T1

Figure 1-4 Contemporary approaches to information systems

Technical
Approaches

Computer
Science

Management
Science
Psychology

Operations
Research

MIS

Sociology
Economics
Behavioral
Approaches

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T2
Figure 1.6 Interdependence between organizations & information systems

Hardware

Business
Strategy

Software

Database

Rules
Procedures
Telecommunications

Organization

Information System

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Ostronie z prognozami:

Wiek XXI bdzie inny ni jego

liczne teraz przewidywania,
wysadzane klejnotami
dziwacznych pomysw
[Stanisaw Lem w Bombie megabitowej]
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T3
Figure 1.7 The widening scope of information systems

Information
Systems

Information
Systems

Information
Systems

Technical
Changes

Managerial
Control

Institutional
Core Activities

Time

1950s

1960s

1970s

1980s

1990s

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T4
Figure 1.9 A virtual organization

Manufactoring Company

CORE
COMPANY

Sales and Marketing Company

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Logistics Company

Finance Company

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T5
Figure 1.11 Electronic commerce and electronic business in the networked enterprise

Factories
Just-in-time production
Continious inventory replenishment

Business partners

Remote officies and work groups

Joint design

Communicate plans and policies

Outsourcing

Group collaboration
Electronic communication

Production planning

Scheduling

ELECTRONIC
ELECTRONIC

BUSINESS
COMMERCE

The Firm

Suppliers

Customers

Built-to-order products

Procurement

On-line marketing

Customer service

Supply chain management

On-line sales

Sales force automation

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T6
Figure 1.12 The information architecture of the firm
Coordination

INFORMATION
ARCHITECTURE OF
THE
ORGANIZATION

Strategic
Systems
Management
Systems

Functional
Business
Applications

Knowledge
Systems
Operational
Systems
Sales and
Marketing

IT
Infrastructure

Hardware

Manufacturing

Finance

Software

Accounting

Human
Resources

Data and
Storage
Technology

Networks

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T7
Figure 2.1 Types of information systems

KIND OF INFORMATION SYSTEM

GROUPS SERVED

Strategic
Level

Senior
Managers

Management
Level

Middle
Managers

Knowledge
Level

Knowledge and
Data Workers
Operational
Managers

Operational
Level
Sales and
Marketing

Manufacturing

Finance

Accounting

Human
Resources

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T8
Figure 2.2 The six major types of information systems
TYPES OF SYSTEMS
Executive Support
Systems (ESS)

Strategic-Level Systems
Profit
5-year sales 5-year
5-year
trend
operating budget
plannig
forecasting plan
forecasting

Manpower
planning

Management Information
Systems (MIS)

Sales
managemnt

Management-Level Systems
Inventory
Annual
Capital investment Relocation
control
budgeting analysis
analysis

Decision- Support
Systems (DSS)

Sales region
analysis

Production
scheduling

Knowledge Work
Systems (KWS)

Enginneering
workstations

Office Automation
Systems (OAS)

Word
processing

Machine control

Cost
analysis

Pricing/profitability
analysis

Knowledge-Level Systems
Graphics
workstations

Contract cost
analysis

Managerial
workstations

Document
imaging

Electronic
calendars

Operational-Level Systems
Securities trading Payroll

Compensation

Transaction
Order tracking Plant scheduling
Accounts payable Training & development
Processing Systems
Order processing Material Movement Cash management Accounts receivable Emplyee record keeping
(TPS)
control

Sales and
Marketing

Manufacturing

Finance

Accounting

Human
Resources

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T8
Table 2.1 Characteristics of Information Processing Systems

Type of System

Information Inputs

Processing

Information Outputs Users

ESS

Aggregate date;
external, internal

Graphics; simulations;
interactive

Projections; responses
to queries

DSS

Low-volume data or
massive databases
optimized for data
analysis; analytic
models and data
analysis tools

Interactive;
simulations, analysis

Special reports;
decision analyses;
responses to queries

MIS

Summary transaction
data; high-volume
data; simple models

Routine reports; simple

models; low-level
analysis

Summary and
exception reports

Middle managers

KWS

Design specifications;
knowledge base

Modeling; simulations

Models; graphics

Professionals;
technical staff

OAS

Documents; schedules

Document management; scheduling;

communication

Documents;
schedules; mail

Clerical workers

TPS

Transactions; events

Sorting; listing;
merging; updating

Detailed reports;
lists; summaries

Operations personnel;
supervisors

Senior managers
Professionals; staff
managers

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T10
Figure 2.6 How management information systems obtain their data
Transaction Processing Systems
Order
processing
systems

Order
file
Materials
resource
planning
system
Production
master file

Management Information Systems

MIS FILES
Sales
data

Unit
product
cost data

Produkt
change
data
General
ledger
system

Accountig
files

MIS

Reports

Managers

Expense
data

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T11
Figure 2.10 Interrelationships among systems

Executive
support
systems
(ESS)

Management
systems
(MIS)

Management
systems
(DSS)

Knowledge
systems
(KWS and
OAS)

Transaction
processing
systems
(TPS)

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T12
Figure 2.13 Business-level strategy

Vendors

Business-Level Strtegy

Customers

The Business Firm

Supply Chain Management

Intra Firm Strategy

Efficient Customer Response

Stockless inventory

Product differentiation
(IT products)

Point-of-sale systems

Continuous replenishment
Just-in-time delivery

Datamining

Focused differentition
(Datamining)
Low-cost producer

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T13
Figure 2.14 The competitive forces model

Substitute
products and
services

New market
entrants

The firm

Suppliers

Traditional
competitors

Customers

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T14
Figure 3.1 The two-way relationship between organizations and information technology

Mediating Factors
Environment
Culture
Structure
Organizations

Standard Procedures

Information
Technology

Business Processes
Politics
Management
Decisions
Chance

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T15
Figure 3.2 The technical microeconomic definition of the organization
(A)

Organization
Inputs from the
environment

Outputs to the
environment
Production process

(B)

K1
Capital
K2
Q

L1

L2
Labor

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T16
Figure 3.4 Environments and organizations have a reciprocal relationship

The Organization and Its Environment

Environmental Resources
and Constrains

The Firm

Governments
Competitors
Customers
Financial Institutions
Culture
Knowledge
Technology

Information Systems

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T17
Figure 3.9 The systems development process

EXTERNAL

INTERNAL
Institutional factors

Environmental factors

Values

Uncertainties

Norms

Opportunities

Interests

System development
Adoption
Utilization
Management

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T18
Figure 3.13 Organisational resistance

Task

Technology

People

Structure
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T19
Figure 4.1 The Evolution of Management Theory
Technical-Rational

Reengineering

Total Quality Management

Value chain analysis

Administrative/Bureaucratic School
Scientific Management
Sensemaking

Classical
Contemporary
Postmodern
1880 1900 1920 1940
1960
1980
2000
Human Relations
User acceptance

The learning
organization
Structuration
theory
Cognitive
Knowledge-based firms
Datamining

Systems Structural
Strategic IS

Behavioral

Network organizations
Virtual organizations

Organizational knowledge
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T20
Figure 4.3 The Knowledge-Based View of the Firm
Environment
Knowledge

Information
Chaos

Information-and-knowledge processing structures

Existing stock of explicit

organizational information +
and knowledge
Origins

Tacit information and

knowledge; Know-how
Learning

Organizational knowledge
= base: routines, structures, ACTIONS
alliances, behavior
Consequences
Utilization

THE ORGANIZATION

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T21
Fiugre 4.4 Diffrent kinds of information systems at the various organizational levels
ORGANIZATIONAL LEVEL
TYPE OF
DECISION
Structured

Operational

Management

Strategic

Electronic
scheduling

Production
cost overruns

OAS

MIS

Accounts receivable

TPS

Semistructured

Knowledge

Budget
preparation

Project
scheduling

KWS
Unstructuredl

Product design
Key:
TPS = Transaction processing system
OAS = Office automation system
KWS = Knowledge work system

DSS
Production
facility location

ESS
New products
New markets

MIS Management information system

DSS = Decision-support system
ESS = Executive support system

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T22
Figure 4.5 The Decision-making Process

Is there a problem?

What are the alternatives?

Which should you choose?

Is the choice working?

Intelligence

Design

Choice

Implementation

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T23
Tabele 4.3 Models of Organizational Decision Making

Name

Basic Concept

Inference Pattern

Rational actor

Comprehensive
rationality

Organizations select goals, examine all alternatives and consequences, and then
choose a policy that maximizes the goal or preference function.

Bureacratic

Organizational output Goals are determined by resource constrains and existing human and capital
resources; SOPs are combined into programs, and programs into repertoires;
Standard operating
these determine what policies will be chosen. The primary purpose of the
procedures
organization is to survive; uncertainty reduction is the principal goal. Policies are
chosen that are incrementally different from the past

Political

Political outcome

Organizational decisions result from political competition; key players are

involved in a game of influence, bargaining, and power. Organizational outcomes
are determined by the beliefs and goals of players, their skills in playing the
games, the resources they bring to bear, and the limits on their attention and
power.

Garbage can

Nonadaptative
organizational
program

Most organizations are nonadaptative, temprary, and disappear over time.

Organizational decizions result from interactions among streams of problems,
potential actions, participants, and chance.

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T24
Figure 5.1 The relationship between ethical, social, and political issues in an information society
Information
Rights and
Obligations

Political Issues

Property Rights
and Obligations

Social Issues
Ethical Issues

Accountability
and Control

Information
Technology
and Systems

System Quality

Indyvidual
Society
Polity
Quality of Life
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T25
Table 5.2 Federal privacy laws in the United States

1. General Federal Privacy Laws

Freedom of Information act, 1968 as Amended (5 USC 552)
Privacy Act of 1974 as Amended (5 USC 552a)
Electronic Communications Privacy Act of 1986
Computer Matching and Privacy Protection Act of 1988
Computer Security Act of 1987
Federal Managers Financial Integrity Act of 1982

2. Privacy Laws Affecting Private Institutions

Fair Credit Reporting Act of 1970
Family Educational Rights and Privacy Act of 1978
Right to Financial Privacy Act of 1978
Privacy Protection Act of 1980
Cable Communications Policy Act of 1984
Electronic Communications Privacy Act of 1986
Video Privacy Protection Act of 1988
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LOGO

T26
Figure 5.2 Who owns the pieces?

Artists, design firm,

or Web site publisher
TEXTUAL CONTENT
Writer or newspaper
publisher
ARTICLE EXCERPT
BUSINESS

Writer or newspaper
publisher

Stock exchanges,
write service, or
database publischer
COLUMN

PHOTOGRAPH

Writer, syndication
service, or newspaper
publisher

Freelance photographer,
wire service, photo
agency, photo library, or
newspaper publisher
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T27
Table 5.4 Internet crime and abuse

Problem

Description

Hacking

Hackers exploit weaknesses in Web site security to obtain access to proprietary data such as
customer information and passwords. They may use Trojan horses posing as legitimate
software to obtain information from the host computer.

Jamming

Jammers use software routines to tie up the computer hosting a Web site so that legitimate
visitors cant access the site.

Malicious software

Cyber vandals use data flowing through the Internet to transmit computer viruses, which can
disable computers that they infect (see Chapter 16)

Sniffing

Sniffing is a form of electronic eavesdropping by placing a piece of software to intercept

information passing from a user to the computer hosting a Web site. This information can
include credit card numbers and other confidental data.

Spoofing

Spoofers fraudulently misrepresent themselves as other organizations, setting up false Web sites
where they can collect confidential information from unsuspecting visitors to the site

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T28
Figure 6.1 Hardware components of a computer system
Central Procesing Unit (CPU)
Arithmetic-Logic Unit
Control Unit
Input Devices

Secondary Storage

Keyboard

Magnetic disk

Computer mouse

Optical disk

Touch screen

Magnetic tape

Source data automation

Buses
Output Devices

Communication
Devices

Printers
Video Display terminals
Plotters
Audio output

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Primary
Storage

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T29
Table 6.1 Examples of ASCII and EBCDIC Codes

Character or Number

ASCII-8 Binary

EBCDIC Binary

01000001

11000001

01000101

11000101

01011010

11101001

00110000

11110000

00110001

11110001

00110101

11110101

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T30
Table 6.2 Time and Size in the Computer World

Time
Milisecond

1/1000 second

Microsecond

1/1,000,000 second

Nanosecond

1/1,000,000,000 second

Picosecond

1/1,000,000,000,000 second

Storage Capacity
Byte

String of eight bits

Kilobyte

1000 bytesa

Megabyte

1,000,000 bytes

Gigabyte

1,000,000,000 bytes

Terabyte

1,000,000,000,000 bytes

Actually 1024 storage positions

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T31
Figure 6.4 The CPU and primary storage

Central Processing Unit (CPU)

Primary Storage

Arithmetic-Logic Unit

1
8

22 + 11 = 33
T

9 < 10

#
U

Control Unit

Primary
storage
address

Data Bus
Address Bus
Control Bus

Input
Devices

Output
Devices

Secondary
Storage

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T32
Figure 6.9 Types of client/server computing
SERVER
Data

Data

Data

Logic

Logic

Logic

Data

Data

Interface

Data

Interface

Interface

Logic

Logic

Logic

Interface

Interface

Interface

CLIENT
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T33
Figure 6.10 Disk pack storage

11 disks
20 recording surfaces
3500 RPMs

Read/write heads
fly over disk
surfaces
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T34
Figure 7.1 The major types of software
SYSTEM SOFTWARE
Operating System
Schedules computer events
Application software
System software
Hardware

FORTRAN

Monitors events
Language Translators
Interpreters
Compilers

APPLICATION SOFTWARE
Programming languages
Assembly language

Allocates computer resources

Utility Programs
Users

Routine operations (e.g., sort, list, print)

Manage data (e.g., create files, merge files)

COBOL
BASIC
PASCAL
C
4th-generation languages and PC software tools
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T35
Figure 7.2 Single-program execution versus multiprogramming

Traditional system with

no multiprogramming

Multiprogramming
environment
Program 1

Operating
system

Program 1

Operating
system

Program 2
Program 3

Unused memory

Unused memory

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T36
Figure 7.4 The language translation process

Other object
code modules

Source
code
program

Compiler

Object
code

Linkage
editor

Load
module

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T37
Figure 7.9 Fourth-generation languages

Oriented toward end users

PC
tools

Lotus 1-2-3
WordPerfect
Internet Explorer
Access

Oriented toward IS professionals

Query
languages/
report
generators

Graphic
languages

Application
generators

Application
software
packages

Very high-level
programming
languages

SQL
RPG-III

Systat

FOCUS

AVP Sales/Use Tax

APL

SAS Graph

Natural

People Soft HRMS

Nomad2

Power Builder

SAP R/3

Microsoft FrontPage
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T38
Figure 7.13 Class, subclasses, inheritance, and overriding

Nonsalaried
Name ID
Hourly rate
Pay

Employee

(Class)

Name ID

(Class variables)

Pay

(Methods)

(subclass of Employee)

Temporary (subclass of Nonsalaried)

Name ID
Hours
Pay - OVERRIDE

Salaried (subclass of Employee)

Name ID
Base pay
Pay - OVERRIDE

Permanent (subclass of Nonsalaried)

Name ID
Hours Overtime
Pay - OVERRIDE

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T39
Figure 8.1 The data hierarchy
Example
Student Database

Hierarchy

Course File

Database

Financial File

Personal History File

File

Record

NAME

Course File
COURSE
DATE

GRADE

John Stewart
Karen Taylor
Emily Vincent

IS 101
IS 101
IS 101

B+
A
C

F99
F99
F99

NAME

COURSE

DATE

GRADE

John Stewart

IS 101

F99

B+

Field

John Stewart (Name field)

Byte

01001010 (Letter J in ASCII)

Bit

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T40
Figure 8.5 Traditional file processing
Master file
Data elements
A to Z
Derivative files
Users

Application
program 1

Application
program 2

Application
program 3

Application
program 4

ACCOUNTING
Users
FINANCE
Users
SALES AND
MARKETING
Users
MANUFACTURING
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T41
Figure 8.6 The contemporary data environment
INTEGRATED HUMAN
RESOURCES DATABASE
Employees
Name

Personnel
application
programs

Address
Social security number

Personnel
department

Position
Marital status
Payroll
Hours worked
Pay rate
Gross pay

Database
management
system

Payroll
application
programs

Payroll
department

Fed tax
State tax
Net pay
Benefits
Life insurance

Benefits
application
programs

Benefits
department

Pension plan
Health care plan
Retirement benefit

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T42
Figure 8.10 A hierarchcal database for a human resources system

ROOT

Employee

FIRST
CHILD

SECOND
CHILD

Compensation

Performance
Ratings

Salary
History

Job
Assignments

Pension

Benefits

Life
insurance

Health

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T43
Figure 8.11 The network data model

Course 1

Student 1

Student 2

Course 2

Student 3

Course 3

Student 4

Student 5

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T44
Figure 8.12 The relational data model
Table
(Relation)
ORDER

PART

SUPPLIER

Columns (Field)
ORDERNUMBER
1634
1635
1636

ORDERDATE
02/02/99
02/12/99
02/13/99

PARTNUMBER
137
145
152

PARTDESCRIPTION
Door latch
Door handle
Compressor

SUPPLIERNUMBER
1125
2038
4058

DELIVERYDATE
02/22/99
02/29/99
03/01/99

SUPPLIERNAME
CBM inc.
Ace Inc.
Bryant Corp.

UNITPRICE
26.25
22.50
70.00

PARTNUMBER
152
137
145

PARTAMOUNT
2
3
1

ORDERTOTAL
144.50
79.70
24.30

Rows
(Records,
Tuples)

SUPPLIERNUMBER
4058
2038
1125

SUPPLIER- ADDRESS
44 Winslow, Gary IN 44950
Rte. 101, Essex NJ 07763
51 Elm, Rochester NY 11349

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T45
Figure 9.1 Components of a telecommunications system
Communications
channels

Host
computer

Minicomputer

Terminals

Front-end
processor
Multiplexer
Modems
Remote
Installation

Modem
Multiplexer

Terminals
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Radio Wave
105

T46
Figure 9.3 Frequency ranges for communications media devices
Microwave
InfraVisible
Ultra- X-Ray
red
Light
violet
108

1010

1012 1013

1014 1015

Gamma and
Cosmic

1016 1017 1018 1019 1020

1022

UHFTV

AM
Radio
ShortWave
Radio

Cellular
phones
RAM
Mobile
Data

FM
Radio Cordless
and
Phones
VHF-TV
Paging
PCS

Radar
Microwave
Satellite

Remote
Controls

Wireless
Fiber
Optics

Industrial
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Terminal 1

T47
Figure 9.5 A star network topology
Computer 1

Computer 2

Computer 3
Host CPU
Terminal 2

Terminal 3

Printer

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Figure 9.6 A bus network topology

Computer 1

Computer 2

Computer 3

Terminal

Printer

Computer 4

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Figure 9.7 A ring network topolgy
Computer 1

Computer 2

Computer 5

Computer 3

Printer

Hard disk drive

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T50
Figure 9.12 Electronic data interchange

SELLER

CUSTOMER

Purchase orders
Payments
Computer

Shipping notices

Computer

Price updates
Invoices

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T51
Table 10.1 Major internet capabilities

Capability

Functions Supported

E-mail

Perso-to-person messaging; document sharing

Usenet newsgroups

Discussion groups on electronic bulletin boards

LISTSERVs

Discussion groups using e-mail mailing list servers

Chatting

Interactive conversations

Telnet

Log on to one computer system and do work on another

FTP

Transfer files from computer to computer

Gophers

Locate information using a hierarchy of menus

World Wide Web

Retrieve, format, and display information (including text, audio,

graphics, and video) using hypertext links

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Figure 10.5 Model of an extranet
Customer

Databases
Client

Customer
Client
Internet
Supplier

Firewall

Server
Client
Client

Business
partner

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T53
Table 10.3 Internet business models

Category

Description

Examples

Virtual Storefront

Sells physical goods or services on-line instead of through a physical storefront or retail outlet
Delivery of nondigital goods and services takes place through traditional means

Amazon.com
Network Bank

Marketplace Concentrator

Concentrates information about products and services from multiple providers at one central point.
Purchasers can search, comparisonshop, and sometimes complete the sales transaction

Internet Mall
InsureMarket

Information Brokers

Provide product, pricing, and availability information. Some facilitate transactions, but their main
value is the information they provide.

Travelocity
Auto-by-Tel

Transaction Brokers

Buyers can view rates and terms, but the primary business activity is to complete the transaction

E*Trade

Electronic Clearinghouses

Provide auction-like settings for products where price and availability are costantly changing,
sometimes in response to customer actions

Bid.com
OnSale

Reverse Auction

Consumers submit a bid to multiple sellers to buy goods or services at a buyer-specified price

Priceline.com

Digital Product Delivery

Sells and delivers software, multimedia, and other digital products over the internet

PhotoDisc

Content Provider

Creates revenue by providing content. The customer may pay to access the content, or revenue
may be generated by selling advertising space or by having advertisers [pay for placement in an
organized listing in a searchable database.

Wall Street Journal

Interactive

On-line Service Provider

Provides service and support for hardware and software users.

Cyber Media

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T54
Figure 10.6 The benefits of disintermediation to the customer
Cost/
Sweater

Manufacturer

Manufacturer

Manufacturer

Distributor

Retailer

Customer

$48.50

Retailer

Customer

$40.34

Customer

$20.45

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T55
Figure 10.9 Intranet linking supply chain functions
Maketing
and sales

Production
planning

Procurement
Customer
service
Intranet
Accounting
and finance

Inventory

Customers

Shipping and
distribution

Production and
manufacturing

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T56
Table 11.1 Information systems plan

1.

Purpose of the Plan

4.

Overview of plan cntents

New system projects

Changes in firms current situation

New capabilities required

Management strategy

Hardware

7.

Strategic Business Plan

Software

Current situation

Database

Requirements

Current business organization

Telecommunications

Potential savings

Changing environments
Major goals of the business plan

3.

Progress reports

Business rationale

Current business organization

Implementation plan
Anticipated difficulties in
implementatinon

Project descriptions

Firms strategic plan

2.

6.

New Developments

Budget Requirements

Financing

5.

Management strategy

Acquisition cycle

Aquisition plans
Current systems

Milestones and timing

Major systems supporting business functions

Organizational realignment

Major current capabilities

Internal reorganization

Hardware

Management controls

Software

Major training initiatives

Database

Personnel strategy

Telecommunications
Dificulties meeting business requirements
Anticipated future demands

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T57
Figure 11.2 Using CSFs to develop systems
Manager A
CSFs

Manager B
CSFs

Manager C
CSFs

Manager D
CSFs

Aggregate + analyze
indyvidual CSFs
Develop agreement
on company CSFs

Define company
CSFs

Define DSS
and
databases
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T58
Figure 11.3 Organizational change carries risks and rewards

Paradigm Shifts
High
Reengineering
Risk
Rationalization

Low

Automation
Low

High
Return

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Table 11.5 New process design options with information technology

Assumption

Technology

Option

Examples

Field personnel need offices Wireless communication

to receive, store and transmit
information

Personnel can send and receive Manitoba Insurance

information wherever they are. Price Waterhouse

Information can appear only

in one place at one time

People can collaborate on the U.S. West

same project from scattered
Banc One
locations; information can be
used simultaneously wherever
it is needed

Shared databases

People are needed to ascertain Automatic identification

where things are located
and tracking technology

Things can tell people where

they are

Businesses need reserve

Communications networks Just-in-time delivery and
inventory to prevent stockouts and EDI
stockless supply

United Parcel Service

Schneider National
Wal-Mart
Baxter International

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T60
Figure 11.5 The system developmeny process

Productio
n and
Maintena
nc e

System
Analysis

Co

nv

Organization
System
design

er

sio

n
Testing

ming
m
a
r
Prog

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Figure 12.1 The lifecycle methodology for system development
STAGES

END PRODUCTS

Project
definition

Project proposal report

System study

System proposal report

Design specifications

Design
Programming

Program specifications - code

Installation

System performance tests

Postimplementation

Milestone 1
Project
initiation

Milestone 2
Design solutin
decision

Milestone 3
Design
specification
sign-off

Year 1

Milestone 4
Produstion
decision
Year 2

Post-implementation audit

OPERATIONS

3-8 Year Life Span

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Figure 12.2 The prototyping process
Identify basic requirements

Step 1

Develop a working prototype

Step 2

Use the prototype

YES

Step 3

User satisfied?

NO
Operational prototype

Revise and enhance the

prototype

Step 4

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Figure 12.7 High-level structure chart for a payroll system

Payroll
process

Get valid
inputs

Get
inputs

Calculate
pay

Validate
inputs

Calculate
gross pay

Calculate
net pay

Write
outputs

Update
master
file

Write checks,
reports, and
output files

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T64
Figure 12.8 Basic control constructs
A

Sequence
Action A
Action B

B
F

Selection

T
R

IF condition R
Action C
ELSE
Action D
ENDIF

Iteration
DO WHILE Condition S
Action E
ENDDO

E
S

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Figure 12.10 System flowchart for a payroll system
Time cards

Human
resources
data

Payroll
master
file

Load and
validate

Valid
transactions
Payroll
master
file

Compute
and update

Payroll
reports and
checks
Color Transparencies

Direct
deposit
tape

General
ledger file

Updated
payroll
master
file

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Figure 13.1 Information system problem areas

Design

Operations

Information
system

Data

Cost
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T67
Figure 13.3 Approaches and implementation stages in the implementation literature

APPROACHES

Actors
roles

Strategy

Organizational
factors

IMPLEMENTATION STAGES
Adoption

Management

XXXX

XXXX

Routinization

XXXX

XXXX

XXXX

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Table 13.1 Actions and indications for succesful system

Support by local funds

New organizational arrangements
Stable supply and maintenance
New personnel classifications
Changes in organizational authority
Internalization of the training program
Continual updating of the system
Promotion of key personnel
Survival of the system after turnover of its originators
Attainment of widespread use
Source: Yin (1981)

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Figure 13.5 Factors in information system success or failure

User involvement
and influence

Management
support

Level of
complexity/risk

IMPLEMENTATION
OUTCOME

Design
Cost
Operations
Data

Management of
implementation
process
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T70
Table 13.4 Strategies to manage projects by controlling risk

Project
Structure
1. High

Project
Technology Level
Low

2. High

Low

3. High

Project Size

Degree of Risk

Large

Low

Small

Very Low

High

Large

Medium

4. High
5. Low

High
Low

Small
Large

Medium Low
Low

6. Low

Low

Small

Very Low

7. Low

High

Large

Very High

8. Low

High

Small

High

Project Management Tool

High use of formal planning
High use of formal control
High use of formal control
Medium use of formal planning
Medium use of formal control
Medium use of formal planning
High internal integration
High external integration
High use of formal planning
High use of formal control
High external integration
High use of formal control
High external integration
High internal integration
High external integration
High internal integration

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T71
Figur 14.1 A number of contemporary information systems are designed to give close-in support to info workers
Share
Knowledge

Group
Collaboration
Systems

Office Automation
Systems

Groupware

Desktop Publishing

Intranets

Imaging and Web

Publishing

Distribute
Knowledge

Word Processing

Electronic Calendaars
Desktop Databases
Artificial Intelligence
Systems
Expert Systems
Neural Nets
Fuzzy Logic
Genetic Algorithms
Capture and Codify
Knowledge

Knowledge Work
Systems
CAD
Virtual Reality
Investment
Workstations

Intelligent Agents
Create
Knowledge

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Figure 14.3 Web publishing and document management

Text indexing
and searching

Author
Web
Page

Edit
and
Review

Web
Server

E-mail links

Links to other
Web pages

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Figure 14.5 The arificial intelligence family

Artificial
Intelligence

Natural
Language

Robotics

Perceptive
Systems

Expert
Systems

Intelligent
Machines

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Figure 14.9 How case-based reasoning works
1.

User describes
the problem

2.

System searches database for

similar cases

3.

System asks user additional

questions to narrow the search

4.

System finds closest fit and

retrieves solution

5.

System modifies the solution to

better fit the problem

NO

Successful?

Case
database

6.

System stores problem and

successful solution in the database

YES

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T75
Table 14.4 Examples of intelligent agents for electronic commerce

Agent Product
Firefly

Description
Vendor
Helps users find music or films of interest. Users send critiques of movies and Agents Inc.
music to the Firefly Web site. When they want to select a new movie to see or a
CD to buy, they supply data on their personal favourites, and Firefly will
produce a list of similar items based on the critiques. The service is being
extended to books, restaurants, and mutual funds.
BargainFinder and BargainFinder does real-time comparison shopping among on-line participa- Andersen
LifestyleFinder
ting CD music stores and returns the names of vendors that offer the lowest
Consulting
price. LifestyleFinder recommends Web sites to users based on information
they provide about their lifestyles
Jango
Automatically consults Web sites and prepares reports to users on prices and Excite
other features of products such as books, clothing, wine and PCs
Smart NewsReader Windows application that provides access to Usenet newsgroups based on
Intel
interests specified by the user. It can read through an article and score each
thread of conversation based on the users past interests
AuctionBot
Allows sellers to set up their own auctions where buyers and sellers can
University of
place bids according to the protocols and parameters that have been
Michigan
established for the auction

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T76
figure 15.1 Overview of a decision support system (DSS)
External
Data

TPS

DSS
Database

DSS Software System,

Models, OLAP Tools,
Datamining Tools

User
Interface

User
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Table 15.1 Examples of decision support systems

Organization

DSS Aplication

American Airlines

Price and route selection

Equico Capital Corporation

Investment evaluation

General Accident Insurance

Customer buying patterns and fraud detection

Bank of America

Customer profiles

Frito-Lay, Inc.

Price, advertising, and promotion selection

Burlington Coat Factory

Store location and inventory mix

National Gypsum

Corporate planning and forecasting

Southern Railway

Train dispatching and routing

Texas Oil and Gas Corporation

Evaluation of potential drilling sites

United Airlines

Flight scheduling

U. S. Department of Defence

Defense contract analysis

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CDSS

T78
Figure 15.3 Customer decision support on the internet
Models
Data

Models

Newsgroups
Information
brokers

Serch engines
and directories

Models
Other customers
Customers
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Competitors

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Figure 15.6 Group systems tools
Brainstorming
Idea generation

Topic Commenter
Group Outliner

Session
manager

Idea Organizer
Idea Organization

Issue Analyzer
Group Writer

Session
Planning

Vote selection
Prioritizing

Alternative Eval.
Questionnaire
Group Matrix

Policy development

Policy Formation
Stakeholder Id.

Enterprise Analyzer
Graphical Browser
Group Dictionary
Brief Case
Access to information

Organizational Memory

Personal productivity

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T80
Figure 16.1 Telecommunications network vulnerabilities
Radiation
TAPS
Radiation Crosstalk Radiation

Crosstalk

Switching
center

Remote
consoles
User, Identification,
Authentication, Subtle
software
modifications

Access,
Attachment of
records, Bugs

TAPS

Radiation

Communication
lines

Radiation

Processor
Files Thef
Copying
Unauthorized
access

Hardware, Imroper
connections
Systems programmer,
Disable protective
features, Reveal
protective measures

Operator, Replace
supervisor, Reveal
protective measures

Maintenance staff,
Disable hardware
devices, Use standalone utility programs

Hardware, Failure of
protection circuits,
Contribute to software
failures

Software, Failure of
protection features,
Access control,
Bounds control

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T81
Table 16.2 Common computer viruses

Virus Name

Description

Concept

Macro virus that attaches itself to Microsoft Word documents and can be
spread when Word documents are attached to e-mail. Can copy itself from one
document to another and delete files

Form

Makes a clicking sound with each keystroke but only on the eighteenth day of
the month. May corrupt data on the floppy disks it infects

One_Half

Encrypts the hard disk so that only the virus can read the data there, flashing
One_Half on the computer screen when its activity is half-completed. Very
descructive because it can mutate, making it difficult to identify and eliminate.

Monkey

Makes the hard disk look like it has failed because Windows will not run

Junkie

A multipartite virus that can infect files as well as the boot sector of the
hard drive (the section of a PC hard drive that the PC first reads when it boots
up), May cause memory conflicts

Ripper (or Jack the Ripper) Corrupts data written to a PCs hard disk about one time in every thousand

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Figure 16.2 Points in the processing cycle where errors can occur
Data
preparation

Transmission

Conversion
Form
completion

On-line
data entry

Keypunching,
Optical scanning,
Other input
Validation

Processing/ file
maintenance

Output

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T83
Figure 16.3 The cost of errors over the system development cycle
Estimate of the relative cost of repairing errors based on consultant reports and the popular trade literature
6
5

Costs

4
3
2
1

Analysis and
design

Programming

Conversion

Postimplementation

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T84
Table 16.3 Effect of weakness in general controls

Weakness

Impact

Implementation controls

New systems or systems that have been modified will have errors or fail to
function as required

Software controls (program

security)

Unauthorized changes can be made in processing. The organization may not

be sure of which programs or systems have been changed

Software controls (system

software)

These controls may not have a direct effect on individual applications. Other
general controls depend heavily on system software, so a weakness in this area
impairs the other general controls

Physical hardware controls

Hardware may have serious malfunctions or may break down altogether,

introducing numerous errors or destroying computerized records

Computer operations control Random errors may occur in a system. (Most processing will be correct,
but occasionally it may not be.)
Data file security controls
Administrative controls

Unauthorized changes can be made in data stored in computer systems or

unauthorized individuals can access sensitive information
All of the other controls may not be properly executed or enforced

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T85
Table 16.4 Important edit techniques

Edit Technique

Description

Example

Reasonableness checks

To be accepted, data must fall within

certain limits set in advance, or they
will be rejected
Characteristics of the contents (letter/
digit), length, and sign of individual
data fields are checked by the system
The computer compares input
reference data to tables or master files
to make sure that valid codes are being
used

If an order transaction is for 20,000 units

and the largest order on record was 50
units, the transaction will be rejected
A nine-position Social Security number
should not contain any alphabetic
characters
An employee can have a Fair Labor
Standards Act code of only 1, 2, 3, 4, or
5. All other values for this field will be
rejected

The computer checks whether a logical

relationship is maintained between data
for the same transaction. When it is not,
the transaction is rejected

A car loan initiation transaction should

show a logical relationship between the
size of the loan, the number of loan
repayments, and the size of each
installment

Format checks

Existence checks

Dependency checks

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T86
Figure 17.1 International information systems infrastructure
Global Environment: Business
Drivers and Challenges

Corporate Global Strategies

Organization Structure

Management and Business

Procedures
Technology Platform

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T87
Table 17.1 The global business drivers

General Cultural Factors

Global communication and transportation technologies
Development of global culture
Emergence of global social norms
Political stability
Global knowledge base
Specific Business Factors
Global markets
Global production and operations
Global coordination
Global workforce
Global economies of scale
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Table 17.2 Challenges and obstacles to global business systems

General
Cultural particularism: regionalism, nationalism
Social expectations: brand-name expectations; work hours
Political lows: transborder data and privacy laws
Specific
Standards: different EDI, e-mail, telecommunications standards
Reliability: phone networks not reliable
Speed: data transfer speeds differ, slower than United States
Personnel: shortages of skilled consultants

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Table 17.3 Global business strategy and stucture

Strategy
Business Function

Domestic Exporter

Multinational

Franchiser

Transnational

Production

Centralized

Dispersed

Coordinated

Coordinated

Finance/Accounting

Centralized

Centralized

Centralized

Coordinated

Sales/Marketing

Mixed

Dispersed

Coordinated

Coordinated

Human Resources

Centralized

Centralized

Coordinated

Coordinated

Strategic Management

Centralized

Centralized

Centralized

Coordinated

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T90
Figure 17.2 Global strategy and system configurations

SYSTEM
CONFIGURATION

STRATEGY
Domestic Exporter

Centralized

Multinational

Networked

Transnational

Duplicated

Decentralized

Franchiser

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T91
Figure 17.3 Agency and other coordination costs increase

Local
Business
Processes

Global
Global
Core
Core
Business
Processes Systems
Regional
Business
Processes

Local
Option
Systems

Regional
Coordinate
d Systems

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T92
Figure 18.1 Traditional view systems

Vendors
Vendors

Inbound
logistics
Business
processes

Inbound
logistics

Manufacturing

Business
processes

Manufacturing

Finance

Business
processes

Finance

Marketing
and sales
Business
processes

Marketing
and sales

Support

Business
processes

Support

Organizational Boundaries

Vendors

Organizational Boundaries

Business Value Chain

Customers
Customers
Customers

Business Systems

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T93
Figure 18.2 Enterprise view of systems

Business Value Chain

Vendors
Vendors
Vendors

Inbound
logistics

Manufacturing

Finance

Marketing
and sales

Customers
Support

Customers
Customers

Business
processes

Business
processes
Business
processes

Inbound
logistics

Business
processes
Business
processes

Manufacturing Finance

Marketing
and sales

Support

Enterprise Business Systems

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T94
Table 18.1 Basic concepts of enterprise computing

Concept

Measure
IT investment portfolio Benchmark competitors
expenditures

Key Questions
Are we spending too much, or too
little on IT? Are we receiving a good
return on investment?

IT infrastructure

Lists of technical
capabilities

Do we have the technical capablity to

achieve our strategic objectives?

Business logic

Descriptions business
model and processes

How do we plan to make money and

what business activities and processes
should we emphasize

IT architecture

Descriptions of systems
that support business
model and processes

Do we have the right systems

environment and applications to
implement the business logic?

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T95
Figure 18.3 Enterprise computing concepts
Business
Unit A
VENDORS

CUSTOMERS

The enterprise
Enterprise-Wide Business Processes

Firm
Information
Archtecture

Enterprise-wide systems and

applications
Business Unit C
Business Unit A
Business Unit B
Business processes
Business processes
Business processes
Systems applications
Systems applications
Systems applications

Firm infrastucture
Hardware Software envirmonment Shared applications Telecommunications
Firm IT
Infrastructure

Public infrastucture

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

Application Superstructure
Customer

rp

ri s
eA
pp

li c
at

io
ns

T96
Figure 18.4 Industrial networks

sen

te

Customer

Tr
an

Customer

Industrial
Networks

Extrnet
ES

ES

ES

Individuals Companies
and Enterprise Systems

ES

Inbound
Logistics

Intranet

Internet

Outbound
Logistics

Customer
Service

Value Chain

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T97
Table 18.2 Business drivers of Enterprisesystems: changing environments

Business Driver

Impact

Market change

Globaliztion and increasing information intesity reduce margins in traditional

industries

Industry change

Mergers, acquisitions, and consolidations in traditional industries increase scale

economies and intensify industry competition

Firm-level change

Business process redesign efforts of the 1990s in traditional industries force

jettsoning legacy systems and highlight the need for enterprise-wide systems to
support the newly defined business processes

Product changes

The growth of information, knowledge, and high-tech-based products shortens

product cycle times; increasing information intensity of traditional products and
services shortens cycle times

Management process
thinking

From discrete business process focus toward a view of the firm as an integrated
set of processes; from neoclassical competition firm- based views of cooperation
and alliance

Management strategy

Growing belief that information architecture investments could lead to unique

knowledge that could not be purchased on input factor markets

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T98
Table 18.3 Technological drivers of enterprise systems and industrial networks

Technology Driver
Nature of change
Relational database technology Relational technology approaches hierarchical database speeds but with greatly
enhanced flexibility
Reductions in storage costs
Storage devices double in capacity every six months
Expanded public network
infrastructure

Open Internet networking technologies cause network costs to plunge; digital

communication costs drop by a factor of 1000X in the 1990s; public switched
network and dedicated Internet trunk lines displace proprietary networks and
make transcompany information transfers commonplace; development of
common protocols-XML, HTTP, TCP/IP

Deployment of client/server

Client/server becomes the dominant mode of computing causing major drops in

information storage, processing, and distribution costs in the 1990s

Evolution of desktop
computing

Desktop computing becomes the dominant mode of information distribution and

60% of the labor force comes on-line at work, gratly increasing the role of
information in the firm
Enterprise software emerges with standardized applications in an integrated
environment that greatly reduces the costs of enterprise systems

Enterprise software
and crossware

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T99
Figure 18.5 An ideal model for planning enterprise systems

Firm strategy and governence

Business model

Business processes

Firm information archtecture

Firm IT infrastructure
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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458

T100
Figure 18.8 The infrastructure governance model
Strategic group
Operational group
Business units/Regions
Legacy infrastructure

TPS

Functional groups/Process owners

Business model

Databases
Telecommunications

New architecture

Enterprise platform
Internet/intranet/extranets

Business processes

Wireless communications

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2000 by Prentice Hall, Inc.

Kenneth C. Laudon, Jane P. Laudon

Upper Saddle River, NJ 07458