ITM100 - Exam Notes

Lecture 1: Information Systems in Global Business Today

What is New in Management Information Systems?

Continuous changes in technology, management and business processes

● IT Innovations
○ Cloud computing, mobile digital platforms, big data, AI, Internet of Things
● New Business Models
○ Viewers are transitioning from cable to Internet for entertainment (Streaming services)
● E-Commerce Expanding
○ Selling services now, not only goods
● Management Changes
○ Online collaboration, Business Intelligence, Virtual Meetings
● Changes in Firms and Organizations
○ More collaborative, Social Media to listen to consumers, etc

Globalization Challenges and Opportunities: A Flattened World

● Globalization: Internet and global communication have changed how business is done
○ Internet has reduced costs of operating on global scales
○ Increase in foreign trade, outsourcing
○ Competition for jobs, markets, resources, ideas
○ Growing interdependence of global economies
○ Requires new understanding of markets and opportunities

The Emerging Digital Firm

● Full Digital Firm
○ Business relationships are digitally enabled and mediated
○ Core business processes are now accomplished through digital networks
○ Key corporate assets are managed digitally
● Digital Firms offer greater flexibility in organization and management
○ Time & Space shifting
● Many firms are already close to becoming digital firms

Strategic Business Objectives of Information Systems

● Growing interdependence between:
1. Ability to use information tech
2. Ability to implement corporate strategy and achieve corporate goals
The Interdependence Between Organizations and Information Systems

Strategic Business Objectives of Information Systems

1. Operational excellence
● Cost benefit analysis
● Improvement in efficiency to attain higher profits
● Information systems and technologies
○ Most important tools in achieving greater productivity
● Ex. Walmart
○ Over $524 billion in sales for 2019
○ Retail Link System
■ Links suppliers to stores for superior replenishment system

2. New products, services, and business models

● Business model
○ How company produces, delivers, and sells product or service for profits
● Information systems are a major enabling tool to create
○ New product
○ New services
○ New business models
● Ex. Apple
○ Old business model: records, tapes, cds
○ New business model: online, iPhone, iTunes

3. Customer and Supplier intimacy

● Serving customers well leads to customers returning
○ Raises revenue and profits
○ Ex. Personalized services in high-end hotels
■ Mandarin Oriental hotel
● Room temp, lights, music, etc
● Intimacy with suppliers results in lower costs
○ Allows them to provide vital input
○ Ex. JCPenney’s info system
■ Enhances relationship with suppliers in Hong Kong
 4. Improved decision making
● Managers do not have the right info at the right time
○ Needle in a haystack
● Big data analytics
○ Using data to determine decision making for a business
■ Ex. opening a medical school in Brampton because data and info helps
make decisions make sense
● Without accurate info:
○ Rely on forecasts (best guesses and luck)
■ Results in:
● Misallocation of resources
● Poor response times
■ Poor outcomes raise costs = losing customers
● Real time data improves ability to make decisions
○ Ex. Verizon’s web-based digital dashboard
■ Realtime data on customer complaints, network performance, etc

5. Competitive Advantage
● Delivering better performance
● Charging less for a superior product
● Responding to consumers and suppliers in real time
● Ex. Industry leaders (apple, walmart, UPS)
○ Use information systems for this purpose
● Competitive advantage results from achieving previous business objectives

6. Survival
● Information technologies is a necessity of business - Competitive Necessity
● Keeping up with competitors (ex. Industry level changes)
○ Citibank’s introduction of the ATM
○ Blockbuster didn’t survive Netflix (streaming over video rental)
○ Kodak didn’t survive digital cameras
○ Nokia didn’t survive smartphones
○ Sears didn’t survive e-commerce
● Governmental regulations requiring record keeping
○ Toxic substance Control Act
○ Sarbanes-Oxley Act
○ Dodd-Frank Act

What is an Information System

● Information System
○ Things that work together
○ Set of interrelated components
○ Collect, Process, Store, and Distribute information
○ Supports decision making, coordination, control
● Information Technology
○ Tool with no people involved
○ Hardware and Software that a firm needs to achieve business objectives
○ Hardware and Software are technical foundation and tools
■ Ex. material and tools used to build a house
Data and Information
● Information vs. Data
○ Data is streams of raw facts
○ Information is data shaped into meaningful form
■ Can make a decision based on this information

Functions of an Information System

● Input
○ Raw data or info from organization, eternal environment, etc
● Processing
○ Converts raw data (or one form of information) into more meaningful information
○ Software
○ Algor
● Output
○ Information to be supplied to people, activities, etc that use it
● Feedback
● Output returned to members of the organization to help them evaluate or correct input/processing

Dimensions of Information Systems

Info systems exist with 3 sections/focuses

● Organization
○ Hierarchy of authority, responsibility; Separation of business functions; Unique business
processes; Unique business culture; Organizational politics
■ Society
● Management
○ Managers set organizational strategy
○ Managers must act creatively:
■ Creation of new products and services
■ Occasionally re-creating the organization
● Technology
○ Hardware/Software
○ Infrastructure
○ Data Management

Figure 1.6 Levels in a Firm

● Senior management
○ Middle Management
■ Operational Management
● Each level has a different responsibility
It Isn’t Just Technology: A Business Perspective on Information Systems
● Information system is instrument for creating value
● Investments in information technology will result in superior returns
● Business information value chain
○ Raw data acquired and transformed through stages that add value to that information
○ Value of information system determined in part by extent to which it leads to better
decisions, greater efficiency, and higher profits
● Business perspective
○ Calls attention to organizational and managerial nature of information systems

The Business Information Value Change

A Business Perspective on Information Systems (cont.)

● Investing in information technology does not guarantee good returns
○ There is considerable variation in the returns firms receive from systems investments
 ● Factors
○ Adopting the right business model
○ Investing in complementary assets
■ Assets required to derive value from a primary investment
■ Organizational assets (ex. Efficient business processes)
■ Managerial assets (ex. Incentives for management innovation)
■ Social assets (ex. Internet and telecommunications infrastructure)

Contemporary Approaches to Information Systems

● Technical Approach
○ Emphasizes mathematically based models
○ The disciplines are
■ Computer science, management science, operations research
● Behavioural Approach
○ Behavioural issues (strategic business integration, implementation, etc.)
○ The disciplines are
■ Psychology, Economics, Sociology
○ Approach of our Book/Class: Sociotechnical
■ Optimal organizational performance achieved by jointly optimizing both social
and technical systems used in production
■ Helps avoid purely technological approach

Lecture 2 - Global E-Business and Collaboration

Business Processes
● Business Processes
○ Flows of material, information, knowledge
○ Sets of activities/steps
○ It may be tied to a functional area or be cross-functional
● Businesses
○ Seen as a collection of business processes
○ Business processes can be assets or liabilities

Examples:
● Manufacturing and production
○ Assemblings the product
● Sales and Marketing
○ Identifying customers
● Finance and Accounting
○ Fundamental to business processes
○ Creating financial statements, paying suppliers
● Human Resources
○ Fundamental to business processes
○ Paying or hiring employees

How Info Tech Improves Business Processes

● Increasing efficiency of existing processes
○ Automating steps that were manual
○ Checking client’s credit, generating an invoice
 ● Enabling entirely new processes
○ Changing the flow of information
○ Replacing sequential steps with parallel steps
○ Eliminating delays in decision-making
○ Supporting new business models

Categories of Info Systems

● TPS
○ Ex. Check out systems at grocery stores
● BI Systems (Business Intelligence Systems)
○ MIS (Management Support Systems)
○ DSS (Decision Support Systems)
○ ESS (Executive Support Systems)
● Enterprise Systems
■ Using the same systems for all processes
○ ERP (Enterprise Resource Planning)
○ SCM (Supply Chain Management)
■ Communicating with suppliers outside of the enterprise
○ CRM (Customer Relationship Management)
■ Knowing more about customers
■ Communicating with customers outside of the system enterprise
○ KMS (Knowledge Management System)
■ Provides knowledge
■ Organizes relevant and accurate info
○ LMS (Learning Management System)
■ In-house LMS in many corporations - conveys info back and forth

Types of Information Systems

● Transaction processing systems (TPS)
○ Serve operational managers and staff
○ Perform and record daily routine transactions necessary to conduct business
■ Ex. Sales order entry, payroll, shipping, etc
○ Allow management to monitor the status of operations and relations with the external
environment
○ Serve predefined, structured goals and decision-making
● Ex. grocery store without its check-out (POS, register) systems

Systems for Business Intelligence

● Business Intelligence (BI)
○ A technology-driven process for analyzing data and presenting actionable information to
help executives make informed decisions
● Examples
○ Management information systems
○ Decision support systems
○ Executive support systems

Management Information Systems (MIS)

● Serve middle management
● Provide reports on the firm’s current performance, based on data from TPS
 ● Provide answers to routine questions with predefined procedures for answering them
● Typically, they have little analytic capability

Decision Support System (DSS)

● Improved decision making
● Serve middle management
● Support non-routine decision-making
○ Ex. What is the impact on the production schedule if December sales are 2x
● May use external information as well as TPS / MIS data
● Types:
○ Model-driven DSS (e.g. Voyage-estimating systems)
○ Data-driven DSS (e.g. Target marketing)
Executive Support System (ESS)
● Support senior management
● Address non-routine decisions
○ Requiring judgment, evaluation, and insight
● Incorporate data about external events as well as summarized info from internal MIS and DSS
○ Ex. new tax laws or competitors
● Ex. Digital dashboard with a real-time view of the firm’s financial performance

Enterprise Applications
● Systems for linking the enterprise
● Span functional areas
● Execute business processes across the firm
● Include all levels of management
● Learning Management Systems (LMS)
○ Ex. D2L Brightspace
● Four major enterprise applications
○ Enterprise Resource Planning (ERP)
○ Supply Chain Management (SCM)
○ Customer Relationship Management (CRM)
○ Knowledge Management System (KMS)

Enterprise Resource Systems (ERP)

● Also known as enterprise resource planning (ERP)
● Collect data from different firm functions and store data in a single central data repository
● Resolve problems of fragmented data
● Enable
○ Coordination of daily activities
○ Efficient response to customer orders (productions, inventory)
○ Decision-making by managers about daily operations and longer-term planning

Supply Chain Management (SCM) Systems

● Manage firm relationships with suppliers
● Inter-organizational systems
○ Automate the flow of info across organizational boundaries
● Share info about
○ Orders, production, inventory levels, delivery of products and services
● Goals
 ○ The right amount of products to destination with the least amount of time and the lowest
cost
■ Ex. re-order food for inventory from a supplier

Customer Relationship Management (CRM) Systems

● Provide info to coordinate all of the business processes that deal with customers
○ Sales
○ Marketing
○ Customer Service
● Helps firms identify, attract, and retain the most profitable customers
● Customer loyalty programs help to collect more info on customers

Knowledge Management Systems (KMS)

● Support processes for capturing and applying knowledge and expertise
○ How to create, produce, and deliver products/services
● Collect internal knowledge and experience within the firm and make it available to employees
● Link to external sources of knowledge
● Include enterprise-wide systems for:
○ Managing documents, graphics and other digital knowledge objects
○ Directories of employees with expertise

Intranets and Extranets

● Also used to increase integration and expedite the flow of info
● Intranets
○ Internal company websites accessible only to employees
● Extranets
○ Company websites accessible externally only to vendors and suppliers
○ Often used to coordinate supply chain

E-Business, E-Commerce, and E-Government

● E-Business
○ Use of digital technology and the Internet to drive major business processes
● E-Commerce
○ Subset of e-business
○ Buying and Selling goods and services through the Internet
● E-Government
○ Using Internet technology to deliver info and services to citizens, employees, and
businesses

Collaboration is more important than ever

● Changing nature of work
● Growth of professional work
● Changing the organization of the firm
● Changing the scope of the firm
● Emphasis on innovation
● Changing the culture of work and business
○ Ex. work from home (WFH)
What is Social Business?
● Social Business
○ Use of social networking platforms to engage employees, customers, suppliers
■ Internal and External
● Aims to deepen interactions and expedite info-sharing
● “Conversations” to strengthen bonds with customers
● Requires info transparency
○ Driving the exchange of info without intervention from the executive or others

Applications of Social Business

Business Benefits of Collaboration and Teamwork

● The more a business firm is “Collaborative” the more successful it will be
● Benefits
○ Productivity
○ Quality
○ Innovation
○ Customer Service
○ Financial Performance
○ Profitability, Sales, Sales growth

The Time/Space Collaboration and Social Tool Matrix

Tools and Technologies for Collaboration and Social Business

● E-mail and instant messaging (IM)
 ● Collaboration and Social Business Platforms
○ Virtual meeting systems (Zoom, Google Meet)
○ Cloud collaboration services (Google Drive, MS Onedrive)
○ Collaboration platforms (MS Teams, Slack)
○ Enterprise social networking tools
● Wikis
● Virtual Worlds
○ Ex. Metaverse

Checklist for Managers: Evaluating and Selecting Collaboration and Social Software Tools
● Six steps in evaluating software tools
1. Identifying your firm’s collaboration challenges
2. Identify what kinds of solutions are available
3. Analyze available products' costs and benefits
4. Evaluate security risks
5. Consult users for implementation and training issues
6. Evaluate product vendors

Building a Collaborative Culture and Business Processes

● ‘Command and Control” organizations
○ No value is placed on teamwork or lower-level participation in decisions
● Collaborative business culture
○ Senior managers rely on teams of employees
○ Policies, products, designs, processes, and systems rely on teams
○ The managers’ purpose is to build teams

The Information Systems Department

● Often headed by chief information officer (CIO)
○ Other senior positions include
■ Chief Info Security Officer (CISO)
■ Chief Technology Officer (CTO)
■ Chief Privacy Officer (CPO)
● Programmers
● Systems Analysts
● Information systems managers, Project managers
● End users

Organizing the Information Systems Function

● IT Governance
○ Strategies and policies for using IT in the organization
○ Decision rights
○ Accountability
○ Organization of information systems function
■ Centralized, Decentralized, etc

Lecture 3 - IT Infrastructure

IT Infrastructure:
● Set of physical devices and software required to operate an enterprise
 ● Set of firm-wide services including:
○ Computing platforms providing computing services
○ Physical facilities & management services
○ IT management, education, and other services
● “Service platform” perspective
○ More accurate view of value of investments
○ Internet value?

Stages in IT Infrastructure:

● Purpose of the creation of the internet was to create a line of connection for US military
communication

Technology Drivers of Infrastructure Evolution:

● Moore’s law and microprocessing power
○ Computing power doubles every 2 years (abt 18 months)
● Law of Mass Digital Storage
○ Amount of data being stored each year doubles
● Metcalfe’s Law and network economics
○ Why people want more computing and storage power?
○ Value or power of a network grows exponentially as a function of the number of network
members

Technology Drivers of Infrastructure Evolution (cont.):

● Declining communication costs and the Internet
○ Exponential growth in size of the internet
● Standards and network effects
○ Technology standards
● Specifications that establish the compatibility of products and the ability to communicate in a
network
● Unleash powerful economies of scale and result in price declines
What Are the Components of IT Infrastructure:
1. Computer hardware platforms
2. Operating system platforms
3. Enterprise software applications
4. Data management and storage
5. Networking/telecommunications platforms
6. Internet platforms
7. Consulting system integration services

Computer Hardware Platforms:

● Client Machines
○ Desktop PCs, Laptops
○ Mobile computing: smartphones, tablets
○ Desktop chips vs. mobile chips
● Servers
● Mainframes
○ IBM mainframe - Z OS
○ Digital workhorse for banking and telecommunications networks

Software Categories:
● System Software (OS)
○ Software that manages a computer system at a fundamental level
● Application Software
○ Software written to address specific needs – to solve problems in the real world

Operating System Platforms:

● Corporate servers:
○ Windows server
○ Unix
○ Linux
● Client level:
○ Microsoft Windows
○ Android, IOS, Windows 10 (mobile/multitouch)
○ Google’s Chrome OS (cloud computing)
● Roles of an Operating System:
○ Operating system is a system software that:
■ Manages computer resources, such as memory and input/output devices
■ Provides an interface through which a human can interact with the computer
■ Allows an application program to interact with these other system resources
○ Various roles of an operating system generally revolve around the idea of “sharing nicely”
○ An operating system manages resources, and these resources are often shared in one
way or another among programs that want to use them

Enterprise Software Applications:

● In 2020, firms are expected to spend over $500 billion on software for enterprise applications
● Largest providers
○ SAP
○ Oracle
 ● Middleware providers
○ IBM
○ Oracle

Data Management and Storage:

● Database software providers
○ IBM (DB2)
○ Oracle
○ Microsoft (SQL servers)
○ SAP Adaptive Server Enterprise
○ MySQL
○ Apache Hadoop
● Physical data storage for large-scale systems
○ Dell EMC
○ Hewlett Packard Enterprise (H3C)

Networking/Telecommunications Platforms:
● Network operating systems
○ Windows Server, Linux, Unix
● Network hardware providers
○ Cisco, Juniper Networks
● Telecommunication services
○ Telecommunications, cable, telephone company charges for voice lines and Internet
access
○ AT&T, Verizon

Internet Platforms:
● Hardware, software, management services to support company websites, intranets
○ Web-hosting services
○ Routers
○ Cabling or wireless equipment
● Internet hardware server market
○ IBM, Dell, Oracle, HP
● Web development tools/suites
○ Microsoft (Visual Studio and .NET), Oracle-Sun (Java), Adobe

Consulting and System Integration Services:

● Even large firms do not have resources for full range of support for new, complex infrastructure
● Leading consulting firms
○ Accenture, IBM Global Services, HP, Infosys, Wipro Technologies
● Software integration
○ Ensuring new infrastructure works with legacy systems
● Legacy systems
○ Older TPS created for mainframes that would be too costly to replace or redesign

Management Issues:
● Dealing with platform and infrastructure change
○ As firms shrink or grow, IT needs to be flexible and scalable
○ Scalability
 ■ Ability to expand to serve larger number of users
■ With cloud services businesses are able to expand or shrink their services with
the cloud (Operating expense)
■ Capital expenses - can’t scale it (depreciates over time)
○ For mobile computing and cloud computing
■ New policies and procedures for managing these new platforms
■ Contractual agreements with firms running clouds and distributing software
required
● Management and governance
○ Who controls IT infrastructure?
○ How should the IT department be organized?
■ Centralized
● Central IT department makes decisions
■ Decentralized
● Business unit IT departments make own decisions
○ How are costs allocated between divisions, departments, etc
● Making wise infrastructure investments
○ Under-investment and over-investment can hamper firm performance
○ Rent vs. Buy
○ Cloud computing
■ Security requirements
■ Impact on business processes and workflow
○ Outsourcing

Total Cost of Ownership (TCO) Model:

● Analyzes direct and indirect costs
● Hardware, software account for only about 20% of TCO
● Other costs
○ Installation, training, support, maintenance, infrastructure, downtime, space, and energy
● TCO can be reduced
○ Use of cloud services, greater centralization and standardization of hardware and
software resources

Cloud Computing – Definition:

1. On demand service
2. Ubiquitous network access
3. Location-independent resource pooling
4. Rapid elasticity
5. Measured service (pay for use)

Lecture 4 - Enterprise Systems

What Are Enterprise Systems?:

● Also known as enterprise resource planning (ERP) systems
● Based on a suite of integrated software modules and common central database
○ Ex. TMU uses Oracle software modules
■ SIS
■ FIS
■ HRIS
 ● Collects data from many divisions of firm for use in nearly all of firm’s internal business activities
● Information entered in one process is immediately available for other processes
○ Data quality/cleansing
■ If info is entered wrong, then it’s entered wrong for everyone
■ Making sure that the data is accurate

Enterprise Software:
● Built around thousands of predefined business processes that reflect best practices
○ Finance and accounting
○ Human resources
○ Manufacturing and production
○ Sales and marketing
● To implement, firms:
○ Select functions of system they wish to use
○ Map business processes to software processes
■ Use software’s configuration tables for customizing

Business Value of Enterprise Systems:

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

The Supply Chain:

● Network of organizations and processes for:
○ Procuring materials
○ Transforming materials into products
○ Distributing the products
● Upstream supply chain
● Downstream supply chain
● Internal supply chain

Supply Chain Management:

● Inefficiencies cut into a company’s operating costs
○ Can waste up to 25% of operating expenses
● Just-in-time strategy
○ Components arrive as theta re needed
○ Finished goods shipped after leaving assembly line
● Safety stock: buffer for lack of flexibility in supply chain
● Bullwhip effect
○ Information about product demand gets distorted as it passes from one entity to next
actress supply chain
Figure 9.3 - The Bullwhip Effect:

Supply Chain Management Software:

● Supply chain planning systems
○ Model existing supply chain
○ Enable demand planning
○ Optimize sourcing, manufacturing plans
○ Establish inventory levels
○ Identify transportation modes
○ “What if” a situation happens??
● Supply chain execution systems
○ Manage flow of products through distribution centers and warehouses
○ “What if” - addressing it and how to solve this issue

More effort into planning compared to execution

Global Supply Chains and the Internet:

● Global supply chain issues
○ Greater geographical distances, time differences
○ Participants from different countries
■ Different performance standards
■ Different legal requirements
● Internet helps manage global complexities
○ Warehouse management
○ Transportation management
○ Logistics
○ Outsourcing

Demand-Driven Supply Chains: From Push to Pull Manufacturing and Efficient Customer Response:
● Push-based model (build-to-stock)
○ Earlier SCM systems
○ Schedules based on best guesses of demand
 ○ Manufacturer starts to produce product based on what they think the consumer would
want
● Pull-based model (demand-driven)
○ Web-based
○ Customer orders trigger events in supply chain
○ Start the production process when a customer orders to product
● Internet enables move from sequential supply chains to concurrent supply chains
○ Complex networks of suppliers can adjust immediately

Figure 9.4 - Push-Based Vs. Pull-Based Supply Chain Models:

Business Value of Supply Chain Management Systems:

● Match supply to demand
● Reduce inventory levels
● Improve delivery service
● Speed product time to market
● Use assets more effectively
○ Total supply chain costs can be 75% of operation budget
● Increase sales

Customer Relationship Management:

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

Figure 9.6 - Customer Relationship Management (CRM):

● Sales
○ Telephone sales
○ Web sales
○ Retail store sales
○ Field sales
 ● Marketing
○ Campaign data
○ Content
○ Data analysis
● Service
○ Call center data
○ Web self-service data
○ Wireless data

Customer Relationship Management Software:

● Packages range from niche tools to large-scale enterprise applications
● More comprehensive packages have modules for:
○ Partner relationship management (PRM)
■ Integrating lead generation, pricing, promotions, order configurations, and
availability
■ Tools to assess partners’ performances
○ Employee relationship management (ERM)
■ Setting objectives, employe performance management, performance-based
compensation, employee training
● CRM packages typically include tools for:
○ Sales force automation (SFA)
■ Sales Force
● Niche tool
● Most dominant…
■ Sales prospect and contact information
■ Sales quotes generation capabilities
○ Customer service
■ Assigning and managing customer service requests
■ Web-based self-service capabilities
○ Marketing
■ Capturing prospect and customer data, scheduling and tracking direct-marketing
mailings or e-mail
■ Cross-selling

Operational and Analytical CRM:

● Operational CRM
○ Customer-facing applications
○ Sales force automation call center and customer service support
○ Marketing automation
● Analytical CRM
○ Based on data warehouses populated by operational CRM systems and customer touch
points
○ Analyzes customer data (OLAP, data mining, etc.)
○ Customer lifetime value (CLTV)
Figure 9.10 - Analytical CRM Data Warehouse:

Business Value of CRM Systems:

● Business value of CRM systems
○ Increased customer satisfaction
○ Reduced direct-marketing costs
○ More effective marketing
○ Lower costs for customer acquisition/retention
○ Increased sales revenue
● Churn rate
○ Number of customers who stop using or purchasing products or services from a company
○ Indicator of growth or decline of firm’s customer base

Enterprise Application Challenges:

● Expensive to purchase and implement
○ Many projects experience cost overruns
○ Long development times
● Technology changes
● Business process changes
● Organizational learning changes
● Switching costs, dependence on software vendors
● Data standardization, management, cleansing

Next Generation Enterprise Applications:

● Enterprise solutions/suites
○ Make applications more flexible, web-enabled, integrated with other systems
● Cloud-based versions
● Functionality for mobile platform
● Versions also available for small and medium-sized businesses

Social CRM
● Incorporating social networking technologies
● Company social networks
 ● Monitor social media activity; social media analytics
● Manage social and web-based campaigns
Business Intelligence
● Inclusion of BI with enterprise applications
● Flexible reporting, ad hoc analysis, “what-if” scenarios, digital dashboards, data visualization, AI
machine learning

Lecture 5 - Foundations of Business Intelligence: Databases and Information Management

Problems of managing data:

● Effective information systems provide accurate, timely and relevant information
○ Accurate: free of errors
○ Timely: available to decision makers when needed
○ Relevant: useful for the types of decisions to be made
● Data management is essential to organize and maintain information within systems, so that the
information continues to be:
○ Accurate, timely and relevant

File Organization Terms and Concepts:

Physical data organizations

● Database: group of related files
● File: group of records of same type
● Record: group of related fields
● Field: group of characters as word(s) or number(s)
Logical data concepts
● Entity: person, place, thing on which we store information
● Attribute: each characteristic, or quality, describing entity

Figure 6.1 The Data Hierarchy:

Problems with the Traditional File Environment:
● Files maintained separately by different departments
● Data redundancy
● Data inconsistency
● Program-data dependence
● Lack of flexibility
● Poor security
● Lack of data sharing and availability

Database Management Systems:

● Database
○ Serves many applications by centralizing data and controlling redundant data
● Database management system (DBMS)
○ Ex. Oracle, SQL server, DB2
○ Interfaces between applications and physical data files
○ Separates logical and physical views of data
○ Solves problems of traditional file environment
■ Controls redundancy
■ Eliminates inconsistency
■ Uncouples programs and data
■ Enables organization to centrally manage data and data security

Relational DBMS:
● Represent data as two-dimensional tables
● Each table contains data on entity and attributes
● Table: grid of columns and rows
○ Rows (tuples): records for different entities
○ Fields (columns): represents attribute for entity
○ Key field: field used to uniquely identify each record
○ Primary key: field in table used for key fields
○ Foreign key: primary key used in second table as look-up field to identify records from
original table
Figure 6.4 Relational Database Table:

Operations of a Relational DBMS:

● Three basic operations used to develop useful sets of data
○ SELECT
■ Creates subset of data of all records that meet stated criteria
○ JOIN
■ Combines relational tables to provide user with more information than available
in individual tables
○ PROJECT
■ Creates subset of columns in table, creating tables with only the information
specified
● SELECT, JOIN, PROJECT are Structured Query Language (SQL) programming statement

Capabilities of Database Management Systems:

● Data definition capability
● Data dictionary
○ Collection of names, definitions, and attributes about data elements in database, IS, etc
● Querying and reporting
○ Data manipulation language
■ Structured Query Language (SQL)
● Many DBMS have report generation capabilities for creating polished reports (Microsoft Access)
Figure 6.7 Example of an SQL Query:

Designing Databases:
● Conceptual design vs. Physical design
○ Conceptual
■ Least detail, establishes the entities, attributes, and their relationship
○ Physical
■ More detailed, specific implementation of the data model
● Normalization
○ Streamlining complex groupings of data to minimize redundant data elements and
awkward many-to-many relationships
● Referential Integrity
○ Rules used by RDBMS to ensure relationships between tables remain consistent
● Entity-relationship diagram (ERD)
○ Illustrates how “entities” such as people, objects or concepts relate to each other
● A correct data model is essential for a system serving the business well

Non-Relational Databases and Databases in the Cloud:

● Non-relational databases: “No SQL”
○ More flexible data model
○ Data sets stored across distributed machines
○ Easier to scale
○ Handle large volumes of unstructured and structured data
● Databases in the cloud
○ Appeal to start-ups, smaller businesses
○ Amazon Relational Database Service, Microsoft SQL Azure
○ Private clouds

Blockchain:
● Distributed ledgers in a peer-to-peer distributed database
● Maintains a growing list of records and transactions shared by all
● Encryption used to identify participants and transactions
● Used for financial transactions, supply chain, and medical records
● Foundation of Bitcoin, and other crypto currencies
Figure 6.12 How Blockchain Works:

The Challenge of Big Data:

● Big data
○ Massive sets of unstructured/semi-structured data from web traffic, social media,
sensors, and so on
● Volumes too great for typical DBMS
○ Petabytes, exabytes of data
● Can reveal more patterns, relationships and anomalies
● Requires new tools and technologies to manage and analyze

The Challenge & Ethics of Big Data:

● Surveillance Capitalism – freely given individual data (from Facebook, Amazon, Apple, Netflix,
Google, LinkedIn, Twitter, etc.) creates unprecedented value for those who capture the data and
distill the information
● This drives up the market value of these companies
● The ability to predict consumption trends, using freely given individual (big) data allows these
companies to sell more, influence more, dominate more
● Can government elections (ex. Trump in 2016, Johnson in 2019) be influenced by Big Data
analysis?

Business Intelligence Infrastructure:

● Array of tools for obtaining information form separate systems and from big data
● Data warehouse
○ Stores current and historical data from many core operational transaction systems
○ Consolidates and standardizes information for use across enterprise, but data cannot be
altered
○ Provides analysis and reporting tools
● Data marts
○ Subset of data warehouse
○ Typically focus on single subject or line of business
● Hadoop
○ Enables distributed parallel processing of big data across inexpensive computers
 ○ Key services
■ Hadoop Distributed File System (HDFS): data storage
■ MapReduce: breaks data into clusters for work
■ Hbase: no SQL database
○ Used Yahoo, NextBio
● In-Memory Computing
○ Used in big data analysis
○ Uses computer's main memory (RAM) for data storage to avoid delays in retrieving data
from (older and slower) disk storage
○ Can reduce hours/days of processing to seconds
○ Requires optimized hardware
● Analytic Platforms
○ High-speed platforms using both relational and non-relational tools optimized for large
datasets

Analytical Tools: Relationships, Patterns, Trends:

● Tools for consolidating, analyzing, and providing access to vast amount of data to help users
make better business decisions
○ Multidimensional data analysis (OLAP)
○ Data mining
○ Text mining
○ Web mining

Online Analytical Processing (OLAP):

● Supports multidimensional data analysis
○ Viewing data using multiple dimensions
○ Each aspect of information (product, pricing, cst, region, time period) is different
dimension
○ Ex. How many washers sold in the East in June compared with other regions
○ Ex. How many students passed ITM100, yet failed excel in the past 10 years, and did not
graduate
● OLAP enables rapid, online answers to AD HOC queries

Data Mining:
● Finds hidden patterns, relationships in datasets
○ Ex. customer buying patterns
● Infers rules to predict future behaviour
● Types of information obtainable from data mining:
○ Associations
○ Sequences
○ Classifications
○ Clustering
○ Forecasting

Text Mining and Web Mining:

● Text mining
○ Extracts key elements from large unstructured data sets
○ Sentiment analysis software
● Web mining
 ○ Discovery and analysis of useful patterns and information from web
○ Web content mining
○ Web structure mining
○ Web usage mining

Establishing an Information Policy:

● Firm’s rules, procedures, roles for sharing, managing, standardizing data
● Data administration
○ Establishes policies and procedures to manage data
● Data governance
○ Deals with policies and processes for managing availability, usability, integrity, and
security of data, especially regarding government regulations (ex. Canada law: Personal
Information Protection and Electronics Document Act – PIPEDA)
● Database administration
○ Creating and maintaining database

Ensuring Data Quality:

● More than 25% of critical data in Fortune 1000 company databases are inaccurate or incomplete
● Before new database is in place, a firm must:
○ Identify and correct faulty data
○ Establish better routines for editing data once database in operation
● Data quality audit
● Data cleansing

Lecture 6 - Enhancing Decision Making

What are the Different Types of Decisions, and How does the Decision-Making Process Work?
● Business value of improved decision making
○ Improving hundreds of thousands of “small” decisions adds up to large amount value for
the business
● Types of decisions
○ Unstructured: Decision maker must provide judgement, evaluation, and insight to solve
problem
■ Ex. Should we build a new TRSM building? Same location or new location?
○ Structured: Repetitive and routine; involve definite procedure for handling so they do not
have to be treated each time as new
■ Ex. Who should get a passing grade in ITM100? Who should get an A, who
should get a D?
○ Semi-Structured: Only part of problem has clear-cut answer provided by accepted
procedure
■ Ex. Who should be admitted into the co-op program?
● Senior Managers
○ Make many unstructured decisions
● Middle Managers
○ Make more structured decisions but these may include unstructured components
● Operational managers and employees
○ Make more structured decisions
Figure 12.1 Information requirements of Key Decision-Making Groups in a Firm (University Example)

The Decision-Making Process

● Intelligence
○ Discovering, identifying, and understanding the problems/opportunities occurring in the
organization
● Design
○ Identifying and exploring solutions to the problem
● Choice
○ Choosing among solution alternatives
● Implementation
○ Making chosen alternative work and continuing to monitor how well solution is working

Stages in Decision Making:

1. Intelligence
a. Problem discovery: what is the problem?
2. Design
a. Solution discovery: what are the possible solutions?
3. Choice
a. Choosing solutions: what is the best solution?
4. Implementation
a. Solution testing: is the solution working? Can we make it work better?

Managerial Roles
● Information systems can only assist in some of the roles played by managers
● Classical model of management: five functions
○ Planning, organizing, coordinating, deciding, and controlling
● More contemporary behavioural models
○ Actual behaviour of managers appears to be less systematic, more informal, less
reflective, more reactive, and less well organized than in classical model

Mintzberg’s 10 Managerial Roles

● Interpersonal Roles
 ○ Figurehead
○ Leader
○ Liaison
● Informational Roles
○ Nerve center
○ Disseminator
○ Spokesperson
● Decisional Roles
○ Entrepreneur
○ Disturbance handler
○ Resource allocator
○ Negotiator

Real-World Decision Making

● Three main reasons why investments in IT do not always produce positive results
○ Information Quality
■ High-quality decisions require high-quality information
○ Management Filters
■ Managers have selective attention and have variety of biases that reject
information that does not conform to prior conceptions
○ Organizational inertia and politics
■ Strong forces within organizations resist making decisions calling for major
change

High-Velocity Automated Decision Making

● Made possible through computer algorithms precisely defining steps for a highly structured
decision
○ Humans taken out of decision
● For example: High-speed computer trading programs
○ Trades executed in 30 milliseconds
● Require safeguards to ensure proper operation and regulation

What is Business Intelligence (BI)?

● Business Intelligence
○ Infrastructure for collecting, storing, analyzing data produced by business
○ Databases, data warehouses, data marts
● Business Analytics
○ Tools and techniques for analyzing data
○ OLAP, statistics, models, data mining
● Business Intelligence Vendors
○ Create business intelligence and analytics purchased by firms

The Business Intelligence Environment

● Six elements in the business intelligence environment
1. Data from the business environment
2. Business intelligence infrastructure
3. Business analytics toolset
4. Managerial users and methods
5. Delivery platform – MIS, DSS, ESS
 6. User interface
a. Data visualization tools

Business Intelligence and Analytics Capabilities

● Goal is to deliver accurate real-time information to decision makers
● Main analytic functionalities of Bi systems
○ Production reports
○ Parameterized reports
○ Dashboard/scorecards
○ Ad hoc query / search / report creation
○ Drill down
○ Forecasts, scenarios, models

Predictive Analytics
● Uses variety of data, techniques to predict future trends and behaviour patterns
○ Statistical analysis
○ Data mining
○ Historical data
○ Assumptions
● Incorporated into numerous BI applications for sales, marketing, fiance, fraud detection, health
care
○ Credit scoring
○ Predicting responses to direct marketing campaigns

Big Data Analytics

● Big Data: Massive datasets collected from social media, online and in-store customer data, and
so on
● Help create real-time, personalized shopping experiences for major online retailers
● Smart Cities
○ Public records
○ Sensors, location data from smartphones
○ Ability to evaluate effect of one service change on system

Operational Intelligence and Analytics

● Operational Intelligence: Business activity monitoring
● Collection and use of data generated by sensors
● Internet of Things
○ Creating huge streams of data from web activities, sensors, and other monitoring devices
● Software for operational intelligence and analytics enable companies to analyze their big data

Location Analytics and Geographic Information Systems

● Location analytics
○ Ability to gain business insight from the location (geographic) component of data
■ Mobile phones
■ Sensors, scanning devices
■ Map data
● Geographic information systems (GIS)
○ Ties location-related data to maps
○ Example: For helping local governments calculate response times to disasters
Figure 12.4 Business Intelligence Users

Support for Semi-Structured Decisions

● Decision-support systems
○ Support for semi-structured decisions
● Use mathematical or analytical models
● Allow varied types of analysis
○ “What-if” analysis
○ Sensitivity analysis
■ Determines how change in values of independent variables affect a dependant
variable
○ Backward sensitivity analysis
○ Multidimensional analysis / OLAP
■ Ex. pivot tables

Decision Support for Senior Management

● ESS: Decision support for senior management
○ Help executives focus on important performance information
● Balanced scorecard BSC method
○ Measures outcomes on four dimensions
■ Financial
■ Business process
■ Customer
■ Learning and growth
○ Key performance indicators (KPIs) measure each dimension
■ Quantifiable measurements used to gauge company long-term performance
■ Financial, operational, etc

The Balanced Scorecard Framework:

● Financial
○ Cash flow
○ ROI
○ Financial result
○ Return on capital employed
 ○ ROE
● Customers
○ Delivery performance
○ Quality performance
○ Customer satisfaction
○ Customer loyalty
○ Customer retention
● Business Processes
○ Number of activities
○ Process execution time
○ Accident ratios
○ Resource efficiency
○ Equipment downtime
● Learning and Growth
○ Investment rate
○ Illness rate
○ Internal promotions %
○ Employee turnover
○ Gender ratios

Decision Support for Senior Management

● Business performance management (BPM)
○ Translates firm’s strategies (ex. Differentiation, low-cost producer, scope of operation)
into operational targets
○ KPIs developed to measure progress toward targets
● Data for ESS
○ Internal data from enterprise applications
○ External data such as financial market databases
○ Drill-down capabilities

Lecture 7 - Telecommunications, the Internet and Wireless Technology

Networking and Communication Trends

● Convergence
○ Telephone networks and computer networks converging into single digital network using
internet standards
○ VOIP is becoming the new convergence
● Broadband
○ More than 76% U.S. internet users have broadband access
● Broadband wireless
○ Voicemail data communication are increasingly taking place over broadband wireless
platforms

What Is a Computer Network?

● Two or more connected computers
○ (Remember Metcalfe’s Law)
● Major components in simple network
○ Client and server computers
○ Network interfaces (NICs)
 ○ Connection medium
○ Network operating system (NOS)
○ Hubs, switches, routers
● Software-defined networking (SDN)
○ Functions of switches and routers managed by central program

Figure 7.1 Components of a Simple Computer Network

Networks in Large Companies

● Hundreds of LANs linked to firm-wide corporate network
● Various powerful servers
○ Website, corporate intranet, extranet
○ Backend systems
● Mobile wireless LANs (Wi-Fi networks)
● Video conferencing system — ex. Zoom
● Telephone network, wireless cell phones

Key Digital Networking Technologies

● Client/server computing
○ Distributed computing model
○ Clients linked through network controlled by network server computer
○ Server sets rules of communication for network and provides every client with an address
so others can find it on the network
○ Has largely replaced centralized mainframe computing
○ The Internet: largest implementation of client/server computing
● Packet switching
○ Method of clicking digital messages into parcels (packets), sending packets along
different communication paths as they become available, and then reassembling packets
at destination
○ Previous circuit-switched networks required assembly of complete point-to-point circuit
(very expensive)
○ Packet switching more efficient use of network’s communications capacity
● TCP/IP and connectivity
 ○ Protocols: rules that govern transmission of information between two points
○ Transmission Control Protocol/Internet Protocol (TCP/IP)
■ Common worldwide standard that is basis for the Internet
○ Department of Defense reference model for TCP/IP
■ Four layers
● Application layer
● Transport layer
● Internet layer
● Network interface layer
○ Important Note: TCP/IP is the global protocol standard that allows any computer to
communicate with other computers using the 4 layer model

Types of Networks
● Signals: Digital vs. Analog
○ Modem: translates digital signals into analog form (and vice versa)
● Types of networks
○ LANs
■ Ethernet
■ Client/server vs. Peer-to-peer
○ Wide area network (WANs)
○ Metropolitan area networks (MANs)
○ Campus area networks (CANs)

Figure 7.5 Functions of the Modem

Transmission Media and Transmission Speed

● Physical transmission media
○ Twisted pair wire (CAT5, CAT6)
○ Coaxial cable
○ Fiber optic cable
○ Wireless transmission media and devices
■ Satellites
■ Cellular systems
● Bandwidth: Transmission speed
○ Bits per second (bps)
○ Hertz — varies for each transmission media
○ Bandwidth — range of frequencies on single channel; greater bandwidth = greater
transmission capacity

What is the Internet?

 ● The Internet
○ World’s most extensive network
○ Internet service providers (ISPs)
■ Provide connections
■ Types of Internet connections
● Dial-up: 56.6 Kbps = old
● Digital subscriber line (DSL/FIOS): 385 Kbps = 40 Mbps
● Cable Internet connections: 1-50 Mbps
● Satellite
● T1/T3 lines: 1.54-45 Mbps; leased & dedicated

Internet Addressing and Architecture

● Each device on Internet assigned Internet Protocol (IP) address
● 32-bit number, ex. 207.46.250.119
● The Domain Name System (DNS)
○ Converts IP addresses to domain names
○ Hierarchical structure
○ Top-level domains

Figure 7.6 The Domain Name System

Internet Architecture and Governance

● Network service providers NSPs (some are governments)
○ Own truck lines (high-speed backbone networks)
● ISPs - Regional telephone and cable TV companies
○ Provide regional and local access
● No one owns the Internet, it has no formal management
● Professional organizations and government bodies establish Internet standards
○ IAB - Internet Architecture Board
○ ICANN - Internet corporation for Assigned Names and Numbers
○ W3C - World Wide Web Consortium (HTML standards)
The Future Internet: IPv6 and Internet 2
● IPv6
○ New addressing scheme for IP numbers
○ Will provide more than a quadrillion new addresses
○ Not compatible with current IPv5 addressing
● Internet 2
○ Advanced networking consortium
■ Universities, businesses, government agencies, other institutions
○ Developed high-capacity 100 Gbps testing network
○ Testing leading-edge new technologies for internet

Internet Services and Communication Tools

● Internet services
○ E-mail
○ Chat and instant messaging
○ Newsgroups
○ Telnet
○ File Transfer Protocol (FTP)
○ World Wide Web
● Voice over IP (VoIP)
○ Digital voice communication using IP, packet switching
○ User 1 sends a message that is coded to User 2
■ User 2 gateway decodes the message
● Unified communications
○ Communications systems that integrate voice, data, e-mail, conferencing
● Virtual private network (VPN)
○ Secure, encrypted, private network run over Internet
○ Lower cost than dedicated private network
○ PPTP —Point to Point Tunnelling Protocol
○ Tunneling - packets of data encrypted and wrapped inside IP packets

The Web
● The most popular Internet service, with universally accepted standards for storing, retrieving,
formatting and displaying information by using a client/server architecture
● Hypertext
○ Hypertext Markup Language (HTML)
○ Hypertext Transfer Protocol (HTTP):
■ Primary protocol used to send data between web browser and server
○ Uniform resource locator (URL): domain name/directory path/webpage name
● Web servers
○ Software for locating and managing web pages

Searching for Information on the Web

● Mobile search
● Semantic search
● Social search
● Visual search
● Intelligent agent shopping bots
 ● Search engine marketing
● Search engine optimization (SEO)
The Future Web
● More tools to make sense of trillions of pages on the Internet
● Pervasive web
● Internet of Things (IoT)
● App Internet
● Increased cloud computing and SaaS
● Ubiquitous mobile connectivity
● Greater seamless mess of web as a whole

Cellular Systems
● Competing Standards
○ CDMA: United States only
○ GSM: Rest of world, AT&T, T-Mobile
● Third-generation (3G) networks
○ 144 Kbps
○ Suitable for e-mail access, web browsing
● Fourth-generation (4G) networks
○ Up to 100 Mbps
○ Suitable for Internet video
○ LTE and WiMax
● 5G Networks
○ Gigabit capacity
○ Currently under development and early test deployments
○ IPhone 12 is 5G capable , Bell, Telus, Rogers offer 5G connectivity in some cities

Wireless Computer Networks and Internet Access

● Bluetooth (802.15)
○ Links up to 8 devices in 10-m area using low-power radio-based communication
○ Useful for personal networking (PANs)
● Wi-Fi (802.11)
○ Set of standards: 802.11
○ 30 m maximum distance (???)
○ Used for wireless LAN and wireless Internet access
○ Use access points: device with radio receiver/transmitter for connecting wireless devices
to a wired LAN
○ Hotspots: one or more access points in public place to provide maximum wireless
coverage for a specific area
○ Weak security features
● WiMax (802.16)
○ Wireless access range of 31 miles
○ Require WiMax antennas

Radio Frequency Identification (RFID)

● Use tiny tags with microchips containing data about an item and location
● Tag antennas to transmit radio signals over short distances to special RFID readers
● Common uses:
○ Automated toll-collection
 ○ Tracking goods in a supply chain
● Reduction in cost of tags making RFID viable for many firms

Wireless Sensor Networks (WSNs)

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

Lecture 8 - E-commerce: Digital Markets, Digital Goods

E-Commerce Today
● E-Commerce: use of the Internet and Web to transact business
● Began in 1995 and grew exponentially; still stable even in a recession
● Companies that survived the dot-com bubble now thrive
● The new e-commerce: social, mobile, local
● Move from desktop to smartphone
● E-commerce keeps growing year-to-year

Why E-Commerce is Different

1. Ubiquity
○ Marketspace is virtual
○ Transaction costs reduced
2. Global Reach
○ Transactions cross cultural and national boundaries
3. Universal Standards
○ One set of technology standards: Internet standards
4. Richness
○ Supports video, audio, and text messages
5. Interactivity
6. Information Density
○ Greater price and cost transparency
○ Enables price discrimination
7. Personalization/Customization
○ Technology permits modification of messages, goods
8. Social Technology
○ Promotes user content generation and social networking

Key Concepts in E-Commerce – Digital Markets and Digital Goods in a Global Marketplace
● Internet and digital markets have changed the way companies conduct business
● Information asymmetry reduced
● Menu costs, search and transaction costs reduced
● Dynamic pricing enabled
● Switching costs
● Delayed gratification
● Disintermediation
○ Elimination of the middle man
Figure 10.2 The Benefits of Disintermediation to the Consumer
● Disintermediation
○ Taking out the middle distributor/retailer to reduce the prices of products

Digital Goods
● Goods that can be delivered over a digital network
● Cost of producing first unit is almost entire cost of product
● Costs of delivery over the Internet very low
● Marketing costs remain the same; pricing highly variable
● Industries with digital goods are undergoing revolutionary changes
○ Book publishers, Music labels, Movie and TV production
○ Future possibilities
■ Sports?
■ Education?
Types of E-Commerce
● Three major types
○ Business-to-consumer (B2C)
■ Ex. Amazon
■ Retail
○ Business-to-Business (B2B)
■ Ex. ChemConnect
■ A business buying materials from a business
○ Consumer-to-Consumer (C2C)
■ Ex. ebay, Kijiji
■ Person selling to another person
● E-commerce can be categorized by platform
○ Mobile commerce (m-commerce) has become common
● Basic Business Model definition
○ What and how you will make a business profitable

E-Commerce Revenue Models

● Advertising
● Sales
● Subscription
○ Recurring payment made in exchange for the use of product/service
● Free/Freemium (but nothing is ever really cost free)
● Transaction Fee
○ Charging a fee on each item sold by a seller (ebay)
● Affiliate

How Has E-Commerce Transformed Marketing?

● Internet provides new ways to identify and communicate with customers
● Long tail marketing
● Internet advertising formats
● Behavioural targeting
○ Tracking online behaviour of individuals
● Programmatic ad buying
 ● Native advertising

Social E-Commerce and Social Network Marketing

● Social E-commerce based on digital social graph
● Features of social e-commerce driving its growth
○ Newsfeed
○ Timelines
○ Social sign-on
○ Collaborative shopping
○ Network notification
○ Social search (recommendations)
● Social media
○ Fastest growing media for branding and marketing
● Social network marketing
○ Seeks to leverage individuals’ influence over others
○ Targeting a social network of people sharing interests and advice
○ Facebook’s “Like” button
○ Social networks have huge audiences
● Social shopping sites
● Wisdom of crowds
● Crowdsourcing
○ Obtaining mass amounts of information by using large number of social media user data
● Personalization
○ Using consumer data to generate ads that target a consumers specific likes
● Information Asymmetry
○ One party is in possession of more information than the other
● Intellectual Property (IP)
○ Intangible assets owned and protected by a company of individual
○ Copyrights, information, etc

How Has E-Commerce Affected Business-to-Business Transactions

● U.S. B2B trade in 2019 is $13.5 trillion
○ U.S. B2B e-commerce in 2018 is $6.2 trillion
● Internet and networking helps automate procurement
● Variety of Internet-enabled technologies used in B2B
○ Electronic data interchange (EDI)
○ Private industrial networks (private exchanges)
○ Net marketplaces
○ Exchanges

Electronic Data Interchange (EDI)

● Computer-to-Computer exchange of standard transactions such as invoices, purchase orders
● Major industries have EDI standards
○ Define structure and information fields of electronic documents
● More companies are moving toward web-enabled private networks
○ Allow them to link to a wider variety of firms than EDI allows
○ Enable sharing a weirder range of information
Figure 10.6 Electronic Data Interchange (EDI)

New Ways of B2B Buying and Selling

● Private industrial networks
○ Private exchanges
○ Large firm using a secure website to link to suppliers and partners
● Net Marketplaces (e-hubs)
○ Single digital marketplace for many buyers and sellers
○ Mat focus on direct of indirect goods
○ May be vertical or horizontal marketplaces
● Exchanges
○ Independently owned third-party Net marketplaces for spot purchasing

What is the Role of M-Commerce in Business, and What are the Most Important M-Commerce
Applications?
● M-commerce in 2017 is 35% of all e-commerce
● Fastest growing form of e-commerce
○ Growing at 30% or more per year
● Main areas of growth
○ Mass market retailing (Amazon, eBay, etc.)
○ Sales of digital content (music, TV, etc.)
○ In-app sales to mobile devices

Location-Based Services and Applications

● Used by 74% of smartphone owners
● Based on GPS map services
● Geosocial services
○ Where friends are
● Geo advertising
○ What shops are nearby
● Geo information services
○ Price of house you are passing

Other Mobile Commerce Services

● Financial account management apps
○ Banks, credit card companies
 ● Mobile advertising market
○ Google and Facebook are largest markets
○ Ads embedded in games, videos, and mobile apps
○ 55% of online retailers have m-commerce websites

What Issues Must Be Addressed When Building an E-Commerce Presence?

● Most important management challenges
○ Developing clear understanding of business objectives
○ Knowing how to choose the right technology to achieve those objectives
● Develop an e-commerce presence map
○ Four areas: websites, e-mail, social media, offline media
● Develop a timeline: milestones
○ Breaking a project into discrete phases

Lecture 9 - Securing Information Systems

System Security
● Information systems are mission critical for many organizations
● Without proper security measures, these systems would be next to impossible to use and take
advantage of
● Security
○ Policies, procedures, and technical measures prevent unauthorized access, alteration,
theft, damage to information systems

Security and Controls

● IT/IS Security measures are a special case of organizational controls
● Controls
○ Methods, policies, and organizational procedures that ensure safety of organization’s
assets; accuracy and reliability of its accounting records; and operational adherence to
management standards

What Is the Business Value of Security and Control?

● Failed computer systems can lead to significant or total loss of business function
● Firms now are more vulnerable than ever
○ Confidential personal and financial data
○ Trade secrets, new products, strategies
● A security breach may cut into a firm’s market value almost immediately
● Inadequate security and controls also bring forth issues of liability

Safety vs. Security

● Safety risks
○ Natural cause, errors, random
○ Power outage, Human error, Phishing
● Security risks
○ Human caused, malicious, targeted
○ Espionage

Acceptable Use Policy:

● Rules related to organizations IT security policies
 ● Includes:
○ Accessing restricted information, changing access data, etc

Business Continuity Planning:

● Establishes protocols and creates prevention and recovery systems in case of cyber-attacks\

Disaster Recovery Planning:

● Formal document created that contains instructions on how to respond to unplanned incidents
● Such as:
○ Natural disasters, power outages, cyber attacks

Why Are Systems Vulnerable?

● Accessibility of networks
● Hardware problems
○ Breakdowns, configuration errors, damage from improper use or crime
● Software problems
○ Programming errors, installation errors, unauthorized changes
● Disasters
● Use of networks/computers outside of firm’s control
● Loss and theft of portable devices

Internet Vulnerabilities
● Network open to anyone
● Size of Internet means abuses can have wide impact
● Use of fixed Internet addresses with cable / DSL modems creates fixed targets for hackers
● Unencrypted VOIP
● E-mail, P2P, IM
○ Interception
○ Attachments with malicious software
○ Transmitting trade secrets

Wireless Security Challenges

● Radio frequency bands easy to scan
● SSIDs (service set identifiers)
○ Identify access points, broadcast multiple times, can be identified by sniffer programs
● War driving
○ Eavesdroppers drive by buildings and try to detect SSID and gain access to network and
resources
○ Once access point is breached, intruder can gain access to networked drives and files

Malware:
● Any type of malicious software designed to harm or exploit

Malicious Software: Computer Viruses

● Rogue software programs that attach to other programs in order to be executed, usually without
user knowledge or permission
● Deliver a “payload”
● Can spread by email attachments
Malicious Software: Worms
● Programs that copy themselves from one computer to another over networks
○ Can destroy
■ Data
■ Programs
■ And halt operations of computer network

Malicious Software: Trojan Horses

● A software program that appears to be begin, but then does something unexpected
● Often “transports” a virus into a computer system
● Name is based on Greek ruse during Trojan War

Malicious Software: SQL Injection, Spyware

● SQL Injection Attacks
○ Hackers submit data to Web forms that sends rogue SQL query to database to perform
malicious acts (e.g. delete segments of the database)
● Spyware
○ Keyloggers
○ Other types
■ Reset browser homepage
■ Redirect search requests
■ Slow computer performance by taking up memory

Hackers and Computer Crime

● Hackers
○ Individuals who attempt to gain unauthorized access to a computer system
● Cracker
○ A hacker with criminal intent
● Cyber-Vandalism
○ Intentional disruption, defacement, destruction of website or corporate information system

Spoofing and Sniffing

● Spoofing
○ Masquerading as someone else, or redirecting a Web link to an unintended address
○ Redirecting Web link to address different from intended one, with site masquerading as
intended destination
● Sniffing
○ An eavesdropping program that monitors information travelling over a network
○ Enables hackers to steal proprietary information such as e-mail, company files, and so on

Denial of Service (DoS) Attacks

● DoS
○ Hackers flood a server with false communications in order to crash the system
● Distributed DoS
○ Uses numerous computers to launch a DoS
● Often use Botnets
○ Deliver 90% of world spam, 80% of world malware
○ Pushdo spamming botnet
■ Pushdo-infected computers sent as many as 7.7 billion spam messages per day
Computer Crime
● Violation of criminal law that involves a knowledge of technology for perpetration, investigation, or
prosecution
● Computer may be target of crime
○ Breaching confidentiality of protected computerized data
○ Accessing a computer system without authority
● Computer may be instrument of crime
○ Theft of trade secrets
○ Using e-mail for threats or harassment
● Identity Theft
○ A crime in which the imposter obtains key pieces of personal information
○ Phishing: setting up fake Websites or sending email messages that look legitimate, and
using them to ask for confidential data
○ Pharming: redirecting users to a bogus website
● Click fraud: bogus clicks to drive up pay-per-clicks
● Cyberterrorism and Cyberwarfare
○ Exploitation of systems by terrorists

Internal Threats: Employees

● Security threats often originate inside an organization
● Inside knowledge
● Sloppy security procedures
○ User lack of knowledge
● Social Engineering
○ Tricking employees into revealing their passwords by pretending to be legitimate
members of the company in need of information
● Both end users and information systems specialists are source of risk

Software Vulnerability
● Commercial software contains flaws that create security vulnerabilities
○ Bugs (program code defects)
○ Zero defects cannot be achieved because complete testing is not possible with large
program
○ Flaws can open networks to intruders
● Patches
○ Small pieces of software to repair flaws
○ Exploits often created faster than patches can be released and implemented

Information Systems Controls

● May be automated or manual
● General Controls
○ Govern design, security, and use of computer programs and security of data files in
general throughout organization
○ Software controls, hardware controls, computer operations controls, data security
controls, system development controls, administrative controls
● Application Controls
○ Controls unique to each computerized application
○ Input controls, processing controls, output controls
Risk Assessment
● Determines level of risk to firm if specific activity or process is not properly controlled
○ Types of threat
○ Probability of occurrence during year
○ Potential losses, value of threat
○ Expected annual loss

Security Policy
● Ranks information risks, identifies acceptable security goals, and identifies mechanisms for
achieving these goals
● Drives other policies
○ Acceptable use policy (AUP)
■ Defines acceptable uses of firm’s information resources and computing
equipment
● Identity Management
○ Identifying valid users
○ Controlling access

Disaster Recovery Planning and Business Continuity Planning

● Disaster Recovery Planning
○ Devises plans for restoration of disrupted services
● Business Continuity Planning
○ Focuses on restoring business operations after disaster
● Both types of plans needed to identify firm’s most critical systems
○ Business impact analysis to determine impact of an outage
○ Management must determine which systems restored first

The Role of Auditing

● Information Systems Audit
○ Examines firm’s overall security environment as well as controls governing individual
information systems
● Security Audits
○ Review technologies, procedures, documentation, training, and personnel
● List and rank control weaknesses and the probability of occurrence
● Assess financial and organization impact of each threat

Tools and Technologies for Safeguarding Information Systems

● Identity Management Software
○ Automates keeping track of all users and privileges
○ Authenticates users, protecting identities, controlling access
● Authentication
○ Password systems
○ Tokens
○ Smart cards
○ Biometric authentication
○ Two-factor authentication
● Encryption
○ Changing or encoding data to protect it from being stolen, changed or compromised
 ● Two-Factor Authentication
○ System that requires 2 separate forms of identification
■ Phone app, email, text
● Firewall
○ Combination of hardware and software that prevents unauthorized users from accessing
private networks
○ Technologies include:
■ Packet filtering
■ Stateful inspection
■ Network address translation (NAT)
■ Application proxy filtering
● Intrusion Detection System
○ Monitors hot spots on corporate networks to detect and deter intruders
● Antivirus and Anti-Spyware Software
○ Checks computers for presence of malware and can often eliminate it as well
○ Requires continual updating
● Unified Threat Management (UTM) Systems
○ A comprehensive security management products

Securing Wireless Networks

● Wired Equivalent Privacy (WEP) Security
○ Static encryption keys are relatively easy to crack
○ Improved if used in conjunction with VPN
● WiFi Protection Access (WPA2) Specification
○ Replaces WEP with stronger standards
○ Continually changing, longer encryption keys

Lecture 10 - Emerging Technologies

What is the Role of Knowledge Management Systems in Business?

● Knowledge management systems among fastest growing areas of software investment
● Information economy
 ○ 37% U.S. labour force: knowledge and information workers
○ 55% U.S. GDP from knowledge and information sectors
● Substantial part of firm’s stock market value is related to intangible assets:
○ Knowledge, brands, reputations, unique business processes
● Well-executed knowledge-based projects can produce extraordinary ROI

Important Dimensions of Knowledge

● Data, information, knowledge, and wisdom
● Tacit knowledge and explicit knowledge
● Important dimensions of knowledge
○ Knowledge is a firm asset
○ Knowledge has different forms
○ Knowledge has a location
○ Knowledge is situational - when & how
● Knowledge-based core competencies
○ Key organizational assets
● Knowing how to do things effectively and efficiently in
ways others cannot duplicate
○ Prime source of profit and competitive
advantage
○ Ex. Having a unique build-to-order production system
● Organizational Learning
○ Process in which organizations gain experience through collection of data, measurement,
trial and error, and feedback

The Knowledge Management Value Chain

● Knowledge Management
○ Set of business processes developed in an organization to create, store, transfer, and
apply knowledge
● Knowledge management value chain
○ Each stage adds value to raw data and information as they are transformed into usable
knowledge
■ Knowledge acquisition
● Documenting tacit and explicit knowledge
● Storing documents, reports, presentations, best practices
● Unstructured documents (ex. emails)
● Developing online expert networks
● Creating knowledge
● TRacking data from TPS and external sources
■ Knowledge storage
● Databases
● Document management systems
● Role of management
■ Knowledge dissemination
● Portals, wikis
● Email, instant messaging
● Search engines, collaboration tools
● A deluge of information?
 ● Training programs, informal networks, shared management experience
help managers focus attention on important information
■ Knowledge application
● New business practices
● New products and services
● New markets

Building Organizational and Management Capital: Collaboration, Communities of Practice, and Office
Environments
● Developing new organizational roles and responsibilities for the acquisition of knowledge
● Chief knowledge officer executives
● Dedicated staff / knowledge managers
● Communities of practice (COPs)
○ Informal social network of professionals and employees
○ Activities include education, online newsletters, sharing knowledge
○ Reduce learning curves of new employees

Types of Knowledge Management Systems (KMS)

● Enterprise-wide knowledge management systems
○ General-purpose firmwide efforts to collect, store, distribute, and apply digital content and
knowledge
● Knowledge work systems (KWS)
○ Specialized system built for engineers, scientists, other knowledge workers charged with
discovering and creating new knowledge
● Intelligent techniques
○ Diverse group of techniques such as data mining used for various goals: discovering
knowledge, distilling knowledge, discovering optimal solutions

What Types of Systems Are Used for Enterprise-Wide Knowledge Management?

● 3 Major types of knowledge in an enterprise
○ Structured documents
■ Reports, presentations
■ Formal rules
○ Semi-structured documents
■ Emails, videos
○ Unstructured / Tacit knowledge
■ 80% of an organization’s business content is semi-structured or unstructured

What is Artificial Intelligence?

● Grand vision
○ Computer hardware and software systems that are as “smart” as humans
○ This vision has eluded computer programmers and scientists
● Realistic vision
○ Systems that take data inputs, processes them, and produce outputs (like all software
programs) and that can perform many complex tasks that would be difficult or impossible
for humans to perform
● AI Challenges
○ Anderson Cancer Centre - U Texas
○ Moonshot - Cure for Cancer (not successful)
 ○ One step at a time - improved customer service (successful)
● Examples:
○ Recognize millions of faces in seconds
○ Interpret millions of CT scans in minutes
○ Analyze millions of financial records
○ Detect patterns in vet large BIg Data databases
○ Improve their performance over time (“learn”)
○ Navigate a car in certain limited conditions
○ Respond to questions from humans (natural language); speech activated assistants like
Siri, Alexa, and Cortana
● Major Types of AI
○ Expert systems
○ Machine learning
○ Neural networks and deep learning networks
○ Genetic algorithms
○ Natural language Processing
○ Computer vision
○ Robotics

Capturing Knowledge: Expert Systems

● Capture tacit knowledge in very specific and limited domain of human expertise
● Capture knowledge as set of rules
● Typically perform limited tasks
○ Diagnosing malfunctioning machine
○ Determining whether to grant credit for loan
● Used for discrete, highly structured decision making
● Knowledge base: Set of hundreds or thousands of rules
● Inference engine: Strategy used to search knowledge base
○ Forward chaining
○ Backward chaining

Machine Learning
● How computer programs improve performance without explicit programming
○ Recognize patterns
○ Experience
○ Prior learnings (database)
○ Supervised vs. unsupervised learning
● Contemporary examples
○ Google searches
○ Recommender systems (Amazon, Netflix)
● Examples
○ Ametros: uses IBM Waston (learns from each semester of student interaction)

Neural Networks
● Find patterns and relationships in massive amounts of data too complicated for humans to
analyze
● “Learn” patterns by searching for relationships, building models, and correcting over and over
again
 ● Human “train” network by feeding it data inputs for which outputs are known, to help neural
network learn solution from human experts
● Used in medicine, science, and business for problems in pattern classification, prediction,
financial analysis, control & optimization
● Example: Weather & Climate
○ Humans are very good at predicting weather
○ Humans train neural networks to learn how to predict weather
○ Weather models become foundation for climate change models

Natural Language Processing (NLP)

● Understand, and speak in natural language. Read natural language and translate
● Typically today based on machine learning, aided by very large databases of common phrases
and sentences in a given language
○ Ex. Google Translate
● Spam filtering systems
● Customer call centre interactions: What is the customer’s problem? What solutions worked in the
past? Also in IT help-desk option
● Digital assistants: Siri, Alexa, Cortana, Google Assistant
● Not useful for an ordinary common sense human conversation but can be very useful in limited
domains (ex. Interacting with your car’s heating system, phone calls and text messages while
driving)
● Examples: Ametros
○ Uses IBM Watson
○ Processes your conversations through NLP

Genetic Algorithms
● Useful for finding optimal solution for specific problem by examining very large number of
possible solutions for that problem
● Conceptually based on process of evolution
○ Search among solution variables by changing and reorganizing component parts using
processes such as inheritance, mutation, and selection
● Used in optimization problems (minimization of costs, efficient scheduling, optimal jet engine
design) in which hundreds or thousands of variables exist
● Able to evaluate many solution alternatives quickly

Computer Vision Systems

● Digital image systems that create a digital map of an image (like a face or street sign), and
recognize this image in large databases of images in real time
● Every image has a unique pattern of pixels
● Facebook’s DeepFace can identify friends in photos across their system, and the entire web
● Autonomous vehicles can recognize signs, road markers, people, animals, and other vehicles
with good reliability
● Industrial machine (robot) vision
● Passport control at airports
● Identifying people in crowds
● Example: Cadillac Fairview
○ Used Anonymous Video Analytics using facial recognition technology
○ Ruled illegal by Canadian Privacy Commissioner
Robotics
● Design, construction, and operation of machines that can substitute for humans in many factory,
office, and home applications
● Generally programmed to perform specific and detailed actions in limited domains (ex. Robots
spray paint autos, and assemble certain parts, welding, heavy assembly movement)
● Used in dangerous situations like bomb disposal
● Surgical robots are expanding their capabilities

Intelligent Agents
● Works without direct human intervention to carry out repetitive, predictable tasks
○ Deleting junk emails
○ Finding cheapest airfare
● Use limited built-in or learned knowledge base
○ Some are capable of self-adjustment
■ Ex. Siri
● Chatbots
● Agent-based modelling applications
○ Model behaviour of consumers, stock markets, and supply chains
○ Used to predict spread of epidemics

Enterprise Content Management Systems

● Help capture, store, retrieve, distribute, preserve documents and semi-structured knowledge
● Bring in external sources
○ News feeds, research
● Tools for communication and collaboration
○ Blogs, wikis
● Key problem: developing taxonomy
● Digital asset management systems

Locating and Sharing Expertise

● Provide online directory of corporate experts in well-defined knowledge domains
● Search tools enable employees to find appropriate expert in a company
● Social networking and social business tools for finding knowledge outside the firm
○ Saving
○ Tagging
○ Sharing web pages

Augmented Reality (AR):

● Interactive experience that combines real world with computer generated content

Virtual Reality (VR):

● Simulated experience using 3D imaging in a virtual space

Digital Asset Management System:

● Creates centralized system for organizations to organize and access their media assets
● Works as a library
○ Ex. Videos, audio files, etc

Learning Management Systems (LMS)

 ● Provide tools for management, delivery, tracking, and assessment of employee learning and
training
● Support multiple modes of learning
○ CD-ROM, web-based classes, online forums
● Automates selection and administration of courses
● Assembles and delivers learning content
● Measures learning effectiveness
● Massively open online courses (MOOCs)
○ Web course open to large numbers of participants

3D Printing:
● Using printer that produces objects from a computer into real life

Knowledge Workers and Knowledge Work

● Knowledge Workers
○ Researchers, designers, architects, scientists, engineers who create knowledge for the
organization
○ Three key roles
■ Keeping organization current in knowledge
■ Serving as internal consultants regarding their areas of expertise
■ Acting as change agents, evaluating, initiating, and promoting change projects
● Knowledge work systems
○ Systems for knowledge workers to help create new knowledge and integrate that
knowledge into business

Requirements of Knowledge Work Systems

● Sufficient computing power for graphics, complex calculations
● Powerful graphics and analytical tools
● Communications and document management
● Access to external databases
● User-friendly interfaces
● Optimized for tasks to be performed (design engineering, financial analysis)

Examples of Knowledge Work Systems

● CAD (computer-aided design)
○ Creation of engineering or architectural designs
○ 3D printing
● Virtual reality systems
○ Simulate real-life environments
○ 3D medical modelling for surgeons
○ Augmented reality (AR) systems - overlay data and images
■ Ex. Football markers
○ Virtual Reality (VR) systems
■ Ex. TMU visit-tours

What Are the Business Benefits of Using Intelligent Techniques for Knowledge Management?
● Intelligence techniques: used to capture individual and collective knowledge and to extend
knowledge base
○ To capture tacit knowledge: expert systems, case-based reasoning, fuzzy logic
 ○ Knowledge discovery: neural networks and data mining
○ Generating solutions to complex problems: genetic algorithms
○ Automating tasks: intelligent agents
● Artificial intelligence (AI) technology:
○ Computer-based systems that emulate human behaviour

Lecture 10.2 - Trends in Computer Hardware and Trends in Software Platforms

Hardware Platform Trends

● The mobile digital platform
● Consumerization of IT and BYOD
● Virtualization
● Cloud computing
● Green computing
● Quantum computing

The Mobile Digital Platform

● Smartphones
● Netbooks
● Tablet computers
● Digital e-book readers (Kindle)
● Wearable devices

Wearable Devices
● Transforms the way we live
○ Fitness, wellness & healthcare
○ Infotainment (information & entertainment): smart glasses
○ Fashion and Military

Consumerization of IT and BYOD

● Consumerization
○ Technology emerges in the consumer market and then spreads into business
organizations
● BYOD: Bring Your Own Device
○ Forces businesses and IT departments to rethink how IT equipment and services are
acquired and managed

Virtualization
● Presents computing resources so that they can be accessed in ways that are not restricted by
configuration
● Allows single physical resources to act as multiple resources
○ Ex. Run multiple instances of OS
● Reduces hardware and power expenditures
● Facilitates hardware centralization
● Software-defined storage (SDS)

Cloud Computing
● Off-load peak demand for computing power to remote, large-scale data processing centers
● Pay only for the computing power they use, as with an electrical utility
 ● Excellent for firms with spiked demand curves caused by seasonal variations in consumer
demand
○ Ex. Holiday shopping
● Saves firms from purchasing excessive levels of infrastructure
● Data permanently stored in remote servers, accessed and updated over the Internet by users

Cloud Computing Services

● Infrastructure as a service (IaaS)
○ Customers use processing, storage, networking resources to run their information
systems
○ They pay for only the computing capacity they use
● Platform as a service (PaaS)
○ Customers use infrastructure and programming tools to develop their own applications
■ Ex. Blue mix
● Software as a service (SaaS)
○ Customers use software hosted on a vendor’s cloud
○ Ex. Google Apps

Cloud Computing
● A loud can be private or public
○ Amazon Web Service (AWS)
● A private cloud is operated only for an organization
● Concerns include
○ Security
○ Availability
○ Users become dependant not he cloud provider

Cloud Computing Growth and Share

● IMG on Slide 12

Green Computing
● Practices and technologies for manufacturing, using, disposing of computing and networking
hardware
● Reducing power consumption a high priority
● Data centers use as much energy as the output of 30 nuclear power plants

Green Computing Example

● IMG on Slide 14

Quantum Computing
● Uses quantum physics to represent and operate on data
● Dramatic increases in computing speed
● While conventional computers handle bits of data either as 0 or 1, quantum computing can
process bits as 0,1 or both simultaneously
○ Allows to solve business and scientific problems millions of times faster

Software Platform Trends

● Open-source software
● Software for the web: Java, HTML, and HTML5
 ● Web services and service-oriented architecture
● Software outsourcing and cloud services

Open-source Software
● Open-source software is free and can be modified by users
● Developed and maintained by a worldwide network of programmers and designers under the
management of user communities
● Examples
○ Apache web server, Mozilla Firefox, OpenOffice
○ Linux is the most widely used open-source software program. (An OS derived from Unix)

Software for the Web: Building Web Applications

● Java: one of the most prominent OO languages, both for PC and mobile environments
○ Java Virtual Machine
■ Used to convert Java code to the native language of a computer
● Python
○ Used for building cloud computing applications
● Objective-C
○ Predecessor to Swift
● Swift
○ One of the most popular mobile app languages for IOS

Software for the Web

● Hypertext Markup Language (HTML)
○ The language used to create or build web page
■ HTML5 - embed audio, video, other elements
● Markup Language
○ A language that uses tags to annotate the information in a document
● Tag
○ The syntactic element in a markup language that annotate the information in a document

Apps and Mashups

● Apps
○ Small pieces of software that run on the Internet, on your computer, or on your
smartphone
○ Generally delivered over the Internet
● Mashups
○ Combinations of two or more online applications, such as combining mapping software
(Google Maps) with local content

Web Services and Service-Oriented Architecture

● Service-Oriented Architecture (SOA)
○ Set of self-contained services that communicate with each other to create a working
software application
○ Software developers reuse these services in other combinations to assemble other
applications as needed
● Web Services: software components that exchange information using Web standards and
languages
 ○ XML: Extensible Markup Language
○ Tagging allows computers to process data automatically

Software Outsourcing and Cloud Services

● Three external sources for software
1. Software packages and enterprise software
a. Prewrittin commercially available set of software
2. Software Outsourcing
3. Cloud-based software services and tools
a. Salesforce.com
b. Service Level Agreements (SLAs): formal agreement with service providers

Lecture 11 - Competitive Strategies Using Information Systems

Porter’s Competitive Forces Model

Why do some firms become leaders in their industry?
● Micheal Porter's competitive forces model
○ Provides general view of firm, its competitors, and environment
● Five competitive forces shape fate of firm:
1. Traditional Competitors
2. New Market Entrants
3. Substitute Products and Services
4. Customers
5. Suppliers
● Traditional Competitors
○ All firms share market space with competitors who are continuously devising new
products, services, efficiencies, and switching costs
● New Market Entrants
○ Some industries have high barriers to entry, for example: computer chip business
○ New companies have new equipment, younger workers, but little brand recognition
● Substitute Products and Services
○ Substitute customers might use if your prices become too high, for example: iTunes
substitutes for CDs
● Customers
○ Can customers easily switch to competitor’s products? Can they force businesses to
compete on price alone in transparent marketplace?
● Suppliers
○ Market power of suppliers when firm cannot raise prices as fast as suppliers

Information System Strategies for Dealing with Competitive Forces

● Four generic strategies for dealing with competitive forces, enabled by using IT:
○ Low-cost Leadership
○ Product Differentiation
○ Focus on Market Niche
○ Strengthen customer and supplier intimacy
● Low-cost Leadership
○ Produce products and services at a lower price than competitors
○ Example: Walmart’s efficient customer response system
● Product Differentiation
 ○ Enable new products or services, greatly change customer convenience and experience
○ Example: Google, Nike
○ Mass Customization - customer experience management
● Focus on Market Niche
○ Use information systems to enable a focused strategy on a single market niche;
specialize
○ Example: Hilton Hotels’ On Q system
● Strengthen Customer and Supplier Intimacy
○ Use information systems to develop strong ties and loyalty with customers and suppliers
○ Increase switching costs
○ Examples: Toyota, Amazon

The Internet’s Impact on Competitive Advantage

● Transformation or threat to some industries
○ Ex. travel agency, printed encyclopedia, media
● Competitive forces still at work, but rivalry more intense
● Universal standards allow new rivals, entrants to market
● New opportunities for building brands and loyal customer bases

Smart Products and the Internet of Things

● Internet of Things (IoT)
○ Growing use of internet-connected sensors in products
● Smart Products
○ Fitness equipment, health trackers
● Expand Product Differentiation Opportunities
○ Increasing rivalry between competitors
● Raise switching costs
● Inhibit new entrants
● May decrease power of suppliers

The Business Value Chain Model

● Firm as series of activities that add value to products or services
● Highlights activities where competitive strategies can best be applied
○ Primary activities vs. Support activities
● At each stage, determine how information systems can improve operational efficiency and
improve customer and supplier intimacy
● Utilize benchmarking, industry best practices
Figure 3.9 The Value Chain Model

Low Cost Leadership:

● Business prioritizes reducing the cost of production to offer low prices

Product differentiation:
● Characteristics that make your product stand out to the target audience

Market Niche:
● Promote their products to small specific audience
● Serving a unique market with specific needs and preferences

Customer and Supplier Intimacy:

● Supplier wants to get closer and understand customer needs and wants better

Extending the Value Chain: The Value Web

● Firm’s value chain is linked to value chains of suppliers, distributors, customers
● Industry value chain
● Value web
○ Collection of independent firms using highly synchronized IT to coordinate value chains
to produce product or service collectively
○ More customer driven, less linear operation than traditional value chain

Synergies
● When output of some units are used as inputs to others, or organizations pool markets and
expertise
● Ex. Merger of Bank of NY and JP Morgan Chase
● Purchase of YouTube by Google
Core Competencies
● Activity for which firm is world-class leader
● Relies on knowledge, experience, and sharing this across business units
● Ex. Procter & Gamble’s intranet and directory of subject matter experts

Network-Based Strategies
● Take advantage of firm’s abilities to network with one another
● Include use of:
○ Network economics
○ Virtual company model
○ Business ecosystems

Network Economics
● Marginal cost of adding new participant almost zero, with much greater marginal gain
● Value of community grows with size
● Value of software grows as installed customer base grows
● Compare to traditional economics and law of diminishing returns

Virtual Company Model

● Virtual Company
○ Uses networks to ally with other companies
○ Creates and distributes products without being limited by traditional organizational
boundaries or physical locations
● Example: Li & Fung
○ Manages production, shipment of garments for major fashion companies
○ Outsources all work to thousands of suppliers

Business Ecosystems and Platforms

● Industry sets of firms providing related services and products
● Platforms
○ Microsoft, Facebook
● Keystone firms
● Niche firms
● Individual firms can consider how IT will help them become profitable niche players in large
ecosystems

Challenges Posed by Strategic Information Systems

● Sustaining competitive advantage - Difficult to do
○ Competitors can retaliate and copy strategic systems
■ FedEx parcel tracking system
■ American Airlines SABRE system
■ Citibank’s ATM system
○ Systems may become tools for survival
● Aligning IT with business objectives - Important to do
○ Performing strategic systems analysis
■ Structure of industry
■ Firm value chains
IT Business Alignment
● The research on IT and business performance has found that
○ (a) the more successfully a firm can align information technology with its business goals,
the more profitable it will be and
○ (b) only one-quarter of firms achieve alignment of IT with the business
● About half of a business firm’s profits can be explained by alignment of IT with business

Strategic Systems Analysis:

What is the structure of the industry in which the firm is located?

1. What is the structure of the industry in which the firm is located?
2. What are some of the competitive forces at work in the industry? Are there new entrants to the
industry? What is the relative power of suppliers, customers, and substitute products and
services over prices?
3. Is the basis of competition quality, price, or brand?
4. What are the direction and nature of change within the industry? From where are the momentum
and change coming?
5. How is industry currently using information technology? Is the organization behind or ahead of the
industry in its application of information systems?

What are the business, firm, and industry value chains for this particular firm?
1. How is the company creating value for the customer – through lower prices and transaction costs
or higher quality? Are there any places in the value chain where the business could create more
value for the customer and additional profit for the company?
2. Does the firm understand and manage its business processes using the best practices available?
Is it taking maximum advantage of supply chain management, customer relationship
management, and enterprise systems?
3. Does the firm leverage its core competencies?
4. Is the industry supply chain and customer base changing in ways that benefit or harm the firm?
5. Can the firm benefit from strategic partnerships, value webs, ecosystems, or platforms?
6. Where in the value chain will information systems provide the greatest value to the firm?

Have we aligned IT with our business strategy and goals?

1. Have we correctly articulated our business strategy and goals?
2. Is IT improving the right business processes and activities to promote this strategy?
3. Are we using the right metrics to measure progress toward those goals?

Lecture 12 - Ethical and Social Issues in Information Systems

What Ethical, Social, and Political Issues are Raised by Information Systems?
● Recent cases of failed ethical judgment in business
○ Wells Fargo, Volkswagen, General Motors, Takata Corporation
○ Lifelabs, Cadillac Fairview, Tim Hortons, Indigo
○ In many, information systems used to bury decisions from public scrutiny
● Ethics
○ Principles of right and wrong that individuals, acting as free moral agents, use to make
choices to guide their behaviours
 ● Information systems raise new ethical questions because they create opportunities for:
○ Intense social change, threatening existing distributions of power, money, rights, and
obligations
● New opportunities for crime
○ New kinds of crime

A Model for Thinking About Ethical, Social, and Political Issues

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

Five Moral Dimensions of the Information Systems

● Information rights and obligations
● Property rights and obligations
● Accountability and Control
● System Quality
● Quality of Life

Key Technology Trends That Raise Ethical Issues

● Computing power doubles every 18 months
● Data storage costs rapidly decline
● Data analysis advances
● Networking advances
● Mobile device growth impact

Advances in Data Analysis Techniques

● Profiling
○ Combining data from multiple sources to create dossiers of detailed information on
individuals
● Non obvious relationship awareness (NORA)
○ Combining data from multiple sources to find obscure hidden connections that might help
identify criminals or terrorists

Surveillance Capitalism:

“Describes a dystopian business model, predicated on turning the details of our lives into corporate profit.
This is most famously or notoriously demonstrated by Facebook and Google.”

● “Information capitalism aims to predict and modify human behavior as a means to produce
revenue and market control.”
● “Google has not been subject to any meaningful public oversight”
● “Anticipatory conformity”
● “Google knows far more about its populations than they know about themselves” .. “Surveillance
capitalism thrives on the public’s ignorance.”

Basic Concepts: Responsibility, Accountability, and Liability

● Responsibility
 ○ Accepting the potential costs, duties, and obligations for decisions that you make
● Accountability
○ Mechanisms for identifying responsible parties – who took action? Who is responsible?
● Liability
○ Permits individuals (and firms) to recover damages done to them
● Due Process
○ Laws are well-known and understood, with an ability to appeal to higher authorities

1. Information systems are filtered through social institutions, organizations and individuals.
Systems do not have impacts themselves
2. Responsibility for the consequence of technology falls clearly on the institutions, organizations
and individual managers who choose to use the technology
3. In an ethical, political society, individuals and others can recover damages done to them through
a set of laws characterized by due process

Ethical Analysis
● Five-step process for ethical analysis
1. Identify and clearly describe the facts
2. Define the conflict or dilemma and identify the higher-order values involved. (ex. Privacy,
Protection of property, etc)
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the potential consequences of your options
● Never decide on your own! – work with specialist such as lawyers, police and senior executives

Candidate Ethical Principles

1. Golden Rule - Aristotle
a. Do unto others as you would have them do unto you
2. Immanuel Kant’s Categorical Imperative
a. If an action is not right for everyone to take, it is not right for anyone
3. Slippery Slope Rule
a. If an action cannot be taken repeatedly, it is not right to take at all
4. Utilitarian Principle (John S. Mill, Jeremy Bentham)
a. Take the action that achieves the higher or greater value
5. Risk Aversion Principle
a. Take the action that produces the least harm or potential cost
6. Ethical “No Free Lunch” Rule
a. Assume that virtually all tangible and intangible objects are owned by someone unless
there is a specific declaration otherwise
7. The New York Times Test
a. What if my decision were to be published tomorrow on the front page of the New York
Times? If I (and my organization) are comfortable with this, then we have made the right
decision
b. Another version of this test…Would you be comfortable facing family and friends when
your decision is made public?

Real-World Ethical Dilemmas

● One set of interests pitted against another
● Examples
 ○ Monitoring employees: Right of company to maximize productivity of workers versus
workers’ desire to use Internet for short personal tasks
○ Facebook monitors users and sells information to advertisers and app developers
○ In June 2022, Tim Hortons was required to stop tracking customers by the Office of the
Privacy Commissioner of Canada

Information Rights: Privacy & Freedom in the Internet Age

● Privacy
○ Claim of individuals to be left alone, free from surveillance or interference from other
individuals, organizations, or state; claim to be able to control information about yourself
● In Canada, privacy protected by the Charter of Rights & Freedoms, the Privacy Act and PIPEDA
● In the United States, privacy protected by:
○ First Amendment (freedom of speech and association)
○ Fourth Amendment (unreasonable search and seizure)
○ Additional federal statutes (ex. Privacy Act of 1974)
● Personal Information Privacy, Electronics Document Act (PIPEDA) - Canadian Law
○ Sets ground rules for how private-sector organizations collect, use and disclose personal
information for-profit
1. Accountability
2. Identifying Purposes
3. Consent
4. Limiting Collection
5. Limiting Use, Disclosure, and Retention
6. Accuracy
7. Safeguards
8. Openness
9. Individual Access
10. Challenging Compliance
● Fair Information Practices
○ Set of principles governing the collection and use of information
■ Basis of most U.S., Canadian and European privacy laws
○ Used to drive changes in US privacy legislation
■ COPPA - Children’s Online Privacy Protection Act
● Requirements to website operators directed to children under 13 years
old
■ HIPAA - Health Insurance Portability and Protection Act
● Requires the creation of national standards to protect sensitive patient
health information from being disclosed without consent
○ Canada Privacy Legislation
■ FIPPA (Ontario) and PIPEDA (Federal)

June 2022: Four new Canadian Laws Proposed

● The federal government has proposed four new laws regarding cybersecurity and privacy,
currently in Parliament (Bills C-26 and C-27)
● Critical Cyber Systems Protection Act (CCSPA) Bill-26 will protect critical cyber systems in the
telecom, financial, energy, transportation and infrastructure sectors
● Bill C-27 will replace PIPEDA with:
○ The Consumer Privacy Protection Act (CPPA)
○ The Personal Information and Data Protection Tribunal Act (PIDPTA)
 ○ Artificial Intelligence and Data Act (AIDA)

EU General Data Protection Regulation (GDPR)

● Requires ambiguous explicit informed consent of customer
● EU member nations cannot transfer personal data to countries without similar privacy protection
○ Applies across all EU countries to any firms operating in EU or processing data on EU
citizens or residents
○ Strengthens right to be forgotten
● Privacy Shield: all countries processing EU data must conform to GDPR requirements
● Heavy Fines: 4% of global daily revenue

Internet Challenges to Privacy

● Cookies
○ Identify browser and track visits to site
○ Super cookies (flash cookies)
● Web Beacons (web bugs)
○ Tiny graphic embedded in emails and web pages
○ Monitor who is reading email message or visiting site
● Spyware
○ Surreptitiously installed on user’s computer
○ May transmit user’s keystrokes or display unwanted ads
● Google services and behavioral targeting
● The United States allows businesses to gather transaction information and use this for other
marketing purposes
● Opt-out vs. Opt-in model
● Online industry promotes self-regulation over privacy legislation
○ Complex/ambiguous privacy statements
○ Opt-out models selected over Opt-in
○ Online “seals” of privacy principles

How Cookies Identify Web Visitors:

1. The Web server reads the user's Web browser and determines the operating system, browser
name, version number, Internet address, and other information.
2. The server transmits a tiny text file with user identification information called a cookie, which the
user's browser receives and stores on the user's computer.
3. When the user returns to the Web site, the server requests the contents of any cookie it
deposited previously in the user's computer.
4. The Web server reads the cookie, identifies the visitor, and calls up data on the user.

Technical Solutions
● Solutions include:
○ Email encryption
○ Anonymity tools
○ Any-spyware tools
● Overall, technical solutions have failed to protect users from being tracked from one site to
another
○ Browser features
■ “Private” browsing
■ “Do not track” options
Property Rights: Intellectual Property
● Intellectual Property (IP)
○ Tangible and intangible products of the mind created by individuals or corporations
● Protected in four main ways:
1. Copyright - protects creators of intellectual property
2. Patents - protects inventors
3. Trademarks - protects consumer and firms
4. Trade secret - protects ideas not in the public domain

Challenges to Intellectual Property Rights

● Digital media different from physical media
○ Ease of replication
○ Ease of transmission (networks, internet)
○ Ease of alteration
○ Compactness
○ Difficulties in establishing uniqueness
● Digital Millennium Copyright Act (DMCA)

Computer-Related Liability Problems

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

System Quality: Data Quality and System Errors

● What is an acceptable, technologically feasible level of system quality?
○ Flawless software is economically unfeasible
● Three principal sources of poor system performance
○ Software bugs, errors
○ Hardware of facility failures
○ Poor input data quality (most common source of business system failure)

Quality of Life: Equity, Access, Boundaries

● Negative social consequences of systems
● Balancing power: center versus periphery
● Rapidity of change: reduced response time to competition
● Maintaining boundaries: family, work, and leisure
● Dependence and vulnerability
● Computer crime and abuse
○ Computer crime
○ Computer abuse
○ Spam
○ CAN-SPAM Act of 2003
○ Canada Anti-Spam Legislation (CASL)
● Employment
○ Trickle-down technology
○ Reengineering job loss
 ● Equity and Access
○ The digital divide
● Health Risks
○ Repetitive stress injury (RSI)
○ Carpal tunnel syndrome (CTS)
○ Computer vision syndrome (CVS)
○ Techno-stress

Recent Ontario Laws

● Right-to-Disconnect amendment to Employment Standards Act came into effect June 1, 2022,
requires companies with more than 25 people to have disconnect policy
● An example: TMU “Disconnecting from Work Policy”
● October 2022, Ontario implements Electronic Monitoring Policy, requires employers to inform
employees how it is monitoring their actions