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Chapter 01 - Foundations of Information Systems in Business

Foundations of Information Systems in Business


Chapter 1: Foundations of Information Systems in Business presents an overview of the five basic areas of information systems knowledge needed by business professionals, including the conceptual system components and major types of information systems. In addition, trends in information systems and an overview of the managerial challenges associated with information systems are presented.

After reading and studying this chapter, you should be able to: 1. Understand the concept of a system and how it relates to information systems.

2. Explain why knowledge of information systems is important for business professionals, and identify five areas of information systems knowledge that they need. 3. Give examples to illustrate how the business applications of information systems can support a firms business processes, managerial decision making, and strategies for competitive advantage. 4. Provide examples of several major types of information systems from your experiences with business organizations in the real world. 5. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business. 6. Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products. 7. Demonstrate familiarity with the myriad of career opportunities in information systems.


Chapter 01 - Foundations of Information Systems in Business

IS Framework for Business Professionals. The IS knowledge that a business manager or professional needs to know is illustrated in Figure 1.2 and covered in this chapter and text. This knowledge includes (1) foundation concepts: fundamental behavioral, technical, business, and managerial concepts like system components and functions, or competitive strategies; (2) information technologies: concepts, developments, or management issues regarding hardware, software, data management, networks, and other technologies; (3) business applications: major uses of IT for business processes, operations, decision making, and strategic/ competitive advantage; (4) development processes: how end users and IS specialists develop and implement business/IT solutions to problems and opportunities arising in business; and (5) management challenges: how to manage the IS function and IT resources effectively and ethically to achieve top performance and business value in support of the business strategies of the enterprise. Business Roles of Information Systems. Information systems perform three vital roles in business firms. Business applications of IS support an organizations business processes and operations, business decision making, and strategic competitive advantage. Major application categories of information systems include operations support systems, such as transaction processing systems, process control systems, and enterprise collaboration systems; and management support systems, such as management information systems, decision support systems, and executive information systems. Other major categories are expert systems, knowledge management systems, strategic information systems, and functional business systems. However, in the real world, most application categories are combined into cross-functional information systems that provide information and support for decision making and also performing operational information processing activities. Refer to Figures 1.7 , 1.9 , and 1.11 for summaries of the major application categories of information systems. System Concepts. A system is a group of interrelated components, with a clearly defined boundary, working toward the attainment of a common goal by accepting inputs and producing outputs in an organized transformation process. Feedback is data about the performance of a system. Control is the component that monitors and evaluates feedback and makes any necessary adjustments to the input and processing components to ensure that proper output is produced. Information System Model. An information system uses the resources of people, hardware, software, data, and networks to perform input, processing, output, storage, and control activities that convert data resources into information products. Data are first collected and converted to a form that is suitable for processing (input). Then the data are manipulated and converted into information (processing), stored for future use (storage), or communicated to their ultimate user (output) according to correct processing procedures (control). IS Resources and Products. Hardware resources include machines and media used in information processing. Software resources include computerized instructions (programs) and instructions for people (procedures). People resources include information systems specialists and users. Data resources include alphanumeric, text, image, video, audio, and other forms of data. Network resources include communications media and network support. Information products produced by an information system can take a variety of forms, including paper reports, visual displays, multimedia documents, e-messages, graphics images, and audio responses.


Chapter 01 - Foundations of Information Systems in Business


1. Computer-Based Information System (8): An information system that uses computer hardware and software to perform its information processing activities. Control (29): The systems component that evaluates feedback to determine whether the system is moving toward the achievement of its goal and then makes any necessary adjustments to the input and processing components of the system to ensure that proper output is produced. Data (34): Facts or observations about physical phenomena or business transactions. More specifically, data are objective measurements of the attributes (characteristics) of entities, such as people, places, things, and events. Data or Information Processing (35): The act of converting data into information. This includes both input and processing activities. Processing includes calculating, comparing, sorting, classifying, and summarizing. Data Resources (33): Data is now thought of as a valuable raw material that should be used, maintained, and secured as such. Data resources include not only structured information typically found in databases, but also the unstructured information found in e-mail or other collaborative systems, audio, and video. Developing successful information system solutions (18): Business professionals are responsible for proposing new or improved systems to support their business activities as well as managing their development. Using a systematic development process increases the likelihood of a successful project. E-business (12): The use of Internet technologies to support business processes, electronic commerce, and collaboration within a company and with its customers, suppliers, and other business stakeholders. E-business applications (12): Businesses today are using the Internet, corporate intranets, and inter-organizational extranets to support business activities with suppliers, partners, customers, accounting, finance, research and development, manufacturing, marketing, sales, and customer service. E-commerce (12): The buying and selling, marketing and servicing, and delivery and payment of products, services, and information over the Internet, intranets, extranets, and other networks, between an inter-networked enterprise and its prospects, customers, suppliers, and other business partners.









10. Enterprise Collaboration Systems (13): The use of groupware tools and the Internet, intranets, extranets, and other computer networks to support and enhance communication, coordination, collaboration, and resource sharing among teams and workgroups. These systems allow the creation of "virtual" teams of people who may work together without ever meeting in person.


Chapter 01 - Foundations of Information Systems in Business

11. Extranet (12): A network that links selected resources of a company with its customers, suppliers, and other business partners using internet technologies. 12. Feedback (29): Data or information concerning an information system's performance. 13. Hardware Resources (32): All physical devices and materials used in information processing. This includes not only machines, but storage media such as disks, tape, and paper. a. Machines (32); Consist of all input, processing, output, networking, and storage devices including computers, keyboards, printers, monitors, and pointing devices. Media (33): Hardware designed to hold data such as paper forms, magnetic disks, optical disks, magnetic tape, magnetic strips, and memory "sticks".


14. Information (34): Data that have been converted into a meaningful and useful context for specific end users. a. Information products (35): The degree to which information is packaged into an easy to use form. Information products include messages, reports, forms, and graphic images.

15. Information System (4): The arrangement of all the components and resources necessary to deliver information and functions to the organization. These resources include hardware, software, and people to perform input, processing, output, storage, and control activities that transform data resources into information products. 16. Information system activities (35): All information systems (manual or automated) share the same characteristics. a. b. c. Input ( 35): Data entry. Processing (35): Data transformation including calculating, comparing, sorting, classifying, and tabulating. Output (35): Information made available to end uses. This may take the form of messages, reports, forms, images, sound, and video. Storage (36): The retention of information such that it can be later retrieved. Control (36): Control includes feedback regarding input, processing, output, and storage activities as well as actions performed in response to this information.

d. e.

17. Information System Model (31): The conceptual view of an information system. 18. Intranet (12): Internet-like networks and websites developed for use within an organization.


Chapter 01 - Foundations of Information Systems in Business

19. Knowledge Workers (32): People whose primary work activities include creating, using, and distributing information. 20. Management information systems (15): These systems provide information to managers and business professionals. 21. Network resources (34) Network resources include communications media, switches, routers, transmitters, software, and other network infrastructure. 22. People Resources (32): People are an essential component of an information system. Broadly, this resource includes IS specialists and end users. a. b. IS specialists (32): Are people who develop and operate information systems. End users (32): Are people who use an information system or the output it produces.

23. Roles of IS in Business (8): Information systems perform three vital roles in any type of organization. a. Support of business processes and operations (8): Examples of supported business processes include activities such as sales transactions, inventory ordering, and payroll processing. Support of business decision making (8): Systems can support less structured business activities such as deciding which product lines to add or discontinue. While these types of decisions require human creativity, information systems can support managers in this process by providing them with useful information on demand. Support of strategies for competitive advantage (8): Information systems can make available new types of products and services through which an organization might gain a competitive advantage.



24. Software Resources (33): Software resources comprise all sets of information processing instructions. This includes not only software but the human procedures associated with managing information systems as well. a. Programs (33): A set of instructions that cause a computer to perform a particular task. These tasks may include managing the operational components of the information system, or they may directly support business operations. Procedures (33) Set of instructions used by people to complete a task.


25. System (26): A system is a group of interrelated components working together toward a common goal by accepting inputs and producing outputs in an organized transformation process.


Chapter 01 - Foundations of Information Systems in Business

26. Types of Information Systems (13): Information systems are classified in order to spotlight the major roles each plays in the operations and management of a business. a. Cross-functional information systems (15) Information systems that cross the boundaries of functional business areas and management levels in order to support business processes throughout the organization. Management support systems (14): Information systems that provide information and support for effective decision making by managers. These types of systems include executive information systems, decision support systems, and management information systems. Operations support systems (13): These systems help enable the day to day operations of an organization. They include office automation systems, transaction processing systems, and process control systems. Functional business systems (15): Systems that focus on basic business functions such as accounting, marketing, sales, finance, and human resource management. Transaction processing systems (14): Transaction processing systems (or TPS) are a type of operations support system. A TPS processes routine business transactions such as sales or purchases. Process control systems (14): These systems monitor and control physical processes such as production lines, package routing, and heating and cooling systems. Enterprise collaboration systems (14): Enterprise collaborative systems facilitate team or workgroup communications and productivity. These include e-mail, instant messaging, message boards, digital whiteboards, wikis, and videoconferencing.








Chapter 01 - Foundations of Information Systems in Business


Q. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

A. 19 23 23a 23b 23c 15 1 22b 8 9 10 25 12 2 3 14 16 17 13 13a 13b 24 24a 24b

Key Term Knowledge workers Roles of IS in business Support of business processes and operations Support of business decision making Support of strategies for competitive advantage Information system Computer-based information system End users E-business applications Electronic commerce Enterprise collaboration systems System Feedback Control Data Information Information system activities Information system model Hardware resources Machines Media Software resources Programs Procedures

Q. 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48

A. 22 16a 16b 16c 16d 16e 26 26c 26b 26a 18 11 7 26d 5 6 14a 21 22a 4 26f 20 26e 26g

Key Term People resources Input Processing Output Storage Control Types of information systems Operations support systems Management support systems Cross-functional informational systems Intranet Extranet E-business Functional business systems Data resources Developing successful information system solutions Information products Network resources IS specialists Data or information processing Process control systems Management information systems Transaction processing systems Enterprise collaborative systems


Chapter 01 - Foundations of Information Systems in Business


1. How can information technology support a companys business processes and decision making and give it a competitive advantage? Give examples to illustrate your answer. Support: Information technology can automate manual process such as document transmission. Instead of writing memos or letters, employees can compose and send e-mails electronically. Information technology can also facilitate the reengineering of entire business processes. For example, the airlines industry relies heavily on online ticket booking. Not only does this facilitate filling seats, but it also provides them with a valuable information about passengers which they can repackage for sale to business partners in the form of "frequent flier" programs. Competitive advantage: product innovations or cost savings program can provide a product or price advantage over competitors that lasts until competitors catch up. Though the advantage may be fleeting, the boost to an organization's image may be longer lasting. 2. How does the use of the Internet, intranets, and extranets by companies today support their business processes and activities? Internet: organization can connect directly with the general public. Opportunities range from giving away basic product information to automatically updating or patching retail software. Many businesses also conduct retail operations online. Intranets: organizations often use internet technologies to facilitate operations within the organization. Such systems might include product support knowledge bases, training systems, and access to the organisation's benefits system. Extranet: organizations may use these same internet technologies to connect with their business partners to facilitate supply chain management, help manage projects, manage accounts, or provide advanced technical support. Organizations use internet technologies to connect with both customers and suppliers. These technologies allow customers to generate and track their own orders as well as manager their accounts. They also enable significant supply chain automation 3. Refer to the Real Word Case on eCourier, Cablecom, and Bryan Cave in the chapter. Jay Bregman, CTO and cofounder of eCourier, notes that the company hopes their innovative use of technology will become a differentiator in their competitive market. More generally, to what extent do specific technologies help companies gain an edge over their competitors? How easy or difficult would it be to imitate such advantages? Advantage: at best, most technology innovations provide only a temporary edge over competitors. Even in the unusual case of patented technologies, the patent runs out after 17 years. If the advantage comes from how a technology is used, then competitors need only copy these successful implementations. Often, competitors have the opportunity to learn from hard won efforts and improve on them to their advantage. Imitation limitations: economies of scale, proprietary technology, brand image, and high switching costs can all work to make imitations less successful. Xerox brand photocopiers benefited from the first three, and it took competitors decades to catch up. In eCourier's case, competitors need only make the capital investment in offthe-shelf technology in order catch up. eCourier should now focus on increasing switching costs by webenabling their account management system.


Chapter 01 - Foundations of Information Systems in Business

4. Why do big companies still fail in their use of information technology? What should they be doing differently? Top Five Reasons for Success User involvement Executive management support Clear statement of requirements Proper planning Realistic expectations Top Five Reasons for Failure Lack of user input Incomplete requirements and specifications Changing requirements and specifications Lack of executive support Technological incompetence

Certainly the reasons listed in the table above could explain some of the major causes of why companies fail in their use of information technology. However, it is important to note that the field of technology is changing at such a rapid pace that many large and successful companies are having difficulty keeping up with it. Other ideas may include such things as a shortage of skilled employees, the major expense involved in managing and developing systems, and a rapidly changing business regulatory environment. 5. How can a manager demonstrate that he or she is a responsible end user of information systems? Give several examples. There are two sides to this answer. First, managers must make good use of information resources placed at their disposal. Second, managers must not use their information systems irresponsibly. Student's answers may vary depending on how they interpret this question. Responsible use: Managers should demonstrate that they are using their information systems as intended. In the case of e-mail, calendar, scheduling, and collaborative systems, other users would notice a manager's lack of participation. They would find it difficult to communicate or schedule meetings with non-participating managers. These managers would increasingly find themselves "out of the loop". Instead, managers should incorporate these tools into their daily habits. To demonstrate appropriate use of other information systems, managers should ensure they receive the appropriate training for these various applications. This would include using data and analysis tools in order to make more informed business decisions. High quality decisions based upon the information these systems provide would demonstrate that these assets are not being wasted. Inappropriate use: As a manager or other end user of information, we must insure that we always consider the ethical responsibilities of the use of information. Irresponsible uses: accessing and/or selling data for personal gain failing to protect data from loss or theft violating privacy laws or abusing community privacy expectations 6. Refer to the Real World Case on the New York Times and Boston Scientific in the chapter, and think about any technology-enabled innovations that you have read about or come across recently. To what extent is innovation about the technology itself, and to what extent is it about changing the underlying ways that companies do business? Innovations: iPad iPhone Droid Solid State Drives (SSD) G4 networks IEEE 802.11n HTML 5.0 Geographically targeted mobile marketing


Chapter 01 - Foundations of Information Systems in Business

Motivation: Manufacturers appear to be uncertain about the extent to which an innovative product may change the underlying ways organizations operate. At least initially, they hold back "suggested use" for fear they might accidentally limit their customer's perceptions. Instead, they tend focus on the technical bits: speed, battery life, flexibility, security, and so on. In short, manufacturers promote solutions in search of a problem. Of course, real world problems exist, and with this sort of promotion, consumers and business consultants are free to find their own ways to apply available solutions. For example, the military developed GPS to solve one set of problems, but marketers now use this technology to provide location-specific advertising to mobile consumers. Rather than guiding a bomb to a target, GPS technology helps guides people looking for a lunch discount to a store with surplus capacity. 7. What are some of the toughest management challenges in developing IT solutions to solve business problems and meet new business opportunities? Challenges: Increased competitive pressures resulting from a rapidly changing business environment. Developing large systems has been often likened to "hitting a moving target." Projects that take a year or more to implement may well satisfy last year's needs, but may do little to address current challenges. Lack of familiarity with information systems development methodologies. As a result, they may make poor decisions that have far-reaching effects. Ever increasing customer expectations. Napster set the expectation that music should be easy to find, easy to acquire, and free. FedEx set the expectation that a customer will know what day a package will arrive. Wikipedia set the expectation that users can add to or correct information in articles themselves. People with Internet access now get many services free: e-mail, calendaring, scheduling, instant messaging, news, information, software, entertainment, and even free web space. All these experiences play into users' expectations. Managers must overcome resistance to change within their own organization. Employees quickly become comfortable with their work, and they find changing processes stressful. Managers need to foster a work environment where employees see change as a routine part of their job.

8. Why are there so many conceptual classifications of information systems? Why are they typically integrated in the information systems found in the real world? Conceptual classifications of information systems are designed to emphasize the many different roles of information systems. This can be done from various points of view, such as the level of management that the information systems serve, or the business functions they support. In practice, these roles are not always clearly divided, and in any case, information produced by one business activity may serve as input data to another activity. Thus it makes sense to integrate various roles into one information system. 9. In what major ways have information systems in business changed during the last 40 years? What is one major change you think will happen in the next 10 years? Refer to Figure 1.4 to help you answer.


Chapter 01 - Foundations of Information Systems in Business History: Tabulation (pre 1950s) Data processing (1950s-1960s) Management reporting (1960s-1970s) Decision support (1970s-1980s) Strategic end user support (1980s-1990s) Enterprise and global internetworking (1990s-2000s) eBusiness (2000s-2010s) Social networking (2010s-current) Future: User authentication Virtual machines Cloud computing Solid state drives Overhaul of computing legislation Integration of video, audio, images, GPS, networks into entirely new products and services. Biometric computing Monitoring and control systems embedded into the human body (for example, insulin injectors, ID chips) 10. Refer to the real world example about responsibility and accountability for project failures in the chapter. Are these IT projects, or business projects with a significant IT component? Who should be responsible for ensuring their success? Explain. (the work below has some application to the answer: re-work) IT Projects A few projects might be considered solely IT projects. For example, a server upgrade involves only IT people. Any resulting failure will almost always trace back to IT. Here's another way of looking at this if I take my car in to a garage for repairs, is it my fault if the mechanic reassembles the transmission incorrectly? My involvement is limited only to ensuring labor hours and work time do not significantly exceed estimates. Business Projects In general, IT departments undertake work at the behest of business managers. Such projects require their participation to succeed. For example, IT people aren't as likely to understand the intricacies of various office operations and rely almost entirely on feedback from the organization's managers. Compare this with buying a new car. It is not sufficient for a new car buyer to establish color and price requirements. For a car buyer to be satisfied with their purchase, they must participate in product research, visit some showrooms, and test drive a few models. Failure: Failure is never an orphan. Failure can come from many sources. Managers do not fully understand their own business processes overestimate the quality of legacy data overestimate employee's willingness to change accept vendor's time & cost estimates without sufficient skepticism fail to appreciate the risks associated with customization disrupt regular business with too many changes at once Technology: oversold implemented by inexperienced technologists


Chapter 01 - Foundations of Information Systems in Business

Responsibility At best, IT managers can only facilitate projects. In most cases, they do not have the all around expertise necessary to manage a project entirely on their own. As a result, it's important for IT managers to establish roles and responsibilities across the entire project and ensure each team member satisfactorily completes their tasks in a timely manner. The project manager should also set checkpoints to assess progress and communicate with key stakeholders. Ultimately, the project's sponsor must have the authority to provide the required resources and be held accountable for a project's final outcome. IT managers and even CIO's rarely have this level of authority.


1. Understanding the Information System A library makes an excellent information systems model. It serves as a very large information storage facility with text, audio, and video data archives. Look up the definitions for each term listed below and briefly explain a library's equivalents. Students will more easily grasp advanced concepts once they learn to think in terms of the basic information systems structures. This exercise takes a familiar system and breaks it down into an information system's components. This exercise makes an excellent in-class discussion topic where students can expand each other's ideas. Consider substituting any common information system in place of a library. Alternative examples might include video rental stores, class registrations systems, and voting systems. a) Input A library's inputs consist of the items it receives for its collection. These items may consist of books, periodicals, maps, microfiche, DVDs, CDs, and many others. Inputs also consist of creating and maintaining patron's accounts. b) Processing A library's main processes revolve around checking out and checking in items from its collection. Additional processes include adding new items into the collection, purging dated, duplicate, or damaged items from the collection, photocopying or reproducing materials, facilitating inter-library loans, sending overdue notices, assisting patron's accounts, and repairing damaged items. c) Output A library's outputs consist of any information that leaves the library. This may take the form of item loans, photocopies, and even hand-written notes.

d) Storage A library's storage systems include shelves for books, stacks for periodicals, file drawers for microfiche, hard drives for databases, and racks for CD's and DVD's. e) f) Control A library's control systems include periodic inventories, anti-theft devices, and security cameras. Feedback A library's feedback systems include circulation, patronage, and loss statistics. Librarians use this information to help identify popular items, plan staffing levels, and develop strategies to reduce loss. In short, librarians use this information to help the library run more effectively and efficiently.


Chapter 01 - Foundations of Information Systems in Business

2. Career Research on the Web Select a job title for a career you would like to pursue as a summer intern or new graduate. Use Figure 1.19. Fill in your diagram with the information about people, hardware, software, and other resources from this exercise. Select a job title for a career you would like to pursue as a summer intern or new graduate. Provide a realworld example of each element in Figure 1.19. You may need to interview someone familiar with this position to find the information you require. Sample answer: "Professor" Element People Software Hardware Network Data Control Input Processing Output Storage Example Students, committee members, administration, peers Blackboard, WebCT, e-mail, grade book Desktop computer, various servers LAN, Wi-Fi Grades, rosters, assignments, meeting minutes, messages Systems administrators Grade entry, assignment submission, meeting request Grade tabulation, message routing, file serving Report card, personal calendar, message Local, online (sometimes replicated)

Alternatively, consider assigning one or more specific job titles. Examples might include: Sales representative Human resources manager Accountant Project manager Store manager Financial analyst Programmer 3. Skydive Chicago: Efficiency and Feedback a) How can this information system benefit the skydiving student? Benefits: Faster learning students see what they are doing right and wrong Improved safety fewer mistakes results in greater safety "Free" video souvenir students can make and keep copies of their videos b) How can this information system benefit Skydive Chicago? Benefits: Marketing student videos make great promotional tools Safety students learn faster and make fewer mistakes Reduced labor instructors don't have to spend as much time with students Instructor feedback instructors can see the results of their training efforts


Chapter 01 - Foundations of Information Systems in Business

c) Draw the information systems model (Figure 1.19, the information system model). Fill in your diagram with people, hardware, software, etc. information from this exercise. Diagram Element People resources Software resources Hardware resources Network resources Data resources Input Process Output Storage Control 4. Detail Student / jumpmaster Record, play, and copy video. Video camera, VCR, VHS tape VCR and camera cables Video Video of jump View, copy video Copy to student, copy to library VHS tape video library Management policy, training room library access

Are Textbooks History? Many students are familiar with both Google and Wikipedia. This exercise will help bring the remaining students up to speed and enable thoughtful classroom discussion. It will also increase student's exposure to this chapter's vocabulary.

a) Go to and use the search box to look up "End-user." Were any of Google's first five search results useful with respect to this course? At the time of this writing, Google returns Wikipedia links, dictionary definitions, a MySpace page, information about end-user licensing agreements, and so on. Note: seven years ago the results were generally useless with respect to this course. b) Go to and use the search box to look up "Knowledge worker." Compare Wikipedia's article to the information provided within this textbook. Which source did you find easiest to use? What advantages did Wikipedia provide? What advantages did this textbook provide? Ease of use: The article was neatly laid out and easy to navigate. Links to related terms at the bottom of the article made exploring the topic in further detail simple. Wikipedia's advantages: Free Detailed Easy to print out, not heavy to carry Textbook's advantages: Fact checked by professionals Concise Contains up to date real-world examples and illustrations Includes useful case studies and exercises Available off-line and without batteries


Chapter 01 - Foundations of Information Systems in Business


Did Google, Wikipedia, or this textbook provide the most useful information about "Intranets"? Why? Google: Google provided Wikipedia's link first, so it was useful in that way. It's simpler to type in a one word query than to navigate to Wikipedia and repeat the query. Other links included intranet building resources, intranet evaluations, and links to subject-matter journals. Wikipedia: Wikipedia's article addressed the subject in detail. It contained hyperlinks to online sources and internal links to related articles. Textbook: The textbook contains the term in its index along with numerous page references spread across many chapters. The book is far more cumbersome to use, but the information is concise, vetted for accuracy, and available offline.

Careers in IS Note: the answers to these questions require a fair amount of commons sense. This exercise may make an excellent in-class discussion topic. Consider asking students if they have ever "lost" important work. Ask them to elaborate on the circumstances. Stories of lost files abound. Students should get into good data management practices early and maintain them throughout their careers. This exercise stimulates thinking and may result in improved practices. It also supports a "no excuses" policy toward future class work. "My computer crashed" is not a valid excuse for failing to turn in work. 1) Failing to frequently save work in progress 2) Failing to make a backup-copy 3) Storing original and backup copies in the same location a) How might this mistake result in data loss? b) What procedures could you follow to minimize this risk? Answers: 1 a. The user might forget to save his or her work before exiting the application. Power might go out. 1 b. Make a habit of frequently saving work. Enable each application's auto-save feature. Learn the "shortcut" keystrokes that cause an application to save your work. When using a desktop machine, install an uninterrupted power supply that provides at least five minutes worth of power in the event of a power outage. Laptop computers have this capability built in. 2 a. The storage media might become lost or damaged. The user may accidentally overwrite or delete their work file. 2 b. Make a habit of frequently backing up work. Always start new edits using a copy of the original file instead of directly onto the original file. Use backup scheduling software included with most operating systems to automate daily backups. 3 a. Backpacks and briefcases may become lost or stolen. Work areas may be destroyed or rendered inaccessible by fire, flood, or other calamity. 3 b. Make a habit of storing backups separately. For example use a key-ring thumb drive to store backups and keep the key ring apart from the computer containing the original copy. Use a storage device on a computer network in combination with removable media. Use a file server if available or even e-mail the file to yourself. E-mailing will place a copy of your work on your e-mail server until you retrieve it.


Chapter 01 - Foundations of Information Systems in Business


RWC 1: eCourier, Cablecom, and Bryan Cave Case Study Questions 1. How do information technologies contribute to the business success of the companies depicted in the case? Provide an example from each company explaining how the technology implemented led to improved performance. These technologies enable fact based decision making. eCourier: uses GPS enabled hand-held devices, online booking, and customer data analysis to increase efficiency, enable scalability, and improve customer service. Cablecom: uses custom data mining tools and surveys to improve customer service and retention. Bryan Cave: uses analysis tools to evaluate their fees. These tools enable flexible fee structures, equal opportunity compliance, and staffing optimization. 2. In the case of law firm Bryan Cave discussed above, the use of BI technology to improve the availability, access, and presentation of existing information allowed them to provide tailored and innovative services to their customers. What other professions could benefit from a similar use of these technologies, and how? Develop two different possibilities. Students should consider other hourly billing based professional services industries. Examples include: consulting firms engineering firms architecture firms software development companies

Student's examples might include scheduling an optimal mix of personnel to provide the appropriate level of supervision, client interaction, expertise, and inexpensive labor. Emergency room staffing would make an excellent example where the chief resident supervises all services while residents, interns, and nurses at various levels provide the majority of the labor. Students might also suggest using the tools described in the Bryan Cave section to estimate project costs given the work currently in the "pipeline". This would enable firms to reject work which might disrupt the current work schedule or make more appropriate bids on more suitable projects. 3. Cablecom developed a prediction model to better identify those customers at risk of switching to other company in the near future. In addition to those noted in the case, what other actions could be taken if that information were available? Give some examples of these. Would you consider letting some customers leave anyway? Why? In addition to identifying at-risk customers, these tools might also help identify problem products, services, personnel, and processes. Once identified, Cablecom could make the appropriate adjustments and thereby reduce the number of complaints. For example, if customers on a particular service route are more prone to complain, managers may wish to review, retrain, or terminate employees responsible for that route.


Chapter 01 - Foundations of Information Systems in Business

BI systems identify chronic complainers. These customers serve not only as a material financial drain, but they also sap the energy of valuable employees. So yes, an organization could benefit from identifying these trouble customers and let them go. On the other hand, managers must be careful not to shift blame onto customers when the fault really lies elsewhere. Doing so not only alienates valuable customers, but it also delays identifying and correcting the true problem. Real World Activities 1. Use the Internet to research the latest offerings in business intelligence technologies and their uses by companies. What differences can you find with those reviewed in the case? Prepare a report to summarize your findings and highlight new and innovative uses of these technologies. Students should search on "Business Intelligence Software" and "business intelligence case studies". 2. Why do some companies in a given industry, like eCourier above, adopt and deploy innovative technologies while others in the same line of business do not? Break into small groups with your classmates to discuss what characteristics of companies could influence their decision to innovate with the use of information technologies. Characteristics: Technical resources Human resources Capital resources Risk tolerance Reward structures Organizational culture Litigation risk Competitive threats Customer demands RWC 2: The New York Times and Boston Scientific Case Study Questions 1. As stated in the case, the New York Times chose to deploy their innovation support group as a shared service across business units. What do you think this means? What are the advantages of choosing this approach? Are there any disadvantages? Shared service A shared service means that it's a resource available to all the organization's business units. Typically, shared services operate as a "profit center". This means they generate internal charges (bills) for their work. The charge-back system helps IT to quantitatively justify its existence to the organization. Advantages Pooled expertise Shared overhead costs Easier to enforce software, hardware, technology, process, and policy standards across an organization Easier to share best practices across an organization Disadvantages Creates an extra layer of management between IT and end-users which may result in some loss of responsiveness or accountability to individual business units Reduced flexibility


Chapter 01 - Foundations of Information Systems in Business

2. Boston Scientific faced the challenge of balancing openness and sharing with security and the need for restricting access to information. How did the use of technology allow the company to achieve both objectives at the same time? What kind of cultural changes were required for this to be possible? Are these more important than the technology-related issues? Develop a few examples to justify your answer. Technology Boston Scientific accomplished its objective by implementing an automated workflow application to help them manage information access. Cultural changes Boston Scientific's managers had to eliminate their "information silo" mentality and perceive the value in sharing their information in a controlled and accountable fashion. Its managers also had to learn the new technology and incorporate it into their daily processes. Importance Since a project will fail without both cultural and technology changes, neither one is more important. Sample examples Some cultures operate under a strict social hierarchy. Enabling workers to participate in quality improvement initiatives by providing them with production data and analysis tools would run counter to this culture. Unless the implementation team manages to overcome this cultural barrier, managers would resist sharing information or simply deny their employees access to the system. 3. The video rental map developed by the New York Times and Netflix graphically displays movie popularity across neighborhoods from major US cities. How would Netflix use this information to improve their business? Could other companies also take advantage of these data? How? Provide some examples. Possible business improvements Netflix could use this data to identify affinities between movies and ensure that its regional distribution centers are appropriately stocked to meet anticipated demand. External use Netflix might consider selling its data to consumer trend-tracking organizations. Netflix need not divulge individual customer data but instead group movie rental data by postal code. Postal codes would give marketers the ability to tie Netflix' data in with data from other marketing systems to help create more useful regional, demographic profiles. Real World Activities 1. The newspaper industry has been facing serious challenges to its viability ever since the Internet made news available online. In addition to those initiatives described in the case, how are the New York Times and other leading newspapers coping with these challenges? What do you think the industry will look like 5 or 10 years from now? Go online to research these issues and prepare a report to share your findings. Note 1: does the current generation even read traditional newspapers? 1 Note 2: early science fiction writers anticipated newspaper facsimiles printing out in each subscriber's home. Current state Traditional newspapers have expanded to the Internet. The Wall Street Journal, USA Today, and The Economist, among others, employ a subscription model for their online services. Others, like The New York Times, rely on revenue generated through online advertising. News aggregators such as do a good job organizing news stories by subject and region, though not by date or political inclination. 1-18

Chapter 01 - Foundations of Information Systems in Business

Search terms "future of newspapers" Future Users will be able to indicate their current "state" or "mode" or "status" and receive news appropriate for the moment. For example, the "newspaper" software would present top local, regional, national, and international headlines before work. During working hours, the user might see only new stories in various industry or technical journals. After hours, weekends, and holidays, the news stories would focus on leisure activities. The software will base its decision on explicit instructions (show me, don't show me), past browsing habits, and the browsing habits of various affinity groups related to the individual and their current "state". The software will adapt over time and adjust to changing preferences. It will also accept user input regarding an article's quality. This will further "instruct" the software as well as provide the newspaper with real-time feedback. The software will also likely consider the user's physical location and connection device when making story recommendations. Newspapers will not charge for these features they'll provide them simply increase readerships. Some newspapers may experiment with a "commercial free" version for a fee. However, if commercials become too intrusive, news providers would run the risk that users would switch to another service. It's distinctly possible that services providers will have so much information about a user including real-time physical location and purchasing desires, that advertising revenue will increase. For example, how much would a local restaurant pay to reach a user located a block away who has expressed interest in finding a nice place to eat within the next hour? The user gets a list, perhaps a discount offer, reservations, and GPS directions only to those places within his or her vicinity that match his or her dining preferences. Just click here 2. Go online and search the Internet for other examples of companies using technology to help them innovate and develop new products or services. Break into small groups with your classmates to share your findings and discuss any trends or patterns you see in current uses of technology in this regard. Examples abound within this text and online. One example worth following closely is Google's Android operating system and its application in smart phones and other devices. This product is a relatively new and direct challenge to Windows CE, iOS, Unix, and others. RWC 3: Sew What? Inc.: The Role of Information Technology in Small Business Success Case Study Questions 1. How do information technologies contribute to the business success of Sew What? Inc.? Give several examples from the case regarding the business value of information technology that demonstrate this conclusion. Examples: Expanded market - Duckett was able to grow her business from local to international clients using her website. Customer education - the website helps her educate her customers about curtain design. Customer service - the website allows customers to more easily match materials, select colors, and learn about her product's "care and feeding." Cost accounting - Duckett tracks production workflows and more accurately calculate costs. Business process reengineering - workflow information helps identify useful process changes and provides feedback to help Duckett evaluate the results.


Chapter 01 - Foundations of Information Systems in Business

2. If you were a management consultant to Sew What? Inc., what would you advise Megan Duckett to do at this point to be even more successful in her business? What role would information technology play in your proposals? Provide several specific recommendations. The article provides no information about Duckett's current challenges, though recommendations should focus on them. In general, Duckett should give scalability and flexibility significant consideration when making future IT decisions. Her reputation may lead to continued growth and/or expansion into new areas. She will not want to find herself limited by her own information systems. Lastly, Duckett should not get too carried away with industry prizes. While it's great to get a pat on the back now and then, the real prize is profitability. Profitability turns into big annual bonuses and pats on the back from people she cares about the most, her employees. 3. How could the use of information technology help a small business you know be more successful? Provide several examples to support your answer. Organizations don't want information systems, they are expensive and distracting. However, organizations usually need information systems in order to accomplish specific goals. Answers should focus primarily on those goals and how the proposed system will help. For example, a car mechanic would want to ensure he or she meets her quota of billable hours. By keeping a customer database with vehicle maintenance schedules, the mechanic can contact customers and schedule them for routine service during anticipated slack times. Real World Activities 1. Search the Internet to help you evaluate the business performance of Sew What? Inc. and its competitors at the present time. What conclusions can you draw from your research about Sew What?'s prospects for the future? Report your findings and recommendations for Sew What?'s continued business success to the class. Marketplace: Sew What? operates in a highly competitive market. Competitors include: ShowBiz Enterprises, Inc. 2 Rose Brand3 Universal Stars Incorporated4 Gerriets International 5 Findings: Sew What?'s competitors offer a spectrum of products far broader than just curtains. If customers prefer a one-stop solution for their staging needs, then they would not consider Sew What? as a potential vendor. Therefore, Duckett should consider expanding her company's product line. 2. Small businesses have been slower to integrate information technology into their operations than larger companies. Break into small groups with your classmates to discuss the reasons for this state of affairs, identifying several possible IT solutions and their business benefits that could help small businesses be more successful. Reasons: Most small companies are focused on their survival and don't have time to plan for the long term. Smaller companies have proportionally smaller IT budgets. Many information technology solutions require considerable startup costs, steep learning curves, and long payback periods.

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Chapter 01 - Foundations of Information Systems in Business Solutions: ASP application suites reduce start-up costs because the software is leased rather than purchased. Small businesses should ensure they hire people who are IT literate. These people would require less training when the business get around to implementing new technology, and the best of them may even be able to take a leadership role in training other users and in helping acquire appropriate systems. Ensure IT purchases are scalable. For example, provides an automated upgrade path. Other vendors charge per user and feature rather than tiered fees. RWC 4: JetBlue and the Veterans Administration Case Study Questions 1. Eric Brinker of JetBlue noted that the database developed during the crisis had not been needed before because the company had never experienced a meltdown. What are the risks and benefits associated with this approach to IT planning? Provide some examples of each. Risks: The risks to this ad-hoc, as-needed planning approach include not being able to function during the middle of a crisis. For example, JetBlue didn't know where many of its employees were and therefore had significant difficulty finding them and organizing a recovery. This could result in loss of business and longer-term damage to its reputation. A hastily developed system, though useful at the moment, may not be well designed. Yet such a system may become part of JetBlue's application portfolio due to its utility. In the end, JetBlue may be stuck maintaining a poorly designed (inefficient) system. Benefits: By designing its systems with flexibility in mind, JetBlue retains the nimbleness to respond quickly to unforeseen events whether they involve a system failure or simply a new competitive threat. In the case at hand, JetBlue was able to quickly design a new database to meet their newest need, and they were able to incorporate this database into their ongoing operations once it proved useful. 2. With hindsight, we now know that the decision made by Eric Raffin of the VA not to fail over to the Denver site was the correct one. However, it involved failing to follow established backup procedures. With the information he had at the time, what other alternatives could he have considered? Develop at least two of them. Alternatives: 1) Continue operations using a paper based approach. This would require creating a phone system to manually look up and communicate records on demand as well as require an extensive post-recovery data entry effort. This assumes paper records are accessible. 2) Since he didn't know the failure was hardware induced, he might have opted to restore the system from backups created at a point in time immediately prior to the failure. This would remove any software or data bug from the system, but it would do nothing to correct a hardware induced failure. 3) Run the system via a mirror site. This would solve most hardware induced problems. Further data corruption could be reduced by using the mirror site in read-only mode until the problem had been fixed. In this way, doctors could still access critical patient information. 3. A small, undocumented change resulted in the collapse of the VA system, largely because of the high interrelationship between its applications. What is the positive side of this high degree of interconnection, and how does this benefit patients? Provide examples from the case to justify your answer. Indirect patient benefits: The organization benefitted from the consolidation security, infrastructure administration and maintenance, and disaster recovery. These indirectly benefit the patient by enabling increased system reliability.


Chapter 01 - Foundations of Information Systems in Business

Direct patient benefits: the interrelationships between systems provide doctors, pharmacists, and other medical professionals with faster access to a complete patient view, increased safety (better order-checking), and better care (event alerts, reminders). Real World Activities 1. Go online and search for reports on the aftermath of these two incidents. What consequences, financial and otherwise, did the two organizations face? What changes, if any, were implemented as a result of these problems? Prepare a report and present your findings to the class. JetBlue: JetBlue apologized to its customers, promised to do better6, and created a passenger's bill of rights. 7 JetBlue's stock remained highly correlated with AMR's, the parent company for JetBlue's main IT service provider, from 2007 through 2008. Southwest Airlines and United Airlines, both with independent IT operations, significantly outperformed JetBlue during this same period. Veteran's Administration: A ComputerWorld article8 appears to be the source for this case and provides additional details. The failure highlights the difficulty associated with reorganizing infrastructure from decentralized to centralized management. The system's failure provided the reorganization's critics with ample fodder. Fallout included an internal review, external review, a temporary hold on additional migrations, enhancement to documentation technologies, and congressional hearings. 9 2. Search the Internet for examples of problems that companies have had with their IT processes. Break into small groups with your classmates to discuss your findings and what solutions you can propose to help organizations avoid the problems you discovered. makes an excellent resource for this assignment.

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