Information Technology and

E-Business
CHAPTER 20
 Learning Objectives

 Explain the importance of information

technology for organizations and discuss
specific ways in which IT has changed the
manager’s job.
 Describe new developments in information
technology and identify the different types of IT
systems used in organizations.
 Tell how information systems support daily
operations and decision making.
 Summarize the key components of e-business
and explain e-business strategies.

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 Learning Objectives (contd.)

 Describe enterprise resource planning and

customer relationship management systems.
 Explain the importance of knowledge
management and business intelligence in
today’s organizations.

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 Technology and E-Business
 The strategic use of information
technology is one of the defining aspects
of organizational success in today’s world
 Many companies in industries from
manufacturing to entertainment use IT to
Get closer to customers
Enter new markets
Streamline business processes

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 Information Technology

 The hardware, software,

telecommunications, database
management, and other
technologies used to store,
process, and distribute
information

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 Implications of IT for Managers
Exhibit 20.1

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 Data versus Information

Data- Raw, non-summarized , and

unanalyzed facts and figures

Information- Data that have been

converted into a meaningful and
useful context for the receiver

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 Types of Information Systems

Operations Information Systems

 Transaction-processing systems
 Process control systems
 Office automation systems

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 Types of Information Systems

 Management Information Systems

 Information-
reporting systems
 Decision support systems
 Groupware
 Executive information
systems

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 Basic Elements of Management
Information Systems Exhibit 20.3

Corporate Decision
and Support
External Systems
Databases

Operations Management Executive

Information Information Information
Systems Systems Systems

Group
Source: Adapted from Ralph M. Stair and
George W. Reynolds, Principles of Reporting Decision
Information Systems: A Managerial
Approach, 4th ed. (Cambridge, Mass.: Systems Support
Course Technology, 1999), 391. System
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 Internet and E-Business

 Internet = global collection of

computer networks linked
together
 World Wide Web = (WWW) a
collection of central servers for
accessing information on the
internet

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 Internet and E-Business

 E-business = any business that

takes place by digital processes
over a computer network rather
than in physical space
 E-commerce = business
exchanges that occur
electronically

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 Internet Communication Systems

 Intranet = an internal communications

system that uses the technology and
standards of the Internet but is
accessible only to people within the
organization
 Extranet = external communicati0ns
system that uses the Internet and is
shared by two or more organizations

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 E-Business Strategies

 Strategy = Market Expansion

● Internet division allows a company to
establish direct links to customers
and expand into new markets
● Organization can provide access
around the clock to a worldwide
market and reach new customers

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 E-Business Strategies
Strategy = Productivity and Efficiency

In-House Internet Division

Spin-Off

Strategic Partnerships

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 Strategies for Engaging
Clicks with Bricks
Exhibit 20.6
Competitive Business
Environment

E-Business Market expansion Increased productivity

Strategy and revenue growth and cost efficiency

•Add new markets •Immediate short-term effects

Benefits •Integrate bricks and •Measurable productivity impact
clicks •Driven by internal processes
•Increase market size

In-house division or In-house division or

Implementation partnership partnership

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 E-Marketplaces

 Biggest boom in e-commerce is in

business-to-business (B2B) transactions
– $2.4 trillion and growing in 2004
– B2B marketplaces = intermediary sets up an
electronic marketplace where buyers and
sellers meet, acting as a hub for B2B
commerce – online portal
– EBay has become a B2B portal

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 B2B Marketplace Model
Exhibit 20.7 Many
sellers offer
products
and
Sellers services
through an
intermediary
to many
buyers
Online portal or
“hub” for B2B
marketplace

Buyers
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 E-Business Information Management
Enterprise Resource Planning Systems

ERP, integrate and optimize all the

various business processes across the
entire firm
•Top ERP vendors today host the applications
themselves and offer their products through
Internet portals
•Customers access the applications with
standard browsers

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 Customer Relationship Management

 Systems that help companies track

customers’ interactions with the
firm and allow employees to call up
information on past transactions

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 Knowledge Management

 Process of systematically gathering

knowledge, making it widely
available throughout the
organization, and fostering a culture
of learning

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 Knowledge Management
Technologies that facilitate knowledge management

 Data warehousing
 Business intelligence
 Knowledge management portals

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