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WEEK 1 provided for COIS20024, CQUniversity

Copyright 2011 by The McGraw-Hill Companies, Inc.


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1 Foundations of Information Systems in Business

1. How can information technology support a companys business processes and decision making and give it
a competitive advantage? Give examples to illustrate your answer.

Support: Information technology can automate manual process such as document transmission. Instead of
writing memos or letters, employees can compose and send e-mails electronically. Information technology can
also facilitate the reengineering of entire business processes. For example, the airlines industry relies heavily on
online ticket booking. Not only does this facilitate filling seats, but it also provides them with a valuable
information about passengers which they can repackage for sale to business partners in the form of "frequent
flier" programs.
Competitive advantage: product innovations or cost savings program can provide a product or price advantage
over competitors that lasts until competitors catch up. Though the advantage may be fleeting, the boost to an
organization's image may be longer lasting.

2. How does the use of the Internet, intranets, and extranets by companies today support their business
processes and activities?

Internet: organization can connect directly with the general public. Opportunities range from giving away
basic product information to automatically updating or patching retail software. Many businesses also conduct
retail operations online.

Intranets: organizations often use internet technologies to facilitate operations within the organization. Such
systems might include product support knowledge bases, training systems, and access to the organisation's
benefits system.

Extranet: organizations may use these same internet technologies to connect with their business partners to
facilitate supply chain management, help manage projects, manage accounts, or provide advanced technical
support.

Organizations use internet technologies to connect with both customers and suppliers. These technologies
allow customers to generate and track their own orders as well as manager their accounts. They also enable
significant supply chain automation

4. Why do big companies still fail in their use of information technology? What should they be doing
differently?
Top Five Reasons for Success Top Five Reasons for Failure
User involvement Lack of user input
Executive management support Incomplete requirements and specifications
Clear statement of requirements Changing requirements and specifications
Proper planning Lack of executive support

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Realistic expectations Technological incompetence

Certainly the reasons listed in the table above could explain some of the major causes of why companies fail in
their use of information technology. However, it is important to note that the field of technology is changing at
such a rapid pace that many large and successful companies are having difficulty keeping up with it. Other
ideas may include such things as a shortage of skilled employees, the major expense involved in managing and
developing systems, and a rapidly changing business regulatory environment.

5. How can a manager demonstrate that he or she is a responsible end user of information systems? Give
several examples.

There are two sides to this answer. First, managers must make good use of information resources placed at their
disposal. Second, managers must not use their information systems irresponsibly. Student's answers may vary
depending on how they interpret this question.
Responsible use: Managers should demonstrate that they are using their information systems as intended. In
the case of e-mail, calendar, scheduling, and collaborative systems, other users would notice a manager's lack of
participation. They would find it difficult to communicate or schedule meetings with non-participating
managers. These managers would increasingly find themselves "out of the loop". Instead, managers should
incorporate these tools into their daily habits. To demonstrate appropriate use of other information systems,
managers should ensure they receive the appropriate training for these various applications. This would include
using data and analysis tools in order to make more informed business decisions. High quality decisions based
upon the information these systems provide would demonstrate that these assets are not being wasted.
Inappropriate use: As a manager or other end user of information, we must insure that we always consider the
ethical responsibilities of the use of information. Irresponsible uses:
accessing and/or selling data for personal gain
failing to protect data from loss or theft
violating privacy laws or abusing community privacy expectations

8. Why are there so many conceptual classifications of information systems? Why are they typically
integrated in the information systems found in the real world?

Conceptual classifications of information systems are designed to emphasize the many different roles of
information systems. This can be done from various points of view, such as the level of management that the
information systems serve, or the business functions they support. In practice, these roles are not always clearly
divided, and in any case, information produced by one business activity may serve as input data to another
activity. Thus it makes sense to integrate various roles into one information system.

9. In what major ways have information systems in business changed during the last 40 years? What is one
major change you think will happen in the next 10 years? Refer to Figure 1.4 to help you answer.

History:
Tabulation (pre 1950s)
Data processing (1950s-1960s)
Management reporting (1960s-1970s)
Decision support (1970s-1980s)
Strategic end user support (1980s-1990s)
Enterprise and global internetworking (1990s-2000s)
eBusiness (2000s-2010s)
Social networking (2010s-current)
Future:
User authentication
Virtual machines
Cloud computing

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Solid state drives


Overhaul of computing legislation
Integration of video, audio, images, GPS, networks into entirely new products and services.
Biometric computing
Monitoring and control systems embedded into the human body (for example, insulin injectors, ID chips)

RWC 3: Sew What? Inc.: The Role of Information Technology in Small Business Success
Case Study Questions
1. How do information technologies contribute to the business success of Sew What? Inc.? Give several
examples from the case regarding the business value of information technology that demonstrate this
conclusion.
Examples:
Expanded market - Duckett was able to grow her business from local to international clients using her
website.
Customer education - the website helps her educate her customers about curtain design.
Customer service - the website allows customers to more easily match materials, select colors, and learn
about her product's "care and feeding."
Cost accounting - Duckett tracks production workflows and more accurately calculate costs.
Business process reengineering - workflow information helps identify useful process changes and provides
feedback to help Duckett evaluate the results.

2. If you were a management consultant to Sew What? Inc., what would you advise Megan Duckett to do at
this point to be even more successful in her business? What role would information technology play in your
proposals? Provide several specific recommendations.
The article provides no information about Duckett's current challenges, though recommendations should focus
on them. In general, Duckett should give scalability and flexibility significant consideration when making
future IT decisions. Her reputation may lead to continued growth and/or expansion into new areas. She will
not want to find herself limited by her own information systems. Lastly, Duckett should not get too carried
away with industry prizes. While it's great to get a pat on the back now and then, the real prize is profitability.
Profitability turns into big annual bonuses and pats on the back from people she cares about the most, her
employees.

3. How could the use of information technology help a small business you know be more successful? Provide
several examples to support your answer.
Organizations don't want information systems, they are expensive and distracting. However, organizations
usually need information systems in order to accomplish specific goals. Answers should focus primarily on
those goals and how the proposed system will help. For example, a car mechanic would want to ensure he or
she meets her quota of billable hours. By keeping a customer database with vehicle maintenance schedules, the
mechanic can contact customers and schedule them for routine service during anticipated slack times.

Real World Activities


1. Search the Internet to help you evaluate the business performance of Sew What? Inc. and its competitors
at the present time. What conclusions can you draw from your research about Sew What?'s prospects for the
future? Report your findings and recommendations for Sew What?'s continued business success to the class.
Marketplace:
Sew What? operates in a highly competitive market. Competitors include:

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ShowBiz Enterprises, Inc. 1


Rose Brand2
Universal Stars Incorporated3
Gerriets International4
Findings:
Sew What?'s competitors offer a spectrum of products far broader than just curtains. If customers prefer a one-stop
solution for their staging needs, then they would not consider Sew What? as a potential vendor. Therefore, Duckett
should consider expanding her company's product line.

2. Small businesses have been slower to integrate information technology into their operations than larger
companies. Break into small groups with your classmates to discuss the reasons for this state of affairs, identifying
several possible IT solutions and their business benefits that could help small businesses be more successful.
Reasons:
Most small companies are focused on their survival and don't have time to plan for the long term.
Smaller companies have proportionally smaller IT budgets.
Many information technology solutions require considerable startup costs, steep learning curves, and long
payback periods.
Solutions:
ASP application suites reduce start-up costs because the software is leased rather than purchased.
Small businesses should ensure they hire people who are IT literate. These people would require less training
when the business get around to implementing new technology, and the best of them may even be able to take a
leadership role in training other users and in helping acquire appropriate systems.
Ensure IT purchases are scalable. For example, Salesforce.com provides an automated upgrade path. Other
vendors charge per user and feature rather than tiered fees.

1
http://www.theatricaldrapery.com/
2
http://www.rosebrand.com/
3
http://www.ledstarcloth.com/
4
http://www.gi-info.com/

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2 Competing with Information Technology

1. Suppose you are a manager being asked to develop computer-based applications to gain a competitive
advantage in an important market for your company. What reservations might you have about doing so?
Why?
Unless the individual is familiar with the tools and processes involved in developing information technology
applications, they will have a high level of apprehension. Reservations would include the fear of being out of
one's depth and feelings of helplessness, insecurity, and dependence on others.
The individual may also wonder whether or not an appropriate application might be obtained off the shelf. Off
the shelf software, though not easily customizable, generally costs less than custom software development.
Lastly, he or she might also feel concerned about how the software may affect their position within the
organization. Change isn't easy, and if it isn't supported at the very top management levels, it may fail due to
lack of organizational will, and this failure would look bad on their performance review.

2. How could a business use information technology to increase switching costs and lock in its customers
and suppliers? Use business examples to support your answers.
Switching Costs
A business might undertake projects to integrate some of its information systems with its customers' systems in
order to provide them with more timely, accurate, and useful information. The business might even provide
applications for its customer's use at low or no cost. Customers later considering changing suppliers would lose
these benefits. Indeed, the very process of developing these tools will help managers increase their familiarity
with their customers and allow them to tune their information resources to their customer's needs. This
relationship will further serve to lock in customers.
Examples
For example, Fed Ex provides its customers with package tracking information. Medical supply companies
provide hospitals with inventory management and re-ordering systems. Wal-Mart will soon provide small
medical practices with reduced cost patient management systems.

3. How could a business leverage its investment in information technology to build strategic IT capabilities
that serve as a barrier to new entrants into its markets?
Businesses may leverage its IT platforms by connecting them with their customers and suppliers to provide
better communications. Initially, both the company and the customer benefit from the new system. However,
as time goes by the customers will tend to integrate these systems into their own core processes thereby
becoming dependent on the platform. In the long run, the companys investment in IT results in locking in their
customers and suppliers and creating switching costs. The high costs associated with developing these systems
serve as barriers to entry for competitors.

5. What strategic role can information play in business process reengineering?


Information plays a critical role in BPR initiatives. First, information about existing operations serves as a
baseline for future comparison. Second, as new processes take shape, information in the form of feedback
allows managers to evaluate and control these new processes. Lastly, the organization may find ways to
repackage this information for its customers' use.

6. How can Internet technologies help a business form strategic alliances with its customers, suppliers, and
others?
Information technology can help a business form strategic alliances with its customers, suppliers, and others by
enabling communications, collaboration, and information sharing in ways that were never before possible. By

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virtue of working together online, managers can monitor and automatically capture process metrics, identify
bottlenecks, and recommend process improvements within and between organizations.

7. How could a business use Internet technologies to form a virtual company or become an agile
competitor?
Virtual company:
Example: a person or company could use the Internet to acquire customers and then farm out the work to
suppliers. A simple example of this can be found managing contractors. A company solicits customers for
contract work (customers) and then solicits reliable contractors who can do this work (suppliers). In exchange
for a share in the contractor's earnings, the virtual company handles the billing and customer relations. It
manages its reputation by monitoring the quality of the contractor's work. High performing contractors retain a
larger percentage of their earnings, and low performing contractors are not invited to work on future contracts.
Some software vendors now lease (or provide for free) web enabled business software to manage accounting,
customer relations management, and office automation tasks (word processing, spreadsheets, calendaring, and
e-mail). As a result, a truly virtual company need only a computer connected to the Internet and a web browser.
Visit rentacoder.com for a reverse auction site version of this enterprise.
Agile competitor:
In addition to monitoring the marketing for business intelligence, an agile competitor might implement an
Internet based system that allows its customers to configure their own products. For example, Dell allows its
customers to configure computers to their own specifications to include type of CPU, motherboard, I/O devices,
memory, monitor, and more. T-shirt and bumper sticker companies might allow customers to upload their own
custom designs or work interactively with their own graphic designers to create a suitable product.

RWC 2: For Companies Both Big and Small


Case Study Questions
1. In which ways do smartphones help these companies be more profitable? To what extent are
improvements in performance coming from revenue increases or cost reductions? Provide several examples
from the case.
Profitability:
Reduced time it takes to close a purchasing deal
Reduced inventory levels
Increased customer satisfaction
Increased employee satisfaction
Reduced service call time and costs
Improvement source:
Performance improvements primarily stem primarily from cost savings. However, we might also infer revenue
increases from satisfied customers and fewer lost opportunities.

Examples:
Better communications enable improved field support with fewer personnel required to fix a problem and the
reduced time it takes to close a service call
Better communications reduced the time it takes to close procurement deals. This has resolved in lower
inventory levels and reduced inventory holding costs. We could also infer that this results in fewer lost sales
opportunities and better purchasing terms, too.
Improved employee satisfaction employees have access to the resources they need to do good work.
Improved customer satisfaction service calls are resolved more quickly thus reducing the impact on their
business.

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2. The companies described in the case encountered a fair amount of resistance from employees when
introducing smartphone technologies. Why do you think this happened? What could companies do to
improve the reception of these initiatives? Develop two alternative propositions.
Employee resistance - CPS: management could not visualize the value these devices would provide.
Employee resistance Lloyd's Construction: employees were not technically savvy and required significant
training. Though not directly mentioned, the case also implied that employees may have resisted these devices
because they performed like workplace monitoring tools.
Resistance causes CPS: without first-hand experience or a clear vision, it's easy for management to discount
the benefits and magnify the risks.
Resistance causes Lloyds Construction: the case does not explicitly state that Lloyd's employees likely have
very low levels of formal education. However, students can reasonably infer this from their job titles. It's also
against human nature to welcome new restrictions on one's freedom.
Potential solutions: given the successes experienced by both CPS and Lloyd's Constructions, students should
learn from their example:
Implement small, low cost, low risk pilot projects to demonstrate the technology's value
Provide a full range of employee training programs
Employ a parallel implementation strategy to give employees time to learn the new systems while
minimizing the impact of any failures
Other feasible recommendations:
Adjust the employee evaluation system to include a section on technology use
Adjust the compensation system so employees benefit from cost savings
Provide "coaches" or "mentors" in addition to a help-desk during implementation
Advertise/recognize early successes

3. CPS Energy and Lloyds Construction used smartphones to make existing processes more efficient. How
could they have used the technology to create new products and services for their customers? Include at least
one recommendation for each organization.
The main point of this question is "how", but students may well focus on "what" instead. On the "how" side,
both organizations may create new products by providing their customers with access to these systems. This
access may take the form of "read" access. FedEx installed a "read" access system for its customers. This
system allowed customers to track a package's delivery status. These organizations may also provide read/write
access. Example applications might include order entry, account management, or even collaborative interaction.
CPS Energy might consider making its experts (or just their expertise) available online. This would enable
their customers to attempt to solve their own problems or escalate a request to CPS' own experts. These experts
could then access and assess the request's entire history. This may allow them to help solve the problem online
or at least better prepare for the onsite service call.

Lloyd's work is done on a project by project basis. Lloyd's could use their systems to provide their general
contractor (the contractor responsible for managing all the individual contractors) with project status
information (site surveys, various permits, etc), schedule coordination, and expense reporting. These systems
might also be used to demonstrate compliance with local and federal regulations such as hazmat handling or
equal opportunity employment directives.

Real World Activities


1. In addition to the companies featured in the case, others like FedEx and UPS, which have large mobile
workforces, heavily use mobile communication technologies. What other companies could benefit from these
innovations?
Search Terms: "mobile workforce automation" + "case studies"
A few examples:

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Full service car rental agencies such as Alamo, Avis, Hertz, and National.
Utility companies (meter readers)
The trucking industry (any shipping and delivery company)
The U.S. Census bureau
Onsite market researchers
Hospitals

2. Go online and research uses of smartphones in industries different from the ones reviewed here. Prepare
a report to share your findings.
Search Terms: "mobile workforce automation" + "case studies"

3. Use the Internet to research the latest technological developments in smartphones, and discuss how those
could be used by companies to deliver value to customers and shareholders.
Search Terms: "smartphone" + "case studies".
Searching a news aggregator like Google News would provide the most current developments.5
Current developments include:
Security and mobile banking
Mobile journalism's impact
Android O/S
Competitor/product analysis

5
For example http://news.google.com/

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