4 Chapter Managing Information Technology and E-Business Objectives Summarize the role and impact of technology in the global economy. Specify how information is managed and explain a management information system. Describe the Internet and explore its main uses. Define e-business and discuss the e-business models. Identify the legal and social issues of information technology and e-business. Assess the opportunities and problems faced by an individual in an e-business and suggest a course of action. (IT) Information Technology The process and applications that create new methods to: o Solve problems o Perform tasks o Manage communication The Role and Impact of Technology in the Economy Technology relates to the application of knowledge, including the processes and procedures to solve problems, perform tasks, and create new methods to obtain desired outcomes. o Includes intellectual knowledge as well as the computer systems devised to achieve business objectives. Technology has been a driving force in the advancement of economic systems and the quality of life. o Increase intellectual knowledge o Achieve business objectives o Advancement of economic systems o Improving the quality of life The Impact of Technology on Consumers Technology changes the way consumers: o Plan and take vacations o Make purchases o Drive cars o Obtain entertainment The Impact of Technology on the Workplace Technology has: o Improved productivity o Improved efficiency o Reduced costs o Enhanced customer service
1
The Biggest Technology Challenge for Business Keeping pace with new information technology in new competitive environments Increasing Speed of Technology Acceptance IT Improves Global Access Global markets and foreign business professionals are now linked through telecommunication o Productivity has doubled in the last 10 years through "real time" access to people and markets Managing Information Data: o Numerical or verbal descriptions related to statistics or other items that have not been analyzed or summarized Knowledge: o An understanding of data gained through study or experience Information: o Data and knowledge that can be used in making decisions Management Information Systems MIS o Used for organizing and transmitting data into information that can be used in decision making o Breaks down time and location barriers Wireless communications Computers, personal data assistants, cell phones, pagers, and GPS positioning devices found in cars Collecting Data To be effective, an MIS must be able to: Collect data Store data Update data Process data Present information Database A collection of data stored in one place and accessible throughout the network The Internet and the World Wide Web Internet: o A global information system that links many computer networks together World Wide Web (www)
2
o A collection of interconnected web sites or pages of text, graphics, audio, and video within the Internet Intranets and Extranets Intranet: o A computer network similar to the Internet Only available to people inside an organization Extranet: o A network of computers that permits selected companies and other organizations to access the same information May allow collaboration and communication about the information How the Internet Works Internet Service Provider (ISP) o Provides access to the Internet through its own series of local networks How the Internet Works Leading Internet Activities Internet Use by Selected Country Internet Users Internet users worldwide in 2006 o More than 1.086 billion Expected growth rate o Asian-speaking countries (34.6 percent) o English-speaking countries (27.2 percent) o The European nations (23.8 percent) Usage growth between 2000 and 2006 o 200.9% Internet usage penetration in the U.S. is 69.3% Internet Users Women o 52 percent in the United States o 42 percent in Europe Children o One-fifth of American Internet users are between the of ages 2 and 17 Seniors o The fastest growing group of Internet users Internet Uses Communication Information Entertainment 3
E-business Emerging Technologies Cellular o The dominant technology for voice communications Wireless fidelity (Wi-Fi) networks o In the near future, experts expect Wi-Fi to link all sorts of device (i.e., lamps, stereos, appliances) Wireless mesh networks o Eliminates centralized failure Radio Frequency Identification (RFID) systems o Use radio waves to identify and track resources and products within the distribution channel Uses for Digital Marketing The Nature of E-Business E-business (E-commerce) utilizes the Internet to carry out marketing activities o These activities include communicating and fostering exchanges and relationships with customers, suppliers, and the public o Reduces the costs of business and customer transactions o Restructures the way work is done Top Seven Reasons for Buying Online Save time by not going to store Can shop when stores are closed Avoid crowds Might be able to find better prices Can find products online more easily Find products not available in stores Easier to compare prices E-Commerce by Ethnicity E-Business Models Business-to-Business (B-to-B) o Use of the Internet for transactions and communications between organizations Business-to-Consumer o Delivery of products and services directly to individual consumers through the Internet Consumer-to-Consumer o Market in which consumers market goods and services to each other through the Internet
4
Customer Relationship Management CRM focuses on using information about customers to create strategies that develop and sustain desirable long-term customer relationships Legal and Social Issues of IT and E-Business Privacy Identity Theft Protection of Intellectual Property Protection of Copyrights Privacy Privacy has become one of Web users' biggest concerns Many sites follow users' online tracks by storing a cookie on their computers o Cookies permit Web site operators to track a user o The potential for misuse has left many consumers uncomfortable with this technology Spam Unsolicited commercial e-mail (UCE) has become a major source of discontent with the Internet o Many Internet users believe spam violates their privacy and steals their resources o Many companies despise spam because it costs them $10 billion a year in lost productivity, new equipment, antispam filters, and manpower o Spam accounts for more than 50 percent of corporate-mail Common Reactions to Spam Identity Theft Criminals obtain personal information that allows them to impersonate someone else to use their credit o Obtain financial accounts o Make purchases Most Common Complaints Related to Identity Theft Credit card fraud Utility fraud Bank fraud Employment-related fraud Government document fraud Loan fraud Intellectual Property and Copyrights Intellectual property consists of the ideas and creative materials developed to solve problems, carry out applications, and educate
5
o Generally protected via patents and copyrights Copyright infringement is the unauthorized execution of the rights reserved by a copyright holder o The Digital Millennium Copyright Act (DMCA) protects copyrighted materials on the Internet Financial Costs of Cyberattacks Taxing the Internet An increasingly controversial issue in e-business is whether states should be able to levy a sales tax on Internet sales The Dynamic Nature of Information Technology and E-Business Today, technology presents a tremendous range of potential applications that can improve the efficiency of employees and companies while providing better service to customers Information Technology and E-Business Pays Solve the Dilemma As a consultant, what would you do to help Paul figure out what went wrong with IOWatch? What ideas for new freeware can you give Paul? What potential uses will the new software have? How will it make money?
6