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MANAGEMENT INFORMATION SYSTEMS
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9 BRIEF CONTENTS

PART 1: FUNDAMENTALS OF INFORMATION SYSTEMS 2

1 Information Systems: An Overview 2
2 Computers: The Machines Behind Computing 24
3 Database Systems, Data Warehouses, and Data Marts 46
4 Personal, Legal, Ethical, and Organizational Issues of
Information Systems 72
5 Protecting Information Resources 92

PART 2: DATA COMMUNICATION, THE INTERNET,

E-COMMERCE, AND GLOBAL INFORMATION SYSTEMS 118
6 Data Communication: Delivering Information Anywhere and
Anytime 118
7 The Internet, Intranets, and Extranets 144
8 E-Commerce 172
9 Global Information Systems 198

PART 3: IS DEVELOPMENT, ENTERPRISE SYSTEMS,

MSS, IIS, AND EMERGING TRENDS 218
10 Building Successful Information Systems 218
11 Enterprise Systems 242
12 Management Support Systems 262
13 Intelligent Information Systems 284
14 Emerging Trends, Technologies, and Applications 308

Endnotes 333
Index 347
Graphic Compressor/Shutterstock.com

iii
 CONTENTS
Information Technologies at Walmart 15
Part 1 1-6c Porter’s Five Forces Model: Understanding the Business
Environment 16
Fundamentals of Information Systems Information Technologies at Netflix 17
Digital Innovation in Retail Industry Using
Information Technologies 18
1-7 The IT Job Market 18
1-7a CTO/CIO 19
1-7b Manager of Information Systems Services 19
ESB Professional/Shutterstock.com

1-7c Systems Analyst 19

1-7d Network Administrator 19
1-7e Database Administrator 19
1-7f Computer Programmer 19
1-7g Webmaster 19
1-8 Outlook for the Future 20

1 Information Systems: Reviews and Discussions 21

Projects 22
An Overview 2 Are You Ready to Move On? 22
1-1 Computers and Information Systems Case Study 1-1: Using Information Technologies at
in Daily Life 3 Federal Express 23
Smartphones Everywhere and for Everything 4 Case Study 1-2: Mobile Technology: A Key Player for
A New Era of Marketing: YouTube 5 Future Shopping 23
Social Networking and the Vulnerability of Personal
Information 6 2 Computers: The Machines
1-2 Computer Literacy and Information Literacy 7 Behind Computing 24
1-3 The Beginning: Transaction-Processing Systems 7 2-1 Defining a Computer 25
Information Technologies at Domino’s Pizza 8 2-1a Components of a Computer System 26
1-4 Management Information Systems 8 2-2 The History of Computer Hardware and Software 27
1-5 Major Components of an Information System 9 IBM Watson: A Supercomputer with Artificial
1-5a Data 9 Intelligence Capabilities 29
1-5b Database 10 2-3 The Power of Computers 29
1-5c Process 10 2-3a Speed 29
1-5d Information 10 2-3b Accuracy 30
1-5e Examples of Information Systems 11 2-3c Storage and Retrieval 30
1-6 Using Information Systems and Information 2-4 Computer Operations 30
Technologies 11 A Supercomputer in Your Pocket 31
1-6a The Importance of Information Systems 11 2-5 Input, Output, and Memory Devices 31
Information Technologies at The Home Depot 12 2-5a Input Devices 31
Human Resource Information Systems in Action 12 Touchless Computing: The New Paradigm in User
Information Technologies at UPS 13 System Interface 32
1-6b Using Information Technologies for a Competitive 2-5b Output Devices 32
Advantage 14 2-5c Memory Devices 33
iv
 A Popular Application of Cloud Storage: Keeping
Photos Online 36
2-6 Classes of Computers 36
Popular iPad Business Applications 37
2-6a Server Platforms: An Overview 37
Ubiquitous Computing 38
2-7 What Is Software? 38
Office 365: Making Data and Applications
Portable 39
2-7a Operating System Software 39
IOS: The Brain Behind Apple Devices 39
2-7b Application Software 40
2-8 Computer Languages 42
Reviews and Discussions 44
Projects 44
Are You Ready to Move On? 44
Case Study 2-1: Become Your Own Banker 45
Case Study 2-2: iPads: New Productivity Tools for
Service Workers 45
3 Database Systems, Data
Warehouses, and Data
Marts 46
3-1 Databases 47
3-1a Types of Data in a Database 48
BI in Action: Law Enforcement 49
3-1b Methods for Accessing Files 49
3-2 Logical Database Design 50
3-2a The Relational Model 51
3-3 Components of a DBMS 53
3-3a Database Engine 53
3-3b Data Definition 53
3-3c Data Manipulation 53
Graph Databases Move Relational Databases One
Step Forward 54
3-3d Application Generation 55
3-3e Data Administration 55
3-4 Recent Trends in Database Design and Use 55
3-4a Data-Driven Web Sites 55
3-4b Distributed Databases 56
3-4c Object-Oriented Databases 56
3-5 Data Warehouses 57
Data Warehouse Applications at Marriott
International 58
3-5a Input 58
3-5b ETL 58
3-5c Storage 59
3-5d Output 59
3-6 Data Marts 61
Data Mining and the Airline Industry 62
3-7 Business Analytics 62
Mobile Analytics in Action: Airbnb 63
3-8 The Big Data Era 63
Predictive Analytics in Action 64
3-8a Who Benefits from Big Data? 65
3-8b Tools and Technologies of Big Data 65
3-8c Big Data Privacy Risks 65
Big Data in Action 65
3-9 Database Marketing 66
Database Marketing in Action: Caterpillar
Corporation 67
Reviews and Discussions 68
Projects 69
Are You Ready to Move On? 69
Case Study 3-1: Data Mining Helps Students Enroll in
Courses with Higher Chances of Success 70
Case Study 3-2: Data Mining Tools at Pandora Radio 70
4 Personal, Legal, Ethical, and
Organizational Issues of
Information Systems 72
4-1 Privacy Issues 73
Social Networking Sites and Privacy Issues 73
Employee Monitoring: Improving Productivity or
Invasion of Privacy 74
4-1a E-mail 76
4-1b Data Collection on the Web 76
E-Mail and Corporate Data Leakage 77
Facebook Experiments: Marketing
Tools or Unethical Behavior? 78
4-2 Ethical Issues of Information Technologies 78
Ten Commandments of Computer Ethics 79
4-2a Censorship 80
Internet Censorship: A Global Problem 81
4-2b Intellectual Property 81
Software Piracy: A Global Problem 83
4-2c Social Divisions and the Digital Divide 83
Verizon’s Cybersquatting Suit 83
4-3 The Impact of Information Technology in the
Workplace 84
The Digital Divide in Action 84
4-3a Information Technology and Health Issues 85
Health and Social Issues of Online Gaming 86
Contents v
 4-4 Green Computing 87 Are You Ready To Move On? 116
Reviews and Discussions 89 Case Study 5-1: Vulnerabilities of Medical Devices 116
Projects 89 Case Study 5-2: Security Breach at Yahoo! 117
Are You Ready to Move On? 90

Part 2
Case Study 4-1: Telecommuting with a New Twist 90
Case Study 4-2: Privacy and Other Legal Issues at Google 91
Data Communication, the Internet,
5 Protecting Information E-Commerce, and Global Information
Systems
Resources 92
5-1 Risks Associated with Information Technologies 93
5-1a The Costs of Cyber Crime to the U.S. Economy 93

Syda Productions/Shutterstock.com
5-1b Spyware and Adware 93
5-1c Phishing, Pharming, Baiting, Quid Pro Quo, SMiShing,
and Vishing 94
5-1d Keystroke Loggers 94
5-1e Sniffing and Spoofing 94
5-1f Computer Crime and Fraud 94
Challenges of Insiders’ Threats 95

6 Data Communication:
Identity Theft at Internal Revenue Service 96
Types of Hackers 97
5-2 Computer and Network Security: Basic Delivering Information
Safeguards 97
Anywhere and Anytime 118
Nearly All Organizations Get Hacked 98
6-1 Defining Data Communication 119
5-3 Security Threats: An Overview 99
6-1a Why Managers Need to Know About Data
5-3a Intentional Threats 99 Communication 119
Protecting Against Data Theft and Data Loss 101 GoToMeeting: Example of an E-collaboration
Social Engineering Costs Ubiquiti Networks More Tool 120
than $39 Million 102 6-2 Basic Components of a Data Communication
5-4 Security Measures and Enforcement: An System 120
Overview 103 6-2a Sender and Receiver Devices 121
5-4a Biometric Security Measures 103 6-2b Modems 121
Biometrics at Phoebe Putney Memorial Hospital 103 6-2c Communication Media 121
5-4b Nonbiometric Security Measures 104 6-3 Processing Configurations 122
5-4c Physical Security Measures 106 Google Invests in Communication Media 123
5-4d Access Controls 107 6-3a Centralized Processing 123
Lost and Stolen Laptops 108 6-3b Decentralized Processing 123
5-4e Virtual Private Networks 109 6-3c Distributed Processing 123
5-4f Data Encryption 109 6-3d Open Systems Interconnection Model 124
5-4g E-Commerce Transaction Security Measures 111 6-4 Types of Networks 125
5-4h Computer Emergency Response Team 111 6-4a Local Area Networks 125
5-5 Guidelines for a Comprehensive Security System 112 6-4b Wide Area Networks 125
Sarbanes-Oxley and Information Security 113 6-4c Metropolitan Area Networks 126
5-5a Business Continuity Planning 113 6-5 Network Topologies 127
Reviews and Discussions 115 6-5a Star Topology 127
Projects 115 6-5b Ring Topology 127
vi Contents
 6-5c Bus Topology 127 7-4f Financial Institutions 155
6-5d Hierarchical Topology 128 7-4g Software Distribution 155
6-5e Mesh Topology 128 7-4h Healthcare 155
6-6 Major Networking Concepts 129 Electronic Health Records Pay Off for Kaiser
6-6a Protocols 129 Permanente 156
6-6b Transmission Control Protocol/Internet Protocol 129 7-4i Politics 156
6-6c Routing 129 The Internet in 2020 157
6-6d Routers 130 7-5 Intranets 157
6-6e Client/Server Model 131 7-5a The Internet versus Intranets 157
6-7 Wireless and Mobile Networks 133 7-5b Applications of an Intranet 158
7-6 Extranets 159
Mobile Computing and Mobile Apps 134
7-7 New Trends: The Web 2.0 and Web 3.0 Eras 160
6-7a Wireless Technologies 135
7-7a Blogs 161
6-7b Mobile Networks 135
7-7b Wikis 161
Mobile Computing in Action: The Apple iPhone 137
LinkedIn: A Professional Social Networking Site 162
6-8 Wireless Security 137
7-7c Social Networking Sites 162
Privacy and Ethical Issues of Wireless Devices 138
Social Media Applications at Walmart 163
6-9 Convergence of Voice, Video, and Data 138
7-7d Business Application of Social Networks 163
Telepresence: A New Use of Data Communication
7-7e RSS Feeds 163
and Convergence 139
7-7f Podcasting 164
Reviews and Discussions 140
Twitter: Real-time Networking with Your Followers 165
Projects 141
7-7g The Internet2 165
Are You Ready to Move On? 141
7-8 The Internet of Everything and Beyond 166
Case Study 6-1: Data Communication at Walmart 141
The Internet of Everything in Action 168
Case Study 6-2: Protecting the Security and Privacy of
Mobile Devices 142 Reviews and Discussions 169

7 The Internet, Intranets,

Projects 169
Are You Ready to Move On? 170
and Extranets 144 Case Study 7-1: Scotts Miracle-Gro’s Intranet: The
Garden 170
7-1 The Internet and the World Wide Web 145 Case Study 7-2: Social Networking in Support of Small
7-1a The Domain Name System 146 Businesses 171
Major Events in the Development of the Internet 147
7-1b Types of Internet Connections 148
What Is HTML? 149
8 E-Commerce 172
7-2 Navigational Tools, Search Engines, and 8-1 Defining E-Commerce 173
Directories 149 8-1a The Value Chain and E-Commerce 173
7-2a Navigational Tools 150 Twitter Helps Businesses Find Customers 175
7-2b Search Engines and Directories 150 Showrooming and Webrooming 175
7-3 Internet Services 151 8-1b E-Commerce vs. Traditional Commerce 176
7-3a E-Mail 151 8-1c Advantages and Disadvantages of E-Commerce 176
7-3b Newsgroups and Discussion Groups 152 The Home Depot Gets Into E-Commerce 177
7-3c Instant Messaging 152 8-1d E-Commerce Business Models 177
7-3d Internet Telephony 153 E-Commerce in 2020 178
7-4 Web Applications 153 8-2 Major Categories of E-Commerce 179
7-4a Tourism and Travel 153 8-2a Business-to-Consumer E-Commerce 179
7-4b Publishing 153 8-2b Business-to-Business E-Commerce 179
7-4c Higher Education 153 8-2c Consumer-to-Consumer E-Commerce 180
7-4d Real Estate 154 8-2d Consumer-to-Business E-Commerce 180
7-4e Employment 154 8-2e Government and Nonbusiness E-Commerce 180
Contents vii
 8-2f Organizational or Intrabusiness E-Commerce 180
E-Gov in Action: City of Denver, Colorado 181
8-3 B2C E-Commerce Cycle 181
8-4 B2B E-Commerce: A Second Look 182
8-4a Major Models of B2B E-Commerce 182
E-Procurement at Schlumberger 183
B2B E-Commerce Growth and Best Practices 184
8-5 Mobile and Voice-Based E-Commerce 184
Mobile Commerce in Action:
The Fast Food Restaurants 185
8-6 E-Commerce Supporting Technologies 186
8-6a Electronic Payment Systems 186
Challenges in Using Mobile Payment Systems 187
8-6b Web Marketing 187
Mobile Marketing at Starbucks 189
8-6c Mobile Marketing 189
8-6d Search Engine Optimization 189
Challenges in Using Digital Ads 190
8-7 E-commerce and Beyond: Social Commerce 190
Social Commerce at Coca-Cola Company 191
8-8 Hyper-Social Organizations 192
Hyper-Social Organization in Action: Spotify 193
8-9 Social Media Information Systems 193
Reviews and Discussions 195
Projects 195
Are You Ready to Move On? 196
Case Study 8-1: Widespread Applications
of Mobile Ads 196
Case Study 8-2: Bridging the Gap Between E-Commerce
and Traditional Commerce 197
9 Global Information
Systems 198
9-1 Why Go Global? 199
Global Information Systems at Rohm & Haas 200
9-1a E-Business: A Driving Force 200
9-1b Growth of the Internet 200
Making a Company Web Site Global 201
9-1c The Rise of Non-English Speakers on the Internet 201
9-1d Mobile Computing and Globalization 202
9-2 Global Information Systems: An Overview 202
9-2a Components of a Global Information System 203
The Internet and Globalization in Action 204
9-2b Requirements of Global Information Systems 204
Video Conferencing Systems Support
Globalization 205
viii Contents
Globalization in Action: Alibaba 206
9-2c Implementation of Global Information Systems 206
9-3 Organizational Structures and Global Information
Systems 207
9-3a Multinational Structure 207
9-3b Global Structure 207
9-3c International Structure 209
9-3d Transnational Structure 209
9-3e Global Information Systems Supporting Offshore
Outsourcing 209
Global Information System at FedEx 210
9-4 Obstacles to Using Global Information Systems 211
9-4a Lack of Standardization 211
9-4b Cultural Differences 211
9-4c Diverse Regulatory Practices 212
9-4d Poor Telecommunication Infrastructures 212
Privacy Law Differences between the United States
and the European Union 213
9-4e Lack of Skilled Analysts and Programmers 213
Reviews and Discussions 214
Projects 215
Are You Ready to Move On? 215
Case Study 9-1: Global Information Systems at Toyota
Motor Company 216
Case Study 9-2: Information Technologies Support
Global Supply Chain 216
Part 3
IS Development, Enterprise Systems,
MSS, IIS, and Emerging Trends
Peshkova/Shutterstock.com
10 Building Successful
Information Systems 218
10-1 Systems Development Life Cycle: An Overview 219
10-2 Phase 1: Planning 219
 10-2a Formation of the Task Force 221
10-2b Feasibility Study 221
A Feasible Project Becomes Unfeasible 222
10-3 Phase 2: Requirements Gathering and
Analysis 224
10-4 Phase 3: Design 227
10-4a Computer-Aided Systems Engineering 227
10-4b Prototyping 228
10-5 Phase 4: Implementation 229
10-5a It Project Management 230
10-5b Request for Proposal 231
Failed Order Management System at Avon 232
10-5c Implementation Alternatives 233
10-6 Phase 5: Maintenance 235
10-7 New Trends in Systems Analysis and Design 235
10-7a Service-Oriented Architecture 235
10-7b Rapid Application Development 236
10-7c 
Extreme Programming 236
Extreme Programming in Action 236
Agile Methodology at HomeAway, Inc. 237
10-7d Agile Methodology 237
Reviews and Discussions 238
Projects 239
Are You Ready to Move On? 239
Case Study 10-1: Systems Development at SEB Latvia 240
Case Study 10-2: Crowdsourcing Pays Off 240
11 Enterprise Systems 242
11-1 Supply Chain Management 243
11-1a SCM Technologies 244
Supply Chain Management at Coca-Cola
Company 245
Green SCM in Action: Walmart 245
3D Printing in Action: the Medical Field 250
11-2 Customer Relationship Management 251
11-2a CRM Applications 252
CRM at Delta Air Lines 253
11-2b Personalization Technology 253
Amazon’s Personalization Assists Sellers on Its
Marketplace 255
11-3 Knowledge Management 255
Knowledge Management in Action 256
11-4 Enterprise Resource Planning 257
ERP Streamlines Operations at Naghi Group 258
Reviews and Discussions 260
Projects 260
Are You Ready to Move On? 260
Case Study 11-1: ERP at Johns Hopkins Institutions 261
Case Study 11-2: CRM at Starbucks 261
12 Management Support
Systems 262
12-1 Types of Decisions in an Organization 263
12-1a Phases of the Decision-Making Process 263
12-2 Decision Support Systems 266
12-2a Components of a Decision Support System 266
12-2b DSS Capabilities 267
12-2c Roles in the DSS Environment 267
12-2d Costs and Benefits of Decision Support
Systems 268
Decision Support Systems at Family
Dollar 269
12-3 Executive Information Systems 269
12-3a Reasons for Using EISs 270
12-3b Avoiding Failure in Design and Use of EISs 270
12-3c EIS Packages and Tools 271
Executive Information Systems at Hyundai Motor
Company 272
12-4 Group Support Systems 272
Microsoft Office SharePoint Server: A New Type of
Groupware 273
12-4a Groupware 273
Groupware and Health IT 274
12-4b Electronic Meeting Systems 274
Remote Collaboration with Google Apps for
Work 275
New Generations of Electronic Meeting
Systems 275
12-4c Advantages and Disadvantages of GSSs 276
12-5 Geographic Information Systems 276
12-5a GIS Applications 277
GISs for Fighting Disease 278
12-6 Guidelines for Designing a Management Support
System 279
Reviews and Discussions 280
Projects 280
Are You Ready to Move On? 281
Case Study 12-1: UPS Deploys Routing Optimization with
a Big Payoff 281
Case Study 12-2: GPS Technology and Analytics Combat
Crimes 282
Contents ix
 13 Intelligent Information
Systems 284
13-1 What Is Artificial Intelligence? 285
13-1a AI Technologies Supporting Decision Making 285
Computers Understanding Common Sense 286
13-1b Robotics 286
13-2 Expert Systems 288
Medical Robotics in Action 289
13-2a Components of an Expert System 289
13-2b Uses of Expert Systems 291
Expert Systems in Baltimore County Police
Department 292
13-2c Criteria for Using Expert Systems 292
13-2d Criteria for Not Using Expert Systems 292
13-2e Advantages of Expert Systems 293
13-3 Case-Based Reasoning 293
13-4 Intelligent Agents 293
13-4a Shopping and Information Agents 294
13-4b Personal Agents 294
13-4c Data-Mining Agents 294
Intelligent Agents in Action 295
13-4d Monitoring and Surveillance Agents 295
13-5 Fuzzy Logic 295
13-5a Uses of Fuzzy Logic 296
13-6 Machine Learning 297
Fuzzy Logic in Action 297
Neural Networks in Microsoft and the Chicago
Police Department 299
13-7 Genetic Algorithms 299
13-8 Natural-Language Processing 300
13-9 Integrating AI Technologies into Decision Support
Systems 300
NLP in Action: The Healthcare Industry 301
13-10   Contextual Computing: Making Mobile Devices
Smarter 301
AI Technologies for Decision Making 302
Contextual Computing in Action 303
Reviews and Discussions 304
Projects 304
Are You Ready to Move On? 305
Case Study 13-1: AI-Based Software Helps Businesses
Better Understand Customers 305
Case Study 13-2: NLP: Making a Smartphone
Smarter 306
x Contents
14 Emerging Trends, Technologies,
and Applications 308
14-1 Trends in Software and Service Distribution 309
14-1a Pull and Push Technologies 309
14-1b Application Service Providers 310
14-2 Virtual Reality 311
14-2a Types of Virtual Environments 312
14-2b Components of a Virtual Reality System 312
14-2c CAVE 313
14-2d Virtual Reality Applications 313
Virtual Reality at Lockheed Martin 314
14-2e Obstacles in Using VR Systems 315
14-2f Virtual Worlds 315
14-2g Augmented Reality 316
14-3 Radio Frequency Identification: An Overview 317
14-3a RFID Applications 318
Coca-Cola Company Uses RFID-Based Dispensers
for Generating Business Intelligence 318
14-4 Quick Response Codes 319
QR Codes in Action 320
14-5 Biometrics: A Second Look 320
Face Recognition Technology in Action 321
14-6 Trends in Networking 321
14-6a Wi-Fi 321
14-6b WiMAX 322
14-6c Bluetooth 322
14-6d Grid Computing 322
14-6e Utility (On-Demand) Computing 323
14-6f Cloud Computing 323
Cloud Computing in Support of Small
Businesses 325
Edge Computing in Action 327
14-7 Nanotechnology 328
14-8 Blockchain Technology and Cryptocurrency 328
Reviews and Discussions 330
Projects 331
Are You Ready to Move On? 331
Case Study 14-1: Cloud Computing at Intercontinental
Hotels Group (IHG) 332
Case Study 14-2: RFID at Macy’s Department
Store 332
Endnotes 333
Index 347
 PART 1

1 Information Systems:
An Overview
ESB Professional/Shutterstock.com

LEARNING OBJECTIVES
After studying this chapter, you should be able to:

1-1 Discuss common applications of computers and information systems.

1-2 Explain the differences between computer literacy and information literacy.

1-3 Define transaction-processing systems.

1-4 Define management information systems.

After you finish
1-5 Describe the four major components of an information system. this chapter, go to
1-6 Discuss the differences between data and information. PAGE 21 for the
1-7 Explain the importance and applications of information systems in functional areas
of a business.
STUDY TOOLS
1-8 Discuss how information technologies are used to gain a competitive advantage.

1-9 Explain the Five Forces Model and strategies for gaining a competitive advantage.

1-10 Review the IT job market.

1-11 Summarize the future outlook of information systems.

2   PART
PARTONE:
ONE: Fundamentals of Information Systems
This chapter starts with an overview of common
uses for computers Organizations use and information
computers and
systems, explains the information systems difference between
computer literacy and to reduce costs and information literacy,
and then reviews gain a competitive transaction-processing
systems as one of the advantage in the earliest applications
marketplace.
of information systems. Next, the
chapter discusses the components of
a management information system (MIS), including data, databases,
processes, and information, and then delves into how information
systems relate to information technologies. This chapter also covers
the roles and applications of information systems and explains the
Five Forces Model used to develop strategies for gaining a competitive
advantage. Finally, the chapter reviews the IT job market and touches
on the future of information systems.

1-1 COMPUTERS AND and retail stores as well. For example, a point-of-sale
(POS) system speeds up service by reading the universal
INFORMATION SYSTEMS product codes (UPCs) on items in your shopping cart
(see Exhibit 1.1). This same system also manages store
IN DAILY LIFE inventory, and some information systems can even reor-
der stock automatically. Banks, too, use computers and
Organizations use computers and
information systems to reduce costs
and gain a competitive advantage in the Exhibit 1.1
marketplace. Throughout this book,
you will study many information sys-
tem applications. For now, you will look
at some common applications used in
daily life.
Computers and information sys-
tems are all around you. As a student,
you use computers and office suite
software and might take online classes.
Computers are often used to grade your
exam answers and generate detailed
reports comparing the performance of
each student in your class. Computers
hin255/Shutterstock.com

and information systems also calculate

grades and grade point averages (GPAs)
and can deliver this information to you.
Computers and information sys-
tems are commonly used in grocery
CHAPTER 1: Information Systems: An Overview 3
 information systems for generating your monthly state-
ment, running ATM machines, and for many other bank-
ing activities.
Exhibit 1.2
Many workers are now telecommuters who perform
their jobs at home, and others often use their personal
digital assistants (PDAs) to conduct business while on
the go. The most common PDA is a smartphone (such
as an iPhone, Galaxy, Droid, or a BlackBerry). A typical
PDA includes a calendar, address book, and task-listing
programs; more advanced PDAs often allow for wireless
connection to the Internet and have built-in MP3 players.
Smartphones are mobile phones with advanced capabili-
ties, much like a mini-PC. They include e-mail and Web-
browsing features, and most have a built-in keyboard or
an external USB keyboard (see Exhibit 1.2). Increasingly,
tablet computers, such as iPads, are being used as PDAs.
These tablets come with apps (small programs) for com-
mon applications, and they can improve the user’s effi-

Scanrail1/Shutterstock.com
ciency. The information box “Smartphones Everywhere
and for Everything” highlights several popular applica-
tions of smartphones.
The Internet is used for all kinds of activities, from
shopping to learning to working. Search engines and broad-
band communication bring information to your desktop
in seconds. The Internet is also used for social purposes.
With social networking sites—such as Facebook, Twitter,
Google+, LinkedIn, and Foursquare—you can connect

Smartphones Everywhere and for Everything

With the growing number of apps available for both iPhones and Android phones, individuals and businesses are
using their smartphones as a productivity tool and as an intelligent assistant for all sorts of activities. Here are few
popular examples.
Group texting app GroupMe is used for sending a message to a group of employees or customers. The Samsung
iPolis app, a video camera security system, is used to remotely watch the video that monitors the location of a busi-
ness or home. Apps are available to pay bills, update a company’s Web site, market and advertise a product or service,
reach out to customers, and keep in touch with employees from anywhere. Some businesses give out the Google Voice
phone number to customers so that they can text an order. Google’s calendar is used to coordinate events, and
Instagram is used to post photos of new merchandise.1
According to Massimo Marinucci, the owner and president of The Wine Connection, a $20-million business with six
employees, the iPhone does nearly everything for business that a desktop used to do. Using their iPhones, employ-
ees check inventory, view sales for the day, run reports, print, change prices, and change inventory quantities. The
new POS app allows customers to buy immediately as soon as a new wine becomes available.2
Starwood Hotels & Resorts Worldwide, Inc., plans to offer customers of two of its hotels in Harlem, NY, and Cupertino,
CA, a virtual key. Guests can bypass the crowded check-in desk and enter their rooms using their smartphones. Guests
receive a message on Starwood’s app that will unlock their rooms with a tap or twist of their smartphones, using
Bluetooth technology. Marriott International, Inc., also does mobile check-ins at some of their hotels. Loyalty program
customers can check in via their smartphones and then go to a separate check-in desk to pick up a key.3

4 PART ONE: Fundamentals of Information Systems

with friends, family, and colleagues online and meet people
with similar interests and hobbies. Twitter (www.twitter
.com), for example, is a social networking and short-
message service. Users can send and receive brief text
updates, called Tweets. These posts are displayed on one’s
profile page, and other users can sign up to have them deliv-
ered to their in-boxes. As an example, the author of this
textbook sends daily Tweets that consist of links to current
articles about information systems applications, new devel-
opments, breaking news, IT jobs, and case e­ xamples. You
can read these Tweets in Twitter, Facebook, or LinkedIn.
Organizations also use social networking sites to give
customers up-to-date information and how-to support
via videos. These sites can reduce organizations’ costs by
providing an inexpensive medium for targeting a large
customer base.
In addition, people use video-sharing sites to watch
news, sporting events, and entertainment videos. One
of the most popular sites is YouTube (www.youtube
.com). You can upload and share video clips via Web sites,
mobile devices, blogs, and e-mails. Users upload most of
the ­content on YouTube, although media corporations
such as CBS, BBC, Sony Music Group, the Sundance
Channel, and others also provide content. Anyone can
watch videos on YouTube, but you must register to upload
videos. (This book has a YouTube channel on which you
can watch many practical videos related to information
systems.) Businesses are increasingly using YouTube to

In the 21st century, knowledge workers need two types

of knowledge to be competitive in the workplace:
computer literacy and information literacy.

A New Era of Marketing: YouTube

Companies use newspapers, magazines, TV shows, and search engines to promote their products, services, and brands.
YouTube is a popular video-sharing service that can be used as a marketing tool. The videos on YouTube are very well
indexed and organized. They are categorized and sorted by “channels.” The channels range from film and animation to
sports, short movies, and video blogging. Individual YouTube users have used this marketing tool to share videos and sto-
ries. One popular application is watching how-to videos for repairing cars, home appliances, and so forth. Corporations can
also take advantage of this popular platform. YouTube represents a great opportunity for marketers to reach consumers
who are searching for information about a brand or related products and services. The service can also be used as a direct
marketing tool. The following are examples of corporations that are using YouTube to promote their products and services:
Quiksilver—This manufacturer of apparel and accessories, including the Roxy brand, frequently posts new videos of
its products, continually renewing its Web presence.
Ford Models—Since 2006, it has uploaded over 554 videos promoting its brand.
University of Phoenix Online—This site has hundreds of video testimonials, reviews, and documentaries that
promote the university’s degree programs.
The Home Depot—Free content, including practical knowledge and money-saving tips for home improvements
may be found at this site.
Nikefootball—Nike maintains several distinct YouTube channels that cater to specific audiences. Consumers can find
content that is relevant to their needs without having to sift through everything.4,5
However, there are some challenges in using YouTube as an advertising medium. In 2017, several companies, includ-
ing Starbucks, Pepsi, AT&T, Verizon, Johnson & Johnson, Volkswagen, and Walmart pulled YouTube ads after ads were
placed on racist videos or alongside unpleasant videos. Alphabet, the parent company of YouTube, has taken steps
to fix this problem by involving more people in reviewing videos and developing more-sophisticated algorithms to
instruct its computers to eliminate this problem.6

CHAPTER 1: Information Systems: An Overview 5

 addition, these workers will
be able to connect to the rest
of the world to share informa-
tion, knowledge, videos, ideas,
and almost anything else that
can be digitized. Throughout
this book, these opportuni-
ties, as well as the power of
computers and information
systems, are explored.
As you read, keep in
mind that the terms infor-
mation systems and informa-
tion technologies are used

Rawpixel.com/Shutterstock.com
interchangeably. Information
systems are broader in scope
than information technolo-
gies, but the two overlap
in many areas. Both are
used to help organizations
be more c­ompetitive and
promote their products and services. See the information to improve their overall efficiency and e­ ffectiveness.
box “A New Era of Marketing: YouTube,” which high- Information technologies offer many advantages for
lights a few such companies. improving decision making but involve some chal-
So what do all these examples mean to you? Com- lenges, too, such as security and privacy issues. The
puters and information technology will help the knowl- information box “Social Networking and the Vulner-
edge workers of the future perform more effectively and ability of Personal Information” describes one of the
productively, no matter what profession they choose. In potential challenges.

Social Networking and the Vulnerability of Personal Information

The popularity of social networking sites such as Facebook, Twitter, Google+, Snapchat, and Foursquare is on the rise.
As of November 1, 2017, Facebook had 2.07 billion monthly active users, and the number is increasing on a daily basis.7
But so is the potential risk. According to an InfoWorld study, over half of all users of social networks in this country are
putting themselves at risk by posting information that could be misused by cybercriminals. Many social networkers
post their full birth dates, their home addresses, photos of themselves and their families, and the times when they will
be away from home. This information could be used by cybercriminals for malicious purposes. According to the report,
9 percent of the 2,000 people who participated in the study had experienced some kind of computer-related trouble,
such as malware infections, scams, identity theft, or harassment. To reduce risk and improve the privacy of your per-
sonal information, the study offers several tips:8
●● Always use the privacy controls offered by the social networking sites.
●● Use long passwords (eight characters or longer) that mix uppercase and lowercase letters with numbers
and symbols.
●● Do not post a phone number or a full address.
●● Do not post children’s names, even in photo tags or captions.
●● Do not be specific when posting information about vacations or business trips.

6 PART ONE: Fundamentals of Information Systems

 1-2 COMPUTER LITERACY enormous volumes of data, such as inventory con-
trol in a multinational textile company. When these
AND INFORMATION systems are ­automated, human involvement is mini-
mal. For example, in an automated payroll system,
LITERACY there is little need for managerial judgment in the task
of printing and sending checks, which reduces person-
In the 21st century, knowledge workers need two nel costs.
types of knowledge to be competitive in the work- Transaction processing systems have come a long
place: computer literacy and information literacy. way. For example, the first ATM opened for busi-
Computer literacy is skill in using productivity soft- ness in 1969 with some very basic features. Similar
ware, such as word processors, spreadsheets, database to other information technologies, ATMs have gone
management systems, and presentation­software, as well through major changes and improvements.9 In 2014,
as having a basic knowledge of hardware and software, JPMorgan Chase introduced electronic banking kiosks
the Internet, and collaboration tools and technologies. (EBKs). Using these kiosks customers can withdraw
Information literacy, on the other hand, is under- cash in a variety of denominations ($10, $20, …). These
standing the role of information in generating and using machines also allow customers to cash a check and
business intelligence. Business intelligence (BI) receive exact change.10 Customers can be identified
is more than just information. It provides historical, cur- using biometric features such as a fingerprint or iris
rent, and predictive views of business operations and scanners.11
environments and gives organizations a competitive The cardless ATM is one of the recent tech-
advantage in the marketplace. (BI is discussed in more nologies deployed by some banks in order to attract
detail in Chapter 3.) To summarize, knowledge workers younger customers. An app provided by the bank is
should know the following: used to withdraw cash. The customers set the amount
using the app and receive a code on his/her smart-
●● Internal and external sources of data
phone which is scanned by the bank’s ATM when the
●● How data is collected customer gets there. The ATM dispenses the cash
●● Why data is collected and sends a receipt over
●● What type of data should be collected the phone, or it can be
●● How data is converted to information and eventually printed at the ATM.12 Computer literacy is skill
to business intelligence According to the in using productivity software,
Chicago-based BMO such as word processors,
●● How data should be indexed and updated spreadsheets, database
Harris Bank, mobile with­
●● How data and information should be used to gain a management systems, and
competitive advantage drawal reduces fraud presentation software, as well
and also increases effi­ as having a basic knowledge
ciency, as a mobile cash of hardware and software, the
Internet, and collaboration tools
transaction takes 15 sec­
and technologies.
1-3 THE BEGINNING: onds compared to 45 sec­
onds for a card-based Information literacy
TRANSACTION-PROCESSING withdrawal. 13 is understanding the role of
information in generating and using
JPMorgan Chase
SYSTEMS says upcoming ATM
business intelligence.

features will include
For the past 60 years, transaction-processing cash withdrawals by tap-
systems (TPSs) have been applied to structured tasks ping smartphones to the
such as record keeping, simple clerical operations, and ATM, the technology
inventory control. Payroll, for example, was one of the first similar to Apple Pay;
applications to be automated. TPSs focus on data collection withdrawals of up to
and processing, and they have provided enormous reduc- $3,000 on some ATMs;
tions in costs. and allowing customers
Computers are most beneficial in transaction- to make their credit card
processing operations. These operations are repeti- and mortgage payments
tive, such as printing numerous checks, or involve at the ATM.14
CHAPTER 1: Information Systems: An Overview
Business intelligence
(BI) provides historical, current,
and predictive views of business
operations and environments
and gives organizations a
competitive advantage in the
marketplace.
Transaction-processing
systems (TPSs) focus on
data collection and processing; the
major reason for using them is
cost reduction.
7
 Information Technologies at Domino’s Pizza
In 1960, Domino’s Pizza opened its first store. Today, there are nearly 12,000 stores, half of them outside the United States. In
2007, Domino’s started online and mobile ordering. Today, customers can order online at www.dominos.com or they can use
apps for the iPhone, Android, or Kindle Fire.15 This allows them to customize their pizzas with any combination of ingredients,
enhancing their sense of participation while also saving Domino’s the labor costs associated with phone orders. After placing
the order, the customer can track it all the way to when it is sent out for delivery, keeping an eye on an estimated delivery time.
In 2012, Domino’s surpassed $1 billion in annual sales through its Web site, proving that e ­ lectronic sales will con-
tinue to play a large role in the company’s success. 16

At Domino’s, online ordering seamlessly accomplishes multiple

objectives without the customer even taking notice. First, it creates the
feeling among customers that they are an active part of the pizza-mak-
ing process. Second, it results in greater efficiency at the various stores
because employees do not have to spend as much time taking orders.
Susan Montgomery/Shutterstock.com
They merely need to prepare the orders, which appear in an instant
order queue, with all the customers’ specifications.
Domino’s now has the ability to store its online orders in its database. This data can then be used for many purposes,
including target marketing and deciding which pizzas to offer in the future. The company is also actively using social
media, including Facebook and Twitter, to promote its products and gather customers’ opinions.
In 2014, Domino’s began allowing customers to order pizza using a voice app called “Dom,” powered by Nuance
Communications. It enables users of iOS and Android devices to place orders using their voices.
Twitter is now a part of the ordering system at Domino’s. As of 2015, U.S. customers can order pizza by tweeting a
pizza emoji.17
Starting in 2016 customers were able to order Domino’s Pizza from a Facebook Messenger bot.18 Also, in 2016,
Domino’s Pizza began testing a delivery robot called DRU in New Zealand.19 And the pizza company also announced
plans to beat Amazon and Google to delivery by drones.20
In 2017, Domino's tested self-driving pizza delivery in a joint project with Ford in a specially equipped Ford Fusion
that comes with both self-driving technology and an oven.21

However, there are some security risks associated ●● Watch for signs that the ATM of a gas pump may have
with using ATMs. ATM skimming is a worldwide problem been tampered with. This could be done by physically
costing more than $2 billion a year in fraudulent charges. touching the machine or checking on Bluetooth for
Skimmers, by using a card the size of a credit card installed unusual Wi-Fi networks.
inside the ATM or on the top of the machine, are able to ●● Cover your pin number when entering it.
record PIN numbers and other financial information of the
users. This could happen when you swiped your card at the
ATM or even at a gas station. Skimmers have been stealing 1-4 MANAGEMENT
financial information from cards with magnetic strips, as
chip-based cards are more difficult to steal from. To protect INFORMATION SYSTEMS
your financial informa-
tion while using an ATM, A management information system (MIS) is an
A management
information system (MIS) follow these steps22: organized integration of hardware and software technol-
is an ­organized integration ogies, data, processes, and human elements designed to
●●  heck your bank
C
of hardware and software
statements regularly.
produce timely, integrated, relevant, accurate, and use-
technologies, data, processes, ful information for decision-making purposes.
and human elements designed to Usually, if you report
fraudulent charges The hardware components, which are discussed
produce timely, integrated, relevant,
accurate, and useful information for within two days your in more detail in Chapter 2, include input, output, and
decision-making purposes. bank will reimburse you memory devices and vary depending on the applica-
for anything over $50. tion and the organization. MIS software, also covered
8 PART ONE: Fundamentals of Information Systems
 If an organization has defined its strategic goals,
objectives, and critical success factors, then structuring
the data component to define what type of data
is collected and in what form is usually easy.
in Chapter 2, can include commercial programs,
software developed in-house, or both. The appli-
cation or organization determines the type of
Exhibit 1.3
software used. Processes are usually methods for
performing a task in an MIS application. The
human element includes users, programmers,
systems analysts, and other technical personnel.
This book emphasizes users of MISs.
In designing an MIS, the first task is to clearly
define the system’s objectives. Second, data must
be collected and analyzed. Finally, information must be
provided in a useful format for decision-making purposes.
Many MIS applications are used in both the private
and public sectors. For example, an MIS for inventory con-
trol provides data (such as how much of each product is on
hand), what items have been ordered, and what items are
back-ordered. Another MIS might forecast sales volume
for the next fiscal period. This type of system uses recent
historical data and mathematical or statistical models to
generate the most accurate forecast, and sales managers
can use this information for planning purposes. In the pub-
lic sector, an MIS for a police department, for example,
could provide information such as crime statistics, crime
forecasts, and allocation of police units. Management can
examine these statistics to spot increases and decreases in
crime rates or types of crimes and analyze this data to deter-
mine future deployment of law enforcement personnel.
As you will see in this book, many organizations use
information systems to gain a competitive advantage.
The information box on Domino’s Pizza describes one
example of this. (Note: MISs are often referred to as just
information systems, and these terms are used inter-
changeably in this book.)
1-5 MAJOR COMPONENTS OF
AN INFORMATION SYSTEM
In addition to hardware, software, and human ele-
ments, an information system includes four major
components, which are discussed in the following
Data Database Process Information
sections: data, a database, a process, and information
(see Exhibit 1.3).23
1-5a
The data component of an information system is consid-
ered the input to the system. The information that users
need affects the type of data that is collected and used.
Generally, there are two sources of data: external and inter-
nal. An information system should collect data from both
sources, although organizational objectives and the type of
application also determine what sources to use. Internal data
includes sales records, personnel records, and so forth. The
following list shows some examples of external data sources:
●● Customers, competitors, and suppliers
●● Government agencies and financial institutions
●● Labor and population statistics
●● Economic conditions
Typically, data has a time orientation, too. For exam-
ple, past data is collected for performance reports, and
current data is collected for operational reports. In addi-
tion, future data is predicted for budgets or cash flow
reports. Data can also be collected in different forms,
such as aggregated (e.g., subtotals for categories of
information) or disaggregated (e.g., itemized lists). An
organization might want disaggregated data to analyze
sales by product, ter-
ritory, or salesperson.
Data consists of raw facts and
Aggregated data can be is a component of an information
useful for reporting over- system.
all performance during
CHAPTER 1: Information Systems: An Overview 9
 a particular sales quarter, for
example, but it limits the ability
of decision makers to focus on
specific factors.
If an organization has defi­
ned its strategic goals, objectives,
and critical success factors, then
structuring the data component
to define what type of data is
collected and in what form is
usually easy. On the other hand,
if there are conflicting goals and
objectives or the company is not

cunaplus/Shutterstock.com
aware of critical success factors,
many problems in data collec-
tion can occur, which affects an
information system’s reliability
and effectiveness.
An information system can include a wide range of
1-5b models to support all levels of decision making. Users
should be able to query an information system and gener-
A database, the heart of an information system, is a ate a variety of reports. In addition, an information sys-
collection of all relevant data organized in a series of tem should be able to grow with the organization so users
­integrated files. (You will learn more about databases in can redefine and restructure models and incorporate new
Chapter 3.) A comprehensive database is essential for information into their analyses.
the success of any information system. To create, orga-
nize, and manage databases, a database management
1-5d
system (DBMS) is used, such as Microsoft Access or
FileMaker Pro for home or small-office use. In a large Although they might seem the same, data and informa-
organization, a DBMS such as Oracle or IBM DB2 tion are different. Data consists of raw facts and by itself
might be used. is difficult to use for making decisions. Information—
Databases are also important for reducing person- the output of an information system—consists of facts
nel time needed to gather, process, and interpret data that have been analyzed by the process component and
manually. With a computerized database and a DBMS, are therefore more useful to the MIS user. For example,
data can be treated as a common resource that is easy to XYZ Company’s total sales last month were $5 million.
access and use. This number is data because it does not tell you how the
company performed. Did it meet the sales goal? Did
1-5c sales increase or decrease from the previous month?
How did the company perform against its top competi-
A database is a collection of all The purpose of an infor- tors? These questions and more can be answered by the
relevant data organized mation system’s process information that an information system provides.
in a series of integrated files. component is generating The quality of information is determined by its use-
The process component of an the most useful type of fulness to users, and its usefulness determines the suc-
information system generates the information for making cess of an information system. Information is useful if it
most useful type of information for decisions. This compo- enables decision makers to make the right decision in a
decision making, including
nent generally includes timely manner. To be useful, information must have the
transaction-processing reports and
models for decision analysis. transaction-processing following qualities:
reports and models for
Information consists of facts ●● Timeliness
decision analysis that can
that have been analyzed by the ●● Integration with other data and information
process component and is an be built into the system
output of an information system. or accessed from external ●● Consistency and accuracy
sources. ●● Relevance
10 PART ONE: Fundamentals of Information Systems
 If information lacks any of these qualities, the results
are incorrect decisions, misallocation of resources, and
overlooked windows of opportunity. If the system c­ annot
give users a minimum level of confidence in its reliabil-
ity, it will not be used or users might dismiss the reports
it generates. Information must provide either a base for
users to explore different options or insight into tasks.
Another factor affecting the usefulness of informa-
tion is the information system’s user interface. Because this
interface must be flexible and easy to use, most informa-
tion systems make use of graphical user interfaces (GUIs),
with features such as menus and buttons. To be useful,
information systems should also produce information in
different formats, including graphics (e.g., pie charts and
bar graphs), tables, and exception reports, which highlight
information that is outside a specified range. Supplying
information in a variety of formats increases the likelihood
of users understanding and being able to use the informa-
tion. Note that, in addition to the formal information that
an information system generates, users need to be able to
make use of informal information—such as rumors, uncon-
firmed reports, and stories—when solving problems.
The ultimate goal of an information system is to gen-
erate business intelligence (BI), described earlier in this
chapter. As you will learn throughout this book, many
different tools, techniques, and types of information sys-
tem technologies are used to generate BI.
1-5e
To better understand the four main components of an infor-
mation system, take a look at the following two examples.
Example 1 A state university stores all student data
in a database. The collected data includes each student’s
first name, last name, age, gender, major, nationality, and
so forth. The process component of the information sys-
tem performs all sorts of analysis on this data. For exam-
ple, the university’s DBMS has a built-in query capability
that can generate the ­following information:
●● How many students are in each major?
●● Which major is the fastest growing?
●● What is the average age of the student body?
●● Among the international students, which country is
home to the highest number of students?
●● What is the ratio of male to female students in
each major?
Many other types of analysis can be done. A fore-
casting model (part of the process component) could
be used to generate the estimated number of students
for 2025, for instance. In addition, predictions could be
made or improved, based on information this system
provides. For example, knowing which major is the fast-
est growing can help with decisions on hiring faculty, and
knowing the estimated number of students for 2025 can
help with planning facilities.
Example 2 Teletech, an international textile com-
pany, uses a database to store data on products, sup-
pliers, sales personnel, costs, and so forth. The process
component of the information system conducts analysis
on the data to provide the following information about
the preceding month:
●● Which salesperson generated the highest sales?
●● Which product generated the highest sales? The
­lowest sales?
●● Which region generated the highest sales?
Again, forecasting models can be used to generate
predictions for the next sales period, and these predic-
tions can be broken down by product, region, and sales-
person. Based on this information, many decisions could
be made, such as allocating the advertising budget to
­different products and regions.
1-6 USING INFORMATION
SYSTEMS AND INFORMATION
TECHNOLOGIES
Information systems are designed to collect data, process
the collected data, and deliver timely, relevant, and use-
ful information that can be used for making decisions. To
achieve this goal, an information system might use many
different information technologies. For example,
organizations often use the Internet as a worldwide
network to communicate with one another. Computer
networks (wired and wireless), database systems, POS
systems, and radio-frequency identification (RFID) tags
are just a few examples of information technologies used
to support information systems. The information box on
The Information Technologies at Home Depot box gives
you an idea of how companies use information technolo-
gies to stay competitive.
1-6a 
Information is the second Information technologies
most important resource support information systems
and use the Internet, computer
(after the human ele-
networks, database systems, POS
ment) in any organiza- ­systems, and radio-frequency
tion. Timely, relevant, and identification (RFID) tags.
accurate information is a
CHAPTER 1: Information Systems: An Overview 11
 Information Technologies at The Home Depot
The Home Depot revolutionized the do-it-yourself home-improvement industry in the United States. Its stores use a POS
system for both fast customer service and improved inventory management as well as a wireless network for efficient in-
store communication.24 The Home Depot has a Web site to communicate with customers and increase sales with online
orders. It also uses RFID tags to better manage inventory and improve the efficiency of its supply chain network.
The Home Depot maintains a high-speed network connecting its stores throughout North America, and it uses a data-
warehousing application to analyze variables affecting its success—customers, competitors, products, and so forth.25 The
information system gives The Home Depot a competitive advantage by gathering, analyzing, and using information to
better serve customers and plan for customers’ needs.
In 2010, The Home Depot launched a transition to Fujitsu
U-Scan self-checkout software in its U.S. and Canadian retail stores.
The software offers retailers the flexibility to quickly make changes

Sergey Yechikov/Shutterstock.com
to their POS systems, and offers savings in labor costs.26
Other Information Technologies used in some of The Home
Depot stores include virtual and augmented reality (discussed
in Chapter 14), mobile checkout, and heat mapping to reduce
in-store congestion. This technology assists the store manager
to deploy more associates to congested area within the store.27

critical tool for enhancing a company’s competitive position
in the marketplace and managing the four Ms of resources:
manpower, machinery, materials, and money.
To manage these resources, different types of infor-
mation systems have been developed. Although all have
the major components shown in Exhibit 1.3, they vary
in the kind of data they collect and the analyses they
perform. This section discusses some major types of
information systems, focusing on the types of data and
analysis used in each.
A personnel information system (PIS) or human
resource information system (HRIS) is designed to provide
information that helps decision makers in personnel carry
out their tasks more effectively. Web technologies have
played a major role in improving the efficiency and effec-
tiveness of HR departments. For example, intranets are
often used to provide basic HR functions, such as employ-
ees checking how much vacation time they have left or
looking up how much they have in their 401(k) plans.
Intranets reduce personnel costs and speed up responses
to common employee requests. As discussed in Chapter 7,
an intranet is a network within an organization that uses
Internet protocols and technologies for collecting, stor-
ing, and disseminating useful information that supports

Human Resource Information Systems in Action

Large organizations have been using HRISs for years by deploying software platforms such as SAP HR software and
Oracle PeopleSoft. With cost reduction, ease of use, and the availability of cloud-based HR software or software as a
service (SaaS) (discussed in Chapter 14), small and mid-sized organizations can now benefit from HRISs.
Sarnova Inc., a medical products company based in Columbus, Ohio, with over 500 employees, replaced its paper-
based system with an HRIS. They used Workforce from ADP for this implementation. The HRIS enables Sarnova to
track employees by region, title, and category, among other things. According to Christy Gigandet, senior HR partner
at Sarnova Inc., the most beneficial feature of the system is managing the open enrollment for employee benefits.
This automation process has saved the company “at least a month in man hours.” The system has automated the
printing and mailing of employee paperwork and has made it a self-service driven process.28
UltiPro, Sage HRMS, and SuccessFactors are among the most popular HRIS software applications on the market.
They all offer basic HR functions such as time management, payroll, talent management, scheduling, and workforce
planning, among other functions.29

12 PART ONE: Fundamentals of Information Systems

business activities such as sales, customer service, human
resources, and marketing. The main difference between
an intranet and the Internet is that intranets are private
and the Internet is public. A PIS/HRIS supports the fol-
lowing decisions, among others:
●● Choosing the best job candidate
●● Scheduling and assigning employees
●● Predicting the organization’s future personnel needs
●● Providing reports and statistics on employee
demographics
●● Allocating human and financial resources
The information box “Human Resource Informa-
tion Systems in Action” highlights some real-life applica-
tions of HRIS.
A logistics information system (LIS) is designed to
reduce the cost of transporting materials while main-
taining safe and reliable delivery. The following are a
few examples of decisions supported by an LIS:
●● Improving routing and delivery schedules
●● Selecting the best modes of transportation
●● Improving transportation budgeting
●● Improving shipment planning
The information box featuring UPS shows uses of
information systems and information technologies, par-
ticularly logistics information systems.
A manufacturing information system (MFIS) is used to
manage manufacturing resources so companies can reduce
manufacturing costs, increase product quality, and make
better inventory decisions. MFISs can perform many types
of analysis with a high degree of timeliness and accuracy.
For example, managers could use an MFIS to assess the
effect on final product costs of a 7 percent increase in raw
materials or to determine how many assembly-line work-
ers are needed to produce 200 automobiles in the next
three weeks. Manufacturing and operations management
can also use social media information systems (SMISs)
(discussed in Chapter 8) for crowdsourcing. This platform
provides a global reach to all sorts of talents throughout the
world for performing certain manufacturing tasks at a mod-
erate cost. Here are some decisions that an MFIS supports:
●● Ordering decisions
●● Product cost calculations
●● Space utilization
●● The bid evaluation process used with vendors and
suppliers
●● Analysis of price changes and discounts

Information Technologies at UPS

Established in 1907, United Parcel Service (UPS) is now a global
company worth $97.37 billion as of November 2017. It uses a
sophisticated information system to manage the delivery of more
than 14 million packages a day.30 The company uses several types of
networks in its operations—particularly, GPS and wireless networks.
Its GPS network includes an algorithm that has helped drivers
reduce the number of left turns they have to take, particularly on
commercial roads. This, along with a vehicle telemetric system, has
reduced the number of accidents and delivery times, thus saving
the company over 20 million miles a year.31,32
To better serve customers, UPS has developed UPS Delivery Inter-
cept, a Web-based service that allows customers to intercept and
reroute packages before they are delivered, thus avoiding potentially
costly mistakes and wasted time and costs. UPS calls the technol-
ogy behind this service Package Flow Technology, which is also used
to map efficient routes for drivers and mark packages for special
handling. Kurt Kuehn, senior vice president of worldwide sales and
iStock.com/Juanmonino

marketing, says, “Innovations like Package Flow Technology and ser-

vices like UPS Delivery Intercept are key components of UPS’s drive to
treat each of our millions of customers as if they’re our only customer.
We’re constantly working on new and innovative ways to harness
technology to help our customers meet their unique needs.”33

CHAPTER 1: Information Systems: An Overview 13

 The goal of a financial information system (FIS) is
to provide information to financial executives in a timely
manner. Here are some decisions an FIS is used to
support:
●● Improving budget allocation
●● Minimizing capital investment risks
●● Monitoring cost trends
●● Managing cash flows
●● Determining portfolio structures
In addition, marketing information systems
(MKISs) are used to improve marketing decisions. An
effective MKIS should provide timely, accurate, and
integrated information about the marketing mix-4Ps:
price, promotion, place, and product. A growing num-
ber of information technology tools are being used in the
marketing field that could play a major role in running an
effective marketing operation in all types of organizations.
One of these technology tool is data-
base marketing discussed in Chapter 3.
Other marketing technology tools are Information
covered below. These IT tools help technologies can help
organizations for direct marketing and bottom-line and
help them grow leads, opportunities, and
revenue.34
top-line strategies.
●● Business analytics, Web and mobile
analytics (discussed in Chapter 3)
enable an organization to pinpoint the performance
of channels, technologies in use, ads campaign,
and offers and everything else that are tractable.
Popular tools include Google Analytics and Adobe
Analytics.
●● E-mail marketing (discussed in Chapter 7) enables an
organization to be in constant contact with its custom-
ers in an effective and efficient manner. Popular tools
include MailChimp and Constant Contact.
●● Search engine marketing (discussed in Chapter 7) that
includes both paid search ads and search engine opti-
mization (SEO) help an organization to get top rank
listings of the organization’s Web site. Popular tools
include Google AdWords and Bing and Yahoo!
●● Mobile technologies (discussed in Chapter 6)
enable an organization to sell products and services
to mobile users as their number is increasing on
daily bases.
●● Marketing automation helps an organization bring
all other IT tools together including analytics, online
forms, customer tracking, personalization technol-
ogy (discussed in Chapter 11), customer relation
management (CRM) (discussed in Chapter 11), and
automated alerts to sales people. Popular tools include
HubSpot and Act-On.
14 PART ONE: Fundamentals of Information Systems
Here are some decisions that an MKIS supports:
●● Analyzing market share, sales, and sales personnel
●● Sales forecasting
●● Price and cost analysis of items sold
1-6b
Michael Porter, a professor at Harvard Business School,
identified three strategies for successfully competing in
the marketplace:35
●● Overall cost leadership
●● Differentiation
●● Focus
Information systems can help organizations reduce
the cost of products and services and, if designed cor-
rectly, they can assist with differentia-
tion and focus strategies. Throughout
this book, you will see many examples
of the cost savings that organizations
have achieved with information sys-
tems and technologies. For example,
Walmart has been using overall cost
leadership strategies successfully (see
the upcoming information box).
Information technologies can help bottom-line and
top-line strategies. The focus of a bottom-line strategy is
improving efficiency by reducing overall costs. A top-line
strategy focuses on generating new revenue by offering
new products and services to customers or increasing
revenue by selling existing products and services to new
customers. For example, e-commerce businesses are
adapting business models to reduce distribution costs
dramatically. A good example is antivirus vendors using
the Internet to distribute software. For a subscription
fee of around $30, you can download the software and
receive updates for a year. Without the Internet for easy,
inexpensive distribution, vendors could not afford to
offer software at such a low price.
As discussed in Chapter 11, many organizations use
enterprise systems, such as supply chain management
(SCM), customer relationship management (CRM),
enterprise resource planning (ERP), knowledge man-
agement (KM), and collaboration software, to reduce
costs and improve customer service. The goal of these
systems is to use information technologies to create
the most efficient, and effective link between suppli-
ers and consumers. A successful CRM program, for
example, helps improve customer service and create
Information Technologies at Walmart
Walmart (http://walmartstores.com), the largest retailer in the world, built
the Walmart Satellite Network, which is the largest private satellite com-
munication system in the United States. The network links branch stores
with the home office in Bentonville, Arkansas, by using two-way voice and
data and one-way video communication. In addition to the POS systems

Vdovichenko Denis/Shutterstock.com
used for many years, Walmart uses the following information technologies
to gain a competitive advantage:
●● Telecommunications is used to link stores with the central computer
system and then to suppliers’ computers. This system creates a seam-
less connection among all parties.
●● Network technologies are used to manage inventory and implement
a just-in-time inventory system. As a result, products and services can
be offered at the lowest possible prices.
●● Walmart uses an extranet, called RetailLink, to communicate with suppliers. Suppliers are able to review product sales
records in all stores and track current sales figures and inventory levels.36 (Extranets are discussed in Chapter 7.)
●● Electronic data interchange (EDI), discussed in Chapter 11, is used to streamline the order-invoice-payment cycle,
reduce paperwork, and improve accuracy.
●● Walmart is a major user of RFID technologies, which have improved its supply chain and inventory management systems.
●● Starting in 2017, Walmart has been using virtual reality to help train its employees on topics such as management
and customer service. It is estimated that over 150,000 employees will go through the program each year.37
●● The same year, Walmart introduced robots in over 50 locations. These 2-feet-tall robots perform tasks such as checking
stock, finding mislabeled or unlabeled products, and assisting employees to fulfill orders for online customers.38

a long-term relationship between an organization and
its customers.
For differentiation strategies, organizations try to
make their products and services different from their
competitors. Apple has been successful with this strategy
by designing its computers to look very different than PCs
and focusing on its computers’ ease of use. As another
example, Amazon has differentiated its Web site by using
certain information technologies, such as personalization
technologies (covered in more detail in Chapter 11) to
recommend products to customers based on their previ-
ous purchases. Amazon also uses the one-click sys-
tem for fast checkout. With this system, customers
can enter credit card numbers and addresses once
and, in subsequent visits, simply click once to make a
purchase, without having to enter information again.
With focus strategies, organizations concen-
trate on a specific market segment to achieve a
cost or differentiation advantage. Apple has also
used this strategy to target iPhones to consumer
users rather than business users. Similarly, Macin-
tosh computers are heavily marketed to creative
Peshkova/Shutterstock.com

professionals such as designers, photographers,

and writers. As another example, Abercrombie &
Fitch targets high-end clothing to low-income
customers, such as teenagers and young adults,
while Nordstrom targets its high-end clothing to
high-income customers. Information technologies

CHAPTER 1: Information Systems: An Overview 15

 Exhibit 1.4

Potential
entrants

Threat of
new entrants

Industry
competitors
Bargaining power Bargaining power
of suppliers of buyers
Suppliers Buyers
Rivalry among
existing
competitors

Threat of
substitute products
or services

Substitutes

could assist these companies in reaching their target ●● Threat of new entrants
market segments more cost effectively. ●● Rivalry among existing competitors
Remember that focus and differentiation strategies
work only up to a certain point. Customers are often will- Buyer power is high when customers have many
ing to pay more for a unique product or service or one choices and low when they have few choices. Typically,
with a specific focus. However, cost still plays a major organizations try to limit buyers’ choices by offering
role. If a product or service becomes too expensive, cus- services that make it difficult for customers to switch,
tomers might not be willing to purchase it. which is essentially using a differentiation strategy. For
example, Dell Computer was among the first to offer
computer customization options to customers, and other
1-6c
computer manufacturers followed suit. Grocery stores,
such as Sam’s Club, offer club cards that encourage cus-
Harvard Business School’s Michael Porter created a com- tomers to shop by giving them big discounts, an example
prehensive framework called the Five Forces Model of overall cost leadership strategies. Similarly, airlines
for analyzing an organization, its position in the market- and hotels offer free mileage and points when customers
place, and how informa- use their services. Information systems can make manag-
tion systems could be ing these strategies easier and more cost effective.
Michael Porter’s Five Forces Organizations use these strategies to increase
Model analyzes an organization, used to make the orga-
nization more competi- customer loyalty, thus combating the threat of new
its position in the marketplace, and
how information systems could be tive.39 The five forces, entrants or substitute products. However, certain
used to make it more competitive. shown in Exhibit 1.4, are: information technology tools, such as the Internet,
The five forces include buyer power, have evened the playing field by giving customers
supplier power, threat of substitute Buyer power
●● more access to all sorts of data, such as the various
products or services, threat of new
entrants, and rivalry among existing
●● Supplier power prices for products and services. This increases buy-
competitors. ●●  hreat of substitute
T ers’ bargaining power and decreases supplier power,
products or services which is discussed next.
16 PART ONE: Fundamentals of Information Systems
Information Technologies at Netflix
Using a wide variety of devices, over 109 million Netflix subscribers in the United States and around the world
connect to the company’s Web site and watch unlimited movies and TV episodes.40 The users can also receive
DVDs through the mail. The Internet, personalization technologies, and effective inventory management tech-
niques have revolutionized rental entertainment at Netflix. Any user with an Internet connection can connect
to the Web site and watch movies and TV episodes streamed and delivered instantly to a user’s device. Netflix is
currently using Amazon Web Services (AWS), which has provided the company with a high degree of availability
and speed.41
Using data-mining and collaborative filtering technologies, Netflix’s personalization system actively searches infor-
mation to discover relationships and patterns and make recommendations based on a user’s past movie-viewing
history and questions that were answered on the
Web site. Based on these techniques, Netflix has
created CineMatch, an algorithm that recom-
mends other movies the customer might enjoy.42
The inventory system used by Netflix is fully
automated, and computers and robots play a
major role in managing CDs and DVDs by scan-
ning them as soon as they arrive, notifying the
customer that the shipment has been received,

Maxxa Satori/Shutterstock.com
and quickly making the CDs and DVDs avail­
able for other customers. (Netflix owns over
89 ­million discs.) A machine called a “stuffer”
processes DVDs—puts the discs into the enve-
lopes, folds and closes the envelope, and applies
the sticker to the center of the envelope.43

Supplier power is high when customers have fewer
options and low when customers have more options.
Organizations might use information systems to make
their products and services cheaper or to offer more ser-
vices in order to distinguish themselves from competitors
(another use of a differentiation strategy). Netflix, for
example, uses information technologies to offer prod-
ucts and services, which increases its power in the mar-
ketplace. (For examples of how these focus strategies get
used, see the information box on Netflix.) Organizations
have tools other than information systems and technolo-
gies to increase their power. For example, drug companies
obtain patents for their products to reduce competition.
The threat of customers choosing substitute prod-
ucts or services is high when many alternatives to an
organization’s products and services are available. Some
organizations add services—such as Amazon’s personal-
ized recommendations—to make their positions in the
marketplace more distinctive. Other organizations use
fees to discourage customers from switching to a com-
petitor, such as when cell phone companies add charges
for switching to another provider before the customer
contract is up.
The threat of new entrants into the marketplace is
low when duplicating a company’s product or service
is difficult. Organizations often use focus strategies to
ensure that this threat remains low. For example, devel-
oping a search engine that could compete successfully
with Google would be difficult. In addition, organiza-
tions use information technologies to increase customer
loyalty, as mentioned previously, which reduces the
threat of new entrants. For example, banks offer free bill
paying to attract customers and keep them from switch-
ing to another bank; setting up a bill-paying service at
another bank takes time that most customers do not
want to spend. Similarly, after customizing their home
pages with options offered by sites such as Yahoo! and
Google, many users do not want to repeat this process
at a new site.
Rivalry among existing competitors is high when
many competitors occupy the same marketplace
position; it is low when there are few competitors.
CHAPTER 1: Information Systems: An Overview 17
 Digital Innovation in Retail Industry Using Information Technologies
In order to reduce cost and minimize the gap between
the e-commerce and traditional commerce, brick-and-
mortar retailers are increasingly using information tech-
nologies. This not only improves customer service, but
it also sets these retailers apart from the competition.
Here are few examples of information technologies

Anatoly Tiplyashin/Shutterstock.com
being deployed in retail business:44,45,46
Digital signage or dynamic signage—These are
kiosks placed throughout stores with dynamic content
update capabilities that provide shoppers with up-to-
date information on product offerings and the latest
promotional campaigns. They also allow customers to
print coupons.
Beacon marketing—Use of Apple’s iBeacon or similar technologies allows retailers to deliver in-store targeted
marketing to customers’ smartphones or other handheld devices.
Interactive touch display—These are virtual sales assistants that help shoppers locate a product in the store
through high-definition graphics similar to those that the shoppers see online.
Image search—Retailers using Google, TinEye, or other search engines allow shoppers to take a photo or submit a
photo to search the retailer’s Web site and then buy the item in the store or online.
Mobile wallets—These allow customers to store their credit, debit, or loyalty cards, as well as coupons, and
redeem them electronically in store. They also allow them to validate tickets, redeem vouchers, make transactions,
and use multiple loyalty services. Customers can also do mobile checkout either at the cash register or with a walk-
ing sales associate equipped with a handheld device.
Smart fitting rooms—Wall-mounted tablets inside fitting rooms provide side-by-side comparisons with video of
the various looks a customer has with different clothes. Customers can actually try on the clothes or just overlay
them on his/her image without changing clothing.

For example, online brokerage firms operate in a highly (discussed in Chapter 14) are in high demand.47 Broadly
competitive environment, so they use information tech- speaking, IT jobs fall into the following categories:
nologies to make their services unique. ●● Operations and help desk
The information box highlights the role of infor-
●● Programming
mation technologies in making retail businesses more
competitive. A growing number of retailers are using ●● Systems design
elements of Porter’s Five Forces Model. ●● Web design and Web hosting
●● Network design and maintenance
●● Database design and maintenance

1-7 THE IT JOB MARKET ●● Robotics and artificial intelligence

The educational backgrounds for an IT position

During the past decade, the IT job market has been one
of the fastest growing segments in the economy, and it
continues to be so. Even during the economic down-
turn, certain segments of the IT job market, such as
Web design, infrastructure, and computer and network
security, have shown growth compared to the rest of the
job market. Currently, cloud computing–related jobs
18 PART ONE: Fundamentals of Information Systems
can include an AA, BA, BS, MS, or MBA in information
systems and related fields. The salaries vary based on
educational background, experience, and the job’s loca-
tion. They range from $52,000 for a programmer to over
$240,000 for a chief information security officer.
Popular jobs in the information systems field are
described in the following sections.
1-7a
The top information systems job belongs to either the
chief technology officer (CTO) or the chief information
officer (CIO). This person oversees long-range planning
and keeps an eye on new developments in the field that
can affect a company’s success. Some organizations also
have a chief privacy officer (CPO). This executive posi-
tion includes responsibility for managing the risks and
business impacts of privacy laws and policies.
1-7b
This person is responsible for managing all the hardware,
software, and personnel within the information systems
department.
1-7c
This person is responsible for the design and implemen-
tation of information systems. In addition to computer
knowledge and an information systems background, this
position requires a thorough understanding of business sys-
tems and functional areas within a business organization.
1-7d
This person oversees a company’s internal and external
network systems, designing and implementing network
systems that deliver correct information to the right
decision maker in a timely manner. Providing network
and cybersecurity is part of this position’s responsibility.
Due to the increasing number of data beaches and
security threats, large organizations have created a rela-
tively new job title called a chief information security
officer (CISO). This executive position is responsible for
establishing and implementing policies in order to ensure
that information assets and technologies are protected
against internal and external threats. The salary of this
executive position could be well over $240,000 per year.48
1-7e
A database administrator (DBA) is responsible for data-
base design and implementation. Additionally, a database
administrator should have knowledge and understanding of
data warehouses and data-mining tools.
1-7f
A computer programmer writes computer programs
or software segments that allow the information system
to perform a specific task. There are many computer
languages available, and each one requires a specific
knowledge suitable for a specific application. Because
of the popularity of smartphones and mobile devices,
many programmers are now developing apps for iOS and
Android devices. There is a huge demand for these appli-
cations and for the programmers who develop these apps.
1-7g
A webmaster designs and maintains the organization’s
Web site. Because of the popularity of e-commerce
applications, webmasters have been in high demand.
In recent years, new IT-related jobs have been created
that appear to also be in high demand.49,50 These jobs include:
●● Data scientist (see the following paragraph for further
explanation of this job title)
●● Social media/online-community manager
●● Social media architect
●● Telework manager or coordinator
●● Search engine optimization specialist
●● Business architect
●● Mobile technology expert
●● Enterprise mobile developer
●● Cloud architect
In recent years, a growing number of companies have
been hiring data scientists (DS) in different sectors of the
economy: sports, politics, agriculture, technology, and
retail. Companies such as Microsoft, Google, Facebook,
Bank of America, JPMorgan Chase, and Target are a few
examples.51 So what does a DS do? A DS may perform dif-
ferent tasks in different disciplines. A DS may interact with
different users to automate data collection, aggregation,
and visualization. He or she deploys statistical and math-
ematical models and certain artificial intelligence tech-
nologies. The ultimate goal is to help generate business
intelligence (BI) and actionable information for decision
making.52 Below are few specific tasks that a DS performs:53
●● Identify the problem that an organization faces
●● Identify and collect data sets and variables
wavebreakmedia/Shutterstock.com
CHAPTER 1: Information Systems: An Overview 19
 ●● Insure the accuracy and completeness of data sets
●● Apply models and algorithms to data sets
●● Analyze and interpret the results for the decision makers
According to a study conducted by IBM, by 2020,
there would be more than 2.7 million job openings in
data scientist-related fields. The top five qualities of an
effective data scientist include:54
●● Analytical skills and quantitative reasoning
●● Storytelling ability—be able to explain data to non-
technical team members
●● Be a team player—work and interact effectively with
team members
●● Be a problem-solver
●● Have a sense of curiosity—help the organization find
new uses for the collected data
The background and educational degrees for a DS
varies. Generally speaking some knowledge of mathe-
matics, statistics, and MIS is needed. There are a variety
of courses and degree programs that prepare students
to become a DS. In 2016, Microsoft launched an online
data science degree program with the goal of addressing
a shortage of workers with data science skills.55
1-8 OUTLOOK FOR THE FUTURE
By examining various factors related to designing, imple-
menting, and using information systems, the following
predictions can be made:
●● Hardware and software costs will continue to decline, so
processing information will be less expensive. These cost
savings should make information systems affordable for
any organization, regardless of its size and financial status.
●● Artificial intelligence and related technologies will
continue to improve and expand, which will have an
impact on information systems. For example, further
development in natural language processing should
make information systems easier to use. Also, robots
will play a major role in the workforce of the future.
According to Gartner, by 2025, one in three jobs will
be taken by software or robots.56
●● The computer literacy of typical information system
users will improve, as computer basics are taught
more in elementary schools.
●● Networking technology will improve, so connect-
ing computers will be easier, and sending informa-
tion from one location to another will be faster.
Compatibility issues between networks will become
more manageable, and integrating voice, data, and
images on the same transmission medium will improve
communication quality and information delivery.
20 PART ONE: Fundamentals of Information Systems
●● Personal computers and tablets will continue to improve
in power and quality, so most information system soft-
ware will be able to run on them without problems. This
trend should make information systems more affordable,
easier to maintain, and more appealing to organizations.
●● Internet growth will continue, which will put small and
large organizations on the same footing, regardless of
their financial status. Internet growth will also make
e-collaboration easier, despite geographical distances.
●● Computer criminals will become more sophisticated,
and protecting personal information will become
more difficult.
Major computing trends that are already underway
and should continue into the future include:57
●● Ubiquitous computing: Computing devices every-
where with different sizes and power and accessed
through multiple formats such as voice, touch, and
gesture (discussed in Chapter 2).
●● The Internet of things (IoT) and the Internet of every-
thing (IoE): Connected devices through the Web that
will be used by businesses and individuals for increasing
productivity and cost savings (discussed in Chapter 7).
●● 3D printing: Creating a physical object from a 3D
digital model for individuals use and businesses. This
could significantly bring down manufacturing costs
●●
(discussed in Chapter 11).
Pervasive analytics: Building and integrating analyt-
ics capabilities into all everyday business activities
(discussed in Chapter 3).
●● Context aware computing: Widespread applications and
deployment of devices that know users, their devices,
and their locations and serve as intelligent assistants to
businesses and individuals (discussed in Chapter 13).
●● Smart machines and devices: Continuous improve-
ments in autonomous cars, trucks, drones, and robots,
such as self-driving cars (discussed in Chapter 13).
●● Cloud computing: Growth in cloud computing for
multiple applications and multiple users (discussed
in Chapter 14).
●● Software defined applications and infrastructures:
The trend toward dynamically assembled infrastruc-
tures that are more responsive to user needs and are
able to deliver results faster, as opposed to predefined
infrastructures.
●● Security: The importance of computer and network
security will increase, and more attention will be given
to application self-protection (discussed in Chapter 5).58
●● Increased applications of augmented and virtual
reality: By 2020, 100 million consumers will shop in
augmented reality (discussed in Chapter 14).59
The Industry Connection highlights Microsoft and its
products and services.
Industry Connection: Microsoft Corporation60
Microsoft, founded in 1975, is the world’s largest software company and is involved in all aspects of desktop computing. In
recent years, Microsoft has also become a major cloud provider. It is best known for the Disk Operating System (DOS), Win-
dows operating systems, and office software suites such as Office. Here are some of the products and services Microsoft offers:

Windows: The most popular operating system for PCs and MSN: An Internet portal combining Web services and free
PC-compatible computers Web-based e-mail (Hotmail)

Windows XP, Windows Vista, Windows 7, Windows 8, SharePoint Server: Groupware for facilitating information
Windows 10: Five widely used OSs for PCs sharing and content management

Windows Server 2003, Server 2008, Server 2010, Server SQL Server 2008, 2010, 2012, 2014, and 2016: Widely used
2012, Server 2016: Five widely used server operating database management systems
systems used in network environments
Xbox: A video game system
Office: The most widely used office suite; includes Word,
Visual Studio: An integrated development environment (IDE)
Excel, Access, and PowerPoint
that can be used to program applications in a number of dif-
Office 365: An online service, similar to Google Apps, that ferent languages (such as C++, Java, Visual Basic, and C#); used
lets users collaborate on documents, spreadsheets, and for console or GUI applications as well as Web applications
e-mail using a combination of subscription desktop soft-
Windows Live ID: A single sign-on service for multiple
ware and Web apps; includes Word, Excel, Exchange, and
Web sites
PowerPoint
Skype: A software application that allows users to commu-
Internet Explorer: A popular Web browser
nicate using voice, videos, and data over the Internet
Expression Web (replacing FrontPage): An HTML editor
Surface: A tablet designed to compete with the iPad
and Web design program for developing Web pages and
other HTML applications Azure: A cloud computing platform

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Reviews and Discussions

1. What are three applications of computers and infor- 2. What are three recommendations for reducing risk
mation systems in your daily life? and improving the privacy of your personal informa-
tion while using social media?

CHAPTER 1: Information Systems: An Overview 21

 3. What is business intelligence (BI)?
4. Define a management information system (MIS).
5. What are four major components of an information
system?
Projects
1. Identify three applications of information systems at the
college or the university that you are attending. Write a
one-page paper that describes these three applications,
and provide an example of the type of decisions that are
being improved by each application. How are multiple
choice and true-false questions graded?
2. Grocery chains have been using information technolo-
gies for several decades. After reading the information
presented in this chapter and other sources, write a
one-page paper that describes three such technolo-
gies. What are two advantages of a POS system?
3. RFID tags are being increasingly used by companies
such as Macy’s, Walmart, and Home Depot. Identify
an additional company that uses RFIDs and write a
one-page paper that describes the company’s spe-
cific application of RFIDs. What are two differences
between an RFID and a UPC system?
Are You Ready to Move On?
1. Computer literacy is understanding the role of infor-
mation in generating and using business intelligence.
True or False?
2. Data consists of raw facts and is a component of an
information system. True or False?
3. Michael Porter’s Five Forces Model analyzes an
organization, its position in the marketplace, and how
information systems could be used to make it more
competitive. True or False?
4. All of the following are among the good practices
while using social media, except:
a. Use long passwords (eight characters or longer) that
mix uppercase and lowercase letters with numbers
b. Do not post a phone number or a full address
c. Do not post children’s names, even in photo tags or
captions
d. Be specific when posting information about vaca-
tions or business trips
22 PART ONE: Fundamentals of Information Systems
6. What are three examples of decisions supported by a
logistics information system (LIS)?
7. What are Michael Porter's three strategies for success-
fully competing in the marketplace?
8. What are three examples of specific tasks performed
by a data scientist (DS)?
4. After reading the information presented in this chapter
and other sources, write a one-page paper that describes
the ways two different companies use Michael Porter’s
three strategies. How are information systems assisting
these companies in implementing each strategy? How
has Walmart (for the most part) become a cost leader?
5. After reading the information presented in this
chapter and other sources, write a one-page paper that
supports the claim that, in the future, computer crimi-
nals will become more sophisticated and that protect-
ing personal information will become more difficult.
How should individuals guard against this threat?
6. Banks are promoting online banking to a broad
range of customers. After reading the information
presented in this chapter and other sources, write a
one-page paper that lists three advantages and three
disadvantages of online banking. Why are some cus-
tomers reluctant to use online banking? What are two
examples of popular apps that your own bank uses?
5. All of the following are among decisions supported by
a financial information system (FIS) except:
a. Sales forecasting
b. Improving budget allocation
c. Minimizing capital investment risks
d. Monitoring cost trends
6. All of the following are among the new IT-related jobs
except:
a. Data scientist
b. Systems analyst
c. Social media/online-community manager
d. Search engine optimization specialist
CASE STUDY 1-1
Federal Express (FedEx), founded
in 1971, handles an average of
3 million package-tracking requests
every day (http://about.van.fedex
.com/). To stay ahead in a highly
competitive industry, the company
focuses on customer service by
maintaining a comprehensive Web
site, FedEx.com, where it assists
customers and reduces costs. For
example, every request for information that is handled at
the Web site rather than by the call center saves an esti-
mated $1.87. Federal Express has reported that customer
calls have decreased by 83,000 per day since 2000, which
saves the company $57.56 million per year. And because
each package-tracking request costs Federal Express
3 cents, costs have been reduced from more than
$1.36 ­billion per year to $21.6 million per year by customers
using the Web site instead of the call center.
Another technology that improves customer service is
Ship Manager, an application installed on customers’ sites
so users can weigh packages, determine shipping charges,
CASE STUDY 1-2
Faced with strong competition by online
stores, retailers are looking for new ways
to improve customer service and lower
operating costs. They have found mobile
technology to be the key for achieving
this goal. Scan-as-you-go mobile devices
are a logical next step after the self-
checkout used by many retailers. Retail
experts predict the new mobile-based
retail devices could eventually bring about the end of tra-
ditional cash register systems. The mobile checkout stations
pioneered at Apple stores appear to be the future. The goal
is to speed up and improve customer service and to keep
consumers in stores and spending.
Ahold USA’s Stop & Shop retail stores use a mobile device
called Scan It that hangs on the handle of the shopping cart
and allows customers to shop and scan as they go through
the aisles. If there is a coupon for an item, the device quickly
gives the customers a credit and the total is recalculated.
The device is smart enough to alert the customer if there is
a coupon for a complementary item, such as coffee creamer
if the customer has purchased coffee. Shoppers who use the
and print shipping labels. Custom-
ers can also link their invoicing,
billing, accounting, and inventory
Denise Kappa/Shutterstock.com
systems to Ship Manager.61
However, Federal Express still
spends almost $326 million per
year on its call center in order to
reduce customers’ frustration when
the Web site is down or when cus-
tomers have difficulty using it.
The company uses customer relationship ­ management
software called Clarify in its call ­centers to make customer
service representatives’ jobs easier and more efficient and
to speed up response time.62
Answer the following questions:
1. Is technology by itself enough to ensure high-quality
customer service?
2. What are Federal Express’s estimated annual savings
from using information technology?
3. What are a couple of examples of information technolo-
gies used by Federal Express?
Scan It device spend about 10 percent
more than average.
Clothing retailer Nordstrom is also using
Tyler Olson/Shutterstock.com
mobile devices, which it issues to its sales
associates on the floor so they can scan
items on the spot and let customers pay
without going through the cash registers.
The Home Depot uses a device called First
Phones as an inventory tracker. If the item
is out of stock, First Phones quickly notifies the customer
whether a nearby store has it, then holds the item for the cus-
tomer to pick up. Starbucks is using a digital wallet model that
allows customers to pay using their smartphones.63
Answer the following questions:
1. According to this case study, what is an upcoming key
technology that will be used in retail stores to improve
customer service?
2. What is the name of the device used by Ahold USA’s
Stop & Shop retail stores?
3. What will be the role of smartphones in the future of
shopping?
CHAPTER 1: Information Systems: An Overview 23
 2 Computers: The
Machines Behind
Computing
Preechar Bowonkitwanchai/Shutterstock.com

LEARNING OBJECTIVES
After studying this chapter, you should be able to:

2-1 Define a computer system, and describe its components.

2-2 Discuss the history of computer hardware and software. After you finish
2-3 Explain the factors distinguishing the computing power of computers. this chapter, go to
2-4 Summarize computer operations.
PAGE 43 for the
2-5 Discuss the types of input, output, and memory devices.
STUDY TOOLS
2-6 Explain how computers are classified.

2-7 Describe the two major types of software.

2-8 List the generations of computer languages.

In this chapter, you will learn about the
major components of If airplanes had a computer and what
developed as
factors distinguish computers have computing power.
You will review a brief developed, today you history of computer
hardware and software would be able to go and learn an overview
of computer operations. around the globe in You will also go
less than 20 minutes
into more detail on for just 50 cents. specific computer
components: input, output, and memory
devices. You will learn how computers are
classified, based on size, speed, and sophistication, and about the two
major types of software—system software and application software—
and the five generations of computer languages.

2-1 DEFINING A COMPUTER manner without the use

of computers. The text A computer is a machine that
was typed and revised accepts data as input, processes
data without human intervention
If airplanes had developed as computers have devel- with word-processing by using stored instructions, and
oped, today you would be able to go around the globe software, and composi- outputs information.
in less than 20 minutes for just 50 cents. Computers tion software was used to
have gone through drastic changes in a short time. For typeset the pages. Print-
example, a computer that weighed more than 18 tons ing, warehousing, inventory control, and shipping were
60 years ago has been replaced by one that now weighs accomplished with the help of computers.
less than 2 pounds. Today’s computer is 100 times more So what is a computer? Many definitions are
powerful and costs less than 1 percent of the 60-year-old possible, but in this book a computer is defined as
computer. a machine that accepts data as input, processes data
As you learned in Chapter 1, you use computers without human intervention by using stored instruc-
every day for a multitude of purposes. You even use tions, and o­utputs ­ information. The instructions,
them indirectly when you use appliances with embedded also called a program, are step-by-step directions for
computers, such as TVs and microwaves.
Computers have become so ubiquitous,
in fact, that a cashless and checkless soci-
ety is likely just around the corner. Simi-
larly, computers might eliminate the need
for business travel. Even now, executives
seldom need to leave their offices for
meetings in other locations because of
technologies such as computer conferenc-
ing and tele­presence systems.
Computers are used in a wide variety
McIek /Shutterstock.com

of tasks, including report distribution in

businesses, rocket guidance control in the
NASA space program, and DNA analy-
sis in medical research. This book could
not have been published in such a timely

CHAPTER 2: Computers: The Machines Behind Computing 25

 Exhibit 2.1

CPU

ALU Control unit

Input devices Output devices

Main memory

­ erforming a specific task, written in a language the

p 2-1a
­computer can understand. Remember that a computer
only processes data (raw facts); it ­cannot change or A computer system consists of hardware and software.
correct the data that is entered. If data is erroneous, Hardware components are physical devices, such as key-
the information the computer provides is also errone- boards, monitors, and processing units. The software
ous. This rule is sometimes called GIGO: garbage in, component consists of programs written in computer
garbage out. languages.
To write a computer program, first you must Exhibit 2.1 shows the building blocks of a com-
know what needs to be done, and then you must plan puter. Input devices, such as keyboards, are used to send
a method to achieve this goal, including selecting the data and information to the computer. Output devices,
right language for the task. Many computer languages such as monitors and printers, display the output a com-
are available; the language you select depends on the puter generates.
problem being solved and the type of computer you Main (primary) memory is where computers
are using. Regardless of the language, a program is store data and instructions, similar to a human brain.
also referred to as the The central processing unit (CPU) is the heart of
source code. This source a computer. It is divided into two components: the
The central processing unit code must be trans- arithmetic logic unit (ALU) and the control unit.
(CPU) is the heart of a computer. It The ALU performs arithmetic operations (1, 2, ∗, /) as
is divided into two components: the lated into object code—
arithmetic logic unit (ALU) and the consisting of binary 0s well as comparison or relational operations (,, ., 5);
control unit. and 1s. Binary code— the latter are used to compare numbers. The control
a set of instructions unit tells the computer what to do, such as instructing
The arithmetic logic unit
(ALU) performs arithmetic used to control the the computer which device to read or send output to.
operations (1, 2, *, /) as well as computer—uses 0s and Some computers have a single processor; other
comparison or relational operations 1s, which the computer computers, called multiprocessors, contain multiple pro-
(,, ., 5); the latter are used to
understands as on or off cessors. Multiprocessing is the use of two or more CPUs
compare numbers.
signals. You will learn in a single computer system. Generally, a multiprocessor
The control unit tells the computer performs better than a ­single-processor com-
more about the binary
computer what to do, such as
system and computer puter in the same way that a team would perform better
instructing the computer which
device to read or send output to. languages later in this than an individual on a large, time-consuming project.
chapter. Some computers use a dual-core processor, which is

26 PART ONE: Fundamentals of Information Systems

 essentially two processors in one, to improve processing
power. Dual-core processors are common in new PCs
and Apple computers. In recent years, multicore proces-
sors have been introduced. A quad-core processor con-
tains four cores, a hexa-core processor contains six cores,
and an octa-core processor contains eight cores. Simply
put, these new chips are making computers faster than
their predecessors.
Another component that affects computer per-
formance is a bus, which is the link between devices
connected to the computer. A bus can be parallel or
serial, internal (local) or external. An internal bus enables
communication between internal components, such as
a video card and memory; an external bus is capable
of communicating with external components, such as a
USB device.
Other factors that affect computer performance
include the processor size and the operating system
(OS). In recent years, 32-bit and 64-bit processors and
OSs have created a lot of interest. A 32-bit proces-
sor can use 232 bytes (4 GB) of RAM; and, in theory, a
64-bit processor can use 264 bytes (16 EB, or exabytes)
of RAM. So a computer with a 64-bit processor can
­perform ­calculations with larger numbers and be more
efficient with smaller numbers; it also has better over-
all performance than a 32-bit system. However, to take
advantage of this higher performance, you must also
have a 64-bit OS.
Exhibit 2.2 shows additional components of a
computer system. A disk drive is a peripheral device
Exhibit 2.2
Avera/Shutterstock.com
Zadorozhnyi Viktor/
Shutterstock.com
for recording, storing, and retrieving information. A
CPU case (also known as a computer chassis or tower)
is the enclosure containing the computer’s main compo-
nents. A motherboard is the main circuit board con-
taining connectors for attaching additional boards. In
addition, it usually contains the CPU, basic input/output
system (BIOS), memory, storage, interfaces, serial and
parallel ports, expansion slots, and all the controllers for
standard peripheral devices, such as the display monitor,
disk drive, and keyboard. A serial port is a communica-
tion interface through which information is transferred
one bit at a time; a parallel port is an interface between
a computer and a printer that enables the computer
to transfer multiple bits of information to the printer
simultaneously.
2-2 THE HISTORY OF COMPUTER
HARDWARE AND SOFTWARE
Major developments in hardware have taken place
over the past 60 years. To make these developments
more clear, computers are often categorized into
“generations” that mark technological breakthroughs.
Beginning in the 1940s, first-generation computers
used vacuum tube technology. They were bulky and
unreliable, generated excessive heat, and were diffi-
cult to program. Second-generation computers used
transistors and were faster, more reliable, and easier
A bus is a link between devices
connected to the computer. It can
be parallel or serial, internal (local)
or external.
A disk drive is a peripheral
device for recording, storing, and
retrieving information.
A CPU case is also known as
Ps-42 /Shutterstock.com
a computer chassis or tower. It
is the enclosure containing the
computer’s main components.
A motherboard is the main
circuit board containing connectors
for attaching additional boards. It
usually contains the CPU, basic input/
output system (BIOS), memory,
storage, interfaces, serial and parallel
ports, expansion slots, and all the
controllers for standard peripheral
devices, such as the display monitor,
disk drive, and keyboard.
CHAPTER 2: Computers: The Machines Behind Computing 27
 TABLE 2.1 HARDWARE GENERATIONS
Generation Date
First 1946–1956
Second 1957–1963
Third 1964–1970
Fourth 1971–1992
Fifth 1993–present
to program and maintain. Third-generation comput-
ers operated on integrated circuits, which enabled
computers to be even smaller, faster, more reliable,
and more sophisticated. Remote data entry and
telecommunications were introduced during this
generation. Fourth-generation computers continued
several trends that further improved speed and ease
of use: miniaturization, very-large-scale integration
(VLSI) circuits, widespread use of personal comput-
ers, and optical discs (discs written or encoded and
read using a laser optical device). The current fifth-
generation computers include parallel processing
(computers containing hundreds or thousands of CPUs
for rapid data processing), gallium arsenide chips that
run at higher speeds and consume less power than sili-
con chips, and optical technologies. Table 2.1 summa-
rizes these hardware generations.
Because silicon cannot emit light and has speed
limitations, computer designers have concentrated on
technology using gallium arsenide, in which electrons
move almost five times faster than silicon. Devices
made with this synthetic compound can emit light,
withstand higher temperatures, and survive much
higher doses of radiation than silicon devices. The
major problems with gallium arsenide are difficul-
ties in mass production. This material is softer and
more fragile than silicon, so it breaks more easily dur-
ing slicing and polishing. Because of the high costs
and difficulty of production, the military is currently
the major user of this technology. However, research
continues to eliminate some shortcomings of this
technology.
IBM has already started using carbon nanotubes
(CNTs) instead of silicon in its computer chips. CNTs
are developed using nanotechnology, which is dis-
cussed in Chapter 14. It is one of the methods that
should keep chip sizes shrinking after the current
silicon-based technology has reached its limit.1
28 PART ONE: Fundamentals of Information Systems
Major Technologies Example
Vacuum tube ENIAC
Transistors IBM 7094, 1401
Integrated circuits, remote data entry, IBM 360, 370
telecommunications
Miniaturization, VSLI, personal Cray XMP, Cray II
computers, optical discs
Parallel processing, gallium arsenide IBM System zEnterprise EC12
chips, optical technologies
IBM has produced a prototype chip with tran-
sistors that are just 7 nanometers wide, or about
1/10,000th the width of a human hair. Those in use
currently are twice as big.2
The field of optical technologies involves the appli-
cations and properties of light, including its interactions
with lasers, fiber optics, telescopes, and so forth. These
technologies offer faster processing speed, parallelism
(several thousand light beams can pass through an ordi-
nary device), and interconnection; much denser arrays
of interconnections are possible because light rays do
not affect each other. Optical computing is in its infancy,
and more research is needed to produce a full-featured
optical computer. Nevertheless, storage devices using
this technology are revolutionizing the computer field by
enabling massive amounts of data to be stored in very
small spaces.
Computer languages and software have also devel-
oped through five generations. They are discussed in
more detail in the “Computer Languages” section, but
Table 2.2 summarizes these generations.
The information box “IBM Watson: A Super-
computer with Artificial Intelligence Capabilities”
describes a supercomputer that has several features of
a fifth-generation computer as well as artificial intel-
ligence capabilities.
TABLE 2.2 COMPUTER LANGUAGE TRENDS
Generation Major Attribute
First Machine language
Second Assembly language
Third High-level language
Fourth Fourth-generation language
Fifth Natural language processing (NLP)
IBM Watson: A Supercomputer with Artificial Intelligence Capabilities
On February 16, 2011, an IBM supercomputer named
Watson beat two former champions of the television game
show Jeopardy and took away the $1 million prize. At first,
Watson did poorly on a variety of subjects, from politics
to USA Today’s 2008 price hike. The supercomputer also
did not know that Slovenia was the only former Yugoslav
­republic currently in the European Union. Eventually,
though, it pulled ahead, with 18 correct answers compared
to Ken Jennings’s 7 and Brad Rutter’s 4.

Source: YouTube/IBM
To achieve its victory, Watson needed massive comput-
ing power and storage space, including 10 server racks, each
with 10 IBM Power 750 servers; it drew on 200 million pages
of content stored on 4 terabytes of disk space.3 Thousands of
algorithms and computer programs allowed it to break down
Watson has been seen conversing with
human language into pieces so it could search for answers in
musician and winner of the 2016 Nobel
its massive database. It answered questions without exactly
understanding them, but it answered them with a high Prize in Literature Bob Dylan in IBM
degree of confidence! Overall, this was a significant improve- commercials.
ment in a computer’s ability to understand context in human
language. IBM believes that the technology behind Watson can be applied to a variety of fields, including medicine.
Voice integration is the next step in the development of Watson-related ­applications.4,5
Watson powered apps are now available that can serve as personal shopping assistant and help brick-and-motor
companies to increase their cross-sell and up-sell opportunities.6
IBM and Pathway Genomics are developing an app that uses personal history and genetics to evaluate risks and
recommend exercises. This app enables an individual to find out what exercises to do, what to eat, and what medical
tests to ask from a doctor.7
Watson has also been used as a trip-planning service providing travelers with relevant information in order to better
plan their trips.8
As an example, H&R Block, an American tax preparation company, is using Watson to improve the client experi-
ence and assist in identifying credits and deductions. Watson will be able to find the best outcome for each and every
unique tax situation and maximize the tax returns. At the same time, it will assist clients to better understand how
different filing options can impact (increase or decrease) their tax returns.9
Some of the new features and capabilities of Watson include vision-recognizing images and patients’ records,10
battling cancer with advanced genomics,11 and managing call centers.12

2-3 THE POWER OF COMPUTERS
Computers draw their power from three factors that far
exceed human capacities: speed, accuracy, and storage
and retrieval capabilities. These are discussed in the
following sections.
2-3a
Computers process data with amazing speed. They are
capable of responding to requests faster than humans
can, which improves efficiency. Today’s high-speed
computers make it possible for knowledge workers to
perform tasks much faster than with the slower com-
puters of the past. Typically, computer speed is mea-
sured as the number of instructions performed during
the following fractions of a second:
●● Millisecond: 1/1,000 of a second
●● Microsecond: 1/1,000,000 of a second
●● Nanosecond: 1/1,000,000,000 of a second
●● Picosecond: 1/1,000,000,000,000 of a second

CHAPTER 2: Computers: The Machines Behind Computing 29

 2-3b TABLE 2.3 STORAGE MEASUREMENTS
Unlike humans, computers do not make mistakes. To (APPROXIMATIONS)
understand computer accuracy more clearly, take a look 1 bit A single value of 0 or 1
at these two numbers: 8 bits 1 byte or character
●● 4.0000000000000000000000001 2 bytes
10
1,000 bytes, or 1 kilobyte (KB)
●● 4.0000000000000000000000002 220 bytes 1,000,000 bytes, or 1 megabyte (MB)
2 bytes
30
1,000,000,000 bytes, or 1 gigabyte (GB)
To humans, these two numbers are so close that they
are usually considered equal. To a computer, however, 2 bytes
40
1,000,000,000,000 bytes, or 1 terabyte (TB)
these two numbers are completely different. This degree 2 bytes
50
1,000,000,000,000,000 bytes, or 1 petabyte (PB)
of accuracy is critical in many computer applications. On 260 bytes 1,000,000,000,000,000,000 bytes, or 1 exabyte (EB)
a space mission, for example, computers are essential for
calculating reentry times and locations for space shuttles.
A small degree of inaccuracy could lead the space shuttle numeric, or special character is represented with an
to land in Canada instead of the United States. 8-bit binary number.
The information box “A Supercomputer in Your
Pocket” highlights the power of smartphones that are
2-3c
faster than a supercomputer of a few years ago.
Storage means saving data in computer memory, and
retrieval means accessing data from memory. Computers
can store vast quantities of data and locate a specific item
quickly, which makes knowledge workers more efficient
2-4 COMPUTER OPERATIONS
in performing their jobs.
In computers, data is stored in bits. A bit is a single Computers can perform three basic tasks: arithmetic
value of 0 or 1, and 8 bits equal 1 byte. A byte is the size operations, logical operations, and storage and retrieval
of a character. For example, the word computer consists operations. All other tasks are performed using one or
of 8 characters or 8 bytes (64 bits). Table 2.3 shows stor- a combination of these operations. For example, play-
age measurements. ing a computer game could require a combination of all
Every character, number, or symbol on the keyboard three operations. During a game, your computer may
is represented as a binary number in computer memory. A perform calculations in order to make a decision (such
binary system consists of 0s and 1s, with a 1 representing as whether to move from point A to point B), it may
“on” and a 0 representing “off,” similar to a light switch. compare two numbers, and it may perform storage and
Computers and communication systems use data retrieval functions for going forward with the process.
codes to represent and transfer data between computers Computers can add, subtract, multiply, divide, and
and network systems. The most common data code for raise numbers to a power (exponentiation), as shown in
text files, PC applications, and the Internet is American the following examples:
Standard Code for Information Interchange (ASCII),
A 1 B (addition) 5 1 7 5 12
developed by the American National Standards Insti-
A 2 B (subtraction) 52253
tute. In an ASCII file, each alphabetic, numeric, or spe-
A p B (multiplication) 5 p 2 5 10
cial character is represented with a 7-bit binary number A / B (division) 5 / 2 5 2.5
(a string of 0s or 1s). Up to 128 (27) characters can be A ⋀ B (exponentiation) 5 ⋀ 2 5 25
defined. There are two additional data codes used by
many operating systems: Unicode and Computers can perform compa­
Extended ASCII. Unicode is capable rison operations by comparing two
of representing 256 (28) characters, and You can store the text numbers. For example, a computer can
Extended ASCII is an 8-bit code that also of more than 1 million compare x to y and determine which
allows representation of 256 characters. number is larger.
books in a memory
Before the ASCII format, IBM’s Computers can store massive
Extended Binary Coded Decimal Inter- device about the size amounts of data in very small spaces
change Code (EBCDIC) was popular. of your fist. and locate a particular item quickly. For
In an EBCDIC file, each alphabetic, example, you can store the text of more
30 PART ONE: Fundamentals of Information Systems
A Supercomputer in Your Pocket
A modern smartphone today has more computing power
and memory than all of NASA during its 1969 mission that
placed two astronauts on the moon and brought them
back safely.13 The Apollo 11 astronauts’ guidance computer
was 2-feet wide, weighed 70 pounds, and had 4 KB of
memory. Its cost in today’s dollars was about $150,000.14
Apple iPhone 8 has 2 GB of RAM, while the iPhone 8 Plus

Everett Historical/Shutterstock.com
and high-end iPhone X both come with 3 GB of RAM. They
are more than 2,000 times faster than the Apollo 11 com-
puter at a fraction of its cost.
You can use your smartphone to order a latté or per-
form a sophisticated statistical analysis. You can shop or
manage a smart home (a home connected to the Internet)
from thousands miles away. Smartphones serve as the
gate to the Internet of things (IoT) discussed in Chapter 7 The Apollo 11 lunar module ascends from
that can connect you to billions of devices. the moon in this July 20, 1969, photo.
As of September 2017, there were more than 3.3 million
apps for Android devices 15 and more than 3.1 million apps for iOS devices. 16 When you combine the speed, memory,
and ease of use of smartphones with the number, variety, and sophistication of over 4 million apps, many of which
are available for free, you can easily see that a supercomputer is in the palm of your hand.

than 1 million books in a memory device about the size tasks with keyboards, but

Benko Zsolt/Shutterstock
of your fist. Later in this chapter, you will learn about for some tasks a scanner
different storage media, such as magnetic disks and tape. or mouse is faster and
more accurate.
●● Mouse—This pointing

2-5 INPUT, OUTPUT, AND
MEMORY DEVICES
To use a computer and process data, three major com-
●●
ponents are needed: input, output, and memory devices.
These are discussed in the following sections.
2-5a
Input devices send data and information to the com-
puter. They are constantly being improved to make data
input easier. Examples of input devices include:
●● Keyboard—This is the most widely used input device.
Originally, keyboards were designed to resemble type-
writers, but several modifications have been made to
improve their ease of use. For example, most keyboards
include control keys, arrow keys, function keys, and
other special keys. In addition, some keyboards, such
as the split keyboard, have been developed for better
ergonomics. You can perform most computer input
.com
device moves the cursor on the
screen, allowing fast, precise cursor positioning. With
programs that use graphical interfaces, such as Micro-
soft Windows or Mac OS, the mouse has become the
input device of choice.
Touch screen—This is a combination of input devices,
usually working with menus. Some touch screens rely
on light detection to determine which menu item has
been selected; others are pressure sensitive. Touch
screens are often easier to use than ­keyboards, but
they might not be as accurate because selections can
be misread or mistouched. You probably saw touch
screens used extensively on television during the
2016 presidential election to quickly show electoral
maps and analyze election data in different ways. The
information box “Touchless Computing: The New
Paradigm in User
System Interface” Input devices send data and
discusses touchless information to the computer.
computing, which Examples include a keyboard and
may become popular mouse.
in the near future.
CHAPTER 2: Computers: The Machines Behind Computing 31
 Touchless Computing: The New Paradigm in User System Interface
Imagine using your tablet, PC, or Macintosh without need-
ing a mouse, keyboard, or touchpad. Like Tom Cruise in
Minority Report, you may soon be able to interact with your

Bosca78/iStock Unreleased/Getty Images

device without touching it, using only ­gestures. In fact,
touchless computing enables you to control what is on
the screen with the movements of your finger. The goal of
touchless computing is to provide an environment similar
to the real world, in which you are able to manipulate
objects using only your fingers.17
This technology should be particularly useful for social
networking sites such as Facebook, in situations where a
user wants to navigate through different types of data in
multiple settings. A San Francisco-based startup company named Leap Motion has designed a device called the Leap
that is the size of a thumb drive. The Leap enables you to control your computer with high degree of accuracy by
waving your hands around. This technology could also radically change our interaction with our TV sets. You will be
able to navigate through channels and programs without touching the remote or the TV set.18
Engineers who use this technology will be able to manipulate 3D models on the screen by mere gesture. The New
York Times has developed a 3D news reader and video reader based on this technology.19

●●  ight pen—This is a light-sensitive stylus connected

L must be able to recognize many special characters and
to the monitor with a cable. When it is placed on an
on-screen location, the data in that spot is sent to the
computer. The data can be characters, lines, or blocks. A
light pen is easy to use, inexpensive, and accurate, and it
is particularly useful for engineers and graphic designers
who need to make modifications to technical drawings.
●● Trackball—This is kept in a stationary location, but it
can be rolled on its axis to control the on-screen cur-
sor. Trackballs occupy less space than a mouse, so they
are ideal for notebook computers. However, position-
ing with a trackball is sometimes less precise than with
a mouse.
●●  ata tablet—This consists of a small pad and a pen.
D multiple-choice and true/false tests.
Menus are displayed on the tablet, and you make selec-
tions with the pen. Data tablets are used most widely in
computer-aided design and manufacturing applications.
●● Barcode reader—This is an optical scanner that uses
lasers to read codes in bar form. These devices are fast
and accurate and have many applications in inventory,
data entry, and tracking systems. They are used mostly
with UPC systems in retail
stores.
An output device is capable ●● Optical character
of representing information from a
reader (OCR)—This
computer. The form of this output
works on the same
might be visual, audio, or digital;
examples include printers, display principle as a barcode
monitors, and plotters. reader but reads
text instead. OCRs
32 PART ONE: Fundamentals of Information Systems
distinguish between uppercase and lowercase letters,
so using one is more difficult than using a barcode
reader. Nevertheless, OCRs have been used success-
fully in many applications and are improving steadily.
The U.S. Postal Service uses OCRs to sort mail.
●●  agnetic ink character recognition (MICR) system—
M
This reads characters printed with magnetic ink and is
used primarily by banks for reading the information at
the bottom of checks.
●●  ptical mark recognition (OMR) system—This is
O
sometimes called a “mark sensing” system because it
reads marks on paper. OMRs are often used to grade
2-5b
Many output devices are available for both main-
frames and personal computers. Out­put displayed on a
screen is called “soft copy.” The most common output
devices for soft copy are cathode ray tube (CRT), plasma
display, and liquid crystal display (LCD). Soon, organic
light-emitting diode (OLED) displays will replace LCDs.
OLED screens are brighter, thinner, and consume less
power than LCD technology. However, they are more
expensive than LCD technology.
A new type of screen that can fold and roll is being
introduced for tablets, wearable devices, and smart-
phones. These displays are based on OLED technology
Another random document with
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however, the more he washed in the hot tears, the redder grew his
clothes, until he was just the colour of the scarlet bean blossom.
“You told me a story,” said Gillydrop to the giant when he saw how
red he was getting.
“I know I did,” said Dunderhead, drying his eyes, for he had now
wept enough, and was growing hungry; “but if I hadn’t told you a
story, I wouldn’t have got any supper. You’ll never be green again, so
don’t trouble your head. I’m going to get some wood to cook these
nice fat children.”
On hearing this, Teddy and Tilly roared like bulls, and Gillydrop
roared too, for he was afraid he would never be able to go back to
Faeryland in his red clothes; but the giant only laughed at them, and
went out to light a fire under his big kettle.
Gillydrop was naturally very cross with the giant for having deceived
him, and determined to punish him for having done so. Bringing the
two children to Dunderhead for his supper could not be the kindly
deed he had to do, or else he would have turned green again; so
Gillydrop made up his mind to take Teddy and Tilly back to earth,
and thus leave Dunderhead without his supper. While he was thus
making up his mind, seated at one end of the table, the two children,
seated at the other end, were crying bitterly at the plight in which
they now found themselves, for it certainly is not a nice thing to be
boiled for an ogre’s supper.
“Poor mother!” wailed Tilly, weeping; “she’ll miss us so much.”
“I don’t know if she will,” replied Teddy dolefully; “we’ve always been
so naughty, I daresay she’ll be glad we’ve gone.”
“Oh no, she won’t,” said Tilly, nodding her head; “she loves us too
much for that; but if we could get back I’d be so good.”
“And so would I,” cried Teddy; and then they both wept again, while
Gillydrop, seeing their tears, wept also out of sheer sympathy.
“Perhaps the giant will only eat one of us,” said Tilly after a pause;
“so while one of us is boiling, the other must run away and go back
to comfort mother.”
“Who will be boiled?” asked Teddy sadly. “Will you, Tilly?”
“I don’t like being boiled,” answered Tilly, with a shudder. “I’m sure it
isn’t nice.”
“Well, I don’t like being boiled either,” observed Teddy. “Suppose we
draw lots who is to run away.”
“Yes, that would be fair,” said Tilly, drying her eyes; “and the one who
wins must go back to cheer mother.”
Gillydrop was quite sorry now that he had brought them for
Dunderhead’s supper, when he heard how they regretted their
mother; so he made up his mind to save them.
“You shall neither of you be boiled,” he said, walking up to them
across the table, which was like a large plain. “I will take you back to
your mother.”
“But how?” asked Teddy and Tilly, both together. “We cannot go back
across the sea alone.”
“Oh yes, you can,” replied the Red Elf. “I brought you here, and can
send you back; that is, if I only had a leaf.”
“Here is one,” cried Tilly eagerly, pulling a faded leaf out of her
pocket. “I picked it up in the wood to-day, it had such pretty red and
yellow colours.”
“Oh, that will do for a boat,” said Gillydrop joyfully.
“But it’s so small,” objected Teddy.
“I’ll make it large enough,” said the elf. “You’ll see.”
“But how can we go on without sails or oars?” said Tilly timidly.
“You don’t need any,” rejoined Gillydrop, laughing; “you know every
tree has power to draw back its own leaves. The boat we came in
was a leaf, and, as soon as it was launched on the air, it went
straight back to the tree in the Country of the Giants upon which it
had grown; and as this leaf comes from a tree on earth, it will go
straight back to its tree.”
“Then we can get home,” cried Tilly, clapping her hands, “for the tree
isn’t far from mother’s cottage.”
“Mind, you are never to be naughty again,” said Gillydrop solemnly.
“Oh, no, no!” cried both children.
“And be very, very good to your mother.”
“Yes, yes! We’ll be very good.”
“Then go down to the beach by the path,” said Gillydrop, spreading
his wings. “I’ll fly down and get the boat ready; be quick, or the giant
will return.”
Then he flew away through the open window, and Teddy scrambled
down the steep path, followed by Tilly, both of them in a great fright
lest the giant should catch sight of them and pop them into his big
kettle. When they reached the beach, they found Gillydrop had
launched the leaf, which had now been transformed into a beautiful
red and yellow coloured boat.
“Good-bye,” said Gillydrop, as soon as they were comfortably seated
in the boat. “I’m sorry I brought you here, but it will do you no harm,
as it will teach you to be good. Mind you don’t quarrel in the boat—if
you do, the leaf will vanish, and you’ll sink for ever in the black
waves.”
“Oh, we’ll be very, very good,” promised both the children eagerly,
and then Gillydrop gave the boat a push, so that it moved rapidly
away from the land, leaving him seated on the beach, a lonely little
red figure.
Teddy and Tilly were rather afraid at finding themselves alone in the
darkness, but they kissed one another, and fell asleep, while the
leaf-boat sailed rapidly over the Sea of Darkness towards its parent
tree. When the children awoke, they found themselves lying on the
ground under the tree, and there above them was their red and
yellow boat, hanging, a red and yellow leaf, on a high bough.
“Now we’ll go home,” cried Tilly, jumping up; “now we’ll go home to
mother.”
“And be very good,” said Teddy, also rising.
“Yes; very, very good,” replied Tilly. And then, taking one another’s
hands, they ran home to their cottage through the dark forest.
Dame Alice, who thought they had lost themselves in the wood, was
very glad to see them, and, after she had kissed them, gave them a
good supper of bread and milk, which they enjoyed very much, for
you see they were very hungry with the long journey.
They told Dame Alice all their adventures, and she was very glad
they had gone to the Giants’ Country, for she guessed, like the wise
mother she was, that this was the lesson the faeries had foretold.
Ever afterwards, Teddy and Tilly were good children; there never
were two such good children, because they thought, if they were not
good, they would be taken back to the Giants’ Country and boiled for
an ogre’s supper. But after a time they liked to do good actions
because they found it pleasant, and Dame Alice was so pleased with
their behaviour that she made a rhyme about them, which soon
passed into a proverb:
“The magic power of a faery
Cures a child when quite contrary.”
 III.

HOW THE RED ELF RETURNED TO FAERYLAND.

When Gillydrop saw the magic boat disappear into the darkness of
the sea, he thought that, now he had done one kindly deed, his
clothes would change from red to green, and he would be able to
return to his dear Faeryland. But nothing of the sort occurred, and
the poor elf began to cry again, thinking he was lost for ever, but this
time his tears were not red, which was a good sign, although he did
not know it.
Very soon he heard Dunderhead roaring for the loss of his supper,
so, drying his eyes, he flew back again to the hall of the castle, to
see what the giant was doing. He found a great fire was lighted, over
which was suspended a great kettle filled with water, which was now
boiling hot. Dunderhead was searching everywhere for the children,
and when he saw Gillydrop he shook his great fist at him.
“Where’s my supper, you red rag?” he roared fiercely.
“Your supper has gone back to earth,” replied Gillydrop angrily, for no
one likes to be called a red rag. “You told me a story, so I thought I’d
punish you.”
“Oh, did you?” bellowed Dunderhead, in a rage. “Then I’ll punish you
also for spoiling my supper.” And before Gillydrop could fly away, he
caught him in his great hand and popped him into the boiling water.
Oh, it was terribly hot, and Gillydrop thought it was all over with him;
but, being a Faery, he could not be killed, as the foolish giant might
have known. He sank down, down, right to the bottom of the great
kettle, and then arose once more to the top. As soon as he found his
head above water, he sprang out of the kettle and flew away high
above the head of Dunderhead, who could only shake his fist at him.
To his delight and surprise, Gillydrop found his clothes had all
changed from red to green, and instead of being dressed in crimson,
his suit was now of a beautiful emerald colour. He was so delighted
that he flew down on to the floor of the hall, and began to dance and
sing, while the giant joined in as he tried to catch him; so that they
had quite a duet.
Gillydrop. Now I’m gay instead of sad,
For I’m good instead of bad:
Dreadful lessons I have had.
Giant. I will catch and beat you!

Gillydrop. Tho’ a naughty elf I’ve been,

Now my clothes are nice and clean:
I dance once more a faery green.
Giant. I will catch and eat you!

But you see he could not do that, because Gillydrop was too quick
for him, and flew round the hall, laughing at Dunderhead, who roared
with anger. Then the elf flew out on to the terrace which overlooked
the Sea of Darkness, followed by the giant. Gillydrop flew down on to
the beach to escape the ogre, and Dunderhead tried to follow; but,
as he could not fly, he fell right into the Sea of Darkness. Dear me!
what a terrible splash he made! The waves arose as high as the
castle walls, but then they settled down again over Dunderhead, who
was suffocated in the black billows. He was the very last of the
giants, and now his bones lie white and gleaming in the depths of the
Sea of Darkness, where nobody will ever find them—nor do I think
any one would trouble to look for them.
As for Gillydrop, now that Dunderhead was dead, he flew away
across the dreary plain towards Faeryland, and soon arrived at the
borders of the sullen grey sea which still rolled under the pale light of
the moon. Gillydrop was not a bit afraid now, because his clothes
were green once more, and he had performed one kindly deed; so
he sat down on the seashore and sang this song:
“When from Faeryland I fled,
All my nice clothes turned to red;
Now in emerald suit I stand—
Take me back to Faeryland.”
And as he sang the grey ocean faded away, and in its place he saw
the green trees of the faery forest, waving their branches in the silver
moonlight. Only a bright sparkling stream now flowed between
Gillydrop and Faeryland; so, spreading his silver and blue wings, he
flew across the water, singing gaily:
“Thanks, dear Oberon. At last
All my naughtiness is past;
Home I come without a stain,
And will never roam again.”

So at last Gillydrop got back to Faeryland after all his trials, and ever
afterwards was one of the most contented elves ever known. You
may be sure he never wanted to see the Country of the Giants
again, and whatever King Oberon said he did willingly, because he
knew it must be right.
He was quite a hero among the faeries, and had the honour of telling
all his adventures to King Oberon himself, which he did so nicely that
the King gave him a title, and ever afterwards he was called “Sir
Gillydrop the Fearless.”
 SHADOWLAND

IT was Christmas Eve, and the snow, falling heavily over a great city,
was trying to hide with its beautiful white robe all the black, ugly
houses and the narrow, muddy streets. The gas lamps stood up
proudly, each on its tall post, and cast their yellow light on the
crowds of people hurrying along with their arms filled with many
lovely presents for good children.
“They are poor things,” said the gas lamps scornfully. “If we did not
shed our light upon them, they would be lost in the streets.”
“Ah, but the people you despise made you,” cried the church bells,
which were calling the people to prayer. “They made you—they
made you, and gave you your beautiful yellow crowns.”
But the street lamps said nothing, because they could not deny what
the church bells said, and instead of acknowledging that they owed
all their beauty to the people they despised, remained obstinately
silent.
Near one of these lamp-posts, at the end of a street, stood a
ragged boy, who shivered dreadfully in his old clothes, and stamped
about to keep himself warm. The boy’s name was Tom, and he was
a crossing-sweeper, as could be seen by his well-worn broom. He
was very cold and very hungry, for he had not earned a copper all
day, and the gaily-dressed army of people swept selfishly past him,
thinking only of their Christmas dinners and warm homes.
The snowflakes fell from the leaden-coloured sky like great white
angels, to tell the earth that Christ would be born again on that night,
but Tom did not have any such ideas, as he was quite ignorant of
angels, and even of the birth of the child-Christ. He only looked upon
the snow as a cold and cruel thing, which made him shiver with pain,
and was a great trouble to brush away from his crossing.
 And overhead the mellow bells clashed out
their glad tidings in the bitterly chill air, while
below, in the warm, well-lighted churches, the
organ rolled out its hymns of praise, and the
worshippers said to one another, “Christ is
born again.”
But poor Tom!
Ah, how cold and hungry he was, standing in
the bright glare of the lamp, with his rags drawn closely round him for
protection against the falling snow. The throng of people grew
thinner and thinner, the gaily-decorated shops put up their shutters,
the lights died out in the painted windows of the churches, the bells
were silent, and only poor Tom remained in the deserted, lonely
streets, with the falling snowflakes changing him to a white statue.
He was thinking about going to his garret, when a gentleman,
wrapped in furs, passed along quickly, and just as he came near
Tom, dropped his purse, but, not perceiving his loss, walked on
rapidly through the driving snow. Tom’s first idea was to pick the
purse up and restore it to its owner, whom Tom knew very well by
sight, for he was a poet, who daily passed by Tom’s crossing. Then
Tom paused for a moment as he thought of all the beautiful things
the money in that purse would buy; while he hesitated, the poet
disappeared in the darkness of the night, so Tom was left alone with
the purse at his feet.
There it lay, a black object on the pure white
snow, and as Tom picked it up, he felt that it
was filled with money. Oh, how many things of
use to him could that money buy—bread and
meat and a cup of warm coffee—which would
do him good. Tom slipped it into his pocket, and thought he would
buy something to eat; but just at that moment he seemed to hear a
whisper in the air,—
 AS TOM PICKED IT UP HE FELT THAT IT WAS
FILLED WITH MONEY

“Thou shalt not steal.”

With a start of terror Tom looked around, thinking a policeman had
spoken, and would take him off to prison for stealing the purse, but
no policeman was in sight. He saw nothing but the whirling flakes
and his ragged shadow cast blackly on the white snow by the light of
the lamp. It could not have been the shadow speaking, as Tom
thought, for he knew that shadows never speak; but, ah! he did not
know the many wonderful things there are in this wonderful world of
ours.
Whoever had made the remark touched Tom’s heart, for he
remembered how his poor mother had blessed him when she died,
and told him to be an honest boy. It certainly would not be honest to
steal money out of the purse, but Tom was so cold and hungry that
he half thought he would do so. He took out the purse again and
looked at its contents—four shining sovereigns and some silver.
Then he put it back in his pocket, and trudged home with his broom
under his arm.
Home!—ah, what a dreary, cheerless home it was!—nothing but a
garret on the top of an old house—a bare garret, with no table or
chairs, but only the sacks upon which Tom slept at night.
He closed the door, and then lighted a little bit of candle he had
picked up in the streets with one of the matches from a box given
him by a ragged match-seller.
Tom placed the candle on the floor, and, kneeling down, opened the
purse to look at the money once more. Oh, how tempted he was to
take one of those shillings and buy some food and wood—it would
be a merry Christmas for him then! Other people were enjoying their
Christmas, and why should he not do the same? The great poet who
had dropped the purse had plenty of money, and would never miss
this small sum; so Tom, desperate with hunger, took a shilling, and,
hiding the purse under his bed, was about to blow out the candle
before creeping down-stairs to buy some food, when he heard a soft
voice whisper,—
“Don’t go, Tom.”
He turned round, and there was the shadow
cast by the reflection of the candle-light on the
wall. It was a very black shadow, much
blacker than Tom had ever seen before, and
as he looked it grew blacker and blacker on
the wall, then seemed to grow out of it until it
left the wall altogether, and stood by itself in
the centre of the floor, a waving, black shadow
of a ragged boy. Curiously enough, however,
Tom could not see its face, but only the outline
of its whole figure, yet it stood there shaking with every flicker of the
candle, and Tom could feel that its eyes were looking right into him.
“Don’t go, Tom,” said the shadow, in a voice so like his own that he
started. “If you go, you will be lost for ever.”
“Lost?” said Tom, with a laugh; “why, I couldn’t lose myself. I know
every street in the city.”
“I don’t mean really lost,” replied the shadow; “but it will be your first
step on the downward path.”
“Who are you?” asked Tom, rather afraid of the shadow, but keeping
a bold front.
“I am your shadow,” it replied, sighing. “I follow you wherever you go,
but only appear when there is light about you. If you had not lighted
that candle I would not have appeared, nor could I have spoken.”
“Was it you who spoke at the lamp-post?” said Tom doubtfully.
“Yes, it was I,” answered the shadow. “I wanted to save you then, as
I do now, from committing a crime. Sit down, Tom, and let us talk.”
Tom sat down, and the shadow sat down also. Then for the first time
he caught a passing glimpse of its face, just like his own, only the
eyes were sad—oh, so sad and mournful!
“Thou shalt not steal,” said the shadow solemnly.
“I don’t want to steal,” replied Tom sulkily; “but I’m cold and hungry.
This shilling would buy me fire and food. I don’t call that stealing.”
“Yes, but it is stealing,” answered the shadow, wringing its hands;
“and you know it is. If you steal you will be put in prison, and then I
shall have to go also. Think of that, Tom, think of that.”
Tom did not say a word, but sat on the floor looking at the bright
shilling in his hand which could procure him so many comforts. The
shadow saw how eager he was to take the shilling, and, with a sigh,
began to talk again.
“Think of your mother, Tom,” it said softly. “She was the wife of a
gentleman—your father; but he lost all his money, and when he died
she could get no one to help her. Do you remember how she died
herself in this very place, and how she implored you with her last
breath to be an honest boy?”
“Yes, I remember,” said Tom huskily; “but she did not know how cold
and hungry I would be.”
“Yes she did—she did,” urged the shadow. “She also had felt cold
and hunger, but she never complained. She never stole, and now
she has her reward, because she is a bright angel.”
“I don’t know what an angel is,” said Tom crossly; “but if she’s all
right, why doesn’t she help me?”
“She does help you, Tom,” said the shadow; “and it was because she
saw you were tempted to steal to-night that she asked me to help
you. She cannot speak as I do, because she is not a shadow.”
“Well, help me if you’re able,” said Tom defiantly; “but I don’t believe
you can.”
The candle on the floor had burnt very low, and as Tom said the last
words his shadow bent nearer and nearer, until he again saw those
mournful eyes, which sent a shiver through his whole body. It
stretched out its arms, and Tom felt them close round him like soft,
clinging mist; the candle flared up for a moment, and then went out,
leaving Tom in darkness altogether. But he did not feel a bit afraid,
for the soft arms of the shadow were round him, and he felt that it
was carrying him through the air.
They journeyed for miles and miles, but Tom knew not which
direction they were taking until a soft light seemed to spread all
around, and Tom felt that he was in the midst of a large crowd,
although he saw no one near him. Then he felt his bare feet touch
some soft, cloudy ground, that felt like a sponge; the shadowy arms
unclasped themselves, and he heard a voice, soft as the whispering
of winds in summer, sigh,—
“This is the Kingdom of Shadows.”
Then Tom’s eyes became accustomed to the subdued twilight, and
he saw on every side a number of shadows hurrying hither and
thither. He seemed to be in the centre of a wide plain, over which
hung a pale white mist, through which glimmered the soft light. The
shadows were all gliding about this plain; some thin, some fat, some
tall, others short; they all appeared to have business to do, and each
appeared to be intent only on his own concerns. Tom’s own shadow
kept close to him, and whispered constantly in his ear of strange
doings.
“These are the shadows of the past and of the future,” it sighed; “all
the shadows of human beings and their doings are here; see, there
is a funeral.”
And a funeral it was which came gliding over the smooth, white plain;
the great black hearse, the dark horses with nodding plumes, and
then a long train of mourners; all this came out of the mist at one
end, glided slowly over the plain, and vanished in the veil of mist at
the other. Then a bridal procession appeared; afterwards a great
army, clashing cymbals and blowing trumpets from whence no sound
of music proceeded; then the coronation triumph of a king, and later
on a confused multitude of men, women, and children, all hurrying
onward with eager rapidity. But they all came out of the mist and
went into the mist, only appearing on the white plain for a few
minutes, like the shadows of a magic lantern.
“The stage of the world,” whispered Tom’s shadow. “Birth, death, and
marriage, triumphs and festivities, joys and sorrows, all pass from
mist to mist, and none know whence they come or whither they go.”
“But what has this got to do with me?” asked Tom, who was feeling
rather bewildered.
“You are a man,” said his shadow reproachfully, “and must take an
interest in all that men do; but come, and I will show you what will
happen if you steal the purse.”
They glided over the plain towards the distant curtain of mist, but
how they travelled over the immense distance so rapidly Tom did not
know, for in a moment it seemed to him that he had come many
miles, and found himself suddenly before a grey, misty veil, with his
own shadow beside him, and many other shadows around.
As he stood there, a whisper like the murmur of the sea on a pebbly
beach sounded in his ears, and he seemed to guess, rather than
hear, what the shadows said.
“Now he will see—now he will see—he must choose the good or the
bad. Which will he choose?—which will he choose?”
Then the grey veil stirred, as if shaken by a gentle wind, and,
blowing aside, disclosed what seemed to Tom to be a great sheet of
ice of dazzling whiteness set up on end. As he looked, however,
shadows began to appear on the milky surface which acted a kind of
play and then vanished, and in the play he was always the central
figure.
First he saw himself pick up the purse in the snowy street; then hide
it in his bed. He saw his ragged shadow glide down-stairs from the
garret to buy food; the shopman looking at him, then at the shilling;
then a policeman arresting him and finding the purse hidden in the
bed. Afterwards he saw himself in prison; then released, and
prowling about the streets. Years seemed to pass as he looked, and
his shadow became taller and stouter, but always wearing a ragged
dress. After many years he seemed to see his shadow breaking into
a house—meet the owner of the house, and kill him. Afterwards the
shadow of himself stood in the dock; then crouched in prison; and,
last of all, he appeared standing under a black gallows with a rope
round his neck. At length all the shadows vanished, and the surface
of the ice mirror again became stainless, whilst a voice whispered in
his ear, “All this will happen if you steal the purse.”
Then the shadows again came on to the mirror and acted another
play; but this time it was much more pleasant.
Tom saw his shadow representative take the purse back to the poet
who had lost it. Then he saw himself in a school, learning all kinds of
wonderful things; and the years rolled by, as they had done in the
other play, unfolding the shadows of a beautiful life. He saw himself
become a great and famous poet, who wrote beautiful books to
make people wise and good. Then he saw himself in church, with a
woman’s shadow by his
side, and he knew, in some mysterious way, that it was the daughter
of the poet who had lost the purse. And as the happy years rolled on
he saw himself rich and honourable, and the end of all was a
magnificent funeral, taking his body to be buried in the great church
wherein many famous men were laid. Then the shadows vanished,
and the mirror became pure again, while over it the grey mists fell
like a soft veil, and once more the voice of his shadow said,—
“All this will happen if you remain honest.”
Then the crowd of shadows around Tom looked at him with their
mournful eyes, and a whispering question ran through the fantastic
throng,—
“Which will he choose?—which will he choose?”
“I will choose the honest life,” cried Tom loudly. “Yes, I will give back
the purse to the poet.”
At this the shadows around seemed to rejoice, and he could see
beautiful faces smiling at him from amid the crowd. The shadow
multitude broke in a wild dance of joy, keeping time to some aerial
music which Tom could not hear; and his own shadow, with
happiness shining out of its mournful eyes, threw its arms round him
once more. A dark veil seemed to fall over him, and the great white
plain, the glimmering mists, and the restless shadows, vanished
together.
When Tom opened his eyes again, he found himself lying on the
floor of his garret, cold and hungry still, but with his heart filled with a
great joy, for the shilling was still clutched in his hand, and he knew
he had not stolen the money. He took the purse from under the
sacks, replaced the shilling, and then went out, in the bright sunshine
of the Christmas morning, to give back the lost purse to its owner.
Overhead the bells rang out merrily, as if they were rejoicing at Tom’s
victory over himself, and a beautiful lady, who was on her way to
church, gave Tom some money to get food. He went and bought a
loaf and a cup of coffee, then, thankful for his good fortune, he
trudged off to the poet’s house.
The great poet received him very kindly, and,
after thanking Tom for returning his purse,
asked him why he had done so instead of
keeping it? Whereupon Tom told the poet all
about the shadow, which interested the poet
very much. He also had been to Shadowland
and seen strange things, which he told to the world in wonderful
verse.
“This boy is a genius,” he said to his wife, “and I must help him.”
Then it all happened as the magic mirror had foretold, for Tom was
put to school by the kind poet, and became a very clever man. He
also wrote poems, which the world received with joy; and when he
became a famous man, the kind poet gave him his own daughter in
marriage, and the bells which had rang the birth of the child-Christ
when Tom was a poor ragged boy, now rang out joyously in honour
of his marriage.
“He has conquered,” they clashed out in the warm, balmy air; “he is
the victor, and now he will be happy.”
And he was happy, very very happy, and felt deeply thankful to the
shadow who had shown him the way to be happy. His own shadow
never left him, but it never spoke to him again, though when Tom felt
tempted to do wrong, he heard a whisper advising him to do right.
Some people said that this was the voice of conscience, but Tom
knew it was the voice of his dear shadow, who still watched over
him.
And one day he took his wife to the garret where he had lived when
a poor boy, and told her how he had been to Shadowland, and
learned that to be honest and noble was the only true way to
happiness. His wife laughed, and said Tom had been dreaming; but
Tom shook his head, and said that it was no dream, but a great truth.
Now, who do you think was right—Tom or his wife?
THE WATER-WITCH
 I.

FIRE AND WATER.

ONCE upon a time, long long years ago, there was a shepherd
called Duldy, who dwelt in the forests which clothed the base of the
great mountain of Kel. This mountain was in the centre of an
immense plain, watered by many rivers, and dotted over with many
cities, for the kingdom of Metella was a very rich place indeed, so
rich that the inhabitants looked upon gold in the same way as we
look upon tin or iron, as quite a common thing. The plain was very
fertile by reason of the great rivers which flowed through it like silver
threads, and all these rivers took their rise in the mountain of Kel, a
mighty snow-clad peak which shot up, white and shining, to the blue
sky from amidst the bright green of its encircling forests.
There were old stories handed down from father to son, which said
that the mountain was once a volcano, which, breathing nothing but
fire, sent great streams of red-hot lava down to the fertile plain, to
wither and blight all the beautiful gardens and rich corn-fields. But
the fires in the breast of the mountain had long since died out, and
for many centuries the black, rugged summit had been covered with
snow, while countless streams, caused by the melting of the glaciers,
fell down its rocky sides, and, flowing through the cool, green pine
forests, spread themselves over the thirsty plain, so that it bloomed
like a beautiful garden.
Duldy lived in these scented pine forests, and
was supposed to be the son of an old couple
called Dull and Day, from whence by joining
both names he got his own Duldy; but he was
really a lost child whom old Father Dull had
found, seventeen years before, on the banks
of the Foam, one of the bright sparkling
streams which flowed from the snowy heights
above. Dull took the child home to his wife
Day, who was overcome with joy, for she