MIS

1
THE DIGITAL FIRM ELECTRONIC COMMERCE AND
ELECTRONIC BUSINESS
2
Internet Technology and The Digital Firm

• Information technology infrastructure Provides a
  universal and easy-to-use set of technologies and
  technology standards that can be adopted by all
  organizations
• Direct communication between trading partners
  Disintermediation removes intermediate layers,
  streamlines process

3
Internet Technology and the Digital Firm

• Round-the-clock service Web sites available to
  consumers 24 hours a day
• Extended distribution channels Outlets created
  for attracting customers who otherwise would not
  patronize
• Reduced transaction costs Costs of searching for
  buyers, sellers, etc. reduced

4
New Business Models and Value Propositions

• Business Model
• Defines an enterprise
• Describes how the enterprise delivers a product
  or service
• Shows how the enterprise creates wealth

5
The Changing Economies of Information

• Information asymmetry One party in a transaction
  has more information than the other
• Increases richness Depth and detail of
  information
• Increases reach Number of people contacted

6
Internet Business Models

• Information broker Provide info on products,
  pricing, etc.
• Transaction broker Buyers view rates, terms from
  various sources
• Online Marketplace Concentrates information from
  several providers
• Content provider Creates revenue through
  providing client for a fee, and advertising

7
Internet Business Models

• On-line service provider Provides service,
  support for hardware, software products
• Virtual community Chat room, on-line meeting
  place
• Portal Initial point of entry to Web,
  specialized content, services
• Virtual storefront Sells goods, services on-line

8
Internet Business Models

• Syndicator Aggregate information from several
  sources sold to other companies
• Auction Electronic clearinghouse products,
  prices, change in response to demand
• Dynamic pricing real-time interactions between
  buyers and sellers determine worth of items
• Banner ad Graphic advertising display, linked to
  the advertisers Web site

9
ELECTRONIC COMMERCE
Categories of Electronic Commerce

• Business-to-customer (B2C) Retailing of products
  and services directly to individual customers
• Business-to-business (B2B) Sales of goods and
  services among businesses
• Consumer-to-consumer (C2C) Individuals use Web
  for private sales or exchange

10
ELECTRONIC COMMERCE
Business-To-Consumer

• Customer-centered retailing Closer, yet more
  cost-effective relationship with customers
• Web sites Provide information on products,
  services, prices, orders

11
ELECTRONIC COMMERCE
Business-To-Consumer

• Disintermediation The removal of organizations
  or business process layers responsible for
  certain intermediary steps in a value chain
• Reintermediation The shifting of the
  intermediary role in a value chain to a new source

12
ELECTRONIC COMMERCE
Benefits of Disintermediation to the Consumer
13
ELECTRONIC COMMERCE
Interactive Marketing and Personalization

• Web personalization
• Benefits of using individual sales people
• Dramatically lower costs

14
ELECTRONIC COMMERCE
M-Commerce and Next Generation Marketing

• Mobile commerce (m-commerce)
• Wireless devices used to conduct both
  business-to-consumer and business-to-business
  e-commerce transactions over the Internet
• Extend personalization by delivering new
  value-added services directly to customers at any
  time and place

15
ELECTRONIC COMMERCE
Customer Personalization
16
ELECTRONIC COMMERCE
Business-To-Business Electronic Commerce

• Automation of purchase, sale transactions from
  business to business
• Private industrial networks Coordination between
  companies for efficient supply chain management
  and collaborative activities
• Electronic hubs On-line marketplaces,
  point-to-point connections, integrated information

17
ELECTRONIC COMMERCE
A Private Industrial Network
18
ELECTRONIC COMMERCE
A Net Marketplace
19
ELECTRONIC COMMERCE

• Exchanges Third-party net marketplace
• Primarily transaction oriented
• Connects buyers and suppliers for spot purchasing

20
ELECTRONIC COMMERCE
Electronic Commerce Payment Systems
21
ELECTRONIC COMMERCE
Electronic Commerce Information Flows
22
ELECTRONIC BUSINESS AND THE DIGITAL FIRM
How Intranets Support Electronic Business

• Benefits
• Functional applications
• Supply chain management

23
ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Benefits of Intranets

• Connectivity accessible from most computing
  platforms
• Can be tied to internal corporate systems and
  core transaction databases
• Can create interactive applications
• Scalable to larger or smaller computing platforms

24
ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Benefits of Intranets

• Easy-to-use, universal Web interface
• Low start-up costs
• Richer, more responsive information environment
• Reduced information distribution costs

25
ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Functional Applications of Intranet

• Finance and accounting
• Human resources
• Sales and marketing
• Manufacturing and production

26
ELECTRONIC BUSINESS AND THE DIGITAL FIRM
Functional Applications of Intranets
27
MANGEMENT CHALLENGES OPPORTUNITIES

• Unproven business models
• Business process change requirements
• Channel conflicts
• Legal issues
• Security and privacy

28
TELECOMMUNICATIONS AND NETWORKS
29
THE TELECOMMUNICATIONS REVOLUTION

• Telecommunications Communication of information
  by electronic means
• The marriage of computers and communications The
  1996 Telecommunications Deregulation and Reform
  Act
• The Information Superhighway High-speed digital
  telecommunications networks, accessible by the
  general public

30
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Telecommunications System Components

• Computers to process information
• Terminals or any input/output devices that send
  or receive data
• Communications processors
• Communications software

31
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Components of a Telecommunications System
32
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Functions of Telecommunications Systems

• Transmit information
• Establish interface between sender and the
  receiver
• Route messages along most efficient paths
• Perform elementary processing of information
• Perform editorial tasks on data
• Convert message speed or format
• Control flow of information

33
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Types of Signals Analog and Digital

• Analog signal
• Continuous waveform
• Passes through communications medium
• Used for voice communications

34
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Types of Signals Analog and Digital

• Digital signal
• Discrete waveform
• Transmits data coded into two discrete states as
  1-bits and 0-bits
• Used for data communications
• Modem
• Translates computers digital signals into analog
  and vice versa

35
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Functions of the Modem
36
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Communications Channels

• Twisted wire Telephone systems
• Coaxial cable Cable television
• Fiber optics and optical networks Dense wave
  division multiplexing (DWDM)

37
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Communications Channels

• Wireless transmission Microwave, Satellites,
  Paging systems, Cellular telephones, Personal
  communication Services, Personal digital
  assistants, Mobile data networks
• Transmission Baud, bandwidth

38
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Frequency Ranges for Communications Media and
Devices
39
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Amocos Satellite Transmission System
40
COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS
SYSTEM
Communications Processors and Software

• Front-end processor Manages communications for
  the host computer
• Concentrator Collects and temporarily stores
  messages
• Controller Supervises communication traffic
• Multiplexer Enables single communication channel
  to carry data transmissions

41
COMMUNICATIONS NETWORKS
Network Topologies

• Star Network All computers and other devices are
  connected to a central host computer
• Bus Network Links a number of computers by a
  single circuit
• Ring Network All computers are linked by a
  closed loop

42
COMMUNICATIONS NETWORKS
A Star Network Topology
43
COMMUNICATIONS NETWORKS
A Bus Network Topology
44
COMMUNICATIONS NETWORKS
A Ring Network Topology
45
COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks
(LANs), and Wide Area Networks (WANs)

• Private Branch Exchanges
• Central switching system
• Handle firms voice and digital communications

46
COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks
(LANs), and Wide Area Networks (WANs)

• Local Area Networks
• Telecommunication network
• Require its own dedicated channels
• Encompass a limited distance
• Gateway, router, Network Operating System (NOS),
  peer-to-peer

47
COMMUNICATIONS NETWORKS
A Local Area Network (LAN)
48
COMMUNICATIONS NETWORKS
Private Branch Exchanges, Local Area Networks
(LANs), and Wide Area Networks (WANs)

• Wide Area Networks (WANs)
• Telecommunication network
• Span large geographical distance
• Consist of variety of cable, satellite, and
  microwave technologies
• Switched lines, dedicated lines

49
COMMUNICATIONS NETWORKS
Network Services and Broadband Technologies

• Value-Added Networks (VANs)
• Private, multipath, data-only, third-party-managed
  network
• Other Network Services
• Packet switching, Frame Relay, Asynchronous
  transfer mode (ATM)
• Integrated Services Digital Network (ISDN),
  Digital subscriber line (DSL), Cable modems, T1
  line, Broadband

50
COMMUNICATIONS NETWORKS
Packed-Switched Networks and Packet Communications
51
COMMUNICATIONS NETWORKS
Network Convergence

• Converged network
• Network with technology
• Enables voice and data to run over a single
  network
• Unified messaging
• System combining voice messages, email, and fax

52
Electronic Commerce and Electronic Business
Technologies
Electronic Mail and Groupware

• E-mail Eliminates telephone tag and costly
  long-distance telephone charges
• Groupware Enables work groups at different
  locations to participate in discussion forums and
  work on shared documents and projects

53
Electronic Commerce and Electronic Business
Technologies
Voice Mail and Fax

• Voice mail Digitizes spoken message and
  transmits it over a network
• Fax Digitizes and transmits documents over
  telephone lines

54
Electronic Commerce and Electronic Business
Technologies
Teleconferencing, Data-conferencing, and
Videoconferencing

• Teleconferencing Ability to confer with a group
  of people simultaneously
• Data conferencing Two or more users can edit and
  modify data files simultaneously
• Videoconferencing Participants are able to see
  each other over video screens

55
Electronic Commerce and Electronic Business
Technologies
Digital Information Services, Distance Learning
and E-Learning

• Distance learning Education or training
  delivered over a distance to individuals in one
  or more locations
• E-learning Instruction delivered online using
  the Internet or private networks

56
Electronic Commerce and Electronic Business
Technologies
Electronic Data Interchange (EDI)

• Direct computer-to-computer exchange between two
  organizations of standard business transaction
  documents

57
Electronic Commerce and Electronic Business
Technologies
Electronic Data Interchange (EDI)
58
Enhancing ManagementDecision Making for the
Digital Firm
59
Decision-Support Systems (DSS)

• Computer system at the management level of an
  organization
• Combines data, analytical tools, and models
• Supports semi-structured and unstructured
  decision making

60
Decision-Support Systems (DSS)
MIS and DSS

• MIS
• Provides reports based on routine flow of data
• Assists in general control of the organization

61
Decision-Support Systems (DSS)
MIS and DSS

• DSS
• Emphasizes change, flexibility, rapid response,
  models, assumptions, ad-hoc queries, and display
  graphics

62
Decision-Support Systems (DSS)
Types of Decision-Support Systems

• Model-Driven DSS
• Primarily stand-alone
• Uses model to perform what-if and other kinds
  of analysis

63
Decision-Support Systems (DSS)
Types of Decision-Support Systems

• Data-driven DSS Supports decision making by
  allowing users to extract and analyze useful
  information previously buried in large databases
• Data-mining Finds hidden patterns and
  relationships in large databases to infer rules
  from them and predict future behavior

64
Decision-Support Systems (DSS)
Cargo revenue optimization of Continental Airlines
65
Decision-Support Systems (DSS)
Types of Decision-Support Systems

• Associations Occurrences linked to a single
  event
• Sequences Events linked over time

66
Decision-Support Systems (DSS)
Types of Decision-Support Systems

• Classification Recognizing patterns that
  describe the group to which an item belongs
• Clustering Similar to classification when no
  groups have yet been defined. Discovers different
  groupings within data

67
Decision-Support Systems (DSS)
Overview of a decision-support system (DSS)

68
Decision-Support Systems (DSS)
Components of DSS

• DSS Database Collection of current or historical
  data from a number of applications or groups. Can
  be a small PC database or a massive data warehouse

69
Decision-Support Systems (DSS)
Components of DSS

• DSS Software System Collection of software tools
  used for data analysis, such as OLAP tools,
  data-mining tools, or a collections of
  mathematical and analytical models

70
Decision-Support Systems (DSS)
Components of DSS

• Model Abstract representation illustrating
  components or relationships of a phenomenon
• Sensitivity Analysis Models that ask what-if
  questions repeatedly to determine the impact of
  changes in one or more factors on the outcomes

71
Decision-Support Systems (DSS)
Sensitivity analysis
72
Decision-Support Systems (DSS)
DSS Applications and the Digital Firm

• Examples of Decision-Support Systems
• General Accident Insurance Customer buying
  patterns and fraud detection
• Bank of America Customer profiles
• Frito-Lay, Inc. Price, advertising, and
  promotion selection

73
Decision-Support Systems (DSS)
DSS Applications and the Digital Firm

• Examples of Decision-Support Systems
• Southern Railway Train dispatching and routing
• Texas Oil and Gas Corporation Evaluation of
  potential drilling sites
• The Gap Inventory stocking and merchandising

74
Decision-Support Systems (DSS)
DSS Applications and the Digital Firm

• Examples of Decision-Support Systems
• United Airlines Flight scheduling, passenger
  demand forecasting
• U.S. Department of Defense Defense contract
  analysis

75
Decision-Support Systems (DSS)
DSS for Pricing Decisions

• By analyzing several years of sales data for
  similar items, the software estimates a seasonal
  demand curve for each item and predicts how many
  units would sell each week at various prices.
• The software uses sales history to predict how
  sensitive customer demand will be to price changes

76
Decision-Support Systems (DSS)
DSS for Supply Chain Management

• Can help firms model inventory stocking levels,
  production schedules, or transportation plans
• Can provide firms with information on key
  performance indicators such as lead time, cycle
  time, inventory turns, or total supply chain costs

77
Decision-Support Systems (DSS)
DSS for customer analysis and segmentation
78
Decision-Support Systems (DSS)
DSS for Customer Relationship Management

• Predictive Analysis
• Use of data-mining techniques, historical data,
  and assumptions about future conditions to
  predict outcomes of events

79
Decision-Support Systems (DSS)
Data Visualization and Geographic Information
Systems (GIS)

• Data Visualization Technology for helping users
  see patterns and relationships in large amounts
  of data by presenting the data in graphical form
• Geographic Information System (GIS) System with
  software that can analyze and display data using
  digitized maps to enhance planning and decision
  making

80
Decision-Support Systems (DSS)
Web-Based Customer Decision-Support Systems

• Customer Decision-Support System (CDSS)
• System to support the decision-making process of
  an existing or potential customer

81
Group Decision-Support Systems (GDSS)
What is a GDSS?

• Group Decision-Support System (GDSS) An
  interactive computer-based system to facilitate
  the solution to unstructured problems by a set of
  decision makers working together as a group

82
Group Decision-Support Systems (GDSS)
Components of GDSS

• Hardware Conference facility, electronic
  hardware
• Software tools Tools for organizing ideas,
  gathering information, and ranking and seeking
  priorities
• People Participants, trained facilitator, staff
  supporting hardware and software

83
Group Decision-Support Systems (GDSS)
Components of GDSS

• Electronic questionnaires
• Electronic brainstorming tools
• Idea organizers
• Questionnaire tools

84
Group Decision-Support Systems (GDSS)
Components of GDSS

• Tools for voting or setting priorities
• Stakeholder identification and analysis tools
• Policy formation tools
• Group dictionaries

85
Group Decision-Support Systems (GDSS)
Overview of a GDSS Meeting

• Each attendee has a workstation
• Workstations are networked and connected to the
  facilitators console
• Data the attendees forward to the group are
  collected and saved on a file server
• Facilitator projects computer images onto the
  projection screen

86
Group Decision-Support Systems (GDSS)
Group system tools
87
Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making

• Number of attendees can increase while
  productivity increases
• More collaborative atmosphere
• Software tools follow structured methods for
  organizing and evaluating ideas and preserving
  the results of meetings

88
Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making

• Increase the number of ideas generated
• Can lead to more participative and democratic
  decision making

89
Group Decision-Support Systems (GDSS)
How GDSS Can Enhance Group Decision Making

• Organizational Memory
• Store learning from an organizations history
  that can be used for decision making and other
  purposes

90
Executive Support in the Enterprise
Executive Support Systems (ESS)

• Focus on the information needs of senior
  management
• Combine data from internal and external sources
• Create a generalized computing and communications
  environment that can be focused and applied to a
  changing array of problems

91
Executive Support in the Enterprise
Executive Support Systems (ESS)

• Monitor organizational performance
• Track activities of competitors
• Spot problems
• Identify opportunities
• Forecast trends

92
Executive Support in the Enterprise
The Role of Executive Support Systems in the
Organization

• Bring together data from the entire organization
• Allow managers to select, access, and tailor data
  
• Enable executive and any subordinates to look at
  the same data in the same way

93
Executive Support in the Enterprise
The Role of Executive Support Systems in the
Organization

• Drill Down
• The ability to move from summary data to lower
  and lower levels of detail

94
Executive Support in the Enterprise
The Role of Executive Support Systems in the
Organization

• Developing ESS
• Ease of use
• Facility for environmental scanning
• External and internal sources of information to
  be used for environmental scanning

95
Executive Support in the Enterprise
Benefits of Executive Support Systems

• Analyze, compare, and highlight trends
• Provide greater clarity and insight into data
• Speed up decision making

96
Executive Support in the Enterprise
Benefits of Executive Support Systems

• Improve management performance
• Increase managements span of control
• Better monitoring of activities

97
Executive Support in the Enterprise
Executive Support Systems and the Digital Firm

• ESS for Competitive Intelligence
• Identify changing market conditions
• Formulate responses
• Track implementation efforts
• Learn from feedback

98
Executive Support in the Enterprise
Executive Support Systems and the Digital Firm

• Balanced Scorecard
• Model for analyzing firm performance that
  supplements traditional financial measures with
  measurements from additional business
  perspectives, such as customers, internal
  business processes, and learning and growth

99
Executive Support in the Enterprise
Enterprise-Wide Reporting and Analysis

• Strategic performance management tools
• for enterprise systems
• SAP Web-enabled mySAP.com, Management Cockpit
• PeopleSoft Web-enabled Enterprise Performance
  Management (EPM)

100
Executive Support in the Enterprise
Enterprise-Wide Reporting and Analysis

• Activity-Based Costing
• Model for identifying all the company activities
  that cause costs to occur while producing a
  specific product or service so that managers can
  see which products or services are profitable or
  losing money and make changes to maximize firm
  profitability

101

• End of Lecture