Solution Manual For Management Information Systems 7th Edition

Solution Manual for Management Information Systems, 7th Edition
Solution Manual for Management Information

Systems, 7th Edition
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MANAGEMENT INFORMATION
SYSTEMS
Seventh Edition
INSTRUCTOR MANUAL
Chapter 5
Kenneth J. Sousa
Bryant University
Effy Oz
The Pennsylvania State University
Management Information Systems 7/e
Instructor’s Manual Chapter 5
Table of Contents
CHAPTER 5 – BUSINESS SOFTWARE ....................................................................................................2
CHAPTER OBJECTIVES .................................................................................................................................2
CHAPTER CASE – KIMBALL’S RESTAURANT: SOFTWARE ADDED TO THE BILL ...........................................2
WHY IS THIS CHAPTER IMPORTANT FOR THE STUDENTS? ...........................................................................3
LECTURE NOTES ..........................................................................................................................................3
TEACHING THOUGHTS .................................................................................................................................4
POINTS OF INTEREST ....................................................................................................................................5
WHY YOU SHOULD......................................................................................................................................6
WEBSITES FOR LECTURES AND ASSIGNMENTS ............................................................................................6
KIMBALL’S REVISITED ................................................................................................................................6
What is Your Advice? .............................................................................................................................7
New Perspectives ...................................................................................................................................7
ANSWERS TO REVIEW QUESTIONS ...............................................................................................................8
ANSWERS TO DISCUSSION QUESTIONS ......................................................................................................10
ANSWERS TO THINKING ABOUT THE CASE QUESTIONS..............................................................................12
Less May Be more ................................................................................................................................12
Investing in Automation for Efficiency .................................................................................................12
Revised: January 2014
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protected website for classroom use.
CHAPTER 5 – BUSINESS SOFTWARE

Chapter Objectives
The objectives of this chapter are:
• Explain the difference between application software and system software.
• Enumerate the different generations of programming languages and explain how they
differ.
• Cite the latest major developments in application and system software.
• Identify and explain the roles of Web programming languages.
• Explain the types and uses of Web site design tools.
• Clarify the differences between proprietary software and open source software.
• List characteristics that are important in evaluating packaged software applications for
business use.
• Understand the problem of software piracy and how it affects businesses and consumers.
Chapter Case – Kimball’s Restaurant: Software Added to the Bill

The “front house” operations were a key factor for a successful restaurant. In their current
location, while they may not have been the most efficient restaurant operation, both Liz and
Michael did focus on delivering quality food at a reasonable price along with excellent customer
service. From his experience in human resources, he knew that resource allocation is a “razor
thin balance” between having too many or too few resources provided. In the restaurant
business, food is a significant percentage of costs and has a limited useful life (spoilage).
Businesses need to collect enough information to make better decisions. Resource allocation
(inventory, materials, labor, production, etc.) needs to be calculated based on estimated demand.
In the restaurant example, it is the expected number of customers expected for a meal seating and
day of the week. Like many restaurants (and other businesses), forecasting resources is often by
the principle of either a) divide a number by factor or b) duplicate what was done last week.
Sometimes that approach works well and sometimes it does not work profitably.
 Discuss the approach that Michael utilizes to understand the operational details of the
ordering process. His wife conveys that it is just a “guess” based on a “look” of the
storage areas. Engage the students the challenges and disadvantages of this method of
planning.
 Discuss how a business (its management) can monitor and control these issues. The use
of historical data, patterns and trends can be used to calculate specific thresholds
associated with a) an optimum level, b) outliers and c) a “safety” range that is
appropriate. Use the example of a retail store that manages its inventory and purchasing
transactions for its products by four factors: 1) demand (sales), 2) delivery lead time, 3)
ordering cost (or discounting) and 4) safety stock.
 In businesses with raw materials and inventory, a significant problem is shrinkage
(employee stealing). In addition, for a restaurant, food spoilage can evaporate profits
very quickly if purchasing and sales levels are not balanced. Discuss the effect of
managing inventory using efficient procedures and methodologies.
 Any business in this environment must integrate a promotional strategy including
information technology. Students are very familiar with websites, social media, browsing
for promotions and mobile computing. Discuss the need to begin developing an
electronic presence (websites). Explore the concepts of planning the strategy and design.
Expand the conversation that technology planning and implementation is not
revolutionary as much as evolutionary … meaning, the first “step” in this process is to
plan a solid launch; but won’t be the last launch.
Why Is This Chapter Important for the Students?

The approach of this chapter should be to that of Chapter 4. To be knowledgeable and successful
users of the technology, students must understand how IT can help them and the businesses that
they work for (or own). Therefore, they must be able to understand the functionality of
application software including its capabilities and limitations.
The main purpose of this chapter is to give students an exposure to the various methodologies
and tools that will allow them to prudently evaluate software, especially packaged software. The
instructor may want to revisit these concepts that, in a later chapter (Chapter 13, “Choices in
Systems Acquisition”), will supplement the business criteria (and approach) in considering
alternatives for acquiring or licensing applications.
Lecture Notes
1. What should drive an IT infrastructure decision?
➢ Ideally, managers would first choose the software they need and only then purchase the
hardware on which it will be installed. The reason we cover hardware before software, which
is not the order in which you have to teach, is that usually organizations already own some
hardware before they decide to acquire software. Another reason is that if the students
understand the notion of digital processing, they may be more comfortable with a discussion
of software because they remember that all software is in digitized form.
➢ It is really important that students understand that the key influence of an IT infrastructure
decision is which software (or approach) will fulfill the business functions of the business. It
is not about glorifying the use of technology, but what value it returns for the organization
and its stakeholders (suppliers, customers, employees, etc.). Functionality and the core value
propositions (solving business problems, creating opportunities, increasing operational
efficiency or gaining a competitive advantage) need to be analyzed and evaluated.
2. Operating systems and application software:
➢ Give the students examples (or ask them to give you examples) from applications that they
have used, e.g., a spreadsheet program. If students are very familiar with spreadsheets (which
more are now), attempt to demonstrate an application software product that is unfamiliar to
them, such as Google Analytics, MapPoint, web survey development, blog maintenance or
webpage builder.
➢ What is the interface that had to be designed by the developers of the application, and what
comes from the operating system?
➢ Demonstrate your answer using Windows or Mac OS: The general layouts of the pull-down
menus, the close box, the resize box, and the scroll button come from the operating system;
the layout of the document that’s being processed is the result of design by the developers of
the application.
➢ Tell the students that icons, such as those for “cut,” “paste,” and “save,” are the same in all
applications that share the same operating system. Then show them icons that were
developed specifically for the application. However, some applications – such as Adobe
Acrobat – have their own “copy,” “save,” and other common functions.
3. Ask the students what they think are the most important features of PC software.
➢ The answer will probably be icons that communicate operations (e.g., scissors for “cut”),
menu names, menu options that are associated with their menu names (e.g., cut, copy, paste,
and clear should be options under Edit), and sequences that are easy to follow by a lay user
(e.g., formatting a paragraph in a certain manner after selecting an option from the Format
menu).
➢ Emphasize the importance of easy-to-understand, intuitive icons: They reduce the time one
needs to learn how to use the software, and they make the software more internationally
accessible because a picture is language-independent. Such features increase employee
productivity by developing metaphors and icon intuition. Example: When you see a dialogue
box with a “red X” on the left, you know that the system is reporting a critical error which
must be resolved. A dialogue box displaying an “I” means that the system is communicating
information to the operator.
4. Ask the students to give you examples of bad user interfaces (menus, icons, etc.).
➢ Ask them how they would design these unfriendly interfaces.
5. Explain that it is sometimes difficult to discern which program is system software and which
functions as application software.
➢ For example, some people consider database management systems to be system software
because they are software that allow development of different applications. (Note that in this
book, we define such software as “general application software.”)
Teaching Thoughts
1. Ask the students: What is the ratio of software to hardware in corporate spending?
➢ They may be surprised by your answer. For every $1 spent on hardware, corporations spend
$9 on software. While many of the hardware items we purchase have become commodities,
much of the software is not.
➢ This may be a good time to discuss with students that a corporation spends significantly more
on applications such as ERP and SCM systems (and on their adaptations for the particular
organization) than on software such as MS-Office.
➢ Attempt to find a recent article on the reduction of hardware costs and the spiraling costs of
software development, maintenance and implementation.
2. Invite an expert in object-oriented programming to give a guest lecture to your class.
➢ Remind him or her that the students would appreciate a lecture that can be understood by a
nontechnical audience.
3. Some students may have the impression that open source software is only Linux or other systems
software.
➢ In fact, some very useful applications are open source, one of which is Open Office. You can
invite the students to download it free of charge at www.openoffice.org. You may want to
ask the students to explore the purpose of this effort. You may want to develop a discussion
on non-monetary incentive for developing software. Incentives include overcoming technical
challenges, professional fame, altruism, and a sense of taking on for-profit software
corporations such as Microsoft.
➢ Many open source software applications are available on tablet and mobile phones as well.
4. Discussion on language translators and interpreters.
➢ This subject is a challenging topic to deliver and engage students with. The depth of material
for this edition was reduced. The subject can be delivered quickly just to inform students on
the differences.
5. Ethical and Societal Issues (pg. 173): Software Piracy
➢ The subject of intellectual property rights and piracy is a challenging topic for students.
During their lifetime, the distribution and accessibility of software, articles, music, videos,
pictures and, yes, textbooks has become so widespread and commonplace for them. The
ethical issues associated with this issue are not completely understood or appreciated by
students and adults alike.
➢ This content is an excellent discussion for students in relation to software and piracy. It may
be useful to frame the discussion both from several points: 1) ethically, 2) cost to businesses,
3) increasing litigation and 4) stifling the creation of intellectual property. It may also be
successful to ask students to play the role as an entrepreneur of a business they have built.
The famous question … if you developed a product (computer game, technology, music,
video, etc.) for revenue, would you let people access it for no cost? How would it affect your
business? Would you continue to develop more intellectual property?
Points of Interest
Page Title Topic/Subject

150 Apps Help Battle Hurricane Sandy Mobile phone and app use assist during
weather crisis.
158 10/20/30 Rule Thoughts on developing a presentation

using business software.
171 The eBay & Skype Licensing Battle Discussion on the legal issues involving
Skype.
172 Wall Street’s Adoption of SaaS The rapid adoption and popularity of
software-as-a-service alternatives to
business software implementation.
Why You Should

Page Title Topic/Subject
152 Be Savvy The importance of fundamental knowledge
of software.
Websites for Lectures and Assignments

Description/URL
Hardware Vs. Software: The Great Price Divide
http://www.informationweek.com/mobile/hardware-vs-software-the-great-price-divide/d/d-
id/1082102?
The Cloud is Killing Traditional Hardware and Software

http://www.infoworld.com/d/cloud-computing/the-cloud-killing-traditional-hardware-and-
software-216963
CNET Insider Secrets – Open Source Free Software

http://www.youtube.com/watch?v=a9fqlI9B6QU
Compare Restaurant Point of Sale Software

http://www.softwareadvice.com/retail/restaurant-pos-software-comparison/
Kimball’s Revisited
WHAT IS YOUR ADVICE?

1. What types of software are needed by Kimball’s to assist them with their operations? What
application software do you believe would complement their point-of-sale system?
➢ Document preparation or word processing. Open Office or Microsoft Publisher, Microsoft
Word could be used to develop brochures or marketing materials.
➢ Website development. Artisteer, Wordpress (could be used to develop websites),
Dreamweaver to develop a website presence for the restaurant.
➢ Accounting. Quickbooks could be used to maintain the accounting transactions and generate
financial reporting.
➢ Spreadsheets. Microsoft Excel or Open Office to develop spreadsheet templates or received
exported data from the POS or accounting system for analysis and modeling.
➢ Databases. To maintain a mailing list of names, addresses and email addresses of customers.
➢  Other software products may be revealed through the classroom discussion.
2. Research various restaurant point-of-sale systems. Can Kimball’s use any packaged productivity
software or integrate with this software to help manage the restaurant?
➢ Students could review POS alternatives. The instructor can review some software review
evaluations on POS systems for restaurants (see URL above). There are MANY alternatives
ranging from small limited software applications to large enterprise systems. It may be useful
for the instructor to have students research alternatives in order to have an in-depth discussion
on the restaurant case (especially for this chapter).
➢ Some of the product alternatives were discussed above.
3. Tyler has heard a great deal about the differences between Windows and Mac-based software for
graphics and artistic work. Now that you have two new Windows-based personal computers for
the restaurant, should you consider additional hardware components or software to work on their
graphs needs?
➢  Many answers are possible for this question. The question of Mac vs. Windows seems to
always elicit some spirited discussions. However, it is an important discussion to encourage.
➢ This discussion could focus on the selection of the best software alternative which fulfills the
organizational needs and THEN select the hardware which will operate the software.
➢ If the software is available on multi-platforms, then institutional issues such as support, cost
and service should be considered.
NEW PERSPECTIVES
1. Liz is very cautious about using past information for ordering food from suppliers. She never has
done that and the restaurant seems to be doing well. Discuss your rationale with her relating to a
better approach to this activity.
➢ Changes in organizational processes and procedures often relates to organizational behavior,
culture and individual anxiety. Liz is probably acting based on one of these categories.
➢ Implementing changes and information technology requires analysis, education and coaching
as well as technology skills. The situation with Liz will probably be best approached with
some data (based on past performance) on the amount of spoilage cost realized by Kimballs.
➢ To focus on the improvements, a “system prototype” (in Excel or some sample reports from
the POS system) could be used to educate and engage Liz on how a) easy the process will be,
b) how it will help her manage her responsibilities more effectively, c) reduce problems and
crisis management and d) improve profits for the restaurant.
➢  Other answers may become known through the discussion.
2. What advice would you give to Tyler to help him with the development of the initial Web site for
the new location? What would you suggest to help with the marketing and promotion of the new
location (from previous chapters)?
➢ Most importantly, the “look” and design of the website should ALWAYS be consistent with
the branding and message of the business. If the restaurant’s strategy and branding is elegant,
a website design (look, feel, structure, pictures) should reinforce and communicate the
message. For example: If Tiffany’s (jewelry store) website was cluttered, confusing, used
“weird” colors (like red, purple) and communicated anything other than “elegance” … it
would not only obscure the branding of the business, but detract from it.
➢ A discussion on building a simpler website, but well planned and designed may be better than
attempting to “take on the world” and create an unprofessional or unstable website. Discuss
the concept of doing things right rather than fast. A discussion of using a marketing
consultant or website developer as well as professional pictures (logos, etc.) would be a great
start. Since restaurants have to appeal to its customers first, a solid foundation would be a
great place to begin.
➢ You may ask students to research hosting services that also will build and maintain a website.
➢  Many other answers may be discussed.
3. Can you use the initial Web site design to help the restaurant? Or do you think you need to scale
up to a larger Web site solution to gain effectiveness?
➢ As discussed earlier, it should communicate and promote the new business. A “landing
page” should be implemented as a placeholder to announce the opening and current news.
This approach would be especially important to a) promote the new location, b) keep
customers informed on the opening and c) create a “buzz” for the new location opening AND
a new website which will be installed (probably just prior to the opening).
➢ Again, scalability of the website is important. Discuss the concept that sometimes a “base
hit” is more strategically advantageous rather than attempting to “hit a home run” and then
striking out. Websites should be well-planned and designed … as well as fulfill the strategic
and operational objectives of the business … but changes to the organization will occur
which will be “mirrored” by the website. As the organization and competitive environment
changes, so will the website.
➢ 
Answers to Review Questions
1. IBM’s OS offerings currently include z/OS, z/VM, z/VSE, Linux for System z and z/TPF.
Popular operating systems for personal computers are Windows, UNIX, Linux (GNU), OS X,
Google Chromium and Mac OS.
2. The rapid adoption of the mobile development market has a number of tools (as of the date of this
publication). View the Wikipedia page for the listing of current tool kits.
➢ http://en.wikipedia.org/wiki/Mobile_application_development
3. 4GLs have many preprogrammed tasks that allow the programmers to use short, easy-to-
remember commands. Thus, the code to be written can be significantly shorter than the code for
the same procedure in third-generation languages. This makes the programming work efficient:
More code is developed in less time. 4GLs are easier to learn and use than third-generation
languages.
4. Multimedia is software that allows the retrieval of information in several forms: text, pictures,
sound, and animation. Motion pictures can be digitized and made part of a multimedia
application. Examples of multimedia use:
➢ Employees are asked question about serving customers; they are shown short movies
demonstrating different ways of service; the trainees click an option to indicate their choice;
if they are wrong, the correct movie is shown again, this time with an accompanying narrated
explanation.
➢ Customers use a kiosk that demonstrates the features of the cars that a dealership offers. They
can touch a screen to invoke both short movies and tables to show the cars and financing
options. The customers are under no pressure from salespeople; they can go back and forth
and view the same information again or touch another button for further information. They
can make a decision and approach a salesperson when they know what and how they want to
purchase.
➢ Students use multimedia to learn about the development of computers. They can view a
timeline in the form of years and pictures of machines. They can click on a machine to view a
short movie showing how the machine works and a sample output. They may click another
button to hear a sample of the designers’ vision.
5. When no ready-made software is available on the market to support the specific needs of an
organization, the organization has no choice but to have the software tailor-made. It’s an
expensive but necessary solution.
6. They are called productivity tools because they help workers be more productive; they execute
more output in less time.
7. An example could be the number of subscribers to a magazine grows by 1.5% per month.
Currently, there are 12,000 subscribers. How long will it take to reach at least 250,000
subscribers? Enter 12,500 in one cell; enter a formula indicating that cell times 1.015 underneath
the cell; copy the formula down for several rows and see if any of them has at least the value of
250,000. The number of cells up to that cell is the number of months.
8. The different media are text, pictures, animation (video), sound, and a combination of animation
and sound. Soon there may also be smell.
9. 3-D geographic systems combine three-dimensional depiction of and motion in a city or campus
and the information that relates to each element of area and the structures on it. It allows virtual
walking, driving, and flying. It is useful for city services such as law enforcement, fire
companies, and medical emergency teams; real estate businesses; and companies specializing in
tourism and travel.
10. System software performs routine operations, usually operations common to many applications,
such as those performed by an operating system. Application software performs a relatively
narrow set of tasks for a specific purpose, such as a business function or a computer game.
11. Software tools such as Artiseer and Joomla allow non-technical professionals to design and
develop websites without the need to learn traditional, more complex webpage development tools
(such as Dreamweaver). In addition, the focus can be directed more toward branding the website
to “connect” directly to the business as well as content (narrative, functions).
➢ Disadvantages are focused on any “template” or non-technical type of product. The
“boundaries” of these types of products can reduce specific technical abilities and functions
which can be installed and implemented in the final website product. Since they do not rely
on customized programming (such as JavaScript), it can limit the functional abilities of the
website.
12. There are two disadvantages to adopting Linux: (1) There are not as many applications that run
on it as there are for commercial operating systems; (2) Further development of the software, as
with all open source software, depends on an army of volunteers. These programmers may or
may not continue to donate their efforts.
13. An interpreter translates one program statement at a time to object code and executes it only if it
is syntactically correct and has no execution errors. A compiler translates all the instructions of a
program to object code and then executes the entire program, if there are no syntax or execution
errors.
14. A compiler or interpreter cannot detect logic errors because it does not know what the
programmer intended to calculate or otherwise have the computer do. To a compiler, any logic is
legitimate, because it is solely in the programmer’s purview.
15. Figure 5.9 on page 174 summarizes the elements to consider and frame the classroom discussion.
16. Open source software is software whose source code and documentation are accessible to all. It is
not proprietary. All have access to the source code (the code of the higher-level language) and
can improve the software.
17. The main reasons for adopting Linux are its reliability, versatility, and low cost. The students
need to realize that no software is without maintenance cost, especially system software such as
operating systems. However, the cost of the software itself is very low compared to proprietary
software. Also contributing to the growing adoption is the fact that IBM and other large IT
companies have adopted it and include it in computers that they sell.
Answers to Discussion Questions

18. The trend has clearly been to purchase (license) software. The reasons are the availability of a
huge selection of applications and their low cost. When software is large and expensive, such as
ERP packages, it certainly makes no business sense for an organization to have the software
tailor-made, because almost all of the elements.
19. An organization will probably develop its own payroll system only if it must use features that are
not available in ready-made software, such as unusual payment schemes, deductible dues, and
other nonstandard conditions.
20. Developers could use more icons for operations. They could add voice-activated error messages
instead of long textual ones; many people prefer listening to reading. Voice-based operating
systems would be a great help, saving us the time to learn how to use a new operating system and
to use the keyboard. (You may also hear some ideas from the students that you have not thought
of.)
21. The main concern is the variety of applications that have been and are about to be developed for
that operating system. IS managers are inclined to adopt an OS only if it can support all the types
of applications that the users in their organization need to use, such as word processors,
spreadsheets, and more specialized applications. This is why most organizations have not yet
adopted Linux; many more applications run on other operating systems, such as Unix and
Windows.
22.  Those who buy the software do so because purchased software comes with a manual.
Organizations also prefer to purchase the software because then they can also get support from
the vendor.
23. Microsoft derives a large proportion of its income from selling its operating systems. Also, almost
all of the applications that it sells run only on its own operating systems. If you download a free
application that runs on another OS, you do not have to purchase Microsoft’s software.
24. The more an application takes advantages of GUI, the less written language it requires. Instead, it
uses intuitive icons and other graphics, and so the interface becomes language-independent and
international.
25.  Opinions will vary based on prior experiences. Many students will report difficulties of
working with speech recognition.
26.  Software piracy is so pervasive because the crime is so easy to commit, and the chances of
getting caught are slim.
27. The pressure to legislate and enforce copyright laws comes from North America and Western
Europe because these are the regions that produce most of the world’s software. Such legislation
and enforcement protect an important economic interest of countries in these regions: U.S.,
Canada, U.K., Germany, France, and others.
28.  Open source software will probably continue to proliferate, if one extrapolates from what has
happened so far.
29.  Opinions will vary. Students may discuss the pros and cons of the open source movement.
30. The benefit is becoming better at programming and gaining a reputation of a good professional,
which may result in good job offers. Linus Torvalds is now a millionaire as a result of his
development of Linux.
31. Water may be free, but companies make money by purifying it, bottling it, and making it easy to
carry and consume. The same principle applies to Linux and other free open source software: You
can download it from the Web and try to install and use it without help, but many businesses
prefer to purchase it “refined” (with friendlier user interface), packaged with a manual and
accompanied by support service.
Answers to Thinking about the Case Questions

LESS MAY BE MORE
1. What were the goals of installing CRM software?
➢ The goal was to eliminate the use of paper and automate customer relationship. This should
have enabled relationship bankers to make more calls to prospects, to know more about both
customers and prospects, and to know whom to call and what services to offer.
2. A Siebel executive commented that the company’s CRM system does not fit the needs of all
clients. He noted that the clients need to decide if they want an application or a tool kit. Research
the term “tool kit.” Is Siebel’s CRM system an application or a tool kit? Explain why.
➢ Siebel’s CRM system is an application, and therefore is so inflexible. It caters to the largest
common denominator. QuickBase is a tool kit. It is flexible enough to mold into several
different types of applications.
3. The bank’s president said that management learned a lesson, and that the $500,000 spent on the
abandoned CRM system was tuition for that education. What would you have done in the first
place to avoid this “tuition”? Use the three considerations as the foundation of your analysis.
➢  The students should offer, at least: (1) Visit other banks of their bank’s size and character
that had already installed a CRM system and ask bankers how satisfied they were; (2) Use
several software packages on a trial basis, if possible; (3) Involve the relationship bankers in
the decision-making process when choosing software.
INVESTING IN AUTOMATION FOR EFFICIENCY
1. Each of these systems needed significant investment in resources and capital. What do you
believe was the rationale to justify the costs of these systems? What types of quantitative savings
can be documented to support this rationale?
➢ As the case conveys, competitive times require a detailed and thoughtful analysis of operating
costs and employee productivity. It uses the metaphor not striving to be a silver medalist, but
a gold medal winner. The case introduces Medco and Staples as examples of this.
➢ As one of the largest health-care companies, Medco needed a different model and process for
fulfilling prescriptions. The labor cost of fulfilling prescriptions by highly paid pharmacists
is prohibitive. In addition, it has limited value-added services by just counting pills based on
their education and training. Medco could not scale their business without a direct increase in
their labor costs. Therefore, it was important to automate the process of filling these
prescriptions … from order to shipment.
➢ Medco could have reviewed the labor cost of filling a prescription by a pharmacist (time to
fill calculated at their compensation). It would be easy to select a period of time (let’s say an
Solution Manual for Management Information Systems, 7th Edition

hour) and determine how many scripts (the abbreviation for a prescription) can be filled in
that time period and place a cost of the labor (and overhead) cost. Then, compare it to
benchmarks of how many scripts filled by an automated system. Calculate the cost of such
system (including R&D, operation, maintenance). These costs then could be compared.
Note: Remember, that R&D and purchasing costs are capitalized over time based on
accounting principles.
➢ Staples accuracy and efficiency of fulfilling online orders (much like scripts) is an important
metric for customer service and satisfaction. The additional resources required to resolve an
inaccurate order (as the case calls rework) can be a) significant and b) reduce brand and
customer loyalty. Therefore, it is important to “get it right” the first time an order is filled
and shipped to a customer. Some of these costs can be quantified. However, the loss of
customer satisfaction cannot be directly valued.
2. It is rather simplistic to conceive the benefits to automating business operations. What would be
the subjective factors and risks associated with these initiatives?
➢ While humans can make mistakes when filling a script, so can an automated process.
However, it could be said that the number of automated controls (100 as discussed in the
case) is probably significantly more than what is being completed by the current process. As
the case suggests, Medco does not want to “automate an error.” The liability as well as the
loss of reputation and business would be catastrophic.
➢ The process of filling a supplies order by Staples does not rise to the same level of liability
and risk as Medco. However, these errors do create “risk” for the company in terms of loss
of customer loyalty and sales. The risk is focused with having the right product delivered to
the customer based on their expectations and order details.
3. The competitive pressures have become more prominent. How would initiatives such as those
implemented by Medco and Staples change the competitive environment in their respective
industries?
➢ As stated many times previously, implementing information technology is rather easy. Doing
so using a thoughtful and planned approach that adds value is not as easy. This approach
requires analysis and attention to detail in order to integrate business activities (still often
completed by humans) along with technology-based processes. After the implementation
(processes and technology) are integrated … does the organization and its stakeholders
benefit? Is there a real value perceived or received?
➢ The innovative use of technology to provide value-oriented benefits can BE a “game
changer” in a market industry. It can “catch” the market’s competitors off-guard and require
a reaction (stress the word reaction) in order to recapture any market, sales and customer
loyalty issues damaged by the “game changing” implementation.
➢  Some discussion may provide additional thoughts.
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CHAPTER 5 – BUSINESS SOFTWARE

• Explain the difference between application software and system software.

• Cite the latest major developments in application and system software.

• Identify and explain the roles of Web programming languages.

• Explain the types and uses of Web site design tools.

Chapter Case – Kimball’s Restaurant: Software Added to the Bill

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Why Is This Chapter Important for the Students?

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Page Title Topic/Subject

158 10/20/30 Rule Thoughts on developing a presentation

Why You Should

Websites for Lectures and Assignments

The Cloud is Killing Traditional Hardware and Software

CNET Insider Secrets – Open Source Free Software

Compare Restaurant Point of Sale Software

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WHAT IS YOUR ADVICE?

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Answers to Review Questions

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Answers to Discussion Questions

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Answers to Thinking about the Case Questions

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Management Information Systems 7/e

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