Using Advanced Information Technology to Increase Performance

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Using Advanced InformationTechnology to Increase
Performance

• chapter eighteen

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Learning Objectives

1. Differentiate between data and information, and
   list the attributes of useful information
2. Describe three reasons why managers must have
   access to information to perform their tasks and
   roles effectively.
3. Describe the computer hardware and software
   innovations that have created the IT revolution.
4. Differentiate among seven performance-enhancing
   kinds of management information systems.
5. Explain how IT is helping managers build
   strategic alliances and network structures to
   increase efficiency and effectiveness.

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Information and the Managers Job

• Data
• Raw, unsummarized, and unanalyzed facts.

• Information
• Data that are organized in a meaningful fashion

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Attributes of Useful Information
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Factors Affecting the Usefulness of Information
Figure 18.1
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What is Information Technology?

• Information Technology
• set of methods or techniques for acquiring,
  organizing, storing, manipulating, and
  transmitting information

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What is Information Technology?

• Management Information System
• specific form of IT that managers utilize to
  generate the specific, detailed information they
  need to perform their roles effectively

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What is Information Technology?

• Managers need information for three reasons
• To make effective decisions
• To control the activities of the organization
• To coordinate the activities of the organization

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Information and Control

• Managers achieve control by
• Establishing measurable goals
• Measuring actual performance
• Comparing actual performance with goals
• Evaluating results and taking any corrective
  action

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Information and Coordination

• Coordination problems that managers face in
  managing global supply chains are increasing
• Managers have adopted sophisticated IT that helps
  them coordinate the flow of materials,
  semifinished goods, and finished goods throughout
  the world

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The Effects of Advancing IT

• IT helps create new product opportunities that
  managers and their organizations can take
  advantage of
• IT creates new and improved products that reduce
  or destroy demand for older, established products

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IT and the Product Life Cycle

• Product Life Cycle
• Refers to the way in which the demand for a
  product changes in a predictable way over time

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A Product Life Cycle
Figure 18.2
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A Product Life Cycle

• Embryonic stage
• Product has yet to gain widespread acceptance
• Customers are unsure what a product has to offer
• Growth stage
• Many consumers are buying the product for the
  first time
• Demand increases rapidly

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A Product Life Cycle

• Mature stage
• Market peaks because most customers have already
  bought the product
• Demand is typically replacement demand
• Decline stage
• Advancing IT leads to the development of a more
  advanced product making the old one obsolete

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Computer Networks

• Network
• Interlinked computers that exchange information.
• Servers are powerful computers that relay
  information to client computers connected on a
  Local Area Network (LAN).

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A Four-Tier Information System with Cloud
Computing
Figure 18.3
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Types of Management Information Systems

• Operating system software
• software that tells computer hardware how to run

• Applications software
• software designed for a specific task or use

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The Organizational Hierarchy

• Traditionally, managers have used the
  organizational hierarchy as the main system for
  gathering information necessary to make decisions
  and coordinate and control activities

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The Organizational Hierarchy

• Drawbacks
• Can reduce timeliness of information
• Reduces quality of information
• Tall structure can make for an expensive
  information system

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Six Computer-Based Management Information Systems
Figure 18.4
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Types of Information Systems

• Transaction Processing Systems
• A management information system designed to
  handle large volumes of routine, recurring
  transactions.
• Were the first computer-based information systems
  handling billing, payroll, and supplier payments.

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Types of Information Systems

• Operations Information Systems
• A management information system that gathers,
  organizes, and summarizes comprehensive data in a
  form that managers can use in their nonroutine
  coordinating, controlling, and decision-making
  tasks.
• Can help managers with non-routine decisions such
  as customer service and productivity.

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Types of Information Systems

• Decision Support Systems
• An interactive computer-based management
  information system that managers can use to make
  nonroutine decisions.
• New productive capacity, new product development,
  launch a new promotional campaign, enter a new
  market or expand internationally

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Types of Information Systems

• Executive Support System
• A sophisticated version of a decision support
  system that is designed to meet the needs of top
  managers.
• Group Decision Support System
• An executive support system that links top
  managers so that they can function as a team.

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Expert Systems and Artificial Intelligence

• Artificial Intelligence
• Behavior by a machine that, if performed by a
  human being, would be called intelligent
• Already possible to write programs that can solve
  problems and perform simple tasks

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Expert Systems and Artificial Intelligence

• Expert Systems
• A management information system that employs
  human knowledge, embedded in a computer, to solve
  problems that ordinarily require human expertise.

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Enterprise Resource Planning Systems

• Enterprise Resource Planning Systems
• Multi-module application software packages that
  coordinate the functional activities necessary to
  move products from the design stage to the final
  customer stage.

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Enterprise Resource Planning Systems

1. Help each individual function improve its
   functional-level skills
2. Improve integration among all functions so that
   they work together to build a competitive
   advantage for the company

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Types of Information Systems

• E-Commerce Systems
• Trade that takes place between companies, and
  between companies and individual customers, using
  IT and the Internet

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Types of E-Commerce
Figure 18.5
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E-Commerce Systems

• Business-to-business (B2B)
• trade that takes place between companies using IT
  and the Internet to link and coordinate the value
  chains of different companies

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E-Commerce Systems

• B2B marketplace
• Internet-based trading platform set up to connect
  buyers and sellers in an industry

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E-Commerce Systems

• Business-to-customer (B2C)
• trade that takes place between a company and
  individual customers using IT and the Internet

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Example Adorama.com

• Adorama.com sells cameras and accessories through
  their web site as well as a physical store in New
  York City
• They also provide online training in photography,
  lighting and composition

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Strategic Alliances, B2B Network Structures, and
IT

• Strategic Alliances
• An agreement in which managers pool or share
  their organizations resources and know-how with
  a foreign company, and the two organizations
  share the rewards and risks of starting a new
  venture.

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Strategic Alliances, B2B Network Structures, and
IT

• B2B network structure
• A series of global strategic alliances that an
  organization creates with suppliers,
  manufacturers, and distributors to produce and
  market a product.

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Flatter Structures and HorizontalInformation
Flows

• Boundaryless Organization
• An organization whose members are linked by
  computers, faxes, computer-aided design systems,
  and video teleconferencing and who rarely, if
  ever, see one another face-to-face.

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Flatter Structures and HorizontalInformation
Flows

• Knowledge management system
• A company specific virtual information system
  that systematizes the knowledge of its employees
  and facilitates the sharing and integrating of
  their expertise.

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Video Case Death of the Business Trip

• What are the benefits of new technologies like
  TelePresence?
• What is the impact of TelePresence on
  organizations?
•  What are the limitations of technologies like
  TelePresence?