INFO 1400

Koffka Khan Koffka Khan

Tutorial 5 Tutorial 5
Dirt Bikess management wants to make sure it has policies and
Developing a Web Site Privacy Policy
g p
procedures in place to protect the privacy of visitors to its Web site.
You have been asked to develop Dirt Bikess Web site privacy
policy.
Th TRUST W b it t URL t t h M d l P i The TRUSTe Web site at <URL>www.truste.org has Model Privacy
Disclosures in its Privacy Resources that you can download and
reviewto help you draft Dirt Bikess privacy policy.
You can also examine specific companies privacy policies by You can also examine specific companies privacy policies by
searching for Web site privacy policies on Yahoo!, Google or
another search engine.
Prepare a report for management that addresses the following g g
issues shown on the following slides:
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1. How much data should Dirt Bikes collect on visitors to its Web site, and why
Running Case Solution
that data? What information could it find out by tracking their activities at its
Web site? What value would this information provide the company? What are
the privacy problems raised by collecting such data?
DB could benefit from using its Web site to learn more about its customers tastes and
interests.
The Web site could collect information such as visitors age, location, marital
t t ti i l l h bbi d ifi t l i t t (i l di h status, occupation, income level, hobbies, and specific motorcycle interests (including why
they might purchase a motorcycle and how they would use itraces, transportation, joining
a motorcycle group).
Such information will help DB to know the types of people interested p yp p p
in its products and how it can communicate to them, create more targeted and
personalized advertising and even affect DBs plans for the future, including designing new
products to better fit their interests.
If DB collects such personal data through its Web site If DB collects such personal data through its Web site,
privacy problems would arise if DB tried to share that information with other companies
without the knowledge and explicit consent of the Web site visitors. The company would
have to state clearly its privacy policy and then carefully follow that policy in order to avoid
privacy problems. Otherwise many visitors might find themselves inundated by
advertisements from DB and from any other companies with which DB might have shared
the information. It could even cause DB to lose sales and its good reputation.
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Running Case Solution
2. Should Dirt Bike use cookies? What are the advantages of using
cookies for both Dirt Bikes and its Web site visitors? What privacy
issues do they create for Dirt Bikes?
Cookies could be very useful for both DB and visitors to its site Cookies could be very useful for both DB and visitors to its site.
The visitors would find their return to DBs site easier and more
personal, while DB could use the cookie data to provide to them
with information of greatest interest to them. Moreover it might
induce visitors returning more often.
However, Web site visitor information collected fromcookies could
be misused by DB and by companies the collect that data,
creating problems for both the visitor and for DBs reputation creating problems for both the visitor and for DBs reputation.
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Running Case Solution
3. Should Dirt Bikes join an organization such as TRUSTe to certify it
has adopted approved privacy practices? Why or why not?
J oining TRUSTe or other such organizations can only help DB
because many of its site visitors may want to see their privacy because many of its site visitors may want to see their privacy
protected. On the other hand many visitors would not care, and in
any case few will notice the certification, so that its impact would
probably be minor. Also many organizations such as TRUSTe are
not necessarily diligent in enforcing its standards. One real
question for DB is how important is it to DB management and
employees that they help protect individual privacy regardless of
its minor affect on DBs business A search of the Internet will its minor affect on DBs business. A search of the Internet will
highlight several other organizations. The real issue is which ones
are most respected and well known; these would be the best
certification organizations.
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Running Case Solution
4. Should Dirt Bikes design its site so that it conforms to P3P
standards? Why or why not?
While P3P works only on sites that support it, it is capable of giving
site visitors more control over the use of their personal information site visitors more control over the use of their personal information.
Giving site visitors such control will certainly enable some people
who have privacy concerns to explore DBs site and perhaps
become a DB purchaser. DB management must realize that it has
to have a long range perspective on its success because DBs bike
must be of high quality and last for years, and must drawcustomers
back to purchase again after a number of years, and it must also
inspire them to help promote DBs bikes to family friends and inspire them to help promote DBs bikes to family, friends and
acquaintances.
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Running Case Solution
5. Should Dirt Bikes adopt an opt-in or opt-out model of informed consent?
Obviously the opt-inapproach puts more power in the hands of site
visitors and therefore does not enable DB to collect as much
information. DB would have to make the choice between collecting
more information and having some visitors not being happy with the
policy choice, or collecting less information but leaving more of its
isitors happ to ha e been there visitors happy to have been there.
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Running Case Solution
6. Include in your report a draft privacy statement for the Dirt Bikes Web site. You
can use the TRUSTe model privacy statement as a guideline if you wish.
The TRUSTe Web site (http://www.truste.org/) is a good place to obtain
i f ti d d l i t t t Th i t t t th information and a model privacy statement. The privacy statements they
developwould address the following:
what personally identifiable information the company or a third party collects from
Web site visitors;;
howthe companies use this information;
whether Dirt Bikes shares such information with other companies.
If a privacy statement is based on these TRUSTe guidelines, Web site visitors
will know:
the organization collectingthe information,
howthe information is used,
with whomthe information may be shared with whomthe information may be shared,
what choices are available to visitors regarding collection,
use and distribution of their information;
the kind of security procedures that are in place to protect the loss, misuse or
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y p p p ,
alteration of visitor information; and
how users can access and correct any inaccuracies in the information collected
about them.
1. How does Salesforce.com use cloud computing?
Case Study - Salesforce.Com: Cloud Services Go Mainstream
Salesforce.comprovides customer relationship management and other software
applications using the software-as-a-service business model over the Internet. Cloud
f computing, also knownas on-demand computing, eliminates the need for a business to
make large up-front hardware and software investments and reduces the time to
implement newprograms. Subscribers to Salesforce.comdont have to purchase or
maintain any hardware (albeit personal computing devices) nor do they have to install any maintain any hardware (albeit personal computing devices) nor do they have to install any
special operating systems, database servers, or application servers. Other than the
monthly user subscription fee, businesses reduce their licensingand maintenance fees.
Users access the Salesforce.comcloud through a standard Web browser or a mobile
handheld device. Businesses usingthe Salesforce.coms cloud have an easier time scaling
their systemas they increase or decrease their workforce they adjust the number of
subscriptions to the cloud.
Salesforce.comoffers some customization of its software so a business can adjust the
software to unique business processes. It offers three types of clouds: Sales cloud, service
cloud and the customcloud The sales and service clouds help businesses improve sales cloud, and the customcloud. The sales and service clouds help businesses improve sales
and customer service. The customcloud provides a venue for customers to develop their
own applications for use within the broader Salesforce network.
.
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Case Study - Salesforce.Com: Cloud Services Go Mainstream
2. What are some of the challenges facing Salesforce as it continues its growth?
How well will it be able to meet those challenges?
Challenges include:
Increasedcompetitionboth fromtraditional industry leaders andnewchallengers hopingto replicate Salesforces success
E di it b i d l i t th Expandingits business model into other areas
Ensuringthe systemis available 24/7 with no outages
Defending the systemagainst security breeches
Salesforce is answering the first two challenges by partnering with Google and combining its services with Gmail, Google
Docs Google Talk and Google Calendar to allow its customers to accomplish more tasks via the Web Salesforce com Docs, Google Talk, and Google Calendar to allow its customers to accomplish more tasks via the Web. Salesforce.com
and Google both hope that their Salesforce.com for Google Apps initiative will galvanize further growth in on-demand
software. By partnering with Apple, Salesforce.comcan expand its applications to iPhone users who will have access to
their data anywhere any time. Through its partnership with Amazon.com, Force customers can tap into Amazon.coms
cloud computing services that can handle cloud burst computing tasks that require extra processing power or storage
capacity. p y
Salesforce opened up its Custom Cloud (also known as Force.com) application development platform to other
independent software developers and listed their programs on its AppExchange. The company introduced a development
tool for integrating with Facebooks social network that allows customers to build applications that call functions at the
Facebook site. Small businesses can go online and download software applications, some add-ons to Salesforce.com
d th th t l t d andothers that are unrelated.
In order to growits revenues to levels that industry observers and Wall Street eventually expects, Salesforce will need to
change its focus fromselling a suite of software applications to providing a broader cloud computing platform on which
many software companies can deliver applications.
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To ensure system availability, Salesforce.com provides tools to assure customers about its system reliability and also
offers PC applications that tie into their services so users can work offline.
Case Study - Salesforce.Com: Cloud Services Go Mainstream
3. What kinds of businesses could benefit from switching to Salesforce and why?
Small to medium-size businesses are probably the most likely ones to switch to
Salesforce.com because of cost factors and the lack of having in-house
t id th l l f ti it B i th t resources to provide the same level of computing capacity. Businesses that are
trying to increase the sophistication of their computing capabilities could also
benefit from switching to Salesforce as long as the two are compatible.
Businesses that rely on smart customer management would benefit greatly from y g g y
using the tools available at Salesforce.com. Also companies that have small
sales and marketing teams can benefit fromthe software-as-a-service business
model.
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Case Study - Salesforce.Com: Cloud Services Go Mainstream
4. What factors would you take into account in deciding whether to use
Saleforce.com for your business?
Businesses should assess the costs and benefits of the service, weighing all
people, organization, and technology issues.
Does the software-as-a-service applications integrate well with the existing
systems?
Does it deliver a level of service and performance thats acceptable for the
business?
Does the SaaS fit with the business overall competitive strategy and allowthe
company to focus on core business issues instead of technology challenges?
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Case Study - Salesforce.Com: Cloud Services Go Mainstream
5. Could a company run its entire business using Salesforce.com, Force.com, and
App Exchange? Explain your answer.
Dependingon the type of business, a companyprobablycouldrunits entire operations using
Salesforce com Force com andApp Exchange All four major functional areas of a business are Salesforce.com, Force.com, andApp Exchange. All four major functional areas of a business are
supported: Sales and Marketing, ManufacturingandProduction, Finance, andHuman Resources. There
are dozens of applications available to fully support all of these areas. It would be a matter of integrating
the software fromSalesforce.comandApp Exchange with anyexistinglegacysystems within the
b i business.
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Running Case Assignment: Improving Decision Making: Making the Rent
vs. Buy Decision for Hardware and Software
This project provides an opportunity for you to help a real-world company make a decision about whether
to rent or buy new technology. Youll use spreadsheet software to compare the total three-year cost of
licensing and maintaining new manufacturing software or renting the software from an application service
provider.
Dirt Bikes would like to implement new production planning, quality control, and scheduling software for
use by 25 members of its manufacturingstaff Management is tryingto determine whether to purchase use by 25 members of its manufacturing staff. Management is trying to determine whether to purchase
the software from a commercial vendor along with any hardware required to run the software or to use a
hosted software solution from an application service provider. (The hosted software runs on the ASPs
computer.) You have been asked to help management with this rent vs. buy decision by calculating the
total cost of each option over a three-year period.
Th t f h i th ft ( t ll f h i li f th d t it The costs of purchasing the software (actually for purchasing a license from the vendor to use its
software package) include the initial purchase price of the software (licensing fee of $100,000 paid in the
first year), the cost of implementing and customizing the software in the first year ($20,000), one new
server to run the software (a first-year purchase of $4000), one information systems specialist devoting
half of his or her time to supporting the software ($55,000 in full-time annual salary and benefits with a pp g ($ , y
3% annual salary increase each year after the first year), user training in the first year ($10,000), and the
cost of annual software upgrades ($5,000).
The costs of renting hosted software are the rental fees ($2500 annually per user), implementation and
customization costs ($12,000 in the first year), and training ($10,000 in the first year).
Calculate the total cost of renting or purchasing this software over a three-year period. Identify the
lowest-price alternative that meets Dirt Bikess requirements.
What other factors should Dirt Bikes consider besides cost in determining whether to rent or buy the
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hardware and software?
Running Case Solution: Improving Decision Making: Making the Rent vs.
Buy Decision for Hardware and Software
The total 3-year cost of renting hosted software is less expensive than purchasing it and using hosted
software requires less management than Dirt Bikes owning and running its software. However, there are
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other factors to consider-the functionality of the hosted software versus purchased software, the flexibility
of the hosted software compared to in-house resources, and the reliability and reputation of the hosted
software vendor.
Review Questions
1. What is IT infrastructure and what are its components?
1.1 Define IT infrastructure from both a technology and a services perspective.
Technical perspective is defined as the shared technology resources that
provide the platformfor the firms specific information systemapplications. It
consists of a set of physical devices and software applications that are required
to operate the entire enterprise.
Service perspective is defined as providing the foundation for serving
customers, working with vendors, and managing internal firmbusiness
processes. In this sense, IT infrastructure focuses on the services provided by
all the hardware and software. IT infrastructure is a set of firm-wide services
budgetedby management and comprising both human and technical
capabilities.
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Review Questions
1.2 List and describe the components of IT infrastructure that firms need to
manage.
IT infrastructure includes hardware, software, and services:
1. Computing platforms: Includes mainframes, midrange computers, desktop and laptop
computers, and mobile handheld devices anything that connect employees,
customers, and suppliers into a coherent digital environment.
2. Telecommunications services: Data, voice, and video connectivity between , , y
employees, customers, and suppliers.
3. Data management: Store, manage and analyze data.
4. Application software: Includes enterprise resource planning, customer relationship
management, supply chain management, and knowledge management systems. g , ppy g , g g y
5. Physical facilities management: Develop and manage the physical installations for
computing, telecommunications, and data management.
6. IT management: Planning and developing the infrastructure, coordinate IT services
among business units, manage accounting for IT expenditures, and provide project g , g g p , p p j
management.
7. IT standards: Policies that determine which information technology will be used, when,
and how.
8. IT education: Employee training in system use and management training for IT
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p y g y g g
investments.
9. IT research and development: Research future IT projects and investments that can
help the firmdifferentiate itself fromcompetitors.
Review Questions
2. What are the stages and technology drivers of IT infrastructure evolution?
2.1 List each of the eras in IT infrastructure evolution and describe its distinguishing
characteristics.
1. General-purpose mainframe and minicomputer era (1959 to present): Consists of a
mainframe performing centralized processing that could be networked to thousands of
terminals and eventually some decentralized and departmental computing using
networked minicomputers.
2. Personal computer era (1981 to present): Dominated by the widespread use of
standalone desktop computers with office productivity tools.
3. Client/server era (1983 to present): Consists of desktop or laptop clients networked to
more powerful server computers that handle most of the data management and
processing.
4. Enterprise computing era (1992 to present): Defined by large numbers of PCs linked
together into local area networks and the growing use of standards and software to link
disparate networks and devices into an enterprise-wide network so that information can
flowfreely across the organization.
5. Cloud and mobile computing era (2000 to present): A model of computing where firms
and individuals obtain computing power and software applications over the Internet,
rather than purchasing their own hardware and software.
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Review Questions
2.2 Define and describe the following: Web server, application server, 2.2 Define and describe the following: Web server, application server,
multitiered client/server architecture.
Web server: Software that manages requests for Web pages on the
computer where they are stored and that delivers the page to the users computer where they are stored and that delivers the page to the user s
computer.
Application server: Software that handles all application operations between
browser-based computers and a companys back-end business applications
or databases.
Multitiered client/server architecture: Client/server network in which the work Multitiered client/server architecture: Client/server network in which the work
of the entire network is balanced over several different levels of servers.
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Review Questions
2.3 Describe Moores Law and the Law of Mass Digital Storage g g
Moores Law: The number of components on a chip with the smallest
manufacturing costs per component (generally transistors) had
doubledeach year Moore later reduced the rate of growth to a doubled each year. Moore later reduced the rate of growth to a
doubling every two years.
Law of Mass Digital Storage: The amount of digital information is
roughly doubling every year. The cost of storing digital information is
falling at an exponential rate of 100 percent a year.
Both of these concepts explain developments that have taken place in Both of these concepts explain developments that have taken place in
computer processing, memory chips, storage devices,
telecommunications and networking hardware and software, and
software design that have exponentially increased computing power
while exponentially reducing costs.
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Review Questions
2.4 Describe how network economics, declining communication , g
costs, and technology standards affect IT infrastructure.
Network economics: Metcalfes Law helps explain the mushrooming use of
computers by showing that a networks value to participants grows exponentially computers by showing that a networks value to participants grows exponentially
as the network takes on more members. As the number of members in a
network grows linearly, the value of the entire system grows exponentially and
theoretically continues to grow forever as members increase.
Declining communication costs: Rapid decline in communication costs and
the exponential growth in the size of the Internet is a driving force that affects
the IT infrastructure As communication costs fall toward a very small number the IT infrastructure. As communication costs fall toward a very small number
and approach zero, utilization of communication and computing facilities
explodes.
Technology standards: Growing agreement in the technology industry to use
computing and communication standards that define specifications that
establish the compatibility of products and the ability to communicate in a
network Technology standards unleash powerful economies of scale and result
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network. Technology standards unleash powerful economies of scale and result
in price declines as manufacturers focus on the products built to a single
standard. Without economies of scale, computing of any sort would be far more
expensive than is currently the case.
Review Questions
3. What are the current trends in computer hardware platforms? p p
3.1 Describe the evolving mobile platform, grid computing, and cloud
computing.
Mobile platform: More and more business computing is moving from PCs and desktop
machines to mobile devices like cell phones and smartphones. Data transmissions, Web
surfing, email and instant messaging, digital content displays, and data exchanges with
internal corporate systems are all available through a mobile digital platform. Netbooks,
small low-cost lightweight subnotebooks that are optimized for wireless communication and
Internet access, are included. The mobile platform is expanding to include tablet computers
(iPad) and digital e-book readers.
Grid computing: Connects geographically remote computers into a single network to
create a virtual supercomputer by combining the computational power of all computers on
the grid. Since most computers use their central processing units only about 25 percent of
the time, they can be used for other tasks.
Cloud computing: A model of computing where firms and individuals obtain computing
capacity, data storage, and software applications over the Internet, rather than purchasing
h i h d d f D d f l i i d
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their own hardware and software. Data are stored on powerful servers in massive data
centers, and can be accessed by anyone with an Internet connection and standard Web
browser. Public clouds are maintained by external service providers while private clouds
are restrained inside a proprietary network or a data center.
Review Questions
3.2 Explain how businesses can benefit from autonomic computing, p p g,
virtualization, green computing, and multicore processors.
Autonomic computing
Systems that automatically do the following: Systems that automatically do the following:
1. Configure themselves
2. Optimize and tune themselves
3. Heal themselves when broken
4 Protect themselves fromoutside intruders and self-destruction 4. Protect themselves from outside intruders and self destruction
5. Reduce maintenance costs
6. Reduce downtime from system crashes
Virtualization Virtualization
1. Run more than one operating system at the same time on a single machine.
2. Increase server utilization rates to 70 percent or higher.
3. Reduce hardware expenditures. Higher utilization rates translate into fewer computers
required to process the same amount of work required to process the same amount of work.
4. Mask server resources from server users.
5. Reduce power expenditures.
6. Run legacy applications on older versions of an operating system on the same server
as newer applications
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as newer applications.
7. Facilitates centralization of hardware administration.
Review Questions
Green computing p g
1. Businesses can minimize their impact on the environment by adopting better
practices and technologies for designing, manufacturing, using, and disposing
of computers, servers, and other computing devices.
2 Reducingpower consumption in data server centers is the leading practice in 2. Reducing power consumption in data server centers is the leading practice in
the green computing movement.
Multicore processors
1. Cost savings by reducing power requirements and hardware sprawl
2. Less costly to maintain as fewer systems need to be monitored.
3. Performance and productivity benefits beyond the capabilities of todays
single-core processors single-core processors.
4. Run applications more efficiently than single-core processors giving users
the ability to keep working even while running the most processor intensive
task in the background.
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Review Questions
4. What are the current trends in software platforms? p
4.1 Define and describe open source software and Linux and explain their
business benefits.
Open-source software provides all computer users with free access to the programcode so
they can modify the code, fix errors in it, or to make improvements. Open-source software is
not owned by any company or individual. A global network of programmers and users
manage and modify the software By definition open source software is not restricted to any manage and modify the software. By definition, open-source software is not restricted to any
specific operating systemor hardware technology.
Linux is the most well-known open-source software. Its a UNIX-like operating systemthat
can be downloaded from the Internet free of charge or purchased for a small fee from can be downloaded from the Internet, free of charge, or purchased for a small fee from
companies that provide additional tools for the software. It is reliable, compactly designed,
and capable of running on many different hardware platforms, including servers, handheld
computers, and consumer electronics. Linux has become popular during the past fewyears
as a robust lowcost alternative to UNIX and the Windows operating system as a robust low-cost alternative to UNIX and the Windows operating system.
Thousands of open-source programs are available fromhundreds of Web sites. Businesses
can choose froma range of open-source software including operating systems, office suites,
Web browsers and games Open source software allows businesses to reduce the total
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Web browsers, and games. Open-source software allows businesses to reduce the total
cost of ownership. It provides more robust software thats often more secure than
proprietary software.
Review Questions
4.2 Define Java and Ajax and explain why they are important. j p y y p
Java: J ava is a programming language that delivers only the software functionality
needed for a particular task. With J ava, the programmer writes small programs
called applets that can run on another machine on a network With J ava called applets that can run on another machine on a network. With J ava,
programmers write programs that can execute on a variety of operating systems
and environments. Further, any program could be a series of applets that are
distributed over networks as they are needed and as they are upgraded.
J ava is important because of the dramatic growth of Web applications. J ava is an
operating system-independent, processor-independent, object-oriented
programming language that can run on multiple hardware platforms It provides a programming language that can run on multiple hardware platforms. It provides a
standard format for data exchange on Web sites.
Ajax: Ajax is short for Asynchronous J avaScript and XML. It allows a client and
server to exchange small pieces of data behind the scene so that an entire Web
page does not have to be reloaded each time the user requests a change. Its
another Web development technique for creating interactive Web applications that
make it easier and more efficient for Web site users to complete forms and other
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make it easier and more efficient for Web site users to complete forms and other
interactive features.
Review Questions
4.3 Define and describe Web services and the role played by XML. p y y
Web services offer a standardized alternative for dealing with integration across
various computer platforms. Web services are loosely coupled software
components based on XML and open Web standards that are not product specific components based on XML and open Web standards that are not product specific
and can work with any application software and operating system. They can be
used as components of Web-based applications linking the systems of two
different organizations or to link disparate systems of a single company. Web
services are not tied to a particular operating system or programming language.
Different applications can use themto communicate with each other in a standard
way without time-consuming customcoding.
Businesses use Web services to tie their Web sites with external Web sites
creating an apparently seamless experience for users. The benefit derives from
not having to re-create applications for each business partner or specific functions
within a single company.
XML provides a standard format for data exchange, enabling Web services to
pass data fromone process to another It performs presentation communication
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pass data fromone process to another. It performs presentation, communication,
and storage of data whereas HTML simply describes how data is presented on
Web pages. XML allows computers to manipulate and interpret data automatically
and performoperations on data without human intervention.
Review Questions
4.4 Name and describe the three external sources for software.
1. Software packages and enterprise software: Prewritten commercially available set of
software programs that eliminates the need for a firmto write its own software programfor
certain functions like payroll processing or order handling. Large-scale enterprise software certain functions like payroll processing or order handling. Large scale enterprise software
systems provide a single, integrated, worldwide software system for firms at a cost much
less than they would pay if they developed it themselves.
2. Cloud-based software services and tools: A business that delivers and manages 2. Cloud based software services and tools: A business that delivers and manages
applications and computer services from remote computer centers to multiple users using
the Internet or a private network. Instead of buying and installing software programs,
subscribing companies can rent the same functions fromthese services. Users pay for the
use of this software either on a subscription or a per-transaction basis. The business must use of this software either on a subscription or a per transaction basis. The business must
carefully assess the costs and benefits of the service, weighing all people, organizational,
and technology issues. It must ensure it can integrate the software with its existing systems
and deliver a level of service and performance that is acceptable for the business.
3. Outsourcing custom application development: An organization contracts its custom
software development or maintenance of existing legacy programs to outside firms,
frequently firms that operate offshore in low-wage areas of the world. An outsourcer often
has the technical and management skills to do the job better, faster, and more efficiently.
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as e ec ca a d a age e s s o do e job be e , as e , a d o e e c e y
Even though its often cheaper to outsource the maintenance of an IT infrastructure and the
development of newsystems to external vendors, a business must weight the pros and cons
carefully.
Review Questions
4.5 Define and describe software mashups and apps. p pp
Mashups are new software applications and services based on combining different online
software applications. Users create new software applications and services by combining
different online software applications into a newapplication. The idea is to take different sources different online software applications into a newapplication. The idea is to take different sources
and produce a newwork that is greater thanthe sumof its parts. Web mashups combine the
capabilities of two or more online applications to create a kind of hybrid that provides more
customer value than the original sources alone.
Apps are small pieces of software programs that are downloaded to computers or cell phones.
Apps turn mobile handheld devices into general-purpose computing tools. They cost much less
than full-fledged software programs and perform one particular task. They tie customers to a
specific hardware platform like the Apple iPhone or Android operating system and increase specific hardware platform like the Apple iPhone or Android operating system and increase
switching costs. Business-related apps allow users to create and edit documents, connect to
corporate systems, schedule and participate in meetings, track shipments, and dictate voice
messages.
Businesses benefit most fromthese newtools and trends by not having to re-invent the wheel.
Apps have already been developed by someone else and a business can use themfor its own
purposes. Mashups let a business combine previously developed Web applications into new
ones with newpurposes. They dont have to re-invent the previous applications fromscratch
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o es e pu poses ey do a e o e e e p e ous app ca o s o sc a c
merely use themin the newprocesses.
Review Questions
5. What are the challenges of managing IT infrastructure and management g g g g
solutions?
5.1 Name and describe the management challenges posed by IT infrastructure.
Creatingandmaintaininga coherent IT infrastructure raises multiple challenges including:
1. Dealing with platform and infrastructure change: As firms grow, they can quickly outgrow their
infrastructure. As firms shrink, they can get stuck with excessive infrastructure purchased in better times. , y g p
Scalability refers to the ability of a computer, product, or systemto expand to serve a larger number of
users without breaking down. Businesses that bring mobile computing and cloud computing platforms into
the mix neednewpolicies andprocedures for managingthem.
2 Management and governance: Involves who will control and manage the firms IT infrastructure Will the 2. Management and governance: Involves who will control and manage the firms IT infrastructure. Will the
IT infrastructure be centrally controlled and managed or divided among departments and divisions? How
will infrastructure costs be allocatedamongbusiness units?
3. Making wise infrastructure investments: IT infrastructure is a major capital investment for the firm. If
too much is spent on infrastructure, it lies idle and constitutes a drag on firmfinancial performance. If too
little is spent, important business services cannot be delivered and the firms competitors will outperform
the underinvesting firm. The organization needs to determine if it will buy or rent all or portions of its IT
infrastructure.
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4. Coordinating infrastructure components: Firms create IT infrastructures by choosing combinations of
vendors, people, andtechnologyservices andfittingthemtogether so theyfunctionas a coherent whole.
Review Questions
5.2 Explain how using a competitive forces model and calculating the TCO of p g p g
technology assets help firms make infrastructure investments
The competitive forces model can be used to determine how much to spend on IT
infrastructure and where to make strategic infrastructure investments What is the infrastructure and where to make strategic infrastructure investments. What is the
market demand for the organizations services? What is the organizations business
strategy? What is the organizations information technology (IT) strategy,
infrastructure, and costs? Has the organization performed an IT assessment? What
technology services do competitors offer to their customers, suppliers, and
employees? How much does the organizations competitors spend on IT
infrastructure?
The total cost of owning technology resources includes not only the original cost of
acquiring and installing hardware and software, but it also includes the ongoing
administration costs for hardware and upgrades, maintenance, technical support,
training, and even utility and real estate costs for running and housing the technology.
The TCO model can be used to analyze these direct and indirect costs to help firms
determine the actual cost of specific technology implementations.
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