Transcript Document

Chapter 13
The Management of
Information and Knowledge
for Better Decisions
Topics to be Discussed
Introduction
The Evolution of Data, Information,
and Knowledge Management
Knowledge Management Tools
ERP, EDI and E-Business
Introduction
The business environment has
changed dramatically. These
changes require more effective
management of knowledge within an
organization. Knowledge is power
and must be managed for
companies to remain competitive.
Introduction
Data: Financial statements, customer
lists, inventory records and the number
and type of products and services sold.
Information: Data that has been
organized, processed and summarized
Knowledge: Information that is shared
and exploited so that it adds value to an
organization
Introduction
Key Concept
Data becomes information when
organized, processed, and
summarized, and information
becomes knowledge when it is
shared and exploited to add
value to an organization.
The Evolution of Data, Information,
and Knowledge Management
Data and information
management has evolved
since the introduction of
mainframe computers in the
1960s. Although access to
information is now faster and
easier, exploiting that
information as usable
knowledge is still difficult.
The Internet and Electronic Commerce
E-Business
The first widespread application
involved direct sales of products to
customers over the Internet. Today a
wide variety of products and services
are sold online via electronic catalogs.
The Internet and Electronic Commerce
An online business has the ability to:
Increase sales
Reduce customer response time
Increase efficiency
Decrease new product’s time to market
Decrease transaction costs
The Internet and Electronic Commerce
Key Concept
E-business can be used to
support an organization’s entire
value chain. One of the key
benefits of e-business is the
ability to quickly access and
share knowledge in and outside
an organization.
The Value Chain
Research and
Development
Product
Development
Experiment Materials
Design Specs
Staff
Staff
The Value Chain
Production
Direct Materials
Direct Labor
Manufacturing
Overhead
Marketing
Advertising and
Promotions
Staff
The Value Chain
Distribution
Vendors
Trucks
Drivers
Customer
Service
Call Center
Personnel
Phone and
Computer
Equipment
The Internet and Electronic Commerce
Even with the
technological innovations
in data and information
management, Ernst &
Young estimates that up
to 80% of a company’s
accumulated knowledge
is not utilized in business
decisions.
The Internet and Electronic Commerce
The Contemporary View of Accounting
Information:
Traditional
Accounting Information
Financial/Monetary
Information
Qualitative Information
Non-financial
Information
Non-monetary
Quantitative
Data
Accounting Information
Financial Information
Balance Sheet
Income Statement
Cost of Goods Manufactured
Gross Margin
Operating Expenses
Accounting Information
Qualitative Information
Customer Satisfaction
Employee Satisfaction
Product or Service Quality
Knowledge Management Tools
Data Warehouses: the central
depositories for electronic
data. May contain years of
transactions, which can be
accessed and browsed
electronically.
Knowledge Management Tools
Data Mining: the way a manager
can search for and extract
information from the corporate
computer system, much like a
coal miner searches for and
extracts coal from a mine.
Data Mining
When you make a purchase
with a value card, the store
collects data on:
What you purchase
How much you purchase
Whether you use coupons
Whether you pay with cash,
check, or credit card
Data Mining
Pause and Reflect
Think of other ways that data can
be collected on your buying habits
to help marketing efforts.
Enterprise Resource Planning Systems
(ERP)
ERP systems collect, organize,
report, and distribute data
throughout an organization and
transform the data into usable
knowledge necessary for
managers to make proper
business decisions.
Enterprise Resource Planning Systems
(ERP)
Pros
Provides real-time
information.
Goal is to get the right
info to the right people
at the right time.
Can allow higher
levels of profitability.
Cons
Involves large-scale
financial, human
resources, time, and
information technology
costs.
The average
implementation time is
23 months.
ERP, EDI and E-Business
Electronic Data Interchange (EDI):
The electronic transmission of data
such as purchase orders and invoices.
Increases the speed and quality of
information exchange
Reduces lead times
Reduces processing costs
ERP, EDI and E-Business
Supply Chain Management:
Includes a variety of activities
centered around making the
purchase of materials and inventory
more efficient and less costly.
ERP, EDI and E-Business
Key Concept
The combination of ERP, EDI, and ebusiness via the Internet has vastly
changed the traditional supply chain
allowing organizations to link
employees, suppliers, and customers
into a communications network whose
benefits extend well beyond simple
exchanges of data.
ERP, EDI and E-Business
Customer Relationship
Management (CRM): designed to
bring a company closer to its
customers in order to serve them
better. Using the Internet makes it
possible to more accurately and
consistently forecast, manage, and
meet customer expectations.
ERP, EDI and E-Business
Who owns customer information?
Is collecting customer information
without the customer’s knowledge
and sharing that information with
other parties ethical?
ERP, EDI and E-Business
Key Concept
The use of the Internet
facilitates CRM by allowing data
to be gathered, stored,
accessed, and shared more
easily and by providing a
feedback loop from customers
to companies.
End of Chapter 13
The boss says that
I’m in trouble if
I can’t grab hold of
our data!!
Can you help me?