2 Ka 3

McMaster
COMMERCE 2KA3
MIDTERM EXAM
STUDY GUIDE
find more resources at oneclass.com
Commerce 2KA3
Chapter 1: Information Systems in Business Today

There are 3 interrelated changes in the technology area: 1) the emerging mobile digital
platform, 2) the growing business use of big data, and 3) the growth in cloud computing,
where more and more business software runs over the internet
Digital Firm: can be defined along several dimensions; it is one in which nearly all of the
organization’s significant business relationships with customers, suppliers, and employees
are digitally enabled and mediated. Core business process are accomplished through digital
networks spanning the entire organization or linking multiple organizations
Business Processes: refer to the set of logically related tasks and behaviours that
organizations develop over time to produce specific business results and the unique
manner in which theses activities are organized and coordinated
Key Corporate Assets: intellectual property, core competencies, and finical and human
assets- are managed through digital means.
Time shifting: refers to business being done continuously 24/7 rather than in a workday
Operational excellence: businesses continually seek to improve the efficiency of their

operations in order to achiever higher profitability
Business Model: describes how a company produces, delivers, and sells a product or
service to create wealth
Competitive Advantage: when firms achieve one or more of these business objectives:
operational excellence, new products, services, and business models; customer/supplier
intimacy, and improved decision making- chances are they have achieved a competitive
advantage
Information Technology (IT): consist of all the hardware and software that a firm needs
to use in order to achieve its business objectives
Information System: is a set of interrelated components that collect or retrieve, process,

store, and distribute information to support decision making and control in an organization
Information: data that have been shaped into a firm that is meaningful and useful to
human beings
Data: are streams of raw facts representing events occurring in organizations or the
physical environment before they have been organized and arranged into a form that
people can understand and use

Input: captures or collects raw data from within the organization or from its external
environment
Processing: converts this raw input into a meaningful form
Output: transfers the process information to the people who will use it or to the activities
for which it will be used
Feedback: is output that is returned to appropriate members of the organization to help

them evaluate or correct the input or processing stage
Information system literacy: the broad understanding of information systems, which

encompasses an understanding of the management and organizational dimensions of
systems as well as the technical dimensions of the system
Computer Literacy: focuses primarily on knowledge of information technology
Management Information Systems (MIS): tries to achieve this broader information

system literacy. Deals with behavioural issues as well as technical issues surrounding the
development, use, and impact of information systems used by managers and employees in
the firm
Senior Management: makes long-range strategic decisions about products and services
and ensures the finical performance of the firm
Middle Management: carries out the programs and plans of senior management, and
operational management
Operational management: is responsible for monitoring the daily activities of the

business
Knowledge workers: such as engineers, scientists, or architects, design products or

services and create new knowledge for the firm
Data workers: secretaries or clerks assist with the scheduling and communications at all
levels of the firm
Production or service workers: actually produce the product and deliver the service
Business functions: specialized tasks performed by business organizations, consist of

sales and marketing, manufacturing, and production, finance and accounting, and HR
Culture: each organization has its own unique culture or fundamental set of assumptions,
values, and ways of doing things, that has been accepted most of its members

Computer Hardware: is the physical equipment used for input, processing, and output
activities in an information system
Computer software: consists of the detailed, pre-programmed instructions that control

and coordinate the computer hardware components in an information system
Data management technology: consist of the software governing the organization of data
on physical storage media
Networking and telecommunications technology: consisting of both physical devices

and software, links the various pieces of hardware and transfers data from one physical
location to another
Network: links two or more computers to share data or resources such as a printer
Internet: the world’s largest and most widely used network
Intranets: internal corporate networks based on Internet technology
Extranets: private intranets extended to authorized users outside the organization
World wide web: is a service or information space provided on the internet that uses
universally accepted standards for storing, retrieving, formatting, and displaying
information in a page format on the internet
Complementary assets: are those assets required to derive value form a primary
investment
Organizational and management capital: firms that support their technology

investments with commensurate investments in complementary assets, such as new
business models, new business process, management behaviour, organizational culture, or
training, receive superior returns, while those firms failing to make complementary
investments receive fewer or no returns on their information technology investments
Sociotechnical view: optimal organizational performance is achieved by jointly optimizing

both the social and technical systems used in production

Commerce 2KA3
Chapter 2: How Businesses Use Information
Business Processes: refer to the manner in which work is organized, coordinated and
focused to produce a valuable product or service. They are the collection of activities
required to produce a product or service. These activities are supported by flows of
materials, information, and knowledge among the participants in business processes.
sales
Systems for Different Management Groups
Transaction Processing systems (TPS):a computerized system that performs and

records daily routine transactions necessary to conduct business, such as sales order entry,
hotel reservations, payroll, employee record keeping and shipping
Business intelligence: a contemporary term for data and software tools for organizing,
analyzing, and providing access to data to help managers and other enterprise users make
more informed decisions
Management Information Systems (MIS): designates a specific category of information

systems serving middle management. Provide middle managers with routine reports on
the organization’s current performance. MIS summarize and report on the company’s basic
operations using data supplied by transaction processing systems. TPS supply summarized
transaction data to MIS reporting system, which combine this data to generate reports
Decision-support system (DSS): focus on problems that are unique and rapidly changing
and for which the procedure for arriving at a solution may not be fully predefined in
advance. DSS uses internal info from TPS and MIS, they often bring in information from
external sources, such as current stock process or product process of competitors

Executive Support System (ESS): a system that focus on strategic issues and long-term
trends, both in the firm and in the external environment. Questions like: What will
employment levels be in five years? What ware the long-term industry cost trends? What
products should we be making in five years? ESS addresses non-routine decisions requiring
judgment, evaluation, and insight because there is no agreed-on procedure.
Portal: information is delivered to senior executives through this, uses a web interface to
present integrated personalized business content
Digital Dashboard: the information is displayed upon a singe screen, graphs and charts of
key performance indicators for managing a company.
Enterprise Applications: systems that span functional areas, focus on executing business
processes across the business firm, and include all levels of management. These
applications help businesses become more flexible and productive by coordinating their
business processes more closely
Enterprise Systems: also known as enterprise resource planning (ERP) systems, firms use
them to integrate business process in manufacturing and production, finance, and
accounting, sales and marketing, and human resources into a single software system
Supply Chain Management systems (SCM) Systems: used by firms to help manage
relationships with their suppliers. These systems help suppliers, purchasing firms,
distributors, and logistics companies share information about orders, production,
inventory levels, and delivery of products, and services, so they can source, produce, and
deliver goods and services efficiently
Interorganizational system: eg, SCM systems because they automate the flow of
information across organizational boundaries
Customer Relationship Management CRM Systems: firms use these to help manage their
relationships with their customers. CRM systems provide information to coordinate all of
the business processes that deal with customers in sales, marketing, and service to
optimize revenue, customer satisfaction, and customer retention.
Knowledge Management systems KMS: some firsm perform better than others because
they have better knowledge about how to create, produce, and deliver products and
services. KMS or knowledge management systems enable organizations to better manage
processes for capturing and applying knowledge and expertise. These systems collect all
relevant knowledge and experience in the firm and make it available whenever and
wherever
Electronic Business (e-business): refers to the use of digital technology and the internet
to execute the major business processes of an enterprise. E-business includes activities for
the internal management of the firm and for coordination with suppliers and other
business partners.

Electronic Commerce (e-commerce): is part of e-business that deals with the buying and
selling of goods and services over the internet. It also encompasses activities, supporting
those market transactions, such as advertising, marketing, customer support, security,
delivery, and payment
E government: refers to the application of the Internet and networking technologies to

digitally enable government and public sector agencies’ relationships with citizens,
businesses, and other arms of government
Systems for Collaboration and Social Business

Collaboration: is working with others to achieve shared and explicit goals
Teams: have a specific mission that someone in the business assigned them. Team
members need to collaborate on the accomplishment of specific task and collectively
achieve the team mission.
Collaboration and teamwork are important today more than ever for the following reasons
- 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
Social Business: the use of social networking platforms, like FB, twitter, etc, to engage
their employees, customers, and suppliers. These tools enable workers to set up profiles,
form groups, and follow each other. The goal of social business is to deepen interaction-
sharing, innovation, and decision making.
Cyberlocker: online file sharing services that allow users to upload files to secure online
storage sites from which the files can be shared with others
Information System Department: the informal organizational unit responsible for

information technology services. The info system department is responsible for
maintaining the hardware, software, data storage, and networks that comprise the firms IT
infrastructure
Programmers: are highly trained technical specialists who write the software instructions
for computers
System analyst: constitute the principal liaisons between the information systems group
and the rest of the organization

Information Systems Manager: are leaders of teams of programmers and analysts,

project managers, physical facility mangers, telecommunications managers, or database
specialists. They are also manager of computer operation and data entry staff
Chief Information Officer (CIO): a senior manager who overseas the use of information
technology n the firm. Todays CIOs are expected to have a strong business background as
well as information systems expertise and play a leadership role in integrating technology
into the firm’s business strategy
Chief Security Offices (CSO): is in charge of information systems security for the firm and
is responsible for enforcing the firm’s information security policy. Responsible for
educating and training uses and information systems specialists about security, keeping
management aware of security threats and breakdowns, and maintaining the tools and
polices chosen to implement security
Chief Privacy Officer (CPO) responsible for ensuring that the company complies with
existing data privacy laws
Chief Knowledge Officer (CKO): is responsible for the firms knowledge management
program The CKO helps design programs and systems to find new sources of knowledge or
to make better sue of existing knowledge in organizational and management processes
End Users: are representatives of department outside of the information systems group
for whom applications are developed. These users are playing an increasingly large role in
the design and development of info systems
IT governance: includes the strategy and polices for using information technology within
an organizations. It specifies the decisions rights and framework for accountability to
ensure that the use of information technology supports the organization’s strategies and
objectives

Commerce 2KA3
Chapter 3: Information Systems, Organizations, and Strategy
Organizations and Information Systems

Organization: is a stable, formal social structure that takes resources from the
environment and processes them to produce outputs. The technical definition focuses on 3
elements of an organization. Capital and labour (the production factors provided by
environment) the origination (the firm doing the transformations), and the products and
services (consumed by environment)
Routines: sometimes called standard operating procedures are precise rules, procedures,
and practices, that have been developed to cope with virtually all expected situations.
Disruptive Technologies: are substitute products that perform as well or better than
anything currently produced. Eg. Car substituted the horse drawn carriage
There are 5 basic kinds of organizational structure
How Information Systems Impact Organizations and Business Firms

Transaction Cost Theory: firms and individuals seek to economize on transaction costs
such as locating and communicating with distant suppliers, monitoring contract
compliance, buying insurance, obtaining information on products, and buying their own
suppliers and distributors, as both GM and Ford used to do. Firms thought that by
integrating vertically they could reduce transaction costs.
Agency Theory: the firm is viewed a s a nexus of contracts among self-interested

individuals rather than as a unified, profit maximizing entity. A principal owner employs

agents (employees) to perform work on his or her behalf. Agents need constant
management and supervision or they will pursue their own best interests instead of the
owners
Information systems reduce the number of levels in an organization by providing managers

with information to supervise larger numbers of works and by giving lower-level
employees more authority to make decisions
Implications for the Design and Understanding of Information Systems

The info system must be developed with a clear understanding of the organization it will be
used in. The central organizational factors that must be considered are as follows:
- the environment in which the organization must function
- the structure of the organization: hierarchy, specialization, routines, and business
processes
- the organization’s culture and politics
- The type of organization and its style of leadership
- The principle interest groups affected by the system and the attitudes of workers
who will be using the system
- The kinds of tasks, decisions, and business process that the information system is
designed to assist
Competitive Forces Model: provides a general view of the firm, its competitors, and the
firm’s environment. The strategic position of the firm and its strategies are determined not
only by competition, but also by four other forces in the industry’s environment: new
market entrants, substitute products, customers, and suppliers
Product Differentiation: a power a firm has over its consumers that prevents them from
easily switching to a competitors products or services. If product differentiation in a
market is low, competitors are forced to compete based on price alone
Efficient Customer Response System: directly links consumer behaviour to distribution

and production and supply chains
Mass customization: the ability to offer individually tailored products or series using the
same production resources as mass production
Switching Costs: the costs of switching from one product to a competing product

Value Chain Model: highlights specific activities in the business where competitive
strategies can best be applied and where information systems are most likely to have a
strategic impact
Primary activities: are most directly related to the production and distribution of the
firm’s products and services, which create value for the customer
Support Activities: make the delivery of the primary activities possible and consist of
organization infrastructure, human resources, technology, and procurement.
Benchmarking: involves comparing the efficiently and effectiveness of your business

processes against strict standards and then measuring the efficiency and effectiveness of
your business processes those standards.

Best Practices: are usually identified by consulting companies, research organizations,

government agencies, and the industry associations as the most successful solutions or
problem solving methods for consistently and effectively achieving a business objective.
Core competency: is an activity for which a firm is a world-class leader. Relies on

knowledge that is gained over many years of practical field experience with a technology,
this knowledge is supplemented with a long-term research effort and committed
employees.
Network Economics: business model based on a network may help firms strategically.
Marginal costs of an additional participant to a network (internet of phone services) is
close to zero while marginal benefits of that same participant are much higher
Virtual Company: uses networks to link people, assets, and ideas, enabling, it to ally with
other companies to crate and distribute products and services without being limited by
traditional organization boundaries or physical locations
Business Ecosystem: another term for a loosely coupled but interdependent network of
suppliers, distributors, outsourcing firms, transportation service firms, and technology
manufactures
Using Systems for Competitive Advantage: Management Issues

Strategic Transitions: a movement between levels of sociotechnical systems

Commerce 2KA3
Chapter 4: Social, Ethical, and Legal Issues in the Digital Firm

The growing use of behavioural targeting techniques can be a double edged sword (by
showing you ads relevant to you interests), but it can also create new opportunities for
invading your privacy and enabling reckless use of that information in a variety of
decisions about you.
In today’s current legal environment, managers who violate the law and are convicted will
most likely spend time in prison. Although business firms would in the past often pay for
legal defence of their employees enmeshed in civil charges and criminal investigations,
firms are now encouraged to cooperate with prosecutes to reduce charges against the
entire firm for obstructing investigations

Five Moral Dimensions of the Information Age

Information rights and obligations: What information rights do individuals and
organizations posses with respect to themselves? What can they protect?
Property rights and obligations: How can traditional intellectual property rights be
protected in digital society in which tracing and accounting for ownership are difficult and
ignoring such property rights is so easy?
Accountability and Control: who can and will be held accountable for harm done to
individual and collective information and property rights?
System quality: what standards of data and system quality should we demand to protect
individual rights and the safety of society
Quality of Life: what values should be preserved in an information- and knowledge based
society? Which intuitions should we protect from violation/ Which cultural values and
practices are supported by the new information technology?

Profiling: the use of computers to combine data from multiple sources and create
electronic dossiers of detailed information on individuals
Nonobvious relationship Awareness (NORA): a new data analysis technology that has
given the government and the private sector even more powerful profiling capabilities.
NORA can take information about people form many disparate sources, such as
employment applications, telephone records, customer listings, and wanted lists, and
correlate relationships to find obscure hidden connections that might help identify
criminals or terrorists.
Advances in networking, including the Internet, promise to greatly reduce the costs of
moving and accessing large quantities of data and open the possibility of mining large pools
of data remotely using small desktop machines, permitting an invasion of privacy on a scale
and with precisions previously unimaginable.
Responsibility: means that you accept the potential costs, duties, and obligations for the
decisions you make.
Accountability: a feature of systems and social institutions; means that mechanisms are in
place to determine who took responsible action and who is responsible
Liability: the concept of responsibility further to the area of laws. Liability is a feature of
political systems in which a body of laws is in place that permits individuals to recover the
damages done to them by other actors, systems, or organizations
Due Process: a related feature of law-governed societies and is a process in which laws are
known and understood, and there is an ability to appeal to higher authorities to ensure that
the laws are applied correctly.
The above 4 basic concepts form the basis of an ethical analysis of information systems and
those who mange them. First information technologies are filtered through social
institutions, organizations, and individuals. The impacts of an information system are in
existence because of institutional, organizational and individual actions. Second
responsibility for the consequences of technology falls clearly on the institutions,
organizations, and individual managers who choose to use the technology. Third, in an
ethical, political society, individuals and others can recover damages done to them through
a set of laws characterized by due process.
Ethical Analysis
When confronted with a situation that seems to present ethical issues, it should be
analyzed using the following five-step process:
1. Identify and describe the facts clearly
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 you options

Candidate Ethical Principles

1. Golden Rule: Do unto others as you would have them do unto you
2. Immanuel Kant’s Categorical Imperative: If an action is not right for everyone to
take, it is not right for anyone
3. Descartes’ Rule of Change: If an action cannot be taken repeatedly, it is not right to
take at all
4. Utilitarian Principle: take the action that achieves the higher or greater value
5. Risk Aversion Principle: take the action that produces the least harm or the least
potential cost
6. Ethical No Free Lunch Rule: assume that virtually all tangible and intangible
objects are owned by someone else unless there is a specific declaration otherwise.
Professional Codes of Conduct

When groups of people claim to be professionals, they take on special rights and
obligations because of their special claims to knowledge, seldom, and respect. Professional
codes of conduct promulgate by association of professionals, such as the Canadian Medical
Association (CMA), the Canadian bar Association (CBA), the Canadian Information
Processing Society (CIPS), and the Association of Computing Machinery (ACM). The
professional groups take responsibility for the partial regulation of their professions by
determining entrance qualifications and competence.
The Moral Dimensions of Information System

Privacy: the claim of individuals to be left alone, free from surveillance or interference
from other individuals or organizations, including the state.
Personal Information Protection and Electronic Documents Act (PIPEDA):establishes

principles to govern the collection, use, and disclosure of personal information:
accountability, identifying the purpose for the collection of personal information, obtaining
consent, limiting collection, limiting use, disclosure and retention, ensuring accuracy,
providing individuals with access to information about themselves, and giving individuals a
right o challenge an organization’s compliance with these principles.
Canada’s Standards Association’s Model Privacy Code: published in 1996, it establishes

10 basic principles for all organizations that collect or use personal information.
These practices are:
- Accountability
- Identifying purposes
- Consent
- Limiting collection
- Limiting use, disclosure, retention
- Accuracy
- Safeguards
- Openness
- Individual access
- Challenging compliance

Informed Consent: consent given with knowledge of all the facts needed to make a
rational decision
Safe Harbour: a private, self-regulating policy and enforcement mechanism that meets the
objectives of government regulators and legislation but does not involve government
regulation or enforcement.
Cookies: are small text files deposited on a computer hard drive when a user visits Web
sites. They identify visitors Web browser software and track visits to the web site.
Web Beacons : also called web bugs, are tiny software programs that keep a record of
users’ online clickstream and report this data back to whoever owns the tracking file
invisibly embedded in email messages and Web pages that are designed to monitor the
behaviour of the user visiting the a website or sending an email
Spyware: much like a web beacon, can be secretly installed on an internet users computer
by piggy backing on larger applications. Once installed, it calls out to websites to send
banner ads and other unsolicited material to the user, and it can report the users
movements on the internet to other computers.
Opt-out: an opt-out model of informed consent permits the collection of personal

information until the consumer specifically requests that the data not be collected.
Opt-in: The model that privacy advocates would rather see more use of, in which
businesses are prohibited from collecting any personal information unless the consumer
specifically takes action to approve collecting any personal information unless the
consumer specifically takes action to approve information collection and use
Intellectual Property: considered to be intangible property created by individuals or

corporations. Information technology has made it difficult to protect intellectual property
because computerized information can be so easily copied or distributed on networks.
Intellectual property I subject to a variety of protections under three different legal
traditions: trade secrets, copyright, and patent law
Trade Secrets: not based on information in the public domain, trade secrets have
arisen out of the broad duty of good faith and the principle of equity that whoever
has received information in confidence shall not take unfair advantage of it
Canada has stated that the test for whether there has been a breach of confidence
consist of three elements
1. The information conveyed must be confidential (not public knowledge)
2. The information must have been communicated in confidence
3. The information must have been misused by the part to whom it was
communicated

Copyright: a statutory grant that protects creators of intellectual property from

having their work copied by others for any purpose for a period of at least 50 years.
Patent: a patent grants the owner an exclusive monopoly on the ideas behind an
invention for between 17 and 20 years. The intent behind patent law is to ensure
that inventors of new machines, devices, or methods receive the full financial and
other rewards of their labours yet still make widespread use of the invention
possible by providing detailed diagrams fro those wishing to use the idea under
licence from the patent’s owner
Digital Millennium Copyright Act (DMCA): of 1998 provides some copyright

protection. Implemented a World intellectual property organization treaty that
makes it illegal to circumvent technology-based protections of copyrighted
materials
Computer Crime: is the commission of illegal acts through the use of a computer or
against a computer system. Computers or computer systems can be the object of the crime,
as well as the instrument of a crime.
Computer Abuse: is the commission of acts involving a computer that may not be illegal
but that are considered unethical. The popularity of the Internet and email has turned one
form of computer abuse spamming into a serious problem fro both individuals and
businesses
Spam: is junk email sent by organizations or individuals to a mass audience of Internet

users who have expressed no interest n the product or service being marketed
Digital Divide: exists in both Canadian and US Schools, with schools in high poverty areas
less likely to have computers, high-quality educational technology programs, or Internet
access availability for their students
Repetitive Stress Injury (RSI): occurs when muscle groups are forced through receptive
actions often with high impact loads or tens of thousands of under low-impact loads. The
single largest source of RSI is computer keyboards.
Carpal tunnel Syndrome (CTS): the most common kind of computer-related RSI, in which
pressure on the median nerve through the wrists bony structure produces pain
Computer Vision Syndrome: refers to any eyestrain condition related to display screen
use in computers of all sorts. It symptoms include headaches, blurred vision, and dry
irritated eyes
Technostress: newest computer related malady, stress induced by computer use. Its
symptoms include aggravation, hostility towards humans, impatience, and fatigue.

Commerce 2KA3
Chapter 9: Enterprise Applications to Manage Supply Chains and Respond to

Customers
Enterprise Systems
Companies are becoming increasingly more connected both internally and with other
companies

Enterprise Software: is built around thousands of predefined business processes that

reflect best practices. Companies implementing this software must first select the function
of the systems they wished to use and then map their business processes to predefined
business process in the software. Enterprise systems provide much valuable information
for improving management decision-making. Corporate headquarters has access to up-to-
the-minute data on sales, inventory, and production
Supply Chain Management Systems

If you mange a small firm that makes a few products or sells a few services, chances are you
will have a small number of suppliers. But if you manage a firm that produces more
complex products and services, then you will have hundreds of suppliers and your
suppliers will have their own set of suppliers. You now need to coordinate that activities of
hundreds or even thousands of other firms in order to produce your products and services
Supply chain: is a network of organizations and business processes for procuring raw
materials, transforming these materials into intermediate and finished products, and
distributing the finished products to customers. It links suppliers, manufacturing plants,
distribution centres, retail outlets, and customers to supply goods and services from source
through consumption. Material, information, and payments flow through the supply chain
in both directions. Goods start through the supply chain, are transformed into intermediate
products, and finally, into finished products. The upstream portion of the supply chain
includes the company’s suppliers, the suppliers and the processes for managing
relationships with them. The downstream portion consists of the processes for
distributing and delivering products to the final customers.

Information Systems and Supply Chain Management

Inefficiencies in the supply chain are caused by inaccurate or untimely information. These
supply chain inefficiencies waste as much as 25% of company’s operating costs.
Just-in-time strategy: If a manufacturer had perfect information about exactly how many
units of product customers wanted, when customers wanted them, and when they could be
produced, then this strategy would be implemented. It would arrive exactly at the moment
they were needed and finished goods would be shipped as they left the assembly line.
Uncertainties arise because events cannot be foreseen- uncertain product demand, late
shipments from suppliers, defective parts or raw materials.
Safety Stock: acts as a buffer for the lack of flexibility in the supply chain, although, excess
inventory is expensive, low fill rates are also costly because businesses may be lost from
cancelled orders.
Bullwhip Effects: information about the demand for a product gets distorted as it passes
from one entity to the next across the supply chain. A slight rise in demand for an item
might cause different members in the supply chain - distributors, manufactures, suppliers,
secondary suppliers, and tertiary suppliers – to stockpile inventory so each ahs enough just
in case. Bullwhip is tamed by reducing uncertainties about demand and supply when all
members of the supply chain have accurate and up-to-date information. If supply chain
members share dynamic information

Supply Chain management Software

Supply Chain Planning Systems: enable the firm to model its existing supply chain,
generate demand forecasts for products, and develop optimal sourcing and manufacturing
plans.
Demand Planning: One of the most important – and complex – supply chain planning
functions. Determines how much product a business needs to make to satisfy all of its
customers’ demands.
Supply Chain Execution Systems: manage the flow of products through distribution
centres and warehouses to ensure that products are delivered to the right locations in the
most efficient manner. They track physical status of goods, the management of materials,
warehouse and transportation operations, and financial information involving all parties.
Demand-Driven Supply Chains: From Push to Pull Manufacturing and Efficient

Customers Response
Push-based Model: production master schedules are based on forecasts or best guesses of
demand for products, and products are pushed to customers.
Pull-based Model: aka demand driven or build-to-order model, actual customers orders or
purchases trigger events in the supply chain. Transactions to produce and deliver only
what customers have ordered move up the supply chain from retailers to distributors to
manufacturers and eventually to suppliers.

Customer Relationship Management Systems

Touch Point: aka a contact point, is a method of interaction with the customer, such as
telephone, email, customers service desk, conventional mail etc.
Customer Relationship Management Software

Partner Relationship Management (PRM): uses many of the same data, tools, and
systems as customer relationship management to enhance collaboration between company
and its selling partners. If a company does not sell directly to customers but rather works
through distributors or retailers, PRM helps these channels sell to customers directly.
Employee Relationship Management (ERM): software that deals with employee issues
that are closely related to CRM, such as setting objectives, employee performance
management, performance-based compensation and employee training.

Sales Force Automation (SFA): sales force automation modules in CRM systems help sales
staff increase their productivity by focusing sales efforts on the most profitable customers,
those who are good candidates for sales and service
Cross-selling: is the marketing of complementary products to customers. Common in

financial services. CRM tools also help firms manage and execute marketing campaigns at
all stages from planning to determining the rate of success for each campaign
Operational CRM: includes customers facing applications such as tools for sales force
automation, call centre and customer service support, and marketing information.
Analytical CRM: includes applications that analyze customer data generated by

operational CRM applications

Customer Lifetime Value (CLTV): based on the relationship between the revenue
produced by a specific customer, the expenses incurred in acquiring and servicing that
customer and the expected life of the relationship between the customer and the company
Customer Churn Rate: measures the number of customers who stop using or purchasing
products or services from a company. It is an important indicator of the growth or decline
of a firm’s customer base
Social CRM: tools that enable a business to connect customer conversations and
relationships from social networking sites to CRM processes.

Commerce 2KA3
Chapter 10: E-Commerce: Digital Markets and Digital Goods
E-commerce refers to the use of the Internet and the Web to transact business. It is
digitally-enabled commercial transactions that occur over the Internet and the Web.
Commercial transactions involve the exchange of values across organizational or individual
boundaries in return for products and services. Began in 1995
E-commerce is ubiquitous, meaning that it is available just about everywhere, at all times.
Ketspace: a marketplace extended to beyond traditional boundaries and removed from a

temporal and geographic location
Transaction Costs: the costs of participating in a market. To transact business, it is no

longer necessary that you spend time or money travelling to a market, and much less
mental effort is required to make a purchase
Global Reach: e commerce technology permits commercial transaction to cross cultural

and national boundaries far more conveniently and cost effectively than is the case in
traditional commerce.

Key Entry Costs: the cost merchants must pay simply to bring their goods to market
Search Costs: the effort required to find suitable products: universal standards reduce
search costs
Richness: refers to the complexity and content of a message

Information Density: the total amount and quality of information available to all market
participants, consumers and merchants alike.
Price Transparency: refers to the ease with which consumers can find out the variety of
prices in a market
Cost Transparency: refers to the ability of consumers to discover the actual costs
merchants pay for products
Price Discrimination: selling the same goods, or nearly the same goods to different
targeted groups at different targeted groups at different prices.
Personalization: merchants can target their marketing messages to specific individuals by

adjusting the messages to a person’s clickstream behaviour, name, interests, and past
purchases.
Customization: changing the delivered product or service based on a user’s preferences or

prior behaviour
Information Asymmetry: exists when one party in a transaction has more information
that is important for the transaction than the other party
Menu Costs: the merchants cost of changing prices
Dynamic Pricing: the price of a product varies depending on the demand characteristics of
the customer or the supply situation of the seller
Disintermediation: the removal of organizations or business process layer responsibility

for intermediary steps in a value chain
Digital Goods: are goods that can be delivered over digital networks

Business to Consumer (B2C): electronic commerce involves retailing products and

services to individual shoppers
Business-to-business (B2B): electronic commerce involves sales of goods and services

among businesses
Consumer-to-consumer (C2C): electronic commerce involves consumer selling directly to

consumers
Mobile Commerce (m-commerce): the use of handheld wireless devices for purchasing
goods and services from any location
E-tailers: online retail stores, they come in all sizes
Intellectual Property: refers to all forms of human expression that can be put into a
tangible medium such as text, CDs, or DVDs, or stored on any digital media, including web.
Podcasting: is a method of publishing audio or video broadcasts via the Internet, allowing
subscribing users to download audio or video files onto their personal computers or
portable music players
Streaming: is a publishing method for music and video files that flows a continuous steam
of content to a user’s device without being stored locally on the device.
Market Creators: build a digital environment in which buyers and sellers can meet,
display products, search for products and establish prices
Community Providers: are sites that create a digital online environment where people
with similar interests can transact (buy and sell goods); share interests, photos, videos,;
communicate with like-minded people; receive interest-related information; and even play
out fantasies by adopting personalities called avatars.

Revenue Model: describes how the firm will earn revenue, generate profits, and produce a
superior return on investment.
Advertising Revenue Model: a website generates revue by attracting a large audience of

visitors who can then be exposed to advertisements. It is the most widely used revenue
model in e-commerce; arguably, without adverting revenues; the world would have been a
different place
Sales Revenue Model: companies derive revenue by selling goods, information, or

services to customers.
Micropayment Systems: provide content providers with a cost-effective method for

processing high volumes of very small monetary transactions. (itunes)
Subscription revenue Model: a website offering content or services chargers a

subscription fee for access to some or all of its offerings on an ongoing basis
Free/Freemium Revenue Model : firms offer basic services or content for free while
charging a premium for advanced or special features.
Transaction Fee Revenue Model: a company receives a fee for enabling or executing a
transaction (ebay makes money when people buy something on from someone else on
ebay)
Affiliate revenue Model: web(called affiliate web sites) sites send visitors to other
websites in return for a referral fee or percentage of the revenue from any resulting sales
Social Shopping: sites like Pinterest, Kaboodle, ThisNext, allow you to swap shopping
ideas with friends
Wisdom Crowds: creating sites where thousands, or millions of people can interact offers
businesses new ways to market and advertise to discover who likes or hates their products
Crowd Sourcing: firms can be actively helped in solving some business problems using
this method, a form of soliciting advice from the external environment
Prediction Markets: are established peer-to-peer betting markets where participants

make bets on specific outcomes of say, quarterly sales of a new product, designs for new
products, or political elections
Long-tail Marketing: the internet enables firms to do this, allows marketers to

inexpensively find potential customers for products where demand is very low
Behavioural Targeting: refers to tracking the clickstreams of individuals on thousands of

websites for the purpose of understanding their interests and intentions and exposing
them to advertisements that are uniquely suited to their behaviour

Social Graph: a mapping of all significant online social relationships. Synonymous with the
idea of a social network
Electronic Data Interchange (EDI): enables the computer-to-computer exchange

between two organizations of standard transactions such as invoices, bills, of lading,
shipment schedules, or purchase orders
Private Industrial Networks: aka private exchange: typically consist of a large firm using
a secure Web site to link to its suppliers and other key business partners. The network is
owned by the buyer, and it permits the firm and designated supplier, distributors, and
other business partners to share product design and development, marketing, production
scheduling, inventory management, and unstructured communication, including graphics
and email
Net Marketplace: sometimes called e-hubs, provider a single digital marketplace based on
Internet technology for many different buyers and sellers. They are industry owned or
operate as independent intermediaries between buyers and sellers> Generate revenues
from purchase and sale transactions and other services provided to clients
Direct Goods: goods used in production process, such as sheet metal for auto body
production
Indirect goods: are all other goods not directly involved in the production process, such as
office supplies or products for maintenance and repair
Exchanges: are independently owned third party net marketplaces that connect thousands
of supplies and buyers for spot purchasing
Location based Services: include geosocial services, geoadvertising, and geoinformation

services. Together these services are the basis GPS
Geosocial Service: can tell you where your friends are meeting
Geoadvertising: can tell you where to find the nearest Italian restaurant
Geoinformation Services: tell you the price of a house that you are looking at or about
special exhibits at a museum you are passing
Co-Location Agreement: your firm purchases or leases a web server (and has total control
over its operation) but locates the server in a vendor’s physical facility

2 Ka 3

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2 Ka 3

Uploaded by

Copyright:

Available Formats

McMaster

Chapter 1: Information Systems in Business Today

Operational excellence: businesses continually seek to improve the efficiency of their

Information System: is a set of interrelated components that collect or retrieve, process,

find more resources at oneclass.com

Processing: converts this raw input into a meaningful form

Feedback: is output that is returned to appropriate members of the organization to help

Information system literacy: the broad understanding of information systems, which

Computer Literacy: focuses primarily on knowledge of information technology

Management Information Systems (MIS): tries to achieve this broader information

Operational management: is responsible for monitoring the daily activities of the

Knowledge workers: such as engineers, scientists, or architects, design products or

Business functions: specialized tasks performed by business organizations, consist of

find more resources at oneclass.com

Computer software: consists of the detailed, pre-programmed instructions that control

Networking and telecommunications technology: consisting of both physical devices

Internet: the world’s largest and most widely used network

Intranets: internal corporate networks based on Internet technology

Extranets: private intranets extended to authorized users outside the organization

Organizational and management capital: firms that support their technology

Sociotechnical view: optimal organizational performance is achieved by jointly optimizing

find more resources at oneclass.com

Chapter 2: How Businesses Use Information

Systems for Different Management Groups

Transaction Processing systems (TPS):a computerized system that performs and

Management Information Systems (MIS): designates a specific category of information

find more resources at oneclass.com

find more resources at oneclass.com

E government: refers to the application of the Internet and networking technologies to

Systems for Collaboration and Social Business

Information System Department: the informal organizational unit responsible for

find more resources at oneclass.com

Information Systems Manager: are leaders of teams of programmers and analysts,

find more resources at oneclass.com

Chapter 3: Information Systems, Organizations, and Strategy

Organizations and Information Systems

There are 5 basic kinds of organizational structure

How Information Systems Impact Organizations and Business Firms

Agency Theory: the firm is viewed a s a nexus of contracts among self-interested

find more resources at oneclass.com

Information systems reduce the number of levels in an organization by providing managers

Implications for the Design and Understanding of Information Systems

Efficient Customer Response System: directly links consumer behaviour to distribution

find more resources at oneclass.com

Benchmarking: involves comparing the efficiently and effectiveness of your business

find more resources at oneclass.com

Best Practices: are usually identified by consulting companies, research organizations,

Core competency: is an activity for which a firm is a world-class leader. Relies on

Using Systems for Competitive Advantage: Management Issues

find more resources at oneclass.com

Chapter 4: Social, Ethical, and Legal Issues in the Digital Firm

find more resources at oneclass.com

Five Moral Dimensions of the Information Age

find more resources at oneclass.com

find more resources at oneclass.com

Candidate Ethical Principles

Professional Codes of Conduct

The Moral Dimensions of Information System

Personal Information Protection and Electronic Documents Act (PIPEDA):establishes

Canada’s Standards Association’s Model Privacy Code: published in 1996, it establishes

find more resources at oneclass.com

Opt-out: an opt-out model of informed consent permits the collection of personal

Intellectual Property: considered to be intangible property created by individuals or