ISA 235

You should be able to provide examples of disruptive technologies and discuss how new technologies can be disruptive. The focus should be on the business implications, especially regarding strategy. You should understand why the Internet was a big disruption, and how it enabled changes to many longstanding business processes.

- Disruptive technology is a new way of doing things that initially does not meet the needs of existing customers; it tends to open new markets and destroy old ones - Typically enter at the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies - Internet is a massive network that connects computers all over the world and allows them to communicate with one another - Internet enabled companies to communicate with anyone, anywhere, at anytime - Examples of disruptive technologies: - Sony - portable radio - Netflix - stream movies anytime/anywhere - Uber - disrupted the taxi market - Cell phones - disrupted landlines - Amazon - disrupted Barnes & Noble

You should understand the consequences of downtime for an organization.

- Downtime refers to a period of time when a system is unavailable - Costs of downtime are not only associated with lost revenues, but also with financial performance, damage to reputation, and even travel or legal expenses - Reliability and resilience of IT systems have never been more essential for business success

Organizations must enable employees, customers, and partners to access information electronically. You should know that the biggest issue surrounding information security is not a technical issue, but a people issue. The first line of defense an organization should follow to help combat insider issues is to develop information security policies and an information security plan.

- Information security policies identify the rules required to maintain information security, such as requiring users to sign off before leaving, never sharing passwords, and changing passwords every 30 days - Information security plan details how an organization will implement the information security policies - The best way for a company to safeguard itself against people is by implementing and communicating its information security plan - This becomes even more important with Web 2.0 and the use of mobile devices, remote workforce, and contractors are growing

You should understand how businesses generate revenue from ebusiness.

- Many companies generate revenue from the marketers and advertisers that pay to place their ads on the website - Can also generate revenue through pay-per-click, pay-per-call, and pay-per-conversion - Can also generate revenue through advertising fees, licensing fees, subscription fees, transaction fees, and value-added service fees

You should be able to define business-related metrics, and explain how managers use them to measure business success, understanding that the three primary organization levels have different metrics needs. You do not need to memorize the list of effectiveness metrics; rather, you should understand the concept of metrics and how orgs use them.

- Metrics are measurements that evaluate results to determine whether a project is meeting its goals - Critical success factors (CSFs) are the crucial steps companies perform to achieve their goals and objectives and implement their strategies - Key performance indicators (KPIs) are the quantifiable metrics a company uses to evaluate progress toward CSFs - Efficiency MIS metrics measure the performance of MIS itself o Throughput, transaction speed, system availability, information accuracy, response time - Effectiveness MIS metrics measure the impact MIS has on business process and activities o Usability, customer satisfaction, conversion rates, financial - Benchmarks are baseline values the system seeks to attain

You should be able to classify the different operational support systems, managerial support systems, and strategic support systems, and explain how managers can use these systems to make decisions and gain competitive advantages. This is not an exercise where you need to know the lists of systems. Rather, understand the concept of how MIS enables decision-making in orgs.

- Operational Support Systems - transaction processing systems - Transactional information - Capture information using technology - Input → Process → Output (with Feedback flowing into all three) - Managerial Support Systems - decision support systems - Analytical information - Online analytical processing (OLAP) is the manipulation of information to create business intelligence in support of strategic decision making - Decision support systems model information using OLAP, which provides assistance in evaluating and choosing among different courses of action - Strategic Support Systems - executive information systems - Decision making at this level requires business intelligence and knowledge to support the uncertainty and complexity associated with business strategies - Digital dashboards compile information from multiple sources and deliver fast results

You should know that requirements determination and management is critical to any system development project. You should be able to describe how requirements are handled in the SDLC and in agile methods, and understand that changing and unclear requirements are unavoidable and must be dealt with.

- Project requirements document - defines the specifications for product/output of the project and is key for managing expectations, controlling scope, and completing other planning efforts - Project objectives - quantifiable criteria that must be met for the project to be considered a success

You should be able to explain the usefulness of an accepted or established code of procedure or behavior in any group, organization, or situation and how protocols have contributed to the success of the Internet in creating a connected world.

- Protocol - standard that specifies the format of data and the rules to be followed during transmission - Computers using the same protocol can communicate easily, providing accessibility, scalability, and connectability between networks - TCP/IP allows diverse networks to connect and communicate with each other, essentially allowing LANs, WANs, and MANs to grow with each new connection

You should understand the concept of a service and how it can embody a business process. You should recognize the advantages of the loose coupling of encapsulated services in a service oriented architecture.

- Service-oriented architecture (SOA) - business-driven enterprise architecture that supports integrating a business as linked, repeatable activities, tasks, or services - Service - tasks that customers will buy to fulfill a want or need - A SOA service is simply a business task, such as checking a potential customer's credit rating when opening a new account - SOA works with services that are not just software/hardware but business tasks - it is a pattern for developing a more flexible kind of software application that can promote loose coupling among software components while reusing existing investments in technology in new, more valuable ways across the organization - Loose coupling - the capability of a services to be joined on demand to create composite services or disassembled just as easily into their functional components - Way of ensuring that the technical details are decoupled from the service - Before the transaction occurs, the services operating within the SOA are dormant and disconnected - Only interact to execute their piece of the overall process - Allows for more flexible, dynamic exchange

You should understand the relationship between supply chain and strategy, value chain, and business processes.

- Strategy determines what business process that go into a value chain - Supply chain is part of the value chain in primary value activities

You should be able to describe how the Cloud enables individuals or businesses to pay only for the services they need, when they need them and where. Further, how the move to the Cloud has reduced barriers to entry and leveled the playing field in the ability to leverage strategic innovation.

- The cloud allows for small/medium sized companies to have the same powerful systems as large companies without making big capital investments - Offers on-demand self-service, broad network access, multi-tenancy, rapid elasticity and a measured service (clients can monitor and measure transactions and use of resources) - The cloud provides hardware and software, making it a viable option for companies of all sizes→ Only pay to access the program - Can buy more processing power for peak periods - User does not have to incur any hardware, software, or networking expenses

You should be able to describe that transactional information encompasses all of the information contained within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks while analytical information encompasses all organizational information, and its primary purpose is to support the performing of managerial analysis tasks.

- Transactional information - encompasses all of the information contained within a single business process or unit of work - Primary purpose is to support the performing of daily operational tasks - Analytical information - encompasses all organizational information - Primary purpose is to support the performing of managerial analysis tasks

You should understand how an organization can implement strategy using Porter's value chain analysis and demonstrate IT's role in strategy.

- Value chain analysis views a firm as a series of business processes that each add value to the product or service - A business process is a standardized set of activities that accomplish a specific task, such as processing a customer's order - Once a firm identifies the industry it wants to enter and the generic strategy it will focus on, it must choose the business process required to create its products or services - The firm must make sure the processes add value and create competitive advantage - Examining a firm as value chain allows managers to identify the important business processes that add value for customers and then find MIS solutions that support them

You should understand that legal and ethical lines are blurry and everyone's ethical lines are different.

- What is legal may not always be ethical - Ethically questionable activities: - Individuals copy, use and distribute software - Employees search organization databases for sensitive information - Organizations collect, buy and use information without checking the validity of it - Individuals create and spread viruses to cause trouble in IT systems - The goal for most businesses is to make decisions that are both legal and ethical - Information itself has no ethics

You should know the value of business process modeling, and compare As-Is and To-Be models. Understand the relationship to systems thinking.

Business process modelling is the activity of creating a detailed flowchart or process map of a work process that shows its inputs, tasks, and activities in a structured sequence - Allows for easy communication and understanding of how core business processes are helping or hindering the business - Business process model is a graphical depiction of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint - As-Is process model represents the current state of the operation without any specific improvements or changes to the existing processes - To-Be process model shows the results of applying change improvement opportunities to the current (As-Is) process model

You should be able to describe the importance of and methods a firm can use to verify that it is ready to respond to an emergency in an organized, timely, and effective manner.

- A firm needs to respond to an emergency in an organized, timely, and effective manner to reduce the amount of downtime that it will experience - Backup and recovery plan - Minimizes the damage of a system crash - A backup is an exact copy of a system's information - Recovery is the ability to get a system up and running in the event of a system crash or failure that includes restoring the information backup - Fault tolerance is the ability for a system to respond to unexpected failures or system crashes as the backup system immediately and automatically takes over with no loss of service - Disaster recovery plan - A detailed process for recovering information or a system in the event of a catastrophic disaster - May include a backup site (hot, warm, or cold) - Business continuity plan - Details how a company recovers and restores critical business operations and systems after a disaster or extended disruption - Contains disaster recovery plans along with many additional plans, including business impact analysis, emergency notification plans, and technology recovery strategies

You should be able to describe the silo problem, how silos come about, and why data duplication is undesirable. Refer to the data redundancy discussion in Chapter 6 as a similar idea.

- An information silo is an insular management system in which one information system or subsystem is incapable of reciprocal operation with others that are related - Thus information is not adequately shared but rather remains sequestered within each system or subsystem - Information silos occur whenever a data system is incompatible or not integrated with other data systems - Duplicate data can cause storage and data integrity issues, making it difficult to determine which values are the most current or most accurate

You should be able to discuss the added complexities that come from a connected world such as continuous 24/7/365 operations and added security vulnerabilities/the difficulty protecting key digital assets.

- Anytime a wireless network connects to a wired one, the wireless network can serve as a conduct for a hacker to gain entry into an otherwise secure wired network - The millions of access points enabled by the internet now allows hackers to work from a distance - This has spawned a variety of security techniques including firewalls, VPNs, SSL and HTTPS - Wired Equivalent Privacy (WEP) - an encryption algorithm designed to protect wireless transmission data by converting the data into a nonhuman readable form - Intranets and extranets let firms share their corporate information securely

You should be able to describe artificial intelligence and how this evolved technology has allowed for greater, more effective unstructured strategic decision making.

- Artificial intelligence simulates human thinking and behavior such as the ability to reason and learn - Increases the speed and consistency of decision making, solving problems with incomplete information and resolving complicated issues that cannot be solved by conventional computing - Five categories of AI: - 1) Expert systems - computerized advisory programs that imitate the reasoning process of experts in solving difficult problems o Fill the gap when human experts are difficult to find or are too expensive - 2) Neural networks - attempts to emulate the way the human brain works o Analyze large quantities of information to establish patterns and characteristics in situations where the logic or rules are unknown - 3) Genetic algorithms - mimics the evolutionary process to generate increasingly better solutions to a problem o Can find and evaluate thousands of solutions faster and more thoroughly than a human - 4) Intelligent agent - special-purpose, knowledge-based information system that accomplished specific tasks on behalf of its users o Can handle all supply chain buying and selling o Environmental scanning and competitive intelligence - 5) Virtual reality - a computer-simulated environment that can be a simulation of the real world or an imaginary world o Enables telepresence where users can be anywhere in the world and use virtual reality systems to work at a remote site

You should be able to explain the value of business processes for a company, and differentiate between customer-facing and business-facing process.

- Business processes transform a set of inputs into outputs - Improving the efficiency/effectiveness of the business processes will improve the firm's value chain - Customer-facing processes result in a product or service received by an organization's external customer - Includes fulfilling orders, communicating with customers, and sending out bills and marketing information - Business-facing processes are invisible to the external customer but essential to the effective management of the business - Include goal setting, day-to-day planning, giving performance feedback and rewards, and allocating resources

Understand the concept of business strategy, noting that Porter's 5 Forces is 1 way to define -but it's not the only way.

- Business strategy is a leadership plan that achieves a specific set of goals or objectives such as increasing sales, decreasing costs, entering new markets, or developing new products and services - Porter's Five Forces Model analyzes the competitive forces within the environment in which a company operates to assess the potential for profitability in an industry - Its purpose is to combat these competitive forces by identifying opportunities, competitive advantages, and competitive intelligence - If the forces are strong, they increase competition - 1) Buyer Power - the ability of buyers to affect the prices they must pay for an item - Reduce by manipulating switching costs and implementing loyalty programs - 2) Supplier power - the suppliers' ability to influence the prices they charge for supplies - If supplier power is high, suppliers can influence the industry by charging higher prices, limiting quality or services, and shifting costs to industry participants - Reduce by finding alternative products - 3) Threat of New Entrants - high when it is easy for competitors to enter the market and low when there are significant entry barriers to joining the market - Entry barrier is a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival - 4) Rivalry Among Existing Competitors - high when competition is fierce in a market and low when competitors are more complacent - Reduce through product differentiation which occurs when a company develops unique differences in its products or services with the intent to influence demand - 5) Threat of Substitute Products or Services - high when there are many alternatives to a product or service and low when there are few alternatives from which to choose - Reduce by offering additional value through wider product distribution, increasing the availability relative to other products - Porter's Three Generic Strategies for entering a new market - 1) broad market and low cost, 2) broad market and high cost, 3) narrow market and low cost, 4) narrow market and high cost

You should understand the general way organizations obtain competitive advantage: the Evaluate/Set Strategy/Execution overlay and the role each plays in developing the competitive advantage.

- Competitive advantage is a feature of a product or service on which customers place a greater value than on similar offerings from competitors → temporary - Firms must continually adapt to their competitive environments which can cause business strategy to shift

Students should understand the goals of CRM, both strategic and operational. You don't need to memorize a list (like the list of strategic goals on p. 224), but you should understand them in broad strokes and be able to recognize them in context.

- Customer relationship management (CRM) - involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and the organization's profitability - CRM strategic goals include: - Identify sales opportunities - Classify low-value customers and create marketing promotions to increase consumer spending - Classify high-value customers and create marketing promotions to increase consumer loyalty - Analyze marketing promotions by product, market segment, and sales region - Identify customer relationship issues along with strategies for quick resolution - CRM moves far beyond technology by identifying customer needs and designing specific marketing campaigns tailored to each - Three phases of CRM: - 1) Reporting - customer identification - asking what happened o Help organizations identify their customers across other application - 2) Analyzing - customer segmentation - asking why it happened o Help organizations segment their customers into best and worst - 3) Predicting - customer prediction - asking what will happen o Help organizations predict consumer behavior, such as which customers are at risk of leaving - Operational CRM supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers - Customer service and support - Sales force automation - tracks all the steps in the sales process - Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

You should understand how companies sift through large amounts of data, extract information and turn that information into actionable knowledge.

- Data mining is the process of analyzing data to extract information not offered by the raw data alone - Estimation analysis - determines values for an unknown continuous variable behavior or estimated future value - Affinity grouping analysis - reveals the relationship between variables along with the nature and frequency of the relationships - Market basket analysis - evaluates items such as websites and checkout scanner information to detect customers' buying behavior and predict future behavior by identifying affinities among customers' choices of products and services - Cluster analysis - a technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible and the different groups are as far apart as possible - Classification analysis - the process of organizing data into categories or groups for its most effective and efficient use - Comparative analysis - can compare two or more data sets to identify patterns and trends - Use data mining tools to find patterns and relationships in large volumes of information that predict future behavior and guide decision making - Use advanced data analytics to turn that information into knowledge - Algorithms are mathematical formulas placed in software that perform analysis on data sets - Advanced analytics uses data patterns to make forward-looking predictions to explain to the organization where it is headed - Can also use data visualization to better understand the information - Business intelligence has now become the art of sifting through large amounts of data, extracting information, and turning that information into actionable knowledge

You should be able to explain how data warehouses extend the transformation of data into information while providing the ability to support decision making without disrupting the day-to-day operations.

- Data warehouses are logical collections of information, gathered from many different operational databases that supports business analysis activities and decision-making tasks - Combine strategic information throughout an organization into a single repository so that people who need that information can make decisions and undertake business analysis - Standardize information - allows for greater accuracy, completeness, and consistency and increases the quality of the information in making strategic business decisions - Extraction, transformation, and loading (ETL) - process that extracts information from internal/external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse - The data warehouse then sends subsets of information to data marts - Data warehousing provides the ability to support decision making without disrupting day-to-day operations - Data warehouse technologies have set up repositories to store information; improved ETL has increased the speedy collecting of information; business intelligence has now become the art of sifting through large amounts of data, extracting information, and turning that information into actionable knowledge

You should be able to explain the benefits of an interactive website kept constantly updated and relevant to the needs of its customers using a database.

- Data-driven websites are interactive websites kept constantly updated and relevant to the needs of its consumers using the database - Can help limit the amount of information displayed to customers based on unique search requirements - Number of advantages: - Web browsers are much easier to use than directly accessing the database using a custom-query tool - The web interface requires few or no changes to the database model - It costs less to add a web interface in-front of the DBMS than to redesign and rebuild the system to support changes - Easy to manage content - owners can make changes without relying on MIS professionals - Easy to store large amounts of data in an organized fashion - Easy to eliminate human error

You should be able to describe how DBMS allows users to create, read, update, and delete structured data in a relational database. Further, you should be able to explain the role that relational database management systems play in data-driven decision making.

- Database Management System creates, reads, updates, and deletes data in a database while controlling access and security - Managers send requests to the DBMS, and the DBMS performs the actual manipulation of the data in the database - Retrieves data through query-by-example or SQL - Relational database model stores information in the form of logically related 2D tables - Relational databases provide many business advantages: - Increased flexibility - allowing each user to access the information in whatever way best suits his or her needs - Increased scalability and performance - scalable to handle massive volumes of information and large number of users expected; needs to perform quickly under heavy use - Reduce information redundancy - redundant data can cause storage and data integrity issues - Increased information integrity (quality) - enforced through business rules and relational integrity constraints - Increased information security - Helps make decision-making easier because relational databases can be aggregated through SQL to get only the necessary data and information

You should be able to describe this means by which portable devices can connect wirelessly to a local area network, using access points that send and receive data via radio waves.

- Each computer initially connects to the access point and then to other computers on the network - Wi-Fi is a means by which portable devices can connect to a LAN, using access points that send and receive data via radio waves - In a Wi-Fi network, the user's device has a wireless adapter that translates data into a radio signal and transmits it to the wireless access point - The wireless access points, which consists of a transmitter with an antenna that is often built into the hardware, receives the signal and decodes it o The access point then sends the information to the internet over a wired broadband connection ▪ When receiving data, the wireless access point takes the information from the internet, translates it into a radio signal, and sends it to the computer's wireless adapter

You should be able to identify how different departments in a company are challenged in working together to achieve success, and be able to explain systems thinking and how management information systems enable business communications.

- Each department link together to achieve a common purpose (a system) - Systems thinking is a way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs while gathering feedback on each part - Management information systems (MIS) is a business function which moves information across the company to facilitate decision making and problem solving

You should be able to define ebusiness and understand that it's not just ecommerce. You should be able to recognize the importance of how ebusiness tools revolutionized back-office processes (e.g., collaboration) and B2B ecommerce in addition to the B2C ecommerce. You should get the idea of Fig. 3.24, although you need not memorize all nine business models.

- Ebusiness includes ecommerce along with all activities related to internal and external business operations - Opened a new marketplace for any company willing to move its business operations online - Ecommerce is the buying and selling of goods and services over the Internet - Ebusiness allows for easy access to real-time information - Operates 24/7 - this availability reduces transaction costs since consumers no longer have to spend a lot of time researching purchases or traveling distances to make them - Allows for extended information reach and richness - Ebusiness is perfect for increasing niche-product sales → mass customization and personalization - Reduces intermediaries as businesses can sell directly to customers - Ebusiness allowed for business processes that require less time and human effort or can be eliminated entirely - B2B - 80% of all online relationships - examples include medical billing service, software sales and licensing, and virtual assistant business - Can interact on emarketplaces

You should know that the primary purpose of an ERP system (as a whole) is integration. You should understand that ERP can be costly and often risky, especially when the ERP is customized. Reflect back on Chapter 2's discussion of reengineering as it relates to business processes.

- Enterprise resource planning (ERP) - integrates all departments and functions throughout an organization into a single system so that employees can make decisions by viewing enterprise-wide information on all business operations - Software customization modifies existing software according to the business's or user's requirements - Heavy customization leads to complex code that must be continuously maintained and upgraded - Customizing an ERP system is costly and complex and should only be done when there is a specific business advantage - The primary risk for ERP implementation are the costs associated with it: - Software costs, consulting fees, process rework, customization, integrations, testing, training, data warehouse integration and data conversions - Business process re-engineering (BPR) is the analysis and redesign of workflow within and between enterprises - Creating value for the customer is the leading reason for instituting BPR and MIS plays an important enabling role

You should understand that enterprise systems replace multiple siloed systems with a single application, thus integrating the systems. You should recognize EAI as an alternative that uses middleware to connect legacy applications.

- Enterprise systems provide enterprise-wide support and data access for a firm's operations and business processes - Integrating an organization's databases allow separate systems to communicate directly with each other, eliminating the need for manual entry into multiple systems and increasing information quality - Eintegration is the use of the internet to provide customers with the ability to gain personalized information by querying corporate databases and their information resources - Application integration is the integration of a company's existing management information systems - Data integration is the integration of data from multiple sources, which provides a unified view of all data - Enterprise application integration (EAI) connects the plans, methods, and tools aimed at integrating separate enterprise systems - Integrations are achieved through middleware - several different types of software that sit between and provide connectivity for two or more software applications; translates information between disparate systems - Enterprise application integration (EAI) middleware takes a new approach to middleware by packaging commonly used applications together, reducing the time needed to integrate application from multiple vendors

You should know that organizations develop a variety of policies to protect information assets.

- Ethical computer use policy - Information privacy policy - Acceptable use policy - Email privacy policy - Social media policy - Workplace monitoring policy

Understand that information ethics govern the ethical and moral issues arising from the development and use of information technologies, as well as the creation, collection, duplication, distribution, and processing of information itself (with or without the aid of computer technologies).

- Ethics are the principles and standards that guide our behavior toward other people - Information ethics govern the ethical and moral issues arising from the development and use of information technologies, as well as the creation collection, duplication, distribution, and processing of information itself

You should understand the concepts of hackers and viruses. You should be able to describe common types of viruses (refer to the Key Terms), but you won't be required to describe how each one works. For example, you should know that a worm is a kind of virus, but should be required to know how the worm works.

- Hackers are experts in technology who use their knowledge to break into companies and computer networks, either for profit or just motivated by the challenge - A virus is software written with malicious intent to cause annoyance or damage

Know that when you understand how work flows through an organization you can identify bottlenecks, redundancies and process issues. You should understand that types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

- Investigating business processes can help an organization find bottlenecks, remove redundant tasks, and recognize smooth-running processes - Automation is the process of computerizing manual tasks, making them more efficient and effective and dramatically lowers operational costs by reducing head count - Streamlining improves business process efficiencies by simplifying or eliminating unnecessary steps - Bottlenecks occur when resources reach full capacity and cannot handle any additional demands o They limit throughput and impede operations - Redundancy occurs when a task or activity is unnecessarily repeated

You should be able to explain the characteristics of quality data and the issues that arise from poor quality data. Also, you should be able to explain how these issues are addressed by organizations (e.g., information cleansing).

- High-quality information can significantly improve the chances of making a good decision and directly increase an organization's bottom line - Five characteristics of quality information: accurate, complete, consistent, timely, unique - Four primary reasons for low-quality information: - Online customers intentionally enter inaccurate information to protect their privacy - Different systems have different information entry standards and formats - Data-entry personnel enter abbreviated information to save time or erroneous information by accident - Third-party and external information contains inconsistencies, inaccuracies, and errors - Dirty data includes: - Inaccurate data - Duplicate data - Misleading data - Incorrect data - Violates business rules data - Non-formatted data - Non-integrated data - Using the wrong information can lead managers to make erroneous decisions which can cost time, money, reputations, and even jobs - Organization treat these issues through information cleansing and scrubbing which weeds out and fixes or discards inconsistent, incorrect, or incomplete information - Achieving perfect information is almost impossible - the more complete and accurate an organization wants its data to be, the more it costs

You should be able to describe how firms which have traditionally relied on onsite hardware, are now incorporating cloud services, and how the increase in the use of cloud services can help establish a sustainable infrastructure now and in the future.

- Huge increases in technology use has greatly amplified energy consumption - Originally computers were designed to run a single application on a single operating system - The cloud has multi-tenancy which means that a single instance of a system serves multiple customers - The cloud offers a company higher availability, great reliability, and improved accessibility - all with affordable high-speed access - Reduces ewaste by eliminating individual hardware because companies can get it from the cloud server instead - Grid computer makes better use of MIS resources as systems can easily grow to handle peaks and valleys in demand → creates a virtual supercomputer as multiple computers work together to solve a common problem - Smart grids add the ability to remotely monitor, analyze, and control the transmission of power, making it more reliable and efficient - System virtualization is the ability to present the resources of a single computer as if it is a collection of separate computers - Virtualization is having a profound impact on data centers as the number of servers a company requires to operate decreases, thereby boosting growth and performance while reducing environmental impact

You should be able to explain why a company's infrastructure must be able to grow and change as the company grows/changes.

- If a company grows faster than anticipated, it might experience a variety of problems, from running out of storage space to taking more time to complete transactions - Performance issues experienced by firms can have disastrous business impacts causing loss of customers, suppliers, and help-desk employees - Need to ensure agile infrastructures that can meet business' operational needs

You should be able to provide an overview of the main types of typical computer networks including the hardware and software needed to for these networks to operate successfully. You should be able to compare and contrast how the categories have blended into the connectivity infrastructure that business is built upon today, how they relate to the Internet.

- Local area network (LAN) - connects a group of computers in close proximity, such as in an office building, school, or home - Wide area network (WAN) - spans large geographic areas such as a state, province, or country - Example is the internet - Metropolitan area network (MAN) - large computer network usually spanning a city - Personal area network (PAN) - provides communication for devices owned by a single user that work over a short distance - Example is Bluetooth - Network performance is measured in bandwidth which is the maximum amount of data that can pass from one point to another in a unit of time; measured in bit rate - A modem is a device that enables a computer to transmit and receive data - Broadband is a high-speed internet connection that is always connected - Two common types are digital subscriber lines and high-speed internet cable connections - Another type is broadband over power line

Demonstrate understanding that MIS is not technology -it's a business function. Most organizations have a department that is responsible for performing the MIS function (i.e. having an Accounting department that is responsible for performing the accounts payable and accounts receivable functions).

- Management information system (MIS) is a business function which moves information about people, products, and processes across the company to facilitate decision making and problem solving - Incorporates systems thinking to help companies operate cross-functionally - Most companies have an internal MIS department often called information technology (IT)

You should be able to explain the ability to innovate and compete enabled by inexpensive, reliable, and cheap connectivity, and understand how the playing field has been leveled for small companies to have access to resources not possible in the recent past which enables them to innovate and compete in very different ways.

- Networking with LAN, WAN, or MAN allows employees to share data quickly and easily and to use applications such as databases and collaboration tools that rely on sharing - By sharing data, networks have made business processes more efficient - Information technology lets small businesses communicate with customers and suppliers without regard to time, place, and sometimes even cost - Historically, this capability was limited to large companies because only they could afford to have worldwide marketing teams

You should understand what outsourcing is, and be able to recognize the benefits and challenges.

- Outsourcing - arrangement by which one organization provides services for another organization that chooses not to perform them in-house - Enables organizations to keep up with market and technology advances with less strain on human and financial resources and more assurance that the IT infrastructure will keep pace with evolving business priorities - Onshore outsourcing - engaging another company within the same country for services - Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby country - Offshore outsourcing - using organizations from developing countries to write code or develop systems - Benefits of outsourcing: - Increased business quality and efficiency of business processes - Reduced operating expenses for head count and exposure to risk for large capital investments - Access to outsourcing service provider's expertise, economies of scale, best practices, and advanced technologies - Increased flexibility for faster response to market changes and less time to market for new products or services - Challenges of outsourcing: - Length of contract - usually long-term o It can be difficult to break o Forecasting business needs for the next several years is challenging and the contract might not meet future business needs o Re-creating an internal MIS department if the outsource provider fails is costly - Threat to competitive advantage - outsourcer could share the company's trade secrets - Loss of confidentiality - information that can be a competitive asset and often critical for business success could leak out if in the wrong hands

You should understand the importance of decision making for managers at each of the three primary organization levels (strategic, managerial, operational).

- Strategic level - unstructured decisions - managers develop overall business strategies, goals, and objectives as part of the company's strategic plan - Unstructured decisions occur in situations in which no procedures or rules exist to guide decision makers toward the correct choice - Related to the long-term business strategy of the firm o Example: decision about entering a new market over the next 3 years - Managerial level - semi-structured decisions - employees are continually evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change - Semi-structured decisions occur in situations in which few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision - Example: decision about producing new products or changing employee benefits - Operational level - structured decisions - employees develop, control, and maintain core business activities required to run the day-to-day operations - Structured decisions arise in situations where established processes offer potential solutions - Example: decision about reordering inventory or creating the employee staffing and weekly production schedules

You should understand what a supply chain is, and recognize how efficient and effective supply chain management can reduce the power of market forces and affect strategy (p. 215), and understand the importance of IS in supporting supply chain management.

- Supply chain - all parties involved, directly or indirectly, in obtaining raw materials or a product - Supply chain management (SCM) - the management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability - Supply chain is an intricate network of business partners linked through communication channels and relationships - Supply chain management systems manage and enhance these relationships with the goal of creating a fast, efficient, and low-cost network for business relationships that take products from concept to market - Efficient and effective supply chain management systems can enable an organization to have these effects on Porter's five forces: - Decrease the buyer power and increase supplier power - Increase buyer's switching costs to reduce the threat of substitute products and services - Create entry barriers to reduce the threat of new entrants - Increase efficiencies while seeking a competitive advantage through cost leadership - Procurement - the purchasing of goods and services to meet the needs of the supply chain - Supported by 3D printing - Logistics - includes the processes that control the distribution, maintenance, and replacement of materials and personnel to support the supply chain - Supported by RFID and drones - Materials management - includes that activities that govern the flow of tangible, physical materials through the supply chain, such as shipping, transport, distribution, and warehousing - Supported by robotics - focuses on creating artificial intelligence devices that can move and react to sensory input

You should understand the challenges and risks inherent in system development projects. You should be able to discuss the causes of these failures (refer to pp. 267). You need not know all the details of each phase of the SDLC, but should know, in broad strokes, what goes in in each phase.

- Systems development life cycle (SDLC) - the overall process for developing information systems, from planning and analysis through implementation and maintenance - Phase 1: Planning - establishes a high-level plan of the intended project and determines project goals - Phase 2: Analysis - the firm analyzes its end-user business requirements and refines project goals into defined functions and operations of the intended system - Phase 3: Design - establishes descriptions of the desired features and operations of the system, including screen layouts, business rules, process diagrams, pseudo code, and other documentation - Phase 4: Development - takes all the detailed design documents from the design phase and transforms them into the actual system - Phase 5: Testing - brings all the project pieces together into a special testing environment to eliminate errors and bugs and verify that the system meets all the business requirements - Phase 6: Implementation - the organization places the system into production so users can begin to perform actual business operations with it - Phase 7: Maintenance - the organization performs changes, corrections, additions, and upgrades to ensure the system continues to meet business goals - Primary reasons projects fail: - Unclear or missing business requirements - business requirements drive entire systems and if they are not accurate they will not be successful - Skipped phases - Changing technology - technology changes so fast that is it almost impossible to deliver an information system without having to update it - The cost of finding errors - if an error is found in the testing or implementation phase, it is going to cost a lot to fix because the organization has to change the actual system - Balance of the triple constraints (time, resources, scope) - if any one of these variables changes, then at least one other is likely to be affected

You should be able to describe the information age and the differences between data, information, business intelligence, and knowledge.

- The information age is the present time, during which quantities of facts are widely available to anyone who can use a computer - Data are raw facts that describe the characteristics of an object or event - Information is data converted into a meaningful and useful context - BI is information collected from multiple sources that analyzes patterns, trends, and relationships for strategic decision making - Knowledge is the skills, experience, and expertise, coupled with information and intelligence, that create a person's intellectual resources

You should be able to describe how the evolution of the web progressively enhanced business collaboration tools. While you need not know the details of all the technologies described in the chapter, you should be able to recognize appropriate uses of the most common tools and be able to compare them. These common tools are email and texting, which you should already be familiar with, plus blogs, wikis, and social media, which are listed as key terms.

- The network effect describes how products in a network increase in value to users as the number of users increases - Web 1.0 included email - The evolution from Web 1.0 to Web 2.0 allowed for user-contributed content, allowing for blogs, wikis, social networks - Social networks allow for tagging and social bookmarking - Blogs are online journals that allow users to post their own comments, graphics, and video - A wiki is a type of collaborative web pages that allows users to add, remove, and change content, which can be easily organized and reorganized as needed - Mashups are websites that use content from more than one source to create a completely new product or service - Web-conferencing blends videoconferencing with document sharing and allows the user to deliver a presentation over the web to a group of geographically dispersed participants - Videoconferencing allows people at two or more locations to interact via two-way video and audio transmissions as well as share documents - Can increase productivity because users participate without leaving their offices - Podcasting converts an audio broadcast to a digital music player - Can increase market reach and build customer loyalty - Email allows people to inform and communicate with many others simultaneously, immediately and with ease - Instant messaging enables instant or real-time communication between people

You should understand the meaning of Figure 4.13 as it relates to information security. Remember, this isn't really about itemizing lists. Instead, the concepts around each of these areas and what makes them unique from one another.

- Three areas of information security include: - People - Authorization and Authentication - Data - Prevention and Resistance - Attacks - Detection and Response 1) People - Authentication is a method of confirming users' identities - Authorization is the process of providing a user with permission including access levels and abilities - Authentication and authorization techniques fall into three categories; the most secure procedures combine all three - Something the users knows - user ID and password - Something the user has - smart card or token - Something that is part of the user - fingerprint and voice signature 2) Data - Content filtering occurs when organizations use software that filters content to prevent accident or malicious transmission of unauthorized information - Encryption scrambles information into an alternative form that requires a key or password to encrypt - Many companies have a private decryption key and give customers a public encryption key - Firewalls are hardware/software that guard a private network by analyzing incoming and outgoing information for the correct markings 3) Attacks - Intrusion detection software (IDS) features full-time monitoring tools that search for patterns in network traffic to identify intruders

You should be able to explain that untethered connectivity, anytime, anywhere, has fueled a major market and technology disruption, which has permeated almost every consumer market worldwide. The student will further expound that the "domino effect" of the success of wireless technology has resulted in a unique opportunity for innovation and creativity in technology, marketing, and business strategy.

- Untethered connectivity, anytime, anywhere, has fueled a major market and technology disruption - The success of wireless technology has resulted in a unique opportunity for innovation and creativity in technology, marketing, and business strategy - Three business applications taking advantage of wireless technologies include RFID, GPS, and GIS - RFID allows for asset tracking which allows a company to focus on its supply chain, reduce theft, identify the last known user of assets, and automate maintenance routines - Companies that deal in transportation combine GISs with database and GPS technology to plot routes with up-to-the-second information about the location of all their transport vehicles - GIS is also good at finding patterns - IT consumerization is the blending of personal and business use of technology devices and applications - Is having a huge impact on corporate MIS departments because they must determine how to protect their networks and manage technology that they did not authorize or recommend - Mobile device management tools enforce policies, track inventory, and perform real-time monitoring and performing

You should be able to describe the importance and methods to represent data in a visual format.

- Use visual representations so the data can be more easily understood - Infographics present the results of data analysis, displaying the patters, relationships, and trends in a graphical format - Great data visualizations provide insights into something new about the underlying patterns and relationships - Data visualization describes technologies that allow users to see or visualize data to transform information into a business perspective - Powerful way to simplify complex data sets by placing data in a format that is easily grasped or understood far quicker than the raw data alone - Helps people make decisions faster - Data visualization tools move beyond Excel graphs and charts into sophisticated analysis techniques such as controls, instruments, maps, time-series graphs, etc. - Can help uncover correlations and trends in data that would otherwise go unrecognized - Business Intelligence Dashboards track corporate metrics such as CSFs and KPIs and include advanced capabilities such as interactive controls, allowing users to manipulate data for analysis

You should understand that the Internet is a "network of networks" and the web is just one applications that uses it. The worldwide web is a dominant application, and it underlies many modern technologies, but the term "web" has become much broader in common use and is casually used to describe many things that don't use web technology. For example, the IoT and Web 3.0 are not about web pages.

- WWW is just one part of the Internet and its primary use is to correlate and disseminate information - Uses web browser to find information - Internet includes the WWW and other forms of communication systems like email - Mostly infrastructure - Web 1.0 - users of a website are passive; only owners control content - Extended the reach of many businesses to global markets - Web 2.0 - user-contributed content; collaboration inside and outside of an organization; content sharing through open sourcing; reputation system - Technical skills are no longer required to use and publish information on the WWW, eliminating entry barriers for online businesses - Web 3.0 - machine-based learning and reasoning; semantic web - Offers a way for people to describe information such that computers can start to understand the relationships among concepts and topics

You should understand why the SDLC was originally implemented as a waterfall method and how Agile seeks to improve on waterfall. You should understand the concept of iterative development, and how advances in technology have made it more practical (e.g., effective prototyping).

- Waterfall methodology - a sequence of phases in which the output of each phase becomes the input for the next - In the SDLC, this means that the steps are performed one at a time, in order - No longer serves today's development efforts because it is inflexible, expensive, and requires rigid adherence to the sequence of steps - Prototyping is a modern design approach where the designers and system users use an iterative approach to building the system - Discovery prototyping builds a small-scale representation or working model of the system to ensure it meets the user and business requirements - Iterative development - consists of a series of tiny projects - Has become the foundation for multiple agile methodologies - Agile methodology - aims for customer satisfaction through early and continuous delivery of useful software components developed by an iterative process using the bare minimum requirements - Fast and efficient with lower costs and fewer features - Helps refine feasibility and supports the process for getting rapid feedback as functionality is introduced - Four forms: rapid prototyping, extreme programming methodology, RUP methodology, scrum methodology

You should understand the usefulness of workflow control systems, BPMN, and analytics to business process improvement.

- Workflow control systems monitor processes to ensure tasks, activities, and responsibilities are executed as specified - BPMN is a graphical notation that depicts the steps in a business process - Business process improvement attempts to understand and measure the current process and make performance improvements accordingly