Chapter 1 : Business Information Systems: An Overview

Summary

• Business professionals are expected to know how to develop and use IT

• Computer-based information systems pervade almost every aspect of our lives

• A system is a set of components that work together to achieve a common goal

• Subsystem: a system performs a limited task that produces an end result, which must be
combined with other products from other systems to reach an ultimate goal

• Data processing has four stages

• Any IS that helps in management is a management information system (MIS)

• Many different types of ISs

• Enterprise application systems (SCM or ERP) tie together different functional areas of a
business

• ISs are used in many business functions, including accounting, finance, marketing, and
human resources

• The job prospects for IT professionals are bright

• IT has created societal concerns regarding privacy, identity theft, spam, and Web
annoyances

Chapter 2 : Strategic Uses of Information Systems

Summary

• Some information systems have become strategic tools as a result of strategic planning;
others have evolved into strategic tools

• Strategic information systems help companies gain strategic advantage

• Company achieves strategic advantage by using strategy to maximize its strength,

resulting in a competitive advantage

• Various initiatives for establishing strategic advantage:

• Cost reduction, raising barriers to competitors, establishing high switching costs,

new products, differentiating products, enhancing products, alliances, and locking
in clients or suppliers

• Creating standards often establishes strategic advantage in software industry

• Reengineering: the process of redesigning a business process from scratch to significantly

reduce costs

• Strategic advantages from information systems are short-lived; new opportunities must
always be sought
 • Must keep systems on the leading edge to maintain strategic advantage

• Bleeding edge is the undesirable result of a failed innovation effort

Chapter 3 : Business Functions and Supply Chains

Summary

• Effectiveness is the degree to which a task is accomplished

• Efficiency is the ratio of output to input

• Productivity is the measure of people’s efficiency

• Information systems have been integrated into accounting services

• Financial information systems help managers track cash

• Computer-aided design (CAD) systems help engineers design new projects

• Computer-aided manufacturing (CAM) systems direct machines that assemble parts

• Supply chain management (SCM) systems optimize workload, speed, and cost in
supply chains

• Customer relationship management (CRM) includes the entire cycle of relationships

with customers

• Human resource management systems facilitate staff selection and record keeping

• Multiple companies’ SCM systems can be linked, facilitating cooperation, which

requires trust

• An enterprise resource planning (ERP) system can encompass all business processes,
but is expensive and challenging

Chapter 4 : Business Hardware

Summary

• Understanding hardware is important for purchasing decisions

• Computers are classified according to power

• All computers have a CPU to process instructions

• Clock rate measures the speed of a CPU

• Data word: the number of bits the computer can process in a single cycle

• Computer power: measured by its speed, memory size, and number of processor
cores

• RAM: volatile memory

 • ROM is nonvolatile; it does not require power

• Imaging devices help process text and graphics

• When evaluating external storage, consider transfer rate, capacity, portability, and
form of data organization supported

• Data is organized sequentially on tapes

• Direct access storage devices such as RAM, magnetic disks, and optical discs allow
random access

• Databases require direct access storage devices

• When purchasing hardware, professionals should consider cost, power, scalability,

compatibility, etc.

• Information technology may pose health risks such as carpal tunnel syndrome

Chapter 5 : Business Software

Summary

• Software: a collective term for computer programs

• Two categories of software: system or application

• Programming languages and software development tools are used to develop

software

• Increasing amount of software is linked to the Internet

• Code written in non-machine language must be translated by compilers or

interpreters

• Some application programs are custom-designed; many are packaged

• Office productivity tools such as word processors and spreadsheets help improve
worker efficiency

• Hypermedia and multimedia technology are useful for training, education, research,
and business

• Groupware combines hypermedia and multimedia with web technologies for

collaboration

• Three-dimensional geographic software helps model maps and locations

• Many applications support web services and access to information on the web

• Most important system software is operating systems

• Open source software is distributed freely via the web

• Nearly all software is licensed; SaaS is an alternative to traditional software licensing

 • Ready-made software purchase decisions should evaluate many factors, e.g.,
suitability, ease of learning, ease of use, vendor reputation, expected quality of
vendor support, etc.

• Software piracy is still a significant problem

Chapter 6 : Business Networks and Telecommunications

Summary

• Telecommunications is communication over distance

• Telecommunications technology has changed the business environment

• Different media have different bandwidths

• Networks are classified according to reach and complexity

• Public network can be turned into a virtual private network (VPN)

• Network protocols are sets of rules to which all devices on a network must adhere

• The Internet adheres to the TCP/IP protocol

• Wireless technologies make it easy and affordable to create wireless LANs and
hotspots

• Organizations and individuals have variety of choices when subscribing to networking

services

• As Internet links become faster, Internet telephony, also known as Voice over Internet
Protocol (VoIP), is gaining in popularity

• Wireless technologies support the increasingly popular RFID technologies

• Much like hardware, telecommunications technologies are merging

• Increasing numbers of employees now telecommute

Chapter 7 : Databases and Data Warehouses

Summary

• Organizations collect vast amounts of data

• Database approach has several advantages over traditional file approach

• Character: smallest piece of data

• Field: made up of multiple characters

• Record: collection of related fields

• File: collection of related records

 • Database management system (DBMS): tool to construct databases

• Relational and object-oriented database models have different advantages

• Keys are used to form links among entities

• Primary keys are unique identifiers

• Object-oriented database maintains objects that contain data and procedures that process
them

• Structured Query Language (SQL) is an international standard for querying databases

• Database designer must construct a schema to construct a database

• Database designers conduct data modeling and create entity relationship diagrams to
plan databases

• Many databases are linked to Web

• Data warehouses contain huge collections of historical transaction data

• Data warehouse data requires extraction, transformation, loading (ETL)

• Invasion of privacy is exacerbated by database technology

• Big Data is the collection and storage of ever-more detailed quantities of data

Chapter 8 : Web-Enabled Enterprise

Summary

• Some industries have changed drastically due to web technologies

• HTTP is an Internet standard controlling web server addresses

• HTTPS is a secure version of HTTP

• XML is a standard for description of data

• Blogs enable people to create discussion Web pages

• Cookies help websites personalize the visitor’s experience

• Many web technologies are proprietary

• A business can maintain its own web server or use a web hosting service

• Organizations should consider several factors when selecting a web host

• Web-enabled commerce is classified into B2B and B2C

• B2B trading relies on electronic data interchange (EDI) and XML

• Mobile commerce needs to be considered in any online business strategy

• Online businesses must adhere to several factors to be successful

 • Spam and spyware are online annoyances

• Phishing is a pervasive fraud crime

Chapter 9 : Challenges of Global Information Systems

Summary

• Companies conducting web-based business must accommodate non-English speaking

audiences

• Companies must tailor to local preferences

• Organizations must be aware of cultural differences and payment preferences

• Businesses must be aware of tariff and legal issues

• Linguistic, cultural, economic, and political challenges must be addressed

• Laws governing the collection and manipulation of personal data in the U.S. and European
Union are different

• The U.S. and EU have incompatible data privacy laws, which restrict the flow of personal
data between the U.S. and EU

Chapter 10 : Decision Support and Expert Systems

Summary

• Decision aids include decision support systems, expert systems, group decision support
systems, geographic information systems, etc.

• Three major phases of decision-making process: intelligence, design, and choice

• Types of problems: spectrum from unstructured to structured

• Most DSSs have three components: data management module, model management
module, and dialog module

• Sensitivity analysis measures how parameters affect results, and allow “what if” analysis

• Spreadsheets allow users to create DSSs without expertise

• Expert systems are designed to emulate the knowledge of an expert, using artificial
intelligence techniques

• Neural network software may be integrated into an expert system to emulate learning

• Expert systems are used in narrow domains where decisions are unstructured

• Geographic information systems are used when decisions involve locations and routes

• Computerized decision aids may overlook important circumstances, leading to

inaccuracies or unfairness to individuals
Chapter 11 : Business Intelligence and Knowledge Management

Summary

• Business intelligence (BI) is any information about organization, its customers, or its
suppliers that can help firms make decisions

• Data mining is the process of selecting, exploring, and modeling large amounts of data to
discover previously unknown relationships

• Data mining is useful for predicting customer behavior and detecting fraud

• Online analytical processing (OLAP) puts data into two-dimensional tables

• OLAP either uses dimensional databases or calculates desired tables on the fly

• Drilling down means moving from a broad view to a specific view of information

• Dashboards interface with BI software tools to provide quick information such as business
metrics

• Knowledge management involves gathering, organizing, sharing, analyzing, and

disseminating knowledge

• The main challenge of knowledge management is identifying and classifying useful

information from unstructured sources

• Most unstructured knowledge is textual

• Employee knowledge networks are software tools to help employees find other employees
with specific expertise

• Autocategorization is the automatic classification of information

Chapter 12 : Systems Planning and Development

Summary

• IT planning is important because of high investment costs and high risk in implementing
enterprise applications

• Standardization is an important part of IT planning

• Systems development life cycle (SDLC) has well-defined phases: analysis, design,
implementation, and support

• Purpose of systems analysis is to determine what needs the system will satisfy

• Feasibility studies determine if a proposed system is possible and desirable

• System requirements detail the features needed

• Developers outline system components graphically and construct the software

 • Models of the desired system are created using tools, e.g., data flow diagrams and Unified
Modeling Language (UML)

• Implementation includes training and conversion from the old system to the new system

• Support entails maintenance and satisfying changing needs

• Agile methods are a popular alternative to traditional systems development life cycle

• Tools help plan and manage development projects

• Systems integration may be more complicated than systems development

• Great responsibility of IS professionals results in the desirability of certification

Chapter 13 : Choices in Systems Acquisition

Summary

• Several alternatives to having applications developed in-house include outsourcing,

licensing ready-made software, using software as a service, and allowing users to develop
their own software

• Outsourcing can mean commissioning development or assigning services to vendor

• Outsourcing custom-designed applications might afford the organization a good fit of

software to need

• Outsourcing IT services offers possible benefits, such as reduced cost and shortened time
implementing new technologies

• Outsourcing IT services has potential risks, such as loss of control, loss of experienced
employees, and loss of competitive advantage

• Licensing software advantages include software being immediately available and low-
priced

• Disadvantage of licensing software is often a loose fit to the organization’s needs

• Software as a service, from an ASP, is a popular method of obtaining software for a

monthly fee

• User application development has advantages, e.g., short lead time, good fit, and freeing
IT staff

• User application development disadvantages include poor quality, islands of information,

security problems, and poor documentation

• Policies must be established to prevent computer abuse by employees

• Employees should not use their computers for anything but work