MIT-215 Sem Part 2 CHP 6 To CHP 11 2

Information Systems,
12th Edition
Chapter 6
Telecommunications and Networks
Why Learn About
Telecommunications
and Networks?
Effective communication:
◦ Essential to the success of every major human
undertaking
Regardless of your chosen career field:
◦ You will need the communications capabilities
provided by telecommunications and networks
Information Systems, Tenth

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An Overview of
Telecommunications
Telecommunications:
◦ Electronic transmission of signals for communications
Telecommunications medium:
◦ Any material substance that carries an electronic signal to
support communications between a sending and
receiving device
Networking protocol:
◦ Set of rules, algorithms, messages, and other mechanisms
that enable software and hardware in networked devices
to communicate effectively

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An Overview of Telecommunications
(continued)

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An Overview of
Telecommunications (continued)
Synchronous communications:
◦ Receiver gets message
instantaneously
Asynchronous communications:
◦ Receiver gets message after some
delay

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Basic Telecommunications
Channel Characteristics
Simplex channel:
◦ Transmits data in only one direction
Half-duplex channel:
◦ Transmits data in either direction, but not
simultaneously
Full-duplex channel:
◦ Permits data transmission in both directions at
the same time

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Basic Telecommunications Channel
Characteristics (continued)

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Basic Telecommunications
Channel Characteristics
(continued)
Broadband over power lines:
◦ Potential problem: transmitting data over unshielded
power lines can interfere with both amateur (ham) radio
broadcasts and police and fire radios
Wireless communications options:
◦ Wireless transmission involves the broadcast of
communications in one of three frequency ranges
◦ Radio, microwave, or infrared frequencies

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Basic Telecommunications Channel
Characteristics (continued)

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Short Range Wireless Options
Near field communication (NFC)
◦ Short-range wireless connectivity technology designed for cell
phones and credit cards
Bluetooth
◦ Wireless communications specification that describes how cell
phones, computers, personal digital assistants, etc., can be
interconnected
Ultra wideband (UWB)

◦ Short-range communications that employs extremely short
electromagnetic pulses lasting just 50 to 1,000 picoseconds

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Short Range Wireless Options
(continued)
Infrared transmission
◦ Sends signals at a frequency of 300 GHz
and above
Zigbee
◦ Form of wireless communications
frequently used in security systems and
heating and cooling control systems

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Medium-Range Wireless Options
Wi-Fi:
◦ Wireless telecommunications technology brand owned
by the Wi-Fi Alliance
Wireless access point:
◦ Consists of a transmitter with an antenna
◦ Receives the signal and decodes it
Wi-Fi access points:

◦ Have maximum range of about 300 feet outdoors and
100 feet within a dry-walled building

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Medium-Range Wireless Options
(continued)

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Wide Area Wireless Network
Types
Microwave transmission:
◦ High-frequency (300 MHz–300 GHz) signal sent through
the air
◦ Common forms of satellite communications:
◦ Geostationary satellite
◦ Low-earth orbit (LEO) satellite
◦ Very small aperture terminal (VSAT)
Wireless mesh:
◦ Uses multiple Wi-Fi access points to link a series of
interconnected local area networks

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Types (continued)

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Types (continued)

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Options (continued): 3G – 4G
and 5G
3G wireless communications:
◦ Support wireless voice and broadband speed data
communications in a mobile environment
4G wireless communications:
◦ Will provide increased data transmission rates in the 20–40
Mbps range
Worldwide Interoperability for Microwave Access
(WiMAX):
◦ Set of IEEE 802.16 wireless metropolitan area network
standards

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Networks and Distributed
Processing
Computer network:
◦ Consists of communications media,
devices, and software needed to
connect two or more computer systems
or devices
◦ Can transmit and receive information
to improve organizational effectiveness
and efficiency

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Network Types: PAN – LAN –
MAN - WAN
Personal area networks:
◦ Support interconnection of information technology within a
range of about 33 feet
Local area networks:
◦ Connect computer systems and devices within a small area
(e.g., office or home)
Metropolitan area networks:
◦ Connect users and their devices in a geographical area that
spans a campus or city
Wide area networks:
◦ Connect large geographic regions
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Client/Server Systems
Client/server architecture:
◦ Multiple computer platforms are dedicated to special
functions
Client:
◦ Any computer that sends messages requesting services
from the servers on the network
Database server:
◦ Sends only the data that satisfies a specific query, not
the entire file

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Client/Server Systems (continued)

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Client/Server Systems (continued)

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Telecommunications Hardware
Smartphones
◦ Combine the functionality of a mobile phone, camera,
Web browser, e-mail tool, MP3 player, and other devices
◦ Have their own software operating systems
Modems
◦ Modulation/demodulation devices
Multiplexers
◦ Combine data from multiple data sources into a single
output signal that carries multiple channels

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(continued)

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(continued)

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(continued)
Switches, bridges, routers, and gateways
◦ Switch: uses the physical device address in each
incoming message on the network
◦ Bridge: connects two LANs together using the same
telecommunications protocol
◦ Router: forwards data packets across two or more
distinct networks toward their destinations
◦ Gateway: serves as an entrance to another network

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Telecommunications Software
Network operating system (NOS):
◦ Systems software that controls the computer
systems and devices on a network
Network management software:
◦ Protects software from being copied, modified,
or downloaded illegally
◦ Locates telecommunications errors and
potential network problems

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Securing Data Transmission
Encryption:
◦ Converting an original message into a form that
can only be understood by the intended receiver
Encryption key:
◦ Variable value that is applied (using an
algorithm) to a set of unencrypted text to
produce encrypted text or to decrypt encrypted
text

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Securing Data Transmission (continued)

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Securing Data Transmission
(continued)
Securing wireless networks:
◦ Wired equivalent privacy (WEP):
◦ Used encryption based on 64-bit key, which has been upgraded to
a 128-bit key
◦ Wi-Fi Protected Access (WPA):
◦ Security protocol that offers significantly improved protection
over WEP
◦ War driving:
◦ Involves hackers driving around with a laptop and antenna trying
to detect insecure wireless access points

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Virtual Private Network (VPN)
Private network that uses a public network
(usually the Internet) to connect multiple
remote locations
Provides network connectivity over a
potentially long physical distance
Supports secure, encrypted connections
between a company’s private network and
remote users

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Telecommunications Services and
Network Applications
Cellular phone services:
◦ Cellular phones:
◦ Operate using radio waves to provide two-way
communications
◦ May be linked to a cordless phone via a
Bluetooth connection

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Cellular Phone Services
Digital subscriber line (DSL) service:
◦ Telecommunications service that delivers high-
speed Internet access
◦ Asymmetric DSL (ADSL) line:
◦ Designed to provide download speed that is three to four times
faster than upload speed
◦ Symmetric DSL (SDSL):
◦ Used mainly by small businesses
◦ Does not allow you to use the phone at the same time
◦ The speed of receiving and sending data is the same

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Home and Small Business
Networks
DSL modem:
◦ Enables each computer in the network to access the
Internet
Firewall:
◦ Filters the information coming from the Internet into
your network
Router:
◦ Encrypts all wireless communications to keep your
network secure

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Electronic Meetings
Videoconferencing:
◦ Enables people at multiple locations to
communicate using simultaneous two-way
video and audio transmissions
◦ Reduces travel expenses and time
◦ Increases managerial effectiveness through:
◦ Faster response to problems, access to more people, and less
duplication of effort

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Electronic Data Interchange (continued)

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Global Positioning System
Applications
Global navigation satellite system that uses two dozen
satellites roughly 11,000 miles above the earth
GPS receivers:
◦ Have become as small as a cell phone and are relatively
inexpensive
◦ Are commonly found in automobiles, boats, planes, laptop
computers, and cell phones
GPS tracking technology:
◦ Has become the standard by which fleet managers monitor
the movement of their cars

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Summary
Networking protocol:
◦ Defines the set of rules that govern the exchange of
information over a telecommunications channel
Channel bandwidth:
◦ Refers to the rate at which data is exchanged, usually
expressed in bits per second
Geographic area covered by a network:
◦ Determines whether it is called PAN, LAN, WAN

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Summary (continued)
Telecommunications and networks:
◦ Creating profound changes in business because
they remove the barriers of time and distance
Networks:
◦ Let users share hardware, programs, and
databases across the organization
◦ Can transmit and receive information to improve
organizational effectiveness and efficiency

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12th Edition
Chapter 7
The Internet, Web, Intranets, and Extranets

Why Learn About the
Internet?
• Businesses use the Internet to:
– Sell and advertise their products and services, reaching
out to new and existing customers
• People working in every field and at every level use the
Internet in their work
• Most companies have Internet sites that:
– List job opportunities, descriptions, qualifications,
salaries, and benefits
Use and Functioning of the
Internet
ARPANET:
◦ Ancestor of the Internet
◦ Project started by the U.S. Department of Defense (DoD) in 1969
Internet Protocol (IP):

◦ Enables computers to route communications traffic from one network to
another
How the Internet Works
Backbone:
◦ One of the Internet’s high-speed, long-distance communications links
Transmission Control Protocol (TCP):

◦ Transport-layer protocol that most Internet applications use with IP
Uniform Resource Locator (URL):

◦ An assigned address on the Internet for each computer
(continued)
(continued)
IP address:
◦ 64-bit number that identifies a computer on the Internet
Internet Corporation for Assigned Names and Numbers (ICANN)

◦ Responsible for managing IP addresses and Internet domain names
◦ Has authority to resolve domain name disputes
Accessing the Internet
Connecting via LAN server:
◦ Used by businesses and organizations that manage a local area network
(LAN)
Connecting via Internet service providers:

◦ Internet service provider (ISP):
◦ Any organization that provides Internet access to people
The World Wide Web
Developed by Tim Berners-Lee at CERN
Originally conceived of as an internal document-management system
The Web has grown to become:
◦ A primary source of news and information
◦ An indispensible conduit for commerce
◦ A popular hub for social interaction, entertainment, and communication
How the Web Works
The Internet:
◦ Made up of computers, network hardware such as routers and fiber-optic
cables, software, and the TCP/IP protocols
The Web:
◦ Consists of server and client software, the Hypertext Transfer Protocol (http),
standards, and mark-up languages that combine to deliver information and
services over the Internet
How the Web Works
(continued)
Hyperlink:
◦ Highlighted text or graphics in a Web document that, when clicked, opens a
new Web page
Web browser:
◦ Web client software such as Internet Explorer, Firefox, and Safari used to
view Web pages
Hypertext Markup Language (HTML):

◦ Standard page description language for Web pages
How the Web Works
(continued)
HTML tags:
◦ Tell the Web browser how to format text
Extensible Markup Language (XML):

◦ Markup language for Web documents containing structured information
Cascading Style Sheet (CSS):

◦ Markup language that defines the visual appearance of content in a Web
page
Internet and Web
Applications
Popular uses for the Internet and Web:
◦ Publishing information
◦ Assisting users in finding information
◦ Supporting communication and collaboration
◦ Building online community
◦ Providing software applications
◦ Providing a platform for expressing ideas
◦ Delivering media of all types
◦ Providing a platform for commerce
◦ Supporting travel and navigation
Communication and
Collaboration
E-mail:
◦ Internet communication
◦ Supports text communication, HTML content, and sharing documents as e-
mail attachments
Instant messaging:
◦ Online, real-time communication between two or more people who are
connected to the Internet
Microblogging, status updates, and news feeds

◦ Twitter is a Web application that allows members to report on what they are
doing throughout the day
Communication and
Collaboration (continued)
Conferencing:
◦ Internet has made it possible for those involved in teleconferences to share
computer desktops
◦ Telepresence takes video conferencing to the ultimate level
◦ Some people, businesses, and organizations hold meetings in virtual space
◦ Virtual worlds such as Second Life allow users to take on a virtual presence
through the use of avatars
Summary
The Internet started with ARPANET
Internet Protocol (IP):
◦ The set of conventions used to pass packets from one host to another
Transmission Control Protocol (TCP):

◦ Other protocol used with IP
Uniform Resource Locator (URL):

◦ Web address that specifies the exact location of a Web page and the
location on the host
Summary (continued)
The Web:
◦ Collection of tens of millions of servers providing information via hyperlink
technology
Hypertext Markup Language (HTML):

◦ Standard page description language for Web pages
Summary (continued)
The Web:
◦ The most popular medium for distributing and accessing information
Intranet:
◦ Internal corporate network built using Internet and World Wide Web
standards and products
Extranet:
◦ Network that links selected resources of the intranet of a company with its
customers, suppliers, or other business partners
12th Edition
Chapter 8
Electronic and Mobile Commerce

Principles and Learning
Objectives
Electronic and mobile commerce are evolving, providing new ways of
conducting business that present both potential benefits and problems
◦ Describe the current status of various forms of e-commerce, including B2B,
B2C, C2C, and e-Government
◦ Outline a multistage purchasing model that describes how e-commerce
works
◦ Define m-commerce and identify some of its unique challenges
E-commerce and m-commerce can be used in many innovative ways to

improve the operations of an organization
◦ Identify several e-commerce and m-commerce applications
◦ Identify several advantages associated with the use of e-commerce and m-
commerce
Why Learn About Electronic
and Mobile Commerce?
Electronic and mobile commerce:
◦ Have transformed many areas of our lives and careers
One fundamental change has been:

◦ The manner in which companies interact with their suppliers, customers,
government agencies, and other business partners
An Introduction to Electronic
Commerce
Electronic commerce:
◦ Conducting business activities electronically over computer networks
Business activities that are strong candidates for conversion to e-

commerce:
◦ Paper based
◦ Time-consuming
◦ Inconvenient for customers
Business-to-Business (B2B)
E-Commerce
Subset of e-commerce
All the participants are organizations
Useful tool for connecting business partners in a virtual supply chain to
cut resupply times and reduce costs
An organization will use both:
◦ Buy-side e-commerce to purchase goods and services and
◦ Sell-side e-commerce to sell products to its customers
Business-to-Consumer (B2C)
E-Commerce
Form of e-commerce in which customers deal directly with an
organization and avoid intermediaries
Disintermediation:
◦ The elimination of intermediate organizations between the producer and the
consumer
Consumer-to-Consumer
(C2C)
E-Commerce
Subset of e-commerce that involves consumers selling directly to other
consumers
Popular sites:
◦ Bidzcom, Craigslist, eBid, Kijiji
◦ ePier, Ibidfree, Ubid, and Tradus
Etsy is a C2C Web site that:

◦ Specializes in the buying and selling of handmade and vintage items
◦ Facilitates sales worth more than $10 million each month
Consumer-to-Consumer
(C2C)
E-Commerce (continued)
e-Government
Use of information and communications technology to:
◦ Simplify the sharing of information
◦ Speed formerly paper-based processes
◦ Improve the relationship between citizen and government
Forms of e-Government:
◦ Government-to-consumer (G2C)
◦ Government-to-business (G2B)
◦ Government-to-government (G2G)
E-Commerce Challenges
oDefining an effective e-commerce model and strategy
oDealing with consumer privacy concerns
oOvercoming consumers’ lack of trust
oOvercoming global issues
Defining an Effective E-
Commerce Model and Strategy
First major challenge:
◦ For the company to define an effective e-commerce model and strategy
Three components of a successful model:

◦ Community, content, and commerce
Dealing with Consumer
Privacy Concerns
Identify theft:
◦ Someone using your personally identifying information without your
permission to commit fraud
Companies must be prepared to:

◦ Make a substantial investment to safeguard their customers’ privacy or run
the risk of losing customers
Overcoming Consumers’
Lack of Trust
Lack of trust in online sellers:
◦ One of the most frequently cited reasons that some consumers are not
willing to purchase online
Online marketers must:

◦ Create specific trust-building strategies for their Web sites by analyzing their
customers, products, and services
Overcoming Global Issues
These include:
◦ Cultural challenges
◦ Language challenges
◦ Time and distance challenges
◦ Infrastructure challenges
◦ Currency challenges
◦ State, regional, and national law challenges
An Introduction to Mobile
Commerce
Mobile commerce (m-commerce) relies on the use of wireless devices
The Internet Corporation for Assigned Names and Numbers (ICANN)
◦ Created a .mobi domain to help attract mobile users to the Web
Mobile Commerce in
Perspective
The market for m-commerce in North America:
◦ Maturing much later than in Western Europe and Japan
M-commerce spending in the United States:

◦ Grew from $369 million in sales in 2008 to $1.2 billion in 2009
M-commerce sales for 2010 projected to be $2.4 billion

Advantages of Electronic and
Mobile Commerce
Reduce costs
Speed the flow of goods and information
Increase accuracy
Improve customer service
Electronic and Mobile
Commerce Applications
Many B2B, B2C, C2C, and m-commerce applications are being used in:
◦ Retail and wholesale
◦ Manufacturing
◦ Marketing and advertising
◦ Price comparison
◦ Couponing
◦ Investment and finance
◦ Banking and e-boutiques
Electronic Payment Systems
Digital certificate:
◦ Attachment to an e-mail message or data embedded in a Web site
that verifies the identity of a sender or Web site
Certificate authority (CA):
◦ Trusted third-party organization or company that issues digital
certificates
(continued)
Secure Sockets Layer (SSL):
◦ Used to secure sensitive data
Electronic cash:
◦ An amount of money that is computerized, stored, and used as cash
for e-commerce transactions
Credit, charge, debit, and smart cards:
◦ Smart card:
◦ Credit card-sized device with an embedded microchip to provide
electronic memory and processing capability
(continued)
(continued)
P-Card
◦ Credit card used to streamline the traditional purchase order and
invoice payment processes
Payments using cell phones
◦ Available options:
◦ Payments linked to your bank account
◦ Payments added to your phone bill
Summary
Electronic commerce:
◦ Conducting business activities electronically over computer networks
Types of e-commerce:
◦ Business-to-consumer (B2C), business-to-business (B2B), and consumer-to-
consumer (C2C)
Successful e-commerce system:

◦ Must address the many stages consumers experience in the sales life cycle
Summary (continued)
Electronic retailing (e-tailing):
◦ Direct sale from a business to consumers through electronic storefronts
Businesses and people use e-commerce and m-commerce to:

◦ Reduce transaction costs
◦ Speed the flow of goods and information
◦ Improve the level of customer service
◦ Enable the close coordination of actions among manufacturers, suppliers,
and customers
Summary (continued)
An effective Web site is one that creates an attractive presence and
meets the needs of its visitors
M-commerce presents additional infrastructure challenges including:
◦ Improving the ease of use of wireless devices
◦ Addressing the security of wireless transactions
◦ Improving network speed
12th Edition
Chapter 9
Enterprise Systems *
Objectives
An organization must have information systems that support routine, day-to-day
activities and that help a company add value to its products and services
◦ Identify the basic activities and business objectives common to all transaction processing systems
◦ Describe the transaction processing systems associated with the order processing, purchasing,
and accounting business functions
A company that implements an enterprise resource planning system is creating a highly

integrated set of systems, which can lead to many business benefits
◦ Discuss the advantages and disadvantages associated with the implementation of an enterprise
resource planning system
◦ Identify the challenges that multinational corporations face in planning, building, and operating
their enterprise systems
Why Learn About Enterprise
Systems?
In our service-oriented economy:
◦ Outstanding customer service has become a goal of virtually all companies
Effective use of enterprise systems:

◦ Will be essential to raise the productivity of your firm, improve customer
service, and enable better decision making
An Overview of Transaction
Processing Systems
Transaction processing systems (TPSs):
◦ Capture and process detailed data necessary to update records about fundamental
business operations
◦ Include order entry, inventory control, payroll, accounts payable, accounts
receivable, general ledger, etc.
◦ Provide valuable input to:
◦ Management information systems, decision support systems, and knowledge management systems
An Overview of Transaction Processing
Systems (continued)
Traditional Transaction
Processing
Methods and Objectives
Batch processing system:
◦ Data processing in which business transactions are:
◦ Accumulated over a period of time
◦ Prepared for processing as a single unit or batch
Online transaction processing (OLTP):

◦ Data processing in which each transaction is processed immediately
Traditional Transaction Processing
(continued)
Organizations expect their TPSs to:
◦ Capture, process, and update databases of business data
◦ Ensure that the data is processed accurately and completely
◦ Avoid processing fraudulent transactions
◦ Produce timely user responses and reports
◦ Reduce clerical and other labor requirements
◦ Help improve customer service
◦ Achieve competitive advantage
Traditional Transaction
Processing Methods and
Objectives (continued)
A TPS typically includes the following types of
systems:
◦ Order processing systems
◦ Accounting systems
◦ Purchasing systems
Traditional Transaction Processing
(continued)
Transaction Processing Systems for
Small and Medium-Size Enterprises
(SMEs)
Many software packages:
◦ Provide integrated transaction processing system solutions for small and
medium-size enterprises (SMEs)
Camp Logan Cement:
◦ Was able to get up and running in a month with Intuit Enterprise Solutions
Transaction Processing Systems
for SMEs (continued)
Transaction Processing
Activities
TPSs:
◦ Capture and process data that describes fundamental business transactions
◦ Update databases
◦ Produce a variety of reports
Transaction processing cycle:

◦ The process of data collection, data editing, data correction, data
manipulation, data storage, and document production
Transaction Processing
Activities (continued)
Data Collection
Capturing and gathering all data necessary to complete the processing
of transactions
Data collection can be:
◦ Manual
◦ Automated via special input devices
Data should be:

◦ Collected at source
◦ Recorded accurately, in a timely fashion
Data Collection (continued)
Data Editing
Checking data for validity and completeness to detect any problems
Examples:
◦ Quantity and cost data must be numeric
◦ Names must be alphabetic
Data Correction
Reentering data that was not typed or scanned properly
Error messages must specify the problem so proper corrections can be
made
Data Manipulation
Performing calculations and other data transformations related to business
transactions
Can include:
◦ Classifying data
◦ Sorting data into categories
◦ Performing calculations
◦ Summarizing results
◦ Storing data in the organization’s database for further processing
Data Storage
Updating one or more databases with new transactions
After being updated, this data can be further processed and manipulated by
other systems
Document Production and
Reports
Generating output records, documents, and reports:
◦ Hard-copy paper reports
◦ Displays on computer screens
Results from one TPS can be inputs to another system

Enterprise Resource Planning
and Customer Relationship
Management
Enterprise resource planning (ERP):
◦ Set of integrated programs that manage a company’s vital business operations for
an entire organization
Business process:
◦ Set of coordinated and related activities that takes one or more kinds of input and
creates an output of value to the customer of that process
Enterprise Resource Planning
and Customer Relationship
Management (continued)
An Overview of Enterprise
Resource Planning
ERP systems:
◦ Evolved from materials requirement planning systems (MRP) developed in
the 1970s
Large organizations:
◦ The first to take on the challenge of implementing ERP
Advantages of ERP
Improved access to data for operational decision making
Elimination of costly, inflexible legacy systems
Improvement of work processes
Upgrade of technology infrastructure
Disadvantages of ERP
Systems
Expense and time in implementation
Difficulty implementing change
Difficulty integrating with other systems
Difficulty in loading data into new ERP system
Risks in using one vendor
Risk of implementation failure
Leading ERP Systems
No one ERP software solution from a single vendor is “best” for all
organizations
SAP:
◦ Largest and most-recognized ERP solution provider among Fortune 1000 and
Global 5000 organizations
Microsoft and SAP:

◦ Partnered in the development of Duet
ERP for Small and Medium-Size
Enterprises (SMEs)
oMany SMEs elect to implement open-source ERP systems
oReasons for customization:
 Customization is needed for your other business systems to work with the
ERP package
 You need additional data fields and/or different field sizes than what
comes with the standard system
 Customization is needed to meet regulatory requirements
Supply Chain Management
(SCM)
A system that includes:
◦ Planning, executing, and controlling all activities involved in raw
material sourcing and procurement
◦ Converting raw materials to finished products, and warehousing and
delivering finished product to customers
Supply Chain Management
(SCM) (continued)
Process for developing a production plan:
◦ Sales forecasting
◦ Sales and operations plan (S&OP)
◦ Demand management
◦ Detailed scheduling
◦ Materials requirement planning (MRP)
◦ Purchasing
◦ Production
◦ Sales ordering
Customer Relationship
Management
Goal is to understand and anticipate the needs of current and potential
customers
Used primarily by people in:
◦ The sales, marketing, and service organizations to capture and view data
about customers and to improve communications
CRM software:
◦ Automates and integrates the functions of sales, marketing, and service in an
organization
Key features of a CRM system:
◦ Contact management
◦ Sales management
◦ Customer support
◦ Marketing automation
◦ Analysis
◦ Social networking
◦ Access by smartphones
◦ Import contact data
Summary
Transaction processing systems (TPSs):
◦ Are at the heart of most information systems in businesses today
Batch and online processing:

◦ The collection of transactions into batches
TPSs perform the following basic activities:

◦ Data collection, data editing, data correction
◦ Data manipulation, data storage, document production
Summary (continued)
Enterprise resource planning (ERP):
◦ Software that supports the efficient operation of business processes
Most firms use ERP systems to:

◦ Support financial and managerial accounting and business intelligence
Organizations are implementing CRM systems to manage all aspects of

customer encounters
12th Edition
Chapter 10
Information and Decision Support Systems

Objectives
Good decision-making and problem-solving skills are the key to
developing effective information and decision support systems
◦ Define the stages of decision making
◦ Discuss the importance of implementation and monitoring in problem
solving
The management information system (MIS) must provide the right

information to the right person in the right format at the right time
◦ Explain the uses of MISs and describe their inputs and outputs
◦ Discuss information systems in the functional areas of business organizations
Decision support systems (DSSs) are used when the problems are
unstructured
◦ List and discuss important characteristics of DSSs that give them the
potential to be effective management support tools
◦ Identify and describe the basic components of a DSS.
Specialized support systems, such as group support systems (GSSs) and

executive support systems (ESSs), use the overall approach of a DSS in
situations such as group and executive decision making
◦ State the goals of a GSS and identify the characteristics that distinguish it
from a DSS
◦ Identify the fundamental uses of an ESS and list the characteristics of such a
system
◦ List and discuss other special-purpose systems
Why Learn About Information
and Decision Support Systems?
True potential of information systems:
◦ Is in helping you and your coworkers make more informed decisions
Transportation coordinators can:

◦ Use management information reports to find the least expensive way to ship
products to market and to solve bottlenecks
Decision Making and Problem Solving
Every organization needs effective decision making
In most cases, strategic planning and overall goals of the organization set the
course for decision making.
*Decision-making phase:
◦ Intelligence stage:
◦ Identify and define potential problems or opportunities
◦ Design stage:
◦ Develop alternative solutions to the problem and evaluate their feasibility
◦ Choice stage:
◦ Select a course of action
◦Problem solving:
◦ Includes and goes beyond decision making
◦ Includes implementation stage
◦Monitoring stage:
◦ Decision makers evaluate the implementation
Decision Making as a
Component of Problem Solving
(continued)
The Benefits of Information and
Decision Support Systems
An Overview of Management
Information Systems
Management information system (MIS):
◦ Integrated collection of people, procedures, databases, and devices
◦ Can give the organization a competitive advantage
Management Information
Systems in Perspective
Purpose of an MIS:
◦ To help an organization achieve its goals
◦ Provide the right information to the right person in the right format at the
right time
Business transactions:
◦ Can enter the organization through traditional methods, or via the Internet,
or via an extranet
Management Information
Systems in Perspective
(continued)
Inputs to a Management
Information System
Internal data sources:
◦ TPS and ERP systems and related databases
◦ Data warehouses and data marts
◦ Specific functional areas throughout the firm
External data sources:

◦ Customers, suppliers, competitors, and stockholders whose data is not
already captured by the TPS and ERP systems
◦ Internet
Outputs of a Management
Information System
Scheduled reports:
◦ Produced periodically, such as daily, weekly, or monthly
◦ Key-indicator report summarizes the previous day’s critical activities
Demand reports:
◦ Developed to provide certain information upon request
Exception reports:
◦ Automatically produced when a situation is unusual or requires management
action
◦ Trigger points should be set carefully
Drill-down reports:
◦ Provide increasingly detailed data about a situation
Characteristics of a Management
Information System
MISs perform the following functions:
◦ Provide reports with fixed and standard formats
◦ Produce hard-copy and soft-copy reports
◦ Use internal data stored in computer system
◦ Allow users to develop custom reports
◦ Require user requests for reports developed by systems personnel
Functional Aspects of the
MIS
Most organizations are structured along functional lines or areas
MIS can be divided along functional lines to produce reports tailored to
individual functions
Financial Management
Information Systems
Financial MIS:
◦ Provides financial information to executives and others
Some financial MIS subsystems and outputs:

◦ Profit/loss and cost systems
◦ Auditing
◦ Uses and management of funds
Manufacturing Management
Information Systems
Manufacturing MIS subsystems and outputs:
◦ Used to monitor and control the flow of materials, products, and services
through the organization
Common information subsystems and outputs used in manufacturing:

◦ Design and engineering
◦ Master production scheduling
◦ Inventory control
◦ Process control
◦ Quality control and testing
Marketing Management
Information Systems
Marketing MIS:
◦ Supports managerial activities in product development, distribution, pricing
decisions, promotional effectiveness, and sales forecasting
Subsystems:
◦ Marketing research
◦ Product development
◦ Promotion and advertising
◦ Product pricing
◦ Sales analysis
Human Resource Management
Information Systems
Concerned with activities related to employees and potential
employees
Subsystems:
◦ Human resource planning
◦ Personnel selection and recruiting
◦ Training and skills inventory
◦ Scheduling and job placement
◦ Wage and salary administration
◦ Outplacement
Other Management
Information Systems
Accounting MIS:
◦ Provides aggregate information on accounts payable, accounts receivable,
payroll, and many other applications
Geographic information system (GIS):

◦ Capable of assembling, storing, manipulating, and displaying geographically
referenced information
An Overview of Decision
Support Systems
DSS:
◦ Organized collection of people, procedures, software, databases, and devices
used to help make decisions that solve problems
◦ Used at all levels
Focus of a DSS:
◦ Is on decision-making effectiveness regarding unstructured or
semistructured business problems
Characteristics of a Decision
Support System
Some important characteristics:
◦ Provide rapid access to information
◦ Handle large amounts of data from different sources
◦ Provide report and presentation flexibility
◦ Offer both textual and graphical orientation
◦ Support drill-down analysis
Capabilities of a Decision
Support System
Support problem-solving phases:
◦ A specific DSS might support only one or a few phases
Support various decision frequencies:

◦ Ad hoc DSS is concerned with situations or decisions that come up only a few
times
◦ Institutional DSS handles situations or decisions that occur more than once.
Support various problem structures:

◦ Highly structured problems are straightforward, requiring known facts and
relationships
◦ Semistructured or unstructured problems are more complex
Support various decision-making levels:

◦ DSSs can provide help for managers at various levels within the organization
Capabilities of a Decision
Support System (continued)
A Comparison of DSS and MIS
DSS differs from an MIS in numerous ways, including:
◦ The type of problems solved
◦ The support given to users
◦ The decision emphasis and approach
◦ The type, speed, output, and development of the system used
A Comparison of DSS and
MIS (continued)
Components of a Decision
Support System
At the core of a DSS are a database and a model base
Dialogue manager:
◦ Allows decision makers to easily access and manipulate the DSS and to use
common business terms and phrases
The Database
Database management system:
◦ Allows managers and decision makers to perform qualitative analysis on data
stored in company’s databases, data warehouses, and data marts
◦ Can also be used to connect to external databases
Data-driven DSS:
◦ Performs qualitative analysis based on the company’s databases
The Model Base
Model base:
◦ Allows managers and decision makers to perform quantitative analysis on
both internal and external data
Model-driven DSS:
◦ Performs mathematical or quantitative analysis
Model management software (MMS):

◦ Coordinates the use of models in a DSS
The Model Base (continued)
The User Interface or
Dialogue Manager
Allows users to interact with the DSS to obtain information
Assists with all aspects of communications between user and hardware
and software that constitute the DSS
Summary
Problem solving:
◦ Begins with decision making
◦ Includes implementation and monitoring
◦ Decision making is a component
Management information system:

◦ Integrated collection of people, procedures, databases, and devices
Data that enters the MIS:

◦ Originates from both internal and external sources
Summary (continued)
Output of most MISs:
◦ Scheduled reports, key-indicator reports
◦ Demand reports, exception reports
◦ Drill-down reports
Primary sources of input to functional MISs:

◦ Corporate strategic plan
◦ Data from the ERP system and TPS
◦ Information from supply chain and business transactions
◦ External sources including the Internet and extranets
Summary (continued)
Components of a DSS:
◦ The database, model base, extranets, networks
◦ User interface or dialogue manager
◦ Link to external databases, the Internet
◦ The corporate intranet, extranets, networks
Group support system (GSS):

◦ Consists of most of the elements in a DSS, plus software to provide effective
support in group decision-making settings
12th Edition
Chapter 11
Knowledge Management and

Specialized Information Systems
Objectives
Knowledge management allows organizations to share knowledge and
experience among managers and employees
◦ Discuss the differences among data, information, and knowledge
◦ Describe the role of the chief knowledge officer (CKO)
◦ List some of the tools and techniques used in knowledge management
Artificial intelligence systems form a broad and diverse set of systems that can
replicate human decision making for certain types of well-defined problems
◦ Define the term artificial intelligence and state the objective of developing
artificial intelligence systems
◦ List the characteristics of intelligent behavior and compare the performance
of natural and artificial intelligence systems for each of these characteristics
◦ Identify the major components of the artificial intelligence field and provide
one example of each type of system
Expert systems can enable a novice to perform at the level of an expert
but must be developed and maintained very carefully
◦ List the characteristics and basic components of expert systems
◦ Outline and briefly explain the steps for developing an expert system
◦ Identify the benefits associated with the use of expert systems
Specialized systems can help organizations and individuals achieve their

goals
◦ Discuss examples of specialized systems for organizational and
individual use
Knowledge Management
Systems
Data consists of raw facts
Information:
◦ Collection of facts organized so that they have additional value
beyond the value of the facts themselves
Knowledge:
◦ Awareness and understanding of a set of information and the ways
that information can be made useful to support a specific task or
reach a decision
Systems (continued)
Knowledge management system (KMS):
◦ Organized collection of people, procedures, software, databases, and
devices
◦ Used to create, store, share, and use the organization’s knowledge
and experience
Knowledge Management Systems
(continued)
Overview of Knowledge
Management Systems
Explicit knowledge:
◦ Objective
◦ Can be measured and documented in reports, papers, and rules
Tacit knowledge:
◦ Hard to measure and document
◦ Typically not objective or formalized
Data and Knowledge
Management Workers and
Communities of Practice
Data workers:
◦ Secretaries, administrative assistants, bookkeepers, etc.
Knowledge workers:
◦ Create, use, and disseminate knowledge
◦ Professionals in science, engineering, or business; writers;
researchers; educators; corporate designers; etc.
Data and Knowledge Management
Workers and Communities of Practice
(continued)
Chief knowledge officer (CKO):
◦ Top-level executive who helps the organization use a KMS to create, store,
and use knowledge to achieve organizational goals
Communities of practice (COP):
◦ Group of people dedicated to a common discipline or practice
◦ May be used to create, store, and share knowledge
Obtaining, Storing, Sharing,
and Using Knowledge
Knowledge workers:
◦ Often work in teams
◦ Can use collaborative work software and group support systems to
share knowledge
Knowledge repository:
◦ Includes documents, reports, files, and databases
Obtaining, Storing, Sharing,
and Using Knowledge
(continued)
Technology to Support
Effective KMS:
◦ Is based on learning new knowledge and changing procedures and
approaches as a result
Microsoft offers a number of knowledge management tools, including
Digital Dashboard

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Information Systems,

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The Internet, Web, Intranets, and Extranets

Internet Protocol (IP):

Transmission Control Protocol (TCP):

Uniform Resource Locator (URL):

Internet Corporation for Assigned Names and Numbers (ICANN)

Connecting via Internet service providers:

Hypertext Markup Language (HTML):

Extensible Markup Language (XML):

Cascading Style Sheet (CSS):

Microblogging, status updates, and news feeds

Transmission Control Protocol (TCP):

Uniform Resource Locator (URL):

Hypertext Markup Language (HTML):

Electronic and Mobile Commerce

E-commerce and m-commerce can be used in many innovative ways to

One fundamental change has been:

Business activities that are strong candidates for conversion to e-

Etsy is a C2C Web site that:

Three components of a successful model:

Companies must be prepared to:

Online marketers must:

M-commerce spending in the United States:

M-commerce sales for 2010 projected to be $2.4 billion