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Management Information Systems

Chapterthree: Information
Technology Infrastructure
 Chapter III

3.1. Definition of IT Infrastructure

What is IT Infrastructure?

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 Chapter III

3.1. Definition of IT Infrastructure

 IT infrastructure:
 Set of physical devices and software required to
support all information system in business and society
 runs the applications (e.g., payroll, inventory, procurement,
etc.)
 Processing data
 storage

 networking

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 Chapter III

3.2. IT Infrastructure Components

1. Computer hardware

2. Computer Software
 Operating system platforms
 Enterprise applications

3. Data Storage and Management

4. Network & Telecommunications

5. Internet Platforms

6. Technology Services
 Meatware: IT consultants – designers, developers, network admins, end
users
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3.2.1. Computer Hardware

 Personal computers (PC)
 Handheld/Mobile computers
 Workstation
 Server
 Mainframe
 Super computer

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 Chapter III
Comp. HW

 Input Devices: Gather data and convert them into electronic

form. (Keyboard, Computer Mouse, Digital Scanner, Touch
Screen , Optical Character Recognition, Barcode reader, Audio
Input and Sensors.

 Output Devices: Display the processed data (Monitor,

Printer , Audio Output/speaker)

 Processing Components
 Central Processing Unit (CPU) – “brain”
 Random Access Memory (RAM) – temporarily store data while
it is being processed

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 Chapter III

3.2.2. Computer Software

 Software:

 Programs /sequence of instructions/ used to operate

computers and related devices what to do
 Two types of Software
 System SW: Interact with HW & Mediates between
Application SW & HW
 Application SW: Interact with user

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3.2.3. Data Storage & Management

Data Storage – a place where data is placed

 Primary Storage:
 RAM, Cache Memory (motherboard)
 Fast access – proximity to possessor
 Volatile – loose data when the computer is off

 Secondary Storage
 Hard disk,
 magnetic tapes,
 magnetic disks;
 optical discs (CDs, DVDs) ,
 flash memory
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 Chapter III
Storage & Mgt. (Cont’d)

 Storage Area Network (SAN) consolidated, block

level data storage
 high-speed interconnected pools of
storage devices with multiple
servers.
 Data is stored in disk array or tape
drives
 OS  as if they are locally attached.
 To minimize the load on server (TBs
of data to be accessed by multiple client
machines)
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 Chapter III

Computer Networks

 Connect two or more computers (millions – Internet)

 to share information, messages, and software
 Categories of Network
 Local Area networks (LAN)
 Metropolitan Area Network (MAN)
 Wide area network (WAN)

 Network Devices (Network Interface Card (NIC), Router,

switch, hub, etc.)

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 Chapter III

3.2.5. Internet Platform

 Internet  global network of networks used for

sharing external and internal information.
 Internet Service Provider (ISP): a company
 providing Internet services around a specific area.
 E.g. Ethio Telecom

 Network Access Point (NAP) a public network

exchange facility where ISPs connect with each
other (access addresses of website or user node)
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 Chapter III

Internet (Contd.)
MAJOR SERVICES FROM THE INTERNET

Communication

Collaboration

Information retrieval
Business Operation)

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Internet (Contd.)

d) Facilitating Business Operations

 E-business, E-commerce
 E-commerce  use of IT by organizations to interact
with market places (B2C, B2B, C2C, B2G)
 Features:
 Electronic Data Interchange (EDI): information on business
transaction (purchase order, invoices, etc.)
 Electronic Fund Transfer (EFT): Bus. Org., banks, customers
 Electronic Clearinghouse (ACH): money movement
 Electronic Advertising: Website
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 Chapter III
Internet (Contd.)
 Intranet Vs. Extranet
 Intranet
 internal network  employees share internal information
 protected from outside access by special security software called
“a fire wall”
 Use Internet concepts & tools:
 browsing & searching;
 communication & collaboration

Extranet

 allow outside users to access the database of the organization

 Connect the intranets of different organizations/ business partners
(B2B, interfacing & exchanging data, forms)
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3.4. Management Issues of IT

Infrastructure
 Chapter III
3.4.1. Issues in Managing Hardware & Software
Technology Assets
 Understanding the new technology requirements
for e-commerce and the digital firm
 heavy demand on hardware technology due to:
 Replacing many manual & paper based processes
by electronic
 Processing and storing vast quantities of data
electronically
 Online access to relevant data – 24/7
 Strong data backup
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 Chapter III
Issues in Managing (Cont’d)
 Determining the Total Cost of Ownership of Technology
Asset
 The actual cost of owning technology resources includes
 Direct Costs: the original cost of acquiring and installing
hardware and software
 Indirect Costs: Ongoing administration costs – upgrading,
maintenance, training, technical support, space and energy
 Hidden costs: support staff, downtime, additional network
management
 Hardware and software acquisition costs constitute 20 to 30%
of TCO,
 more attention to administration costs & hidden costs 17
 Chapter III
Issues in Managing (Cont’d)

 How much should the firm spend on IT infrastructure?

 Too much – idle;
 Too small – poor business services, outshined by
competitors

 Advancement of technology:
 Avoid investing on advanced technologies that are still
experimental, often expensive, and sometimes
unreliable
 But spend on technologies – established standards,
multiple suppliers
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Issues in Managing (Cont’d)

 Selection criteria for buying system and

application SW
 appropriateness, efficiency, compatibility, and support

 Don’t let competitors to excel in IT services:

 Look for ways your firm can excel at service levels

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Issues in Managing (Cont’d)

 TCO can be reduced through:

 use of cloud services,
 greater centralization
 administering and troubleshooting from a central location

 standardization of hardware and software

resources
 The same OS, the same make and model of HW to
address the same basic need

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Issues in Managing (Contd.)

 Software costs represent one of the largest 

more than double as compared to HW costs
Rent/Outsource vs. Build/Buy
 The major trend – Rent/outsourcing to external providers
for both hardware & software platforms
 lower costs
 focus on core business issues instead of technology challenges

 But careful assessment of costs and benefits 

management, organizational, and technological issues
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Issues in Managing (Cont’d.)

Software Maintenance – challenging (built
in-house)  modifying as per new
requirements arising
very costly, time consuming, and
challenging to manage
 more than 50% of staff time is spent on
maintaining the software

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Issues in Managing (Cont’d.)

 Identifying technology trends impacting the
organization’s IT infrastructure
 managers need to:
 constantly monitor technology trends and
 make decisions about upgrading the firm’s IT
infrastructure
 formulate new policies and procedures – mobile &
cloud computing platforms
 tracking, updating, and securing data and applications

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3.4.2. Management & Governance

 Four major issues:
 Who will control and manage the firm’s IT infrastructure?
 How should IT department be organized?
 Centralized
 Central IT department makes decisions
 Decentralized
 Departments and divisions make their own IT decisions

 May result in redundant, incompatible hardware and software

 What is the relationship between centralized information system

management & Units’ IS management?

 How will infrastructure costs be allocated among business units?

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