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Information Systems and Knowledge Management

LEARNING OUTCOMES

Know and distinguish the concepts of data, information, and intelligence

Understand the four characteristics that describe data

Know the purpose of research in assisting business operations

Know what a decision support system is and does

Recognize the major categories of databases

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Delivery, Data, and UPS

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United Parcel Service (UPS) is the largest package delivery company in the world.
Integrated data collection and management system that incorporates all levels of services, both global and domestic, in one pickup and delivery system.
Telemetrics – incorporates GPS with package information.

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Information, Data, and Intelligence

Data

Facts or recorded measures of certain phenomena (things or events).

Information

Data formatted (structured) to support decision making or define the relationship between two facts.

Market intelligence

The subset of data and information that actually has some explanatory power enabling effective decisions to be made.

So there is more data than information, and more information than intelligence.

EXHIBIT 2.1 Data, Information, Intelligence

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Characteristics of Valuable Information

Relevance

Reflects how pertinent these particular facts are to the situation at hand.

Quality

Degree to which data represent the true situation.

Timeliness

Data are current enough to still be relevant.

Information Completeness

Having the right amount of information.

RFID Technology Gets Cheaper—Business Knowledge Grows

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Radio frequency identification (RFID) tags track the whereabouts of virtually all kinds of products big and small.
U.S. military uses them, but so do businesses.
Walmart is pushing suppliers to adopt the technology.
Cost: 9¢ - 25¢, but dropping

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Knowledge

A blend of previous experience, insight, and data that forms organizational memory.

Knowledge Management

The process of creating an inclusive, comprehensive, easily accessible organizational memory, which is often called the organization’s intellectual capital.

Knowledge Management

Are Businesses Clairvoyant?

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Active data warehousing allows companies to integrate data with research results, allowing them to predict consumer preferences and even cyclical usage patterns quite accurately.
Customers can voluntarily enter data or block certain data from being transmitted.

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Global Information Systems

An organized collection of computer hardware, communication equipment, software, data, and personnel.

Designed to capture, store, update, manipulate, analyze, and immediately display information about worldwide business activities.

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Functions of Business Research

Foundational—answers basic questions. What business should we be in?
Testing—addresses things like new product concepts or promotional ideas. How effective will they be?
Issues—examines how specific issues impact the firm, such as organizational structure.
Performance—which metrics are critical in real-time management and what insights can be gained from “what-if” analyses of policy changes?

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Decision Support Systems (DSS)

Helps decision makers confront problems through direct interaction with computerized databases and analytical software programs.

Stores data and transforms them into organized information that is easily accessible to managers.

A customer relationship management (CRM) system is the part of the DSS that addresses exchanges between the firm and its customers.

EXHIBIT 2.2 Decision Support System

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Databases and Data Warehousing

Database

A collection of raw data arranged logically and organized in a form that can be stored and processed by a computer.

Data warehousing

The process allowing important day-to-day operational data to be stored and organized for simplified access.

Data warehouse

The multitiered computer storehouse of current and historical data.

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Input Management

Input

All numerical, text, voice, and image data entered into the decision support system.

Major Sources of Input

Internal records

Proprietary business research

Salesperson input

Behavioral tracking

Outside vendors and external distributors

EXHIBIT 2.3 Six Major Sources of Input for Decision Support Systems

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Internal Records

Contain data that may become useful information for managers.

Accounting reports of sales and inventory figures

Costs, orders, shipments, inventory, sales, and other aspects of regular operations

Customer profiles

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Proprietary Business Research

Studies specific company problems.

Emphasizes the company’s gathering of new data.

Is not conducted regularly or continuously.

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Salesperson Input

Sales representatives’ reports:

Can alert managers to changes in competitors’ prices and new product offerings.

May involve the types of complaints salespeople are hearing from customers.

As trends become evident, this data may become business intelligence.

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Behavioral Tracking

Modern technology provides new ways of tracking human behavior.

Global positioning satellite (GPS) systems

“Click-through” sequence

Scanner data

The accumulated records resulting from point-of-sale data recordings.

Single-source data

A system’s ability to gather several types of interrelated data.

Type of purchase

Use of a sales promotion

Advertising frequency data

Staying Home at Home Depot

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The DSS of any organization is no better than the quality of the data input to its data warehouse.
Home Depot makes executives spend time on the sales floor so the people who decide what should go into the data warehouse and how the DSS will use it appreciate the types of decisions faced by store managers

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Outside Vendors and External Distributors

Market information as their products.

e.g., Nielsen Company provides television program ratings, audience counts, and information about the demographic viewer groups.

Data specialists record and store certain business information.

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Computerized Data Archives

Data Wholesalers

Companies that put together consortia of data sources into packages that are offered to municipal, corporate, and university libraries for a fee.

Wilson Business Center

Hoovers

PROQUEST

INFOTRAC

DIALOG (Dialog Information Services, Inc.)

LEXIS-NEXIS,

Dow Jones News Retrieval Services

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Types of Databases

Statistical databases

Contain numerical data for analysis and forecasting.

Geographic information systems use geographical databases and powerful software to prepare computer maps of relevant variables.

Scanner data are a common source.

Financial databases

Includes competitors and customers’ financial data, such as income statements and balance sheets.

Example: CompuStat

Video databases

Video databases and streaming media are having a major impact.

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Networks and Electronic Data Interchange

Electronic Data Interchange (EDI)

Systems that integrate one company’s computer system with another company’s system to exchange business information with suppliers or customers.

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What Exactly is the Internet?

A worldwide network of computers that allows users access to information from distant sources.
A domain is typically a company name, institutional name, or organizational name associated with a host computer.

Host—where the content for a particular Web site physically resides and is accessed.

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How is the Internet Useful in Research?

Accessing available data

Allows instantaneous and effortless access to a great deal of information.

Collecting data

Questionnaires can be posted on a Web site, cutting down on costs and reducing errors.

Consumers’ usage leaves a record that can be traced and observed.

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Navigating the Internet

Content providers

Parties that furnish information on the World Wide Web.

Uniform Resource Locator (URL)

A web site address that Web browsers recognize.

Search Engines

Computerized directories used to search the WWW.

Yahoo! (www.yahoo.com)

Google (www.google.com)

Hotbot (www.hotbot.com)

Keyword Search

Takes place as the search engine searches through millions of Web pages for documents containing the keywords.

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Interactive Media and Environmental Scanning

Interactive medium

A medium, such as the Internet, that a person can use to communicate with and interact with other users.

Environmental scanning

Entails all information gathering designed to detect changes in the external operating environment of the firm.

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Information Technology

Pull Technology

Consumers request information from a web page and the browser then determines a response.

The consumer is essentially asking for the data.

Push Technology

Sends data to a user’s computer without a request being made.

Software is used to guess what information might be interesting to consumers based on the pattern of previous responses.

EXHIBIT 2.5 The Google Web Interface

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Information Technology (cont’d)

Smart Agent Software

Software capable of learning an Internet user’s preferences and automatically searching out information and distributing it to a user’s computer.

Small computer files that record a user’s Web usage history.

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Intranet

A company’s private data network that uses Internet standards and technology.

The information—data, graphics, video, and voice—is available only inside the organization or to those individuals whom the organization deems as appropriate participants.

Firewall

Security software installed to limit access to only those persons authorized to enter an Intranet.

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Internet2

A collaborative effort involving about 250 universities, government entities (including the military), and corporate organizations in the U.S.(www.internet2.edu).

Users are limited to the affiliated organizations.

Hope is to recreate some of the cooperative spirit that created the Internet originally.

Multimodal access

Wireless technologies

Building global trading mechanisms