The Management of Information and Knowledge for Better Decisions

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Chapter 13

• The Management of Information and Knowledge for
  Better Decisions

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Topics to be Discussed
Introduction The Evolution of Data, Information,
and Knowledge Management Knowledge Management
Tools ERP, EDI and E-Business
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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.
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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
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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.
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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.
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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.
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The Internet and Electronic Commerce
An online business has the ability to Increase
sales Reduce customer response time Increase
efficiency Decrease new products time to
market Decrease transaction costs
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The Internet and Electronic Commerce
Key Concept E-business can be used to support an
organizations 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.
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The Value Chain
Research and Development
Product Development
Experiment Materials Staff
Design Specs Staff
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The Value Chain
Production
Marketing
Direct Materials Direct Labor Manufacturing
Overhead
Advertising and Promotions Staff
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The Value Chain
Customer Service
Distribution
Vendors Trucks Drivers
Call Center Personnel Phone and Computer Equipment
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The Internet and Electronic Commerce

• Even with the technological innovations in data
  and information management, Ernst Young
  estimates that up to 80 of a companys
  accumulated knowledge is not utilized in business
  decisions.

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The Internet and Electronic Commerce
The Contemporary View of Accounting Information
Traditional Accounting Information Financial/Mone
tary Information
Qualitative Information Non-financial Information
Non-monetary Quantitative Data
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Accounting Information
Financial Information Balance Sheet Income
Statement Cost of Goods Manufactured Gross
Margin Operating Expenses
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Accounting Information
Qualitative Information Customer
Satisfaction Employee Satisfaction Product or
Service Quality
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Knowledge Management Tools
Data Warehouses the central depositories for
electronic data. May contain years of
transactions, which can be accessed and browsed
electronically.
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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.
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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
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Data Mining
Pause and Reflect Think of other ways that data
can be collected on your buying habits to help
marketing efforts.
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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.
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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.
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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

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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.

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ERP, EDI and E-Business

• Key Concept
• The combination of ERP, EDI, and e-business 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.

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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.
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ERP, EDI and E-Business
Who owns customer information? Is collecting
customer information without the customers
knowledge and sharing that information with other
parties ethical?
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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.
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End of Chapter 13
The boss says that Im in trouble if I cant grab
hold of our data!! Can you help me?