Information Systems Final Exam

Physical Access Controls

- BiometricsWith this method employees have to identify themselves with their fingerprints or other body characteristics. - Access-control softwareThis software enables users of a computer to access only the files that are related to their work. - Wireless LAN controlWith this method the WLAN is configured such that only users with authorization have access. - Virtual private networksA virtual private network (VPN) is a network connection that is constructed dynamically within an existing network. Users are connected via this VPN.

Collaboration

- Cloud-based Collaboration tools: Collaboration has improved due to cloud computing. It enables easy access and transfer of files from one person to another. - Content management: This system allows its users to edit, publish, version track and retrieve digital content. - Collective intelligence: This refers to the notion that distributed groups of people with divergent expertise and information can outperform the capabilities of individual experts. The creation of services or goods by self-organizing communities is defined as peer production. - Human based computing: Companies use everyday people as a cheap labor force. This is called crowdsourcing. Companies also integrate external stakeholders into the innovation process. This is called open innovation and can create great benefits.

Careers in IS

- Develop (systems analyst, software developer, systems consultant) - Maintain (IS auditor, database admin, webmaster) - Manage (IS manager, chief information officer) - Academic (professor or analyst) What makes IS personnel so valuable? A blend of technical, business, and system skills

Wiki

- Create, edit, delete - View revision history - Revery changes - Discuss

Systems Development Process

1. Systems planning and selection: the goal of systems planning and selection is simply to identify, plan, and select a development project from all possible projects that could be performed. Organizations differ in how they identify, plan, and select projects. Some organizations have a formal information systems planning process whereby a senior manager, a business group, an IS manager, or a steering committee identifies and assesses all possible systems development projects that the organization could undertake. During project planning, the analyst works with the customers—the potential users of the system and their managers—to collect a broad range of information to gain an understanding of the project size, potential benefits and costs, and other relevant factors. 2. Systems analysis: The second phase of the SDLC is called systems analysis. One purpose of the systems analysis phase is for designers to gain a thorough understanding of an organization's current way of doing things in the area for which the new information system will be constructed. ◦ Collecting Requirements: The old saying "garbage in, garbage out" very much applies to the systems development process. Requirements collection is the process of gathering and organizing information from users, managers, customers, business processes, and documents to understand how a proposed information system should function. ‣ Interviews. Analysts interview people informed about the operation and issues of the cur- rent or proposed system. ‣ Questionnaires. Analysts design and administer surveys to gather opinions from people informed about the operation and issues of the current or proposed system. ‣ Observations. Analysts observe system users at selected times to see how data are handled and what information people need to do their jobs. ‣ Document Analysis. Analysts study business documents to discover issues, policies, and rules as well as concrete examples of the use of data and information in the organization. ‣ Joint Application Design. Joint application design (JAD) is a group meeting-based pro- cess for requirements collection. During this meeting, the users jointly define and agree on system requirements or designs. This process can result in dramatic reductions in the length of time needed to collect requirements or specify designs. ◦ Modeling Data: To construct an information system, systems analysts must understand what data the information system needs in order to accomplish the intended tasks. To do this, they use data modeling tools to collect and describe the data to users to confirm that all needed data are known and presented to users as useful information. Data modeling tools enable the systems analyst to represent data in a form that is easy for users to understand and critique. ◦ Modeling Processes and Logic: The next step in this phase is to model how data are being input, processed, and presented to the users. As the name implies, data flows represent the movement of data through an organization or within an information system. Processing logic represents the way in which data are transformed. Processing logic is often expressed in pseudocode, which is a representation of the program's internal functioning, independent of the actual programming language being used. As there are no standards for pseudocode, the level of detail can vary. After the data, data flow, and processing logic requirements for the proposed system have been identified, analysts develop one or many possible overall approaches—sometimes called designs—for the information system. After a system design approach is selected, details of that particular approach can be defined. 3. Systems design: The third phase of the SDLC is systems design. As its name implies, it is during this phase that the proposed system is designed; that is, the details of the chosen approach are elaborated. As with analysis, many different activities must occur during systems design. The elements that must be designed when building an information system include the following: Processing and logic, Databases and Files, and Human-computer Interface. ◦ Designing Processing and Logic: The processing and logic operations of an information system are the steps and procedures that transform raw data inputs into new or modified information. There are typically different ways to complete each process, with some being more efficient or effective than others. Modeling the processes thus includes specifying not only what is to be done but also the specific algorithms, which outline the steps, or set of rules, to be followed. Regardless of how the logic is represented, the process of converting pseudocode, structure charts, or decision trees into actual program code during system implementation is a relatively straightforward process. ◦ Designing Databases and Files: To design databases and files, a systems analyst must have a thorough understanding of an organization's data and informational needs. The database design is more complete and more detailed than a conceptual data model built during systems analysis. ◦ Designing the Human-Computer Interface: Just as people have different ways of interacting with other people, information systems can have different ways of interacting with people. A human-computer interface (HCI) is the point of contact between a system and users. 4. Systems implementation and operation: One group of activities focuses on transforming the system design into a working information system. These activities include software programming and testing. A second group of activities focuses on preparing the organization for using the new information system. These activities include system conversion, documentation, user training, and support. ◦ Software Programming and Testing: Programming is the process of transforming the system design into a working computer system. During this transformation, both programming and testing should occur in parallel. As you might expect, a broad range of tests is conducted before a system is complete, including developmental testing, alpha testing, and beta testing ◦ System Conversion, Documentation, Training, and Support: System conversion is the process of decommissioning the current way of doing things (automated or manual) and installing the new system in the organization. Effective conversion of a system requires not only that the new software be installed but also that users be effectively trained and supported. Many types of documentation must be produced for an information system. Programmers develop system documentation that details the inner workings of the system to ease future maintenance and to ensure reliability of the system. A second type of documentation is user-related documentation, which is typically written not by programmers or analysts but by users or professional technical writers. The range of documents can include the following: user and reference guides, user training manuals and tutorials, and installation procedures and troubleshooting suggestions. In addition to documentation, users may also need training and ongoing support to use a new system effectively. Besides training, providing ongoing education and problem-solving assistance for users may also be necessary. This is commonly referred to as system support, which is often provided by a special group of people in the organization who make up an information center or help desk.

Process Analysis - BPMN

Why-Why Diagrams

What is E-Commerce

the exchange of services, goods and money supported by communication technologies, especially the Internet. The exchange occurs between firms, between firms and customers and between customers.

What should an organization do when they can't develop an in-house system

1. External Acquisition of a prepackaged system 2. Outsourcing systems development

Business Process Management (BPM)

1. Process modeling 2. Process analysis 3. Process redesign

Process Redesign - BPMN

Activity Elimination: eliminate unnecessary activities.. is X adding value? Activity Composition: combine small activities into composite activities and divide large activities into workable smaller activities Contact Reduction: reduce the number of contacts with customers and third parties Activity Automation Resequencing: move activities to more appropriate places Parallelism: consider whether activities may be executed in parallel Outsourcing: consider outsourcing a business process or part of it Interfacing: consider a standardized interface with customers and partners

The Technology/Strategy Fit

• There are never enough resources to implement every possible IS improvement • Therefore, organizations try to maximize business/IT alignment • This means matching the IT investment to the company's strategy - e.g., don't invest in IS that maximizes product differentiation if your company's strategic focus is on being a low cost leader • Companies that focus on the improvements and business process management that help their value creation strategy the most will see the greatest competitive benefit

Types of Information Systems

• Transaction processing system (TPS) • Management information system (MIS) • Decision support system (DSS) • Intelligent system • Business intelligence system • Office automation system • Collaboration system • Knowledge management system • Social software • Geographic information system (GIS) • Functional area information system • Customer relation management (CRM) system • Enterprise resource planning system (ERP) • Supply chain management system • Electronic commerce system

Securing Payments in the Digital World

› Credit and Debit Cards • Credit cards are a simple mechanism • Consumers have to transfer a lot of personal information to the seller • Risk of identity theft › Managing Risk • Businesses are financially liable for fraudulent transactions • Businesses have to look for fraud indicators and sometimes reject risky transactions › Payment Services • Examples: PayPal, Google Checkout

Trend or Fad

› Fad: • High sales for a short period of time. • Will fade before a new product can be created › Trend: • Enduring • Four questions: 1. Is it compatible with a change in consumer lifestyles? 2. Does the innovation provide benefits? 3. Is the innovation compatible with other changes in the marketplace? 4. Who is adopting the trend?

Cooperation

› Media Sharing: sharing photos and vids • Via Flickr, Instagram, Vimeo, YouTube, SlideShare • Webcasting, podcasting › Tagging • Manually adding metadata (data describing data) to content › Geotagging • Geospatial data added (where the photo was taken) › Social Bookmarking: - Allows users to share internet bookmarks, use a categorization system, and refine data › Social Cataloging - Creation of a categorization system by users. People can organize their topics and use this to structure the large amounts of information they have, making the information better accessible and useful.

E-Banking

› Online Banking and Electronic Bill Services • Convenience • Security concerns • Mobile banking › Online Investing • Increased access to financial information and analytical tools • Online investing • Mobile investing

Determining the Value of Information Systems

- Economic value: This is the value of the investment in terms of improving the infrastructure to increase profitability. - Architectural value: This value measures if the investment can make use of the capabilities of the infrastructure to meet the business needs. - Operational value: This value is derived from determining if the investment improves the business processing requirements. - Regulatory and compliance value: This value is based on whether the investment is able to meet the requirements for security, control and integrity.

Organizational Decision-Making Levels

- Executive/Strategic Level (upper management): decisions include which products to produce and in which countries to operate. The decisions that are made are unstructured. IS are used to obtain summaries of trneds and predictions for the future. - Managerial/ Tactical Level (middle management): they focus on increasing effectiveness by deploying resources to reach firm goals. Decisions are less structured than at the operational level. - Operational Level (operational employees, foremen, supervisors)

Opportunities of Operating in the Digital World

- Falling transportation costs - Falling telecommunication costs - Reaching global markets - Accessing a global labor pool

Challenges of Operating in the Digital World

- Government (political instability and regulations) - Geo-Economic (time zones, infrastructure, welfare, demographics) - Cultural (language, beliefs, attitudes, religion, life focus)

Safety Considerations of Information Systems

- Integrity - Availability for users - Accountability - Confidentially 1st Step: organizations perform information system risk assessment. They do this to understand the risks associated to availability, confidentially and integrity of data systems. We define threats as undesirable events that will cause harm. Vulnerabilities are the weaknesses of the information system security of an organization. To implement effective information systems controls, an organization needs to understand the interaction between threats, impacts and vulnerabilities. An organization rates the risks and then determines what steps to undertake to secure the system. Several approaches can be used, like risk reduction, risk acceptance, risk transference or risk avoidance. 2nd Step: In the second step is determined which information systems controls need to be implemented. For an information systems security strategy to be effective it must focus on the following controls: - Preventive controls - Detective controls - Corrective controls The third step is implementing controls and training. To safeguard information systems, the following controls are often used: - Firewalls - Systems development controls - Secure data centers - Human controls - Physical access restrictions - Encryption - Virus monitoring and prevention

5 Different Functional Areas of an Organization

- Marketing - Manufacturing and operations - Accounting and finance - Supply chain management - Human resources

Core Activities of an Organization

- Marketing and sales activities - Manufacturing and operations activities - Customer service activities - Inbound logistics activities: consists of the activities associated with receiving and stocking raw materials, products and parts. - Outbound logistics activities: consists of distributing the end products.

5 IT Megatrends in the Information Age

- Mobile - Social Media - Internet of Things - Cloud Computing - Big Data

Factors to Consider with Social media (Enterprise 2.0 Strategy)

- Not all Web-based technologies are a success in the corporate environment. - Culture is also a critical success factor for implementing social media applications in organizations and can cause resistance. - Organizational context: The chosen tool must fit the objectives of the firm. - Organizational hierarchies: implementation of Enterprise 2.0 tools often need organizational changes and to achieve this the senior management must be involved. - The dependence on the network effect and the long tail and the time an implications needs to achieve a critical mass - Generation gap: if a workforce consists of millennials then Enterprise 2.0 tools are more likely to be successful. - Technological inertia: people are not willing to change to another technology - Technological integration: the applications must be well integrated with the existing information system - Security and intellectual property issues

Business Privacy Policies

- Notice/awareness: tell what data is gathered - Choice/consent: give options about what will be done with the data - Access/participation: give customers access to the data - Integrity/security: ensuring integrity - Enforcement/redress: provide means to enforce the practices

IS Infrastructure Components: Storage

- Operational Storage: for processing transactions or for data analysis - Backup: short-term copies of organizational data, used to recover from system-related disaster. Backup data are frequently overwritten with newer backups - Archival: long-term copies of organizational data, often used for compliance and reporting purposes.

Sources of Competitive Advantage

- Quality - Service - Use base - Proprietary - Innovation - Brand - Value - Data Another list from the book: - Superior customer service - Best made product of the market - Lower costs than rivals - Brand name and reputation - First entrant of the market (first-mover advantage) - Technology benefits - Shorter developing time

Assessing IS Risk

- Risk Reduction: Actively installing countermeasures - Risk Acceptance: Accepting any losses that occur - Risk Transference: Have someone else absorb the risk (insurance, outsourcing) - Risk Avoidance: Using alternative means, avoiding risky tasks

Common Forms of Information Represented as a Report or a Query

- Scheduled Reports - Drill-Down Reports (reports w heavy detail) - Key-Indicator Reports - Ad Hoc Queries (created because there are information needs which are unplanned, and these are generally not saved for later use). - Exception Reports

Computer Criminals

1. Current or former employees; most organizations report insider abuses as their most common crime 2. People with technical knowledge who commit business or information sabotage for personal gain 3. Career criminals who use computers to assist in crimes 4. Outside crackers—commit millions of intrusions per year Vulnerability scanners can automatically test a targeted system for weaknesses. Packet sniffers can be used to analyze the network traffic and identify unencrypted passwords. These two are sophisticated software tools that criminals use to gain access to a computer system. When someone breaks into a system and then changes the electronic information then we speak of information modification.

How to Achieve Enterprise System Success

- Secure executive sponsorship: Most enterprise systems fail because there is no support from top level management. - Hire experts: ERP systems are complex so it is wisely to hire experts - Train the users: It is hard to learn how to use an enterprise system and therefore you should train the users of the system. This is often underestimated by companies. - Evolve the implementation: Once an ERP system is implemented, organizations must be able to adapt when the business requirements change. - Use a multidisciplinary approach for implementation: The implementation of an enterprise system has an effect on the entire organization. Therefore, personnel from different levels must be included in the implementation project. - Evolve the implementation: Some organizations fear the ability to quickly respond to changing business requirements, particularly because large ERP systems are difficult to install, maintain and upgrade, while this can have huge payoffs.

Three Traditional Threats to Information Systems

- Spyware: This is any software that gathers information about users via an Internet connection. The user does not know that his activities are being monitored. Keyloggers are able to find information like e-mail addresses, passwords and credit card numbers. - Spam: This is electronic junk mail that usually has the goal of advertising. The worst form of spam is phising. Criminals exploit human weaknesses by using phishing attacks, shoulder surfing, social engineering and dumpster diving. Spear phising targets a specific person. Completely Automated Public Turing Test to Tell Computers and Humans Apart (CAPTCHA) consists of a distorted image with letters and numbers the user has to fill out in order to submit something. - Cookies: A cookie is a small text file that is passed from the server to the Web browser on the computer of the user. The browser stores the text file message and then the message is send back to the server each time the browser requests a page from the server.

Required IS Skills

- Technical Competency: This includes skills and knowledge about networking, hardware and software. The person must know how these three work and what an organization can do with them. Since technology is something that develops very fast it is hard to keep your technology knowledge updated. - Business Competency: Besides knowledge about the technologies it is also very important to have knowledge about business aspects, like business integration and communication. If a worker has these business skills he has the opportunity to get management positions. - Systems Competency: These skills include the integration of systems, the design and development of systems, critical thinking and problem solving. Good IS employees must also have social skills that enable them to work well with others.

How do Companies Analyze Unstructured Data

- Text mining: analytical techniques are used to extract info from textual documents - Web content mining: extracting textual info from web documents - Web usage mining: Used to determine patterns in the usage data of consumers. With clickstream data companies can analyze how customers navigate through a Web page. Clickstream is a recording of a user's path through a website. This helps assess the sites stickiness, or the ability to attract and keep visitors attention.

Zara Activity System

- Word of mouth marketing - Cutting-edge fashion at moderate price and quality - Very frequent product changes - Prime store locations in high traffic areas - Very flexible production system

Innovation Process

1. Organizing to make innovation choices: Making smart innovative choices is done best when starting early when identifying investors, displaying executive leadership, building a team of expert innovators and educating the organization. 2. Implementing the innovation process: The disruptive innovation cycle consists of choosing enabling/emerging technologies, matching technologies to (economic) opportunities, executing business innovation for growth and assessing value of the technology. Growth will be most successful when selecting technologies that have the biggest potential. 3. Thinking about investments in radical innovations: this consist of putting technology ahead of strategy and ahead of marketing, while taking into consideration that innovation is continuous. If an organization wants to deploy a new information system then the processes, resources etc of the firm need to be ready to adapt to the new system. The organization needs the following: - Process requirements: the people in the organization must be willing to change - Resource requirements: to make a change one must have the necessary human resources available - Risk tolerance requirements: the people of the organization must have tolerance for risk and uncertainty

Three Ways in which Infrastructures can have a profound influence on businesses, individuals, and society

1. Over time, new systems and capabilities are built on top of prior systems, acting to refine and extend the capabilities of prior generations of systems in ways much easier than physical infrastructure. 2. In contrast to other types of infrastructure, digital ones are typically not controlled by a single business or government actor, but are provided by huge companies. 3. Digital infrastructures allow for platform-based business models that permeate almost every aspect of our daily lives

Roles of a Computer Network

1. Server: a computer makes it possible for the users of the network to access files, communications, printing, and other services 2. Client: a computer that uses the services that are provided by the server. Clients usually have one user and only request services. 3. Peer: a computer that can both provide and request a service

Key Recommendations in Attracting/Retaining Online Customers

1. The website should offer something unique 2. The website must motivate people to visit, to stay, and to return 3. You must advertise your presence on the web 4. You should learn from your website

Strategic Competition

1. Unique value proposition 2. Tailored activities 3. Clear tradeoffs 4. Activities fit together in an integrated system 5. Continuity of position but consistent improvement

Architecture of a CRM System

A comprehensive CRM system comprises three primary components: 1. Operational CRM. Systems for automating the fundamental business processes— marketing, sales, and support—for interacting with the customer 2. Analytical CRM. Systems for analyzing customer behavior and perceptions (e.g., quality, price, and overall satisfaction) in order to provide business intelligence 3. Collaborative CRM. Systems for providing e ective and e cient communication with the customer from the entire organization

The Sarbanes-Oxley (S-OX) Act

The Sarbanes-Oxley (S-OX) Act addresses financial controls - Companies must demonstrate that controls are in place - Companies must preserve evidence documenting compliance - Information systems typically used to meet compliance requirements - Growing need for IS auditors

Developing a Security Strategy

After assessing risk, a strategy is developed detailing the information security controls. Types of controls: - Preventive - Detective - Corrective Use the principles of least permissions and least privileges... Policies and procedures include: - Information policy - Security policy - Use policy - Backup policy - Account management policy - Incident handling procedures - Disaster recovery plan Disaster Planning: • Business continuity plan—how a business continues operating after a disaster • Disaster recovery plan—detailed procedures for recovering from systems-related disasters Backups are important!! Backup media include CD, external hard drives, and tapes • Cold backup site—an empty warehouse with all necessary connections for power and communication but nothing else • Hot backup site—fully equipped backup facility, all needed equipment and one-to-one replication of current data • Recovery time objectives: Specify the maximum time allowed to recover from a catastrophic event • Recovery point objectives: Specify how current the backup data should be - Mission-critical transaction data need to be very current - Hot backup involves mirrored data

Benefits vs. Costs of Enterprise Systems

An enterprise system has benefits but the acquisition of one also has some costs. Some benefits of enterprise systems are improved information availability, reduced IS costs, reduced operating expenses and improving customer interaction. Some costs include project governance costs, training and travel costs for the personnel, business process studies and continuously customization and integration costs.

Enterprise Systems

An enterprise-wide information system (or enterprise system) is an integrated suite of business applications for virtually every business process, allowing companies to integrate data across functional areas on a company-wide basis. Rather than storing data in separate places through- out the organization, enterprise systems use an integrated database to provide a central repository common to all users. The main objective of enterprise systems is to help achieve competitive advantage by streamlining business activities within and outside a company. However, many implementations turn out to be costlier and more time-consuming than originally envisioned. Given these numbers, should businesses even attempt to tackle large IS projects? The answer is, in most cases, yes. Typically, organizations do not (or should not) start such projects for the sake of starting the projects; rather, organizations are trying to fix certain problems, such as inefficient or ineffective distribution, pricing, or logistics, or lack of compliance with government regulations. Stand Alone Systems: when organizations first started using IS, they typically implemented proprietary systems rom multiple vendors on a department-by-department or process-by-process bassis. This resulted in multiple information systems optimizing the practices of each department or process independent of the rest of the organization, with a marked lack of data flow between business departments or processes. This lack of continuous data flow created large inefficiencies. These older standalone systems are now typically referred to as legacy systems, reflecting their advancing age and lack of upgradability. Integrated Systems: they perform all the functions of legacy systems, but with the added benefit of being integrated across the value chain with a consolidated database. This ensures that all departments and processes have access to both their internal information and the information of upstream and downstream processes and functions. This integrated approach streamlines operations across the entire value chain, eliminating road blocks and enhancing efficiency.

Intranets and employee portals

An intranet is a private network of an organization and the members of the organization can access the intranet with their Web browser. The member of the organization can communicate with each other via the intranet network. Intranets are not only used for communication and collaboration but also to provide employee portals that enable employee self-service for applications that are based on human resources, like managing retirement plans or administering benefits. › Real-Time Access to Information • Updated information instantly available throughout the organization › Enterprise Search • Company focused, including corporate databases › Collaboration • Document sharing and coediting › Employee Portals • Employee benefits selfservice

Open Source Software

As the programs' source code is freely available for use and/or modification, this software is referred to as open source software. Open source software owes its success to the inputs from a large user base, helping to fix problems or improve the software. Open source projects have also become indispensable for Big Data initiatives ranging from storing and managing vast amounts of unstructured data to analyzing these data. Not only do open source applications provide the tools to deal with Big Data, the openness of the source code also helps instill confidence as to where the results come from. Typically, contributors suggest modifications for changes; for example, they contribute to program code or provide new designs for the system's user interface; a small group of carefully selected "committers" can then test and implement these modifications into the official releases of the software so as to ensure the quality and stability of the software.

Computer Networking

Three things we need: 1. A sender and receiver 2. A transmission medium: transmission media is defined as the physical pathway used to carry network information. 3. Rules or protocols about the communication between senders and receivers: protocols are the procedures tht computers perform when they transmit and receive data.

Business Intelligence Tools - How can Data be Analyzed?

BI tools are used to help organizations make sense of the massive amounts of data they collect. Data organization is key to being able to quickly retrieve needed data to help make critical business decisions. - Information Visualization (digital dashboards): Digital dashboards are used to visually present key performance indicators used by management that are necessary to understand how the company is operating. Data is usually highly aggregated. They use a variety of design elements to present data in a user friendly way. - Decision Support Systems: used to support decision making at all levels in the organization. The basic DSS model is composed of input, process, and output. It uses models to manipulate data. These models can involve simulations, forecasting, optimization, or other techniques. One common approach is a what if analysis, which allows you to make hypothetical changes to the data associated with a problem and observe how this influences results. - Online Analytical Processing (OLAP): complex, multi-dimensional analysis of data stored, optimized for retrieval usually using graphical software tools. An OLAP cube is a multidimensional database structured to support slicing, dicing, and drill-down. Drill down is where managers look at specific subsets of data as part of the process of understanding how the business is currently performing. Different subsets can be narrowed on dimensions and the processes of narrowing down is data is slicing and dicing. - Advanced analytics: data mining, text mining. Advanced analytics are designed to help users gain a deeper understanding of why things happen and then build predictive models to support decision making. Data science describes the advanced analytics field of study and practice. Advanced analytics are often used by business analysts to take decisions out of their hands, thus freeing up valuable resources.

How Can Companies Use Big Data?

Big data is data which has high volume, velocity and variety. The trends in social and mobile field have led to an enormous amount of potential data. The large volume of data enables companies to make decisions that are based on more factors. However, managing and storing such large amount is a challenge for companies. Companies obtain data at a very high rate. Useful data can have several forms: - Structured data: like transaction data, which can be fitted in a spreadsheet or database - Semi-structured data: sensor data and like clickstreams - Unstructured data: like video and audio data

How to Use Social media

Blogs: Blogging is defined as creating an online text diary, consisting of chronological entries that include everything from the daily life of a person. Bloggers write stories about their lives and often do this to improve their writing skills. Blogging is often referred to as the amateurization of journalism. Blogging is valuable because it can bring breaking news very fast to the public. Microblogging tools: Microblogging tools enable people to let other people know their thoughts. These tools are sometimes also referred to as social presence tools. The text updates of microblogging are relatively short compared to the text of blogs. Anyone can follow the microblog of another person. An example of a microblog is Twitter. There are many organizations that have a Twitter account which they use to post news about the company. When posting a twee people can use hashtags. If a topic is tagged relatively much than it is said to be trending. Instant messaging: Instant messaging, also called online chat, enables people to have real-time written conversations. With instant messaging you can get immediate feedback from the partners you are having a conversation with. Snapchat is a new form of instant messaging which allow users to set a time limit on how long others can see the message. Virtual worlds: In virtual words there is real-time communication and people can use avatars for this communication. In the beginning virtual worlds were very popular but the popularity for business use has faded.

Types of Electronic Commerce

Business-to-consumer (B2C)= transactions between businesses and their customers Business-to-business (B2B)= transactions among businesses Consumer-to-business (C2B)= transactions between customers and businesses... it is a new phenomenon. Used for small pieces of work like photos or services. - the web has allowed consumers to sell goods to businesses, reversing the usual B2C model Consumer-to-consumer (C2C)= transaction between people not necessarily working together... eliminates middleman, can buy and sell in broader markets, but there is no quality control and a higher risk of fraud. - E-Auctions - Online Classified site like craigslist - Platform based C2C models

The Order Management Process Shapes (Process Modeling)

Circle=event Rectangle=task Arrow=flow Diamond=gateway - Exclusive Decision/Merge: indicates locations within a business process where the sequence flow can take two or more alternative paths. Only one of the paths can be taken. Depicted by a diamond shape that may or may not contain a marker X in the middle. - Parallel Fork/Join: provide a mechanism to synchronize parallel flow and to create parallel flow. It is depicted as a diamond shape that must contain a marker plus sign

Measures of Internet Marketing Performance

Click through rate: reflects the number of surfers who click on an ad divided by the number of times it was displayed. Conversion rate: percentage of visitors who perform the desired action.

What is Cloud Computing?

Cloud Computing is a way to allocate resources much like a utility sells power... In the cloud data is processed, stored, and transmitted. A utility computing model is used by the cloud that enable companies to pay for computing resources only when they need them. The cloud computing model has several characteristics: • On demand self-service • Rapid elasticity • Broad network access • Resource pooling • Measured service The cloud provides different services. There are several different cloud computing service models that you can use: • Infrastructure as a service model (IaaS): this model only provides the basis capabilities of storage, processing, and networking • Platform as a service model (PaaS): this model enables you to run your own applications and you have control over your applications. However, as a user you have limited control over the underlying infrastructure. • Software as a service model (SaaS): a user of this model you can only use applications that are provided by the cloud infrastructure. Example are Gmail and Google Docs A public cloud is generally used for applications that need rapid scalability and is for instance used by amazon. A private cloud is internal to an organization and enables the organization to abalone demand and supply of the computing resources.... When evaluating different public cloud services the management must consider the following strategic issues: ◦ Availability/reliability of the service ◦ Scalability ◦ Viability ◦ Security, privacy and compliance ◦ Diversity of offerings ◦ Openness ◦ Costs

Systems Integration

Combining Custom, Open Source, and Off-the-Shelf Systems: The process of linking together different computing systems and software applications physically or functionally to act as a coordinated whole is referred to as systems integration. Organizations can perform this integration them- selves or hire experts who are well versed in weaving together various technologies into an integrated solution. Systems integration is an important skill because it allows an organization to bring together cheaper, preconfigured components and off-the-shelf software to meet business needs rather than having to pursue the more expensive approach of building a customized system from scratch.

Implementing Controls and Training

Commonly used controls: - Physical access restrictions - Firewalls - Encryption - Virus monitoring and prevention - Secure data centers - Systems development controls - Human controls Physical Access Restraints: Physical access controls typically focus on authentication - Something you have: Keys, Smart cards - Something you know: Password, PIN code - Something you are: Biometrics Virus Monitoring and Prevention: Standard precautions - Purchase, install, and maintain antivirus software - Do not use flash drives or shareware from unknown or suspect sources - Use reputable sources when downloading material from the Internet - Delete without opening any e-mail message received from an unknown source - Do not blindly open e-mail attachments, even if they come from a known source - If your computer system contracts a virus, report it Secure Data Centers:Securing the facility's infrastructure - Site selection - Physical access restrictions - Intrusion detection - Uninterruptible power supply - Protection from environmental threats Other Controls: • System development controls • Human controls • Deployment and training

Support Activities of an Organization

Core activities can take place because of support activities: - Administrative activities - Infrastructure activities - Human resource activities - Technology development activities - Procurement activities

Components and E-Business Revenue of a Business Model

Components - Customer segments - Value proposition - Channels - Customer relationships - Revenue streams - Key resources - Key activities - Key partners - Cost structure Revenue Model - Affiliate marketing - Subscription - Licensing - Transaction fees and Brokerage - Traditional sales - Web advertising

Systems Maintenance

Corrective maintenance is most likely to occur after initial system installation as well as over the life of a system after major system changes. This means that adaptive, perfective, and preventive maintenance activities can lead to corrective maintenance activities if they are not carefully designed and implemented. • Corrective Maintenance: Making changes to an information system to repair flaws in the design, coding, or implementation • Adaptive Maintenance: Making changes to an information system to evolve its functionality, to accommodate changing business needs, or to migrate it to a different operating environment • Preventative Maintenance: Making changes to a system to reduce the chance of future system failure • Perfective Maintenance: Making enhancements to improve processing performance or interface usability or adding desired but not necessarily required system features Other methods include Prototyping (trial and error) and agile methodology (An agile methodology utilizes an evolutionary systems development approach that focuses on creating small, client-approved parts of the system as the project progresses rather than delivering one large application at the end of the project.)

Custom vs. Off-the-Shelf Software

Custom Software: Today, building a complete system from scratch is quite rare; most information systems that are developed within an organization for its internal use typically include a large number of preprogrammed, reusable modules that are purchased from development organizations or consultants. Custom software has two primary advantages over general purpose commercial technologies: ◦ Customizability. The software can be tailored to meet unique organizational requirements. Such requirements, for example, can re ect a desire to achieve a competitive advantage through a speci c type of system (e.g., Amazon.com's one-click ordering); to better t business operations, characteristics of the organizational culture, or proprietary security requirements; or to better interface with existing systems. Further, company- or industry- speci c terms or acronyms can be included in a new software application, as can unique types of required reports. Such specificity is not typically possible in o -the-shelf systems that are targeted at a more general audience. ◦ Problem Specificity. The company pays only for the features specifically required for its users. In contrast to software packages such as Microsoft Office, which include a wide range of individual programs (some of which may never be used), only those components that are really needed can be implemented. Off-the-Shelf Software: Although custom software has advantages, it is not automatically the best choice for an organization. Off-the-shelf software (or packaged software) is typically used to support common business processes that do not require any specific tailoring. In general, off-the-shelf systems, whether hardware or software, are less costly, faster to procure, of higher quality, and less risky than custom systems.

Destructive vs. Strategic Competition

Destructive Competition: - companies pursue a single, best way to compete - companies imitate each other - product and service offerings homogenize - prices fall - poor performance leads to write-offs and trestucturings - one company's gain comes at expense of others - competition is zero sum Strategic Competition: - companies pursue distinctive ways of competing - customer choice expands - innovation flourishes - number of companies can be successful - strategic competition expands the market while increasing overall customer satisfaction - competition is positive sum

Data vs. Information

Data are just symbols, like words or numbers, without meaning. If this data is transformed, organized, formatted or processed such that it is useful then we speak of information. Information is a representation of reality and can therefore be used solve problems. Knowledge is defined as the ability to understand information. Without knowledge, information is useless. Computer hardware is able to transform data into useful information and then software is used to tell the computer which tasks and processes it must perform. Finally, information can be shared and global communication is possible because of the telecommunications networks.

Data Mining

Data mining enables us to find hidden predictive relationships in the data. Often data mining algorithms are used to find patterns and trends to develop prediction models. - Discovering hidden patterns and predictive relationships in large data sets. - Computer algorithms running on large data warehouses - Types of data mining algorithms: association discovery, clustering, classification, text and web content mining. One application of association discovery is called market basket analysis which involves predicting which types of products will be likely to be bought by someone who purchased another product. Clustering involves finding natural groupings of data points based on similarity metrics. Classification involves trying to assign data into predefined categories. One application is determining high-risk versus low-risk loan applicants based on previous experiences. Web content mining uses clickstream data and web crawlers

Moore's Law

Dr. Gordon Moore - Co-founder of Intel - Hypothesized that the number of transistors on a chip would double every two years - Transistors predicted computing power • Computing power would double every two years • Has been relatively accurate to this date • First CPU had 2200 transistors • Current CPUs have over 5 billion

Benefits of E-Tailing

E-tailing is able to offer a virtually unlimited amount of different products because it is not restricted by the space of physical locations. Furthermore, as the Web can be reached from computers at any location, e-tailers can compete more effectively. E-tailers are also able to compete more efficiently in prices. This is because they are able to turn over their inventory more often than companies using the traditional model. The Long Tail business model is centered around these three benefits in terms of product, place and price. This business model refers to catering to niche markets while also purely selling mainstream products. Benefits include: - Mass customization: firms can tailor their products and services to meet a customer's particular needs - Disintermediation: cutting out the middlemen and reaching customers more directly and efficiently - Group buying: if many people agree to purchase the product or service, they get significant discounts. - New revenue and pricing models: companies can earn revenues not only through traditional sales, but also through subscription, licensing, or transaction fees. Companies and individuals can earn money through web ads or affiliate marketing. - Social commerce: utilizing social networks to build lasting relationships and advertise products Product Benefits: with no store size and shelf space restrictions, companies can sell a far wider variety of goods Place Benefits: internet storefronts are available on almost every computer connected to the internet. Price Benefits: online retailers are efficient, with high volumes and low overhead allow for very competitive pricing

E-Commerce Business Strategies

E-tailing is defined as the online sales of goods and services. There are several different strategies a company can use: Brick and Mortar: The company decides to operate solely in the physical market. The business activities are approached in a traditional way by using physical locations like retail stores. Companies using this strategy do not sell their products or services online. Click and Mortar: Companies using this strategy choose to extend their traditional offline retail channels by using the Internet. So they use both EC and physical locations. The EC revolution has affected companies using the click-and-mortar business strategy the most. These companies need to maximize commercial opportunities in both the physical and virtual world. This creates challenges for the company. Click Only: These companies conduct business electronically in the cyberspace. They focus completely on EC and do not have physical locations. The companies that use the click-only strategy can generally compete more effectively in price.

Corporate Social Responsibility

Effectively managing the supply chain has also become tremendously important for aspects related to corporate social responsibility. Specifically, transparency and accountability within the supply chain can help organizations save costs and/ or create a good image. Two related issues are product recalls and sustainable business practices; both are discussed next. ◦ Product Recalls: It is extremely important to have the necessary information to trace back the move- ment of products through the supply chain so as to be able to quickly identify the problematic link. Being able to single out the source of a problem can help a company to perform an appro- priate response, helping to save goodwill and limiting the costs of a recall. Hence, companies need to have a clear picture of their supply chain and also need to store these data in case of problems at a later point in time. ◦ Sustainable Business Practices: Another aspect related to corporate social responsibility is a growing emphasis on sustainable business practices. Particularly, organizations have come under increasing scrutiny for issues such as ethical treatment of workers (especially overseas) or environmental practices.

B2B Marketplaces

For small to medium sized companies, it is not possible to set up customer and supplier portals, so they have B2B marketplaces instead...These marketplaces are maintained by a separate vendor/entity and is not associated with a specific supplier or buyers. They bring many sellers and buyers together and therefore create greater efficiencies for companies. Often the marketplaces allow firms to trade with companies in their vertical market. A vertical market is a market that consists of companies that operate within a certain industry. There are also marketplaces that are not focused on a particular industry.

Devil's Quadrangle

Ideally the result of a process redesign is that costs decrease, quality increases, time decreases, and flexibility increases

Supply Chain Management

If companies develop strong and integrated relationships with suppliers, then they can compete more effectively. This is possible because the integrated relationships will enable them to reduce costs and to respond to market demands. The supply chain is defined as a collection of processes and companies, which are involved in the process from the raw materials' suppliers, to the suppliers of intermediate components, to the final product and then to the consumer. There are several parties between the suppliers and the customers. The flow of materials from suppliers to customers is called the supply network.

Lanes and Pools BPMN (Process Modeling)

In BPMN, resource classes are captured using: Pools - independent organizational entities (like customers, suppliers, hospitals) Lanes - resource classes in the same organizational space and sharing common systems (sales department, marketing department, clerk, manager) Messages flows - (dotted arrows) are represented as exchanges between different pools.

Cold vs. Hot Backup Site

In an event of a disaster, backup sites are crucial for the continuity of the business. A cold backup site is an empty warehouse that contains all necessary connections for power and communication. A hot backup contains much more information. It is a fully equipped facility that has a backup of every data. In a disaster recovery plan is the maximum time allowed to recover determined.

The Productivity Paradox

Information systems may have increased productivity, but other forces may have simultaneously worked to reduce it, the end results being difficult to identify. Factors such as govern- ment regulations, more complex tax codes, stricter financial reporting requirements, and more complex products can all have major impacts on a firm's productivity. number of reasons have been given for the apparent productivity paradox of technology investments. The four most prominent factors are examined next. 1. Measurement Problems: In many cases, the benefits of information systems are difficult to pinpoint because firms may be measuring the wrong things. Often, the biggest increases in productivity result from increased effectiveness. Unfortunately, many business metrics focus on efficiency 2. Time Lags: A second explanation for why productivity is sometimes difficult to demonstrate for some technology investments is that there may be significant time lags between a company making an investment and observable impacts on the bottom line. 3. Redistribution: A third possible explanation for why IS productivity figures are not always easy to define is that a new type of system may be beneficial for individual firms but not for a particular industry or the economy as a whole. Particularly in competitive situations, new innovations may be used to redistribute the pieces of the pie rather than making the whole pie bigger. 4. Mismanagement: the new system has not been implemented and managed well. Some believe that people often simply build bad systems, implement them poorly, and rely on technology fixes when the organization has problems that require a joint technology/ process solution. Rather than increasing outputs or profits, IS investments might merely be a temporary bandage and may serve to mask or even increase organizational inefficiency.

Generic Cost/Quality Strategies

Low-cost Leadership StrategyL offers best prices Differentiation Strategy: firm will provide better products or services than rivals. It can be focused on a particular customer segment. Best-Cost Provider Strategy: provide products with reasonable quality at competitive prices.

How to Manage Supply Chain Networks

Just-in-time (JIT) strateg: a company tries to optimize its ordering quantities such that the raw materials or components just arrive when they are needed for production. The order quantities are smaller and therefore the costs associated with storage and inventory are minimized. For this strategy, tight cooperation between the partners of the network is needed. Vendor-managed inventory (VMI): the suppliers to a manufacturer manage the inventory of the manufacturer based on service levels that are negotiated. So, the manufacturer or retailer does not manage its own inventories. The supplier monitors the stock levels and the sales of the manufacturer. When effectively managing supply chains, the bullwhip effect is reduced. this entails forecast errors and safety stocks multiplying, when moving up the chain. Thus a small fluctuation ripples ito a large one the further down the chain it gets.

Knime

KNIME analytics platform is: - Open solution for data-driven innovation - Used to discover potential hidden in data, mine for fresh insights, or predict new features.

Knowledge Management

Knowledge management is defined as the process to obtain the greatest value from the knowledge assets of the organization. The knowledge assets are routines, principles, formulas, methods, underlying skills etc. They can be explicit or tacit. Explicit knowledge can be documented while tacit knowledge refers to the processes in the mind. A knowledge management system contains a set of technology-based tools such as communication technologies and retrieval systems. The benefits of these systems are enhanced innovation, improved customer service, enhanced employee retention and improved performance of the organization. However, there are also challenges to knowledge management. These include focusing too much on technology, forgetting the main goal, dealing with too much knowledge and getting employee buy-in.

Malware

Malicious software, also called malware, can be a virus or worm that is affecting the computer system. Other malicious software are worms and trojan horses. Worms are defined as a sort of virus that targets networks. The virus can spread by itself, without the sharing of infected files. A trojan horse is defined as something that appears to legitimate but contains a destructive virus. There are also variations on trojans horses, which are called logic bombs or time bombs. These operate without disrupting the normal functioning of a computer and are not able to reproduce themselves.

Main Business and Revenue Models that Rely on the Internet

Mass customization: This enables firms to adapt their products and services the meet the particular needs of each of its customers on a large scale. With this model online product configuration systems are linked with just-in-time production. Therefore, companies are able to assemble each product on the preferences of the customer. Disintermediation: The Web makes it possible to sell products directly to the customers without intermediary retailers or distributors. Such a process where the intermediary is cut out is known as disintermediation. This method enables companies to offer their products and services at a lower price. Group buying: Some companies offer large scale discounts. If many people agree to buy the product or service then the customers get significant discounts. New revenue and pricing models: Because of the Internet, companies can generate revenue by advertising on the Web. A new pricing model that developed is menu-driven pricing. With this model companies set the prices that the customers pay for the products. In a reverse pricing model, customers specify which product they want and how much they want to pay for it and then the bids from the customers are matched with the offers from companies Social commerce: When companies try to influence the social networks of their visitors in order to build lasting relationships, create value or advertise then we speak of social commerce.

Productivity Frontier

Nonprice Buyer Value Delivered (low to high) vs. Relative Cost Position (high to low) If the company goes up on the frontier they are improving the quality, if they go right they are innovating or reducing costs, and if they go down they are lowering price segments. Technological innovation shifts the whole curve to the right... most innovation will be based on tech innovation.

Geographical Information Systems

Often geographic information systems are incorporated into digital dashboards. A geographic information system (GIS) is defined as a system designed to create, store, manage and analyze geographical information. These systems are used in many different industries like banking, media, agriculture, retail and insurance. GISs enable organizations to combine demographic, geographic and other data.

Supplier and Customer Portals

Often portals are used to interact with business partners. Portals are access points which enable business partners to access secured, proprietary information. This information can be distributed through an organization using an extranet. There are supplier portals and customer portals. A supplier portal is a subset of an extranet of an organization which is created to automate business processes that happen before, during and after the transaction of sales. The transaction occurs between an organization and its suppliers. Supplier portals are used by companies that have many suppliers. Customer portals automate the business processes that happen before, during and after the transaction of sales between a supplier and its customers.

Drawbacks of E-Tailing

One of the main drawbacks of e-tailing is trust. Customers hesitate to purchase products online from companies they never heard off. This is especially a challenge for companies that are new. The trust issues arise because customers do not have direct product experience and they are questioning product delivery and returns. The customers can only see the product online and read additional information but they do not know how the product feels or tastes. Drawbacks include: - Trust: this is especially a concern for new online businesses without a proven track record - Direct Product Experience: e-tailing doesn't provide sensory information - Product Delivery and Returns: except for direct downloads, e-tailing requires additional delivery time... returns may also be a hassle

Operational Systems and Business Intelligence

Online Transaction Processing (OLTP): systems that interact with customers and run a business in real time. They make the organization run and include applications for order processing and sales, production, human resource operations, and supply chain operations like purchasing from vendors. Data Warehouses: integrate data from multiple databases and other data sources. They contain historic as well as current data Data Marts: subset of a data warehouse, limited in scope to organizational unit.

Possible Issues of Social Media

Online product reviews: Many consumers first read online reviews but these reviews are not always unbiased. Companies can hire people to place positive reactions on their site, which is unethical. Microblogging: This can be valuable but posting a wrong tweet can have severe consequences. Social networks: For organizations it is important to monitor their social network and take appropriate action when needed. Again, the wrong content on the social network of the company can have severe consequences. Bad vibes going viral: Everyone can see your content and reaction and these can go viral very fast.

Online Transaction Processing System (OLTP)

Operational systems are used to run a business in real time and interact with customers. For a company's internet success, it is crucial to respond quickly to consumers. Therefore, it is necessary to have immediate automated responses when users make requests. This can be done using an online transaction processing (OLTP) system. These systems are designed to deal with multiple concurrent transactions from customers. The OLTP system gathers, transforms and updates data in the system. It is important that the speed of DMBS for processing transactions is high. Another factor that is important is the choice of which technology is used to process the transactions.

Outsourcing Systems Development

Outsourcing systems development is a way to acquire new systems that closely resembles the process of in-house development. - Cost and quality concerns (outsourcing achieves higher quality and a lower price) - IS performance problems - Supplier pressures - Simplifying, downsizing and re-engeneering - Financial factors - Organizational culture - Internal tensions

Business Project Management

Optimizing business processes is key for organizational efficiency, effectiveness, and agility, and over the years, various approaches for improving business processes have been developed. Given the magnitude of change that an enterprise system can impose on an organization's business processes, understanding the role of business process management in the implementation of an enterprise system is necessary. Business process management (BPM) is a systematic, structured improvement approach by all or part of an organization whereby people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures, such as quality, cycle time, or cost. At the heart of BPM initiatives are information systems that enable the streamlining of business processes. The basic steps in BPM can be summarized as follows: 1. Develop a vision 2. Identify key processes 3. Understand and measure existing processes 4. Identify how the processes can be improved 5. Design and implement the new processes

Core Business Processes

Order-to-cash: the process of selling goods or services and collecting revenue for them Procure-to-pay: the process of ordering goods or services and paying for them Make-to-Stock/Make-to-Order: the process fo manufacturing goods, either based on forecasts or based on orders.

Intranet vs. Extranet

Organizations make use of the intranet. This consists of webpages that are behind the firewall of the company, such that information is secured within the local area network or wide range network. The info on these webpages can only be viewed by authorized users. The extranet enables two companies to use the internet to do business together. The companies then have a private part of the internet that is closed for ordinary users.

Web 2.0

Over the past few years there have been several technology changes which has led to new uses of the Web. People can now share information online and collaborate because of dynamic web applications. These applications are referred to as Web 2.0 applications in which the role of the users, the passive consumer, is shifted to the creator. Many organizations have incorporated Web 2.0 applications into their business models. The success of the applications depends on the network effect. The network effect means that the value of a network increases as more people use the network. Web sites can choose to make parts of their data or functionality available to other Web sites. This enables them to create dynamic and unique applications, or mashups, easily and quickly. A mashup is defined as an application that uses data from one or more service providers. Companies give others this access because it enables the organization to extend their reach and build and strengthen the relationships with customers.

Improving Business Systems Through Enterprise Systems

Packaged software (off-the-shelf): written by third-party vendors for many users Customer software (developed by contractors): developed for a specific organization EIS: modules for functional areas (accounting, human resources, etc.) Implementing enterprise software provides an opportunity for organizations to migrate under-performing processes to industry best practices, which are built into the software implementation. However, if an organization has unique practices that are superior to industry standards best practices, the enterprise software may be unable to support them without significant customization. An organization needs to understand how it is performing against industry benchmarks to know when it should adopt industry best practices and when it should keep unique business practices in place.

Enabling Organizational Strategy Through IS

Part 1 - Organization Decision-Making Levels - Organizational Functional Areas - Information Systems for Automating (doings things faster) - Information Systems for Organizational Learning (doing things better)Information systems can track and identify trends and seasonality. Managers can use this to plan staffing levels and cross-training Part 2 • Information Systems for Supporting Strategy (doing things smarter): Firms have a competitive strategy. Information systems should be implemented that support that strategy: Low-cost strategy implies information systems to minimize expenses and a High-quality strategy implies information systems to support ensuring excellent quality and minimal defects • Identifying Where to Compete: analyzing Competitive Forces • Identifying How to Compete: Choosing a Generic Strategy • Identifying How to Compete: Resources and Capabilities • Identifying How to Compete: Analyzing the Value Chain • The Role of Information Systems in Value Chain Analysis • The Technology/Strategy Fit

Steps in an External Acquisition of a System

Purchasing an existing system from an outside vendor. In many cases, your organization will use a competitive bid process for making an external acquisition. ◦ Step 1: Systems Planning and Selection: ◦ Step 2: Systems Analysis ◦ Step 3: Development of a Request for Proposal: A request for proposal (RFP) is a document that is used to tell vendors what your requirements are and to invite them to provide information about how they might be able to meet those requirements. An RFP is sent to vendors who might potentially be interested in providing hardware and/or software for the system... some things that may be covered in the RFP include a summary of existing systems and applications, requirements for system performance and features, reliability, the criteria that will be used to evaluate proposals, and a timetable and budget constraints. The RFP is then sent to prospective vendors along with an invitation to present their bids for the project. ◦ Step 4: Proposal Evaluation: The fourth step in external acquisition is to evaluate proposals received from vendors. This evaluation may include viewing system demonstrations, evaluating the performance of those systems, examining criteria important to the organization, and judging how the proposed systems "stack up" to those criteria. Demonstrations are a good way to get a feel for the different systems' capabilities. During a demonstration, a sales team from the vendor gives an oral presentation about the system, its features, and its cost followed by a demonstration of the actual system. One of the methods you can use to evaluate a proposed system is systems benchmarking, which is the use of standardized performance tests to facilitate comparison between systems. Common benchmarks are response time time to sort records, time to retrieve records, time to produce report, time to read in a set of data. The systems analysis phase should have revealed some specific requirements for the new system. These requirements may be listed as criteria that the organization can use to further evaluate vendor proposals. ◦ Step 5: Vendor Selection: In most cases, more than one system will meet your needs, just as more than one car will usually meet your needs. One way of choosing the best is by devising a scoring system for each of the criteria and benchmarking results as described when making the business case. You can also use simple checklists or a more subjective process.

The Road to Sustained Competitive Advantage

Resources (technology, brand recognition, etc.), Distinctive Competencies (product value, lower cost, higher quality), and capabilities (shorter lead times, engineering design quality) lead to cost or differentiation advantage, which eventually leads to a sustained competitive advantage

Internet Marketing Methods

Search Marketing - search engine optimization - search advertising/sponsored search Display Ads - static banners - interactive ads Email Marketing - low cost Social Media Marketing Mobile Marketing Performance assessment: Impression, pay-per-click/click-through, and conversion models (but beware of click fraud)

Information Systems Threats

Securing against these threats must consider these primary goals: - Availability: Ensuring that legitimate users can access the system - Integrity: Preventing unauthorized manipulations of data and systems - Confidentiality: Protecting data from unauthorized access - Natural disasters - Accidents - Consultants and employees - People outside the organization - Links to outside business contacts

Business Models in the Digital World

Should reflect: 1. What does a company do? 2. How does a company uniquely do it? 3. In what way (or ways) does the company get paid for doing it? 4. What are the key resources and activities needed? 5. What are the costs involved?

Connection

Social Networking: • Helps build and maintain virtual social ties • Enables "social search" to facilitate knowledge management • One of the most popular uses of the Internet • Social Search Viral Marketing: • Good marketing techniques can be driven by word-of-mouth or person-to-person communication • The power of viral marketing can be a great tool • Leverage social media to let the crowd work for you • Multiplies outside of a campaign's usual reach/target market

Online Needs of Customers (Internet Marketing)

Structural firmness: This refers to the characteristics that influence the security and performance of the Web site. Functional convenience: This refers to the characteristics that make interacting with the Web site more convenient and easier. Representational delight: This refers to the characteristics that stimulate the senses of the customer. People are more likely to visit sites that look good. Companies want to maximize all these three concepts. However, in reality this is not possible and they have to make trade-offs between different factors. In order to do this it is important to know the relative needs of the customers.

Supply Chain Planning

Supply chain planning is defined as the development of several resource plans to support the effective and efficient production of services and goods. The following four key processes are generally supported by SCP: 1. Demand Planning and Forecasting. Supply chain planning begins with product demand planning and forecasting. To develop demand forecasts, SCM modules examine historical data to develop the most accurate forecasts possible. The accuracy of these forecasts will be in influenced greatly by the stability of the data. When historic data are stable, plans can be longer in duration, whereas if historic data show unpredictable fluctuations in demand, the forecasting time frame must be narrowed. SCM systems also support collaborative demand and supply planning such that a sales representative can work together with the demand planner, taking into account data provided by the organization's point-of-sale system, pro- motions entered in the customer relationship management system, and other factors in inflencing demand. Demand planning and forecasting leads to the development of the overall demand forecast. 2. Distribution Planning. Once demand forecasts are nalized, plans for moving products to distributors can be developed. Speci cally, distribution planning focuses on delivering products or services to consumers as well as warehousing, delivering, invoicing, and pay- ment collection. Distribution planning leads to the development of the overall transportation plan. 3. Production Scheduling. Production scheduling focuses on the coordination of all activi- ties needed to create the product or service. When developing this plan, analytical tools are used to optimally utilize materials, equipment, and labor. Production also involves product testing, packaging, and delivery preparation. Production scheduling leads to the develop- ment of the production plan. 4. Inventory and Safety Stock Planning. Inventory and safety stock planning focuses on the development of inventory estimates. Using inventory simulations and other analytical techniques, organizations can balance inventory costs and desired customer service levels to determine optimal inventory levels. Once inventory levels are estimated, suppliers are chosen who contractually agree to preestablished delivery and pricing terms. Inventory and safety stock planning leads to the development of a sourcing plan.

Process Modeling - BPMN

The core elements of the process: 1. What needs to be done and when? Control Flow 2. What do we need to work on? Artifacts 3. Who is doing the work? Resources (human and systems) Activities (control flow) - Active elements - Time-consuming, resource-demanding - State changing Events (control flow) - Passive elements - Represent conditions/circumstances - Atomic, instantaneous (not time consuming) Business Objects (or artifacts) - Organizational artifacts that undergo state changes - Physical or electronic information - Examples: sales order, digital object, consulting proposal Actors (or resources) - The entities performing process activities and generating events - Human/Systems - Examples: financial officer, warehouse clerk, ERP, CRM, etc.

Supply Chain Execution (SCE)

The execution of SCP is called supply chain execution (SCE). SCE is the process of improving the collaboration between all members of the supply chain. The four members are suppliers, producers, distributers and customers. There are three key elements of the supply chain that are involved in SCE: - Product flow: The movement of goods from supplier → production → distribution → consumer - Information flow: The movement of information along the supply chain - Financial flow: The movement of financial assets through the supply chain

Steps in Creating an IS Strategy

The organizational strategy of a firm is its plan to achieve its goals and mission or to gain competitive advantage over rivals. 1. First they have to analyze competitive forces, to identify where in the market they should compete. Being the first to enter a market, gives the first-more advantage. 2. Then an organization has to choose a generic strategy. 3. Identifying resources and capabilities that can give a cost or differentiation advantage. 4. The last step is analyzing the value chain. The value chain consists of activities that add value throughout the organization.

Customer Relationship Management

The execution of SCP is called supply chain execution (SCE). SCE is the process of improving the collaboration between all members of the supply chain. The four members are suppliers, producers, distributers and customers. To assist in deploying an organization-wide strategy for managing these increasingly complex customer relationships, organizations are deploying customer relationship management (CRM) systems. CRM is not simply a technology but also a corporate-level strategy to create and maintain, through the introduction of reliable systems, processes, and procedures, lasting relationships with customers by concentrating on downstream information flows. CRM systems come in the form of packaged software that is purchased from software vendors. CRM systems are commonly integrated with a comprehensive ERP implementation to leverage internal and external information to better serve customers. Companies that have successfully implemented CRM systems can experience greater customer satisfaction and increased productivity of their sales and service personnel, which can translate into dramatic enhancements to the company's profitability.

Freeconomics

The future!! Examples include google, spotify, yahoo, and all other free interfaces that get money from advertising. Value Proposition:Free doesn't mean no profit - Google gives away search - Users give Google search results their attention • This can include attention to sponsored links • Google sells space for sponsored links - Advertisers pay Google for that attention to sponsored links • Some users convert into customers • Customers pay advertising firms for their products Advertising: Free services are provided to customers and paid for by a third party (yahoo banner ads and google pay-per-click) Freemium: Basic services are free; a premium is charged for special features Cross Subsidies: Sale price of one item is reduced in order to sell something else of value Zero Marginal Cost: Products are distributed to customers without an appreciable cost to anyone Labor Exchange: The act of customers using free services creates value Gift Economy: People participate and collaborate to create value for everyone

Text Mining

The internet contains a wealth of valuable info that is unstructured and difficult to analyze. The process of gathering and processing is called text mining. Web content mining refers to extracting textual information from web documents after which text mining is used to apply analytical techniques to produce useful reports.

Mobile E-Commerce

The mobile commerce (m-commerce) is defined as an electronic transaction or information interaction that is made using a wireless, mobile device and mobile networks. This transaction must lead to the transfer of real value in exchange for goods, services or information. Since the use of the mobile devices has increased, people increasingly make purchases of products or services online on the go. Because of this trend, many retailers that sell online have made a mobile version of their Web site. › Location-Based M-Commerce • Services can be offered tailored to a person's needs based on their current location › Information on the Go • Customers can get further information about a product wherever they are, including in the store, but this can lead to "showrooming" › Product and Content Sales • Consumers use mobile apps to make purchases while on the go

Artificial Intelligence

The science that uses information technologies (hardware, networks and software) to simulate human intelligence is called artificial intelligence (AI). It is used for human intelligence like learning and reasoning or other sensing capabilities. Conventional computers are not able to adapt to changing circumstances or deal with data that is noisy. AI can be used to enable systems to learn by identifying patterns in massive amounts of data. This is called machine learning and has led to improvements in intelligent systems, language processing, Web searching etc. Intelligent systems consist of software, sensors and computers embedded in machines and devices. There are many different types of intelligent systems. All these types are based on machine learning.

Systems Analysis and Design

This process of designing, building, and maintaining information systems is often referred to as systems analysis and design. Likewise, the individual who performs this task is referred to as a systems analyst. Organizations want to hire systems analysts because they possess a unique blend of managerial and technical expertise—systems analysts are not just "techies." Systems analysts remain in demand precisely because of their unique blend of abilities.

How Can Data Be Stored?

The three purposes of storing data are: 1. Operational (such as processing transactions)... often stored on databases or files on a disk/harddrive. 2. Backup (short-term copies of OG data) 3. Archival (long-term copies of OG data)

Business Processes

These processes associated with procuring goods from external vendors are together referred to as the procure-to-pay process. Subprocesses of the procure-to-pay process include price and terms negotiations, issuing of the purchase order, receiving the goods, and receiving and paying the invoice. An effective procure-to-pay process can help to obtain favorable conditions, reduce transaction costs, and, ultimately, create customer goodwill as it helps to efficiently fulfill customer orders.

Procure-to-Pay

These processes associated with procuring goods from external vendors are together referred to as the procure-to-pay process. Subprocesses of the procure-to-pay process include price and terms negotiations, issuing of the purchase order, receiving the goods, and receiving and paying the invoice. An effective procure-to-pay process can help to obtain favorable conditions, reduce transaction costs, and, ultimately, create customer goodwill as it helps to efficiently fulfill customer orders. Functional Areas: - Supply chain management - Accounting and finance - Manufacturing and operations

Databases (Business Analytics)

They provide inputs into business analytics. They are essential for all elements of business: maintaining customer records, supporting business processes, sales transactions, inventory management, marketing. - Data and knowledge are an organization's most valuable resource, over entire value chain - BI applications are used to analyze sales trends, customer satisfaction, and other key performance indicators. - Enabling interactive web sites using databases: product catalog data are stored in databases and available to users. Customer billing and shipping are stored in databases. E-commerce applications process millions of transactions per day

Developing a CRM Strategy

To develop a successful CRM strategy, organizations must do more than simply purchase and install CRM software. The first consideration is whether a comprehensive CRM system is even needed for a company; for example, the closer an organization is to the end customer, the more important CRM becomes. Further, companies have to realize that a successful CRM strategy must include enterprise-wide changes, including changes to: • Policies and Business Processes. Organizational policies and procedures need to reflect a customer-focused culture. • Customer Service. Key metrics for managing the business need to reflect customer- focused measures for quality and satisfaction as well as process changes to enhance the customer experience. • Employee Training. Employees from all areas—marketing, sales, and support—must have a consistent focus that values customer service and satisfaction. • Data Collection, Analysis, and Sharing. All aspects of the customer experience— prospecting, sales, support, and so on—must be tracked, analyzed, and shared to optimize the benefits of the CRM.

Enterprise Resource Planning

Today, most enterprise-wide information systems come in the form of enterprise resource planning (ERP) systems. ERP systems replace standalone applications by providing various modules based on a common database and similar application interfaces that serve the entire enterprise rather than portions of it. Data stored on legacy systems is converted into a large, centralized database that stores data related to the various business activities of an organization. Thus, ERP systems make accessing data easier by providing a central repository, giving personnel access to accurate, up-to-date information throughout the organization. ERP Control: locus of control over the computing systems and the data contained in those systems as well as the decision making authority. - Centralized or decentralized across business units - Policies and procedures: do they need to be flexible? do they need to be standardized? ERP Business Requirement - What modules are available? - How well do they meet specific business needs?

IS Infrastructure Components: System Software

Used to automate processes to reduce costs or generate revenue... Software is the collection of programs that control the basic operations of the computer hardware. This system software coordinates interaction between application software, users, and peripherals. • Controls computer hardware operations • Operating systems - Examples: Windows, OS X, Ubuntu, Linux - Manages hard drives and storage - Manages keyboard, mouse, monitor, and printers - Coordinates application access to computing resources

Enterprise Resource Planning (ERP) System

Vanilla vs. Customized software systems... ERP systems are very complex! Changing an implemented ERP system is challenging ERP Systems support core business processes and assist with - order-to-cash - procure-to-pay - make-to-stock/make-to-order - other business processes There are often industry-specific versions

Communication and Collaboration Tools

Virtual Teams: composed of members from different geographic areas and assembled as needed to collaborate on a certain project Groupware: a class of software that enables people to work together more effectively. We can distinguish groupware on the ground of whether there is synchronous or asynchronous collaboration and communication and whether groups work together face-to-face or distributed. Groupware supports several modes of group interaction: Live meetings in electronic meeting facility, Electronic meeting facility as home base, Virtual teams, Synchronous distributed meetings, Videoconferencing.

Acquiring Information Systems

We have now explained some of the general approaches that organizations follow when building systems in-house with their own IS staff. Many times, however, this is not a feasible solution. The following are four situations in which you might need to consider alternative development strategies. 1. Limited IS Staff. Often, an organization does not have the capability to build a system itself. Perhaps its development staff is small or deployed on other activities and does not have the capability to take on an in-house development project. 2. IS Staff Has Limited Skill Set. In other situations, the IS staff may not have the skills needed to develop a particular kind of system. This has been especially true with the explosive growth of the web and mobile devices; many organizations are having out- side groups develop and manage their websites and mobile apps. 3. IS Staff Is Overworked. In some organizations, the IS staff may simply not have the time to work on all the systems that the organization requires or wants. 4. Problems with Performance of IS Staff. Earlier in this book, we discussed how and why systems development projects could sometimes be risky. Often, the efforts of IS departments are derailed because of staff turnover, changing requirements, shifts in technology, or budget constraints. Regardless of the reason, the result is the same: another failed (or flawed) system.

How to organize databases?

When designing a databases, it is important to first create a data model. It will specify what data will be in the database and how they will be represented. After the model is complete, a data dictionary is developed that specifies how the data will be implemented in the database. The data model - What data will be captured - How the data will be represented (tables, queries, reports) The Data Dictionary: - Attribute name - Type of data - Valid values - Business rules

Database Management System (DBMs)

a software application that enables you to store, organize, create and retrieve data from one or more databases. An example of a DBMS is Microsoft Access. Something that we can collect data about, like people, is called an entity. Entities are often referred to as tables, where each column is called an attribute and where each row is called a record. Most databases under a DBMS consist of multiple tables, which are organized in multiple files. With DBMS you can manage many tables simultaneously. Other advantages of a database approach are improved data consistency, improved data sharing, increased security, improved data quality and accessibility. However, there are also costs like the installation costs and conversion costs. There are several different database types. A relational database management system (RDBMS) tries to balance efficiency of storage needs, ease of retrieval and other things by storing data in tables that are linked via relationships. Many organizations have used such a system to support their business processes. A management system that has become more popular is NoSQL. These databases can be distributed across multiple machines and can handle more types of data. A data model is a diagram or map that represents entities and their relationships. In these data models the structure of the data is captured. There are multiple data types and each attribute in the database is of a certain type. Data types enable the DBMS to organize and sort the data, allocate storage space and make calculations. After the data model is formed, a data dictionary is used to capture the format of the data. A data dictionary is defined as a document that explains multiple pieces of information for each attribute, like name and the type of the data.

Bots

are destructive software robots which are, via the Internet, working together with zombie computers, this creates a botnet. The amount of attacks using botnets is increasing and has led to many specialized criminals.

Denial-of-service (DoS) attacks

are electronic attacks that disable the users of the system to use a certain service. The criminals often do this by using up all the resources of the system. These attacks are often performed by creating zombie computers. The computers in a certain location are infected with viruses and worms.

Assessing Value for the US Instrastructure

• Economic Value - Direct financial impact • Architectural Value - Extending business capabilities today and in the future • Operational Value - Enhancing ability to meet business requirements • Regulatory and Compliance Value - Complying with regulatory requirements

Database

collection of related data organized in a way that facilitates data searches and are vital to an organization's operations and often are vital to competitive advantage and success. They are used to store data and make it more accessible. They also support storing and analyzing big data from a variety of sources.

Hardware

computers that run the databases and applications necessary for analyzing business and processing transactions ◦ Super computer: solves massive scientific problems. Most powerful and expensive computer. ◦ Mainframe: main computing system for most organizations. They are optimized for resource utilization and security. ◦ Server: computer on a network. Users of the network have access to all of the files, communications, and other services of the network. ◦ Workstation: these computers are designed for engineering, animation, and graphic design users. The memory is large and they have fast processors. ◦ Personal computer: used for personal or business computations.

E-Government

defined as the use of information systems to provide organizations, citizens and other governmental agencies with information about public services and to enable interaction with the government. Government-to-citizens (G2C): This includes interactions between local, state and federal governments and their citizens. Government-to-business (G2B): This includes business relationships with all levels of government. Government-to-government (G2G): This includes electronic interactions between different levels of a government within a country or interactions between countries.

Analytical CRM

focuses on analyzing customer behavior and perceptions in order to provide the business intelligence necessary to identify new opportunities and to provide superior customer service. Organizations that effectively utilize analytical CRM can more easily customize marketing campaigns from the segment level to even the individual customer. Such customized campaigns help to increase cross- or up-selling as well as retain customers by having accurate, timely, and personalized information. Key technologies within analytical CRM systems include Big Data analytics and other busi- ness intelligence technologies that attempt to create predictive models of various customer attributes. Similarly, analytical CRM tools can help in analyzing customer acquisition and retention. In addition, analytical CRM tools help in pricing optimization by building models of customer demand, taking into consideration not only factors such as product usage and customer satisfaction but also price, quality, and sat- isfaction of competitors' products or services. ◦ Social CRM: Social media applications enable companies to engage with their customers using a variety of social media channels. This use of social media for customer relationship management is often referred to as social CRM. As companies are using various social media channels, customers use various social media channels to quickly share both positive and negative experiences with a product or service. ◦ Social Media Monitoring: the process of identifying and assessing the volume and sentiment of what is being said about a company, individual, product, or brand. To collect this information, organizations utilize a variety of tools to track and aggregate social media content from blogs, wikis, news sites, microblogs such as Twitter, social networking sites like Facebook, video- and photo-sharing websites like YouTube and Flickr, forums, message boards, blogs, and user-generated content in general. Given the rise in importance of social media for reaching out to and communicating with customers, many organizations are creating a formal organizational group to engage in social media monitoring. With the increasing use of social media, social media monitoring has become a central part of analyzing and understanding evolving market trends and customer sentiments.

Information technology

hardware, software, telecommunications

Managing Software Licensing (External Acquisition)

hen purchasing commercial, off-the-shelf software, companies usually have to agree to a license agreement. In general, software licenses can be classified based on their restrictiveness or the freedom they offer to use or modify the software. For organizations using proprietary software, two types of licenses are of special importance. The first type includes the shrink-wrap licenses and click-wrap licenses that accompany the software, which are used primarily for generic, off-the-shelf application and systems software. The shrink-wrapped contract has been named as such because the contract is activated when the shrink wrap on the packaging has been removed; similarly, a click-wrap license refers to a license primarily used for downloaded software that requires computer users to click on "I accept" before installing the soft- ware. The second type of license is an enterprise license (also known as a volume license). Enter- prise licenses can vary greatly and are usually negotiated. In addition to rights and permissions, enterprise licenses usually contain limitations of liability and warranty disclaimers that protect the software vendor from being sued if its software does not operate as expected.

Operational CRM

includes the systems used to enable customer interaction and service. With an effective operational CRM environment, organizations are able to provide personalized and highly efficient customer service. Customer-focused personnel are provided complete customer information—history, pending sales, and service requests—in order to optimize interaction and service. It is important to stress that the operational CRM environment provides all customer information regardless of the touch point. ◦ Sales Force Automation: The first component of an operational CRM is sales force automation (SFA). SFA refers to modules that support the day-to-day sales activities of an organization. SFA systems provide advantages for sales personnel, sales managers, and marketing man- agers. For sales personnel, SFA reduces the potentially error-prone paperwork associated with the selling process. Because all the information is within the system, personnel can more easily hand off work and collaborate; it is also easier to train new personnel. Sales personnel can then use their time more efficiently and ultimately focus more on selling than on paperwork and other non-selling tasks. Finally, SFA improves the effectiveness of the marketing function by providing an improved understanding of market conditions, competitors, and products. In sum, the primary goals of SFA are to better identify potential customers, streamline selling processes, and improve managerial information. Next, we examine systems for improv- ing customer service and support. ◦ Customer Service and Support: refers to modules that automate service requests, complaints, product returns, and information requests. In the past, organizations had help desks and call centers to provide customer service and support. Today, organizations are deploying customer engagement centers that use multiple communication channels to support the communication preferences of customers, such as the web, the company's Facebook page, industry blogs, face-to-face contact, telephone, and so on ◦ Enterprise Marketing Management: Enterprise marketing management tools help a company in the execution of the CRM strategy by improving the management of promotional campaigns. Using enterprise marketing management tools can help integrate those campaigns such that the right messages are sent to the right people through the right channels. This necessitates that customer lists are managed carefully to be able to personalize messages that can deliver individualized attention to each potential or existing customer

Encryption

process where messages are encoded with an encryption key before they enter the network. Different types are end-to-end encryption, symmetric encryption, public key encryption, asymmetric encryption, certificate authority. Secure Sockets Layer (SSL) is a popular public key encryption method.

Cyberterrorism

launched by individuals and organized groups. There are many types of cyberterrorist attacks. Examples include coordinated bomb attacks, manipulation of banking and financial information and the physical destruction of computer systems. Because of the internet, the business process of terrorists has changed. Terrorists are using the internet for data mining, training, fundraising, recruiting, information gathering and networking.

Cyberwar

organized attempt by the military of a country to disrupt or destroy the information and communication systems of another country. Cyberwars are done with the purpose to obtain information that is beneficial for the country while it diminishes capabilities of the other country. Cyberwars often try to control the content and distribution of propaganda and information to the government and troops of the opponent. Cyberwars are launched by governments. Cyberwar Vulnerabilities: - Command-and-control systems - Intelligence collection, processing, and distribution systems - Tactical communication systems and methods - Troop and weapon positioning systems - Friend-or-foe identification systems - Smart weapons systems

Firewalls

part of your computer system which are designed to detect intruders of your computer and prevent unauthorized access from a private network. Filter traffic: - Incoming and/or outgoing traffic - Filter based on traffic type - Filter based on traffic source - Filter based on traffic destination - Filter based on combinations of parameters

Collaborative CRM

refers to systems for providing effective and efficient communication with the customer from the entire organization. Collaborative CRM systems facilitate the sharing of information across the various departments of an organization in order to increase customer satisfaction and loyalty. Sharing useful customer information on a company-wide basis helps improve information quality and can be used to identify products or services a customer may be interested in. A collaborative CRM system supports customer communication and collaboration with the entire organization, thus providing more streamlined customer service with fewer handoffs. Collaborative CRM enhances communication in the following ways: ◦ Greater Customer Focus. Understanding customer history and current needs helps to focus the communication on issues important to the customer. ◦ Lower Communication Barriers. Customers are more likely to communicate with the organization when personnel have complete information and when they utilize the communication methods and preferences of the customer. ◦ Increased Information Integration. All information about the customer as well as all prior and ongoing communication is given to all organizational personnel interacting with the customer; customers can get status updates from any organizational touch point.

Making the Business Case

refers to the process of identifying, quantifying, and presenting the value provided by a system. To prove that an information system adds value to the organization, managers must provide strong arguments and evidence. If you are working in the field of finance, marketing, management or accounting then it is likely that you have to make the case for new or existing information systems.Ma Business Case Objectives: a manager has to build a strong, integrated set of arguments and evidence to prove that an information system (or any type of investment) is adding value to the organization or its constituents. Whether a new system or an existing one is being considered, your goal is to make sure that the investment adds value, that it helps the firm achieve its strategy and competitive advantage over its rivals, and that money is being spent wisely.

Cyber squatting

registering a domain name and then trying to sell the name for a great amount of money to the person, organization or company that wants it most.

3 Capabilities of IS

storage, transmission, and processing

Make-to-Stock/Make-to-Order

the make to stock and make to order processes both involve the production of goods, but the make to order process is more complex, as it includes additional steps involving taking the order and then doing any design and engineering work required. The make to stock process is based on forecast or budgeted sales figures. Bus

Order-to-Cash Business Process

the processes associated with selling a product or service are referred to as the order-to-cash process As with all business processes, the order-to-cash process can be broken down into multiple subprocesses Functional Areas: - Sales and marketing - Accounting and finance - Manufacturing and operations

E-Finance

the use of information systems to provide financial services and markets... it consists of e-banking (paying bills online using electronic bill pay) and online brokerage (People can turn to multiple sites to get the latest info about stock prices) Fintech refers to technologies that support activities in the financial sector

Advanced Analytics (Business Analytics)

tools and techniques used to understand why something happened, predict future outcomes, or discover hidden patterns in large data sets

Supply Chain Management Systems

two goals: to accelerate product development and innovation and to reduce costs. They improve coordination of supplier, product or service production, and distribution. When implemented successfully, SCM systems help in not only reducing inventory costs but also enhancing revenue through improved customer service. SCM systems are often integrated with ERP systems to leverage internal and external information in order to better collaborate with suppliers. The extent to which the supply chain of a company is focusing on minimizing procurement, transportation costs and production is called supply chain efficiency. Sometimes even sacrificing customer service. On the contrary we have supply chain effectiveness, which is the extent to which the supply chain of a company is focused on maximizing customer service. Here there is less focus on reducing production, procurement and transportation costs. A company's supply chain strategy must seek for a balance between supply chain efficiency and effectiveness. SCM systems allow you to make trade-offs between efficiency and effectiveness.

Information Systems

use information technology to collect, create, and distribute useful data

Business Intelligence (Business Analytics)

use of information systems to collect and analyze data and information to improve making good business decisions. It refers to tools and techniques for analyzing and visualizing past data. The data and information can be both internal and external. Companies use business intelligence to gain or sustain a competitive advantage. Business processes occur at different organization levels and they are highly interconnected. Addressing threats and opportunities: External factors in the business environment, such as changes in consumer demand, competitive pressures, and changing regulations, can create both threats and opportunities that businesses must respond to. The more rapidly businesses can recognize changes and move to account for them, the more competitive they will be in today's ever-changing business environment Understanding Big Data - High volume: unprecedented amounts of data - High variety: structured and unstructured data - High velocity: rapid processing to maximize value

How does a cyber criminal do it?

• Technology - Vulnerability scanners - Packet sniffers - Keyloggers - Brute force • Exploiting human weaknesses - Phishing - Social engineering - Shoulder surfing - Dumpster diving

Transnational Business Strategy

• Both centralized and decentralized components, integrated network and market • Benefits of both multi-domestic and global strategies • Highly complex, difficult to manage • Distributed/shared systems, enterprise-wide linkages, common global data resources

The IS Infrastructure

• Businesses rely on an information systems infrastructure - Hardware - System software - Storage - Networking - Data centers

Global Business Strategy

• Central organization, standardized offerings across markets, homogenous markets • Standardized products, economies of scale • Inability to react to local market conditions • Centralized systems, networks and data sharing between home office and subsidiaries

World Wide Web Architecture

• Components - Interconnected Web servers - Utilize Transmission Control Protocol/Internet Protocol (TCP/IP) - Communicate over the Internet • Clients request Web page hosted on server • Server breaks into packets • Packets stream over internet to client • Client reassembles • Client can request retransmission of any missing packets • Web browser translates Web page into visible output

Increasing Energy Needs

• Computing can require a lot of power - Hardware draws power, which generates heat - Heat requires cooling, which requires more power • Data centers can use large amounts of power - 15 to 17 kilowatts per rack - Large data centers have hundreds of racks - More power is required for cooling and lost through other inefficiencies

Multi-Domestic Business Strategy

• Decentralized federation, heterogeneous markets • Quick reaction to changing local market conditions • Differing products, lack of economies of scale, limited communication and knowledge sharing • Decentralized systems, bidirectional communications, local databases

Making a Successful Argument

• Faith: Arguments based on beliefs about organizational strat- egy, competitive advantage, industry forces, customer perceptions, market share, and so on... Arguments based on faith often hold that an information system must be implemented in order to achieve the organization's strategy effectively and to gain or sustain a competitive advantage over rivals. In short, successful business case arguments based on faith should clearly describe the firm's mission and objectives, the strategy for achieving them, and the types of information systems that are needed in order to enact the strategy. • Fear: Arguments based on the notion that if the system is not implemented, the firm will lose out to the competition or, worse, go out of business. Probably the most important industry factor that can affect technology investments is the nature of competition or rivalry in the industry. • Facts: Arguments based on data, quantitative analysis, and/or indisputable factors. The most common way to prove this is to provide a detailed cost-benefit analysis of the information system. Although this step is critical, the manager must remember that there are inherent difficulties in and limits to cost-benefit analyses for information systems.

Big Data Increasing Storage Needs

• Firms collect unprecedented levels of data - Business intelligence - Legal compliance (e.g., Sarbanes-Oxley) • Unprecedented levels of data require unprecedented infrastructure capabilities - More storage space, powerful hardware, and database management - Ever-increasing Internet bandwidth - Vicious cycle: enhanced capacity drives new applications, requiring even more capacity

Home-Replication Strategy

• Focused domestically, homogenous markets • International business an extension of home business • Focus on core home market competencies • Inability to react to local market conditions • Domestic systems, limited communication, local databases

Making the Business Case

• Know the Audience: Depending on the firm, a number of people from various areas of the firm might be involved in the decision-making process. People from different areas of the firm typically hold very different perspectives about what investments should be made and how those investments should be managed. Decisions and choices are driven by perceived needs, resource availability, evaluation criteria, and so on. Numerous outcomes can occur from this decision process. Of course, the project can be accepted or rejected; often, projects can be conditionally accepted or flagged for revision in order to more carefully consider resource, time, or other constraints. Understanding the audience and the issues important to them is a first step in making an effective presentation. Various ways to improve the development of a business case are examined next. • Convert Benefits to Monetary Terms: When making the case for an IS investment, it is desirable to translate all potential benefits into monetary terms. For example, if a new system saves department managers an hour per day, try to quantify that savings in terms of dollars. Figure 9.8 shows how you might convert time savings into dollar figures • Devise Proxy Variables: In cases in which it is not as easy to quantify the impact of an investment, you can come up with proxy variables (i.e., alternative measures of outcomes) to help clarify what the impact on the firm will be. Proxy variables can be used to measure changes in terms of their perceived value to the organization. You can communicate these differences using percentages, increases or decreases, and so on—whatever best conveys the idea that the new system is creating changes in work, in perfor- mance, and in the way people think about their work. This gives decision makers some relatively solid data on which to base their decision. • Measure What is Important to Management: One of the most important things you can do to show the benefits of a system is one of the simplest: Measure what senior managers think is important. You may think this is trivial advice, but you would be surprised how often people calculate impressive-looking statistics in terms of downtime, reliability, and so on, only to find that senior managers disregard or only briefly skim over those figures. Managers are more likely to buy in to the importance of systems if they can see the impact on areas that are important to them.

Demand Fluctuations

• Many companies face demand fluctuations - Seasonal fluctuations (e.g., December holidays) - Monthly fluctuations (month-end spikes) • Demand fluctuations create inefficiencies - Some estimate up to 70% of IS capacity only used 20% of the time - IS infrastructure is typically not readily scalable • Changing internal capacity takes time • Cloud computing (next section) may be the answer

Predicting the Next New Thing

• Many innovations can be copied - Limited time span of any advantage - May become a requirement for staying competitive • Some innovations deliver longer advantages - Unique customer service based on customer data - High levels of customer investment in proprietary systems; high switching costs - Technologies that are very difficult to copy

Monitoring Security

• Monitoring external events - Information Sharing and Analysis Centers, United States Computer Emergency Readiness Team • IS Auditing - External entity reviews the controls to uncover any potential problems • Sarbanes-Oxley Act - Best practices: Control Objectives for Information and related Technology (COBIT) • Responding to Security Incidents • Computer Forensics - Examining the computers of crime victims for evidence - Auditing computer activity logs

Types of Computer Networks

• Personal area network (PAN): wireless communication between devices • Local area network (LAN): users share data, software applications and other resources • Wide area network (WAN): connects multiple LANs and distributes management and ownership. The physical distance of this network is large and ranges from multiple buildings to a city or even worldwide.

The Internet and the World Wide Web (WWW)

• The Internet is one of several global networks - The Internet has standard protocols - The Internet is based on internetworking, or combining networks to form larger networks • The World Wide Web uses the Internet - The World Wide Web is not the Internet - The World Wide Web is • Web protocols (e.g., HTML and HTTP) • Web pages (documents containing HTML ) • Web servers (store and provide access to Web pages via a Website) • Web browsers (provide users with an interface to Web pages)

IP Addresses

• The Internet uses IP addresses - IPV4: Old style, 32-bit, running out of addresses - IPV6: New style, 128-bit, huge address space • The WWW translates domain names into IP addresses - www.arizona.edu translates to (IPV4) 128.196.134.37 • A URL could be expressed directly as an IP address, although it's more common to use domain nam

Why Cloud Computing?

• The efficiency benefits are tremendous - Different customers have different demand spikes - Large data centers have economies of scale • Purchasing, deploying, and managing technology • Implementing green cooling technologies • Flexibly reallocating resources • Customers can focus on core operations - Infrastructure can be consumed as needed - Scalability no longer a limiting factor

International Business Strategies

• There are four international business strategies - Home replication - Global - Multi-domestic - Transnational Each has pros and cons in terms of complexity, cost benefits, local responsiveness, and control

Legal Issues in E-Commerce

› Taxation: sales on the internet are treated the same as mail-order sales. A company is required to collect sales tax only from customers that live in a state where the business has substantial presence. • Sales taxes • Internet Freedom Act: Internet sales are treated like mail-order sales › Digital Rights Management: allows publishers to control their digital media to limit and discourage illegal copying and distribution • Preventing unauthorized duplication • Restrict which devices can play media • Limit number of times media can be played › Net Neutrality: all data on the internet should be treated the same. Anyone should be allowed to freely communicate with any content or application without interference of a third party. • Should the Internet be open? Or should Internet access come first to the highest bidder?