MGMT 3000 1st edition Lecture 31Outline of Last Lecture I. Balanced Scorecard Outline of Current Lecture I. Strategic informationII. Processing informationIII. Capturing informationIV. Protecting information Current Lecture Strategic Importance of Information Moore’s law: the prediction that about every two years, computer-processing power would double and its cost would drop by 50 percent- Moore was one of the founders of Intel Data vs. Information 1. Raw data: facts and figures, which aren’t particularly useful unless they have meaning 2. Information: Meaningful, useful data that can influence someone’s choices and behavior o Context: What turns Raw Data into information o Information has context Big Idea: Information in general has strategic importance for organizations because it can be used to 1. Obtain first-mover advantage: Strategic advantage that companies earn by being first to use information technology to substantially lower costs or differentiate a product 2. Sustain competitive advantage once it has been created: 3 questions a. Does the information technology create value? b. Is the information technology different across competing firms? c. Is it difficult to create or buy the information technology? Processing information: transforming raw data into meaningful information that can be applied to business decision-making - Evaluating sales data to determine the best- and worst-selling products, examining repair recordsto determine product reliability, and monitoring the cost of long-distance phone calls are all examples of processing raw data into meaningful information.- With automated, electronic capture of data, increased processing power, and cheaper and more plentiful ways to store data, managers no longer worry about getting data. - Furthermore, most managers know little about statistics and have neither the time nor the inclination to learn how to use them to analyze data.Costs of useful information: - Acquisition cost is the cost of obtaining data that you don’t have - Processing cost is the cost of turning raw data into usable information.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Storage cost is the cost of physically or electronically archiving information for later use and retrieval. - Retrieval cost is the cost of accessing already-stored and processed information.o One misconception is that it is easy and cheap to retrieve once the company has it. Not so. - Communication cost is the cost of transmitting information from one place to another. Characteristics of useful information: - Accurate: before relying on information to make decisions, you must know that the information is correct. - Complete: Incomplete or missing information makes it difficult to recognize problems and identify potential solutions- Relevant: has to be pertaining to problems that are at hand - Timely: to be timely, the information must be available when needed to define a problem or to begin to identify possible solutions. - Useful information is a function of how you capture the data, what data you capture and the software program Capturing information: There are two basic methods of capturing information: manual and electronic. - Manual capture of information is a slow, costly, labor-intensive process that entails recording andentering data by hand into a data storage device.o Manual data input- Consequently, companies are relying more on electronic capture. They use electronic devices such as bar codes, radio frequency identification tags, and document scanners to capture and record data electronically.o RFID: Radio frequency identification tags o Bar codes o Electronic Scanners Access and sharing of information within an organization: Executives managers and workers use 3 kindsof information technology to access and share information.1. An executive information system (EIS) uses internal and external sources of data to provide managers and executives the information they need to monitor and analyze organizational performance. a. Provides accurate, complete, relevant, and timely information to managers. b. Run the corporation on a day to day basis by using the balanced scorecard data to make decisions 2. Intranets are private company networks that allow employees to easily access, share, and publish information using Internet softwarea. Just like external websites, but the firewall separating the internal company network from the Internet permits only authorized internal access. 3. Corporate portals are a hybrid of executive information systems and intranets. a. While an EIS provides managers and executives with the information they need to monitor and analyze organizational performance, and intranets help companiesdistribute and publish information and forms within the company, corporate portals allow managers and employees to access customized information and complete specialized transactions using a web browser. Data is captured in different information systems: 1. ERP Enterprise resources planning: gives you better control through better information and measurement of results and processes 2. Financial information systems 3. CRM: customer Relationship management systems External Assess and sharing: Make it easier to share company data with external groups 1. With electronic data interchange, or EDI, two companies convert purchase and ordering information to a standardized format to enable direct electronic transmission of that informationfrom one company’s computer system to the other company’s system2. Web services use standardized protocols to describe and transfer data from one company in such a way that those data can automatically be read, understood, transcribed, and processed by different computer systems in another company.3. An extranet allows companies to exchange information and conduct transactions by purposely providing outsiders with direct, web–based access to authorized parts of a company’s intranet orinformation system. Typically, user names and passwords are required to access an extranetSharing knowledge and expertise: Knowledge: understanding that one gains from information Companies have begun to use technologies to capture and share knowledge of specialists and experts with other managers and workers 1. Decision support system (DSS) helps managers understand problems and potential solutions by acquiring and