Chapter B

Bonus Chapter B: Using Technology to Manage Information

Learning Objectives

• B1: Outline the changing role of business technology.
• B2: List the types of business information, identify the characteristics of useful information, and discuss how data is stored and analyzed.
• B3: Compare the scope of the Internet, intranets, extranets, and virtual private networks, and explain how broadband technology and 5G have enabled the evolution to Web 2.0 and Web 3.0.
• B4: Explain the differences between LAN and WAN and discuss the benefits and drawbacks of cloud computing.
• B5: Evaluate the human resource, security, privacy, and stability issues affected by information technology.

The Role of Information Technology

B1: Outline the Changing Role of Business Technology

• Importance of business knowledge has evolved to managing it as an asset.
• Efficient sharing of information is crucial for knowledge management.
• New technologies facilitate the exchange of information among staff, suppliers, and customers.
  • Data-driven decision making improves productivity by approximately 5% over intuition-based decisions.

Evolution of Business Technology

1. **1970s: Data Processing (DP)

   • Focus:** Improving the flow of financial information.
   • Data is viewed as raw facts and figures (unprocessed).
   • Primary staff roles involved sorting information into databases, less interaction with customers.

2. **1980s: Information Systems (IS)

   • Focus:** Transition from supporting to conducting business.
   • Customer interactions increased with technologies like ATMs and voice mail.
   • Business technology started to influence business operations.

3. **1990s: Information Technology (IT)

   • Focus:** Transforming business operations through better storage, retrieval, and transmission of information.
   • Emergence of the World Wide Web, changing how people access information and communicate.
   • Advantage of wireless technology (e.g., Bluetooth) began to improve flexibility and convenience.

4. Business Intelligence (BI)

   • Defined as a variety of software applications used to analyze raw data for insights.
   • Includes processes like data mining, querying, and reporting to generate relevant and actionable knowledge.

Knowledge Generation

• Knowledge is defined as information that is relevant and useful.
• Tools like the Amazon Echo (powered by Alexa) exemplify how knowledge technology can enhance user interaction by filtering and delivering useful insights when needed.

BI in Practise

• BI allows efficient diagnostics for business operations, emphasizing actionable data for decision making.
• Example: If a sales rep closes a deal with a customer known for late payments, BI provides insights that can help negotiate better payment terms, linking sales and financial intelligence.

Change and Adaptability

• Technology changes interconnect and drive further adaptations in business.
• Case Study: Kodak, once a leader in photography, faltered by resisting digital technology despite creating the first digital camera, leading to bankruptcy due to inflexibility.

Types of Business Information

B2: Business Information Characteristics and Data Management

• Businesses today gather various types of information:
  1. Business Process Information: Transaction data gathered at points of sale (POS), supported by systems like ERP, SCM, and CRM.
  2. Physical World Observations: Data from sensors (RFID, GPS) monitoring locations and activities.
  • Example: Smart coasters that aid cocktail preparation by guiding ingredient measurement.
  1. Biometric Data: Fingerprint and retinal scans, used for identification.
  • Useful in security settings like hospitals.
  1. Public Data: Data available from social media and other public interactions.
  2. Preferences Tracking: Data reflecting consumer preferences and behavior collected through online transactions.

Information Management Challenges

• Information Overload: Managers face excess data which may lead to confusion rather than clarity.
• Successful strategies: Identify goals, filter irrelevant information, and maintain focused data collection to improve decision-making efficiency.

Characteristics of Useful Information

1. Quality: Accuracy and reliability of data.
   • Mistakes in data can lead to failure in business decisions.
2. Completeness: Enough information for decision-making without overwhelming the decision-maker.
3. Timeliness: Information must be delivered quickly to be useful.
4. Relevance: Managers must learn to frame questions to extract accurate data, needing to set clear objectives.

Big Data and Data Analytics

• Data Analytics: Process of collecting and analyzing large data sets (big data) to find patterns and guide business decisions.
• Data Mining: Technique for discovering hidden patterns in large data collections.
• Example: McDonald's utilizes algorithms to analyze sales data in real-time, optimizing product offerings based on external conditions (weather, local events).

Internet Connectivity and Evolution

B3: The Scope of Connectivity Technologies

• Internet: A global network of networks facilitating broad data communication.
• Intranets: Company-wide private networks leveraging internet technology while restricting access to outsiders through firewalls.
  • A firewall can consist of hardware and software tools to safeguard networks.
• Extranets: Controlled networks allowing multiple companies or users to share specific information while maintaining privacy.
• VPNs (Virtual Private Networks): Create secure connections over public networks via encryption, ensuring data confidentiality.

Evolution of Web Technologies

• Web 2.0: Focused on user interaction, social networking, and content collaboration through sites like blogs and wikis.
• Web 3.0: Aims to enhance data decentralization with technologies like blockchain, giving users more control over data and online interactions.

Broadband and 5G Impact

• Broadband Technology: Provides a steady and fast internet connection improving data flow and accessibility, reaching average speeds up to 38 Mbps in the U.S.
  • Comparison: Global leaders like Taiwan and Singapore average 85 Mbps and 70 Mbps, respectively.
• 5G Technology: Offers significant speed improvements (up to 100 times faster than current networks), crucial for supporting high-demand environments and applications.
• Importance of AI and machine learning in conjunction with 5G, revolutionizing business operations and user experiences.

Network Types and Cloud Computing

B4: LAN, WAN, and Cloud Computing

• LAN (Local Area Network): Networks within a limited geographical area (homes/offices), can include both wired and wireless devices.
• WAN (Wide Area Network): Connects multiple LANs across broader geographic spaces; the internet exemplifies a WAN.
• Cloud Computing: Delivery of computing resources (servers, storage) over the internet.
  • Benefits include cost reduction, improved security, flexible capacity, lower equipment needs, and easier access.
  • Drawbacks include concerns related to security, data stability, and control.

Impacts of IT on Management

B5: Human Resource, Security, Privacy, and Stability Issues

• Human Resource Concerns: IT has both enhanced and complicated recruitment and training processes; new skills are required to keep pace with technology changes.
  • Telecommuting offers flexibility; however, challenges include managing remote employees and maintaining communication and team spirit.
• Security Issues: Vulnerabilities arising from competitive hacking, the growing complexity of networks, and the requirement for robust protection measures.
  • Instances of significant data breaches highlight these vulnerabilities and the potential for identity theft.
• Privacy Concerns: Personal data is at risk of exposure; significant ethical considerations arise over data collection and consumer privacy rights.
• Stability Issues: Technology reliance can lead to operational disruptions; complex software and hardware interconnections may increase error risks when systems fail or underperform.