diLigUuUctivit It is the information age—a time when knowledge is power. Today, more than eve, businesses are using information (and information technology) to gain and sustain 4 competitive advantage. You'll never find a business whose slogan is “What you don't leave can’t hurt you.” Businesses understand that what they don’t know can become ay ‘Achilles’ heel and a source of advantage for the competition Think about your major. Whether it’s marketing, finance, accounting, human re. source management, or any of the many other specializations in a business program, you're preparing to enter the business world as a knowledge worker. Simply put, ; Inowledge worker works with and produces information as a product. According o U.S. News ¢ World Report in 1994, knowledge workers in the United States outnumber all other workers by a four-to-one margin? Unfortunately, we couldn’t find a more up- to-date reference for the same statistic, but we would imagine that knowledge workers today outnumber all other types of workers by at least a five-to-one margin. Sure, you may work with your hands to take notes or use a mouse and keyboard to produce.a spreadsheet, but what you've really done is use your mind to work with, mas- sage, and produce more information (hopefully meaningful and useful information). Ac- countants generate profit and loss statements, cash flow statements, statements of re tained earnings, and so on, some of which appear on paper. But you wouldn’t say that an accountant produces paper any more than you would say Michelangelo was a commer- cial painter of churches. In the information age, management information systems is a vitally important topic. Why? Because management information systems deals with the coordination and use of three very important organizational resources—information, information technology, and people. Formally, we define MIS as follows: Management information systems (MIS) deals with the planning for, development, management, and use of information technology tools to help people perform all tasks related to information processing and management. In that definition, you can find three key resources—information, information technol ogy, and people. That is, people or knowledge workers use information technology t0 work with information. Indeed, if we were not in the information age, information tech- nology would probably still be around, but it wouldn't be nearly as important as itis today. ‘That's what this text is all about—management information systems or MIS. What you need to remember is that the sole focus of MIS is not technology. Technology is 5 of tools that enables you to work with information. Pragmatically speaking, people and information are the most important resources within MIS, not technology. Of course, every organization today needs all three (and many others such as capital) to compete eF fectively in the marketplace. So, don't think of this as a technology textbook, because not. You will read three very technology-focused chapters: Chapter 3 on databases and data warehouses; Chapter 4 on decision support systems and artificial intelligences and Chapter 8 on technology infrastructures. But all the remaining six chapters, including this one, really focus on how people, information, and information technology work '- gether to help an organization achieve a competitive advantage in the marketplace.Today's Economic Environment about today’s exciting clin this chapter, et’ first talk some more Then, we'll explore information, people, and infor- ally, we'll address the specific roles and goals of wid the life of any business, These roles and cy also define the ways in which businesses rketplace. ‘As we move forwat sic market environ nology as key resources. Fit chnology in both your life formation tc vals drive our Orga al are gaining ant ration of this text. J eustaining a competitive advantage in the n Today's Economic Environment derstand and operate effectively withi nent. As you'll see later in this in business afl in business today, you have to une faetepaced, and changing economic environ Shaper. many businesses must undergo 2 sor of transformation just to stay in k pete efectively- Other businesses remain highly competing by continuing to in- critics, Whatever the case, today’s economic envi economic environment, = Tobe succes a dynamics and ovate product and service charact aimee i changing at a dramatic pace, As you enter todays you must « Know your competition, sometimes known as competitive intelligence through such best business practices as customer + Know your custome’ relationship management (CRM) + Work closely with your business partners, through such best business practices as supply chain management (SCM) ch and every part of your organization works together to provide its * Know how products and services “Throughout this text, we focus om all hese, including many best business practices and the technologies that support them. Right now; le’ look at an overall view of today’s economic environment THE E.CONOMY Electronic commerce is certainly the hottest topic in business today, and we've devoted all of Chapter 5 to it as well a significant portions of other chapters (especially the next chapter), But what exactly is electronic commerce and what does it enable a business to do? Formally defined, : Electronic commerce is commerce, but it is commerce accelerated and enhanced by information technology, in particular, the Internet. It enables customers, consumers, and companies to form powerful new relationships that would not be possible without the enabling technologies. Electronic commerce will make serious winners out of some businesses and losers out of others. Indeed, most of the early dot-com companies are out of business today be- cause of ther fulure to implement electronic commerce correctly. In short, you can’t simply create a Web site and expect your customers to beat a virtual path to your door. You must still follow sound business principles and guidelines. That's why most of the carly dot-coms failed. They ignored sound business principles and focused solely on the technology. That's a bad road to travel, and one that will undoubtedly lead to failure, Re- member: information technology is indeed a key organizational resource, but it is only one of many.Higher Education =rereqarzten, Communications, ‘and Uiilities Business and Other Services ‘Wholesale and Retail Trade ‘Manufacturing Banking, Finance, Figure 1.1 Percentage of Sites That Plan to Add Telecommuting* Government and Insurance Chapter 1 The Information ‘Age in Which You Live 80 100 20 40 ‘best business prac- Blectronic commerce is giving rise to many new and innovative 1.1). Telecommut- sioes such a8 telecommuting and the virtual workplace (see Figure ing and the virtual workplace go hand in hand: Telecommuting is the use of communications technologies (such as the Internet) to work in a place other than a central location. jorkplace. No walls. No The virtual workplace is a ‘technology-enabled we her people and information you boundaries. Work anytime, anyplace, linked to ot! need, wherever they are. ‘Today, more than 35 million people in the United States telecommute, and that figure is expected to grow by 20 percent over the next several years. You may be participating in 2 form of telecommuting if you're taking this class via distance learning, Distance learn- ing essentially enables you to learn ina virtual classroom without going to campus a cou ple of times a week. Of course, ifyou are participating in distance learning, then your in- structoris most probably participating in telecommuting as well. That is, he or she may be sitting at home right now sending you e-mails and leading class discussions in chat rooms. ‘Telecommuting is popping up in many business sectors; some make obvious sense and some may surprise you. For example, JC Penney has told its telephone service rep- resenaves who handle orders over the phone to go home and work thee. In exch ome, JC Penney provides a computer, work space furniture, and a high-speed Internet connection. When you cll he 1-800 number for JC Penney to order from its eas Your phone calli outed tothe home ofa telecommuter. The telephone service repre tative will answer the phone and speak with you and i ae : you and use the high-speed Internet = record your order, inform you ofa delivery time, and process your credit . It makes sense when you think about it. Ifyou ing eurtomer orders eee Ifyou're handling customer orders over ddan at teal ned is computer wih a connection to a database of product fou don’t need to be sitting in a central office. THE “NOW” ECONOMY oe any time of the day or night and just about Seer for your bank to open to cash a check feb sites are also great examples, In the5 - 1 WANT ITE Tennis shoes with lighted heels are just one of the many wants-based products that have recently surfaced. Take walk around a mall, see how many wants-based prod- tis you can find, and then fill in the table below. Criti ‘aly think about what information a business must know about its customers to identify potential buyers. Also, stay away from foods—we need very few actual Now that you've identified a few wants-based prod: ucts, consider how technology could help you capture and process information relating to people who buy those products. Where would that information come from? Could you use technology to capture that infor- mation? Once you have the information, what tech- nologies could you use to process that information? food products, but our taste buds deserve variety. comfort of your home, apartment, or dona, you can buy books from Amazon.com jon.com), make airline reservations (at wws.ual.com for example, United s Web site), and purchase concert tickets from such sites as Ticketmaster (www.ticketnnaster.com). The truth is we've become » very impatient society. And we've come to expect busi- nesses to provide us with products and services (or at a minimum the ability to order them) whenever and wherever we desire. Technology is certainly an integral facilitator here. M-commerce, the term used to describe electronic commerce conducted over a wireless device such as a cell phone or personal digital assistant, now gives you the abil- ity to buy and sell stocks with your cell phone while driving down the road. And, using most Web-enabled personal digital assistants, you can bid on auctions at eBay or obtain up-to-the-minute weather forecasts. ‘A closely related concept is that of a wants-based economy. Some 30 years ago, peo ple mainly purchased what they needed. Not so today. Consider these two examples. First, there are tennis shoes in which the heels light up with the pressure of each foot- step. Now, how many people do you think really need tennis shoes with rear lights? Very few, if any, but if that’s what they want, that’s what they'll buy. A second example is that of dog bakeries, some of which offer dog birthday cakes that range in price from $100 to $500. In realty, neither people nor dogs need to eat treats, but some dog owners simply want to indulge their pets. Why is it important to understand that you're in a wants-based economy? Because you will then realize that, while you can fairly easily forecast what your customers will need, you can’t always predict what they'll want. So, the better you know your cus- tomers, the better you can determine what they might want.8 Fa 2» i Bs Ze § Z 5 4 we Figure 1.2 where the 8ig Companies Are* — Gen pritainneth France ters 1985 1980 — THE GLOBAL ECONOMY «which customers, businesses, suppliers, distributors, and A global economy is one in ie eee “lloperate without regard to physical and geographical omen Con. ‘der the graph in Figure 1.2. Ie charts the world’s industrial leaders from 1975 to 2000, Notice the gradual and consistent increase in the number of companies outside the United States. But don’t let the number ‘Although its true that there are many : dollars in the U.S. market, U.S.-based companies enjoy ervices throughout most of the world. So, while foreign co the dollars in the United States of some 287 million consumers, ing products and services to a market of more than 6.2 billion cons ‘You must realize that most large businesses (and even many small businesses) oper- ate as transnational firms—firms that produce and sell products and services in coun- ‘e world, This is a substantial career opportunity for you. Think of how ige or had rs scare you. “foreign” companies competing for consumer marketing their products and mpanies are competing for U.S. companies are sell sumers worldwide. tries all over the much better your résumé would look if you could speak a foreign langue knowledge in subjects related to all aspects of international commerce. THE ARRIVING DIGITAL ECONOMY We are in the information age right now. But we are seeing a transition into the digital age. When we do arrive there, the digital economy will be one marked by the electronic movement of all types of information, not limited to numbers, words, graphs, and pho- tos but including physiological information such as voice recognition and synthesiar tion, biometrics (your retina scan and breath for example), and 3-D holograms. A holo- gamina oa image projected into the air. If you've ever watched Star iad i Es i a the holodeck, a sophisticated technology-based device that ees >perience virtual experiences without the need of today’s clunky oe (found in current virtual reality systems). short years ago, oie as oe moving in that direction. Justa fev sion ofthe future. Today they are a reality and a pat of the Coen ad ae This represent another substantial career oppor ee eek ing tothe digital movement only of words, nunbers went ee a 's, numbers, graphs, and photos. Think outsideInformation as a Key Resource envision moving all types of information electronically: For a rich and bo arvaking discussion ofthe fatre digital economy: you might want to fi Se oot Chapter 9. (This isn't a work of fiction, so reading the end first vont aim he est ofthe story for You) i aye economic environment is ded uniques exciting and fall of opportunities ‘Temorrow's economic environment wil be even more exciting id holds m Far you in your career. Are you ready to help a usiness use technology to gain for yo promises and sushi Information as a Key Resource n'a competitive advantage? <> Infomation is important for several reasons today, two of which we've already stated. ders pfornation is one of the three Key components of management information sys- ep along with information technology and people. Second, we are ip the “informa- wi age ane when knowledge is power. And knowledge comes from having timely sects to information and knowing what to do with it. DATA VERSUS INFORMATION ‘Tounderstand the nature of information and exactly what iti, you must first understand another term —data. Data are raw facts that describe a particular phenomenon. For €x- anole, the curent temperature, price of movie rental, and your age are all data. Infor- snatign then i simply data that have a particular meaning within a specific context. For Trample, if you're trying to decide what to wea, the current temperature is information yeeaseits pertinent to your decision at and (what to wear); the price ofa movie rental, however is not Tnformation may be data that have been processed in some way or presented in @ more meaningfl fashion. In business, for instance, the price ofa movie rental may be in- formation to a checkout clerk, butt may represent only data to an accountant who is re- sponsible for determining net revenues 2t the end of the month. PERSONAL DIMENSIONS OF 'N&GRMATION As a knowledge worker, you work with and produce information. As you do, you can consider it from three points of view or dimensions: time, location, and form (see Figure 1.3). Figure 1.3 Personal Dimensions of Information ‘THE TIME DIMENSION The time di- mension of information encompasses two aspects: (1) having access to infor- mation when you need it and (2) having information that describes the time pe- riod you're considering, The first really deals with timeliness. Information can become old and obsolete. For example, if you want to make a stock trade today, you need to know the price of the stock right now. Ifyou have to wait a day to get stock prices, you may not survive in theANGUAGE BARRIER? un" > * ovERCOMING F the Internet, "| 4 tess and Ie is becoming less an en no. ical worl err vpave new issues 10 a8) with, no: However, ni happens if you connect jer, What tably a language barrie ion in a language you mail to to a site that o don't understan someone who doesn ‘one solution is lang\ J? How can you send an e 't speak English in Japan? uage translation software. And i in the development of cone company leading the way in Tanguage translation software is SYSTRAN- SYSTRAN Enterprise isa suite of software tools that enables you to. among other things, translate about 3,700 words per minute, translate both e-mail and Web page con- tent, and display Asian fonts. Is it perfect? Not according to SYSTRAN's disclaimer, which reads, “SYSTRAN strives to achieve the highest possible accuracy, however, no automated translation is perfect nor isit intended to replace human trang, Users should note that the quality of the sou significantly affects the translation.” As you imighy pect, automated translation software has a particu difficult time with idioms. lary Indeed, when Kentucky Fried Chicken wantey translate its slogan “finger-lickin’ good" into Ching? it came out as “eat your fingers off." Now, KFC war” using SYSTRAN's software, but this example does mn trate the difficulty of translating idiomatic ohrase, from one language to another. Product names ae ¢° other example. When General Motors (GM) tried to A the Chevy Nova in South America, people dicin’t buy ‘Asis turns out, No va means “it won't go” in Spanish GM subsequently changed the name to Caribe for ig Spanish markets. By the way, you should connect to SYSTRAN's Web site at www.systransoft.com. There, you can type in a phrase or sentence and choose the language into which you would like it translated. turbulent securities market. It’s no wonder that over one-third of all stock transactions today occur over the Internet. __ The second time aspect deals with having information that describes the appropriate Lime period. For example, most uilty companies provide you witha ill that not ony tals you of your current usage and the average temperature but also compares that in fomaton tothe previous moth and perhaps the sme month st yea. This type ait formation can help you better manage your utes or simply unde dit th inonth’s high uly bill was caused by inclement weather, THE LOCATI . — ea DIMENSION The location dimension of information deals with hav- ing ses wo iforaton no mater where you are This simply meas tht you sol ss needed information from an airplane, in a hotel room, at home, in he student center of your campus, because of the Internet you can information you need atwork, or even when driving down the road. Of course, almost anywhere in the world and access almost any To keep certain i ; ployees, many — Private and secure while providing remote access for em Internet thats guarded seahe ne intranets. An intranets an internal organizational val (which can be softwere nastde access by a special security feature called fie sion hasan itn and on tare, ora combination of the two). Soi your oat ce all you need is Web browser sofvaresa moder else ea Fo +a modem, and the password that will alo» you through the firewall, 10Information as a Key Resource a) Wea ar a dat for examples aa Global Villag Slohal Village.? Eanployees is, exchange doc caneonneet iol sidan 0 ie ity, in the Hite ai janet-baserk information: she Te FORM DIMENSION anc, The frnt issn yh srandabley yom errors. Thin) yon iyscal product you buy a produc vers Likewine, if you receive information that is incorrect, tn defective, you be: ions, you also should be mindful that you pro- you provide to your customers ccessible 1c varionss information side your custonvers with “Fon he tiely, should describe the approp from anywhere, the nat usable foram, an ft aocnL lus commodity you provide to customers. Make sure they get it the way ‘ate time dimension, should be a of errors. Information is a valuable re- they w / ORGANIZATIONAL DIMENSIONS OF INFORMATION entrepreneur and to run your own business, you rizational dimensions of information. ‘These include 1 granularity, and how infor- iytical processing, which ven if your elie in life in ob ory describes, informati inform information flown, wh Al (for either snainly transaction processing oF HN discuss in an upcoming section). INFORMATION FLOWS Information in an organization flows in four basic diree- ward, ‘Vo consider these flows, let's first briefly finn, Most people view a traditional organization ‘igure 1.4), At the top is strategic tions: up, down, horizontally, and 0 Jouk at the struct of an oF ava pyramid with Sour levels and many sides (see wp HE we ws sy customers.z) 8% x oN 7) . ' osFigure 1. yok ee igure 1 4 ot) ‘An Organization, Its >)... Information Flows, and S terol ion Granularity aot ° oS Curent stato ‘of the organization : | [: ‘trmtagh andothor Coarse partners granularity ons, cum ea HORIZONTAL Vee ~ ae ional business units gh ond werk team rer2 Chapter 1. The Information Age in Which You Live ation with overall direction and guidance, which develops the goals and yt fement, which provides an or ccconl called tactical management, whiich | : ined by strategie management, ‘The third level is operational managemey, gies outlined by st inthe ay uperations and implementations ofthe yt etre ie aa oe ar ern etribed noes een ah ptr daly activities, ach an order processing, deseigit Van services, and serving customers, Iya consider your aye sat would include the chan ad vet ment would include the deans. Operational pan jars of academic programs. : fe the dep: rectors of aca he final level would inchude instructors who are responsible for teaching the classes, nee ward, or the mprard flow of information, describes th sed on its daily transactions, When a wale occurs, for vy second level is ofte which and strategies. employees who act and producing goods example, strategic n ice presidents. Tuetical man Information that flows rent state of the organization b " na al ample, that information originates at the lowest level of the organization tht th through the various levels of management, Information that is gathered ay , ion technology and passed up. passed u Fan af every operaiond if easfidacl By fnfoems ” ward to decision makers who monitor and respond to problems and opportunities, ‘The downward low of information consist ofthe strategies, goal, and directives that originate at one level and are passed to lower levels Information that flows horizontal or the horizontal flow of information, is between functional business units and work teams. For example, at your school various departments are responsible for scheduling courses. That information is passed horizontally to the registrar’s office, which creates course schedule for your entire campus (which may be online—timely and accessible from anywhere by you). Finally, the outward flow of information consists of information that is communicated to customers, suppliers, distributors, and other partners for the purpose of doing busi ness. This outward flow of information (and its corresponding inward flow of informa, tion) is really what electronic commerce is ll about. Today, no organization isan island, and you must ensure that your organization has the right information technology tools ‘0 communicate outwardly with all types of business partners. In a later section and in ‘nore detail in Chapter 2, well discuss this outward flow of information within the con. text of creating business partnerships and alliances, the information. On one end ofthis spectrum ig Coarse granularity, or highly summarized m. At the other end is fine granularity, amount of detail As you might guess, or information that contains a great beople in the highest levels of the organization f information, with sales by year being an exam wine rama ne oft rganizaton, on the other hand, need information maton in peat detail dat dese gis nonmanagement employees need nr ‘gh rez who male he seto whom tae ea eee Whe : + he sale was So, when transaction information originates at the toa ee 3 organization (with fine ity), it i rough ety), itis consolidated to a mone Coarse granularity as it moves UP 1h the organization (the upward flow of information), DEScRrii . Co : ion aed jfnothes organizational dimension of inform” one mation can be j : -ectives OF some combination of the four. internal, external, objecee MICHAEL DELL PREACHES IMMEDIATE INFORMATION ACCESS - We can all learn a lot from Michael Dell, CEO and rapidly. We just continue to shrink the time and ender of Dell Computer. In the mid-1980s, Michael space and distance between our customers and our ronan even wait to get out of college (the University Supplies and make that as efficent as we can. We're Of Texas) to start his own direct-sales computer busi- iNacerdaieiscore eae inventory now. ress. In the 18 years since he started that small opera- just sold. You take ou the guesine on what we tion in his dorm room, Dell Computer has definitely become the market leader, with over $30 billion in rev- That's a powerful statement. Look closely at it again, oases in 2001. By having access to timely information, Dell Computer see peaking to a group of entrepreneurs re- i able to carry only three to four days of inventor, cemtn Michael had this to say about the importance of Thats remarkable when you compare it to the industy timely information: standard of about 45 days. Businesses in the technology one ofthe great things about our businessisthatwe or when yo lr he aera rarer one cfamestate information: we don have to wait ‘FY When you consider the rapid speed at which tech- a veek or a month. We get information every day, so ology is changing. awe know that yesterday we sold 77,850 comput. _ Notice also that timely information takes out the ters. L know it by customer type, by product type, by “guess work” for Dell. If your business is guessing to geography, and what the mix was. So that immedi- determine its next move, you won't be in business very acy of information is incredibly valuable to every- jong, Perhaps it's time to get timely information * thing in our business, because it’s changing very, very jy eb Internal information describes specitic operational aspects ofthe organization. | s&s External information describes the envionment surrounding the organization. |_, No 3. Objective information quantifiably describes something that is known, Ste f ly o S 4. Subjective information aiterapts to describe something that is unknown. ) > Consider a bank that faces the decision of what interest rate to offer on a CD. That bank will use internal information (how many customers it has who can afford to buy a CD), external information (what other banks are offering), objective information (what S is today’s prime interest rate), and subjective information (what prime interest is ex- pected to be several months down the road). As well, what other banks are offering is not only an example of external information (it describes the surrounding environment) but also objective information (its quantifiably known). ‘Asa general rule, people in the lowest levels of the organization deal mainly with in- ternal and objective information (the price of movie rental is an example), People in the highest levels of the organization, on the other hand, deal with all types of information. Ll “People as a Key Resource “The single most important resource in any organization is its people. People (knowledge workers) set goals, carry out tasks, make decisions, serve customers, and, in the case of IT specialists, provide a stable and reliable technology environment so the organization ‘can run smoothly and gain a competitive advantage in the marketplace. This discussion is all about you. You're preparing to be a knowledge worker. 3tos / INFORMATION AND TECHNOLOGY LITERACY nob recknlengy bast rather your mind Vy, Jp pens nk ots ant prices tSornation, bat i real ae has spreadsheet software can help y In brasinese, yon ment valuable anes it Bly a vet oh ule tat be Pe cypnt wah vs, Vecknwergy such 28 $7 whoa ‘cata ity aod reeaing, pray Bit can't well yo vet pies fi Paul cant ey yo evninewhvether yo shin trv aaron a pie ypaph, ant eee ve ele alenperson, Uns are stakes, ane that’ hey your sins vena inchudes clases in Wwman Fesnutce mnanaesne weosmantings, Srany is roduction and operations managesnen eee eae ‘san iigvotant set of rl Sor yo. echoing cabal ain cian an ean help you dissect and better understand problems ated ens, i important for yon vs learn brow vo une your vechnolony we. Aad i, yoo understand the information to which you're app be wore. tunities. exyually itaportant tat technoligy tons. ; ‘A technology-lilerale knowledge worker is a person veo kavrws bor and when yy apply technology, The “hora” aspect includes kwrwinrg what technology vob exploit die many benefits of application software, and what technology infras required vv get businesses connected to each other, just wo name a few. I avs that deals vith learning personal productivity sofeware, then you already kavrn the benefits of application softwar han technoliagy (if any) a org he a technology Siterave kaureledge worker, In many unforunate cases, people and organizations have blindly decided wo we siness problem. What you need to understand technology to help volve wurne sort of jn that technology is not « panacea. You can't simply apply technology to any gen yw become more efficient and effective. Lookt ty 4 process that doesn’t work correctly, then you'l of times faster. There are cases when technoligy is not the solution. o crate knowledge worker will help you determine when and when not to apply technology. only be doing, things Information-lilerale knowledge workers * Can define what information they need * Know how aud vivere wy obtain that information * Understand the information once they receive * Can act appropriately based on the information to help the organization achieve the greatest advantage ° Consider a unique, real-life example of an information literate knowledge worker. Several years ago, 1 manager of « retail store on the Fast Coast received some int eating information: diaper sales on Friday evening accounted for a large percentage tntl wales forthe week. Most people in this situation would immediately jump to the 4 chin ta ensure that diapers are always well stocked on Friday evenings or to run 25 talon diapers daring that time to increase sales further, but not our information-literte Thai Marker She firs looked at the information and decided it was not compe rs i ae peuded mote information before she could act. She decided the information she need h of di fon un) occurred during, that time and eae en oe on sored within the computer system, so she stationed 7 employee inthe diaperSe POLAROID 1S POLAR-PEOPLE people really are the most important resource in any Grganization, no matter how big or small and no mat- ter in what industry, People possess intellectual capital, sd intellectual capital is what enables an organization to innovate. , iat Polaroid, film isn’t the most important asset—it's simply the product produced. The most important asset is the group of scientists who know everything about the chemistry of film, So Polaroid has created a very so- phisticated model for its hiring requirements. ‘The model first combines employee-turnover infor- mation with forecasts and known trends of its current workforce, For example, Polaroid forecasts probable retirement dates of each scientist and estimates how many people in each given skill area will leave within the next decade. That information is then used extensively in the in- terviewing and hiring processes. Where Polaroid sees an intellectual capital vacancy upcoming in the next several years, it focuses its hiring efforts. How many businesses do you believe have such an elaborate system for hiring new employees?” Friday evening to record any information pertinent to the situation (i.e., she knew how and where to obtain information). The store manager learned that young businessmen purchased the most diapers on Friday evening. Apparently, they had bee: structed to buy the weekend supply of diapers on their way home from work, Her response was to stock premium domestic and imported beer near the diapers. Since then, Friday evening is not only a big sale time for diapers but also for premium domestic and imported beer. This is a true story ofan information-literate knowledge worker. Her ability to define ‘what information she needed, know how and where to obtain that information, and un- derstand the meaning of the information once she received it enabled her to determine that diapers and premium beer were complementary products for most young business- men. Would you have made that connection? By the way, this is an example of a wants- based economic environment. Although diapers are a very necessary product (just ask any parent), premium beer is a wants-based product. YOUR ETHICAL RESPONSIBILITIES Your roles as a technology-literate and information-literate knowledge worker extend far beyond using technology and informa n to gain an advantage in the marketplace for your organization, You must also consider your social responsibilities: This is where ethics become important. Ethics are the principles and standards that guide our beha ior toward other people. Ethics are different from laws. Laws either require or prohibit some sort of action on your part. Ethies are more of a matter of personal interpretation, and thus have a right and wrong outcome according to different people. Consider the following examples: 1, Copying software you purchased, making copies for your friends, and charging them for the copies 2. Making an extra backup of your software just in case both the copy you are using and the primary backup fail for some reason 3. Giving out the phone numbers of your friends and family, without their permission, to a telecom provider of some sort of calling plan so you can receive a discountBenya we privacy rights Lagat tMogot Figure 1.5 ‘ : stribution i ibl Acting Ethically and sing socaly ancl ethically responsible natin ‘neces the actions you under- self but also deals with the ac- hers, which may involve protect- pot onl Ethical i 1 take your tions of ol ing yourself aga ' Eyre group of people who commit ae tybererines. A hacker is avery knowk gable computer ser who ses his or fer knowledge to invade other people’s computers. There are actually many types Sthackers today—white-hat hackers, black-hat hackers, crackers, hackt puannes. Each has different motives for hacking, anel each is lagely a dif t people To protect yourselfancl your organization from their hacking, you Uerstand who they are and what they do. We explore hackers Learning Module H. People, again, are the most valuable resource in any organi inst cyber crimes, Hackers Unothical MW M7 nt group of eed to un- ore detail in Kxtended ion. People, like you as knowledge worker, use IT to work with and massage information, The most success- fal people understand their information and information-processing needs, and they un- derstand the benefits of technology and know how to use technology to facilitate their working with information, [| Information Technology as a Key Resource Within management information systems (MIS), the third key resource is information technology. Formally defined, information technology (IT) is any computer-based tool that people use to work with information and support the information and information- t processing needs of an organization. So, IT includes a cell phone or PDA that you might use to obtain stock quotes, your home computer that you use to write term papers, large networks that businesses use to connect to other businesses, and the Internet that almost one in every six people in the world currently use. KEY TECHNOLOGY CATEGORIES ‘There are two basic categories of technology: hardware and software (see Figure 1.6 on the following page). Hardware is the physical devices that make up a computer (often referred to as a computer system). Software is the set of instructions that your hardware executes to earry out a specific task for you, So, ifyou have a Nintendo Gamecube, the Gamecube box itself and the controller are hardware devices, while the games you play ie software, Lets brielly look at hardware and software; for a more thorough diseus- sion, read “Extended Learning Module A: Computer Hardware and Software,” which follows this chapter, TECHNOLOGY HARDWARE All hardware falls into one of six categories: input de- vi r i Ces, output devices, storage devices, CPU and RAM, telecommunications devices, and connecting devices. Here’s a quick summary. * An input device is a tool you use to capture information and commands; input devices include such tools as a keyboard, mouse, touch screen, game controller, bar code reader, and skimmer (used for swiping credit cards and the like).apter 1 The Information Age in Wien or otherwise accept the results y¢ 0 see, heat, include such tools as q rice is a tool you Use t 0 ts, Output devices formation-processing Teques and set of speakers. rr tool you use to store information FOF Seat 8 later time, Jude such tools as a floppy disk, hard disk, Coan Dvp. Ge oo yey + Anoutput dev your in printer, monitor + Astorage device Output devices ine Examples Description hat make up a computer Hardware—The physical devices t * Keyboard, mouse ice—] use to Input deve ran 2 Touch screen, game controiizr ion and commands capture information an ee ic * Printer ut device—Tool you use to see, te fene : + Monitor hear or otherwise accept the results of your information-processing «Set of speakers requests storage device—Tool you use tO + Floppy disk store information for use at a later + Hard disk time «CD, DVD Central processing unit (CPU)—The * Pentium 4 AMD Athlon XP Thunderbird actual hardware that interprets the software instructions and coordinates how all the other hardware devices work together RAM (random access memory}— + Many manufacturers make RAM Temporary memory that holds that will fit in a variety of information, application software, computers and operating system software Telecommunications device—Tool * Telephone modem you use to send information to and * DSL modem receive it from another person or * Cable modem location * Microwave * Satellite Connecting devices—Tools that * Printer cord connect devices to each other * Parallel and serial ports Software—The set of instructions that Softenree ine st your hardware executes to carry out Apalcation software Software * Word processing software les you to solve specific Payr s * Payroll problems or perform specific tasks . Spreadsnect software ; * Inventory management software perating system software—s system . fi software that controls your Sawer on application oftare and manages = MacOS Ww your hardware devi i how you fevices work + Linux - . Ix Utitysoftware—software that + Antivi Provides ational functionality to Neoenseee rating system veld * Disk optimization software Uninstaller software20 Figure 1.7 Decentralized Computing and Shared Information Chapter 1. The Information Age in Which You Live unwanted software), and a hog gf e (for properly removi z Sa it follows this chapter, We discus re, uninstall ey aa aarning module ¢ others. Again, in the extended software in greater detail. COMPUTING AND SHARED INFORMATION / DECENTRALIZED foam so many different tasks within a business environment, the concepts of decent ized computing and shared information are very important (see Figure 1.7). Decentralized computing is an environment in which an organization splits com, puting power and locates it in funetional business areas as well as on the desktops of knowledge workers. This is possible because ofthe proliferation of less expensive, more powerful, and smaller systems including notebooks, desktops, minico i servers. The Internet is a great example of a decentralized computing environment, You use your computer or perhaps cell phone or PDA to access the information and services of host computers on the Internet. In this case, your computer is called a client computer, while the host computers are referred to as server computers. Shared information is an environment in which an organization’s information is or. ganized in one central location, allowing anyone to access and use it as he or she needs to, Shared information enables people in the sales department, for example, to access work-in-progress manufacturing information to determine when products will be avail- able to ship. At your school, the registrar's office can access the information within the financial aid office to determine how much of your tuition bill is covered by a scholar- ship or loan. To support shared information, most businesses organize information in the form ofa database. In fact, databases have become the standard by which businesses organize their information and provide everyone access to it. We've devoted all of Chap- ter 3 to databases as well as data warehouses, tools for organizing information to support decision-making tasks. Now that we've provided you with a brief overview of information technology, le’s Jook specifically atthe roles and goals of information technology in any business. IT is an essential enabler of business operations. In the information age, all businesses need technology as tools for working with information. J sofiware to connect people to each other; to reach ers, ResourcesRoles and Goals of Information Technology yy and varied. Here we refer back to these through- the an of information technology are ma ‘They're not only important to Tear so you ean do well on an ex ganze your view of teebolOgy ology (sce Figure 1.8) include you to six imp ut the chapte 1 bet will aso help y gai sajor ote and goals of information fe an organization. ‘c employee product 1. Inc hance decision making 3, Improve team collaboration +L. Create business partnerships and alliances 5, Enable global reach 6, Facilitate organizational transformation INCREASE EMPLOYEE PRODUCTIVITY “The orginal and still most fundamental role of information technology is to increase productivity In short, because ofits great speed and ability to store and process massive revvants of information accurately, IT can greatly reduce the time, errorsy and costs as- Figure 1.8 ociated with processing information in a variety of ways. The Roles and Goals of Information Technology Role/Goal IT Tools Examples Business Benefits Examples 1. Increase employee + OLTP + Reduce time productivity * TPS + Reduce errors * as + Reduce costs + Enable customers to process their own transactions Enhance decision * OLAP * Generate alternatives making + DSS + Recommend solutions * GIs © Drill down through information * EIS oA * Data warehouses 3. Improve team Collaboration System * Manage knowledge within the organization collaboration © Groupware + Support geographically dispersed teams « Facilitate communications * Develop applications quickly 4, Create business * los ‘+ Manage supply chains Enemas + EDI © Share expertise and intellect iances ‘+ Enable B2B e-commerce 5. Enable global reach Internet ‘+ Translation phones Take advantage of a cheaper/larger workforce Advertise locally made Tap into global intellectual expertise 6. Facilitate * Just about any technology * * Stay competitive organizational you can name, dependin« n 9 * Offer new custor | ransformation nits use Be ae ie