TIM 50 - Business Information Systems
Lecture 8
Instructor: John Musacchio
UC Santa Cruz
April 24, 2014
Class Announcements
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(Regular) Assignment 2 Due 4/29
Database Assignment 1 Due 5/1
READ: Messerschmitt Ch 5
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
Web 2.0, Social Networking, and the Wisdom of Crowds
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Most popular Web 2.0 service: social networking
•  Social networking sites sell banner ads, user preference
information, and music, videos and e-books.
•  Social shopping sites
•  Swap shopping ideas with friends (Kaboodle, ThisNext)
•  Wisdom of crowds
•  Large numbers of people can make better decisions
about topics and products than a single person.
•  Prediction markets: peer-to-peer betting markets on specific
outcomes (elections, sales figures, designs for new products)
9.3
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
E-commerce Marketing
9.4
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Internet provides marketers with new ways of identifying and
communicating with customers.
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Long tail marketing: ability to reach a large audience inexpensively.
Behavioral targeting: tracking online behavior of individuals on
thousands of Web sites.
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Advertising formats include search engine marketing, display ads,
rich media, and e-mail.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
How an Advertising Network Works
9.5
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Networked Computing in direct
Procurement
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History predates Internet
Electronic Data Interchange (EDI)
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q 
Exchange order information between firms
involved in direct procurement
Usually large firms who could who afford
proprietary communication links
Initially order and invoice
Existed since 70’s
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
Business-to-Business Electronic Commerce: New
Efficiencies and Relationships
•  Electronic data interchange (EDI)
•  Major industries have EDI standards that define structure
and information fields of electronic documents for that
industry.
•  More companies increasingly moving away from private
networks to Internet for linking to other firms.
9.7
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
Electronic Data Interchange (EDI)
Companies use EDI to automate transactions for B2B e-commerce and continuous
inventory replenishment.
9.8
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
Business-to-Business Electronic Commerce: New
Efficiencies and Relationships
•  Private industrial networks (private exchanges)
•  Large firm using extranet to link to its suppliers,
distributors, and other key business partners
•  Owned by buyer
•  Permits sharing of:
9.9
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Product design and development
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Marketing
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Production scheduling and inventory management
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Unstructured communication (graphics and e-mail)
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
A Private Industrial Network
Figure 9-6
9.10
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
E-commerce: Business and Technology
Business-to-Business Electronic Commerce: New
Efficiencies and Relationships
•  Net marketplaces (e-hubs)
•  Single market for many buyers and sellers.
•  Industry-owned or owned by independent intermediary.
•  Generate revenue from transaction fees, other services.
•  Use prices established through negotiation, auction,
RFQs, or fixed prices.
•  May focus on direct or indirect goods.
•  May be vertical or horizontal marketplaces.
9.11
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Essentials of Management Information Systems
Chapter 9 E-Commerce: Digital Markets, Digital Goods
The Mobile Digital Platform and Mobile E-commerce
M-Commerce Services and Applications
•  Although m-commerce represents small fraction of
total e-commerce transactions, revenue has been
steadily growing
•  Location-based services
•  Banking and financial services
•  Wireless advertising
•  Games and entertainment
9.12
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
Data and information
by
David G. Messerschmitt
Copyright notice
©Copyright David G. Messerschmitt, 2000.
This material may be used, copied, and
distributed freely for educational
purposes as long as this copyright notice
remains attached. It cannot be used for
any commercial purpose without the
written permission of the author.
Key concept
The key commodity manipulated by
information technology is information
To be manipulated in a computing/networking
environment, information must be
represented by data
What is information?
Information
From a user (human) perspective…
….recognizable patterns that influence you in
some way
(perspective, understanding, behavior…)
In the computing infrastructure, information
has a somewhat different connotation as
structure and interpretation added to data
Data
A bit is “0” or “1” — the atom of the
information economy
Data is a collection of bits, like
q 
q 
q 
“0101110111010110”
“0000011”
“111011101011010110101111011011010”
Note: the terms data and information are
not always used consistently!
Representation
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Take the place of the original
Equivalent to, in the sense that the original
can be reconstructed from its
representation
Often the original can only be
approximately reconstructed, although it
may be indistinguishable to the user
q 
e.g. audio or video
ASCII
Alphabet
<7>
<8>
<9>
<:>
<;>
<<>
<=>
</>>
<?>
<At>
<A>
<B>
<C>
<D>
Hex
/x37
/x38
/x39
/x3A
/x3B
/x3C
/x3D
/x3E
/x3F
/x40
/x41
/x42
/x43
/x44
Binary
00110111
00111000
00111001
00111010
00111011
00111100
00111101
00111110
00111111
01000000
01000001
01000010
01000011
01000100
Interpretation
Note that this representation is
not unique…
….this one happens to be a standard
(ANSI X3.110-1983)
Structure
A picture
This picture conveys
information
This information is represented in this computer, but how?
Representation of picture:
image
An
approximation!
Expanding a small portion of the
picture, we see that it is represented
by square pixels….
Structure
….300 tall by 200 wide…..
Interpretation
….with a range of 256 intensities
per pixel
300 • 200 • 8 bits = 480,000 bits (but it can be compressed)
Color picture
A color picture can be
represented by three
monochrome images…
At the expense of three
times as many bits
Terminology
Information
Information
Representation
Data
Data
processing
Communicate data to
another user or organization
Data
Slide adapted from slides for Understanding Networked Applications
By David G Messerschmitt. Copyright 2000. See copyright notice
Representation needs to be
standardized
Information
Information
If the representation
is not standardized, the
information is garbled!
Data
Communicate data to
another user or organization
Data
Slide adapted from slides for Understanding Networked Applications
By David G Messerschmitt. Copyright 2000. See copyright notice
Regeneration
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Make a precise copy of the data (copy bit
by bit)
If you know the representation, this is
equivalent to making a precise copy of the
information
Each such precise copy is called a
generation
process is called regeneration
Slide adapted from slides for Understanding Networked Applications
By David G Messerschmitt. Copyright 2000. See copyright notice
Replication of information
0101011010111
1010110110100
1011000000110
1010111101110
1010101110101
0101011010111
1010110110100
1011000000110
1010112101110
1010101110101
0101011010111
1010110110100
1011000000110
1010111101110
1010101110101
0101011010111
1010110110100
0101011010111
1011000000110
1010110110100
1010112101110
1011000000110
1010101110101
1010111101110
1010101110101
0101011010111
1010110110100
1011000000110
10101121011100101011010111
10101011101011010110110100
1011000000110
1010111101110
1010101110101
0101011010111
1010110110100
1011000000110
1010112101110
1010101110101
Anything that can be
regenerated can be replicated
any number of times This is a blessing and a curse
Analog information cannot be
regenerated
Analog information
can be copied, but not
regenerated
We will never know
exactly what the
original of this
Rembrandt looked like
Discrete information can be
regenerated
Regeneration can
preserve data (but not its
original physical form)
Regeneration is possible for
information represented
digitally (which is tolerant of
physical deterioration)
0 + noise  0
1 + noise  1
Replication of information requires
knowledge of representation
Information
Information
Replication of information
also presumes knowledge of
its representation
Data
Replication
Replication preserves the integrity
of the data, but that is not sufficient
Data
Every .xxx
DOS file is
a representation
Slide adapted from slides for Understanding Networked Applications
By David G Messerschmitt. Copyright 2000. See copyright notice