1 CHAPTER 1 INTRODUCTION TO INFORMATION SYSTEMS Management Information Systems, 9 th edition, By Raymond McLeod, Jr. an d Geor ge P. Schell © 2004, Prentice Hall, Inc.
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CHAPTER 1
INTRODUCTION TO
INFORMATION SYSTEMS
Management Information Systems, 9th edition,
By Raymond McLeod, Jr. and George P. Schell© 2004, Prentice Hall, Inc.
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Learning Objectives:
• Understand how computer hardware has evolvedto its present level of sophistication.
• Understand the basics of computer and
communications architectures.• Know the distinction between physical and
conceptual systems.
• Understand how business applications haveevolved from an initial emphasis on accountingdata to the current emphasis on information for problem solving.
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Learning Objectives (cont.):
• Know how to tailor information systems tomanagers based on where they are located in theorganizational structure and what they do.
• Know the relationship between problem solvingand decision making, and know the basic problem-solving steps.
• Understand what enterprise resource planningsystems are and the reasons for their popularity.
• Know what innovations to expect in informationtechnology.
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Introduction
• The first computers were as large as a room and
used light -bulb -sized vacuum tubes for much
of their circuitry
• Vacuum tubes were later replaced withtransistors and chips made using silicon wafer
technology
• This change resulted in a dramatic and long-
term lowering of costs of manufacturing leading
to the high growth in the demand for computers
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Half the Size But Twice the
Speed• Miniaturization has been a key factor in
lowering costs and increasing computer
performance
• Redesigning a circuit is to be half the scale
of a previous one and also double its speed
• Thus, continually shrinking the computer
chip size has been important in increasing
computer processor speeds
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HISTORY OF INFORMATION SYSTEMS
• The earliest ―mainframe‖ computers could only
process a single task by a single user
– 1946: ENIAC (Electronic Numerical Integrator and
Calculator) was developed
– 1951: first computer installed by the U.S. Census Bureau – 1954: first computer used by G.E.
• Over the last half century, hardware has seen many-
fold increases in speed and capacity and dramatic
size reductions
• Applications have also evolved from relatively
simple accounting programs to systems designed to
solve a wide variety of problems
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[Insert Figure 1.1 here]
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Multitasking
• IBM revolutionized the computer industry
in the mid-1960s by introducing the IBM
System/360 line of computers• These computers were the first to perform
multiple processing tasks concurrently
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Smaller Computers
• The first small-scale systems, calledminicomputers, were smaller and less powerful but could handle processing forsmall organizations more cheaply
• Even smaller microcomputers designed forindividual use were later developed, first byApple and Tandy Corp.
• In 1982, IBM introduced the first personalcomputer, or PC, in 1982, which has since become the standard for individualcomputing
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Moore's Law
• Coined in the 1960s by Gordon Moore, one
of the founders of Intel
• States that the storage density (and thereforethe processing power) of integrated circuits
is doubling about every year
• By the 1970s the doubling rate had slowedto 18 months, a pace that has continued up
to the present
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INTRODUCTION TO
COMPUTER ARCHITECTURE
• Most computers have similar architectures
that combine software and hardware
• Software includes the operating systemwhich controls the computer hardware and
application software, such as word
processing, spreadsheets, etc.
• Hardware includes, processors, memory
and peripheral devices
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Computer Hardware
• The processor manages the input andoutput devices, data storage devices, and
operations on the data
• The central processing unit (CPU)controls all the other components
• Two types of memory are:
– Random access memory (RAM) acts as thetemporary workspace for the CPU
– Permanent data storage devices such as CD-
ROM, floppy and hard disk drives
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INTRODUCTION TO
COMMUNICATIONS ARCHITECTURE• Modem: a hardware device that sends the
computer’s digital signals by modulating ananalog carrier wave
• Data rates for various communications systems:
– Telephone lines: 56 kbps
– Cable modem: up to 2 Mbps
– WiFi: 11 Mbps
– Local Area Networks: 10 to 100 Mbps
• Wireless has recently taken off because it’s cheapand easy to install
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THE EVOLUTION IN
COMPUTER APPLICATIONS• An information system is a conceptual system
that enables managers to control and monitor a
firm’s physical systems used to transform input
resources into output resources
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Transaction Processing Systems
• A transaction processing systems is
shown in Figure 1.8
• It gathers data from the firm’s physical
system and environment and enters it into
its database
• The software also transforms the data into
information for the firm’s managers andother individuals in the firm’s environment
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Management Information Systems
• Management information systems (MIS)transform the data in frontline systems, such astransaction processing systems into information useful to managers
• Typical MIS modules are report-writing software,and models that can simulate firm operations
• Information from the MIS is then used byorganizational problem solvers as an aid in decision-
making, as illustrated in Figure 1.9• Firms can also interact with suppliers or others to
form inter organizational information systems(IOS), in which the MIS supplies information to the
other members of the IOS as well as the firm's users
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Virtual Office Systems
• Office automation - the use of electronics tofacilitate communication, began with wordprocessing
• Subsequent applications include electronic mail,
voice mail, electronic calendaring, and audio andvideo conferencing
• These personal productivity systems nowaccount for a large portion of a firm's use of the
computer as a communications vehicle• With improvements in networking, the concept of
a virtual office has developed, in which officeactivities can be performed without the need for an
employee to be in a specific location
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Decision Support Systems (DSS)
• A DSS is a system used to assist managers inmaking decisions to help solve a specific problem
• Figure 1.10 shows the 3 sources for theinformation to be delivered to users: a relational
database, a knowledge base, and amultidimensional database
• Two additional types of DSS-related software are:
– group decision support systems: used in aiding a
group of managers work out decisions, and – artificial intelligence: in which a program is created
for a computer to logically analyze a problem on itsown
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Enterprise Resource Planning
Systems (ERP)
• Over time, firms began to use many different
kinds of information systems throughout the firm
• During the 1990s firms began to see the value inintegrating all of these systems so that they could
function as a coordinated unit
• ERP systems are computer-based systems aimed
at meeting this need that enable the managementof all of a firm’s resources on an organization-
wide basis
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MANAGERS AS INFORMATION
SYSTEM USERS
• Managers exist at various managerial levels
and within various business areas of the firm
• What level an IS is developed for influences
how it operates (see Figure 1.11)• The 3 primary management levels are (see
Figure 1.12):
1. Strategic planning level
2. Management control level
3. Operational control level
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THE ROLE OF INFORMATION IN
MANAGEMENT PROBLEM SOLVING
• While a problem can be harmful or potentiallyharmful to a firm in a negative way , it can also bebeneficial or potentially beneficial in a positive way
• The outcome of the problem-solving activity is asolution
• A decision is a particular selected course of action
• Simon described problem-solving as being made up
of four phases: – Intelligence activity
– Design activity
– Choice activity
– Review activity
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THE FUTURE OF INFORMATION
TECHNOLOGY
• The future of information technology will be driven by the following two trends:
– Ongoing cost reductions and increased power
of information technologies – Convergence between computers andcommunications
• To take advantage of these new
possibilities, managers must learn toincorporate information systems intodecision making
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END OF CHAPTER 1
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CHAPTER 2
INFORMATION SYSTEMSFOR COMPETITIVE
ADVANTAGE
Management Information Systems, 9th edition,
By Raymond McLeod, Jr. and George P. Schell© 2004, Prentice Hall, Inc.
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Learning Objectives:
• Be able to use the general systems model of the firm as atemplate for evaluating any type of organization.
• Be able to use the eight-element environmental model as a
framework for understanding the environment of a
business organization.• Recognize that competitive advantage can be achieved
with conceptual as well as physical resources.
• Understand Michael E. Porter's concepts of value
chains/systems.• Know the dimensions of competitive advantage.
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Learning Objectives (cont.): • Become acquainted with the multinational corporation and
recognize its special need for coordination.• Know the basic types of information resources available to
the firm.
• Know the dimensions of information that should be
provided by an information system.• Know how to manage information in the form of legacy
systems, images, and knowledge.
• Know how a firm goes about strategic planning for thefirm, its business areas, and its information resources.
• Know four basic global strategies that can be practiced bymultinational corporations and understand the role ofinformation in each.
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THE FIRM AND ITS ENVIRONMENT
• The physical system of a firm is an open system inthat it interfaces with its environment
• Firms take resources from their environments,transforms these resources into products and
services, and return the transformed resources to theenvironment
• Figure 2.1 shows this flow of resources from theenvironment, through the firm, and back to the
environment• The flow of physical resources is at the bottom and
the flow of conceptual resources is at the top
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The General Systems Model of
the Firm
• Figure 2.1 shows three flows:
– The Physical Resource Flow: includes personnel,
material, machines, and money
– The Conceptual Resource Flow: The arrows in the upper part of the figure show data, information, and decision-
related information. At right, a 2-way flow of data and
information that connects the firm to its environment
– The Firm's Control Mechanism: The elements that
enable the firm to operate as a closed-loop system are
shown in the upper portion of the diagram
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Environmental elements exist outside the firm and have
a direct or indirect influence on it.
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Environmental Resource Flows• The firm is connected to its environmental
elements through resource flows, including:• information flowing from customers;
• materials flowing to customers;
• money flowing to stockholders;
• machinery flowing from suppliers;
• personnel flowing from suppliers; and
• the global community and labor unions
• Less frequent flows include: the money flow fromthe government, the material flow to suppliers,and the personnel flow to competitors
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COMPETITIVE ADVANTAGE
• In the IS field, competitive advantage refers to theuse of information to gain marketplace leverage
• Porter argues that firms achieve competitive
advantage by providing one of the following: – products and services at a lower price,
– higher quality products and services, or
– meeting the special needs of certain market segments
• An important point to recognize is that the firm’smanagers use both conceptual and physical
resources to meet the firm’s strategic objectives
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Porter’s Value Chains
• Porter argued that firm’s opportunities to createcompetitive advantage occur at different steps inthe value chain (Figure 2.3)
• The Margin is the value of the firm’s products
and services less their costs, as perceived by thefirm’s customers
• The value chain is made of the primary andsupport activities that contribute to a firm’s
margin value. Increasing that marginal value is theobjective of the chain model
• Firms can create value by performing activities,which Porter calls value activities
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S f
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Expanding the Scope of the
Value Chain (Figure 2.4)• Additional advantages that can be achieved
by linking the firm’s value chain to those of
other organizations creating an inter-
organizational system (IOS)
• The participating firms (business partners)
work as a coordinated unit, creating a
synergy that cannot be achieved by workingalone
• Porter termed this the value system
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Th Di i f C titi
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The Dimensions of Competitive
Advantage
1. Strategic advantage: plans used to achieve an
advantage
2. Tactical advantage: methods for accomplishinga strategy in a better way than competitors do
3. Operational advantage: everyday transactions
and processes that confer an advantage
Information systems shaped by all three have the
best chance to substantially increase a firm's
performance
The Dimensions of Competitive Advantage
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The Dimensions of Competitive Advantage
(cont.)• Competitive advantage can be
created at all three levels of the
corporate pyramid:
– Strategic advantage: advantage
achieved through the selection of
the fundamental strategic direction
and destination of the firm
– Tactical advantage: methods for
accomplishing a strategy in a
better way than competitors do
– Operational advantage: everyday
transactions and processes that
confer an advantage
CHALLENGES FROM GLOBAL
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CHALLENGES FROM GLOBAL
COMPETITORS
• The biggest players in today’s globalmarketplace are multinational corporations(MNCs)
• Information processing and communications- based coordination are especially crucial foran MNC due to the scale and geographic
dispersal of their business activities• Coordination, in particular, has become a key
to achieving competitive advantage in aglobal marketplace
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INFORMATION MANAGEMENT
• A firm’s information resources consist of:
– Computer hardware
– Computer software
– Information specialists
– Users – Facilities
– Databases
– Information• Achieving competitive advantage through the useof information requires the effective managementof these resources, otherwise known as
information management
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The Dimensions of Information
• Information can be viewed as having four basicdimensions that contribute to information value:
• Relevancy: information is relevant when it pertains to the problem at hand
• Accuracy: information has value when it isaccurate
• Timeliness: Information should be available for problem solving before crisis situations develop
or opportunities are lost• Completeness: information should be available
to present a complete picture of a problem or asolution
Th Ch i N t f
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The Changing Nature of
Information Management • The task of information management faces new
problems as new technologies are making olderstyle transaction processing systems obsolete
• Managing ―legacy systems‖ is one such problem,such as converting them to run on new hardware
• The use of multimedia data means that imagemanagement is now a second important task for
information managers• Knowledge management is a third task, requiring
an easy-to-use database management system andsoftware packages for use in analyzing data
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STRATEGIC PLANNING FOR
INFORMATION RESOURCES
• The chief information officer (CIO) provides thestrategic direction for a firm’s informationresources; and
• The CIO also coordinates the IS department’sstrategic effort with the firm’s overall strategic business plan
• As strategic planning in specific business areas is
also developed, the firm’s information resourcesmust also be coordinated with these efforts (seeFigure 2.6)
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Strategic Planning for Information
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Strategic Planning for Information
Resources (SPIR)
• SPIR is the concurrent development of strategic
plans for both the firm and its information services
• Developing the two plans together means that the
firm’s plan will reflect the support provided byinformation services and the information services
plan will reflects the future demands for systems
support
• Figure 2.7 illustrates the manner these two
planning processes influence each other
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Core Content of a Strategic
• Figure 2.8 shows the basic framework for a
strategic plan for information resource
management
• Two core topics that should be in every firm’s
strategic plan for information resources are:1. The objectives to be achieved by each
category of information system during the
time period covered by the plan
2. The information resources necessary to meet
those objectives
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An Example Strategic Plan for
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An Example Strategic Plan for
Information Resources
Figure 2.9 (see text) is an example of an SPIRreport. It includes the following aspects:
• An executive summary, spelling out the goals
of the firm's information services unit;
• Definitions of the scope of IT services inthree organizational units; and
• A summary of the work plan forimplementing systems enabling the firm tomeet its information services goals
GLOBAL BUSINESS STRATEGIES
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GLOBAL BUSINESS STRATEGIES
• Bartlett and Ghoshal identified 4 main
strategic ways that MNCs can use
information to coordinate the activities of a
parent company with its subsidiaries (see
Figs. 2.10-13):1. Decentralized control strategy
2. Centralized control strategy
3. Centralized expertise strategy
4. Centralized control and distributed
expertise strategy
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END OF CHAPTER 2
CHAPTER 3
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CHAPTER 3
USING INFORMATION
TECHNOLOGY TO ENGAGEIN ELECTRONIC
COMMERCE
Management Information Systems, 9th
edition,By Raymond McLeod, Jr. and George P. Schell
© 2004, Prentice Hall, Inc.
Learning Objectives
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Learning Objectives
• Recognize the importance and advantages of electronic
commerce.• Understand that within ten years electronic commerce will
be blended into everyday business processes and
consumers will not recognize e-commerce as a special
category.• Understand the difference between business-to-business
electronic commerce and business-to-consumer electronic
commerce.
• Learn examples of good business-to-business electroniccommerce and business-to-consumer electronic commerce.
• Understand the role that business intelligence plays in
electronic commerce.
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Learning Objectives (cont.):
• Know the role that inter-organizational systems, the
Internet, and the World Wide Web play in electronic
commerce.
• Know what factors influence the adoption of interorganizational systems.
• Recognize the movement from electronic data interchange
to various Web-standard data exchange practices.
• Understand why many firms choose to have both a virtualstore and a physical store.
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Introduction
• Electronic commerce (or e-commerce), usescommunications networks and computers to
accomplish business processes
• Most electronic commerce is between businesses (B2B), rather than between a
business and a consumer, but B2C still has
many opportunities for growth and profit
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ELECTRONIC COMMERCE
• Here, we shall treat ―electronic business‖
and ―electric commerce‖ as synonyms
• Thus, any business transaction that uses
network access, computer-based systems,and a Web browser interface qualifies as
electronic commerce
Electronic Commerce Beyond the
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Electronic Commerce Beyond the
Boundary of the Firm
• Business-to-customer (B2C) electronic commerce
refers to transactions between a business and the
final consumer of the product
• Business-to-business (B2B) electronic commercerefers to transactions between businesses in which
neither is the final consumer. These may involve
relatively few people, generally the information
systems groups of the companies are most affected
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Anticipated Benefits from
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Anticipated Benefits from
Electronic Commerce
There are three main benefits of e-Commerce:1. Improved customer service before, during, and
after the sale
2. Improved relationships with suppliers and the
financial community3. Increased economic return on stockholder and
owner investments
These benefits contribute to the firm’s financial
stability and enable it to better compete in a business
world that is using more and more computer
technology
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Electronic Commerce Constraints
Three constraints on e-commerce are as follows:1. High costs
2. Security concerns
3. Immature or unavailable softwareEach of these constraints is being challenged as IT
and IS needs for e-commerce become increasingly
popular and the cost of the required computingresources keeps falling
Scope of Electronic Commerce
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Scope of Electronic Commerce
• The amount of economic impact varies from
industry to industry but about 94% of electroniccommerce is B2B leaving 6% for B2C
• E-commerce is estimated to be growing at
between 5% and 15% each year, though mayslow down, high growth in e-Commerce will
likely continue for the next several years
• Table 3.2 gives examples of the extent of the use
of e-commerce in certain areas of the economy
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The Path to Electronic Commerce
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The Path to Electronic Commerce
• Implementing an e-commerce systemincludes a significant risk of failure
• The first step is a commitment to implement
the system as part of a strategic business plan to use e-commerce to achieve
competitive advantage
• The firm then gathers business intelligenceto understand the potential role each
environmental element will play
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BUSINESS INTELLIGENCE
• Before engaging in e-commerce managersmust understand their firm’s relationships
with customers, competitors, suppliers, and
other external entities• Business Intelligence (BI) is the gathering
of information about the environmental
elements that interact with your firm
External Databases
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External Databases
• Companies can also use commercial
databases that provide environmentalinformation instead of gathering itthemselves
• Firms use these databases because it isfaster and less expensive than trying toresearch the information on their own
• Figure 3.1 illustrates the use of externaldatabases and Web searches for businessintelligence
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Search Engines
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Search Engines
• A search engine is a special program that
provides links to Web sites based on akeyword or group of words supplied by theuser
• Search engines then look through theirdatabase of Web site content to see whichWeb sites use that word or phrase
• Other specialized indexing programs create
directories of Web site categories, workingon the ―backend‖ of the search engine
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THE INTERORGANIZATIONAL
SYSTEM (IOS)• An IOS is created through linkages with
other firms so they can work together as a
coordinated unit
• This allows them to achieve benefits that
each could not achieve alone
• Inter organizational systems are
fundamental to electronic commerce
IOS B fit
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IOS Benefits
• The trading partners enter into an IOS venturewith the expectation of realizing benefits such as:
– Comparative Efficiency
– Internal efficiency
– Inter organizational efficiency
– Bargaining Power
• Vendor stock replenishment is a special type of
IOS where the supplier can initiate thereplenishment process by electronicallymonitoring the firm’s inventory levels
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Electronic Data Interchange (EDI)
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Electronic Data Interchange (EDI)
• EDI is essentially electronic forms that can be sentover networks
• It involves transmitting data in a machine-
readable, structured format, enabling the data to be
received without the need for re-keying
• Two major standards for EDI are the American
National Standards Institute standard ASC X12 is
used in North America and the EDIFACTinternational standards are used in Europe
Extranet
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Extranet
• Another way of establishing an IOS is byusing a secure form of Internet technologycalled an extranet
• Firms use them in collaboration with trustedsuppliers and large customers to sharesensitive information
• Security and privacy are serious concerns so
the extranets are generally secured behind afirewall
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Electronic Funds Transfer (EFT)
• When data representing money istransmitted over a computer network, it is
called electronic funds transfer
• EFT is used by firms and individuals whohave their payroll checks deposited into
their bank accounts or who pay bills using
electronic payments• EFT also plays a major role in electronic
commerce
Proactive and Reactive Business
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Proactive and Reactive Business
Partners
• The IOS sponsor typically takes a proactive
approach, stimulating interest in the IOS and
encouraging participation in the network
• The participants, on the other hand, typicallyrespond in a reactive manner — accepting or
rejecting the sponsor’s offer to adopt IOS
• For example, the proactive approach taken by thelarge automobile manufacturers forced suppliers
to react by either adopting an EDI system or risk
losing participation in the supply chain
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Indirect IOS Benefits
• The indirect benefits of participating in anIOS include:
– increased ability to compete;
– improved relationships with trading partners; – and improved customer service
• Figure 3.4 shows this relationship betweendirect and indirect benefits
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A Challenge to EDI
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• Newer approaches to inter organizational systems
for B2B data transfer XML, DHTML, andCORBA
– Extensible markup language (XML) is an extensionof the hypertext markup language used to code Web
pages
– Dynamic hypertext markup language (DHTML) adds features such as scripting and active controls sothe content of the displayed Web page can bedynamically generated
– Common Object Request Broker Architecture(CORBA) grew as a standard as the software industryembraced object-oriented programming and databases
B2C STRATEGIES FOR ELECTRONIC
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COMMERCE
• Reasons why it’s important to understandB2C business include:
– More products and services are becomingavailable for digital delivery
– Consumers are overcoming their reluctance to purchase using the Web
– Higher communications speeds have made thedelivery of digital products practical
– Fear of information theft (such as credit cardinfo), is being replaced with greater confidencethat sensitive information will be safeguarded
Products and Services to Be Delivered to the
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Consumer Over the Internet
• Digital Products: such as songs, albums, movies,computer programs and their updates and services
• Physical Products: Sales can be made over the
Web, but shipping has to be arranged. The growthof private mail/shipping companies has indirectly
aided retail e-Commerce
• A key difference between digital and physical
products is that digital products can be consumedas soon as they are downloaded
Virtual Versus Hybrid Sales
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Virtual Versus Hybrid Sales
• Virtual sales are those made by a firm that doesnot operate a physical storefront
• Hybrid sales occur when firms have both a
physical storefront and a Web site where
customers can purchase products
• Office Depot’s Web site (www.officedepot.com)
shows an example of the strategy restricting the
number of images displayed until the customerhas focused his/her search to a relatively few
choices (next slide)
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EVOLUTION OF THE INTERNET
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• Understanding the Internet's evolution can help
forecast future opportunities• ARPANET makes it possible for military personnel
and civilian researchers to exchange informationrelating to military matters. It forms a major portion
of what has come to be known today known as theInternet
• In 1989, Tim Berners-Lee, working at CERN, cameup with a way for physicists to communicate using
hypertext electronically linked documents.• This system quickly evolved into what is now known
as the World Wide Web
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CYBERSPACE AND THE
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INFORMATION SUPERHIGHWAY
• The term cyberspace is from William Gibson’s 1984 book Neuromancer to describe a society that had become a slave to its technology
• The information superhighway describes a system
that gives everyone access to the wealth of informationthat exists in our modern society
• The two main organizations in leadership roles inestablishing Internet and Web standards are The
Internet Society and the IETF (Internet EngineeringTask Force)
• Web standards come from the World Wide WebConsortium (W3C)
BUSINESS APPLICATIONS OF
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THE INTERNET
• The Internet can be used for any businessapplication that involves data communication,including both communication inside the firm andwith the environment
• Unlike proprietary networks, the Internet can beused with any computer platform without anyspecial effort to access the network
• The Internet also makes it possible to transmit a
wider variety of media than can be handled overmost conventional networks
Marketing Research and
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Retailing Applications
• By taking advantage of this new source of
customer information, industrial marketers
have gained new inroads to their markets• The Web business application with which
the general public is most familiar is
retailing – most large retail chains now havean established Web presence
Suggestions for Successful
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Internet Use
1. Make sure your Web site is robust2. Make sure your browser and database
structure are both flexible and intuitive
3. Emphasize content
4. Update often
5. Look beyond customers
6. Target content to specific users’ needs
7. Make the interface intuitive8. Be in the right Web location
9. Create a sense of community
10. Get help if you need it
Future Impact of the Internet on
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Business
• The Internet is seen as the precursor to a NationalInformation Infrastructure
• Each country will have its own NII, all linked togetherin some manner that is yet to be defined
• Having an NII will affect commerce in the differentcountries in different ways. Industrialized countriesthat make quick use of innovations in technology, theeffect can be swift and dramatic
• Important new issues are also emerging, especiallythe issue of circulating customers’ personalinformation
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END OF CHAPTER 3
CHAPTER 4
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CHAPTER 4
SYSTEM USERS ANDDEVELOPERS
Management Information Systems, 9th edition,
By Raymond McLeod, Jr. and George P. Schell
© 2004, Prentice Hall, Inc.
Learning Objectives:
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• Learn that the organizational context for systems
development and use is changing from a physical to avirtual structure.
• Recognize the benefits and disadvantages of the virtual
office and the virtual organization.
• Know who the information specialists are and how theycan be integrated into an information services organization.
• Be alerted to new directions that the information services
organization might take.
• Understand what is meant by end-user computing and whyit came about.
Learning Objectives (cont ):
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Learning Objectives (cont.):
• Appreciate that users, especially those with an end-user
computing capability, are a valuable information resource.
• Know the benefits and risks of end-user computing.
• Be aware of the types of knowledge and skill that areimportant to systems development, practiced by both end-
users and information specialists.
• Understand knowledge management and the challenges
that must be addressed for successful implementation.
• Be aware of the special constraints that face developers of
global information systems.
Introduction
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• The first office automation applications were mostly
designed for secretarial and clerical tasks; but soonspread to managerial and professional ranks, leading
eventually to the virtual office
• As firms evaluated the advantages and disadvantages
of centralized and decentralized IS organizations,three structures were identified: the partner,
platform, and scalable models
• Systems development is an evolving activity, with
the organizational setting and the roles played by the
users and information specialists constantly changing
THE BUSINESS ORGANIZATION
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• Information systems have been developed
to support all organizational levels (Figure4.1)
• At the strategic level, executive information
systems are used by the firm's top managers
• An MIS is designed to meet the information
needs of managers throughout the firm
• At the lowest, operational level systems aredesigned to meet the firm’s day-to-day
information needs in those business areas
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OFFICE AUTOMATION
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• OA includes all of the formal and informal
electronic systems primarily concerned with thecommunication of information to and from persons inside and outside the firm
• Figure 4.2 shows an OA model of computer- and
non computer-based applications used by a firm• Innovations in IT made it possible for many firm
activities to be conducted independent of theirlocation
• This is called a virtual organization, andevolved out of office automation
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A Shift from Clerical to Managerial
P bl S l i
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Problem Solving
• The first OA applications supported secretarial andclerical personnel
• As managers and professionals became more computer
literate they learned to use the computer applications in
problems solving
• They began using e-mail to communicate, electronic
calendaring to schedule meetings, video conferencing
to link problem solvers over a wide geographical area,and so on
• OA applications have also been extended by such
technologies as hand held computers and PDAs
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THE VIRTUAL OFFICE
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• Evidence of the virtual office began to
emerge during the 1970s as low-priced
microcomputers and communications
equipment made it possible for individuals
to work at home• At the time, the term teleprocessing was
used, later the term telecommuting was
introduced to describe how employeescould electronically ―commute‖ to work
Advantages and Disadvantages of
T l ti
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Telecommuting
• Advantages:
– Provides employees with scheduling flexibility so that
personal tasks can also be accommodated
– Firms typically pay more attention to communicationsneeds of telecommuters
• Disadvantages:
– Employees can develop a sense of not belonging
– Employees can get the idea that they are expendable – The division between home and office responsibilities
can become blurred
Hoteling
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• The concept of ―hoteling‖ is for the firm to
provide a ―sharable‖ central facility thatemployees can use as the need for office space andsupport rises and falls
• The guiding principles for hoteling include:
• Design the spaces for functional needs
• Similar sized offices are built
• Centralized storage space is provided
• Fewer enclosed office spaces• Assigned offices spaces are eliminated
Advantages and Disadvantages of
T l ti
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Telecommuting
• Advantages: – Reduced facility cost
– Reduced equipment cost
– Reduced work stoppages – Social contribution
• Disadvantages
– Low morale
– Fear of security risks
• The virtual office demands cooperation by boththe firm and the employees if it is to succeed
THE VIRTUAL ORGANIZATION
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• In a virtual organization, firm operations are
designed so they are not tied to physical locations
• Industries that are the most attracted to these
concepts are those that add value in the form of:
information, ideas and intelligence• Such as: education, health care, entertainment,
travel, sports, and consulting
• Workers in this “3I Economy” need to have theknowledge and skills required to succeed as IT
and information systems are included in business
processes
THE INFORMATION SERVICES
ORGANIZATION
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ORGANIZATIONRequire
• The Information Resources
• The Information Specialists
• Systems Analysts
• Database Administrators• A Webmaster
• Network Specialists
• Programmers
• Operators
• A structure that is typical of a centralizedoperation is illustrated in Figure 4.4
THE INFORMATION SERVICES
ORGANIZATION
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ORGANIZATION
• Information services organizations usually require:
– The Information Resources
– The Information Specialists
– Systems Analysts
– Database Administrators – A Webmaster
– Network Specialists
– Programmers – Operators
• Figure 4.4 shows the structure of a typicalinformation services organization
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Innovative Organizational Structures
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• During the 1990s, large firms sought to achieve a"centrally decentralized" organizational structure
• Three innovative organizational structures thathave since been identified are:
– the partner model; – the platform model; and
– the scalable model
• Whereas the organizational structure in Figure 4.4
illustrates how the information specialists aregrouped, the innovative structures show how the IT functions are grouped
Three Innovative Structures
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• The Partner Model (Figure 4.5): IT coordinates
business areas to achieve value innovation andaccomplish delivery of solutions
• The Platform Model (Figure 4.6): IT provides
the networks so that innovation can beaccomplished by the business areas
• The Scalable Model (Figure 4.7): shows that two
sourcing networks are utilized to interface with
vendors when engaging in infrastructuremanagement and solutions delivery within a
flexible structure
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What All Three Models Share
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• All three models recognize that the IT function is not
a self-contained unit, but interfaces with both users
and vendors
• Responsibilities for certain functions must be
allocated to specialists such as divisionalinformation officers and account managers
• All three models reflect an effort to make the IT unit
a team player in the firm's use of information
resources sharing and delegating functions when itis best for the firm
END-USER COMPUTING• The first Information Systems were developed with
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• The first Information Systems were developed withIT specialists doing all of the work for the users
(Figure 4.8)• In the late 1970s, users began developing their own
computer applications
• End-user computing evolved out of four maininfluences
1. The impact of computer education
2. The information services backlog
3. Low-cost hardware4. Prewritten software
• In Figure 4.9 the end-user relies on the informationspecialists for some degree of support
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USERS AS AN
INFORMATION RESOURCE
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INFORMATION RESOURCE
• In deciding how the firm will use its
information resources, management must
consider how end-user computing will be
conducted, so as to maximize the benefits
and minimize the risks
Benefits and Risks of End-User
Computing
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Computing • Benefits:
– Match Capabilities and Challenges
– Reduce Communications Gap
• Risks:
– Poorly Aimed Systems
– Poorly Designed and Documented Systems
– Inefficient Use of Information Resources
– Loss of Data Integrity
– Loss of Security
– Loss of Control
SYSTEMS DEVELOPMENT
KNOWLEDGE AND SKILL
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KNOWLEDGE AND SKILL
• The development of information systems requirescertain knowledge and skills
• It is possible to identify not only the types ofknowledge and skill needed by information
specialists and users, but also how users can bedivided into general management and their staff
• Table 4.1 identifies the types of knowledgeneeded and whether they are of major,
intermediate, or minor importance• In the same way, we can identify different types of
skills and their relative importance (Table 4.2)
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Knowledge Management
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• This knowledge relates to the firm's processes,
technology, management, and interactions with itsenvironmental elements
• Firms are embarking on projects to developknowledge management systems for the purpose
of achieving a competitive advantage• Firms typically regard KM as another type of
system to be developed as an IS that gathersknowledge, stores it and makes it available to
users• Table 4.3 lists the challenges that must be faced by
firms in developing KM systems
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A Successful KM Development
Project at Nortel Networks
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Project at Nortel Networks • Nortel Networks (using knowledge management
software from Excalibur Technologies) credits its pilot KM project with enabling its transformationfrom a technology-focused company to one that isopportunity/customer-focused
• The old new product development system illustratedin Figure 4.10 consisted of a five-phase process
• The new project involved an NPD system that enabled
Nortel to: – leverage multidisciplinary NPD knowledge assets;
– improve NPD decision making; and
– facilitate learning and knowledge exchange
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CHALLENGES IN DEVELOPING
GLOBAL INFORMATION SYSTEMS
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• GIS describes the information system used by
multinational companies (MNC)
• GIS developers must address the following
constraints:
– Politically Imposed Constraints – Cultural and Communications Barriers
– Restrictions on Hardware Purchases and Imports
– Restrictions on Data Processing
– Restrictions on Data Communications
– Technological Problems
– Lack of Support from Subsidiary Managers
PUTTING THE SYSTEM USERS AND
INFORMATION SPECIALISTS IN
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PERSPECTIVE
• Early systems development was accomplished
solely by information specialists, but over time the
users have played increasingly important roles
• Not only has systems development work changed,
but the setting in which the work is performed has
changed as well
• Electronic communication networks enable firmsto become virtual organizations, so now their
development work can be done almost anywhere
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END OF CHAPTER 4