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Transaction Processing Systems (TPS)

The first information system. An automated mannual bookkeeping system focussed only on date collection processing.
Ex: Airline ticket reservation systems, banking systems for recording deposits and withdrawals

Management Information Systems (MIS)

Designed to produce timely, integrated, relevant, accurate, and useful information focused on providing information helpful to decision making.


Raw facts and figures that are not necessarily helpful to decision making


Data that has been summarized, organized, compared, etc. so that its meaningful, that is, helpful to the decision maker


The understanding or learning that is acquired by cognitively processing information

Applied Knowledge

The use of knowledge to make decisions

How does and MIS support decision making

An information system inputs data, then processes data to create meaningful information that managers use to derive knowledge that is needed to make good decisions about how to run the business.

Decision Support Systems (DSS)

An interactive support system that managers can use to build models like a financial forecasting model

Michael Porter

Professor and author of classic article used to explain how IT can be used by companies to achieve a competitive advantage by explaining the Five Forces Model

Premises of the five forces model

the five forces or threats that companies must confront and overcome in order to thrive and be successful, defining the profitability potential of that industry.

Rivalry among existing competitors

High when many competitors occupy the same marketplace position
Low when there are few competitors

Threat of substitute products or services

High when many alternatives for an organization's products or services are available.
Add services to make organizations more distinct
Add fees to discourage customers from switching

Threat of new entrants

Low when duplicating a company's product or service is difficult.
Use focus strategies to ensure that this threat remains low

Buyer Power

High when customers have many choices
Low when they have few choices
Limit buyers' choices by offering services that make it difficult for customers to switch

Supplier power

High when customers have fewer options
Low when customers have more options
Use information systems to make their products and services cheaper

Three Competitive Strategies

Low Cost Provider (Walmart)
Differentiator (Apple iphone)
Niche focus (rolex watch, porsche)

The Processing Unit

Contains the central processing unit (CPU) which is the brain and the main memory (RAM). Data and instructions are stored in the memory and processed by the CPU.

Central Processing Unit (CPU)

The brain and the main memory of the unit.

(RAM) Random Access Memory

a big grid of capacitors, each with its own transistor to turn it on and off, and the pathways (wire) that connect the capacitors to the electrical power source

the BUS

the highway (wires) that data (electrical pulses) travel along to move between components on the motherboard.


One capacitor can store a bit (a binary digit)


an 8-digit number that can be stored by eight capacitors

RAM memory

a big grid of storage units and each unit consists of 8 capacitors

RAM memory size is expressed in numbers of bytes

1 gigabyte=1 billion bytes
1 kilobyte=1 thousand bytes
1 megabyte=1 million bytes
1 gigabyte=1 billion bytes
1 terabyte=1 trillion bytes


An eight digit binary code is assigned to each letter of the alphabet. Other characters are also assigned binary codes.

unicode encoding scheme

An encoding scheme which created codes for letters and symbols in other languages. Replaced ASCII code with a 16-digit scheme


After a programmer writes a program in programming language, it must be translated into a machine language using a complier.

CPU (central processing unit)

microprocessor; the computer's brain
Intel (Pentium processors)
AMD (Athlon processors)

Main Parts of a Microprocessor

Control Unit (CU)
Arithmetic Logic Unit (ALU)

Control Unit (CU)

Part of the microprocessor that manages the execution of programming instructions

Arithmetic Logic Unit (ALU)

Part of the microprocessor responsible for performing the arithmetic and logical operations. (Registers in the ALU)

Optical Storage Disks

Slower than magnetic disks but less susceptible to damage from contamination and less fragile


First generation optical disks which stored data using the land-and-pit technology.

Digital Video Disks (DVD)

Have huge storage capacities because they store data on both the top and bottom layer.

Storage area network (SAN)

A network of storage devices that make storage devices available to all servers on a network

Network-attached storage (NAS)

Network-connected computer dedicated to providing file-based storage services to other network devices

Computer languages

Machine language
Assembly language
High-level languages
Fourth generation languages
Fifth-generation languages

Machine language

Code written for one type of computer but does not work on another.

Assembly language

Higher level than machine but still machine dependent

High-level language

C++, Java, VB
Used for Wev development and the Internet

Fourth generation languages

Easiest to use

Fifth generation languages (5GLs)

Knowledge-based systems
Natural language processing (NLP)
Visual programming
Graphical approach to using programming

Super computer

The most powerful type of computer system. May have hundreds of processors and can perform calculations at speeds expressed in trillions of operations per second

Applications that run on super computers

Highly calculation-intensive tasks:
-weather forecasting
-weapon development
-oil exploration

Major universities, large govt agencies and scientific labs are the typical purchasers

Mainframe computers

Large computers used mainly by large organizations and govt agencies that can process more than 1 billion transactions per day for hundreds of users.

Minicomputer or Midrange

Smaller versions of the mainframe computer that perform the same functions as mainframes but to a more limited extent

Workstation Computers

Powerful single-user computers for engineers designed to run computationally intensive scientific, engineering, and financial applications

Basic types of Servers

Print Server
FTP Server
Mail Server
Web Server

Print Server

Acts as a buffer by storing print jobs in a queue until it is their turm to get printed

FTP Server

File server that has a large capacity disk drive and stores files for multiple users on a network. Many users can use it as a repository for all their files.

Mail Server

Sends, receives and stores email messages for multiple users

Web Server

Stores and sends web pages to web browsers. May process the page before sending it

Other Servers

-Proxy Server
-Application Server
-Database Server

Proxy Server

Intercepts all requests for web pages that are sent to the web server.
Proxy servers improve web page access time by catching frequently requested pages and sending them to browsers on the web server's behalf and protect web servers by blocking certain types of messages from ever reaching the web server

Application Server

A computer that is running the "back-end" or "middle level" processes of a larger enterprise application

Database Server

Runs a database management system and performs resource-intensive processes such as processing queries

Operating System Software

Ex.: Microsoft Windows
Functions include:
"traffic cop"- makes processes take turns using the CPU
"memory manager"-swaps data and programs in and out of the different parts of memory
"file clerk"-helps storage device controllers keep track of where files are stored on storage devices
"security guard"-prompts for and verifies login and passwords
"receptionist"-displays the user interface (desktop)

4 major operating systems

Microsoft's Windows
Bell Lab's UNIX
Apple's MacOS X
The open source community's Linux

Microsoft Windows

Operating system installed on most desktop and laptop computers

Bell Lab's UNIX

Operating System typically installed on large computers that function as servers

Apple's MacOS X

Operating system installed on Apple computers

The open source community's Linux

a free operating system typically installed on computers functioning as servers


small text files with a unique ID tag saved on the user's hard drive
(usually helpful but can be intrusive)

Where are cookies stored?

in your "temp" folder


Monitors your activities, gathers information about you, and sends that information back to themselves or a third party


A type of spyware that displays ads on your computer screen and collects information about how long you look at the ads and whether you clich through on an ad. The advertiser uses that information or may sell it to third parties who want to sell you products based on your interests.


When an attacker sends an email message posing as a trustworthy entity for the puposes of fraudulently acquiring sensitive info, such as usernames, passwords and credit card details


Monitor and record keystrokes. can be software or hardware devices. sometimes used by companies to track employees' use of email and internet. can be used for malicious purposes


an attacker fraudulently acquires the domain name for a company's web site, so that when a victim types in that company's URL, an "imposter" web page loads into the victim's browser window


Segments of computer code that attach themselves to programs and cause that program to do something different. The virus spreads when one user copies or sends that program to another user

Acceptable use policies

A set of rules written by an organization specifying what acts are forbidden when using their computer systems. System users must agree to the terms of the Acceptable Use Policy to gain access which makes users accountable for their actions and they cannot claim they are exempt from these rules

Intellectual Property Laws

Protections that involve copyrights, trademarks, trade secrets, and patents for "creations of the mind" developed by people or businesses


Protects product names and identifying marks


Protects new processes

Software piracy

making illegal copies of programs

Intellectual Property Rights

States that only the owner of a program has that right to reproduce, modify, or distribute (sell) the program

Software License

When you buy a program, you don't own it, you have purchased a license to use that program

Site license

A license to install the program on a multiple number of computers

End-User License Agreement (EULA)

specifies that you cannot make illegal copies of the program nor can you modify the program and sell or redistribute the modified program as your own work

Health Insurance Portability and Accountability Act (HIPPA)

Requires health care providers, insurance providers, and employers to follow specific procedures to protect the privacy of individual's medical data

Section 404 of the Sarbanes-Oxley Act (SOX)

Requires IT professionals to document and test the effectiveness of security measures protecting information assets. Also requires companies to set up security systems to protect the confidentiality of data/ information on their systems.

Gramm-Leach-Bliley Act (GLBA)

Requires financial institutions to follow specific procedures to protect the privacy and security of customers' financial data.

Fault- tolerant system

A combination of hardware and software that ensures availability in the case of a system failure

Ex: Uninterruptible power supply used to protect data loss in the event of power failure or power surge

Redundant array of independent disks and mirrored disks used to recover data that could be lost if a hard disk fails or crashes

Denial-of-Service Attacks

Floods a network or server with service requests, targets internet servers, distributed denial-of-service attack

Social Engineering

Using "people skills" to trick others into revealing private information and break into servers and networks and steal data

Callback Modem

verify whether a user's access is valid by logging the user off when he/she connects, then calls the user back at a predetermined number.

Useful in organizations with many employees who work off-site


Hardware or software that can be installed on a computer or a router that uses Access Control Lists set up by the network administrator that acts as a filter or barrier between a private network and external computers (Internet) a private network

Virtual Private Network

Provides a secure tunnel through the internet. Used by "off-site" employees to send private data over the public airways. Once the VPN connection is established, all data traversing back and forth is encrypted

Business Continuity Planning

Develops procedures for keeping information systems operational in the event of disaster


Rules that govern data communication, including procedures for handling error detection and correction, specified message length and transmission speed


(short for "modulator-demodulator) A device that connects a user to the Internet via phone or cable lines. Types include dial up (analog), digital subscriber line (DSL) and cable

Dial-up Modems

Phone lines are designed to transmit analog or voice signals. A modem translates a digital signal into an analog signal so that it can travel along the phone lines. When the signal reaches its destination, it much be converted back into digital

Conducted media

a type of communication media that uses a physical path for transmitting data.
-twisting pair phone lines
-co-axial cable
-fiber optic cable

Radiated media

A type of communitcation media that uses antennas to transmit data through air or water
-electromagnetic waves
-may use satallites and microwave ground stations to relay signals

Twisted pair wire

*Typical data Rates: 1-4 M bps

-low cost
-already in most buildings

-low speed


*Typical Data Rates: 10-100M bps

-Higher Speed

-More costly
-installation difficulties

Optical Fiber

*Typical Data Rates: 10-1000M bps

-much higher speeds

-difficult installation
-less mature

The elecro-magnetic spectrum

the categorization of waves by their frequency


A device that combines several input signals into one output signal


A collection of binary digits, including message data and control characters for formatting and transmitting sent from computer to computer over a network


Process of deciding which path data takes using routing table


The device that routes data packets to their destinations and choose the best possible path for packets

Parts of a URL

http: the protocol used to request that page

www: indicates that it's a web page on a web browser domain name indicating who owns the server on which the page is hosted

~hbidgoli: the folder that the file is in on that server

books.html: the file name


a network within an organization that uses Internet protocols and technologies for collections, storing, and disseminating useful information that supports business activities. Also called "corporate portals" and for internal use by employees


An inter-connection of intranets usually established between business partners to order more supplies from suppliers without human intervention.


(short for "weblog")
A journal or newsletter that's updated frequently and intended for the general public; usually dedicated to a particular topic or organization


Allows users to add, delete, and sometimes modify others web pages

RSS Feeds

"really simple syndication"
Fast, easy way to distribute Web content in Extensible Markup Language (XML) format


Electronic audio file posted on the Web for users to download to their mobile devices

The Internet2

Collaborative effort involving more than 200 U.S. universities and corportations to develop advanced Internet technologies and applications

Final aspect of Strategic Planning Model

Look at your value chain and ask yourself, "where should I apply IT or use e-commerce capabilities to help me achieve my strategy?"

Value Chain

a general model of all the activities performed by a company. It's called the value chain because each activity performed by a company is supposed to add value to the final product or service delivered.

The value chain and E-commerce

The value chain can be applied when a company is trying to figure out how it can use technologies to add more value. It can examine its own value chain to see which "links" may be able to add more value if technology were applied in some way to that business activity

e-commerce business

the merchant model
the brokerage model
the advertising model
the mixed model
the informediary model
the subscription model

The merchant model

traditional "brick and mortar" business

the brokerage model

a business may play the role of an intermediary in a transaction helping buyers and sellers find each other or handle the funds transfer (PayPal, online malls, Lending Tree)

the advertising model

A business may give away a free service that attracts users and then sell advertising space on your site (Google)

the mixed model

a combined approach (a newspaper may sell subscriptions to both online and print versions)

the informediary model

a business collects information about customers and businesses and sells it to third parties (BizRate)

the subscription model


Catagories of Ecommerce

C2C (consumer sells to consumer)C2B (consumer sells to business)
C2G (consumer sells to government)


Exchange sites

Businesses may go to exchange sites to obtain hard-to-find products or services

Forward auction

Sellers place items up for auction and buyers bid; the high bidder wins

Reverse auction

Buyers wishing to purchase items invite sellers (suppliers) to post quotes on selling prices. The lowest supplier wins

Electronic Payment system

Electronic payment
payment cards
smart cards

electronic payment

money or scrip that is exchanged only electronically

payment cards

credit, debit, charge and smart cards

smart cards

credit card sized, contains an embedded micriprocessor chip storing important financial and personal information


a small file that can be stored on your computer or a vendor's server that contains your name, credit card information, shipping address, ect.

Obstacles to Using Global Information Systems

Lack of international telecommunication standards
Poor telecommunication Infrastructures
Legal Differences
Lack of skilled analysts and programmers
Trans-border data flow (TDF) restrictions
Cultural differences

Poor telecommunications infrastructure

Most third world countries do not have reliable telecommunications infrastructure

Legal protections

China and many other foreign countries have laws that protect intellectual properties right but they don't enforce them. Microsoft loses billions of dollars a year due to foreign piracy of its programs

Data Privacy in the EU

In the European Union, personal privacy rights are highly protected. The Organization for Economic Cooperation and Development (OECD) in the EU issued its "Recommended Guidelines Governing the Protection of Privacy and Trans-Border Flow of Personal Data."

Data Privacy in the US

The US uses a self-regulation approach to protecting personal data. There is no universal data privacy legislation in the US. Instead, data privacy laws tend to be adopted on an ad hoc basis, with legislation arising when certain sectors and circumstances require

The Safe Harbor Agreement

EU Compromise:
If a US company could demonstrate that they were complying with the seven principles in the OECD Guidelines, then they would be allowed to transport EU citizens' data to the US

Cultural Differences b/w Asia and the U.S.

LANGUAGE: It is generally good practice to "localize" materials when feasible. Local words and expressions sometimes just do not properly translate for English and may actually be offensive

INDIVIDUALISM VS. COLLECTIVISM: Asians depend more on groups or institutions to determine what they should do and emphasize loyalty. More likely to cooperate and avoid risks. Americans rely on their own view; tend to work alone; reluctant to cooperate. More masculine culture.

Asians- pay more attention to relationships than contracts. Asians do not consider contracts as seriously as the Americans
American- place greater importance on contractual safeguards than the Asians

Non-simple database

Objects that may be included in a non-simple database may have 10 or more tables and include:
-a data entry form
-a query
-a report

Standard Query Language (SQL)

A computer language that includes commands to create databases and tables, to updata, insert, and extract data, and to grant or revoke user access privileges, and to post transactions

The Database Administrator (DBA)

A person who is in charge of the database. Manages the development, operation, and maintenance of the database

Designing a Database
Step 1

Develop conceptual data model (describes at an abstract level what data needs to be stored in the database).
The diagram is called an entity-relationship diagram

Conceptual Database Model

An entity is a person, place, thing, or event such as a customer, employee, or product

Conceptual Database Model

Attributes are things that describe our entities

Conceptual Database Model

Identifiers are attributes that uniquely identify each entity instance

CDM Step 2

Adding "keys" to link entity instances:
Primary keys and foreign keys (attribute that is a primary key in another table)

Analytical Databases

A type of database that is used just for performing various types of analysis on the data.

Data warehouse

A type of analytical database that stores operational and other types of data from a combination of sources

Data mart

A smaller version of a data warehouse and may store data about one subject only


Incoming data is "cleansed" by the ETL (Extraction, Transformation, and Loading) system by re-organizing it, reformatting it, or combining it with other data

Analytical tools

Used to derive various forms of business intelligence from the data in the data warehouse or data mart

See more

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