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Business: A Changing World, 4/e
O.C. Ferrell, Colorado State University
Geoffrey Hirt, DePaul University

Managing Information Technology and E-Business

CyberSummary


The technology behind computers, the Internet, and their applications has changed the face of business of the past few decades. Information technology relates to processes and applications that create new methods to solve problems, perform tasks, and manage communication.

THE ROLE & IMPACT OF TECHNOLOGY IN THE ECONOMY

Technology relates to the application of knowledge, including the processes and procedures to solve problems, perform tasks, and create new methods to obtain desired outcomes. It includes intellectual knowledge as well as the computer systems devised to achieve business objectives. Today, our economic productivity is based more on technology than any other advance. Information technology is important because our economy is service based. It has changed many traditional products and improved global access by linking people in business through telecommunications.

MANAGING INFORMATION

Data refers to numerical or verbal descriptions related to statistics or other items that have not been analyzed or summarized. Knowledge is usually referred to as an understanding of data gained through study or experience. Information includes data and knowledge that can be used in making business decisions. Businesses often engage in data processing efforts to improve data flow and the usefulness of information.

Because information is a major business resource, it should be viewed as an asset that must be developed and distributed to managers. A management information system (MIS) is used for transmitting and organizing data into information that can be used for decision making. The purpose of the MIS is to obtain data from both internal and external sources to create information that is easily accessible and structured for user-friendly communication to managers. The MIS breaks down time and location barriers making information available when and where it is needed to solve problems. To be effective, an MIS must be able to collect data, store and update data, and process and present information. A database is a collection of data stored in one place and accessible throughout the network.

THE INTERNET

The Internet, the global information system that links many computer networks together, has profoundly altered the way people communicate, learn, do business, and find entertainment. Its origins can be traced to the late 1950s. It evolved from a system for government and university researchers into a tool used by millions around the globe for communication, information, entertainment, and e-business. The World Wide Web is a collection of interconnected Web sites or pages of text, graphics, audio, and video within the Internet.

An intranet is a network of computers similar to the Internet that is available only to people inside an organization. An extranet is a network of computers that permits selected companies and other organizations to access the same information and may allow different managers in various organizations to collaborate and communicate about the information.

To access the Internet through narrowband or dial-up, a user needs a computer, modem, and an Internet Service Provider, an organization that provides access to the Internet through its own series of local networks. The Internet is used mainly for communication, information, entertainment, and e-business. The most popular use of the Internet in the US for both individuals and businesses is communication or e-mail. An adaptation of e-mail is instant messaging which allows users to carry on one or more real-time conversations simultaneously.

E-BUSINESS

E-business can be distinguished from traditional business as carrying out the goals of business (trying to earn a profit by providing products that satisfy people's needs) through utilization of the Internet. E-commerce includes activities such as conducting marketing research, providing and obtaining price and product information, and advertising, as well as online selling. E-business is a broad concept that includes not only contacts with customers but internal systems of communication within organizations. E-business has not changed all industries; it has had more impact in certain industries where the cost of business and customer transactions are very high.

The are three major e-business models or markets with unique challenges and opportunities that represent areas with shared characteristics and decisions related to organizational structure, job requirements, and financial needs. Business-to-business (B-to-B) e-business, sometimes called collaborative commerce, is the use of the Internet for transactions and communications between organizations. B-to-B activities are the largest and fastest growing area of e-business. Typical ways that a company might join the B-to-B world range from going online with an electronic catalog to creating a private trading network, using collaborative design, engaging in supply chain management, or creating a public exchange. Business-to-consumer (B-to-C) e-business means delivering products and services directly to individual consumers through utilization of the Internet. Services provided in e-business relationships are often referred to as e-services. In consumer-to-consumer e-business, consumers market goods and services to each other through the Internet.

LEGAL AND SOCIAL ISSUES OF INFORMATION TECHNOLOGY AND E-BUSINESS

Legal and social issues created by the extraordinary growth of information technology, the Internet, and e-business include privacy concerns, identity theft, and protection of intellectual property and copyrights.

Current technology has made it possible to amass vast quantities of personal information, often without consumers' knowledge, and allows for the collection, sharing, and selling of this information to interested third parties. Many Web sites follow users' online activities by storing cookies, identifying strings of text, on the users' computers. Cookies allow permit Web site operators to track how often a user visits a site, what he/she looks at while there, and in what sequence. Some measure of protection of personal privacy is provided by the US Constitution, Supreme Court rulings, and federal laws.

Identity theft occurs when criminals obtain personal information that allows them to impersonate someone else in order to use their credit to obtain financial accounts and make purchases.

In addition to protecting personal privacy, Internet users and others are concerned about protecting their rights to property they may create, including songs, movies, books, and software. Such intellectual property consists of the ideas and creative materials developed to solve problems, carry out applications, and educate and entertain others. Intellectual property is generally protected via patents and copyrights.





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