Management Information Systems:

Managing the Digital Firm

Seventeenth Edition

Chapter 4
IT Infrastructure and Emerging
Technologies
Building Information Systems

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Learning Objectives
5.1 What is IT infrastructure, and what are the stages and drivers
of IT infrastructure evolution?
5.2 What are the components of IT infrastructure?
5.3 What are the current trends in computer hardware platforms?
5.4 What are the current computer software platforms and trends?
5.5 What are the challenges of managing IT infrastructure and
management solutions?
5.6 How will MIS help my career?

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Video Cases
• Case 1: Rockwell Automation Fuels the Oil and Gas
Industry with the Internet of Things (IoT)
• Case 1: GE Becomes a Digital Firm: The Emerging
Industrial Internet
• Case 2: National Basketball Association: Competing on
Global Delivery with Akamai OS Streaming
• Case 2: Netflix: Building a Business in the Cloud

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Defining IT Infrastructure
• Set of physical devices and software required to operate
an enterprise
• Set of firm-wide services including:
– Computing platforms providing computing services
– Physical facilities management services
– IT management, education, and other services
• “Service platform” perspective
– More accurate view of value of investments

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Figure 5.1 Connection Between the Firm, IT
Infrastructure, and Business Capabilities

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Evolution of IT Infrastructure
• General-purpose mainframe and minicomputer era: 1959
to present
• Personal computer era: 1981 to present
• Client/server era: 1983 to present
• Enterprise computing era: 1992 to present
• Cloud and mobile computing: 2000 to present

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Figure 5.2 Stages in IT Infrastructure Evolution

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Figure 5.3 A Multitiered (N-Tier)
Client/Server Network

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Technology Drivers of Infrastructure
Evolution (1 of 2)
• Moore’s law and microprocessing power
– Computing power doubles every 2 years
– Nanotechnology
• Law of Mass Digital Storage
– The amount of data being stored each year doubles
• Metcalfe’s Law and network economics
– Value or power of a network grows exponentially as a
function of the number of network members
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Figure 5.4 Moore’s Law and
Microprocessor Performance

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Figure 5.5 Falling Cost of Chips

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Nanotubes

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Figure 5.6 The Amount of Storage Per
Dollar Rises Exponentially, 1950–2016

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Technology Drivers of Infrastructure
Evolution (2 of 2)
• Declining communication costs and the Internet
– Exponential growth in size of the Internet
• Standards and network effects
– Technology standards
▪ Specifications that establish the compatibility of products
and the ability to communicate in a network
▪ Unleash powerful economies of scale and result in price
declines
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Figure 5.7 Exponential Declines in Internet
Communications Costs ($/MBPS)

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What Are the Components of IT
Infrastructure?
1. Computer hardware platforms
2. Operating system platforms
3. Enterprise software applications
4. Data management and storage
5. Networking/telecommunications platforms
6. Internet platforms
7. Consulting system integration services

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What Are the Components of IT Infrastructure?
• Computing services: Provide platforms that ensure a
coherent digital environment
• Telecommunications services: Determine appropriate data,
voice, and video that connect employees, customers, and
suppliers
• Data management services: Not just store, but manage
massive amounts of corporate data and make it available
for users to analyze

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What Are the Components of I T Infrastructure?
• Application software services: Enterprise resource
planning, customer relationship management, supply chain
management, and knowledge management systems
• Physical facilities management services: Physical
installation of computing, telecommunications, and data
management services
• IT management services: Plan and develop infrastructures,
coordinate IT services among business units, account for
IT expenditure, and provide project management services
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What Are the Components of IT Infrastructure?
• IT standards services: Develop policies that ensure
interoperability of all IT infrastructure components
• IT education services: Train employees to properly use IT
investments and educate managers about planning for and
managing the investments
• IT research and development services: Research future IT
projects and investments

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Figure 5.8 The IT Infrastructure
Ecosystem

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Computer Hardware Platforms
• Client machines
– Desktop PCs, laptops
– Mobile computing: smartphones, tablets
– Desktop chips vs. mobile chips
• Servers
• Mainframes
– IBM mainframe
– Digital workhorse for banking and telecommunications
networks

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Operating System Platforms
• Corporate servers
– Windows Server
– Unix
– Linux
• Client level
– Microsoft Windows
– Android, iOS, Windows 10 &11 (mobile/multitouch)
– Google’s Chrome OS (cloud computing)

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Enterprise Software Applications
• In 2020, firms are expected to spend over $500 billion on
software for enterprise applications
• Largest providers: SAP and Oracle
• Middleware providers: IBM, Oracle

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Data Management and Storage
• Database software providers
– IBM (DB2)
– Oracle
– Microsoft (SQL Server)
– SAP Sybase (Adaptive Server Enterprise),
– MySQL (Oracle)
– Apache Hadoop

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Networking/Telecommunications
Platforms
• Network operating systems
– Windows Server, Linux, Unix
• Network hardware providers
– Cisco, Juniper Networks
• Telecommunication services
– Telecommunications, cable, telephone company
charges for voice lines and Internet access
– AT&T, Verizon
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Internet Platforms
• Hardware, software, management services to support company
websites, intranets
– Web-hosting services
– Routers
– Cabling or wireless equipment
• Internet hardware server market
– IBM, Dell, Oracle, HP
• Web development tools/suites
– Microsoft (Visual Studio and .NET), Oracle-Sun (Java),
Adobe
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Consulting and System Integration
Services
• Even large firms do not have resources for full range of
support for new, complex infrastructure
• Leading consulting firms: Accenture, IBM Global Services,
HP, Infosys, Wipro Technologies
• Software integration: ensuring new infrastructure works
with legacy systems
• Legacy systems: older TPS created for mainframes that
would be too costly to replace or redesign
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What Are the Current Trends in
Computer Hardware Platforms? (1 of 5)
• The mobile digital platform
– Smartphones
– Tablet computers
– Digital e-book readers and apps (Kindle), or Apple’s iPad
– Wearable devices(453 million devices connected in 2017,929
million devices in 2021, expected market $150 billion by 2027)
• Consumerization of IT and BYOD (bring your own device)
– Forces businesses and IT departments to rethink how IT
equipment and services are acquired and managed
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Interactive Session: Management: What
Should Firms Do About BYOD?
• Class discussion
– What are the advantages and disadvantages of allowing
employees to use their personal mobile devices for work?
– What management, organization, and technology issues should
be addressed when deciding whether to allow employees to use
their personal mobile devices for work?
– Compare and evaluate how the companies described in this case
study dealt with the challenges of BYOD.
– Allowing employees to use their own smartphones for work will
save a company money. Do you agree? Why or why not?
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What Are the Current Trends in
Computer Hardware Platforms? (2 of 5)
• Quantum computing
– Uses quantum physics to represent and operate on data
– Dramatic increases in computing speed
• Virtualization
– Allows single physical resource to act as multiple resources (i.e.,
run multiple instances of OS); also enables multiple physical
resources (such as storage devices) to appear as a single logical
resource (such as in software-defined storage (SDS))
– Reduces hardware and power expenditures
– Facilitates hardware centralization
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What Are the Current Trends in
Computer Hardware Platforms? (3 of 5)
• Cloud computing
– On-demand computing services obtained over network
▪ Infrastructure as a service (IaaS)
▪ Software as a service (SaaS)
▪ Platform as a service (PaaS)
– Cloud can be public or private
– Allows companies to minimize IT investments
– Drawbacks: Concerns of security, reliability
– Hybrid cloud computing model
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Figure 5.9 Cloud Computing Platform

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Figure 5.10 Amazon Web Services

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Interactive Session: Organizations:
Look to the Cloud
• Class discussion
– What business benefits do cloud computing services
provide? What problems do they solve?
– What are the disadvantages of cloud computing?
– What kinds of businesses are most likely to benefit
from using cloud computing? Why?

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What Are the Current Trends in
Computer Hardware Platforms? (4 of 5)
• Edge computing
– Servers at the edge of the network, near the source of
the data
– Reduces latency and network traffic

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What Are the Current Trends in
Computer Hardware Platforms? (5 of 5)
• Green computing (Green IT)
– Practices and technologies for manufacturing, using,
disposing of computing and networking hardware
– Reducing power consumption a high priority
– Green data centers
• High-performance, power-saving processors
– Multicore processors
– Power-efficient microprocessors
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What Are the Current Computer Software
Platforms and Trends? (1 of 3)
• Linux and open-source software
– Produced by community of programmers
– Examples: Apache web server, Mozilla Firefox browser,
OpenOffice
– Linux
• Software for the web: Java, HTML, and HTML5
– Java Virtual Machine
– Web browsers
– HTMLand HTML5
– Ruby and Python
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What Are the Current Computer Software
Platforms and Trends? (2 of 3)
• Web services and service-oriented architecture
– Web services
– XML: Extensible Markup Language
– SOA: service-oriented architecture
▪ Set of self-contained services that communicate with one
another to create a working software application
▪ Software developers reuse these services in other
combinations to assemble other applications as needed

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Figure 5.11 How Dollar Rent A Car
Uses Web Services

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What Are the Current Computer Software
Platforms and Trends? (3 of 3)
• Software outsourcing and cloud services
– Software packages and enterprise software
– Software outsourcing
– Cloud-based software services and tools
▪ Service Level Agreements (SLAs): formal agreement
with service providers
• Mashups and apps

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Figure 5.12 Changing Sources of
Firm Software

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Dealing with Platform and Infrastructure
Change
• As firms shrink or grow, IT needs to be flexible and scalable
• Scalability
– Ability to expand to serve larger number of users
• For mobile computing and cloud computing
– New policies and procedures for managing these new
platforms
– Contractual agreements with firms running clouds and
distributing software required

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Management and Governance
• Governance
• Who controls IT infrastructure?
• How should IT department be organized?
– Centralized
▪ Central IT department makes decisions
– Decentralized
▪ Business unit IT departments make own decisions
• How are costs allocated between divisions, departments?

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Making Wise Infrastructure Investments
• Under-investment and over-investment can hamper firm
performance
• Rent-versus-buy
• Cloud computing
– Security requirements
– Impact on business processes and workflow
• Outsourcing

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Total Cost of Ownership (TCO) Model
• Analyzes direct and indirect costs
• Hardware, software account for only about 20% of TCO
• Other costs: Installation, training, support, maintenance,
infrastructure, downtime, space, and energy
• TCO can be reduced
– Use of cloud services, greater centralization and
standardization of hardware and software resources

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Competitive Forces Model for I T
Infrastructure Investment
• Market demand for firm’s services
• Firm’s business strategy
• Firm’s IT strategy, infrastructure, and cost
• Information technology assessment
• Competitor firm services
• Competitor firm IT infrastructure investments
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Figure 5.13 Competitive Forces Model
for IT Infrastructure

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Learning Objectives
13.1 How does building new systems produce organizational change?
13.2 What are the core activities in the systems development process?
13.3 What are the principal methodologies for modeling and designing
systems?
13.4 What are alternative methods for building information systems?
13.5 What are new approaches for system building in the digital firm era?
13.6 How will MIS help my career?

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Systems Development and
Organizational Change (1 of 2)
• IT-enabled organizational change

• Automation
– Increases efficiency
– Replaces manual tasks

• Rationalization of procedures
– Streamlines standard operating procedures
– Often found in programs for making continuous quality improvements
▪ Total quality management (TQM)
▪ Six Sigma
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Systems Development and
Organizational Change (2 of 2)
• Business process redesign
– Analyze, simplify, and redesign business processes
– Reorganize workflow, combine steps, eliminate repetition
• Paradigm shifts
– Rethink nature of business
– Define new business model
– Change nature of organization

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Figure 13.1 Organizational Change Carries
Risks and Rewards

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Business Process Redesign
• Business process management (BPM)
– Variety of tools, methodologies to analyze, design, optimize
processes
– Used by firms to manage business process redesign
• Steps in BPM
1. Identify processes for change
2. Analyze existing processes
3. Design the new process
4. Implement the new process
5. Continuous measurement
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Figure 13.2 As-is Business Process for
Purchasing a Book from a Physical
Bookstore

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Figure 13.3 Redesigned Process for
Purchasing a Book Online

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Tools for Business Process Management
• Identify and document existing processes
– Identify inefficiencies
• Create models of improved processes
• Capture and enforce business rules for performing, automating
processes
• Integrate existing systems to support process improvements
• Verify that new processes have improved
• Measure impact of process changes on key business performance
indicators
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Systems Development
• Activities that go into producing an information system
solution to an organizational problem or opportunity
– Systems analysis
– Systems design
– Programming
– Testing
– Conversion
– Production and maintenance

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Figure 13.4 The Systems Development
Process

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Systems Analysis
• Analysis of problem to be solved by new system
– Defining the problem
– Identifying causes
– Specifying solutions
– Identifying information requirements

• Feasibility study

• Systems proposal report

• Information requirements
– Faulty requirements analysis is a leading cause of systems failure and
high systems development costs

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Systems Design
• Describes system specifications that will deliver functions identified
during systems analysis
• Should address all managerial, organizational, and technological
components of system solution
• Role of end users
– User information requirements drive system building
– Users must have sufficient control over design process to ensure
system reflects their business priorities and information needs
– Insufficient user involvement in design effort is major cause of
system failure

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Table 13.1 System Design Specifications (1 of 2)
Category Specifications

Output Medium, Content, Timing

Input Origins, Flow, Data entry

User Interface Simplicity, Efficiency, Logic, Feedback, Errors

Database Design Logical data model, Volume and speed requirements, File organization
and design, Record specifications

Processing Computations, Program modules, Required reports, Timing of outputs

Manual Procedures What activities, Who performs them, When, How, Where

Controls Input controls (characters, limit, reasonableness), Processing controls

(consistency, record counts), Output controls (totals, samples of
output), Procedural controls (passwords, special forms)

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Table 13.1 System Design Specifications (2 of 2)

Category Specifications

Security Access controls, Catastrophe plans, Audit trails

Documentation Operations documentation, Systems documents, User
documentation
Conversion Transfer files, Initiate new procedures, Select testing method
Cut over to new system
Training Select training techniques, Develop training modules, Identify
training facilities
Organizational Changes Task redesign, Job redesign, Process design, Organization
structure design, Reporting relationships

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Completing the Systems Development
Process (1 of 3)
• Programming
– System specifications from design stage are translated into software
program code

• Testing
– Ensures system produces right results
– Unit testing: Tests each program in system separately
– System testing: Test functioning of system as a whole
– Acceptance testing: Makes sure system is ready to be used in production
setting
– Test plan: All preparations for series of tests
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Figure 13.5 A Sample Test Plan to Test a
Record Change

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Completing the Systems Development
Process (2 of 3)
• Conversion
– Process of changing from old system to new system
– Four main strategies
▪ Parallel strategy
▪ Direct cutover
▪ Pilot study
▪ Phased approach
– Requires end-user training
– Finalization of detailed documentation showing how system works from
technical and end-user standpoint
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Completing the Systems Development
Process (3 of 3)
• Production and maintenance
– System reviewed to determine if revisions needed
– May include post-implementation audit document
– Maintenance
▪ Changes in hardware, software, documentation, or
procedures to a production system to correct errors,
meet new requirements, or improve processing
efficiency

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Table 13.2 Systems Development
Core Activity Core Activity

Systems analysis Identify problem(s), Specify solutions, Establish information

requirements
Systems design Create design specifications
Programming Translate design specifications into program code
Testing Perform unit testing, Perform systems testing, Perform
acceptance testing
Conversion Plan conversion, Prepare documentation, Train users and
technical staff
Production and Operate the system, Evaluate the system, Modify the system
maintenance

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Structured Methodologies (1 of 3)
• Structured: Techniques are step-by-step, progressive
• Process-oriented: Focusing on modeling processes or
actions that manipulate data
• Separate data from processes

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Structured Methodologies (2 of 3)
• Data flow diagram
– Represents system’s component processes and flow of data
between them
– Logical graphic model of information flow

• Data dictionary
– Defines contents of data flows and data stores

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Figure 13.6 Data Flow Diagram for Mail-in
University Registration System

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Structured Methodologies (3 of 3)
• Process specifications
– Describe transformation occurring within lowest level of data
flow diagrams
• Structure chart
– Top-down chart, showing each level of design, relationship
to other levels, and place in overall design structure

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Figure 13.7 High-level Structure Chart for
a Payroll System

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Object-Oriented Development (1 of 2)
• Object
– Basic unit of systems analysis and design
– Combines data and the processes that operate on those data
– Data in object can be accessed only by operations associated with
that object
• Object-oriented modeling
– Based on concepts of class and inheritance
– Objects belong to a certain class and have features of that class
– May inherit structures and behaviors of a more general, ancestor
class

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Figure 13.8 Class and Inheritance

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Object-Oriented Development (2 of 2)
• More iterative and incremental than traditional structured development
– Systems analysis: Interactions between system and users
analyzed to identify objects
– Design phase: Describes how objects will behave and interact;
grouped into classes, subclasses, and hierarchies
– Implementation: Some classes may be reused from existing library
of classes, others created or inherited
• Objects are reusable
– Object-oriented development can potentially reduce time and cost
of development

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Traditional Systems Life Cycle
• Oldest method for building information systems
• Phased approach
– Development divided into formal stages
– “Waterfall” approach: One stage finishes before next stage begins
• Formal division of labor between end users and information systems
specialists
• Emphasizes formal specifications and paperwork
• Still used for building large complex systems
• Can be costly, time-consuming, and inflexible
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Figure 13.9 The Traditional Systems
Development Life Cycle

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Prototyping (1 of 2)
• Building experimental system rapidly and inexpensively for end users
to evaluate
• Prototype: Working but preliminary version of information system
– Approved prototype serves as template for final system
• Steps in prototyping
– Identify user requirements
– Develop initial prototype
– Use prototype
– Revise and enhance prototype

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Figure 13.10 The Prototyping Process

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Prototyping (2 of 2)
• Advantages of prototyping
– Useful if some uncertainty in requirements or design solutions
– Often used for end-user interface design
– More likely to fulfill end-user requirements
• Disadvantages
– May gloss over essential steps
– May not accommodate large quantities of data or large number of
users
▪ May not undergo full testing or documentation

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Application Software Packages, Software
Services, and Outsourcing (1 of 3)
• Application software packages and software services
– Save time and money
– Many packages offer customization features

• Evaluation criteria for systems analysis include:

– Functions provided, flexibility, user friendliness, required resources,
database requirements, installation and maintenance efforts,
documentation, vendor quality, and cost

• Request for Proposal (RFP)

– Detailed list of questions submitted to software vendors
– Used to evaluate alternative software packages and cloud software
services
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Application Software Packages, Software
Services, and Outsourcing (2 of 3)
• Outsourcing: several types
– Cloud and SaaS providers: subscribing companies use
software and hardware provided by vendors
– External vendors
▪ Hired to design, create software
▪ Domestic outsourcing
– Driven by firm’s need for additional skills, resources,
assets
▪ Offshore outsourcing
– Driven by cost-savings
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Application Software Packages, Software
Services, and Outsourcing (3 of 3)
• Outsourcing Advantages/Disadvantages
– Advantages: Allows organization flexibility in IT needs
– Disadvantages
▪ Hidden costs, for example:
– Identifying and selecting vendor
– Transitioning to vendor
▪ Opening up proprietary business processes to third party

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Figure 13.11 Total Cost of Offshore
Outsourcing

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Rapid Application Development (RAD),
Agile Development, Automated Software
Testing, and DevOps (1 of 3)
• Rapid application development (RAD)
– Process of creating workable systems in a very short
period of time
• Joint application design (JAD)
– Used to accelerate generation of information
requirements and to develop initial systems design

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Rapid Application Development (RAD), Agile
Development, Automated Software Testing,
and DevOps (2 of 3)
• Agile development
– Focuses on rapid delivery of working software by breaking large project
into subprojects that can be completed in short periods of time

• Automated software testing

– Tools to perform examinations of software, report outcomes, compare
results with earlier test runs

• DevOps
– Builds on agile development principles as an organizational strategy

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Interactive Session: Technology: McAfee
Turns to Automated Software Testing
• Class discussion
– Why would a company such as McAfee benefit from
automated software testing?
– What management, organization, and technology factors did
McAfee address in moving to automated software testing?
– Was Worksoft Certify a good solution for McAfee? Why or
why not?
– How did automated software testing change the way
McAfee ran its business.
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Rapid Application Development (RAD),
Agile Development, Automated Software
Testing, and DevOps (3 of 3)
• Low-code development
– Enables faster development of applications, with minimal hand-coding,
using visual modelling in a graphical interface

• No-code development
– Includes built-in tools that enable user to create apps without any coding
– Some disadvantages
▪ Have limited functionality
▪ Users can create applications without proper management oversight

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Mobile Application Development
• Mobile websites
• Mobile web apps
• Native apps
• Special requirements for mobile platform
– Smaller screens, keyboards, multitouch gestures, saving
resources (memory, processing)
• Responsive web design
– Websites programmed so that layouts change automatically
according to user’s computing device
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