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Information Systems for Managers
With Cases
Edition 4.0

Gabriele Piccoli
Louisiana State University

Federico Pigni
Grenoble École de Management
Edition 4.0

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managers/.
 To Margaret, the finest teammate I could have asked for.
To Laura Jean and Erik, who always help put it all in perspective.
GP

To Paola, who teaches me how life is beautiful every day.

FP
 Contents
Preface
Foreword

Part I: Foundations
Chapter 1. Information Systems and the Role of General and Functional
Managers
What You Will Learn in This Chapter
1.1. Introduction
1.2. General and Functional Managers
1.3. General and Functional Managers versus End Users
1.4. Information Systems Professionals
The Chief Information Officer
The Technical Staff
Analysts and Managerial Staff
IT Consulting
Data Science and Data Scientists
Advanced Analytics Skills and Competencies
1.5. Fundamental IT Trends: The Staying Power of Moore’s Law
Processing Power and Memory Have Increased
Costs of Computing Power Have Declined
Computers Have Become Easier to Use
1.6. Other IT Trends of Managerial Interest
Declining Storage Costs
Ubiquitous Network Access
Ubiquitous Computing and Digital Data Genesis
1.7. How Do These Trends Affect Today’s Managers?
Summary
Study Questions
Glossary

Chapter 2. Information Systems Defined

 What You Will Learn in This Chapter
2.1. Introduction
2.2. Information Systems: Definition
IS, Not IT
Information Systems as Sociotechnical Systems
The Four Components of an Information System
Systemic Effects
2.3. Why Do Organizations Build Information Systems?
Successful Information Systems
Information Systems Outcomes
2.4. Information Systems in the Organizational Context
Every Organization Is Unique
Bringing It All Together
2.5. Information Systems and Organizational Change
First-Order Change: Automate
Second-Order Change: Informate
Third-Order Change: Transform
2.6. Implications
Don’t Put the Cart before the Horse
Manage Systemic Effects
Information Systems Are in Flux
2.7. Conclusion
Summary
Study Questions
Glossary

Chapter 3. Organizational Information Systems and Their Impact

What You Will Learn in This Chapter
3.1. Introduction
3.2. Categorizing Systems
Hierarchical Perspective
Functional Perspective
Process Perspective
3.3. Enterprise Systems
Integration
 Enterprise Resource Planning
The Advantages of ERP
The Limitations of ERP
Supply Chain Management
Customer Relationship Management
Knowledge Management
3.4. Analytics and Big Data
The Batch Era
The Transaction Era
Business Intelligence Era
Big Data Era
3.5. Computing Architectures and the Cloud
Mainframes and Terminals
Standalone Personal Computing
The Client-Server Model
Cloud Computing
Summary
Study Questions
Glossary

Part II: Competing in the Digital Age

Chapter 4. The Changing Competitive Environment
What You Will Learn in This Chapter
4.1. Introduction
4.2. Network Economics
Networks Are Different: Value in Plentitude
Physical and Virtual Networks
Key Concepts and Vocabulary
Two-Sided Networks
Networks, Marketplaces, and Platforms
Implications for General and Functional Managers
4.3. The Economics of Information
Data and Information
 Classic Information Goods
The Economic Characteristics of Information
Implications
Information-Intensive Goods
4.4. Information in Networks
The Richness and Reach Trade-Off
Process Virtualization Theory
Managerial Implications
Obstacles
4.5. A Note about Disruptive Technology
Sustaining Technology
Disruptive Technology
Implications for Managers
What to Do?
Summary
Study Questions
Glossary

Chapter 5. Digital Business

What You Will Learn in This Chapter
5.1. Introduction
5.2. The Internet
5.3. Internet Services
Web 2.0
5.4. The Mobile Platform
5.5. Digital Business Innovation
Digital Business Modeling
The Elements of the Business Model Canvas
Categorizing Digital Business Initiatives
Categorizing Ventures by Transaction Type
Categorizing Ventures by Company Structure
Dominant Business Models for Digital Business
Dominant Revenue Models for Digital Business
5.6. Issues to Consider
Disintermediation
 Reintermediation
Market Efficiency
Channel Conflict
Customer and Employee Self-Service
Long-Tail Strategies
Online-to-Offline
Summary
Study Questions
Glossary

Part III: The Strategic Use of Information Systems

Chapter 6. Strategic Information Systems Planning
What You Will Learn in This Chapter
6.1. Introduction
A Word about Strategic and Operational Planning
Strategic Alignment
6.2. Six Decisions Requiring Managerial Involvement
6.3. The Purpose of Strategic Information Systems Planning
Plans Enable Communication
Plans Enable Unity of Purpose
Plans Simplify Decision Making over Time
6.4. The Strategic Information Systems Planning Process
Know Who You Are: Strategic Business Planning
Know Where You Start: Information Systems Assessment
Know Where You Want to Go: Information Systems Vision
Know How You Are Going to Get There: Information Systems Guidelines
Know How Well Equipped You Are to Get There: Information Systems SWOT
From Planning to Action: Proposed Strategic Initiatives
Summary
Study Questions
Glossary

Chapter 7. Value Creation and Strategic Information Systems

What You Will Learn in This Chapter
 7.1. Introduction
The Analysis of Added Value
The Benefits of Disciplined Analysis
The Definition of Value
Defining the Components of Value Created
Computing the Total Value Created
Appropriating the Value Created
The Definition of Added Value
Added Value in a Competitive Market
Pricing Considerations
The Relationship between Added Value and Competitive Advantage
How Is Added Value Created?
Two Ways to Create New Value
Some Considerations about the Analysis of Added Value
7.2. Strategic Information Systems
Definition: Strategic Information Systems
IT-Dependent Strategic Initiatives
Summary
Study Questions
Glossary

Chapter 8. Value Creation with Information Systems

What You Will Learn in This Chapter
8.1. Introduction
8.2. Traditional Models of Value Creation with IT
Industry Analysis
Value Chain
Customer Service Life Cycle
Traditional Models, Not “Old” Models
8.3. Specialized Frameworks
Virtual Value Chain
Value Creation with Customer Data
Crafting Data-Driven Strategic Initiatives
8.4. Conclusions
Summary
 Study Questions
Glossary

Chapter 9. Appropriating IT-Enabled Value over Time

What You Will Learn in This Chapter
9.1. Introduction
9.2. Not All IT Is Created Equal
High-Speed Internet Access in Hotel Rooms
Business Intelligence at Caesars Entertainment
Tesla and the Strategic Value of Autonomous Driving
The Need for A Priori Analysis
9.3. Appropriating Value over Time: Sustainability Framework
Sustainable Competitive Advantage
Resource-Based View
Response Lag
Four Barriers to Erosion
The Holistic Approach
The Dynamics of Sustainability
9.4. Applying the Framework
Prerequisite Questions
Sustainability Questions
9.5. Making Decisions
Develop the IT-Dependent Strategic Initiative Independently
Develop the IT-Dependent Strategic Initiative as Part of a Consortium
Shelve the IT-Dependent Strategic Initiative
Summary
Study Questions
Glossary

Part IV: Getting IT Done

Chapter 10. Funding Information Systems
What You Will Learn in This Chapter
10.1. Introduction
10.2. Information Systems Governance
 Steering Committee
10.3. Funding Information Systems
Chargeback
Allocation
Overhead
10.4. The Budgeting and Project Prioritization Process
Making the Budget
10.5. Funding Information Systems Projects: Making the Business Case
Limitations of the Business Case
Overcoming the Limitations of the Business Case
Individual Project Risk
Portfolio Management
10.6. Outsourcing
Drivers of Outsourcing
The Risks of Outsourcing
Offshoring
Making Optimal Outsourcing Decisions
Summary
Study Questions
Glossary

Chapter 11. Creating Information Systems

What You Will Learn in This Chapter
11.1. Introduction
How Hard Can IT Be?
11.2. Fulfilling Information Processing Needs
Three Approaches
Make versus Buy
Buy and Make
11.3. Build Your Own: Systems Design and Development
Systems Development Life Cycle
Prototyping
Agile Development
Outsourced Development
11.4. Buying Off-the-Shelf Applications
 Definition
Build
Implementation
DevOps
11.5. Open Source Development
Open Source: Definition
Advantages and Disadvantages of Open Source Software
11.6. End-User Development
The Benefits of End-User Development
The Risks of End-User Development
Summary
Study Questions
Glossary

Chapter 12. Information System Trends

What You Will Learn in This Chapter
12.1. Introduction
12.2. The Internet of Things
12.3. Wearable Devices
12.4. Digital Data Genesis
Digital Data Streaming
Virtual and Augmented Reality
12.5. Digital Manufacturing
Machine Learning
Deep Learning
A Note about Artificial Intelligence
Blockchain
Summary
Study Questions
Glossary

Chapter 13. Cybersecurity, Privacy, and Ethics

What You Will Learn in This Chapter
13.1. Introduction
13.2. IT Risk Management and Cybersecurity
 Why Is Cybersecurity Not an IT Problem?
Risk Assessment
Risk Mitigation
The Internal Threat
The External Threat
Mobile and IoT Cybersecurity Threats
Responding to Cybersecurity Threats
Cybersecurity Frameworks
Cybersecurity Responses
Managing Cybersecurity: Overall Guidelines
13.3. Privacy
Privacy Defined
Privacy Risks
Safeguarding Privacy
13.4. Ethics
Ethics: Definition
Information Systems Ethics
Ensuring Ethical Uses of Information Systems
Summary
Study Questions
Glossary

Part V: Cases
Case Study for Chapter 2: Troubleshooting Information Systems at the Royal Hotel
Case Study for Chapter 3: eLoanDocs: Riding the Tide of Technology without Wiping
Out
Case Study for Chapter 4: Online Education
Case Study for Chapter 5: Zoorate: Certifying Online Consumer Reviews to Create
Value
Case Study for Chapter 6: Outrigger Hotels and Resorts
Case Study for Chapter 7: Upscale Markets: Value Creation in a Mature Industry
Case Study for Chapter 8: TRIPBAM: Leveraging Digital Data Streams to Unleash
Savings (A)
Case Study for Chapter 9: TRIPBAM: Leveraging Digital Data Streams to Unleash
Savings (B)
 Case Study for Chapter 10: IT Planning at ModMeters
Case Study for Chapter 11: Pearson’s SuccessMaker: Putting the Customer First in
Transforming Product Development Processes
Case Study for Chapter 13: Targeting Target with a 100 Million Dollar Data Breach

Index
 Preface

The Philosophy of This Book

This book is inspired by the notion that today, half a century into the
“information age,” general and functional managers must be able to actively
and knowledgeably participate in discussion and decisions about information
systems and information technology. We designed this book from the ground
up, based on what has worked and proven useful to advanced undergraduate,
master of management, and executive management students we have taught
over the past 20 years in the United States and in Europe. Thus, the topics
this book covers; its writing style; and the examples, minicases, and full-
length cases we use are all carefully chosen to be both relevant and engaging
to an audience of students who may or may not plan to become information
systems specialists.
In interactions with executives of large and small firms, we find that both
general and functional managers need to be able to do two things when it
comes to information systems decisions:

1. Evaluate the plethora of modern information technology and trends

—from a strategic not a technical standpoint—in order to be able to
identify and use the technology/technologies that will generate
value for the organization.
2. Become effective partners of the information systems’ function. To
this end, they need to be familiar with those areas where they will
have to come in contact with information systems professionals.

The main foci of this book are therefore the strategic role of information
systems in the modern firm and the design and implementation of IT-
dependent strategic initiatives. Over the years we have come to believe that
master’s and executive MBA students, as well as undergraduates with an
interest in information systems, don’t need a “breadth book” that offers an
overview knowledge of technology and technology issues. They are best
served by an “analytics tools–focused” book that offers them frameworks and
tangible guidance on how to ensure that their firms benefit from information
systems and technology efforts. We designed this book and we write every
revision to provide such a toolkit for them.
Thus, this is not a text about IT and how IT works. This is a book about the
information system and information technology resource and how it should
be optimally deployed to achieve an organization’s objectives. In other
words, this book treats IT like any other organizational resource—an asset
that general and functional managers alike need to understand enough to be
able to plan for, select, deploy, and effectively manage with a keen eye to its
strategic potential. The ultimate goal is to be able to create and appropriate
value for their organizations.
How This Book Is Organized
The book follows a progression designed to engage skeptical students while
creating a sound long-term basis for decision making. We are particularly
sensitive to the audience needs with both the expository approach and content
selection. The book uses a more colloquial and engaging writing style than
traditional textbooks, with many examples and quotes centering on decision
making by both general and functional managers. Our students, as well as
many of our colleagues’ students, have told us that this book has the
colloquial style of a consulting report rather than the dry writing style of a
textbook. This is important feedback, as it confirms that once the “dry
reading” obstacle is removed, students can see what the course is really all
about: a critical subject matter for modern managers, delivering a set of
tangible and practical skills that will help them be assets for their
organizations. One of our adopters once wrote to us: “The writing style is
outstanding (lots of examples, which is critical). My non-techy MBA
students (many of whom work full-time as business managers) commented
that they now see the relevance of taking my course!” This is what Gabe set
out to do when originally designing the book, and it is the goal we both
continue to target with each revision. The opening minicases, written from
the perspective of functional or general managers, reinforce our pedagogical
approach by clearly showing the relevance of the chapter’s content while
helping foster discussion and generate momentum at the start of class.
The book’s content is organized into four sections, four stepping-stones
that build upon one another in a sequential manner. Part I covers essential
definitions and provides the conceptual foundation for the following chapters.
Part II describes how new technologies have changed, and continue to
change, the competitive landscape and social environment, thus creating both
opportunities and new threats for established firms and startups. Part III
carries the defining content of this book, offering actionable frameworks to
help managers envision how to develop value-adding IT-dependent strategic
initiatives and to gauge whether they can be protected so as to reap benefits
in the long term. Part IV concludes the text by focusing on how to create and
implement information systems at the core of any initiative. It also discusses
common systems and major trends, as well as security, privacy, and ethical
considerations.
Finally, the “With Cases” version of the book provides a number of full-
length cases (included in Part V), written by us and colleagues, that were
expressly designed to use the frameworks and debate the issues covered in
the chapters. This tight parallel between content and cases has worked very
well in our classes because students immediately see the applicability of the
theories and concepts covered in the book.

New for the Fourth Edition

For this edition, the text underwent a major update. The world continues to
change rapidly, shaped by the ever-increasing pervasiveness of IT. It has
never been so compelling for students to understand the opportunities IT
provides for creating new strategic initiatives.
With this edition, we account for these changes while respecting the plan
Gabe has drawn since the first installment of the book. All chapters
underwent a careful update, and several new and current examples are
introduced to engage students in critically reviewing the discussed concepts.
Chapters 3 and 12 are those that underwent the most changes. We now cover
themes such as big data technologies and cloud computing and discuss
emerging trends such as the blockchain, virtual and augmented reality,
machine learning, and artificial intelligence. We introduced new content in
almost all other chapters. In Chapter 1 we discuss the new data-oriented
specialists with whom future managers will increasingly team up. In Chapter
4 we made the distinction among networks, markets, and platforms.
Furthermore, we proposed the Process Virtualization Theory as a reference
framework to identify the increasing digitization of activities. In Chapter 5
we introduced a new minicase for jumpstarting the discussion on business
models, a topic we revamped in this edition and that we present in greater
detail. With cybersecurity as a top priority for managers, we restructured
Chapter 13, introducing new content such as mobile security, fake news, troll
factories, and cybersecurity frameworks.
In the “With Cases” version, we further introduced four new case studies,
three of which we wrote to support the learning objectives of the relative
chapters. We phased out those that we felt lost their appeal and welcomed the
suggestions from the third edition’s adopters. Thus, to complement Chapter
5, you find a brand new case dealing with the business of certified reviews
—“Zoorate: Certifying Online Consumer Reviews to Create Value.” To
support Chapters 8 and 9, we have now a new case discussing the design,
development, and platform opportunity, in both the B2B and B2C spaces, of
a custom-made clustered rate shopping system—“TRIPBAM: Leveraging
Digital Data Streams to Unleash Savings.” To integrate Chapter 11, we
selected a case presenting the transition from waterfall to agile software
development methodologies—“Pearson’s SuccessMaker: Putting the
Customer First in Transforming Product Development Processes.” For
Chapter 13, we provide now an original case on cybersecurity—“Targeting
Target with a 100 Million Dollar Data Breach.” With this new edition, you
will “feel at home” if you have already used this book. We believe you will
find the new content engaging for your students and supportive of a
successful learning journey.
As usual, we maintain two editions of the book: “With Cases” and
“Without Cases.” The two versions are identical except for the full-length
cases in Part V that the latter omits. The lower-priced “Without Cases”
version gives you the opportunity to use your own selection of cases or to
still support your pedagogy when you plan not to use the case method.

Supporting Resources
For this book, we have developed an extensive set of support resources, all
available on the book’s website (http://www.is4managers.com). We really
recommend that you join. You will find the standard set of materials,
including the following:

• PowerPoint presentations for each chapter

• A test bank (to supplement the study questions at the end of each
chapter)
• An instructor’s manual containing teaching notes for each of the
opening minicases, along with tips and suggestions on how to use
them to jump-start class with a high-energy discussion
• The full teaching notes of the cases, including the case analysis and
the teaching plan
 • Links to videos and other interactive materials

Moreover, we invite you to share your experiences and discuss how you
use the book. We have grown a vital user base engaged in constantly
improving the teaching materials, which will provide a unique value for this
edition.
Information on pricing and ordering the different versions of the text can
be found at the publisher’s website: http://prospectpressvt.com/​titles/​piccoli-
information-systems-for-managers/.

Acknowledgments
While there are only two names on the cover of this book, and while we take
responsibility for any errors or inaccuracies, a book like this one is really a
joint effort. The ideas and concepts, teaching philosophy, pedagogical
approaches, tools, and techniques covered came about through observation of
and discussion with the many colleagues we have had the good fortune of
interacting with over the years. Among the most influential, we want to
acknowledge Roy Alvarez, Kathryn Brohman, Blake Ives, Dick Moore, Erica
Wagner, and Rick Watson. Each of them has helped us in shaping the courses
we have taught and ultimately the content of this book.
We would also like to acknowledge the contribution of the many students
over the last fifteen years who have brought a positive attitude and an open
mind to the Information Systems Management course, those who have
challenged our own understanding of the concepts in this book as well those
who pushed us to find better ways to introduce and discuss them. We would
also like to acknowledge the many companies and their management and
employees who recognize that we can’t have relevant education without their
full engagement and support. These people have kindly volunteered their
time to discuss many of the ideas explored in this book with us. Many have
also agreed to allow their companies’ examples and experiences to serve as
case studies and welcomed my colleagues and us to share their knowledge.
We would also like to thank the colleagues who took time from their busy
schedules to review the first, second, and third editions of the manuscript and
to offer valuable and constructive feedback. From the first edition,
 Louis Beaubien, Providence College
Ed Christensen, Monmouth University
John Kohlmeier, DePaul University
Blake Ives, University of Houston
Roberto Mejias, Indiana University
Graham Peace, West Virginia University
Cynthia Ruppel, Nova Southeastern University
Paul Licker, Oakland University
Richard McCarthy, Quinnipiac University
Paul Pavlou, Temple University
John Scigliano, Nova Southeastern University
Michael Wade, IMD Lausanne
Erica Wagner, Portland State University
Ted Williams, University of Michigan, Flint

From the second edition,

Patrick Becka, Webster University, Louisville

Leida Chen, Creighton University
J. Michael Cummins, Georgia Tech
F. J. DeMicco, University of Delaware
David Dischiave, Syracuse University
Rassule Hadidi, University of Illinois, Springfield
Raymond Henry, Cleveland State University
Jeff Howells, University of Georgia
Shin-jeng Lin, Le Moyne College
Rodger Morrison, Troy University
Barbara Ozog, Benedictine University
Jeffrey Pullen, University of Maryland
Malu Roldan, San Jose State University

From the third edition,

Michael Bliemel, Dalhousie University

Sophie Buer-Chemin, Grenoble École de Management
Mark Cecchini, University of South Carolina
Mitchell Church, Coastal Carolina University
Michael Cummins, Georgia Tech
 Pierre Dal Zotto, Grenoble École de Management
Greg Dawson, Arizona State University
Patrick Fan, Virginia Tech
Alberto Francesconi, University of Pavia
Robert Gordon, Molloy College
Iris Lui, Ming Chuan University
Brandi N. Guidry Hollier, University of Louisiana at Lafayette
Alex Heckman, Franklin University
Paul Licker, Oakland University
Efrem Mallach, University of Massachusetts, Dartmouth
John Muraski, University of Wisconsin, Oshkosh
Mark Rosso, North Carolina Central University
James Stewart, Syracuse University
Andrew Walker, Grenoble School of Management

For this new Edition 4.0 we would like to thank:

Pierre Dal Zotto, Grenoble École de Management, for the constant

feedback and the support in collecting the primary data for the
opening minicase of Chapter 4.
Michael Rauchs, Cambridge Centre for Alternative Finance, for the
input his work provided on the development of the blockchain
section and of course all of the book adopters who joined the
IS4Managers.com community, asked questions, and provided us
with feedback.

We also wish to thank the colleagues who provided input for the
development of the new Edition 4.0. These include the following:

Robert Boncella, Washburn University

Jason Black, Northeastern University
Laura Brazie, Virginia Tech University
H. M. Chung, California State University, Long Beach
Geoff Dick, Northern Arizona University
John Drake, East Carolina University
Harold Fraser, California State University, Fullerton
Biswadip Ghosh, Metro State University of Denver
Robert Gordon, Molloy College
 Shaoyi He, California State University, Long Beach
Derek Holbert, Franklin University
Carolyn Holton, Southeastern University
Esther Klein, Hofstra University
Gerald Lancia, Northeastern University
Diane Lending, James Madison University
Steve Nelson, Butler University
Sandra Newton, Sonoma State University
Alexander Pelaez, Hofstra University
John Pendergrass, Northern Illinois University
Hindupur Ramakrishna, University of Redlands
Mark Rosso, North Carolina Central University
Kevin Scheibe, Iowa State University
Yide Shen, Rowan University
William Spangler, Duquesne University
Nelson Velez, University of Massachusetts, Boston
Chris Zimmer, West Texas A&M University

Last, but certainly not least, we would like to acknowledge Beth Lang Golub,
who originally saw the opportunity for this book to be written and constantly
supported its development. We also thank Andy Golub, Beth’s husband, for
his indefatigable support of our work and enthusiasm.
 Foreword
There tend to be two major approaches to teaching information systems. The
technology perspective instructs students about hardware and software, and
the focus is very much on information technology. The transformative
approach assists students in identifying how information systems can
transform an enterprise’s relationships with its key stakeholders, such as
customers and suppliers. Under the transformative approach, the emphasis is
on what the information systems as an enterprise can create and the value
they can then unleash. Anyone can buy information technology, but it takes
skill, vision, and persistence to create a transformative information system
that can radically change an enterprise and even a society.
Gabe is a key member of the transformational school of information
systems. His academic research and work with practitioners, the results of
which are incorporated in this book, are directed at understanding and
exploiting the transformative power of information systems. He has studied
many examples of transformation, as you will find when you read some of
the insightful cases in this book and the highly useful frameworks he
presents. As you read this book, you will discover why information systems
have been the major change engine for many enterprises and economies over
the last five decades. Nothing else has had anywhere near the same influence
on the way we live today.
As you develop your managerial skills, it is important that you realize that
to become an organizational leader, you will need to demonstrate that you
can design, lead, and execute transformational projects. Most of the morphing
assignments you take on will require an intimate understanding of technology
in organizations. Irrespective of which particular field is your area of
concentration, you will find that at some point you will need to become
deeply steeped in understanding how you can exploit one or more
information technologies to create a new information system to generate a
competitive advantage or superior customer experience. How well you
integrate people, procedures, and information technology to create an
information system will determine your success. This book is about
developing your skills to successfully participate in, and possibly lead, an
information systems–enabled project to create new opportunities for
customer service and organizational growth. Read the book carefully, reflect
on the frameworks and cases, incorporate the key insights into your model of
the world, and above all, apply the knowledge gained to improve your
organization’s performance.

Richard T. Watson
Rex Fuqua Distinguished Chair for Internet Strategy
University of Georgia
Athens, GA

As we all know, the required master’s-level information systems course is a

very difficult one to teach. I always admire the few faculty teaching this
course who can transcend the reluctance, prejudice, and general disinterest
too many of us confront from our students. Gabe is one of the talented few.
He has enjoyed significant success teaching the required information systems
course over the years, receiving teaching awards for his work with both
master’s and executive MBA students. In my foreword to the first edition, I
said, “Hopefully, this book will arm the rest of us with some of Gabe’s
teaching magic.” Now that we are in Edition 4.0, I can report that I have
talked to a number of colleagues who teach required MBA, executive MBA,
and high-level undergraduate courses who have confirmed that this book has
worked quite well for them.
I can now be confident in saying that this book will be a great addition to
your arsenal, allowing you to leverage the enthusiasm of students already
interested in the material and energize those who come in the door with a
negative bias toward an “IT course.” This book can make your course more
compelling to your students thanks to Gabe’s very approachable writing
style, the wealth of examples he uses, the opening minicases that quickly
create excitement and buzz, and the unique full-length cases in the full
version of this textbook (several of which we wrote together). Most helpfully,
Gabe has identified both the foundational and cutting-edge content that is
most relevant to management students. With this book, you will find it much
easier to demonstrate the relevance of information systems to your students
and to create a positive learning environment in your classes.

Blake Ives, PhD

C. T. Bauer Chair in Business Leadership
C. T. Bauer College of Business
University of Houston
 Part I
Foundations
In Part I, we lay the foundations for the study of information systems (IS).
Although the press and commentators devote much attention to information
technology (IT) and the (often substantial) IT investments that organizations
make, modern managers don’t have the time, or often the inclination, to
become IT experts. After all, that’s why organizations hire and pay IS and IT
professionals.
Yet with information technology becoming pervasive in both business and
society at large, modern general and functional managers can no longer
abdicate their obligation to make decisions about this crucial organizational
resource. The good news is that you can be an effective manager without
knowing a huge amount about IT, without knowing in detail how the
technology works, and without having to keep up with the barrage of new
technologies that are constantly being commercialized. To be an effective
general or functional manager, a proficient user of IT resources, and a
productive partner of the firm’s information systems and technology
professionals, you need a strong grounding in the fundamentals of IS
management and decision making.
As we describe in Chapter 2, information systems are sociotechnical
organizational systems that encompass technology, the people who will be
using such technology, and the business processes they execute to accomplish
their daily tasks and carry out business activities. User-managers can rely on
IT professionals when it comes to choosing among programming languages
or the appropriate structure of a new database being implemented, but
business managers must be able to design the appropriate information
systems for their organization, plan and budget for the use of IT resources,
and analyze whether or not a given information system creates a competitive
advantage that can be protected.
This is not a book about IT and how it works. This is a book about
information systems and the IS decisions that general and functional
managers are routinely called on to make. In Part I, we lay the foundations
upon which you will build your information systems knowledge.
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