BUS 444: chapter 1
Five components of an information system
(1) Hardware (2) Software (3) Data (4) Processes (5) People
Business process
a specific set of transactions, events and results that can be described and documented.
Mission-critical system
a system that is vital to a company's operations. ▹ e.g., an order processing system is mission-critical because the company cannot do business without it.
Information
data that has been transformed into output that is valuable to users.
Information Technology (IT)
refers to the combination of hardware, software and services that people use to manage, communicate and share information.
(3) Data
the raw material that an information system transforms into useful information. ▸ An information system can store data in various locations, called tables. ▸ By linking the tables, the system can display the specific information that the users needs—no more, and no less. ▸ A user can display any or all data items and filter the data to fit defined limits.
Chapter objectives
● Describe the impact of *information technology*. ● Define *systems analysis and design* and the role of a *systems analyst*. ● Define an *information system* and describe its components. ● Explain how to use *business profiles* and *models*. ● Explain Internet *business strategies* and *relationships*, including *B2C* and *B2B*.
Three major trends shape the business of today
(1) Rapidly increasing globalization; (2) Technology integration for seamless information access across a wide variety of devices such as laptops and smartphones; (3) The rapid growth of cloud-based computing and software services. ▸ These trends are being driven by the immense power of the Internet.
Organizational levels
(1) Top Managers (2) Middle Managers and Knowledge Workers (3) Supervisors and Team Leaders (4) Operational Employees ▸ In an effort to increase productivity, many companies *reduced* the number of management levels and delegated responsibility to operational personnel.
*Five steps of SDLC model*
***Five steps of SDLC model*;** ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ (I.) *Systems planning* ↳ Preliminary investigation report (II.) *Systems analysis* ↳ System requirements document (III.) *Systems design* ↳ System design specification (IV.) *Systems implementation* ↳ Functioning system (V.) *Systems support and security* ↳ Fully operational system
The Internet Model ■ *E-commerce* (I.) B2C (business-to-consumer) (II.) B2B (business-to-business)
■ *E-commerce* - internet-based commerce. ▸ A typical model is a series of webpages that provides a user interface, which communicates with database management software and a web-based data server. ▸ On mobile devices, the user interacts with the system with an app, but the same back-end services are accessed.
Agile methods ■ Iterative ■ Spiral model
Development techniques change over time. For example, structured analysis is a traditional approach, and agile methods are the newest development. Structured analysis builds an overall plan for the information system, just as a contractor might use a blueprint for constructing a building. ---- Agile methods, in contrast, attempt to develop a system incrementally, by building a series of prototypes and constantly adjusting them to user requirements. As the agile process continues, developers revise, extend and merge earlier versions into the final product. An agile approach emphasizes continuous feedback, and each incremental step is affected by what was learned in the prior steps. ---- ▹ Although relatively new to software development, the notion of *iterative* development can be traced back to Japanese auto firms that were able to boost productivity by using a flexible manufacturing system, where team-based effort and short-term milestones helped keep quality up and costs down. ---- ■ Agile methods typically use a *spiral model*, which represents a series of iterations, or revisions, based on user feedback. ▸ As the process continues, the final product gradually evolves. An agile approach requires intense interactivity between developers and individual users, and does not begin with an overall objective. ▸ Instead, the agile process determines the end result. ▹ Proponents of the spiral model believe that this approach reduces risks and speeds up software development. ---- ▸ Typically, each iteration in a spiral model includes planning, risk analysis, engineering and evaluation. The repeated iterations produce a series of prototypes, which evolve into the finished system. These phases resemble SDLC tasks, which also can be iterative. ---- ▸ By their nature, agile methods can allow developers to be much more flexible and responsive, but can be riskier than more traditional methods. ▹ e.g., without a detailed set of system requirements, certain features requested by some users might not be consistent with the company's larger game plan. ▸ Other potential disadvantages of agile methods can include weak documentation, blurred lines of accountability and too little emphasis on the larger business picture. ▸ Also, unless properly implemented, a long series of iterations might actually add to project cost and development time. ---- ▹ The bottom line is that systems analysts should understand the pros and cons of any approach before selecting a development method for a specific project.
(IV.) Systems implementation ↳ *Functioning system* ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ● Systems evaluation
During the *systems implementation phase*, the new system is constructed. Whether the developers use structured analysis or O-O methods, the procedure is the same—programs are written, tested and documented, and the system is installed. ▸ If the system was purchased as a package, systems analysts configure the software and perform any necessary modifications. ▸ The *objective* of the systems implementation phase is to deliver a completely functioning and documented information system. ---- ▸ At the conclusion of this phase, the system is ready for use. ▸ Final preparations include converting data to the new system's files, training users and performing the actual transition to the new system. ---- ▸ The systems implementation phase also includes an assessment, called a *systems evaluation*, to determine whether the system operates properly and if costs and benefits are within expectations.
(V.) Systems support and security ↳ *Fully operational system* ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ● Scalable design
During the *systems support and security phase*, the IT staff maintains, enhances and protects the system. ▸ Maintenance changes correct errors and adapt to changes in the environment, such as new tax rates. ▸ Enhancements provide new features and benefits. ▸ The *objective* during this phase is to maximize return on the IT investment. ---- ▸ A well-designed system must be secure, reliable, maintainable and scalable. ■ A *scalable design* can expand to meet new business requirements and volumes. ▸ Information systems development is always a work in progress. 🢃 ▸ Business processes change rapidly, and most information systems need to be updated significantly or replaced after several years of operation. ▹ e.g., a web-based system may need more servers added to cope with increased workload.
Prototyping
■ *Prototype - an early working version of an information system. ▸ Prototyping speeds up the development process significantly. ▸ A possible disadvantage of prototyping is that important decisions might be made too early, before business or IT issues are understood thoroughly.
(I.) Systems planning ↳ *Preliminary investigation report* ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ● Preliminary investigation ● Feasibility study
The *systems planning phase* usually begins with a formal request to the IT department, called a *systems request*, which describes problems or desired changes in an information system or a business process. ▸ In many companies, IT systems planning is an integral part of overall business planning. ▸ When managers and users develop their business plans, they usually include IT requirements that generate systems requests. ---- ▹ A systems request can come from a top manager, a planning team, a department head or the IT department itself; the request can be very significant or relatively minor. ▹ A major request might involve a new information system or the upgrading of an existing system. ▹ Alternatively, a minor request might ask for a new feature or a change to the interface. ---- ■ *Preliminary investigation report* - the purpose of the systems-planning phase. 🢃 ■ *Feasibility study* - a key part of the preliminary investigation that reviews anticipated costs and benefits and recommends a course of action based on operational, technical, economic and time factors. ▹ In some situations, a business process review may be recommended, rather than an IT solution.
(II.) Systems analysis ↳ *System requirements document* ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ● Requirements modeling ● System requirements document
The purpose of the *systems analysis phase* is to build a logical model of the new system. ■ *Requirements modeling* - the first step, where the analyst investigates business processes and documents what the new system must do to satisfy the users. ▸ To understand the system, fact-finding using techniques are used such as: (1) interviews; (2) surveys; (3) document review; (4) observation; and (5) sampling. ▸ The fact-finding techniques are used to build business models, data and process models, object models. ■ *System requirements document* - the deliverable for the systems analysis phase, describing management and user requirements, costs and benefits, and outlines alternative development strategies.
(III.) Systems design ↳ *System design specification* ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
The purpose of the *systems design phase* is to create a physical model that will satisfy all documented requirements for the system. ▸ At this stage, the user interface is designed and necessary outputs, inputs and processes are identified. ▸ In addition, internal and external controls are designed, including computer-based and manual features to guarantee that the system will be reliable, accurate, maintainable and secure. ---- ▸ During the systems design phase, the application architecture is also determined, which programmers will use to transform the logical design into program modules and code. ---- ■ *System design specification* - the deliverable for the systems design phase, presented to management and users for review and approval. 🢃 ▸ Management and user involvement is critical to avoid any misunderstanding about what the new system will do, how it will do it, and what it will cost.
Object-Oriented Analysis ■ *Objects* ■ *Class* ■ *Properties* ■ *Methods* ■ *Message*
Whereas structured analysis treats processes and data as separate components, object-oriented analysis combines data and the processes that act on the data into things called *objects*. ▸ The result is a set of software objects that represent actual people, things, transactions and events. ---- ■ An object is a member of a *class*, which is a collection of similar objects. ■ Objects possess characteristics called *properties*, which the object inherits from its class or possesses on its own. ---- ■ In O-O design, built-in processes called *methods* can change an object's properties. ▹ e.g., in an online catalog store, an ORDER object might have a property called STATUS that changes when a CUSTOMER object clicks to place, confirm or cancel the order. ---- ▸ One object can send information to another object by using a message. ■ A *message* requests specific behavior or information from another object. ▹ e.g., an ORDER object might send a message to a CUSTOMER object that requests a shipping address. 🢃 When it receives the message, the CUSTOMER object supplies the information. 🢃 The ORDER object has the capability to send the message, and the CUSTOMER object knows what actions to perform when it receives the message. ---- ▸ O-O analysis uses object models to represent data and behavior, and to show how objects affect other objects. ▹ By describing the objects and methods needed to support a business operation, a system developer can design reusable components that speed up implementation and reduce development cost. ---- ▸ In a typical O-O development model, planning, analysis and design tasks interact to produce prototypes that can be tested and implemented. 🢃 ▸ The result is an interactive model that can accurately depict real-world business processes. ---- ▹ O-O methodology is popular because it provides an easy transition to O-O programming languages such as C++, Java and Swift.
System
a set of related components that produces specific results; ▹ e.g., specialized systems route Internet traffic, manufacture microchips and control complex entities like the Hubble Telescope.
Systems analysis and design
a step-by-step process for developing high-quality information systems.
Systems analyst
a valued member of the IT department team who helps plan, develop and maintain information systems. ▸ Analysts must be excellent communicators with strong analytical and critical-thinking skills ▸ Because systems analysts transform business requirements into IT projects, they must be business-savvy as well as technically competent, and be equally comfortable with managers and programmers—who sometimes have different points of view. ▸ Most companies assign systems analysts to the IT department, but analysts can report to a specific user area such as marketing, sales or accounting; ▹ As a member of a functional team, an analyst is better able to understand the needs of that group and how IT supports the department's mission. ▹ Smaller companies often use consultants to perform systems analysis work on an as-needed basis. ---- ▸ On any given day, an analyst might be asked to: (1) document business processes; (2) test hardware and software packages; (3) design input screens; (4) train users; and (5) plan e-commerce websites. ▹ A systems analyst may occasionally manage IT projects, including tasks, resources, schedules and costs. ▸ To keep managers and users informed, the analyst conducts: (1) meetings; (2) delivers presentations; and (3) writes memos, reports and documentation.
Business profile
an overview of a company's mission, functions, organization, products, services, customers, suppliers, competitors, constraints and future direction. ▸ Although much of this information is readily available, a systems analyst usually needs to do additional research and fact-finding. *** A business profile is the starting point. *** ▹ A rough sketch might be sufficient to document a simple business process.
Information system
combines technology, people and data to provide support for business functions such as order processing, inventory control, human resources, accounting and many more. ▸ Some information systems handle routine day-to-day tasks, while others can help managers make better decisions, spot marketplace trends and reveal patterns that might be hidden in stored data. ▸ Talented people, including a mix of mangers, users, network administrators, web designers, programmers and systems analysts, typically develop information systems.
(1) Hardware ■ *Server farm* ■ *Moore's Law*
consists of everything in the physical layer of the information system. ▹ e.g., hardware can include servers, workstations, networks, telecommunications equipment, fiber-optic cables, mobile devices, scanners, digital capture devices and other technology-based infrastructure. ■ *Server farm* - a large concentration of servers working together. ---- ▸ In 1965, Gordon Moore, a co-founder of Intel, predicted that the number of transistors on an integrated circuit chip would double about every 24 months. ■ *Moore's Law* - exhibits the preceding concept, and has remained valid for 50 years.
(4) Processes
describe the tasks and business functions that users, managers and IT staff members perform to achieve specific results. ▸ Processes are the building blocks of an information system because they represent actual day-to-day business operations. ▹ To build a successful information system, analysts must understand business processes and document them carefully.
Business process model (BPM) ■ *Business process modeling notation (BPMN)*
graphically displays one or more business processes, such as handling an airline reservation, filling a product order or updating a customer account. ■ *Business process modeling notation (BPMN)* - computer-based tools that are used for complex models. ▸ BPMN includes standard shapes and symbols to represent events, processes, workflows, etc. ▹ e.g., (1) multipurpose applications such as Microsoft Visio; (2) CASE tools such as Visible Analyst; and (3) online diagramming tools such as draw.io can be used to create BPMN models.
Data
in an information system, data consists of basic facts that are the system's raw material.
Herman Hollerith
invented a card that identified characters by the location of punched holes and founded IBM's predecessor company in 1896. ▸ A deck of hundreds or even thousands of these cards could store data that was easily sorted, queried and printed by machines.
Transaction processing (TP) systems
process data generated by day-to-day business operations. ▹ e.g., customer order processing, accounting receivable and warranty claim processing. ▸ TP systems perform a series of tasks whenever a specific transaction occurs—such as a TP system that, for example: (1) verifies the customer's data; (2) checks the customer's credit status; (3) checks the stock status; (4) posts to accounts receivable; (5) adjusts the inventory level; and (6) updates the sales file. ---- ▸ TP systems are efficient because they process a set of transaction-related commands as a group rather than individually. 🢃 ▸ To protect data integrity, however, TP systems ensure that if any single element of a transaction fails, the system does not process the rest of the transaction.
Modeling ■ *Business model*
produces a graphical representation of a concept or process that systems developers can analyze, test and modify. ▸ A systems analyst can describe and simplify an information system by using a system an information system by using a set of business, data, object, network and process models. ---- ■ *Business model* - describes the information that a system must provide. ▸ Analysts also create models to represent data, objects, networks and other system components. ▸ Although the models might appear to overlap, they actually work together to describe the same environment from different points of view.
Business support systems ■ *Management information systems (MIS)* ■ *Radio frequency identification (RFID) technology*
provide job-related information support to users at all levels of a company. ... These systems can: (1) analyze transactional data; (2) generate information needed to manage and control business processes; (3) provide information that leads to better decision-making. ---- ▹ The earliest business computer systems replaced manual tasks, such as payroll processing. Companies soon realized that computers also could produce valuable information. 🢃 ■ *Management information systems (MIS)* - the subsequent systems, used primarily by managers. Today, employees at all levels need information to perform their jobs, and they rely on information systems for that support. ---- ▸ A business support system can work hand-in-hand with a TP system. ▹ e.g., when a company sells merchandise to a customer, a TP system records the sale, updates the customer's balance and makes a deduction from inventory. A related business support system highlights slow- or fast-moving items, customers with past-due balances and inventory levels that need adjustment. ---- ▸ To compete effectively, firms must collect production, sales and shipping data in order to update the company-wide business support system immediately. ■ *Radio frequency identification (RFID) technology* - uses high-frequency radio waves to track physical objects. ▹ Major retailers such as Wal-Mart, which requires its suppliers to add RFID tags to all items, have fueled RFID's dramatic growth. ---- ▸ An important feature of a business support system is decision support capability. Decision support helps users make decisions by creating a computer model and applying a set of variables. ▹ e.g., a truck fleet dispatcher might run a series of what-if scenarios to determine the impact of increased shipments or bad weather. Alternatively, a retailer might use what-if analysis to determine the price it must charge to increase profits by a specific amount while volume and costs remain unchanged.
Enterprise computing ■ *Enterprise resource planning (ERP) systems*
refers to information systems that support company-wide operations and data management requirements. ▹ e.g., Wal-Mart's inventory control system, Boeing's production control system and Hilton Hotel's reservation system are examples of enterprise enterprise computing systems. ▸ The main objective of enterprise computing is to integrate a company's primary functions (such as production, sales, service, inventory control and accounting) to improve efficiency, reduce costs and help managers make key decisions. ---- ■ *Enterprise resource planning (ERP) systems* - used by large companies to foster cost-effective support for users and managers throughout the company. ▹ e.g., a car rental company can use ERP to forecast customer demand for rental cars at hundreds of locations; Microsoft Dynamics is an ERP solution that can boost productivity. ▸ Because of its growth and potential, many hardware and software vendors target the enterprise computing market and offer a wide array of products and services. 🢃 ▸ By providing a company-wide computing environment, many firms have been able to achieve dramatic cost reductions; other companies have been disappointed in the time, money and commitment necessary to implement ERP successfully. ▸ A potential disadvantage is that ERP systems generally impose an overall structure that might or might not match the way a company operates.
(2) Software ■ *System software* ■ *Application software* □ Enterprise applications (a.) *Horizontal system* (b.) *Vertical system* □ Legacy systems
refers to the programs that control the hardware and produce the desired information or results. ▸ Software consists of system software and application software. ---- ■ *System software* - manages the hardware components, which can include a single computer or a global network with many thousands of clients. ▸ Either the hardware manufacturer supplies the system software or a company purchases it from a vendor; ▹ e.g.: (1) the operating system; (2) security software that protects the computer from intrusion; (3) device drivers that communicate with hardware such as printers; and (4) utility programs that handle specific tasks such as data backup and disk management. ▸ System software also controls the flow of data, provides data security and manages network operations. ---- ■ *Application software* - consists of programs that support day-to-day business functions and provides users with the information they need. 🢃 □ Enterprise applications - company-wide applications such as order processing systems, payroll systems and company communications networks. ▸ On a smaller scale, individual users can boost productivity with tools such as spreadsheets, presentation software and database management systems. ---- ▸ Application software includes horizontal and vertical systems. (a.) *Horizontal system* - a system, such as an inventory or payroll application, that can be adapted for use in many different types of companies. (b.) *Vertical system* - designed to meet the unique requirements of a specific business or industry, such as an online retailer, a medical practice or an auto dealership. ---- ▸ Most companies use a mix of software that is acquired at various times. □ Legacy system - an older system. ▸ When planning an information system, a company must consider how a new system will interface with older systems. ▹ e.g., a new human resources system might need to exchange data with a legacy payroll application.
(a.) *Structured analysis*
═══════════ □ *Description*: ═══════════ ▸ Represents the system in terms of data and the processes that act upon that data. ▸ Systems development is organized into phases, with deliverables and milestones to measure progress. ▸ The waterfall model typically consists of five phases: (1) Requirements (2) Design (3) Construction (4) Testing (5) Maintenance and evolution ▸ Iteration is possible among the phases. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═════════════ □ *Modeling tools*: ═════════════ ▸ Data flow diagrams (DFDs) and process descriptions (chapter 5). ▸ Also, business process modeling. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ══════ □ *Pros*: ══════ ▸ Traditional method that has been very popular over time. ▸ Relies heavily on written documentation. ▸ Frequent phase iteration can provide flexibility comparable to other methods. ▸ Well-suited to traditional project management tools and techniques. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═══════ □ *Cons*: ═══════ ▸ Changes can be costly, especially in later phases. ▸ Requirements are defined early, and can change during development. ▸ Users might not be able to describe their needs until they can see examples of features and functions.
(c.) *Agile methods*
═══════════ □ *Description*: ═══════════ ▸ Stresses intense team-based effort. ▸ Breaks development into cycles—or *iterations*—that add functionality. ▸ Each cycle is designed, built and tested in an ongoing process. ▸ Attempts to reduce major risks by incremental steps in short time intervals. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═════════════ □ *Modeling tools*: ═════════════ ▸ Tools that enhance communication, such as collaborative software, brainstorming and whiteboards. ▸ Business process modeling works well with agile methods. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ══════ □ *Pros*: ══════ ▸ Very flexible and efficient in dealing with change.. ▸ Stresses team interaction and reflects a set of community-based values. ▸ Frequent deliverables constantly validate the project and reduce risk. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═══════ □ *Cons*: ═══════ ▸ Team members need a high level of technical and communication skills. ▸ Lack of structure and documentation can introduce risk factors. ▸ Overall project might be subject to scope change a user requirements change.
(b.) *Object-oriented analysis*
═══════════ □ *Description*: ═══════════ ▸ Views the system in terms of objects that combine data and processes. ▸ The objects represent actual people, things, transactions and events. ▸ Compared to structural analysis, O-O phases tend to be more interactive. ▸ Can use the waterfall model or a model that stresses greater iteration. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═════════════ □ *Modeling tools*: ═════════════ ▸ Various object-oriented diagrams depict system actors, methods and messages (chapter 6). ▸ Also, business process modeling. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ══════ □ *Pros*: ══════ ▸ Integrates easily with object-oriented programming languages. ▸ Code is modular and reusable, which can reduce cost and development time. ▸ Easy to maintain and expand because new objects can be created using inherited properties. ¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯ ═══════ □ *Cons*: ═══════ ▸ Somewhat limited newer method might be less familiar to development team. ▸ Interaction of objects and classes can be complex in larger systems.
Computer-Aided Systems Engineering (CASE) Tools ■ *Computer-Aided Software Engineering*
■ *Computer-Aided Software Engineering* - a technique that uses powerful software, called a CASE tool, to help systems analysts develop and maintain information systems. ▸ CASE tools provide an overall frame work for systems development and support a wide variety of design methodologies, including structured analysis and object-oriented analysis. ▸ CASE tools can generate program code, which speeds the implementation process.
(5) People ■ *Stakeholders* ■ *Users*
■ *Stakeholders* - people who have an interest in an information system, including the management group responsible for the system, the users and IT staff members—such as systems analysts, programmers and network administrators who develop and support the system. ■ *Users* - people inside and outside the company who will interact with the system. ---- ▸ Each stakeholder group has a vital interest in the information system, but most experienced IT professionals agree that the success or failure of a system usually depends on whether it meets the needs of its users. 🢃 ▸ For that reason, it is essential to understand user requirements and expectations throughout the development process.
(1) Top Managers ■ *Strategic plans*
■ Develop long-range plans, called *strategic plans*, which define the company's overall mission and goals. 🢃 "How much should the company invest in information technology?" "How much will Internet sales grow in the next five years?" "Should the company build new factories or contact out production functions?" ---- ▸ Top managers focus on the overall business enterprise and use IT to set the company's course and direction. ▸ To develop a strategic plan, top managers also need information from outside the company, such as economic forecasts, technology trends, competitive threats and governmental issues.
Systems Development Methods (a.) *Structured analysis* (b.) *Object-oriented (O-O) analysis* (c.) *Agile methods* (also called *adaptive methods*)
■ Many options exist for developing information systems, but the most popular alternatives are: (a.) *structured analysis*, which is a traditional method that is still widely used; (b.) *object-oriented (O-O) analysis*, which is a more recent approach that many analysts prefer; (c.) *agile methods* (also called *adaptive methods*), which include the latest trends in software development.
(II.) B2B (business-to-business) ■ *Electronic data interchange (EDI)* ■ *Supply chain*
▸ Although the B2C sector is more familiar to retail customers, the volume of B2B transactions is many times greater. ▸ Industry observers predict that B2B sales will increase sharply as more firms seek to improve efficiency and reduce costs. ---- ■ *Electronic data interchange (EDI)* - initially, electronic commerce between two companies used a data-sharing arrangement called EDI. ▸ EDI enabled computer-to-computer data transfer, usually over private telecommunications lines. ▸ Firms used EDI to: (1) plan production; (2) adjust inventory levels; or (3) stock up on raw materials using data from another company's information system. ▸ As B2B volume soared, company-to-company transactions migrated to the Internet, which offered: (1) standard protocols; (2) universal availability; and (3) low communications costs. ▹ The main advantage of the web is that it offers seamless communication between different hardware and software environments, anywhere and anytime. ---- ▸ Because it allows companies to reach the global marketplace, B2B is especially important to smaller suppliers and customers who need instant information about prices and availability. ▸ In an approach that resembles an open marketplace, some B2B sites invite buyers, sellers, distributors and manufacturers to offer products, submit specifications and transact business. ---- ▸ Most large firms and government agencies use supply chain management (SCM) software. ■ *Supply chain* - refers to all the companies who provide materials, services and functions needed to provide a product to a customer. ▹ e.g., a Sherwin-Williams customer who buys a gallon of paint is at the end of a chain that includes the raw material sources, packaging suppliers, manufacturers, transporters, warehouses and retail stores. ▸ Because SCM is complex and dynamic, specialized software helps businesses manage inventory levels, costs, alternate suppliers, etc.
User productivity systems ■ *Groupware*
▸ Companies provide employees at all levels with technology that improves productivity. ■ *User productivity systems* - include: (1) email; (2) voice mail; (3) video and web conferencing; (4) word processing; (5) automated calendars; (6) database management; (7) spreadsheets; (8) desktop publishing; (9) presentation graphics; (10) company intranets; (11) integrated mobile computing systems. 🢃 ▸ User productivity systems also include groupware. ■ *Groupware* - programs that enable users to share data, collaborate on projects and work in teams. ---- ▸ When companies first installed word processing systems, managers expected to reduce the number of employees as office efficiency increased. ▸ Instead, with computers performing repetitive work, office personnel were able to handle tasks that required more judgment, decision-making and access to information. 🢃 ▸ Companies assigned more responsibility to employees at lower organizational levels. Relatively inexpensive hardware, powerful networks, corporate downsizing and a move toward employee empowerment also contributed to this trend. ▸ Today, administrative assistants and company presidents alike are networked, use computer workstations and share corporate data to perform their jobs.
Knowledge base ■ *Inference rules*
▸ Knowledge management systems use a large database called a *knowledge base* that allows users to find information by entering keywords or questions in normal English phrases. ■ *Inference rules* - logical rules that identify data patterns and relationships. ---- ▹ e.g., WolframAlpha describes itself as a "computational knowledge engine." It has a sophisticated natural language front end that understands user queries in several domains. 🢃 ▹ It relies upon a large knowledge base spanning multiple websites and its own proprietary algorithms to provide users with detailed answers to their questions on many different topics. The results are displayed using a mix of multimedia, including mathematical equations if appropriate.
(2) Middle Managers and Knowledge Workers
▸ Middle managers provide direction, necessary resources and performance feedback to supervisors and team leaders. ▸ Because they focus on a somewhat shorter time frame, middle managers need more detailed information than top managers, but somewhat less than supervisors who oversee day-to-day operations. ▹ e.g., a middle manager might review a weekly sales summary for a three-state area, whereas a local sales team leader would need a daily report on customer sales at a single location. ---- ▸ In addition to middle managers, every company has people called knowledge workers. ▸ Knowledge workers include: (1) systems analysts; (2) programmers; (3) accountants; (4) researchers; (5) trainers; (6) human resource specialists; and (7) other professionals. ▸ Knowledge workers provide support for the organization's basic functions.
Systems integration
▸ Most large companies require systems that combine transaction processing, business support, knowledge management and user productivity features.
(4) Operational Employees ■ *Empowerment*
▸ Operational employees include users who rely on transaction processing systems to enter and receive data they need to perform their jobs. 🢃 ■ This trend, called *empowerment*, gives employees more responsibility and accountability; many companies find that empowerment improves employee motivation and increases customer satisfaction.
Structured analysis ■ *Systems development life cycle (SDLC)* ■ *Business rules* ■ *Data flow diagram (DFD)* ■ *Waterfall model* ■ *Deliverable*
▸ Structured analysis is a traditional systems development technique that is time-tested and easy to understand. ▸ Structured analysis uses a series of phases, called the *systems development life cycle (SDLC)*, to plan analyze, design, implement and support an information system. ▸ Although structured analysis evolved many years ago, it remains a popular systems development method. ▸ Based on an overall plan, similar to a blueprint for constructing a building, so it is called a predict approach. ---- ▸ Uses a set of process models to describe a system graphically. ▸ Because it focuses on processes that transform data into useful information, structured analysis is called a *process-centered technique*. ▸ In addition to modeling the processes, structured analysis also addresses data organization and structure, relational database design and user interface issues. ---- ▸ A process model shows the data that flows in and out of system processes. ■ Inside each process, input data is transformed by *business rules* that generate the output. ■ The model, which represents a school registration system, is called a *data flow diagram (DFD)* because it uses various symbols and shapes to represent data flow, processing and storage. ---- ▸ Structured analysis uses the SDLC to plan and manage the systems development process. ▸ The SDLC describes activities and functions that all systems developers perform, regardless of which approach they use. ■ In the *waterfall model*, the result of each phase is called a *deliverable*, which flows into the next phase. ---- ▸ Some analysts see a disadvantage in the built-in structure of the SDLC, because the waterfall model does not emphasize interactivity among the phases. 🢃 ▸ This criticism can be valid if the SDLC phases are followed too rigidly. However, adjacent phases can and do interact, and interaction among several phases is not uncommon. 🢃 ▸ Used in this manner, the traditional model is not as different from agile methods as it might appear to be.
(3) Supervisors and Team Leaders
▸ Supervisors, often called team leaders, oversee operational employees and carry out day-to-day functions. ▸ They coordinate operational tasks and people, make necessary decisions, and ensure that the right tools, materials and training are available.
Business information systems
▹ In the past IT managers identified an information system based on its primary users. For example, administrative staff used office systems, operational people used operational systems, middle managers used decision support systems and top managers used executive information systems. ---- ▸ Today, those traditional labels no longer apply. For example, all employees, including top managers, use office productivity systems to do their jobs. 🢃 ▸ Similarly, operational users often require decision support systems to do their jobs. *** As business changes, information use also changes, and now it makes more sense to identify a system by its functions and features, rather than by its users. ***
(I.) B2C (business-to-consumer)
▹ Using the Internet, consumers can go online to purchase an enormous variety of products and services. ▸ This new shopping environment allows customers to: (1) do research; (2) compare prices and features; (3) check availability; (4) arrange delivery; and (5) choose payment methods in a single convenient session. ▸ Many companies, such as airlines, offer incentives for online transactions because web-based processing costs are lower than traditional methods. ▹ By making flight information available online to last-minute travelers, some airlines also offer special discounts on seats that might otherwise go unfilled. ---- ▸ B2C commerce is changing traditional business models and creating new ones. ▹ e.g., a common business model is a retail store that sells a product to a customer. To carry out that same transaction on the Internet, the company must develop an online store and deal with a totally different set of marketing, advertising and profitability issues. ---- ▸ Some companies have found new ways to use established business models. ▹ e.g., eBay.com has transformed a traditional auction concept into a popular and successful method of selling goods and services. ▹ Other retailers seek to enhance the online shopping experience by offering gift advisers, buying guides, how-to clinics and similar features. ▸ In the e-commerce battles, the real winners are online consumers, who have more information, better choices and the convenience of shopping at home.
