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MANAGING INFORMATION TECHNOLOGY
7th EDITION
CHAPTER 1
MANAGING IT IN A DIGITAL WORLD
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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall
1-1
MANAGING INFORMATION TECHNOLOGY, 7e
.
Information Technology (IT):
Computer technology (hardware and software)

for processing and storing information
and
Communications technology (voice and data networks)

for transmitting information.

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MANAGING INFORMATION TECHNOLOGY, 7e
Part I
• Technologies available today and emerging technology trends for
hardware, software, networks and data
Part II
• Software applications to support business operations and business
intelligence, as well as e-business applications
Part III
• “Best practices” for acquiring and implementing new systems and
managing IT projects
Part IV
• Planning and managing an IS department’s resources, as well as
managing information security; social/ethical/legal issues

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MANAGING IT IN A DIGITAL WORLD
• IT has become more pervasive
- IT is not used only by back-office workers, but also front-line workers
- More and more employees are reliant upon IT for accomplishing their work
activities
• Business managers, not just IT managers, are responsible for IT

investments and effective system utilization
• By the Year 2000, the total annual cost of IT purchases was more
than half of the annual capital expenditures of businesses in
developed countries
• IT is linking emerging, developing and developed economies,

which can help “level” the economic playing field
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RECENT INFORMATION TECHNOLOGY TRENDS
• Computer Hardware: Faster, Cheaper, Mobile
- Computers have become smaller and faster

- Hardware prices have dropped
- High growth in small, mobile devices for communications and
access to the Internet
Personal Digital Laptop

IBM Personal Smart Phones
Microcomputers Assistants [PDAs] Computers outsell
Computer introduced
(1970’s) introduced desktops
(1981) (2007)
(early 1990s) (2005)

1-5
• But it can be hard to predict long-term IT trends….

1-6
• Computer Software: Integrated, Downloadable, Social
• Integrated
- Standardization has enabled more integration
- Many “standards” are just de facto standards (Microsoft
Windows, Office, Internet Explorer)
- Many companies have benefitted from “Enterprise Systems”
investments (e.g., electronic health records in hospitals)
Enterprise Systems:
Software packages with integrated modules that pass
common business transactions across groups,
divisions, and geographic locations in “real time”
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• Computer Software: Integrated, Downloadable, Social
• Downloadable
- Bit-size software programs for smart phones downloadable
from App stores
- Download speeds have increased so that even large files can
be downloaded by users
• Social
- Growth of Web 2.0 (social media) applications (such as
Facebook, LinkedIn)
- Used by companies for marketing and branding activities
- Collaboration tools connect employees across distance
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• Computer Networks: High Bandwidth, Wireless and Cloudy
- High demand for high speed Internet access

- Wireless technologies to replace hardwired lines; support for
mobile devices anytime/anywhere
- Use of Internet to access remote hosts, data storage, and other IT
capabilities from the “Cloud”
Consumer high-
Wireless Internet
Introduction of the speed Internet Number of Internet
ARPANET created connections widely access common in
World Wide Web users tops 1 billion many locations
(late 1960s) available
(early 1990s) (2005) (today)
(early 2000s)

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NEW WAYS TO COMPETE
• New ways for businesses to use IT to compete on:
• Low Cost – Competing with other businesses by being a low-
cost producer for a good or a service
• Automating transaction time
• Shortening order cycle time
• Providing operational information for decision making
• Differentiation – Competing with other businesses by offering
products or services that customers prefer due to superiority in
product innovativeness, quality or customer service
• Giving sales personnel information to better serve customers
• Providing just-in-time supplies for customers
• Creating new information-based products
• Allowing product customization by the consumer
• OR Both Low Cost and Differentiation, enabled by IT
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NEW WAYS TO WORK
• New ways for people to work using IT:
• Telecommuters: Individuals who use mobile technology

and/or network connections to work remotely
• Pros
- Flexibility
- Work-life balance
• Cons
- Feelings of being isolated
- Concerns about job promotion opportunities
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NEW WAYS TO WORK
• New ways for people to work using IT, continued:
• Virtual Teams: Geographically separated work teams

whose members communicate through the use of IT
• Pros
- Workers can be located anywhere
- Teams can be composed of members with specialized
skills from different business units or companies
• Cons
- Coordination across team members more difficult
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NEW WAYS TO WORK
• New ways for people to work using IT, continued:
• Free Agents: Individuals who choose to contract out their

services and are not tied to an organization
• Pros
- Work may change more than when an employee of a
single organization
• Cons
- Lack of benefits
- Unpredictability in scheduling and work

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MANAGING IT IN ORGANIZATIONS
Information Systems (IS) Department:

The organizational unit or department that has the primary
responsibility for managing IT
• Information Systems departments can vary greatly across

businesses, depending on the organization’s dependency on IT
for:
• reliable & secure business operations and
• competitive advantage based on new technologies

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• Example: IS Organization in
Support Mode
- Low Need for New Information

Technology for competing
- Low Need for Reliable & Secure
Information Technology for
business operations
- IT used mostly to support back-
office support functions
Support

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• Example: IS Organization in
Strategic Mode
- High Need for New Information

Technology for competitive
advantage
- High Need for Reliable & Secure
Information Technology for
business operations
- Strategically dependent on IT to
enable new business strategies Strategic

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• Three Types of IT Resources (Figure 1.1 – based on Ross et al.)
- Technology Infrastructure: Computers, software and networks

that enable an organization to conduct business and share
information across organizational units as well as business partners
- Human Resources: IT professionals and managers who have the

needed mix of technology, business and interpersonal skills to plan
for, design and manage the other IT resources
- Business/IT Relationships: Established relationships between

business and IT workers to ensure that the other IT resources are
aligned with the business needs
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IT LEADERSHIP ROLES
• IT leaders have to work closely with the senior managers o keep the
• In many organizations, the senior IT leader is a CIO.
company’s IT resources aligned with the business goals
Chief Information Officer (CIO):
A firm’s high-level general IT manager with both technology
and business leadership experience. Together with the
organization’s executive management team the CIO ensures the
alignment of IT resources with business goals and plans for
integration of IT for strategic advantage.
• Two primary responsibilities:

• - Computer and communication operations
• - Acquiring and maintaining applications software

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IT LEADERSHIP ROLES
• Example: IS Organization Chart

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COPYRIGHT
• All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.
Copyright © 2012 Pearson Education, Inc.

Publishing as Prentice Hall

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7th EDITION
CHAPTER 2
COMPUTER SYSTEMS
-HARDWARE
-SOFTWARE
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-1

HARDWARE
Building Blocks of Information Technology
Hardware Software Networks Data
Chapter 2 Chapter 2 Chapter 3 Chapter 4

COMPUTER SYSTEMS
• Hardware:
Physical pieces of a computer system
• Software:
Set of programs that control the operations of a computer

BASIC COMPONENTS OF COMPUTER SYSTEMS
• All computers made up of the

same set of six building blocks:
input, output, memory,
arithmetic/logic unit, control
unit, and files
• Control unit and

arithmetic/logical unit together
known as the central processing
unit (CPU)


Input:
• Device(s) needed to enter
data into the computer for it
to use in computations and
comparisons

Input: What is the difference between a terminal

and a PC?
• Terminal
- Designed strictly for input and output

- Has keyboard and screen
- Does not have a processor
- Connected to a computer with a processor via
telecommunications
- Examples: point-of-sale terminal, ATM

Common Input Methods:
- Keyboard: input entered by user through keystrokes

- Mouse, stylus, touchpad: alternative to keystrokes
- Disk drive or flash drive: data on disk read into memory
- Magnetic ink character recognition (MICR): used to process
bank checks
- Barcode labeling: scans barcodes on packages or products, and
reads into computer
- Optical character recognition (OCR): directly scans typed,
printed, or handwritten material
- Imaging: inputs digital form of documents and photos
Keyboard
Disk Drive
Barcode
Output:
• Device(s) needed to produce
results in a usable format

Common Output Methods:
- Video display unit: displays output on a screen

- Disk drive or flash drive: output written to disk for storage
- Printer: output to paper (various types of printers)
- Computer output microfilm (COM): microfilm generated
for archive copies in small space
- Voice response units: computer-generated verbal response
messages
Video Display
Disk Drive
Microfilm
Memory:
• Referred to as main memory or
primary memory
• All data flows to and from
memory
• Divide into cells
- Each has a unique address
- Can only store limited amount
of data
-Byte: stores one character of data
-Word: stores two or more
characters of data
Memory
Memory:

Memory:
• Each memory cell is a set of circuits
• Each circuit is on or off (represented by 1 or 0)
• Each circuit corresponds to a bit (binary digit)
• Most computers – 8 bits (circuits) represents a character (byte)
• 2 common bit coding schemes used today:
- ASCII
- EBCDIC

Arithmetic/Logical Unit:
• Carries out:
- Mathematical operations
(addition, subtraction,
multiplication, division)
- Logical operations
(number comparisons)

Arithmetic/Logical Unit:
• Consists of VLSI circuits on a silicon chip

• Can perform up to billions of operations per second
• Numbers are taken from memory as input and results are
stored in memory as output
ALU Circuits
Computer files:
• File devices used to store vast
quantities of data
• Main memory is limited,
volatile and expensive
• Advantages:
- File devices or secondary memory
are used to store additional data that
is non-volatile
• Disadvantages:
- It has relatively slow speed
• Storage Devices:
- Magnetic tape drives, disk drives,
floppy drives
- Optical CD or DVD drives

Types of Computer files:

• Sequential Access Files
- Records are stored in sequence according to file’s control
key
- Usually stored on magnetic tape
• Direct Access Files

- Records can be accessed immediately, without regard to
physical location
- Stored on Direct Access Storage Devices (DASD)

DIRECT ACCESS STORAGE DEVICES
• Types of DASD:
• Fixed (hard) drives
• Optical disk storage

- CD-ROM - DVD-ROM
- CD-R - DVD-R
- CD-RW - DVD-RW
• Removable drives
- Floppy Drives
- Zip Drives
- Flash (keychain) Drives

Control unit:
• Controls the other five
components of the computer
system
• Used to take advantage of speed
and capacity of other
components
• List of operations, called a
program, tells the control unit
what to do
• These operations are read from
memory, interpreted, and
carried out one at a time
(stored- program concept)

STORED-PROGRAM CONCEPT
• Computer Program
- A list of what is to be done for an application
- Each step or operation is called an instruction
• Machine Language
- Computer program written for specific computer model
- Program executed by control unit; consists of operation code and
addresses
• Measure of Computer Power

- Millions of instructions per second (MIPS)
- Millions of floating point operations per second (MFLOPS)
• Benchmarking is used to compare speed for running a set of jobs on
different machines

TYPES OF COMPUTER SYSTEMS
Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Table 2.1 2-21
Microcomputers:
• For personal computing
• Can generally be carried or moved by one person and only
have one keyboard and display unit
• Examples:
- Desktop PC
- Laptop or notebook
- Handheld or personal digital assistant (PDA)
- Tablet PC

Microcomputers:

Microcomputers, continued:
• Two major microcomputer platforms

- IBM-compatible PCs (personal computers)
- Apple microcomputers (does not use Windows OS)
• Have been put to a myriad of uses

- Record-keeping
- Word processing
- Presentations
- Programming
- and a “client” in a client/server system

Midrange systems:
• In 1980s, included 2 types of computer systems
1. Workstations
- Microcomputers with more powerful chips than PCs
- Reduced instruction set computing (RISC) chip yielded
greater performance because it was specialized
2. Minicomputers
- Less powerful and less expensive than mainframe systems
- Used for departmental computers & office automation
Midrange Systems
Midrange systems - today:
• Servers for client/server applications, Web server, etc.
- Low-end
- Essentially high-powered PCs
- Typically built on Intel Pentium, Celeron, Xeon or AMD
processors
- Often run Windows Server software
- High-end
- Powered by RISC processors or top-of-the-line Intel or
AMD processors
- Usually run Linux or some variation of UNIX

Mainframe Computers:
• Computer platforms for most major corporations and

government agencies
• Major strength is versatility in application processing
- Online and batch processing
- Integrated enterprise systems
- Engineering and scientific applications
- Network control
- Systems development environment (not production)
- Web server
• Major players today: IBM, Fujitsu, Unisys
Supercomputers:
• “Number-crunchers” at 250K MFLOPS
• Handle problems generated by research scientists
• High-end supercomputers located in government, R&D labs,
major universities
• Cost: $1 - $100 million
• One of fastest supercomputers (IBM Blue Gene/P):
294,912 processors and can achieve speed of 1 petaflop

SOFTWARE
Hardware Software Network Data
Chapter 2 Chapter 2 Chapter 3 Chapter 4

TWO CATEGORIES OF SOFTWARE
1. Applications software
2. Support software

APPLICATIONS SOFTWARE
• Programs written to accomplish particular business tasks:

accounting, payroll, inventory, sales invoicing, etc.
• Programs that users interact with
• Software for standard applications typically purchased from a

vendor
• Software for applications unique to the organization typically

developed internally or via a vendor contract
• Includes personal productivity software by knowledge workers

APPLICATIONS SOFTWARE EXAMPLE
• Accounting Software Package:
- Commercial accounting package for smaller businesses

- Includes general ledger, accounts receivable, accounts
payable, inventory, payroll, time and billing, job costing,
fixed asset accounting, and analysis and reporting tools
- Price: $500 for single-user version

APPLICATIONS SOFTWARE EXAMPLE
Personal Productivity Software

may be purchased as a software suite
- Word Processing
- Spreadsheets
- Database Management Systems
- Presentation Graphics
- Electronic Mail and Groupware

• Database management systems

- Used to create, manage and protect organizational data
- All employ a relational data model
• Database
- Is a shared collection of logically related data organized to
meet organizational needs
- MS Office Example : Access

• Presentation graphics
- Used to create slide shows for business presentations
- All allow embedding of clip art, photos, graphs, and other
media
- MS Office Example: PowerPoint

• Electronic mail
• Groupware
- Incorporates e-mail and other productivity features, such as
calendaring, scheduling, and document sharing
- MSOffice Example : Outlook

WWW Browsers
• Used to access information (navigate) on the WWW from
computers that can access the Internet
- Hypertext-based approach (to link text and media objects to
each other)
• Pull technology: browser requests a Web page before it is
sent to client
• Push technology: data sent to client without requesting it
(such as e-mail, spam, software patches)
• Examples:
Internet Explorer (Microsoft), Firefox (Mozilla), Safari (Apple)

SUPPORT SOFTWARE
• Enables applications software to be carried out (run)

• Ensures that computer hardware and software are used efficiently
• Purchased from a hardware or software vendor

SUPPORT SOFTWARE
Operating System (OS)

• Usually purchased from manufacturer of computer hardware
that OS will be used on
• Complex program that controls operation of computer
hardware and coordinates other software
• Performance objective is to maximize work done (throughput)
• User communicates with operating system software for input,
output, storage, etc.
• Easier to use with graphical user interface (GUI): click on
icons instead of enter text commands

SUPPORT SOFTWARE
Operating System

SUPPORT SOFTWARE
Operating System Concepts

• Job control language (JCL): instructions used to communicate with the
operating system
• Multiprogramming: employed on larger machines to overlap input and output

operations with processing time, keeping the CPU busy and speeding up
execution
• Multitasking: similar to multiprogramming, but employed on microcomputers
• Multithreading: similar to multitasking, but multiple threads within the same

program are overlapped
• Multiprocessing: work that takes place when two or more CPUs are installed
on same computer system

SUPPORT SOFTWARE
Operating System Concepts, cont.
• Virtual Memory:
- Optimizes management of main memory by switching in
and out portions of programs from DASD
-- Permits multiprogramming to operate more efficiently

SUPPORT SOFTWARE
Operating System Concepts, cont.
- Proprietary systems: operating systems written for a
particular computer hardware configuration
- Microcomputers: MS-DOS, Vista, Windows 7, Mac OS
- Large systems: IBM z/OS and z/VM
- Open systems: not tied to any particular computer system or

hardware manufacturer – will run on virtually any computer
• Examples: UNIX and Linux
- IT Platform: set of hardware, software, communications ;

OS name usually implies platform
SUPPORT SOFTWARE
Server or Network Operating System (NOS)
- Software running on a server that manages network

resources and controls the operation of a network
- Enhanced operating system that allows for:
- Sharing disk drives and printers
- Handling server side of client/server applications
- Major players include:
- UNIX and Linux
- Microsoft Windows Server

SUPPORT SOFTWARE
First and Second Generation Languages

• Machine language (1GL)
• Each instruction must be expressed in unique form for a
particular computer
• Complete program consists of thousands of instructions
• Programming is a tedious, time-consuming process
• Assembly languages (2GL)

• Easily remembered mnemonic operation codes substituted for
machine language operation codes
• Assembler used to convert mnemonic codes to machine
language
SUPPORT SOFTWARE
First and Second Generation Languages

SUPPORT SOFTWARE
Third Generation Languages
• Procedural languages (3GL)

- Express a step-by-step procedure devised by the
programmer
- Typically machine independent
- Easier for programmers to learn
- Structured programs: divided into modules, where each has
one entry and one exit point
- Must be compiled or interpreted (translated into machine
language) ; one 3GL instruction typically translates into
many machine language instructions
SUPPORT SOFTWARE
Compiling and running a 3 GL Program

SUPPORT SOFTWARE
Developing programs with a 3GL

SUPPORT SOFTWARE
Third Generation Languages
• Most popular procedural languages & decade introduced
1950s - FORTRAN
1960s - COBOL (COmmon Business Oriented Language)
BASIC
1970s – C

SUPPORT SOFTWARE
COBOL program example

SUPPORT SOFTWARE
Fourth Generation Languages

• Nonprocedural languages (4GL)
• Easier to program, but less efficient for computers to run
• Uses more English-like statements for program instructions
• Today may be referred to as a language for business
intelligence (BI) application development
• SAS
• IBM Cognos
• SAP Business Objects
• Oracle BI Enterprise Editing Plus
• Microsoft SQL 2008 Services (Analysis, Reporting)

SUPPORT SOFTWARE
Markup Languages
• Employ tags to “mark up” documents
• HTML
- Used to create Web pages
- Consists of special tags that tell the Web browser how to display
various elements on a Web page (e.g., bold-faced or italic text,
image location, links to other Web pages)
HTML Example
• XML
- Used to facilitate data interchange among Web applications and
Web services
- Meta language consisting of tags that identify particular data
elements
EXAMPLES
XML Example (tags in brackets)
<Game type= “College Football” date=“9/26/2009”>

Indiana vs. Michigan
<Score team= “Indiana”>33</Score>
<Score team= “Michigan”>36</Score>
</Game>
XML Example
SUPPORT SOFTWARE
Object-Oriented Programming (OOP) Languages
• Neither 3GL nor 4GL … new paradigm

• Create objects once, store, then reuse
• Object examples:
- Text box, check box
• Most Common Languages:
- C++, Java, Visual Basic.NET, C#

SUPPORT SOFTWARE
Object-Oriented Programming – Java Example

SUPPORT SOFTWARE
Languages for Developing Web Applications
• HTML is the most common form of user interface
• Server-side programming languages include:

• PHP
• Java Servlets and Java Server Pages (JSP)
• Microsoft’s Active Server Pages (ASP, ASP.NET)
• Adobe’s ColdFusion

SUPPORT SOFTWARE
Database Management Systems (DBMS)

- Systems that create, store, and manage modifications to data
in a database – and make data accessible for queries, reporting
Data Dictionary/Directory
- Repository for data definitions used by a Database
Data Warehouse
- Very large database or collection of databases for decision
support that use a DBMS optimized for analytics (including
data mining)

SUPPORT SOFTWARE
5 DBMS Architectures
1. Hierarchical
• Data are arranged like a top-down organization chart
• Example: IBM Information Management System (IMS)
2. Network
• Data are arranged like cities on a highway system, often with
several paths from one piece of data to another
• Example: Computer Associates’ CA-IDMS
3. Relational
• Most common type
• Data arranged in simple tables
• Records related by storing common data in each associated
table
• Examples: Microsoft Access and SQL Server, Paradox,
DB2, and Ingres
SUPPORT SOFTWARE
DBMS Architectures
4. Object- Oriented
• Data can be graphics, video, and sound as well as simpler
data types
• Attributes and methods are encapsulated in object classes,
and relationships between classes can be shown by nesting
one class within another
• Examples: Versant Object Database, Progress ObjectStore,
and Objectivity/DB
5. Object-relational
• Hybrid approach that can handle complex data types with the
simplicity of the relational model
• Examples: Oracle, IBM’s DB2 and Cloudscape, and FFE
Software’s First SQL/J

SUPPORT SOFTWARE
• Query Language example: SQL/DS Command Language
SELECT ORDER#, CUSTOMER#, CUSTNAME,

ORDER-DATE FROM CUSTOMER, ORDER
WHERE ORDER-DATE> ‘03/12/11’
AND CUSTOMER.CUSTOMER# =
ORDER.CUSTOMER#

SUPPORT SOFTWARE
Computer-aided software engineering (CASE) Tools
• Collection of software tools to help automate all phases of the
software development life cycle to increase productivity of
software designers and programmers
• CASE tools for OO development for Unified Modeling

Language ( UML)
- UML = general-purpose notational language for
specifying and visualizing complex software, especially
large, object-oriented projects

SUPPORT SOFTWARE
Communications Interface Software
• For Large computers:

• Controls communications between workstations and
terminals connected to a network & central computer
• Example: IBM’s Customer Information Control System
(CICS)
• Web Server Software serves Web pages to Web browser
• File Transfer Protocol (FTP) transfers files from one computer
system to another
• Utility programs: link together programs & subprograms,
merge files (ZIP programs), check for viruses, etc.
FTP
KEY SOFTWARE TRENDS
• More concern with human efficiency
• More purchased applications software
• More open source support software
• More programming using object-oriented languages
• More emphasis on applications that run on intranets and the Internet
• More user development
• More use of personal productivity software on microcomputers

IT INDUSTRY TRENDS
Hardware firms
• Have been expanding by adding services (including acquiring
established consulting firms)
• Major players:
- US: IBM, Hewlett-Packard, Dell , Apple
- Non US : Acer, Lenovo, Toshiba, Fujitsu, Sony
Software firms
• Have been expanding by developing new products and acquiring
smaller software companies
- IBM bought Cognos; SAP bought Business Objects
- Oracle bought PeopleSoft and Salesforce.com
- Oracle also bought Sun (hardware and Java)
COPYRIGHT
All rights reserved. No part of this publication may be reproduced, stored in a retrieval
system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, recording, or otherwise, without the prior written permission of the
publisher. Printed in the United States of America.


7th EDITION
CHAPTER 3
TELECOMMUNICATIONS AND NETWORKING

PART 1: IT BUILDING BLOCKS
Hardware Software Network Data

NETWORKING AND TELECOMMUNICATIONS
.
NETWORKING:
The electronic linking of geographically dispersed devices
TELECOMMUNICATIONS:
Communications at a distance, including voice and data
- Also referred to as: data communications, datacom,
teleprocessing, telecom, and networking

OVERVIEW OF TELECOMMUNICATIONS AND
NETWORKING
• Telecommunications and networking have become

increasingly important to businesses because of
distributed processing and globalization
Early 1990s prediction came true:

“ …networks will change everything"
- Paul Saffo

THE TELECOMMUNICATIONS INDUSTRY
Three Major Segments of Telecom Industry:
• Carriers who own or lease physical plant & sell the

service of communications transmission
• Equipment vendors who manufacture and sell

telecommunications equipment
• Service providers who operate and deliver network

services or provide access to or deliver services via the
Internet
THE TELECOMMUNICATIONS INDUSTRY
Example: AT&T
• One of largest carriers in U.S. industry
• In 1984, AT&T split into several companies as a result of a

US Department of Justice antitrust lawsuit
• Breakup of AT&T led to greater innovation through

competition
• But recent trend has been consolidation in the industry

REASONS FOR NETWORKING
Five primary reasons for networking
1. Sharing of technology resources

2. Sharing of data
3. Distributed data processing and client/server systems
4. Enhanced communications
5. Marketing outreach

1. Sharing of technology resources:

• Prior to networking capabilities, computers could not even share
printers….
• Today, PCs share software, mainframes share storage devices, etc.
2. Sharing of data:
• Enables retrieval of data stored on other nodes in the network
• Allows efficient transactions between businesses, their suppliers,
and their customers, based on up-to-date data
• Some businesses share many terabytes of data per day
• Sharing of data via Internet users

3. Distributed data processing and client/server systems:
Distributed data processing
• Information processing that uses multiple computers at multiple
sites that are tied together through telecommunication lines
Client/server systems
• A type of distributed system in which the processing power is
distributed between a central server and a number of client
computers
Transfer of Data
Client Server

4. Enhanced communications:
• Telecommunication networks provide the ability to communicate
through Email, Bulletin Boards, Blogs, Instant Messaging, Wikis,
Social network sites, Videoconferencing
• Links between organizations can lead to strategic alliances
o SABRE airline reservation system
o Electronic data interchange (EDI)
5. Marketing outreach:
• Sharing data via the Internet with consumers = an important
marketing and sales channel

FUNCTIONS OF A TELECOMMUNICATIONS NETWORK
• A telecommunications network is more than a series of

wires or wireless signals…
Table 3.1
ANALOG AND DIGITAL SIGNALS
• Analog Signals
A signal in which some physical property continuously varies
across time
• Digital Signals
A signal that is not a continuous function of time, but rather
a series of discrete values that represent ones and zeros

• Representation of digital and analog signals

• Digital computer data does not naturally mesh with analog

transmission; it must be converted from ones and zeros to
analog signals
• Solutions:
• Modem (Modulator/Demodulator)
• Digital networks
• Advantages of lower error rates and higher speeds

TYPES OF TRANSMISSION LINES
 Private (dedicated physical lines)

• Advantage:
- Ensures quality of transmission
• Disadvantage:
- Costly
 Switched (such as public telephone network)

• Advantage:
- Less costly
• Disadvantages:
- Message may take many different routes
- Quality of transmission may degrade

TYPES OF TRANSMISSION LINES
• Simplex
Data can only travel in one direction
• Half Duplex
Data can travel in both directions, but not simultaneously
• Full Duplex
Data can travel in both directions at once

TRANSMISSION MEDIA
Twisted Pair
• Literally, wires that are twisted to reduce interference
• Can be shielded (STP) or unshielded (UTP), but the most
commonly used is UTP
• Medium used for public telephone networks
• Transmission speeds vary greatly

TRANSMISSION MEDIA
Coaxial (Coax) Cable

• Baseband
- Inexpensive, designed for digital transmission
• Broadband
- Originally for analog, now used for digital
- Commonly used in television cable
Figure 3.2
TRANSMISSION MEDIA
 Wireless
• Not truly a transmission medium, but rather a broadcast
technology in which radio signals are sent through the air
• Cordless telephones and cellular telephones now widely used
• Wireless technologies:
• Wireless LANs
• Microwave
– Line of sight
• Satellite
– Long distances
– Line of sight
• RFID
• Bluetooth
Wireless Cards
TRANSMISSION MEDIA
Wireless
• Wireless LANs
- Growing in popularity
- Useful when wiring is not possible
- Slower than some wired solutions
- Allow mobile devices to connect to network

TRANSMISSION MEDIA
Wireless
• Microwave
- Widespread use for several decades
- Line of sight transmission
- Limited to 25-50 mile distances because of curvature of
the earth
- Expensive, but less costly than fiber optic cables
Microwave Tower

TRANSMISSION MEDIA
Wireless
• Satellite
1. Geostationary Earth Orbit (GEO)

- Remains stationary relative to earth
2. Low Earth Orbit ( LEO)

- 400 to 1000 miles above earth
Figure 3.3
TRANSMISSION MEDIA
LEO projects beginning in 1990s
• Iridium
- First major LEO project with 66 satellites
- Faced high operating costs which resulted in bankruptcy
- Mostly military subscribers
• Globalstar
- LEO project with 40 satellites that does not provide global coverage
• Teledesic
- Ambitious project with original plans to launch 840 satellites
- This was later cut to 288 satellites, then 30, and then the program
was cancelled

TRANSMISSION MEDIA
Wireless
• RFID
- Acronym for Radio Frequency Identification
- An old technology that became popular in business after
Wal-Mart required the use of RFID by some of its
suppliers to improve inventory and supply chain
management
Wal-Mart and RFID

Wal-Mart CIO on RFID
Wal-Mart gets tough with suppliers about RFID
TRANSMISSION MEDIA
Wireless
• RFID
• Two Broad Types of RFID tags:
- Active – these tags have their own power supply and can
transmit messages continuously, on request, or on a schedule
Cost over $1.00
- Passive – these tags only send a response to an incoming

radio signal
Cost in the $0.08 - $0.20 range

TRANSMISSION MEDIA
Wireless
• Bluetooth
• Named after Danish King who united Denmark
• Short-range radio technology
• Designed to consume very little electrical power and be
produced at a low cost
• Found in a growing number of devices such as cell phones,
laptops, headsets, keyboards, mice, and home appliances
- Thousands of Bluetooth products in use today
Bluetooth Devices
TRANSMISSION MEDIA
Fiber Optics
• Light pulses through a thin fiber of glass or silica

• Faster and more reliable than other media
• Large diameter fiber is multimode (multiple light rays at the

same time) while smaller diameter is single mode
• But smaller diameter fiber has larger capacity due to light
rays bouncing less….

NETWORK ACCESS FOR INDIVIDUALS
• Internet Service Providers (ISPs) sell access to the Internet
• Consumers now have more options including faster broadband connections

- Digital Subscriber Line (DSL) is a connection through a telephone company
- Cable modem is a connection through a cable television company
- Satellite
• With one-way service, individuals must obtain uplink service from another
provider
- Other Wireless access may be through a municipal carrier or a private
company
• Pricing methods for personal Internet access

- Fixed price (usually monthly plans)
- But hotels, airports, cafes, etc. now offer Internet access for short periods of time
- Cost based on usage (data transferred)
- Also offered “free” to customers in various locations
NETWORK TOPOLOGY
Network topology = configuration or arrangement of the devices
• Bus
- All devices are attached to one cable
- Single-point failure
• Ring
- Similar to bus, but ends are attached
- Not susceptible to single-point failure
• Star
- All nodes are attached to central device
- Susceptible to failure of central device, but easy to
identify cable failure
• Tree
- Similar to the star, but with a hierarchical structure
• Mesh
- Devices link to multiple other devices
- A failure has little impact on the network, but costly
Figure 3.4
NETWORK TYPES
Six types:
1. Computer Telecommunications Networks

2. Local Area Networks (LANs)
3. Backbone Networks
4. Wide Area Networks (WANs)
5. The Internet
6. Internet2

NETWORK TYPES
1. Computer Telecommunications Networks:
• This was the only type of network until the 1980s

• Commonly used in mainframe architectures
Figure 3.5
NETWORK TYPES
2. Local Area Networks (LANs)
- Standards developed by the Institute for Electrical and

Electronic Engineering (IEEE)
IEEE 802 is a family of standards for LANs and metropolitan area networks
- Five types of LANs in common use today – 3 wired, 2 wireless

o Contention Bus (IEEE 802.3)
o Token Bus (IEEE 802.4)
o Token Ring (IEEE 802.5)
o Wi-Fi (IEEE 802.11)

o WiMAX (IEEE 802.16e)
NETWORK TYPES - LAN
o Contention Bus (IEEE 802.3)

- Developed by Xerox
- Usually called Ethernet after the original Xerox version
- Half-duplex
- All devices must contend to use
• CSMA/CD protocol for collisions

NETWORK TYPES - LAN
o Token Bus (IEEE 802.4)

- A token (special message) is passed among devices
- Only the device with the token can transmit a message
- Important for Manufacturing Automation Protocol (MAP)
o Token Ring (IEEE 802.5)

- Developed by IBM
- Combination of ring topology with use of tokens (used the
same way as in token bus)

NETWORK TYPES - LAN
o Wi-Fi (IEEE 802.11)

- Short for Wireless Fidelity
- Most common wireless LAN type today
- Uses a shared Ethernet design

- CSMA/CA Protocol
• Similar to CSMA/CD, but with less collisions
- Commonly used in offices to supplement wired Ethernet
networks and support mobile devices, or in areas where
adding hardwiring is problematic
- Many U.S. cities are offering Wi-Fi networks

NETWORK TYPES
o WiMAX (802.16e)
- Newest of the network types
- Similar to Wi-Fi, but operates over longer distances and at
higher speeds
- Can use both licensed and non-licensed frequencies

- Clearwire = leading vendor at this time

NETWORK TYPES
Wireless Local Area Networks: Some Implementation Problems
- More difficult to secure than other network types

- Organizations that offer wireless access to entice customers
have problems with non-customers or unprofitable customers
overusing the network
- Unauthorized wireless use is also problematic in condos and
apartments
Multiple Unsecured Wireless Networks

NETWORK TYPES
3. Backbone Networks
• Connect LANs
• Key to internetworking
Figure 3.8
BACKBONE NETWORK DEVICES
Hardware devices for backbone (middle-distance) networks
•Hub: Simple device that forwards all messages to every device
attached to it
•Wireless Access Point: Central device that connects wireless LAN to
other networks
•Bridge: Connects two LAN segments and only forwards messages
that need to go to other segment
•Switch: A multiport bridge; connects two or more LAN segments
•Router: Connects two ore more LANs and only forwards messages
that go to the other LAN

NETWORK TYPES
4. Wide Area Networks (WANs)
• Similar to LANs, but cover greater distances (“long-haul”)

• We will consider the following three general types of WANs
because they each have advantages and disadvantages:
- Switched Circuit
- Dedicated Lines
- Packet-switched

NETWORK TYPES - WAN
Switched Circuit (or circuit-switched):
• A single physical path is temporarily created between two nodes for

their exclusive communication
• Most widely available means of implementing a WAN using a switched
circuit connection is to use the ordinary telephone network
• Advantages
- Easy to set up
• Disadvantages
- Low speed
- High error rates
• There are two different pricing schemes available for this service
- Direct Distance Dialing (DDD) - pay for usage
- Wide Area Telephone Service (WATS) - fixed rate

NETWORK TYPES - WAN
Dedicated Lines:
• These are permanent channels exclusive to

the business
• Advantages
- High capacity
- Low error rates
• Disadvantages
- Expensive
• Two different types of dedicated circuits:

- Leased lines are cable, microwave, or fiber
connections
- Satellite circuits are popular for organizations
with many global locations Table 3.3
- SONET lines are high-capacity leased fiber lines
Wide Area Networks

NETWORK TYPES - WAN
Packet-switched:
• Multiple connections exist simultaneously over the same physical
circuit
• Messages are broken up into packets
• Businesses use PADs (Packet assembly/disassembly devices) to
connect their networks to a common carrier network
• Advantages
- Efficient use of network
- Can be high capacity
• Disadvantages
- Packets may arrive in different
order or with delay
Figure 3.9
NETWORK TYPES
5. The Internet
- Network of networks that use the TCP/IP protocol

- Similar to an enormous WAN
- 733 million hosts as of January 2010
- Began with ARPANET and NSFNET

• ARPANET (Advanced Research Projects Agency Network)
was created by the US Department of Defense
• NSFNET (National Science Foundation Network) was
created to link supercomputers for research
• Each of these were largescale, packet-switching networks
that led to the creation of the Internet ARPANET
NSFNET
NETWORK TYPES
Internet Applications

NETWORK TYPES
6. Internet2
- Not-for-profit consortium made up of over 200 universities, as

well as industry and government partners, to develop and deploy
advanced network applications and technologies for research and
commercial purposes
- Goals
• Create a leading-edge network capability for the national
research community
• Enable revolutionary Internet applications based on a much
higher-performance Internet than we have today
• Ensure the rapid transfer of new network services and
applications to the broader Internet community

NETWORKING PROTOCOLS
• Network Protocols
– An agreed-upon set of rules or
conventions governing communication
among elements of a network
– Open Systems Interconnection (OSI)
Reference Model
• Skeleton for standards developed by
International Organization for
Standardization (ISO)
• Conceptual framework to understand
how communications in networks
take place
Figure 3.11
NETWORKING PROTOCOLS
• Transmission Control Protocol/Internet Protocol (TCP/IP)
• Created to link different types of networks (e.g., satellite and

ground packet networks) together into a network of networks
• Has become de facto standard protocol for networking
-TCP is responsible for the reliable and ordered transmission of
messages
- IP is responsible for routing individual packets based on their
individual addresses (IP addresses)
• Roughly corresponds to network and transport layers of OSI
model

NETWORKNG HAS BECOME CRITICAL TO DO BUSINESS
• Networking and Telecommunications have become necessary

for businesses to function
• Increasing access to the Internet in developing countries due to

new lines being funded by private and public organizations
Impact of cut Internet cables in Middle East - 2008

COPYRIGHT


7th EDITION
CHAPTER 5
ENTERPRISE SYSTEMS

PART II - APPLICATION AREAS
Intra-organizational systems:
• Enterprise systems: (Ch. 5)
support all or most of the organization
• Managerial Support systems (Ch. 6)
support a specific manager or group of managers
Inter-organizational systems:
• e-Business applications (Ch. 7)
- B2C – link businesses with end consumers
- B2B – link businesses with other businesses
- Intermediaries
CHAPTERS 5 AND 6
Intra-Organizational systems

CRITICAL CONCEPTS
Batch processing
• A group (or batch) of transactions are accumulated, then
processed all at one time
• Key Disadvantage: Time delay before the master file updated

CRITICAL CONCEPTS
Online processing
• Each transaction is entered directly into computer when it occurs
• Interactive System: A fully implemented online system where
user interacts directly with the computer
• In-Line System: Provides for online data entry, but processing of
transactions is deferred for batch processing

CRITICAL CONCEPTS
Batch processing vs. Online processing
Batch Processing Online Processing

• Significant delay before master • Master file updated within a
file is updated (usually 1 day) fraction of a second
• Much less expensive to • Much more expensive to

operate operate
• Some applications naturally • Some applications need to be
suited for batch processing processed in real time
(e.g., payroll)
Given these tradeoffs, hybrid systems that combine online data entry,
with batch processing, are very common
CRITICAL CONCEPTS
Functional information systems
• Information systems that support one primary business

function or process of an organization
Example Business Functions and Subsystems
Marketing Accounting Personnel Personnel Engineering
Production
Sales
Planning
Forecasting
Production Etc.
Scheduling

CRITICAL CONCEPTS
Vertically integrated information systems
• Serve more than one vertical level

in an organization or industry
Top Management
Long-term trend
analysis
Sales System Example
Middle Management
Weekly data analysis to
track slow-moving items
and productive salespeople
Produce invoices
Capture initial sales data

CRITICAL CONCEPTS
Distributed systems
• Refers to mode of delivery: Processing power is distributed to
multiple sites, which are linked via telecommunications
Client/server systems
• A type of distributed system where processing power is
distributed between a central server computer and a
number of client computers (usually PCs)

CRITICAL CONCEPTS
Client/server systems and Middleware
Client Middleware Server
• Handles user • Software to support • Runs on bigger machine

interface clients and server • Handles data storage
• Accesses distributed interaction for applications …
services through a • Three categories: – Databases
network – Server operating systems – Web pages
– Transport stack software – Groupware
– Service-specific software

CRITICAL CONCEPTS
2- tier vs. 3- tier Client/server systems
2-tier system 3-tier system
- Original model - Popular beginning

mid-1990’s
Client Client
Server Application
Server
Database
Server

CRITICAL CONCEPTS
Client/server systems and Fat/Thin Models
• Fat client/thin server: most processing done on the client

Ex: Web and groupware servers
• Thin client/fat server: most processing done on the server

Ex: Database servers

CRITICAL CONCEPTS
Virtualization
• Server Virtualization:
- Physical server split in multiple virtual server
- Each virtual server can run its own full fledged operating system
- Physical server acts as a hypervisor program creating virtual servers
- Each virtual server can be employed as a standalone physical server,
reducing the number of physical servers needed
• Desktop Virtualization:
- Implemented through a client server computing model
- Virtualized desktop environment stored on a server then on local storage
of desktop device
- All the programs, application and data are kept on the server and all
programs and applications are run on the server
CRITICAL CONCEPTS
Service-oriented architecture (SOA)
• Application architecture based on a collection of functions, or
services, where these services can communicate (or be connected)
with one another
• Advantages:
- Once a service is created (internally or externally) it can be used
over and over again
Web services
• Collection of technologies built around the XML standard of
communicating
• Other protocols used in web services include:
- Web Services Description Language (WSDL)
- Universal Description, Discovery, and Integration (UDDI)
- SOAP (originally Simple Object Access Protocol)
TRANSACTION PROCESSING SYSTEMS (TPS)
• Thousands of transactions critical to business operations are

processed each day in large organizations for sales, bills for sales
and customer payments, inventory shipped and received,
payments to employees, etc.
• Typical outputs: invoices, checks, orders, reports

TRANSACTION PROCESSING SYSTEMS
Payroll system
• System to produce
payroll checks also
contains numerous
subsystems

TRANSACTION PROCESSING SYSTEMS
Order entry system
• Sales Order Processing or a Query
• Output includes invoices for sales orders
• Linked to other subsystems

ENTERPRISE RESOURCE PLANNING (ERP)
SYSTEMS
Enterprise Resource Planning (ERP) Systems
• Set of integrated business applications (modules) that carry out
common business functions
- Transaction data accessible to workers in multiple functional
units (sales + accounting +…)
• Process-oriented way of doing business
- Not separate systems for separate functions
- Support for “Order fulfillment,” not just Sales
• Usually purchased from a software vendor
• ERP = “First wave” of enterprise system packages
“Later waves” of enterprise system packages
- Customer relationship management (CRM)
- Supply chain management (SCM) systems
ENTERPRISE RESOURCE PLANNING (ERP)
SYSTEMS
By mid-1990s, SAP and other vendors designed “suites” of integrated
modules for “back-office” transaction processing that eliminated the need
for many custom-developed interfaces
3 Modules for Value-Chain Activities

S Materials Production/ Sales/
Management modules Operations modules Distribution modules C
U
U
P
S
P
Procurement Production Distribution T
L
O
I
M
E
Financials/Accounting modules E
R
R
S Human Resources modules S
2 Modules for Enterprise Support Activities
ERP SYSTEMS, Continued
• Suite from one vendor OR “best of breed” from multiple vendors
• Some organizations implement Enterprise Support modules only
( Financials, HR)
• Value-Chain module implementations involve large investment of
money and people resources because of impact on business
• Have become “essential” systems in many industries
Source: Gartner Dataquest

SAP BUSINESS SUITE
Financials
Financial Supply Chain Management
Today’s vendors offer modules

Financial Accounting
Management Accounting
Treasury Applications
Human Capital Management beyond the “back-office” modules
Talent Management
Workforce Process Management
Workforce Deployment
Operations
Procurement
Inventory and Warehouse Management
Inbound and Outbound Logistics
Transportation Management
Production Planning
Manufacturing Execution
Product Development
Life-Cycle Data Management
Sales Order Management
Aftermarket Sales and Service
Professional-Service Delivery
Corporate Services
Real Estate Management
Enterprise Asset Management
Project and Portfolio Management
Travel Management
Environment, Health, and Safety Management
Quality Management
Global Trade Services
End-User Service Delivery
Manager Portal
Employee Portal
Employee Interaction Support Center
Analytics
Financial Analytics
Operations Analytics
Workforce Analytics
Figure 5.6 Key Functional Areas of SAP ERP

ENTERPRISE RESOURCE PL ANNING
ERP SYSTEMS, continued
ERP Business Benefits
• Support for Cross-Functional processes

- Modules were designed to support business processes that
involved multiple business functions and multiple geographic
locations
• Access to Integrated Data via a unified platform

- Data entered into one module could be accessed in real-time by
other modules, by employees in dispersed business units, if a
single centralized database is implemented.
• Support for Global Transactions

- National currencies are automatically converted to the parent
firm’s currency
- Employees in different countries can see the same screen in their
own languages
ENTERPRISE RESOURCEPLANNING SYSTEMS
ERP IT Infrastructure Benefits
• Centralized Database on Client/Server Architecture

- Many early adopters replaced legacy system applications (with separate
databases) written for mainframe computers
• Software updates with increased functionality from the vendor

on a regular basis
- Companies can avoid high costs of customized system enhancements
• Standard IT platform for external transactions and regulatory

compliance
- Enables transactions with external suppliers and customers
- Costs avoided for updating legacy systems (e.g., Y2K and Euro
compliance)
DATA WAREHOUSING
• The establishment and maintenance of a large data storage facility

containing data on all (or at least many) aspects of the enterprise
• Provides users data access and analysis capabilities without

endangering operational systems
• Designed for analysis of data, not efficient operational performance
• Summary reports may be automatically generated on periodic basis

DATA WAREHOUSING: KEY ELEMENTS
Requires software tools to:
- Construct warehouse
- Operate warehouse
- Access and analyze data from the warehouse

DATA WAREHOUSING
Key data concepts for Data Warehousing
• Subject-oriented
- Data stored by business subject, rather than by application
- Customer, Claims vs. Order-Billing, Claims Processing
• Integrated
- Data stored once in a single integrated location
• Time-variant
- Data tagged with some element of time
- Data available for long periods of time
• Nonvolatile
- Data warehouse is “read only”: existing data is not
overwritten or updated
CUSTOMER RELATIONSHIP MANAGEMENT
SYSTEMS
Customer relationship management systems (CRM)

• A business strategy directed at customer relationships that
involves new business processes for execution and
communication
- Customer interactions focused on customer needs
• Integrated approach to customer channels for marketing,

sales, and support
- Cross-functional vs. single functional view

SYSTEMS
CRM systems
• A new way to compete using IT: service-based differentiation
- Single-face-to-the-customer, no matter which channel
customer uses
Traditional Channels New Electronic Channels

• Call centers • E-mail
• Field reps • Web sites for consumers and
partners
• Retail dealer networks/ • Communications via wireless
business partners devices

SYSTEMS
CRM systems, continued

• Some top CRM enterprise vendors offer:
- Traditional out-of-the-box CRM
- Traditional CRM with templates for specific vertical
industries
• Major ERP software vendors also offer CRM modules

(e.g., SAP and Oracle)
• Salesforce.com positioned itself as an on-demand solution

- Vendor is also the software host (ASP)

SYSTEMS
Types of purchased CRM systems
CRM
e-CRM
Suites
Ex. Siebel Ex: Salesforce.com
ERP
Extensions
Ex. mySAP

SUPPORTED BY A DATA WAREHOUSE
• CRM systems often pull data that is stored in a data

warehouse
• Example: Harrah’s Entertainment

- Total Rewards system captures all guest transactions
(including slot machines and game tables)
- Harrah’s can track who plays what games, where, when, and
how often – and then offer special deals aimed at generating
repeat business

OFFICE AUTOMATION
Most Common Office Applications
• Word processing • Desktop publishing

• Electronic mail • Electronic calendaring
• Telephony/IM • Document imaging
• Voice mail • Document preparation,
storage, and sharing

OFFICE AUTOMATION
E-Mail
• Permits rapid, asynchronous communication between workstations on a
network, eliminating telephone tag
• Emails allow the sending of notes to distribution lists and individuals, and
filing notes in electronic folders for later recall
• Variants of E-mail include bulletin boards, listservs, computer
conferencing, chat rooms, instant messaging (IM), blogs
Drawbacks:
• Spam and volume of e-mail received can be overwhelming
• Some use offensive words on e-mails that they would never use in face-to-
face communication
• Privacy issues due to electronic monitoring by supervisors
• However most often these drawbacks are overshadowed by the advantages
of the rapid, asynchronous communication of e-mails
OFFICE AUTOMATION
Video Conferencing
• Permits face-to-face meetings and conferences without need for

costly and time-consuming travel
• Computer-generated reports and graphics (e.g., PowerPoint
presentations) can be shared during the conference
• Videoconferencing can be used at the desktop level for a smaller
audience and at conference room level for larger audience
• Polycom Inc is a worldwide leader in videoconferencing
• Skype has been one of the most popular ways of videoconferencing
over the internet

GROUPWARE AND COLLABORATION
Groupware
• Software designed to support groups by facilitating:
- Collaboration
- Communication
- Coordination
• Also called collaboration or collaborative environment tools
• Products vary in the features they provide

GROUPWARE
Common Groupware Features

• Electronic mail • Meeting support systems
• Electronic bulletin boards • Workflow routing
• Computer conferencing • Electronic forms

• Electronic calendaring • Internet telephony
• Group scheduling • Sharing documents
• Desktop • Learning management
videoconferencing systems
• Electronic whiteboards • Instant messaging
• Shared workspace

GROUPWARE
• Lotus Notes (purchased by IBM in 1995)

GROUPWARE
Lotus Notes

INTRANETS AND PORTALS
Intranet
• A network operating within an organization that employs the
same TCP/IP protocol used on the Internet
Advantages:
- Implementation is relatively easy (Web technologies)
- Web browser acts as “universal client” that works with
heterogeneous platforms
- E-mail and document sharing available to all employees.
- Low cost due to common technologies and little training
Web Portal
• Software that provides intranets with a structure and easier
access to internal information via a Web browser
- Initial intranets had lots of documents, but little structure to
help users find them
FACTORY AUTOMATION
• Traditional factory automation:
- Numerically controlled machines, which use a computer

program or a tape with punched holes to control movement of
tools on machines
- Material requirements planning (MRP) uses data input to
produce a production schedule for the factory and a schedule of
needed raw materials
• Computer-integrated manufacturing (CIM)

- Combines MRP with the ability to carry out schedules through
computer controlled machines

COMPUTER-INTEGRATED MANUFACTURING
• Three major categories of CIM systems

1. Engineering systems
2. Manufacturing administration
3. Factory automation
TABLE 5.1 Abbreviations Used in Factory Automation
Acronym Full Name
CIM computer-integrated manufacturing

CAD computer-aided design
CAE computer-aided engineering
GT group technology
CAPP computer-aided process planning
MRP material requirements planning
MRP II manufacturing resources planning
SCM supply chain management
CAM computer-aided manufacturing
AGV automated guided vehicle
MAP Manufacturing Automation Protocol
SFC shop floor control

Engineering systems
• Computer-aided design (CAD) – use of two and three-
dimensional computer graphics to create and modify
engineering designs
• Computer-aided engineering (CAE) – system that analyzes
functional characteristics of a design and simulates the product
performance under various conditions
• Group technology (GT) – systems that logically group parts
according to physical characteristics, machine routings, and
other machine operations
• Computer-aided process planning (CAPP) – systems that
plan the sequence of processes that produce or assemble a part

Manufacturing Administration Systems
• Manufacturing Resources Planning systems (MRP II)

- A system that usually has three components:
1. Master production schedule
2. Material requirements planning
3. Shop floor control
- May include just-in-time (JIT) production to minimize
inventory
- Does not directly control machines on the shop floor

Manufacturing Administration Systems, continued
Supply Chain Management
- Systems to deal with distribution and transportation of raw

materials and finished products throughout the supply chain
- Are often inter-organizational systems that communicate

with suppliers and/or distributors

SUPPLY CHAIN
MANAGEMENT (SCM) SYSTEMS
• Supports procurement of components needed to make a product or

service and movement and distribution of finished products through
the supply chain
• Five basic components of SCM system:

1. Plan: developing strategy for managing resources
2. Source: choosing suppliers
3. Make: manufacturing the product
4. Deliver: logistics of getting product to the customer
5. Return: procedure for handling defective products

FACTORY AUTOMATION
Factory operations
• Computer-aided manufacturing (CAM) – use of computers to

control manufacturing processes
- Series of programs to control automated equipment on shop floor
- Includes guiding vehicles to move raw materials and finished
products
- Requires a lot of input from other systems

FACTORY AUTOMATION
Factory operations
• Manufacturing automation protocol (MAP) – communications
protocol to ensure an open manufacturing system
- Pioneered by General Motors and now accepted by nearly all
manufacturers and vendors
- Allows for seamless communication between all equipment on
the factory floor
• Shop Floor Control (SFC) Systems

- Provides online, real-time control and monitoring of machines
on the shop floor
- Allows for analyzing machine activity to take corrective
measures
FACTORY AUTOMATION
Robotics
• A branch of artificial intelligence (AI) where scientists and

engineers build machines to accomplish coordinated
physical tasks like humans do
• Advantages:
- Perform repetitive tasks tirelessly
- Produce consistent high-quality output
- Avoid putting humans at risk (subject to dangers such as
paint inhalation or retinal damage)

COPYRIGHT


7th EDITION
CHAPTER 6
MANAGERIAL SUPPORT SYSTEMS

PART II - APPLICATION AREAS
Intra-organizational systems:
• Enterprise systems: (Ch. 5)
support all or most of the organization
• Managerial Support systems (Ch. 6)
support a specific manager or group of managers
Inter-organizational systems:
• e-Business applications (Ch. 7)
- B2C – link businesses with end consumers
- B2B – link businesses with other businesses
- Intermediaries
MANAGERIAL SUPPORT SYSTEMS
• Decision Support Systems

• Data Mining
• Group Support Systems
• Geographic Information Systems
• Executive Information Systems
• Business Intelligence Systems
• Knowledge Management Systems
• Expert Systems
• Neural Networks
• Virtual Reality

DECISION SUPPORT SYSTEMS
• Interactive decision support for complete or poorly structured

problems
• Data often comes from transaction processing systems or data

warehouse
• Incorporates data and models

• Three major components:
1. Data management: select

and handle appropriate data
2. Model management: apply

the appropriate model
3. Dialog management:
facilitate user interface to the
DSS

• Specific DSS – actual DSS applications that directly assist

in decision making
• DSS generator – a software package (ex. Spreadsheet)

used to build a specific DSS quickly and easily
used to create DSS Model 1

DSS Generator DSS Model 2
DSS Model 3

DATA MINING
• Employs different technologies to search for (mine) “nuggets” of

information from data stored in a data warehouse
• Decision techniques:
– Decision trees
– Linear and logistic regression
– Association rules for finding patterns
– Clustering for market segmentation
– Rule induction
– Statistical extraction of if-then rules
– Nearest neighbor
– Genetic algorithms

ONLINE ANALYTICAL PROCESSING (OLAP)
• Human- driven analysis:
- Querying against a database
- Program extracts data from the database and structures it by

individual dimensions, such as region or dealer

USES OF DATA MINING

DATA MINING PRODUCT EXAMPLES
• Xerox installed Rapid Insight Analytics software to mine customer order,
sales prospects and supply chain data to develop monthly and quarterly
forecasts.
• Farmers Insurance Group uses IBM’s DecisionEdge software to mine

data.
• Vermont County store (VCS) a catalog retailer uses SAS’s Enterprise

miner software to segment its customers to create appropriate direct
marketing lists.
Data Mining software:

- Oracle 10g Data Mining
- SAS Enterprise Miner
- IBM Intelligent Miner Modeling
SAS Enterprise Miner
- Angoss Software’s Knowledge SEEKER, XL Miner
Knowledge STUDIO, and Strategy BUILDER
DATA MINING
More Data Mining examples
• Data mining urban legend - beer and diapers
• Can data mining catch terrorists
• Data mining gamers
• Mayo builds toward customized medicines
• Data mining to locate Venusian Volcanoes

GROUP SUPPORT SYSTEMS (GSS)
• Decision support for group meetings

Goal: more productive meetings
• Includes “different time, different place” mode = virtual teams
• Product example:
Group Systems (Purchased by IBM)
Group Systems

GROUP SUPPORT SYSTEMS
• Traditional setup for “same-time, same-place” GSS

GEOGRAPHIC INFORMATION SYSTEMS
• Systems based on manipulation of relationships in space that use

geographic data
• Early GIS users:

- Natural resource management
- Public administration
- NASA and the military
- Urban planning
- Forestry
- Map makers

• Current business uses:

- Determining site locations
- Market analysis and planning
- Logistics and routing
- Environmental engineering
- Geographic pattern analysis
• Applications for mobile users: ;

- Logistics (fastest route)
- Location intelligence

• Representation of spatial data:
• Raster-based GISs – rely on dividing space into small,

uniform cells (rasters) in a grid
• Vector-based GISs – associate features in the landscape

with a point, line, or polygon
• “Coverage” data model – different layers represent similar

types of geographic features in the same area and are
stacked on top of one another

“Coverage” data model

• Organizations can buy off-the-shelf technologies and spatial

data:
- Base maps, zip code maps, street networks, and advertising
media market maps
• Other data sources may be spread throughout the organization

in different internal databases

GIS Vendors
• Environmental Research Institute (ESRI)

• Pitney Bowes ( with its MapInfo products)
• Autodesk
• Tactician Corp.
• Intergraph Corp.
ESRI
MapInfo
Tactician
Intergraph

Executive Information Systems (EIS)/
Business Intelligence Systems
• Hands-on tool that focuses, filters, and organizes information so

that an executive can make more effective use of it
• User base for EISs has expanded to encompass all levels of

management
Today also called performance management software
• Focus on competitive information…

today referred to as business intelligence systems

Executive Information Systems/
- Delivers online current information about business conditions in

aggregate form
- Filtered and summarized transaction data
- Competitive information, assessments and insights
- Easily accessible to senior executives and other managers
- Designed to be used without intermediary assistance
- Uses state-of-the-art graphics, communications and data storage

methods
Commercial EIS software
• Executive Dashboard from Qualitech Solutions
• Oracle Enterprise performance Management Systems
• SAP Business Objects Strategy Management
• SAS/EIS
• Symphony RPM from Symphony Metreo
• IBM Cognos Business Intelligence
• MicroStrategy Intelligence Server
• Oracle Business Intelligence Suite Executive Dashboard
• SAP Business Objects BI solutions SAP Business Objects
SAS/EIS
• SAS Business Intelligence
• Infor PM Symphony Metreo
Infor PM
• “Dashboard” layout for data representation:

KNOWLEDGE MANAGEMENT SYSTEMS
What is Knowledge management (KM)?
• Practices to manage Organizational knowledge
• Strategies and processes for identifying, creating,

capturing, organizing, transferring, and leveraging
knowledge held by individuals and the firm

What is a Knowledge management system (KMS)?
• System to help manage organizational knowledge
• Technologies that facilitate the sharing and transferring of

knowledge so that it can be reused
• Enables people and organizations to learn from others to

improve performance of individuals, groups and the organization
as a whole

• Potential benefits of a corporate KMS:
• Operational improvements
- Faster and better dissemination of knowledge
- Efficient processes
- Change management processes
- Knowledge reuse
• Market improvements
- Increased sales
- Lower cost of products and services
- Customer satisfaction
Example: Corporate KMS in a Pharmaceutical Firm
- KM team formed to develop organization-wide KMS
- Coordinators within communities of practice (COP)

responsible for overseeing knowledge in the community
- Portal software provides tools, including discussion forums
- Any member of the community can post a question or tip

Example continued: Corporate KMS
• Field sales KMS

- KM team formed to build both content and structure of
KMS for field sales
- Taxonomy developed so that knowledge would be
organized separately
- KM team formats documents and enters into KMS
- Tips and advice required to go through validation and
approval process

KMS Success Factors:

• Knowledge Contribution (Supply Side)
- Leadership commitment
- Manager and peer support for KM initiatives
- Knowledge quality control
• Knowledge Reuse (Demand Side)

- Incentives and reward systems
- Relevance of knowledge
- Ease of using the KMS
- Satisfaction with the use of the KMS

ARTIFICIAL INTELLIGENCE
• The study of how to make computers do things that are

currently done better by people
• Natural languages: systems that translate ordinary human

instructions into a language that computers can understand and
execute
• Perceptive systems: machines possessing a visual and/or aural
perceptual ability that affects their physical behavior
• Genetic programming/ evolutionary design: problems are
divided into segments, and solutions to these segments are
linked together breeding new solutions
• Expert systems Most relevant for
• Neural networks Managerial Support

EXPERT SYSTEMS
Expert Systems
• Captures the expertise of humans for a particular domain in a
computer program
• Knowledge Engineer:
- A specially trained systems analyst who works closely with one
or more experts in the area of study
- Learns from experts how they make decisions
- Loads decision information from experts (“rules”) into module
called knowledge base

EXPERT SYSTEMS
• Major components of an Expert System:

• Knowledge base: contains the inference rules that are followed in
decision making and the parameters, or facts, relevant to the decision
• Inference engine: a logical framework that automatically executes a
line of reasoning when supplied with the inference rules and
parameters involved in the decision
• User interface: the module used by the end user

EXPERT SYSTEMS
Options for obtaining an Expert System:
• Buy a fully developed system created for a specific application
• Develop a system using a purchased expert system shell

(basic framework) and user-friendly special language
• Custom build system by knowledge engineers using a special-

purpose language (such as Prolog or Lisp)

EXPERT SYSTEMS
Examples of Expert Systems

• Stanford University’s Diagnoses and prescribes treatment
MYCIN for meningitis and blood diseases
• General Electric’s Diagnoses mechanical problems in
CATS-1 diesel locomotives
• AT&T’s ACE Locates faults in telephone cables
• Market Surveillance Detects insider trading
• FAST Used by banking industry for credit
analysis
• IDP Goal Advisor Assists in setting short- and long-
range employee career goals
• Nestlé Foods Provides employees information on
pension fund status
• USDA’s EXNUT Helps peanut farmers manage
irrigated peanut production
NEURAL NETWORKS
Neural Networks
• Systems designed to tease out meaningful patterns from vast amounts of

data that humans would find difficult to analyze without computer support
• How it works:
1. Program given set of data
2. Program analyzes data, works out correlations, selects variables to
create patterns
3. Pattern used to predict outcomes, then results compared to known
results
4. Program changes pattern by adjusting variable weights or variables
themselves
5. Repeats process over and over to adjust pattern
6. When no further adjustment identified, ready to be used to make
predictions for future cases

NEURAL NETWORKS

VIRTUAL REALITY (VR)
Virtual Reality
• Use of a computer-based system to create an environment that

seems “real” to one or more of the human senses
• Non-entertainment uses of VR:

- Training
- Design
- Marketing
- Meetings
- Social Collaborations

Example Uses of VR
Training U.S. Army to train tank crews
Amoco for training its drivers
Duracell for training factory workers on using new
equipment
Design Design of automobiles
Walk-throughs of air conditioning/ furnace units
Marketing Interactive 3-D images of products (used on the Web)
Virtual tours used by real estate companies or resort
hotels


COPYRIGHT


INFORMACISKI
TEHNOLOGII
Josimovski Sa{o
Definicija na IT
 informacija + avtomatika
 delovna informatika - disciplina za proektirawe, dizajnirawe i
implementirawe na delovni informaciski sistemi
 informaciskite tehnologii pretstavuvaat sistemi, vo koi, vrz osnova
na podatocite na organizaciite i na pretprijatijata i na nivnata okolina,
lu|eto gi oblikuvaat informaciite za potrebite na delovnoto
odlu~uvawe so koristewe na soodvetni tehni~ki sredstva
 glavna zada~a na informaciskite tehnologii e da ja obezbedi
organizacijata so strategiska i konkurentska prednost u~estvuvaj}i i
pomagaj}i vo re{avaweto na delovnite problemi, da ja zgolemi
produktivnosta i efikasnosta, da go podobri kvalitetot na uslugite kon
potro{uva~ite i da ovozmoì delovna reorganizacija
 IKT kako dominantni faktori na delovnoto rabotewe vo noviot
milenium: informaciite i znaeweto kako strategiski resurs
IT vo sovremenoto op{testvo
 Op{testva i ekonomii koi baziraat na znaewe
 Informaciite i znaeweto se vaèn strategiski resurs na pretprijatijata
 Informaciskoto op{testvo moè da go definirame kako op{testvo
koe uspe{no gi upotrebuva informaciskite i komunikaciskite
tehnologii za ostvaruvawe i kreirawe na cela niza novi, informaciski
vtemeleni proizvodi, odnosno stoki i uslugi
 Osnovna dviè~ka sila na op{testvoto i ekonomijata bazirana na
znaewe e rapidniot razvoj i primenata na informaciskite i
komunikaciskite tehnologii (IKT)
 Informatizacija - teì{te na ekonomskite aktivnosti i na tehnolo{kite
promeni vo industriskoto op{testvo e proizvodstvoto i proda`bata na
industriski stoki od materijalna priroda, a vo informaciskoto
op{testvo, toa se obrabotkata, proizvodstvoto i proda`bata na
informaciski bazirani stoki i uslugi
INFORMACISKA REVOLUCIJA -
ISTORISKI PERSPEKTIVI
ZEMJODEL SKA I NDUSTRI SKA I NF ORMACI SKA

REVOL UCI JA REVOL UCI JA REVOL UCI JA
P^ ENI CA I NDUSTRI SKI PROI ZVODI I NF ORMACI JA
KI NA V.BRI TANI JA, F RANCI JA SAD

Karakteristiki na informaciskite proizvodi i
uslugi
 Def.: Sekoja digitalizirana stoka
 Proizvodstvoto se karakterizira so visoki fiksni i niski
marginalni tro{oci
 Stoki na iskustvoto: vrednost po konsumirawe
 Nekonkurentna stoka: ne se uniшtuva so konsumirawe
 Neekskluzivna stoka: po prodavawe na eden potro{uva~,
te{ko drugite se isklu~uvaat
 Lock in i mreèn efekt na tehnologiite za proizvodstvo
Rast i zna~ewe na sektorot za IKT i
sektorot za sodrìni i mediumi
 Najgolemi implikacii na ekonomiite vo svetot
 Del od ekonomijata bazirana na znaewe
 kombinacija na proizvodstveni i uslu`ni industrii ,
definirani od strana na OECD
 najglobaliziran del na svetskata ekonomija
 IKT proizvodite pretstavuvaa edna ~etvrtina od vkupniot
svetski uvoz i edna pettina od vkupniot svetski izvoz
 stapkata na rast na me|unarodniot pazar na IKT za
2006-2008 e 4% godi{no
 Na EU pripa|a 33.1%, a na SAD 28.4% od svetskiot IKT
pazar
Rast i zna~ewe na sektorot za IKT i sektorot za
sodrìni i mediumi (EU)
 3% od vrabotenite, so 5% od vkupniot BDP (vo SAD

6.4% i Japonija 6.8%)
 26% udel vo vkupno istraùvawe so 32% istraùva~i
 IKT sektorot ima dva pati pogolema produktivnost od
ostanatite sektori
 50% od vkupniot rast na produktivnost i 25% od rastot
na BDP e pottiknat od IKT sektorot
 Над 70% go koristi internet regularno (над 75% vo SAD)
 97% dostapnost na {irokopojasen internet
 180m sami kreirale sodrìna
IKT i EU
 êtvrtina od rastot na bruto doma{niot proizvod (BDP) na

Evropskata unija (EU) i 40% od rastot na produktivnosta
e kako posledica na koristeweto na IKT
 Na Evropa pripa|a edna tretina od globalnata IKT
proda`ba, so stapka na rast od 5% godi{no
 Momentalnite investicii na EU vo IKT istraùvawe i razvoj
po ìtel iznesuvaat 100 Evra, {to e mnogu pomalku od
iznosot na SAD, 350 Evra i Japonija, 400 Evra
 2.1% od BDP vo istraùvawe i razvoj (2.8 SAD, 3.4
Japonija i 2.5 Kina)
IKT I SAD
 Pove}e od polovina od bruto doma{niot proizvod i nad 50% od
vkupniot broj vraboteni pripa|aat na dejnostite povrzani so
proizvodstvo i obrabotka na podatoci i informacii
 Nad 9 % od BDP vo IKT
 namaluvawe na inflacijata za pove}e od 1%, odnosno zabeleànata
vrednost od 2% bez u~estvoto na informacis-kite tehnologii bi
iznesuvala nad 3%;
 Vo periodot 1989-2001 prose~niot godi{en rast na BDP vo IT
intenzivnite industrii (4.41%) e skoro dvojno pogolem otkolku vo
pomalku intenzivnite IT industrii (2.44%). Isto taka prose~niot
godi{en rast na BDP vo ramkite na IT intenzivnite industrii za
periodot 1995-2001 godina e za 2.55% pogolem od rastot za
periodot 1989-1995 godina
IKT I SAD
 Spored poslednite istraùvawa, pove}e od edna ~etvrtina

od vkupniot ekonomski rast se dolì na razvojot na
informaciskite tehnologii
 Investiciite vo informaciskata oprema pretstavuvaat
okolu 50% od site vloùvawa vo oprema nameneta za
delovnoto rabotewe (vo 1960 godina u~estvoto
iznesuvalo samo 2%)
 Zgolemeniot prose~en godi{en rast na produktivnosta od
1.4% za periodot 1990-1995 godina, na 3.2% za
periodot 1996-2002 godina, se smeta deka e glavno
rezultat na rastot na digitalnata ekonomija
“digital divide” se odnesuva na razlikite pome|u
individualci, doma}instva, delovni subjekti i
geografski oblasti {to se na razli~no socio-
ekonomsko nivo od gledna to~ka na nivnite
mo`nosti da imaat pristap i da gi koristat
informaciskite i komunikaciskite tehnologii i
Internet.
Za prvpat video korisnicite gi nadminaa e-mail korisnicite!!!
Korisnicite na socijalnite mreì gi nadminaa korisnicite
na e-mail!!!
Indeks za e-podgotvenost, Economist
Intelligence unit
Индекси на вмрежена подготвеност, World
economic forum (Македонија на 66 место)
Хаити 2,27
Албанија 3,89
Романија 3,9
Македонија 3,91
Хрватска 4,22
Словенија 4,58
САД 5,56
Финска 5,81
Шведска 5,94
0 1 2 3 4 5 6 7
Premin na Evropa i Republika Makedonija vo
informacisko i op{testvo bazirano na znaewe
 1994 godina go izdade, takanare~eniot,

“Bangemanov izve{taj”, so naslov “Evropa vo
globalnoto informacisko op{testvo”
 Lisabonskiot ministerski sostanok vo Mart 2000
godina postavena e mnogu ambiciozna cel, so
~ija realizacija Evropskata Unija (EU) treba da
stane najkonkurenten region so najrazviena
ekonomija vo svetot
eEvropa 2005: informacisko op{testvo za
site
 Politi~ki merki koi se odnesuvaa na adaptacija na
legislativata, pottiknuvawe na konkurencijata i
me|usebnata sorabotka i pristap kon raznovidni
kompjuterski mreì
 Razmena na iskustvo, najdobri praktiki i poddr{ka na
proekti za implementacija na soodvetni aplikacii i
razvivawe na infrastrukturata
 Monitoring i ben~marking
 Koordinacija na postoe~kite politiki, so cel postignuvawe
na sinergiski efekt
i2010 – Evropsko informacisko op{testvo
za rast i vrabotuvawe
 Kompletirawe na Edinstveniot evropski informaciski
prostor koj }e promovira otvoreni i konkurentni vnatre{ni
pazari za informacisko op{testvo i mediumi
 Poddrùvawe na inovativnosta i na investiciite vo IKT
istraùvawata i promovirawe na novi rabotni mesta, so
cel eliminirawe na zaostanuvaweto na Evropa vo odnos
na vode~kite konkurenti, SAD i Japonija
 Postignuvawe na inkluzivno evropsko informacisko
op{testvo
Evropska Digitalna Agenda
 Edna od sedumte inicijativi vo Evropa 2020: strategija za

pameten, odr`liv i inkluziven rast
 [irokopojasen internet so brzina 30 Mbps (televizija na
barawe)
 NGA mreì
INFORMACISKI
TEHNOLOGII
Josimovski Sa{o
Eksponencijalen rast na …
 Udvojuvawe na ~ove~koto znaewe na sekoi 5

godini
 Над 10 egzabajti digitalizirani informacii =
74.000 kongresni biblioteki
 Digitalno pretprijatie: koristewe na IKT za poddr{ka na
aktivnostite i vrskite so potro{uva~ite, partnerite,
vrabotenite i vladinite institucii
 Biznis-proces pak pretstavuva mnoèstvo na povrzani i
struktuirani aktivnosti ili zada~i vo edno pretprijatie koi
proizveduvaat specifi~en proizvod ili usluga namenet za
posebni potro{uva~i
 Digitalna ekonomija pretstavuva ekonomija koja bazira
na koristeweto na digitalnite tehnologii pri {to u~esnicite
se podobro informirani i imaat mo`nost za komunicirawe
preku IKT
Hierarhiska struktura na procesi
Vr ednosen si nxi r
Bi zni s-pr oces Bi zni s-pr oces

… Bi zni s-pr oces
…
Bi zni s-podpr oces
… Bi zni s-podpr oces
…
Akt i vnost Akt i vnost
… Akt i vnost
…
Par t ner i
F i nansi i
Smet kovodst vo
Pr oces V Mar ket i ng
Pr oces A
Pr et pr i j at i e
Pr oi zvodst vo
^ ove~ki
Pr oces B
r esur si
Procesi – funkcionalni oblasti
Pot r o{ uva~i
K-ki na digitalnata ekonomija (1/2)
 Globalni elektronski pazari kade se sretnuvaat globalni
potro{uva~i, dobavuva~i i partneri;
 Masovno koristewe na digitalnite sistemi;
 Koristewe na transakcii vo realno vreme pri {to poradi
digitalizacijata na proizvodite i uslugite biznis procesite
se izvr{uvaat mnogu pobrzo;
 Informaciska preoptovarenost, poradi {to na zna~ewe
dobivaat inteligentnite sistemi za prebaruvawe na
informaciite;
 Digitalizacija na proizvodite i uslugite;
K-ki na digitalnata ekonomija (2/2)
 Pojava na novi i podobreni biznis modeli i procesi koi
davaat mo`nosti za pojava na novi kompanii i industrii;
 Porast na digitalnite i internet-bazirani inovacii, koi
sozdavaat visoka stapka na zastarenost na proizvodi i
tehnologii;
 Inovativni sistemi za izmama;
 Potpolna ili parcijalna digitalizacija na pretprijatijata.
IT gi podrùvaat slednite celi:
 podobruvawe na produktivnosta,
 namaluvawe na tro{ocite,
 podobruvawe na odlu~uvaweto,
 podobruvawe na odnosite so potro{uva~ite i
 razvivawe na novi strate{ki aplikacii
Mo`nosti na IT
 izvr{uvawe na obemni numeri~ki presmetki so golema brzina,
 obezbeduvawe na brza i evtina komunikacija vo ramkite na
organizacijata i nadvor od nea,
 skladirawe na golemi koli~ini na informacii,
 ovozmoùvawe na brz i eftin pristap kon golemi koli~ini na informacii
na razli~ni lokacii,
 olesnuvawe na rabotata vo te{ki uslovi, avtomatizirawe na biznis
procesi,
 olesnuvawe na globalnata trgovija,
 koristewe na aplikacii od bilo koe mesto i pokvalitetno i poeftino
izvr{uvawe na biznis procesite
ENTERPRISE ARCHITECTURE
Enterprise Architecture Pyramid

EA IS VITAL FOR SUCCESS
“…analysts have predicted that by 2010,

companies that have not aligned their
technology with their business strategy will
no longer be competitive in their
industries.” BPTrends, Paul Harmon, May
2004
BUSINESS PROCESS DESIGN IN E-BUSINESS MASTER OF E-BUSINESS BY DISTANCE LEARNING

Delovni pritisoci, odgovor na
organizaciite i IT
Organizacija
Informaciski tehnologii
Delovni pritisoci
 pazarnite pritisoci
 tehnolo{kite pritisoci
 op{testveni pritisoci
Odgovori na organizaciite
 strate{ki sistemi za konkurentska prednost

 postojani napori za podobruvawe
 reorganizacija na delovnoto rabotewe
 delovni zdruùvawa
 e-biznis
Ciklus na inovirawe na delovnata praktika
Post oe~ka
del ovna Post oe~ki I KT
pr akt i k a
Mi si ja
Cel i
St r at egi ja
Del ov ni Tehnol o{ k i
Pl anov i
pot r ebi , pot r ebi ,
okol nost i i okol nost i i
r i zi c i r i zi c i
Per f omansi
Moni t or i ng
Nov a del ov na Nov i I KT

pr akt i k a
Trendovi koi vlijaat vrz inoviraweto na
delovnoto rabotewe
 elektronska komercija i elektronski biznis

 integrirawe na kompjuterskite i na komunikaciskite
tehnologii
 avtomatizacija na delovnoto rabotewe
 u~estvo na novosozdadena vrednost vo nematerijalen
oblik
 reorganizacija
 skratuvawe na delovnite ciklusi
 globalna konkurencija
 standardizacija
u~estvo na novosozdadena vrednost vo nematerijalen
oblik
Specifi~ni trendovi koi vlijaat vrz inoviraweto
na delovnoto rabotewe
 Tehnolo{ki
 Kompjutersko rabotewe vo oblak
 pomo}ni i po{tedlivi kompjuteri
 Softver kako servis
 Mobilni digitalni platformi
 Mali kompjuterski uredi
 Menaxment
 Internet bazirana sorabotka i socijalni mreì
 Biznis inteligencija
 Videokonferencii i veb konferencii
 Organizaciski
 Veb 2.0, 3.0, 4.0
 Autsorsirawe
 Pro{ireno pretprijatie
Strategisko koristewe na IT
 Promenata na strategiskite celi bara promena na
IKT infrastrukturata
 Strate{ki biznis celi
 Operativna odli~nost
 Novi proizvodi, uslugi i biznis modeli
 Bliskost so partnerite
 Podobreno donesuvawe na odluki
 Konkurentska prednost
 Opstanok
 Specifikacii na strategiite so
 Porterov model na konkurentski sili
 Porterov model na vrednosen sinxir
Porterov model na konkurentski sili
 Razvoj na strategii za zgolemuvawe na
konkurentska prednost
 Kako IKT ja podobruvaat konkurentosta
 Pet glavni sili koi vlijaat na konkurentnosta
 Opasnost od vlez na novi u~esnici na pazarot;
 Mo} na pregovarawe so dobavuva~ite;
 Mo} na pregovarawe so potro{uva~ite ili kupuva~ite;
 Opasnost od supstitut na proizvodite ili uslugite;
 Rivalstvo pome|u postoe~ki kompanii vo industrijata
 Osnovni strategii
 Strategija na niski tro{oci;
 Strategija na diferencijacija;
 Strategija na fokus na mal segment na pazarot
 Ostanati strategii
 Ostvaruvawe na bliskost so potro{uva~ite i dobavuva~ite;
 Zgolemuvawe na udelot na pazarot;
 Formirawe na alijansi so delovnite partneri;
 Voveduvawe na inovativni proizvodi;
 Podobruvawe na operativnata efikasnost;
 Podobruvawe na zadovolstvoto na potro{uva~ite;
 Sozdavawe na barieri za vlez na novi kompanii;
 Stavawe na potro{uva~ite vo efekt na zaklu~enost;
 Zgolemuvawe na tro{ocite na zaklu~uvawe
Nov i u~esni ci
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7th EDITION
CHAPTER 9/10/14/15

METHODOLOGIES FOR CUSTOM SOFTWARE
DEVELOPMENT
• Large firms purchase software packages whenever feasible, but

development of custom software still highly important
• Custom methodology also used by software companies who

develop products for many different buyers
• Approaches for developing custom applications:

- Traditional Systems Development Life Cycle (SDLC)
- Prototyping
- Rapid Application Development (RAD)
- Agile Development

SYSTEMS DEVELOPMENT LIFE CYCLE
• Systems development life cycle (SDLC)
- Highly structured process for developing customized

applications
- Requires a lot of documentation and formal reviews at end of
each major step
- Output from one step = input to next step (Waterfall model)
SDLC Waterfall

SDLC Waterfall: 8 Steps in 3 phases
Figure 9.1
Typical SDLC project costs by Steps in 3 Phases

SDLC DEFINITION PHASE
Definition Phase
Feasibility Analysis (3 types)
Technical
Operational
Economic

Technical Feasibility
• Primary responsibility of the IS analyst
• Based on:
- Knowledge of current and emerging technological
solutions
- IT expertise of in-house personnel
- Anticipated infrastructure needed to both develop and
support the proposed system

Operational Feasibility
• Primary responsibility of the business manager
• Entails assessing the degree to which a proposed system
addresses the business issues that gave rise to the idea for
a new information system
Economic Feasibility
• Business managers and IS analysts work together to
prepare a cost/benefit analysis
• IS analyst responsible for establishing the
developmental costs for the project

Feasibility analysis
• Typical Deliverable:10-20 page document:
- Executive overview and recommendations

- Description of what system would do and how it would
operate
- Analysis of costs and benefits
- Development plan

Requirements Definition
• Focuses on processes, data flows, and data interrelationships

rather than a specific physical implementation
• Requirements are gathered by:

- Interviewing individuals or work groups
- Reviewing documents
- Observing employees doing their jobs

Requirements Definition
• Deliverable = systems requirements document:

- Detailed descriptions of inputs and outputs, processes used
to convert input data to outputs
- Formal diagrams and output layouts
- Revised cost/benefit analysis
- Revised plan for remainder of project
Approved by business managers before next phase begins

RAPID APPLICATION DEVELOPMENT (RAD)
• Hybrid methodology: combines aspects of SDLC and

prototyping
• Goal = produce a system more quickly than an SDLC alone

A common RAD technique is:

JOINT APPPLICATION DEVELOPMENT (JAD)
• Team of users and IS specialists engage in an intense

and structured process in order to minimize total
time required for gathering information from
multiple participants


CASE TOOLS
Computer Aided Software Engineering (CASE)
Any software tool used to automate one or more steps of a software

development methodology

AGILE DEVELOPMENT
• Alternative methodology for smaller projects
• Based on four key values:

- Simplicity
- Communication
- Feedback
- Courage
AGILE Manifesto
THE MAKE-OR-BUY DECISION
.
- In large companies today, application software is typically

both custom developed and purchased.
-In small businesses, software is typically purchased.
Why?
Make Buy

THE MAKE-OR-BUY DECISION
Advantages and Disadvantages of Purchasing

PURCHASING METHODOLOGY
Initiating the Purchasing process

• Development of a high-level cost estimate - with business
manager and IS analyst input

The Purchasing Steps
• Steps for purchasing application packages fit into the three SDLC
phases (referred to as the modified SDLC approach)
Fig 10.1

The Purchasing Steps, continued
• In comparison to an SDLC methodology, the Definition phase

has additional steps, and the Construction phase is greatly
reduced.
• In special circumstances, if the package is new, the purchaser

may play a major role as an Alpha or Beta site for the vendor:
- Alpha site: plays a role in determining the final

functionality and user interface design for the new package
- Beta site: plays a role in user acceptance testing

INFORMATION SECURITY
• Background
- Organizations face both internal and external security threats
- Growth in online transactions and usage of external networks

has increased the demands for information security
- Traditional security measures include technical solutions
- Managerial measures will be a key focus of this chapter

COMPUTER CRIME (E-CRIME)
• A crime that involves a computer or a network
• Some crimes directly target computer or networks; other

crimes use computer or networks to commit a crime
• Computer crimes can involve a single computer or

thousands of computers
• Due to increased Internet connectivity, “cyber attacks” have

greatly increased over the past decade

COMPUTER CRIMES BY EXTERNAL ATTACKERS
Virus: a small unit of code that invades a computer program or file. When the invaded program is
.
executed or the file is opened, the virus makes copies of itself that are released to invade other programs
or files in that computer. It may also do nasty things like erase files or corrupt programs. Viruses are
transmitted from one computer to another when an invaded computer program or files is transmitted to
another computer.
Example: ILOVEYOU – May 2000. Written in Visual Basic script; transmitted as an attachment to an
e-mail with the subject line ILOVEYOU. Estimated damage: $10-15 billion
Worm: a virus that has the ability to copy itself from machine to machine, normally over a network
Example: Sobig.F – August 2003. Spread via email attachments; sent massive amounts of email with
forged sender information; deactivated itself Sept. 10, 2003. Estimated damage: $5-10 billion
Trojan Horse: a security-breaking program that is introduced into a computer and serves as a way for
an intruder to re-enter the computer in the future. Like the huge wooden horse used by the Greeks to
trick the Trojans into opening their city gates to let in the horse, it may be disguised as something
innocent such as an electronic greeting card, screen saver or game.
Logic Bomb: a program introduced into a computer that is designed to take action at a certain time or
when a specific event occurs.
Denial of Service Attack: a large number of computers on the Internet simultaneously send repeated
messages to a target computer, resulting in the computer being overloaded or the communications lines
are jammed so that legitimate users cannot obtain access.
FIGURE 14.1 Common Techniques Used by External Attackers

NEWER “SOCIAL ENGINEERING” TECHNIQUES
• Phishing
The solicitation of sensitive personal information from users,
commonly in the form of email and instant messages
• Spoofing
The use of a fraudulent Web site that mimics a legitimate one; often
used in conjunction with phishing

COMPUTER CRIMES BY INSIDERS
• Typical crimes by current employees, recent employees,

and business partners:
• Gaining unauthorized access to information, systems, and/or

networks
• Theft of intellectual property rights, trade secrets, and/or

research and development knowledge
• Data breaches by an organization’s business partners

SECURITY TECHNIQUES BY OSI LAYER
Layer #1: Firewalls Pros: lots of vendor solutions, easy to
Perimeter Layer VPN encryption implement
(web servers, mail servers, etc.) Network-based Anti-virus Cons: hackers can easily penetrate it
Layer #2: Intrusion detection systems (IDS) Pros: solutions provide deep security
Network Vulnerability management systems not easy to breach and regular
(LAN/WAN) Network access control monitoring
User control/Authentication Cons: IDS tend to report false
alarms; some solutions better for
specific network devices rather than
network as a whole
Layer #3: Host IDS Pros: solutions provide good
Host Security Host Anti-Virus operational protection at device level
(individual computer, server, Cons: time-consuming to deploy as
router, etc.) are fine-tuned for individual devices
Layer #4: Public Key Interface (PKI) Pros: encryption provides robust
Application RSA security
Access Control/Authentication Cons: overhead results in slower
system response
Level #5: Encryption Pros: solutions provide good security
Data Cons: Dependent on good
organizational policies and good
execution by data steward
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall Figure 14.2 14-27
SOCIAL, ETHICAL AND LEGAL ISSUES
• IT is influencing societies across the globe
• Despite its benefits, there are also a number of negative

social impacts, such as:
- Loss of personal privacy and identity theft
- Increased intellectual property violations
- E-mail spam
- Computer viruses and worms that destroy data on personal as
well as corporate computers

THE LEGAL ENVIRONMENT
• Purpose of Legislation
- To constrain behavior within a society so that there is minimal

harm to its members and its needs are met
- IT is evolving so rapidly that laws inevitably lag behind
- Both needs and harms also differ across nations
Note: Examples of several recent U.S. laws that impact information

security management are discussed in Chapter 14
ETHICAL ISSUES
• IT is having a growing effect on our lives and can give rise to
ethical issues
• Managers who determine how IT is used are also responsible for
the ethical implications of their decisions
• Potential consequences of unethical behavior

• For an individual employee
- Loss of reputation
- Loss of employment or career
• For an organization
- Loss of reputation
- Business survival

IDENTIFYING ETHICAL PROBLEMS
– The first step is to recognize that a decision or action has ethical

implications
– These questions can be used to identify potential ethical

problems:
• Is this fair to everyone that will be affected?
• Would I want my mother to know about this?
• Would I care if everyone knew about this?
• What would be the result if everyone did this?
– IT-related ethical problems have the potential to impact many

stakeholders
ANALYZING ETHICAL PROBLEMS
• There is no universally accepted way to determine whether an

action is justified or unethical
• Many basic ethical principles have come from religious

traditions and philosophers
• Ethical issues may also be viewed differently depending on

culture
• Example: In some countries, bribery is not considered
unethical
APEC attempt to
ban bribes
EXAMPLE: CODE OF ETHICS
Professional Association Example:

The IEEE-CS and ACM have jointly developed a comprehensive
code of ethics for the software engineering profession

ANALYZING ETHICAL PROBLEMS
• Ethical reasoning is seldom difficult, but some problems are so

complex that the decision is not obvious
• In these complex situations, there are usually many alternative

actions to consider
• In organizations: Managers should identify ethical problems and

include all parties who are affected by the decision

SOCIAL ISSUES
• Privacy
• Identity Theft
• Intellectual Property Rights

PRIVACY
Textbook definition of Privacy:
The ability to control access to information about ourselves
• An individual might give permission to collect and use certain

personal information in exchange for some benefit or business
transaction
• Privacy is invaded when information is used in ways the individual

never intended or explicitly agreed to

PRIVACY
Why is Privacy a business issue?
• Personal information can be extremely valuable to marketers, and

many companies spend significant funds on obtaining it
• Credit cards, customer loyalty cards, warranty cards, and
sweepstakes are all used to collect personal information
• U.S. citizens differ widely in their attitude toward personal

privacy. On average, U.S. surveys suggest that:
- 25% of individuals are not concerned with privacy issues
- 50% are willing to consider trading some personal privacy for
other benefits
- 25% are quite sensitive to loss of privacy

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MANAGING INFORMATION TECHNOLOGY

Information Technology (IT):

Computer technology (hardware and software)

Communications technology (voice and data networks)

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Business managers, not just IT managers, are responsible for IT

• IT is linking emerging, developing and developed economies,

• Computer Hardware: Faster, Cheaper, Mobile

- Computers have become smaller and faster

Personal Digital Laptop

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Computer Networks: High Bandwidth, Wireless and Cloudy

- High demand for high speed Internet access

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Telecommuters: Individuals who use mobile technology

• Virtual Teams: Geographically separated work teams

• Free Agents: Individuals who choose to contract out their

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Information Systems (IS) Department:

• Information Systems departments can vary greatly across

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

- Low Need for New Information

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

- High Need for New Information

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Three Types of IT Resources (Figure 1.1 – based on Ross et al.)

- Technology Infrastructure: Computers, software and networks

- Human Resources: IT professionals and managers who have the

- Business/IT Relationships: Established relationships between

• Two primary responsibilities:

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Example: IS Organization Chart

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

• All rights reserved. No part of this publication may be reproduced, stored in a

Copyright © 2012 Pearson Education, Inc.

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-1

Building Blocks of Information Technology

Hardware Software Networks Data

Chapter 2 Chapter 2 Chapter 3 Chapter 4

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Physical pieces of a computer system

Set of programs that control the operations of a computer

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• All computers made up of the

• Control unit and

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Input: What is the difference between a terminal

- Designed strictly for input and output

- Examples: point-of-sale terminal, ATM

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Common Input Methods:

- Keyboard: input entered by user through keystrokes

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Common Output Methods:

- Video display unit: displays output on a screen

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Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall 2-14