Professional Documents
Culture Documents
왘 CASE STUDY IV-1 The Clarion School for Boys, Inc.—Milwaukee Division:
Making Information Systems Investments 594
왘 CASE STUDY IV-2 FastTrack IT Integration for the Sallie
Mae Merger 611
왘 CASE STUDY IV-3 IT Infrastructure Outsourcing at Schaeffer (A):
The Outsourcing Decision 628
왘 CASE STUDY IV-4 IT Infrastructure Outsourcing at Schaeffer (B):
Managing the Contract 634
왘 CASE STUDY IV-5 Systems Support for a New Baxter Manufacturing
Company Plant in Mexico 642
왘 CASE STUDY IV-6 The Challenges of Local System Design for
Multinationals: The MaxFli Sales Force Automation
System at BAT 647
왘 CASE STUDY IV-7 Meridian Hospital Systems, Inc.: Deciding Which IT
Company to Join 660
왘 CASE STUDY IV-8 Mary Morrison’s Ethical Issue 666
Glossary 668
Index 691
CONTENTS: CASE STUDIES
Case Study 1 Midsouth Chamber of Commerce (A): The Role of the Operating
Manager in Information Systems 10
Case Study I-1 IMT Custom Machine Company, Inc.: Selection of an Information
Technology Platform 116
Case Study I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier 128
Case Study I-3 The VoIP Adoption at Butler University 144
Case Study I-4 Supporting Mobile Health Clinics: The Children’s Health Fund
of New York City 157
Case Study I-5 Data Governance at InsuraCorp 166
Case Study I-6 HH Gregg: Deciding on a New Information Technology
Platform 170
Case Study I-7 Midsouth Chamber of Commerce (B): Cleaning Up an Information
Systems Debacle 177
Case Study II-1 Vendor-Managed Inventory at NIBCO 279
Case Study II-2 Real-Time Business Intelligence at Continental Airlines 284
Case Study II-3 Norfolk Southern Railway: The Business Intelligence Journey 294
Case Study II-4 Mining Data to Increase State Tax Revenues in California 300
Case Study II-5 The Cliptomania™ Web Store 308
Case Study II-6 Rock Island Chocolate Company, Inc.: Building a Social Networking
Strategy 321
Case Study III-1 Managing a Systems Development Project at Consumer and
Industrial Products, Inc. 432
Case Study III-2 A Make-or-Buy Decision at Baxter Manufacturing Company 442
Case Study III-3 ERP Purchase Decision at Benton Manufacturing Company, Inc. 449
Case Study III-4 The Kuali Financial System: An Open-Source Project 455
Case Study III-5 NIBCO’s “Big Bang”: An SAP Implementation 468
Case Study III-6 BAT Taiwan: Implementing SAP for a Strategic Transition 484
Case Study III-7 A Troubled Project at Modern Materials, Inc. 498
Case Study III-8 Purchasing and Implementing a Student Management System at
Jefferson County School System 506
Case Study IV-1 The Clarion School for Boys, Inc.—Milwaukee Division: Making
Information Systems Investments 594
Case Study IV-2 FastTrack IT Integration for the Sallie Mae Merger 611
Case Study IV-3 IT Infrastructure Outsourcing at Schaeffer (A):
The Outsourcing Decision 628
Case Study IV-4 IT Infrastructure Outsourcing at Schaeffer (B):
Managing the Contract 634
Case Study IV-5 Systems Support for a New Baxter Manufacturing Company Plant
in Mexico 642
Case Study IV-6 The Challenges of Local System Design for Multinationals:
The MaxFli Sales Force Automation System at BAT 647
Case Study IV-7 Meridian Hospital Systems, Inc.: Deciding Which IT
Company to Join 660
Case Study IV-8 Mary Morrison’s Ethical Issue 666
xv
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PREFACE
Today’s private and public organizations are increasingly dependent on information technologies
for achieving their strategic and operational objectives. Over the past decade alone, enterprise
systems have been expanded to provide secure, electronic linkages with suppliers and customers,
and the Internet has become a mainstream channel for communications and business transac-
tions. As a result, decision making about information technology resources has also become even
more visible as the roles and accountabilities of the IS function have become important not only
operationally but also strategically.
The overall objectives and targeted audience for this edition remain the same as for the prior
sixth edition: to provide comprehensive coverage of IS management practices and technology trends
for advanced students and managers. Earlier editions of this textbook have been used for courses in
MBA, MS in IS, and executive education programs, as well as in advanced undergraduate courses.
We believe that our approach of providing both up-to-date chapter content and full-length case
studies, written by the same authors, results in a unique set of materials for educators to customize
for students seeking careers as business managers, IS managers, or IS specialists.
• All 15 chapters in this edition have been revised to reflect up-to-date technology trends and
state-of-the-art IS management practices.
• The total number of chapters has been reduced from 17 to 15 to better match the semester
schedules of many of our textbook adopters.
• Overall topical coverage has been retained, but we have reduced some presentations of the
content as follows:
• Chapter 2 (Computer Systems) includes content from separate chapters on computer
hardware and computer software in the sixth edition.
• The content from Chapter 13 of the sixth edition has now been incorporated into two
chapters in the seventh edition: The discussion of key characteristics of user-developed
applications appears in Chapter 9 (Methodologies for Custom Software Development)
and the discussion of support and control mechanisms for end-user computing appears
in Chapter 13 (Leading the Information Systems Function).
• The in-depth case studies in this edition include five completely new case studies and six
that have been significantly revised.
• PowerPoint Slides The PowerPoint slides that have been developed for this edition
emphasize the key concepts in the text, include many of the figures in the text, and provide
some Web links to enhance student learning. Faculty instructors can customize these
presentations by adding their own slides and links to Web resources and/or by editing the
existing ones.
• The Image Library is a collection of the text art organized by chapter. This collection
includes all of the figures, tables, and screenshots (as permission allows) from the book.
These images can be used to enhance class lectures and PowerPoint slides.
ACKNOWLEDGMENTS
Our thanks go to our professional colleagues who have used one or more editions of this
textbook and have provided valuable feedback to us directly, or responded to review requests by
our publisher, since the first edition in 1991. The list is too long to provide here, but we hope that
all of you will accept our collective, anonymous Thank You!
Special thanks also go to academic colleagues (mostly current and prior Indiana University
faculty and students) who have coauthored content for specific chapters that can still be found in
this edition: Susan A. Brown, Dong-Gil Ko, Lisa Murphy, Jay Newquist, Madhu Rao, Blaize
Reich, Andrew Urbaczewski, Ramesh Venkataraman, and Dwight Worker. The following
individuals have also collaborated with us on case study research or coauthored the case studies that
appear in this book: Ron Anderson-Lehman, S. Balaji, Greg Clancy, Tony Easterlin, Jane
Fedorowicz, Janis L. Gogan, Dale Goodhue, Vijay Khatri, Scott A. Kincaid, Nicholas Lockwood,
Stephen R. Nelson, Kevin Ryan, John Sacco, Rebecca Scholer, Mohan Tatikonda, Iris Vessey,
Hugh Watson, Taylor Wells, Bradley Wheeler, Michael Williams, and Barbara Wixom.
We have also benefited from several sources of support for our research that have led to the
development of case studies for this textbook—including the IM Affiliates program at the Kelley
School of Business at Indiana University, the EDS Corporation, British American Tobacco,
SAP-America, Teradata Corporation, the Center for Information Systems Research at MIT’s
Sloan School of Management, and the Society for Information Management (SIM). Our deep
appreciation goes out to the reviewers of the sixth edition, who helped make the seventh edition
better: T.C. Bradley, III, Indiana University; Chiang-Nan Chao, St. John’s University; Abbas
Foroughi, University of Southern Indiana; Richard Gram, Worcester Polytechnic Institute;
Georgia Miller, Indiana University-Purdue University at Columbus; Ezra Rhein, Brooklyn
College; Robin Starnes, Texas A&M University; Manouchehr Tabatabaei, Georgia Southern
University; Nolan J. Taylor, Indiana University; and Patricia White, Troy University.
Finally, each author extends their gratitude to the other four for their intellect, professionalism,
and longtime interest in providing quality instructional materials for today’s and tomorrow’s
business managers and IS leaders.
Carol V. Brown
Daniel W. DeHayes
Jeffrey A. Hoffer
E. Wainright Martin
William C. Perkins
October 2010
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CHAPTER 1
Managing IT in a
Digital World
The utilization of information technology (IT) has become pervasive. Businesses not only have information systems
(IS) that connect frontline employees with back-office accounting and production systems but also compete with
dot-com (Internet only) companies via Web-based stores and online customer service channels. Travelers can access
high-speed wireless networks from public transportation, airports, and even in-flight airplanes to keep them
productive. Work teams may never meet face-to-face and regularly use meeting software and video conferencing.
Workers may choose a BlackBerry, iPhone, or other smartphone to access office e-mail anytime, anywhere. And
today’s schoolchildren find resources via Internet searches rather than card catalogs in school libraries.
Today’s consumers also live in what has been called an increasingly “flat world” in which IT linkages across
emerging, developing, and developed economies help to “level” the economic playing field (Friedman, 2005).
Citizens across the globe may have access to world news online. Geographical positioning systems not only help
travelers find the best route to their destination but can also facilitate the identification of a nearby retail store or
restaurant.
The designing and management of computer hardware, software, and networks to enable this pervasive
digital world is the work of IT professionals. However, all business managers, not just IT managers, are
responsible for wisely investing in and effectively utilizing these information technologies for the benefit of their
organizations. By the year 2000, more than half of capital expenditures by businesses in developed countries were
for IT purchases.
The primary objective of this textbook is to increase your knowledge about IT management so that as a
manager you can effectively invest in and utilize new and already in-place information technologies. In the
following chapters we will describe
• technologies available today and emerging technology trends,
• software applications to support business operations and business intelligence,
• “best practices” for acquiring and implementing new systems, and
• planning and managing an IS department’s resources.
The objective of this first textbook chapter is to set the stage for the remaining 14 chapters and the full-length case
studies that follow.
We use the term information technology (IT) as computer technology (hardware and software) for
processing and storing information, as well as communications technology (voice and data networks) for
transmitting information.
We use the term information systems (IS) department to refer to the organizational unit or department
that has the primary responsibility for managing IT.
1
2 Chapter 1 • Managing IT in a Digital World
Next, we briefly describe some recent IT trends that have led produced by manufacturers around the world have become
to (1) new ways for businesses to compete and (2) new ways commodity products with processing power that is equiva-
for employees to accomplish their work. Then we briefly lent to an organization’s entire computing center of the
introduce the key IT management responsibilities in today’s 1960s. The typical computer for individuals to use today has
organizations and the types of IT assets that need to be graphical icons, point-and-click and/or touch screen naviga-
managed in collaboration with business leaders. The chapter tion, and preloaded software to access the Internet—all at a
ends with a brief summary of the topics that will be covered cheaper price than what the same features would have cost
in the remaining Parts I–IV of this textbook. 12 months earlier, with better computer virus protection.
Because of their portability and wireless capabilities, light-
RECENT INFORMATION TECHNOLOGY weight laptop and notebook computers are replacing larger
TRENDS desktop machines in offices today. They can be carried into
meetings, taken on business trips, and used at home to
As a personal user of various computer and communication remotely connect to office systems.
devices, you are probably already aware of some of the Smaller, handheld devices have also continued to im-
innovations in computer systems and networks that have prove in functionality and have become indispensable tools
been introduced by IT vendors over the past decade. This to access e-mail and other applications inside and outside of
fast-paced technological change makes it difficult to the office, on the factory floor, as well as in hospital corri-
accurately predict the IT products and services that will be dors. In mid-2007, Apple Computer began selling a new
“winners” tomorrow—and significant mispredictions about smartphone (iPhone) with touch screen navigation and
technologies have been common in the past (see the box scrolling, and simplified calling from an address book,
“Mispredictions by IT Industry Leaders”). However, it e-mail and text messaging, visual voice mail, video playing,
seems safe to predict that computer and communication de- and Web browsing via Wi-Fi connectivity. Since then, other
vices will continue to touch almost every aspect of our lives. IT vendors have been developing smartphones with similar
In Part I of this textbook, we will discuss in detail the features, and Apple has introduced a lightweight notebook
key concepts underlying today’s computer systems (hard- computer (the iPad) with a similar interface.
ware and software) and network technologies. For now, let
us briefly consider some of the technology developments Computer Software: Integrated,
that have already led to pervasive computing in the first Downloadable, Social
decades of this twenty-first century. By the early 1990s, Microsoft Corporation’s Windows soft-
ware had become the standard operating system for the vast
Computer Hardware: Faster, Cheaper, Mobile
majority of microcomputers being used as desktop and
Computer-on-a-chip (microcomputer) technology was avail- portable computer “clients.” By the end of the 1990s,
able as early as the 1970s, and the introduction of the first Microsoft’s Office suite (i.e., word processing, spreadsheet,
IBM Personal Computer (PC) in 1981 was the beginning of database, slideshow presentation, and e-mail software sold
desktop computing. Today, desktop and portable computers in a single bundle) as well as its Web browser (Internet
— Eh! Che dicevo? Dicevo il vero quando asserivo che Buck vale
per due diavoli.
Fu questo il discorso di François la mattina dopo, quando scoprì che
mancava Spitz e che Buck era coperto di ferite. Lo tirò vicino al
fuoco e alla luce del fuoco mostrò le ferite.
— Quello Spitz combatte come un diavolo, — disse Perrault, mentre
esaminava gli squarci e i tagli.
— E questo Buck combatte come due diavoli. — fu la risposta di
François. — Ed ora potremo guadagnar tempo. Non più Spitz, non
più disordine, per certo.
Mentre Perrault impaccava gli attrezzi dell’accampamento e caricava
la slitta, il conducente incominciò a porre i finimenti ai cani. Buck
trottò subito al posto che Spitz avrebbe occupato come capo del tiro;
ma François, non badando ad esso, condusse Sol-leks alla bramata
posizione. A suo giudizio, Sol-leks era il miglior cane che rimaneva
per dirigere il tiro. Buck si slanciò furioso su Sol-leks, spingendolo
via e prendendone il posto.
— Eh? eh? — gridò François battendo le mani allegramente. —
Guardate un po’ Buck. Ha ucciso Spitz, e crede ora di prenderne il
posto.
— Via! via di qui, stupido! — gridò, ma Buck non si mosse.
Afferrò Buck per la collottola del collo, e benchè il cane ringhiasse
minacciosamente, lo trascinò da un lato e rimise a posto Sol-leks. Il
vecchio cane non era punto contento, e mostrava chiaramente che
aveva paura di Buck. François era cocciuto, ma quando voltò le
spalle, Buck scacciò via nuovamente Sol-leks, che era contento di
andarsene.
François si stizzì. — Ora, perdio! t’insegno io a ubbidire! — gridò,
ritornando con una pesante mazza in mano.
Buck, che ricordava l’uomo dalla maglia rossa, si ritirò lentamente,
nè ritentò di scacciare Sol-leks quando fu rimesso a posto. Girava
intorno, fuori del tiro della mazza, ringhiando furiosamente e
amaramente; e mentre girava intorno, teneva d’occhio la mazza per
schivarla se mai François gliela avesse gettata contro, giacchè era
diventato saggio nei rapporti con le mazze.
Il conducente continuò i suoi preparativi, e chiamò Buck quando fu il
momento di porlo al vecchio posto davanti a Dave. Buck indietreggiò
di due o tre passi. François lo seguì, ma il cane continuò a
indietreggiare. Dopo un po’ di questo gioco, François depose la
mazza, pensando che Buck temesse d’essere picchiato, ma Buck
era, invece, in piena rivolta. Non voleva sfuggire alla mazza, ma
avere il comando del tiro. Gli apparteneva di diritto. Se l’era
guadagnato, e non avrebbe rinunciato.
Perrault venne a dare una mano a François. Tutt’e due lo rincorsero
per quasi un’ora. Gli gettarono mazze: egli le schivò. Lo maledirono,
e maledirono i suoi genitori, e la sua semente sino alle più remote
venture generazioni, e tutti i peli del suo corpo e ogni goccia di
sangue delle sue vene; ed egli rispondeva ad ogni maledizione con
ringhi e si teneva lontano dal loro raggio d’azione. Egli non cercò di
scappare, facendo intendere chiaramente che quando l’avessero
accontentato, sarebbe rientrato al suo posto e sarebbe stato buono.
François alla fine si sedette grattandosi la testa. Perrault guardò
l’orologio e bestemmiò. Il tempo fuggiva, ed essi avrebbero dovuto
essere in cammino già da un’ora. François si grattò nuovamente la