credit cards, or other monetary benefits by
impersonating the victim
– phishing, pharming
• Intellectual Property
– something produced by the intellect or mind that has
commercial value
• Spyware
– program unknowingly downloaded by users that
monitors their computer activities, gathering e-mail
addresses, credit card numbers, and other information
that it transmits to someone outside the host system
• Spam
– junk e-mail sent to a mailing list or a newsgroup
IT Protection Measures (1 of 2)
• Firewall
– security system with special software or hardware
devices designed to keep computers safe from hackers
• Anti-Virus Software
– product that protects systems by searching incoming e-
mails and data files for “signatures” of known viruses
and virus-like characteristics
IT Protection Measures (2 of 2)
• Encryption System
– software that assigns an e-mail message to a unique
code number (digital fingerprint) for each computer so
only that computer, not others, can open and read the
message
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Business Essentials

▪ Most efficient store in world as result of digital links between suppliers

• Information systems and technologies enable

• Example: Music industry

• Close relationships with suppliers result in

• Often results from achieving previous

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