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Management Information Systems
Managing the Digital Firm
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Management Information
Systems
Managing the Digital Firm
FIFTEENTH EDITION
Kenneth C. Laudon • Jane P. Laudon
FIFTEENTH
EDITION
Laudon
Laudon
G LO B A L
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MANAGEMENT
INFORMATION SYSTEMS
MANAGING THE DIGITAL FIRM
FIFTEENTH EDITION
GLOBAL EDITION
Kenneth C. Laudon
New York University
Jane P. Laudon
Azimuth Information Systems
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About the Authors
Kenneth C. Laudon is a Professor of Information Systems at New York University’s Stern
School of Business. He holds a B.A. in Economics from Stanford and a Ph.D. from Columbia
University. He has authored 12 books dealing with electronic commerce, information systems, organizations, and society. Professor Laudon has also written more than 40 articles
concerned with the social, organizational, and management impacts of information systems,
privacy, ethics, and multimedia technology.
Professor Laudon’s current research is on the planning and management of large-scale
information systems and multimedia information technology. He has received grants from
the National Science Foundation to study the evolution of national information systems at
the Social Security Administration, the IRS, and the FBI. Ken’s research focuses on enterprise system implementation, computer-related organizational and occupational changes in
large organizations, changes in management ideology, changes in public policy, and understanding productivity change in the knowledge sector.
Ken Laudon has testified as an expert before the United States Congress. He has been a
researcher and consultant to the Office of Technology Assessment (United States Congress),
the Department of Homeland Security, and the Office of the President, several executive
branch agencies, and Congressional Committees. Professor Laudon also acts as an in-house
educator for several consulting firms and as
a consultant on systems planning and strategy to several Fortune 500 firms.
At NYU’s Stern School of Business, Ken
Laudon teaches courses on Managing the
Digital Firm, Information Technology
and Corporate Strategy, Professional
Responsibility (Ethics), and Electronic
Commerce and Digital Markets. Ken
Laudon’s hobby is sailing.
Jane Price Laudon is a management consultant in the information systems area and
the author of seven books. Her special interests include systems analysis, data management, MIS auditing, software evaluation, and
teaching business professionals how to design and use information systems.
Jane received her Ph.D. from Columbia University, her M.A. from Harvard University,
and her B.A. from Barnard College. She has taught at Columbia University and the New
York University Graduate School of Business. She maintains a lifelong interest in Oriental
languages and civilizations.
The Laudons have two daughters, Erica and Elisabeth, to whom this book is dedicated.
3
Brief Contents
PART ONE
Organizations, Management, and the Networked
Enterprise 29
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Information Systems in Global Business Today 30
PART TWO
Information Technology Infrastructure 191
Chapter 5
Chapter 6
IT Infrastructure and Emerging Technologies 192
Chapter 7
Chapter 8
Telecommunications, the Internet, and Wireless Technology 276
PART THREE
Key System Applications for the Digital Age 363
Chapter 9
Achieving Operational Excellence and Customer Intimacy: Enterprise
Applications 364
Chapter 10
Chapter 11
Chapter 12
E-commerce: Digital Markets, Digital Goods 398
PART FOUR
Building and Managing Systems 513
Chapter 13
Chapter 14
Chapter 15
Building Information Systems 514
Glossary
Indexes
4
Global E-business and Collaboration 68
Information Systems, Organizations, and Strategy 106
Ethical and Social Issues in Information Systems 150
Foundations of Business Intelligence: Databases and Information
Management 238
Securing Information Systems 320
619
631
Managing Knowledge 444
Enhancing Decision Making 480
Managing Projects 554
Managing Global Systems 588
Complete Contents
PART ONE
Organizations, Management, and the Networked
Enterprise 29
Chapter 1
Information Systems in Global Business Today 30
Opening Case: Rugby Football Union Tries Big Data 31
1-1
How are information systems transforming business, and why are they so
essential for running and managing a business today? 33
How Information Systems Are Transforming Business 34 • What's New in
Management Information Systems? 35
Interactive Session: Management The Mobile Pocket Office 37
Globalization Challenges and Opportunities: A Flattened World 39 • The
Emerging Digital Firm 40 • Strategic Business Objectives of Information
Systems 41
1-2
What is an information system? How does it work? What are its
management, organization, and technology components? Why are
complementary assets essential for ensuring that information systems
provide genuine value for organizations? 44
What Is an Information System? 44 • Dimensions of Information Systems 46
Interactive Session: Technology Digital Transformation of Healthcare at
Singapore's JurongHealth Services 51
It Isn't Just Technology: A Business Perspective on Information
Systems 52 • Complementary Assets: Organizational Capital and the Right
Business Model 54
1-3
What academic disciplines are used to study information systems,
and how does each contribute to an understanding of information
systems? 56
Technical Approach 56 • Behavioral Approach 57 • Approach of This Text:
Sociotechnical Systems 58
Review Summary 59 • Key Terms 60 • Review Questions 60 • Discussion
Questions 61
Hands-On MIS Projects 61
Collaboration and Teamwork Project 62
Case Study: Are Farms Becoming Digital Firms? 62
References: 66
5
6
Contents
Chapter 2
Global E-business and Collaboration 68
Opening Case: Enterprise Social Networking Helps ABB Innovate and Grow 69
2-1
What are business processes? How are they related to information
systems? 71
Business Processes 71 • How Information Technology Improves Business
Processes 73
2-2
How do systems serve the different management groups in a business,
and how do systems that link the enterprise improve organizational
performance? 74
Systems for Different Management Groups 74 • Systems for Linking the
Enterprise 79
Interactive Session: Organizations New Systems Help Plan International
Manage Its Human Resources 80
E-business, E-commerce, and E-government 84
2-3
Why are systems for collaboration and social business so important, and
what technologies do they use? 85
What Is Collaboration? 85 • What Is Social Business? 86 • Business Benefits
of Collaboration and Social Business 87 • Building a Collaborative Culture and
Business Processes 87 • Tools and Technologies for Collaboration and Social
Business 89
Interactive Session: Technology Collaborating the Glasscubes Way 91
2-4
What is the role of the information systems function in a business? 95
The Information Systems Department 96 • Organizing the Information Systems
Function 97
Review Summary 98 • Key Terms 99 • Review Questions 99 • Discussion
Questions 100
Hands-On MIS Projects 100
Collaboration and Teamwork Project 101
Case Study: Social Business: Full Speed Ahead or Proceed with Caution? 101
References: 104
Chapter 3
Information Systems, Organizations, and Strategy 106
Opening Case: Tate & Lyle Devise a Global IT Strategy 107
3-1
Which features of organizations do managers need to know about to
build and use information systems successfully? 109
What Is an Organization? 110 • Features of Organizations 112
3-2
What is the impact of information systems on organizations? 117
Economic Impacts 117 • Organizational and Behavioral Impacts 118
Interactive Session: Management Can Technology Replace Managers? 120
The Internet and Organizations 122 • Implications for the Design and
Understanding of Information Systems 122
Contents
3-3
7
How do Porter's competitive forces model, the value chain model,
synergies, core competencies, and network economics help companies
develop competitive strategies using information systems? 123
Porter's Competitive Forces Model 123 • Information System Strategies for
Dealing with Competitive Forces 125 • The Internet's Impact on Competitive
Advantage 128 • The Business Value Chain Model 129
Interactive Session: Technology Smart Products, Smart Companies 130
Synergies, Core Competencies, and Network-Based Strategies 134
3-4
What are the challenges posed by strategic information systems, and
how should they be addressed? 138
Sustaining Competitive Advantage 138 • Aligning IT with Business
Objectives 139 • Managing Strategic Transitions 140
Review Summary 140 • Key Terms 141 • Review Questions 141 • Discussion
Questions 142
Hands-On MIS Projects 142
Collaboration and Teamwork Project 143
Case Study: Deutsche Bank: The Cost of Legacy Systems 144
References: 147
Chapter 4
Ethical and Social Issues in Information Systems 150
Opening Case: The Dark Side of Big Data 151
4-1
What ethical, social, and political issues are raised by information
systems? 153
A Model for Thinking About Ethical, Social, and Political Issues 155 • Five Moral
Dimensions of the Information Age 156 • Key Technology Trends that Raise
Ethical Issues 156
4-2
What specific principles for conduct can be used to guide ethical
decisions? 158
Basic Concepts: Responsibility, Accountability, and Liability 159 • Ethical
Analysis 160 • Candidate Ethical Principles 160 • Professional Codes of
Conduct 161 • Some Real-World Ethical Dilemmas 161
4-3
Why do contemporary information systems technology and the Internet
pose challenges to the protection of individual privacy and intellectual
property? 162
Information Rights: Privacy and Freedom in the Internet Age 162 • Property
Rights: Intellectual Property 169
4-4
How have information systems affected laws for establishing
accountability and liability and the quality of everyday life? 172
Computer-Related Liability Problems 173 • System Quality: Data Quality and
System Errors 174 • Quality of Life: Equity, Access, and Boundaries 174
Interactive Session: Technology Monitoring in the Workplace 178
Health Risks: RSI, CVS, and Cognitive Decline 180
Interactive Session: Organizations Are We Relying Too Much on Computers to
Think for Us? 181
Review Summary 183 • Key Terms 184 • Review Questions 184 • Discussion
Questions 185
Hands-On MIS Projects 185
8
Contents
Collaboration and Teamwork Project 186
Case Study: Facebook Privacy: What Privacy? 186
References: 190
PART TWO
Information Technology Infrastructure 191
Chapter 5
IT Infrastructure and Emerging Technologies 192
Opening Case: EasyJet Flies High with Cloud Computing 193
5-1
What is IT infrastructure, and what are the stages and drivers of IT
infrastructure evolution? 195
Defining IT Infrastructure 195 • Evolution of IT Infrastructure 197 • Technology
Drivers of Infrastructure Evolution 201
5-2
What are the components of IT infrastructure? 206
Computer Hardware Platforms 207 • Operating System Platforms 208
• Enterprise Software Applications 208 • Data Management and Storage 209
• Networking/Telecommunications Platforms 209 • Internet Platforms 209
• Consulting and System Integration Services 210
5-3
What are the current trends in computer hardware platforms? 210
The Mobile Digital Platform 210
Interactive Session: Technology Wearable Computers Change How We Work 211
Consumerization of IT and BYOD 212 • Quantum Computing 213
• Virtualization 213 • Cloud Computing 213
Interactive Session: Organizations Glory Finds Solutions in the Cloud 216
Green Computing 219 • High-Performance and Power-Saving Processors 220
5-4
What are the current computer software platforms and trends? 220
Linux and Open Source Software 220 • Software for the Web: Java, HTML, and
HTML5 221 • Web Services and Service-Oriented Architecture 222 • Software
Outsourcing and Cloud Services 224
5-5
What are the challenges of managing IT infrastructure and management
solutions? 226
Dealing with Platform and Infrastructure Change 226 • Management and
Governance 227 • Making Wise Infrastructure Investments 227
Review Summary 230 • Key Terms 231 • Review Questions 232 • Discussion
Questions 232
Hands-On MIS Projects 232
Collaboration and Teamwork Project 233
Case Study: BYOD: Business Opportunity or Big Headache? 234
References: 237
Chapter 6
Foundations of Business Intelligence: Databases
and Information Management 238
Opening Case: BAE Systems 239
6-1
What are the problems of managing data resources in a traditional file
environment? 241
Contents
9
File Organization Terms and Concepts 242 • Problems with the Traditional File
Environment 243
6-2
What are the major capabilities of database management systems
(DBMS), and why is a relational DBMS so powerful? 245
Database Management Systems 245 • Capabilities of Database Management
Systems 248 • Designing Databases 250 • Non-relational Databases and
Databases in the Cloud 253
6-3
What are the principal tools and technologies for accessing information
from databases to improve business performance and decision
making? 254
The Challenge of Big Data 254 • Business Intelligence Infrastructure 255
Interactive Session: Organizations Data-Driven Crime Fighting Goes Global
256
Analytical Tools: Relationships, Patterns, Trends 260 • Databases and the Web 263
6-4
Why are information policy, data administration, and data quality
assurance essential for managing the firm's data resources? 264
Establishing an Information Policy 264 • Ensuring Data Quality 265
Interactive Session: Management Societe Generale Builds an Intelligent
System to Manage Information Flow 267
Review Summary 268 • Key Terms 269 • Review Questions 270 • Discussion
Questions 270
Hands-On MIS Projects 270
Collaboration and Teamwork Project 272
Case Study: Lego's Enterprise Software Spurs Growth 272
References: 275
Chapter 7
Telecommunications, the Internet, and Wireless
Technology 276
Opening Case: Wireless Technology Makes Dundee Precious Metals Good as
Gold 277
7-1
What are the principal components of telecommunications networks and
key networking technologies? 279
Networking and Communication Trends 279 • What is a Computer
Network? 280 • Key Digital Networking Technologies 282
7-2
What are the different types of networks? 285
Signals: Digital Versus Analog 285 • Types of Networks 285 • Transmission
Media and Transmission Speed 287
7-3
How do the Internet and Internet technology work, and how do they
support communication and e-business? 287
What is the Internet? 288 • Internet Addressing and Architecture 288
Interactive Session: Organizations The Battle over Net Neutrality 291
Internet Services and Communication Tools 293
Interactive Session: Management Monitoring Employees on Networks:
Unethical or Good Business? 296
The Web 298
10
Contents
7-4
What are the principal technologies and standards for wireless
networking, communication, and Internet access? 306
Cellular Systems 306 • Wireless Computer Networks and Internet
Access 307 • RFID and Wireless Sensor Networks 309
Review Summary 312 • Key Terms 313 • Review Questions 314 • Discussion
Questions 314
Hands-On MIS Projects 314
Collaboration and Teamwork Project 315
Case Study: RFID Propels the Angkasa Library Management System 316
References: 319
Chapter 8
Securing Information Systems 320
Opening Case: Hackers Attack Singapore's Telecom Infrastructure 321
8-1
Why are information systems vulnerable to destruction, error, and
abuse? 323
Why Systems are Vulnerable 323 • Malicious Software: Viruses, Worms, Trojan
Horses, and Spyware 326 • Hackers and Computer Crime 329 • Internal
Threats: Employees 333 • Software Vulnerability 334
8-2
What is the business value of security and control? 335
Legal and Regulatory Requirements for Electronic Records Management 335
• Electronic Evidence and Computer Forensics 336
8-3
What are the components of an organizational framework for security
and control? 337
Information Systems Controls 337 • Risk Assessment 338
Interactive Session: Organizations Stuxnet and the Changing Face of
Cyberwarfare 339
Security Policy 341 • Disaster Recovery Planning and Business Continuity
Planning 342 • The Role of Auditing 343
8-4
What are the most important tools and technologies for safeguarding
information resources? 343
Identity Management and Authentication 344 • Firewalls, Intrusion
Detection Systems, and Antivirus Software 346 • Securing Wireless
Networks 348 • Encryption and Public Key Infrastructure 348 • Ensuring
System Availability 350 • Security Issues for Cloud Computing and the Mobile
Digital Platform 351 • Ensuring Software Quality 352
Interactive Session: Technology BYOD: A Security Nightmare? 353
Review Summary 354 • Key Terms 355 • Review Questions 356 • Discussion
Questions 357
Hands-On MIS Projects 357
Collaboration and Teamwork Project 358
Case Study: Information Security Threats and Policies in Europe 358
References: 361
Contents
PART THREE Key System Applications for the Digital Age
Chapter 9
11
363
Achieving Operational Excellence and Customer Intimacy:
Enterprise Applications 364
Opening Case: Alimentation Couche-Tard Competes Using Enterprise Systems
365
9-1
How do enterprise systems help businesses achieve operational
excellence? 367
What are Enterprise Systems? 368 • Enterprise Software 369 • Business Value
of Enterprise Systems 370
9-2
How do supply chain management systems coordinate planning,
production, and logistics with suppliers? 371
The Supply Chain 371 • Information Systems and Supply Chain
Management 372 • Supply Chain Management Software 373 • Global Supply
Chains and the Internet 375 • Business Value of Supply Chain Management
Systems 376
9-3
How do customer relationship management systems help firms achieve
customer intimacy? 377
What is Customer Relationship Management? 377
Interactive Session: Management Unilever Unifies Globally with Enhanced
ERP 378
Customer Relationship Management Software 381 • Operational and Analytical
CRM 383
Interactive Session: Organizations DP World Takes Port Management to the
Next Level with RFID 385
Business Value of Customer Relationship Management Systems 387
9-4
What are the challenges that enterprise applications pose, and how are
enterprise applications taking advantage of new technologies? 387
Enterprise Application Challenges 387 • Next-Generation Enterprise
Applications 388
Review Summary 390 • Key Terms 391 • Review Questions 391 • Discussion
Questions 392
Hands-On MIS Projects 392
Collaboration and Teamwork Project 393
Case Study: Customer Relationship Management Helps Celcom Become Number
One 394
References: 397
Chapter 10
E-commerce: Digital Markets, Digital Goods 398
Opening Case: Uber Storms Europe: Europe Strikes Back 399
10-1 What are the unique features of e-commerce, digital markets, and digital
goods? 401
12
Contents
E-commerce Today 402 • The New E-commerce: Social, Mobile, Local 403
• Why E-commerce is Different 405 • Key Concepts in E-commerce: Digital
Markets and Digital Goods in a Global Marketplace 408
10-2
What are the principal e-commerce business and revenue models? 412
Types of E-commerce 412 • E-commerce Business Models 412 • E-commerce
Revenue Models 415
10-3
How has e-commerce transformed marketing? 417
Behavioral Targeting 418 • Social E-Commerce and Social Network
Marketing 422
Interactive Session: Technology Getting Social with Customers 424
10-4 How has e-commerce affected business-to-business transactions? 426
Electronic Data Interchange (EDI) 426 • New Ways of B2B Buying and
Selling 427
10-5
What is the role of m-commerce in business, and what are the most
important m-commerce applications? 429
Location-Based Services and Applications 430
Interactive Session: Organizations Can Instacart Deliver? 431
Other Mobile Commerce Services 433
10-6
What issues must be addressed when building an e-commerce
presence? 433
Develop an E-Commerce Presence Map 434 • Develop a Timeline:
Milestones 435
Review Summary 435 • Key Terms 436 • Review Questions 437 • Discussion
Questions 437
Hands-On MIS Projects 437
Collaboration and Teamwork Project 438
Case Study: Walmart and Amazon Duke It Out for E-commerce Supremacy 439
References: 442
Chapter 11
Managing Knowledge 444
Opening Case: Fiat: Real Time Management with Business Intelligence 445
11-1 What is the role of knowledge management systems in business? 447
Important Dimensions of Knowledge 448 • The Knowledge Management Value
Chain 449 • Types of Knowledge Management Systems 452
11-2
What types of systems are used for enterprise-wide knowledgge
management, and how do they provide value for businesses? 453
Enterprise Content Management Systems 453
Interactive Session: Organizations ECM in the Cloud Empowers New Zealand
Department of Conservation 454
Locating and Sharing Expertise 456 • Learning Management Systems 456
11-3
What are the major types of knowledge work systems, and how do they
provide value for firms? 457
Knowledge Workers and Knowledge Work 457 • Requirements of Knowledge
Work Systems 457 • Examples of Knowledge Work Systems 458
11-4
What are the business benefits of using intelligent techniques for
knowledge management? 460
Contents
13
Capturing Knowledge: Expert Systems 460
Interactive Session: Technology Will Robots Replace People in Manufacturing?
461
Organizational Intelligence: Case-Based Reasoning 464 • Fuzzy Logic
Systems 465 • Machine Learning 467 • Intelligent Agents 470 • Hybrid AI
Systems 471
Review Summary 472 • Key Terms 473 • Review Questions 473 • Discussion
Questions 474
Hands-On MIS Projects 474
Collaboration and Teamwork Project 475
Case Study: Knowledge Management and Collaboration at Tata Consulting
Services 475
References: 479
Chapter 12
Enhancing Decision Making 480
Opening Case: Roche: Managing Diabetes with Big Data and Mobile Apps 481
12-1 What are the different types of decisions, and how does the decisionmaking process work? 483
Business Value of Improved Decision Making 483 • Types of
Decisions 483 • The Decision-Making Process 485
12-2
How do information systems support the activities of managers and
management decision making? 486
Managerial Roles 486 • Real-World Decision Making 488 • High-Velocity
Automated Decision Making 489
12-3
How do business intelligence and business analytics support decision
making? 490
What is Business Intelligence? 490 • The Business Intelligence
Environment 491 • Business Intelligence and Analytics Capabilities 492
Interactive Session: Technology Singapore Sports Institute Uses Analytics for
SEA Games 495
Management Strategies for Developing BI and BA Capabilities 497
Interactive Session: Management Britain's National Health Service Jettisons
Choose and Book System 498
12-4 How do different decision-making constituencies in an organization
use business intelligence, and what is the role of information
systems in helping people working in a group make decisions more
efficiently? 500
Decision Support for Operational And Middle Management 500 • Decision
Support for Senior Management: Balanced Scorecard and Enterprise
Performance Management Methods 503 • Group Decision-Support Systems
(GDSS) 504
Review Summary 505 • Key Terms 506 • Review Questions 506 • Discussion
Questions 507
Hands-On MIS Projects 507
Collaboration and Teamwork Project 507
Case Study: GE Bets on the Internet of Things and Big Data Analytics 508
References: 512
14
Contents
PART FOUR
Building and Managing Systems 513
Chapter 13
Building Information Systems 514
Opening Case: Angostura Builds a Mobile Sales System 515
13-1 How does building new systems produce organizational change? 517
Systems Development and Organizational Change 517 • Business Process
Redesign 519
13-2
What are the core activities in the systems development process? 522
Systems Analysis 523 • Systems Design 524 • Completing the Systems
Development Process 525
13-3
What are the principal methodologies for modeling and designing
systems? 528
Structured Methodologies 528 • Object-Oriented Development 530
• Computer-Aided Software Engineering 532
13-4
What are alternative methods for building information systems? 532
Traditional Systems Life Cycle 533 • Prototyping 534 • End-User
Development 535 • Application Software Packages, Software Services, and
Outsourcing 536
Interactive Session: Organizations Fujitsu Selects a SaaS Solution to Simplify
the Sales Process 537
13-5 What are new approaches for system building in the digital firm era? 540
Rapid Application Development (RAD), Agile Development, and DevOps 541 •
Component-Based Development and Web Services 542 • Mobile Application
Development: Designing for A Multiscreen World 542
Interactive Session: Technology Developing Mobile Apps: What's Different 544
Review Summary 545 • Key Terms 547 • Review Questions 547 • Discussion
Questions 548
Hands-On MIS Projects 548
Collaboration and Teamwork Project 549
Case Study: ConAgra's Recipe for a Better Human Resources System 550
References: 553
Chapter 14
Managing Projects 554
Opening Case: Intuit Counts on Project Management 555
14-1 What are the objectives of project management, and why is it so
essential in developing information systems? 557
Runaway Projects and System Failure 557 • Project Management
Objectives 558
14-2
What methods can be used for selecting and evaluating information
systems projects and aligning them with the firm's business goals? 559
Management Structure for Information Systems Projects 559 • Linking Systems
Projects to The Business Plan 560 • Information Requirements and Key
Performance Indicators 562 • Portfolio Analysis 562 • Scoring Models 563
14-3
How can firms assess the business value of information systems? 564
Information System Costs and Benefits 564 • Capital Budgeting for Information
Systems 565 • Limitations of Financial Models 566
Contents
14-4
15
What are the principal risk factors in information systems projects, and
how can they be managed? 566
Dimensions of Project Risk 566 • Change Management and the Concept of
Implementation 567
Interactive Session: Management Can the National Health Service Go
Paperless? 568
Controlling Risk Factors 571
Interactive Session: Technology Hilti AG: Putting Things Together with New
Project Management Tools 575
Designing for the Organization 577 • Project Management Software Tools 577
Review Summary 578 • Key Terms 579 • Review Questions 579 • Discussion
Questions 580
Hands-On MIS Projects 580
Collaboration and Teamwork Project 581
Case Study: A Shaky Start for Healthcare.gov 581
References: 585
Chapter 15
Managing Global Systems 588
Opening Case: The Bel Group: Laughing All the Way to Success 589
15-1 What major factors are driving the internationalization of business? 591
Developing an International Information Systems Architecture 592 • The Global
Environment: Business Drivers and Challenges 593 • State of the Art 596
15-2
What are the alternative strategies for developing global businesses? 597
Global Strategies and Business Organization 597 • Global Systems to Fit the
Strategy 598 • Reorganizing the Business 599
15-3
What are the challenges posed by global information systems and
management solutions for these challenges? 600
A Typical Scenario: Disorganization on a Global Scale 600 • Global Systems
Strategy 601 • The Management Solution: Implementation 603
15-4
What are the issues and technical alternatives to be considered when
developing international information systems? 604
Computing Platforms and Systems Integration 605 • Connectivity 605
Interactive Session: Organizations Indian E-commerce: Obstacles to
Opportunity 607
Software Localization 608
Interactive Session: Management Steelcase Designs Goes for Global Talent
Management 609
Review Summary 611 • Key Terms 612 • Review Questions 612 • Discussion
Questions 612
Hands-On MIS Projects 613
Collaboration and Teamwork Project 614
Case Study: Crocs Clambers to Global Efficiency 614
References: 618
Glossary 619
Indexes 631
Business Cases And Interactive Sessions
Here are some of the business firms you will find described in the cases and Interactive Sessions
of this book:
Chapter 1: Information Systems in Global Business Today
Rugby Football Union Tries Big Data
The Mobile Pocket Office
Digital Transformation of Healthcare at Singapore's JurongHealth Services
Are Farms Becoming Digital Firms?
Chapter 2: Global E-Business and Collaboration
Enterprise Social Networking Helps ABB Innovate and Grow
New Systems Help Plan International Manage Its Human Resources
Collaborating the Glasscubes Way
Social Business: Full Speed Ahead or Proceed with Caution?
Chapter 3: Information Systems, Organizations, and Strategy
Tate & Lyle Devise a Global IT Strategy
Can Technology Replace Managers?
Smart Products, Smart Companies
Deutsche Bank: The Cost of Legacy Systems
Chapter 4: Ethical and Social Issues in Information Systems
The Dark Side of Big Data
Monitoring in the Workplace
Are We Relying Too Much on Computers to Think for Us?
Facebook Privacy: What Privacy?
Chapter 5: IT Infrastructure and Emerging Technologies
EasyJet Flies High with Cloud Computing
Wearable Computers Change How We Work
Glory Finds Solutions in the Cloud
BYOD: Business Opportunity or Big Headache?
Chapter 6: Foundations of Business Intelligence: Databases and Information Management
BAE Systems
Data-Driven Crime Fighting Goes Global
Societe Generale Builds an Intelligent System to Manage Information Flow
Lego's Enterprise Software Spurs Growth
Chapter 7: Telecommunications, the Internet and Wireless Technology
Wireless Technology Makes Dundee Precious Metals Good as Gold
The Global Battle over Net Neutrality
Monitoring Employees on Networks: Unethical or Good Business?
RFID Propels the Angkasa Library Management System
16
Business Cases and Interactive Sessions
Chapter 8: Securing Information Systems
Hackers Attack Singapore's Telecom Infrastructure
Stuxnet and the Changing Face of Cyberwarfare
BYOD: A Security Nightmare?
Information Security Threats and Policies in Europe
Chapter 9: Achieving Operational Excellence and Customer Intimacy: Enterprise
Applications
Alimentation Couche-Tard Competes Using Enterprise Systems
Unilever Unifies Globally with Enhanced ERP
DP World Takes Port Management to the Next Level with RFID
Customer Relationship Management Helps Celcom Become Number One
Chapter 10: E-commerce: Digital Markets, Digital Goods
Uber Storms Europe: Europe Strikes Back
Getting Social with Customers
Can Instacart Deliver?
Walmart and Amazon Duke It Out for E-commerce Supremacy
Chapter 11: Managing Knowledge
Fiat: Real Time Management with Business Intelligence
ECM in the Cloud Empowers New Zealand Department of Conservation
Will Robots Replace People in Manufacturing?
Knowledge Management and Collaboration at Tata Consulting Services
Chapter 12: Enhancing Decision Making
Roche: Managing Diabetes with Big Data and Mobile Apps
Singapore Sports Institute Uses Analytics for SEA Games
Britain's National Health Service Jettisons Choose and Book System
GE Bets on the Internet of Things and Big Data Analytics
Chapter 13: Building Information Systems
Angostura Builds a Mobile Sales System
Fujitsu Selects a SaaS Solution to Simplify the Sales Process
Developing Mobile Apps: What’s Different
ConAgra’s Recipe for a Better Human Resources System
Chapter 14: Managing Projects
Intuit Counts on Project Management
Can the National Health Service Go Paperless?
Hilti AG: Putting Things Together with New Project Management Tools
A Shaky Start for Healthcare.gov
Chapter 15: Managing Global Systems
The Bel Group: Laughing All the Way to Success
Indian E-commerce: Obstacles to Opportunity
Steelcase Designs Goes for Global Talent Management
Crocs Clambers to Global Efficiency
17
Preface
The Global Edition is written for business school students in Europe, the
Middle East, South Africa, Australia, and the Pacific Asian region. Case studies
and examples focus on how firms in these regions use information systems.
We wrote this book for business school students who wanted an in-depth look
at how today's business firms use information technologies and systems to
achieve corporate objectives. Information systems are one of the major tools
available to business managers for achieving operational excellence, developing
new products and services, improving decision making, and achieving competitive advantage. Students will find here the most up-to-date and comprehensive
overview of information systems used by business firms today. After reading
this book, we expect students will be able to participate in, and even lead, management discussions of information systems for their firms.
When interviewing potential employees, business firms often look for new
hires who know how to use information systems and technologies for achieving bottom-line business results. Regardless of whether you are an accounting,
finance, management, operations management, marketing, or information systems major, the knowledge and information you find in this book will be valuable throughout your business career.
What’s New in This Edition
Currency
The 15th edition features all new opening, closing, and Interactive Session
cases. The text, figures, tables, and cases have been updated through September
2016 with the latest sources from industry and MIS research.
New Features
• New Conceptual Videos collection includes 45 conceptual videos of 3
to 5 minutes in length. Ken Laudon walks students through three of the
most important concepts in each chapter using a contemporary animation platform. Available only in the MyLab MIS digital edition
• New Video Cases collection: 36 video cases (two or more per chapter)
and 10 additional instructional videos covering key concepts and experiences in the MIS world. Video Cases are listed at the beginning of each
chapter.
• Learning Tracks: 47 Learning Tracks in MyLab MIS for additional coverage of selected topics.
New Topics
18
• Big Data and the Internet of Things: In-depth coverage of big data,
big data analytics, and the Internet of Things (IoT) in Chapters 1, 6,
7, and 12. Includes big data analytics, analyzing IoT data streams,
Preface
Hadoop, in-memory computing, non-relational databases, and analytic
platforms.
• Cloud Computing: Updated and expanded coverage of cloud computing
in Chapter 5 (IT infrastructure) with more detail on types of cloud services, private and public clouds, hybrid clouds, managing cloud services,
and a new Interactive Session on using cloud services. Cloud computing
also covered in Chapter 6 (databases in the cloud), Chapter 8 (cloud security), Chapter 9 (cloud-based CRM and ERP), Chapter 10 (e-commerce),
and Chapter 13 (cloud-based systems development).
• Social, Mobile, Local: New e-commerce content in Chapter 10 describing how social tools, mobile technology, and location-based services are
transforming marketing and advertising.
• Social Business: Expanded coverage of social business, introduced in
Chapter 2 and discussed in throughout the text. Detailed discussions of
enterprise (internal corporate) social networking as well as social networking in e-commerce.
• BYOD and mobile device management
• Smart products
• DevOps
• Zero-day vulnerabilities
• Machine learning
• Chatbots
• Near field communication (NFC)
• Native advertising
• Windows 10
• Microsoft Office 365
• Zero-day vulnerabilities
• Platforms
• Software-defined storage (SDS)
The 15th Edition: The Comprehensive Solution for the
MIS Curriculum
Since its inception, this text has helped to define the MIS course around the
globe. This edition continues to be authoritative but is also more customizable,
flexible, and geared to meeting the needs of different colleges, universities, and
individual instructors. Many of its learning tools are now available in digital
form. This book is now part of a complete learning package that includes the
core text, Video Case Package, and Learning Tracks.
The core text consists of 15 chapters with hands-on projects covering the
most essential topics in MIS. An important part of the core text is the Video
Case Study and Instructional Video Package: 36 video case studies (two to three
per chapter) plus 10 instructional videos that illustrate business uses of information systems, explain new technologies, and explore concepts. Videos are
keyed to the topics of each chapter.
In addition, for students and instructors who want to go deeper into selected
topics, there are 47 Learning Tracks in MyLab MIS that cover a variety of MIS
topics in greater depth.
19
20
Preface
The CORE Text
The core text provides an overview of fundamental MIS concepts using an
integrated framework for describing and analyzing information systems. This
framework shows information systems composed of management, organization, and technology elements and is reinforced in student projects and case
studies.
Chapter Organization
Each chapter contains the following elements:
• A Chapter Outline based on Learning Objectives
• Lists of all the Case Studies and Video Cases for each chapter
• A chapter-opening case describing a real-world organization to establish
the theme and importance of the chapter
• A diagram analyzing the opening case in terms of the management, organization, and technology model used throughout the text
• Two Interactive Sessions with Case Study Questions
• A Review Summary keyed to the Student Learning Objectives
• A list of Key Terms that students can use to review concepts
• Review questions for students to test their comprehension of chapter
material
• Discussion questions raised by the broader themes of the chapter
• A series of Hands-on MIS Projects consisting of two Management
Decision Problems, a hands-on application software project, and a project
to develop Internet skills
• A Collaboration and Teamwork Project to develop teamwork and presentation skills with options for using open source collaboration tools
• A chapter-ending case study for students to apply chapter concepts
• Two assisted-graded writing questions with prebuilt grading rubrics
• Chapter references
Business
Challenges
A diagram accompanying
each chapter-opening case
graphically illustrates how
management, organization,
and technology elements work
together to create an information system solution to the
business challenges discussed
in the case.
• Monitor service level
and costs
• Plan new IT
Management
infrastructure
• Make IT infrastructure
investments
• Create new services
and business
processes
• On-premises
reservation system
• Microsoft Azure cloud
computing services
Organization
Technology
• Costly, unwieldy IT infrastructure
• Low-cost provider
• Highly competitive industry
Information
System
Seat Allocation System
• Provide online seat selection
service
Business
Solutions
• Improve customer
service
• Increase revenue
Preface
Key Features
We have enhanced the text to make it more interactive, leading edge, and
appealing to both students and instructors. The features and learning tools are
described in the following sections.
Business-Driven with Real-World Business Cases and
Examples
The text helps students see the direct connection between information systems
and business performance. It describes the main business objectives driving the
use of information systems and technologies in corporations all over the world:
operational excellence, new products and services, customer and supplier intimacy, improved decision making, competitive advantage, and survival. In-text
examples and case studies show students how specific companies use information systems to achieve these objectives.
We use only current (2016) examples from business and public organizations throughout the text to illustrate the important concepts in each chapter. All the case studies describe companies or organizations that are familiar
to students, such as Nike, Rugby Football Union, Facebook, Walmart, Fiat,
Unilever, and GE.
Interactivity
There’s no better way to learn about MIS than by doing MIS! We provide different kinds of hands-on projects where students can work with real-world business scenarios and data and learn firsthand what MIS is all about. These projects heighten student involvement in this exciting subject.
• Online Video Case Package. Students can watch short videos online,
either in-class or at home or work, and then apply the concepts of the
book to the analysis of the video. Every chapter contains at least two
business video cases that explain how business firms and managers are
using information systems and explore concepts discussed in the chapter. Each video case consists of one or more videos about a real-world
company, a background text case, and case study questions. These video
cases enhance students’ understanding of MIS topics and the relevance of
MIS to the business world. In addition, there are 10 Instructional Videos
that describe developments and concepts in MIS keyed to respective
chapters.
• Online Conceptual Videos [the digital edition only]. Forty-five video
animations where the authors walk students through three concepts from
each chapter.
• Interactive Sessions. Two short cases in each chapter have been redesigned as Interactive Sessions to be used in the classroom (or on Internet
discussion boards) to stimulate student interest and active learning. Each
case concludes with case study questions. The case study questions provide topics for class discussion, Internet discussion, or written assignments.
• Hands-On MIS Projects. Every chapter concludes with a Hands-On
MIS Projects section containing three types of projects: two Management
Decision Problems; a hands-on application software exercise using
Microsoft Excel, Access, or web page and blog creation tools; and a project that develops Internet business skills. A Dirt Bikes USA running case
in MyLab MIS provides additional hands-on projects for each chapter.
21
22
Preface
INTERACTIVE SESSION: TECHNOLOGY
Getting Social with Customers
Each chapter contains two
Interactive Sessions on
Management, Organizations,
or Technology using real-world
companies to illustrate chapter
concepts and issues.
Lowe’s “In-a-Snap” Snapchat series tries to inspire
young homeowners and renters to undertake simple home improvement projects such as installing
shelves to build a study nook. During the Lowe’s
Snapchat story, users can tap on the screen to put
a nail in a wall or chisel off an old tile. Lowe’s is
working on another series of video tutorials on Facebook and Instagram called “Home School” that uses
drawings from chalk artists to animate maintenance
projects.
Lowe’s social media activities have helped
increase brand engagement. Although the company’s
social campaigns are designed to teach first-time
homeowners or young renters about home improvement, the company is also hoping they will encourage consumers to think differently about the brand
beyond its products and services. Management
believes millennials who are becoming first-time
homeowners want to know the deeper meaning of
what a company is trying to stand for, not just the
products and services it offers.
An estimated 90 percent of customers are influenced by online reviews, and nearly half of U.S.
social media users actively seek customer service
through social media. As a result, marketing is now
placing much more emphasis on customer satisfaction and customer service. Social media monitoring
helps marketers and business owners understand
more about likes, dislikes, and complaints concerning products, additional products or product modifications customers want, and how people are talking
about a brand (positive or negative sentiment).
General Motors (GM) has 26 full-time social media
customer care advisers for North America alone,
covering more than 150 company social channels
from GM, Chevrolet, Buick, GMC, and Cadillac, and
approximately 85 sites such as automotive enthusiast
Businesses of all sizes are finding Facebook, Twitter, and other social media to be powerful tools for
engaging customers, amplifying product messages,
discovering trends and influencers, building brand
awareness, and taking action on customer requests
and recommendations. Half of all Twitter users recommend products in their tweets.
About 1.6 billion people use Facebook, and more
than 30 million businesses have active brand pages,
enabling users to interact with the brand through
blogs, comment pages, contests, and offerings on the
brand page. The “like” button gives users a chance to
share with their social network their feelings about
content and other objects they are viewing and websites they are visiting. With like buttons on millions
of websites, Facebook can track user behavior on
other sites and then sell this information to marketers. Facebook also sells display ads to firms that
show up in the right column of users’ home pages
and most other pages in the Facebook interface such
as photos and apps.
Twitter has developed many new offerings to
interest advertisers, like “promoted tweets” and “promoted trends.” These features give advertisers the
ability to have their tweets displayed more prominently when Twitter users search for certain keywords. Many big advertisers are using Twitter’s Vine
service, which allows users to share short, repeating
videos with a mobile-phone app or post them on
other platforms such as Facebook.
Lowe’s is using Facebook mobile video and Snapchat image messaging to help first-time millennial
home buyers learn home improvement skills. The
home improvement retailer launched a new series of
social videos in April 2016 to showcase spring cleaning and do-it-yourself projects. Lowe’s believes this
is a more immediate and interactive way to reach
,
Case Study Questions encourage students to apply chapter
concepts to real-world companies in class discussions, student presentations, or writing
assignments.
,
CASE STUDY QUESTIONS
1. Assess the management, organization, and technology issues for using social media technology to
engage with customers.
2. What are the advantages and disadvantages of
using social media for advertising, brand building,
market research, and customer service?
3. Give an example of a business decision in this
case study that was facilitated by using social
media to interact with customers.
4. Should all companies use social media technology
for customer service and marketing? Why or why
not? What kinds of companies are best suited to
use these platforms?
• Collaboration and Teamwork Projects. Each chapter features a collaborative project that encourages students working in teams to use
Google Drive, Google Docs, or other open source collaboration tools.
The first team project in Chapter 1 asks students to build a collaborative
Google site.
Assessment and AACSB Assessment Guidelines
The Association to Advance Collegiate Schools of Business (AACSB) is a notfor-profit corporation of educational institutions, corporations, and other organizations that seeks to improve business education primarily by accrediting university business programs. As a part of its accreditation activities, the AACSB has
Preface
23
Management Decision Problems
11-8 U.S. Pharma Corporation is headquartered in New Jersey but has research sites in Germany, France, the
United Kingdom, Switzerland, and Australia. Research and development of new pharmaceuticals is key to
ongoing profits, and U.S. Pharma researches and tests thousands of possible drugs. The company’s
researchers need to share information with others within and outside the company, including the U.S.
Food and Drug Administration, the World Health Organization, and the International Federation of Pharmaceutical Manufacturers & Associations. Also critical is access to health information sites, such as the
U.S. National Library of Medicine, and to industry conferences and professional journals. Design a knowledge portal for U.S. Pharma’s researchers. Include in your design specifications relevant internal systems
and databases, external sources of information, and internal and external communication and collaboration tools. Design a home page for your portal.
11-9 Canadian Tire is one of Canada’s largest companies, with 50,000 employees and 1,100 stores and gas bars
(gas stations) across Canada selling sports, leisure, home products, apparel, and financial services as well
as automotive and petroleum products. The retail outlets are independently owned and operated. Canadian Tire has been using daily mailings and thick product catalogs to inform its dealers about new products, merchandise setups, best practices, product ordering, and problem resolution, and it is looking for a
better way to provide employees with human resources and administrative documents. Describe the problems created by this way of doing business and how knowledge management systems might help.
Two real-world business scenarios per chapter provide
opportunities for students to
apply chapter concepts and
practice management decision
making.
Students practice using software in real-world settings for
achieving operational excellence and enhancing decision
making.
Improving Decision Making: Using Web Tools to Configure and Price an Automobile
Software skills: Internet-based software
Business skills: Researching product information and pricing
3-11 In this exercise, you will use software at car websites to find product information about a car of your choice
and use that information to make an important purchase decision. You will also evaluate two of these sites
as selling tools.
You are interested in purchasing a new Ford Escape (or some other car of your choice). Go to the
website of CarsDirect (www.carsdirect.com) and begin your investigation. Locate the Ford Escape. Research
the various Escape models, and choose one you prefer in terms of price, features, and safety ratings. Locate
and read at least two reviews. Surf the website of the manufacturer, in this case Ford (www.ford.com). Compare the information available on Ford’s website with that of CarsDirect for the Ford Escape. Try to locate
the lowest price for the car you want in a local dealer’s inventory. Suggest improvements for CarsDirect.com
and Ford.com.
developed an Assurance of Learning Program designed to ensure that schools
do in fact teach students what they promise. Schools are required to state a clear
mission, develop a coherent business program, identify student learning objectives, and then prove that students do in fact achieve the objectives.
We have attempted in this book to support AACSB efforts to encourage assessment-based education. The back end papers of this edition identify student
learning objectives and anticipated outcomes for our Hands-On MIS projects.
The authors will provide custom advice on how to use this text in colleges with
different missions and assessment needs. Please e-mail the authors or contact
your local Pearson representative for contact information.
Each chapter features a project
to develop Internet skills for
accessing information, conducting research, and performing online calculations and
analysis.
24
Preface
For more information on the AACSB Assurance of Learning Program and
how this text supports assessment-based learning, please visit the website for
this book.
Customization and Flexibility: Learning Track Modules
Our Learning Tracks feature gives instructors the flexibility to provide in-depth
coverage of the topics they choose. There are 47 Learning Tracks in MyLab MIS
available to instructors and students. This supplementary content takes students
deeper into MIS topics, concepts, and debates; reviews basic technology concepts
in hardware, software, database design, telecommunications, and other areas.
Author-Certified Test Bank and Supplements
• Author-Certified Test Bank. The authors have worked closely with
skilled test item writers to ensure that higher-level cognitive skills are
tested. Test bank multiple-choice questions include questions on content
but also include many questions that require analysis, synthesis, and
evaluation skills.
• Annotated Slides. The authors have prepared a comprehensive collection of 50 PowerPoint slides for each chapter to be used in your lectures.
Many of these slides are the same as used by Ken Laudon in his MIS
classes and executive education presentations. Each of the slides is annotated with teaching suggestions for asking students questions, developing
in-class lists that illustrate key concepts, and recommending other firms
as examples in addition to those provided in the text. The annotations
are like an Instructor’s Manual built into the slides and make it easier to
teach the course effectively.
Student Learning-Focused
Student Learning Objectives are organized around a set of study questions to
focus student attention. Each chapter concludes with a Review Summary and
Review Questions organized around these study questions, and each major
chapter section is based on a Learning Objective.
Career Resources
The Instructor Resources for this text include extensive Career Resources,
including job-hunting guides and instructions on how to build a Digital Portfolio
demonstrating the business knowledge, application software proficiency, and
Internet skills acquired from using the text. The portfolio can be included in a
resume or job application or used as a learning assessment tool for instructors.
Instructor Resources
At the Instructor Resource Center, www.pearsonglobaleditions.com/laudon,
instructors can easily register to gain access to a variety of instructor resources
available with this text in downloadable format. If assistance is needed, our
dedicated technical support team is ready to help with the media supplements
that accompany this text. Visit http://support.pearson.com for answers to frequently asked questions and toll-free user support phone numbers.
The following supplements are available with this text:
• Instructor’s Resource Manual
• Test Bank
Preface
• TestGen® Computerized Test Bank
• PowerPoint Presentation
• Image Library
• Lecture Notes
Video Cases and Instructional Videos
Instructors can download step-by-step instructions for accessing the video cases
from the Instructor Resources Center. Video Cases and Instructional Videos are
listed at the beginning of each chapter as well as in the Preface.
Learning Tracks Modules
There are 47 Learning Tracks in MyLab MIS providing additional coverage
topics for students and instructors. See page 26 for a list of the Learning Tracks
available for this edition.
Video Cases and Instructional Videos
Chapter
Video
Chapter 1: Information Systems in Global
Business Today
Business in the Cloud: Facebook and eBay Data Centers
UPS Global Operations with the DIAD
Instructional Video: Tour IBM's Raleigh Data Center
Chapter 2: Global E-business and
Collaboration
Walmart's Retail Link Supply Chain
CEMEX: Becoming a Social Business
Instructional Video: US Foodservice Grows Market with Oracle CRM on Demand
Chapter 3: Information Systems,
Organizations, and Strategy
GE Becomes a Digital Firm: The Emerging Industrial Internet
National Basketball Association: Competing on Global Delivery with Akamai OS Streaming
Chapter 4: Ethical and Social Issues in
Information Systems
What Net Neutrality Means for You
Facebook and Google Privacy: What Privacy?
The United States v. Terrorism: Data Mining for Terrorists and Innocents
Instructional Video: Viktor Mayer Schönberger on the Right to Be Forgotten
Chapter 5: IT Infrastructure and Emerging
Technologies
Rockwell Automation Fuels the Oil and Gas Industry with the Internet of Things (IoT)
ESPN.com: The Future of Sports Broadcasting in the Cloud
Netflix: Building a Business in the Cloud
Chapter 6: Foundations of Business
Intelligence: Databases and Information
Management
Dubuque Uses Cloud Computing and Sensors to Build a Smarter City
Brooks Brothers Closes in on Omnichannel Retail
Maruti Suzuki Business Intelligence and Enterprise Databases
Chapter 7: Telecommunications, the
Internet, and Wireless Technology
Telepresence Moves out of the Boardroom and into the Field
Virtual Collaboration with IBMSametime
Chapter 8: Securing Information Systems
Stuxnet and Cyberwarfare
Cyberespionage: The Chinese Threat
Instructional Video: Sony PlayStation Hacked; Data Stolen from 77 Million Users
Instructional Video: Meet the Hackers: Anonymous Statement on Hacking SONY
Chapter 9: Achieving Operational
Excellence and Customer Intimacy:
Enterprise Applications
Life Time Fitness Gets in Shape with Salesforce CRM
Evolution Homecare Manages Patients with Microsoft CRM
Instructional Video: GSMS Protects Products and Patients by Serializing Every Bottle of Drugs
Chapter 10: E-commerce: Digital Markets,
Digital Goods
Walmart Takes on Amazon: A Battle of IT and Management Systems
Groupon: Deals Galore
Etsy: A Marketplace and Community
Instructional Video: Walmart's eCommerce Fulfillment Center Network
Instructional Video: Behind the Scenes of an Amazon Warehouse
Chapter 11: Managing Knowledge
How IBM's Watson Became a Jeopardy Champion
Alfresco: Open Source Document Management and Collaboration
Chapter 12: Enhancing Decision Making
PSEG Leverages Big Data and Business Analytics Using GE's PREDIX Platform
FreshDirect Uses Business Intelligence to Manage Its Online Grocery.
Business Intelligence Helps the Cincinnati Zoo Work Smarter
25
26
Preface
Video Cases and Instructional Videos (Continued)
Chapter
Video
Chapter 13 Building Information Systems
IBM: Business Process Management in a SaaS Environment
IBM Helps the City of Madrid with Real-Time BPM Software
Instructional Video: BPM: Business Process Management Customer Story
Instructional Video: Workflow Management Visualized
Chapter 14 Managing Projects
Blue Cross Blue Shield: Smarter Computing Project
NASA Project Management Challenges
Chapter 15 Managing Global Systems
Daum Runs Oracle Apps on Linux
Lean Manufacturing and Global ERP: Humanetics and Global Shop
Learning Tracks
Chapter
Learning Tracks
Chapter 1: Information Systems in Global
Business Today
How Much Does IT Matter?
Information Systems and Your Career
The Mobile Digital Platform
Chapter 2: Global E-business and
Collaboration
Systems From a Functional Perspective
IT Enables Collaboration and Teamwork
Challenges of Using Business Information Systems
Organizing the Information Systems Function
Occupational and Career Outlook for Information Systems Majors 2014–2020
Chapter 3: Information Systems,
Organizations, and Strategy
The Changing Business Environment for IT
Chapter 4: Ethical and Social Issues in
Information Systems
Developing a Corporate Code of Ethics for IT
Chapter 5: IT Infrastructure and Emerging
Technologies
How Computer Hardware Works
How Computer Software Works
Service Level Agreements
The Open Source Software Initiative
Comparing Stages in IT Infrastructure Evolution
Cloud Computing
Chapter 6: Foundations of Business
Intelligence: Databases and Information
Management
Database Design, Normalization, and Entity-Relationship Diagramming
Introduction to SQL
Hierarchical and Network Data Models
Chapter 7: Telecommunications, the
Internet, and Wireless Technology
Broadband Network Services and Technologies
Cellular System Generations
Wireless Applications for Customer Relationship Management, Supply Chain Management, and Healthcare
Introduction to Web 2.0
LAN Topologies
Chapter 8: Securing Information Systems
The Booming Job Market in IT Security
The Sarbanes-Oxley Act
Computer Forensics
General and Application Controls for Information Systems
Management Challenges of Security and Control
Software Vulnerability and Reliability
Chapter 9: Achieving Operational
Excellence and Customer Intimacy:
Enterprise Applications
SAP Business Process Map
Business Processes in Supply Chain Management and Supply Chain Metrics
Best-Practice Business Processes in CRM Software
Chapter 10: E-commerce: Digital Markets,
Digital Goods
E-commerce Challenges: The Story of Online Groceries
Build an E-commerce Business Plan
Hot New Careers in E-Commerce
E-commerce Payment Systems
Building an E-commerce Website
Chapter 11: Managing Knowledge
Challenges of Knowledge Management Systems
Chapter 12: Enhancing Decision Making
Building and Using Pivot Tables
Preface
Chapter
Learning Tracks
Chapter 13: Building Information Systems
Unified Modeling Language
Primer on Business Process Design and Documentation
Primer on Business Process Management
Fourth-Generation Languages
Chapter 14: Managing Projects
Capital Budgeting Methods for Information Systems Investments
Enterprise Analysis (Business Systems Planning) and Critical Success Factors
Information Technology Investments and Productivity
MyLab MIS
Available in MyLab MIS
• MIS Video Exercises - Videos illustrating MIS concepts, paired with brief
quizzes
• MIS Decision Simulations - interactive exercises allowing students to play
the role of a manager and make business decisions
• Assisted-Graded writing exercises - taken from the end of chapter, with a
rubric provided
• Chapter Warm Ups, Chapter Quizzes - objective-based quizzing to test
knowledge
• Discussion Questions - taken from the end of chapter
• Dynamic Study Modules - on the go adaptive quizzing, also available on a
mobile phone
• Learning Catalytics - bring-your-own-device classroom response tools
• Enhanced eText - an accessible, mobile-friendly eText with Conceptual
Animations, which walk students through key concepts in the chapter by
making figures come to life
• Excel & Access Grader Projects - live in the application auto-graded
Grader projects provided inside MyLab MIS to support classes covering
Office tools
Acknowledgments
The production of any book involves valued contributions from a number of
persons. We would like to thank all of our editors for encouragement, insight,
and strong support for many years. We thank our editor Samantha McAfee
Lewis and project manager Katrina Ostler for their role in managing the project.
Our special thanks go to our supplement authors for their work, including the
following MyLab content contributors: John Hupp, Columbus State University;
Robert J. Mills, Utah State University; John P. Russo, Wentworth Institute of
Technology; and Michael L. Smith, SUNY Oswego. We are indebted to Robin
Pickering for her assistance with writing and to William Anderson and Megan
Miller for their help during production. We thank Diana R. Craig for her assistance with database and software topics.
Special thanks to colleagues at the Stern School of Business at New York
University; to Professor Werner Schenk, Simon School of Business, University
of Rochester; to Professor Mark Gillenson, Fogelman College of Business and
Economics, University of Memphis; to Robert Kostrubanic, Indiana-Purdue
University Fort Wayne; to Professor Lawrence Andrew of Western Illinois
University; to Professor Detlef Schoder of the University of Cologne; to Professor
27
28
Preface
Walter Brenner of the University of St. Gallen; to Professor Lutz Kolbe of the
University of Gottingen; to Professor Donald Marchand of the International
Institute for Management Development; and to Professor Daniel Botha of
Stellenbosch University who provided additional suggestions for improvement.
Thank you to Professor Ken Kraemer, University of California at Irvine, and
Professor John King, University of Michigan, for more than a decade-long discussion of information systems and organizations. And a special remembrance
and dedication to Professor Rob Kling, University of Indiana, for being our friend
and colleague over so many years.
We also want to especially thank all our reviewers whose suggestions helped
improve our texts. Reviewers for Managing the Digital Firm include:
Charles Wankel, St. John's University
Ahmed Kamel, Concordia College
Deborah E Swain, North Carolina Central University
Jigish Zaveri, Morgan State University
Robert Gatewood, Mississippi College
James Drogan, SUNY Maritime College
Amiya Samantray, Marygrove College
John Miles, Keuka College
Werner Schenk, University of Rochester
Shuyuan Mary Ho, Florida State University
Brian Jones, Tennessee Technological University
Robert Fulkerth, Golden Gate University
Osman Guzide, Shepherd University
Pearson gratefully acknowledges and thanks the following people for their
contribution to the Global Edition:
Daniel Ortiz Arroyo, Aalborg University
June Clarke, Sheffield Hallam University
Andy Jones, Staffordshire University
Sahil Raj, Punjabi University
Neerja Sethi, Nanyang Technological University
Vijay Sethi, Nanyang Technological University
K.C.L.
J.P.L.
PART ONE
Organizations,
Management, and the
Networked Enterprise
Chapter 1
Chapter 3
Information Systems in Global Business
Today
Information Systems, Organizations,
and Strategy
Chapter 2
Chapter 4
Global E-business and Collaboration
Ethical and Social Issues in
Information Systems
PART ONE introduces the major themes of this book, raising a series of important questions:
What is an information system, and what are its management, organization, and technology
dimensions? Why are information systems so essential in businesses today? Why are systems for collaboration and social business so important? How can information systems help
businesses become more competitive? What broader ethical and social issues are raised by
widespread use of information systems?
CHAP TER
1
Information Systems in Global
Business Today
Learning Objectives
After reading this chapter, you will be able to answer the following questions:
1-1
How are information systems transforming business, and why are they so
essential for running and managing a business today?
1-2
What is an information system? How does it work? What are its
management, organization, and technology components? Why are
complementary assets essential for ensuring that information systems
provide genuine value for organizations?
1-3
What academic disciplines are used to study information systems, and how
does each contribute to an understanding of information systems?
MyLab MIS™
Visit mymislab.com for simulations, tutorials, and end-of-chapter problems.
CHAPTER CASES
Rugby Football Union Tries Big Data
The Mobile Pocket Office
Digital Transformation of Healthcare at Singapore’s JurongHealth Services
Are Farms Becoming Digital Firms?
VIDEO CASES
Business in the Cloud: Facebook and eBay Data Centers
UPS Global Operations with the DIAD
Instructional Video:
Tour IBM’s Raleigh Data Center
30
Rugby Football Union Tries Big Data
I
n 1871, twenty-one English clubs decided that their sport, officially called
rugby union but commonly referred to simply as rugby, needed an administrative body. The clubs formed The Rugby Football Union (RFU), which
today manages the English national team (England Rugby) in partnership
with Premier Rugby Limited. Responsible for the promotion of rugby at all
levels, the RFU organizes the Six Nations Championship, the unofficial northern hemisphere championship featuring teams from England, Scotland, Wales,
Italy, Ireland, and France, and the Heineken Cup, its club-level counterpart.
Owned by its member clubs, the RFU’s mission is to maximize profits from
international ticket sales and vending
so that it can support the more than
60,000 volunteers who organize
matches and seminars, help secure
loans and insurance policies, fundraise, write grant proposals, provide
medical advice and support, and perform the clerical duties that keep the
lower-level clubs operating.
To succeed in this complicated
mission, the RFU entered into a fiveyear deal with IBM to capture and
analyze Big Data that will be useful
to both fans, and later—it is hoped—
the players themselves. The system
is called TryTracker. In rugby, a try,
worth five points, is the highest scoring opportunity. Teams get possession of the ball through a scrum, a
contest for the ball where eight players bind together and push against eight
players from the other team. The outcome determines who can control the
ball. To score a try, a team must break through the opposition’s defenses,
move into their in-goal area, and “ground” the ball. This is done in one of
two ways. A player can either hold the ball in one or both hands or arms and
then touch it to the ground in the in-goal area, or exert downward pressure
on a ball already on the ground using one or both hands or arms or the upper
front of the body (from the neck to the waistline).
The IBM TryTracker does not just track tries, however. It uses predictive
analytics to track three categories of data: keys to the game, momentum, and
key players. TryTracker uses over 8,000 measures of performance. Traditional rugby statistics on team and individual performance as well as live
©Michal Sanca/Shutterstock
31
32
Part One Organizations, Management, and the Networked Enterprise
text commentary complement the TryTracker data. The keys to the game
are determined ahead of a specific contest by analyzing a historical database
of past matchups between a pair. For example, in 2015 England’s key was
to average at least 3.2 meters per carry in the forwards; attempt an off load
from 10 percent of opposition tackles; and make more than 66 percent of total
line-breaks in the match. Fans can use their mobile devices to keep track of
how their favorite team is faring, concentrating on game elements that will
increase its winning chances. Key players for each team are selected after the
game by comparing a single score compiled using different criteria for each
position. Goal scoring is currently excluded so as not to overvalue kickers and
undervalue players who contribute to creating scoring opportunities.
Like the IBM SlamTracker used at the Grand Slam tennis tournaments,
the goal of TryTracker is to provide data visualization and real-time statistics to draw in fans. To compete with more popular sports such as Premier
League football, the RFU hopes that enhanced communication will increase
fan engagement. In 2015, IBM TryTracker was an ever-present fixture of EnglandRugby.com’s extensive match coverage. As their understanding of game
mechanics and emotional investment in what their team needs to do in order
to prevail grows, casual fans will become dedicated fans who return again
and again. Beyond marketing strategy, the long-term potential of predictive
analysis is that it may provide tactical insights to players and coaches that will
improve match play and thus the overall product offered to fans.
In 2016 IBM has deployed the same predictive analytics technology to the
Australian New South Wales Waratahs Rugby team with an emphasis on predicting player injuries based on their general health, and performance data on
the field generated from GPS sensors that players wear.
Sources: IBM, “Building a Solid Foundation for Big Data Analytics,” IBM Systems Thought
Leadership Paper, 2016; IBM, “IBM Predictive Analytics Reduces Player Injury and Optimises Team Performance for NSW Waratahs Rugby Team,” IBM.com, accessed November
14, 2016; IBM, “3 Ways Big Data and Analytics Will Change Sports,” by Preetam Kumar, IBM
Analytics, ibmbigdatahub.com, December 17, 2015; Simon Creasey, “Rugby Football Union
Uses IBM Predictive Analytics For Six Nations,” ComputerWeekly.com, 2016; “About Us,”
rfu.com, accessed December, 14, 2015; “TryTracker: Rugby Data Analysis,” Telegraph,
November 19, 2015; Oliver Pickup, “How Does TryTracker Work,” Telegraph, November 19,
2015; Simon Creasey, “Rugby Football Union Uses IBM Predictive Analytics for Six Nations,”
ComputerWeek, September 2015; “IBM Rugby Insight Summer 2015,” MSN.com/sports, September 3, 2015; “Live England vs. Scotland with IBM TryTracker,” www.englandrugby.
com, March 15, 2015; “IBM TryTracker Confirms Performance,” www.englandrugby.com/
ibmtrytracker/, November 29, 2014; IBM UK, “IBM TryTracker Rugby Insight: QBE Internationals 2014 England vs. Australia,” IBM Rugby Insight, November 27, 2014; Oliver Pickup,
“IBM TryTracker: How Does It Work?” Telegraph, October 31, 2013.
T
he challenges facing the RFU demonstrate why information systems are so
essential today. The RFU is classified as a “Friendly Society,” somewhere
between a true company and a charity. It receives both government support
and corporate sponsorship money. But it must maximize revenues from ticket
sales, hospitality and catering, television rights, and its travel company in order
to support both grassroots and elite rugby in England.
Chapter 1 Information Systems in Global Business Today
The chapter-opening diagram calls attention to important points raised by
this case and this chapter. The RFU entered into a strategic partnership with
IBM to educate and engage fans. Using the data collected by sports data company Opta and the analytics developed by IBM, it may also be able to improve
coaching and game performance as an additional way of cultivating customers. IBM is also helping the RFU to develop a customer relationship management (CRM) system integrated with its Web site.
Here are some questions to think about: What role does technology play
in the RFU’s success as the administrative head of rugby union in England?
Assess the contributions which these systems make to the future of RFU.
1-1 How are information systems transforming
global business, and why are they so essential
for running and managing a business today?
It’s not business as usual in the global economy anymore. Information systems and technologies are transforming the global business environment. In
2015, global firms and governments spent about €3.4 trillion on information
systems hardware, software, and telecommunications equipment. In addition,
they spent another €544 billion on business and management consulting and
services—much of which involves redesigning firms’ business operations to
take advantage of these new technologies (Gartner, 2016; IDC 2016; Shumsky,
2016). In fact, most of the business value of IT investment derives from these
organizational, management, and cultural changes inside firms (Saunders and
Brynjolfsson, 2016). It is not simply the technology that is changing. Figure 1.1
shows that between 2005 and 2015, global investment in information technology
33
Part One Organizations, Management, and the Networked Enterprise
consisting of hardware, software, and communications equipment grew from
€2.43 trillion to €3.18 trillion and is expected to expand to €3.55 trillion by 2020.
While America and Europe account for an estimated 70 percent of this investment, 30 percent is occurring in Asia Pacific, Latin America, the Middle East
and North Africa, and Eastern Europe. (Accelerance, 2016; IDC, 2016).
As managers, most of you will work for firms that are intensively using
information systems and making large investments in information technology. You will certainly want to know how to invest this money wisely. If you
make wise choices, your firm can outperform competitors. If you make poor
choices, you will be wasting valuable capital. This book is dedicated to helping you make wise decisions about information technology and information
systems.
How Information Systems Are Transforming Business
You can see the results of this large-scale spending around you every day
by observing how people conduct business. Changes in technology and
new, innovative business models have transformed social life and business practices. Some 2.8 billion people worldwide have smartphones (50
percent of the world’s population), and an estimated 1.26 billion use their
smartphones for Internet access. More than 1 billion people use tablet
computers, about 15 percent of the global population. In developing and
emerging countries, phones and tablets are the primary means of access to
the Internet (Pew Research, 2016; eMarketer, 2015). An estimated 2.34 billion people now use social networks, with Facebook accounting for 1.7 billion people alone. Messaging services like WhatsApp, Facebook Messenger,
and Twitter collectively have over 2 billion monthly users. Smartphones,
FIGURE 1. 1
INFORMATION TECHNOLOGY CAPITAL INVESTMENT
€4.00
€3.75
Investment (trllions)
34
€3.50
€3.25
€3.00
€2.75
€2.50
2020201920182017201620
Global investment in information technology has expanded by 30 percent in the period 2005 to 2015.
IT investment now accounts for an estimated 20 percent of all capital investment.
Source: World Economic Outlook, International Monetary Fund, October 2016; industry sources; author estimates.
Chapter 1 Information Systems in Global Business Today
social networking, texting, e-mailing, and webinars have all become essential tools of business because that’s where your customers, suppliers, and
colleagues can be found (eMarketer, 2016a).
By June 2015, more than 150 million businesses worldwide had dot-com
Internet sites registered (Curtis, 2015). In 2016 1.62 billion Internet users will
purchase online, generating $1.9 billion in sales. Half of these sales will be
from mobile devices. While still only 8 percent of total retail global sales,
online commerce is growing at 6 percent annually, three times the growth
of traditional offline retail (eMarketer, 2016a). In 2015, FedEx moved about
11.5 million packages daily in 220 countries and territories around the world,
mostly overnight, and the United Parcel Service (UPS) moved more than
18 million packages daily. Businesses are using information technology to
sense and respond to rapidly changing customer demand, reduce inventories
to the lowest possible levels, and achieve higher levels of operational efficiency. Supply chains have become more fast-paced, with companies of all
sizes depending on just-in-time inventory to reduce their overhead costs and
get to market faster.
In comparison with the 2.7 billion people who read a print newspaper,
online newspapers are read by one billion people, growing at 10 percent annually, far faster than print newspapers (WPT, 2016; Conaghan, 2015). An estimated 1.7 billion people watch videos and feature films online, 100 million
post to a blog everyday, and 250 million read a blog, creating an explosion of
new writers and new forms of customer feedback that did not exist five years
ago. Social networking site Facebook attracted more than 1.7 billion monthly
visitors worldwide. Nearly all of the Fortune 2000 global firms now have Facebook pages, Twitter accounts, and Tumblr sites.
Global e-commerce and Internet advertising continue to expand. Google’s
online ad revenues surpassed €80 billion in 2016, and Internet advertising continues to grow at more than 20 percent a year, reaching more than €194 billion
in revenues in 2016 (eMarketer, 2016c). That’s about one-third of all advertising
in the world.
These changes in information technology and systems, consumer behavior,
and commerce have spurred the annual growth of digital information to over
5 exabytes every few days, roughly equivalent to all the libraries in existence
(Pappas, 2016). A recent study concluded that the value of information flowing between countries has grown 45 times since 2005, and the value of this
information now exceeds the value of goods and finance exchanged (McKenzie, 2016).
What’s New in Management Information Systems
Plenty. In fact, there’s a whole new world of doing business using new technologies for managing and organizing. What makes the MIS field the most
exciting area of study in schools of business is the continuous change in technology, management, and business processes. Five changes are of paramount
importance.
IT Innovations. A continuing stream of information technology innovations is
transforming the traditional business world. Examples include the emergence
of cloud computing, the growth of a mobile digital business platform based on
smartphones and tablet computers, big data, business analytics, and the use
of social networks by managers to achieve business objectives. Most of these
35
36
Part One Organizations, Management, and the Networked Enterprise
changes have occurred in the past few years. These innovations are enabling
entrepreneurs and innovative traditional firms to create new products and
services, develop new business models, and transform the day-to-day conduct
of business. In the process, some old businesses, even industries, are being
destroyed while new businesses are springing up.
New Business Models. For instance, the emergence of online video services like Netflix for streaming, Apple iTunes, Amazon, and many others for
downloading video has forever changed how premium video is distributed
and even created. Netflix in 2016 attracted more than 75 million subscribers
worldwide to what it calls the “Internet TV” revolution. Netflix has moved
into premium TV show production with 30 original shows such as House of
Cards and Orange Is the New Black, challenging cable and broadcast producers of TV shows, and potentially disrupting cable network dominance of TV
show production. Apple’s iTunes now accounts for 67 percent of movie and
TV show downloads and has struck deals with major Hollywood studios for
recent movies and TV shows. A growing trickle of viewers are unplugging
from cable and using only the Internet for entertainment.
E-commerce Expanding. E-commerce generated about $600 billion in
revenues in 2016 and is estimated to grow to nearly $900 billion by 2020.
E-commerce is changing how firms design, produce, and deliver their products and services. E-commerce has reinvented itself again, disrupting the
traditional marketing and advertising industry and putting major media and
content firms in jeopardy. Facebook and other social networking sites such
as YouTube, Twitter, and Tumblr along with Netflix, Apple Beats music service, and many other media firms exemplify the new face of e-commerce in
the twenty-first century. They sell services. When we think of e-commerce,
we tend to think of selling physical products. While this iconic vision of
e-commerce is still very powerful and the fastest-growing form of retail in
the United States, growing up alongside is a whole new value stream based
on selling services, not goods. It’s a services model of e-commerce. Growth
in social commerce is spurred by powerful growth of the mobile platform:
80 percent of Facebook’s users access the service from mobile phones and
tablets. Information systems and technologies are the foundation of this new
services-based e-commerce. Mobile e-commerce hit $130 billion in 2016 and
is growing at more than 30 percent a year.
Management Changes. The management of business firms has changed: With
new mobile smartphones, high-speed wireless Wi-Fi networks, and tablets,
remote salespeople on the road are only seconds away from their managers’
questions and oversight. Business is going mobile, along with consumers. Managers on the move are in direct, continuous contact with their employees. The
growth of enterprise-wide information systems with extraordinarily rich data
means that managers no longer operate in a fog of confusion but instead have
online, nearly instant access to the really important information they need for
accurate and timely decisions. In addition to their public uses on the web, wikis
and blogs are becoming important corporate tools for communication, collaboration, and information sharing.
Changes in Firms and Organizations. Compared to industrial organizations
of the previous century, new fast-growing twenty-first-century business firms
put less emphasis on hierarchy and structure and more emphasis on employees
Chapter 1 Information Systems in Global Business Today
37
INTERACTIVE SESSION: MANAGEMENT
The Mobile Pocket Office
Can you run your company out of your pocket?
Perhaps not entirely, but there are many business
functions today that can be performed using an
iPhone, iPad, or Android mobile handheld device.
The smartphone has been called the “Swiss Army
knife of the digital age.” A flick of the finger turns it
into a web browser, a telephone, a camera, a music
or video player, an e-mail and messaging machine,
and, increasingly, a gateway into corporate systems.
New software applications for document sharing, collaboration, sales, order processing, inventory management, and production monitoring make these
devices even more versatile business tools. Mobile
pocket offices that fit into a purse or coat pocket are
helping to run companies large and small.
Sonic Automotive is one of the largest automotive retailers in the United States with more than
100 dealerships in 14 states. Every year Sonic sells
250,000 new and used cars from approximately 25
different automotive brands, and it also sells auto
parts and maintenance, warranty, collision, and vehicle financing services. Sonic Automotive managers
and employees do much of their work on the iPhone
and iPad.
Sonic developed several custom iPhone and iPad
applications to speed up sales and service. Virtual
Lot, a dealer inventory app, lets sales associates
quickly search for vehicles held in inventory by all
Sonic dealerships. They have immediate access to
vehicle information, pricing, trade-in values, interest
rates, special promotions, financing, and what competitors are charging for identical vehicles. The associates can quickly find the best selection for each
customer and often offer far more choices than the
competition. Dealers are not limited to selling only
their own inventory.
A mobile app called the Sonic Inventory Management System (SIMS) has speeded up and simplified
trade-in appraisals and pricing. Sonic staff use their
iPhones or iPads to take photos of a car, input the
vehicle identification number (VIN) and mileage,
and note any issues. The data are transmitted to corporate headquarters, which can quickly appraise the
car. A Service Pad app simplifies the steps in repair
and warranty work. In the past, customers with cars
requiring repairs had to go inside the dealership and
sit at a desk with a Sonic staff member who wrote
up the repair order by hand. Now the Sonic staff
members go outside to the customer's vehicle and
enter the repair order on an iPad on the spot.
SKF is a global engineering company headquartered in Gothenburg, Sweden, with 140 manufacturing sites in 32 countries and 48,500 employees
worldwide. SKF produces bearings, seals, lubrication
systems, and services used in more than 40 industries, including mining, transportation, and manufacturing. SKF has developed more than 30 custom
iPhone and iPad applications for streamlining workflows and accessing critical corporate data from anywhere in the world.
For example, a virtual reality app uses the iPhone
or iPad camera to identify a factory machine and
produce a 3-D overlay of the SKF parts it contains.
A sensor-driven app called Shaft Align is used by SKF
service teams and customers in the field. Shaft Align
connects via wireless Bluetooth sensors to a piece of
machinery such as a motor-driven fan to ensure that
the drive shaft is running in proper alignment. If not,
the app generates step-by-step instructions and a 3-D
rendering to show how to manually align the motor.
Then it checks the work and produces a report.
A mobile app called MOST enables factory operators to monitor some SKF factory production lines.
MOST links to the back-end systems running the
machinery and provides operators with key pieces of
data. Operators using this mobile app are able to use
secure instant messaging to communicate with managers and each other, update maintenance logs, and
track products in real time as they move through the
factory line.
SKF's Shelf mobile app allows sales engineers and
customers to access on demand more than 5,000
pieces of product literature, catalogs, product specifications, and interactive marketing materials. Sales
teams can use Shelf to create custom “shelves” to
organize, annotate, and share materials with customers right from their iPhones or iPads. The iPhone,
iPad, and Shelf app save company sales engineers
as much as 25 minutes per day on processes and
paperwork, freeing them up to spend more time
in the field supporting customers. This increase in
productivity is equivalent to putting 200 more sales
engineers in the field.
SKF auditors perform about 60 audits per year,
and each audit used to take more than a month to
complete. With the SKF Data Collect app, auditors
38
Part One Organizations, Management, and the Networked Enterprise
are able to use their iPads to collect data and present
customers with detailed reports instantly.
SKF Seals offers specifications and information
about SKF's machined and injection-molded seals
and plastic parts, while the Seal Select app helps
users select seals and accessories using several different input parameters to find the right solution for
their needs.
Sources: “Sonic Automotive: Driving Growth with iPhone and iPad”
and “Driving Innovation in the Factory and in the Field with iOS,”
iPhone in Business, www.apple.com, accessed March 31, 2016;
www.skf.com, accessed March 31, 2016; www.sonicautomotive.com,
accessed March 31, 2016; and “Why the Mobile Pocket Office Is Good
For Business,” ITBusinesEdge.com, accessed March 6, 2015.
CASE STUDY QUESTIONS
1. What kinds of applications are described here?
What business functions do they support? How do
they improve operational efficiency and decision
making?
2. Identify the problems that businesses in this case
study solved by using mobile digital devices.
3. What kinds of businesses are most likely to benefit
from equipping their employees with mobile digital devices such as iPhones and iPads?
4. One company deploying iPhones has said, “The
iPhone is not a game changer, it's an industry
changer. It changes the way that you can interact
with your customers” and “with your suppliers.”
Discuss the implications of this statement.
taking on multiple roles and tasks and collaborating with others on a team.
They put greater emphasis on competency and skills rather than position in the
hierarchy. They emphasize higher speed and more accurate decision making
based on data and analysis. They are more aware of changes in technology, consumer attitudes, and culture. They use social media to enter into conversations
with consumers and demonstrate a greater willingness to listen to consumers,
in part because they have no choice. They show better understanding of the
importance of information technology in creating and managing business firms
and other organizations. To the extent organizations and business firms demonstrate these characteristics, they are twenty-first-century digital firms.
Whether it’s attending an
online meeting, checking
orders, working with files
and documents, or
obtaining business intelligence, Apple's iPhone
and iPad offer unlimited
possibilities for business
users. A stunning multitouch display, full Internet
browsing, and capabilities
for messaging, video and
audio transmission, and
document management
make each an all-purpose
platform for mobile
computing.
iPhone and iPad Applications
for Business
1.
2.
3.
4.
5.
6.
7.
8.
Salesforce1
Cisco WebEx Meetings
SAP Business One
iWork
Evernote
Adobe Acrobat Reader
Oracle Business Intelligence Mobile
Dropbox
© STANCA SANDA/Alamy Stock Photo
Chapter 1 Information Systems in Global Business Today
You can see some of these trends at work in the Interactive Session on Management. Millions of managers rely heavily on the mobile digital platform
to coordinate suppliers and shipments, satisfy customers, and manage their
employees. A business day without these mobile devices or Internet access
would be unthinkable.
Globalization Challenges and Opportunities:
A Flattened World
In 1492, Columbus reaffirmed what astronomers were long saying: the world was
round and the seas could be safely sailed. As it turned out, the world was populated by peoples and languages living in isolation from one another, with great
disparities in economic and scientific development. The world trade that ensued
after Columbus’s voyages has brought these peoples and cultures closer. The
“industrial revolution” was really a worldwide phenomenon energized by expansion of trade among nations and the emergence of the first global economy.
In 2005, journalist Thomas Friedman wrote an influential book declaring the
world was now “flat,” by which he meant that the Internet and global communications had greatly reduced the economic and cultural advantages of developed
countries. Friedman argued that the United States and European countries
were in a fight for their economic lives, competing for jobs, markets, resources,
and even ideas with highly educated, motivated populations in low-wage areas
in the less developed world (Friedman, 2007). This “globalization” presents both
challenges and opportunities for business firms.
A significant percentage of the global economy depends on imports and
exports. In 2015, about 57 percent of the worlds €74 trillion GDP resulted from
imports and exports (World Bank, 2016). Many Fortune 1000 global firms derive
more than half their revenues from foreign operations. Tech companies are particularly dependent on offshore revenue: 85 percent of Intel’s revenues in 2015
came from overseas sales of its microprocessors, while Apple earned 60 percent
of its revenue outside of the United States. Eighty percent of the toys sold in
the United States are manufactured in China, while all iPhones and about 90
percent of the PCs assembled in China use American-made Qualcomm, Intel
or AMD chips.
It’s not just goods that move across borders; jobs do too, some of them highlevel jobs that pay well and require a college degree. In the past decade, the
United States lost 5 million manufacturing jobs to offshore, low-wage producers.
But manufacturing is now a very small part of U.S. employment (less than 12
percent of the labor force and declining). Manufacturing jobs in the last decade
have been replaced by service and retail jobs even as the value of manufactured
goods made in the U.S. has soared by 20 percent in the same period, largely
due to highly automated factories and enterprise information systems (Cassel...
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