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 David M. Kroenke Randall J. Boyle

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 Resource Description Benefit Example

2027? Each chapter concludes with a Learn to anticipate Chapter 7, 2027?

discussion of how the concepts, changes in technology discusses the future of
technology, and systems described in and recognize how those ERP applications
that chapter might change by 2027. changes may affect
the future business
environment.

Active Review This review provides a set of activities After reading the Chapter 9, Active Review
for you to perform in order to chapter, use the Active
demonstrate your ability to answer the Review to check your
primary questions addressed by the comprehension. Use
chapter. for class and exam
preparation.

Using Your Knowledge These exercises ask you to take your Test your critical-thinking Chapter 4, Using Your
new knowledge one step further by skills. Knowledge
applying it to a practice problem.

Collaboration Exercises These exercises and cases ask you
to collaborate with a group of fellow
students, using collaboration tools
introduced in Chapter 2.
Practice working with
colleagues toward a
stated goal.
Collaboration Exercise 3
discusses how to tailor
a high-end resort’s
information system to fit
its competitive strategy

Case Studies Each chapter includes a case study at Apply newly acquired Case Study 6, FinQloud
the end. knowledge to real-world Forever… Well, at Least
situations. for the Required Interval

Application Exercises These exercises ask you to solve Develop your computer AE10-2 builds on
situations using spreadsheet (Excel) or skills. your knowledge from
database (Access) applications. Chapter 10 by asking you
to score the websites you
visit using WOT

International Dimension This module at the end of the text Understand the International Dimension
discusses international aspects of international implications QID-3, How Do Inter-
MIS. It includes the importance and applications of the enterprise IS Facilitate
of international IS, the localization chapters’ content. Global Supply Chain
of system components, the roles Management?
of functional and cross-functional
systems, international applications,
supply chain management, and
challenges of international systems
development.

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561590_MILL_MICRO_FM_ppi-xxvi.indd 2 24/11/14 5:26 PM

 T e n t h E diti o n

Using MIS
David M. Kroenke
Randall J. Boyle

330 Hudson Street, NY NY 10013

A01_KORE6996_10_SE_FM.indd 7 08/12/16 6:34 pm

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Library of Congress Cataloging-in-Publication Data

Kroenke, David M., 1948- author. | Boyle, Randall, author.
Using MIS / David M. Kroenke, Randall J. Boyle.
   Using management information systems
Tenth Edition. | Hoboken : Pearson, [2018] | Revised edition of
   the authors’ Using MIS, [2017]
LCCN 2016048315| ISBN 013460699X | ISBN 9780134606996
LCSH: Management information systems.
LCC HD30.213 .K76 2018 | DDC 658.4/038011—dc23
LC record available at https://lccn.loc.gov/2016048315

10 9 8 7 6 5 4 3 2 1

ISBN 10:    0-13-460699-X

ISBN 13: 978-0-13-460699-6

A01_KORE6996_10_SE_FM.indd 8 08/12/16 6:34 pm

 Contents ix

Brief Contents
Describes how this course teaches four key
skills for business professionals. Defines MIS,
information systems, and information.
Describes characteristics, criteria for success,
Part 1: Why MIS? 1 and the primary purposes of collaboration.
Discusses components of collaboration IS and
1 The Importance of MIS 3 describes collaboration for communication
and content sharing. Illustrates use of Google
Drive, SharePoint, and other collaboration tools.
2 Collaboration Information Systems 37 Describes reasons why organizations create
and use information systems: to gain competi-
3 Strategy and Information Systems 81 tive advantage, to solve problems, and to sup-
port decisions.
Describes the manager’s essentials of hard-
ware and software technology. Discusses open
Part 2: Information Technology 111 source, Web applications, mobile systems, and
BYOD policies.
Explores database fundamentals, applications,
4 Hardware, Software, and Mobile Systems 113 modeling, and design. Discusses the entity-
relationship model. Explains the role of Access
and enterprise DBMS products. Defines Big
5 Database Processing 159 Data and describes nonrelational and NoSQL
databases.
6 The Cloud 201 Explains why organizations are moving to the
cloud and how they can use the cloud effec-
tively. Describes basic network technology that
underlies the cloud and how the Internet works.
Part 3: Using IS for Competitive Advantage 249 Explains Web servers, SOA, and Web services
standards. Discusses how organizations, includ-
ing Falcon Security, can use the cloud securely.
7 Processes, Organizations, and Information Systems 251 Discusses workgroup, enterprise, and inter-
enterprise IS. Describes problems of informa-
tion silos and cross-organizational solutions.
8 Social Media Information Systems 293 Presents CRM, ERP, and EAI. Discusses ERP
vendors and implementation challenges.
9 Business Intelligence Systems 335 Describes components of social media IS
(SMIS) and explains how SMIS can contribute
to organizational strategy. Discusses the theory
of social capital and how revenue can be gen-
Part 4: Information Systems Management 381 erated using social media. Explains the ways
organizations can use ESN and manage the
risks of SMIS.
10 Information Systems Security 383 Describes business intelligence and knowledge
management, including reporting systems,
data mining, and social media-based knowl-
11 Information Systems Management 423
edge management systems.
Describes organizational response to informa-
12 Information Systems Development 451 tion security: security threats, policy, and safe-
guards.
The International Dimension 498 Describes the role, structure, and function of
the IS department; the role of the CIO and CTO;
Application Exercises 519 outsourcing; and related topics.
Discusses the need for BPM and the BPM pro-
Glossary 538 cess. Introduces BPMN. Differentiates between
processes and information systems. Presents
Index 555 SDLC stages. Describes agile technologies and
scrum and discusses their advantages over the
SDLC.

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 Contents

Part 1: Why MIS?

1: The Importance of MIS 3

Q1-1 Why Is Introduction to MIS the Most Important Class in the

Business School? 5
The Digital Revolution 5
Evolving Capabilities 6
Moore’s Law 6
Metcalfe’s Law 7
Other Forces Pushing Digital Change 8
This Is the Most Important Class in the School of Business 9

Q1-2 How Will MIS Affect Me? 9

How Can I Attain Job Security? 9
How Can Intro to MIS Help You Learn Nonroutine Skills? 10
What Is the Bottom Line? 14

Q1-3 What Is MIS? 14

Components of an Information System 14
Management and Use of Information Systems 15
Achieving Strategies 16

Q1-4 How Can You Use the Five-Component Model? 16

The Most Important Component—You 17
All Components Must Work 17
High-Tech Versus Low-Tech Information Systems 17
• So What? A Is for Alphabet 18
Understanding the Scope of New Information Systems 19
Components Ordered by Difficulty and Disruption 19

Q1-5 What Is Information? 19

Definitions Vary 20
Where Is Information? 20

Q1-6 What Are Necessary Data Characteristics? 21

Accurate 21
Timely 21
Relevant 22
Just Barely Sufficient 22
Worth Its Cost 22

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 Contents xi

Q1-7 2027? 22
• Ethics Guide: Ethics and Professional Responsibility 23
• Security Guide: Passwords and Password Etiquette 26
• Career Guide: Five-Component Careers 28
Case Study 1: zulily 33

2: Collaboration Information Systems 37

Q2-1 What Are the Two Key Characteristics of

Collaboration? 39
Importance of Constructive Criticism 40
Guidelines for Giving and Receiving Constructive Criticism 40
Warning! 41

Q2-2 What Are Three Criteria for Successful Collaboration? 42

Successful Outcome 42
Growth in Team Capability 43
Meaningful and Satisfying Experience 43

Q2-3 What Are the Four Primary Purposes of Collaboration? 43

Becoming Informed 44
Making Decisions 44
Solving Problems 46
Managing Projects 46

Q2-4 What Are the Requirements for a Collaboration Information

System? 48
The Five Components of an IS for Collaboration 48
Primary Functions: Communication and Content Sharing 49

Q2-5 How Can You Use Collaboration Tools to Improve Team

Communication? 49

Q2-6 How Can You Use Collaboration Tools to Manage Shared

Content? 53
Shared Content with No Control 55
Shared Content with Version Management on Google Drive 55
Shared Content with Version Control 58
• Ethics Guide: Big Brother Wearables 60

Q2-7 How Can You Use Collaboration Tools to Manage

Tasks? 62
Sharing a Task List on Google Drive 62
Sharing a Task List Using Microsoft SharePoint 62
• So What? Augmented Collaboration 63

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 xii Contents

Q2-8 Which Collaboration IS Is Right for Your Team? 65

Three Sets of Collaboration Tools 66
Choosing the Set for Your Team 67
Don’t Forget Procedures and People! 68

Q2-9 2027? 69
• Security Guide: Evolving Security 70
• Career Guide: Software Product Manager 72
Case Study 2: Eating Our Own Dog Food 75

3: Strategy and Information Systems 81

Q3-1 How Does Organizational Strategy Determine Information

Systems Structure? 83

Q3-2 What Five Forces Determine Industry Structure? 84

Q3-3 How Does Analysis of Industry Structure Determine

Competitive Strategy? 85
• Ethics Guide: The Lure of Love Bots 86

Q3-4 How Does Competitive Strategy Determine Value Chain

Structure? 88
Primary Activities in the Value Chain 88
Support Activities in the Value Chain 89
Value Chain Linkages 89

Q3-5 How Do Business Processes Generate Value? 90

Q3-6 How Does Competitive Strategy Determine Business

Processes and the Structure of Information Systems? 92

Q3-7 How Do Information Systems Provide Competitive

Advantages? 93
Competitive Advantage via Products 93
• So What? The Autonomous Race 94
Competitive Advantage via Business Processes 95
How Does an Actual Company Use IS to Create Competitive Advantages? 96
How Does This System Create a Competitive Advantage? 97

Q3-8 2027? 99
• Security Guide: Hacking Smart Things 100
• Career Guide: Director of Architecture 103
Case Study 3: The Amazon of Innovation 106

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 Contents xiii

Part 2: Information Technology

4: Hardware, Software, and Mobile Systems 113

Q4-1 What Do Business Professionals Need to Know About

Computer Hardware? 115
Hardware Components 115
Types of Hardware 116
Computer Data 117

Q4-2 How Can New Hardware Affect Competitive

Strategies? 119
Internet of Things 119
Digital Reality Devices 121
Self-driving Cars 122
3D Printing 125

Q4-3 What Do Business Professionals Need to Know About

Software? 126
What Are the Major Operating Systems? 127
Virtualization 129
Own Versus License 131
What Types of Applications Exist, and How Do Organizations Obtain Them? 131
What Is Firmware? 132

Q4-4 Is Open Source Software a Viable Alternative? 133

Why Do Programmers Volunteer Their Services? 133
• So What? New from CES 2016 134
How Does Open Source Work? 135
So, Is Open Source Viable? 136

Q4-5 What Are the Differences Between Native and Web

Applications? 136
Developing Native Applications 136
Developing Web Applications 137
Which Is Better? 139

Q4-6 Why Are Mobile Systems Increasingly Important? 139

Hardware 140
Software 141
Data 141
• Ethics Guide: Free Apps For Data 142
Procedures 144
People 144

Q4-7 What Are the Challenges of Personal Mobile Devices

at Work? 145
Advantages and Disadvantages of Employee Use of Mobile Systems at Work 145
Survey of Organizational BYOD Policy 146

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 xiv Contents

Q4-8 2027? 147

• Security Guide: Poisoned App-les 148
• Career Guide: Technical Account Manager 150
Case Study 4: The Apple of Your i 155

5: Database Processing 159

Q5-1 What Is the Purpose of a Database? 161

Q5-2 What Is a Database? 163

Relationships Among Rows 164
Metadata 165
• Ethics Guide: Querying Inequality? 166

Q5-3 What Is a Database Management System (DBMS)? 168

Creating the Database and Its Structures 168
Processing the Database 169
Administering the Database 169
• So What? Slick Analytics 170

Q5-4 How Do Database Applications Make Databases More

Useful? 172
Traditional Forms, Queries, Reports, and Applications 172
Browser Forms, Reports, Queries, and Applications 174
Multi-user Processing 175

Q5-5 How Are Data Models Used for Database Development? 176
What Is the Entity-Relationship Data Model? 177

Q5-6 How Is a Data Model Transformed into a Database Design? 180

Normalization 181
Representing Relationships 182
Users’ Role in the Development of Databases 184

Q5-7 How Can Falcon Security Benefit from a Database

System? 186

Q5-8 2027? 187

• Security Guide: Big Data . . . Losses 188
• Career Guide: Database Engineer 190
Case Study 5: Searching for Pianos . . . 194

6: The Cloud 201

Q6-1 Why Are Organizations Moving to the Cloud? 203

Cloud Computing 204
Why Do Organizations Prefer the Cloud? 205
When Does the Cloud Not Make Sense? 206

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 Contents xv

Q6-2 How Do Organizations Use the Cloud? 207

Resource Elasticity 207
Pooling Resources 208
Over the Internet 209
Cloud Services from Cloud Vendors 209
Content Delivery Networks 212
Using Web Services Internally 213

Q6-3 What Network Technology Supports the Cloud? 214

What Are the Components of a LAN? 215
• Ethics Guide: Cloudy Profit? 216
Connecting Your LAN to the Internet 218

Q6-4 How Does the Internet Work? 220

The Internet and the U.S. Postal System 220
Step 1: Assemble Package (Packets) 221
Step 2: Put Name on Package (Domain Names) 221
Step 3: Look Up Address (IP Address) 221
Step 4: Put Address on Package (IP Address on Packet) 222
Step 5: Put Registered Mail Sticker on Package (TCP) 222
Step 6: Ship Package (Packets Transported by Carriers) 223

Q6-5 How Do Web Servers Support the Cloud? 224

Three-Tier Architecture 225
Watch the Three Tiers in Action! 225
Service-Oriented Architecture (SOA) 226
A SOA Analogy 226
SOA for Three-Tier Architecture 228
Internet Protocols 229
TCP/IP Protocol Architecture 229

Q6-6 How Can Falcon Security Use the Cloud? 231

SaaS Services at Falcon Security 231
PaaS Services at Falcon Security 232
IaaS Services at Falcon Security 232

Q6-7 How Can Organizations Use Cloud Services

Securely? 232
Virtual Private Networks (VPNs) 233
Using a Private Cloud 233
Using a Virtual Private Cloud 235
• So What? Quantum Learning 236

Q6-8 2027? 237

• Security Guide: From Anthem to Anathema 238
• Career Guide: Senior Network Manager 241
Case Study 6: FinQloud Forever . . . Well, at Least for the Required
Interval . . . 245

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 xvi Contents

Part 3: Using IS for

Competitive Advantage
7: Processes, Organizations, and Information Systems 251

Q7-1 What Are the Basic Types of Processes? 253

How Do Structured Processes Differ from Dynamic Processes? 254
How Do Processes Vary by Organizational Scope? 255

Q7-2 How Can Information Systems Improve Process Quality? 257

How Can Processes Be Improved? 258
How Can Information Systems Improve Process Quality? 258

Q7-3 How Do Information Systems Eliminate the Problems of

Information Silos? 259
What Are the Problems of Information Silos? 260
How Do Organizations Solve the Problems of Information Silos? 261
An Enterprise System for Patient Discharge 262

Q7-4 How Do CRM, ERP, and EAI Support Enterprise Processes? 262
The Need for Business Process Engineering 263
Emergence of Enterprise Application Solutions 263
Customer Relationship Management (CRM) 264
Enterprise Resource Planning (ERP) 265
• So What? Workflow Problems 266
• Ethics Guide: Paid Deletion 268
Enterprise Application Integration (EAI) 270

Q7-5 What Are the Elements of an ERP System? 272

Hardware 272
ERP Application Programs 273
ERP Databases 273
Business Process Procedures 273
Training and Consulting 274
Industry-Specific Solutions 275
Which Companies Are the Major ERP Vendors? 276

Q7-6 What Are the Challenges of Implementing and Upgrading

Enterprise Information Systems? 276
Collaborative Management 276
Requirements Gaps 276
Transition Problems 277
Employee Resistance 277
New Technology 277

Q7-7 How Do Inter-enterprise IS Solve the Problems of Enterprise

Silos? 278

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 Contents xvii

Q7-8 2027? 279

• Security Guide: It’s Not Me . . . It’s You 280
• Career Guide: IT Technical Manager 282
Case Study 7: A Tale of Two Interorganizational IS 288

8: Social Media Information Systems 293

Q8-1 What Is a Social Media Information System (SMIS)? 295

Three SMIS Roles 295
SMIS Components 298

Q8-2 How Do SMIS Advance Organizational Strategy? 300

Social Media and the Sales and Marketing Activity 300
Social Media and Customer Service 301
Social Media and Inbound and Outbound Logistics 302
Social Media and Manufacturing and Operations 302
Social Media and Human Resources 303

Q8-3 How Do SMIS Increase Social Capital? 303

What Is the Value of Social Capital? 304
How Do Social Networks Add Value to Businesses? 304
Using Social Networking to Increase the Number of Relationships 305
• So What? Enhanced Golf Fan 306
Using Social Networks to Increase the Strength of Relationships 307
Using Social Networks to Connect to Those with More Resources 308

Q8-4 How Do (Some) Companies Earn Revenue from Social

Media? 309
You Are the Product 309
Revenue Models for Social Media 309
Does Mobility Reduce Online Ad Revenue? 310
• Ethics Guide: Synthetic Friends 312

Q8-5 How Do Organizations Develop an Effective SMIS? 313

Step 1: Define Your Goals 314
Step 2: Identify Success Metrics 314
Step 3: Identify the Target Audience 315
Step 4: Define Your Value 315
Step 5: Make Personal Connections 316
Step 6: Gather and Analyze Data 316

Q8-6 What Is an Enterprise Social Network (ESN)? 317

Enterprise 2.0 317
Changing Communication 318
Deploying Successful Enterprise Social Networks 318

Q8-7 How Can Organizations Address SMIS Security

Concerns? 319
Managing the Risk of Employee Communication 319
Managing the Risk of Inappropriate Content 320

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 xviii Contents

Q8-8 2027? 322

• Security Guide: Digital is Forever 325
• Career Guide: International Content Director 327
Case Study 8: Sedona Social 330

9: Business Intelligence Systems 335

Q9-1 How Do Organizations Use Business Intelligence (BI)

Systems? 338
How Do Organizations Use BI? 339
What Are Typical BI Applications? 339

Q9-2 What Are the Three Primary Activities in the BI Process? 341
Using Business Intelligence to Find Candidate Parts 341

Q9-3 How Do Organizations Use Data Warehouses and Data

Marts to Acquire Data? 346
Problems with Operational Data 348
Data Warehouses Versus Data Marts 349
• Ethics Guide: MIS-diagnosis 350

Q9-4 How Do Organizations Use Reporting Applications? 352

Basic Reporting Operations 352
RFM Analysis 352
Online Analytical Processing (OLAP) 353

Q9-5 How Do Organizations Use Data Mining Applications? 355

Intelligent Machines 356
Unsupervised Data Mining 357
Supervised Data Mining 357
Market-Basket Analysis 358
Decision Trees 359

Q9-6 How Do Organizations Use Big Data Applications? 361

MapReduce 361
• So What? BI for Securities Trading? 362
Hadoop 363

Q9-7 What Is the Role of Knowledge Management Systems? 364

What Are Expert Systems? 364
What Are Content Management Systems? 366
What Are the Challenges of Content Management? 366
What Are Content Management Application Alternatives? 367
How Do Hyper-Social Organizations Manage Knowledge? 367
Hyper-Social KM Alternative Media 368
Resistance to Knowledge Sharing 368

Q9-8 What Are the Alternatives for Publishing BI? 369

Characteristics of BI Publishing Alternatives 369
What Are the Two Functions of a BI Server? 370

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 Contents xix

Q9-9 2027? 371

• Security Guide: Semantic Security 372
• Career Guide: Manager, Data and Analytics 374
Case Study 9: Hadoop the Cookie Cutter 378

Part 4: Information Systems

Management
10: Information Systems Security 383

Q10-1 What Is the Goal of Information Systems

Security? 386
The IS Security Threat/Loss Scenario 386
What Are the Sources of Threats? 387
What Types of Security Loss Exist? 388
Goal of Information Systems Security 390

Q10-2 How Big Is the Computer Security Problem? 390

Q10-3 How Should You Respond to Security Threats? 392

Q10-4 How Should Organizations Respond to Security

Threats? 394
• So What? New from Black Hat 2015 395

Q10-5 How Can Technical Safeguards Protect Against Security

Threats? 396
Identification and Authentication 396
Single Sign-on for Multiple Systems 397
Encryption 397
• Ethics Guide: Securing Privacy 398
Firewalls 401
Malware Protection 402
Design for Secure Applications 403

Q10-6 How Can Data Safeguards Protect Against Security

Threats? 404

Q10-7 How Can Human Safeguards Protect Against Security

Threats? 405
Human Safeguards for Employees 405
Human Safeguards for Nonemployee Personnel 407
Account Administration 407
Systems Procedures 409
Security Monitoring 409

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 xx Contents

Q10-8 How Should Organizations Respond to Security

Incidents? 410

Q10-9 2027? 411

• Security Guide: Exhaustive Cheating 412
• Career Guide: Senior Consultant 414
Case Study 10: Hitting the Target 418

11: Information Systems Management 423

Q11-1 What Are the Functions and Organization of the IS

Department? 425
How Is the IS Department Organized? 426
Security Officers 427
What IS-Related Job Positions Exist? 427

Q11-2 How Do Organizations Plan the Use of IS? 429

Align Information Systems with Organizational Strategy 429
• So What? Managing the IS Department 430
Communicate IS Issues to the Executive Group 431
Develop Priorities and Enforce Them Within the IS Department 431
Sponsor the Steering Committee 431

Q11-3 What Are the Advantages and Disadvantages of

Outsourcing? 431
• Ethics Guide: Training Your Replacement 432
Outsourcing Information Systems 433
International Outsourcing 435
What Are the Outsourcing Alternatives? 436
What Are the Risks of Outsourcing? 437

Q11-4 What Are Your User Rights and Responsibilities? 439

Your User Rights 439
Your User Responsibilities 440

Q11-5 2027? 441

• Security Guide: Watching the Watchers 442
• Career Guide: Senior Data Analyst 444
Case Study 11: Automating Labor 447

12: Information Systems Development 451

Q12-1 How Are Business Processes, IS, and Applications

Developed? 453
How Do Business Processes, Information Systems, and Applications Differ and
Relate? 454
Which Development Processes Are Used for Which? 455

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 Contents xxi

Q12-2 How Do Organizations Use Business Process Management

(BPM)? 457
Why Do Processes Need Management? 457
What Are BPM Activities? 458

Q12-3 How Is Business Process Modeling Notation (BPMN) Used

to Model Processes? 460
Need for Standard for Business Processing Notation 460
Documenting the As-Is Business Order Process 460

Q12-4 What Are the Phases in the Systems Development Life Cycle
(SDLC)? 463
Define the System 465
• Ethics Guide: Estimation Ethics 466
Determine Requirements 468
Design System Components 470
System Implementation 471
Maintain System 472

Q12-5 What Are the Keys for Successful SDLC Projects? 473
Create a Work Breakdown Structure 473
Estimate Time and Costs 474
Create a Project Plan 475
Adjust Plan via Trade-offs 476
Manage Development Challenges 478

Q12-6 How Can Scrum Overcome the Problems of the SDLC? 479
• So What? Banking on IoT 480
What Are the Principles of Agile Development Methodologies? 481
What Is the Scrum Process? 482
How Do Requirements Drive the Scrum Process? 484

Q12-7 2027? 486

Fetch! 486
User-Driven Systems 487
Industry Will Push Change 487
• Security Guide: Psst. There’s another Way, You Know… 488
• Career Guide: Developing Your Personal Brand 490
Case Study 12: When Will We Learn? 495

The International Dimension 498

Application Exercises 519
Glossary 538
Index 555

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 Preface

In Chapter 1, we claim that MIS is the most important class in the business curriculum. That’s a bold
statement, and every year we ask whether it remains true. Is there any discipline having a greater
impact on contemporary business and government than IS? We continue to doubt there is. Every
year brings important new technology to organizations, and many of these organizations respond by
creating innovative applications that increase productivity and help them accomplish their strategies.
Over the past year, we’ve seen long-discussed innovations take big leaps forward. Digital
reality (sometimes called virtual reality) really took off. Microsoft (HoloLens), Meta (Meta 2), and
Facebook (Oculus Rift) released their digital reality devices in early 2016. The reviews for these
devices from early adopters were glowing. These devices will create entirely new types of compa-
nies and could change the way people live, work, shop, and entertain themselves.
Internet of Things (IoT) smart devices once again dominated the Consumer Electronics Show
(CES), which is the industry’s annual display of the latest innovative products. Smart refrigera-
tors, smart beds, and smart sensors of every kind were a hit. But it isn’t just consumers who are
excited for IoT devices; businesses see their potential value, too. More importantly, these busi-
nesses recognize the need to collect, store, and analyze the data these devices will generate. As a
result, jobs in analytics, business intelligence, and Big Data are all in high demand right now.
In addition to changing the ways we live and gather data, recent innovations are changing
the way companies work, too. For example, over the past year Amazon experienced tremendous
success using Kiva robots in its fulfillment centers. It expanded their use to 13 warehouses around
the world. These 30,000 Kiva robots have reduced operating costs by 20 percent ($22 million per
warehouse); they have also reduced click-to-ship times from 60 minutes to just 15 minutes.1 If
Amazon rolls out these robots to all of its 110 warehouses, it could save billions. Technology—in
this case, an automated workforce—is fundamentally changing the way organizations operate.
It’s enabling them to be more productive, innovative, and adaptable.
Another technological advancement that made huge strides over the past year was self-
driving cars. Tesla Motors turned a regular car into a self-driving car by simply pushing out a
software update. In 6 months the nearly autonomous vehicles logged more than 100 million miles
on autopilot (with a few traffic incidents). Google, Mercedes-Benz, and nearly all other automobile
manufacturers are running full tilt to turn their traditional cars into fully autonomous smart
cars. The implications for autonomous vehicles go beyond consumers, too. Consider what would
happen if Amazon started using self-driving trucks. It could reduce shipping costs by 80 percent!
Of course, not all of this year’s technology news has been good. Large-scale data breaches
continue to be a major problem. LinkedIn (117 million), Ashley Madison (30 million), Tumblr (65
million), and MySpace (360 million) all suffered enormous data losses. And these are just a frac-
tion of the total number of organizations affected this year. Organizations saw a jump in the num-
ber of attacks from highly organized international hacking groups; they also saw the proliferation
of cryptographic ransomware.
This edition of the text has been updated for these developments as well as normal revisions
that address emergent technologies like cloud-based services, artificial intelligence, machine
learning, and so on.
All of these changes highlight the fact that more sophisticated and demanding users push
organizations into a rapidly changing future—one that requires continual adjustments in busi-
ness planning. In order to participate in this business environment, our graduates need to know

xxii

A01_KORE6996_10_SE_FM.indd 22 08/12/16 6:34 pm

Another random document with
no related content on Scribd:
 CHAPTER XXVI
EDMONTON—THE GATEWAY TO THE
NORTHWEST

Come with me to Edmonton, the capital and second largest city

of Alberta. It is built on high bluffs on both sides of the Saskatchewan
River, and we can see standing out against the landscape the great
steel girders of the Canadian Pacific “high level” bridge, which joins
the north and south sections of the city. Edmonton has between
sixty-five and seventy thousand people. It is noted for its factories
and wholesale houses and as a distributing point for the Northwest.
There are several meat packing houses here, and the city’s
creameries supply forty per cent. of the entire output of butter in the
province. It owns its own street railway, and its water, light, power,
and telephone systems. It is an important educational centre, and in
the University of Alberta has the farthest north college on the
continent. It has eight hundred acres of parks and golf links
belonging to the municipality.
The city is not far from the site of a Hudson’s Bay Company fort
built in 1795. Near by was a trading post of the Northwest Fur
Company, its one time rival. When, in 1821, the two companies were
amalgamated, a new fort was erected. This was called Edmonton,
which was the name of the birthplace of the Hudson’s Bay official in
charge. You remember how the English town figures in John Gilpin’s
famous ride:

To-morrow is our wedding day,

And we will then repair
Unto the Bell at Edmonton
 All in a chaise and pair.

My sister and my sister’s child,

Myself and children three
Will fill the chaise, so you must ride
On horseback after we.

For a half century afterward Edmonton was an important trading

and distributing point for all western Canada. Furs were sent from
here down the Saskatchewan to York Factory on Hudson Bay, and
supplies were packed overland to the Athabaska and taken by canoe
to the head waters of that stream. Some were floated down the river
to Lake Athabaska, thence into Great Slave Lake, and on into the
Mackenzie, which carried them to the trading posts near the Arctic.
Big cargoes of goods are still shipped by that route every year, and
hundreds of thousands of dollars’ worth of furs are brought back over
it to Edmonton, to be sent on to New York or London.
After the transfer of this northern territory from the Hudson’s Bay
Company to the Canadian government, the town grew steadily. Its
first real land boom occurred in 1882, when it was rumoured that the
Canadian Pacific would build through here on its way to the
Yellowhead Pass over the Rockies. The excitement caused by this
rumour was short lived, however, as the officials decided to cross the
mountains by the Kicking Horse Pass farther south. It was not until
1891, or almost ten years later, that the Canadian Pacific built a
branch line to Strathcona, just across the river. A year later
Edmonton was incorporated as a town, and in 1898 its growth was
greatly stimulated by its importance as an outfitting post for the
thousands of gold seekers who made their way to the Klondike by
the overland route.
 Four fifths of the coal reserves in the Dominion
are in Alberta. In addition to the big producing mines,
there are many “country banks,” where the settlers
can come and dig out the coal for themselves.
 Throughout central Alberta are many dairies that
supply the creameries of Edmonton and other towns.
Butter is sent from here to the Northwest and Yukon
territories, and is even shipped to England by way of
the Panama Canal.
 In 1904, when its population was ten thousand, Edmonton
became a city and the capital of Alberta. It was then a typical frontier
town of the New West. Its main thoroughfare was a crooked street
laid out along an old Indian trail, and its buildings were of all shapes,
heights, and materials. The older structures were wooden and of one
story, the newer ones of brick and stone and often four stories high.
The town was growing rapidly and the price of business property
was soon out of sight. A fifty-foot lot on Main Street sold for twenty
thousand dollars, and there was a demand for land in the business
section at four and five hundred dollars per front foot.
That year the Canadian Northern transcontinental line reached
Edmonton, and four years later the Grand Trunk Pacific was put
through. In 1913 the Canadian Pacific completed the bridge uniting
the northern part of the city with its former terminus across the river
at Strathcona, which had been made a part of Edmonton the year
before. In addition to these three transcontinental lines, Edmonton
now has railway connection with every part of central and southern
Alberta, as well as a road built northwesterly along the Lesser Slave
Lake to the Peace River district. The trains run over that route twice
a week; they are equipped with sleeping cars and a diner for most of
the way.
The location of Edmonton is much like that of St. Louis. The city
is on a large river in the midst of a farming region almost as rich as
the Mississippi Valley. It is in the northern part of the wheat belt, and
the surrounding country is adapted to mixed farming as well as
wheat growing. It produces enormous crops of oats, barley, and
timothy. I have seen wheat near here so tall that it almost tickled my
chin, and oats and timothy as high as my head. The land will raise
from seventy-five to a hundred and twenty-five bushels of oats to the
acre, and an average of forty bushels of winter wheat. The farmers
are now growing barley for hogs; they say that barley-fed pork is
better than corn-fed pork. They also feed wheat to cattle and sheep.
Indeed, when I was at Fort William I was told that thousands of
sheep are fattened there each winter on the elevator screenings.
I am surprised at the climate of Edmonton. For most of the winter
it is as mild as that of our central states. The weather is tempered by
the Japanese current, just as western Europe is affected by the Gulf
Stream. The warm winds that blow over the Rockies keep British
Columbia green the year round and take the edge off the cold at
Edmonton and Calgary.
Edmonton is an important coal centre, with thirty mines in its
vicinity. Indeed, Alberta’s coal deposits are estimated to contain
1,000,000,000,000 tons, which is one seventh of the total supply of
the world. It is eighty per cent. of Canada’s coal reserves. Coal is
found throughout about half of the province from the United States
boundary to the Peace River, and is mined at the rate of about five
million tons a year. Half of the product is lignite, about two per cent.
anthracite, and the remainder bituminous. Nova Scotia is a close
second in the coal production of the Dominion, and British Columbia
ranks third.
Because of the long haul across the prairies, Alberta coal cannot
compete in eastern Canada with that from the United States. Even
the mines of Nova Scotia are farther from Canada’s industrial
centres than is our Appalachian coal region. Cape Breton is more
than a thousand miles from Montreal, Ottawa, and Toronto, and
about two thousand miles from Winnipeg. Scranton, Pennsylvania,
on the other hand, is only four hundred miles from Toronto, and
Pittsburgh but three hundred and sixty-seven. Consequently, Alberta
coal supplies little more than the local demand.
Of the three hundred mines in operation, only about seventy are
important. Many of the others, some operated by only one man, are
known as “country banks.” In these the coal is dug out by the
farmers, who often drive thirty miles or more to one of the “banks.” At
some places bunk houses and stables have been erected to provide
shelter for settlers who cannot make the round trip in one day.
Alberta ranks next to Ontario in the production of natural gas,
which is found chiefly about Medicine Hat and in the Viking field,
which supplies Edmonton. Oil in small quantities is produced south
of Calgary, and new wells are being drilled in the southeastern part
of the province near the Saskatchewan border, and even north of
Peace River.
 The Peace River Valley, the southernmost part of which is four
hundred miles above Montana, is the northern frontier of Alberta. It
has been opened up largely within the last ten years. Across the
British Columbia line, part of the valley has been set aside as the
Peace River Block, where the settlement is controlled by the
Dominion government.
The basin of the Peace River consists of a vast region of level or
rolling land, much of which is thickly wooded with fir, spruce, pine,
tamarack, and birch. The forests are full of moose, deer, and bear,
and the beaver, lynx, marten, and muskrat are trapped for their furs.
There are vast stretches of rich black loam that produce annually
about a million bushels of wheat, three or four million bushels of
oats, and almost a million bushels of barley. Considering the latitude,
the winter climate is moderate, and in summer there is almost
continual daylight for the space of three months.
This district is dotted with settlements along the route of the
railway from Edmonton. It has telephone and telegraph connections
with southern Alberta, and a half dozen weekly newspapers are
published in its various towns. There are all together a hundred or
more schools. The largest settlement is Grande Prairie, near the
British Columbia border, but the oldest is the town of Peace River,
which lies in a thickly wooded region on the banks of the Peace. It is
two hundred and fifty miles northwest of Edmonton. The trip, which
was formerly over a wagon trail and took two or three weeks, can
now be made by rail in twenty-six hours.
Steamboats ply up and down Peace River for hundreds of miles,
the route downstream to Fort Smith being used by many trappers
and prospectors bound for the far Northwest. The trip takes one past
the historic old post of Fort Vermilion, two hundred and fifty miles
beyond Peace River town. To the northeast of Vermilion is said to be
a herd of wood buffalo, probably the last of their species roaming
wild.
A shorter route from Edmonton to the Northwest, and one that
has grown in popularity since oil has been found along the
Mackenzie, is down the Athabaska River, through Great Slave Lake,
and down the Mackenzie to Fort Norman, the trading post for the oil
region.
Let us imagine ourselves taking a trip over this route, which
penetrates to the very heart of the Northwest Territories. The train
leaves Edmonton only once a week. It usually starts Tuesday
morning, and we should reach “End of Steel,” on the bank of the
Clearwater River, the following day. Here we take one of the little
motor boats that push along the freight scows carrying supplies to
the trading posts during the open season, and chug down that
stream for twenty miles to its junction with the Athabaska at Fort
McMurray.
At Fort McMurray we take a steamer and go down the
Athabaska and across the lake of that name. The river loses its
identity when it empties into the lake, the river that joins Lake
Athabaska and Great Slave Lake being known as the Slave. The
latter stream at times flows through land soaked in oil. This “tar
sand,” as it is called, has been used as paving material in Edmonton,
and is said to have outlasted asphalt. It is probable that when better
transportation facilities are available it will be commercially valuable.
Just before reaching Fort Smith, halfway between Lake
Athabaska and Great Slave Lake, we leave our boat and ride in
wagons over a portage of fifteen miles. Fort Smith is just across the
Alberta boundary. It is the capital of the Northwest Territories. Here
the Royal Canadian Mounted Police is all-powerful, and it must be
satisfied that the traveller going farther north has food and other
essentials sufficient for his trip. In this land, where supplies are
brought in only once a year, no chances are taken on allowing
inexperienced prospectors to become public burdens.
Two hundred miles north of Fort Smith we reach Great Slave
Lake, the fourth largest inland body of water on the North American
continent. It is almost three hundred miles long, and the delta that is
being pushed out at the mouth of the Slave River may some day
divide the lake into two parts. Great Slave Lake is drained by the
mighty Mackenzie, down which we float on the last lap of our
journey. This river is as long as the Missouri, and carries a much
larger volume of water. It is like the mighty waterways of Siberia.
We are several days going down the Mackenzie to Fort Norman.
Fifty-four miles north of here, and only sixty miles south of the arctic
circle, is the first producing oil well in the Northwest Territories. The
well was the cause of a miniature “oil rush” to this land that is frozen
for nine months of the year. At this time no one knows how much oil
there is here. The region may never be of any greater importance
than it is now, or it may be another mighty oil field such as those in
Oklahoma and Texas. But even if oil is found in paying quantities it
will be many years before its exploitation will be commercially
profitable. The nearest railway is twelve hundred miles away, and the
river boats are of such shallow draft that they cannot carry heavy
freight. A pipe line to Prince Rupert or Vancouver would mean an
expenditure of almost one hundred million dollars, and to make such
a line pay it would be necessary to produce thirty thousand barrels of
oil daily.
In the meantime, prospectors have come in from at directions,
travelling overland as well as by river. One man made the fifteen-
hundred-mile trip from Edmonton with a dog team, and others have
mushed their way over the mountains from the Klondike. Two
aviators of the Imperial Oil Company attempted to fly to Fort
Norman. They were obliged to land several hundred miles to the
south and both planes were smashed. However, by using the
undamaged parts of one plane they were able to repair the other,
except for a propeller. They finally collected a pile of sled runners
from a near-by trading post, stuck them together with glue made by
boiling down a moose hide, and with a hunting knife carved out a
pair of propellers that enabled them to fly back the eight hundred
miles to Peace River.
On every hand I hear stories of how the vast Canadian
Northwest is being opened up. Edmonton is at the gateway to the
valleys of the Peace, the Athabaska, and the Mackenzie rivers, and
each year sees more settlers penetrating the remote areas that once
knew the white man only through the traders of the Hudson’s Bay
Company. Arthur Conan Doyle has caught the spirit of this new
Northwest in his “Athabaska Trail”:

I’ll dream again of fields of grain that stretch from sky to sky,
And the little prairie hamlets where the cars go roaring by,
Wooden hamlets as I saw them—noble cities still to be——
To girdle stately Canada with gems from sea to sea.

* * * * *
I shall hear the roar of waters where the rapids foam and tear;
I shall smell the virgin upland with its balsam-laden air,
And shall dream that I am riding down the winding woody
vale,
With the packer and the pack horse on the Athabaska Trail.
 CHAPTER XXVII
THE PASSING OF THE CATTLE RANGE

The story of southern Alberta is the story of the passing of

Canada’s great cattle ranches, the reclamation of millions of acres of
dry land by irrigation, and the growth of general farming where once
the open range stretched for hundreds of miles.
From Calgary I have ridden out to visit the mighty irrigation
works of the Canadian Pacific Railway. This corporation has taken
over three million acres, or a block of land forty miles wide and
extending from Calgary one hundred and forty miles eastward. It is
divided into three sections. The central division gets its water from
the Saint Mary’s River, and the east and west divisions from the Bow
River, which does not depend upon the rainfall for its volume, being
fed by the snows and glaciers of the Rockies.
At Bassano, about eighty miles from Calgary, is the great
Horseshoe Bend dam, where the level of the Bow has been raised
forty feet. The dam is eight thousand feet long, with a spillway of
seven hundred and twenty feet. From it the water flows out through
twenty-five hundred miles of irrigation canals and ditches. This dam
has been the means by which the semi-arid lands of southern
Alberta, formerly good only for cattle grazing, have been turned into
thousands of farms, raising wheat, alfalfa, and corn, as well as fruits
and vegetables.
 The dam at Bassano is the second largest in the
world, being exceeded in size only by the one at
Aswan, which holds back the waters of the Nile. The
water stored here flows out through 2,500 miles of
irrigation canals and ditches.
 The riproaring cowboy with his bucking bronco
was a familiar figure of the old Alberta, but with the
passing of the “Wild West” he is now rarely seen
except in exhibitions known as “stampedes.”
 Among the ranch owners of the Alberta foothills is
no less a personage than the Prince of Wales, who
occasionally visits his property and rides herd on his
cattle.
The ranching industry of Alberta was at its height during the
thirty years from 1870 to 1900. With the disappearance of buffalo
from the Canadian plains, cattle men from the United States began
bringing their herds over the border to the grazing lands east of the
foothills of the Rockies. The luxuriant prairie grass provided excellent
forage, and the warm Chinook winds kept the winters so mild that
the cattle could feed out-of-doors the year round. When the high
ground was covered with snow, there were always river bottoms and
hollows to furnish shelter and feed.
The United States cattle men were followed by Canadians and
Britishers. One of the first big ranch holders was Senator Cochrane
of Montreal. He owned sixty-seven thousand acres, and most of it
cost him only a dollar an acre. There were other immense holdings,
and the grazing industry continued to grow until it extended into
southwestern Saskatchewan and included horses and sheep as well
as cattle.
 Then the homesteaders began to take up their claims. In 1902
the first tract of land for irrigation purposes was bought from the
government by the Alberta Railway and Irrigation Company, and in
1903 the Canadian Pacific Railway’s big irrigation project was
begun. In May of the same year there occurred one of the severest
snow storms in the history of the plains. It lasted for a week, and fully
half the range cattle in what was then Alberta territory perished. The
introduction of wire fences dealt another hard blow to cattle ranching.
Large herds can be run all the year round only on an open range.
There are still a few big stock men in Alberta, but they have been
crowded into the foothills west of the old original “cow” country. Small
herds pasture on the open range also in the Peace River district. As
a matter of fact, Alberta still leads the Dominion in the production of
beef and breeding cattle. It has as much livestock as ever, each
mixed farm having at least a few head. There are a half million dairy
cattle in the province.
Most of the stock raised to-day is pure bred. There are cattle
sales at Calgary every year as big as any in the United States. The
favourite animal is the Shorthorn, but there are many Polled Angus
and Galloways. The best breeding animals come from England, and
there are some ranchmen who make a specialty of raising choice
beef for the English market. Within the last ten years the cattle in
Alberta have tripled in number, and their total value is now in the
neighbourhood of one hundred and twenty-five million dollars.
On my way from Edmonton to Calgary I passed through the
famous dairying region of Alberta. The cheese industry is still in its
infancy, but the province makes more than enough butter each year
to spread a slice of bread for every man, woman, and child in the
United States. It supplies butter for the Yukon and Northwest
Territories, and is now shipping it to England via Vancouver and the
Panama Canal.
Sheep can exist on poorer pasture than cattle, and some large
flocks are still ranged in the higher foothills of southern Alberta. They
are chiefly Merinos that have been brought in from Montana. On the
small farms the homesteaders often raise the medium-fleeced
English breeds, such as Shropshires, Hampshires, and Southdowns.
Some of the ranchers are experimenting in raising the karakul
sheep, a native of Central Asia, whose curly black pelts are so highly
prized for fur coats and wraps.
Horse raising was another big industry of early Alberta. The
bronco is now almost extinct, and almost the only light-weight horse
now reared is a high-bred animal valuable chiefly as a polo pony. In
Alberta, as elsewhere in the Dominion and in the United States, the
motor car has taken the place of the horse as a means of
transportation, and nine tenths of the animals in the province to-day
are of the heavy Clydesdale or Percheron types, and used solely for
farm work.
I have gone through Calgary’s several meat packing houses, and
have visited its thirteen grain elevators, which all together can hold
four million bushels of wheat. Calgary ranks next to Montreal and the
twin ports of Fort William and Port Arthur in its grain storage
capacity. It is surrounded by thousands of acres of wheat lands, not
in vast stretches such as we saw in Saskatchewan, but divided up
among the general farming lands of the province. The city is an
important industrial centre, and in some of its factories natural gas,
piped from wells a hundred miles away, is used to produce power.
Calgary is less than fifty years old. Nevertheless, it has sky-
scrapers, fine public buildings, and wide streets and boulevards.
Many of the business buildings are of the light gray sandstone found
near by, and nearly every residence is surrounded by grounds. The
city lies along the Bow and Elbow rivers, and the chief residential
section on the heights above these streams has magnificent views of
the peaks of the Rockies, one hundred miles distant.
Like many of the big cities of Western Canada, Calgary began as
a fort of the Mounted Police. That was in 1874. Its real growth dates
from August, 1883, when the first train of the main line of the
Canadian Pacific pulled into the town. Before that time much of the
freight for the ranch lands came farther south through Macleod,
which, the old-timers tell me, was the real “cow town” of southern
Alberta. Goods were brought up the Missouri River to the head of
navigation at Benton, Montana, and thence carried overland to
Macleod in covered wagons drawn by horse, ox, or mule teams.
The cattle town of Calgary is now a matter of history, and the old
cattle men who rode the western plains when Alberta was a
wilderness have nearly all passed away. Indeed, it is hard to believe
that this up-to-date place is the frontier town I found here some years
ago. Then cowboys galloped through the streets, and fine-looking
Englishmen in riding clothes played polo on the outskirts. The
Ranchers’ Club of that day was composed largely of the sons of
wealthy British families. Many of them were remittance men who had
come out here to make their fortunes and grow up with the country.
Some came because they were ne’er-do-wells or their families did
not want them at home, and others because they liked the wild life of
the prairies. They received a certain amount of money every month
or every quarter, most of which was spent in drinking and carousing.
The son of an English lord, for instance, could be seen almost any
day hanging over the bar, and another boy who had ducal blood in
his veins would cheerfully borrow a quarter of you in the lean times
just before remittance day.
 Calgary, chief city of the prairie province of
Alberta, is less than fifty years old. Beginning as a fur-
trading and police post, it now has sky-scrapers and
palatial homes.
 At Macleod, in southern Alberta, the headquarters
of the Mounted Police are in the centre of an
important live-stock region, where, in the early days of
open ranges, cattle thieves were a constant menace.
Others of these men brought money with them to invest. One of
them, the son of Admiral Cochrane of the British navy, owned a big
ranch near Calgary on which he kept six thousand of the wildest
Canadian cattle. Every year or so he brought in a new instalment of
bulls from Scotland, giving his agents at home instructions to send
him the fiercest animals they could secure. When asked why he did
this, he replied:
“You see, I have to pay my cowboys so much a month, and I
want to raise stock that will make them earn their wages. Besides, it
adds to the life of the ranch.”
“I went out once to see Billy Cochrane,” said a Calgary banker to
me. “When I arrived at the ranch I found him seated on the fence of
one of his corrals watching a fight between two bulls. As he saw me
he told me to hurry and have a look. I climbed up beside him, and as
I watched the struggle going on beneath, I said: ‘Why, Billy, if you do
not separate those bulls one will soon kill the other.’ ‘Let them kill,’
was the reply. ‘This is the real thing. It is better than any Spanish bull
fight, and I would give a bull any day for the show.’
“We watched the struggle for more than an hour, Cochrane
clapping his hands and urging the animals on to battle. Finally one
drove his horns into the side of the other and killed it. To my protest
against this wanton waste of valuable live stock, Cochrane replied:
‘Oh! it doesn’t matter at all. We must have some fun.’”
Another famous character of old-time Calgary was Dickie Bright,
the grandson of the man after whom Bright’s disease was named.
Dickie had been supplied with money by his grandfather and sent
out. He invested it all in a ranch and then asked for a large
remittance from time to time to increase his herds. He sent home
florid stories of the money he was making and how he was fast
becoming a cattle king. Shortly after writing one of his most
enthusiastic letters he received a dispatch from New York saying that
his grandfather had just arrived and was coming out to see him. The
boy was in a quandary. He had spent his remittance in riotous living
and he had no cattle. Adjoining him, however, was one of the largest
ranch owners of the West. Dickie confided his trouble to this man
and persuaded him to lend a thousand head of his best stock for one
night.