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CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
Introduction to
Information Systems
Second Edition
PATRICIA WALLACE
Johns Hopkins University
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Library of Congress Cataloging-in-Publication Data
Wallace, Patricia.
Introduction to Information Systems/Patricia Wallace, Johns Hopkins University—Second edition.
p. cm.
Includes index.
ISBN 978-0-13-357175-2
1. Organizational change. 2. Management information systems. I. Title.
HD58.8.W345 2015
658.4'038011—dc23
2013030711
10 9 8 7 6 5 4 3 2 1
ISBN 10:
0-13-357175-0
ISBN 13: 978-0-13-357175-2
To Callie, Julian, and a bright future
of human–centered computing.
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CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
vii
About the Author
P
atricia Wallace is currently Senior Director for Information Technology
and Online Programs at Johns Hopkins University Center for Talented
Youth. Before joining JHU, she was Chief, Information Strategies, and
Executive Director, Center for Knowledge Management, at the Robert H. Smith
School of Business, University of Maryland, College Park. She also teaches
technology management courses as Adjunct Professor in the MBA Program of
the Graduate School of Management and Technology, University of Maryland
University College, where she previously served as CIO for 10 years. Wallace
earned her Ph.D. in psychology at the University of Texas at Austin and holds an
M.S. in Computer Systems Management. She has published 10 books, including
The Internet in the Workplace: How New Technologies Transform Work and The
Psychology of the Internet, several educational software programs, and numerous
scholarly and general articles.
vii
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CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
ix
Brief Contents
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
CHAPTER
1
2
3
4
5
6
7
8
9
10
11
12
CASE STUDIES
Information Systems and People 2
Information Systems and Strategy 32
Information and Communications
Technologies: The Enterprise Architecture 62
Databases and Data Warehouses 94
Information Systems for the Enterprise 130
The Web, E-Commerce, and M-Commerce 164
Business Intelligence and Decision Making 196
Collaborating with Technology 226
Knowledge Management and E-Learning 256
Ethics, Privacy, and Security 288
Systems Development and Procurement 320
Project Management and Strategic Planning 348
Facebook and Instagram: Privacy Challenges 378
A Humanitarian Supply Chain for the Red Cross 382
Apple: Can the Company Pull Off Another Disruptive
Innovation? 385
Managing the Federal Government’s IT Project Portfolio
388
Glossary 393
Index 400
ix
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CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
xi
Contents
Preface
xxiii
Acknowledgments
CHAPTER
1
xxxi
Information Systems and People 2
Learning Objectives 2
Introduction
2
Information Systems in Action
MANAGING OPERATIONS
4
4
SUPPORTING CUSTOMER INTERACTIONS
MAKING DECISIONS
6
6
COLLABORATING ON TEAMS
7
GAINING COMPETITIVE ADVANTAGE
8
IMPROVING INDIVIDUAL PRODUCTIVITY
The Nature of Information
8
9
WHAT MAKES INFORMATION VALUABLE?
9
The Components of an Information System
PEOPLE
TECHNOLOGY
PROCESSES
DATA
11
11
12
12
15
Information Systems, the Discipline
16
Information Systems Throughout the Organization
INFORMATION SYSTEMS IN BUSINESS
INFORMATION SYSTEMS IN NONPROFITS AND GOVERNMENT
INSIDE THE IT DEPARTMENT
17
17
18
18
COLLABORATING ON INFORMATION SYSTEMS
IMPROVING YOUR OWN PRODUCTIVITY
Promises, Perils, and Ethical Issues
19
21
21
PRIVACY BREACHES AND AMPLIFICATION EFFECTS
22
THE ETHICAL FACTOR: Ethical Issues Surrounding Information Systems 23
Online Simulation
23
Chapter Summary
24
Key Terms and Concepts
24
Chapter Review Questions
24
Projects and Discussion Questions
Application Exercises
25
26
EXCEL APPLICATION: MANPOWER PLANNING SPREADSHEET
ACCESS APPLICATION: INFORMATION SYSTEMS IN BUSINESS
26
26
Case Study #1 Nasdaq’s Information Challenges: Facebook’s Botched Public Opening
and High Frequency Trading
27
Case Study #2 Breaking News: Twitter’s Growing Role in Emergencies and Disaster Communications
28
xi
xii
CO N TEN T S
E-Project 1 Analyzing the May 6 “Flash Crash” with Excel Charts
30
E-Project 2 Gathering, Visualizing, and Evaluating Reports from Twitter
and Other Sources During a Disaster
30
Chapter Notes
CHAPTER
2
31
Information Systems and Strategy 32
Learning Objectives
Introduction
32
32
Porter’s Five Competitive Forces
THREAT OF NEW ENTRANTS
POWER OF BUYERS
34
35
36
POWER OF SUPPLIERS
37
THREAT OF SUBSTITUTES
37
RIVALRY AMONG EXISTING COMPETITORS
38
Factors That Affect How the Five Forces Operate
DISRUPTIVE TECHNOLOGY AND INNOVATIONS
GOVERNMENT POLICIES AND ACTIONS
38
39
40
COMPLEMENTARY SERVICES AND PRODUCTS IN THE ECOSYSTEM
ENVIRONMENTAL EVENTS AND “WILDCARDS”
41
42
The Value Chain and Strategic Thinking
43
EXTENDING THE VALUE CHAIN: FROM SUPPLIERS TO THE FIRM TO CUSTOMERS
BENCHMARKING COMPONENTS OF THE VALUE CHAIN
43
44
THE ETHICAL FACTOR: Ethical Responsibility in an Extended Value Chain 45
IT BENCHMARKS
45
Competitive Strategies in Business
46
THE ROLE OF INFORMATION SYSTEMS IN STRATEGY
47
INFORMATION SYSTEMS: RUN, GROW, AND TRANSFORM THE BUSINESS
Information Strategies and Nonprofit Organizations
FUND-RAISING
48
49
50
VOLUNTEERING
50
INFORMATION STRATEGIES AND GOVERNMENT
Does IT Matter?
51
52
SPENDING ON RUNNING, GROWING, AND TRANSFORMING
LEVELING UP!: A STRATEGIC ANALYSIS
Online Simulation
54
Chapter Summary
55
Key Terms and Concepts
55
Chapter Review Questions
56
Projects and Discussion Questions
Application Exercises
52
53
56
57
EXCEL APPLICATION: IT BENCHMARKS
57
ACCESS APPLICATION: TELETHON CALL REPORTS
57
Case Study #1 Can GameStop Survive with Its Brick-and-Mortar Stores?
58
Case Study #2 The Open Internet Coalition and the Battle for Net Neutrality
59
E-Project 1 Identifying Company Strategy with Online Financial Chart Tools
60
E-Project 2 Analyzing Movie Download Times with Excel
Chapter Notes
61
60
CONTENTS
CHAPTER
3
xiii
Information and Communications Technologies:
The Enterprise Architecture 62
Learning Objectives
Introduction
62
The Hardware
64
INPUT AND OUTPUT
PROCESSING
STORAGE
62
64
68
69
THE ETHICAL FACTOR: Ethical Implications of Big Data 70
The Software
70
TYPES OF SOFTWARE
70
HOW IS SOFTWARE CREATED?
72
Networks and Telecommunications
TRANSMISSION MEDIA AND PROTOCOLS
TYPES OF NETWORKS
NETWORK PROTOCOLS
74
74
77
79
The Enterprise Architecture
81
TRENDS IN ENTERPRISE ARCHITECTURES
GUIDING THE ARCHITECTURE
Online Simulation
85
Chapter Summary
86
81
84
Key Terms and Concepts
87
Chapter Review Questions
87
Projects and Discussion Questions
Application Exercises
87
88
EXCEL APPLICATION: ANALYZING GROWTH IN COMPUTER STORAGE CAPACITIES
ACCESS APPLICATION: MANAGING ICT ASSETS WITH A DATABASE
88
89
Case Study #1 Google Glass and Wearable Technologies
89
Case Study #2 Rolling Out Its 4G Network, Sprint Nextel Competes with Rivals
E-Project 1 Voluntary Distributed Computing
E-Project 2 Using Excel to Analyze Cost Effectiveness for 4G Rollouts
Chapter Notes
CHAPTER
4
90
92
92
93
Databases and Data Warehouses 94
Learning Objectives
Introduction
94
94
The Nature of Information Resources
96
STRUCTURED, UNSTRUCTURED, AND SEMI-STRUCTURED INFORMATION
METADATA
96
97
THE QUALITY OF INFORMATION
97
Managing Information: From Filing Cabinets to the Database
TABLES, RECORDS, AND FIELDS
THE RISE AND FALL OF FILE PROCESSING SYSTEMS
100
DATABASES AND DATABASE MANAGEMENT SOFTWARE
Developing and Managing a Relational Database
PLANNING THE DATA MODEL
99
99
102
105
105
ACCESSING THE DATABASE AND RETRIEVING INFORMATION
109
THE ETHICAL FACTOR: Ethical Issues in Database Design: The Case of Ethnic Identification 110
MANAGING AND MAINTAINING THE DATABASE
111
xiv
CO N TEN T S
Multiple Databases and the Challenge of Integration
SHADOW SYSTEMS
113
114
INTEGRATION STRATEGIES AND MASTER DATA MANAGEMENT
Data Warehouses and Big Data
114
114
BUILDING THE DATA WAREHOUSE
116
THE CHALLENGE OF BIG DATA
116
STRATEGIC PLANNING, BUSINESS INTELLIGENCE, AND DATA MINING
118
The Challenges of Information Management: The Human Element
OWNERSHIP ISSUES
119
119
DATABASES WITHOUT BOUNDARIES
119
BALANCING STAKEHOLDERS’ INFORMATION NEEDS
Online Simulation
120
Chapter Summary
121
Key Terms and Concepts
122
Chapter Review Questions
122
Projects and Discussion Questions
Application Exercises
120
122
123
EXCEL APPLICATION: MANAGING CATERING SUPPLIES
ACCESS APPLICATION: DD-DESIGNS
123
124
Case Study #1 U.K. Police Track Suspicious Vehicles in Real Time with Cameras
and the License Plate Database
125
Case Study #2 Colgate-Palmolive Draws on Its Global Database to Evaluate Marketing Strategies
E-Project 1 Identifying Suspects with a License Plate Database:
Constructing Queries with Access
127
E-Project 2 Building a Database for Customer Records
Chapter Notes
CHAPTER
5
128
129
Information Systems for the Enterprise 130
Learning Objectives
Introduction
130
130
Finance Management
132
COMPONENTS OF FINANCIAL INFORMATION SYSTEMS
132
FINANCIAL REPORTING, COMPLIANCE AND TRANSPARENCY
Human Capital Management
COMPONENTS OF HUMAN CAPITAL MANAGEMENT SYSTEMS
HCM METRICS
134
135
135
137
Managing the Supply Chain
137
THE ETHICAL FACTOR: Ethics and Talent Management 138
SUPPLY CHAIN FUNDAMENTALS
138
MEASURING PERFORMANCE IN SUPPLY CHAINS
139
INFORMATION SYSTEMS AND TECHNOLOGY FOR SUPPLY CHAIN MANAGEMENT
Customer Relationship Management
CRM GOALS AND METRICS
144
144
CRM STRATEGIES AND TECHNOLOGIES
146
Enterprise Resource Planning (ERP): Bringing It All Together
ERP COMPONENTS
150
INTEGRATION STRATEGIES
152
IMPLEMENTATION ISSUES
153
149
141
126
CONTENTS
Online Simulation
154
Chapter Summary
155
Key Terms and Concepts
156
Chapter Review Questions
156
Projects and Discussion Questions
Application Exercises
156
157
EXCEL APPLICATION: PERFORMANCE BICYCLE PARTS
ACCESS APPLICATION: VSI CONSULTANTS
157
157
Case Study #1 Helping the Homeless: A Customer-Centric Approach with CRM Software
159
Case Study #2 Winning the War for Talent: The Mandarin Oriental’s Talent Management System
E-Project 1 CRM for Human Services Agencies
161
E-Project 2 Evaluating Employment and Recruitment Websites
Chapter Notes
CHAPTER
6
161
162
The Web, E-Commerce, and M-Commerce 164
Learning Objectives
Introduction
164
164
Developing a Web Strategy
CHOOSING A GOAL
166
166
NAMING THE WEBSITE
167
Building the Website
WEBSITE DESIGN
170
170
THE ETHICAL FACTOR: Website Accessibility: Why Is Progress So Slow? 174
SOFTWARE DEVELOPMENT STRATEGIES FOR THE WEB
E-Commerce
174
177
THE ONLINE TRANSACTION AND E-COMMERCE SOFTWARE
E-COMMERCE SECURITY
177
177
E-COMMERCE TRUST
178
Mobile Devices and M-Commerce
WHY MOBILE MATTERS
178
178
DESIGNING WEBSITES AND APPS FOR MOBILE DEVICES
M-COMMERCE AND MOBILE PAYMENTS
Marketing the Website
179
180
180
SEARCH ENGINE OPTIMIZATION
WEB ADVERTISING
180
182
Web 2.0 and Beyond
183
CROWDSOURCING AND COLLECTIVE INTELLIGENCE
184
EXPANDING DATA AND SENSORY INPUT: THE “INTERNET OF THINGS”
THE LEARNING WEB
185
Online Simulation
186
Chapter Summary
187
Key Terms and Concepts
188
Chapter Review Questions
188
Projects and Discussion Questions
Application Exercises
xv
188
189
WEBSITE APPLICATION: HERITAGE DOGS
189
EXCEL APPLICATION: HERITAGE DOGS WEBSITE METRICS
ACCESS APPLICATION: SPRINGFIELD ANIMAL SHELTER
190
190
184
160
xvi
CO N TEN T S
Case Study #1 Mobile Payments and the Digital Wallet
191
Case Study #2 Pandora Internet Radio: The Net Threatens the Music Business (Again)
E-Project 1 Examining Top M-Commerce Sites
193
E-Project 2 Exploring Pandora’s Web Analytics
193
Chapter Notes
CHAPTER
7
194
Business Intelligence and Decision Making 196
Learning Objectives
Introduction
196
196
Levels of Decision Making
OPERATIONAL LEVEL
TACTICAL LEVEL
198
198
198
STRATEGIC LEVEL
199
Sources of Business Intelligence
200
TRANSACTIONAL DATABASES, DATA WAREHOUSES, AND INTERNAL DATA SOURCES
EXTERNAL DATA SOURCES AND BIG DATA
200
200
THE ETHICAL FACTOR: The Ethics of Tagging Faces in Photos 202
Data Mining and Analytics
202
ANALYZING PATTERNS, TRENDS, AND RELATIONSHIPS
SIMULATING, OPTIMIZING, AND FORECASTING
ARTIFICIAL INTELLIGENCE
Web Analytics
202
205
207
210
WEB METRICS
210
ANALYZING TRAFFIC AND ACHIEVING SUCCESS
212
Putting It All Together: Dashboards, Portals, and Mashups
DASHBOARDS
PORTALS
MASHUPS
213
213
214
215
BUSINESS INTELLIGENCE: THE HUMAN ELEMENT
217
Online Simulation 217
Chapter Summary
218
Key Terms and Concepts
218
Chapter Review Questions
219
Projects and Discussion Questions
Application Exercises
219
220
EXCEL APPLICATION: ANALYZING REVENUE AND EXPENSES FOR CITY HOSPITAL SEMINARS
ACCESS APPLICATION: MARKETING CITY HOSPITAL SEMINARS
Case Study #1 Cracking Fraud with Government’s Big Data
221
Case Study #2 TV and Twitter: How Nielsen Rates Programs with “Social TV”
E-PROJECT 1 Detecting Suspicious Activity in Insurance Claims
E-PROJECT 2 Analyzing Nielsen TV Ratings with Excel
Chapter Notes
CHAPTER
8
224
225
Collaborating with Technology 226
Learning Objectives
Introduction
226
226
220
221
223
222
192
CONTENTS
The Evolution of Collaborative Technologies
EMAIL
DISCUSSION FORUMS
230
INSTANT MESSAGING AND TEXTING
230
GROUP DECISION SUPPORT SYSTEMS (GDSS)
WEB CONFERENCING
233
SHARED WORKSPACES
234
Web 2.0 Collaborative Technologies
WIKIS
232
233
INTERACTIVE VIDEO
BLOGS
228
228
235
235
236
SOCIAL NETWORKING
237
MICROBLOGGING
238
VIRTUAL WORLDS
239
Unified Communications
241
CAPABILITIES FOR UNIFIED COMMUNICATIONS
UNIVERSAL DASHBOARDS
241
241
The Human Element and Collaborative Technologies
PSYCHOLOGICAL CHARACTERISTICS OF ONLINE ENVIRONMENTS
242
242
THE ETHICAL FACTOR: Flash Mobs and Free Speech: Should Police Block Mobile
Messaging Services? 244
MANAGING ONLINE IMPRESSIONS
245
GROUP DYNAMICS IN VIRTUAL TEAMS
MAKING VIRTUAL TEAMS WORK
245
247
Online Simulation 248
Chapter Summary
249
Key Terms and Concepts
249
Chapter Review Questions
249
Projects and Discussion Questions
Application Exercises
250
251
EXCEL APPLICATION: GOING GREEN!
ACCESS APPLICATION: CLOUD 9
251
251
Case Study #1 “Telepresence Robots” Support Remote Collaboration
Case Study #2 Yahoo! Bans Telecommuting: Was It the Right Move?
251
253
E-Project 1 Estimating Breakeven Pricing for Telepresence Robots Using a Spreadsheet
E-Project 2 Estimating Savings for Virtual Work Using an Excel Model
Chapter Notes
CHAPTER
9
254
255
Knowledge Management and E-Learning 256
Learning Objectives
Introduction
256
256
The Nature of Intellectual Capital
TYPES OF INTELLECTUAL CAPITAL
TYPES OF KNOWLEDGE
258
258
258
MANAGING INTELLECTUAL CAPITAL
259
Knowledge Management Strategies and Technologies
IDENTIFY THE GOAL
260
LOCATE THE SOURCES
CAPTURE THE KNOWLEDGE
260
263
ORGANIZE, SHARE, AND VALUE KNOWLEDGE
265
260
254
xvii
xviii CO N TEN T S
Knowledge Management: Pitfalls and Promises
THE HUMAN ELEMENT: WHY SHARE KNOWLEDGE?
INCENTIVES FOR KNOWLEDGE SHARING
268
268
269
THE ETHICAL FACTOR: Knowledge Sharing in Fast-Paced Industries: The Case
of Formula One Racing 269
TECHNOLOGY HURDLES AND CONTENT ISSUES
THE SEMANTIC WEB
270
270
PRACTICAL TIPS FOR LAUNCHING A KNOWLEDGE MANAGEMENT PROJECT
E-Learning
270
271
COMPARING E-LEARNING APPROACHES
271
Creating an E-Learning Program
COURSE DEVELOPMENT
LEARNING OBJECTS
273
273
274
CONTENT AUTHORING TOOLS
COLLABORATION TOOLS
274
275
STRATEGIES TO PREVENT CHEATING
276
LEARNING MANAGEMENT SYSTEMS
277
E-Learning in Education
277
DIFFERENCES BETWEEN CORPORATE AND EDUCATION E-LEARNING
COMPARING E-LEARNING AND CLASSROOM LEARNING
Online Simulation
280
Chapter Summary
281
Key Terms and Concepts
278
278
282
Chapter Review Questions
282
Projects and Discussion Questions
Application Exercises
282
283
EXCEL APPLICATION: TOP TALENT
ACCESS APPLICATION: TOP TALENT
283
283
Case Study #1 Lynda.com: How an E-Learning Entrepreneur Rides Waves of Change
Case Study #2 Diplopedia: Managing State Department Knowledge with a Wiki
E-Project 1 Exploring the World of Online Courses
286
E-Project 2 Managing the Human Element on Wikipedia with Technology
Chapter Notes
CHAPTER
10
287
Ethics, Privacy, and Security 288
Learning Objectives
Introduction
Ethics
288
288
290
ETHICAL FRAMEWORKS
ETHICS AND THE LAW
290
290
ETHICAL ISSUES AND INFORMATION AND COMMUNICATIONS TECHNOLOGIES
Information Ethics
292
INTELLECTUAL PROPERTY AND DIGITAL RIGHTS MANAGEMENT
PLAGIARISM
Privacy
294
295
TRADING PRIVACY FOR CONVENIENCE AND FREEBIES
ANONYMITY
SURVEILLANCE
297
298
“THE RIGHT TO BE FORGOTTEN”
299
296
292
291
286
285
283
CONTENTS
Information Security
RISK MANAGEMENT
xix
299
299
IDENTIFYING THREATS
299
THE ETHICAL FACTOR: Ethical Dilemmas in a Distributed Denial of Service Attack 302
ASSESSING VULNERABILITY
302
ADMINISTRATIVE SECURITY CONTROLS
TECHNICAL SECURITY CONTROLS
303
304
INFORMATION SECURITY AND CLOUD COMPUTING
307
The Human Element in Information Ethics, Security, and Privacy
COGNITIVE ISSUES AND PRODUCTIVITY
SOCIAL ENGINEERING AND INFORMATION SECURITY
SECURITY AWARENESS AND ETHICAL DECISION MAKING
Online Simulation
311
Chapter Summary
312
Key Terms and Concepts
307
307
308
310
312
Chapter Review Questions
313
Projects and Discussion Questions
Application Exercises
313
314
EXCEL APPLICATION: CITYWIDE COMMUNITY COLLEGE
ACCESS APPLICATION: CITYWIDE COMMUNITY COLLEGE
314
314
Case Study #1 Zynga Kills Petville and Angers Virtual Pet Owners
315
Case Study #2 Community Policing on the Internet: Spamhaus Targets Worldwide Spammers
and Draws a Massive Distributed Denial of Service Attack
316
E-Project 1 Tracking the Trackers: Investigating How Third-Party Cookies Steer the Ads You See
E-Project 2 Analyzing Spammers by Country, Using Excel Pivot Tables
Chapter Notes
CHAPTER
11
317
318
Systems Development and Procurement 320
Learning Objectives
Introduction
320
320
Systems Development Life Cycle
PLANNING
ANALYSIS
322
322
323
DESIGN PHASE
325
DEVELOPMENT PHASE
TESTING PHASE
IMPLEMENTATION
MAINTENANCE
327
328
328
330
Software Development Strategies
331
THE ETHICAL FACTOR: Developing Systems That Promote Ethical Decision Making
and Social Responsibility 331
WATERFALL SOFTWARE DEVELOPMENT
ITERATIVE METHODS
AGILE METHODS
332
332
333
Comparing Software Development Approaches
TYPE OF PROJECT
334
ORGANIZATIONAL CULTURE
IS WATERFALL DEAD?
335
334
334
317
xx
CO N TEN T S
Software Procurement: The “Buy” Strategy
PROS AND CONS OF BUILD AND BUY
THE PROCUREMENT PROCESS
335
335
336
ADAPTATION AND CUSTOMIZATION
337
The Human Element in Systems Development and Procurement
CROSS-FUNCTIONAL TEAMS
THE ROLE OF SENIOR MANAGEMENT
WORKING WITH CONSULTANTS
Online Simulation
340
Chapter Summary
341
339
339
Key Terms and Concepts
341
Chapter Review Questions
342
Projects and Discussion Questions
Application Exercises
338
338
342
343
EXCEL APPLICATION: JAY’S BIKES
343
ACCESS APPLICATION: MANAGING A RECIPE COLLECTION
343
Case Study #1 Baby Steps Toward Scrum: How Babycenter.com Made the Cultural Transition
to Agile Software Development
344
Case Study #2 Extreme Programming at the U.S. Strategic Command
345
E-Project 1 Watching Babycenter.com Change over Time with the Internet Archive
E-Project 2 Analyzing Software Defect Rates Using Excel
Chapter Notes
CHAPTER
12
346
346
347
Project Management and Strategic Planning 348
Learning Objectives
Introduction
348
348
What Is a Project?
350
PROJECTS VS. PROCESSES
350
THE TRIPLE CONSTRAINT: TIME, COST, AND SCOPE
Project Management
351
351
THE FIVE PROJECT MANAGEMENT PROCESSES
THE ROLE OF THE PROJECT MANAGER
352
355
THE ETHICAL FACTOR: Code of Ethics for Project Managers 356
Project Management Software
MANAGING TIME
MANAGING PEOPLE AND RESOURCES
MANAGING COSTS
356
356
357
357
Why Projects Succeed, and Why They Fail
WHY DO PROJECTS FAIL?
358
358
SUCCESS FACTORS FOR PROJECT MANAGEMENT
358
Strategic Planning for Information Systems
VISION, PRINCIPLES, AND POLICIES
360
PROJECT PORTFOLIO MANAGEMENT
362
359
DISASTER RECOVERY AND BUSINESS CONTINUITY
TECHNOLOGY AND INDUSTRY TRENDS
363
364
Planning for the Future: The Human Element
COGNITIVE BIASES AND STRATEGIC PLANNING
THE BLACK SWAN
367
365
365
CONTENTS
Online Simulation
368
Chapter Summary
369
Key Terms and Concepts
370
Chapter Review Questions
370
Projects and Discussion Questions
Application Exercises
370
371
EXCEL APPLICATION: CREATING A GANTT CHART WITH EXCEL
ACCESS APPLICATION: APPRENTICE PROJECT MANAGERS
371
372
Case Study #1 Predicting the Future: Gartner’s Research Informs Strategic Planning
Case Study #2 JetBlue and WestJet: A Tale of Two Software Implementations
E-Project 1 Checking on Gartner’s Predictions
376
E-Project 2 Analyzing Airline Performance with Excel Pivot Tables
Chapter Notes
377
Case Studies
Glossary
Index
378
393
400
376
374
373
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CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
xxiii
Preface
What’s New in the 2nd Edition
The information systems field is fast-moving, and this 2nd edition introduces and
updates many important concepts and technologies. We changed the title to Introduction
to Information Systems to better reflect the contents and the course. This edition includes
more figures, graphs, and tables to illustrate topics in visual ways, and the references,
examples, data, and case studies are all updated. Larger fonts are used for the tables, and
the text portion of each chapter has been shortened, most notably by tightening up the
chapter introductions to get into the chapter content more quickly. The online simulations are converted to HTML5 so they are accessible from iPads and iPhones, and the
scores go into the gradebook.
Major new features for the 2nd edition include the following:
▶ Extended coverage of big data and the technologies used to store and analyze it has
been added, along with a new “Ethical Factor” box that explores the ethics of big data.
▶ Expanded discussion of mobile devices and m-commerce is featured in Chapter 6,
including a review of evolving mobile payment technologies using near field communications and strategies for mobile-friendly software development.
▶ The “Internet of Things” is highlighted in several chapters because of its growing
impact on network architecture and bandwidth, and its rapidly increasing role in
data collection, analysis, privacy, and surveillance.
▶ The 2nd edition expands the discussion of cloud computing, personal clouds, mobility, and the BYOD (bring your own device) trend, especially as they affect strategic
planning for the organization.
▶ A new comprehensive case study at the end of the text charts Apple’s disruptive innovations, and encourages students to predict the company’s future business strategy.
▶ Twitter’s role in social TV and the “multiscreening” phenomenon are featured in a
new case study about Nielsen’s program rating system, so students see how tweeting
fits into the entertainment industry’s strategies.
Chapter-Specific Changes
CHAPTER 1: INFORMATION SYSTEMS AND PEOPLE
▶
▶
▶
▶
▶
Apple’s Siri and competitive advantage
New self-quiz on student’s use of technology: “How Productive Are You?”
New “Productivity Tip” on digital footprints
Revised case study on Nasdaq OMX to include Facebook’s botched public opening
Five new figures
CHAPTER 2: INFORMATION SYSTEMS AND STRATEGY
▶ Updated examples of disruptive innovations
▶ Examples of new government policies affecting strategy (e.g., Internet tax)
▶ New “Productivity Tip” on personal cloud use
▶ Updated IT expenditure benchmarks
▶ App.net, example of an ad-free social network
▶ Case on GameStop updated with new data
xxiii
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I N F O RMEAT I ON SYS T EM S IN O RGAN IZ ATI O N S
▶ Case on Net Neutrality updated with new events and lawsuits
▶ Four new figures and several charts updated with recent data
CHAPTER 3: INFORMATION AND COMMUNICATIONS TECHNOLOGIES:
THE ENTERPRISE ARCHITECTURE
▶ New QR code figure for students to read with smartphone app
▶ In-memory computing is introduced and described as a key term
▶ New “Did You Know?” anecdote on detection of gestures without contact with
the screen
▶ Expanded discussion on why businesses should be concerned with operating system
market shares, especially for mobile devices
▶ Updated figures and charts on operating system market shares
▶ Simplified discussion of last mile
▶ Added 802.11 currently in draft (802.11ac and 802.11ad)
▶ Six new or updated figures
▶ New Case Study #1: Google Glass and Wearable Technologies
▶ Updated Case Study #2 on Sprint Nextel
CHAPTER 4: DATABASES AND DATA WAREHOUSES
▶ Improved discussion of relational databases
▶ New figure showing data definitions in Access
▶ Updated statistics in figures
▶ Updated “Productivity Tips”
▶ New figure describing characteristics of big data
▶ Expanded section on data warehouses to include big data technologies
▶ Data scientist described
▶ Updated case studies
CHAPTER 5: INFORMATION SYSTEMS FOR THE ENTERPRISE
▶ Added discussion of machine-readable financial data to improve transparency
▶ New figure on paperless workflow
▶ Discussion of supply chain fundamentals and collaboration made more concise
▶ Updated discussion of virtual worlds for CRM
▶ Expanded discussion of mobile CRM strategies
▶ New figure describing portals into an ERP for higher education
▶ Improved organization of ERP section with subtitles
▶ Deleted Supply Chain Operations Reference (SCOR) from key terms
▶ Updated case studies with recent information
CHAPTER 6: THE WEB, E-COMMERCE, AND M-COMMERCE
▶ Expanded discussion of how infomediaries take advantage of the growing amount
of information in XML format
▶ Updated discussion on HTML 5 and its features
▶ New discussion of social commerce (s-commerce) relying on social networks
▶ New figure comparing mobile apps and mobile-friendly websites
▶ New figures illustrating mobile-friendly design, and a list of tips to achieve it
▶ Updated discussion of search engine marketing, including Facebook’s Graph Search
▶ Updated examples of crowdsourcing
▶ New key terms: mobile commerce (m-commerce), near field communications
▶ Updated Case Study #3 on mobile payments and the digital wallet
▶ Updated Case Study #2 on Pandora
▶ Clarified steps in E-Project #1
CHAPTER 7: BUSINESS INTELLIGENCE AND DECISION MAKING
▶ Updated discussion of data mining to include predictive analytics
▶ Expanded discussion of data visualization with new figure of interactive map
PREFACE
▶ New “Did You Know?” anecdote about the use of text mining
▶ Expanded discussion of AI and data from sensors
▶ New figure on website metrics drawn from online simulation (Chocolate
Lovers Unite)
▶ Key term deleted: executive information system
▶ Key term added: predictive analytics
▶ New Case Study #1, “Cracking Fraud with Government’s Big Data”
▶ New E-Project #2: “Analyzing Nielsen TV Ratings with Excel,” with downloadable
TV ratings data for analysis
▶ New “Productivity Tip” on managing your own big data
CHAPTER 8: COLLABORATING WITH TECHNOLOGY
▶ New figure showcasing top corporate blogs
▶ New figure on reasons for taking a break from Facebook
▶ Discussion of recently introduced collaborative technologies such as Vine and
Instagram
▶ Revised section on unified communications to feature critical capabilities
▶ Major revision of Case Study #1, now called “‘Telepresence Robots’ Support
Remote Collaboration”
▶ New Case Study #2, “Yahoo! Bans Telecommuting: Was It the Right Move?”
CHAPTER 9: KNOWLEDGE MANAGEMENT AND E-LEARNING
▶ Expanded discussion about incentives for knowledge sharing
▶ New discussion on technologies to prevent cheating in e-learning courses
▶ New “Did You Know?” anecdote about telepresence robots who attend classes
▶ New discussion about massive open online courses (MOOCs), also added as a key
term
▶ New “Productivity Tip” about taking an online course
▶ New Case Study #1, “Lynda.com: How an E-Learning Entrepreneur Rides Waves
of Change”
▶ Updated Case Study #2, “Diplopedia: Managing State Department Knowledge
with a Wiki”
CHAPTER 10: ETHICS, PRIVACY, AND SECURITY
▶ New discussion of Apple’s unique approach to music piracy with iTunes Match
▶ New figure on recent software piracy survey
▶ New discussion on an emerging “right to be forgotten” law, to ensure people can
erase their digital footprints
▶ New details added to discussion of encryption strategies
▶ Expanded discussion of mobile devices and security
▶ New Case Study #1: “Zynga Kills Petville and Angers Virtual Pet Owners”
▶ Updated Case Study #2 to include recent massive DDoS on Spamhaus
▶ Revised and simplified E-Project #1
CHAPTER 11: SYSTEMS DEVELOPMENT AND PROCUREMENT
▶ New “Did You Know?” anecdote on smartphone app
▶ Updated examples of feasibility studies
▶ New “Productivity Tip” about clarifying the scope of work to avoid disagreements
▶ Updated examples on consulting
▶ Updated Case Study #2 with recent research findings on agile methods
CHAPTER 12: PROJECT MANAGEMENT AND STRATEGIC PLANNING
▶ Tightened up discussion of the five project management processes
▶ New figure showing the top strategic technology trends currently underway
▶ Updated Case Study #1 with current information on technologies and their location
on the hype cycle
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PRE FAC E
▶ New figure on hype cycle with current technologies
▶ Updated E-Project #1 with more recent Gartner predictions
End-of-Book Comprehensive Case Studies
▶ New Case Study #3: “Apple: Can the Company Pull Off Another Disruptive
Innovation?” (replaces case on Clearwire)
▶ Red Cross case updated to include the Safe and Well Website.
▶ Facebook case updated and revised to include uproar over Instagram’s privacy and
ownership challenges
▶ Updated “Managing the Federal Government’s IT Project Portfolio” to incorporate
recent steps by federal government to get control over IT spending
To the Student
Any college student thinking about the job market can’t help but notice how valuable it
is to have skills related to information systems. In this course you will learn what information systems are all about and why they are so fundamental to business and society. It
will be an exciting journey, filled with revelations about business strategies, technology
trends and innovations, and also tips that will help you work smarter as a student. Here
are the main features of this text and its supplements:
Learn by Doing: The Interactive, Online Role-Playing Simulations
A course on information systems should tap their power for active, experiential learning.
This text includes interactive role-playing simulations in MyMISLab™ (mymislab.com)
in which students can apply their knowledge and actually experience what each chapter
is about, not just memorize key terms and concepts. You will enter realistic and often
tense situations, interacting with the characters via a simulated smartphone or laptop,
and using email, text messages, web conferencing, video chat, voicemail, dashboards,
ordering screens, and other applications. Each simulation is scored and students receive
extensive feedback on the choices they make. Each one also includes key terms from the
chapter (with rollover definitions) so you see how they are used in context, which will
help you more easily remember their meanings.
The simulations bring the chapter alive, as you enter authentic settings in which
people struggle to solve a problem involving information systems. Some examples:
▶ In World of Mammals (Chapter 1), you help the harried director of a wild animal preserve interview candidates for the CIO position, after the former CIO leaves
abruptly. What skills does a CIO need? What kind of experience would fit best?
▶ Chocolate Lovers Unite (Chapter 7) challenges you to resolve a heated debate over
which online marketing pitch works best by conducting tests, analyzing the results,
and drawing on data-driven decision making.
▶ In Green Wheeling, the simulation on software development and procurement
(Chapter 11), you join a task force charged with replacing a college’s obsolete fundraising system. You and your team members weigh the pros and cons of “build” or
“buy,” and you will see how the outcome can change based on your decisions.
▶ Vampire Legends drops you into a fast-paced, tense situation in which the material in
Chapter 10 (Ethics, Privacy, and Security) comes to life in an online game company that
is racing to launch a sequel. When troubling things begin happening that involve the
company’s data center and information security, you will have difficult choices to make.
I’ve done research on games and simulations in education, and have led several projects to create software that draws on the compelling features of these environments for
learning. While online flash cards, Q&A games, and other interactive applications can
help students memorize terms or review the chapter contents, simulations that immerse
PREFACE
students in a relevant and authentic case can do more. Research shows they create engagement, improve learning outcomes, and build critical thinking skills through active,
student-centered involvement. You will find it much easier to learn and remember the
material in the textbook when you can engage in simulations like this.
The Human Element in Information Systems
In addition to the simulations, this text brings a fresh perspective to the introductory
course in information systems that combines comprehensive and up-to-date coverage
with a stronger focus on the human element in businesses, nonprofits, and other organizations. It covers all the major topics for the course in a rigorous way, without skimping
on any of the fundamentals. But it enriches those topics with probing discussions about
the roles people play in building, shaping, implementing, and sometimes obstructing
information systems.
In Chapter 8 on collaborative technologies, for example, students learn how different
channels affect the tone of human communications, and how to choose the best channel
for each task to support virtual teamwork, management, negotiation, and leadership.
Chapter 12 on project management and strategic planning shows how human biases can
creep into the process.
The text also stresses the processes and policies that people devise to manage information systems. Why do some high-tech companies ban telecommuting, even though employees have well-equipped home offices? Why do organizations implement surveillance?
Exploring Technology Battlegrounds
Grand battles over technology directions help students understand the close links between competitive business strategies and information systems. The stakes are very high
in debates about topics such as net neutrality, 4G standards, wireless spectrum auctions,
cloud computing, programming languages, mobile operating systems, mobile payment
systems, and social network privacy. Billions of dollars are on the line for winners and
losers. Yet most people know little about these battlegrounds because the underlying
technology issues are out of reach. After reading this text, students will look at online
ads, privacy policies, social networks, and their own smartphones with a new appreciation for the fierce business competitions unfolding before their eyes.
Reaching a Changing Student Body
The text recognizes the growth in the number of women, minorities, international students, online students, and nontraditional students who enroll in this course, drawing
on examples and settings that will resonate with them. Devon, for instance, is starting
her own web design business, and students learn about relational databases by helping
her build one for her small business (Chapter 4). International student Prakash is the
cofounder of Leveling UP!, a smartphone app that is the centerpiece for the interactive
role-playing simulation on business strategy (Chapter 2). In the chapter on knowledge
management and e-learning (Chapter 9), Sally takes an online course in nonprofit management as she nears retirement and helps her own company build an e-learning course
for the coworkers she’s leaving behind.
Balancing Coverage of Business, Government, and Nonprofits
This text broadens the coverage about information systems to include all the varied settings in which students work (or will work). It draws on timely examples from multinational corporations, nonprofits, government agencies, midsized businesses, start-ups,
charities, volunteer organizations, student clubs, and other settings. The text highlights
how these different organizations launch information systems to fulfill their missions,
whether that means generating profits, attracting donations, or serving citizens.
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PREFACE
The strategies that underlie cell-phone marketing, for instance, work as effectively
for nonprofits that want to mobilize citizens as they do for businesses that tempt new
customers with discount coupons. And competitive advantage is not just for business.
Charities compete for volunteers and donations, and they benefit from customer relationship management systems.
Changing Student Roles
Just as students are gaining employment in a wide variety of organizations, they are
taking on more varied roles within them. Though some will become information systems managers, many more will become consultants, business analysts, accountants,
marketing professionals, talent development specialists, volunteers, virtual team leaders,
forensic experts, legal advisors, and project managers. The text introduces emerging professions, as well, such as data scientist.
Examples in the text, case studies, and simulations feature all these different roles,
showing how successful information systems emerge from a broad base of stakeholders with different perspectives and specialties. Carlos, for instance, is the instructional
designer on a corporate e-learning development team, adding his knowledge of usability
and accessibility for people with disabilities (Chapter 9). In Chapter 11, Lily is a senior
manager for an online grocery who comes up with a clever website to capture a valuable
market—busy singles who forgot to buy groceries.
Emphasizing Ethics
Ethical concerns weave throughout the text, touching on very human ethical dilemmas
such as the one Wikipedia founder Jimmy Wales faced when asked to delete any posts
that mentioned the name of a journalist kidnapped by the Taliban. That action was
directly opposed to his site’s fervent commitment to free speech, and Wales raised a firestorm within the Wikipedia community when he had to make a choice.
A special feature in each chapter titled “The Ethical Factor” explores timely ethical
issues such as corporate responsibility in extended supply chains (Chapter 5), or the ethics of massive surveillance and collection of big data by governments and corporations
(Chapter 3). In Chapter 10 on ethics, privacy, and security, students take a survey to
learn more about how they judge situations that touch on information ethics. The online
simulation for that chapter immerses students in a tense situation in which security is
compromised and they face some difficult ethical dilemmas.
Here is a list of all the “Ethical Factor” boxes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Ethical Issues Surrounding Information Systems, p. 23
Ethical Responsibility in an Extended Value Chain, p. 45
Ethical Implications of Big Data, p. 70
Ethical Issues in Database Design: The Case of Ethnic Identification, p. 110
Ethics and Talent Management, p. 138
Website Accessibility: Why Is Progress So Slow? p. 174
The Ethics of Tagging Faces in Photos, p. 202
Flash Mobs and Free Speech: Should Police Block Mobile Messaging
Services? p. 244
Knowledge Sharing in Fast-Paced Industries: The Case of Formula One
Racing, p. 269
Ethical Dilemmas in a Distributed Denial of Service Attack, p. 302
Developing Systems That Promote Ethical Decision Making and Social Responsibility, p. 331
Code of Ethics for Project Managers, p. 356
Working Smarter, Not Harder: Productivity Tips for Students
Every chapter includes several “Productivity Tips” that suggest ways students can improve their own productivity by applying what they’ve learned.
PREFACE
In Chapter 2 on information systems and strategy, for instance, a tip invites students
to check out the software trial versions that came preinstalled on their computers to see
how companies leverage this valuable product positioning, and then remove them to save
space and improve the computer’s performance. A tip in the section on neural networks
in Chapter 7 advises students to alert their credit card companies before traveling abroad
because a neural net may trigger a very ill-timed block on the card. Another tip points to
solid productivity gains for people who use two monitors, which is especially helpful for
students with laptops.
These tips are not only immediately useful. They help you learn chapter material by
applying it so you can work smarter, not harder.
Highlighting Globalization and International Contexts
Information systems play a key role in globalization, especially through the Internet and
all the creative destruction it unleashed. Examples abound throughout the text, highlighting how Baidu captured the search engine market in China (Chapter 2) or how Ikea
manages a global supply chain (Chapter 5). The global financial crises underscore the
important work of the International Accounting Standards Board—to promote transparent and enforceable financial reporting for companies around the world using XBRL
tags—from the XML family of standards (Chapter 5). The international emphasis also
unfolds in working relationships across national borders. For example, the chapter on
collaboration (Chapter 8) follows a team planning a campaign to launch a string of
clubs in several major cities, and the team’s members hail from Dallas, Texas, and Hong
Kong. As they use collaborative technologies that span the Pacific, this dynamic virtual
team works through differences in time zones, communication styles, and culture.
Inspiring Students to Pursue Promising Careers
Finally, an important goal of this text and its supplements is to convey the sheer excitement and limitless potential of this field, with an eye toward inspiring students to go further. Inside are countless examples of how savvy men and women leverage information
systems to transform organizations of all stripes, and even build new empires. The text
includes many job descriptions, job growth rates, and projected salaries, as well.
Some of the excitement comes from groundbreaking technological advances, such
as IBM’s “Watson”—the supercomputer that competed on “Jeopardy!” and soundly defeated the game’s human champs in a dramatic live broadcast. The disruptive innovations
that topple some industries and open star-studded paths for others are also part of the
excitement. GPS dealt a crushing blow to map makers, and the Internet did the same to
print newspapers. But both events opened up vast new territory for innovative start-ups.
To further stimulate interest, each chapter includes short “Did You Know?” snippets
to highlight an engaging or amusing application of the chapter’s topic. For example, the
chapter on hardware, software, and networks (Chapter 3) features a coffee shop whose
zany owner constantly renames the free wireless network to different messages, such as
“BuyAnotherCupYouCheapskate.”
If students catch some of this energy and enthusiasm, they may decide to pursue this
field. Those who do will have outstanding career prospects in the private and public sectors, and they’ll never be bored.
Supplements
The following supplements are available at the Online Instructor Resource Center,
accessible through www.pearsonhighered.com/wallace:
Instructor’s Manual
The Instructor’s Manual, assembled by Jollean Sinclaire and John Hupp, includes a list
of learning objectives and answers to all end-of-chapter questions.
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PRE FAC E
Test Item File
The Test Item File, prepared by ANSR Source, Inc., contains more than 1,300 questions, including multiple choice, true/false, and essay. Each question is followed by the
correct answer, the learning objective it ties to, a course learning objective, and difficulty
rating. In addition, certain questions are tagged to the appropriate AACSB category.
Powerpoint Presentations
The Instructor PowerPoints, prepared by John Hupp, highlight text learning objectives
and key topics and serve as an excellent aid for classroom presentations and lectures.
Image Library
This collection of the figures and tables from the text offers another aid for classroom
presentations and PowerPoint slides.
TestGen
Pearson Education’s test-generating software is available from www.pearsonhighered.
com/irc. The software is PC/MAC compatible and preloaded with all of the Test Item
File questions. You can manually or randomly view test questions and drag-and-drop to
create a test. You can add or modify test-bank questions as needed. Our TestGens are
converted for use in BlackBoard, WebCT, Moodle, D2L, and Angel. These conversions
can be found on the Instructor’s Resource Center. The TestGen is also available in Respondus and can be found on www.respondus.com.
CourseSmart
CourseSmart eTextbooks were developed for students looking to save on required or
recommended textbooks. Students simply select their eText by title or author and purchase immediate access to the content for the duration of the course using any major
credit card. With a CourseSmart eText, students can search for specific keywords or
page numbers, take notes online, print out reading assignments that incorporate lecture
notes, and bookmark important passages for later review. For more information or to
purchase a CourseSmart eTextbook, visit www.coursesmart.com.
CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
xxxi
Acknowledgments
Many thanks go to all the reviewers who took time to comment on manuscripts, simulation storyboards, case studies, and other features of the text. Their feedback and
suggestions were extremely valuable, and they help ensure the text and its ancillaries
will meet the needs of faculty and students.
Dennis Adams, University of Houston
Barbara Edington, St. Francis College
Joni Adkins, Northwest Missouri State University
Sven Aelterman, Troy University
Solomon Antony, Murray State University
John Appleman, State University of New York
College at Brockport
Kurt Engemann, Iona College
John Erickson, University of Nebraska at Omaha
William Figg, Dakota State University
David Firth, The University of Montana
Anne Formalarie, Plymouth State University
Saiid Ganjalizadeh, The Catholic University of America
Richard Glass, Bryant University
Tanya Goette, Georgia College & State University
Sandeep Goyal, University of Southern Indiana
Martin Grossman, Bridgewater State University
Bin Gu, University of Texas at Austin
Laura Hall, University of Texas—El Paso
Rosie Hauck, Illinois State University
Jun He, University of Michigan—Dearborn
Devanandham Henry, Stevens Institute of Technology
Michelle Hepner, University of Central Oklahoma
John Hupp, Columbus State University
Jerry Isaacs, Carroll University
Brian Janz, University of Memphis
Jon (Sean) Jasperson, Texas A&M University
Bay Arinze, Drexel University
Janine Aronson, University of Georgia
John Kirk Atkinson, Western Kentucky University
Robert Balicki, Cleary University
Cynthia Barnes, Lamar University
Stephen Barnes, Regis University
Peggy Batchelor, Furman University
Jon Beard, George Mason University
Hossein Bidgoli, California State University—Bakersfield
Robert Bonometti, MGB Enterprises LLC
Ted Boone, University of Kansas
Uptal Bose, University of Houston; Rainer
David Bradbard, Winthrop University
Jason Chen, Gonzaga University
Joselina Cheng, University of Central Oklahoma
Steve Clements, Eastern Oregon University
Phillip Coleman, Western Kentucky University
Emilio Collar, Jr., Western Connecticut State University
Steve Corder, Williams Baptist College
Brian Jones, Tennessee Technological University
Junghwan Kim, Texas Tech University
Philip Kim, Walsh University
Dave Croasdell, University of Nevada, Reno
Albert Cruz, National University
Sung-kwan Kim, University of Arkansas at Little Rock
Charles S. Knode, University of Maryland University
College
Mohammad Dadashzadeh, Oakland University
Don Danner, San Francisco State University
Dessa David, Morgan State University
Brian Kovar, Kansas State University
Bill Kuechler, University of Nevada at Reno
Louis LeBlanc, Berry College
Carolyn Dileo, Westchester Community College
Albert Lederer, University of Kentucky
Michael Douglas, Millersville University
Doris Duncan, California State University—East Bay
Ingyu Lee, Troy University
Mary Locke, Greenville Technical College
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ACKN OW L E D G ME NT S
Sanchita Mal-Sarkar, Cleveland State University
Nancy Martin, Southern Illinois University Carbondale
Aaron Schorr, Fashion Institute of Technology
Paul Seibert, North Greenville University
Prosenjit Mazumdar, George Mason University
Roger McHaney, Kansas State University
Narcissus Shambare, College of St. Mary
Larry Smith, Charleston Southern University
William McMillan, Madonna University
Tonya Melvin-Bryant, North Carolina Central University
Toni Somers, Wayne State University
Todd Stabenow, Hawkeye Community College
Kimberly Merritt, Oklahoma Christian University
Allison Morgan, Howard University
Fui Hoon (Fiona) Nah, University of Nebraska—Lincoln
James Stewart, University of Maryland University College
Joe Teng, Troy University Troy Campus
Evelyn Thrasher, Western Kentucky University
Sandra Newton, Sonoma State University
Ravi Paul, East Carolina University
Jan Tucker, Argosy University
Jonathan Whitaker, University of Richmond
Adriane Randolph, Kennesaw State University
Betsy Ratchford, University of Northern Iowa
Bruce White, Quinnipiac University
Anita Whitehill, Mission College
Mandy Reininger, Chemeketa Community College
Nicolas Rouse, Phoenix College
Paula Ruby, Arkansas State University
Werner Schenk, University of Rochester
Daniel Schmidt, Washburn University
G. W. Willis, Baylor University
Charles Willow, Monmouth University
Marie Wright, Western Connecticut State University
Jigish Zaveri, Morgan State University
Chen Zhang, Bryant University
Thanks also go to the excellent work of Ilene Kahn and Kaylee Rotella at Pearson
Education, and Emily Bush at S4Carlisle Publishing Services also deserves special
mention. As in any organization, there are many people behind the scenes whose efforts make all the difference in a project like this, and though unnamed, they deserve
recognition and thanks.
I also want to thank Jollean K. Sinclaire of Arkansas State University and John
Hupp of the Columbus State University who made the end-of-chapter materials and
Instructor’s Manual into the best resources I’ve seen for a text like this. They are filled
with thoughtful questions, engaging projects, and useful material for both students
and faculty.
Many thanks to Bob Horan, my editor, whose commitment to this project has
always been unwavering. He eagerly supported the development of the online simulations, even when they were just sample storyboards loaded with branching scripts and
“if-then” pseudocode. Bob knows the introductory MIS world better than anyone,
and his instincts about what works for students and faculty are right on target.
And finally, thanks to Julian and Callie, and also Keiko, Lili, and Marlene, a list
that includes my very supportive human family and our four-footed companions.
Your Feedback Is Welcome
To all of you who are using this book, as professors, teaching assistants, and students,
I welcome your thoughts and feedback. Please email your comments, questions, and
suggestions, and I’ll be eager to hear how your course goes.
Patricia Wallace, Ph.D.
pwallace@jhu.edu
Introduction to
Information Systems
CHAPTER
1
Information Systems
and People
LEARNING OBJECTIVES
1
Describe the main roles that information systems play in organizations.
2
Compare the terms data, information, and knowledge, and describe three characteristics that make
information valuable.
3
Describe the four main components of an information system and the role that each plays.
4
Identify several research areas in the discipline of management information systems (MIS).
5
Provide examples of how business, nonprofit, and government managers, as well as information technology
departments, depend on information systems knowledge.
6
Explain how information systems present both promises and perils, and pose ethical questions.
An online, interactive decision-making simulation
that reinforces chapter contents and uses key
terms in context can be found in MyMISLab™.
INTRODUCTION
AT THE HEART OF EVERY ORGANIZATION IS ITS INFORMATION
SYSTEMS, and that is what this course is all about. Google,
Twitter, Microsoft, and Facebook are all popular companies
on the cutting edge of technology, and their innovations and
competitive battles make front page news. But even organizations that don’t seem very high tech—from a familyowned restaurant to a fitness gym—can hardly do without
information systems, or without people who know how to
build and manage them.
Consider The World of Mammals, for example, the animal preserve featured in the interactive simulation for this
chapter. Director Yolanda Whalen is a veterinarian, but she
knows very well that this preserve won’t succeed without top
notch information systems and a qualified person to provide
leadership. She is asking you, as an enthusiastic volunteer
and a student learning about information systems, to help
interview potential candidates and join the team that will
decide who is best suited for this role. What skills, knowledge, and abilities should this person have—beyond managing payroll and ticket sales—to take advantage of innovative
technologies that will make The World of Mammals the most
successful preserve in the country?
This opening chapter highlights information systems in
action, the nature of information itself, and the four main
3
C HAP TE R 1 INFORMATION SYSTEMS AND PEOPLE
MyMISLab Online Simulation
The World of Mammals
Shutterstock.
A Role-Playing Simulation on Choosing a New CIO for an Animal Preserve
components of every information system. You will see how
the information systems (IS) discipline is changing and
growing, and why a solid understanding of this subject will
give you a critical edge, regardless of your major or career
path. Finally, the chapter examines the promises and perils of
information systems and the many ethical issues that arise
with the phenomenal power within everyone’s reach.
nformation is an organization’s most important asset.
Creating, capturing, organizing, storing, retrieving, analyzing, and acting on information are fundamental activities in every organization. The skill with which you carry
out those tasks will be the deciding factor for not just your
company’s success, but for your own as well. This book is
about information and the systems that people develop and
manage to perform all those tasks and more.
I
You will see how these systems work, why they are created, how they have become the organization’s central nervous system, and why they sometimes fail. You will also learn
to tap the power of information systems to help your company compete or your organization become more effective.
Finally, you will become more productive yourself—working
smarter, not harder—in college, in your career, at home, and
throughout your life.
Like the information they manage, information systems
cover a very broad scope and contribute to many different
activities in an organization. What roles do they play and
how do they transform work? The next section shows the
enormous variety of settings in which innovative information systems play a role, well beyond the very useful Google
searches.
4
I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
Describe the main roles that information
systems play in organizations.
1 INFORMATION SYSTEMS IN ACTION
▶ Dancing with the Stars became a smash reality TV hit by engaging millions of
viewers in judging the contestants. Hopeful celebrity couples compete each week
with a novel dance routine, and audience members cast a vote for their favorite by
phoning, sending text messages, or logging into the show’s website. An information
system on the back end tallies the results, which count for half the couple’s score.
The system must be able to handle enormous incoming volume in a very short time
period to get accurate tallies.
▶ Hurricane Sandy arrived just before the November 2012 elections in the United
States, and many voters could not make it to the polls. Officials in New Jersey
decided to let people vote by email, but county clerks were overwhelmed by the volume in their inboxes. Although glitches and security concerns are not uncommon
with electronic voting, information systems are playing a more important role every
year. Disabled voters, for instance, can now use tablets to vote, eliminating the need
for expensive custom-made voting machines.
▶ Walmart, with some $446 billion in net sales in 2012, pioneered the globe’s most efficient information system to track shipments as they move from supplier factories to
warehouses to retail stores. Tags attached to pallets transmit information wirelessly,
so Walmart execs know exactly where merchandise is in the supply chain and can
spot trouble immediately.
FIGURE 1-1
The major roles of information systems in organizations.
Supporting
Customer
Interactions
Managing
Operations
Improving
Individual
Productivity
The Six Major
Roles of
Information
Systems
Gaining
Competitive
Advantage
Making
Decisions
Collaborating
on Teams
When those bulky computers first entered company basements
in the 1970s, the term information system brought up images of
payroll programs, general ledgers, invoice tracking, and inventory
management. Those back-office functions are still critically important, but today’s information systems have migrated into every facet
of an organization, touching every employee from the mail clerk to
the CEO. They also extend well beyond the company’s boundaries,
reaching out to customers, clients, suppliers, partners, citizens, and all
kinds of stakeholders. Their hardware might be as vast as Google’s
data centers or far smaller than Walmart’s pallet tags. And their connections could be the thick fiber-optic cables on the ocean floor or
electromagnetic waves in the air around you.
Multinational firms, small businesses, nonprofits, governments,
volunteer organizations, self-employed entrepreneurs, universities,
and other organizations rely on information systems for a host of reasons, and they continue to adapt, expand, and interconnect them to
achieve their strategic objectives. These systems play critical roles in
six major areas (Figure 1-1).
Managing Operations
Every successful organization must excel at operations management, which involves the
design, operation, and improvement of the systems and processes the organization uses
to deliver its goods and services. Some of these deal with several very basic functions that
are part of every business. Information systems are crucial for tracking employee payroll, taxes, benefits, and timesheets. Accounting information systems are essential to track
accounts receivable, to process transactions, to procure goods and services, and to pay the
suppliers. Organizations also must manage their assets and inventories, from the computers and the desks they sit on to the massive factories and equipment located in far corners
of the globe. Eric Schmidt, former CEO of Google, once remarked that he had no idea
how many data centers Google actually managed. He might not have known, but his backoffice information systems certainly did.
Information systems designed to handle the processes involved in these functions
must also meet compliance standards set by governments and other regulatory agencies,
CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
which may change from time to time and also vary by country or state. Reports must
be filed, audits passed, and changing regulations followed. Extensive regulations put
into place after the global financial crisis of 2009, for example, set tighter standards
for accounting practices—particularly in banking—and demanded more transparent
reporting.
Many organizations choose commercially produced information systems to handle
their back-office information needs, relying on software packages such as SAP, Oracle,
NetSuite, or QuickBooks. Some organizations are moving these functions to service
providers or even outsourcing them entirely. India became known as the world’s
“back office” because so many companies moved these applications there,1 and now the
Philippines is becoming the world’s biggest operator of call centers.2
Depending on their missions, organizations also need information systems to manage
industry-specific operations, such as these:
▶ Manufacturers need systems to manage assembly lines, product quality, production
schedules, and just-in-time supply deliveries (Figure 1-2).
▶ Colleges and universities need systems to manage student academic records, class
scheduling, faculty assignments, and student financial aid (Figure 1-3).
▶ Transportation companies rely on information systems equipped with GPS to track
their fleets, optimize routes, and conserve gas.
▶ Companies that buy products from suppliers around the globe need real-time
updates on their global supply chains to manage inventories and reduce costs.
Achieving excellence in operations can provide enormous cost savings and competitive advantage, as companies shave every ounce of fat out of their processes without
sacrificing quality. UPS drivers, for instance, know to avoid left turns on their delivery
routes when possible, because they take a few seconds longer, wasting time and gas.
Systems that support operations are discussed in Chapter 5.
Production Volume by Hour
Production Volume
70
Safety Metrics
Temperature
60
50
40
30
20
10
0
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Hour
Production Volume by Category
70
Production Volume
Humidity
FIGURE 1-2
Manufacturing information system
displaying production volumes and
other metrics.
Quality Metrics
60
50
A
40
Rejected
B
30
High
26
C
20
D
10
0
15
25
7
8
9 10
1 11
1 12
1 13
1 14
1 1
15 16
1 17
1 18
1 19
1 20
2 21
2 2
22 23
2 24
2
Hour
operations management
The area of management concerned with
the design, operation, and improvement of the
systems and processes the organization uses
to deliver its goods and services.
23
Medium
Low
5
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I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
FIGURE 1-3
Student information system with
online services for students and
faculty.
MyCollege
MyTools
Update contact info
View schedules
Submit request
View requirements
Register for courses
MyClasses
MyProfile
Course
Days
Time
Location
Bus 111
MW
14:00–15:00
Macintyre
Bus 111
MW
15:00–16:00
Doyle
Bus 112
T-TH
9:00–10:45
Student Services
Bus 112
-
-
Online
Bus 112
M
9:00–11:45
Garcia
Bus 113
W
1:00–2:45
Doyle
Supporting Customer Interactions
Interactions with customers, clients, students, patients, taxpayers, citizens, and others
who come to your organization desiring a product or service are fundamental to success.
Your customers pay the bills. Customer relationship management (CRM) systems, discussed
in Chapter 5, build and maintain relationships and support all the processes that
underlie them.
A brick-and-mortar retail store, for example, needs a sales system that identifies each
product in the shopper’s basket, tallies the total, feeds the data to the inventory system, and accepts various kinds of payment. Shoppers want fast checkouts, and they get
annoyed by clumsy, inefficient processes. When an item lacks its barcode, impatient customers may just abandon it rather than wait for a salesclerk to track it down. Strategies
to prevent theft, such as the check on weights added to the bag, also anger shoppers
when they do not function properly.
Web-based shopping and self-service transform relationships with customers, freeing them from time-consuming phone calls. These web-based processes often mimic
the brick-and-mortar versions, with “shopping carts” and “checkouts” clearly labeled.
A web application offers many opportunities to build stronger relationships and also
better understand the motives and desires of each person who visits.
Scattered throughout Amazon.com’s site, for example, are recommendations based
on previous purchases, encouragements to “review this book” or “rate this item,” special
discounts and coupons, storage space for your wish lists and gift ideas, and many other
innovative features to map out your preferences and build a stronger relationship. All of
this data contributes to Amazon’s customer relationship management excellence and the
company’s understanding of what each customer wants.
Infinite variations in customer interaction exist, from American Idol’s cell-phone voting to the Internal Revenue Service’s e-file system. Developing these relationships is not
just about improving sales and collecting receipts. It is about building long-term loyalty
and satisfaction by listening to customers and learning what is most important to them.
That also includes sensitivity to their privacy concerns, as we discuss in Chapter 10.
Making Decisions
How should a restaurant manager make decisions like the ones in Figure 1-4?
Managers make decisions every day, and many rely mainly on their own judgment.
In fact, researchers surveyed 250 executives and learned that 40% of major corporate
decisions were based on gut instincts.3 Smart managers, however, know that information systems support data-driven decision making, which draws on the billions of pieces
of data to reveal important trends and patterns. For example, the sales system will show
how much the restaurant makes in the last hour of business, and that data will help the
manager make a good decision about closing early.
Business intelligence refers to all the information managers use to make decisions,
and it can come from many sources beyond the organization’s own information systems.
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FIGURE 1-4
How do managers answer questions like these?
Where should we
open another
branch of our
restaurant?
Should we add
more fish to the
menu?
Can we save
money by closing
an hour earlier?
Source: Aaron Amat/Shutterstock
Should we offer
free wifi to
customers?
The restaurant manager, for example, might combine customer records with publicly available information about income levels by zip code to help make a smart decision about
where to open another branch.
Decision support systems and business intelligence, discussed in Chapter 7,
encompass a growing and varied category that blends rapid analysis of information sources with artificial intelligence
and human knowledge. For knowlYour online behavior is one of the most important sources of business intelligence.
edge workers, in particular, the value
The sites you visit and the links you click reveal your interests and intentions, and
of knowing how to draw upon those
marketers try to display ads that match just what you are looking for. Spending
vast mountains of information to make
wise decisions is extremely high.
for digital ads should top $55 billion by 2016.4
Did You Know?
Collaborating on Teams
Collaboration and teamwork have considerable support from innovative information systems
that allow people to work together at any time and from any place. Regardless of where they
live and work, participants can hold online meetings, share documents and applications, and
interact using microphones, video cameras, and whiteboards. Social networking sites support
online communities of people who create profiles for themselves, form ties with others with
whom they share interests, and make new connections based on those ties. These social groups
exploded in popularity as people jumped at the chance to share news, photos, videos, and
tidbits. Figure 1-5 shows usage rates for the larger social networking sites. Services that target
business users, such as Microsoft’s Sharepoint, offer additional useful services such as shared
calendars and group document editing.
The huge success of social networks prompts many corporations to launch experiments to see how their collaborative features could support business. Research analysts
predict that 50% of large companies will depend heavily on internal social networks for
customer relationship management
(CRM) system
An information system used to build customer
relationships, enhance loyalty, and manage
interactions with customers.
data-driven decision making
Decision making that draws on the billions
of pieces of data that can be aggregated to
reveal important trends and patterns.
business intelligence
The information managers use to make
decisions, drawn from the company’s own
information systems or external sources.
social networking sites
Online communities of people who create
profiles for themselves, form ties with others
with whom they share interests, and make
new connections based on those ties.
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I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
FIGURE 1-5
Social networking sites and their
demographics.
Sources: Duggan, M., &
Brenner, J. (February 14, 2013).
The demographics of social media
users – 2012. http://pewinternet
.org/Reports/2013/Social-mediausers.aspx, accessed March 25,
2013. Carlson, N. (February 27,
2012). Infographic: Who really uses
LinkedIn? Business Insider, http://
www.businessinsider.com/infographicwho-really-uses-linkedin-2012-2,
accessed March 25, 2013.
% Internet Users Who Use . . .
Any social networking site
67%
Facebook
67%
LinkedIn
20%
Twitter
16%
Pinterest
15%
Instagram
13%
Tumblr
6%
their employees by 2016, and that, for many of them, the network will be at least as
important as email is now.5
Developing information systems for collaboration takes ingenuity and attention to
the ways in which people really do work together. The possibilities are endless, and different groups have different preferences. In online university courses, for example, debates
about whether students should turn on their webcams during virtual class sessions are
common. Many prefer to keep them turned off, valuing the privacy that invisibility
creates. (One can doze off in a virtual class with little concern for detection.)
The information systems that support virtual teamwork, discussed in Chapter 8, are
in some respects still in their infancy—especially compared to the more mature systems
used to manage operations. Expect many improvements as we learn more about what
features work best for different people and different situations.
Gaining Competitive Advantage
Information systems play what could be their most valuable role when they are tied
closely to strategy and to the major initiatives that will help achieve competitive advantage—a topic we take up in Chapter 2. Competitive advantage, which is anything that
gives a firm a lead over its rivals, can be gained through the development and application of innovative information systems. Information systems are a fundamental part of a
company’s strategic vision. Indeed, the vision itself is often shaped by what these systems
can achieve today and what is possible for the future.
Consider how Apple’s iPhone got the jump on smartphone competitors with Siri,
the intelligent personal assistant. Siri responds to spoken commands such as “Tell my
brother I’ll be late,” and also answers questions like “Any Italian restaurants near here?”
The iPhone’s market share rose to over 50%, in part because no other smartphone had
anything like Siri. But competitive advantage can be fleeting, and IBM has plans to
develop a supercharged personal assistant for mobile phones based on “Watson,” the
supercomputer that surprised the world by defeating two Jeopardy champions.6 Time
will tell which personal assistant wins the most hearts.
Strategy is equally important to nonprofit organizations and government agencies, and
their information systems break new ground by offering new services to the public, streamlining operations, and improving decision making. For instance, U.S. citizens can apply for
social security benefits online, rather than wait in line. Government strategies to combat
terrorism also involve information systems—and analysis of immense volumes of data.
Those strategies raise important ethical dilemmas, discussed in Chapters 3 and 10.
Improving Individual Productivity
Tools to help people improve their own productivity abound, from the smartphones that
combine voice calls with web browsing, contact databases, email, music, and games, to the
many software applications that eliminate tedious work. Even word processing has transformed work in every organization, and many students aren’t aware of all the ways that
software can make them more productive. You can, for example, automatically create and
properly format your term paper references by integrating a bibliographic manager such
as EndNote or RefNote. Online libraries and reference databases offer links to export the
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citation in any format, so typing
is unnecessary.
To improve productivity at
work, people can choose from a
bewildering variety of computer
software and electronic devices,
but more is not necessarily better. You should select carefully,
with an eye to the functions
you need most, ease of use, and
short learning curves. No one
likes reading thick instruction
manuals. Throughout this book,
you will see productivity tips
in boxes—like the ones on this
page—that will help you improve
your own productivity.
PRODUCTIVITY TIP
Time management experts advise that you process your email inbox to zero,
flagging important messages and rerouting others by using automated
filtering tools. Stop devoting time to tasks that technology can do for you,
and don’t be a slave to your email.
PRODUCTIVITY TIP
Many colleges and universities have agreements with software companies to
offer discounts to their students. Before you buy software, check with your
IT department. Once you leave student status behind, you’ll be hard-pressed
to find deals like the ones you can get now.
Compare the terms data,
information, and knowledge, and
describe three characteristics that
Except for words like the, a, and, if, and it, the word information was once one of the most make information valuable.
common words on the Internet. No wonder people called the net an “information” storehouse.
The term information is critical to understanding how information systems work, but it can
be very slippery.
Facts, data, intelligence, knowledge, and even tips are synonyms for information,
and they all touch on characteristics of the “stuff ” that information systems can manage. For our purposes, the term data refers to individual facts or pieces of information,
and information refers to data or facts that are assembled and analyzed to add meaning
and usefulness. A patient’s single high-temperature reading at a 24-hour walk-in clinic
in Maryland is one piece of data. But entered into the clinic’s information system, and
combined with the patient’s other symptoms and previous medical records, it becomes
far more valuable as a diagnostic tool.
We gain even more from this one temperature reading by combining it with data from
other patients entering all clinics that week. The patterns may warn of a flu outbreak, or even
a major epidemic. The health staff at the Centers for Disease Control in Atlanta, Georgia,
draw on data like this to map the spread of diseases and take swift action to protect the public.
Refining, analyzing, and combining information makes it more and more useful
and meaningful, and the effort adds to our ability to use it to make decisions and take
action. The path from data to information, and then to knowledge, is a continuum, and
Figure 1-6 shows some examples. No clear dividing lines separate these categories;
they blend together and form a continuum as more meaning and usefulness are created
through skillful analysis and human insight.
THE NATURE OF INFORMATION
2
What Makes Information Valuable?
Separating useful information from the trivial is no easy task given the sheer volume of
information on the planet. Three characteristics stand out, however, that contribute to
making some information very valuable: (1) timeliness, (2) accuracy, and (3) completeness
(Figure 1-7).
Timeliness matters a great deal in some settings, and near real-time information often
costs more. For example, people pay monthly fees to financial services to get up-to-the
minute stock prices, rather than the delayed price reports shown on free stock tickers you
competitive advantage
Anything that gives a firm a lead over
its rivals; it can be gained through the
development and application of innovative
information systems.
data
Individual facts or pieces of information.
information
Data or facts that are assembled and
analyzed to add meaning and usefulness.
9
10
I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
FIGURE 1-6
Examples of the continuum from
data to information to knowledge,
as meaning and usefulness grow.
FIGURE 1-7
What makes information valuable?
Timeliness
Accuracy
Completeness
Data
Information
Knowledge
Patient’s temperature at walk-in
clinic on Dec. 15 = 103.9º F.
Table showing flu diagnoses
in region during month of
December
Worldwide map of flu outbreaks
suggesting pandemic
01010011 01001111 01010011
Binary code for SOS
HELP!!!
Microsoft (MSFT) closing
stock price
Graph of Microsoft highs and
lows for one year
Combined with analysis of other
information, leads to broker’s
recommendation to buy, hold,
or sell stock
CWOT
Complete Waste of Time
(text messaging abbreviation)
May be interpreted as an insult
GPS coordinates
Map showing location with
push pin
Location of Taj Mahal in India
Invoice #259 Total Amount =
$139.23
Total Sales for Southern Region
in First Quarter = $2,156,232
Fastest growing sales region;
consider broader marketing
campaign
can add to your own browser. Riswan Khalfan of TD Securities says his system can handle a breathtaking 5 million pieces of data per second, far more than most other banks.
He points out that “if you fall behind, you’re dealing with stale data and that puts you
at a disadvantage.” With timely, up-to-date trading data, Khalfan’s systems can make
quicker decisions, which he argues are better (Figure 1-8).7
Accuracy may seem like an obvious feature of valuable information, but there actually are degrees of accuracy. The more accurate you want the information to be, the
longer it may take to obtain, making extreme accuracy a trade-off to timeliness. A CEO
who wants to know how much competitors charge for a rival product, for example, might
wait too long for staff to scour all the distribution channels and assemble the data. An
approximate but timely answer is more valuable.
Completeness adds value, particularly as a means to avoid bias or spin. A marketing
survey that polls customers as they enter a store will completely miss those who shop
online, for example. The survey results would be incomplete without taking greater care
to assess the interests of all the customers. Striving for complete information, however,
may also introduce delays that affect timeliness.
FIGURE 1-8
Timeliness is a critical attribute for
certain kinds of information, such as
stock prices.“If you fall behind, you’re
dealing with stale data.” –Riswan
Khalfan
Source: Shutterstock
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THE COMPONENTS OF AN
INFORMATION SYSTEM
3
11
Describe the four main components
of an information system and the role
that each plays.
An information system, whether it is that speed camera network, a company’s payroll system,
or a social networking service, brings together four critical components to collect, process,
manage, analyze, and distribute information: (1) people, (2) technology, (3) processes, and
(4) data (Figure 1-9).
People
The design, development, launch, and maintenance of any information system involves
teams of people. They play a number of different roles—as visionaries, developers, and managers of information systems, and also as analysts, liaisons, users, customers, contributors,
and sometimes roadblocks. Often underestimated, the human element plays a crucial role in
the success or failure of most information systems, and you will see many examples of that
throughout this book.
Leaders may be first to propose a system that will accomplish an important strategic
objective for the company. However, innovative ideas for such systems come from every
level, provided the organization’s culture openly encourages people to think about how
information systems can help. Managers and staff from many departments participate
on teams with technologists to design a new system or evaluate commercial systems that
might be purchased. The information technology team usually works closely with staff in
marketing, finance, human resources, and other functional areas to launch user-friendly,
people-oriented systems.
Many systems draw from a much wider pool of people, involving users as contributors
and developers, not just customers or clients. User-generated content (UGC), for example,
makes up most of the information in systems such as Wikipedia, eBay, Craigslist, YouTube,
Facebook, and Twitter. These systems would not exist without generous contributions
from the community. UGC is an important ingredient in Web 2.0, the second generation of
FIGURE 1-9
The four components of an
information system.
People
Processes
information system
A system that brings together four critical
components to collect, process, manage,
analyze, and distribute information; the
four components are people, technology,
processes, and data.
Technology
Data
user-generated content (UGC)
The content contributed to a system
by its users.
Web 2.0
The second generation of web development
that facilitates far more interactivity, end-user
contributions, collaboration, and information
sharing compared to earlier models.
12
I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
web development that facilitates far more interactivity, end-user contributions, collaboration, and information sharing compared to earlier models. Social networking and virtual
meetings are all features of Web 2.0.
The people who manage systems that tap UGC work hard to promote the positive
contributions and even harder to keep the criminals and pranksters from taking over. For
instance, scammers in Texas copied photos from legitimate “Home For Sale” ads, then
posted them as “For Rent” on Craigslist. People who wanted to rent one of the houses
sent in their deposits to the fake landlord who was “out of town,” only to learn later the
home was never for rent at all. Craigslist founder Craig Newmark tirelessly helps the
organization deal with issues like that one. The number one tip is to “deal locally with
folks you can meet in person.”
Technology
Information technology (IT) includes hardware, software, and telecommunications. IT
is one of the four components of an information system, though people often use
the terms interchangeably. Rack after rack of servers in Google’s windowless data
centers are examples of this component, along with all the desktop computers, laptops, netbooks, tablets, cell phones, navigation devices, digital cameras, scanners, and
sensors. Anything capable of collecting, processing, storing, or displaying electronic
data is potentially part of an information system. The transponder chip on your car’s
windshield that allows electronic toll collection is another example. The batterypowered device sends a signal to the tollbooth; in some areas, drivers don’t even need
to slow down.
Software ranges from the code needed to boot up a computer to programs with artificial intelligence and their own learning capabilities. The Internet and the World Wide
Web unleashed an explosion of software creativity, transforming businesses around the
globe. Organizations can create applications that their partners, suppliers, and customers
can access anywhere on the planet.
Telecommunications and networks are also part of IT, and the term information
and communications technology (ICT) is often used to refer to the broader collection. The
main role of the telecommunications component is to move electronic signals from one
place to another, route traffic, and add features to improve transmission speeds, eliminate noise, increase security, or analyze traffic patterns. The infrastructure includes
both wired and wireless transmission.
Increasingly, people favor wireless transmission because of its flexibility and reduced
cost, though speed still lags. Many developing countries that can’t afford to build wired
networks are transforming their communications and expanding Internet access through
wireless transmission. In much of sub-Saharan Africa, for example, copper wiring may
never be deployed at all. Wireless is also more likely to stay up and running during storms
that bring down utility poles and wires.
While the “people” component and UGC play key roles in Web 2.0 developments,
technology is a major driver of what some call “Web 3.0.” As hundreds of millions
of sensors are embedded in vehicles, doorways, livestock, warehouse shelves, ocean
buoys, and anything else, and all are connected to the net, we begin to glimpse the
power of “the Internet of things.” The sensors can pick up geographic location, temperature, motion, wind speed, pollution indicators, heart rate, and much more. When
combined with traditional data sources and UGC, these immense, rapidly growing
collections are known as “big data,” and they offer stunning opportunities for innovation. As the web continues to evolve, new skills and tools will be needed to analyze big
data intelligently.8
Processes
A business process is a set of activities designed to achieve a task. Organizations implement information systems to support, streamline, and sometimes eliminate business
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processes. Countless decisions are made about how each process should operate, what
rules it should follow, how information should be handled from input to output, and
especially how the information system will support the process. For example, should
the system log every change an employee makes to the data? Will the system require
supervisors to electronically approve all purchases or just those above a certain value?
What decisions can the information system make on its own based on incoming data
and rules, and which ones require human judgment?
Managers develop policies that affect information system processes and the systems
can enforce those policies. A major policy category involves security. How will the system
authenticate the user, and what access will he or she be granted? If the system requires a
password, how long should it be, and when will it expire?
The steps in any process are affected by thousands of decisions people make, and these
are influenced by the way people look at process improvements. For example, some organizations try to design systems that just reproduce what employees were doing, thereby
reducing labor. In a college registrations office, employees might send letters to students
who could not enroll in a class that they selected to explain why they were denied. One
improvement might be to design a feature that automatically generates form letters to
those students with their name and address, the class they selected, and a list of the most
common reasons they could not register. Instead of typing the letter, the employees can
check the reason and stuff the letter into an envelope (Figure 1-10). The staff would be
pleased with this handy new efficiency, though students might think the new letters are a
bit mechanical.
A closer look at the process, however, might lead to far more radical changes.
Moving to online registrations, for instance, could eliminate the process entirely. If a
class is full, or if the student isn’t eligible to take it, the registration system should not
allow the student to choose it, thus eliminating the need to send letters at all. This new
FIGURE 1-10
NARA SELLERS
143 LA GUARDIA STREET
JACKSON, AZ
Although automatically generating
letters like this one provides some
process improvement, information
systems can do much more. This
process could be eliminated entirely.
Dear Student:
We are sorry to inform you that we are unable to confirm your registration for the
class listed below for the reason checked:
FALL
BMGT 322
◻
The class is full.
◻
Your records show you have not fulfilled the prerequisites.
◻
The class is only open to juniors or seniors.
◻
Your tuition payment has not yet been received.
◻
Other_________________________________
SECTION 5
Please contact the Registrations Office if you have any questions.
Sincerely,
Registrations
information technology (IT)
The hardware, software, and
telecommunications that comprise the
technology component of information
systems; the term is often used more broadly
to refer to information systems.
information and communications
technology (ICT)
The term encompasses the broad
collection of information processing and
communications technologies, emphasizing
that telecommunication technology is a
significant feature of information systems.
business process
A set of activities designed to achieve a task;
organizations implement information systems
to support, streamline, and sometimes
eliminate business processes.
14
I N T R O D U CTIO N TO INFO RM AT IO N SYS TE MS
FIGURE 1-11
Process diagram for a smarter
registration system.
Student logs into
registration system
System retrieves
student records and
class records
Is class full?
No
Is student
eligible to
take class?
Yes
Yes
System does not
allow student to
choose class
No
System does not
allow student to
choose class
System allows
student to choose
class
design, shown in Figure 1-11, would please students because they would get instant
confirmation that their class choices were available. Also, they would no longer receive
frustrating form letters that foil their academic plans. Registrations staff, however, may
worry about layoffs.
Business process management (BPM) is the field that focuses on designing, optimizing,
and streamlining processes, taking into account the human element. Analysts look at
processes from many different angles to weigh input from all stakeholders, suggest innovative approaches that leverage the power of information systems, and propose tweaks
at every step. Software is available to simulate business processes and conduct “what if ”
experiments to assist with the analysis.
Efforts to manage business processes also take into account the overall organizational culture and its approach to information systems. Does the organization need very
tight controls over every piece of information and employees’ use of it? Banks, hospitals,
military units, and many other institutions bear heavy responsibilities to develop crystal
clear policies. They must safeguard sensitive information, and their missions affect the
way processes are designed. Free use of the Internet may not be permitted, and employees may not be able to take files home on portable USB flash drives to catch up over the
weekend. Some organizations even push epoxy glue into the desktop computers’ USB
ports to prevent anyone from copying data. In contrast, people involved in a free-wheeling
start-up or a volunteer organization may not be too concerned with where or when people work, how secure their information is, or whether staff post party photos on the
company servers.
Business processes and organizational policies must also be reviewed frequently
because circumstances change quickly. Numerous corporate scandals, for example, have
led to stiff laws about retaining electronic documents. If there is a pending legal case,
businesses have a duty to preserve electronic files that might be relevant, including email.
E-discovery refers to the processes by which electronic data that might be used as legal
evidence are requested, secured, and searched. Electronic documents that might be relevant to a case cover a very wide scope, and they can be quite slippery to manage as
people edit, cut and paste, and make copies–not just on the company’s computers but on
their own smartphones and tablets.9
# 149079 Cust: Pearson Au: Wallace Pg. No. 14
Title: Introduction to Information Systems/ 2e Server:
C/M/Y/K
Short / Normal
DESIGN SERVICES OF
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Publishing Services
CH AP T ER 1 INFORMATION SYSTEMS AND PEOPLE
FIGURE 1-12
Examples of data.
Photos: © Maxim Pavlov/Alamy, © D. Hurst/Alamy, ©Sandra Baker/Alamy, © PaulPaladin/Alamy,
© StockShot/Alamy, © Picture Press/Alamy.
Data
Data are the grist for every information system, and these raw facts can present themselves in an enormous variety of shapes and forms. Figure 1-12 shows many examples
of data that become part of information systems. Using a mercury thermometer, for
example, a patient’s temperature reading would appear as the height of the mercury bar
in a glass tube. Data reflecting time intervals might appear as seconds on a stopwatch.
Data from spoken language are becoming especially important for smartphones and
other technologies that accept and analyze voice commands. VoicePrism, a Chicagobased company that creates information systems to analyze vocal patterns, focuses on
the streams of data contained i...