Iis PDF

Introduction to
Information Systems
What is IS?
 IS – a set of interrelated components working together

to collect, retrieve, process, store, and distribute
information for the purpose of facilitating planning,
control, coordination, analysis, and decision making in
business organizations
 Input-process-output perspective
 People-organization-technology perspective
Choice Hotels Reservation
System example:
 Technology – the means by which data is transformed and
organized for business use:
 Hardware
 Software
 Database
 Telecommunication
 People – the users of IS

 Organization -- a collection of functional units working together to
achieve a common goal
Functional units of business
organizations:
production
sales/marketing
finance/accounting
human resources
 maximize profit by
producing goods and/or
services
Functional Areas of Business
 The manufacturing and production function is

responsible for producing the firm's goods and
services. There are three stages of the manufacturing/
production process:
 inbound logistics
 production
 outbound logistics
 The sales and marketing function is responsible for

finding customers for the firm's product or service and
selling the firm's product or service to those customers.
The sales and marketing process consists of
 identifying and creating markets
 developing markets
 maintaining markets
 The finance and accounting function is responsible for

managing the firm's financial assets and maintaining
the firm's financial records. The finance process
involves managing the firm's financial assets, whereas
the accounting process is involved primarily in
financial record keeping.
 The human resource function is responsible for

attracting and maintaining an appropriate work force
for the firm. The human resources process entails
 attracting the work force
 developing the firm's work force to meet the firm's
personnel needs
 maintaining the work force
Computer vs IS literacy
IS in Business
 Business functions
 Business processes
 A series of interrelated activities through which work is
organized and focused to produce a product or service
 Business levels
 Strategic (long range planning)
 Tactical (co-ordinate & supervise)
 Operational (produce product & service)
The order generation and fulfillment process
Role of IS in Business
Competitive advantage
 Low-cost (value chain)
 Market niche
 Product differentiation
 Customer loyalty
Globalization
 People (language)
 Organization (culture)
 Technology (telecommunication)
The value chain views the firm as a series of basic
activities that add value to a firm's products or services
(Fig. 3-2)
Primary activities
•inbound logistics,
•operations,
•outbound logistics,
•sales and marketing
•service
Support activities
•administration and management
•human resources
•technology and procurement.
Quality
 Process simplification
 Benchmarking
 Customer focus
 Cycle time reduction
 Improve design & production
 Error reduction
Reengineering
 Business processes redesign
Ethical & social responsibility
 Information rights & privacy
 Intellectual property
 Accountability & liability
 Quality of life
IS Approach to Problem Solving
Systems Analysis
Systems Design
Systems Analysis & Design
 Systems Analysis
 Problem analysis (what)
 Information gathering (where & why)
 Decision making (how)
 Establish objectives
 Determine feasibility
 Choose best solution
 Systems Design (Input, Process, Output, Procedures, Control)

 Logical design
Systems Analysis & Design
 Systems Design
 Logical design (what will the system do?)
 Input: content, format, source, volume, frequency, timing
 Process: rule, model, formula, timing
 Output: content, format, organization, volume, freq., timing
 Storage: data, format, organization, relationship, volume
 Procedure: manual activities, rule, sequence, timing, location
 Control: security, accuracy, validity, supervision
 Physical design (how the system will work?)
 Input: keyboard, voice, scanner
 Process: PC, operating system, software
 Output: print-outs, files, audio
 Storage: tape, CD
 Procedure: batching, backup, auditing, data entry
 Control: batch control, password, audit logs
 Implementation (coding, testing, training)
Technology perspective to problem solving
Organizational perspective to problem solving
People perspective to problem solving
Chapter 2
INFORMATION
SYSTEMS IN THE
ENTERPRISE
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Types of Information Systems
Figure 2-1
Major Types of Systems
• Executive Support Systems (ESS)

• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)
TYPES OF INFORMATION SYSTEMS
Figure 2-2
Transaction Processing Systems (TPS):
• Basic business systems that serve the

operational level
• A computerized system that performs and

records the daily routine transactions
necessary to the conduct of the business
Payroll TPS
Figure 2-3

Types of TPS Systems
Figure 2-4
Knowledge Work Systems (KWS):
Knowledge level
 Inputs: Design specs
 Processing: Modeling
 Outputs: Designs, graphics
 Users: Technical staff
Example: Engineering work station

Management Information System (MIS):
Management level
 Inputs: High volume data
 Processing: Simple models
 Outputs: Summary reports
 Users: Middle managers
Example: Annual budgeting

Management Information System (MIS)
Figure 2-5
Management Information System (MIS)
 Structured and semi-structured decisions
 Report control oriented
 Past and present data
 Internal orientation
 Lengthy design process

Decision Support System (DSS):
Management level
 Inputs: Low volume data
 Processing: Interactive
 Outputs: Decision analysis
 Users: Professionals, staff
Example: Contract cost analysis

Decision Support System (DSS)
Figure 2-6
Decision Support System (DSS)
Figure 2-7
Executive Support System (ESS):
Strategic level
 Inputs: Aggregate data
 Processing: Interactive
 Outputs: Projections
 Users: Senior managers
Example: 5-year operating plan

Executive Support System (ESS)
Figure 2-8
Executive support system (ESS)
 Top level management
 Designed to the individual
 Ties CEO to all levels
 Very expensive to keep up
 Extensive support staff

INTERRELATIONSHIPS AMONG SYSTEMS
Figure 2-9
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL
MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE
PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC

Manufacturing and Production Systems
Major functions of systems:
Scheduling, purchasing, shipping,

receiving, engineering, operations
Major application systems:
Materials resource planning systems,

purchase order control systems,
engineering systems, quality control
systems
Manufacturing and Production Systems
MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL
COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE
PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC

Overview of Inventory Systems
Figure 2-10
Financing and Accounting Systems
Budgeting, general ledger, billing, cost

accounting
General ledger, accounts receivable,

accounts payable, budgeting, funds
management systems
Financing and Accounting Systems
ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL
PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE
BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC

Human Resource Systems
Personnel records, benefits,

compensation, labor relations, training
Payroll, employee records, benefit

systems, career path systems, personnel
training systems
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

Figure 2-11
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Business Processes and Information Systems
Business processes
Manner in which work is organized,

coordinated, and focused to produce a
valuable product or service
Concrete work flows of material,

information, and knowledge—sets of
activities
Unique ways to coordinate work,

information, and knowledge
Ways in which management chooses

to coordinate work
Information systems help organizations
Achieve great efficiencies by automating

parts of processes
Rethink and streamline processes

Examples of Business Processes
Assembling product,
 Manufacturing and production:
checking quality, producing bills of
materials
Identifying customers,
 Sales and marketing:
creating customer awareness, selling
Examples of Business Processes
Paying creditors,
 Finance and accounting:
creating financial statements, managing
cash accounts
Hiring employees, evaluating

 Human Resources:
performance, enrolling employees in
benefits plans
The Order Fulfillment Process
Figure 2-12
Customer Relationship Management (CRM)
Manages all ways used by firms to deal with

existing and potential new customers
Business and Technology discipline
Uses information system to coordinate entire

business processes of a firm
Provides end-to-end customer care
Provides a unified view of customer

across the company
Consolidates customer data from multiple

sources and provides analytical tools for
answering questions

Figure 2-13
Supply Chain Management (SCM)
 Close linkage and coordination of activities

involved in buying, making, and moving a
product
 Integrates supplier, manufacturer, distributor,

and customer logistics time
 Reduces time, redundant effort, and

inventory costs
Supply Chain
Network of organizations and business

processes
Helps in procurement of materials,

transformation of raw materials into
intermediate and finished products
Helps in distribution of the finished

products to customers
Includes reverse logistics - returned items

flow in the reverse direction from the
buyer back to the seller

Supply Chain Management
Figure 2-14
How Information Systems Facilitate Supply Chain Management
 Decide when, what to produce, store, move

 Rapidly communicate orders
 Communicate orders, track order status
 Check inventory availability, monitor levels
 Track shipments
 Plan production based on actual demand
 Rapidly communicate product design change
 Provide product specifications
 Share information about defect rates, returns
 Supply chain planning system: Enables

firm to
generate forecasts for a product and to
develop sourcing and a manufacturing
plan for the product
 Supply chain execution system: Manages

flow of
products through distribution centers and
warehouses
Collaborative Commerce
Figure 2-15
Industrial Networks
Private Industrial Networks
Web-enabled networks
Link systems of multiple firms in an industry
Coordinate transorganizational business

processes
Traditional View of the Systems
Figure 2-16
Enterprise Systems
Figure 2-17
Benefits of Enterprise Systems
 Firm structure and organization: One organization
Firm-wide knowledge-based
 Management:
management processes
 Technology: Unified platform
More efficient operations and

 Business:
customer-driven business processes
Challenges of Enterprise Systems
Require fundamental changes

 Difficult to build:
in the way the business operates
Require complex pieces of

 Technology:
software and large investments of time,
money, and expertise
 Centralized organizational coordination and decision making:

Not the best way for the firms to operate
INTERNATIONAL INFORMATION SYSTEMS
Forms of Global Business Organization
Four main ways of organizing businesses

internationally:
Heavy centralization of
 Domestic Exporter:
corporate activities in the home country of
origin
Financial management and control

 Multinational:
out of a central home base, production, sales
and marketing operations decentralized
Forms of Global Business Organization
Product created, designed, financed,

 Franchiser:
and produced in the home country, relies on
foreign personnel for production, marketing
and human resources
No national headquarters; value-

 Transnational:
added activities managed from a global
perspective, no reference to national
borders, sources of supply and demand and
local competitive advantage optimized
Global System Configuration
Four types of system configuration:
Centralized Systems
Duplicated Systems
Decentralized Systems
Networked Systems
INTERNATIONAL INFORMATION SYSYTEMS
Global System Configuration
Figure 2-18
COMPUTERS: THE
MACHINES BEHIND
COMPUTING
Hossein BIDGOLI
MIS, Chapter 2
©2011 Course Technology, a part of Cengage Learning
1
Chapter 2 Computers: The Machines Behind Computing
learning outcomes
LO1 Define a computer system and describe its
components.
LO2 Discuss the history of computer hardware and
software.
LO3 Explain the factors distinguishing computing power
of computers.
LO4 Describe the major operations of computers
LO5 Summarize the binary system and data
representation.
MIS, Chapter 2
2
Chapter 2 Computers: The Machines Behind Computing
l e a r n i n g o u t c o m e s (cont’d.)
LO6 Discuss the types of input, output, and memory
devices.
LO7 Explain how computers are classified.
LO8 Describe the two major types of software.
LO9 List the generations of computer languages.
MIS, Chapter 2
3
Defining a Computer
 Computer
 Machine that accepts data as input
 Processes data without human intervention using stored
instructions
 Outputs information
 “Program”
 Step-by-step directions for performing a specific task
 Written in a language the computer can understand
 GIGO
 Garbage in, garbage out
MIS, Chapter 2
4
Components of a Computer
System
 Hardware components
 Physical devices, such as keyboards, monitors, and
processing units
 Software
 Programs written in computer languages
 Central processing unit (CPU)
 Arithmetic logic unit (ALU)
 Control unit
 Single or multiprocessor
MIS, Chapter 2
5
Exhibit 2.1 The Building Blocks of a Computer
MIS, Chapter 2
6
Components of a Computer
System (cont'd.)
 Bus
 Link between devices connected to the computer
 Computer performance factors
 Processor
 Bus
 Operating system
 Disk drive
 CPU case
 Motherboard
 Main circuit board
MIS, Chapter 2
7
Exhibit 2.2 Components of a Computer System
MIS, Chapter 2
8
Table 2.1 Hardware Generators
The History of Computer Hardware and Software
MIS, Chapter 2
9
Table 2.2 Computer Language Trends
The History of Computer Hardware and

Software (cont’d.)
MIS, Chapter 2
10
The Power of Computers
 Factors that exceed human capacities:

 Speed
 Accuracy
 Storage and retrieval
MIS, Chapter 2
11
Speed
 Computer speed measured as the number of

instructions performed per fractions of a second:
 Millisecond: 1/1000 of a second
 Microsecond: 1/1,000,000 of a second
 Nanosecond: 1/1,000,000,000 of a second
 Picosecond: 1/1,000,000,000,000 of a second
MIS, Chapter 2
12
Accuracy
 Computers don’t make mistakes

 Degree of accuracy is critical in many computer
applications
 Example
 Space mission calculations
MIS, Chapter 2
13
Storage and Retrieval
 Storage: saving data in computer memory

 Retrieval: accessing data from memory
 Data is stored in bits
 Eight bits is one byte
 Binary system
 American Standard Code for Information Interchange
(ASCII)
 Data code to represent and transfer data between
computers and network systems
 Up to 128 characters can be defined
MIS, Chapter 2
14
Computer Operations
 Three basic tasks:

 Arithmetic operations
 Add, subtract, multiply, divide, raise to power
 Logical operations
 Comparison
 Storage and retrieval operations
MIS, Chapter 2
15
Spotlight on Computer
Storage
 Millipede
 Developed by IBM
 Allows storing one trillion bits of data per square inch
 Could buy a storage device of 1 TB for less than $400
 Uses thousands of very fine silicon tips to punch holes
into a thin film of plastic
MIS, Chapter 2
16
Input Devices
 Input devices
 Send data and information to computer
 Types
– Optical character reader
Keyboard

– Magnetic ink character recognition
Mouse

system
 – Optical mark recognition system
Touch screen
 Light pen
 Trackball
 Data tablet
 Barcode reader
MIS, Chapter 2
17
Output Devices
 Output devices
 For mainframes and personal computers
 Soft copy
 Monitor
 Cathode ray tube (CPT), plasma, liquid crystal display (LCD)
 Hard copy
 Printer
 Inkjet, laser
 Voice
MIS, Chapter 2
18
Memory Devices
 Main memory
 Stores data and information
 Volatile
 Secondary memory
 Nonvolatile
 Holds data when the computer is off or during course of
a program's operation
 Serves as archival storage
MIS, Chapter 2
19
Main Memory Devices
 Semiconductor chips made of silicon

 Random access memory (RAM)
 Volatile
 Cache RAM
 Read only memory (ROM)
 Nonvolatile
 BIOS and system clock
 PROM
 EPROM
MIS, Chapter 2
20
Secondary Memory Devices
 Magnetic disks
 Made of mylar or metal
 Used for random-access processing
 Magnetic tape
 Made of a plastic material
 Stores data sequentially
 Optical discs
 Use laser beams to access and store data
 CD-ROM, WORM, DVD
MIS, Chapter 2
21
Exhibit 2.3 Magnetic Memory Devices
MIS, Chapter 2
22
Secondary Memory Devices
(cont'd.)
 Other secondary memory
 Hard disk
 USB flash drive
 Memory card
 Redundant array of independent disks (RAID) system
 Collection of disk drives used for fault tolerance and
improved performance
 If one disk in the array fails, data isn’t lost
MIS, Chapter 2
23
Exhibit 2.4 Examples of Memory Devices
MIS, Chapter 2
24
Table 2.4 Capacity of Secondary Memory Devices
MIS, Chapter 2
25
Storage Area Networks and
Network-Attached Storage
 Storage area network (SAN)
 Dedicated high-speed network consisting of both hardware and software
 Connect and manage shared storage devices
 Makes storage devices available to all servers on a network
 Network-attached storage (NAS)
 Network-connected computer dedicated to providing file-based data
storage services to other network devices
MIS, Chapter 2
26
Classes of Computers
 Classify based on:

 Cost, amount of memory, speed, sophistication
 Types
 Subnotebooks, notebooks, personal, minicomputers,
mainframes, supercomputers
MIS, Chapter 2
27
Popular iPad Business
Applications
 Healthcare workers
 Sales agents and service workers
 Insurance agents
 Real estate agents
 Legal professionals
 Teachers and students
 Financial professionals
 Corporate campus workers
 Remote and mobile workers
MIS, Chapter 2
28
Ubiquitous Computing
 Also called:
 Pervasive computing
 Third wave computing
 Wearable computers
 Cell phones
 Medical devices
MIS, Chapter 2
29
Server Platforms: An
Overview
 Server
 Computer and all the software for managing network
resources and offering services to a network
 Types of servers
 Application – Print
 Database – Remote access (RAS)
 Disk – Web
 Fax
 File
 Mail
MIS, Chapter 2
30
What is Software?
 All the programs that run a computer system

 Classified broadly as:
 System software
 Application software
MIS, Chapter 2
31
Operating System Software
 Operating system (OS)

 Set of programs for controlling and managing computer
hardware and software
 Provides an interface between a computer and the user
 Increases computer efficiency by helping users share
computer resources and performing repetitive tasks for
users
MIS, Chapter 2
32
Operating System Software
(cont'd.)
 Operating system control programs
 Job management
 Resource allocation
 Data management
 Communication
 Kernel
 Supervisor program
 Responsible for controlling all other programs in the OS
MIS, Chapter 2
33
Google Docs: Applications
and Challenges
 Free Web-based application for creating:
 Word processor documents, spreadsheets, presentations,
and forms
 Create and edit document
 Collaboration in real time
 Save in various formats
 Cloud computing
 Security risks
MIS, Chapter 2
34
Application Software
 Application software
 Commercial software or software developed in-house
 Software types
 Word processing
 Spreadsheet
 Database
 Presentation
 Graphics
 Desktop publishing
MIS, Chapter 2
35
Application Software
(cont'd.)
 Financial planning and accounting
 Project management
 Computer-aided design (CAD)
MIS, Chapter 2
36
Computer Languages
 Machine language
 0s and 1s
 Code written for one type of computer does not work on
another
 Assembly language
 Higher level than machine but still machine dependent
MIS, Chapter 2
37
Computer Languages
(cont'd.)
 High-level languages
 C++, Java, VB.Net
 Used for Web development and the Internet
 Fourth-generation languages
 Easiest to use
 SQL
MIS, Chapter 2
38
Computer Languages
(cont'd.)
 Fifth-generation languages (5GLs)
 Knowledge-based systems
 Natural language processing (NLP)
 Visual programming
 Graphical approach to using programming
MIS, Chapter 2
39
Summary
 Components and distinguishing factors of computers

 Brief history of computer hardware and software
 Input, output, and memory devices
 Classifications for computers
 Different types of software
 Generations of computer languages
MIS, Chapter 2
40
DATABASES AND
DATA WAREHOUSES
LEARNING OUTCOMES
1. List, describe, and provide an example of

each of the five characteristics of high
quality information
2. Define the relationship between a

database and a database management
system
3. Describe the advantages an organization

can gain by using a database.
LEARNING OUTCOMES
4. Define the fundamental concepts

of the relational database model
5. Describe the role and purpose of a

database management system
and list the four components of a
database management system
6. Describe the two primary methods

for integrating information across
multiple databases
UNDERSTANDING
INFORMATION
 Information is everywhere in an organization
 Employees must be able to obtain and

analyze the many different levels, formats,
and granularities of organizational
information to make decisions
 Successfully collecting, compiling, sorting,

and analyzing information can provide
tremendous insight into how an organization
is performing
UNDERSTANDING
INFORMATION
 Information granularity – refers to the extent of detail
within the information (fine and detailed or coarse
and abstract)
 Levels
 Formats
 Granularities
Information Quality
Business decisions are only as good as the

quality of the information used to make the
decisions
Characteristics of high quality information

include:
 Accuracy
 Completeness
 Consistency
 Uniqueness
 Timeliness
Information Quality
 Low quality information example
Understanding the Costs of
Poor Information
 The four primary sources of low quality information include:
1. Online customers intentionally enter inaccurate information to protect their
privacy
2. Information from different systems have different entry standards and
formats
3. Call center operators enter abbreviated or erroneous information by
accident or to save time
4. Third party and external information contains inconsistencies, inaccuracies,
and errors
Understanding the Costs of
Poor Information
 Potential business effects resulting from low quality
information include:
 Inability to accurately track customers
 Difficulty identifying valuable customers
 Inability to identify selling opportunities
 Marketing to nonexistent customers
 Difficulty tracking revenue due to inaccurate invoices
 Inability to build strong customer relationships
Understanding the Benefits of
Good Information
 High quality information can significantly improve the

chances of making a good decision
 Good decisions can directly impact an organization's

bottom line
DATABASE FUNDAMENTALS
 Information is everywhere in an organization
 Information is stored in databases

 Database – maintains information about various types of
objects (inventory), events (transactions), people
(employees), and places (warehouses)
DATABASE FUNDAMENTALS
 Database models include:
 Hierarchical database model – information is organized into a tree-like structure
(using parent/child relationships) in such a way that it cannot have too many
relationships
 Network database model – a flexible way of representing objects and their
relationships
 Relational database model – stores information in the form of logically related
two-dimensional tables
DATABASE ADVANTAGES
 Database advantages from a business perspective

include
 Increased flexibility
 Increased scalability and performance
 Reduced information redundancy
 Increased information integrity (quality)
 Increased information security
Increased Flexibility
 A well-designed database should:

 Handle changes quickly and easily
 Provide users with different views
 Have only one physical view
 Physical view – deals with the physical storage of information on a storage
device
 Have multiple logical views

 Logical view – focuses on how users logically access information
Increased Scalability and
Performance
 A database must scale to meet increased demand,
while maintaining acceptable performance levels
 Scalability – refers to how well a system can adapt to
increased demands
 Performance – measures how quickly a system performs a
certain process or transaction
Reduced Redundancy
 Databases reduce information redundancy

 Redundancy – the duplication of information or storing
the same information in multiple places
 Inconsistency is one of the primary problems with

redundant information
Increased Integrity (Quality)
Information integrity – measures the quality of

information
Integrity constraint – rules that help ensure the

quality of information
Relational integrity constraint – rule that enforces
basic and fundamental information-based
constraints
Business-critical integrity constraint – rule that
enforce business rules vital to an organization’s
success and often require more insight and
knowledge than relational integrity constraints
Increased Security
 Information is an organizational asset

and must be protected
 Databases offer several security features

including:
 Password – provides authentication of the
user
 Access level – determines who has access to
the different types of information
 Access control – determines types of user
access, such as read-only access
RELATIONAL DATABASE
FUNDAMENTALS
Entity – a person, place, thing, transaction, or
event about which information is stored
The rows in each table contain the entities
In Figure 6.5 CUSTOMER includes Dave’s Sub Shop
and Pizza Palace entities
Entity class (table) – a collection of similar

entities
In Figure 6.5 CUSTOMER, ORDER, ORDER LINE,
DISTRIBUTOR, and PRODUCT entity classes
RELATIONAL DATABASE
FUNDAMENTALS
 Attributes (fields, columns) –

characteristics or properties of an entity
class
 The columns in each table contain the
attributes
 In Figure 6.5 attributes for CUSTOMER include:
 Customer ID
 Customer Name
 Contact Name
 Phone
RELATIONAL DATABASE
FUNDAMENTALS
 Primary keys and foreign keys identify the various entity

classes (tables) in the database
 Primary key – a field (or group of fields) that uniquely
identifies a given entity in a table
 Foreign key – a primary key of one table that appears an
attribute in another table and acts to provide a logical
relationship among the two tables
Potential relational database for
Coca-Cola
DATABASE MANAGEMENT
SYSTEMS
 Database management systems (DBMS) – software through which users
and application programs interact with a database
DATABASE MANAGEMENT
SYSTEMS
 Four components of a DBMS

Data Definition Component
 Data definition component – creates

and maintains the data dictionary
and the structure of the database
 The data definition component

includes the data dictionary
 Data dictionary – a file that stores
definitions of information types, identifies
the primary and foreign keys, and
maintains the relationships among the
tables
Data Definition Component
 Data dictionary essentially defines the logical

properties of the information that the database
contains
Data Manipulation
Component
Data manipulation component – allows users to
create, read, update, and delete information
in a database
A DBMS contains several data manipulation

tools:
View – allows users to see, change, sort, and query
the database content
Report generator – users can define report formats
Query-by-example (QBE) – users can graphically
design the answers to specific questions
Structured query language (SQL) – query language
Data Manipulation
Component
 Sample report using Microsoft Access Report Generator
Data Manipulation
Component
 Sample report using Access Query-By-Example (QBE) too
Data Manipulation
Component
Results from the query in Figure 6.10
Data Manipulation
Component
 SQL version of the QBE Query in Figure 6.10
Application Generation and Data
Administration Components
Application generation component –

includes tools for creating visually appealing
and easy-to-use applications
Data administration component – provides

tools for managing the overall database
environment by providing faculties for
backup, recovery, security, and
performance
IT specialists primarily use these components

INTEGRATING DATA AMONG
MULTIPLE DATABASES
 Integration – allows separate systems to communicate

directly with each other
 Forward integration – takes information entered into a
given system and sends it automatically to all
downstream systems and processes
 Backward integration – takes information entered into a
given system and sends it automatically to all upstream
systems and processes
INTEGRATING DATA
AMONG MULTIPLE DATABASES
 Forward and backward integration
INTEGRATING DATA
AMONG MULTIPLE DATABASES
 Building a central repository specifically for integrated

information
HISTORY OF DATA
WAREHOUSING
 Data warehouses extend the

transformation of data into information
 In the 1990’s executives became less

concerned with the day-to-day business
operations and more concerned with
overall business functions
 The data warehouse provided the ability

to support decision making without
disrupting the day-to-day operations
DATA WAREHOUSE
FUNDAMENTALS
 Data warehouse – a logical collection of

information – gathered from many
different operational databases – that
supports business analysis activities and
decision-making tasks
 The primary purpose of a data

warehouse is to aggregate information
throughout an organization into a single
repository for decision-making purposes
DATA WAREHOUSE
FUNDAMENTALS
 Extraction, transformation, and

loading (ETL) – a process that extracts
information from internal and external
databases, transforms the information
using a common set of enterprise
definitions, and loads the information
into a data warehouse
 Data mart – contains a subset of data

warehouse information
DATA WAREHOUSE
FUNDAMENTALS
Multidimensional Analysis
 Databases contain information in a series of two-

dimensional tables
 In a data warehouse and data mart, information is

multidimensional, it contains layers of columns and
rows
 Dimension – a particular attribute of information
 Cube – common term for the representation of multidimensional
information
 Data mining – the process of analyzing

data to extract information not offered
by the raw data alone
 To perform data mining users need data-

mining tools
 Data-mining tool – uses a variety of
techniques to find patterns and relationships
in large volumes of information and infers rules
that predict future behavior and guide
decision making
Information Cleansing or
Scrubbing
 An organization must maintain high-quality data in the
data warehouse
 Information cleansing or scrubbing – a process that

weeds out and fixes or discards inconsistent, incorrect,
or incomplete information
Scrubbing
 Contact information in an operational system
Scrubbing
 Standardizing Customer name from Operational System
Scrubbing
Scrubbing
 Accurate and complete information
BUSINESS INTELLIGENCE
 Business intelligence – information that people use to

support their decision-making efforts
 Principle BI enablers include:

 Technology
 People
 Culture
PERSONAL, LEGAL, ETHICAL, AND
ORGANIZATIONAL ISSUES OF
INFORMATION SYSTEMS
Risks Associated with Information
Technologies
 Misuses of information technology
 Invade users’ privacy
 Commit computer crimes
 Minimize or prevent by:
 Installing operating system updates regularly
 Using antivirus software
 Using e-mail security features
Cookies
 Cookies
 Small text files with a unique ID tag
 Embedded in a Web browser
 Saved on the user’s hard drive
 Can be useful or intrusive
 Many users disable cookies
 By installing a cookie manager
 Or using Web browser options
Spyware and Adware
 Spyware
 Software that secretly gathers information about users while they browse the
Web
 Can be used maliciously
 Install antivirus or antispyware software
 Adware
 Form of spyware
 Collects information about the user to display advertisements in the Web browser
Phishing
 Phishing
 Sending fraudulent e-mails that seem to come from legitimate sources
 Direct e-mail recipients to false Web sites
 To capture private information
Keyloggers
 Keyloggers
 Monitor and record keystrokes
 Can be software or hardware devices
 Sometimes used by companies to track employees’ use of e-mail and the
Internet
 Can be used for malicious purposes
 Some antivirus and antispyware programs protect against software
keyloggers
Sniffing and Spoofing
 Sniffing
 Capturing and recording network traffic
 Often used by hackers to intercept information
 Spoofing
 Attempt to gain access to a network by posing as an authorized user to find
sensitive information
Computer Crime and Fraud
 Computer fraud
 Unauthorized use of computer data for personal gain
 Social networking sites
 Used for committing computer crime
 Examples
 Denial-of-service attacks
 Identity theft
 Software piracy
 Distributing child pornography
 E-mail spamming
Computer Crime and Fraud (cont’d.)
 Writing or spreading viruses, worms, Trojan programs, and other malicious code
 Stealing file
 Changing computer records
 Virus hoaxes
 Sabotage
 Company insiders commit most computer crimes
Internet Fraud Cost $559 Million in 2009
 Losses from cybercrime more than doubled in 2009
 They jumped from $265 million in 2008 to $559.7 million
 Most of the complaints were about e-mail scams and the non-delivery of
merchandise or payments
Privacy Issues
 Concerns about privacy in the workplace

 Employers search social networking sites
 Employee monitoring systems
 Misuse and abuse of information gathered by:
 Healthcare organizations
 Financial institutions
 Legal firms
 Defining privacy is difficult
 Information technologies have increased ease of access to information
Social Networking Sites and Privacy
Issues
 Stacy Snyder
 Former student at Millersville University of Pennsylvania
 Posted a photo of herself on MySpace, wearing a pirate’s hat and drinking
 Millersville administrators
 Considered the image unprofessional
 Refused to grant her an education degree and teaching certificate
Privacy Issues (cont’d.)
 Number of databases is increasing rapidly

 Enforcement of federal laws has been lax
 Index and link databases using Social Security numbers
 Direct marketing companies are major users of this information
 U.S. government began linking large databases to find information
Privacy Issues (cont’d.)
 Federal laws now regulate collecting and using information on people and
corporations
 1970 Fair Credit Reporting Act
 Acceptable use policies
 Accountability
 Nonrepudiation
 Hardware or software controls
 Determine what personal information is provided on the Web
E-mail
 Presents some serious privacy issues

 Spamming
 Unsolicited e-mail sent for advertising purpose
 Sent in bulk by using automated mailing software
 Ease of access
 People should assume that others could have access to their messages
 Any e-mails sent on company-owned computers are the property of the
organization
Statistics for E-mail and Spam in 2009
 90 trillion – number of e-mails sent on the Internet

 247 billion – average number of e-mail messages per
day
 1.4 billion – number of e-mail users worldwide
 100 million – new e-mail users from the year before
 81% – percentage of e-mails that were spam
 92% – peak spam levels late in the year
 24% – increase in spam over previous year
Data Collection on the Internet
 Number of people shopping online is increasing

 Some customers are reluctant to make online purchases
 Concerns about hackers getting access to their credit card numbers
 Many credit card companies reimburse fraudulent charges
 Other electronic payment systems are being developed
Data Collection on the Internet
(cont’d.)
 Concerned about computers’ contents being searched while they’re
connected to the Internet
 Information users provide on the Web
 Combined with other information and technologies to produce new information
 Log files
 Generated by Web server software
 Record a user’s actions on a Web site
 Data collected on the Internet must be used and interpreted with caution
Ethical Issues of Information
Technologies
 Ethics and ethical decision making
 Moral guidelines people or organizations follow in dealing with others
 More difficult to determine than legal versus illegal
Ethical Issues of Information
Technologies (cont’d.)
 Information technology offers many opportunities for unethical behavior
 Cybercrime, cyberfraud, identity theft, and intellectual property theft
 Many associations promote ethically responsible use of information systems
and technologies
 Codes of ethics
 Quick ethics test
Censorship
 Who decides what should be on the Internet?

 Types of information
 Public
 Private
 Whether or not something can be censored depends in part on who is
doing the censoring
 Restricted access to the Internet
 Burma, China, Singapore
 U.S. citizens don’t want the government controlling Internet access
Censorship (cont’d.)
 Parents are concerned about what their children are exposed to

 Pornography, violence, and adult language
 Mistaken or mistyped URLs
 Search terms
 Guidelines to teach their children to use good judgment while on the
Internet
 Programs such as CyberPatrol, CyberSitter, Net Nanny, and SafeSurf
Intellectual Property
 Intellectual property
 Protections that involve copyrights, trademarks, trade secrets, and patents for
“creations of the mind” developed by people or businesses
 Industrial property
 Inventions, trademarks, logos, industrial designs
 Copyrighted material
 Literary and artistic works
 May apply to online materials
 Exceptions under Fair Use Doctrine
Intellectual Property (cont’d.)
 Trademark
 Protects product names and identifying marks
 Patent
 Protects new processes
 Advantages of patents
 Software piracy
 Laws
 Telecommunications Act of 1996
 Communications Decency Act (CDA)
 Laws against spamming
Intellectual Property (cont’d.)
 Internet use policy

 Guard against legal issues and avoid the risks
 Cybersquatting
 Registering, selling, or using a domain name to profit from someone else’s
trademark
Verizon’s Cybersquatting Suit
 Verizon sued OnlineNic

 OnlineNic registered domain names containing Verizon trademarks
 myverizonwireless.com
 iphoneverizonplans.com
 verizon-cellular. com
 Verizon won this suit
Social Divisions and the Digital Divide
 Digital divide
 Computers still aren’t affordable for many people
 Haves and have-nots
 Companies installing cables for Internet connections might subject their
communities to a type of economic “red-lining”
 Children are often victims of this divide
 Funding for computers at schools and libraries
 Loaner programs
The Impact of Information Technology
in the Workplace
 New jobs for:
 Programmers
 Systems analysts
 Database and network administrators
 Network engineers
 Webmasters
 Web page developers
 e-commerce specialists
 Chief information officers (CIOs)
 Technicians
in the Workplace (cont’d.)
 Web designers
 Java programmers
 Web troubleshooters
 Telecommuting and virtual work
 Job deskilling
 Skilled labor eliminated by introducing high technology
 Job downgraded from a skilled to a semiskilled or unskilled position
Advantages and Disadvantages
of Telecommuting
in the Workplace (cont’d.)
 Job upgrading
 Clerical workers who now use computers
 One skilled worker might be capable of doing the job of several
workers
 Virtual organizations
 Networks of independent companies, suppliers, customers, and
manufacturers
 Connected via information technologies
 Share skills and costs
 Have access to each other’s market
Information Technology and Health
Issues
 Reports of health-related issues caused by video display terminals (VDTs)
 No conclusive study
 Health problems associated with the environment in which computers are used
Information Technology and Health
Issues (cont’d.)
 Other reports of health problems
 Vision
 Musculoskeletal
 Skin
 Reproductive
 Stress-related
 Amount of time some people spend on the Web
Green Computing
 Green computing is computing that promotes a sustainable environment

and consumes the least amount of energy
 Green computing involves the design, manufacture, utilization, and
disposal of computers, servers, and computing devices (such as monitors,
printers, storage devices, and networking and communications equipment)
in such a way that there is minimal impact on the environment
Ways to Pursue a Green Computing
Strategy
 Designing products that last longer and are modular in design so that
certain parts can be upgraded without replacing the entire system
 Designing search engines and other computing routines that are faster and
consume less energy
 Replacing several underutilized smaller servers with one large server using a
virtualization technique
Strategy (cont’d.)
 Using computing devices that consume less energy and are

biodegradable
 Allowing certain employees to work from their homes, resulting in fewer cars
on the roads
 Replacing actual face-to-face meetings with meetings over computer
networks
 Using video conferencing, electronic meeting systems, and groupware
Strategy (cont’d.)
 Using a virtual world
 Using cloud computing
 Turning off idle PCs, recycling computer-related materials, and

encouraging car-pool and non-motorized transportation for employees
Summary
 Information technologies
 Affect privacy
 Can be used for computer crimes
 Privacy issues
 E-mail
 Censorship
 Organizational issues
 Digital divide
 Workplace impacts
 Health impact
 Green computing
Introduction to
Information Security
Learning Objectives:
Upon completion of this chapter you should

be able to:
 Understand what information security is and
how it came to mean what it does today.
 Comprehend the history of computer security
and how it evolved into information security.
 Understand the key terms and critical concepts
of information security as presented in the
chapter.
 Outline the phases of the security systems
development life cycle.
 Understand the role professionals involved in
information security in an organizational
structure.
Principles of Information Security

What Is Information Security?
Information security in today’s enterprise is a “well-

informed sense of assurance that the information risks
and controls are in balance.” –Jim Anderson, Inovant
(2002)

The History Of Information
Security
 Computer security began immediately after the
first mainframes were developed
 Groups developing code-breaking computations
during World War II created the first modern
computers
 Physical controls were needed to limit access to
authorized personnel to sensitive military locations
 Only rudimentary controls were available to
defend against physical theft, espionage, and
sabotage

Figure 1-1 – The Enigma

The 1960s
 Department of Defense’s Advanced Research Project

Agency (ARPA) began examining the feasibility of a
redundant networked communications
 Larry Roberts developed the project from its inception

Figure 1-2 - ARPANET

The 1970s and 80s
 ARPANET grew in popularity as did its

potential for misuse
 Fundamental problems with ARPANET
security were identified
 No safety procedures for dial-up connections
to the ARPANET
 User identification and authorization to the
system were non-existent
 In the late 1970s the microprocessor
expanded computing capabilities and
security threats

R-609 – The Start of the Study of
Computer Security
 Information Security began with Rand Report R-609
 The scope of computer security grew from physical security to
include:
 Safety of the data
 Limiting unauthorized access to that data
 Involvement of personnel from multiple levels of the organization

The 1990s
 Networks of computers became more common, so

too did the need to interconnect the networks
 Resulted in the Internet, the first manifestation of a
global network of networks
 In early Internet deployments, security was treated as
a low priority

The Present
 The Internet has brought millions of computer networks

into communication with each other – many of them
unsecured
 Ability to secure each now influenced by the security
on every computer to which it is connected

What Is Security?
 “The quality or state of being secure--to

be free from danger”
 To be protected from adversaries
 A successful organization should have
multiple layers of security in place:
 Physical security
 Personal security
 Operations security
 Communications security
 Network security

What Is Information Security?
 The protection of information and its critical

elements, including the systems and
hardware that use, store, and transmit that
information
 Tools, such as policy, awareness, training,
education, and technology are necessary
 The C.I.A. triangle was the standard based
on confidentiality, integrity, and availability
 The C.I.A. triangle has expanded into a list of
critical characteristics of information

Critical Characteristics Of
Information
The value of information comes from the
characteristics it possesses.
 Availability
 Accuracy
 Authenticity
 Confidentiality
 Integrity
 Utility
 Possession

Figure 1-3 – NSTISSC Security
Model

Components of an
Information System
To fully understand the importance of
information security, you need to know the
elements of an information system
An Information System (IS) is much more

than computer hardware; it is the entire set
of software, hardware, data, people, and
procedures necessary to use information as
a resource in the organization
Securing the Components
 The computer can be either or both the subject of an

attack and/or the object of an attack
 When a computer is
 the subject of an attack, it is used as an active tool to
conduct the attack
 the object of an attack, it is the entity being attacked

Figure 1-5 – Subject and
Object of Attack

Balancing Security and Access
 It is impossible to obtain perfect security - it is not an absolute; it is a

process
 Security should be considered a balance between protection and
availability
 To achieve balance, the level of security must allow reasonable
access, yet protect against threats

Figure 1-6 – Balancing
Security and Access

Bottom Up Approach
 Security from a grass-roots effort - systems

administrators attempt to improve the security of their
systems
 Key advantage - technical expertise of the individual
administrators
 Seldom works, as it lacks a number of critical features:
 participant support
 organizational staying power

Figure 1-7 – Approaches to
Security Implementation

Top-down Approach
 Initiated by upper management:

 issue policy, procedures, and processes
 dictate the goals and expected outcomes of
the project
 determine who is accountable for each of the
required actions
 This approach has strong upper management
support, a dedicated champion, dedicated
funding, clear planning, and the chance to
influence organizational culture
 May also involve a formal development strategy
referred to as a systems development life cycle
 Most successful top-down approach

The Systems Development
Life Cycle
 Information security must be managed in a manner
similar to any other major system implemented in the
organization
 Using a methodology
 ensures a rigorous process
 avoids missing steps
 The goal is creating a comprehensive security
posture/program

Figure 1-8 – SDLC Waterfall
Methodology

SDLC and the SecSDLC
 The SecSDLC may be

 event-driven - started in response to some occurrence or
 plan-driven - as a result of a carefully developed
implementation strategy
 At the end of each phase comes a structured review

Investigation
 What is the problem the system is being developed to

solve?
 The objectives, constraints, and scope of the project are
specified
 A preliminary cost/benefit analysis is developed
 A feasibility analysis is performed to assesses the
economic, technical, and behavioral feasibilities of the
process

Analysis
 Consists primarily of
 assessments of the organization
 the status of current systems
 capability to support the proposed systems
 Analysts begin to determine
 what the new system is expected to do
 how the new system will interact with existing systems
 Ends with the documentation of the findings
and a feasibility analysis update

Logical Design
 Based on business need, applications

are selected capable of providing
needed services
 Based on applications needed, data
support and structures capable of
providing the needed inputs are
identified
 Finally, based on all of the above, select
specific ways to implement the physical
solution are chosen
 At the end, another feasibility analysis is
performed

Physical Design
 Specific technologies are selected to support the

alternatives identified and evaluated in the logical
design
 Selected components are evaluated based on a
make-or-buy decision
 Entire solution is presented to the end-user
representatives for approval

Implementation
 Components are ordered, received, assembled, and

tested
 Users are trained and documentation created
 Users are then presented with the system for a
performance review and acceptance test

Maintenance and Change
 Tasks necessary to support and modify the system for

the remainder of its useful life
 The life cycle continues until the process begins again
from the investigation phase
 When the current system can no longer support the
mission of the organization, a new project is
implemented

Security Systems
Development Life Cycle
 The same phases used in the traditional SDLC adapted to support
the specialized implementation of a security project
 Basic process is identification of threats and controls to counter them
 The SecSDLC is a coherent program rather than a series of random,
seemingly unconnected actions

Investigation
 Identifies process, outcomes and goals of the project,

and constraints
 Begins with a statement of program security policy
 Teams are organized, problems analyzed, and scope
defined, including objectives, and constraints not
covered in the program policy
 An organizational feasibility analysis is performed

Analysis
 Analysis of existing security policies or programs, along

with documented current threats and associated
controls
 Includes an analysis of relevant legal issues that could
impact the design of the security solution
 The risk management task (identifying, assessing, and
evaluating the levels of risk) also begins

Logical & Physical Design
Creates blueprints for security
Critical planning and feasibility analyses to
determine whether or not the project
should continue
In physical design, security technology is
evaluated, alternatives generated, and
final design selected
At end of phase, feasibility study determines
readiness so all parties involved have a
chance to approve the project
Implementation
 The security solutions are acquired (made or bought),

tested, and implemented, and tested again
 Personnel issues are evaluated and specific training
and education programs conducted
 Finally, the entire tested package is presented to
upper management for final approval

Maintenance and Change
 The maintenance and change phase is perhaps most

important, given the high level of ingenuity in today’s
threats
 The reparation and restoration of information is a
constant duel with an often unseen adversary
 As new threats emerge and old threats evolve, the
information security profile of an organization requires
constant adaptation

Security Professionals and
the Organization
 It takes a wide range of professionals to support a diverse
information security program
 To develop and execute specific security policies and procedures,
additional administrative support and technical expertise is required

Senior Management
 Chief Information Officer

 the senior technology officer
 primarily responsible for advising the senior
executive(s) for strategic planning
 Chief Information Security Officer
 responsible for the assessment, management,
and implementation of securing the
information in the organization
 may also be referred to as the Manager for
Security, the Security Administrator, or a similar
title

Security Project Team
A number of individuals who are

experienced in one or multiple requirements
of both the technical and non-technical
areas:
 The champion
 The team leader
 Security policy developers
 Risk assessment specialists
 Security professionals
 Systems administrators
 End users

Data Ownership
 Data Owner - responsible for the security and use of a

particular set of information
 Data Custodian - responsible for the storage,
maintenance, and protection of the information
 Data Users - the end systems users who work with the
information to perform their daily jobs supporting the
mission of the organization

Communities Of Interest
 Each organization develops and maintains its own

unique culture and values. Within that corporate
culture, there are communities of interest:
 Information Security Management and Professionals
 Information Technology Management and Professionals
 Organizational Management and Professionals

Information Security: Is It an
Art or a Science?
 With the level of complexity in today’s information systems, the
implementation of information security has often been described as
a combination of art and science

Security as Art
 No hard and fast rules nor are there many universally

accepted complete solutions
 No magic user’s manual for the security of the entire
system
 Complex levels of interaction between users, policy,
and technology controls

Security as Science
 Dealing with technology designed to perform at high

levels of performance
 Specific conditions cause virtually all actions that
occur in computer systems
 Almost every fault, security hole, and systems
malfunction is a result of the interaction of specific
hardware and software
 If the developers had sufficient time, they could
resolve and eliminate these faults

Security as a Social Science
 Social science examines the behavior of individuals

interacting with systems
 Security begins and ends with the people that interact
with the system
 End users may be the weakest link in the security chain
 Security administrators can greatly reduce the levels of
risk caused by end users, and create more
acceptable and supportable security profiles

Electronic Commerce Systems
James A. O'Brien, and George Marakas. Management

Information Systems with MISource 2007, 8th ed. Boston, MA:
McGraw-Hill, Inc., 2007. ISBN: 13 9780073323091
Introduction to e-Commerce
 Electronic commerce encompasses the entire online process of
 Developing
 Marketing
 Selling
 Delivering
 Servicing
 Paying for products and services
 It relies on the Internet and other information technologies to support
every step of the process

The Scope of e-Commerce

E-Commerce Technologies

Categories of e-Commerce
 Business-to-Consumer
 Virtual storefronts, multimedia catalogs, interactive order
processing, electronic payment, online customer support
 Business-to-Business
 Electronic business marketplaces, direct links between
businesses, auctions and exchanges
 Consumer-to-Consumer
 Online auctions, posting to newspaper sites, personal
websites, e-commerce portals

Essential e-Commerce Architecture

Access Control and Security
 E-commerce processes must establish mutual trust and

secure access between parties
 User names and passwords
 Encryption key
 Digital certificates and signatures
 Restricted access areas
 Other people’s accounts
 Restricted company data
 Webmaster administration areas

Profiling and Personalizing
 Profiling gathers data on you and your website behavior and choices
 User registration
 Cookie files and tracking software
 User feedback
 Profiling is used for
 Personalized (one-to-one) marketing
 Authenticating identity
 Customer relationship management
 Marketing planning
 Website management

Search Management
 Search processes help customers find the specific

product or service they want
 E-commerce software packages often include
a website search engine
 A customized search engine may be acquired from
companies like Google or Requisite Technology
 Searches are often on content or by parameters

Content and Catalog Management
 Content Management Software

 Helps develop, generate, deliver, update, and archive text and
multimedia information at
e-commerce websites
 Catalog Management Software
 Helps generate and manage catalog content
 Catalog and content management software works with profiling
tools to personalize content
 Includes product configuration and
mass customization

Workflow Management
 E-business and e-commerce workflow management depends on a
workflow software engine
 Contains software model of business processes
 Workflow models express predefined
 Sets of business rules
 Roles of stakeholders
 Authorization requirements
 Routing alternative
 Databases used
 Task sequences

Example of Workflow Management

Event Notification
 Most e-commerce applications are event driven

 Responds to such things as customer’s first website visit
and payments
 Monitors all e-commerce processes
 Records all relevant events, including problem situations
 Notifies all involved stakeholders
 Works in conjunction with user-profiling software

Collaboration and Trading
 Processes that support vital collaboration

arrangements and trading services
 Needed by customers, suppliers, and other stakeholders
 Online communities of interest
 E-mail, chat, discussion groups
 Enhances customer service
 Builds loyalty

Electronic Payment Processes
 Complex processes
 Near-anonymous and electronic nature
of transactions
 Many security issues
 Wide variety of debit and credit alternatives
 Financial institutions may be part of the process

Electronic Payment Processes
 Web Payment Processes
 Shopping cart process
 Credit card payment process
 Debit and other more complex processes
 Electronic Funds Transfer (EFT)
 Major payment system in banking, retail
 Variety of information technologies capture
and process money and credit card transfers
 Most point-of-sale terminals in retail stores
are networked to bank EFT systems

Electronic Payment Example

Securing Electronic Payments
 Network sniffers easily recognize credit card formats

 Encrypt data between customer and merchant
 Encrypt data between customer and financial institution
 Take sensitive information off-line

E-Commerce Application Trends

E-Commerce Success Factors
 Some of the success factors in e-commerce

 Selection and value
 Performance and service
 Look and feel
 Advertising and incentives
 Personal attention (one-to-one marketing)
 Community relationships
 Security and reliability

Differences in Marketing

Web Store Requirements

Developing a Web Store
 Build a website
 Choose or set up web hosting
 Use simple design tools and templates
 Include a shopping cart and payment support
 Market the website
 Include Web page and e-mail advertising
and promotions
 Exchange advertising with other Web stores
 Register with search engines and directories
 Sign up for affiliate programs

Serving Your Customers
 Convert visitors into loyal customers
 Develop one-to-one relationship with customers
 Create incentives to encourage registration
 Use Web cookies to identify visitors
 Use tracking services to record and analyze website behavior and
customer preferences
 Create an attractive, friendly, efficient store
 Offer fast order processing and payment
 Notify when orders are processed and shipped
 Provide links to related websites

Managing a Web Store
 Manage both the business and the website
 Record and analyze traffic, inventory, sales
 Use CRM features to help retain customers
 Link sales, inventory data to accounting systems
 Operate 24 hours a day, seven day a week
 Protect transactions and customer records
 Use security monitors and firewalls
 Use redundant systems and power sources
 Employ passwords and encryption
 Offer 24-hour tech support

B2B E-Commerce
 B2B is the wholesale and supply side of
the commercial process
 Businesses buy, sell, or trade with other businesses
 Relies on multiple electronic information technologies
 Catalog systems
 Trading systems
 Data interchange
 Electronic funds transfers

E-Commerce Marketplaces
 One to Many
 Sell-side marketplaces
 One supplier dictates product offerings and prices
 Many to One
 Buy-side marketplaces
 Many suppliers bid for the business of a buyer
 Some to Many
 Distribution marketplaces
 Unites suppliers who combine their product catalogs to attract a larger
audience

E-Commerce Marketplaces
 Many to Some
 Procurement marketplaces
 Unites major buyers who combine purchasing catalogs
 Attracts more competition and thus lower prices
 Many to Many
 Auction marketplaces
 Dynamically optimizes prices

E-Commerce Portals
 B2B e-commerce portals offer multiple marketplaces

 Catalogs
 Exchanges
 Auctions
 Often developed and hosted by third-party market-
maker companies
 Infomediaries serve as intermediaries in
e-business and e-commerce transactions

B2B E-Commerce Web Portal

Clicks and Bricks
 Success will go to those who can integrate Internet

initiatives with traditional operations
 Merging operations has trade-offs
 See Figure 9.18

E-Commerce Integration
 The business case for merging e-commerce
with traditional business operations
 Move strategic capabilities in traditional operations to the e-commerce
business
 Integrate e-commerce into the traditional business
Sharing of established brands

Sharing of key business information
Joint buying power and distribution
efficiencies

Other Clicks and Bricks Strategies
 Partial e-commerce integration

 Joint ventures and strategic partnerships
 Complete separation
 Spin-off of an independent e-commerce company
 Barnes and Noble’s experience
 Spun off independent e-commerce company
 Gained venture capital, entrepreneurial culture, and flexibility
 Attracted quality management
 Accelerated decision making
 Failed to gain market share

E-Commerce Channel Choices
 An e-commerce channel is the marketing or sales

channel created by a company for its e-commerce
activities
 There is no universal strategy or e-commerce channel
choice
 Both e-commerce integration and separation
have major business benefits and shortcoming
 Most businesses are implementing some
measure of clicks and bricks integration

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Introduction to

 IS – a set of interrelated components working together

 People – the users of IS

 The manufacturing and production function is

 The sales and marketing function is responsible for

 The finance and accounting function is responsible for

 The human resource function is responsible for

 Systems Design (Input, Process, Output, Procedures, Control)

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Major Types of Systems

• Executive Support Systems (ESS)

TYPES OF INFORMATION SYSTEMS

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Transaction Processing Systems (TPS):

• Basic business systems that serve the

• A computerized system that performs and

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Knowledge Work Systems (KWS):

Example: Engineering work station

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS):

Example: Annual budgeting

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

 Structured and semi-structured decisions

 Report control oriented

 Past and present data

 Lengthy design process

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS):

Example: Contract cost analysis

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive Support System (ESS):

Example: 5-year operating plan

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive Support System (ESS)

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive support system (ESS)

 Top level management

 Designed to the individual

 Ties CEO to all levels

 Very expensive to keep up

 Extensive support staff

INTERRELATIONSHIPS AMONG SYSTEMS

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL

MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE

PRICING ANALYSIS DETERMINE PRICES MANAGEMENT