Chapter 5

IT Infrastructure and Emerging Technologies

1. List and describe the major components of IT infrastructure. Computer hardware platforms. Consists of technology for computer processing and includes client and server machines and mainframes. Computer software platforms. Includes system software, application software, and enterprise applications. Data management and storage. Includes database management software and hardware for storage, such as disk arrays, tape libraries, and SANs. Networking and telecommunications platforms. Include telecommunication services for voice lines and Internet access, as well as cellular phone services. Internet platforms. includes hardware, software, and management services for maintaining Web sites, intranets, and extranets. Consulting and system integration services. Includes consulting services and staff for maintaining legacy systems and integrating older systems with new infrastructure technologies. 2. Briefly explain why corporations are increasingly interested in using Unix or Linux for their operating system. Linux is an inexpensive and robust open-source relative of Unix. Unix and Linux constitute the backbone of corporate infrastructure throughout much of the world because they are scalable, reliable, and much less expensive than mainframe operating systems. They can also run on many different types of processors. The major providers of Unix operating systems are IBM, HP, and Sun with slightly different and partially incompatible versions. Although Windows continues to dominate the client marketplace, many corporations have begun to explore Linux as a low-cost desktop operating system provided by commercial vendors such as RedHat Linux and Linux-based desktop productivity suites such as Suns StarOffice. Linux is also available in free versions downloadable from the Internet as opensource software. The rise of open-source software, particularly Linux and the applications it supports at the client and server level, has profound implications for corporate software platforms: cost, reduction, reliability and resilience, and integration, because Linux works on all the major hardware platforms from mainframes to servers to clients. Linux has the potential to break Microsofts monopoly on the desktop. Suns StarOffice has an inexpensive Linux-based version that competes with Microsofts Office productivity suite.

3.

Distinguish between grid computing, edge computing, on-demand computing, and autonomic computing. Grid computing involves connecting geographically remote computers into a single network to create a computational grid that combines the computing power of all the computers on the network with which to attack large computing problems. Edge computing balances the processing load for Web-based applications by distributing parts of the Web content, logic, and processing among multiple servers. On-demand computing also depends on networks for firms to purchase additional processing power from large computer service firms and to have that power delivered when they need it over a network. Autonomic computing seeks to develop systems that can configure themselves, optimize and tune themselves, heal themselves when broken, and protect themselves from internal and external threats.

4.

Identify and describe five or more of the current trends in contemporary software platforms. Growing use of Linux and open-source software. Open-source software is produced and maintained by a global community of programmers and is downloadable for free. Linux is a powerful, resilient open-source operating system that can run on multiple hardware platforms and is used widely to run Web servers. Java is an operating system and hardware-independent programming language that is the leading interactive programming environment for the Web. Web services and service-oriented architecture. Software for enterprise integration includes enterprise applications and middleware such as enterprise application integration (EAI) software and Web services. Unlike EAI software, Web services are loosely coupled software components based on open Web standards that are not product-specific and can work with any application software and operating system. They can be used as components of Web-based applications linking the systems of two different organizations or to link disparate systems of a single company. New software techniques such as Ajax and RIA for enabling Web applications, and trends for combining Web applications to create new products (mashups). New ways to think about Web applications, in the trend of Web 2.0, which emphasize services over packaged software, trusting users as co-developers, harnessing collective intelligence, using lightweight development methods. Software outsourcing. Companies are purchasing their new software applications from outside sources, including application software packages, by outsourcing custom application development to an external vendor (that may be offshore), or by renting software services from an application service provider.

5.

Web services communicate through XML messages over standard protocols. Distinguish between Simple Object Access Protocol (SOAP), Web Services Description Language (WSDL), and Universal Description, Discovery, and Integration (UDDI). Simple Object Access Protocol (SOAP) is a set of rules for structuring messages that enables applications to pass data and instructions to one another. Web Services Description Language (WSDL) is a common framework for describing the tasks performed by a Web service and the commands and data it will accept so that it can be used by other applications. Universal Description, Discovery, and Integration (UDDI) enable a Web service to be listed in a directory of Web services so that it can be easily located.

6.

What is scalability? Why is it essential to the success of the modern business firm? Scalability is the ability of the computer, product, or system to expand to survey larger numbers of users without breaking down. It is important because as firms grow, they can quickly outgrow their infrastructure. As firms shrink, they can get stuck with excessive infrastructure purchased in better times. Any modern company must be able to make plans for the future, even though that future may be different than what was expected. Computer equipment is expensive, though dropping in price, and budgets must be planned to allow for new purchases, upgrades, and training. It is generally assumed that a successful company will need more computer capacity for more people as it follows a path to continued success.

7.

You are starting a market research company with a single business partner and are planning the hardware and software need for the two of you. Which factors should play into your decision of how much to spend on these investments? Using the competitive forces model for IT infrastructure investment, the most relevant factors in this decision are: The firms business strategy. What capabilities we will want to have over the next five years? Alignment of IT strategy. How does our IT strategy match up with the business plan? IT assessment. What are the current technology levels for the services we are offering and our business type? We would probably not need to be at the bleeding edge, but not behind the times either. Competitor firm services. What technology-enabled capabilities do our competitors have? We would want to match services with our competitors. Competitor firm IT investments. How much are competitor firms investing in their technology? Because this is a startup, one other factor may not play such a large role: That of market demand for services. However, finding out what the market demand for competitors services may uncover ways that this new company could have a competitive advantage.

8.

Explain why standards are so important in information technology? What standards have been important for the growth of Internet technologies? Standards are important because they result in different manufacturers creating products that can be used either with each other or to communicate with each other. For example, without standards, each light-bulb manufacturer would have to also create specific light-bulb sockets for use with their light-bulbs. In the same way, computers and computer technology have been enabled through standards. Standards have allowed many different manufacturers to contribute to the same, standardized definitions of a technological application. For example, the ASCII data standards made it possible for computer machines from different manufacturers to exchange data, and standardized software languages have enabled programmers to write programs that can be used on different machines. The standards that have been important for the growth of the Internet include TCP/IP, as a networking standard, and WWW standards for displaying information as Web pages, including HTML.

9.

An international ad-hoc group of climatologists and oceanographers needs to set up a system to analyze massive amounts of data on ocean temperatures, collected hourly by hundreds of ships worldwide. The technology and hardware for gathering the data and transmitting the data to a computer is in place. What additional hardware might they need? What techniques might they use to make their research more efficient and lower costs? To store their data they may want to use a SAN. To process their data, they will need a supercomputer or grid computing. If they will be using a Web interface to analyze or retrieve data, they could consider implementing edge computing. To lower costs, they could look at on-demand or utility computing as well as virtualization and implementing multicore processors.

10.

A small design agency you are consulting for will be creating client Web sites and wants to purchase a Web server so they can host the sites themselves. How will you advise them on this purchase? They need to understand total cost of ownership: the costs will go beyond the cost of the server, but they will also need to purchase the server software and any application software they will be using. They will also need someone in their IT department to manage and maintain the computers. They will also incur facilities costs for running the computer. They need to have a backup plan should the server fail. The design agency will need to add up all the potential costs and risks. Additionally, they need to prepare for their plan if they need more servers? Will they eventually have to run and maintain their own server farm? What if one of their clients sites is more popular than anticipated and the server has difficulty handling the load? How quickly can they add servers or processing power? The company should look at collocation, Web hosting services, and ASPs to see if their needs will be better met this way.

Chapter 6

Foundations of Business Intelligence: Databases and Information Management

1. The small publishing company you work for wants to create a new database for storing information about all of their author contracts. What factors will influence how you design the database? Student answers will vary, but should include some assessment of data quality; business processes and user needs; and relationship to existing IT systems. Key points to include are: Data accuracy when the new data is input, Establishing a good data model, Determining which data is important and anticipating what the possible uses for the data will be, beyond looking up contract information, Technical difficulties linking this system to existing systems, New business processes for data input and handling, and contracts management, Determining how end users will use the data, Making data definitions consistent with other databases, Determining what methods to use to cleanse the data.

2.

When you design the new contracts database for the publishing house mentioned above, what fields do you anticipate needing? Which of these fields might be in use in other databases used by the company? Author first name, author last name, author address, agent name and address, title of book, book ISBN, date of contract, amount of money, payment schedule, date contract ends. Other databases might be an author database (author names, address, and agent details), a book title database (title and ISBN of book), and financial database (payments made).

3.

List at least three conditions that contribute to data redundancy and inconsistency. Data redundancy occurs when different divisions, functional areas, and groups in an organization independently collect the same piece of information. Because it is collected and maintained in so many different places, the same data item may have: (1) different meanings in different parts of the organization, (2) different names may be used for the same item, and (3) different descriptions for the same condition. In addition, the fields into which the data is gathered may have different field names, different attributes, or different constraints.

4.

List and describe three main capabilities or tools of a DBMS. A data definition capability to specify the structure of the content of the database. This capability would be used to create database tables and to define the characteristics of the fields in each table. A data dictionary to store definitions of data elements in the database and their characteristics. In large corporate databases, the data dictionary may capture additional information, such as usage; ownership; authorization; security; and the individuals, business functions, programs, and reports that use each data element. A data manipulation language, such as SQL, that is used to add, change, delete, and retrieve the data in the database. This language contains commands that permit end users and programming specialists to extract data from the database to satisfy information requests and develop applications.

5.

What types of relationships are possible in a relational database? Describe and give an example of each. A one-to-one relationship occurs when each record in one table has only one related record in a second table. An example might be a table of salespeople and a separate table of company cars. Each salesperson can only have one car, or be related to the one car in the database. A one-to-many relationship occurs when a record in one table has many related records in a second table. An example might be a table of salespeople and clients. Each salesperson may have several clients. A many-to-many relationship occurs when records in one table have many related records in a second table, and the records in the second table have many related records in the first table. An example might be a clients table and a products table. Clients may buy more than one product, and products are sold to more than one client.

6.

What are the three basic operations used to extract useful sets of data from a relational database? The select operation creates a subset consisting of all records (rows) in the table that meets stated criteria. The join operation combines relational tables to provide the user with more information than is available in individual tables. The project operation creates a subset consisting of columns in a table, permitting the user to create new tables that contain only the information required.

7.

Describe the ways in which database technologies could be used by an office stationery supply company to achieve low-cost leadership. Sales databases could be used to make the supply chain more efficient and minimize warehousing and transportation costs. You can also use sales databases to determine what supplies are in demand by which customers, and whether needs are different in different geographical areas. DSS databases using business intelligence could be used to predict future trends in office supply needs, to help anticipate demand, and to determine the most efficient methods of transportation and delivery.

8.

Describe the ways in which database technologies could be used by an office stationery supply company to achieve product differentiation. Product databases could be made available to customers for greater convenience when ordering online. Databases could be used to track customer preferences and to help anticipate customer desires. Sales databases could also help a client anticipate when they would need to re-supply, providing an additional service. Data mining could help anticipate trends in sales or other factors to help determine new services and products to sell to the clients.

9.

What makes data mining an important business tool? What types of information does data mining produce? In what type of circumstance would you advise a company to use data mining? Data mining is one of the data analysis tools that helps users make better business decisions and is one of the key tools of business intelligence. Data mining allows users to analyze large amounts of data and find hidden relationships between data that otherwise would not be discovered. For example, data mining might find that a customer that buys product X is ten times more likely to buy product Y than other customers. Data mining finds information such as: Associations or occurrences that are linked to a single event. Sequences, events that are linked over time. Classification, patterns that describe the group to which an item belongs, found by examining existing items that have been classified and by inferring a set of rules. Clusters, unclassified but related groups. I would advise a company to use data mining when they are looking for new products and services, or when they are looking for new marketing techniques or new markets. Data mining might also be helpful when trying to analyze unanticipated problems with sales whose causes are difficult to identify.

10.

What are the differences between data mining and OLAP? When would you advise a company to use OLAP? Data mining uncovers hidden relationships and is used when you are trying to discover data and new relationships. It is used to answer questions such as: Are there any product sales that are related in time to other product sales? In contrast, OLAP is used to analyze multiple dimensions of data and is used to find answers to complex, but known, questions, such as: What were sales of a productbroken down by month and geographical region, and how did those sales compare to sales forecasts?

Chapter 9

Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

1. Identify and briefly describe three major enterprise applications. Enterprise systems, customer relationship management, and supply chain management are three enterprise applications. Enterprise systems are based on a suite of integrated software modules and a common central database. Enterprise systems utilize enterprise software to support financial and accounting, human resources, manufacturing and production, and sales and marketing processes. Enterprise systems provide many benefits including an enterpriseenabled organization, improved management reporting and decision making, a unified information systems technology platform, and more efficient operations and customer-driven business processes. Supply chain management systems help an organization better manage its supply chain, including planning, sourcing, and making, delivering, and returning items. Supply chain management software can be categorized as a supply chain planning system or as a supply chain execution system. A supply chain planning system enables a firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. A supply chain execution system manages the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. Supply chain management benefits include improved customer service and responsiveness, cost reduction, and cash utilization. Customer relationship management systems help firms maximize the benefits of their customer assets. These systems capture and consolidate data from all over the organization and then distribute the results to various systems and customer touch points across the enterprise. Customer relationship management systems can be classified as operational or as analytical. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance. Benefits include increased customer satisfaction, reduced direct marketing costs, more effective marketing, and lower costs for customer acquisition and retention.

2.

What is an enterprise system? What is enterprise software? Enterprise systems focus on integrating the key internal business processes of the firm. Enterprise software is used by enterprise systems and is a set of integrated software modules for finance and accounting, human resources, manufacturing and production, and sales and marketing that allows data to be used by multiple functions and business processes.

3.

What are the benefits of enterprise systems? What are the challenges of enterprise systems? Benefits include creating an enterprise-enabled organization, providing firmwide knowledgebased management processes, providing a unified information system technology platform and environment, and enabling more efficient operations and customer-driven business processes. Challenges include a daunting implementation process, surviving a cost-benefit analysis, inflexibility, and realizing strategic value.

4.

Identify two categories of supply chain software. For each category, identify five capabilities. Supply chain planning systems and supply chain execution systems are two classifications for supply chain software. Supply chain planning systems enable a firm to generate demand forecasts for a product and develop sourcing and manufacturing plans for that product. Capabilities include order planning, advanced scheduling and manufacturing planning, demand planning, distribution planning, and transportation planning. Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations. Capabilities include order commitments, final production, replenishment, distribution management, and reverse distribution.

5.

Identify two supply chain models. Which is better? Push-based and pull-based models were discussed in the textbook. Push-based refers to a supply chain driven by production master schedules based on forecasts or best guesses of demand for products. Pull-based refers to a supply chain driven by actual customer orders or purchases so that members of the supply chain produce and deliver only what customers have ordered. Pull-based models are better.

6.

Identify two aspects of customer relationships management. The two aspects of customer relationships management are: operational CRM and analytical CRM. Operational CRM refers to customer-facing applications, such as sales force automation, call center and customer service support, and marketing automation. Analytical CRM refers to customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance.

7.

Identify five benefits of customer relationship management systems. Benefits include: better customer service, making call centers more efficient, cross-sell products more effectively, help sales staff close deals faster, simplify marketing and sales processes, acquire new profitable customers, sell additional products and services, provide customer information for developing new products, increase product utilization, reduce sales and marketing costs, identify and retain profitable customers, optimize service delivery costs, retain high-lifetime value customers, improve customer loyalty, improve response rates to direct mail, increase product profitability, and respond quickly to market opportunities.

8.

You have been hired by Santori, Inc., a small company that imports and distributes an Italian sparkling water. The company is interested in what benefits an enterprise system would bring. Would an enterprise system be appropriate for this company? What steps would you take in determining this? Student answers will vary; an example answer is: An enterprise system may be too expensive, although there are enterprise software packages that are available to smaller companies. A hosted enterprise application might be the most economical way to implement an enterprise system. To determine whether this would be beneficial to Santori, I would first look at their existing business processes. It would be ideal to determine if their efficiency meets benchmarks in their industry and allows them to be competitive with other businesses in their niche. Then I would review existing hosted applications to see how the applications business processes matched up with Santoris. It would be important to compare the costs of instituting new business processes with the benefits and cost-savings.

9.

Plant Away is an Oregon-based retailer and distributor of trees and shrubs. They have hundreds of smaller nurseries based around the country that grow the plant stock. The majority of their business is conducted online: Consumers purchase typically small quantities of products online and Plant Away coordinates the shipping from the most appropriate nursery. What unique problems might you anticipate they have in their supply chain? What might remedy these problems? Typical problems in supply chains arise from unforeseeable events. In a plant nursery, variations in the weather, growing season, plant diseases, crop output would be uncertainties. Other problems might be interstate regulations governing plants allowed in different states, and making sure plants survive and are healthy during transportation. It would be very important to have up-to-date forecasting of the weather or growing seasons that could anticipate possible problems, and analyze and determine the best transportation routes.

10.

You have been hired by Croydon Visiting Nurse Services, whose business processes are all manual, paper-based processes. How might a CRM system benefit them? A CRM system that includes patients health records would allow any nurse to take over if another needed replacement. Assuming that the nurses had access via laptops or PDAs to the system, a new nurse would have instant access to the patients needs. The CRM might also be able to record which types of treatments or products customers were most interested in or gave the greatest benefit to customers, and help anticipate needs. Additionally, with CRM capabilities, products needed by the nursing service would be more easily anticipated, ordered, and delivered. Since the employees work in the field, or away from a central office, Internet-based communications might provide tools for reviewing employee performance.

Chapter 11

Managing Knowledge
1. What is knowledge management? What types of knowledge might a company such as a taxi service have, and could a taxi service benefit from knowledge management? Knowledge management is the set of processes developed in an organization to create, gather, store, disseminate, and apply the firms knowledge. A taxi companys knowledge might include explicit knowledge, such as maps and routes between destinations. Tacit knowledge would include the experience of drivers, such as the best alternate routes between destinations or passenger needs. A taxi service might benefit from a system that gave drivers guides on routes that included alternate routes drivers had found. It might benefit from a learning management system that trained drivers for locations, destinations, and alternate routes. 2. Briefly outline the knowledge management chain as it might apply to the online catalog system of a public library. Steps in the knowledge management chain include: 1. 2. 3. 4. Acquisition. For an online catalog of a library this would be getting the book data into digital format. Storage. This would involve the systems for storing this data, perhaps a central server. Dissemination. The library would need to determine how the card catalog information is accessed by the public or by staff. Application. This would involve the card catalog becoming part of the librarys business processes. For example, the card catalog would be linked to a system of borrowing, so that users would know from the card catalog whether a book was out on loan. Management and organizational activities. This would entail using the system with a card catalog base for other services, perhaps linking up to a wider library system to share resources, information, or book loaning between systems.

5.

3.

Identify the three major types of knowledge management systems. Provide two examples of each. The major types of knowledge management systems are enterprise knowledge management systems, knowledge work systems, and intelligent techniques. Enterprise knowledge management systems include: Structured knowledge systems, semistructured knowledge systems, learning management systems, and knowledge networks. Knowledge work systems include: Computer-aided design systems, virtual reality systems, and financial investment workstations. Intelligent techniques include: Data mining, expert systems, case-based reasoning, fuzzy logic, neural networks, genetic algorithms, hybrid AI systems, and intelligent agents.

4.

How can knowledge be gathered from the personal and undocumented expertise of professionals within a firm? List at least four ways to gather and disseminate such knowledge. The expertise and experience of firm employees can be gathered by documenting their experience through documenting best practices and frequently asked questions. You can also develop a referral system by providing a way for employees to find a company expert for the solution they are looking for. There is commercially available software for enterprise-wide knowledge network system, but other tools you can use include best-practices documents, FAQs, social bookmarking, collaboration tools, wikis, and blogs for helping gather and disseminate tacit knowledge.

5.

Why are knowledge workers so important to the digital firm? What are their functions and which of these do you feel is most critical to the success of the firm? Why? Student answers will vary, but should include an understanding of the three main functions of knowledge workers. An example answer is: Knowledge workers create new products or find ways to improve existing ones. Without them, the firm would stagnate and become less competitive in an environment that is always changing and is increasingly more competitive. In the modern economy, knowledge is truly power. The three major functions of knowledge workers are: keeping the organization up-todate in knowledge as it develops in the external world; serving as internal consultants regarding their areas of knowledge and its opportunities; and acting as change agents as they evaluate, initiate, and promote new projects. The most important of these is to develop new knowledge as it applies to the making of products or services, as offering products and services is the mainstay of the corporation.

6.

Identify three important qualities or capabilities of knowledge work systems. Knowledge work systems must give knowledge workers the specialized tools they need, such as powerful graphics, analytical tools, and communications and document-management tools. Knowledge work systems must provide a user-friendly interface to the KWS. These userfriendly interfaces save time by allowing the user to perform needed tasks and get to required information without having to spend a lot of time learning to use the computer. Knowledge work systems must be carefully designed to optimize the performance of the specific tasks of the pertinent knowledge worker.

7.

Discuss the concept of virtual reality, especially with regard to VRML and its applications in the business arena. Virtual reality systems use interactive graphics software and hardware to create the illusion of reality in cyberspace. The original applications were in gaming, but new uses in education, science, and business are being developed and have great promise. Virtual reality applications are being developed for the Web using a standard called Virtual Reality Modeling Language (VRML), which can organize multiple media types to put users in a simulated real-world environment. VRML is platform independent, operates over a desktop computer, and requires little bandwidth. DuPonts HyperPlant is an example of a business application. HyperPlant allows users to go through three-dimensional models as if they were physically walking through a plant, which reduces errors during the construction of manufacturing structures.

8.

What is the difference between a neural network, fuzzy logic, and genetic algorithms? Which would be most useful to an organization of astronomers analyzing gamma ray emissions reaching Earth? A neural network attempts to emulate the processing patterns of the biological brain. The results are a program that can learn by comparing solutions to known problems to sets of data presented to it. Neural networks are used for solving complex, poorly understood problems for which large amounts of data have been collected. Fuzzy logic creates rules that use approximate or subjective values. It describes a particular phenomenon or process linguistically and then represents that logic in a small number of flexible rules. Genetic algorithms are problem-solving methods that use the model of living organisms adapting to their environment. Possible solutions are evaluated, the best choices are made, then more possible solutions are created by combining the factors involved in those first best choices, and choosing again. The process continues until an optimum solution is reached. These genetic algorithms are useful for finding the optimal solution for a specific problem by examining a very large number of alternative solutions for that problem. I think a neural network would be of most use, because of its ability to analyze large amounts of data and find hidden relationships.

9.

What do you see as the challenges in setting up a knowledge management system? Determining what knowledge will be the most effective or offer the most benefits to the company; defining taxonomies, gathering accurate knowledge, quantifying the systems success, change management and implementing business processes that incorporate the system.

10.

You have been hired by a small architectural firm interested in implementing a knowledge management system. What features do you think would be of most benefit to them? The ability to store structured documents, such as plans, blueprints; collaboration tools, the ability to reference up-to-date local or national building codes, a system for storing case studies, best practices, and corporate standards.

Chapter 12

Enhancing Decision Making

1. Describe MIS and DSS and differentiate between them. MIS provide information on the firms performance to help managers monitor and control the business. They typically produce hard copy, fixed, regularly scheduled reports based on data extracted and summarized from the organizations underlying transaction processing systems. DSS provide new sets of capabilities for nonroutine decisions and user control. MIS accents reports based on routine flows of data and assists in the general control of the organization. DSS emphasizes change, flexibility, and rapid response to unstructured problems. 2. What is the difference between a model-driven and a data-driven DSS? Model-driven DSS use some type of model to perform what-if and other types of analyses. Their analysis capabilities were based on a strong theory or model combined with a good user interface to make the model easy to use. Data-driven DSS analyze large pools of data found in major organizational systems. They support decision making by allowing users to extract useful information that was previously buried in large quantities of data. 3. Discuss four types of models commonly used by DSS. Statistical modeling software can be used to help establish relationships, such as relating product sales to differences in age, income, or other factors between communities. Optimization models determined optimal resource allocation to maximize or minimize specified variables such as cost or time. A classic use of optimization models is to determine the proper mix of products within a given market to maximize profits. Forecasting models are often used to forecast sales. The user of this type of model might supply a range of historical data to project future conditions and the sales that might result from those conditions. Companies often use this software to predict the actions of competitors. Sensitivity analysis models ask what-if questions repeatedly to determine the impact of changes in one or more factors on outcomes. 4. What is the business value of a DSS? DSS can help companies improve supply chain management and customer relationship management. Some take advantage of the company-wide data provided by enterprise systems. DSS today can also harness the interactive capabilities of the Web to provide decision-support tools to both employees and customers.

5.

If both contemporary ESS and DSS incorporate tools for modeling and analysis, what qualities distinguish the two types of system? DSS are concerned with solving more specific business problems, such as determining the best pricing for a product, establishing optimized delivery routes, whereas ESS are designed specifically for executives to use as a way of managing the company and seeing an overview of both external and internal information in order to monitor more general business situations. The ESS modeling tools would be used to provide different views of status, rather than to analyze large amounts of data to arrive at a solution for a specific problem.

6.

List and describe at least three ways in which GIS can be used by modern business. Geographic information systems are a special category of DSS that use data visualization technology to analyze and display data for planning and decision making in the form of digitized maps. GIS can best be used to support decisions that require knowledge about the geographic distribution of people or other resources in scientific research, resource management, and development planning. GIS have modeling capabilities, allowing managers to change data and automatically revise business scenarios to find better solutions. For instance, a company could display its customers on a map and then design the most efficient delivery route for its products. A second way in which it could be used would be to analyze demographic information to decide where to open branch restaurants. A third use could be customer demographic data and map information to locate people who are likely to become customers for the companys services.

7.

What do you see as the business value of a GDSS? GDSS helps groups make decisions about unstructured problems. Firstly, because GDSS provides value by allowing collaboration over important decisionsthe decision doesnt rest in the hands of one person alone. By having more people working on the problem, the decision is more likely to realistically reflect the needs and goals of the group, rather than just one person. Secondly, because anonymity is a feature, people are encouraged to be more honest. This will also enhance the accuracy of the solution. The ability of the GDSS to record the meeting and decisions means that the decision-making process, its ideas and solutions, can be made part of the companys knowledge base. Additionally, by providing structure, the GDSS may enhance the efficiency of the particular type of unstructured decision making.

8.

Describe and explain how a GDSS works to enhance group decision making. What are at least four factors involved in the successful outcome of any group meeting? Beyond three to five attendees the traditional meeting process breaks down. GDSS software tools contribute to a more collaborative atmosphere by guaranteeing contributors anonymity so that attendees can focus on evaluating the ideas themselves. The GDSS software tools follow structured methods for organizing and evaluating ideas and for preserving the results of meetings, allowing non-attendees to locate needed information after the meeting. The documentation of the meeting by one group at one site can also be used as input to another meeting on the same project at another site. If properly designed and supported, GDSS meetings can increase the number of ideas generated and the quality of decisions while producing the desired results in fewer meetings. The nature of electronic meeting technology is only one of a number of factors that affect meeting processes and output. The outcome of group meetings depends upon the composition of the group, the manner in which the problem is presented to the group, the facilitators effectiveness, the organizations culture and environment, the quality of the planning, the cooperation of the attendees, and the appropriateness of tools selected for different types of meetings and decision problems.

9.

You have been hired as a consultant for an established bicycle parts manufacturer to assist senior management in planning a new ESS. What factors will you advise management to take into consideration? Student answers will vary, but should take into account technical difficulties (integrating data from different systems), the types of information and overview of the organization needed, and change management. An example answer is: A major challenge of building executive support systems has been to integrate data from systems designed for very different purposes so that senior executives can review organizational performance from a firm-wide perspective. ESS must be designed so that high-level managers and others can use them without much training. One area that merits special attention is the determination of executive information requirements. ESS need to have some facility for environmental scanning. A key information requirement of managers at the strategic level is the capability to detect signals of problems in the organizational environment that indicate strategic threats and opportunities. The ESS need to be designed so that both external and internal sources of information can be used for environmental scanning purposes. Implementation of the ESS must be carefully managed to neutralize the opposition of managers at the lower levels of the organization, because ESS potentially could give top executives the ability to examine their work without their knowledge.

10.

What is the balanced scorecard model? Why is it particularly useful? Where does it get its information? The balanced scorecard is a model for analyzing firm performance that supplements traditional financial measures with measurements from additional business perspectives, such as customers, internal business processes, and learning and growth. Managers can use balanced scorecard systems to see how well the firm is meeting its strategic goals. Data to fill out the scorecard, from sources such as financial ledger applications and client retention and market penetration ratios, feed a central data warehouse. The data is mined and ad-hoc reports can be created.

Chapter 13

Building Systems
1. Describe each type of organizational change enabled by information technology. Give an example of each type of change, as it might be illustrated through the operations of a hotel. 1. In automation, employees are assisted with performing tasks automatically. In a hotel, this might mean that a system is set up for the reservations desk to record and process customer reservations. In rationalization of procedures, standard operating procedures are streamlined. In a hotel, this might mean that a reservation system that required three or four steps for checking a customer in would be reduced to one or two steps. In business process reengineering, business processes are analyzed, simplified and redesigned. In a hotel, the reservation and check-in system might be designed to allow the customers to reserve rooms and check in themselves, without the need of a hotel employee to confirm the process. In paradigm shift, the very nature of the business is rethought and new business models are defined. In a hotel, this might mean that the idea of renting rooms on a night-bynight basis to clients might be rethought of as an extended stay place, or perhaps even as a condominium or other business type.

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You are consulting for the information technology division of a state university to guide and facilitate the design of a new system for handling college applications, which has previously been handled entirely with a paper-based process. They would like to set up a system by which prospective students can apply online. What factors should they consider before embarking on systems development? Student answers will vary, but should include an understanding of the elements of reviewing an identified business process to understand how the process works. An example answer is: The university has decided which business process they wish to enable through information technology. Now they should perform some more analysis on that process itself. Factors they will need to look at include: identifying the inputs and outputs. identifying the flow of this process. identifying the various activities and buffers or time delays in the process. identifying the resources: capital, labor, and time involved in the process. identifying the information structure and flow. identifying the process owner. identify other process actors and decision makers.

They will need to review the existing process and determine what steps can be automated or reengineered. A systems analysis with feasibility study should ultimately be conducted.

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Describe how business processes are measured. There are four main dimensions used to measure business processes: 1. 2. 3. 4. Process cost: the total cost of the process for a typical transaction. Process time: the total decision and activity time of all actors. Process flexibility: the ability of the process to produce a variety of outputs or change in the face of environmental pressures. Process quality: the amount of time and money spent to correct defective parts and service.

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What is the purpose of systems analysis? What does the systems analyst do to achieve these goals? It consists of defining the problem, identifying its causes, specifying the solution, and identifying the information requirements that must be met by a system solution. The system analyst creates a road map of the existing organization and systems, identifying the primary owners and users of data in the organization. From this organizational analysis, the systems analyst details the problems of existing systems. By examining documents, work papers, and procedures; observing system operations; and interviewing key users of the systems, the analyst can identify the problem areas and objectives a solution would achieve. Often the solution requires building a new information system or improving an existing one. The systems analysis itself would include a feasibility study to determine whether the solution suggested would be achievable from a financial, technical, and organizational standpoint.

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List and describe at least nine factors considered in the design specifications for a new system. Give at least two examples for each one. Output. Medium, content, timing Input. Origins, flow, data entry User interface. Simplicity, efficiency, logic, feedback, errors Database design. Logical data model, volume and speed requirements, organization and design, record specifications Processing. Computations, program modules, required reports, timing of outputs Manual procedures. What activities, who performs them, when, how, where Controls. Input controls, processing controls, output controls, procedural controls Security. Access controls, catastrophe plans, audit trails Documentation. Operations documentation, systems documents, user documentation Conversion. Transfer files, initiate procedures, select testing method, cut over to new system Training. Select training techniques, develop training modules, identify training facilities Organizational changes. Task redesign, job design, process design, organization structure design, reporting relationships.

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You work for the IT department of a startup ASP, and it is your job to set up the testing processes for a new enterprise system the company will be hosting. Describe the processes you will recommend. What unique considerations will you have? The first step is to prepare the test plan. Any individual components will need to be tested separately, first, and then the system as a whole will need to be tested. Because this is a hosted application, the system will need to be tested as accessed from the variety of platforms that are supported by the application. If the hosted application supports both Mac and Windows users, the system and its parts will need to be tested using client computers running these systems.

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What are the advantages and disadvantages of prototyping? Describe the steps in prototyping. Give at least two circumstances under which prototyping might be useful. Prototyping is most useful when there is some uncertainty about requirements or design solutions. Because prototyping encourages intense end-user involvement throughout the process, it is more likely to produce systems that fulfill user requirements. Working prototype systems can be developed very rapidly and inexpensively. Rapid prototyping can gloss over essential steps in systems development. If the completed prototype works reasonably well, management may not see the need for reprogramming, redesigned, full documentation in testing to build a polished production system. This can backfire later with large quantities of data or large numbers of users in a production environment. The steps in prototyping are: identify the users basic requirements. develop an initial prototype. use the prototype. revise and enhance the prototype.

Prototyping might be especially useful in designing end-user interfaces, or situations in which the users have no clear ideas of what their information requirements are. 8. List the identifying features of each of the five systems development approaches. Systems lifecycle. Sequential step-by-step formal process, written specification and approvals, limited role of users Prototyping. Requirements specified dynamically with experimental system; rapid, informal, and iterative process; users continually interact with the prototype Applications software package. Commercial software eliminates the need for internally developed software programs End-user development. Systems created by end users using fourth-generation software tools, rapid and informal, minimal role of information systems specialists Outsourcing. Systems built and sometimes operated by an external vendor

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What qualities of object-oriented development make this method especially suitable for Internet applications? Object-oriented development uses the object as the basic unit of systems analysis and design. The system is modeled as a collection of objects and the relationships between them. E-commerce companies need to be able to add, change, and retire their technology capabilities very rapidly. Object-oriented development allows objects to be reused and repackaged with other objects to create new software, saving money and development time.

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Discuss the role and influence the user plays in software development. The user is the primary focus of software development. Whether a new information system succeeds or fails largely depends on the roles of users. Building successful information systems requires close cooperation among end users and information systems specialists throughout the systems development process. If users are heavily involved in the development of a system, they have more opportunities to mold the system according to their priorities and business requirements, and more opportunities to control the outcome. They also are more likely to react positively to the completed system because they have been active participants in the change process. Incorporating user knowledge and expertise leads to better solutions. The role of the user in the development of software depends on the method of development used. In SLDC work, end users are limited to providing information requirements and reviewing the technical staffs work. In prototyping, users are involved throughout development, through the use and review of iterative steps of the prototype. In end-user development, the users themselves create the system. Users are typically more involved also in RAD, through the use of prototyping and JAD. In joint application design, end users and information systems specialists work together in an interactive session to discuss design.

Chapter 14

Project Management: Establishing the Business Value of Systems and Managing Change
1. You are working as a project manager for a small IT consulting firm and have been asked to create a plan for reviewing and auditing completed projects in order to gauge their success. What factors will you use to measure the success of a project? What questions would you ask in order to understand why a project succeeded or failed? Student answers will vary but should include an understanding of the main project variables: Scope, time, cost, quality, and risk. A sample answer is: The factors I would use are: Cost: What was the original budget and final budget Time: What was the original schedule and final schedule Quality: Did the project meet the requirements outlined in the project plan Scope: Did the scope of the project change? Questions I would ask to understand the success or failure of the project would be: What technical difficulties were experienced and which could have been foreseen? What risks did the project entail? What events led to the scope changing? What difficulties occurred that were a consequence of personal, employee-oriented problems? What difficulties occurred that were a consequence of environmental, organizational, or managerial challenges? What do project team members consider as the primary challenges? What do clients or stakeholders consider as the primary challenges?

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Describe the elements of a management structure for information systems projects in a large corporation. In a large corporation, the management structure typically consists of (from top to bottom levels in the hierarchy): Corporate strategic planning group: The higher level group of managers responsible for developing the firms strategic plan. Information systems steering committee: A senior management group with responsibility for systems development and operation. Project management: A group of information systems managers and end-user managers responsible for overseeing several specific information systems projects. Project team: The group directly responsible for the individual systems project, consisting of systems analysts, specialists from the relevant end-user business areas, application programmers, and perhaps database specialists.

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List five categories of information that should be included in an information systems plan. General categories of information included in an information plan are: Purpose of the plan Business rationale Current systems or situation New developments to consider Management strategy Implementation plan Budget

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You have been hired as a consultant for a nationwide real estate firm who are interested in achieving better organization between branches by updating their information systems. Will you conduct an enterprise analysis or use a CSF approach to gain an understanding of the corporations information requirements? List at least two reasons why you feel this is the better approach. Student answers will vary: An example answer is: I would choose an enterprise analysis because this will (1) give a better idea of the types of information that need to be shared. Also, (2) since the goal is the sharing of information, rather than reorganizing, I will need an understanding of all the current information and process flows. A CSF approach would be better if the information system were primarily for decision support or executive support and geared toward top managers.

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Describe the process of portfolio analysis. In what situations is this evaluation method useful? Portfolio analysis inventories all of the organizations information systems projects and assets, including infrastructure, outsourcing contracts, and licenses. Each project can be described as having a profile of risk and benefit to the firm, similar to the financial portfolio. In a portfolio analysis, you would list the various systems projects and rate them according to their potential risks and benefits. You would use the portfolio analysis to determine which potential projects should be pursued and which should be modified or abandoned. High risk, low benefit projects should be avoided, while low-risk, high benefit projects would be at the top of the list. High-benefit, high-risk projects and low-risk, low-benefit projects would be reexamined to see if they could be modified to better fit with the companies strategic plans. A mix of profiles could also be defined as acceptable in terms of the companys overall plans, much as is done with a financial portfolio.

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You have been hired as a consultant to make recommendations for Smartys, a healthy fast-food chain that is undergoing major expansion and is in need of a supply chain planning system. They are evaluating two commercially available software packages. What systems evaluation model will help them assess and compare the two packages? How does this model work? A scoring model can be used for selecting projects where many criteria must be considered. It assigns weights to various features of a system and then calculates the weighted totals. What Smartys would do is have decision makers such as top managers list the various features they feel are important to have in the system, such as the processes that need support or reports they may need from the system. Each feature, or criteria, the managers list is given a weight, or rating, in terms of how important it is overall to have in the system. Each package then is evaluated in terms of the percentage of requirements it contributes or supports for each criteria. In the scoring model, you multiply the weight with the softwares percentage of contribution to arrive at a score for each criteria. The scores of both software packages are totaled and compared to see overall their contribution to fulfilling the companys requirements.

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Differentiate between intangible and tangible benefits and list three examples of each. In what types of systems are intangible benefits more predominant? Tangible benefits can be quantified and given a monetary value. For example, a monetary value can be given to increased productivity, lower operational costs, reduced workforce, lower computer expenses, lower outside vendor costs, lower clerical and professional costs, reduced rate of growth in expenses, and reduced facility, telecommunications, software, services, and personnel costs. Intangible benefits cannot be immediately quantified but may lead to quantifiable gains in the long run such as higher sales. Examples of intangible benefits include: improved asset utilization, resource control, organizational planning, decision making, operations; increased flexibility, learning, job satisfaction ,client satisfaction, employee goodwill, more timely information and more information, the fulfillment of legal requirements and a better corporate image. Systems that produce more intangible benefits are MIS, DSS, and collaborative work systems.

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List and describe the four principle capital budgeting models. In what situations are these models not useful? The payback method is a measure of the time required to pay back the initial investment of a project. The accounting rate of return on investment (ROI) calculates the rate of return from an investment by adjusting the cash inflows produced by the investment for depreciation. The net present value is the amount of money an investment is worth, taking into account its cost, earnings, and the time value of money. Internal rate of return (IRR) is defined as the rate of return or profit that an investment is expected to earn, taking into account the time value of money. IRR is the discount (interest) rate that will equate the present value of the projects future cash flows to the initial cost of the project.

These models may not be useful for some information systems projects, especially when their future revenue streams are unclear and the upfront costs are high, and the benefits may be more intangible than tangible.(In such cases, managers might benefit from using real options pricing models to evaluate information technology investments.)

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You are the senior project manager for a Web development company with upwards of 100 current client projects. You have been assigned to evaluate two upcoming projects. One project is to develop a time tracking solution that would allow your 20 freelancers to submit daily time sheets and would report on the time spent on each project. The other project is to redesign the client interface to the company extranet to make it easier to use. The extranet allows clients to log in and view their current Web sites under development, as well as view project statistics, documents, and progress reports. Compare the two projects in terms of risk factors. Student answers will vary but should include an understanding of the main risks factors: size, structure, and technical expertise. An example answer is: The main risk factors are size, structure, and technical expertise. Size. The time-tracking project is a larger project: It involves creating new programming that may interface with back-end systems and will immediately influence payment and cost. It also affects business processes. Redesigning an interface for the client extranet may simply be designing one or two pages that will be replicated for each client once the initial design is done. Structure. It may be easier to define the requirements of the time-tracking software, as this process is relatively straightforward. Understanding what makes the user interface problematic and defining ways to make it easier to use is somewhat of a less tangible quality than reporting on time, so this may be a concern in the second project. Technical expertise. Since the time-tracking project is a new application, there may be some issues of making sure any in-house staff has the appropriate level of expertise. The user interface involves working with existing programming that will not change. However, there may be a need to make sure that an expert who understands usability is present.

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Americlinic, a national chain of budget health-care clinics, is creating an information system that will allow patients and doctors at participating franchises to communicate online. The goal of the system is to allow doctors to respond to minor health questions quickly and more efficiently, saving patients unnecessary visits to the clinic. This will be a major procedural change. What steps would you recommend to this company to ensure the user acceptance of the system? The first step should be to conduct an organizational impact analysis, to determine the changes in procedures, job function, organizational structure, power relationships, and behavior that this system requires or will engender. Any organizational changes should occur prior to implementing the system. In order to gain compliance and support of the doctors, I would establish a review committee of influential participating doctors and change agents to discuss the system prior to development and during development in order to meet physician needs and requirements. I would also involve focus groups of intended users to review prototypes of the system to make sure it is easy to use, and hopefully easier to use in the relevant health situations than going to the doctor. The company will need to make sure that there is also an option for users that do not have Internet access. User training for doctors and nurses will be essential. The company should also consider incentives for doctors and patients that use the system.