Chapter 10 - E-commerce: Digital Markets, Digital Goods
E-commerce involves digitally enabled commercial transactions between and among organizations and individuals. As compared to traditional markets, digital markets offer more transparency, along with reduced search and transaction costs, while also offering opportunities for more dynamic updates based on changing market conditions. Examples of digital goods include music, video, software, and books with contemporary providers including the likes of Apple iTunes, Netflix, and Amazon. Once produced, the cost of delivering a digital product is extremely low, while the delivery speed is also fast and oftentimes available instantly upon purchase. E-commerce has transformed marketing through the Internet via new ways of identifying and communicating with millions of potential customers at costs far lower than traditional media. In particular from this chapter, I benefited from the discussion on the typical e-commerce revenue models. The majority of companies rely on one or more of six revenue models: advertising, sales, subscription, free/freemium, transaction fee, and affiliate. The advertising revenue model is the most widely used revenue model. While self-experienced with the concept, I found the previously unfamiliar term of "freemium" to be quite clever to describe offerings of upgraded content beyond teaser free information and/or services.
Chapter 11 - Managing Knowledge
The chapter highlights the role of knowledge management, which refers to the set of business processes developed in an organization to create, store, transfer, and apply knowledge. It also discusses what types of systems are used for enterprise-wide knowledge management and how they provide value for businesses. It says there are essentially three major types of knowledge management systems including enterprise-wide knowledge management systems, knowledge work systems, and intelligent techniques. There are a number of business benefits of using intelligent techniques for knowledge management, including speed and efficiency of problem identification and diagnosis. In a manner similar to human behavior, artificial intelligence can be used to capture, codify, and extend organizational knowledge. As the chapter discusses, I have found interactions with artificial intelligence agents to be increasingly common in my life, especially over the past five years or so. Today alone, I have had interactions with Apple's Siri, was given customized web searches/advertising based on my personal search history, and offered assistance from an automated online shopping assistant just ahead of making an online purchase.
Chapter 12 - Enhancing Decision Making
The chapter discusses the different types of decisions and how the decision-making process works in an organization. There are four stages in decision making: intelligence, design, choice, and implementation. The chapter also discussed how information systems can support the activities of managers and aid in the management decision making process. While not particularly surprising, I found it interesting that actual research of manager behavior reveals that mangers' activities tend to be highly fragmented, variegated, and brief in duration while shying away from grand, sweeping policy decisions. Information systems help managers by providing support for their roles in disseminating information, offering better communication between organizational levels, and assistance in allocating resources. Business intelligence and analytics can deliver correct, nearly real-time information to decision makers and the analytical tools to quickly understand the information and take action. As a life-long fan of baseball and self-admitted statistical nut, the embedded early chapter inset commentary on "Moneyball" and the Oakland Athletics was particularly interesting. Although I am traditional about baseball in many respects, I do believe that statistical analysis and so-called "sabermetrics" should have a consequential role in baseball, if nothing more than to explore market inefficiencies and player "value" while otherwise attempting to evaluate and confirm/deny some of baseball's longstanding conventional wisdom. Late in the 2013 season, it would seem as if the Oakland A's are benefiting yet again from this sort of statistically-enhanced decision making. The A's have a first-place record in the American League West while having the fourth lowest payroll within Major League Baseball.
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