UNIT IV STUDY GUIDE
The Cloud, Processes, Organizations,
and Information Systems
Reading
Assignment
Chapter 6:
The Cloud
Chapter 7:
Processes,
Organizations, and
Information Systems
Course Learning Outcomes for Unit IV
Upon completion of this unit, students should be able to:
2. Distinguish the similarities and differences between the personal knowledge
management tools.
5. Evaluate the approaches to developing organizational knowledge
management strategies.
Unit Lesson
Suggested Reading
See information below.
Learning Activities
(Non-Graded)
In Unit III, we discussed the basic concepts of hardware and software. We also
discussed open source software development, database management systems, and
compared the differences between native and thin-client applications. Lastly, we
explored mobile systems and the characteristics of quality mobile user experiences. In
this unit, we will discuss the cloud and how the cloud works, the types of business
processes, and ERP systems.
Networks and IP Addresses
See information below.
The author of your textbook does a great job of breaking down computer networks as
described below:
A computer network is a collection of computers that communicate
with one another over transmission lines or wirelessly… A local area
network (LAN) connects computers that reside in a single geographic
location on the premises of the company that operates the LAN. The
number of connected computers can range from two to several
hundred. The distinguishing characteristic of a LAN is a single
location. A wide area network (WANs) connects computers at
different geographic locations. The computers in two separated
company sites must be connected using a WAN… An internet is a
network of networks. Internets connect LANs, WANs, and other
internets. The most famous internet is "the Internet” (with an
uppercase letter I)…In addition to the Internet, private networks of
networks, called internets, also exist. A private internet that is used
exclusively within an organization is sometimes called an intranet
(Kroenke, 2015, p. 206).
An IP address is a number that identifies a particular device. Public IP addresses
identify a particular device on the public Internet. Because public IP addresses must
be unique worldwide, their assignment is controlled by a public agency known as
ICANN (Internet Corporation for Assigned Names and Numbers). Private IP
addresses identify a particular device on a private network, usually on a LAN. Their
assignment is controlled within the LAN.
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The private/public IP address scheme has two major benefits. First, public IP
addresses are conserved. All of the computers on the LAN use only one public IP
address. Second, by using private IP addresses, you need not register a public IP
address for your computer with ICANN-approved agencies. Furthermore, if you had a
public IP address for your computer, every time you moved it the Internet would have
to update its addressing mechanisms to route traffic to your new location. Such
updating would be a massive burden.
Once again, Kroenke gives a wonderful description; this time of the virtual private
network:
A virtual private network (VPN) uses the Internet to create the
appearance of private, secure connections. In the IT world, the term
virtual means something that appears to exist but in fact does not… a
VPN uses the public Internet to create the appearance of a private
connection on secure network… The remote user is the VPN client…
Once the Internet connection is made, VPN software on the remote
user's computer establishes a connection with the VPN server… The
VPN client and VPN server then have a secure connection. That
connection, called a tunnel, is a virtual, private pathway over a public
or shared network from the VPN client to the VPN server (Kroenke,
2015, pp. 223-224).
The Cloud
Cloud computing is defined “as the elastic leasing of pooled computer resources over
the Internet” (Kroenke, 2015, p. 199). The term elastic is used because the amount of
leased resources can grow or shrink in response to needs seamlessly and quickly,
and fees are charged only for resources used. The term pooled is used because many
organizations share the physical hardware through virtualization. The term Internet is
important because cloud resources are accessed using standardized Internet
protocols and standards.
Cloud-based computing does not require a large investment in typical computing
center resources. Organizations will not have to invest in significant development
costs, maintenance costs, support costs, personnel costs, management costs, and will
not bear the risks of technical obsolescence. Cloud computing customers expect
excellent computing resources to be provided and expect excellent security and
support.
If an organization chooses to utilize in-house computing, it retains control over its
physical computing resources and knows exactly how its computing resources are
secured and protected.
Some of the most salient advantages of cloud computing are:
lower costs,
known cost structure,
scalability of resources to meet varying demand,
access to skilled resource management, and
no worry about technical obsolescence.
Three factors have made cloud-based hosting advantageous today:
1. Processors, data communication, and data storage are so cheap as to be
nearly free. Because data communication is so cheap, getting the data to and
from that processor is also nearly free.
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2. Virtualization technology enables the near instantaneous creation of a new
virtual machine. The customer provides (or creates in the cloud) a disk image
of the data and programs of the machine it wants to provision. Virtualization
software takes it from there.
3. Internet-based standards enable cloud-hosting vendors to provide processing
capabilities in flexible, yet standardized, ways.
For example, the cloud [iCloud] will give Apple a competitive advantage over other
mobile device vendors because the iCloud enables Apple to offer significant
enhancements to its mobile device product line. The ability to synchronize each
device’s content is an incredible advantage, and relieves users of a common
frustration when the content of their various devices is not synchronized. This
definitely differentiates Apple’s mobile device offerings from their competitors.
The iCloud will help to lock in customers who will not consider moving to another
provider’s devices and hence give up the advantages of the iCloud. Apple has already
moved to lock in suppliers by only accepting apps developed by committed Apple
developers. This huge investment in the iCloud data center will be difficult for new
entrants in the market to duplicate, thus raising barriers to entry. Apple should
experience lower costs with the almost self-managing data center it has created.
AllRoad Parts has been using a traditional, third-party hosting organization. It pays for
a monthly plan for certain servers. Those servers may or may not be virtual (AllRoad
does not know how they are managed within the vendor), but they are most certainly
not elastic. The benefits of the cloud are substantial to a business like AllRoad Parts,
especially considering the need to store the new, large 3D printing design files.
AllRoad Parts does not know if it will sell one or 100,000 such files. Elastic servers
provide strong benefits.
Also, regarding security concerns, the major cloud service vendors employ thousands
of highly trained, skilled specialists to create, manage, administer, and improve their
cloud services. It is nearly impossible to imagine that the security they provide could
be done better in a private internet managed by the IT department at AllRoad. If
security is paramount, AllRoad should consider a Virtual Private Cloud, which is a
subset of a public cloud with highly-restricted, secure access.
The cloud is based on the Internet as its foundation. It also utilizes a design
philosophy called the service-oriented architecture (SOA). According to this
philosophy, all interactions among computing devices are defined as services in a
formal, standardized way. This philosophy enables all the pieces of the cloud to fit
together. For many organizations to use the cloud and to be able to mix and match
Web services, they need to agree on standard ways of formatting and processing
service requests and data. That leads us to cloud protocols and standards. The
protocols that run the Internet also support cloud processing.
WSDL (Web Services Description Language)
Web services description language is a standard for describing the services, inputs
and outputs, and other data supported by a Web service. Documents coded according
to this standard are machine readable and can be used by developer tools for creating
programs to access the service.
SOAP
A protocol for requesting Web services and for sending responses to Web service
requests.
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XML (Extensible Markup Language)
XML is a markup language used for transmitting documents. It contains much
metadata that can be used to validate the format and completeness of the document,
but includes considerable overhead.
JSON (JavaScript Object Notation)
JSON is a markup language used for transmitting documents. It contains little
metadata and is preferred for transmitting volumes of data between servers and
browsers. While the notation is the format of JavaScript objects, JSON documents can
be processed by any language.
Cloud-based hosting makes sense for most organizations. The only
organizations for which it may not make sense are those that are
required by law or by industry standard practice to have physical
control over their data. Such organizations might be forced to create
and maintain their own hosting infrastructure. A financial institution,
for example, might be legally required to maintain physical control
over its data (Kroenke, 2015, p. 203).
Be careful not to confuse the cloud with the Internet. The Internet is a group of
interconnected computers that span the globe called the World Wide Web. Through
the World Wide Web, you are given access to web sites and hyperlinked web
documents. The Internet is also known as the largest network in the world because it
consists of thousands of networked computers. Cloud computing is technology that
provides resources and services such as software distribution over the Internet.
Another service is SaaS (software as a service), which eliminates the need for
proprietary email and local servers. Instead, businesses can choose SaaS cloud
services like Google for email, rather than setting up local email servers.
An organization that provides software as a service (SaaS) provides
not only hardware infrastructure, but also an operating system and
application programs as well. For example, Salesforce.com provides
hardware and programs for customer and sales tracking as a
service… The second category of cloud hosting is platform as a
service (PaaS), whereby vendors provide hosted computers, an
operating system, and possibly a DBMS. Microsoft Windows Azure,
for example, provides servers installed with Windows Server.
Customers of Windows Azure then add their own applications on top
of the hosted platform… The most basic cloud offering is
infrastructure as a service (IaaS), which is the cloud hosting of a bare
server computer or data storage (Kroenke, 2015, pp. 219-220).
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Below is a visual illustration of the cloud (Figure 1).
Figure 1. The Cloud
Connecting to the Internet
The best way to connect to the Internet is to connect employees’ computers on a LAN
and the network using a single device to connect to the Internet. Each computer must
have network interface card (NIC) installed. Connect each NIC to a switch using
unshielded twisted pair wire (preferably Ethernet CAT 5 or CAT 6). Connect the switch
to a router or gateway (Firewall), enabling the computers to share a single Internet
connection. Connect the router to a modem (DSL or cable or alternate ISP device),
and pay your ISP for the Internet connection.
An ISP has three important functions. First, it provides the user with a legitimate
Internet address. Second, it serves as the user's gateway to the Internet. The ISP
receives the communications from the user's computer and passes them on to the
Internet, and it receives communications from the Internet and passes them on to the
user. Finally, ISPs pay for the Internet. They collect money from their customers and
pay access fees and other charges on the user's behalf.
Digital subscriber lines (DSL) operate on the same lines as voice telephones, but they
operate so that their signals do not interfere with voice telephone service. Because
DSL signals do not interfere with telephone signals, DSL data transmission and
telephone conversations can occur simultaneously. A device at the telephone
company separates the phone signals from the computer signals and sends the latter
signal to the ISP. Digital subscriber lines use their own protocols for data transmission.
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This setup provides the most effective and flexible plan for Internet access for the
business. Below is a diagram of how a company can connect a group of employees in
a small business to the Internet (Figure 2).
Figure 2. Typical Office Network
Further Discussion
Now that we have explored the cloud, let’s discuss how the cloud will affect job
prospects between now and 2024. There will be fewer small companies providing
information systems services to their local communities. The number of employees
involved in managing the computing infrastructures associated with the cloud is
relatively small. In other words, businesses that have been focused on creating and
maintaining an IT infrastructure for other businesses, it is likely that they will
experience difficult times as existing customers and new businesses choose to utilize
cloud-based computing resources. The cloud is a viable, inexpensive alternative to
owning and managing computing resources, hence, our traditional business services
will no longer be needed.
Because of the availability of cheap computing infrastructure, there may be more
startup businesses that can quickly and cheaply acquire the computing infrastructure
they need. However, the demand for people who know how to create, use, and
manage information systems will continue to be strong. Also, companies will still need
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help in determining the right cloud-based computing options. They will need help in
building their databases on the cloud. They will need help in learning to use the cloudbased resources, and they will still need training so that their people are comfortable
with the systems obtained from the cloud vendors. Under existing conditions, the
business emphasizes technical expertise. Now, the business will need to emphasize
detailed understanding of their customers’ needs for the cloud-based environment.
The focus will be on what you can DO with cloud-based offerings to make the
business more efficient and effective, not just providing the technical expertise to
create the infrastructure. Services will be very people-oriented and will be much less
technically-oriented. It is not likely that everyone on the IT staff can adapt to the more
people-centered focus of the business. Unfortunately, some highly technical folks are
not well suited to providing training and support to business people.
The most important lesson to be learned here is that technological change is constant.
While the changes can be confusing and even frightening, business professionals
should welcome the opportunities provided by new technological options and look to
the future instead of trying to cling to the past. The information technology world is one
of constant change and evolution. No company can assume their market will remain
constant over time, no matter how large it is.
Processes
“Structured processes are formally defined, standardized processes that involve dayto-day operations: accepting a return, placing an order, purchasing raw materials, and
so forth” (Kroenke, 2015, p. 244).
The characteristics of structured processes are:
standardized,
usually formally defined and documented,
exceptions are rare and not (well) tolerated,
process structure changes slowly and with organizational agony, and
support operational and structured managerial decisions and activities.
“Dynamic processes are flexible, informal, and adaptive processes that normally
involve strategic and less unstructured managerial decisions and activities” (Kroenke,
2015, p. 244).
The characteristics of dynamic processes are:
support strategic and less structured managerial decisions and activities,
less specific and fluid,
usually informal,
exceptions frequent and expected, and
adaptive processes that change structure rapidly and readily.
A workgroup process is a structured process that “exists to enable workgroups to fulfill
the charter, purpose, and goals of a particular group or department” (Kroenke, 2015,
p. 245).
Kroenke defines enterprise processes as structured processes that “span an
organization and support activities in multiple departments” (Kroenke, 2015, p. 246),
and inter-enterprise processes as structured processes that “span two or more
independent organizations” (Kroenke, 2015, p. 246).
Structured inter-enterprise information systems are information systems that support
inter-enterprise processes. Such systems typically involve thousands of users, and
solutions to problems that require cooperation among different, usually independently
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owned, organizations. Problems are resolved by meeting, by contract, and sometimes
by litigation. Data are often duplicated between organizations, but such duplication is
either eliminated or is carefully managed. Because of their wide span, complexity, and
use by multiple companies, such systems can be exceedingly difficult to change.
Supply chain management is a classic example of an inter-enterprise information
system.
Process Quality
The two dimensions of process quality are process efficiency and process
effectiveness. The first being a measure of the ratio of process outputs to inputs, and
the second a measure of how well a process achieves organizational strategy.
Organizations can improve the quality (efficiency and/or effectiveness) of a process in
one of three ways:
change the process structure
change the process resources
change both
Information systems can be used to improve process quality by:
performing an activity
augmenting a human who is performing an activity
controlling data quality and process flow
Information silos are instances where information is stored and isolated from other
information systems.
The problems associated with information silos include:
data duplication and data inconsistency,
disjointed processes,
limited information and lack of integrated information,
isolated decisions that lead to organizational inefficiencies, and
increased expense.
The fundamental problem of information silos is that data are duplicated in isolated
systems. The most obvious fix is to integrate the data into a single database and
revise applications (and business processes) to use that database. Another remedy is
to allow the isolation, but to manage it to avoid problems.
ERP
Enterprise resource planning (ERP) is a suite of applications called
modules, a database, and a set of inherent processes for
consolidating business operations into a single, consistent, computing
platform. An ERP system is an information system based on ERP
technology... The primary purpose of an ERP system is integration;
an ERP system allows the left hand of the organization to know what
the right hand is doing. This integration allows real-time updates
globally, whenever and wherever a transaction takes place. Critical
business decisions can then be made on a timely basis using the
latest data. (Kroenke, 2015, pp. 254-258)
In Chapter 7 you are given an opportunity to use the PRIDE system as an example to
assess, evaluate, and apply emerging information technology to business, connect
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applications of IS to the fundamentals presented in the prior chapters, show a realistic
application of mobile and cloud technology, and demonstrate the need for, the
creation of, and some of the issues involving an inter-enterprise IS.
The functions of Enterprise application integration (EAI) are as follows:
It connects system "islands" via a new layer of software/system.
It enables existing applications to communicate and share data.
It provides integrated information.
It leverages existing systems—leaving functional applications as is, but
providing an integration layer over the top.
It enables a gradual move to ERP.
ERP vendors have developed training curricula and numerous classes because of the
complexity and difficulty of implementing and using ERP solutions. ERP training falls
into two broad categories. The first category is training about how to implement the
ERP solution. This training includes topics such as obtaining top-level management
support, preparing the organization for change, and dealing with the inevitable
resistance that develops when people are asked to perform work in new ways. The
second category is training on how to use the ERP application software.
The four primary challenges or factors affecting implementation of enterprise systems
are:
collaborative management,
requirements gaps,
transition problems, and
employee resistance.
There are ways for organizations to manage employee resistance to change in the
context of new enterprise systems.
First, senior-level management needs to communicate the need for
the change to the organization and reiterate this, as necessary,
throughout the transition process. Second, employees fear change
because it threatens self-efficacy, which is a person's belief that he or
she can be successful at his or her job. To enhance confidence,
employees need to be trained and coached on the successful use of
the new system. Word-of-mouth is a very powerful factor, and in some
cases key users are trained ahead of time to create positive buzz
about the new system. Video demonstrations of employees
successfully using the new system are also effective. Third, in many
ways, the primary benefits of a new ERP system are felt by the
accounting and finance departments and the senior management.
Many of the employees who are asked to change their activities to
implement ERP will not receive any direct benefit from it. Therefore,
employees may need to be given extra inducement to change to the
new system… Implementing new enterprise systems can solve many
problems and bring great efficiency and cost savings to an
organization, but it is not for the faint of heart. (Kroenke, 2015, p. 267)
PRIDE
The author of your textbook developed a prototype of PRIDE in 2011-2012 for the
owner of a health club who wanted to connect the workout data of his club member to
their workout data at home and to their employer, insurance company, and healthcare
professionals. PRIDE was written in C Sharp (C#), and the code runs against an
Azure database in the cloud. As a prototype, the author wanted to demonstrate
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capability quickly, so he used the Windows Phone emulator that is part of Visual
Studio to demo the phone interface. The plan was to port the application to iOS and
Android devices after demonstrating feasibility and after the club owner obtained
financing.
As it turned out, the health club owner lost interest in the project and released all the
code, database designs, and other project material to the author. The author
suspected that the owner lost interest for the following reasons:
the amount of time that it would require him to devote to the project,
the size of the financial commitment involved, and
the risks inherent in any startup venture.
The author then recast the PRIDE application from the health club to a doctor’s office
because he wanted to connect it directly to the medical community and he wanted it to
appeal to the student’s experience. Every student has been to a doctor, but not all
students have been members of health clubs. A stand in for the owner, Dr. Flores,
was used and many of his comments were similar to the statements by the health club
owner. The least realistic aspect of this case is that it assumes Dr. Flores would have
the time to manage the project.
However, this is a good project because it can go in many different directions.
Regarding the topics in Chapter 7, the fundamental issue that PRIDE addresses is the
existence of information silos among patients, doctors, health clubs, employers, and
insurance companies. The PRIDE database integrates those disparate data sources.
PRIDE uses the ANT+ protocol to obtain exercise data from exercise equipment. All of
the leading exercise vendors support this protocol, and devices such as the Garmin
watch are able to gather that data. In the prototype, a PC in the facility gathered the
ANT+ bike exercise data and pushed it onto the health club’s wireless network from
which it was sent to the Azure database over the Internet. At home, the connection
was to be via the patient’s cell phones; this part of the prototype was not developed.
PRIDE illustrates the problem of managing various parties in an inter-enterprise
system. Doctors, nurses, staff, patients, health club owners, personal trainers,
employers, and insurance companies have different objectives, interests in the
system, work cultures, and financial incentives. One must understand that getting this
group of people to share data, use common procedures, and understand each other’s
problems and issues will be challenging. Problem solving and dispute resolution will
also be difficult.
The reason employers and insurance companies are involved in the PRIDE project is
because this gives employers a way to prove to their health insurance vendors that
their employees engage in exercise. The goal here is to enable the employer to use
that data to negotiate lower healthcare premiums.
Privacy and security of data are paramount. Patients may not want their exercise data
to be shared with their employer or healthcare company. Accordingly, several tables in
the database contain privacy permission data; this aspect of the design is discussed
further in Chapter 12.
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PRIDE demonstrates a need because certain patients, such as cardiac patients, need
just the right amount of exercise, not too little or too much. The application can provide
motivation to exercise by providing social support for coming to the virtual, online class
and by providing some control over under- and over-exercisers. PRIDE demonstrates
that mobile and the cloud is feasible by using the ANT+ protocol to obtain readings
from heart monitors, shoe pads, bikes, and so on, and integrates this. This means all
parties have access to the data and saves Dr. Flores and other users the trouble of
setting up and managing a network-facing database.
Summary
The technology you learned in Chapters 1-6 is useful in evaluating new applications.
The PRIDE application solves exercise data information silos in an interesting and
potentially useful way. Cloud and mobile open the door to many novel and potentially
useful inter-enterprise applications.
Reference
Kroenke, D. (2015). Using MIS 2014 (7th ed.). Upper Saddle River, NJ: Prentice Hall.
Suggested Reading
Chapter 6 Presentation
Chapter 7 Presentation
Abbadi, I. M., & Martin, A. (2011). Trust in the Cloud. Information Security Technical
Report. Retrieved from
http://www.cin.ufpe.br/~redis/intranet/bibliography/middleware/abbadi-trust2011.pdf
Minar, N. (2001). Distributed systems topologies: Part 1. Retrieved from
http://www.openp2p.com/pub/a/p2p/2001/12/14/topologies_one.html
Minar, N. (2002). Distributed systems topologies: Part 2. Retrieved from
http://www.openp2p.com/pub/a/p2p/2002/01/08/p2p_topologies_pt2.html
Saatcioglu, O. (2007). What determines user satisfaction in ERP projects: Benefits,
barriers or risks? Retrieved from
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.103.4235&rep=rep1
&type=pdf
In order to access the resource below, you must first log into the myCSU Student
Portal and access the ABI/INFORM Complete database within the CSU Online
Library.
Anthes, G. (2010). Security in the cloud. Association for Computing Machinery
Communications of the ACM, 53(11), 16.
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Learning Activities (Non-Graded)
Course Flashcards:
http://media.pearsoncmg.com/ph/bp/bp_kroenke_umis_7/flashcards/index.html
From the Textbook:
Ethics Guide, Cloudy Profit? pp. 204-205
Ethics Guide, Dialing for Dollars, pp. 256-257
Using MIS InClass 6, What, Exactly, Does That Standard Mean? p. 226
Using MIS InClass 7, Choosing a CRM Product, p. 255
Security Guide, You Said What? About Me? In Class? pp. 230-231
Security Guide, One-Stop Shopping, pp. 270-271
Guide, Is It Spying or Just Good Management? pp. 232-233
Guide, ERP and the Standard, Standard Blueprint, pp. 272-273
Using Your Knowledge, pp. 235-236
Using Your Knowledge, p. 275
Case Study 6, FinQloud Forever…Well, at Least for the Required Interval… pp. 236238
Case Study 7, Using the PRIDE Database, pp. 278-280
Non-graded Learning Activities are provided to aid students in their course of study.
You do not have to submit them. If you have questions, contact your instructor for
further guidance and information.
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