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.
Data that has been summarized, organized, compared, etc. so that its meaningful, that is, helpful to the decision maker
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
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
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
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.
(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 highway (wires) that data (electrical pulses) travel along to move between components on the motherboard.
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)
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
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
Fourth generation languages
Fifth generation languages (5GLs)
Natural language processing (NLP)
Graphical approach to using programming
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:
Major universities, large govt agencies and scientific labs are the typical purchasers
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
Powerful single-user computers for engineers designed to run computationally intensive scientific, engineering, and financial applications
Acts as a buffer by storing print jobs in a queue until it is their turm to get printed
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.
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
A computer that is running the "back-end" or "middle level" processes of a larger enterprise application
Runs a database management system and performs resource-intensive processes such as processing queries
Operating System Software
Ex.: Microsoft Windows
"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
Bell Lab's UNIX
Apple's MacOS X
The open source community's Linux
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)
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
Intellectual Property Rights
States that only the owner of a program has that right to reproduce, modify, or distribute (sell) the program
When you buy a program, you don't own it, you have purchased a license to use that program
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
Floods a network or server with service requests, targets internet servers, distributed denial-of-service attack
Using "people skills" to trick others into revealing private information and break into servers and networks and steal data
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
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
a type of communication media that uses a physical path for transmitting data.
-twisting pair phone lines
-fiber optic cable
A type of communitcation media that uses antennas to transmit data through air or water
-may use satallites and microwave ground stations to relay signals
Twisted pair wire
*Typical data Rates: 1-4 M bps
-already in most buildings
*Typical Data Rates: 10-100M bps
*Typical Data Rates: 10-1000M bps
-much higher speeds
A collection of binary digits, including message data and control characters for formatting and transmitting sent from computer to computer over a network
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
csub.edu: 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
"really simple syndication"
Fast, easy way to distribute Web content in Extensible Markup Language (XML) format
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?"
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
the merchant model
the brokerage model
the advertising model
the mixed model
the informediary model
the subscription model
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)
Catagories of Ecommerce
C2C (consumer sells to consumer)C2B (consumer sells to business)
C2G (consumer sells to government)
Buyers wishing to purchase items invite sellers (suppliers) to post quotes on selling prices. The lowest supplier wins
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
Lack of skilled analysts and programmers
Trans-border data flow (TDF) restrictions
Poor telecommunications infrastructure
Most third world countries do not have reliable telecommunications infrastructure
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
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
Objects that may be included in a non-simple database may have 10 or more tables and include:
-a data entry form
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
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
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)
A type of database that is used just for performing various types of analysis on the data.
A type of analytical database that stores operational and other types of data from a combination of sources
Incoming data is "cleansed" by the ETL (Extraction, Transformation, and Loading) system by re-organizing it, reformatting it, or combining it with other data
Used to derive various forms of business intelligence from the data in the data warehouse or data mart
Analytical tool to produce "intellegence" from data by applying statistical techniques that reveal patterns, relationships, and trends in large data sets
Online Analytical Processing (OLAP) tools
Anaylytical tools that create OLAP cubes which are reports showing data summarized by multiple dimensions
Systems Development Methodology (SDLC)
Software Development Life Cycle is a method for building information systems.
1) Planning stage
2) Requirements gathering and analysis
Phase One Feasibility Study
Can it be completed in time?
Will there be legal repercussions?
Phase 2: Prototyping
A prototype is a small-scale version of the system is developed. Large enough to illustrate the system's benefits and allows users to offer feedback about what they like and dislike
Phase 3: Design
Analysits choose the solution that's the most realistic and offers the highest payoff for the organization.
Three Levels of Design
1) Conceptual design: draw diagrams of the new system
2) Logical design: identify number of servers needed, what database will be used, what software programs will be purchased or developed
3) Physical design: specify exactly what computers will be purchased and what type of software licenses will be purchased
Phase 3: CASE tools
CASE tools are Computer-Aided System Engineering tools; automate parts of application development process
Phase 4: Implementation Phase
-RFP (Requests for proposal) are sent out to hardware, software, and network component vendors soliciting their bids on the job/provide the equipment
Implement new system while old system is still running. Make sure new system works before shutting down old system
Rapid Application Development (RAD)
The design and implementation phases are broken into smaller "chunks" and a design-implement-fix cycle is performed iteratively one chunk at a time
More end user involvement reduces likelihood that end users will be happy with the new system; extensive use of prototyping
Extreme Programming (XP)
Small incremental releases are made more frequently.
End users very closely monitor the system's progress at every step to immediately point out adjustments that should be made along the way.
Programmers grouped into pairs; during requirements stage, end users write stories about how they would like the system to help them do their jobs.
Alternatives to developing your own information system
PURCHASING: off-the-shelf applications
OUTSOURCING: can save money and provide better quality of service
CLOUD COMPUTING: may be used to transfer application hosting services to an Application Service Provider
Some companies are allowing Application Service Providers (ASPs) to host their applications for them. Someone else hosts your applications on their site "in the cloud" and you just pay a monthly fee to access the program using your web browser
Supply Chain Management
About managing and coordinating with suppliers and other partners in the supply chain to accomplish the process of moving products and services through the supply chain
Supply Chain Management System
An inter-organizational system that is designed to facilitate supply chain management. Helps to coordinate product flows, information flows, and financial flows
SCMs and Extranets
A SCMs is an inter-organizational system, meaning that one SCM system is shared by multiple businesses so that they can pass information to each other easily. Typically run on extranets
Electronic Data Interchange (EDI)
A set of standards that define the format of an electronic message. When inventory levels drop to a certain minimal level, a retailer's computer system can automatically send a purchase order message to the supplier's system requesting more merchandise. If all computers agree to use the same format for these messages, they can communicate automatically without human intervention
Customer Relationship Management Systems (CRMs)
A system used to give businesses a more complete picture of their customers by integrating demographic and other external data with customers' transaction data to better understand customer behavior.
Main goal: improve services offered to customers and use customer contact information for targeted marketing; focus on long-term relationships with customers instead of transactions
CRMs and personalized service
Using personalization requires gathering a lot of information about customers' preferences and shopping patterns
Enterprise Resource Planning systems (ERPs)
A single system that can integrate departmental systems in the manufacturing, logistics, distribution, accounting, finance, marketing/sales, and human resource functional areas.
Benefits of ERPs implementations
-ERPs enable business processes that cross functional boundaries to be coordinated/ integrated
-ERPs enable data sharing b/w functional areas
-ERPs can simplify the IT infrastructure by replacing several separate systems with one enterprise system
ERPs enable organizations with multiple facilities to standardize their business processes I so that all locations perform business processes the same way)
Types of Decisions made in organizations
Structured decisions (easy to make)
Unstructured decisions (difficult to make)
Semi-structured decisions (in between)
Easy to make
"programmable" decisions that have a clear-cut "formula" for resolving
Difficult to make
Decisions that have no clear-cut formula for resolving
Ex: how to boost employee morale
Decisions that have somewhat of a formula for resolving but require information gathering and analysis to quantify or "structure" the factors that impact the decision outcome.
Steps to the decision making process (Herbert Simon)
According to Herbert Simon, once a problem is discovered or a situation occurs that needs addressing, a decision maker should go through four steps
Step 1: The Intelligence (gathering) Step
The Intelligence (gathering) Step:
Look into finding out what the problem is about; what needs resolving. Generate ideas and gather data about alternative solutions/ options.
Step 2: The Design Step
The Design Step:
Define what procedure or form of analysis you will use to resolve the problem. Identify what selection criteria you will use when selecting amongst alternative solutions
Management Support Systems (MSS)
A term used to describe all the different types of information systems that have been developed to support certain aspects and types of decisions.
Decision Support Systems
Executive Information Systems
Group Support Systems
'What if' analysis example
Determines what the impact will be on the output variables (such as projected profits) if one of the input variables (price or sales volume) changes.
Goal Seek Analysis
Determines what combination of inputs are necessary to achieve a desired output (goal)
Executive Information Systems
A type of MSS designed for top executives that includes:
-Access to both internal and external information (to make strategic decisions)
-Makes extensive use of charts, graphs, and color-coding (to easily spot trends and make forecasts)
-"Drill-down" features (to see increasing levels of detail in summary reports if the need arises)
-Digital dashboard (integrates info from multiple sources and presents is in a unified, understandable format)
Group Support Systems
Use computer and communication technologies to support the group decision making process
**reduce communication barriers by allowing geographically dispersed groups to collaborate
**may require group member to take turns talking so that everybody hears everything
**may provide ranking or voting tools
**keeps a log of the conversation for future reference