Course Related
Virtual Expert
Jack Brown (Business Analyst)
JSB Inc.
Car Accessory Dealership
James S. Black (Company founder)
An entrepreneur with a love for cars.
Abigail Foley (Senior vice president of Business Development) Reported an increase in customers cancelling their accounts. Mark Thompson (Business Development Manager)
Prepared proposal for implementing an information system.
Major Business Functions (In JSB)
Manufacturing
Assembling the product, checking for quality, producing bills of materials Sales and Marketing
Identifying customers, making customers aware of product, and selling the product Human Resources
Hiring employees, evaluating job performance, enrolling employees in benefits. Finance and Accounting
Paying creditors, creating financial statements, managing cash accounts
Terms
Information vs Data
(Pg. 13)
Data is raw. Information turns it into something meaningful. Digital Manufacturing
Digital Manufacturing (DM) systems
DELMIA
Dassault Systemes’ Digital Enterprise Lean Manufacturing Interactive Application (DELMIA) POS
Point of Sale (POS) systems (E.g. Store registers) Example: MICRO 3700 from
MICRO Systems (Pg. 52) Inventory Management System
Inventory management system (pg. 52)
The Business plan on Opening The Business Steve Research Information
Steve decided to open his own tee- shirt shop, near a local university. He felt it was the perfect time to start his own business, due to the location and the fact that the summer Olympics were being held 55 miles away in Atlanta. Wow! What a great opportunity it was, for him to take initiative to become his own boss, gain exposure, and become profitable. The only problem was that Steve did not ...
Mapping Technology
Mapping technology: MapInfo software (E.g. MapInfo Smart Site Solutions) (pg. 52) Electronic Business / E-Business
(Pg. 56)
Refers to the use of digital technology and the Internet to execute the major business processes in the enterprise. Electronic Commerce / E-Commerce
(Pg. 56)
The part of e-business that deals with the buying and selling of goods and services over the Internet. E-Government
(PG. 56)
Refers to the application of the Internet and networking technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government. For example, citizens in some states can renew their driver’s licenses or apply for unemployment benefits online, and the Internet has become a powerful tool for instantly mobilizing interest groups for political action and fund-raising. Business Process
(g. 42)
Logically related activities to perform the four functions of business. Unique way which work, information, and knowledge are coordinated. (Specific tasks employees perform, in what order, and on what schedule; what steps for production employees to transform raw material into finished products. IS enhances this business process by automating manual processes, sharing information instantly. FiOS
(Pg. 79)
Verizon FiOS is a bundled Internet access, telephone, and television service which operates over a fiber-optic communications network. Contrast with cable.
Benchmarking
Benchmarking involves comparing the efficiency and effectiveness of your business processes against strict standards and then measuring performance against those standards. Best Practices
Industry best practices are usually identified by consulting companies, research organizations, government agencies, and industry associations as the most successful solutions or problem-solving methods for consistently and effectively achieving a business objective. Disruptive Technology
(Pg. 93-94)
Sometimes new technology comes along like a tsunami and destroys everything it its path. Some firms are able to create these tsunamis and ride the wave of profits; others learn quickly and are able to swim with the current; and still others are obliterated because their products, services, and business model are obsolete. mySAP
The Essay on Technology creates more problems than it can solve
“If communicating across continents in the blink of an eye; Cripples our mind If being able to unfold the untold depths of this universe; Cripples our mind If having all the information in the world ready at our fingertips; Cripples our mind Then, Yes, indeed Technology - Cripples our mind ” Honorable chairperson, respected principal(s), teachers, members of the jury, my worthy opponents and not ...
The mySAP enterprise software is used by Nestle for its large, transnational company.
Problem Solving
This is a process, not an event. (Pg. 23)
Critical Thinking
(Pg. 23)
The importance of critical thinking: The sustained suspension of judgment with an awareness of multiple perspective and alternatives. Maintaining doubt and suspending judgment
Being aware of different perspectives
Testing alternatives and letting experience guide
Being aware of organizational and personal imitations
Steps (For Implementing Information System)
(Pg. 20-23)
SEE ALSO PAGE 381-387
This may require a system development team (pg. 384)
1. Problem Identification
System analysis refers to the first three steps in the problem solving method. (pg. 382) Dimensions of Business Problems
Organizations
(E.g. Poor business processes, unsupportive culture, political in-fighting, changed in the organization’s surrounding environment, complexity of tasks, inadequate resources.) Technology (E.g. Insufficient or aging hardware, outdated software, inadequate database capacity, insufficient telecommunications capacity, the incompatibility of old systems with new technology, and rapid technological change.) (Example: Power grids were unable to monitor and control power consumption until Smart Grids came along. Pg. 35) (E.g. Tato used Digital Manufacturing (DM) (Specifically DELMIA) to produce new car (Tato) more quickly and at lower cost. The system is also flexible allowing other cars to be designed, evaluated and produced. pg. 39) People
(E.g. Lack of employee training, difficulties of evaluating performance, legal and regulatory compliance, work environment/ergonomics, poor or indecisive management, interrelationships between people and groups, and lack of employee support and participation. Examples
Manually inputting data into spreadsheets, manually tracking sales (experiencing loss and theft), manually tracking inventory (or not tracking it).
2. Solution Design
3. Solution Evaluation and Choice
A system analysis includes a feasibility study to determine whether each proposed solution is feasible, or achievable, from a financial, technical, and organizational standpoint. Cost effectiveness and Weighing Other Benefits
The Essay on Personality Development Analysis
Personality development is among the important aspects of life that we have to go through to ensure a complete and healthy life mentally, physically and emotionally. In this paper the three major theories of personality development are going to be used to analyse an individual that has already been chosen. Erickson’s theory of psychosocial development, Piaget’s theory of cognitive development, and ...
Feasibility of the solution for your business given existing resources Support from employees and managers
Time to implement, test, document, and train employees
Individual Department Needs and Impact on Each Department
4. Implementation
Change management: Refers to the many techniques used to bring about successful change in a business Systems design is the model or blueprint for an information system solution and consists of all the specifications that will deliver the functions identified during system analysis. (Pg. 383) Steps
(Pg. 384-386)
Hardware Selection and Acquisition
Software development and programming
Testing
Testing (Pg. 384)
Unit Testing (Pg. 384)
System Testing (Pg. 384)
Acceptance Testing (Pg. 384)
Test Plan (Pg. 384)
Training and documentation
For maintenance as well (pg. 20-23)
Conversion
Strategies
Parallel Strategy
(Pg. 386)
Direct overcut strategy
(Pg. 386)
Phased approach
(Pg. 386)
Production and Maintenance
(Employee training/meetings) (page 20-23)
(Measurement of outcomes) (Pg. 20-23)
Manage the Change (Organization and People)
(Pg. 386)
Alternative Approaches for Implementing Information Systems
(Pg. 387-393)
Rapid Application development (RAD) (Pg. 392)
Joint Application Design (JAD) (Pg. 393)
Traditional Systems Development Lifecycle (SDLC)
Prototyping
Identify the user’s basic requirements
Develop an initial prototype
Use the prototype
Revise and enhance the prototype
End-User Development
Application Software Packages
Request for Proposal (RFP) (Pg. 389)
Customization (Pg. 390)
Outsourcing
Alternative Methods for Modeling and Designing Systems
Computer-Aided Software Engineering / Computer Aided Systems Engineering (CASE) (Pg. 397) Structured Methodology
The Essay on Information Systems in Global Business Today
1. Why is it important to understand the difference between computer literacy and information literacy? Answer: Computer literacy – When you are computer literate, you have a general working knowledge of computers. You understand what they can be used for. Most people know that they can type a paper, create a power point and if you have internet access, you may e-mail and search the World ...
Data flow diagram used for analysis and structure chart used for design. (Pg. 395) Data Flow Diagram (DFD) (Pg. 393)
Process Specifications (Pg. 394)
Structure Chart (Pg. 394)
Object-Oriented Development
Basic Concepts
Class
Inheritance
Component-Based Development, Web Services, Cloud-Based Development Analyzing Performance
Spreadsheet Database
Columns for calculating [Actual Delivery Time For Each Order And The Number Of Days The Delivery Is Late.] Actual delivery time = Arrival Date – Promised Ship Date
Number of Days = Actual Delivery Time – Promised Transit Time If number of days late is negative, this indicates the order arrived early. Determine Which Vender has Best Delivery Track Record
Use DAVERAGE function
Other functions are useful for determining the vender with the best accounts payable terms Case Study Analysis
Refer to document:
http://www.content.distance-education.itt tech.edu//cliksdmrroot/content_directory/mount1/544582/images/How_to_Analyze_a_Case_Study_new.pdf A case study analysis is not merely a summary.
Identify the most important facts surrounding the case
Identify key issues and problems
Specify alternative courses of action
Evaluate each course of action
Recommend the best course of action
Project Management
(Pg. 397-399)
Variables
Scope
Time
Cost
Quality
Risk
Selecting Projects
(Pg. 399)
Determining Cost and Benefits
Tangible Benefits (Pg. 400)
Intangible Benefits (Pg. 400)
Information Systems Plan
Portfolio Analysis
Scoring model (pg. 402)
Managing Risks and Change
User-Designer Implementation and Change
Implementation (Pg. 404)
User-Designer Communications Gap (Pg. 404)
Controlling Risk Factors
Formal planning and tools (Pg. 405)
Gantt chart (Pg. 405)
PERT chart (Pg. 405)
Project Management Software (Pg. 405)
User Resistance
Ergonomics (Pg. 405)
Organizational impact analysis (Pg. 405)
Global Projects
(PG. 406)
Information Systems
The Term Paper on Why Software Systems Fail
1.0 Introduction In this report I will be concentrating on the failure of software systems. To understand why software systems fail we need to understand what are software systems. Software systems are a type of information system. This is because a software system is basically a means for hardware to process information. Flynns definition of an information system is: "An information system ...
Definition
Information Technology versus Information Systems
(Pg. 13)
Information Technology
Consists of all the hardware and software that a firm needs to use in order to achieve its business objectives. We refer to this broader understanding of the people and organizational dimensions of systems as well as the technical dimensions of systems as information system literacy. The field of management information systems (MIS) deals tried to achieve this broader information systems literacy. MIS deals with behavioral issues as well as technical issues surrounding the development, use, and impact of information systems used by managers and employees in the firm. Information System
INFORMATION SYSTEMS AID BUSINESS PROCESSES (Pg. 44)
Businesses invest in information systems as a way to cope with and manage their internal production functions and to cope with the demands of key actors in their environments (pg. 46).
A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making, coordinating, and control in an organization. In addition, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products. Computer literacy focuses primarily on knowledge of information technology.
Dimensions
(Pg. xvii)
The following is an Information System framework showing how people, organizations, and technology work together to create an information system solution to business challenges.
(Pg. 20-23)
See Problem Solving for example of problems in each dimension. (Pg. 15-20)
Organization
Technology aside, the history culture of business firms also affects how the technology is used and how it should be used. In order to understand howa specific business firm uses information systems, you need to know something about the structure, history, and culture of the company. Information systems are built by the firm in order to serve these different specialties and different levels of the firm. An organization accomplishes and coordinates work through this structured hierarchy and through its business processes (which includes rules developed over time), which are logically related tasks and behaviors for accomplishing work. Each organization has a unique culture, or set of assumptions, values, and ways of doing things, that has been accepted by most of its members. (e.g. UPS placing customer service first.)
The Term Paper on Affects Of Information Technology On Managerial Functions part 1
Affects of Information Technology on Managerial Functions This report demonstrates the practice of scenario planning on the problem situation How might managerial opportunities in the IS/IT industry develop and what is a robust strategy for exploiting this situation? To begin with, the reasons and rationale from completing this report are described in some detail. Then a brief description of the ...
Technology
Components
(*Including People in this List Defines the IT Infrastructure) Hardware
This is the physical equipment used for input, processing, and output activities in an information system. It consists of the following: computers of various sizes and shapes (including mobile handheld devices); various input, output, and storage devices; and telecommunications devices that link computers together. (Pg. 118-129)
Types of Computers
Personal Computer (PC)
Workstations
Server
Mainframe
IBM in the lead vendor of mainframes.
Supercomputer
Volvo and most other automobile manufacturers use supercomputers to simulate vehicle crash tests. Grid Computing
Private firms are beginning to use computer grids because of their greater reliability than supercomputers, higher capacity , and lower costs. Example: Royal Dutch/Shell Group uses a platform which links 1,024 IBM servers running Linux. Network Types (Processing Perspective)
Distributed Processes
Client/Server Computing / Two-tiered client/server Model
Multitiered Client/Server Architecture / N-Tier client/server Model Example: Web Server will serve web page to client. If a client requests access to a corporate system, the request is passed to an application server.
Centralized Processing
Secondary Storage Technology
Magnetic Disks
Most widely used secondary storage medium today. (Hard drive) Optical Disks
CD-ROM
Digital Video Disks
Magnetic Tape
Storage Networking
Storage area networks (SANs) connect multiple storage devices on a separate high-speed network dedicated to storage. Input/Output Devices
Contemporary Hardware Trends
Mobile Digital Platform
More businesses are moving from PCs and desktop machines to mobile devices. Nanotechnology
Uses individual atoms and molecules to create computer chips and other devices that are thousands o times smaller than current technologies permit. Cloud Computing
Refers to a model of computing in which firms and individuals obtain computing resources and software applications over the internet (aka cloud).
On-demand computing refers to purchasing computing services from remote providers, paying only for the amount of computing power actually used. Types of Service
Cloud infrastructure as a service
Customers use processing, storage, networking, and other computer resources from cloud service providers to run their information systems. Cloud platform as a service
Customers use infrastructure and programming tools hosted by the service provider to develop their own applications. Cloud software as a service
Customers use software hosted by a vender.
Autonomic Computing
An industry-wide effort to develop systems that can configure themselves, optimize and tune themselves, heal themselves when broken, and protect themselves from outside intruders and self-destruction. Virtualization and
Multicore Processors
Virtualization presents a set of computing resources (such as computing power or data storage) so that they can all be accessed in ways that are not restricted by physical configuration or geographic location. A multicore processor is an integrated circuit to which two or more processors have been attached for enhanced performance, reduced power consumption, and more efficient simultaneous processing of multiple tasks. Software
Computer software consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in an information system. (Pg. 129-142)
Types
System Software
Operating systems
Multitouch is a new interface technology emerging for both business and home systems. Windows
UNIX
LINUX
Mobile OS
Minimal Web/Cloud Computing OS
Applications Converting Programming Language to Machine Language Application Software
Application Programming Languages for Business
C, C++, Visual Basic, COBOL
Unlike traditional programs, which separate data from the actions to be taken on the data, a software object combines data and procedures (Object-oriented software development).
Fourth-Generation Languages
These tend to be less procedural. Some non-procedural languages are “natural languages” that enable users to communicate with the computer using conversational commands resembling human speech. The following is arranged from user-oriented to IS professional-oriented: PC software tools (General=purpose application software packages for PC like WordPerfect or Microsoft Access) Query Language (E.g. SQL)
Report Generator (E.g. Crystal Reports)
Graphics language (E.g. SAS/Graph, Systat)
Application generator (E.g. WebFOCUS, Quickbase)
Application Software Package (E.g. Oracle PeopleSoft HCM, mySAP ERP) Software Packages and Desktop Productivity Tools
A software package is a prewritten, precoded, commercially available set of programs that eliminate the need for individuals or organizations to write their own software programs for certain functions. Word Processing Software (E.g. MS Word)
Spreadsheet Software (E.g. Excel)
Data Management Software (E.g. Microsoft Access)
Presentation Graphics (E.g. PowerPoint)
Software Suites (E.g. Office 2010)
Web Browsers
Software for the Web
Java: An operating system-independent, processor-independent, object-oriented programming language that has become a leading interactive programming environment for the Web. AJAX (Asynchronous JavaScript and XML) is a Web development technique for creating interactive Web applications. HTML (Hypertext Markup Language): A page description language for specifying how text, graphics, video, and sound are placed on a Web page and for creating dynamic links to other Web pages and objects. Web Services
Refers to a set of loosely coupled software components that exchange information with each other using universal Web communication standards and languages. XML (Extensible Markup Language) is the foundational technology for Web services. It is a more powerful and flexible markup language than HTML. A service-oriented architecture (SOA) is a set of self-contained services that communicate with each other to create a working software application. Software Trends
Open Source Software
Cloud-Based Software Tools and Services
Mashups and Widgets
Software As a Service (SaaS)
Managing Hardware and Software Technology
Capacity Planning and Scalability
Total Cost of Ownership (TCO) of Technology Assets
(Pg. 143)
Own or Lease Hardware or Software
Outsourcing
Web hosting service, Offshore software outsourcing, Service level agreement (SLA) Cloud Services
Managing mobile platforms and software localization
Software localization refers to the process of converting software to operate in a second language (instead of English, for example) Data Management Technology
Data management technology consists of the software governing the organization of data on physical storage media. Data management software organizes, manages, and process business data concerned with inventory, customers, and venders. (Pg. 118) Database
(Pg. 159)
A database is a collection of related files containing records on people, places, or things. Types
Relational Database
Components
(Entity)(Entity)
Relationships
Types
One-to-One
One-to-Many
Many-To-Many
Entity Relationship Diagram
One-to-One
One-to-Many
Many-To-Many
Resolving a Many-to-Many Relationship
Placing a “Line Item” table in between parts and orders breaks up the many to many relationship.
Object-oriented Databases
Stores the data and procedures that act on those data as objects that can be automatically retrieved and shared. Object-oriented database management systems (DBMS) are becoming popular. Object-Relational DBMS
Provide capabilities of both object-oriented and relational DBMS. Related Concepts
Normalization
A database that has been properly designed and normalized will be easy to maintain, and will minimize redundant data elements and awkward many-to-many relationships, and increase stability and flexibility. Referential Integrity
Rules that ensure relationships between coupled tales remain consistent. Database Management Systems (DBMS)
(Pg. 165)
A database management system is a specific type of software for creating, storing, organizing, and accessing data from a database.
Examples
Microsoft Access (for desktop systems), DB2, Oracle Database, Oracle Database Lite, Microsoft SQL, MySQL (open-source) Basic Operations
Capabilities
(Pg. 166)
Data definition
This is the capability to specify the structure of the content of the database. It would be used to create database tables and to define the characteristics of the fields in each table. This information about the database would be documented in a data dictionary (an automated or manual file that stores definitions of data elements and their characteristics).
Querying and Reporting
These are tools for accessing and manipulating information in databases. Data Manipulation Language
Most DBMS have a specialized language called a data manipulation language that is used to add, change, delete, and retrieve the data in the database. The most prominent data manipulation language today is Structured Query Language (SQL).
Data Warehouses
(Pg. 170)
This is a database that stores current and historical data of potential interest to decision makers throughout the company. Data Mart
This is a subset of a data warehouse in which a summarized or highly focused portion of the organization’s data is placed in a separate database for a specific population of users. Improve Business Performance with Databases
(Pg. 169)
Business Intelligence (BI)
(Pg. 173)
These are tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better decisions are often referred to as business intelligence (BI).
Online Analytical Processing (OLAP)
(Pg. 174)
Data Mining
(Pg. 174)
Types of information obtainable from data mining include associations, sequences, classifications, clusters, and forecasts. Predictive analysis uses data mining techniques, historical data, and assumptions about future conditions to predict outcomes of events, such as the probability a customer will respond to an offer or purchase a specific product. Text Mining and Web Mining
(Pg. 176)
Policies and Procedures
(Pg. 178)
An Information policy specifies the organization’s rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information. (pg. 178) Data administration (Pg. 178)
Database administration (Pg. 178)
Ensuring Data Quality
(Pg. 179)
Data quality Audit (Pg. 179)
Data Cleansing (Pg. 179)
Databases and the Web
(Pg. 176)
Database server (Pg. 177)
Networking and Telecommunications Technology
Networking and telecommunications technology, consisting of both physical devices and software, links the various pieces of hardware and transfers data from one physical location to another. Computers and communications equipment can be connected in networks for sharing voice, data, images, sound, and video. A network links two or more computers to share data or resources, such as a printer. The world’s largest and most widely used network is the Internet. The Internet has created a new “universal” technology platform on which to build new products, services, strategies, and business models. This same technology platform has internal uses, providing the connectivity to link different systems and networks within the firm. Internal corporate networks based on Internet technology are called intranets.
Private intranets extended to authorized users outside the organization are called extranets. The World Wide Web is a service provided by the Internet that uses universally accepted standards for storing, retrieving, formatting, and displaying information in a page format on the Internet. All of these technologies, along with the people required to run and manage them, represent resources that can be shared throughout the organization and constitute the firm’s information technology (IT) infrastructure. (SKIPPED CHAPTER 6 ON THIS ENTIRE SUBJECT)
*Technology Services/People
(*Including this component defines the whole IT Infrastructure. See Pg. 118) Many businesses supplement their in-house information systems staff with external technology consultants. Even large firms do not have the staff, skills, the budget, or the necessary experience to implement and run the wide array of technologies that would be required. Function
Automate processes
Improve current business processes and create new ones by changing the flow of information and giving access to many more people Replacing sequential tasks with ones that can be performed simultaneously Eliminating delays in decision making
Driving new business models
People
Information systems are useless without skilled people to build and maintain them, and without people who can understand how to use the information in a system to achieve business objectives. Employees must be adequately trained to deal with things like customers to find solutions to their problems and leave the customer feeling that the company cares for them. Likewise, employees attitudes about their jobs, employers, or technology can have a powerful effect on their abilities to use information systems productively. Managers make sense out of many situations faces by organizations, make decisions and formulate action plans to solve organizational problems. Managers perceive business challenges in the environment , they set the organizational strategy for responding to those challenged, and they allocate the human and financial resources to coordinate the work and achieve success. They also create new products and re-create the organization from time to time.
Functions
(Pg. 14-15)
Three activities in an information system produce the information that an organization need to make decisions, control operations, analyze problems, and create new products or services. Environmental factors, such as customers, suppliers, competitors, stockholders, and regulatory agencies interact with the organization and its information systems. Input
Captures or collects raw data from within the organization of from its external environment. (E.g. Purchase data on products: customer name, address, credit card number, number of products, when it was purchased, etc.) Processing
Converts this raw input into a meaningful form.
(e.g. Calculate order totals, track product purchases, send requests for payment to credit card companies) Output Transfers the processed information to people who will use it or to the activities for which it will be used. Information systems also require feedback, which is output that is returned to appropriate members of the organization to help them evaluate or correct the input stage. (e.g. Tickets to print, receipts for an order, online reports of purchases, number of tickets sold for a game, number of tickets sold per year, and frequent customers.)
Types
These correspond directly with the hierarchies of management in business (see Business section)
Strategic-level systems
(This corresponds with and servers the Senior Management level) E.g. Determining what kind of car accessories to stock
Types
Executive Support Systems (ESS)
These help senior management make these decisions. They address non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. ESS present graphs and data from many sources through an interface that is easy for senior managers to use. ESS are designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from
internal MIS and DSS.
They filter, compress, and track critical data, displaying the data of greatest importance to senior managers. Increasingly, such systems include business intelligence analytics for analyzing trends, forecasting, and “drilling down” to data at greater levels of detail. Often the information is delivered to senior executives through a portal, which uses a Web interface to present integrated personalized business content. EXAMPLE: Digital Dashboard (Pg. 51)
SEE ALSO PAGE 355
Helps solve unstructured and semistructured problems.
Drill down (pg. 355)
Digital dashboard (pg. 355)
Management-level systems
(This corresponds with and serves the Middle Management Level) Middle management needs systems to help with monitoring, controlling, decision-making, and administrative activities. The principal question addressed by such systems is this: Are things working well? E.g. How many people the company will need to receive, sell, and ship the car accessories. Types
Management Information Systems (MIS)
(Pg. 48-49)
DON’T CONFUSE THIS WITH THE GENERAL FIELD OF STUDY CALLED MIS (I.E. WHAT THIS COURSE IS ALL ABOUT)! MIS provide middle managers with reports on the organization’s current performance. This information is used to monitor and control the business and predict future performance. MIS summarize and report on the company’s basic operations using data supplied by transaction processing systems. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. SEE ALSO PAGE 347
MIS primarily deals with structured decision problems.
Decision-Support Systems (DSS) / (Business Intelligence Systems) In contrast, decision-support systems (DSS) support more non-routine decision making. They focus on problems that are unique and rapidly changing, for which the
procedure for arriving at a solution may not be fully predefined in advance. They try to answer questions such as these: What would be the impact on production schedules if we were to double sales in the month of December? What would happen to our return on investment if a factory schedule were delayed for six months? Although DSS use internal information from TPS and MIS, they often bring in information from external sources, such as current stock prices or product prices of competitors. EXAMPLE: “Voyage-Estimating System” (pg. 50)
SEE ALSO PAGE 348
Supports semistructured and unstructured decision problem analysis. Some DSS are data-driven, relying on online analytical processing (OLAP) and data mining to analyze large pools of data. Components
(Pg. 348)
Database
Software system
Contains models, data mining, and other analytical tools
Model (Pg. 351)
Statistical Analysis (Pg. 351)
User interface
Types?
Spreadsheet Pivot Tables
Pivot table (Pg. 353)
Data Visualization and Geographic Information Systems (GIS)
Data visualization (Pg. 353)
Graphical Information Systems (Pg. 353)
Web-Based Customer Decision Support Systems (CDSS)
Operational-level systems
(This corresponds with and serves the Operational Management level) Operational managers need systems that keep track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and he flow of materials in a factory. Types
Transaction Processing System (TPS)
(Pg. 47)
Transaction Processing System is a computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping. Example: A payroll system is a typical accounting TPS that processes transactions such as employee time cards and changes in employee salaries and deductions (diagram on pg. 48)
Group Decision-Support Systems (GDSS)
(Pg. 347)
Provide a group electronic environment in which managers and teams can collectively make decisions and design solutions for unstructured and semistructured decisions. (Pg. 355)
Enterprise Applications
(Pg. 53-55)
These are systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management. Types
Enterprise Systems / Enterprise Resource Planning (ERP) systems Firms use enterprise systems to integrate business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources into a single software system. See also Pg. 273
Enterprise Software (Pg. 274)
Business Value of Enterprise Systems
(Pg. 275)
Supply Chain Management (SCM) Systems
Supply Chain Management Systems Firms use supply chain management (SCM) systems to help manage relationships with their suppliers. This also happens to be a type of Interorganizational system. See alternate category of Types. This, along with CRM, is one of the most common system applications that result from a business value chain analysis (Pg. 90) See also Pg. 276
Just-in-time strategy (Pg. 278)
Bullwhip Effect (Pg. 278)
Supply Chain Management Software
(Pg. 279)
Types
Supply Chain Planning Systems
(Pg. 279)
Examples: i2 Technologies (Master Scheduling, Deployment Planning, Inventory Planning, and web-based tool for Collaborative Planning, Forecasting, Replenishment [CPFR]) Demand Planning (pg. 279)
Supply Chain Execution Systems
(Pg. 280)
Example: Haworth Incorporated’s Warehouse Management System (WMS); Manugistics; i2 Technologies (both acquired by JDA Software); vendors SAP and Oracle PeopleSoft offer applications as well. Global Supply Chains
Using intranets and extranets over the web
(Pg. 280)
Model
Push-based Model (Pg. 283)
Pull-based Model (Pg. 283)
Business Value
(Pg. 284)
Customer Relationship Management (CRM) Systems
Firms use customer relationship management (CRM) systems to help manage their relationships with their customers. CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This, along with SCM, is one of the most common system applications that result from a business value chain analysis (Pg. 90) See more on Pg. 285
Touch point (pg. 285)
Customer Relationship Management (CRM) Software
Modules
Partner relationship management (PRM) (Pg. 286)
Employee relationship management (ERM) (Pg. 286)
Sales Force Automation (SFA) (Pg. 286)
Customer Service (Pg. 286)
Marketing (Pg. 286)
Cross-selling (Pg. 286)
Types
Operational
(Pg. 290)
Analytical
(Pg. 291)
Customer lifetime value (CLTV) (Pg. 291)
Business Value
(Pg. 291)
Churn rate (Pg. 291)
Knowledge Management Systems (KMS)
Some firms perform better than others because they have better knowledge about how to create, produce, and deliver products and services. Knowledge management systems (KMS) enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm, and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge. Challenges
(Pg. 292)
Next Generation Enterprise Applications
(Pg. 293)
Service Platforms
(Pg. 294)
Types
Interorganizational System
Automate the flow of information across organizational boundaries. (E.g. Supply Chain Management Systems (SMC) as mentioned in Enterprise
Applications.) Types
Intranets
Intranets are simply internal company Web sites that are accessible only by employees. Extranets
Extranets are company Web sites that are accessible to authorized vendors and suppliers, and often used to coordinate the movement of supplies to the firm’s production apparatus. (I think extranets can also be made for employees to access information off-site.) Security
(Pg. 235)
Security refers to the policies, procedures, and technical measures used to prevent unauthorized access, alternation, theft, or physical damage to information systems. Controls are methods, policies, and organizational procedures that ensure the safety of the organization’s assets; the accuracy and reliability of its records; and operational adherence to management standards. Vulnerabilities
Internet Vulnerabilities
(Pg. 236)
Wireless Vulnerabilities
(Pg. 237)
War driving (Pg. 237)
Malicious Software
(Pg. 238-240)
Malware
Virus
Worms
Trojan Horse
SQL injection attack
Spyware
Keyloggers
Hackers and Computer Crime
(Pg. 240)
Cybervandalism (Pg. 240)
Spoofing and Sniffing
(Pg. 240)
Denial-of-Service Attacks (DoS)
(Pg. 240)
Distributed denial-of-service attack (DDoS) (Pg. 241)
Computer Crime
(Pg. 241)
Identity Theft
(Pg. 241)
Phishing
Evil Twins
Pharming
Click Fraud
(Pg. 244)
Global Threats (Cyberterrorism and Cyberwarfare)
(Pg. 244)
Internal Threats (Employees)
(Pg. 245)
Social Engineering (Pg. 245)
Software Vulnerability
Bugs (Pg. 245)
Patches (Pg. 245)
Business Value of Security
(Pg. 246)
Legal and Regulatory Requirements for Electronic Records Management HIPAA (Pg. 246)
Gramm-Leach-Bliley Act (Pg. 247)
Sarbanes-Oxley Act (Pg. 247)
Electronic Evidence and Computer Forensics
(Pg. 247)
Establishing Framework for Security and Control
(Pg. 248)
Controls
General control (Pg. 248)
Application Controls (Pg. 248)
Risk Assessment
(Pg. 248)
Security Policy
(Pg. 250)
Acceptable Use Policy (AUP) (Pg. 250)
Authorization Policies (Pg. 250)
Authorization management systems (Pg. 250)
Disaster Recovery and Continuity Planning
(Pg. 250)
See System Availability in Technologies and Tools for solutions Business continuity planning (Pg. 251)
Auditing
(Pg. 252)
MIS audit (Pg. 252)
Cloud Security
(Pg. 258)
Mobile Security
(Pg. 259)
Technologies and Tools
(Pg. 252)
Access Control
Authentication
Token (Pg. 253)
Smart Card (Pg. 253)
Biometric Authentication (Pg. 253)
Protection
Firewalls
(Pg. 254)
Intrusion Detection System
(Pg. 255)
Antivirus and AntiSpyware
(Pg. 255)
Unified Threat Management (UTM) System
(Pg. 255)
Encryption
(Pg.255-257)
Secure Socket Layer (SSL) (Pg. 256)
Secure Hypertext Transfer Protocol (S-HTTP) (Pg. 256)
Public key encryption (Pg. 256)
Digital Certificates (Pg. 256)
Public Key Infrastructure (PKI) (Pg. 257)
System Availability
(Pg. 257)
Hardware and Software
Online transaction processing (pg. 257)
Fault-tolerant computer system (pg. 257)
High-availability computing (Pg. 258)
Downtime (Pg. 258)
Recovery-oriented computing (Pg. 258)
Controlling Network Traffic
Deep packet inspection (DPI) (Pg. 258)
Security Outsourcing
Managed Security Service Providers (MSSPs) (Pg. 258)
Quality Software
(Pg. 259)
Types for Collaboration
(See Collaboration in Business section)
Business Motivations/Objectives for IS
(pg. 10-12)
Achieve Operational Excellence
(Productivity, efficiency, agility)
(E.g. Tato used Digital Manufacturing (DM) (Specifically DELMIA) to produce new car (Tato) more quickly and at lower cost. The system is also flexible allowing other cars to be designed, evaluated and produced. pg. 39) Create New Products, Services, and Business Models
(E.g. Tato used Digital Manufacturing (DM) (Specifically DELMIA) to produce new car (Tato) more quickly and at lower cost. The system is also flexible allowing other cars to be designed, evaluated and produced. pg. 39) Raise Revenue and Profits while Lowering Costs by Increasing Customer and Supplier
Intimacy (continuous marketing, sales, and service; customization and personalization) Improve Decision Making for Managers and Employees
(Accuracy and speed)
(E.g. Use database to query and report items sold in order to determine which need to be restocked, or which region would benefit from a promotional campaign, or when should products be offered at discount price.) Decisions
(Pg. 344)
Types
Unstructured (Pg. 344)
Structured (Pg. 344)
Semistructured (Pg. 344)
Process
(Pg. 345)
These correspond with the four problem solving steps.
Intelligence (Pg. 345)
Design (Pg. 346)
Choice (Pg. 346)
Implementation (Pg. 346)
Quality Dimensions
(Pg. 346)
Accuracy
Comprehensiveness
Fairness
Speed (Efficiency)
Coherence
Due Process
Enhancing Decisions
(Pg. 347)
Intelligent Techniques
(Pg. 347)
Expert systems
Case-based reasoning
Genetic algorithms
Neural networks
Fuzzy logic
Intelligent agents
Knowledge Management Systems
See type of information systems
Information Systems for Decision Support
(Pg. 347)
Management Information Systems (MIS)
Decision Support System (DSS)
(Pg. 348)
Executive Support Systems (ESS)
(Pg. 355)
Group Decision Support Systems (GDSS)
(Pg. 355)
Intelligent Systems for Decision Support
Artificial Intelligence (AI) (Pg. 356)
Expert Systems
(Pg. 356)
Knowledge base (Pg. 356)
Inference Engine (Pg. 356)
Case-based Reasoning (CBR)
(Pg. 358)
Fuzzy Logic
(Pg. 358)
Neural Networks
(Pg. 359)
Machine learning (pg. 360)
Genetic Algorithms
(Pg. 360)
Intelligent Agents
(Pg. 362)
Knowledge Management
(Pg. 363)
Improves business processes and decisions
Knowledge Types
Structured
(Pg. 364-365)
(i.e. text documents, reports, presentations)
Semistructured
(e.g. email, voice mail, chat room, etc.)
Tacit knowledge
(Pg. 364)
(e.g. in the mind of employees not written down)
Enterprise-wide Knowledge Management Systems
These systems deal with all three types of knowledge
Enterprise Content Management Systems
(Pg. 365)
Helps organizations manage structured semistructured and unstructured information. Digital asset management system (Pg. 366)
Knowledge Network Systems (Expertise location and management systems) (Pg. 366)
Collaboration Tools and Learning Management Systems
(Pg. 366)
Social bookmarking (Pg. 366)
Folksonomies (Pg. 367)
Learning management system (LMS) (Pg. 367)
Knowledge Work Systems (KWS)
(Pg. 367)
These systems are for knowledge workers as mentioned in the Business > Hierarchy of Management > Middle Management. Requirements
(Pg. 367)
Hardware Platform (Knowledge Workstation)
Software (Graphics/Visualization, Modeling/Simulation, Document Management, Communications) User Interface
External Knowledge Base
Examples
(Pg. 367)
CAD Systems
(Pg. 367)
Virtual Reality systems
(Pg. 368)
Virtual Reality Modeling Language (VRLM) (Pg. 368)
Investment workstations (Pg. 368)
Financial workstations
(Pg. 367-368)
Increase Competitive Advantage
Ensure Survival in Spite of Business Environment Change
New Themes/Developments
Major New Themes in Information Systems
(pg. 6-7)
Technology
Cloud Computing
Software as a service (SasS)
Mobile Digital Platform
People
Mangers adopt online collaboration and social networking software to improve coordination, collaboration, and knowledge sharing. Business intelligence applications accelerate
Virtual meetings proliferate
Organizations
Web 2.0 applications are widely adopted by firms
Telework gains momentum in the workplace
Co-creation of business value
Effects on Careers and Departments
(See pg. 25-29)
Accounts
Finance
Marketing
Operations (-Management in Services and Manufacturing)
Management
Information Systems
(Business Intelligence?)
General Knowledge Requirements in Business
(Pg. 29)
These are common requirements/themes of Information System which various department/fields expect you to have skill and knowledge in. Understanding of how information systems help firms achieve major business objectives An appreciation of the central roles of databases
Skills in information analysis and business intelligence
Sensitivity to the ethical, social, and legal issues raised by systems The ability to work with technology specialists and other business professionals in designing and building systems
Businesses
(Pg. 41)
A business is a formal organization whose aim is to produce products or provide services for a profit—that is, to sell products at a price greater than the costs of production. Customers are willing to pay this price because they believe they receive a value greater than or equal to the sale price. Business firms purchase inputs and resources from the larger environment (suppliers who are often other firms).
Employees of the firm transform these inputs by adding value to them in the production process. Then they deliver their outputs to constituents and customers. Starting a Business
Strategic choice
What to produce. Determines customers, type of employees, production methods and facilities needed, marketing themes, etc. Kind of Organization (A) Develop of product division –an arrangement of people, machines, and business processes that will produce the product. (B) Sales and marketing group – attract customers, sell products, keep track of after-sale issues (warranties and maintenance).
(C) Once sales happen, finance and accounting group keeping track of financial transactions (orders, invoices, disbursements, payroll) Seek out sources of credit and finance. (D) Group to focus on recruiting, hiring, training, and retaining employees Globalization Challenges and Opportunities
(Pg. 9)
Flattened world: Developed countries no longer have advantage as products and
jobs are being sent overseas. Global collaboration and instantaneous communication.
Functions
A typical business organization has systems supporting processes for each of the major business functions (pg. 47).
(Pg. 42)
Manufacturing and Production
Business Process
Assembling the product, Checking the quality, Producing bills of material Sales and Marketing
Business Process
Identifying customers, Making customers aware of the product, Selling the product Finance and Accounting
Business Process
Paying creditors, Creating financial statements, Managing cash accounts Human Resources
Business Process
Hiring Employees, Evaluating employees’ job performance, Enrolling employees in benefits plan Departments
(I have not seen this mentioned in the book but it seems implied.) Accounts
Finance
Marketing
Operations (-Management in Services and Manufacturing)
Management
Information Systems
(Pg. 68)
The formal organizational unit responsible for information technology services. Responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. Specialists
Programmers
Systems Analyst
Information Systems Manager
Chief Information Officer (CIO)
Chief Security Officer (CSO)
Chief Privacy Officer (CPO)
Chief Knowledge Officer (CKO)
Services
(See pg. 69)
(Business Intelligence?)
Hierarchy of Management
A typical firm also has different systems supporting the decision-making needs of each of the main management groups (pg. 47).
(Pg. 44-45)
Senior Management
Makes long-range strategic decisions about products and services as well as ensures financial performance of the firm. Special Inhabitants
Data workers assist with administrative work at all levels of the firm (e.g. Secretaries or clerks).
Middle Management
Carries out the programs and plans of senior management.
Special Inhabitants
Knowledge workers design products/services and create knowledge for the firm (e.g. Scientists, engineers, architects).
Knowledge workers can use Knowledge Work Systems as mentioned in the Business Motivations > Improve Decision Making section. Data workers assist with administrative work at all levels of the firm (e.g. Secretaries or clerks).
Operational Management
Responsible for monitoring the daily activities of the business. Special Inhabitants
Production or Service Workers actually produce the product and deliver the service. Data workers assist with administrative work at all levels of the firm (e.g. Secretaries or clerks).
Environment
(Pg. 45-46)
To be successful, an organization must constantly monitor and respond to –or even anticipate- developments in its environment. (Competitive Advantage is also evaluated on the basis of a business environment. See Competitive Advantage section and pg. 81-83) Immediate Environment
Customers
Stockholders
Regulations
Competitors
Suppliers
Broad Environment
Technology and Science
Economy/Socioeconomic Trends
International Events/Change
Politics
Collaboration
(Pg. 56)
Collaboration is working with others to achieve shared and explicit goals. Teams have a specific mission that someone in the business assigned to them. They have a job to complete. Necessity
(Pg. 57-58)
Changing nature of work.
Growth of professional work.
Changing organization of the firm.
Changing scope of the firm.
Emphasis on innovation.
Changing culture of work and business.
Benefits
(Pg. 58)
Productivity
Quality
Customer Service
Financial Performance (Profitability, Sale, and Sales Growth) Requirements
Collaboration Capacity
Open Culture
Decentralized structure
Breadth of collaboration
Collaboration Technology
Use of collaboration technology for implementation and operations Use of collaboration technology for strategic planning
Types
(Pg. 60-66)
Email and Instant Messaging
Social Network
Wikis
Virtual Worlds
Internet-Based Collaboration Environments
Virtual Meeting Systems
In an effort to reduce travel expenses, many companies, both large and small, are adopting videoconferencing and Web conferencing technologies. An important feature of leading-edge high-end videoconferencing systems is telepresence technology, an integrated audio and visual environment that allows a person to give the appearance of being present at a location other than his or her true physical location. Telepresence example on pg. 62. Cisco, HP, LifeSize, and Polycom supply these products. Skype and ooVoo are internet options. Google Apps/Google Sites
One of the most widely used “free” online services for collaboration is Google Apps/Google Sites. Google Sites allows users to quickly create online, group-editable Web sites. Google Calendar: Private and shared calendars; multiple calendars Google Gmail: Google’s free online e-mail service, with mobile access capabilities Google Talk: Instant messaging, text and voice chat
Google Docs: Online word processing, presentation, spreadsheet, and drawing software; online editing and sharing Google Sites: Team collaboration sites for sharing documents, schedules, calendars; searching documents and creating group wikis Google Video: Private hosted video sharing
Google Groups: User-created groups with mailing lists, shared calendars, documents, sites, and video; searchable archives Microsoft SharePoint
Microsoft SharePoint is the most widely adopted collaboration system for small and medium-sized firms that use Microsoft server and networking products. SharePoint is a browser-based collaboration and document management platform, combined with a powerful search engine that is installed on corporate servers. Lotus Notes
For very large firms (Fortune 1000 and Russell 2000 firms), the most widely
used collaboration tool is IBM’s Lotus Notes. Notes is now Web-enabled with enhancements for social networking (Lotus Connections) and a scripting and application development environment so that users can build custom applications to suit their unique needs. The Notes software installed on the user’s client computer allows the machine to be used as a platform for e-mail, instant messaging (working with Lotus Sametime), Web browsing, and calendar/resource reservation work, as well as for interacting with collaborative applications. Today, Notes also provides blogs, wikis, RSS aggregators, CRM, and help desk systems. Socialtext
Zoho Notebook
Project
Bluetie
Basecamp
Onehub
WorkZone
Categories
E-mail and instant messaging
Collaborative writing
Collaborative reviewing/editing
Event scheduling
File sharing
Screen sharing
Audio conferencing
Video conferencing
White boarding
Web presenting
Work scheduling
Document sharing (including wikis)
Mind mapping
Large audience Webinars
Co-browsing
Evaluating and Selecting
(Pg. 67)
Time/Space Matrix
1. Collaboration challenges as identified by the Time/Space Matrix 2. In your Matrix cell placement, what solutions are available? 3. Consider cost (including training and involving information system departments) and benefits 4. Identify security, vulnerability, and financial risks
5. Seek the help of potential users to identify implementation and training issues 6. Select candidate tools and allow venders to make presentations Competitive Advantage
Evaluating Competitive Advantage
Competitive Forces Model
(Pg. 81-83)
This model is created by Michael Porter. Porter’s model is all about the firm’s general business environment.\ Traditional Competitors
New Market Entrants
Being a new business comes with certain advantages. See text book for more details.
Suppliers
The more different suppliers a firm has, the greater control it can exercise over suppliers in terms of price, quality, and delivery schedules. Substitute Products The more substitute products and services in your industry, the less you can control pricing and the lower your profit margins.
Customers
A profitable company depends in large measure on its ability to attract and retain customers (while denying them to competitors), and charge high prices. Achieving Competitive Advantage
(Pg. 83-87)
General
Align the IT with Business Objectives
Methods
Identify your business strategy and goals
Break these strategic goals down into concrete activities and processes Identify how you till measure progress towards the business goal (e.g. metrics) Ask yourself “How can information technology help me achieve progress towards our business goals and how it will improve our business process and activities?” Measure actual performance. Let the numbers speak.
Strategies
Low-cost Leadership
Use information systems to achieve the lowest operational costs and the lowest prices. Walmart’s continuous replenishment system is also an example of an efficient customer response system. Product Differentiation
Use information systems to enable new products and services, or greatly change the customer convenience in using your existing products and services. From an example: This ability to offer individually tailored products or services using the same production resources as mass production is called mass customization. Focus on Market Niche
Use information systems to enable a specific market focus, and serve this narrow target market better than competitors. Strengthen Customer and Supplier Intimacy
Use information systems to tighten linkages with suppliers and develop intimacy with customers. The strong linkage to customers and suppliers increase switching cost (the cost of switching from one product to competing product), and loyalty to your firm. (This information is found in another version of the text book.) Value Chain Model
(PG. 89-90)
The value chain model highlights specific activities in the business where competitive strategies can best be applied (Porter, 1985) and where information systems are most likely to have a strategic impact. See related term, benchmarking (pg. 90)
There appears to be a difference between the wider “Industry Value Chain” and the “Business Value Chain” which falls within the Industry Value Chain.
Primary Activities
Primary activities are most directly related to the production and distribution of the firm’s products and services, which create value for the customer. Primary activities include inbound logistics, operations, outbound
logistics, sales and marketing, and service. Support Activities
Support activities make the delivery of the primary activities possible and consist of organization infrastructure (administration and management), human resources (employee recruiting, hiring, and training), technology (improving products and the production process), and procurement (purchasing input).
Business Process Management (BPM)
(Pg. 101-104)
An approach to business which aims to continuously improve business processes. BPM uses a variety of tools and methodologies to understand existing processes, design new products, and optimize those processes. The radical rethinking and redesign of business processes is called business process reengineering (BPR).
Steps
Identify Processes for Change
Analyze Existing Processes
Design the New Process
Implement the New Process
Continuous Measurement
Challenges
Employees do not like change (in organizational culture).
Types
1
Monitor and Identify Inefficiencies
Example: Sajus BPM monitoring software
2
Automate some part of a business process and enforce business rules for consistency and efficiency Example: Pegasystems BPM workflow software
3
Helps integrate existing systems to support process improvements. Automatically manage processes across the business, extract data and generate transactions in multiple related systems. Global/Enterprise-Specific (Many Firms Working Together)
Value Web
(Pg. 91)
A value web is a collection of independent firms that use information technology to coordinate their value chains to produce a product or service for a market collectively. It is more customer driven and operates in a less linear fashion than the traditional value chain. ERP systems are essential here.
By working with other firms, industry participants can use information technology to develop industry-wide standards for exchanging information or business transactions electronically, which force all market participants to subscribe to similar standards. Such efforts increase efficiency, making product substitution less likely and perhaps raising entry costs—thus discouraging new entrants. Also, industry members can build industry-wide, IT-supported consortia, symposia, and communications networks to coordinate activities concerning government agencies, foreign competition, and competing industries.
Other Enhancements
(Pg. 92)
Synergy
One use of information technology in these synergy situations is to tie together the operations of disparate business units so that they can act as a whole. Enhancing Core Competencies
The performance of all business units will increase insofar as these business units develop, or create, a central core of competencies. A core competency is an activity for which a firm is a world-class leader. Any information system that encourages the sharing of knowledge across business units enhances competency. Such systems might encourage or enhance existing competencies and help employees become aware of new external knowledge; such systems might also help a business leverage existing competencies to related markets. Network-Based Strategies
In traditional economics, production experiences the law of diminishing returns. The more any given resource is applied to production, the lower the margin of gain in output. However, this is not true in network economics. The more telephone subscribers means the more users are able to connect with others, and so the value increases for everyone. Internet sites can be used by firms to build communities of users—like-minded customers who want to share their experiences. This builds customer loyalty and enjoyment, and builds unique ties to customers. Network economics also provides strategic benefits to commercial software vendors.
The value of their software and complementary software products increases as more people use them, and there is a larger installed base to justify continued use of the product and vendor support. A virtual company, also known as a virtual organization, uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. Quality
(Pg. 99)
Quality can be defined from both the produce and the customer perspectives. Total Quality Management (TQM) makes quality the responsibility of all people and functions within the organization. Six Sigma is a specific measurement of quality, representing 3.4 defects per million opportunities. How Information Systems Improve Quality
(Pg. 100-101)
Reduce Cycle Time and Simplify the Production Process
(Cycle time refers to the total elapsed time from the beginning of a process to its end.) Benchmark
Use Customer Demands to Improve Products and Services
(A computer-aid design (CAD) system automates the creation and revision of designs, using computers and sophisticated graphics.) Improve Design Quality and Precision
Improve Production Precision and Tighten Production Tolerances Internet’s Impact on Competitive Advantage
The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting on a global scale, deepening the possibilities for large companies but
simultaneously creating many opportunities for small and medium-sized firms. (Pg. 97) (Pg. 88)
Negative
Substitute Products or Services
Customers’ bargaining power
Suppliers’ bargaining power
Threat of new entrants
Positioning and rivalry among existing competitors
Because of the internet, competitive rivalry has become much less intense. Internet technology is based on universal standards that any company can use, making it easy for rivals to compete on price alone and for new competitors to enter the market. Because information is available to everyone, the Internet raises the bargaining power of customers, who can quickly find the lowest-cost provider on the Web. Profits have been dampened. Positive
New opportunities for building brands and large customer loyalty, willing to pay premium New strategic opportunities for success (using technology better than others) Global/International Organization
(Pg. 98)
Types
Domestic Exporter
Characterized by heavy centralization of corporate activities in the home country of origin. Production, finance/accounting, sales/marketing, human resources, and strategic management are set up to optimize resources in the home country. Multinational
Concentrates financial management and control out of a central home base while decentralizing production, sales, and marketing operations to units in other countries. Example: General Motors, Chrysler, and Intel.
Franchiser
The product is created, designed, financed, and initially produced in the home country, but for product-specific reasons must rely heavily on foreign personnel for further production, marketing, and human resources. Example: MCDonalds and Starbucks. Local products and marketing vary according to location. Transnational
These have no single national headquarters but instead have many regional headquarters and perhaps a world headquarters. Example: Citigroup, Sony, and Nestle are attempting this transition. Functions
Centralized
In the home country.
Decentralized
To local foreign units.
Coordinated
All units participate as equals.
System Configurations
(PG. 98-99)
Centralized
Those in which systems development and operation occur totally at the domestic home base. Duplicated
Those in which development occurs the home base but operations are handed over to autonomous units in foreign locations.
Decentralized
Those in which each foreign unit designs its own unique solutions and systems.
Networked
Those in which systems development and operations occur in an integrated and coordinated fashion across all units.
E-Commerce
(Pg. 305)
Uniqueness
(Pg. 306)
Ubiquity
Global Reach
Universal Standards
Richness
Interactivity
Information Density
Personalization/Customization
Social Technology: User Content Generation and Social Networking Key Concepts
(Pg. 310)
Information asymmetry (Pg. 310)
Menu costs (Pg. 310)
Dynamic pricing (Pg. 312)
Disintermediation (Pg. 312)
Digital Goods
(Pg. 313)
Types
Mobile commerce (Pg. 315)
Business-to-consumer (B2C)
Business-to-business (B2B)
Consumer-to-consumer (C2C)
Business Models
(Pg. 315)
Portal
(Pg. 315)
E-tailer
(Pg. 315)
Content Provider
(Pg. 316)
Transaction Broker
(Pg. 317)
Market Creator
(Pg. 317)
Service Provider
(Pg. 317)
Community Provider
(Pg. 317)
Revenue Models
(Pg. 317)
Advertising Revenue Model
(Pg. 317)
Sales Revenue Model
(Pg. 319)
Subscription Revenue Model
(Pg. 320)
Free/Fremium Revenue Model
(Pg. 320)
Transaction Fee Revenue Model
(Pg. 320)
Affiliate Revenue Model
(Pg. 320)
Web 2.0 and Social Networking
(Pg. 321)
Social shopping (Pg. 321)
Wisdom of Crowds
(Pg. 321)
Crowdsourcing (Pg. 321)
Predication Markets (Pg. 321)
Marketing
(pg. 322)
Long tail marketing (Pg. 322)
Behavioral targeting (Refers to click streams) (pg. 322)
Business to Business (B2B) E-commerce
(Pg. 325)
Electronic data interchange (EDI) (Pg. 325)
Procurement (Pg. 325)
Private industrial networks (Pg. 326)
Private exchange (Pg. 326)
Net marketplaces (Pg. 326)
Exchanges (Pg. 327)
Mobile E-commerce
(Pg. 327)
Services and Applications
(Pg. 327)
Location-Based Services
Banking and Financial Services
Wireless Advertising
Games and Entertainment
Website
(Pg. 329)
Requirements
Business objectives
System functionality
Information Requirements
Building Website
(Pg. 331)
In-House
Outsource
Hosting Website
Co-location (Pg. 332)
In-House
Outsource
Budget
(Pg. 332)
