BUSINESS DRIVEN TECHNOLOGY UNIT 2: Managing Information for Business Initiatives OPENING CASE Searching for Revenue - Google The Google case offers an exciting introduction to databases Figure 2.1 displays the life of a typical Google query Many of your students have used Google and will be able to easily relate to the case Let your students know that you will be addressing the opening case throughout the text as the opening case questions are found at the end of the each chapter in the Unit UNIT TWO OPENING CASE – Additional Case Information Searching for Revenue - Google Like McDonald's talking about selling "billions and billions" of hamburgers, Internet search giant Google said that it now accesses more than 6 billion Web pages, images, and online postings. In total, the Web is estimated to contain over 10 billion Web pages, and with the Web constantly growing, Google will have to continually expand its search engine. Google previously had access to 3.3 billion pages. Its new index covers 4.3 billion pages, 880 million images, 845 million bulletin board posts, plus book chapters and reviews, which Google now also searches. Images took the biggest jump, doubling in size because of the booming popularity in digital cameras. Google adds indexes by sending tens of thousands of computers to crawl the Web to find pages to add. To grow the index, Google could not add more PC power, for fear of crashing certain Web sites; instead, it formed a secondary index. The searches that retrieve millions of results go into the main index; the more esoteric ones go into the second index. A larger index means a better chance of people clicking on your ad, because with more results, more people will be searching.

The chapters in this unit include: Unit Two The chapters in this unit include: Chapter Six – Valuing Organizational Information Chapter Seven – Storing Organizational Information - Databases Chapter Eight – Viewing and Protecting Organizational Information

BUSINESS DRIVEN TECHNOLOGY Valuing Organizational Information Chapter Six: Valuing Organizational Information CLASSROOM OPENER GREAT BUSINESS DECISIONS – Julius Reuter Uses Carrier Pigeons to Transfer Information In 1850, the idea that sending and receiving information could add business value was born. Julius Reuter began a business that bridged the gap between Belgium and Germany. Reuter built one of the first information management companies built on the premise that customers would be prepared to pay for information that was timely and accurate. Reuter used carrier pigeons to forward stock market and commodity prices from Brussels to Germany. Customers quickly realized that with the early receipt of vital information they could make fortunes. Those who had money at stake in the stock market were prepared to pay handsomely for early information from a reputable source, even if it was a pigeon. Eventually, Reuter’s business grew from 45 pigeons to over 200 pigeons. Eventually the telegraph bridged the gap between Brussels to Germany, and Reuter’s brilliantly conceived temporary monopoly was closed.

LEARNING OUTCOMES 6.1 Describe the broad levels, formats, and granularities of information 6.2 Differentiate between transactional and analytical information 6.3 List, describe, and provide an example of each of the five characteristics of high-quality information 6.4 Assess the impact of low-quality information on an organization and the benefits of high-quality information on an organization 6.1 Information levels include individual, department, and enterprise. Information formats include document, presentation, spreadsheet, and database. Information granularities include detail, summary, and aggregate. 6.2 Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks. Examples of transactional information include withdrawing cash from an ATM or making an airline reservation. Analytical information encompasses all organizational information and its primary purpose is to support the performing of managerial analysis tasks. Examples of analytical information include trends, sales, and product statistics. 6.3 Accuracy determines if all values are correct. Example – is the name spelled correctly? Completeness determines if any values are missing. Example - is the address complete? Consistency ensures that aggregate or summary information is in agreement with detailed information. Example – do totals equal the true total of the individual fields? Uniqueness ensures that each transaction, entity, and event is represented only once in the information. Example – are there any duplicate customers? Timeliness determines if the information is current with respect to the business requirement. Example – is the information updated weekly? 6.4 Using the wrong information can lead to making the wrong decision. Making the wrong decision can cost time, money, and even reputations. Business decisions are only as good as the information used to make the decision. Low-quality information leads to low-quality business decisions. High-quality information can significantly improve the chances of making a good business decision and directly affect an organization’s bottom line.

Information is everywhere in an organization CHAPTER SIX OVERVIEW Information is everywhere in an organization Employees must be able to obtain and analyze the many different levels, formats, and granularities of organizational information to make decisions Successfully collecting, compiling, sorting, and analyzing information can provide tremendous insight into how an organization is performing Granularity means fine and detailed or “coarse” and abstract information Ask your students for examples of times when they have had to correlate two different formats, levels, or granularities of information How did they correlate the information? Taking a hard look at organizational information can yield exciting and unexpected results such as potential new markets, new ways of reaching customers, and even new ways of doing business

Levels, Formats, and Granularities of Information CHAPTER SIX OVERVIEW Levels, Formats, and Granularities of Information Discuss the Samsung Electronics and Staples examples on pages 54 and 55 Students should understand that information varies and different levels, formats, and granularities of information can be found throughout an organization Class Activity: Break your students into groups and assign each group a different information type from Figure 2.2 Ask the students to find examples of the different kinds of information they might encounter in an organization for their information type For example, information formats for a spreadsheet might include a profit and loss statement or a market analysis Ask your students to determine potential issues that might arise from having different types of information Ask your students what happens if the information does not correlate For example, the customer letters sent out do not match the customers and customer addresses in the database For example, the total on the customer’s bill does not add up to the individual line items

THE VALUE OF TRANSACTIONAL AND ANALYTICAL INFORMATION Transactional information – encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks Analytical information – encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks Organizations capture and store transactional information in databases and use it when performing operational tasks and repetitive decisions such as analyzing daily sales reports and production schedules Transactional information examples include withdrawing cash from an ATM, making an airline reservation, purchasing stocks Ask your students to compile a list of additional transactional information examples Ans: These could include daily sales, hourly employee payroll, product orders, shipping an order Analytical information includes transactional information Analytical information also includes external organizational information such as market, industry, and economic conditions Analytical information is used to make ad-hoc decisions Analytical information examples include trends, sales, product statistics, and future growth projections Ask your students to compile a list of additional analytical information examples Ans: These could include cost/benefit analysis, sales forecast, market trends, industry trends, and regulations Ask your students to compile a list of the different types of ad-hoc decisions a business might base on analytical information Ans: These could include building a new plant, hiring or reducing workforces, introducing a new product

THE VALUE OF TIMELY INFORMATION Timeliness is an aspect of information that depends on the situation Real-time information – means immediate, up-to-date information Real-time systems – provide real-time information in response to query requests The important point that students must understand regarding timely information is that “timely” is relative to each business decision Some decisions require weekly information while others require daily information Organizations such as 911 and stock trading companies require up-to-the second information Class Activity: Break your students into groups and ask them to compile a list of three business decisions that require up-to-the-second information, three business decisions that require quarterly information, and three business decisions that require yearly information. Have your students present their answers to the class.

THE VALUE OF TIMELY INFORMATION Real-time systems can help organizations make faster and more effective decisions Review the Bell Mobility example on page 56 Review Bell Mobility’s Real-time tool results displayed in Figure 2.3 Ask your students what the expense is to a business that provides its employees with hourly updates, when the employees only require weekly updates Ans: Updating information costs money Updated information must be stored; the more frequently an organization updates its information, the more information they will have in their data warehouse and databases Updating information changes information Review the scenario on page 56 which discusses three managers who make different business decisions based on the same report The reason for the different business decisions is because the managers pulled the report at three different times during the day Since the information was continually being updated, they came to different conclusions

THE VALUE OF QUALITY INFORMATION Business decisions are only as good as the quality of the information used to make the decisions The five characteristics of high-quality information include Accuracy Completeness Consistency Uniqueness Timeliness Review the WFS example on page 57 Ask your students if they have any examples of a time when they have encountered a problem due to low-quality information For example, they didn’t receive a package because their address was incorrect or missing Ask them to list the business ramifications that can occur for an organization that maintains low-quality information?

THE VALUE OF QUALITY INFORMATION Five common characteristics of high-quality information Class Activity: Break your students into groups and ask each group to provide an additional example of each of the five common characteristics of high-quality information that is not provided in Figure 2.4 For example, Accuracy – does a purchase price on a bill match the item description on the bill? Item 1: Kids juice cup, cost $10,000. Chances are a kids juice cup would not cost $10,000 and this is an inaccurate item.

THE VALUE OF QUALITY INFORMATION Low-quality information example Walk-thru each of the six issues and have your students extrapolate a potential business problem that might be associated with each issue. The example does not state what type of database or spreadsheet this information is contained (sales, marketing, customer service, billing, etc), so allow your students use their imagination when they are extrapolating the potential business problems Issue 1: Without a first name it would be impossible to correlate this customer with customers in other databases (Sales, Marketing, Billing, Customer Service) to gain a compete customer view (CRM) Issue 2: Without a complete street address there is no possible way to communicate with this customer via mail or deliveries. An order might be sitting in a warehouse waiting for the complete address before shipping. The company has spent time and money processing an order that might never be completed Issue 3: If this is the same customer, the company will waste money sending out two sets of promotions and advertisements to the same customers. It might also send two identical orders and have to incur the expense of one order being returned Issue 4: This is a good example of where cleaning data is difficult because this may or may not be an error. There are many times when a phone and a fax have the same number. Since the phone number is also in the e-mail address field, chances are that the number is inaccurate Issue 5: The business would have no way of communicating with this customer via e-mail Issue 6: The company could determine the area code based on the customer’s address. This takes time, which costs the company money. This is a good reason to ensure that information is entered correctly the first time. All incorrect information needs to be fixed, which costs time and money

THE VALUE OF QUALITY INFORMATION The four primary sources of low-quality information include: Online customers intentionally enter inaccurate information to protect their privacy Information from different systems that have different information entry standards and formats Call center operators enter abbreviated or erroneous information by accident or to save time Third party and external information contains inconsistencies, inaccuracies, and errors Addressing the above sources of information inaccuracies will significantly improve the quality of organizational information Ask your students to determine a few additional sources of low-quality information Ans: A customer service representative could accidentally transpose a number in an address or misspell a last name

Understanding the Costs of Low-quality Information Potential business effects resulting from low-quality information Inability to accurately track customers Difficulty identifying valuable customers Inability to identify selling opportunities Marketing to nonexistent customers Difficulty tracking revenue due to inaccurate invoices Inability to build strong customer relationships – which increases buyer power Ask your students if they can list any additional business effects resulting from low-quality information Ask your students to focus on organizational strategies such as SCM, CRM, and ERP Ans: Low-quality information could cause the SCM system to order too much inventory from a supplier based on inaccurate orders Low-quality information could cause a CRM system to send an expensive promotional item (such as a fruit basket) to the wrong address of one of its best customers

Understanding the Benefits of High-Quality Information High-quality information can significantly improve the chances of making a good decision Good decisions can directly impact an organization's bottom line Review the Lillian Vernon example on page 59 Review the golf club sales example on page 59

OPENING CASE STUDY QUESTIONS Searching for Revenue - Google Determine if Google’s search results are examples of transactional information or analytical information Describe the ramifications on Google’s business if the search information it presented to its customers was of low-quality Review the five common characteristics of high-quality information and rank them in order of importance to Google’s business Explain how the Web site RateMyProfessors.com solved its problem of low-quality information 1. Determine if Google’s search results are examples of transactional information or analytical information From the customer’s perspective Google’s search results are an example of analytical information. They are using the information to make a decision or perform an analysis. From Google’s perspective each search result is an example of transactional information since it is their primary business process. 2. Describe the ramifications on Google’s business if the search information it presented to its customers was of low-quality Displaying links that do not work, links that have nothing to do with the query, or multiple duplication of links will cause customers to switch to a different search engine. If Google’s search results were of low-quality, they would quickly lose business. Since providing search results is Google’s primary line of business, it must display high-quality search results. 3. Review the five common characteristics of high-quality information and rank them in order of importance to Google’s business Student answers to this question will vary depending on their personal views and experiences with technology. The important part of the question is understanding the students’ justifications for their order. Potential order of importance: Timeliness – Google’s information must be timely. If users are receiving old and outdated answers to their queries, they will not use Google for long. Accuracy – Google’s search results must be accurate Consistency – Google’s results must be consistent. Users will not trust the system if it provides different results for the same query Completeness – Google’s search results need to be complete; however, users understand that there could be thousands of answers to a search result and are not anticipating that Google find and provide thousands of answers for each query Uniqueness – Google’s users expect to receive unique answers to their queries, not the same search site listed over and over again 4. Explain how the Web site RateMyProfessors.com solved its problem of low-quality information The developers of the Web site turned to Google’s API to create an automatic verification tool. If Google finds enough mentions in conjunction with a professor or university then it considers the information valid and posts it to the Web site.

CHAPTER SIX CASE Fishing for Quality Alaska’s Department of Fish and Game requires high-quality information to manage the state’s natural resources, specifically to increase fishing yields, while ensuring the future of many species Using fish counts the department makes daily decisions as to which districts will be open or closed to commercial fishing Allowing too many fish to be caught before they swim upstream to spawn could diminish fish populations – yielding devastating effects for years to come

CHAPTER SIX CASE QUESTIONS Describe the difference between transactional and analytical information and determine which type the Alaska Department of Fish and Game is using to make decisions Explain the importance of high-quality information for the Alaska Department of Fish and Game Review the five common characteristics of high-quality information and rank them in order of importance for the Alaska Department of Fish and Game 1. Describe the difference between transactional and analytical information and determine which type the Alaska Department of Fish and Game is using to make decisions Transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks. Analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks. The Alaska Department of Fish and Game is using transactional information to make analytical decisions. The transactional information includes the daily fish tickets from the commercial fishing boats that include the species caught, weight, and quantity. Fish escapement information from remote areas is tracked by field workers positioned in towers who scan rivers to visibly count fish. The analytical decisions that are made from this information include determining whether or not fishermen can fish each day. 2. Explain the importance of high-quality information for the Alaska Department of Fish and Game If the department receives low-quality information from fish counts, then either too many fish escape or too many are caught. Allowing too many salmon to swim upstream could deprive fishermen of their livelihoods. Allowing too many to be caught before they swim upstream to spawn could diminish fish populations- yielding devastating effects for years to come. 3. Review the five common characteristics of high-quality information and rank them in order of importance for the Alaska Department of Fish and Game. Student answers to this question will vary depending on their personal views and experiences with technology. The important part of the question is understanding the students’ justifications for their order. Potential order of importance: Timeliness – Without timely information the department can not make fishing decisions Accuracy – inaccurate information will lead to the department making the wrong decisions Completeness – incomplete information will make it harder for the department to make decisions regarding the amount of fish. Incomplete information probably occurs frequently since part of the process, fish escapement, is performed manually Consistency – information inconsistency probably occurs since the fish escapement is performed manually Uniqueness – it is probably impossible to tell if fish are counted only once, or sometimes twice in the fish escapement process. For this reason, the department must anticipate having issues with uniqueness