ITMG final exam ch 1

AMAZON,,,Store ,

THE OMNICHANNEL STRATEGY TO COMPETE WITH___ In recent years, the traditional bricks-and-mortar strategy for large retailers, with its accompanying high overhead costs, has become a liability rather than an asset. Amazon (www .amazon.com), which has no stores, has achieved major market share—and grown into the world's largest Internet retailer—through a combination of lower prices and huge selection. The third battleground is location, and retailers are not conceding that field to Amazon. Regarding location, Amazon poses additional problems to traditional retailers. For sameday delivery, Amazon customer pay an extra $8.99 or more at checkout. For $99 per year, the company offers its Prime service, which includes free two-day shipping for most items as well as same-day service starting at $3.99. Going further, Amazon's same-day delivery system works only if (a) Amazon has the item in stock at a nearby warehouse or (b) a third-party seller can immediately ship the order. To improve its delivery times, Amazon is adding robots, storage space, and refrigerators at more than 90 of its warehouses, which function as the company's fulfillment centers. Amazon routes deliveries via carriers such as FedEx and UPS, and now on Sundays using the U.S. Postal Service. To reach more U.S. customers more quickly, the company has spent about $14 billion since 2011 on new warehouses. It is adding some 5,000 full-time warehouse jobs. As of early 2015, Amazon could reach about 15 percent of the U.S. population with sameday delivery. The company is building another five warehouses, and it hopes to eventually reach 50 percent of Americans if it can secure storage space near the top 20 metropolitan areas. The Solution To compete with Amazon, some of the world's largest retailers are adopting an omni-channel strategy. In this strategy, customers seamlessly combine their experience of online shopping on any device with in-store shopping. This strategy is becoming increasingly important as Amazon builds its own fulfillment centers closer to customers. To compete more effectively online against Amazon, major retailers are turning their stores into mini-distribution hubs. Instead of fulfilling Web orders from warehouses located hundreds of miles from shoppers' homes, retailers such as Walmart (www.walmart.com), Best Buy (www.bestbuy.com), Target (www.target.com), Nordstrom (www.nordstrom.com), Macy's (www .macys.com), Lowe's (www.lowes.com), and Gap (www.gap.com) are routing orders to nearby stores. Store employees pick products from shelves, pack them into boxes, and drop them into FedEx and UPS trucks that take the items to customers. This trend, known as ship-from-store, saves money by utilizing shorter delivery routes. More importantly, it speeds up deliveries, avoids expensive markdowns on unsold products, and recoups sales that have been lost to Amazon. Let's take a closer look at Gap's omni-channel strategy. As the largest specialty apparel chain in the United States, Gap (www.gap.com) must keep its shelves well stocked at its approximately 3,000 worldwide stores. This process requires Gap to maintain an extensive in-store inventory. At the same time, Gap needs sufficient inventory in its e-commerce fulfillment channel to meet the growing customer demand. One element of Gap's mission is to make shopping seamless to its customers through its digital strategy. To integrate its in-store and e-commerce inventories, Gap developed an algorithm, known as Ship From Store, which it implemented in its Web site e-commerce system. Ship From --allows online shoppers to purchase Gap products directly from the store inventory. The system is integrated seamlessly into Gap's e-commerce system, so that customers are not aware of it. Ship From Store is not available from all stores, a factor that is critical to making the new feature profitable. The challenge was that the e-commerce system would bog down if it had to check the inventory of every store, which changes hour by hour. So, knowing which stores to include in the system is "the secret sauce," according to Gap's senior vice president of information technology. Claiming that the information is proprietary, Gap will not reveal how many stores the system taps, or what percentage of online shoppers receive items from warehouses compared with the situation before the company implemented Ship From Store. There is another reason why not all Gap locations are included: The staff in participating stores must be trained and equipped to receive an order and ship the goods, just as they would in a fulfillment and distribution center. When the Web site informs a customer that a purchase will be delivered the next day, then it is up to Gap staffers to make that happen. The blurring lines between the physical channel (stores) and the online channel help explain why Gap's IT and product management teams are located next to each other in the retailer's headquarters. They also explain why both groups are located within the company's growth, innovation, and digital business unit. Most customers engage in preshopping, meaning they go to the company's Web site and browse the merchandise. For customers who want to see an item, feel its fabric, or try it on, Gap added a Find In Store function, which advises shoppers where to find the nearest store that stocks that item. Find In Store led to Reserve In Store, where a shopper can place a hold on an item for 24 hours. The progression demonstrates that Ship From Store was not a single project that the IT group launched into production and then moved on to the next project. With the added functionalities, IT must constantly review how the system as a whole is functioning and make any necessary revisions. The algorithm is not static. Results Let's take a closer look at three retailers: Walmart, Best Buy, and Gap. In early 2015, Walmart was shipping online orders from 35 stores. This ship-from-store strategy has exceeded expectations, and Walmart is planning to expand the service to hundreds of its stores. Nearly 70 percent of the U.S. population live within five miles of a Walmart, so the company is using store locations as nodes in a broader distribution network that includes storage warehouses and specific fulfillment centers for online orders. In early 2015, roughly 10 percent of the items ordered on Walmart.com were shipped from stores, and the majority of those packages were delivered within two days or less. Walmart charges a $10 fee for same-day delivery service. In some cases, the company uses third-party carriers to ship items from its stores. In addition, Walmart employees sometimes deliver products by car. Best Buy, the largest U.S. consumer electronics retailer, was labeled a "Big Box Zombie" on the cover of Bloomberg BusinessWeek in October 2012. However, the company is experiencing a rebound. A crucial part of this turnaround is the ship-from-store process, which Best Buy has deployed in about 50 stores. Best Buy receives about 1 billion online visits per year. In 2-4 percent of those cases, shoppers cannot buy products because the products are out of stock in the company's e-commerce warehouses. However, in 80 percent of those cases, Best Buy has the products in one of its physical stores. Ship From Store was first implemented at Gap stores, and the retailer has added this service to the e-commerce systems of two Gap-owned chains, Banana Republic and Athleta. Not coincidentally, Gap's annual revenue increased by $500 million in 2013. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 199). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 198). Wiley. Kindle Edition.

Facebook

[Closing Case Has -- Solved the Mobile Ad Problem?] The Business Problem In 2012, Facebook (www.facebook.com) was unsuccessfully managing the shift of online activities from computers to smartphones and tablets. Immediately before its initial public offering (IPO) in May 2012, the company revealed that it was not earning "any significant revenue" from either its mobile Web site or its mobile app, despite the fact that more than half of its members used its service on their mobile devices. Facebook had to deal with the two most common problems associated with mobile devices: small screens and gaps in marketers' ability to measure the impact of mobile ads. These factors made ads look far less effective on mobile devices. Consequently, marketers were less willing to pay for them. Compounding these issues, Facebook's advertising team was too preoccupied with pushing a new kind of desktop Web ad, called Sponsored Stories, to pay much attention to mobile. Sponsored Stories are actions by a Facebook member, such as "liking" a page or checking in at a store, that marketers can then promote, for a fee, to the member's friends. CEO Mark Zuckerberg viewed these ads as the future of Facebook advertising because users were more likely to respond to real posts from friends. By August 2013, the widening gap between mobile usage and revenue caused Facebook shares to drop by 50 percent of their offering price. Zuckerberg admitted in September 2013 that the company had made a "bunch of missteps" in mobile. The IT Solution Facebook discovered that integrating ads directly into a user's flow of natural activities—in Facebook's case, the main feed where people view updates from friends—is far more effective than banners and pop-up ads. Although these "native ads" might be controversial, they appear to be advertising's most successful adaptation yet to mobile computing. Facebook began running its ads not just in the right-hand section reserved for ads but also on its prime real estate: the news feed, where people spend most of their time on the social network. Facebook executives realized this was a risky step— particularly when they extended the same type of ads to mobile as well. What if the ads in the news feed really annoyed people? Fortunately for Facebook, that fear did not materialize. Sponsored Stories still got more clicks than it had previously. However, the mobile ads got twice as many clicks as Sponsored Stories and commanded nearly three times as much revenue from advertisers as ads on the desktop, according to a study by advertising agency TBG Digital. Within a short time, the mobile ads were grossing $500,000 per day. Facebook then launched other mobile ads, including one that allowed makers of mobile apps to encourage users to install their games or programs. This step was an even bigger leap. It was the first ad in the mobile news feed that did not require advertisers to wait for a "Like" or some other social action to create it. Advertisers instead could use Facebook's huge quantity of biographical data from user profiles to target likely prospects, as they already were doing with traditional ads. This process worked as well. For instance, Cie Games used app installation ads to draw players for its first iPhone game, Car Town Streets. The cost of acquiring the ads was 40 percent lower using Facebook's ads than using ads from other mobile ad networks. In addition, Walmart purchases 50 million mobile ads from Facebook annually. The Results Consider this trend for Facebook mobile ads: • Revenue from mobile apps totaled $305 million for the fourth quarter of 2012, a figure that amounted to 23 percent of overall Facebook ad sales. • For the fourth quarter of 2013, Facebook reported that mobile ads accounted for 53 percent of the company's total ad revenue, for a total of $1.24 billion. • Facebook's ad revenue in the fourth quarter, 2014, totaled $3.6 billion, with mobile ads comprising nearly 70 percent of this total, or $2.5 billion. Facebook's success has exploded several myths concerning mobile marketing. Advertisers often complain that they cannot run big, flashy ads on tiny screens. However, Facebook's mobile ads take up a larger part of the screen than desktop ads do, which is one reason why they attract so many clicks. In fact, an increasing number of mobile ads now contain photographs, and Facebook is actively looking to incorporate video into mobile ads. Industry analysts worried that users might balk at ads that are mixed with posts from friends. So far, that has not happened. Research revealed that the ads reduced comments, likes, and other interaction with posts by only 2 percent, a decline that Facebook considers acceptable However, Facebook will have to be careful not to overdo mobile ads to the point of overloading its users' feeds. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 260). Wiley. Kindle Edition.

new

-- (Consultative) Functions of the MIS Department Initiating and designing specific strategic IS Incorporating the Internet and e-commerce into the business Managing system integration including Internet, Intranets, and Extranets Educating the MIS staff about the business

New

-- (Consultative) Functions of the MIS Department Partnering with business-unit executives Managing outsourcing Proactively using business and technical knowledge to seed innovative IT ideas Creating business alliances with business partners ZAPPOS'S - Video

traditional..computer

-- function of MIS dept. Managing systems development and systems project management Managing --operations Staffing, training, and developing IS skills Providing technical services Infrastructure planning, development, and control

Hardware: Software Database Network Procedures

Basic components of a COMPUTER BASED INFORMATION SYSTEM AKA CBIS:HSDN --- consists of devices such as the processor, monitor, keyboard, and printer ----: is a program or collection of programs that enable the hardware to process data ---is a collection of related files or tables containing data ---- is connecting system that permits different computers to share resources .... ---are the instructions for coming the above components in order to process information and generate the desired output

Area Information Systems

Breadth of Support of Information Systems Functional _____(FAIS) Accounting Finance Production & Operations Management Marketing HR

expensive

Managing Information Resources is difficult and complex because: IS has an enormous strategic value to organizations IS's are very --- to acquire, operate, and maintain Evolution of the MIS function within the organization

Decision

IT Changes the Manager's Job --- making is the most important managerial task IT changes the way managers make decisions IT provides near-real-time information Managers have less time to make decisions IT provides tools for analysis to assist in decision making

Health..Speech..Audible

IT Impacts Employees at Work IT Impacts Employees' -- & Safety Job Stress Long-term use of the keyboard & mouse IT Provides Opportunities for People with Disabilities ---recognition for employees unable to type due to physical impairment -- screen tips for employees who are visually impaired

Middle

IT Reduces the Number of---Managers IT makes them more productive Consequently, IT reduces the number of middle managers required

Chief Information Officer

IT is vital to modern business providing many lucrative career opportunities Programmers, business analysts, systems analysts, and designers __(CIO) - executive in charge of the IS function

Warby Parker..oligopoly..Luxottica..VisionSpring ..contact

IT's [about business] ___(Warby; www.warbyparker.com) is an online eyewear retailer founded in 2010. The idea for the company was conceived when the firm's founders (MBA students at the time) wondered why glasses—uncomplicated, easily breakable, and mass produced—cost so much ($500 or more, for example). The students were convinced they knew why. The optical industry is an ----, meaning that a small number of companies monopolize the business and are making large margins. Consider, for example, --(www.luxottica.com), based in Milan, Italy. Luxottica runs the eyewear business for most major fashion houses, including Armani, Chanel, Prada, and Ralph Lauren. Luxottica also markets its own frames as well: Oakley, OliverPeoples, Persol, and Ray-Ban are all Luxottica brands. Further, LensCrafters, Pearle Vision, and Sunglass Hut are Luxottica subsidiaries. Luxottica also owns EyeMed, a leading vision insurance company. Warby's founders realized that Luxottica had created "the illusion of choice," while in fact they monopolized the eyewear industry. Warby uses the same materials and the same Chinese factories as Luxottica. It then sells its glasses at a lower price because it does not have to pay licensing fees, which can amount to as much as 15 percent of the $100 wholesale cost of a pair of glasses. Warby also does not have to deal with retailers, whose markups can double prices. Warby's business model allows customers to test the company's retro-style glasses via a mail order, try-it-at-home program. The glasses cost only $95, and customers may test up to five frames at a time. The price includes prescription lenses, shipping, and a donation to its not-for-profit organization, VisionSpring (www.visionspring.org). -- has a market-based approach to philanthropy. Rather than simply give away free eyeglasses, the organization supplies frames to entrepreneurs to sell to their neighbors. On its Web site, Warby even offers a way to upload photos and "try on" frames virtually. Such large-scale individualized shopping experiences have attracted a devoted following among young, trendy professionals and have made the firm a commercial success. In addition to enjoying great commercial success, Warby also has a social mission. For every pair of glasses it sells, it provides subsidies to help someone in need buy a pair—although not one— of Warby's creations. By July 2014, Warby had distributed $100 million. By early 2015, Warby had opened 10 retail stores around the United States. Warby plans to open additional stores and to increase their product offerings—for example, thinner lenses for customers with extreme prescriptions and even clipon sunglasses. Significantly, Warby does not plan to offer -- lenses in the near future because lens prescriptions tend to be brand specific, and that market is dominated by 1-800-Contacts (www.1800contacts.com). Warby does face intense competition from companies such as EyeFly (www.eyefly.com), Made Eyewear (www.madeeyewear.com), and Jimmy Fairly (www.jimmyfairly.com/fr). In addition, Luxottica has not been standing still. In January 2015, the company acquired Glasses.com, which mimics many of Warby's features and offers some additional ones, including a three-dimensional virtual try-on app that is similar to Warby's virtual try-on app. Around the same time, it has made its brand, Pearle Vision, "look and feel" much like Warby.

Weather LOSING VIEWERS... reality..mobile..SKYLOCAL

The --- Channel (www.weather.com) is a cable and satellite television channel that is owned as a joint venture by NBC Universal (www.nbcuniversal.com) and two investment firms: The Blackstone Group (www.blackstone.com) and Bain Capital (www .bain.com). The channel broadcasts weather forecasts along with weather-related news, documentaries, and entertainment. In addition to its programming on the cable channel, TWC provides forecasts for terrestrial and satellite radio stations, newspapers, and Web sites. TWC maintains its online presence at www.weather.com as well as via a set of mobile smartphone and tablet applications. 2.4 Despite its powerful and well-known brand, however, TWC is losing viewers. According to Nielsen, TWC viewership has declined by 20 percent since 2013. One reason for this decline is that viewers have been complaining about TWC airing-- TV programs (e.g., Fat Guys in the Woods, Prospectors, and many others) for large amounts of time, rather than straight weather coverage. In addition, TWC viewers are increasingly using -- devices instead of television as their primary source of weather information. According to the analytics firm Distimo (www.distimo.com), more than 10,000 weather apps have been developed for the iPhone and Android devices. TWC also has to contend with changing user expectations about what a weather forecast should be. "Nowcasting"—highly accurate short-term weather predictions for a specific location—is becoming increasingly popular among weather watchers who dislike semireliable five-day forecasts. TWC has typically relied on methods that can actually delay forecasts, such as having meteorologists interpret data for longer term predictions over a broader geographical area. Despite these competitive pressures, thanks largely to its brand recognition, TWC's mobile app is the category's most popular, with approximately 100 million users. However, a group of startup companies, including Dark Sky (www.darkskyapp .com), Sky Motion (www.skymotion.com), and WeatherSphere (www.weathersphere.com), are beginning to cut into TWC's lead.__VIEWERS Whereas TWC's app can present conditions in 15-minute intervals, Dark --, for example, predicts to the minute—often with startling precision—when it is going to start raining or snowing within the next hour. Sky Motion does the same for the upcoming two hours. WeatherSphere's product, Radar Cast, can navigate drivers around oncoming storms. These startups can predict the weather with such accuracy because they integrate and analyze data from National Weather Service radar, satellites, and personal weather stations to improve short-term forecasting. Interestingly, Dark Sky's $3.99 app has been downloaded about 400,000 times since 2012. Another competitor, IBM (www.ibm.com), has been in the weather forecasting arena since it initiated its Deep Thunder project in 1996. Deep Thunder provides local, high-resolution weather predictions, customized to weather-sensitive specific business operations. For example, the system could predict up to 84 hours in advance the wind velocity at an Olympic diving platform or which locations are at risk for flooding or damaged power lines. To combat viewer migration, TWC revamped its TV channel in November 2013, implementing major changes to both its appearance and its coverage. The channel now supports a graphic display on the bottom third of the television screen that displays local hourly weather conditions 24/7, even during commercials. The channel is also deploying technology that enables it to televise location-specific information to a defined geographical area, called "hype--" forecasting. Using this technology, TWC's 220 meteorologists divide the country into 4,000 geographical zones. Viewers can watch weather forecasts pertinent to their zone. TWC is also developing mobile projects to compete with the startups. For example, the company created an app called Radius that lets weather watchers share user-generated photos with other people in their areas. Another new technology, called Forecast on Demand, could be transformative. Forecast on Demand incorporates elements of nowcasting, but it can also create a detailed forecast, at the request of a user, for more than 2 billion points around the globe. The application runs on a Web site that features a world map. As the user clicks on a location, Forecast on Demand instantly generates real-time forecasts for that specific geographical point. This technology disrupts traditional forecasting, which relies on pregenerated predictions. Not surprisingly, the competition is not standing still. Dark Sky, for example, has created a service that makes short-term and long-term forecasts available to other up-and-coming companies, encroaching even further into TWC's territory. In addition, the company is negotiating with auto companies to install its technology in their vehicles, which could dramatically expand its user base. Meanwhile, DirecTV (www.directv.com) dropped the TWC for about three months in 2014 after failing to come to an agreement about how much DirecTV should be paid in affiliate fees. To reach an agreement with DirecTV, TWC agreed to reduce its reality programming to include more local weather updates. If the two sides had not resolved this dispute, then TWC would have lost approximately 20 million of its 100 million viewers. Despite this agreement, in November 2014, TWC laid off approximately 6 percent of its workforce. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 50). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 49). Wiley. Kindle Edition.

Aloft Amazon DaVinci Drones

The Robot Revolution is Here Now Robotics used in Industry: Hotels- -- Retail - -- Robots Hospitals - -- Farming operations ---

Pittsburgh.. Journals, TDC, VCC, ELECTRONIC

The University of -- Medical Center Makes Effective Use of IT Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 58). Wiley. Kindle Edition. The University of Pittsburgh Medical Center (www.upmc.com) is one of the country's largest nonprofit healthcare organizations. Its revenues for fiscal year 2013 totaled more than $10 billion. UPMC operates more than 20 hospitals and 400 physician offices and outpatient sites in Pennsylvania. It is also one of the state's largest health insurance plans. In its dual role of provider and payer, UPMC services more than 2 million customers. The center has implemented an aggressive approach to implementing and developing information technology to make healthcare more effective and efficient. UPMC's IT organization performs several major roles. For example, it must improve the operations of the company's hospitals and health insurance plan, enhance patient care, and drive down the company's costs. In addition, it should be profitable for UPMC rather than function as a cost center. Finally, it has the mandate to develop unique technologies that the company can sell to other healthcare providers and insurers. UPMC's IT initiatives are developed at its Technology Development Center (---, a business incubator and laboratory located in Pittsburgh. The TDC's mission is to develop new healthcare technologies and then to provide resources for startup companies to develop these technologies. (A business incubator is an organization that speeds up the growth and success of startup and early-stage companies. Just a few of the services provided by incubators are help with business basics, marketing assistance, high-speed Internet access, help with accounting and financial management, and help with bank loans.) The TDC initially attempts to use off-the-shelf technology to meet the needs of its clinicians, insurance teams, and other businessgroups. (Off-the-shelf technology are products that are ready-made and available for sale to the public.) For example, it uses electronic health record (EHR) systems from Cerner (www.cerner.com) and Epic (www.epic.com). If it cannot find the technology it needs, then it will look to develop that technology, often in a joint venture with a large vendor. Another strategy is to purchase a stake in a startup, in which case it can influence the development process. One example of a technology that TDC is developing is a telemedicine system called Virtual Care Collaboration (VCC).-- combines videoconferencing with medical records. The greatest obstacle to telemedicine is not the technology, but the business model. For example, health insurance plans often will not pay for telemedicine consultations, and licensing rules can prevent doctors from treating patients across state lines. To combat these problems and to provide impetus for the practice of telemedicine, the UPMC health plan and some other insurers are starting to cover telemedicine appointments. UPMC's IT group is also utilizing cloud computing, a system in which tasks are performed by networked computers in remote locations (the cloud). (We discuss cloud computing in Technology Guide 3.) Cloud computing presents problems for the healthcare industry because it typically requires patient data to leave the healthcare providers' data centers. In early 2015, UPMC had more than 5 petabytes of data, and that volume was doubling every 18 months. These data include medical images, genomic data (data about the complete set of genetic information for each patient which is encoded in the patient's chromosomes), and remote patient monitoring data. UPMC could not afford to spend tens of millions of dollars to build data centers with the capacity to store all of that data. Therefore, the center turned to the cloud. Specifically, it rents storage infrastructure from cloud computing vendors such as Amazon and IBM. UPMC's IT group is also creating a data warehouse that combines clinical, genomic, insurance, financial, and other information from more than 200 data sources. (We discuss data warehouses in detail in Chapter 5.) This initiative ties into the aspect of the U.S. healthcare reform that intends to change how healthcare is delivered and paid for. Providers will be paid to keep a group of people— for example, all the employees at a company—healthy rather than treat them after they become ill. This arrangement creates a financial incentive for providers to increase their preventive care efforts and to minimize mishaps that lead to hospital readmissions. UPMC cannot accomplish its goals without analytics. Consider a recent UPMC study of the use of a particular catheter. The study revealed that the catheter was not used consistently, although on average it led to better outcomes. The study also found that the catheter was more expensive than other similar catheters. These findings led to the next analysis that examined which patients benefited from the catheter and under which circumstances. The findings were presented to doctors to help them make decisions about the use of the catheter. Ongoing projects include analyzing patients' individual genomes so that health providers can personalize their treatments. UPMC has experienced some IT problems. For example, problems occurred in the implementation of electronic health records that were needed to comply with government mandates and financial incentives. As one example, new technologies allow physicians to cut-and-paste -- records. As a result, an in-hospital progress note that used to present the patient's daily status in less than 1 page can now total 19 pages.: electronic

Creates

Will IT Eliminate Jobs? the competitive advantage of replacing people with IT & machines is increasing rapidly Increasing the use of IT in business also: -- new job categories Requires more employees with IT knowledge and skills

Data Item. Information. Knowledge.

_DIK 1. __transactions that are recorded, classified and stored but are not organized to convey any specific meaning ...Elementary description of things, events, activities and transactions that are recorded, classified and stored but are not organized to convey any specific meaning. __ 2. Data organized so that they have meaning and value to the recipient...meaning and value ___ 3. Data and/or information organized and processed to convey understanding, experience, accumulated learning and expertise as they apply to a current problem or activity...accumulated learning and expertise as they apply to a current problem or activity.

PENSKE Analytics

___USSED TRUCKS Throughout 2009 and 2010, used trucks grew more appealing to businesses because the economy was in poor shape. Penske Truck Leasing (www.pensketruckleasing.com), which has a steady supply of used trucks coming off leases, realized that it was missing out on revenue by selling those trucks at reduced prices to wholesalers rather than directly to would-be buyers. To sell its used trucks, Penske had relied on a bare-bones Web site used primarily by wholesale buyers, as well as by local Penske used-truck coordinators who visited the site for reference material when assisting wholesalers. Penske needed a high-quality Web site that would generate sales to wholesalers as well as directly to the end customers, such as the owner of a flower store or hardware store who needed a cargo van or box truck. The result, PenskeUsedTrucks (www.penskeusedtrucks.com), illustrates how various business units must work together to implement a major electronic commerce project. Penske's vehicle remarketing group recognized the value of used trucks, and they realized that the company was losing money with its current business model. To remedy this problem, they brought in the company's marketing staff to evaluate how Penske could employ a new Web site to attract more buyers. The two groups then collaborated with the information technology group to build the Web site. Penske faced several challenges in creating the site. To begin with, the site had to incorporate the correct terminology and keywords to attract the attention of shoppers and search engines. To address this challenge, IT and marketing interviewed customers to obtain feedback concerning effective keywords. They discovered, for example, that Penske calls one type of truck a "cargo van," whereas some potential customers refer to it as a "high cube" or a "box truck." Ultimately, the additional keywords and crossreferencing dramatically expanded Penske's keyword base from roughly 100 vehicle names to more than 2,000. Another problem was collecting and organizing photos. In most cases obtaining images for a Web site is a fairly straightforward process. Unfortunately, in Penske's case this task was more complicated because the company does not have a centralized truck lot. Rather, its fleet operates out of 2,500 locations nationwide. The solution required Penske to reengineer its fleet management system. In addition, Penske implemented a policy mandating that whenever the company lists a new vehicle for sale on its Web site, five images must come with the vehicle. The resulting Web site resembles CarMax (www.carmax.com) more than it does Penske's previous site: a Web-based catalog. Every type of Penske vehicle, from a standard cargo van to a refrigerated 18-wheel trailer truck, is searchable on the site, and Penske updates the inventory every day. The number of vehicles for sale can vary from 3,500 to 5,000 units. A vehiclecomparison tool enables a buyer to compare up to five trucks side-by-side in terms of price, mileage, weight, horsepower, and other specifications. Maintenance reports display a vehicle's repair and maintenance history for the previous three years. Finally, buyers can close the sale on a single truck or a fleet of trucks by phone via Penske's call center. Offering a good product and building a useful Web site are basic strategic necessities in the digital era. Successful companies must do better than this. Attracting customers requires an aggressive search engine optimization (SEO) and social media strategy as well. Search engine optimization is the process of maximizing the number of visitors to a particular Web site by ensuring that the site appears high on the list of results returned by a search engine. The Penske marketing team followed Google's SEO advice to incorporate keywords that customers use when searching across the Web site. Penske uses Adobe-- (www.adobe.com) software to obtain information such as which keywords drive visitors to the Web site, where buyers are coming from, how long they stay on the site, and which pages they visit. Google search results also include rich details such as the price and availability of a vehicle. The SEO helped increase Google search traffic for the Penske site by 37 percent. Penske also extended its marketing strategy to include social media and blogging. The marketing team uses a company blog called Move Ahead (blog.gopenske.com) as a content hub where the team posts daily truck specials and directs traffic to the PenskeUsedTrucks.com Web site. The team also tweets about daily truck specials in both the morning and the evening. Furthermore, Penske has active company pages on Facebook, YouTube, Pinterest, and Google+. In October 2013, Penske added a mobile version of PenskeUsedTrucks.com. Penske's Used Trucks has become so successful that in 2014 the operation doubled its commercial truck dealership in North America. The company opened centers in the Dallas, Atlanta, and Toronto areas. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 212). Wiley. Kindle Edition.

jasmine revolution

____An example of the far-reaching effects of IT on individuals and organizations Egypt Revolution

SKYBOXsoftware.

____Of the 1,000 or more satellites orbiting the Earth at any given time, only about 100 transmit visual data. Of those 100, only 12 send back high-resolution pictures, which are defined as an image in which each pixel represents a square meter or less of ground. Further, only 9 of these 12 sell to the commercial space-based imaging market. Roughly 80 percent of that market is controlled by the U.S. government, which has priority over all other buyers. Basically, if government agencies decide that they want satellite time for themselves, they can simply demand it. In January 2013, after the government reduced its imaging budget, the market's two largest companies—DigitalGlobe (www. digitalglobe.com) and GeoEye, which between them operated five of the nine commercial geoimaging satellites—were forced to merge under the name DigitalGlobe. Due to the small number of satellites and the government's claim on their operations, ordering and obtaining an image of a specific place can take days, weeks, or even months. With the image resolutions—resolution means sharpness or clarity—allowed by the government for commercial purposes, an orbiting satellite can clearly show individual cars and other objects that are just a few feet across. As a result, an almost entirely untapped source of data—information that companies and governments sometimes try to keep secret—is orbiting in space right above us. A startup called Skybox Imaging (Skybox; www.skyboximaging.com) has designed and built something unprecedented. Using inexpensive consumer hardware, the company plans to ring the Earth with constellations of imaging satellites that are dramatically less expensive to build and maintain than existing satellites. By blanketing the Earth's orbit with its cameras, Skybox will quickly disrupt the commercial space-imaging industry. Even with only six small satellites orbiting Earth, Skybox can provide practically real-time images of the same spot twice a day at a fraction of the current cost. Over the long term, Skybox's real payoff will not be in the images that the company sells. Instead, it will derive from the massive collection of unsold images its satellites capture every day—images that, when analyzed either by computer vision or by humans, can be translated into extremely useful, desirable, and valuable data. Let's consider some examples: • The number of cars in the parking lot of every Walmart in America. • The number of fuel tankers on the roads of the three fastestgrowing economic zones in China. • The size of the pits and slag heaps outside the largest gold mines in southern Africa. These images would allow analysts to estimate a mine's productivity. • The rate at which the electrical wattage along key stretches of the Ganges River in India is growing brighter as a result of population growth and industrialization. These images contain clues about the economic health of countries, industries, and individual businesses. Skybox has already brainstormed entirely practical ways to estimate major economic indicators for any country, based entirely on satellite images. The same analysis process will yield even more direct insight into the revenues of a retail chain, a mining company, or an electronics company, once the company analysts determine which of the trucks leaving their factories are shipping out goods or key components. Many people want real-time access to these data— investors, environmentalists, activists, journalists—and no one currently has it, with the exception of certain government agencies. Skybox can dramatically alter this situation by putting enough satellites into orbit, transmitting the image streams back to Earth, and then analyzing them. This is exactly what the company has done. Significantly, Skybox has made only incremental changes to existing inexpensive off-the-shelf technologies, which anyone can purchase. The company started with CubeSat (www.cubesat.org), a type of low-cost satellite built entirely from inexpensive components or prepackaged kits. The result was a cube, 4 inches on each side, containing a basic sensor and communications payload, solar panels, and a battery, that could be built and launched for less than $60,000. Skybox launched the first CubeSats in 2003. Since that time there have been astounding advances in computer processing power and speed, and similar advances in telecommunications technologies. Consequently, Skybox engineers were able to build a 220-pound satellite about 3 feet tall, with a payload of optics equipment designed to capture commercial-grade images. Also, Skybox uses a 6-foot antenna to communicate with a dish the size of a dinner plate instead of the much more expensive 30-foot antenna that commercial satellite-imaging companies typically require. Unlike the other satellite companies, which concentrated on hardware, Skybox focused on -- Consider the cameras that Skybox uses. Compared with most satellites, they are cheap, low resolution, and unsophisticated. But, by writing custom-built software algorithms to integrate dozens of images, Skybox creates one super-high-quality image that enables users to distinguish things they cannot see in any of the individual images. The company focuses on off-board processing; that is, processing that is handled by computers on the ground rather than on the satellite itself. As a result, less processing has to be performed on the satellite. Therefore, the satellite can be lighter and less expensive. As an analogy to what Skybox has accomplished, consider your smartphone. There was a time when you had a phone, a pocket organizer (such as the Palm), a personal computer, and a camera. Now, information and communications technologies have improved to such an extent that all of these functions are integrated into a much smaller physical package (today's smartphones) at a much lower cost. TITLE:___IMAGING PROVIDES COMMERCIAL IMAGES FROM EARTHS ORBIT..Skybox launched its first satellite, SkySat-1, on November 21, 2013, from Yasny, Russia, aboard a Dnepr rocket. The satellite began capturing its first images just hours after the payload door opened. The image quality exceeded Skybox's expectations. Even in the photos' uncalibrated state, it is possible to make out details such as car windshields, varying car colors, and road markings. Because these satellites are so cost-effective, Skybox intends to launch 24 of them to provide comprehensive coverage of Earth, beaming back images in near real-time. Despite these successes, Skybox faces certain problems. The disruptive threat that the company poses to the space-based commercial imaging market could present a threat to U.S. national security. As a result, the government could deny the company licenses, seize its technology or bandwidth, and place restrictions on the frequency and users of its service. In the end, the government will likely commandeer some of Skybox's imaging capabilities under similar terms to those imposed on other vendors. However, Skybox feels confident that its network will be so wide and so nimble that there will be plenty of images and data left over for everyone else. In June 2014, Google purchased Skybox for $500 million. Google noted that Skybox imagery will help keep Google Maps up-to-date. At least two other startups are building a business around satellite imagery. One, Urthecast (www.urthecast.com), has the rights to images collected by two powerful telescopes attached to the International Space Station (ISS). The company broadcasts the images in near-real time at Ustream (www.ustream.tv). Urthecast is planning on offering its satellite imagery on smartphones, tablets, and online. If you are in the path of the two telescopes, Urthecast will inform you when the ISS will next be overhead. So, if your timing is correct, a few hours later you will have a video of your event from orbit. Urthecast images are also used in the fight against deforestation. Urthecast has joined forces with DeforestACTION's Earthwatchers program to assign participants a 10-square-kilometer area of rainforest to monitor. You track any changes you see and inform local authorities of deforestation. The other startup, Planet Labs (www.planet-labs.com), plans to launch a network of ultralow-cost (though also less powerful) satellites. In March 2014 the company announced it would launch more than 100 satellites over the next year. At the end of 2014, the company had launched 67 of those satellites. This satellite constellation enables Planet Labs to image the entire earth every 24 hours. The company states that it wants to help with deforestation and overfishing while improving agricultural yields. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 237). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 236). Wiley. Kindle Edition.

THE LION KING..YMS

____ROARS BACK -opened on Broadway in 1997 to critical acclaim. The play went on to win six Tony Awards, including best musical. Like many Broadway hit shows, The Lion King enjoyed increasing ticket sales early on, often grossing $1 million per week. Earnings eventually leveled off, however, as newer musicals such as The Producers (2001) became hot attractions. To reverse this trend, Disney actually discounted tickets to The Lion King for a period of time. In 2006, Disney moved The Lion King from the New Amsterdam Theater to the slightly smaller Minskoff Theater to make way for its Mary Poppins musical. At this time, Disney executives were occupied with opening new musicals such as The Little Mermaid. The entertainment giant made the mistake of bundling those shows with The Lion King in their ads, even though the target audiences for the two shows were different. Ticket sales for The Lion King remained uneven, both before and after the 2008 recession. By March 2009 weekly gross revenues had declined to $813,000. To reinvigorate ticket sales, in 2011 the show's producers, Disney Theatrical Productions, implemented a proprietary yield management system (--)—also known as dynamic pricing—to recommend the highest ticket prices that audiences would be likely to pay for each of the 1,700 seats at every performance at the Minskoff. Although other shows employ YMSs to increase seat prices during tourist-heavy holiday weeks, only Disney has reached the level of yield management sophistication achieved by the airline and hotel industries. Disney uses its system to analyze and set prices based on demand and ticket purchasing patterns. Yield management systems enable businesses to implement a variable pricing strategy, based on understanding, anticipating, and influencing consumer behavior to maximize revenue from a fixed, perishable resource (e.g., airline seats, hotel rooms, and theater seats). YMSs are designed to sell inventory to the right customer at the right time for the right price. In the case of The Lion King, Disney's --analyzes historical data for 11.5 million audience members. It then recommends prices for different types of performances—for example, peak dates such as Christmas, off-peak dates such as a weeknight in February, and periods in between. Historical ticket demand for a particular week, for instance, will influence price recommendations for that week in subsequent years. To help keep audience demand strong, Disney has made a highly unusual choice among Broadway hit shows. The company has factored in an upper ticket price limit of $227 in its YMS. This price is well below the top prices for blockbuster shows such as The Book of Mormon ($477), Kinky Boots ($349), and Wicked ($300). This pricing strategy provides at least three benefits: (1) It makes The Lion King relatively affordable for large groups and families; (2) it reduces the chance of buyer's remorse (the sense of regret after having made a purchase), which can generate negative word-of-mouth feedback; and (3) it offers Disney the flexibility to raise prices over the long term. Based on the results Disney obtained from its YMS, the company abandoned the traditional strategy of charging one price for entire sections of seats. Instead, the producers raise prices for busy weeks by making predictions based on the show's historical data. An interactive seating map accompanies the YMS that allows customers to visually pick their seats. Disney has discovered that customers often choose better, pricier seats 0hen they examine the seating chart. How successful was Disney's yield management system? In 2013 The Lion King stunned Broadway by replacing Wicked as the Number 1 earner, a position it had not enjoyed for 10 years. By March 2014 the play was grossing $1.5 million per week. Additionally, consumer demand has grown. In 2013 the show attracted 700,000 theater goers, which was 50,000 more than in 2008. By early 2015, The Lion King had become the highest-grossing Broadway play of all time.

SOCIAL COLLAB..NOT..job..rethink..Baxter

____ROBOTSThe Robot Revolution Is Here Now Once restricted largely to science fiction movies, robots that can perform practical tasks are becoming more common. In fact, "cyberpooches," "nursebots," and other mechanical beings may be our companions before we know it. Around the world, quasi-autonomous devices have become increasingly common on factory floors, in hospital corridors, and in farm fields. For home use, iRobot (www.irobot.com) produces the Roomba to vacuum our floors, the Scooba to wash our floors, the Dirt Dog to sweep our garages, the Verro to clean our pools, and the Looj to clean our gutters. Robots are increasingly being utilized in a variety of areas. For example, take a look at the commercial use of drones in the chapter closing case. Further, IT's About Business 1.3 illustrates the use of social, collaborative robots in the workplace. IT's [about business] Manufacturing constitutes a $2 trillion sector of the U.S. economy. In the past, the United States retained higher-value-added manufacturing jobs while allowing lower-value-added jobs to go elsewhere. However, the world will eventually run out of places where low-cost labor is available. Therefore, the question is: "What will it take to break out of the cycle of making inexpensive goods by hand with unskilled, inexpensive labor?" Perhaps robots are the answer. Today's industrial robots perform well on very narrowly defined, repetitive tasks. However, they are not adaptable, flexible, or easy to use, and they are very expensive. In addition, most industrial robots are not safe for people to be around. Moreover, it typically takes 18 months to integrate an industrial robot into a factory operation. As of early 2015, about 70 percent of all industrial robots in the United States were being utilized in automobile factories. The cost to integrate one of today's industrial robots into a factory operation is often three to five times the cost of the robot itself. Such integration requires the services of computer programmers and machine specialists. In addition, companies must place safety cages around the robots so that they do not strike people while they are operating. Further, most industrial robots have no sensors or means to detect what is happening in their environment. There are roughly 300,000 small manufacturing companies in the United States that have fewer than 500 employees. Almost none of these firms utilizes industrial robots, for the reasons we just discussed. In addition, almost all of these firms have relatively small production runs, meaning that they are constantly changing the design and manufacturing procedures for their products. Some of these companies, called -- shops," produce a wide variety of goods for other companies. They specialize in manufacturing a type of product that can be highly customized to an individual client's needs. In a typical factory that uses an industrial robot, a production run is rarely less than four months long. For a job shop, a production run can be as short as one hour. Clearly, then, small manufacturing firms need a different kind of robot.--Robotics (www.rethinkrobotics.com) is putting these technological developments to work with Baxter, a new kind of industrial robot that sells for $25,000. --is very different from existing industrial robots. It does not need an expensive or elaborate safety cage, and factory operators do not need to segregate it from human workers. In fact, humans actually share a workspace with Baxter, making it an excellent example of a social, collaborative robot. Baxter also works right out of the box. It can be integrated into a factory's workflow in about one hour. Baxter also requires no special programming. Interacting with Baxter is more like working with a person than operating a traditional industrial robot. If Baxter picks up something it shouldn't on the assembly line, for instance, workers can take its arm and move the robot to put the object down. Baxter also contains a variety of sensors, including depth sensors as well as cameras in its wrists, so it "sees" with its hands. It is constantly building and adjusting a mathematical model of the world in front of it, enabling it to recognize different objects. Another benefit of Baxter is that other factory workers can train it. In fact, a factory worker who has never seen a robot before can learn to train Baxter to perform simple tasks in five minutes. For example, a worker can show Baxter a part of the task she is asking the robot to perform, and Baxter can infer the rest of the task. Also, if a human is interacting with Baxter or doing part of the task, the robot can figure out how to perform the rest of the task. In November 2014, Rethink Robotics announced its new Robot Positioning System for Baxter. This system enables Baxter to adapt to changing, real-world environments, such as tables and benches being moved. As a result, manufacturers can now deploy Baxter in flexible manufacturing environments, such as short production runs. The new system highlights a huge advantage for companies that acquire Baxter. Because so much of Baxter's capabilities are contained in its software, when the robot is upgraded it tends to increase in-- Rethink Robotics asserts that Baxter empowers factory workers by providing them with user-friendly machines they can manage themselves. In fact, Rethink claims it is on a mission to rescue U.S. manufacturing through technological innovation. That is, Baxter can help U.S. manufacturers lower costs sufficiently to compete with manufacturers overseas who employ low-cost labor. However, Baxter does raise the question of the future of lowskilled labor in the United States: How fast will Baxter replace these workers, and what will they do after they are replaced? view, January.........ANSWERS:"job..Baxter .. value.

CAN SIMPLE DISRUPT,push

____TRADITIONAL BANKING? Consumer banking is an industry that is ready to be disrupted. Banks are known for hidden fees, confusing language, and customer frustration. Online-only banks may provide the business model that can help solve these problems and enhance customer satisfaction. One such bank, Simple (www.simple.com), was founded in 2009 and launched commercially in July 2012. Instead of seeking a new bank charter, Simple chose to partner with Bancorp to sponsor them in the payment networks and to ensure that all of their banking services are FDIC insured. Simple was founded on the idea that traditional banks do not provide adequate online and mobile tools to properly service their customers. Think of Simple as an online-only bank with a heavy focus on customer service that incorporates financial tracking and budgeting tools similar to those offered by Mint (www.mint.com). Mint is a free, Webbased personal financial management service for the United States and Canada. Mint's primary service allows users to track bank, credit card, investment, and loan transactions and balances, as well as to make budgets. Intuit (www.intuit.com) acquired Mint in 2009. Simple's plan is to provide easy-to-use, cloud-based apps and outstanding customer service. The company's Web site and apps are attractive and uncluttered, with a minimalist design that is easy to navigate. They focus on Simple's financial management tools like Goals, which allows customers to establish financial goals to save toward, for example, a vacation or a down payment on a car. Goals then regularly updates customers as to how much progress they are making toward achieving that goal. Another innovative tool is Safe to Spend, which displays the amount in the checking account that will be available after customers pay their scheduled bills and set aside money toward their goals. Simple also offers a unique feature called "push notification" that it sends to customers' smartphones after they make a purchase. With -- notification, customers can take a picture of a purchase, which is automatically geotagged—meaning location data are added to the image. They can then add notes about the purchase for their records. This information can help customers to better understand their spending habits and to track specific types of purchases they have made in the past. Simple makes money from interest margins and interchange revenue from payment networks, which is the fee that companies pay to be able to accept card-based transactions. Simple has no IT infrastructure and no physical branches to support, so they are able to operate on a lower profit margin than traditional banks. Simple's market is paradoxical, in that banking customers desire the convenience of Internet banking, but they remain wary of the Internet itself. (For example, see the case about the Target breach in Chapter 4.) Despite these concerns, however, Pew research (www.pewresearch.org) reported in 2013 that 51 percent of all U.S. adults conduct some banking online. Simple experienced rapid growth, attracting roughly 100,000 customers across the United States by the end of 2013. That year the bank completed $1.6 billion in transactions. Then, in February 2014, Simple was purchased by BBVA Compass Bank (www. bbvacompass.com) for $117 million. Simple promised that it would continue to operate as it always had and that nothing would change for its existing customers. Despite these assurances, however, the purchase raised several serious questions: • How can Simple, which built a loyal following by criticizing annoying banking practices, keep its business model intact as a subsidiary of a huge traditional bank? • Can Simple retain its current customer base? • What does BBVA intend to do with Simple? Will it allow Simple to maintain its traditional business practices? How much independence will it allow the bank? then approve or reject the transaction. The Online Job Market. The Internet offers a promising new environment for job seekers and for companies searching for hard-to-find employees. Thousands of companies and government agencies advertise available positions, accept resumes, and take applications via the Internet. Job seekers use the online job market to reply online to employment ads, to place resumes on various sites, and to use recruiting firms (e.g., www.monster.com, www.simplyhired.com, www.linkedin.com, and www.truecareers.com). Companies that have jobs to offer advertise these openings on their Web sites, and they search the bulletin boards of recruiting firms. In many countries (including the United States), governments must advertise job openings on the Internet. Travel Services. The Internet is an ideal place to plan, explore, and arrange almost any trip economically. Online travel services allow you to purchase airline tickets, reserve hotel • Given that Internet-only banks are typically small startups, what does this purchase mean for the future of such banks? • What are the implications of this purchase for the disruption of the banking industry as a whole? Pointing out a problem with Internet-only banking, in August 2014 approximately 10 percent of Simple's 120,000 customers lost access to their money for an entire day. The problem resulted when the company moved to a new information system for processing financial transactions. Simple's CEO apologized, and the bank awarded every customer who experienced the outage a $50 credit. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 214). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 213). Wiley. Kindle Edition.

CRATE&BARREL..Amber

_____IMPROVES ITS SUPPLY CHAIN VISIBILITY - , a leading retailer in the area of home furniture and furnishings, is finding that globalization brings many opportunities, but it also increases challenges and risk. The company has used an import model for much of its merchandise, meaning that when it sources (procures) goods from overseas, it ships those goods to the United States and then distributes them back to overseas markets. The retailer wants to improve its supply chain transparency significantly, so, for example, it can source goods from overseas and ship them directly to nearby overseas markets without going through the United States, an arrangement known as international transfers. That is, Crate & Barrel is working to evolve what had been a U.S.-centric supply chain into a truly global supply chain. The retailer's ultimate goal is to put any CB product anywhere in the world, quickly and cost-effectively. CB sources from about three dozen different countries, and it was expanding its international store locations. As a result, the challenges of importing and exporting continue to increase. Adding to the complexity of its supply chain are myriad new regulations involving product quality, plant security, and other related areas. Furthermore, these regulations are increasing both within the United Sates and globally. In addition to globalization, electronic commerce has also created a number of opportunities and challenges. The opportunity occurs because consumers across the globe can purchase CB products online. The challenges occur because e-commerce also increases customer expectations in terms of service and information. In fact, the price transparency that comes with e-commerce has made cost reduction a key supply chain imperative for CB. To reduce both supply chain costs and risk, CB set out to increase its supply chain visibility. To accomplish these goals, the company needed data about the products in its supply chain such as what the products are, where they are, and when they will arrive at their destination. CB implemented a new supply chain visibility system from Amber Road (www.amberroad.com), a provider of software solutions for global trade management. The new system provides detailed end-to-end views of orders, inventory, shipments, events, and many more variables across CB's entire global supply chain. The system includes inbound import visibility, outbound export visibility, and international transfers. Supply chain visibility enhances supply chain flexibility. Supply chain flexibility is necessary because problems inevitably occur along the supply chain, forcing companies to make appropriate adjustments on the fly. Using -- Road's system, Crate & Barrel can now identify where inventory is "stuck" in a location, and it can move this inventory to areas where it is needed. CB hopes that this process will enable it to make smaller, more frequent shipments that may actually cost more per unit shipped but will pay off in higher sales and reduced inventory costs. In essence, the costs that accompany inventory that a company owns too long, or that is in the wrong place in the company's supply chain, are higher than the costs of shipping less cost-effectively.

SOCIAL

______COLLABORATIVE, ROBOTS Manufacturing constitutes a $2 trillion sector of the U.S. economy. In the past, the United States retained higher-value-added manufacturing jobs while allowing lower-value-added jobs to go elsewhere. However, the world will eventually run out of places where low-cost labor is available. Therefore, the question is: "What will it take to break out of the cycle of making inexpensive goods by hand with unskilled, inexpensive labor?" Perhaps robots are the answer. Today's industrial robots perform well on very narrowly defined, repetitive tasks. However, they are not adaptable, flexible, or easy to use, and they are very expensive. In addition, most industrial robots are not safe for people to be around. Moreover, it typically takes 18 months to integrate an industrial robot into a factory operation. As of early 2015, about 70 percent of all industrial robots in the United States were being utilized in automobile factories. The cost to integrate one of today's industrial robots into a factory operation is often three to five times the cost of the robot itself. Such integration requires the services of computer programmers and machine specialists. In addition, companies must place safety cages around the robots so that they do not strike people while they are operating. Further, most industrial robots have no sensors or means to detect what is happening in their environment. There are roughly 300,000 small manufacturing companies in the United States that have fewer than 500 employees. Almost none of these firms utilizes industrial robots, for the reasons we just discussed. In addition, almost all of these firms have relatively small production runs, meaning that they are constantly changing the design and manufacturing procedures for their products. Some of these companies, called "job shops," produce a wide variety of goods for other companies. They specialize in manufacturing a type of product that can be highly customized to an individual client's needs. In a typical factory that uses an industrial robot, a production run is rarely less than four months long. For a job shop, a production run can be as short as one hour. Clearly, then, small manufacturing firms need a different kind of robot. Rethink Robotics (www.rethinkrobotics.com) is putting these technological developments to work with Baxter, a new kind of industrial robot that sells for $25,000. Baxter is very different from existing industrial robots. It does not need an expensive or elaborate safety cage, and factory operators do not need to segregate it from human workers. In fact, humans actually share a workspace with Baxter, making it an excellent example of a social, collaborative robot. Baxter also works right out of the box. It can be integrated into a factory's workflow in about one hour. Baxter also requires no special programming. Interacting with Baxter is more like working with a person than operating a traditional industrial robot. If Baxter picks up something it shouldn't on the assembly line, for instance, workers can take its arm and move the robot to put the object down. Baxter also contains a variety of sensors, including depth sensors as well as cameras in its wrists, so it "sees" with its hands. It is constantly building and adjusting a mathematical model of the world in front of it, enabling it to recognize different objects. Another benefit of Baxter is that other factory workers can train it. In fact, a factory worker who has never seen a robot before can learn to train Baxter to perform simple tasks in five minutes. For example, a worker can show Baxter a part of the task she is asking the robot to perform, and Baxter can infer the rest of the task. Also, if a human is interacting with Baxter or doing part of the task, the robot can figure out how to perform the rest of the task. In November 2014, Rethink Robotics announced its new Robot Positioning System for Baxter. This system enables Baxter to adapt to changing, real-world environments, such as tables and benches being moved. As a result, manufacturers can now deploy Baxter in flexible manufacturing environments, such as short production runs. The new system highlights a huge advantage for companies that acquire Baxter. Because so much of Baxter's capabilities are contained in its software, Rethink Robotics asserts that Baxter empowers factory workers by providing them with user-friendly machines they can manage themselves. In fact, Rethink claims it is on a mission to rescue U.S. manufacturing through technological innovation. That is, Baxter can help U.S. manufacturers lower costs sufficiently to compete with manufacturers overseas who employ low-cost labor. However, Baxter does raise the question of the future of lowskilled labor in the United States: How fast will Baxter replace Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 24). Wiley. Kindle Edition.

GEA GROUP USES..SAP

_______SAP FOR FINANCIAL REPORTING With 25,000 employees worldwide, GEA Group (GEA) (www.gea. com) develops, produces, and sells innovative and energy- efficient systems in the food and energy industries. The company's goals are to help its customers process food using highly efficient methods and to conserve scarce energy resources. Sales in these two industries account for 70 percent of the company's revenue, which totaled approximately $8 billion in 2014. As a public corporation whose stock is listed on the MDAX index (a stock index that lists German companies), GEA is required to publish its quarterly, midyear, and year-end financial statements by specific deadlines. GEA provides the consolidated balance sheet, profit and loss (P&L) statement, cash flow statement, statement of stockholders' equity, notes concerning these statements, as well as management reporting, the firm's business outlook, and other stock-related information. Creating these financial statements was a time-consuming process. At GEA, the responsibility for this task lies with a relatively small team within the accounting department, which is based in the company's headquarters located in Düsseldorf, Germany. The team begins by gathering the required financial data from the business divisions, which it then consolidates to create a draft report. As new and more current data and financial figures are added on an ongoing basis, the team constantly has to modify and update the content and the graphics of its reports. This process was extremely time consuming, because most of the processes for creating the reports were performed manually and were not standardized. Furthermore, manual data manipulation carries with it a high risk of introducing errors and of circulating different versions of the same report. In short, GEA did not have a satisfactory solution for the inherent weaknesses in the processes it used to generate its financial statements. To resolve these problems, GEA implemented the --(www.sap.com) Disclosure Management application, one of the SAP solutions for enterprise performance management. This software delivers all of the financial data and information necessary for preparing financial statements. It provides GEA with a consistent data repository, which enables the firm to set up end-to-end workflows (business processes) in accounting. In addition, it enables multiple users to process a single report simultaneously, in parallel. In collaboration with SAP partner cundus AG, the accounting department at GEA successfully implemented the new solution in only eight weeks. The approximately 20 users required only minimal training because the application is user-friendly and straightforward. Many of the functions are self-explanatory. The implementation took place in parallel with the generation of the firm's quarterly financial statements. GEA now gathers all of the data and information necessary for creating financial statements, and it manages those data in the accounting department. For the team members, many processes have become simpler. All of the data required to produce the financial reports—the balance sheet figures, notes, text, graphics, and tables from the business divisions—now flow seamlessly into the SAP solution. At the same time, all of the steps of the process are documented in an audit-compliant manner, while built-in authorization requirements precisely govern access rights. Therefore, both the company's management and external auditors can use the audit trail created by the solution to track the source of the financial figures and to determine who changed them and when. Furthermore, GEA can now produce reports in all of the desired and required formats—including Microsoft Word, Microsoft Excel, Microsoft PowerPoint, and Adobe PDF files. The simplification of the process extends to the external graphic design agency, which can now create the print version of the financial statements more quickly. The GEA accounting department now has a clear view of the current status of a report at any time. The result has been a tangible improvement in the flow of information to GEA's management. The new solution also offers integrated version control, a feature that prevents multiple versions of the same report from being circulated. Thanks to the SAP solution, GEA can create their financial reports 20 percent faster than previously. As a result, the company is better able to meet the increasingly tough legal requirements within Germany and abroad regarding timely external reporting. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 306). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 305). Wiley. Kindle Edition.

Apricot Forest..MedClip..Pocket... Journals

____helps china physicians Most physicians in China work for state-operated hospitals, where entry-level physicians earn about $500 per month. This amount is roughly equivalent to what taxi drivers make. In addition, China's physicians have a potentially overwhelming caseload, typically treating 50-60 patients per day. This situation is causing problems. One of these problems is violence perpetrated by patients against health providers. Chinese hospitals experienced an average of 27 assaults in 2012, as angry patients beat, stabbed, and even killed the physicians who failed to meet their expectations. These problems have created a need for software tools that improve the efficiency and effectiveness of patient care. Essentially, these tools must provide China's physicians with more data—about patients, their records, and their illnesses—as well as easier access to those data. Further, the tools must allow physicians and their patients to communicate seamlessly. --- (http://www.xingshulin.com) is a Beijing-based startup company that offers three applications that address the problems in China's medical system. The primary app is --, an all-in-one patient service system. Physicians can photograph, store, and organize patient records; dictate notes directly into a patient's chart; send patients reminders and educational materials via China's popular Weixin (aka WeChat) messaging system; and consult with other physicians on difficult cases. The second app, e---, contains reference materials, such as drug formularies and specialized calculators. The third app, Medical Journals, helps physicians stay current on the latest research literature. Apricot Forest's clients are China's physicians who, as we discussed, earn little money. The company compensates for this problem by making money in other areas. Pharmaceutical companies place ads inside the apps to reach doctors. The company takes a cut of the sales of books and other publications made accessible through e-Pocket and Medical---. Further, Apricot Forest plans to charge patients for follow-up phone calls with their physicians via MedClip. Both physicians and patients agree to this arrangement because patients cannot currently connect easily with their doctors, and the app lets doctors keep their phone numbers private and control the amount of contact with patients. Apricot Forest also plans to aggregate the data that physicians upload to MedClip, analyze them, and sell the reports to companies that research, design, and market medical products. Finally, the apps can also become a mobile office for physicians, enabling them to treat patients in the patients' homes. And the results? By early 2015, roughly 25 percent of China's 2.5 million physicians were using at least one of Apricot Forest's apps. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 25). Wiley. Kindle Edition. Rainer, R. Kelly; Prince, Brad. Introduction to Information Systems, 6th Edition (Page 24). Wiley. Kindle Edition.

finance marketing

types of information systems(functional area information systems) accounting ---- product/operations management IS --- human resources transaction processing systems IT services IT personnel IT components