Siste Me

Essentials of Management Information
Systems
Thirteenth Edition
Chapter 1
Business Information
Systems in Your Career
Copyright © 2019 Pearson Education Ltd.

Learning Objectives
1.1 Why are information systems so essential for running and
managing a business today?
1.2 What exactly is an information system? How does it work?
What are its people, organizational, and technology
components?
1.3 How will a four-step method for business problem solving
help you solve information system-related problems?
1.4 What information systems skills and knowledge are essential
for business careers?
1.5 How will MIS help my career?

Video Cases
• Case 1: Business in the Cloud: Facebook, Google, and

eBay Data Centers
• Case 2: UPS Global Operations with the DIAD and
Worldport
• Instructional Video: Tour IBM’s Raleigh Data Center

Premier League: The Power of IT
Analytics (1 of 2)
• Problem
– Improving revenue and player training through Big
Data.
• Solutions
– The Football Manager game simulation as a database
– A system of player-performance-enhancing IT
analytics apps

Premier League: The Power of IT
Analytics (2 of 2)
• Use of networked sensors and powerful analytics to drive

business operations and management decisions
• Demonstrates how technology can be used to improve
consumer experience
• Illustrates why information systems are so essential today

How Information Systems are
Transforming Business
• In 2016, more than 142 million businesses had dot-com
addresses registered.
• 273 million adult Americans online; 183 million purchased
online
• Internet advertising continues to grow at around 15 percent
per year.
• New laws require businesses to store more data for longer
periods.
• Changes in business result in changes in jobs and careers.

What’s New in Management Information
Systems?
• New technologies
– Cloud computing, big data, Internet of Things
– Mobile digital platform
• Management
– Managers use social networks, collaboration
– Business intelligence applications accelerate
– Virtual meetings proliferate
• Organizations
– Social business
– Telework gains momentum
– Co-creation of value, collaboration across firms

Interactive Session – People: Can You Run
the Company with Your iPhone?
• Class discussion
– What kinds of applications are described here? What business
functions do they support? How do they improve operational
efficiency and decision making?
– Identify the problems that businesses in this case study solved
by using mobile digital devices.
– What kinds of businesses are most likely to benefit from
equipping their employees with mobile digital devices such as
iPhones and iPads?
– One company deploying iPhones has said, “The iPhone is not a
game changer, it’s an industry changer. It changes the way that
you can interact with your customers and with your suppliers.”
Discuss the implications of this statement.

Globalization Challenges and Opportunities:
A Flattened World
• Internet and global communications have greatly reduced

economic and cultural advantages of developed
countries.
– Drastic reduction of costs of operating and transacting
on global scale
– Competition for jobs, markets, resources, ideas
– Dependence on imports and exports
– Requires new understandings of skills, markets,
opportunities

Business Drivers of Information Systems
• Businesses invest in IT to achieve six important business

objectives.
1. Operational excellence
2. New products, services, and business models
3. Customer and supplier intimacy
4. Improved decision making
5. Competitive advantage
6. Survival

Operational Excellence
• Improved efficiency results in higher profits.

• Information systems and technologies help improve
efficiency and productivity.
• Example: Walmart
– Power of combining information systems and best
business practices to achieve operational efficiency—
and over $473 billion in sales in 2014
– Most efficient retail store in world as result of digital
links between suppliers and stores

New Products, Services, and Business
Models
• Information systems and technologies enable firms

to create new products, services, and business
models.
• Business model: how a company produces, delivers,
and sells its products and services
• Example: Apple
– Transformed old model of music distribution with
iTunes
– Constant innovations—iPod, iPhone, iPad, etc.

Customer and Supplier Intimacy
• Customers who are served well become repeat

customers who purchase more.
– Mandarin Oriental hotel
▪ Uses IT to foster an intimate relationship with its
customers, keeping track of preferences, and so
on
• Close relationships with suppliers result in lower costs.
– JCPenney
▪ IT to enhance relationship with supplier in Hong
Kong

Improved Decision Making
• If managers rely on forecasts, best guesses, and luck,

they will misallocate employees, services, and inventory.
• Real-time data improves ability of managers to make
decisions.
• Verizon: Web-based digital dashboard to update
managers with real-time data on customer complaints,
network performance, and line outages

Competitive Advantage
• Often results from achieving previous business objectives

• Advantages over competitors:
– Charging less for superior products, better
performance, and better response to suppliers and
customers
– Examples: Apple, Walmart, UPS are industry leaders
because they know how to use information systems
for this purpose

Survival
• Businesses may need to invest in information systems

out of necessity; simply the cost of doing business.
• Keeping up with competitors
– Citibank’s introduction of ATMs
• Federal and state regulations and reporting requirements
– Toxic Substances Control Act and the Sarbanes-
Oxley Act

What is an Information System? (1 of 2)
• Information technology: the hardware and software a

business uses to achieve objectives
• Information system: interrelated components that
manage information to:
– Support decision making and control
– Help with analysis, visualization, and product creation
• Data: streams of raw facts
• Information: data shaped into meaningful, useful form

What is an Information System? (2 of 2)
• Activities in an information system that produce

information:
– Input
– Processing
– Output
– Feedback
• Sharp distinction between computer or computer
program versus information system

Figure 1.1 Data and Information

Figure 1.2 Functions of an Information
System

The Role of People and Organizations
• Information systems literacy

– Includes behavioral and technical approach
• Computer literacy
– Focuses mostly on knowledge of IT
• Management information systems (MIS)
– Focuses on broader information systems literacy
– Issues surrounding development, use, impact of
information systems used by managers and
employees

Figure 1.3 Information Systems are More
Than Computers

Dimensions of Information Systems (1 of 3)
• Organizations
– Coordinate work through structured hierarchy and
business processes
– Business processes: related tasks and behaviors for
accomplishing work
▪ Examples: fulfilling an order, hiring an employee
▪ May be informal or include formal rules
– Culture embedded in information systems
▪ Example: UPS’s concern with placing service to
customer first

• People
– Information systems require skilled people to build,
maintain, and use them.
– Employee attitudes affect ability to use systems
productively.
– Role of managers:
▪ Perceive business challenges
▪ Set organizational strategy
▪ Allocate human and financial resources
▪ Creative work: new products, services

• Technology
– IT Infrastructure: Foundation or platform that
information systems are built on
▪ Computer hardware
▪ Computer software
▪ Data management technology
▪ Networking and telecommunications technology
– Internet and Web, extranets, intranets
– Voice, video communications

Interactive Session – Technology: Healthcare at
Singapore’s JurongHealth Services
– What technologies are used by JurongHealth? What
purpose do they serve?
– Search the web for RFID. Suggest an example of
using RFID for locating and tracking people.
– What information systems are implemented by
JurongHealth? Describe the input, processing, and
output of any one such system.
– Why are information systems important for
JurongHealth?

The Problem-Solving Approach
• Few business problems are simple or straightforward.

• Most business problems involve a number of major
factors that can fall into three main categories:
– Organization
– Technology
– People

A Model of the Problem-Solving
Approach (1 of 7)
• Problem solving: four-step process

1. Problem identification
2. Solution design
3. Choice
4. Implementation

Approach (2 of 7)
• Problem identification includes:

– Agreement that problem exists
– Definition of problem
– Causes of problem
– What can be done given resources of firm

Approach (3 of 7)
• Typical organizational problems

– Outdated business processes
– Unsupportive culture and attitudes
– Political in-fighting
– Turbulent business environment, change
– Complexity of task
– Inadequate resources

Approach (4 of 7)
• Typical technology problems

– Insufficient or aging hardware
– Outdated software
– Inadequate database capacity
– Insufficient telecommunications capacity
– Incompatibility of old systems with new technology
– Rapid technological change

Approach (5 of 7)
• Typical people problems

– Lack of employee training
– Difficulties of evaluating performance
– Legal and regulatory compliance
– Work environment, ergonomics
– Poor or indecisive management
– Lack of employee support and participation

Approach (6 of 7)
• Solution design
– Often many possible solutions
– Consider as many as possible to understand range of
solutions
• Solution Evaluation and Choice
– Factors include
▪ Cost
▪ Feasibility given resources and skills
▪ Length of time needed to implement solution

Approach (7 of 7)
• Implementation
– Building or purchasing solution
– Testing solution, employee training
– Change management
– Measurement of outcomes
– Feedback, evaluation of solution
• Problem solving is a continuous process, not a single
event
– Sometimes chosen solution doesn’t work or needs
adjustment

Figure 1.4 Problem Solving is a Continuous
Four-Step Process

The Role of Critical Thinking in Problem
Solving (1 of 2)
• Without critical thinking, easy to jump to conclusions,

misjudge a problem, and waste resources
• Critical thinking:
– Sustained suspension of judgment with an awareness
of multiple perspectives and alternatives
– Ability to collect and analyze data that might help
understand the nature of the problem; a “data driven”
approach

The Role of Critical Thinking in Problem
Solving (2 of 2)
• Four elements of critical thinking:

1. Maintaining doubt and suspending judgment
2. Being aware of different perspectives
▪ Including technology, organization, and people
perspectives
3. Testing alternatives and letting experience guide
4. Being aware of organizational and personal
limitations

The Connections Among Business
Objectives, Problems, and Solutions
• When firms cannot achieve business objectives these

objectives become challenges.
• Information systems often present solutions, partially or
fully, to these challenges.

How Information Systems Will Affect
Business Careers (1 of 9)
• Success in today’s job market requires a broad set of

skills.
• Job candidates must have problem-solving skills as well
as technical skills so that they can complete specific
tasks.
• The service sector will account for 95 percent of the new
jobs that are created or open up by 2022.

• Accounting:
– Accountants increasingly rely on information systems
to summarize transactions, create financial records,
organize data, and perform financial analysis.
– Skills:
▪ Knowledge of databases and networks
▪ Online financial transactions and reporting
systems
▪ How systems are used to achieve accounting
functions

• Finance:
– Relationship between information systems and
financial management and services is so strong that
many advise finance majors to co-major in
information systems.
– Skills:
▪ Use systems for financial reporting, direct
investment activities, implementation of cash
management strategies
▪ Plan, organize, implement information systems
strategies for the firm

• Marketing:
– No field has undergone more technology-driven
change in the past five years than marketing and
advertising.
– Skills:
▪ Work with databases for tracking and reporting on
customer behavior, product performance, customer
feedback, product development
▪ Enterprise systems for product management, sales
force management, customer relationship
management

• Operations management in services and manufacturing:

– Production managers, administrative service
managers, and operations analysts
– Skills:
▪ Hardware and software platforms for operations
management
▪ Use database and analytical software for
coordinating and optimizing resources required for
producing goods and services

• Management:
– The job of management has been transformed by
information systems.
– Impossible to manage business today without
information systems
– Skills:
▪ Use of information systems for each function of
job, from desktop productivity tools to applications
coordinating the entire enterprise

• Information systems:
– Fast changing and dynamic profession because
information technologies are among most important
tools for achieving business firms’ key objectives
– Domestic and offshore outsourcing
– Skills:
▪ Uses of new and emerging hardware and software
to achieve six business objectives
▪ An ability to take a leadership role in the design
and implementation of new information systems

• Outsourcing and offshoring:

– Two types: outsourcing to domestic U.S. firms and
outsourcing to low-wage countries such as India,
China
– Production programming, system maintenance, call
centers
– Benefits:
▪ Lower cost of building and maintaining systems
within U.S.
▪ Increased need for managerial positions

• Common requirements for all majors

– How IT helps achieve six business objectives
– Central role of databases
– Business analytics and intelligence systems
– Working with specialists and systems designers
– Ethical, social, legal environment and issues
▪ Use of IT to meet legal requirements

How Will MIS Help My Career?
• The Company: Power Financial Analytics Data Services

Inc.
• Position Description
• Job Requirements
• Interview Questions

Systems
Thirteenth Edition
Chapter 2
Global E-business and
Collaboration

Learning Objectives
2.1 What major features of a business are important for

understanding the role of information systems?
2.2 How do systems serve different management groups in
a business, and how do systems that link the enterprise
improve organizational performance?
2.3 Why are systems for collaboration and social business
so important, and what technologies do they use?
2.4 What is the role of the information systems function in a
business?
Video Cases
• Case 1: Walmart’s Retail Link Supply Chain

• Case 2: CEMEX – Becoming a Social Business
• Instructional Video 1: US Foodservice Grows Market
with Oracle CRM on Demand

Enterprise Social Networking Helps Sanofi
Pasteur Innovate and Improve Quality (1 of 2)
• Problem
– Hierarchical top-down processes
– Large geographically dispersed workforce
• Solutions
– Develop knowledge-sharing strategy and goals
– Redesign knowledge and collaboration processes
– Microsoft Yammer
– Enterprise social networking

Enterprise Social Networking Helps Sanofi
Pasteur Innovate and Improve Quality (2 of 2)
• Use of new technology to engage employees and

enabled knowledge gathering and sharing
• Demonstrates how outdated processes can affect
knowledge sharing and innovation
• Illustrates why organizations rely on information systems
to improve performance and remain competitive

Organizing a Business: Basic Business
Functions (1 of 2)
• Business: formal organization that makes products or

provides a service in order to make a profit
• Four basic business functions
– Manufacturing and production
– Sales and marketing
– Finance and accounting
– Human resources

Organizing a Business: Basic Business
Functions (2 of 2)
• Five basic business entities

– Suppliers
– Customers
– Employees
– Invoices/payments
– Products and services

Figure 2.1 The Four Major Functions of a
Business

Business Processes
• Logically related set of tasks that define how specific

business tasks are performed
– The tasks each employee performs, in what order,
and on what schedule
– E.g., Steps in hiring an employee
• Some processes tied to functional area
– Sales and marketing: identifying customers
• Some processes are cross-functional
– Fulfilling customer order

Figure 2.2 The Order Fulfillment Process

How IT Enhances Business Processes
• Automation of manual processes

• Change the flow of information
• Replace sequential processes with simultaneous activity
• Transform how a business works
• Drive new business models

Managing a Business and Firm Hierarchies
• Firms coordinate work of employees by developing

hierarchy in which authority is concentrated at top.
– Senior management
– Middle management
– Operational management
– Knowledge workers
– Data workers
– Production or service workers
• Each group has different needs for information.

Figure 2.3 Levels in a Firm

The Business Environment
• Businesses depend heavily on their environments for

capital, labor, supplies, and more.
• Global environment
– Technology and science, economy, politics,
international change
• Immediate environment
– Customers, suppliers, competitors, regulations,
stockholders

Figure 2.4 The Business Environment

The Role of Information Systems in a
Business
• Firms invest in information systems in order to:

– Achieve operational excellence
– Develop new products and services
– Attain customer intimacy and service
– Improve decision making
– Promote competitive advantage
– Ensure survival

Systems for Different Management Groups
• Transaction processing systems (TPS)

– Keep track of basic activities and transactions of
organization
• Systems for business intelligence
– Address decision-making needs of all levels of
management
▪ Management information systems (MIS)
▪ Decision support systems (DSS)
▪ Executive support systems (ESS)

Transaction Processing Systems
• Serve operational managers

• Principal purpose is to answer routine questions and to
track the flow of transactions through the organization
– E.g., inventory questions, granting credit to customer
• Monitor status of internal operations and firm’s
relationship with external environment
• Major producers of information for other systems
• Highly central to business operations and functioning

Figure 2.5 A Payroll TPS

Management Information Systems
• Provide middle managers with reports on firm’s

performance, to help monitor firm and predict future
performance
• Summarize and report on basic operations using data
from TPS
• Provide weekly, monthly, annual results, but may enable
drilling down into daily or hourly data
• Typically not very flexible systems with little analytic
capability

Figure 2.6 How MIS Obtain Their Data
from the Organization’s TPS

Figure 2.7 Sample MIS Report

Decision Support Systems
• Serve middle managers

• Support nonroutine decision making
– Example: What is impact on production schedule if
December sales doubled?
• Often use external information as well from TPS and MIS
• Model driven DSS
– Voyage-estimating systems
• Data driven DSS
– Intrawest’s marketing analysis systems

Figure 2.8 Voyage-Estimating Decision
Support System

Executive Support Systems
• Serve senior managers
• Address strategic issues and long-term trends
– E.g., what products should we make in five years?
• Address nonroutine decision making
• Provide generalized computing capacity that can be applied to
changing array of problems
• Draw summarized information from M IS, DSS, and data from
external events
• Typically use portal with Web interface, or digital dashboard, to
present content

Figure Digital Dashboard

Interactive Session – People: Data Changes How
NFL Teams Play the Game and How Fans See it
– What kinds of systems are illustrated in this case study? Where
do they obtain their data? What do they do with the data?
Describe some of the inputs and outputs of these systems.
– What business functions do these systems support? Explain
your answer.
– How do the data about teams and players captured by the NFL
help NFL football teams and the NFL itself make better
decisions? Give examples of two decisions that were improved
by the systems described in this case.
– How did using data help the NFL and its teams improve the way
they run their business?

Systems for Linking the Enterprise
• Enterprise applications
– Systems that span functional areas, focus on
executing business processes across the firm, and
include all levels of management
• Four major types
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems

Figure 2.9 Enterprise Application
Architecture

Enterprise Systems
• Also called enterprise resource planning (E RP) systems

• Integrate data from key business processes into single
system
• Speed communication of information throughout firm
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment
• Enable managers to assemble overall view of operations

Supply Chain Management (SCM) Systems
• Manage relationships with suppliers, purchasing firms,

distributors, and logistics companies
• Manage shared information about orders, production,
inventory levels, and so on
– Goal is to move correct amount of product from
source to point of consumption as quickly as possible
and at lowest cost
• Type of interorganizational system
– Automating flow of information across organizational
boundaries

Customer Relationship Management
(CRM) Systems
• Help manage relationship with customers.

• Coordinate business processes that deal with customers
in sales, marketing, and customer service
• Goals:
– Optimize revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales

Knowledge Management Systems
• Manage processes for capturing and applying knowledge

and expertise
• Collect relevant knowledge and make it available
wherever needed in the enterprise to improve business
processes and management decisions
• Link firm to external sources of knowledge

Intranets and Extranets
• Technology platforms that increase integration and

expedite the flow of information
• Intranets:
– Internal networks based on Internet standards
– Often are private access area in company’s website
• Extranets:
– Company websites accessible only to authorized
vendors and suppliers
– Facilitate collaboration

E-Business, E-Commerce, and E-Government
• E-business:
– Use of digital technology and Internet to drive major
business processes
• E-commerce:
– Subset of e-business
– Buying and selling goods and services through
Internet
• E-government:
– Using Internet technology to deliver information and
services to citizens, employees, and businesses

What is Collaboration?
• Growing importance of collaboration:

– 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

What is Social Business?
• Use of social networking platforms to engage employees,

customers, suppliers
• Conversations to strengthen bonds
• Requires information transparency
• Seen as way to drive operational efficiency, spur
innovation, accelerate decision making

Business Benefits of Collaboration and
Social Business
• Investment in collaboration technology can return large

rewards, especially in sales and marketing, research and
development
• Productivity: Sharing knowledge and resolving problems
• Quality: Faster resolution of quality issues
• Innovation: More ideas for products and services
• Customer service: Complaints handled more rapidly
• Financial performance: Generated by improvements in
factors above

Figure 2.10 Requirements for Collaboration

Tools and Technologies for Collaboration
and Teamwork
• Email and instant messaging (IM)

• Wikis
• Virtual worlds
• Collaboration and social business environments
– Virtual meeting systems (telepresence)
– Cloud collaboration services
▪ Google Drive, Dropbox
– Microsoft SharePoint and IBM Notes
– Enterprise social networking tools

Interactive Session – Technology: Collaborating the
Glasscubes Way
– Discuss the features of Glasscubes as a collaboration
software.
– Why did the NSHCS require a tool for collaboration?
Was Glasscubes a feasible option?
– Name some other areas where such software can be
useful. Discuss at least one such area.

Evaluating and Selecting Collaboration
Tools
1. What are your firm’s collaboration challenges?

2. What kinds of solutions are available?
3. Analyze available products’ cost and benefits.
4. Evaluate security risks.
5. Consult users for implementation and training issues.
6. Select candidate tools and evaluate vendors.

Figure 2.11 The Time/Space Collaboration
and Social Tool Matrix

The Information Systems Department
• Programmers
• Systems analysts
– Principle liaisons to rest of firm
• Information systems managers
– Leaders of teams of programmers and analysts,
project managers, physical facility managers,
telecommunications managers, database specialists,
managers of computer operations, and data entry staff
• Senior managers: CIO, CPO, CSO, CKO, CDO
• End users
Information Systems Services
• Computing services
• Telecommunications services
• Data management services
• Application software services
• Physical facilities management services
• IT management services
• IT standards services
• IT educational services
• IT research and development services
• The Company: Comprehensive Supplemental Insurance

USA

Systems
Thirteenth Edition
Chapter 3
Achieving Competitive
Advantage with Information
Systems

Learning Objectives
3.1 How do Porter’s competitive forces model, the value chain
model, synergies, core competencies, and network-based
strategies help companies use information systems for
competitive advantage?
3.2 How do information systems help businesses compete
globally?
3.3 How do information systems help businesses compete using
quality and design?
3.4 What is the role of business process management (B PM) in
enhancing competitiveness?
Video Cases
• Case 1: GE Becomes a Digital Firm: The Emerging

Industrial Internet
• Case 2: National Basketball Association: Competing on
Global Delivery with Akamai OS Streaming

Tate & Lyle Devise a Global IT Strategy
• Problem
– expand the specialty food segment
– face off stiff competition from giant global competitors
– reconcile financial accounting systems across four
regions and thirty operating facilities
• Solutions
– Account Reconciliation and Task Management
system based on SAP’s ERP
• Demonstrates that businesses must change their
strategies over time

Porter’s Competitive Forces Model
• Five competitive forces shape fate of firm

– Traditional competitors
– New market entrants
– Substitute products and services
– Customers
– Suppliers

Figure 3.1 Porter’s Competitive Forces Model

Information System Strategies for Dealing
with Competitive Forces (1 of 5)
• Basic strategy: Align IT with business objectives

– Identify business goals and strategies
– Break strategic goals into concrete activities and
processes
– Identify metrics for measuring progress
– Determine how IT can help achieve business goals
– Measure actual performance

• Low-cost leadership
– Use information systems to achieve the lowest
operational costs and the lowest prices
– E.g. Walmart
▪ Inventory replenishment system sends orders to
suppliers when purchase recorded at cash register
▪ Minimizes inventory at warehouses, operating
costs
▪ 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
– E.g., Google's continuous innovations, Apple's iPhone
– Use information systems to customize, personalize
products to fit specifications of individual consumers
▪ E.g., Nike's NIKEiD program for customized
sneakers

• Focus on market niche

– Use information systems to enable specific market
focus, and serve narrow target market better than
competitors.
▪ Analyzes customer buying habits, preferences
▪ Advertising pitches to smaller and smaller target
markets
– E.g., Hilton Hotel’s OnQ System
▪ Analyzes data collected on guests to determine
preferences and guest's profitability

• Strengthen customer and supplier intimacy.

– Strong linkages to customers and suppliers increase
switching costs and loyalty
– Toyota: uses IS to facilitate direct access from
suppliers to production schedules
▪ Permits suppliers to decide how and when to ship
supplies to plants, allowing more lead time in
producing goods.
– Amazon: keeps track of user preferences for
purchases, and recommends titles purchased by
others

The Internet’s Impact on Competitive
Advantage
• Enables new products and services

• Encourages substitute products
• Lowers barrier to entry
• Changes balance of power of customers and suppliers
• Transforms some industries
• Creates new opportunities for creating new markets,
building brands, and large customer bases
• Smart products and the Internet of Things

The Business Value Chain Model
• Highlights specific activities in a business where

competitive strategies can best be applied and where
information systems are likely to have a strategic impact.
– Primary activities
– Support activities
– Benchmarking
– Best practices

Figure 3.2 The Value Chain Model

The Value Web
• A firm’s value chain is linked to the value chains of its

suppliers, distributors, and customers.
• Value web
– Collection of independent firms that use information
technology to coordinate their value chains to
produce a product collectively.
– Value webs are flexible and adapt to changes in
supply and demand.

Figure 3.3 The Value Web

Synergies, Core Competencies, and
Network-Based Strategies
• Large corporations comprised of business units

– Financial returns overall are tied to performance of
business units
• Information systems improve performance of business
units by promoting
– Communication
– Synergies
– Core competencies

Synergies
• When output of some units can be used as inputs to

other units
• When two firms can pool markets and expertise (e.g.,
recent bank mergers)
• Lower costs and generate profits
• Enabled by information systems that ties together
disparate units so they act as whole

Core Competency
• Activities for which firm is world-class leader

– E.g., world’s best miniature parts designer, best
package delivery service, etc
• Relies on knowledge gained over years of experience as
well as knowledge research
• Any information system that encourages the sharing of
knowledge across business units enhances competency
– E.g., Procter & Gamble uses intranet to help people
working on similar problems share ideas and
expertise.

Network-Based Strategies
• Network economics
– Marginal costs of adding another participant are near
zero, whereas marginal gain is much larger
– E.g., larger number of participants in Internet, greater
value to all participants
• Virtual company
– Uses networks to link people, resources, and ally with
other companies to create and distribute products
without traditional organizational boundaries or
physical locations

Disruptive Technologies
• Technologies with disruptive impact on industries and

businesses, rendering existing products, services and
business models obsolete
– Personal computers
– World Wide Web
– Internet music services
• First movers versus fast followers
– First movers of disruptive technologies may fail to see
potential, allowing second movers to reap rewards
(fast followers)

The Internet and Globalization
• Prior to the Internet, competing globally was only an

option for huge firms able to afford factories, warehouses,
and distribution centers abroad.
• The Internet drastically reduces costs of operating
globally.
• Globalization benefits
– Scale economies and resource cost reduction
– Higher utilization rates, fixed capital costs, and lower
cost per unit of production
– Speeding time to market

Figure 3.4 Apple iPhone’s Global Supply
Chain

Global Business and System Strategies
• Domestic exporters
• Multinationals
• Franchisers
• Transnationals

Global System Configuration
• Centralized systems
• Duplicated systems
• Decentralized systems
• Networked systems

Figure 3.5 Global Business Organization
Systems Configurations

What is Quality?
• Producer perspective
– Conformance to specifications and absence of variation
from specs
• Customer perspective
– Physical quality (reliability), quality of service,
psychological quality
• Total quality management (TQM)
– Quality control is end in itself
– All people, functions responsible for quality
• Six sigma
– Measure of quality: 3.4 defects/million opportunities
How Information Systems Improve Quality
• Reduce cycle time and simplify production

• Benchmark
• Use customer demands to improve products and services
• Improve design quality and precision
– Computer-aided design (C AD) systems
• Improve production precision and tighten production
tolerances

What is Business Process Management (BPM)?
• Technology alone is often not enough to improve

business
• Organizational changes often necessary
– Minor changes in work habits
– Redesigning entire business processes
• Aims to continuously improve processes
• Uses variety of tools and methodologies to
– Understand existing processes
– Design and optimize new processes

Steps in BPM
1. Identify processes for change

2. Analyze existing processes
3. Design new process
4. Implement new process
5. Continuous measurement

Figure 3.6 As-Is Business Process for
Purchasing a Book from a Physical Bookstore

Figure 3.7 Redesigned Process for Purchasing
a Book Online

Interactive Session: Organizations:
Carter’s Redesigns Its Business Processes
– How did Carter’s previous business processes affect its business
performance?
– What people, organization, and technology factors contributed to
Carter’s problems with its business processes?
– Diagram Carter’s old and redesigned business process for
paying an invoice.
– Describe the role of technology in Carter’s business process
changes.
– How did Carter’s redesigned business processes change the
way the company worked? What was the business impact?
Explain.

Business Process Reengineering
• A radical form of fast change

• Not continuous improvement, but elimination of old
processes, replacement with new processes, in a brief
time period
• Can produce dramatic gains in productivity
• Can produce more organizational resistance to change

• The Company: A+ Superior Data Quality


Systems
Thirteenth Edition
Chapter 4
Ethical and Social Issues in
Information Systems

Learning Objectives
4.1 What ethical, social, and political issues are raised by
information systems?
4.2 What specific principles for conduct can be used to guide
ethical decisions?
4.3 Why do contemporary information systems technology and
the Internet pose challenges to the protection of individual
privacy and intellectual property?
4.4 How have information systems affected laws for establishing
accountability, liability, and the quality of everyday life?

Video Cases
• Case 1: What Net Neutrality Means for You

• Case 2: Facebook and Google Privacy: What Privacy?
• Case 3: United States v. Terrorism: Data Mining for
Terrorists and Innocents
• Instructional Video: Viktor Mayer Schönberger on the
Right to Be Forgotten

The Dark Side of Big Data (1 of 2)
• Problem
– Opportunities from new technology
– Undeveloped legal environment
• Solutions
– Develop big data strategy
– Develop privacy policies
– Develop big data predictive models
– Develop big data mining technology
– Develop big data analytics tools and predictive
modeling systems

The Dark Side of Big Data (2 of 2)
• Organizations like Progressive and Deloitte Consulting

LLP use predictive modeling to identify individual
customers that fit risk or vulnerability profiles
• Demonstrates how technological innovations can be a
double-edged sword
• Illustrates the ability of IT systems to support decision
making

What Ethical, Social, and Political Issues
are Raised by Information Systems? (1 of 2)
• Recent cases of failed ethical judgment in business

– Deerfield Management, Teva Pharmaceuticals
Industries, General Motors, Takata Corporation
– In many, information systems used to bury decisions
from public scrutiny
• Ethics
– Principles of right and wrong that individuals, acting
as free moral agents, use to make choices to guide
their behaviors

What Ethical, Social, and Political Issues
are Raised by Information Systems? (2 of 2)
• Information systems raise new ethical questions because

they create opportunities for:
– Intense social change, threatening existing
distributions of power, money, rights, and obligations
– New kinds of crime

A Model for Thinking About Ethical,
Social, and Political Issues
• Society as a calm pond

• IT as rock dropped in pond, creating ripples of new
situations not covered by old rules
• Social and political institutions cannot respond overnight
to these ripples—it may take years to develop etiquette,
expectations, laws
– Requires understanding of ethics to make choices in
legally gray areas

Figure 4.1 The Relationship Between Ethical, Social,
and Political Issues in an Information Society

Five Moral Dimensions of the Information
Age
• Information rights and obligations

• Property rights and obligations
• Accountability and control
• System quality
• Quality of life

Key Technology Trends That Raise Ethical
Issues
• Computing power doubles every 18 months

• Data storage costs rapidly decline
• Data analysis advances
• Networking advances
• Mobile device growth impact

Advances in Data Analysis Techniques
• Profiling
– Combining data from multiple sources to create
dossiers of detailed information on individuals
• Nonobvious relationship awareness (N ORA)
– Combining data from multiple sources to find obscure
hidden connections that might help identify criminals
or terrorists

Figure 4.2 Nonobvious Relationship
Awareness (NORA)

Basic Concepts: Responsibility,
Accountability, and Liability
• Responsibility
– Accepting the potential costs, duties, and obligations for
decisions
• Accountability
– Mechanisms for identifying responsible parties
• Liability
– Permits individuals (and firms) to recover damages done
to them
• Due process
– Laws are well-known and understood, with an ability to
appeal to higher authorities
Ethical Analysis
• Five-step process for ethical analysis

1. Identify and clearly describe the facts.
2. Define the conflict or dilemma and identify the higher-
order values involved.
3. Identify the stakeholders.
4. Identify the options that you can reasonably take.
5. Identify the potential consequences of your options.

Candidate Ethical Principles (1 of 2)
• Golden Rule
– Do unto others as you would have them do unto you
• Immanuel Kant’s Categorical Imperative
– If an action is not right for everyone to take, it is not
right for anyone
• Slippery Slope Rule
– If an action cannot be taken repeatedly, it is not right
to take at all

Candidate Ethical Principles (2 of 2)
• Utilitarian Principle
– Take the action that achieves the higher or greater
value
• Risk Aversion Principle
– Take the action that produces the least harm or
potential cost
• Ethical “No Free Lunch” Rule
– Assume that virtually all tangible and intangible
objects are owned by someone unless there is a
specific declaration otherwise

Professional Codes of Conduct
• Promulgated by associations of professionals

– American Medical Association (AMA)
– American Bar Association (ABA)
– Association for Computing Machinery (A CM)
• Promises by professions to regulate themselves in the
general interest of society

Real-World Ethical Dilemmas
• One set of interests pitted against another

• Examples
– Monitoring employees: Right of company to maximize
productivity of workers versus workers’ desire to use
Internet for short personal tasks
– Facebook monitors users and sells information to
advertisers and app developers

Information Rights: Privacy and Freedom
in the Internet Age (1 of 3)
• Privacy
– Claim of individuals to be left alone, free from
surveillance or interference from other individuals,
organizations, or state; claim to be able to control
information about yourself
• In the United States, privacy protected by:
– First Amendment (freedom of speech and
association)
– Fourth Amendment (unreasonable search and
seizure)
– Additional federal statues (e.g., Privacy Act of 1974)
• Fair information practices

– Set of principles governing the collection and use of
information
▪ Basis of most U.S. and European privacy laws
– Used to drive changes in privacy legislation
▪ C OPPA
▪ Gramm-Leach-Bliley Act
▪ H IPAA

• FTC FIP principles

– Notice/awareness (core principle)
– Choice/consent (core principle)
– Access/participation
– Security
– Enforcement

European Directive on Data Protection
• Use of data requires informed consent of customer

• EU member nations cannot transfer personal data to
countries without similar privacy protection
• New EU General Data Protection Regulation (G DPR)
replacing existing Data Protection :
– Applies across all EU countries to any firms operating
in EU
– Strengthens right to be forgotten
• Privacy Shield replaces safe harbor framework

Internet Challenges to Privacy (1 of 2)
• Cookies
– Identify browser and track visits to site
– Super cookies (Flash cookies)
• Web beacons (web bugs)
– Tiny graphics embedded in emails and web pages
– Monitor who is reading email message or visiting site
• Spyware
– Surreptitiously installed on user’s computer
– May transmit user’s keystrokes or display unwanted ads
• Google services and behavioral targeting

Internet Challenges to Privacy (2 of 2)
• The United States allows businesses to gather

transaction information and use this for other marketing
purposes.
• Opt-out v s. opt-in model
ersu
• Online industry promotes self-regulation over privacy

legislation.
– Complex/ambiguous privacy statements
– Opt-out models selected over opt-in
– Online “seals” of privacy principles

Figure 4.3 How Cookies Identify Web
Visitors
1. The Web server reads the user's Web browser and determines the
operating system, browser name, version number, Internet address, and
other information.
2. The server transmits a tiny text file with user identification information
called a cookie, which the user's browser receives and stores on the user's
computer.
3. When the user returns to the Web site, the server requests the contents of
any cookie it deposited previously in the user's computer.
4. The Web server reads the cookie, identifies the visitor, and calls up data on
the user.
Technical Solutions
• Solutions include:
– Email encryption
– Anonymity tools
– Anti-spyware tools
• Overall, technical solutions have failed to protect users
from being tracked from one site to another
– Browser features
▪ “Private” browsing
▪ “Do not track” options

Property Rights: Intellectual Property
• Intellectual property
– Tangible and intangible products of the mind created
by individuals or corporations
• Protected in four main ways:
– Copyright
– Patents
– Trademarks
– Trade secret

Challenges to Intellectual Property Rights
• Digital media different from physical media

– Ease of replication
– Ease of transmission (networks, Internet)
– Ease of alteration
– Compactness
– Difficulties in establishing uniqueness
• Digital Millennium Copyright Act (DMCA)

Computer-Related Liability Problems
• If software fails, who is responsible?

• If seen as part of a machine that injures or harms,
software producer and operator may be liable
• If seen as similar to book, difficult to hold author/publisher
responsible
• If seen as a service, would this be similar to telephone
systems not being liable for transmitted messages?

System Quality: Data Quality and System
Errors
• What is an acceptable, technologically feasible level of

system quality?
– Flawless software is economically unfeasible
• Three principal sources of poor system performance
– Software bugs, errors
– Hardware or facility failures
– Poor input data quality (most common source of
business system failure)

Quality of Life: Equity, Access,
Boundaries (1 of 3)
• Negative social consequences of systems

• Balancing power: center versus periphery
• Rapidity of change: reduced response time to competition
• Maintaining boundaries: family, work, and leisure
• Dependence and vulnerability
• Computer crime and abuse

Boundaries (2 of 3)
• Computer crime and abuse

– Computer crime
– Computer abuse
– Spam
– CAN-SPAM Act of 2003
• Employment
– Trickle-down technology
– Reengineering job loss

Boundaries (3 of 3)
• Equity and access

– The digital divide
• Health risks
– Repetitive stress injury (RSI)
– Carpal tunnel syndrome (CTS)
– Computer vision syndrome (CVS)
– Technostress

Interactive Session: Technology: Volkswagen
Pollutes its Reputation with Software to Evade
Emissions Testing
– Does the Volkswagen emission crisis pose an ethical
dilemma? Why or why not? If so, who are the
stakeholders?
– Describe the role of management, organization, and
technology factors in creating VW’s software cheating
problem. To what extent was management
responsible? Explain your answer.
– Should all software-controlling machines be available
for public inspection? Why or why not?

Interactive Session – People: Will
Automation Kill Jobs?
– Identify the problem described in this case study. In
what sense is it an ethical dilemma?
– Should more tasks be automated? Why or why not?
Explain your answer.
– Can the problem of automation reducing cognitive
skills be solved? Explain your answer.

• The Organization: Pinnacle Air Force Base


Systems
Thirteenth Edition
Chapter 5
IT Infrastructure: Hardware
and Software
Slides in this presentation contain hyperlinks.

JAWS users should be able to get a list of
links by using INSERT+F7

Learning Objectives
5.1 What are the components of IT infrastructure?

5.2 What are the major computer hardware, data storage,
input, and output technologies used in business and the
major hardware trends?
5.3 What are the major types of computer software used in
business and the major software trends?
5.4 What are the principal issues in managing hardware
and software technology?

Video Cases
• Case 1– Rockwell Automation Fuels the Oil and Gas

Industry with the Internet of Things (IoT)
• Case 2– ESPN.com: The Future of Sports Coverage in
the Cloud
• Case 3– Netflix: Building a Business in the Cloud

Grab Leverages Information Technology to
Enhance Its Services
• Problem
– providing customers with timely service and drivers
with enough fares
– matching demand with resources in an unpredictable
sector
• Solutions
– Managed cloud infrastructure
– On-demand, scalable services
• Illustrates use of cloud computing to improve
effectiveness and control costs

Infrastructure Components
• IT infrastructure
– Platform for supporting all information systems in the
business
• Computer hardware
• Computer software
• Data management technology
• Networking and telecommunications technology
• Technology services

Figure 5.1 IT Infrastructure Components

Types of Computers
• Personal computers and mobile devices

• Workstations
• Servers
• Mainframes
• Supercomputers
• Grid computing

Client/Server Computing
• Form of distributed computing

• Splits processing between “clients” and “servers”
• Two-tiered client/server architecture
• Multi-tiered client/server architecture (N-tier)
– Web servers
– Application servers

Figure 5.2 Client/Server Computing

Figure 5.3 A Multitiered Client/Server
Network (N-Tier)

Storage, Input, and Output Technology
• Primary secondary storage technologies

– Magnetic disk
▪ SSDs
– Optical disks
– Magnetic tape
– Storage networking: SANs
• Input devices
– E.g. keyboard
• Output devices
– E.g. monitor
Contemporary Hardware Trends (1 of 3)
• The mobile digital platform

– Tablet computers
– Netbooks
• Consumerization of IT and BYOD
• Nanotechnology and quantum computing
• Virtualization
– Software-defined storage (SDS)

Interactive Session – Technology: Wearable
Computers Change How We Work
– Wearables have the potential to change the way organizations
and workers conduct business. Discuss the implications of this
statement.
– How would a business process such as ordering a product for a
customer in the field be changed if the salesperson was wearing
a smartwatch equipped with Salesforce software?
– What people, organization, and technology issues would have to
be addressed if a company was thinking of equipping its workers
with a wearable computing device?
– What kinds of businesses are most likely to benefit from
wearable computers? Select a business and describe how a
wearable computing device could help that business improve
operations or decision making.
Examples of Nanotubes
© forance/123RF

Figure 5.4 Cloud Computing Platform

Figure 5.5 Major Amazon Web Services

• Cloud computing:
– Computing resources obtained over the Internet
▪ Infrastructure as a service (IaaS)
▪ Software as a service (SaaS)
▪ Platform as a service (PaaS)
– Public v s. private clouds
ersu
– Utility computing, on-demand computing

– Hybrid cloud
– Data storage security is in hands of provider

• Green computing
– Green IT
– Practices and technologies for minimizing impact on
environment
• High-performance and power-saving processors
– Multicore processors
– Reduced power consumption

Interactive Session – Organizations: Glory
Finds Solutions in the Cloud
– Why did Glory choose a cloud solution as opposed to
modernizing the systems it had?
– Why was it necessary to hire a systems integrator
firm?
– What were the main organizational change
requirements for implementing the new cloud
platform?
– Why did management choose a regional rollout
strategy? Why in the UK?

Figure 5.6 The Major Types of Software

Operating System Software
• Software that controls computer activities

• GU Is
• Multitouch
• PC operating systems
– Windows, Mac
– UNIX
– Linux (open source)
• Mobile operating systems
– Chrome, Android, iOS

Application Software and Desktop
Productivity Tools (1 of 2)
• Programming languages for business

–C
– C++ - newer, object-oriented version of C
– Visual Basic: Visual programming language for MS
Windows applications
– Java: OS-independent object-oriented programming
language
▪ Migrated to mobile applications, game machines,
cable TV systems
▪ Java Virtual Machine

Application Software and Desktop
Productivity Tools (2 of 2)
• Software packages and desktop productivity tools

– Word processing software
– Spreadsheet software
– Data management software
– Presentation graphics
– Software suites
– Web browsers

Figure 5.7 Spreadsheet Software

HTML and HTML5
• Hypertext markup language (HTML):

– Page description language for specifying how
elements are placed on a web page and for creating
links to other pages and objects
• HTML5
– Next evolution of HTML
– Enables multimedia embedding without 3rd party
plugins like Flash

Web Services
• Software components that exchange information with one

another using universal web communication standards
and languages
• XML (eXtensible Markup Language)
– Foundation of web services
• Service oriented architecture (SOA)
– Collection of services used to build an organization’s
software systems

Figure 5.8 How Dollar Rent-A-Car Uses
Web Services

Software Trends
• Open source software

– Linux, Apache
• Cloud-based software and tools
– SaaS (software as a service)
▪ Google Docs
– Mashups
▪ Zip Realty uses Google Maps and Zillow.com
– Apps
▪ Mobile apps

Capacity Planning and Scalability
• Capacity planning
– Predicting when hardware system becomes saturated
– Ensuring computing power for current and future needs
– Factors include:
▪ Maximum number of users
▪ Impact of current, future software
▪ Performance measures
• Scalability
– Ability of system to expand to serve large number of users
without breaking down

Total Cost of Ownership (TCO) model
• Analyzing direct and indirect costs to determine the

actual cost of owning a specific technology
– Direct costs: hardware, software purchase costs
– Indirect costs: ongoing administration costs,
upgrades, maintenance, etc.
– Hidden costs: support staff, downtime, etc.
• TCO can be reduced through increased centralization,
standardization of hardware and software resources.

Using Technology Service Providers
• Outsourcing
– Using external provider to run computer center and
networks
– Web hosting service
– Offshore software outsourcing
– Service level agreements (SLAs)
• Using cloud services
– Appealing to businesses with smaller I T budgets
– Pricing is per hour, per-use
– Switching costs
Managing Mobile Platforms
• Mobile devices provide productivity gains

• Expenses of equipping employees with devices
• Network configuration
• Software
• Device security
• Stolen or compromised devices
• Mobile device management (M DM) software

Managing Software Localization for Global
Business
• Software localization
– Local language interfaces
– Complex software interfaces
• Differences in local cultures
• Differences in business processes
• These factors add to TCO of using technology service
providers

• The Business: A1 Tech IT Consulting


Systems
Thirteenth Edition
Chapter 6
Foundations of Business
Intelligence: Databases and
Information Management

Learning Objectives
6.1 What is a database, and how does a relational database
organize data?
6.2 What are the principles of a database management system?
6.3 What are the principal tools and technologies for accessing
information from databases to improve business performance
and decision making?
6.4 Why are information policy, data administration, and data
quality assurance essential for managing the firm’s data
resources?

Video Cases
• Case 1: Dubuque Uses Cloud Computing and Sensors to

Build a Smarter City
• Case 2: Brooks Brothers Closes in on Omnichannel
Retail
• Case 3: Maruti Suzuki Business Intelligence and
Enterprise Databases

Data Management Helps the Charlotte
Hornets Learn More About Their Fans
• Problem
– Large volumes of data in isolated databases
– Outdated data management technology
• Solutions
– SAP HANA
– Data warehouse
– FanTracker
• Illustrates the importance of data management for better
decision making and customer analysis

What is a Database?
• Database:
– Collection of related files containing records on people,
places, or things
• Entity:
– Generalized category representing person, place, thing
– E.g., SUPPLIER, PART
• Attributes:
– Specific characteristics of each entity:
▪ SUPPLIER name, address
▪ PART description, unit price, supplier
Relational Databases
• Organize data into two-dimensional tables (relations) with

columns and rows
• One table for each entity:
– E.g., (CUSTOMER, SUPPLIER, PART, SALES)
– Fields (columns) store data representing an attribute
– Rows store data for separate records, or tuples
• Key field: uniquely identifies each record
• Primary key

Figure 6.2 A Relational Database Table

Figure 6.3 The PART Table

Establishing Relationships (1 of 2)
• Entity-relationship diagram
– Used to clarify table relationships in a relational
database
• Relational database tables may have:
– One-to-one relationship
– One-to-many relationship
– Many-to-many relationship
▪ Requires “join table” or intersection relation that
links the two tables to join information

Figure 6.4 A Simple Entity-Relationship
Diagram

Establishing Relationships (2 of 2)
• Normalization
– Streamlining complex groups of data
– Minimizes redundant data elements
– Minimizes awkward many-to-many relationships
– Increases stability and flexibility
• Referential integrity rules
– Ensure that relationships between coupled tables
remain consistent

Figure 6.5 Sample Order Report

Figure 6.6 The Final Database Design with
Sample Records

Figure 6.7 Entity-Relationship Diagram for
the Database with Four Tables

Database Management Systems (DBMS)
• Software for creating, storing, organizing, and accessing

data from a database
• Separates the logical and physical views of the data
– Logical view: how end users view data
– Physical view: how data are actually structured and
organized
• Examples: Microsoft Access, DB2, Oracle Database,
Microsoft SQL Server, MySQL

Figure 6.8 Human Resources Database
with Multiple Views

Operations of a Relational DBMS
• Select:
– Creates a subset of all records meeting stated criteria
• Join:
– Combines relational tables to present the server with
more information than is available from individual
tables
• Project:
– Creates a subset consisting of columns in a table
– Permits user to create new tables containing only
desired information

Figure 6.9 The Three Basic Operations of a
Relational DBMS

Capabilities of Database Management
Systems
• Data definition capabilities:

– Specify structure of content of database
• Data dictionary:
– Automated or manual file storing definitions of data
elements and their characteristics
• Querying and reporting:
– Data manipulation language
▪ Structured query language (SQL)
▪ Microsoft Access query-building tools
– Report generation, e.g., Crystal Reports
Figure 6.10 Access Data Dictionary
Features

Figure 6.11 Example of an SQL Query
SELECT PART.Part_Number, PART.Part_Name,
SUPPLIER.Supplier_Number,
SUPPLIER.Supplier_Name
FROM PART, SUPPLIER
WHERE PART.Suplier_Number = SUPPLIER.Supplier_Number AND
Part_Number = 137 OR Part_Number = 150;

Figure 6.12 An Access Query

Non-Relational Databases
• “NoSQL”
• Handle large data sets of data that are not easily
organized into tables, columns, and rows
• Use more flexible data model
– Don’t require extensive structuring
• Can manage unstructured data, such as social media
and graphics
• E.g. Amazon’s SimpleDB, MetLife’s MongoDB

Cloud Databases and Distributed
Databases
• Relational database engines provided by cloud

computing services
– Pricing based on usage
– Appeal to small or medium-sized businesses
• Amazon Relational Database Service
– Offers MySQL, Microsoft SQL Server, Oracle
Database engines
• Distributed databases
– Stored in multiple physical locations
– Google’s Spanner cloud service
The Challenge of Big Data
• Massive quantities of unstructured and semi-structured

data from Internet and more
– 3Vs: Volume, variety, velocity
– Petabytes and exabytes
• Big datasets offer more patterns and insights than smaller
datasets, e.g.
– Customer behavior
– Weather patterns
• Requires new technologies and tools

Business Intelligence Infrastructure
• Array of tools for obtaining useful information from

internal and external systems and big data
– Data warehouses
– Data marts
– Hadoop
– In-memory computing
– Analytical platforms

Data Warehouses
• Data warehouse:
– Database that stores current and historical data that
may be of interest to decision makers
– Consolidates and standardizes data from many
systems, operational and transactional databases
– Data can be accessed but not altered
• Data mart:
– Subset of data warehouses that is highly focused and
isolated for a specific population of users

Hadoop
• Open-source software framework for big data

• Breaks data task into sub-problems and distributes the
processing to many inexpensive computer processing
nodes
• Combines result into smaller data set that is easier to
analyze
• Key services
– Hadoop Distributed File System (H DFS)
– MapReduce

In-Memory Computing
• Relies on computer’s main memory (RAM) for data

storage
• Eliminates bottlenecks in retrieving and reading data
• Dramatically shortens query response times
• Enabled by high-speed processors, multicore processing
• Lowers processing costs

Analytic Platforms
• Preconfigured hardware-software systems

• Designed for query processing and analytics
• Use both relational and non-relational technology to
analyze large data sets
• Include in-memory systems, NoSQL DBMS
• E.g. IBM PureData System for Analytics
– Integrated database, server, storage components
• Data lakes

Figure 6.13 Business Intelligence
Technology Infrastructure

Interactive Session – Society: Societe
Generale Builds an Intelligent System to
Manage Information Flow
– Why did Societe Generale’s managers decide to
develop an automated transaction processing
system?
– Why did managers decide they needed an “intelligent
system?” In what way was the new system
“intelligent?”
– What is the role of human decision makers in the new
system?
– Why did managers select the Infogix platform?

Analytical Tools: Relationships, Patterns,
Trends
• Once data is gathered, tools are required for

consolidating, analyzing, to use insights to improve
decision making
– Software for database querying and reporting
– Multidimensional data analysis (O LAP)
– Data mining

Online Analytical Processing (OLAP)
• Supports multidimensional data analysis, enabling users

to view the same data in different ways using multiple
dimensions
– Each aspect of information—product, pricing, cost,
region, or time period—represents a different
dimension
– E.g., comparing sales in East in June versus May and
July
• Enables users to obtain online answers to ad hoc
questions such as these in a fairly rapid amount of time

Figure 6.14 Multidimensional Data Model

Data Mining
• Finds hidden patterns and relationships in large

databases and infers rules from them to predict future
behavior
• Types of information obtainable from data mining
– Associations: occurrences linked to single event
– Sequences: events linked over time
– Classifications: patterns describing a group an item
belongs to
– Clustering: discovering as yet unclassified groupings
– Forecasting: uses series of values to forecast future
values
Text Mining
• Unstructured data (mostly text files) accounts for 80

percent of an organization’s useful information.
• Text mining allows businesses to extract key elements
from, discover patterns in, and summarize large
unstructured data sets.
• Sentiment analysis
– Mines online text comments online or in email to
measure customer sentiment

Web Mining
• Discovery and analysis of useful patterns and information

from the web
– E.g. to understand customer behavior, evaluate
website, quantify success of marketing
• Content mining – mines content of websites
• Structure mining – mines website structural elements,
such as links
• Usage mining – mines user interaction data gathered by
web servers

Databases and the Web
• Firms use the web to make information from their internal

databases available to customers and partners.
• Middleware and other software make this possible
– Web server
– Application servers or CGI
– Database server
• Web interfaces provide familiarity to users and savings
over redesigning legacy systems.

Figure 6.15 Linking Internal Databases to
the Web

Establishing an Information Policy
• Information policy
– States organization’s rules for organizing, managing,
storing, sharing information
• Data administration
– Responsible for specific policies and procedures
through which data can be managed as a resource
• Database administration
– Database design and management group responsible
for defining and organizing the structure and content
of the database, and maintaining the database.

Ensuring Data Quality
• Poor data quality: major obstacle to successful customer

relationship management
• Data quality problems caused by:
– Redundant and inconsistent data produced by
multiple systems
– Data input errors
• Data quality audit
• Data cleansing

Interactive Session – Organizations: Data-Driven
Policing Goes Global
– What are the benefits of intelligence-driven
prosecution for crime fighters and the general public?
– What problems does this approach to crime fighting
pose?
– What management, organization, and technology
issues should be considered when setting up
information systems for intelligence-driven
prosecution?

• The Business: Mega Midwest Power


Systems
Thirteenth Edition
Chapter 7
Telecommunications, the
Internet, and Wireless
Technology
Slides in this presentation contain

hyperlinks. JAWS users should be able to
get a list of links by using INSERT+F7

Learning Objectives
7.1 What are the principal components of

telecommunications networks and key networking
technologies?
7.2 What are the different types of networks?
7.3 How do the Internet and Internet technology work, and
how do they support communication and e-business?
7.4 What are the principal technologies and standards for
wireless networking, communication, and Internet access?

Video Cases
• Case 1: Telepresence Moves out of the Boardroom and

into the Field
• Case 2: Virtual Collaboration with IBM Sametime

Alibaba: Redefining Traditional Retailing (1 of
2)
• Problem
– omnichannel retail strategy
– supply chain
• Solutions
– Hema app
– curating through QR codes

Alibaba: Redefining Traditional Retailing (2 of
2)
• The Hema app continuously acquires information from its

customers
• Demonstrates IT’s role in helping organizations increase
efficiency and lower costs
• Illustrates the ability of IT systems to support inventory
management and sales

Networking and Communication Trends
• Convergence
– Telephone networks and computer networks
converging into single digital network using Internet
standards
• Broadband
– Majority of U.S. Internet users have broadband
access
• Broadband wireless
– Voice, data communication are increasingly taking
place over broadband wireless platforms

What is a Computer Network?
• Two or more connected computers

• Major components in simple network
– Client and server computers
– Network interfaces (NICs)
– Connection medium
– Network operating system (NOS)
– Hubs, switches, routers
• Software-defined networking (S DN)
– Functions of switches and routers managed by
central program
Figure 7.1 Components of a Simple
Computer Network

Networks in Large Companies
• Large numbers of local area networks (LANs) linked to

firm-wide corporate network
• Various powerful servers
– Website, corporate intranet, extranet
– Backend systems
• Mobile wireless LANs (Wi-Fi networks)
• Videoconferencing system
• Telephone network, wireless cell phones

Figure 7.2 Corporate Network Infrastructure

Key Digital Networking Technologies (1 of 3)
• Client/server computing
– Distributed computing model
– Clients linked through network controlled by network
server computer
– Server sets rules of communication for network and
provides every client with an address so others can
find it on the network
– Has largely replaced centralized mainframe
computing
– The Internet: largest implementation of client/server
computing
• Packet switching
– Method of slicing digital messages into parcels
(packets), sending packets along different
communication paths as they become available, and
then reassembling packets at destination
– Previous circuit-switched networks required assembly
of complete point-to-point circuit
– Packet switching more efficient use of network’s
communications capacity

Figure 7.3 Packet-Switched Networks and
Packet Communications

• TCP/IP and connectivity
– Protocols: rules that govern transmission of information between
two points
– Transmission Control Protocol/Internet Protocol (TCP/IP)
▪ Common worldwide standard that is basis for the Internet
– Department of Defense reference model for TCP/IP
▪ Four layers
– Application layer
– Transport layer
– Internet layer
– Network interface layer

Figure 7.4 The Transmission Control
Protocol/Internet Protocol (TCP/IP) Reference Model

Types of Networks
• Signals: Digital versus analog

– Modem: translates digital signals into analog form
(and vice versa)
• Types of networks
– Local area networks (LANs)
▪ Ethernet
▪ Client/server v s. peer-to-peer
ersu
– Wide area networks (WANs)

– Metropolitan area networks (MANs)
– Campus area networks (CANs)
Figure 7.5 Functions of the Modem

Transmission Media and Transmission
Speed
• Physical transmission media
– Twisted pair wire (CAT5)
– Coaxial cable
– Fiber optics cable
– Wireless transmission media and devices
▪ Satellites
▪ Cellular systems
• Transmission speed
– Bits per second (bps)
– Hertz
– Bandwidth
What is the Internet?
• The Internet
– World’s most extensive network
– Internet service providers (I SPs)
▪ Provide connections
▪ Types of Internet connections
– Dial-up: 56.6 Kbps
– Digital subscriber line (DSL/FIOS): 385 Kbps–40
Mbps
– Cable Internet connections: 1–50 M bps
– Satellite
– T1/T3 lines: 1.54–45 M bps

Internet Addressing and Architecture
• Each device on Internet assigned Internet Protocol (I P)

address
• 32-bit number, e.g. 207.46.250.119
• The Domain Name System (DNS)
– Converts IP addresses to domain names
– Hierarchical structure
– Top-level domains

Figure 7.6 The Domain Name System

Internet Architecture and Governance
• Network service providers

– Own trunk lines (high-speed backbone networks)
• Regional telephone and cable TV companies
– Provide regional and local access
• Professional organizations and government bodies
establish Internet standards
– IAB
– IC AN N
– W3C

Figure 7.7 Internet Network Architecture

Interactive Session: Organizations: The
Global Battle over Net Neutrality
– What is net neutrality? Why has the Internet operated under net
neutrality up to this point?
– Who’s in favor of net neutrality? Who’s opposed? Why?
– What would be the impact on individual users, businesses, and
government if Internet providers switched to a tiered service
model for transmission over landlines as well as wireless?
– It has been said that net neutrality is the most important issue
facing the Internet since the advent of the Internet. Discuss the
implications of this statement.
– Are you in favor of legislation enforcing network neutrality? Why
or why not?

The Future Internet: IPv6 and Internet 2
• IPv6
– New addressing scheme for IP numbers
– Will provide more than a quadrillion new addresses
– Not compatible with current IPv5 addressing
• Internet2
– Advanced networking consortium
▪ Universities, businesses, government agencies,
other institutions
– Developed high-capacity 100 G bps testing network
– Testing leading-edge new technologies for Internet
Internet Services and Communication
Tools (1 of 2)
• Internet services
– Email
– Chatting and instant messaging
– Newsgroups
– Telnet
– File Transfer Protocol (FTP)
– World Wide Web
• Voice over IP (VoIP)
– Digital voice communication using I P, packet
switching

Figure 7.8 Client/Server Computing on the
Internet

Internet Services and Communication
Tools (2 of 2)
• Unified communications
– Communications systems that integrate voice, data,
email, conferencing
• Virtual private network (VPN)
– Secure, encrypted, private network run over Internet
– PPTP
– Tunneling

Figure 7.9 How Voice Over IP Works

Interactive Session – People: Monitoring Employees
on Networks: Unethical or Good Business?
– Should managers monitor employee email and Internet
usage? Why or why not?
– Describe an effective email and web use policy for a
company.
– Should managers inform employees that their web
behavior is being monitored? Or should managers monitor
secretly? Why or why not?

Figure 7.10 A Virtual Private Network
Using the Internet

The Web
• Hypertext
– Hypertext Markup Language (H TML)
– Hypertext Transfer Protocol (HTTP):
– Uniform resource locator (U RL):
▪ http://www.megacorp.com/content/features/082602.htm
l
• Web servers
– Software for locating and managing web pages

Searching for Information on the Web (1 of 2)
• Search engines
– Google’s PageRank System
• Mobile search
• Semantic search
• Social search
• Visual search and the visual web
– Tagging
– Pinterest

Searching for Information on the Web (2 of 2)
• Intelligent agent shopping bots

• Search engine marketing
• Search engine optimization (S EO)
– Link farms
• Search engine algorithms

Figure 7.11 Top Web Search Engines
Worldwide
Source: Based on data from Net Market Share, April 2017.

Figure 7.12 How Google Works

Web 2.0 (1 of 2)
• Second-generation services
• Enabling collaboration, sharing information, and creating
new services online
• Features
– Interactivity
– Real-time user control
– Social participation (sharing)
– User-generated content

Web 2.0 (2 of 2)
• Blogs: chronological, informal websites created by

individuals
– RSS (Really Simple Syndication)
– Blogosphere
– Microblogging
• Wikis: collaborative websites where visitors can add,
delete, or modify content on the site
• Social networking sites: enable users to build
communities of friends and share information

Web 3.0 and the Future Web
• More tools to make sense of trillions of pages on the

Internet
• Pervasive web
• Internet of Things
• App Internet
• Increased cloud computing and SaaS
• Ubiquitous mobile connectivity
• Greater seamlessness of web as a whole

Cellular Systems
• Competing standards
– CDMA: United States only
– GSM: Rest of world, AT&T, T-Mobile
• Third-generation (3G) networks
– 144 Kbps
– Suitable for email access, web browsing
• Fourth-generation (4G) networks
– Up to 100 Mbps
– Suitable for Internet video
– LTE and WiMax
Wireless Computer Networks and Internet
Access (1 of 2)
• Bluetooth (802.15)
– Links up to 8 devices in 10-m area using low-power,
radio-based communication
– Useful for personal networking (PANs)
• Wi-Fi (802.11)
– Set of standards: 802.11
– Used for wireless LAN and wireless Internet access
– Use access points: device with radio
receiver/transmitter for connecting wireless devices to
a wired LAN

Wireless Computer Networks and Internet
Access (2 of 2)
• Wi-Fi (802.11) [continued]

– Hotspots: one or more access points in public place
to provide maximum wireless coverage for a specific
area
– Weak security features
• WiMax (802.16)
– Wireless access range of 31 miles
– Require WiMax antennas

Figure 7.13 A Bluetooth Network (PAN)

Figure 7.14 An 802.11 Wireless LAN

Radio Frequency Identification (RFID)
• Use tiny tags with microchips containing data about an

item and location
• Tag antennas to transmit radio signals over short
distances to special RFID readers
• Common uses:
– Automated toll-collection
– Tracking goods in a supply chain
• Near field communication (N FC)

Figure 7.15 How RFID Works

Wireless Sensor Networks (WSNs)
• Networks of hundreds or thousands of interconnected wireless
devices
• Used to monitor building security, detect hazardous
substances in air, monitor environmental changes, traffic, or
military activity
• Devices have built-in processing, storage, and radio frequency
sensors and antennas
• Require low-power, long-lasting batteries and ability to endure
in the field without maintenance
• Major sources of “big data” and fueling “Internet of Things”

Figure 7.16 A Wireless Sensor Network

• The Business: A1 Western Car Dealers


Systems
Thirteenth Edition
Chapter 8
Securing Information
Systems

Learning Objectives
8.1 Why are information systems vulnerable to destruction,

error, and abuse?
8.2 What is the business value of security and control?
8.3 What are the components of an organizational
framework for security and control?
8.4 What are the most important tools and technologies for
safeguarding information resources?

Video Cases
• Case 1: Stuxnet and Cyberwarfare

• Case 2: Cyberespionage: The Chinese Threat
• Instructional Video 1: Sony PlayStation Hacked; Data
Stolen from 77 Million Users
• Instructional Video 2: Meet the Hackers: Anonymous
Statement on Hacking Sony

Cyberattacks in the Asia-Pacific Target the
Weakest Link: People (1 of 2)
• Problem
– Information technology is pervasive
– Social engineering attacks
• Solutions
– Educate customers about security practices
– Manage data breaches proactively

Cyberattacks in the Asia-Pacific Target the
Weakest Link: People (2 of 2)
• Robust business processes need to be created and

monitored
• Demonstrates vulnerabilities in information technology
systems
• Illustrates some of the reasons organizations need to pay
special attention to information system security

Why Systems are Vulnerable (1 of 2)
• Security
– Policies, procedures, and technical measures used to
prevent unauthorized access, alteration, theft, or
physical damage to information systems
• Controls
– Methods, policies, and organizational procedures that
ensure safety of organization’s assets; accuracy and
reliability of its accounting records; and operational
adherence to management standards

Why Systems are Vulnerable (2 of 2)
• Accessibility of networks
• Hardware problems (breakdowns, configuration errors,
damage from improper use or crime)
• Software problems (programming errors, installation
errors, unauthorized changes)
• Disasters
• Use of networks/computers outside of firm’s control
• Loss and theft of portable devices

Figure 8.1 Contemporary Security
Challenges and Vulnerabilities

Internet Vulnerabilities
• Network open to anyone

• Size of Internet means abuses can have wide impact
• Use of fixed Internet addresses with cable / DSL modems
creates fixed targets for hackers
• Unencrypted VOIP
• Email, P2P, IM
– Interception
– Attachments with malicious software
– Transmitting trade secrets

Wireless Security Challenges
• Radio frequency bands easy to scan

• SSIDs (service set identifiers)
– Identify access points, broadcast multiple times,
can be identified by sniffer programs
• War driving
– Eavesdroppers drive by buildings and try to detect
SSID and gain access to network and resources
– Once access point is breached, intruder can gain
access to networked drives and files
• Rogue access points
Figure 8.2 Wi-Fi Security Challenges

Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (1 of 2)
• Malware (malicious software)

• Viruses
• Worms
• Worms and viruses spread by
– Downloads and drive-by downloads
– Email, IM attachments
• Mobile device malware
• Social network malware

Malicious Software: Viruses, Worms,
Trojan Horses, and Spyware (2 of 2)
• Trojan horse
• SQL injection attacks
• Ransomware
• Spyware
– Key loggers
– Other types
▪ Reset browser home page
▪ Redirect search requests
▪ Slow computer performance by taking up memory

Interactive Session Technology – WannaCry and the
SWIFT System Hacking Attacks: Theft on a
Worldwide Scale
– Compare the WannaCry and SWIFT system hacking
attacks. What security vulnerabilities were exploited in
each of these attacks?
– What people, organization, and technology factors
contributed to these security weaknesses?
– How could these attacks have been prevented?
– What was the business and social impact of these
attacks?

Hackers and Computer Crime (1 of 3)
• Hackers v s. crackers
ersu
• Activities include:
– System intrusion
– System damage
– Cybervandalism
▪ Intentional disruption, defacement, destruction of
website or corporate information system
• Spoofing and sniffing

• Denial-of-service attacks (DoS)

• Distributed denial-of-service attacks (D DoS)
• Botnets
• Spam
• Computer crime
– Computer may be target of crime
– Computer may be instrument of crime

• Identity theft
– Phishing
– Evil twins
– Pharming
• Click fraud
• Cyberterrorism
• Cyberwarfare

Internal Threats: Employees
• Security threats often originate inside an organization

• Inside knowledge
• Sloppy security procedures
– User lack of knowledge
• Social engineering
• Both end users and information systems specialists are
sources of risk

Software Vulnerability
• Commercial software contains flaws that create security

vulnerabilities
– Bugs (program code defects)
– Zero defects cannot be achieved
– Flaws can open networks to intruders
• Zero-day vulnerabilities
• Patches
– Small pieces of software to repair flaws
– Patch management

What is the Business Value of Security and
Control?
• Failed computer systems can lead to significant or total

loss of business function
• Firms now are more vulnerable than ever
– Confidential personal and financial data
– Trade secrets, new products, strategies
• A security breach may cut into a firm’s market value
almost immediately
• Inadequate security and controls also bring forth issues
of liability

Legal and Regulatory Requirements for
Electronic Records Management
• H IPAA
– Medical security and privacy rules and procedures
• Gramm-Leach-Bliley Act
– Requires financial institutions to ensure the security
and confidentiality of customer data
• Sarbanes-Oxley Act
– Imposes responsibility on companies and their
management to safeguard the accuracy and integrity
of financial information that is used internally and
released externally

Electronic Evidence and Computer
Forensics
• Electronic evidence
– Evidence for white collar crimes often in digital form
– Proper control of data can save time and money
when responding to legal discovery request
• Computer forensics
– Scientific collection, examination, authentication,
preservation, and analysis of data from computer
storage media for use as evidence in court of law
– Recovery of ambient data

Information Systems Controls
• May be automated or manual
• General controls
– Govern design, security, and use of computer programs
and security of data files in general throughout
organization
– Software controls, hardware controls, computer operations
controls, data security controls, system development
controls, administrative controls,
• Application controls
– Controls unique to each computerized application
– Input controls, processing controls, output controls

Risk Assessment
• Determines level of risk to firm if specific activity or

process is not properly controlled
– Types of threat
– Probability of occurrence during year
– Potential losses, value of threat
– Expected annual loss

Table 8.5 Online Order Processing Risk
Assessment
Exposure Probability of Loss Range Expected Annual

Occurrence (Average) ($) Loss ($)
Power 30% $5,000 − $200,000 $30,750
failure ($102,500)
Embezzlem 5% $1,000 − $50,000 $1275
ent ($25,500)
User error 98% $200 − $40,000 $19,698
($20,100)

Security Policy
• Ranks information risks, identifies security goals and

mechanisms for achieving these goals
• Drives other policies
• Acceptable use policy (AUP)
– Defines acceptable uses of firm’s information
resources and computing equipment
• Identity management
– Identifying valid users
– Controlling access

Figure 8.3 Access Rules for a Personnel
System

Disaster Recovery Planning and Business
Continuity Planning
• Disaster recovery planning

– Devises plans for restoration of disrupted services
• Business continuity planning
– Focuses on restoring business operations after disaster
• Both types of plans needed to identify firm’s most critical
systems
– Business impact analysis to determine impact of an
outage
– Management must determine which systems restored
first

The Role of Auditing
• Information systems audit

– Examines firm’s overall security environment as well
as controls governing individual information systems
• Security audits
– Review technologies, procedures, documentation,
training, and personnel
– May even simulate disaster to test responses
• List and rank control weaknesses and the probability of
occurrence
• Assess financial and organizational impact of each threat
Figure 8.4 Sample Auditor’s List of
Control Weaknesses

Tools and Technologies for Safeguarding
Information Systems (1 of 3)
• Identity management software

– Automates keeping track of all users and privileges
– Authenticates users, protecting identities, controlling
access
• Authentication
– Password systems
– Tokens
– Smart cards
– Biometric authentication
– Two-factor authentication

• Firewall
– Combination of hardware and software that prevents
unauthorized users from accessing private networks
– Packet filtering
– Stateful inspection
– Network address translation (NAT)
– Application proxy filtering

Figure 8.5 A Corporate Firewall

• Intrusion detection system

– Monitors hot spots on corporate networks to detect
and deter intruders
• Antivirus and antispyware software
– Checks computers for presence of malware and can
often eliminate it as well
– Requires continual updating
• Unified threat management (UTM) systems

Securing Wireless Networks
• WEP security
– Static encryption keys are relatively easy to crack
– Improved if used in conjunction with V PN
• WPA2 specification
– Replaces WEP with stronger standards
– Continually changing, longer encryption keys

Encryption and Public Key
Infrastructure (1 of 3)
• Encryption
– Transforming text or data into cipher text that cannot
be read by unintended recipients
– Two methods for encryption on networks
▪ Secure Sockets Layer (SSL) and successor
Transport Layer Security (TLS)
▪ Secure Hypertext Transfer Protocol (S-HTTP)

• Two methods of encryption of messages

– Symmetric key encryption
▪ Sender and receiver use single, shared key
– Public key encryption
▪ Uses two, mathematically related keys: public key
and private key
▪ Sender encrypts message with recipient’s public
key
▪ Recipient decrypts with private key

Figure 8.6 Public Key Encryption

• Digital certificate
– Data file used to establish the identity of users and
electronic assets for protection of online transactions
– Uses a trusted third party, certification authority (CA), to
validate a user's identity
– CA verifies user’s identity, stores information in CA server,
which generates encrypted digital certificate containing
owner ID information and copy of owner’s public key
• Public key infrastructure (P KI)
– Use of public key cryptography working with certificate
authority
– Widely used in e-commerce
Figure 8.7 Digital Certificates

Ensuring System Availability
• Online transaction processing requires 100% availability

• Fault-tolerant computer systems
– Contain redundant hardware, software, and power
supply components that create an environment that
provides continuous, uninterrupted service
• Deep packet inspection
• Security outsourcing
– Managed security service providers (M SSPs)

Security Issues for Cloud Computing and
the Mobile Digital Platform (1 of 2)
• Security in the cloud

– Responsibility for security resides with company
owning the data
– Firms must ensure providers provide adequate
protection:
▪ Where data are stored
▪ Meeting corporate requirements, legal privacy laws
▪ Segregation of data from other clients
▪ Audits and security certifications
– Service level agreements (SLAs)

Security Issues for Cloud Computing and
the Mobile Digital Platform (2 of 2)
• Securing mobile platforms
– Security policies should include and cover any special
requirements for mobile devices
▪ Guidelines for use of platforms and applications
– Mobile device management tools
▪ Authorization
▪ Inventory records
▪ Control updates
▪ Lock down/erase lost devices
▪ Encryption
– Software for segregating corporate data on devices

Ensuring Software Quality
• Software metrics: Objective assessments of system in

form of quantified measurements
– Number of transactions
– Online response time
– Payroll checks printed per hour
– Known bugs per hundred lines of code
• Early and regular testing
• Walkthrough: Review of specification or design document
by small group of qualified people
• Debugging: Process by which errors are eliminated
Interactive Session: Organizations: How
Secure is BYOD?
– It has been said that a smartphone is a computer in
your hand. Discuss the security implications of this
statement.
– What kinds of security problems do mobile computing
devices pose?
– What management, organizational, and technology
issues must be addressed by smartphone security?
– What steps can individuals and businesses take to
make their smartphones more secure?

• The Business: No. 1 Value Supermarkets


Systems
Thirteenth Edition
Chapter 9
Achieving Operational
Excellence and Customer
Intimacy: Enterprise
Applications

Learning Objectives
9.1 How do enterprise systems help businesses achieve

operational excellence?
9.2 How do supply chain management systems coordinate
planning, production, and logistics with suppliers?
9.3 How do customer relationship management systems
help firms achieve customer intimacy?
9.4 What are the challenges that enterprise applications
pose, and how are enterprise applications taking
advantage of new technologies?
Video Cases
• Case 1: Life Time Fitness Gets in Shape with Salesforce

CRM
• Case 2: Evolution Homecare Manages Patients with
Microsoft Dynamics CRM
• Instructional Video: GSMS Protects Patients by
Serializing Every Bottle of Drugs

Alimentation Couche-Tard Competes Using
Enterprise Systems
• Problem
– Antiquated IT infrastructure and ERP system
– disparate processes for each country and market
– massive operational inefficiencies
• Solutions
– Numerous separate legacy systems replaced with
Oracle’s JD Edwards EnterpriseOne ERP system
• Demonstrates use of technology to maximize supply
chain efficiency, integrate data into a common source

Enterprise Systems
• Enterprise resource planning (E RP) systems

• Suite of integrated software modules and a common
central database
• Collects data from many divisions of firm for use in nearly
all of firm’s internal business activities
• Information entered in one process is immediately
available for other processes

Figure 9.1 How Enterprise Systems Work

Enterprise Software
• Built around thousands of predefined business processes

that reflect best practices
– Finance and accounting
– Human resources
– Manufacturing and production
– Sales and marketing
• To implement, firms:
– Select functions of system they wish to use
– Map business processes to software processes
▪ Use software’s configuration tables for customizing
Business Value of Enterprise Systems
• Increase operational efficiency

• Provide firm-wide information to support decision making
• Enable rapid responses to customer requests for
information or products
• Include analytical tools to evaluate overall organizational
performance and improve decision-making

The Supply Chain
• Network of organizations and processes for:

– Procuring materials
– Transforming materials into products
– Distributing the products
• Upstream supply chain
• Downstream supply chain
• Internal supply chain

Figure 9.2 Nike’s Supply Chain

Supply Chain Management
• Inefficiencies cut into a company’s operating costs

– Can waste up to 25 percent of operating expenses
• Just-in-time strategy
– Components arrive as they are needed
– Finished goods shipped after leaving assembly line
• Safety stock: buffer for lack of flexibility in supply chain
• Bullwhip effect
– Information about product demand gets distorted as it
passes from one entity to next across supply chain

Figure 9.3 The Bullwhip Effect

Supply Chain Management Software
• Supply chain planning systems

– Model existing supply chain
– Enable demand planning
– Optimize sourcing, manufacturing plans
– Establish inventory levels
– Identify transportation modes
• Supply chain execution systems
– Manage flow of products through distribution centers
and warehouses

Global Supply Chains and the Internet
• Global supply chain issues

– Greater geographical distances, time differences
– Participants from different countries
▪ Different performance standards
▪ Different legal requirements
• Internet helps manage global complexities
– Warehouse management
– Transportation management
– Logistics
– Outsourcing
Demand-Driven Supply Chains: From Push to Pull
Manufacturing and Efficient Customer Response
• Push-based model (build-to-stock)

– Earlier SCM systems
– Schedules based on best guesses of demand
• Pull-based model (demand-driven)
– Web-based
– Customer orders trigger events in supply chain
• Internet enables move from sequential supply chains to
concurrent supply chains
– Complex networks of suppliers can adjust
immediately
Figure 9.4 Push- Versus Pull-Based Supply
Chain Models

Figure 9.5 The Emerging Internet-Driven
Supply Chain

Business Value of Supply Chain
Management Systems
• Match supply to demand

• Reduce inventory levels
• Improve delivery service
• Speed product time to market
• Use assets more effectively
– Total supply chain costs can be 75 percent of
operating budget
• Increase sales

Interactive Session: Management: Physical Flow
in Alibaba
– Identify the delivery problems Alibaba faced. How does
physical flow impact its business?
– What factors contributed to Alibaba’s problems with
physical flow?
– How did Cainiao Networks impact Alibaba’s business?
‘
– How did Cainiao Networks improve the delivery of service

for the customer?

• Knowing the customer

• In large businesses, too many customers and too many
ways customers interact with firm
• CRM systems
– Capture and integrate customer data from all over the
organization
– Consolidate and analyze customer data
– Distribute customer information to various systems
and customer touch points across enterprise
– Provide single enterprise view of customers

Figure 9.6 Customer Relationship
Management (CRM)

Software (1 of 2)
• Packages range from niche tools to large-scale enterprise
applications
• More comprehensive packages have modules for:
– Partner relationship management (P RM)
▪ Integrating lead generation, pricing, promotions, order
configurations, and availability
▪ Tools to assess partners’ performances
– Employee relationship management (E RM)
▪ Setting objectives, employee performance
management, performance-based compensation,
employee training

Software (2 of 2)
• CRM packages typically include tools for:
– Sales force automation (S FA)
▪ Sales prospect and contact information
▪ Sales quote generation capabilities
– Customer service
▪ Assigning and managing customer service requests
▪ Web-based self-service capabilities
– Marketing
▪ Capturing prospect and customer data, scheduling and
tracking direct-marketing mailings or email
▪ Cross-selling

Figure 9.7 How CRM Systems Support
Marketing
Responses by Channel for January 2018 Promotional Campaign

Figure 9.8 CRM Software Capabilities

Figure 9.9 Customer Loyalty Management
Process Map

Operational and Analytical CRM
• Operational CRM
– Customer-facing applications
– Sales force automation Call center and customer
service support
– Marketing automation
• Analytical CRM
– Based on data warehouses populated by operational
CRM systems and customer touch points
– Analyzes customer data (OLAP, data mining, etc.)
▪ Customer lifetime value (CLTV)

Figure 9.10 Analytical CRM Data
Warehouse

Interactive Session – Organizations: Kenya Airways
Flies High with Customer Relationship Management
– What was the problem at Kenya Airways described in this case?
What people, organization, and technology factors contributed to
this problem?
– What was the relationship of customer relationship management
to Kenya Airway’s business performance and business strategy?
– Describe Kenya Airway’s solution to its problem. What people,
organization, and technology issues had to be addressed by the
solution?
– How effective was this solution? How did it affect the way Kenya
Airways ran its business and its business performance?

Business Value of Customer Relationship
Management Systems
• Business value of CRM systems

– Increased customer satisfaction
– Reduced direct-marketing costs
– More effective marketing
– Lower costs for customer acquisition/retention
– Increased sales revenue
• Churn rate
– Number of customers who stop using or purchasing
products or services from a company
– Indicator of growth or decline of firm’s customer base
Enterprise Application Challenges
• Highly expensive to purchase and implement enterprise

applications
– Average cost of ERP project in 2015—$6.1 million
• Technology changes
• Business process changes
• Organizational learning, changes
• Switching costs, dependence on software vendors
• Data standardization, management, cleansing

Next-Generation Enterprise Applications (1 of 2)
• Enterprise solutions/suites
– Make applications more flexible, web-enabled,
integrated with other systems
• SOA standards
• Open-source applications
• On-demand solutions
• Cloud-based versions
• Functionality for mobile platform

Next-Generation Enterprise Applications (2 of 2)
• Social CRM
– Incorporating social networking technologies
– Company social networks
– Monitor social media activity; social media analytics
– Manage social and web-based campaigns
• Business intelligence
– Inclusion of BI with enterprise applications
– Flexible reporting, ad hoc analysis, “what-if”
scenarios, digital dashboards, data visualization

• The Business: XYZ Global Industrial Components


Systems
Thirteenth Edition
Chapter 10
E-commerce: Digital
Markets, Digital Goods
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Learning Objectives
10.1 What are the unique features of e-commerce, digital markets, and
digital goods?
10.2 What are the principal e-commerce business and revenue
models?
10.3 How has e-commerce transformed marketing?
10.4 How has e-commerce affected business-to-business transactions?
10.5 What is the role of m-commerce in business, and what are the
most important m-commerce applications?
10.6 What issues must be addressed when building an e-commerce
presence?
Video Cases
• Case 1: Walmart Takes on Amazon: A Battle of T

I and
Management Systems
• Case 2: Groupon: Deals Galore
• Case 3: Etsy: A Marketplace and Community
• Instructional Video 1: Walmart’s E-commerce
Fulfillment Center Network
• Instructional Video 2: Behind the Scenes of an
Amazon Warehouse

Uber Storms Europe. Europe Strikes Back
• Problem
– Opportunities presented by new technology
– Political and regulatory hurdles
• Solutions
– Driver and rider apps
– Demand prediction software
• Illustrates the use of IT to create new services as well as
business models
• Demonstrates the disruptive effects of new technologies

E-Commerce Today
• E-commerce: Use of the Internet and web to transact

business
• Began in 1995 and grew exponentially; still stable even in
a recession
• Companies that survived the dot-com bubble now thrive
• The new e-commerce: social, mobile, local
• Move from desktop to smartphone

Figure 10.1 The Growth of E-Commerce
Sources: Based on data from e Marketer, “US Retail Ecommerce Sales, 2015-2021,”
2017a; eMarketer, “US Digital Travel Sales, 2014-2020,” 2016; and eMarketer chart, “U S
Mobile Downloads and In-App Revenues 2013-2016,” 2016.
Why E-Commerce is Different (1 of 2)
• Ubiquity
– Marketspace is virtual
– Transaction costs reduced
• Global reach
– Transactions cross cultural and national boundaries
• Universal standards
– One set of technology standards: Internet standards
• Richness
– Supports video, audio, and text messages

Why E-Commerce is Different (2 of 2)
• Interactivity
• Information density
– Greater price and cost transparency
– Enables price discrimination
• Personalization/customization
– Technology permits modification of messages, goods
• Social technology
– Promotes user content generation and social
networking

Key Concepts in E-Commerce – Digital Markets
and Digital Goods in a Global Marketplace
• Internet and digital markets have changed the way

companies conduct business
• Information asymmetry reduced
• Menu costs, search and transaction costs reduced
• Dynamic pricing enabled
• Switching costs
• Delayed gratification
• Disintermediation

Figure 10.2 The Benefits of
Disintermediation to the Consumer

Digital Goods
• Goods that can be delivered over a digital network

• Cost of producing first unit is almost entire cost of product
• Costs of delivery over the Internet very low
• Marketing costs remain the same; pricing highly variable
• Industries with digital goods are undergoing revolutionary
changes (publishers, record labels, etc.)

Types of E-Commerce
• Three major types

– Business-to-consumer (B2C)
▪ Example: BarnesandNoble.com
– Business-to-business (B2B)
▪ Example: ChemConnect
– Consumer-to-consumer (C2C)
▪ Example: eBay
• E-commerce can be categorized by platform
– Mobile commerce (m-commerce)

E-Commerce Business Models
• Portal
• E-tailer
• Content provider
• Transaction broker
• Market creator
• Service provider
• Community provider

Interactive Session – Organizations:
Deliveroo: Australian Food Delivery
Platform
– Analyze Deliveroo using the competitive forces and
value chain models. What is its competitive
advantage?
– What is the relationship between information
technology and Deliveroo’s business model? Explain
your answer.
– Is Deliveroo a viable business? Explain your answer.

E-Commerce Revenue Models
• Advertising
• Sales
• Subscription
• Free/Freemium
• Transaction fee
• Affiliate

How Has E-commerce Transformed
Marketing?
• Internet provides new ways to identify and communicate

with customers
• Long tail marketing
• Internet advertising formats
• Behavioral targeting
– Tracking online behavior of individuals
• Programmatic ad buying
• Native advertising

Figure 10.3 Website Visitor Tracking

Figure 10.4 Website Personalization

Figure 10.5 How an Advertising Network
Such as DoubleClick Works

Social E-Commerce and Social Network
Marketing (1 of 2)
• Social e-commerce based on digital social graph

• Features of social e-commerce driving its growth
– Newsfeed
– Timelines
– Social sign-on
– Collaborative shopping
– Network notification
– Social search (recommendations)
• Social media
– Fastest growing media for branding and marketing
Social E-Commerce and Social Network
Marketing (2 of 2)
• Social network marketing

– Seeks to leverage individuals’ influence over others
– Targeting a social network of people sharing interests
and advice
– Facebook’s “Like” button
– Social networks have huge audiences
• Social shopping sites
• Wisdom of crowds
• Crowdsourcing

Interactive Session – Technology: Getting
Social with Customers
– Assess the people, organization, and technology issues for
using social media technology to engage with customers.
– What are the advantages and disadvantages of using
social media for advertising, brand building, market
research, and customer service?
– Give an example of a business decision in this case study
that was facilitated by using social media to interact with
customers.
– Should all companies use social media technology for
customer service and marketing? Why or why not? What
kinds of companies are best suited to use these platforms?

How Has E-Commerce Affected Business-
To Business Transactions?
• U.S. B2B trade in 2017 is $13.3 trillion

– U.S. B2B e-commerce in 2017 is $6.3 trillion
• Internet and networking helps automate procurement
• Variety of Internet-enabled technologies used in B2B
– Electronic data interchange (EDI)
– Private industrial networks (private exchanges)
– Net marketplaces
– Exchanges

Electronic Data Interchange (EDI)
• Computer-to-computer exchange of standard

transactions such as invoices, purchase orders
• Major industries have EDI standards
– Define structure and information fields of electronic
documents
• More companies are moving toward web-enabled private
networks
– Allow them to link to a wider variety of firms than E DI
allows
– Enable sharing a wider range of information

Figure 10.6 Electronic Data Interchange (EDI)

New Ways of B2B Buying and Selling
• Private industrial networks
– Private exchanges
– Large firm using a secure website to link to suppliers and
partners
• Net marketplaces (e-hubs)
– Single digital marketplace for many buyers and sellers
– May focus on direct or indirect goods
– May be vertical or horizontal marketplaces
• Exchanges
– Independently owned third-party Net marketplaces for spot
purchasing
Figure 10.7 A Private Industrial Network

Figure 10.8 A Net Marketplace

What is the Role of M-Commerce in Business, and
What are the Most Important M-Commerce
Applications?
• M-commerce in 2017 is 35 percent of all e-commerce
• Fastest growing form of e-commerce
– Growing at 20 percent or more per year
• Main areas of growth
– Mass market retailing (Amazon, eBay, etc.)
– Sales of digital content (music, TV, etc.)
– In-app sales to mobile devices

Figure 10.9 Mobile Retail Commerce
Revenues
Sources: Data from eMarketer chart “Retail Mcommerce Sales, US, (billions)
2015-2021,” eMarketer, 2017

Location-Based Services and Applications
• Used by 74 percent of smartphone owners

• Based on GPS map services
• Geosocial services
– Where friends are
• Geoadvertising
– What shops are nearby
• Geoinformation services
– Price of house you are passing

Other Mobile Commerce Services
• Financial account management apps

– Banks, credit card companies
• Mobile advertising market
– Google and Facebook are largest markets
– Ads embedded in games, videos, and mobile apps
• 55 percent of online retailers have m-commerce websites

What Issues Must Be Addressed When
Building an E-Commerce Presence?
• Most important management challenges

– Developing clear understanding of business
objectives
– Knowing how to choose the right technology to
achieve those objectives
• Develop an e-commerce presence map
– Four areas: websites, email, social media, offline
media
• Develop a timeline: milestones
– Breaking a project into discrete phases

Figure 10.10 E-Commerce Presence Map

• The Business: Sports Fantasy Empire


Systems
Thirteenth Edition
Chapter 11
Improving Decision Making
and Managing Knowledge

Learning Objectives
11.1 What are the different types of decisions, and how does the
decision-making process work?
11.2 How do business intelligence and business analytics
support decision making?
11.3 What are the business benefits of using intelligent
techniques in decision making and knowledge management?
11.4 What types of systems are used for enterprise-wide
knowledge management, and how do they provide value for
businesses?

Video Cases
• Case 1: How IBM’s Watson Became a Jeopardy

Champion
• Case 2: Business Intelligence Helps the Cincinnati Zoo
Work Smarter
• Instructional Video 1: IBM Watson Demo Oncology
Diagnosis and Treatment

Roche: Changing Medical Care with
Mobile Technology and Big Data (1 of 2)
• Problem
– Opportunities from new technology
– Aging population
• Solutions
– Healthcare monitoring your body’s vital signs in real
time
– Cloud servers
– Big Data software analytics
– Smartphone connections to patients

Roche: Changing Medical Care with
Mobile Technology and Big Data (2 of 2)
• The connected healthcare model collects data from

smartphones and sends it to a health facility that monitors
in real time.
• Demonstrates IT’s role in providing information and
business intelligence that help organizations improve
services
• Illustrates how information systems improve decision
making

Business Value of Improved Decision
Making
• Possible to measure value of improved decision making

• Decisions made at all levels of the firm
– Some are common, routine, and numerous
– Although value of improving any single decision may
be small, improving hundreds of thousands of “small”
decisions adds up to large annual value for the
business

Table 11.1 Business Value of Enhanced
Decision Making
Example Decision Value Decision # of Annual Estimated Annual

Maker Decisions Value to Firm
Allocate support to most Accounts 12 $100,000 $1,200,000
valuable customers manager
Predict call center daily Call Center 4 150,000 600,000
demand management
Decide parts inventory level Inventory 365 5,000 1,825,000
daily manager
Identify competitive bids from Senior 1 2,000,000 2,000,000
major suppliers management
Schedule production to fill Manufacturing 150 10,000 1,500,000
orders manager

Types of Decisions
• Unstructured
– Decision maker must provide judgment to solve problem
– Novel, important, nonroutine
– No well-understood or agreed-upon procedure for making them
• Structured
– Repetitive and routine
– Involve definite procedure for handling them so do not have to
be treated as new
• Semi-structured
– Only part of problem has clear-cut answer provided by accepted
procedure

Figure 11.1 Information Requirements of
Key Decision-Making Groups in a Firm

The Decision-Making Process
1. Intelligence
– Discovering, identifying, and understanding the
problems occurring in the organization
2. Design
– Identifying and exploring various solutions
3. Choice
– Choosing among solution alternatives
4. Implementation
– Making chosen alternative work and monitoring how
well solution is working
Figure 11.2 Stages in Decision Making

High-Velocity Automated Decision Making
• Humans eliminated
• Decision-making process capture by computer algorithms
• Predefined range of acceptable solutions
• Decisions made faster than managers can monitor and
control
• E.g. Trading programs at electronic stock exchanges

Quality of Decisions and Decision Making
• Accuracy
• Comprehensiveness
• Fairness
• Speed (efficiency)
• Coherence
• Due process

Business Intelligence
• Infrastructure for managing data from business

environment
– Warehousing
– Integrating
– Reporting
– Analyzing
• Hadoop, OLAP, analytics
• Products defined by technology vendors and consulting
firms

The Business Intelligence Environment
• Six elements in the BI environment

1. Data from business environment
2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform
▪ MSS, DSS, ESS
6. User interface

Figure 11.3 Business Intelligence and
Analytics for Decision Support

Business Intelligence and Analytics
Capabilities
• Production reports
• Parameterized reports
• Dashboards/scorecards
• Ad-hoc query/search/report creation
• Drill-down
• Forecasts, scenarios, models
– Linear forecasting, what-if scenario analysis, data
analysis

Table 11.3 Examples of Predefined Business
Intelligence Production Reports
Business Functional Area Production Reports
Sales Sales forecasts, sales team performance, cross
selling, sales cycle times
Service/Call Center Customer satisfaction, service cost, resolution
rates, churn rates
Marketing Campaign effectiveness, loyalty and attrition,
market basket analysis
Procurement and Support Direct and indirect spending, off-contract
purchases, supplier performance
Supply Chain Backlog, fulfillment status, order cycle time, bill of
materials analysis
Financials General ledger, accounts receivable and payable,
cash flow, profitability
Human Resources Employee productivity, compensation, workforce
demographics, retention

Predictive Analytics
• Uses statistical analytics, data mining, historical data;

assumptions of future conditions
• Extracts information from data to predict future trends
and behavior patterns
– Responses to direct marketing campaigns
– Best potential customers for credit cards
– At-risk customers
– Customer response to price changes and new
services
• Accuracies range from 65 to 90 percent

Big Data Analytics
• Predictive analytics can use the big data generated from

social media, consumer transactions, sensor and
machine output, etc.
• Combining with customer data
• Big data analytics driving move toward “smart cities”
– Utility management
– Transportation operation
– Healthcare delivery
– Public safety

Operational Intelligence and Analytics
• Operational intelligence
– Day-to-day monitoring of business decisions and
activity
• Real-time monitoring
• Schneider National truckload logistics services provider
– Data developed from sensors in trucks, trains,
industrial systems
• The Internet of Things (IoT) providing huge streams of
data from connected sensors and devices

Location Analytics and GIS
• Location analytics
– Big data analytics that uses location data from mobile
phones, sensors, and maps
– E.g. Helping a utility company view customer costs as
related to location
• GIS – Geographic information systems
– Help decision makers visualize problems with
mapping
– Tie location data about resources to map

Figure 11.4 Business Intelligence Users

Support for Semi-Structured Decisions
• Decision-support systems (DSS)

– BI delivery platform for “super-users” who want to
create own reports, use more sophisticated analytics
and models
– What-if analysis
– Sensitivity analysis
– Backward sensitivity analysis
– Pivot tables: Spreadsheet function for
multidimensional analysis
– Intensive modeling techniques

Figure 11.5 Sensitivity Analysis

Figure 11.6 A Pivot Table That Examines Customer
Regional Distribution and Advertising Source

Decision Support for Senior Management (1 of 2)
• Executive support systems

• Balanced scorecard method
– Measures four dimensions of firm performance
▪ Financial
▪ Business process
▪ Customer
▪ Learning and growth
– Key performance indicators (KPI) used to measure
each dimension

Figure 11.7 The Balanced Scorecard
Framework

Decision Support for Senior Management (2 of 2)
• Business performance management (B PM)

– Management methodology based on firm’s strategies
– Translates strategies into operational targets
– Uses set of KPIs to measure progress toward targets
• ESS combine internal data with external
– Financial data, news, etc.
• Drill-down capabilities

Group Decision-Support Systems (GDSS)
• Facilitate solving of unstructured problems by set of

decision makers
• Software collects, ranks, stores ideas and decisions
• Conference rooms or virtual collaboration
• Support increased meeting sizes with increased
productivity

Artificial Intelligent Techniques (1 of 4)
• Artificial intelligence
• Intelligent techniques
– Capture knowledge
– Discover patterns and behaviors in large amounts of
data
– Perform some human-like action
– Generate solutions to problems to complex for
humans to solve alone
– Used in decision making and knowledge
management

• Machine learning
– Computers improving performance by using algorithms to
learn patterns from data and examples
• Neural networks
– Find patterns and relationships in very large amounts of
data
– Sensoring and processing nodes
• Genetic algorithms
– Examine large number of solutions for a problem
– Based on machine learning techniques inspired by
evolutionary biology
Interactive Session – Technology: Singapore
Sports Institute Uses Analytics for SEA
Games
– What technologies are used by SSI? What is their
purpose?
– To what extent was technology responsible for Team
Singapore’s success at the SEA games? Explain.
– Search the web for SimulCam and StroMotion. How
can these tools be used for video analysis?
– Search the web for the role of big data in the German
team’s 2014 World Cup victory and compare it with
Team Singapore’s success at the SEA Games.
Figure 11.8 How a Neural Network Works

Figure 11.9 The Components of a Genetic
Algorithm

• Intelligent agents
– Software programs that work in the background to
carry out specific repetitive tasks
• Natural language processing
– Software that can process voice or text commands
using natural human language
• Computer vision systems
– Emulate human visual system to view and extract
information from real-world images

Figure 11.10 Intelligent Agents in P&G’s
Supply Chain Network

• Robotics
– Design and use of movable machines that can
substitute for humans
• Expert systems
– Capture human expertise in a limited domain of
knowledge
– Express expertise as a set of rules in a software
system
– Knowledge base
– Inference engine

Figure 11.11 Rules in an Expert System

Interactive Session – People: Will Robots
Replace People in Manufacturing?
– Why have robots caught on in manufacturing? What
knowledge do they require?
– Can robots replace human workers in manufacturing?
Explain your answer.
– If you were considering introducing robots in your
manufacturing plant, what people, organization, and
technology issues would you need to address?

Knowledge Management
• Business processes developed for creating, storing,

transferring, and applying knowledge
• Increases the ability of organization to learn from
environment and to incorporate knowledge into business
processes and decision making
• Knowing how to do things effectively and efficiently in
ways that other organizations cannot duplicate is major
source of profit and competitive advantage

Enterprise-wide Knowledge Management
Systems
• Three kinds of knowledge

– Structured
– Semi-structured
– Tacit knowledge (unstructured)
• Enterprise-wide knowledge management systems
– Deal with all three types of knowledge
– General-purpose, firm-wide systems that collect,
store, distribute, and apply digital content and
knowledge

Enterprise Content Management Systems
• Capabilities for knowledge capture, storage

– Collecting and organizing semi-structured knowledge
such as email
• Repositories for documents and best practices
• Classification schemes
– Key problem in managing knowledge
– Each knowledge object must be tagged for retrieval
• Tools for locating and sharing expertise
– Search tools and directories of experts and profiles

Figure 11.12 An Enterprise Content
Management System

Learning Management Systems
• Provide tools for management, delivery, tracking, and

assessment of employee learning and training
• Multiple modes of learning
– Videos
– Web-based classes
– Live instruction
– Group learning in online forums
• Massive open online courses (MOOCs)

Knowledge Work Systems
• Specialized systems for knowledge workers

• Requirements of knowledge work systems:
– Specialized tools
▪ Powerful graphics, analytical tools, and
communications and document management
– Computing power to handle sophisticated graphics or
complex calculations
– Access to external databases
– User-friendly interfaces

Figure 11.13 Requirements of Knowledge
Work Systems

Examples of Knowledge Work Systems
• Computer-aided design (CAD) systems

• Virtual reality (VR) systems
– Simulation and modeling
– Virtual Reality Modeling Language (VRML)
• Augmented reality (AR) systems
– Live view of physical world with elements augmented
by computer-generated imagery
– E.g. image-guided surgery

• The Business: Western Well Health


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Essentials of Management Information

Copyright © 2019 Pearson Education Ltd.

Copyright © 2019 Pearson Education Ltd.

• Case 1: Business in the Cloud: Facebook, Google, and

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• Use of networked sensors and powerful analytics to drive

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• Internet and global communications have greatly reduced

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• Businesses invest in IT to achieve six important business

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• Improved efficiency results in higher profits.

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• Information systems and technologies enable firms

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• Customers who are served well become repeat

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• If managers rely on forecasts, best guesses, and luck,

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• Often results from achieving previous business objectives

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• Businesses may need to invest in information systems

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• Information technology: the hardware and software a

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• Activities in an information system that produce

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• Information systems literacy

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• Few business problems are simple or straightforward.

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• Problem solving: four-step process

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• Problem identification includes:

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• Typical organizational problems

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• Typical technology problems

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• Typical people problems

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• Without critical thinking, easy to jump to conclusions,

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• Four elements of critical thinking:

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• When firms cannot achieve business objectives these

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• Success in today’s job market requires a broad set of

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