MANAGING THE DIGITAL FIRM Chapter 1 MANAGING THE DIGITAL FIRM

How are information systems transforming organizations and management? Essentials of Management Information Systems Chapter 1 Managing the Digital Firm OBJECTIVES What is the role of information systems in today’s competitive business environment? What exactly is an information system? What do managers need to know about information systems? How are information systems transforming organizations and management?

How has the Internet and Internet technology transformed business? Essentials of Management Information Systems Chapter 1 Managing the Digital Firm OBJECTIVES How has the Internet and Internet technology transformed business? What are the major management challenges to building and using information systems?

1. Design competitive and effective systems Essentials of Management Information Systems Chapter 1 Managing the Digital Firm MANAGEMENT CHALLENGES 1. Design competitive and effective systems 2. Understand system requirements of global business environment 3. Create information architecture that supports organization’s goal

4. Determine business value of information systems Essentials of Management Information Systems Chapter 1 Managing the Digital Firm MANAGEMENT CHALLENGES 4. Determine business value of information systems 5. Design systems people can control, understand and use in a socially, ethically responsible manner

Four powerful worldwide changes that Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Four powerful worldwide changes that have altered the business environment: Emergence of the Global Economy Transformation of Industrial Economies Transformation of the Business Enterprise The Emerging Digital Firm

Emergence of the Global Economy Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Emergence of the Global Economy Management and control in a global marketplace Competition in world markets Global work groups Global delivery systems

Transformation of Industrial Economies Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Transformation of Industrial Economies Knowledge- and information-based economies Productivity New products and services Knowledge: a central productive and strategic asset

Transformation of Industrial Economies Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Transformation of Industrial Economies Time-based competition Shorter product life Turbulent environment Limited employee knowledge base

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Labor Force Composition 1900-1997 Figure 1-1

Transformation of the Business Enterprise Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Transformation of the Business Enterprise Flattening Decentralization Flexibility Location independence Low transaction and coordination costs Empowerment Collaborative work and teamwork

Emergence of the Digital Firm Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? The Competitive Business Environment and the Emerging Digital Firm Emergence of the Digital Firm Digitally-enabled relationships with customers, suppliers, and employees Core business processes accomplished via digital networks Digital management of key corporate assets Rapid sensing and responding to environmental changes

A set of interrelated components that collect Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? What Is an Information System? A set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? What Is an Information System? Data: Streams of raw facts representing events such as business transactions Information: Clusters of facts that are meaningful and useful to human beings in the processes such as making decisions

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? What Is an Information System? Figure 1-2 Data and Information

INPUT PROCESS OUTPUT FEEDBACK Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Activities in an Information System INPUT PROCESS OUTPUT FEEDBACK

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Functions of an Information System Figure 1-3

Rely on computer hardware and software Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer-Based Information System (CBIS) Rely on computer hardware and software Processing and disseminating information

Fixed definitions of data, procedures Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Formal Systems Fixed definitions of data, procedures Collecting, storing, processing, disseminating, using data

An organizational and management solution Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? A Business Perspective on Information Systems An organizational and management solution Based on information technology To a challenge posed by the environment

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Information Systems ORGANIZATIONS TECHNOLOGY MANAGEMENT INFORMATION SYSTEMS Figure 1-4

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? A Business Perspective on Information Systems Information systems literacy: Broad-based understanding of information systems that includes behavioral knowledge about organizations and individuals using information systems as well as technical knowledge about computers. Computer literacy: Knowledge about information technology, focusing on under-standing how computer-based technologies work

Sales and marketing Manufacturing Finance Accounting Human resources Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Major Business Functions Sales and marketing Manufacturing Finance Accounting Human resources

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Organizations Key Elements: People: Managers, knowledge workers, data workers, production or service workers Structure: Organization chart , groups of specialists, products, geography

Politics: Power to persuade, get things done Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Organizations Operating procedures: Standard operating procedures (SOP, rules for action) Politics: Power to persuade, get things done Culture: Customs of behavior

Middle managers: Carry out the programs and plans of senior management Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Management Levels: Senior managers: make long-range strategic decisions about products and services Middle managers: Carry out the programs and plans of senior management Operational managers: monitor the firm’s daily activities

Tools managers use to cope with change Hardware: Physical equipment Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer Technology Tools managers use to cope with change Hardware: Physical equipment Software: Detailed preprogrammed instructions Storage: Physical media for storing data and the software

Networks: link computers to share data or resources Essentials of Management Information Systems Chapter 1 Managing the Digital Firm WHY INFORMATION SYSTEMS? Computer Technology Communications Technology: transfers data from one physical location to another Networks: link computers to share data or resources

MIS TECHNICAL APPROACHES BEHAVIORAL APPROACHES Essentials of Management Information Systems Chapter 1 Managing the Digital Firm CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS SOCIOLOGY POLITICAL SCIENCE PSYCHOLOGY COMPUTER SCIENCE OPERATIONS RESEARCH MANAGEMENT TECHNICAL APPROACHES MIS BEHAVIORAL APPROACHES Figure 1-5

Optimize systems performance: Essentials of Management Information Systems Chapter 1 Managing the Digital Firm CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS Socio-Technical Systems Optimize systems performance: Technology and organization Organizations mutually adjust to one another until fit is satisfactory

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS Socio-technical Systems SOURCE: Liker, et al, 1987 Figure 1-6

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM The Interdependence Between Organizations and Information Systems Figure 1-7

Growing Importance 1950s: Technical changes Essentials of Management Information Systems Chapter 1 Managing the Digital Firm THE NETWORK REVOLUTION AND THE INTERNET The Widening Scope of Information Systems 1950s: Technical changes 60s-70s: Managerial controls 80s-90s: Institutional core activities Growing Importance

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm THE NETWORK REVOLUTION AND THE INTERNET The Widening Scope of Information Systems Figure 1-8

Communicate and collaborate Access information Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM What You Can Do on the Internet Communicate and collaborate Access information Participate in discussions Supply information Find entertainment Exchange business transactions

Flattening organizations Separating work from location Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM New Options for Organizational Design Flattening organizations Separating work from location Reorganizing work-flows Increasing flexibility Redefining organizational boundaries

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Flattening Organizations Information Systems Figure 1-9

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Redesigned Work Flow For Insurance Underwriting Figure 1-10

Electronic commerce Electronic business Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM The Digital Firm Electronic commerce Electronic business Electronic market: Information systems links, buyers and sellers to exchange information, products, services, payments

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Figure 1-11

Internet links buyers, sellers Lower transaction costs Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Electronic Commerce Internet links buyers, sellers Lower transaction costs Goods and services advertised, bought, exchanged worldwide Business-to-business transactions increasing

Internet: Business builds private, secure network Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Electronic Business Internet: Business builds private, secure network E-mail, Web documents, group software: Extends effective communication and control Extranet: Extension of intranet to authorized external users

Essentials of Management Information Systems Chapter 1 Managing the Digital Firm TOWARD THE DIGITAL FIRM Information Architecture and Information Technology Infrastructure Figure 1-12

MANAGING THE DIGITAL FIRM Chapter 1 MANAGING THE DIGITAL FIRM

INFORMATION SYSTEMS IN THE ENTERPRISE Chapter 2 INFORMATION SYSTEMS IN THE ENTERPRISE

How do information systems support the major business functions? Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise OBJECTIVES What are the key system applications in a business? What role do they play? How do information systems support the major business functions? Why should managers pay attention to business processes?

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise OBJECTIVES What are the business benefits of using collaborative commerce, private industrial networks and enterprise systems? What types of information systems are used by companies that operate internationally?

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise MANAGEMENT CHALLENGES Integration: Different systems serve variety of functions, connecting organizational levels difficult, costly Enlarging scope of management thinking: Huge system investments, long development time must be guided by common objectives

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Types of Information Systems Figure 2-1

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Major Types of Systems Executive Support Systems (ESS) Decision Support Systems (DSS) Management Information Systems (MIS) Knowledge Work Systems (KWS) Office Automation Systems (OAS) Transaction Processing Systems (TPS)

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise TYPES OF INFORMATION SYSTEMS Figure 2-2

Transaction Processing Systems (TPS): Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Transaction Processing Systems (TPS): Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Payroll TPS Figure 2-3

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Types of TPS Systems Figure 2-4

Knowledge Work Systems (KWS): Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Knowledge Work Systems (KWS): Knowledge level Inputs: Design specs Processing: Modeling Outputs: Designs, graphics Users: Technical staff Example: Engineering work station

Management Information System (MIS): Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS): Management level Inputs: High volume data Processing: Simple models Outputs: Summary reports Users: Middle managers Example: Annual budgeting

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS) Figure 2-5

Structured and semi-structured decisions Report control oriented Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS) Structured and semi-structured decisions Report control oriented Past and present data Internal orientation Lengthy design process

Decision Support System (DSS): Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS): Management level Inputs: Low volume data Processing: Interactive Outputs: Decision analysis Users: Professionals, staff Example: Contract cost analysis

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS) Figure 2-6

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Decision Support System (DSS) Figure 2-7

Executive Support System (ESS): Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive Support System (ESS): Strategic level Inputs: Aggregate data Processing: Interactive Outputs: Projections Users: Senior managers Example: 5-year operating plan

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive Support System (ESS) Figure 2-8

Designed to the individual Ties CEO to all levels Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive support system (ESS) Top level management Designed to the individual Ties CEO to all levels Very expensive to keep up Extensive support staff

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERRELATIONSHIPS AMONG SYSTEMS Figure 2-9

Major functions of systems: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems Major functions of systems: Sales management, market research, promotion, pricing, new products Major application systems: Sales order info system, market research system, pricing system

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems

Major functions of systems: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production Systems Major functions of systems: Scheduling, purchasing, shipping, receiving, engineering, operations Major application systems: Materials resource planning systems, purchase order control systems, engineering systems, quality control systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production Systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Overview of Inventory Systems Figure 2-10

Major functions of systems: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Financing and Accounting Systems Major functions of systems: Budgeting, general ledger, billing, cost accounting Major application systems: General ledger, accounts receivable, accounts payable, budgeting, funds management systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Financing and Accounting Systems

Major functions of systems: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems Major functions of systems: Personnel records, benefits, compensation, labor relations, training Major application systems: Payroll, employee records, benefit systems, career path systems, personnel training systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems Figure 2-11

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Business processes Manner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledge—sets of activities

Unique ways to coordinate work, information, and knowledge Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work

Information systems help organizations Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Information systems help organizations Achieve great efficiencies by automating parts of processes Rethink and streamline processes

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Manufacturing and production: Assembling product, checking quality, producing bills of materials Sales and marketing: Identifying customers, creating customer awareness, selling

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Finance and accounting: Paying creditors, creating financial statements, managing cash accounts Human Resources: Hiring employees, evaluating performance, enrolling employees in benefits plans

Cross-Functional Business Processes Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Cross-Functional Business Processes Transcend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to a complete piece of work Example: Order Fulfillment Process

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES The Order Fulfillment Process Figure 2-12

Customer Relationship Management (CRM) Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) Customer Relationship Management (CRM) Manages all ways used by firms to deal with existing and potential new customers Business and Technology discipline Uses information system to coordinate entire business processes of a firm

Provides end-to-end customer care Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) Provides end-to-end customer care Provides a unified view of customer across the company Consolidates customer data from multiple sources and provides analytical tools for answering questions

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) Figure 2-13

Supply Chain Management (SCM) Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) Supply Chain Management (SCM) Close linkage and coordination of activities involved in buying, making, and moving a product Integrates supplier, manufacturer, distributor, and customer logistics time Reduces time, redundant effort, and inventory costs

Supply Chain Network of organizations and business processes Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) Supply Chain Network of organizations and business processes Helps in procurement of materials, transformation of raw materials into intermediate and finished products

Helps in distribution of the finished products to customers Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) Helps in distribution of the finished products to customers Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management Figure 2-14

Decide when, what to produce, store, move Rapidly communicate orders Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES How Information Systems Facilitate Supply Chain Management Decide when, what to produce, store, move Rapidly communicate orders Communicate orders, track order status Check inventory availability, monitor levels Track shipments Plan production based on actual demand Rapidly communicate product design change Provide product specifications Share information about defect rates, returns

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) Limitations: Inefficiencies can waste as much as 25% of company’s operating costs Bullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to next

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) Supply chain planning system: Enables firm to generate forecasts for a product and to develop sourcing and a manufacturing plan for the product Supply chain execution system: Manages flow of products through distribution centers and warehouses

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Collaborative Commerce Uses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage products Increases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informed

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Collaborative Commerce Figure 2-15

Private Industrial Networks Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Industrial Networks Private Industrial Networks Web-enabled networks Link systems of multiple firms in an industry Coordinate transorganizational business processes

Outside the organization’s boundaries: There are customers and vendors Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Traditional View of the Systems Within the business: There are functions, each having its uses of information systems Outside the organization’s boundaries: There are customers and vendors Functions tend to work in isolation

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Traditional View of the Systems Figure 2-16

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Figure 2-17

Firm structure and organization: One organization Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Benefits of Enterprise Systems Firm structure and organization: One organization Management: Firm-wide knowledge-based management processes Technology: Unified platform Business: More efficient operations and customer-driven business processes

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Challenges of Enterprise Systems Difficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertise Centralized organizational coordination and decision making: Not the best way for the firms to operate

Four main ways of organizing businesses internationally: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERNATIONAL INFORMATION SYSTEMS Forms of Global Business Organization Four main ways of organizing businesses internationally: Domestic Exporter: Heavy centralization of corporate activities in the home country of origin Multinational: Financial management and control out of a central home base, production, sales and marketing operations decentralized

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERNATIONAL INFORMATION SYSTEMS Forms of Global Business Organization Franchiser: Product created, designed, financed, and produced in the home country, relies on foreign personnel for production, marketing and human resources Transnational: No national headquarters; value-added activities managed from a global perspective, no reference to national borders, sources of supply and demand and local competitive advantage optimized

Four types of system configuration: Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERNATIONAL INFORMATION SYSTEMS Global System Configuration Four types of system configuration: Centralized Systems Duplicated Systems Decentralized Systems Networked Systems

Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERNATIONAL INFORMATION SYSYTEMS Global System Configuration Figure 2-18

INFORMATION SYSTEMS IN THE ENTERPRISE Chapter 2 INFORMATION SYSTEMS IN THE ENTERPRISE

INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY Chapter 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

What impact do information systems have on organizations? Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy OBJECTIVES What do managers need to know about organizations in order to build and use information systems successfully? What impact do information systems have on organizations? How do information systems support the activities of managers in organizations?

How can businesses use information systems for competitive advantage? Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy OBJECTIVES How can businesses use information systems for competitive advantage? Why is it so difficult to build successful information systems, including systems that promote competitive advantage?

Sustainability of competitive advantage Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGEMENT CHALLENGES Sustainability of competitive advantage 2. Fitting technology to the organization (or vice-versa)

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS The Two-Way Relationship Between Organizations and Information Technology MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANIZATIONS INFORMATION TECHNOLOGY Figure 3-1

Organization: Stable, formal structure Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Organization: Stable, formal structure Takes resources from environment and processes them to produce outputs

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Technical Microeconomic Definition of the Organization Figure 3-2

Behavioral definition of Organization: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Behavioral definition of Organization: Collection of rights, privileges, obligations, responsibilities Delicately balanced Conflict resolution

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy COMMON FEATURES OF ORGANIZATIONS The Behavioral View of Organizations Figure 3-3

Organizations are bureaucracies that have certain structural features Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Organizations are bureaucracies that have certain structural features

Structural Characteristics of Organizations: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Structural Characteristics of Organizations: Clear division of labor Hierarchy Explicit rules and procedures Impartial judgments

Structural Characteristics of Organizations (cont.): Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Structural Characteristics of Organizations (cont.): Technical qualifications Maximum organizational efficiency

Standard Operating Procedures: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Standard Operating Procedures: Precise rules, procedures, and practices Enable organizations to cope with all expected situations

Organizational Politics: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Organizational Politics: Divergent viewpoints leads to political struggle, competition, and conflict Hamper organizational change

Organizational Culture: a set of fundamental assumptions about: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations Organizational Culture: a set of fundamental assumptions about: What products the organization should produce How and where it should produce them For whom they should be produced

All organizations have different: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS & INFORMATION SYSTEMS Unique Features of Organizations All organizations have different: Structures/Organizational types Goals Constituencies Leadership Styles, Tasks Surrounding Environment

Entrepreneurial: Start up business Essentials of Management Information Systems Chapter 3 Information Systems , organizations, Management, and Strategy ORGANIZATIONS & INFORMATION SYSTEMS Organizational Structures Entrepreneurial: Start up business Machine bureaucracy: Midsize manufacturing firm Divisionalized bureaucracy: Fortune 500 Professional bureaucracy: Law firms, hospitals, school systems Adhocracy: Consulting firm

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS & INFORMATION SYSTEMS Organization and Its Environment Figure 3-4

Different groups and constituencies Nature of leadership Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Other Differences Among Organizations Ultimate goal Different groups and constituencies Nature of leadership Tasks and technology

Information systems department: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Information Technology Infrastructure and Information Technology Services Information systems department: Formal organizational unit Responsible for information systems in the organization

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Information Technology Services Figure 3-5

Includes specialists: Programmers: Highly trained, write software Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Information Technology Infrastructure and Information Technology Services Includes specialists: Programmers: Highly trained, write software Systems analysts: Translate business problems into solutions, act as liaisons between the information systems department and rest of the organization

Information system managers: Leaders of various specialists Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Information Technology Infrastructure and Information Technology Services Specialists (cont.): Information system managers: Leaders of various specialists Chief information officer (CIO): Senior manager in charge of information systems function in the firm End users: Department representatives outside the information system department for whom applications are developed

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS How Information Systems Affect Organizations Economic theories Information technology is a factor of production, like capital and labor

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS How Information Systems Affect Organizations Transaction cost theory: Firms can conduct marketplace transactions internally more cheaply to grow larger

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Transaction Cost Theory Figure 3-6

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS How Information Systems Affect Organizations Agency theory: Firm is nexus of contracts among self-interested parties requiring supervision

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Agency Cost Theory Figure 3-7

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS How Information Systems Affect Organizations Behavioral theories: Information technology could change hierarchy of decision making Lower cost of information acquisition Broadens the distribution of information

Virtual organization: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS How Information Systems Affect Organizations Virtual organization: Task force networked organizations Uses networks to link people, assets, and ideas to create and distribute products and services without being limited to physical locations

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Implementing Change and Organizational Resistance Figure 3-8

Classical model of management: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS The Role of Managers in Organizations Classical model of management: Traditional description of management Focuses on formal functions: plan, organize, coordinate, decide, control Behavioral model of management: Describes management based on observations of managers on the job

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS The Role of Managers in Organizations Managerial roles Expectation of activities that managers should perform in an organization

Interpersonal: Managers act as figureheads and leaders Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS The Role of Managers in Organizations Categories Interpersonal: Managers act as figureheads and leaders Informational: Managers receive and disseminate critical information, nerve centers Decisional: Managers initiate activities, allocate resources, and negotiate conflicts

Process of Decision Making Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Managers and Decision Making Process of Decision Making Strategic Decision Making: Determines long-term objectives, resources, and policies Management Control: Monitors effective or efficient usage of resources and performance of operational units

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Managers and Decision Making Operational control: Determines how to perform specific tasks set by strategic and middle-management decision makers Knowledge-level decision making: Evaluates new ideas for products, services, ways to communicate new knowledge, ways to distribute information

Decisions are classified as: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Managers and Decision Making Decisions are classified as: Unstructured: Non routine, decision maker provides judgment, evaluation, and insights into problem definition, no agreed-upon procedure for decision making Structured: Repetitive, routine, handled using a definite procedure

TPS MIS OAS DSS ESS KWS Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Different Kinds of Information Systems TPS OAS MIS KWS DSS ESS Organizational Level TYPE OF DECISION OPERATIONAL KNOWLEDGE MANAGEMENT STRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI- BUDGET PREPARATION PROJECT FACILITY LOCATION UNSTRUCTURED PRODUCT DESIGN NEW PRODUCTS NEW MARKETS Figure 3-9

Intelligence: Collect information, identify problem Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Stages of Decision Making Intelligence: Collect information, identify problem Design: Conceive alternative solution to a problem Choice: Select among the alternative solutions Implementation: Put decision into effect and provide report on the progress of solution

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Decision-Making Process Figure 3-10

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Models of Decision Making Rational: People, organizations, and nations engage in consistent, value-maximizing calculations or adaptations within certain constraints Cognitive style: Underlying personality dispositions toward the treatment of information, selection of alternatives, and evaluation of consequences

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Models of Decision Making Systematic decision makers: Cognitive style, describes people who approach a problem by structuring it in terms of some formal method Intuitive: Cognitive style, describes people approaching a problem with multiple methods in an unstructured manner

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Models of Decision Making Organizational models of decision making: Consider structural and political characteristics of an organization

Factors to consider while planning a new system: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Implications for the Design and Understanding of Information Systems Factors to consider while planning a new system: Organizational environment Organizational structure, hierarchy, specialization, standard operating procedures

Culture and politics of the organization Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Implications for the Design and Understanding of Information Systems Culture and politics of the organization Type of organization and its style of leadership

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Implications for the Design and Understanding of Information Systems Groups affected by the system and the attitudes of workers who will be using the system Kinds of tasks, decisions, and business processes, information system is designed to assist

Characteristics to be kept in mind while designing systems: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Implications for the Design and Understanding of Information Systems Characteristics to be kept in mind while designing systems: Flexibility and multiple options for handling data and evaluating information Capability to support a variety of styles, skills, and knowledge

Capability to keep track of many alternatives and consequences Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Implications for the Design and Understanding of Information Systems Capability to keep track of many alternatives and consequences Sensitivity to the organization’s bureaucratic and political requirements

Computer system at any level of an organization Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY What is Strategic Information System Computer system at any level of an organization Changes goals, operations, products, services, or environmental relationships Helps organization gain a competitive advantage

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Digital firms Manage the supply chain by building efficient customer “sense and response” systems Participate in “value webs” to deliver new products and services

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Value Chain Model: Highlights the primary or support activities adding a margin of value to products or services Helps achieve a competitive advantage

Primary Activities: Support Activities: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Primary Activities: Directly related to the production and distribution of a firm’s products or services Support Activities: Make the delivery of primary activities possible Consist of the organization’s infrastructure, human resources, technology, and procurement

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Firm Value Chain Figure 3-11

Value Web: Customer-driven network of independent firms Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Value Web: Customer-driven network of independent firms Uses information technology to coordinate value chains for collectively producing a product or service

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY The Value Web Figure 3-12

Product Differentiation: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Product Differentiation: Competitive strategy Creates brand loyalty by developing new and unique products and services Products and services not easily duplicated by competitors

Focused Differentiation: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Business Level Strategy and the Value Chain Model Focused Differentiation: Competitive strategy Enables development of new market niches for specialized products or services Helps businesses compete better than competitors in the target areas

Efficient Customer Response System: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Supply Chain Management and Efficient Customer Response System Efficient Customer Response System: Directly links consumer behavior back to distribution, production, and supply chains

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Supply Chain Management and Efficient Customer Response System Switching costs: Expense incurred by a customer or company in terms of time and expenditure of resources when changing from one supplier or system to another

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Stockless Inventory Compared to Traditional and Just-in-time Supply Methods Figure 3-13

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Enhancing Core Competencies Figure 3-14

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Firm-Level Strategy and Information Technology Core Competency: Activity at which a firm excels as a world-class leader Information system encouraging the sharing of knowledge across business units enhances competency

Information partnership: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Industry-Level Strategy and Information Systems Information partnership: Cooperative alliance formed between two or more corporations for sharing information to gain strategic advantage Help firms gain access to new customers, creating new opportunities for cross-selling and targeting products

The competitive forces model: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Industry-Level Strategy and Information Systems The competitive forces model: Describes the interaction of external influences, specifically threats and opportunities, affecting an organization’s strategy and ability to compete

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Porter’s Competitive Forces Model Figure 3-15

Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY New Competitive Forces Model Figure 3-16

Network Economics: Model of strategic systems at the industry level Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Industry-Level Strategy and Information Systems Network Economics: Model of strategic systems at the industry level Based on the concept of a network Adding another participant entails zero marginal costs but can create much larger marginal gain

Managing strategic transitions: Essentials of Management Information Systems Chapter 3 Information Systems , Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Using Systems for Competitive Advantage: Management Issues Managing strategic transitions: Movement from one level of sociotechnical system to another Required when adopting strategic systems demanding changes in the social and technical elements of an organization

INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY Chapter 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY

THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS Chapter 4 THE DIGITAL FIRM: ELECTRONIC COMMERCE AND ELECTRONIC BUSINESS

What are the principal payment systems for electronic commerce? Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business OBJECTIVES How has Internet technology changed value propositions and business models? What is electronic commerce? How has electronic commerce changed consumer retailing and business-to-business transactions? What are the principal payment systems for electronic commerce?

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business OBJECTIVES How can Internet technology support electronic business and supply chain management? What are the major managerial and organizational challenges posed by electronic commerce and electronic business?

Challenges and opportunities Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business MANAGEMENT CHALLENGES Emerging digital firm Electronic commerce Electronic business Challenges and opportunities

Electronic commerce and electronic business require new mind set Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business MANAGEMENT CHALLENGES Electronic commerce and electronic business require new mind set Finding a successful Internet business model

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Technology and The Digital Firm Information technology infrastructure: Provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organizations Direct communication between trading partners: Disintermediation removes intermediate layers, streamlines process

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Technology and the Digital Firm Round-the-clock service: Web sites available to consumers 24 hours a day Extended distribution channels: Outlets created for attracting customers who otherwise would not patronize Reduced transaction costs: Costs of searching for buyers, sellers, etc. reduced

Business Model: Defines an enterprise Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM New Business Models and Value Propositions Business Model: Defines an enterprise Describes how the enterprise delivers a product or service Shows how the enterprise creates wealth

Increases richness: Depth and detail of information Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM The Changing Economies of Information Information asymmetry: One party in a transaction has more information than the other Increases richness: Depth and detail of information Increases reach: Number of people contacted

New levels of richness and reach attainable Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM The Changing Economics of Information Richness New levels of richness and reach attainable Reach ENABLERS Explosion of connectivity Dissemination of standards Figure 4-1

Virtual storefront: Sells goods, services on-line Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Business Models Virtual storefront: Sells goods, services on-line Information broker: Provide info on products, pricing, etc. Transaction broker: Buyers view rates, terms from various sources

Online Marketplace: Concentrates information from several providers Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Business Models Online Marketplace: Concentrates information from several providers Content provider: Creates revenue through providing client for a fee, and advertising

Virtual community: Chat room, on-line meeting place Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Business Models On-line service provider: Provides service, support for hardware, software products Virtual community: Chat room, on-line meeting place

Portal: Initial point of entry to Web, specialized content, services Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Business Models Portal: Initial point of entry to Web, specialized content, services Syndicator: Aggregate information from several sources sold to other companies Auction: Electronic clearinghouse products, prices, change in response to demand

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, AND THE EMERGING DIGITAL FIRM Internet Business Models Dynamic pricing: real-time interactions between buyers and sellers determine worth of items Banner ad: Graphic display used for advertising, linked to the advertiser’s Web site

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Categories of Electronic Commerce Business-to-customer (B2C): Retailing of products and services directly to individual customers Business-to-business (B2B): Sales of goods and services among businesses Consumer-to-consumer (C2C): Individuals use Web for private sales or exchange

Web sites: Provide information on products, services, prices, orders Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Business-To-Consumer Customer-centered retailing: Closer, yet more cost-effective relationship with customers Web sites: Provide information on products, services, prices, orders

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Business-To-Consumer Disintermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a value chain Reintermediation: The shifting of the intermediary role in a value chain to a new source

Manufacturer Distributor Customer Retailer Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Benefits of Disintermediation to the Consumer Cost/ Sweater $48.50 $40.34 $20.45 Manufacturer Distributor Customer Retailer Figure 4-2

Web personalization: Benefits of using individual sales people Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Interactive Marketing and Personalization Web personalization: Benefits of using individual sales people Dramatically lower costs

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Web Site Personalization

Mobile commerce (m-commerce): Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE M-Commerce and Next Generation Marketing Mobile commerce (m-commerce): Wireless devices used to conduct both business-to-consumer and business-to-business e-commerce transactions over the Internet Extend personalization by delivering new value-added services directly to customers at any time and place

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Customer Personalization Figure 4-4

Automation of purchase, sale transactions from business to business Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Business-To-Business Electronic Commerce Automation of purchase, sale transactions from business to business Private industrial networks: Coordination between companies for efficient supply chain management and collaborative activities Electronic hubs: On-line marketplaces, point-to-point connections, integrated information Ritu, plz check the content

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE A Private Industrial Network Figure 4-5

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE A Net Marketplace Figure 4-6

Exchanges: Third-party net marketplace Primarily transaction oriented Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Exchanges: Third-party net marketplace Primarily transaction oriented Connects buyers and suppliers for spot purchasing

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Electronic Commerce Payment Systems

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC COMMERCE Electronic Commerce Information Flows Figure 4-7

Functional applications Supply chain management Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM How Intranets Support Electronic Business Benefits Functional applications Supply chain management

Connectivity: accessible from most computing platforms Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Benefits of Intranets Connectivity: accessible from most computing platforms Can be tied to internal corporate systems and core transaction databases Can create interactive applications Scalable to larger or smaller computing platforms

Easy-to-use, universal Web interface Low start-up costs Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Benefits of Intranets Easy-to-use, universal Web interface Low start-up costs Richer, more responsive information environment Reduced information distribution costs

Finance and accounting Human resources Sales and marketing Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Functional Applications of Intranet Finance and accounting Human resources Sales and marketing Manufacturing and production

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Functional Applications of Intranets Figure 4-8

General ledger reporting Project costing Annual reports Budgeting Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Finance and Accounting General ledger reporting Project costing Annual reports Budgeting

Company Employees On-line publishing of corporate policy Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Human Resources Company On-line publishing of corporate policy Job postings and internal job transfers Company telephone directories, and training Employees Healthcare Employee savings Competency tests

Promotional campaigns Sales presentations Sales contracts Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Sales and Marketing Competitor analysis Price updates Promotional campaigns Sales presentations Sales contracts

Maintenance schedules Design specifications Machine outputs Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM Manufacturing and Production Quality measurements Maintenance schedules Design specifications Machine outputs Order tracking

Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business ELECTRONIC BUSINESS AND THE DIGITAL FIRM The Future Internet-Driven Supply Chain Figure 4-9

Unproven business models Business process change requirements Essentials of Management Information Systems Chapter 4 Electronic Commerce & Electronic Business MANGEMENT CHALLENGES & OPPORTUNITIES Unproven business models Business process change requirements Channel conflicts Legal issues Security and privacy

ELECTRONIC COMMERCE & ELECTRONIC BUSINESS Chapter 4 ELECTRONIC COMMERCE & ELECTRONIC BUSINESS

Chapter 5 ETHICAL AND SOCIAL ISSUES IN THE DIGITAL FIRM

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm OBJECTIVES What ethical, social, and political issues are raised by information systems? Are there specific principles for conduct that can be used to guide decisions about ethical dilemmas? Why does contemporary information systems technology pose challenges to the protection of individual privacy and intellectual property?

How have information systems affected everyday life? Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm OBJECTIVES How have information systems affected everyday life? How can organizations develop corporate policies for ethical conduct?

Understanding the moral risks of new technology Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm MANAGEMENT CHALLENGES Understanding the moral risks of new technology Establishing corporate ethics policies that include information systems issues

Principles of right and wrong Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS Ethics Principles of right and wrong Can be used by individuals acting as free moral agents to make choices to guide their behavior

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS A Model for Thinking about Ethical, Social, and Political Issues Illustrates the dynamics connecting ethical, social, and political issues Identifies the moral dimensions of the “information society,” across individual, social, and political levels of action

Information rights and obligations Property rights Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS Moral Dimensions of the Information Age Information rights and obligations Property rights Accountability and control System quality Quality of life

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS The Relationship between Ethical, Social, and Political Issues in an Information Society Figure 5-1

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS Key Technology Trends that Raise Ethical Issues Computing power doubles every 18 months: Dependence on computer systems Rapidly declining data storage costs: Easy maintenance of individual database

Datamining advances: Analysis of vast quantities of data Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm UNDERSTANDING ETHICAL AND SOCIAL ISSUES RELATED TO SYSTEMS Key Technology Trends that Raise Ethical Issues Datamining advances: Analysis of vast quantities of data Networking advances and the Internet: Remotely accessing personal data

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Basic Concepts: Responsibility, Accountability, and Liability Responsibility: Accepting the potential costs, duties, and obligations for decisions Accountability: Assessing responsibility for decisions made and actions taken

Liability: Permits individuals to recover damages Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Basic Concepts: Responsibility, Accountability, and Liability Liability: Permits individuals to recover damages Due process: Laws are well-known and understood, with an ability to appeal to higher authorities

Golden rule: Do unto others as you would have them do unto you Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Candidate Ethical Principles Golden rule: Do unto others as you would have them do unto you Immanuel Kant’s categorical imperative: If an action is not right for everyone to take, then it is not right for anyone

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Candidate Ethical Principles Descartes’ rule of change: If an action cannot be taken repeatedly, then it is not right to be taken at any time Utilitarian principle: Put values in rank order and understand consequences of various courses of action

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Candidate Ethical Principles Risk aversion principle: Take the action that produces the least harm or incurs the least cost Ethical “no free lunch” rule: All tangible and intangible objects are owned by creator who wants compensation for the work

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Professional Codes of Conduct Promises by professions to regulate themselves in the general interest of society Promulgated by associations such as the American Medical Association (AMA) and the American Bar Association (ABA)

Information system being used by organizations to: Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm ETHICS IN AN INFORMATION SOCIETY Some Real-World Ethical Dilemmas Information system being used by organizations to: Minimize drains on productivity Prevent wastage of resources for non-business activities

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Information Rights: Privacy and Freedom in the Internet Age Privacy: Claim of individuals to be left alone, free from surveillance or interference from other individuals, organizations, or the state Fair information practices: Set of principles governing the collection and use of information on the basis of U.S. and European privacy laws

General Federal Privacy Laws Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS U.S. Federal Privacy Laws General Federal Privacy Laws Freedom of Information Act, 1968 Privacy Act of 1974 Electronic Communications Privacy Act of 1986 Computer Matching and Privacy Protection Act of 1988 Computer Security Act of 1987 Federal Managers Financial Integrity Act of 1982

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS The European Directive on Data Protection Informed consent Consent given with knowledge of all facts needed to make a rational decision

Cookies Tiny files deposited on a hard drive Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Internet Challenges to Privacy Cookies Tiny files deposited on a hard drive Used to identify the visitor and track visits to the Web site

Web bugs Tiny graphic files embedded in e-mail messages and Web pages Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Internet Challenges to Privacy Web bugs Tiny graphic files embedded in e-mail messages and Web pages Designed to monitor on-line Internet user behavior

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Internet Challenges to Privacy Opt-out model Informed consent permitting the collection of personal information Consumer specifically requests for the data not to be collected

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Internet Challenges to Privacy Opt-in model Informed consent prohibiting an organization from collecting any personal information Individual has to approve information collection and use

P3P Platform for Privacy Preferences Project Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Technical Solutions P3P Platform for Privacy Preferences Project Industry standard designed to give users more control over personal information

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Technical Solutions

Under what conditions should the privacy of others be invaded? Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Ethical Issues Under what conditions should the privacy of others be invaded? What legitimaizes intruding into others’ lives through unobtrusive surveillance, through market research, or by whatever means?

Do we have to inform people that we are eavesdropping? Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Ethical Issues Do we have to inform people that we are eavesdropping? Do we have to inform people that we are using credit history information for employment screening purposes?

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Social Issues Concerns the development of “expectations of privacy” or privacy norms, as well as public attitudes

Concern the development of statutes Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Political Issues Concern the development of statutes Govern the relations between record keepers and individuals

Intellectual property: Intangible creations protected by law Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Property Rights: Intellectual Property Intellectual property: Intangible creations protected by law Trade secret: Intellectual work or product belonging to business, not in public domain

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Property Rights: Intellectual Property Copyright: Statutory grant protecting intellectual property from getting copied for 28 years Patents: Legal document granting the owner an exclusive monopoly on the ideas behind an invention for 20 years

Ethical issues: Production of intellectual property Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Challenges to Intellectual Property Rights Ethical issues: Production of intellectual property Social issues: Current intellectual property laws breaking down Political issues: Creation of new property protection measures

Ethical issues: Who is morally responsible for consequences of use? Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Accountability, Liability and Control Ethical issues: Who is morally responsible for consequences of use? Social issues: What should society expect and allow? Political issues: To what extent should government intervene, protect?

Political Issues: Laws of responsibility and accountability Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS System Quality: Data Quality and System Errors Ethical issues: At what point to release the software/services for consumption? Social issues: Should people be encouraged to believe systems are infallible? Political Issues: Laws of responsibility and accountability

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Quality of Life: Equity, Access, and Boundaries Balancing power center versus periphery: Key policy decisions centralized as in the past Rapidity of change- Reduced response time to competition: Reduced normal social buffers

Dependence and vulnerability: No regulatory or standard-setting forces Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Quality of Life: Equity, Access, and Boundaries Maintaining boundaries: Family, work, and leisure: “Do anything anywhere” environment blurring boundaries between work and family time Dependence and vulnerability: No regulatory or standard-setting forces

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Quality of Life: Equity, Access, and Boundaries Computer crime: Commission of illegal acts through the use of a computer or against a computer system Computer abuse: Commission of acts involving a computer that may not be illegal but are considered unethical

Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Quality of Life: Equity, Access, and Boundaries Employment- Trickle-down technology and reengineering job loss: Causes millions of middle-level managers and clerical workers to lose their jobs Equity and access- Increasing racial and social class cleavages: Society of computer literate and skilled, versus computer illiterate and unskilled

Repetitive stress injury (RSI) Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Health Risks: RSI, CVS, and Technostress Repetitive stress injury (RSI) Occupational disease Muscle groups are forced through repetitive actions with high-impact loads or thousands of repetitions with low impact loads

Carpal tunnel syndrome (CTS) Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Health Risks: RSI, CVS, and Technostress Carpal tunnel syndrome (CTS) Type of RSI Pressure on the median nerve through the wrist’s bony carpal tunnel structure produces pain

Computer vision syndrome (CVS) Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Health Risks: RSI, CVS, and Technostress Computer vision syndrome (CVS) Eyestrain condition Related to computer display screen usage Symptoms include headaches, blurred vision, and dry and irritated eyes

Technostress Stress induced by computer use Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Health Risks: RSI, CVS, and Technostress Technostress Stress induced by computer use Symptoms include aggravation, hostility toward humans, impatience, and enervation

Information rights and obligations Property rights and obligations Essentials of Management Information Systems Chapter 5 Ethical and Social Issues in the Digital Firm THE MORAL DIMENSIONS OF INFORMATION SYSTEMS Management Actions: A Corporate Code of Ethics Information rights and obligations Property rights and obligations Accountability and control System quality Quality of life

Chapter 5 ETHICAL AND SOCIAL ISSUES IN THE DIGITAL FIRM

MANAGING HARDWARE AND SOFTWARE ASSETS Chapter 6 MANAGING HARDWARE AND SOFTWARE ASSETS

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets OBJECTIVES What computer processing and storage capability does our organization need to handle its information and business transactions? What arrangement of computers and computer processing would best benefit our organization? What kinds of software and software tools do we need to run our business? What criteria should we use to select our software technology? Nidhi-Too congested! Can we shorten it ?

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets OBJECTIVES Of what new software technologies should we be aware? How would they benefit our organization? How should we acquire and manage the firm’s hardware and software assets?

The centralization versus decentralization debate Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets MANAGEMENT CHALLENGES The centralization versus decentralization debate The application backlog

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Hardware Components of a Computer System Figure 6-1

Represents smallest unit of data in the form of either 0 or 1 Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE The Computer System bit Binary digit Represents smallest unit of data in the form of either 0 or 1 byte String of bits, usually eight Stores one number or character

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Bits and Bytes Figure 6-2

Central Processing Unit (CPU) Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE The CPU and Primary Storage Central Processing Unit (CPU) Manipulates symbols, numbers, and letters Controls other parts of the computer system

Temporarily stores program instructions Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE The CPU and Primary Storage Primary Storage Temporarily stores program instructions Data being used by the instructions

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE The CPU and Primary Storage Figure 6-3

Software program being executed Operating system programs Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Primary Storage Stores Software program being executed Operating system programs Data being used by program

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Primary Storage Arithmetic-logic unit (ALU): performs the computer’s principal logic and arithmetic operations Control Unit: coordinates and controls the other parts of the computer system

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Primary Storage RAM: Directly accesses any randomly chosen location in the same amount of time ROM: Semiconductor memory chips with program instructions, cannot be written to

Microprocessors and Processing Power Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Computer Processing Microprocessors and Processing Power Integrated circuit technology Integrates the computer’s memory, logic, and control on a single chip

Parallel Processing Problem broken down into smaller parts Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Computer Processing Parallel Processing Problem broken down into smaller parts Multiple instructions processed simultaneously with multiple processors

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets COMPUTER HARDWARE AND INFORMATION TECHNOLOGY INFRASTRUCTURE Sequential and Parallel Processing Figure 6-4

Magnetic disk: Floppy disk, Hard disk Optical disks: CD-ROM, DVDs Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY Secondary Storage Technology Magnetic disk: Floppy disk, Hard disk Optical disks: CD-ROM, DVDs Magnetic tape: Inexpensive, older secondary-storage medium New storage alternatives: Storage Area Networks (SANs)

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY A Storage Area Network (SAN) Figure 6-5

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY Input and Output Devices

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY Input and Output Devices

Batch processing On-line processing Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY Batch and On-Line Input and Processing Batch processing Transactions accumulated and stored until processing On-line processing Transactions are entered directly into computer and processed immediately

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY A Comparison of Batch and On-line Processing Figure 6-6

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets STORAGE, INPUT AND OUTPUT TECHNOLOGY Interactive Multimedia Integrates two or more types of media into a computer-based application

Mainframes: Largest computer, massive memory, rapid processing power Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Classifying Computers Mainframes: Largest computer, massive memory, rapid processing power Midrange computers: Less powerful, less expensive, and smaller than a mainframe Server: Provides software and other resources to computers over a network

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Classifying Computers Minicomputers: Middle-range computer, used in universities, factories, or research laboratories Server Farm: Large group of servers maintained by a commercial vendor, available for electronic commerce and other activities

Personal Computer (PC): Small desktop or portable computer Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Classifying Computers Personal Computer (PC): Small desktop or portable computer Workstation: Desktop computer with powerful graphics and mathematical capabilities Supercomputer: Highly sophisticated and powerful, performs complex computations

Centralized processing: Accomplished by one large central computer Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Computer Networks and Client/Server Computing Distributed processing: Distribution of processing work among multiple computers Centralized processing: Accomplished by one large central computer Client/server computing: Splits processing between “clients” and “servers” on network

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Client/Server Computing Figure 6-7

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Types of Client/Server Computing Figure 6-8

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CATEGORIES OF COMPUTERS AND COMPUTER SYSTEMS Network Computers and Peer-to-Peer Computing Network computer (NC): Simplified desktop computer, does not store data permanently Peer-to-peer computing: Distributed processing that links computers through Internet or private networks

Software program: Series of statements or instructions to the computer Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Software program: Series of statements or instructions to the computer System software: Generalized programs, manages computer’s resources Application software: Programs written to perform functions specified by end users

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE The Major Types of Software Figure 6-9

Operating system System software Manages and controls computer Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Operating system System software Manages and controls computer

Functions of the operating system Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Functions of the operating system Allocates and assigns system resources Schedules use of computer resources Monitors computer system activities Provides locations in primary memory for data and programs Controls the input and output devices

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Multiprogramming Executes two or more programs concurrently using the same computer CPU executes only one program but services the input/output needs of others

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Single-Program Execution Versus Multiprogramming Figure 6-10

Multitasking Virtual Storage Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Multitasking Multiprogramming capability of single-user operating systems Virtual Storage Handles programs more efficiently by dividing the programs into small fixed or variable length

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Virtual Storage Figure 6-11

Time Sharing Multiprocessing Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Time Sharing Sharing of computer resources by many users simultaneously Multiprocessing Executing two or more instructions simultaneously in a single computer using multiple central processing units

Language translation and utility software Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE System Software and PC Operating Systems Language translation and utility software Translates high-level language programs into machine language

Windows Millennium Edition (Windows Me) Windows 2000 Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE PC Operating Systems and Graphical User Interfaces GUI Microsoft’s Windows 98 Windows Millennium Edition (Windows Me) Windows 2000

Windows XP UNIX Linux Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE PC Operating Systems and Graphical User Interfaces Windows XP UNIX Linux

Programming languages: Consists of 1s and 0s of binary code Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Application Software and Programming Languages Programming languages: Consists of 1s and 0s of binary code Assembly language: Resembles machine language, substitutes mnemonics for numeric codes Third-generation languages: FORTRAN, COBOL, BASIC, Pascal, and C

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Assembly language Figure 6-12

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE FORTRAN Figure 6-13

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE COBOL Figure 6-14

Fourth-generation language: Employed directly by end users Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Fourth-Generation Languages and PC Software Tools Fourth-generation language: Employed directly by end users Natural languages: Close to human language

Query languages: Provides immediate on-line answers to requests Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Fourth-Generation Languages and PC Software Tools Query languages: Provides immediate on-line answers to requests Application software packages and PC software tools: Word Processing Software, Spreadsheets, Data Management Software

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Spreadsheet Software Figure 6-16

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Data Management Software Figure 6-17

Enterprise software Set of integrated modules Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Software for Enterprise Integration: Enterprise Software and Middleware Enterprise software Set of integrated modules Allows data to be used by multiple functions and business processes

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Software for Enterprise Integration: Enterprise Software and Middleware Middleware Allows two disparate applications to communicate to exchange data Web server Manages requests for Web pages on the computer where they are stored

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Middleware Figure 6-18

Enterprise application integration software Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets TYPES OF SOFTWARE Software for Enterprise Integration: Enterprise Software and Middleware Enterprise application integration software Ties together multiple applications to support enterprise integration

Object-oriented programming Visual programming Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CONTEMPORARY TOOLS FOR SOFTWARE DEVELOPMENT Object-Oriented Programming Object-oriented programming Approach to software development that combines data and procedures into a single object Visual programming Construction of software programs by selecting and arranging programming objects

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CONTEMPORARY TOOLS FOR SOFTWARE DEVELOPMENT Class, subclasses, and overriding Figure 6-19

Delivers the software functionality needed for a particular task Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CONTEMPORARY TOOLS FOR SOFTWARE DEVELOPMENT Java Programming language Delivers the software functionality needed for a particular task Runs on any computer and operating system

Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets CONTEMPORARY TOOLS FOR SOFTWARE DEVELOPMENT Hypertext Markup Language (HTML) and XML Hypertext Markup Language (HTML): Page description language, creates Web pages and other hypermedia documents XML (eXtensible Markup Language): General-purpose language, supports links to multiple documents, used for both Web and non-Web applications

Capacity planning: Process of predicting the computing power Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets HARDWARE TECHNOLOGY REQUIREMENTS Hardware Technology Requirements for Electronic Commerce and Digital Firm Capacity planning: Process of predicting the computing power Scalability: Ability of a computer, product, or system to expand and to serve without breaking down

Designates the total cost of owning technology resources Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets HARDWARE TECHNOLOGY REQUIREMENTS Total Cost of Ownership (TCO) of Technology Assets Designates the total cost of owning technology resources Includes initial purchase costs, cost of hardware and software upgrades, maintenance, technical support, and training

On-Line storage service providers Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets HARDWARE TECHNOLOGY REQUIREMENTS Rent or Build Decisions: Using Technology Service Providers On-Line storage service providers Third-party provider Rent out storage space to subscribers over the Web Allow customers to store and access data

Application Service Providers (ASPs) Essentials of Management Information Systems Chapter 6 Managing Hardware and Software Assets HARDWARE TECHNOLOGY REQUIREMENTS Rent or Build Decisions: Using Technology Service Providers Application Service Providers (ASPs) Provide software that can be rented by other companies Other Types of Service Providers Provide additional resources for helping organizations manage their technology assets

MANAGING HARDWARE AND SOFTWARE ASSETS Chapter 6 MANAGING HARDWARE AND SOFTWARE ASSETS

Chapter 7 MANAGING DATA RESOURCES

Essentials of Management Information Systems Chapter 7 Managing Data Resources OBJECTIVES Why do businesses have trouble finding the information they need in their information systems? How does a database management system help businesses improve the organization of their information?

Essentials of Management Information Systems Chapter 7 Managing Data Resources OBJECTIVES How do the principal types of database models affect the way businesses can access and use information? What are the managerial and organizational requirements of a data-base environment? What new tools and technologies can make databases more accessible and useful?

Organizational obstacles to a database environment Essentials of Management Information Systems Chapter 7 Managing Data Resources MANAGEMENT CHALLENGES Organizational obstacles to a database environment Cost/benefit considerations

Byte: Group of bits that represents a single character Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT File Organization Terms and Concepts Bit: Smallest unit of data; binary digit (0,1) Byte: Group of bits that represents a single character Field: Group of words or a complete number

Record: Group of related fields File: Group of records of same type Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT File Organization Terms and Concepts Record: Group of related fields File: Group of records of same type Database: Group of related files

Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT Data Hierarchy in a Computer System Figure 7-1

Attribute: Description of a particular entity Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT File Organization Terms and Concepts Entity: Person, place, thing, event about which information is maintained Attribute: Description of a particular entity Key field: Identifier field used to retrieve, update, sort a record

Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT Entitities and Attributes Figure 7-2

Program-Data dependence Lack of flexibility Poor security Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT Problems with the Traditional File Environment Data redundancy Program-Data dependence Lack of flexibility Poor security Lack of data-sharing and availability

Essentials of Management Information Systems Chapter 7 Managing Data Resources ORGANIZING DATA IN A TRADITIONAL FILE ENVIRONMENT Traditional File Processing Figure 7-3

Creates and maintains databases Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Database Management System (DBMS) Creates and maintains databases Eliminates requirement for data definition statements Acts as interface between application programs and physical data files Separates logical and design views of data

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT The Contemporary Database Environment Figure 7-4

Data manipulation language: Manipulates data in a database Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Components of DBMS Data definition language: Specifies content and structure of database and defines each data element Data manipulation language: Manipulates data in a database Data dictionary: Stores definitions of data elements, and data characteristics

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Sample Data Dictionary Report Figure 7-5

Hierarchical and Network DBMS Object-Oriented Databases Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Types of Databases Relational DBMS Hierarchical and Network DBMS Object-Oriented Databases

Represents data as two-dimensional tables called relations Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Relational DBMS Represents data as two-dimensional tables called relations Relates data across tables based on common data element Examples: DB2, Oracle, MS SQL Server

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Relational Data Model Figure 7-6

Select: Creates subset of rows that meet specific criteria Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Three Basic Operations in a Relational Database Select: Creates subset of rows that meet specific criteria Join: Combines relational tables to provide users with information Project: Enables users to create new tables containing only relevant information

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Three Basic Operations in a Relational Database Figure 7-7

Hierarchical DBMS Organizes data in a tree-like structure Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Hierarchical and Network DBMS Hierarchical DBMS Organizes data in a tree-like structure Supports one-to-many parent-child relationships Prevalent in large legacy systems

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Hierarchical DBMS Figure 7-8

Network DBMS Depicts data logically as many-to-many relationships Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Hierarchical and Network DBMS Network DBMS Depicts data logically as many-to-many relationships

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Network DBMS Figure 7-9

Disadvantages Outdated Less flexible compared to RDBMS Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Hierarchical and Network DBMS Disadvantages Outdated Less flexible compared to RDBMS Lack support for ad-hoc and English language-like queries

Essentials of Management Information Systems Chapter 7 Managing Data Resources THE DATABASE APPROACH TO DATA MANAGEMENT Object-Oriented databases Object-oriented DBMS: Stores data and procedures as objects that can be retrieved and shared automatically Object-relational DBMS: Provides capabilities of both object-oriented and relational DBMS

Physical design: Detailed description of business information needs Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Designing Databases Conceptual design: Abstract model of database from a business perspective Physical design: Detailed description of business information needs

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Designing Databases Entity-relationship diagram: Methodology for documenting databases illustrating relationships between database entities Normalization: Process of creating small stable data structures from complex groups of data

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT An Entity-Relationship Diagram Figure 7-10

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT An Unnormalized Relation of ORDER Figure 7-11

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT An Normalized Relation of ORDER Figure 7-12

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Distributing Databases Centralized database Used by single central processor or multiple processors in client/server network

Distributed database Stored in more than one physical location Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Distributing Databases Distributed database Stored in more than one physical location Partitioned database Duplicated database

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Distributed Databases Figure 7-13

Key elements in a database environment: Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Management Requirements for Database Systems Key elements in a database environment: Data Administration Data Planning and Modeling Methodology Database Technology and Management Users

Essentials of Management Information Systems Chapter 7 Managing Data Resources CREATING A DATABASE ENVIRONMENT Management Requirements for Database Systems Figure 7-14

On-line analytical processing (OLAP) Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Multidimensional Data Analysis On-line analytical processing (OLAP) Multidimensional data analysis Supports manipulation and analysis of large volumes of data from multiple dimensions/perspectives

Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Multidimensional Data Model Figure 7-15

Data warehouse Supports reporting and query tools Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Data Warehousing and Datamining Data warehouse Supports reporting and query tools Stores current and historical data Consolidates data for management analysis and decision making

Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Components of a Data Warehouse Figure 7-16

Data mart Subset of data warehouse Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Data Warehousing and Datamining Data mart Subset of data warehouse Contains summarized or highly focused portion of data for a specified function or group of users

Datamining Tools for analyzing large pools of data Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Data Warehousing and Datamining Datamining Tools for analyzing large pools of data Find hidden patterns and infer rules to predict trends

Improved and easy accessibility to information Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Benefits of Data Warehouses Improved and easy accessibility to information Ability to model and remodel the data

The Web and Hypermedia database Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Databases and the Web The Web and Hypermedia database Organizes data as network of nodes Links nodes in pattern specified by user Supports text, graphic, sound, video and executable programs

Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS A Hypermedia Database Figure 7-17

Database server Application server Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Databases and the Web Database server Computer in a client/server environment runs a DBMS to process SQL statements and perform database management tasks Application server Software handling all application operations

Essentials of Management Information Systems Chapter 7 Managing Data Resources DATABASE TRENDS Linking Internal Databases to the Web Figure 7-18

Chapter 7 MANAGING DATA RESOURCES

Chapter 8 TELECOMMUNICATIONS AND NETWORKS

What technologies are used in telecommunications systems? Essentials of Management Information Systems Chapter 8 Telecommunications and Networks OBJECTIVES What technologies are used in telecommunications systems? What telecommunications transmission media should our organization use? How should our organization design its networks?

What alternative network services are available to our organization? Essentials of Management Information Systems Chapter 8 Telecommunications and Networks OBJECTIVES What alternative network services are available to our organization? What telecommunications applications can be used for electronic commerce and electronic business?

Managing LANs Managing bandwidth Essentials of Management Information Systems Chapter 8 Telecommunications and Networks MANAGEMENT CHALLENGES Managing LANs Managing bandwidth

Telecommunications: Communication of information by electronic means Essentials of Management Information Systems Chapter 8 Telecommunications and Networks THE TELECOMMUNICATIONS REVOLUTION Telecommunications: Communication of information by electronic means The marriage of computers and communications: The 1996 Telecommunications Deregulation and Reform Act The Information Superhighway: High-speed digital telecommunications networks, accessible by the general public

Computers to process information Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Telecommunications System Components Computers to process information Terminals or any input/output devices that send or receive data Communications processors Communications software

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Components of a Telecommunications System Figure 8-1

Establish interface between sender and the receiver Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Functions of Telecommunications Systems Transmit information Establish interface between sender and the receiver Route messages along most efficient paths

Perform elementary processing of information Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Functions of Telecommunications Systems Perform elementary processing of information Perform editorial tasks on data Convert message speed or format Control flow of information

Analog signal Continuous waveform Passes through communications medium Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Types of Signals: Analog and Digital Analog signal Continuous waveform Passes through communications medium Used for voice communications

Digital signal Modem Discrete waveform Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Types of Signals: Analog and Digital Digital signal Discrete waveform Transmits data coded into two discrete states as 1-bits and 0-bits Used for data communications Modem Translates computer’s digital signals into analog and vice versa

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Functions of the Modem Figure 8-2

Twisted wire: Telephone systems Coaxial cable: Cable television Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Channels Twisted wire: Telephone systems Coaxial cable: Cable television Fiber optics and optical networks: Dense wave division multiplexing (DWDM)

Transmission: Baud, bandwidth Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Channels Wireless transmission: Microwave, Satellites, Paging systems, Cellular telephones, Personal communication Services, Personal digital assistants, Mobile data networks Transmission: Baud, bandwidth

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Frequency Ranges for Communications Media and Devices Figure 8-3

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Amoco’s Satellite Transmission System Figure 8-4

Front-end processor: Manages communications for the host computer Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMPONENTS AND FUNCTIONS OF A TELECOMMUNICATIONS SYSTEM Communications Processors and Software Front-end processor: Manages communications for the host computer Concentrator: Collects and temporarily stores messages Controller: Supervises communication traffic Multiplexer: Enables single communication channel to carry data transmissions

Bus Network: Links a number of computers by a single circuit Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Network Topologies Star Network: All computers and other devices are connected to a central host computer Bus Network: Links a number of computers by a single circuit Ring Network: All computers are linked by a closed loop

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS A Star Network Topology Figure 8-5

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS A Bus Network Topology Figure 8-6

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS A Ring Network Topology Figure 8-7

Private Branch Exchanges Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Private Branch Exchanges Central switching system Handle firm’s voice and digital communications

Local Area Networks Telecommunication network Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Local Area Networks Telecommunication network Require its own dedicated channels Encompass a limited distance Gateway, router, Network Operating System (NOS), peer-to-peer

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS A Local Area Network (LAN) Figure 8-8

Wide Area Networks (WANs) Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Private Branch Exchanges, Local Area Networks (LANs), and Wide Area Networks (WANs) Wide Area Networks (WANs) Telecommunication network Span large geographical distance Consist of variety of cable, satellite, and microwave technologies Switched lines, dedicated lines

Value-Added Networks (VANs) Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Network Services and Broadband Technologies Value-Added Networks (VANs) Private, multipath, data-only, third-party-managed network Other Network Services Packet switching, Frame Relay, Asynchronous transfer mode (ATM) Integrated Services Digital Network (ISDN), Digital subscriber line (DSL), Cable modems, T1 line, Broadband

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Packed-Switched Networks and Packet Communications Figure 8-9

Converged network Unified messaging Network with technology Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Network Convergence Converged network Network with technology Enables voice and data to run over a single network Unified messaging System combining voice messages, email, and fax

Electronic Mail and Groupware Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Commerce and Electronic Business Technologies Electronic Mail and Groupware E-mail: Eliminates telephone tag and costly long-distance telephone charges Groupware: Enables work groups at different locations to participate in discussion forums and work on shared documents and projects

Fax: Digitizes and transmits documents over telephone lines Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Commerce and Electronic Business Technologies Voice Mail and Fax Voice mail: Digitizes spoken message and transmits it over a network Fax: Digitizes and transmits documents over telephone lines

Teleconferencing, data conferencing, and videoconferencing Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Commerce and Electronic Business Technologies Teleconferencing, data conferencing, and videoconferencing Teleconferencing: Ability to confer with a group of people simultaneously Data conferencing: Two or more users can edit and modify data files simultaneously Videoconferencing: Participants are able to see each other over video screens

Digital information services, distance learning and E-Learning Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Commerce and Electronic Business Technologies Digital information services, distance learning and E-Learning Distance learning: Education or training delivered over a distance to individuals in one or more locations E-learning: Instruction delivered online using the Internet or private networks

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Data Interchange Direct computer-to-computer exchange between two organizations of standard business transaction documents

Essentials of Management Information Systems Chapter 8 Telecommunications and Networks COMMUNICATIONS NETWORKS Electronic Data Interchange (EDI) Figure 8-10

Chapter 8 TELECOMMUNICATIONS AND NETWORKS

9 THE INTERNET AND THE NEW INFORMATION TECHNOLOGY INFRASTRUCTURE Chapter 9 THE INTERNET AND THE NEW INFORMATION TECHNOLOGY INFRASTRUCTURE

How does the Internet work? What are its major capabilities? Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure OBJECTIVES What is the new information technology (IT) infrastructure for business? Why is connectivity so important in this infrastructure? How does the Internet work? What are its major capabilities? How can organizations benefit from the Internet?

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure OBJECTIVES What are the principal technologies for supporting electronic commerce and electronic business? What management problems are raised by the new information technology (IT) infrastructure? How can businesses solve these problems?

Taking a broader perspective on infrastructure development Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure MANAGEMENT CHALLENGES Taking a broader perspective on infrastructure development Selecting technologies for the new information technology (IT) infrastructure

Enterprise Networking Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The New Information Technology (IT) Infrastructure for the Digital Firm Enterprise Networking and Internetworking Enterprise Networking Arrangement of organization’s hardware, software, network, and data resources Creates a company-wide network linking many smaller networks Internetworking Links separate networks into an interconnected network

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The New Information Technology (IT) Infrastructure for the Digital Firm The New Information Technology (IT) Infrastructure Figure 9-1

Connectivity Open System Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The New Information Technology (IT) Infrastructure for the Digital Firm Standards and Connectivity for Digital Integration Connectivity Measures how well computers and computer-based devices communicate Open System Software systems Operate on different hardware platforms

Models of Connectivity for Networks Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The New Information Technology (IT) Infrastructure for the Digital Firm Standards and Connectivity for Digital Integration Models of Connectivity for Networks Transmission Control Protocol/Internet Protocol (TCP/IP) Open Systems Interconnect (OSI) 802.11b Bluetooth

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The New Information Technology (IT) Infrastructure for the Digital Firm (TCP/IP) Reference Model Figure 9-2

Internet Service Provider (ISP) Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm What is the Internet? Internet Service Provider (ISP) Commercial organization with a permanent connection to Internet Sells temporary connections to subscribers

Information appliance Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Internet Technology and Services Information appliance Device customized to perform few specialized computing tasks with minimal user effort

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Client/Server Computing on the Internet Figure 9-3

Electronic Mail (E-Mail) Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Internet Tools for Communication Electronic Mail (E-Mail) Connects people worldwide Creates productivity gain LISTSERV On-line discussion groups Uses e-mail broadcast from mailing list servers

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Analysis of an Internet Address Figure 9-4

Chatting Instant messaging Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Internet Tools for Communication Chatting Live, interactive conversations over public network Instant messaging Chat service Allows participants to create their own private chat channels

File Transfer Protocol (FTP) Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm Internet Tools for Communication Telnet Network tool Allows users to log on to one computer system while working on another File Transfer Protocol (FTP) Tool for retrieving and transferring files from a remote computer

Internet2 Research network with new protocols and transmission speeds Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The Internet: Information Technology Infrastructure for the Digital Firm The Next Generation Internet and Internet 2 Internet2 Research network with new protocols and transmission speeds Provides an infrastructure for supporting high bandwidth Internet applications

Combines text, hypermedia, graphics, and sound Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Overview Based on a standard hypertext language called hypertext markup language (HTML) Combines text, hypermedia, graphics, and sound Handles all types of digital communication Uses graphical user interfaces for easy viewing

Search Engine Shopping Bot Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Searching for Information on the Web Search Engine Locates specific sites or information on Internet Shopping Bot Software with varying levels of built-in intelligence Helps electronic commerce shoppers locate and evaluate products or services

“Push” technology Multicasting Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Searching for Information on the Web “Push” technology Obtains relevant information on networks Multicasting Transmission of data to a selected group of recipients

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Intranets and Extranets Firewall Hardware or software placed between an organization’s internal network and external network Prevents outsiders from invading private networks Extranets Private intranets extended to authorized users outside company

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Model of an Extranet Figure 9-5

Web-based applications Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web The Wireless Web Web-based applications Enables users to access digital information from the Internet Wireless Web Standards: Wireless Application Protocol (WAP) WML (Wireless Markup Language) Microbrowser I-mode M-Commerce Challenges Voice portals

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Figure 9-6

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web WAP Versus I-Mode Figure 9-7

Keyboards and screens of cell phones tiny and awkward to use Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web M-Commerce Challenges Keyboards and screens of cell phones tiny and awkward to use Very slow data transfer speeds Minimal memory and limited power supplies in Internet-enabled phones Web content primarily in text with very little graphics Incompatible technologies

Connectivity and global reach Reduced communication costs Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure The World Wide Web Organizational Benefits of Internet and Web Technology Connectivity and global reach Reduced communication costs Lower transaction costs Reduced agency costs Interactivity, flexibility, and customization Accelerated distribution of knowledge

Electronic commerce server software Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Support Technology for Electronic Commerce and Electronic Business Web Servers and Electronic Commerce Servers Hit Entry into Web server’s log file Generated by each request to the server for a file Electronic commerce server software Provides functions essential for running e-commerce Web sites

Collecting and storing data Combining data with already stored data Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Support Technology for Electronic Commerce and Electronic Business Customer Tracking and Personalization Tools Collecting and storing data Combining data with already stored data Analyzing the data Identifying customer preferences and trends

Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Support Technology for Electronic Commerce and Electronic Business Web Content Management Tool Software to facilitate collection, assembly, and management of content on Web site, intranet, or extranet

Monitors time taken for downloading Web pages Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Support Technology for Electronic Commerce and Electronic Business Web Site Performance Monitoring Tool Monitors time taken for downloading Web pages Identifies broken links between Web pages, Web site problems, and bottlenecks

Company with large Web server computers Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Support Technology for Electronic Commerce and Electronic Business Web Hosting Services Company with large Web server computers Maintain Web sites of fee-paying subscribers

Loss of management control Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Management Issues and Decisions The Challenge of Managing the New Information Technology Infrastructure Loss of management control Connectivity and application integration challenges Organizational change requirements Hidden costs of enterprise computing Scalability, reliability, and security downtime

Education and training Data administration disciplines Essentials of Management Information Systems Chapter 9 The Internet and the New information Technology Infrastructure Management Issues and Decisions Some Solutions Change management Education and training Data administration disciplines Planning for connectivity and application integration

9 THE INTERNET AND THE NEW INFORMATION TECHNOLOGY INFRASTRUCTURE Chapter 9 THE INTERNET AND THE NEW INFORMATION TECHNOLOGY INFRASTRUCTURE

Chapter 10 MANAGING KNOWLEDGE FOR THE DIGITAL FIRM

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OBJECTIVES Why do businesses today need knowledge management programs and systems for knowledge management? Which information system applications are most useful for distributing, creating, and sharing knowledge in the firm? What are the business benefits of using artificial intelligence technology for knowledge management?

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OBJECTIVES How can businesses use expert systems and case-based reasoning to capture knowledge? How can organizations benefit from using use neural networks and other intelligent techniques?

Creating robust expert systems Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm MANAGEMENT CHALLENGES Designing knowledge systems that genuinely enhance organizational performance Creating robust expert systems

Organizational learning Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm KNOWLEDGE MANAGEMENT IN THE ORGANIZATION Organizational Learning and Knowledge Management Organizational learning Creation of new standard operating procedures and business processes Knowledge management Set of processes Creates, gathers, stores, maintains, and disseminates knowledge

Chief Knowledge Officer (CKO) Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm KNOWLEDGE MANAGEMENT IN THE ORGANIZATION Organizational Learning and Knowledge Management Chief Knowledge Officer (CKO) Senior executive in charge of organization’s knowledge management program

Tacit Knowledge Best Practices Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm KNOWLEDGE MANAGEMENT IN THE ORGANIZATION Systems and Infrastructure for Knowledge Management Tacit Knowledge Expertise and experience not formally documented Best Practices Successful solutions or problem-solving methods developed by specific organization or industry

Organizational Memory Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm KNOWLEDGE MANAGEMENT IN THE ORGANIZATION Systems and Infrastructure for Knowledge Management Organizational Memory Stored learning from organization’s history Used for decision making and other purposes

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm KNOWLEDGE MANAGEMENT IN THE ORGANIZATION IT Infrastructure for Knowledge Management Figure 10-1

Consists of creating or processing information Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Information Work Consists of creating or processing information Divided into knowledge workers and data workers

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Distributing Knowledge: Office and Document Management Systems Office systems Manage and coordinate work of data and knowledge workers Connect work of local information workers with all levels and functions of organization Connect organization to external world Example: Word processing, voice mail, and imaging

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS The Three Major Roles of Offices Figure 10-2

Document imaging systems Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Typical Office Systems Document imaging systems Convert documents and images into digital form Can be stored and accessed by the computer Jukebox Device for storing and retrieving many optical disks

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Components of an Imaging System Figure 10-3

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Web Publishing and Document Management Figure 10-4

Knowledge Work Systems (KWS) Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Creating Knowledge: Knowledge Work Systems Knowledge Work Systems (KWS) Information system Aid knowledge workers in creation and integration of new knowledge

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Changes in the Construction Project Management Process Figure 10-5

User-friendly interface Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Requirements of Knowledge Work Systems Specialized tools User-friendly interface

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Requirements of Knowledge Work Systems Figure 10-6

Computer-aided design (CAD) Virtual reality systems Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Examples of Knowledge Work Systems Computer-aided design (CAD) Virtual reality systems Virtual Reality Modeling Language (VRML) Investment workstations

Intranets and Enterprise Knowledge Environments Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS Sharing Knowledge: Group Collaboration Systems and Enterprise Knowledge Environments Groupware Intranets and Enterprise Knowledge Environments Enterprise information portals Teamware

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm INFORMATION AND KNOWLEDGE WORK SYSTEMS An Enterprise Information Portal Figure 10-7

Effort to develop computer-based systems that behave as humans Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE What is Artificial Intelligence? Effort to develop computer-based systems that behave as humans

Artificial Intelligence: Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Why Business is Interested in Artificial Intelligence Artificial Intelligence: Stores information in active form Creates mechanism not subjected to human feelings Eliminates routine and unsatisfying jobs Enhances organization’s knowledge base Generates solution to specific problems

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE The Artificial Intelligence Family Figure 10-8

Rule-based Expert System Rule Base Knowledge Frames Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Capturing Knowledge: Expert Systems Knowledge Base Rule-based Expert System Rule Base Knowledge Frames

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Rules in an AI Program Figure 10-9

AI shell Inference Engine Forward Chaining Backward Chaining Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Capturing Knowledge: Expert Systems AI shell Inference Engine Forward Chaining Backward Chaining

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Frames to Model Knowledge Figure 10-10

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Inference Engines in Expert Systems Figure 10-11

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Building an Expert System Knowledge engineer Specialist eliciting information and expertise from other professionals Translates information into set of rules, or frames, for an expert system

BlueCross BlueShield of North Carolina Countrywide Funding Corp. Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Examples of Successful Expert System BlueCross BlueShield of North Carolina Countrywide Funding Corp.

Case-based Reasoning (CBR) Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE Organizational Intelligence: Case Based Reasoning Case-based Reasoning (CBR) Artificial intelligence technology Represents knowledge as database of cases and solutions

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm ARTIFICIAL INTELLIGENCE How Case-Based Reasoning Works Figure 10-12

Hardware or software emulating processing patterns of biological brain Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Neural Networks Hardware or software emulating processing patterns of biological brain Put intelligence into hardware in form of a generalized capability to learn

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Biological Neurons of a Leech Figure 10-13

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Artificial Neural Network with Two Neurons Figure 10-14

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES A Neural Network Figure 10-15

Tolerates imprecision Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Fuzzy Logic Rule-based AI Tolerates imprecision Uses nonspecific terms called membership functions to solve problems

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Implementing Fuzzy Logic Rules in Hardware Figure 10-16

Problem-solving methods Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Genetic Algorithms Problem-solving methods Promote evolution of solutions to specified problems Use a model of living organisms adapting to their environment

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES The Components of a Genetic Algorithm Figure 10-17

Integration of multiple AI technologies into a single application Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Hybrid AI Systems Integration of multiple AI technologies into a single application Takes advantage of best features of technologies

Essentials of Management Information Systems Chapter 10 Managing Knowledge for the Digital Firm OTHER INTELLIGENT TECHNIQUES Intelligent Agents Software programs Use built-in or learned knowledge base to carry out specific, repetitive, and predictable tasks

Chapter 10 MANAGING KNOWLEDGE FOR THE DIGITAL FIRM

ENHANCING MANAGEMENT DECISION-MAKING FOR THE DIGITAL FIRM Chapter 11 ENHANCING MANAGEMENT DECISION-MAKING FOR THE DIGITAL FIRM

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm OBJECTIVES How can information systems help individual managers make better decisions when the problems are non-routine and constantly changing? How can information systems help people working in a group make decisions more efficiently?

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm OBJECTIVES Are there any special systems that can facilitate decision-making among senior managers? Exactly what can these systems do to help high-level management? What benefits can systems that support management decision-making provide for the organization as a whole?

Create meaningful reporting and management decision-making processes Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm MANAGEMENT CHALLENGES Building information systems that can actually fulfill executive information requirements Create meaningful reporting and management decision-making processes

Computer system at the management level of an organization Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Computer system at the management level of an organization Combines data, analytical tools, and models Supports semi-structured and unstructured decision-making

MIS Provides reports based on routine flow of data Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) MIS and DSS MIS Provides reports based on routine flow of data Assists in general control of the organization

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) MIS and DSS DSS Emphasizes change, flexibility, rapid response, models, assumptions, ad hoc queries, and display graphics

Model-driven DSS Primarily stand-alone Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Types of Decision-Support Systems Model-driven DSS Primarily stand-alone Uses model to perform “what-if” and other kinds of analysis

Data-driven DSS Datamining Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Types of Decision-Support Systems Data-driven DSS Allows users to extract and analyze useful information from previous databases Datamining Finds hidden patterns and relationships in large databases to infer rules

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Overview of a Decision-Support System (DSS) Figure 11-1

DSS database DSS software system Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Components of Decision-Support Systems DSS database Collection of current or historical data DSS software system Collection of software tools/mathematical and analytical models

Model Sensitivity analysis Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Components of Decision-Support Systems Model Abstract representation illustrating components or relationships Sensitivity analysis Asks “what-if” questions repeatedly to determine the impact of change

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Sensitivity Analysis Figure 11-2

Bank of America: Customer profiles Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm General Accident Insurance: Customer buying patterns and fraud detection Bank of America: Customer profiles Frito-Lay, Inc.: Price, advertising, and promotion selection

Burlington Coat Factory: Store location and inventory mix Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Burlington Coat Factory: Store location and inventory mix Keycorp: Targeting direct mail marketing customers National Gypsum: Corporate planning and forecasting

Southern Railway: Train dispatching and routing Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm Southern Railway: Train dispatching and routing Texas Oil and Gas Corporation: Evaluation of potential drilling sites United Airlines: Flight scheduling, passenger demand forecasting

U.S. Department of Defense: Defense contract analysis Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS Applications and the Digital Firm U.S. Department of Defense: Defense contract analysis

Comprehensive examination of supply management chain Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS for Supply Chain Management Comprehensive examination of supply management chain Searches for most efficient and cost-effective combination Reduces overall costs Increases speed and accuracy of filling customer orders

Uses data mining to guide decisions Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS for Customer Relationship Management Uses data mining to guide decisions Consolidates customer information into massive data warehouses Uses various analytical tools to slice information into small segments

Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS for Customer Analysis and Segmentation Figure 11-3

Geographic Information Systems (GIS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) DSS for Simulating Business Scenarios Geographic Information Systems (GIS) Software for analyzing and displaying data using digitized maps Enhances planning and decision-making

Customer Decision-Support Systems (CDSS) Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm DECISION-SUPPORT SYSTEMS (DSS) Web-Based Customer Decision-Support Systems Customer Decision-Support Systems (CDSS) Support decision-making process of an existing or potential customer

Interactive computer-based system Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) What Is a GDSS? Interactive computer-based system Facilitates solution to unstructured problems Set of decision makers working together as a group

Hardware: Conference facility, electronic hardware Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Characteristics of GDSS Hardware: Conference facility, electronic hardware Software tools: Tools for organizing ideas, gathering information, and ranking and seeking priorities People: Participants, trained facilitator, staff supporting hardware and software

Electronic questionnaires Electronic brainstorming tools Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) GDSS Software Tools Electronic questionnaires Electronic brainstorming tools Idea organizers Questionnaire tools

Tools for voting or setting priorities Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) GDSS Software Tools Tools for voting or setting priorities Stakeholder identification and analysis tools

Electronic Meeting System (EMS): Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Overview of a GDSS Meeting Electronic Meeting System (EMS): Collaborative GDSS Makes group meetings more productive Supports meetings Facilitates communication and decision-making

Increased participation Open, collaborative meeting atmosphere Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) How GDSS can Enhance Group Decision-Making Improved preplanning Increased participation Open, collaborative meeting atmosphere Criticism-free idea generation Evaluation objectivity

Idea organization and evaluation Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) How GDSS can Enhance Group Decision-Making Idea organization and evaluation Setting priorities and making decisions Documentation of meetings Access to external information Preservation of “organizational memory”

Executive Support Systems (ESS): Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm EXECUTIVE SUPPORT IN THE ENTERPRISE Executive Support Systems (ESS): Information system at strategic level of an organization Addresses unstructured decision-making through advanced graphics and communications

Brings together data from the entire organization Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) The Role of Executive Support Systems in the Organization Brings together data from the entire organization Allows managers to select, access, and tailor data Enables executive and any subordinates to look at the same data in the same way

Facility for environmental scanning Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) The Role of Executive Support Systems in the Organization Developing ESS: Ease of use Facility for environmental scanning External and internal sources of information to be used for environmental scanning

Analyzes, compares, and highlights trends Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Benefits of Executive Support Systems Analyzes, compares, and highlights trends Provides greater clarity and insight into data Speeds up decision-making

Improves management performance Increases management’s span of control Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Benefits of Executive Support Systems Improves management performance Increases management’s span of control Better monitoring of activities

ESS for business intelligence: Identifies changing market conditions Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Executive Support Systems and the Digital Firm ESS for business intelligence: Identifies changing market conditions Formulates responses Tracks implementation efforts Learns from feedback

Monitoring corporate performance: balanced scorecard systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Executive Support Systems and the Digital Firm Monitoring corporate performance: balanced scorecard systems Model for analyzing firm performance Supplements traditional financial measures with measurements from additional business perspectives

Strategic performance management tools for enterprise systems Essentials of Management Information Systems Chapter 11 Enhancing Management Decision-Making for the Digital Firm GROUP DECISION-SUPPORT SYSTEMS (GDSS) Enterprise Wide Reporting and Analysis Strategic performance management tools for enterprise systems SAP: Web-enabled mySAP.com™, Management Cockpit PeopleSoft: Web-enabled Enterprise Performance Management (EPM) Oracle: Strategic Enterprise Management

ENHANCING MANAGEMENT DECISION-MAKING FOR THE DIGITAL FIRM Chapter 11 ENHANCING MANAGEMENT DECISION-MAKING FOR THE DIGITAL FIRM

Chapter 12 REDESIGNING THE ORGANIZATION WITH INFORMATION SYSTEMS

How could building a new system change the way an organization works? Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems OBJECTIVES How could building a new system change the way an organization works? How can a company make sure that the new information systems it builds fit its business plan? What are the steps required to build a new information system?

e-commerce and e-business applications more rapidly? Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems OBJECTIVES What alternative methods for building information systems are available? Are there any techniques or system-building approaches to help us build e-commerce and e-business applications more rapidly?

Major risks and uncertainties in systems development Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems MANAGEMENT CHALLENGES Major risks and uncertainties in systems development Controlling information systems development outside the information systems department

Information systems plan Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Linking Information Systems to the Business Plan Information systems plan Road map indicating direction of systems development

Enterprise Analysis (Business Systems Planning) Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Establishing Organizational Information Requirements Enterprise Analysis (Business Systems Planning) Analysis of organization-wide information requirements Identifies key entities and attributes

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Process/Data Class Matrix Figure 12-1

Strategic Analysis or Critical Success Factors Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Establishing Organizational Information Requirements Strategic Analysis or Critical Success Factors Small number of easily identifiable operational goals Shaped by industry, firm, manager, and broader environment Used to determine information requirements of organization

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Using CSFs to Develop Systems Figure 12-2

Automation: Speeding up performance Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Systems Development and Organizational Change Automation: Speeding up performance Rationalization of procedures: Streamlining of operating procedures Business process reengineering: Radical design of business processes Paradigm shift: Radical reconceptualization

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems SYSTEMS AS PLANNED ORGANIZATIONAL CHANGE Organizational Change Carries Risks and Rewards Figure 12-3

Work Flow Management Process of streamlining business procedures Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Business Process Reengineering Work Flow Management Process of streamlining business procedures Documents can be moved easily and efficiently from one location to another

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Redesigning Mortgage Processing in the United States Figure 12-4a

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Redesigning Mortgage Processing in the United States Figure 12-4b

Senior management needs to develop broad strategic vision Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Steps in Effective Reengineering Senior management needs to develop broad strategic vision Management must understand and measure performance of existing processes as baseline Information technology should be allowed to influence process design from start IT infrastructure should be able to support business process changes

How information systems contribute to Total Quality Management Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Process Improvement and Total Quality Management (TQM) How information systems contribute to Total Quality Management Simplify product or production process Enable benchmarking Use customer demands as guide to improve products and services Reduce cycle time

Systems development Systems analysis Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems OVERVIEW OF SYSTEMS DEVELOPMENT Overview Systems development Activities that go into producing information systems solution Systems analysis Analysis of problems that organization aims to resolve using information systems

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) The Systems Development Process Figure 12-5

Establishing information requirements Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems OVERVIEW OF SYSTEMS DEVELOPMENT Overview Feasibility study Determining achievability of solution Establishing information requirements Stating information needs that new system must satisfy Identifying who, when, where and how components of information

Increases users’ understanding and acceptance of the system Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Systems Design Details how system will meet information requirements as determined by systems analysis Increases users’ understanding and acceptance of the system Reduces problems caused by power transfers, intergroup conflict, and unfamiliarity with the new system

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Completing the Systems Development Process Programming Process of translating system specifications into program code Testing Checks whether the system produces desired results under known conditions Unit testing, system testing, acceptance testing, test plan

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) A Sample Test Plan to Test a Record Change Figure 12-6

Conversion Process of changing from old system to new system Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Completing the Systems Development Process Conversion Process of changing from old system to new system Strategies: Parallel Direct cutover Pilot study Phased approach Documentation

Production and maintenance Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems BUSINESS PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM) Completing the Systems Development Process Production and maintenance Production is stage after new system is installed and the conversion is complete Maintenance is changes in hardware, software, documentation, or procedures of production system to correct errors

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Traditional Systems Lifecycle Systems lifecycle Traditional methodology for developing information system Partitions systems development process into formal stages that must be completed sequentially

Prototyping Prototype Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Prototyping Prototyping Process of building experimental system quickly and inexpensively for demonstration and evaluation Prototype Preliminary working version of information system for demonstration and evaluation

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Prototyping Iterative A process of repeating over and over again the steps to build system

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES The Prototyping Processes Figure 12-7

Identifying user’s basic requirements Developing initial prototype Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Steps in Prototyping Identifying user’s basic requirements Developing initial prototype Using prototype Revising and enhancing prototype

Advantage Disadvantage Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Advantages and Disadvantages of Prototyping Advantage Useful in designing information system’s end-user interface Disadvantage Rapid prototyping can gloss over essential steps in systems development

Application software packages Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Application Software Packages Application software packages Set of prewritten, precoded application software programs commercially available for sale or lease Customization Modification of software package to meet organization’s unique requirements without destroying the software’s integrity

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES The Effects of Customizing a Software Package on Total Implementation Costs Figure 12-8

Request for Proposal (RFP) Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Application Software Packages Request for Proposal (RFP) Detailed list of questions submitted to vendors of software or other services Determines how well vendor’s product can meet organization’s specific requirements

Allows users to specify their own business needs Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES End-User Development Development of information systems by end users with little or no formal assistance from technical specialists Allows users to specify their own business needs

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES End-User Versus System Lifecycle Development Figure 12-9

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES End-User Development Improves requirements gathering leading to higher level of user involvement and satisfaction Cannot easily handle processing of large numbers of transactions or applications

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems ALTERNATIVE SYSTEM-BUILDING APPROACHES Outsourcing Practice of contracting computer center operations, telecommunications networks, or applications development to external vendors

Approach for software development De-emphasizes procedures Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems APPLICATION DEVELOPMENT FOR THE DIGITAL FIRM Object-Oriented Software Development Approach for software development De-emphasizes procedures Shifts focus from modeling business processes and data to combining data and procedures to create objects

Process for developing systems in short time period Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems APPLICATION DEVELOPMENT FOR THE DIGITAL FIRM Rapid Application Development (RAD) Process for developing systems in short time period Uses prototyping, fourth-generation tools, and close teamwork

Software components deliverable over Internet Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems APPLICATION DEVELOPMENT FOR THE DIGITAL FIRM Web Services Software components deliverable over Internet Enable one application to communicate with another with no translation required

Essentials of Management Information Systems Chapter 12 Redesigning the Organization With information Systems APPLICATION DEVELOPMENT FOR THE DIGITAL FIRM Looking Beyond the Organization E-commerce and e-business require systems planning and systems analysis based on a broader view of organization

Chapter 12 REDESIGNING THE ORGANIZATION WITH INFORMATION SYSTEMS

UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE Chapter 13 UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change OBJECTIVES How can our company measure the business benefits of our information systems? What models should be used to measure that business value? Why do so many system projects fail? What are the principal reasons for system failures? How should the organizational change surrounding a new system be managed to ensure success?

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change OBJECTIVES Are there any special challenges in implementing international information systems? What strategies can our organization use to manage the system implementation process more effectively?

Essentials of Management Information Systems MANAGEMENT CHALLENGES Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGEMENT CHALLENGES Determining benefits of a system when they are largely intangible Dealing with the complexity of large-scale systems projects

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Traditional Capital Budgeting Models Capital budgeting Process of analyzing and selecting various proposals for capital expenditures

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Limitations of Financial Models Do not express the risks and uncertainty of own cost and benefits estimates

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen The Problem No automated way of tracking billable hours No secure method for communication No client database No system to track costs

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen The Solution Local area network Lotus Notes to handle client accounting, document management, group collaboration, and e-mail

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Costs and Benefits of the Legal Information System Figure 13-1

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Financial Models Figure 13-2

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen The Payback Method Measure of time required to pay back the initial investment on a project Accounting Rate of Return on Investment (ROI) Approximates the accounting income earned by the investment

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen Present value Value of a payment or stream of payments to be received in dollars Net present value Amount of money an investment is worth

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen Cost-benefit ratio Calculates returns from capital expenditure Profitability index Compares profitability of alternative investments by dividing the present value of total cash inflow by initial cost

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Case Example: Primrose, Mendelson, and Hansen Internal Rate of Return (IRR) Rate of return or profit an investment is expected to earn Results of the Capital Budgeting Analysis Cash flow positive over the time period and returns more benefits than it costs

Essentials of Management Information Systems Strategic Considerations Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Strategic Considerations Portfolio Analysis Analysis of portfolio of potential applications within a firm Determines risks and benefits Selects among alternatives for information systems

Essentials of Management Information Systems Strategic Considerations Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Strategic Considerations Scoring Models Method for deciding among alternative systems based on a system of ratings Real Options Pricing Models Models for evaluating information technology investments with uncertain returns

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS A System Portfolio Figure 13-3

Essentials of Management Information Systems Strategic Considerations Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Strategic Considerations Knowledge Value–Added Approach Focuses on knowledge input into a business process Determines costs and benefits of changes in business processes from new information systems

Information Technology Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change UNDERSTANDING THE BUSINESS VALUE OF INFORMATION SYSTEMS Information Technology Investments and Productivity Productivity Measure of firm’s efficiency in converting inputs to outputs Information Technology Reduces cost Increases quality of products and services

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Information System Problem Areas System failure Information system does not perform as expected, is not operational at a specified time Poor design, inaccurate data, excessive expenditure, breakdown in operations

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change THE IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Information System Problem Areas Figure 13-4

Implementation Change agent Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Change Management and the Concept of Implementation Implementation Organizational activities working towards adoption, management, and routinization of innovation Change agent Individual acting as catalyst to ensure successful organizational adaptation to a new system or innovation

Role of users in implementation process Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Causes of Implementation Success and Failure Role of users in implementation process Degree of management support for implementation effort Level of complexity and risk of implementation project Quality of management of implementation process

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Factors in Information System Success or Failure Figure 13-5

User–designer communications gap Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE User Involvement and Influence User–designer communications gap Different backgrounds, interests, and priorities Impedes communication and problem solving among end users and information systems specialists

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Management Support and Commitment Project requires backing and commitment of management at various levels Perceived positively by both users and technical information services staff

Project size: Larger project has greater risk Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Level of Complexity and Risk Project size: Larger project has greater risk Project structure: Clear and straightforward requirements help define outputs and processes Experience with technology: Project risk rises if project team and information system staff lack required technical expertise

Improper management leads to: Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Management of the Implementation Process Improper management leads to: Cost overruns Unexpected time slippage Technical shortfalls Failure to obtain anticipated benefits

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Consequences of Poor Project Management Figure 13-6

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE Change Management Challenges for Enterprise Applications, Business Process Reengineering (BPR), and Mergers and Acquisitions System Challenges of Mergers and Acquisitions Integrating systems Organizational characteristics Information technology infrastructures

Disparate Information Requirements and Business Processes Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE The Challenge of Implementing Global Systems Disparate Information Requirements and Business Processes Transborder data flow: Movement of information across international boundaries in any form Technology Hurdles: Lack of standards and connectivity in hardware, software, and telecommunications

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change IMPORTANCE OF CHANGE MANAGEMENT IN INFORMATION SYSTEM SUCCESS AND FAILURE The Challenge of Implementing Global Systems Local User Resistance to Global Systems: Difficult to convince local managers to change their business processes

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Controlling Risk Factors Managing Technical Complexity: Usage of internal integration tools to ensure operation of implementation team Formal Planning and Control Tools: Structures and sequences tasks, monitors progress towards fulfillment of goals

Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Controlling Risk Factors Increasing User Involvement and Overcoming User Resistance: Linking work of implementation team to that of users at all organizational levels

Essentials of Management Information Systems MANAGING IMPLEMENTATION Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Formal planning and control tools help to manage information systems projects successfully Figure 13-7

Allowing for the Human Factor Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Designing for the Organization Allowing for the Human Factor Interaction of people and machines in work environment Sociotechnical Design Produces information system blending technical efficiency with sensitivity to organizational and human needs

Implementation Tactics: Cooptation Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Managing Global Implementations Core systems Support functions absolutely critical to organization Implementation Tactics: Cooptation Bringing opposition into process of designing and implementing a solution

Essentials of Management Information Systems MANAGING IMPLEMENTATION Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Figure 13-8

Creating a Global Technology Infrastructure Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Managing Global Implementations Creating a Global Technology Infrastructure Build international private network Rely on value added network service Use Internet technology Build global intranets Use Virtual Private Networks

Project planning is an enterprise-wide focus Essentials of Management Information Systems Chapter 13 Understanding the Business Value of Systems and Managing Change MANAGING IMPLEMENTATION Fourth-Generation Project Management Project planning is an enterprise-wide focus Managers focus on solving problems and meeting challenges

UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE Chapter 13 UNDERSTANDING THE BUSINESS VALUE OF SYSTEMS AND MANAGING CHANGE

Chapter 14 INFORMATION SYSTEMS SECURITY AND CONTROL

What types of controls are available for information systems? Essentials of Management Information Systems Chapter 14 Information Systems Security and Control OBJECTIVES Why are information systems so vulnerable to destruction, error, abuse, and system quality problems? What types of controls are available for information systems? What special measures must be taken to ensure the reliability, availability and security of electronic commerce and digital business processes?

What are the most important software quality assurance techniques? Essentials of Management Information Systems Chapter 14 Information Systems Security and Control OBJECTIVES What are the most important software quality assurance techniques? Why are auditing information systems and safeguarding data quality so important?

Applying quality assurance standards in large systems projects Essentials of Management Information Systems Chapter 14 Information Systems Security and Control MANAGEMENT CHALLENGES Designing systems that are neither over-controlled nor under-controlled Applying quality assurance standards in large systems projects

Advances in telecommunications and computer software Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE Why Systems are Vulnerable Advances in telecommunications and computer software Unauthorized access, abuse, or fraud Hackers Denial of service attack Computer virus

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE Telecommunication Network Vulnerabilities Figure 14-1

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE Concerns for System Builders and Users Disaster Destroys computer hardware, programs, data files, and other equipment Security Prevents unauthorized access, alteration, theft, or physical damage

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE Concerns for System Builders and Users Errors Cause computers to disrupt or destroy organization’s record-keeping and operations

Maintenance Nightmare Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE System Quality Problems: Software and Data Bugs Program code defects or errors Maintenance Nightmare Maintenance costs high due to organizational change, software complexity, and faulty system analysis and design

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE Points in the Processing Cycle where Errors can Occur Figure 14-2

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE System Quality Problems: Software and Data Data Quality Problems Caused due to errors during data input or faulty information system and database design

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control SYSTEM VULNERABILITY AND ABUSE The Cost of Errors over the Systems Development Cycle Figure 14-3

Controls Methods, policies, and procedures Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Overview Controls Methods, policies, and procedures Ensures protection of organization’s assets Ensures accuracy and reliability of records, and operational adherence to management standards

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT General Controls and Application Controls General controls Establish framework for controlling design, security, and use of computer programs Include software, hardware, computer operations, data security, implementation, and administrative controls

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Security Profiles for a Personnel System Figure 14-4

Application controls Unique to each computerized application Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT General Controls and Application Controls Application controls Unique to each computerized application Include input, processing, and output controls

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Protecting the Digital Firm On-line transaction processing: Transactions entered online are immediately processed by computer Fault-tolerant computer systems: Contain extra hardware, software, and power supply components

Disaster recovery plan: Runs business in event of computer outage Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Protecting the Digital Firm High-availability computing: Tools and technologies enabling system to recover from a crash Disaster recovery plan: Runs business in event of computer outage Load balancing: Distributes large number of requests for access among multiple servers

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Protecting the Digital Firm Mirroring: Duplicating all processes and transactions of server on backup server to prevent any interruption Clustering: Linking two computers together so that a second computer can act as a backup to the primary computer or speed up processing

Intrusion Detection System Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Internet Security Challenges Firewalls Prevent unauthorized users from accessing private networks Two types: proxies and stateful inspection Intrusion Detection System Monitors vulnerable points in network to detect and deter unauthorized intruders

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Internet Security Challenges Figure 14-5

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Security and Electronic Commerce Encryption: Coding and scrambling of messages to prevent their access without authorization Authentication: Ability of each party in a transaction to ascertain identity of other party Message integrity: Ability to ascertain that transmitted message has not been copied or altered

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Security and Electronic Commerce Digital signature: Digital code attached to electronically transmitted message to uniquely identify contents and sender Digital certificate: Attachment to electronic message to verify the sender and to provide receiver with means to encode reply

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Security and Electronic Commerce Secure Electronic Transaction (SET): Standard for securing credit card transactions over Internet and other networks

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Public Key Encryption Figure 14-6

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Digital Certificates Figure 14-7

Criteria for determining control structure Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT Developing a Control Structure: Costs and Benefits Criteria for determining control structure Importance of data Efficiency, complexity, and expense of each control technique Level of risk if a specific activity or process is not properly controlled

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control CREATING A CONTROL ENVIRONMENT The Role of Auditing in the Control Process MIS audit Identifies all controls that govern individual information systems and assesses their effectiveness

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Sample Auditor’s List of Control Weaknesses Figure 14-8

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Software Quality Assurance Methodologies and Tools Development methodology: Collection of methods, for every activity within every phase of development project Structured: Refers to fact that techniques are carefully drawn up, step-by-step, with each step building on a previous one

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Software Quality Assurance Methodologies and Tools Structured analysis: Method for defining system inputs, processes, and outputs, for partitioning systems into subsystems or modules Data Flow Diagram (DFD): Graphically illustrates system’s component processes and flow of data

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Data Flow Diagram for Mail-in University Registration System Figure 14-9

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Software Quality Assurance Methodologies and Tools Structured design: Encompasses set of design rules and techniques for designing systems Structured programming: Organizing and coding programs that simplify control paths System flowchart: Graphic design tool depicting physical media and sequence of processing steps

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY High-Level Structure Chart For a Payroll System Figure 14-10

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Basic Program Control Constructs Figure 14-11

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY System Flow-Chart for a Payroll System Figure 14-12

Inflexible Time-consuming Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Limitation of Traditional Methods Inflexible Time-consuming

Reduces repetitive work Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Computer-Aided Software Engineering (CASE) Automation of step-by-step methodologies for software and systems development Reduces repetitive work Enforces standard development methodology and design discipline Improves communication between users and technical specialists

Organizes and correlates design components Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Computer-Aided Software Engineering (CASE) Organizes and correlates design components Automates tedious and error-prone portion of analysis and design, code generation, testing, and control rollout

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Resource Allocation During Systems Development Resource allocation Determines how costs, time, and personnel are assigned to different phases of systems development project

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Software Metrics Objective assessment of software used in the system in form of quantified measurements

Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Testing Walkthrough: Review of specification or design document by small group of people Debugging: Process of discovering and eliminating errors and defects in program code

Data quality audit Data cleansing Survey and/or sample of files Essentials of Management Information Systems Chapter 14 Information Systems Security and Control ENSURING SYSTEM QUALITY Data Quality Audit and Data Cleansing Data quality audit Survey and/or sample of files Determines accuracy and completeness of data Data cleansing Correcting errors and inconsistencies in data to increase accuracy

Chapter 14 INFORMATION SYSTEMS SECURITY AND CONTROL