1

Foundations of Information
Systems in Business
CHAPTER OVERVIEW

Chapter 1: Foundations of Information Systems in Business presents an overview of the five basic areas of
information systems knowledge needed by business professionals, including the conceptual system components and
major types of information systems. In addition, trends in information systems and an overview of the managerial
challenges associated with information systems are presented.

LEARNING OBJECTIVES
After reading and studying this chapter, you should be able to:
1.

Understand the concept of a system and how it relates to information systems.

2. Explain why knowledge of information systems is important for business professionals, and identify five areas
of information systems knowledge that they need.
3. Give examples to illustrate how the business applications of information systems can support a firms business
processes, managerial decision making, and strategies for competitive advantage.
4. Provide examples of several major types of information systems from your experiences with business
organizations in the real world.
5. Identify several challenges that a business manager might face in managing the successful and ethical
development and use of information technology in a business.
6. Provide examples of the components of real world information systems. Illustrate that in an information system,
people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and
control activities that transform data resources into information products.
7.

Demonstrate familiarity with the myriad of career opportunities in information systems.

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SUMMARY
IS Framework for Business Professionals. The IS knowledge that a business manager or professional needs to
know is illustrated in Figure 1.2 and covered in this chapter and text. This knowledge includes (1) foundation
concepts: fundamental behavioral, technical, business, and managerial concepts like system components and
functions, or competitive strategies; (2) information technologies: concepts, developments, or management issues
regarding hardware, software, data management, networks, and other technologies; (3) business applications: major
uses of IT for business processes, operations, decision making, and strategic/ competitive advantage; (4)
development processes: how end users and IS specialists develop and implement business/IT solutions to problems
and opportunities arising in business; and (5) management challenges: how to manage the IS function and IT
resources effectively and ethically to achieve top performance and business value in support of the business
strategies of the enterprise.
Business Roles of Information Systems. Information systems perform three vital roles in business firms.
Business applications of IS support an organizations business processes and operations, business decision making,
and strategic competitive advantage. Major application categories of information systems include operations support
systems, such as transaction processing systems, process control systems, and enterprise collaboration systems; and
management support systems, such as management information systems, decision support systems, and executive
information systems. Other major categories are expert systems, knowledge management systems, strategic
information systems, and functional business systems. However, in the real world, most application categories are
combined into cross-functional information systems that provide information and support for decision making and
also performing operational information processing activities. Refer to Figures 1.7 , 1.9 , and 1.11 for summaries of
the major application categories of information systems.
System Concepts. A system is a group of interrelated components, with a clearly defined boundary, working
toward the attainment of a common goal by accepting inputs and producing outputs in an organized transformation
process. Feedback is data about the performance of a system. Control is the component that monitors and evaluates
feedback and makes any necessary adjustments to the input and processing components to ensure that proper output
is produced.
Information System Model. An information system uses the resources of people, hardware, software, data, and
networks to perform input, processing, output, storage, and control activities that convert data resources into
information products. Data are first collected and converted to a form that is suitable for processing (input). Then the
data are manipulated and converted into information (processing), stored for future use (storage), or communicated
to their ultimate user (output) according to correct processing procedures (control).
IS Resources and Products. Hardware resources include machines and media used in information processing.
Software resources include computerized instructions (programs) and instructions for people (procedures). People
resources include information systems specialists and users. Data resources include alphanumeric, text, image,
video, audio, and other forms of data. Network resources include communications media and network support.
Information products produced by an information system can take a variety of forms, including paper reports, visual
displays, multimedia documents, e-messages, graphics images, and audio responses.

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KEY TERMS AND CONCEPTS

1.

Computer-Based Information System (8):

An information system that uses computer hardware and software to perform its information processing
activities.

2.

Control (29):
The systems component that evaluates feedback to determine whether the system is moving toward the
achievement of its goal and then makes any necessary adjustments to the input and processing components of
the system to ensure that proper output is produced.

3.

Data (34):
Facts or observations about physical phenomena or business transactions. More specifically, data are objective
measurements of the attributes (characteristics) of entities, such as people, places, things, and events.

4.

Data or Information Processing (35):

The act of converting data into information. This includes both input and processing activities. Processing
includes calculating, comparing, sorting, classifying, and summarizing.

5.

Data Resources (33):

Data is now thought of as a valuable raw material that should be used, maintained, and secured as such. Data
resources include not only structured information typically found in databases, but also the unstructured
information found in e-mail or other collaborative systems, audio, and video.

6.

Developing successful information system solutions (18):

Business professionals are responsible for proposing new or improved systems to support their business
activities as well as managing their development. Using a systematic development process increases the
likelihood of a successful project.

7.

E-business (12):
The use of Internet technologies to support business processes, electronic commerce, and collaboration within a
company and with its customers, suppliers, and other business stakeholders.

8.

E-business applications (12):

Businesses today are using the Internet, corporate intranets, and inter-organizational extranets to support
business activities with suppliers, partners, customers, accounting, finance, research and development,
manufacturing, marketing, sales, and customer service.

9.

E-commerce (12):
The buying and selling, marketing and servicing, and delivery and payment of products, services, and
information over the Internet, intranets, extranets, and other networks, between an inter-networked enterprise
and its prospects, customers, suppliers, and other business partners.

10. Enterprise Collaboration Systems (13):

The use of groupware tools and the Internet, intranets, extranets, and other computer networks to support and
enhance communication, coordination, collaboration, and resource sharing among teams and workgroups.
These systems allow the creation of "virtual" teams of people who may work together without ever meeting in
person.
11. Extranet (12):
A network that links selected resources of a company with its customers, suppliers, and other business partners
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using internet technologies.

12. Feedback (29):
Data or information concerning an information system's performance.
13. Hardware Resources (32):
All physical devices and materials used in information processing. This includes not only machines, but storage
media such as disks, tape, and paper.
a.

Machines (32);
Consist of all input, processing, output, networking, and storage devices including computers, keyboards,
printers, monitors, and pointing devices.

b. Media (33):
Hardware designed to hold data such as paper forms, magnetic disks, optical disks, magnetic tape, magnetic
strips, and memory "sticks".
14. Information (34):
Data that have been converted into a meaningful and useful context for specific end users.
a.

Information products (35):

The degree to which information is packaged into an easy to use form. Information products include
messages, reports, forms, and graphic images.

15. Information System (4):

The arrangement of all the components and resources necessary to deliver information and functions to the
organization. These resources include hardware, software, and people to perform input, processing, output,
storage, and control activities that transform data resources into information products.
16. Information system activities (35):
All information systems (manual or automated) share the same characteristics.
a.

Input ( 35):
Data entry.

b. Processing (35):
Data transformation including calculating, comparing, sorting, classifying, and tabulating.
c.

Output (35):
Information made available to end uses. This may take the form of messages, reports, forms, images,
sound, and video.

d. Storage (36):
The retention of information such that it can be later retrieved.
e.

Control (36):
Control includes feedback regarding input, processing, output, and storage activities as well as actions
performed in response to this information.

17. Information System Model (31):

The conceptual view of an information system.
18. Intranet (12):
Internet-like networks and websites developed for use within an organization.
19. Knowledge Workers (32):
People whose primary work activities include creating, using, and distributing information.
20. Management information systems (15):
These systems provide information to managers and business professionals.

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21. Network resources (34)

Network resources include communications media, switches, routers, transmitters, software, and other network
infrastructure.
22. People Resources (32):
People are an essential component of an information system. Broadly, this resource includes IS specialists and
end users.
a.

IS specialists (32):
Are people who develop and operate information systems.

b. End users (32):

Are people who use an information system or the output it produces.
23. Roles of IS in Business (8):
Information systems perform three vital roles in any type of organization.
a.

Support of business processes and operations (8):

Examples of supported business processes include activities such as sales transactions, inventory ordering,
and payroll processing.

b. Support of business decision making (8):

Systems can support less structured business activities such as deciding which product lines to add or
discontinue. While these types of decisions require human creativity, information systems can support
managers in this process by providing them with useful information on demand.
c.

Support of strategies for competitive advantage (8):

Information systems can make available new types of products and services through which an organization
might gain a competitive advantage.

24. Software Resources (33):

Software resources comprise all sets of information processing instructions. This includes not only software but
the human procedures associated with managing information systems as well.
a.

Programs (33):
A set of instructions that cause a computer to perform a particular task. These tasks may include managing
the operational components of the information system, or they may directly support business operations.

b. Procedures (33)
Set of instructions used by people to complete a task.
25. System (26):
A system is a group of interrelated components working together toward a common goal by accepting inputs
and producing outputs in an organized transformation process.
26. Types of Information Systems (13):
Information systems are classified in order to spotlight the major roles each plays in the operations and
management of a business.
a.

Cross-functional information systems (15)

Information systems that cross the boundaries of functional business areas and management levels in order
to support business processes throughout the organization.

b. Management support systems (14):

Information systems that provide information and support for effective decision making by managers.
These types of systems include executive information systems, decision support systems, and management
information systems.
c.

Operations support systems (13):

These systems help enable the day to day operations of an organization. They include office automation
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systems, transaction processing systems, and process control systems.

d. Functional business systems (15):
Systems that focus on basic business functions such as accounting, marketing, sales, finance, and human
resource management.
e.

Transaction processing systems (14):

Transaction processing systems (or TPS) are a type of operations support system. A TPS processes routine
business transactions such as sales or purchases.

f.

Process control systems (14):

These systems monitor and control physical processes such as production lines, package routing, and
heating and cooling systems.

g.

Enterprise collaboration systems (14):

Enterprise collaborative systems facilitate team or workgroup communications and productivity. These
include e-mail, instant messaging, message boards, digital whiteboards, wikis, and videoconferencing.

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ANSWERS TO REVIEW QUIZ

Q.

A.

Key Term

Q.

A.

Key Term

19

Knowledge workers

25

22

People resources

23

Roles of IS in business

26

16a

Input

23a

Support of business processes and operations

27

16b

Processing

23b

Support of business decision making

28

16c

Output

23c

Support of strategies for competitive advantage

29

16d

Storage

15

Information system

30

16e

Control

Computer-based information system

31

26

22b

End users

32

26c

Operations support systems

E-business applications

33

26b

10

Electronic commerce

34

26a

Management support systems

Cross-functional informational
systems

11

10

Enterprise collaboration systems

35

18

Intranet

12

25

System

36

11

Extranet

13

12

Feedback

37

14

Control

38

26d

15

Data

39

16
17
18
19
20
21

14
16
17
13
13a
13b

Information
Information system activities
Information system model
Hardware resources
Machines
Media

40
41
42
43
44
45

6
14a
21
22a
4
26f

Data resources
Developing successful information
system solutions
Information products
Network resources
IS specialists
Data or information processing
Process control systems

22

24

Software resources

46

20

Management information systems

23

24a

Programs

47

26e

Transaction processing systems

24

24b

Procedures

48

26g

Enterprise collaborative systems

Types of information systems

E-business
Functional business systems

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ANSWERS TO DISCUSSION QUESTIONS

1. How can information technology support a companys business processes and decision making and give it
a competitive advantage? Give examples to illustrate your answer.
Support: Information technology can automate manual process such as document transmission. Instead of
writing memos or letters, employees can compose and send e-mails electronically. Information technology can
also facilitate the reengineering of entire business processes. For example, the airlines industry relies heavily on
online ticket booking. Not only does this facilitate filling seats, but it also provides them with a valuable
information about passengers which they can repackage for sale to business partners in the form of "frequent
flier" programs.
Competitive advantage: product innovations or cost savings program can provide a product or price advantage
over competitors that lasts until competitors catch up. Though the advantage may be fleeting, the boost to an
organization's image may be longer lasting.
2. How does the use of the Internet, intranets, and extranets by companies today support their business
processes and activities?
Internet: organization can connect directly with the general public. Opportunities range from giving away
basic product information to automatically updating or patching retail software. Many businesses also conduct
retail operations online.
Intranets: organizations often use internet technologies to facilitate operations within the organization. Such
systems might include product support knowledge bases, training systems, and access to the organisation's
benefits system.
Extranet: organizations may use these same internet technologies to connect with their business partners to
facilitate supply chain management, help manage projects, manage accounts, or provide advanced technical
support.
Organizations use internet technologies to connect with both customers and suppliers. These technologies allow
customers to generate and track their own orders as well as manager their accounts. They also enable
significant supply chain automation
3. Refer to the Real World Case on the four ways in which IT can leverage strategy and innovation. To what
extent do specific technologies help companies gain an edge over their competitors? How easy or difficult
would it be to imitate such advantages?
Specific technologies: Students may select any technology that interests them, or the instructor may assign a
technology to evaluate. The amount of advantage gained will depend on the value provided by the innovation
and the length of time competitors need to reproduce or supersede the advantage. Patented or copyrighted
innovations may help extend this period.
Imitation: Imitation becomes significantly more challenging when patents have been filed to protect non-trivial
software innovations. In the U.S., reverse engineering such software for most purposes other than enabling
inter-operability is not legal. However, this is not necessarily the case in other countries.
4. Why do big companies still fail in their use of information technology? What should they be doing
differently?
Top Five Reasons for Success

Top Five Reasons for Failure

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User involvement

Lack of user input

Executive management support

Incomplete requirements and specifications

Clear statement of requirements

Changing requirements and specifications

Proper planning

Lack of executive support

Realistic expectations

Technological incompetence

Certainly the reasons listed in the table above could explain some of the major causes of why companies fail in
their use of information technology. However, it is important to note that the field of technology is changing at
such a rapid pace that many large and successful companies are having difficulty keeping up with it. Other
ideas may include such things as a shortage of skilled employees, the major expense involved in managing and
developing systems, and a rapidly changing business regulatory environment.
5. How can a manager demonstrate that he or she is a responsible end user of information systems? Give
several examples.
There are two sides to this answer. First, managers must make good use of information resources placed at their
disposal. Second, managers must not use their information systems irresponsibly. Student's answers may vary
depending on how they interpret this question.
Responsible use: Managers should demonstrate that they are using their information systems as intended. In
the case of e-mail, calendar, scheduling, and collaborative systems, other users would notice a manager's lack of
participation. They would find it difficult to communicate or schedule meetings with non-participating
managers. These managers would increasingly find themselves "out of the loop". Instead, managers should
incorporate these tools into their daily habits. To demonstrate appropriate use of other information systems,
managers should ensure they receive the appropriate training for these various applications. This would include
using data and analysis tools in order to make more informed business decisions. High quality decisions based
upon the information these systems provide would demonstrate that these assets are not being wasted.
Inappropriate use: As a manager or other end user of information, we must insure that we always consider the
ethical responsibilities of the use of information. Irresponsible uses:
accessing and/or selling data for personal gain
failing to protect data from loss or theft
violating privacy laws or abusing community privacy expectations
6. Refer to the Real World Case on the New York Times and Boston Scientific in the chapter, and think
about any technology-enabled innovations that you have read about or come across recently. To what extent is
innovation about the technology itself, and to what extent is it about changing the underlying ways that
companies do business?
Innovations:

iPad

iPhone

Droid

Solid State Drives (SSD)

G4 networks

IEEE 802.11n

HTML 5.0

Geographically targeted mobile marketing

Motivation:
Manufacturers appear to be uncertain about the extent to which an innovative product may change the
underlying ways organizations operate. At least initially, they hold back "suggested use" for fear they might
accidentally limit their customer's perceptions. Instead, they tend focus on the technical bits: speed, battery
life, flexibility, security, and so on.

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In short, manufacturers promote solutions in search of a problem. Of course, real world problems exist, and
with this sort of promotion, consumers and business consultants are free to find their own ways to apply
available solutions. For example, the military developed GPS to solve one set of problems, but marketers now
use this technology to provide location-specific advertising to mobile consumers. Rather than guiding a bomb
to a target, GPS technology helps guides people looking for a lunch discount to a store with surplus capacity.
7. What are some of the toughest management challenges in developing IT solutions to solve business
problems and meet new business opportunities?
Challenges:
Increased competitive pressures resulting from a rapidly changing business environment. Developing large
systems has been often likened to "hitting a moving target." Projects that take a year or more to implement
may well satisfy last year's needs, but may do little to address current challenges.

Lack of familiarity with information systems development methodologies. As a result, they may make poor
decisions that have far-reaching effects.

Ever increasing customer expectations. Napster set the expectation that music should be easy to find, easy
to acquire, and free. FedEx set the expectation that a customer will know what day a package will arrive.
Wikipedia set the expectation that users can add to or correct information in articles themselves. People
with Internet access now get many services free: e-mail, calendaring, scheduling, instant messaging, news,
information, software, entertainment, and even free web space. All these experiences play into users'
expectations.

Managers must overcome resistance to change within their own organization. Employees quickly become
comfortable with their work, and they find changing processes stressful. Managers need to foster a work
environment where employees see change as a routine part of their job.

8. Why are there so many conceptual classifications of information systems? Why are they typically
integrated in the information systems found in the real world?
Conceptual classifications of information systems are designed to emphasize the many different roles of
information systems. This can be done from various points of view, such as the level of management that the
information systems serve, or the business functions they support. In practice, these roles are not always clearly
divided, and in any case, information produced by one business activity may serve as input data to another
activity. Thus it makes sense to integrate various roles into one information system.
9. In what major ways have information systems in business changed during the last 40 years? What is one
major change you think will happen in the next 10 years? Refer to Figure 1.4 to help you answer.
History:
Tabulation (pre 1950s)
Data processing (1950s-1960s)
Management reporting (1960s-1970s)
Decision support (1970s-1980s)
Strategic end user support (1980s-1990s)
Enterprise and global internetworking (1990s-2000s)
eBusiness (2000s-2010s)
Social networking (2010s-current)
Future:
User authentication
Virtual machines
Cloud computing
Solid state drives

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Overhaul of computing legislation

Integration of video, audio, images, GPS, networks into entirely new products and services.
Biometric computing
Monitoring and control systems embedded into the human body (for example, insulin injectors, ID chips)

10. Refer to the real world example about responsibility and accountability for project failures in the chapter.
Are these IT projects, or business projects with a significant IT component? Who should be responsible for
ensuring their success? Explain.
(the work below has some application to the answer: re-work)
IT Projects
A few projects might be considered solely IT projects. For example, a server upgrade involves only IT people.
Any resulting failure will almost always trace back to IT. Here's another way of looking at this if I take my
car in to a garage for repairs, is it my fault if the mechanic reassembles the transmission incorrectly? My
involvement is limited only to ensuring labor hours and work time do not significantly exceed estimates.
Business Projects
In general, IT departments undertake work at the behest of business managers. Such projects require their
participation to succeed. For example, IT people aren't as likely to understand the intricacies of various office
operations and rely almost entirely on feedback from the organization's managers. Compare this with buying a
new car. It is not sufficient for a new car buyer to establish color and price requirements. For a car buyer to be
satisfied with their purchase, they must participate in product research, visit some showrooms, and test drive a
few models.
Failure:
Failure is never an orphan. Failure can come from many sources.
Managers
do not fully understand their own business processes
overestimate the quality of legacy data
overestimate employee's willingness to change
accept vendor's time & cost estimates without sufficient skepticism
fail to appreciate the risks associated with customization
disrupt regular business with too many changes at once
Technology:
oversold
implemented by inexperienced technologists
Responsibility
At best, IT managers can only facilitate projects. In most cases, they do not have the all around expertise
necessary to manage a project entirely on their own. As a result, it's important for IT managers to establish roles
and responsibilities across the entire project and ensure each team member satisfactorily completes their tasks in
a timely manner. The project manager should also set checkpoints to assess progress and communicate with
key stakeholders. Ultimately, the project's sponsor must have the authority to provide the required resources
and be held accountable for a project's final outcome. IT managers and even CIO's rarely have this level of
authority.

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ANSWERS TO ANALYSIS EXERCISES

1. Understanding the Information System
A library makes an excellent information systems model. It serves as a very large information storage facility
with text, audio, and video data archives. Look up the definitions for each term listed below and briefly
explain a library's equivalents.
Students will more easily grasp advanced concepts once they learn to think in terms of the basic information
systems structures. This exercise takes a familiar system and breaks it down into an information system's
components. This exercise makes an excellent in-class discussion topic where students can expand each other's
ideas. Consider substituting any common information system in place of a library. Alternative examples might
include video rental stores, class registrations systems, and voting systems.
a) Input
A library's inputs consist of the items it receives for its collection. These items may consist of books,
periodicals, maps, microfiche, DVDs, CDs, and many others. Inputs also consist of creating and maintaining
patron's accounts.
b) Processing
A library's main processes revolve around checking out and checking in items from its collection. Additional
processes include adding new items into the collection, purging dated, duplicate, or damaged items from the
collection, photocopying or reproducing materials, facilitating inter-library loans, sending overdue notices,
assisting patron's accounts, and repairing damaged items.
c)

Output
A library's outputs consist of any information that leaves the library. This may take the form of item loans,
photocopies, and even hand-written notes.

d) Storage
A library's storage systems include shelves for books, stacks for periodicals, file drawers for microfiche, hard
drives for databases, and racks for CD's and DVD's.
e)

Control
A library's control systems include periodic inventories, anti-theft devices, and security cameras.

f)

Feedback
A library's feedback systems include circulation, patronage, and loss statistics. Librarians use this information
to help identify popular items, plan staffing levels, and develop strategies to reduce loss. In short, librarians use
this information to help the library run more effectively and efficiently.

2. Career Research on the Web

Select a job title for a career you would like to pursue as a summer intern or new graduate. Use Figure 1.19.
Fill in your diagram with the information about people, hardware, software, and other resources from this
exercise.
This question is not entirely clear. Consider changing the wording to:
Select a job title for a career you would like to pursue as a summer intern or new graduate. Provide a realworld example of each element in Figure 1.19. You may need to interview someone familiar with this
position to find the information you require.
Sample answer: "Professor"
Element
Example
People
Students, committee members, administration, peers
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Software
Hardware
Network
Data
Control
Input
Processing
Output
Storage

Blackboard, WebCT, e-mail, grade book

Desktop computer, various servers
LAN, Wi-Fi
Grades, rosters, assignments, meeting minutes, messages
Systems administrators
Grade entry, assignment submission, meeting request
Grade tabulation, message routing, file serving
Report card, personal calendar, message
Local, online (sometimes replicated)

Alternatively, consider assigning one or more specific job titles. Examples might include:
Sales representative
Human resources manager
Accountant
Project manager
Store manager
Financial analyst
Programmer
3. Skydive Chicago: Efficiency and Feedback
a) How can this information system benefit the skydiving student?
Benefits:
Faster learning students see what they are doing right and wrong
Improved safety fewer mistakes results in greater safety
"Free" video souvenir students can make and keep copies of their videos
b) How can this information system benefit Skydive Chicago?
Benefits:
Marketing student videos make great promotional tools
Safety students learn faster and make fewer mistakes
Reduced labor instructors don't have to spend as much time with students
Instructor feedback instructors can see the results of their training efforts
c) Draw the information systems model (Figure 1.19, the information system model). Fill in your diagram
with people, hardware, software, etc. information from this exercise.
Diagram Element

Detail

People resources

Student / jumpmaster

Software resources

Record, play, and copy video.

Hardware resources

Video camera, VCR, VHS tape

Network resources

VCR and camera cables

Data resources

Video

Input

Video of jump

Process

View, copy video

Output

Copy to student, copy to library

Storage

VHS tape video library

Control

Management policy, training room library access

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4.

Are Textbooks History?

Many students are familiar with both Google and Wikipedia. This exercise will help bring the remaining
students up to speed and enable thoughtful classroom discussion. It will also increase student's exposure to this
chapter's vocabulary.

a) Go to http://www.google.com and use the search box to look up "End-user." Were any of Google's first
five search results useful with respect to this course?
At the time of this writing, Google returns Wikipedia links, dictionary definitions, a MySpace page, information
about end-user licensing agreements, and so on.
Note: seven years ago the results were generally useless with respect to this course.
b) Go to http://www.wikipedia.com/ and use the search box to look up "Knowledge worker." Compare
Wikipedia's article to the information provided within this textbook. Which source did you find easiest to
use? What advantages did Wikipedia provide? What advantages did this textbook provide?
Ease of use:
The article was neatly laid out and easy to navigate. Links to related terms at the bottom of the article made
exploring the topic in further detail simple.
Wikipedia's advantages:
Free
Detailed
Easy to print out, not heavy to carry
Textbook's advantages:
Fact checked by professionals
Concise
Contains up to date real-world examples and illustrations
Includes useful case studies and exercises
Available off-line and without batteries
c)

Did Google, Wikipedia, or this textbook provide the most useful information about "Intranets"? Why?
Google:
Google provided Wikipedia's link first, so it was useful in that way. It's simpler to type in a one word query
than to navigate to Wikipedia and repeat the query. Other links included intranet building resources, intranet
evaluations, and links to subject-matter journals.
Wikipedia:
Wikipedia's article addressed the subject in detail. It contained hyperlinks to online sources and internal links to
related articles.
Textbook:
The textbook contains the term in its index along with numerous page references spread across many chapters.
The book is far more cumbersome to use, but the information is concise, vetted for accuracy, and available
offline.

Careers in IS
Note: the answers to these questions require a fair amount of commons sense. This exercise may make an
excellent in-class discussion topic. Consider asking students if they have ever "lost" important work. Ask them
to elaborate on the circumstances. Stories of lost files abound. Students should get into good data management
practices early and maintain them throughout their careers. This exercise stimulates thinking and may result in
improved practices. It also supports a "no excuses" policy toward future class work. "My computer crashed" is
not a valid excuse for failing to turn in work.

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1) Failing to frequently save work in progress

2) Failing to make a backup-copy
3) Storing original and backup copies in the same location
a) How might this mistake result in data loss?
b) What procedures could you follow to minimize this risk?
Answers:
1 a. The user might forget to save his or her work before exiting the application. Power might go out.
1 b. Make a habit of frequently saving work. Enable each application's auto-save feature. Learn the "shortcut"
keystrokes that cause an application to save your work. When using a desktop machine, install an uninterrupted
power supply that provides at least five minutes worth of power in the event of a power outage. Laptop
computers have this capability built in.
2 a. The storage media might become lost or damaged. The user may accidentally overwrite or delete their
work file.
2 b. Make a habit of frequently backing up work. Always start new edits using a copy of the original file
instead of directly onto the original file. Use backup scheduling software included with most operating systems
to automate daily backups.
3 a. Backpacks and briefcases may become lost or stolen. Work areas may be destroyed or rendered
inaccessible by fire, flood, or other calamity.
3 b. Make a habit of storing backups separately. For example use a key-ring thumb drive to store backups and
keep the key ring apart from the computer containing the original copy. Use a storage device on a computer
network in combination with removable media. Use a file server if available or even e-mail the file to yourself.
E-mailing will place a copy of your work on your e-mail server until you retrieve it.

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ANSWERS TO REAL WORLD CASES

RWC 1: The Global Innovation Revolution and ITs Indispensable Role

Case Study Questions
1. How do information technologies contribute to the business success of the companies depicted in the
case? Provide an example from each company explaining how the technology implemented led to improved
performance.
Amazon: experiments with different versions of its web pages to see how design changes affect customer
behavior. Presumably Amazon adopts designs that provide better results.
Google: typically performs 200 to 300 web page design experiments a day.
CVS: experimented with an improved business process for ordering prescription drugs at one pharmacy. When
the experiment succeeded in improving customer satisfaction, CVS implemented the innovation system-wide.
2. CVS used IT to improve business processes, which resulted in improved customer satisfaction. What other
professions could benefit from a similar use of these technologies, and how? Develop two different
possibilities.
Presumably CVS' innovations, though not described in the case, likely resulted in improved accuracy, safety,
privacy, customer communications, and order fulfillment speed. Improvements to any or all of these areas
would significantly improve customer satisfaction. What profession couldn't benefit from these improvements?
Examples
These examples closely fit pharmacy customer service requirements described above. Students should have no
difficulty identifying many useful examples.

Medical testing
Hospital patient in-processing
Surgical care
Emergency services (fire, police, EMS)

3. Brynjolfsson lists four ways in which companies can leverage their IT assets. What other ways can global
firms use their IT assets for strategic advantage?
Brynjolfsson's list:
Measurement (monitoring)
Experimentation (testing, evaluating)
Sharing (repository, library, archive, teaching, learning)
Replication
Other ways:
Collaboration (working together remotely)
Self-promotion (marketing)
Real World Activities
1.
Use the Internet to research examples of global companies using one or more of the four strategies
offered by Brynjolfsson. What differences can you find with those reviewed in the case? Prepare a report to
summarize your findings and highlight new and innovative uses of these technologies.
Search terms
"Business Intelligence Software"
"business intelligence case studies".
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2. Why do some companies in a given industry, like Google above, adopt and deploy innovative technologies
while others in the same line of business do not? Break into small groups with your classmates to discuss what
characteristics of companies could influence their decision to innovate with the use of information
technologies.
Characteristics:

Technical resources

Human resources

Capital resources

Risk tolerance

Reward structures

Organizational culture

Litigation risk

Competitive threats

Customer demands

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RWC 2: The New York Times and Boston Scientific

Case Study Questions
1. As stated in the case, the New York Times chose to deploy their innovation support group as a shared
service across business units. What do you think this means? What are the advantages of choosing this
approach? Are there any disadvantages?
Shared service
A shared service means that it's a resource available to all the organization's business units. Typically, shared
services operate as a "profit center". This means they generate internal charges (bills) for their work. The
charge-back system helps IT to quantitatively justify its existence to the organization.
Advantages

Pooled expertise

Shared overhead costs

Easier to enforce software, hardware, technology, process, and policy standards across an organization

Easier to share best practices across an organization

Disadvantages

Creates an extra layer of management between IT and end-users which may result in some loss of
responsiveness or accountability to individual business units

Reduced flexibility
2. Boston Scientific faced the challenge of balancing openness and sharing with security and the need for
restricting access to information. How did the use of technology allow the company to achieve both objectives
at the same time? What kind of cultural changes were required for this to be possible? Are these more
important than the technology-related issues? Develop a few examples to justify your answer.
Technology
Boston Scientific accomplished its objective by implementing an automated workflow application to help them
manage information access.
Cultural changes
Boston Scientific's managers had to eliminate their "information silo" mentality and perceive the value in
sharing their information in a controlled and accountable fashion. Its managers also had to learn the new
technology and incorporate it into their daily processes.
Importance
Since a project will fail without both cultural and technology changes, neither one is more important.
Sample examples
Some cultures operate under a strict social hierarchy. Enabling workers to participate in quality improvement
initiatives by providing them with production data and analysis tools would run counter to this culture. Unless
the implementation team manages to overcome this cultural barrier, managers would resist sharing information
or simply deny their employees access to the system.
3. The video rental map developed by the New York Times and Netflix graphically displays movie
popularity across neighborhoods from major US cities. How would Netflix use this information to improve
their business? Could other companies also take advantage of these data? How? Provide some examples.
Possible business improvements
Netflix could use this data to identify affinities between movies and ensure that its regional distribution centers
are appropriately stocked to meet anticipated demand.
External use
Netflix might consider selling its data to consumer trend-tracking organizations. Netflix need not divulge
individual customer data but instead group movie rental data by postal code. Postal codes would give marketers
the ability to tie Netflix' data in with data from other marketing systems to help create more useful regional,
demographic profiles.

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Real World Activities

1. The newspaper industry has been facing serious challenges to its viability ever since the Internet made
news available online. In addition to those initiatives described in the case, how are the New York Times and
other leading newspapers coping with these challenges? What do you think the industry will look like 5 or 10
years from now? Go online to research these issues and prepare a report to share your findings.
Note 1: does the current generation even read traditional newspapers? 1
Note 2: early science fiction writers anticipated newspaper facsimiles printing out in each subscriber's home.
Current state
Traditional newspapers have expanded to the Internet. The Wall Street Journal, USA Today, and The Economist,
among others, employ a subscription model for their online services. Others, like The New York Times, rely on
revenue generated through online advertising.
News aggregators such as news.google.com do a good job organizing news stories by subject and region,
though not by date or political inclination.
Search terms
"future of newspapers"
Future
Users will be able to indicate their current "state" or "mode" or "status" and receive news appropriate for the
moment. For example, the "newspaper" software would present top local, regional, national, and international
headlines before work. During working hours, the user might see only new stories in various industry or
technical journals. After hours, weekends, and holidays, the news stories would focus on leisure activities. The
software will base its decision on explicit instructions (show me, don't show me), past browsing habits, and
the browsing habits of various affinity groups related to the individual and their current "state". The software
will adapt over time and adjust to changing preferences. It will also accept user input regarding an article's
quality. This will further "instruct" the software as well as provide the newspaper with real-time feedback. The
software will also likely consider the user's physical location and connection device when making story
recommendations. Newspapers will not charge for these features they'll provide them simply increase
readerships. Some newspapers may experiment with a "commercial free" version for a fee. However, if
commercials become too intrusive, news providers would run the risk that users would switch to another
service.
It's distinctly possible that services providers will have so much information about a user including real-time
physical location and purchasing desires, that advertising revenue will increase. For example, how much would
a local restaurant pay to reach a user located a block away who has expressed interest in finding a nice place to
eat within the next hour? The user gets a list, perhaps a discount offer, reservations, and GPS directions only to
those places within his or her vicinity that match his or her dining preferences. Just click here
2. Go online and search the Internet for other examples of companies using technology to help them
innovate and develop new products or services. Break into small groups with your classmates to share your
findings and discuss any trends or patterns you see in current uses of technology in this regard.
Examples abound within this text and online. One example worth following closely is Google's Android
operating system and its application in smart phones and other devices. This product is a relatively new and
direct challenge to Windows CE, iOS, Unix, and others.

http://www.arcamax.com/doonesbury/s-746877-698187
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RWC 3: Sew What? Inc.: The Role of Information Technology in Small Business Success
Case Study Questions
1. How do information technologies contribute to the business success of Sew What? Inc.? Give several
examples from the case regarding the business value of information technology that demonstrate this
conclusion.
Examples:

Expanded market - Duckett was able to grow her business from local to international clients using her
website.

Customer education - the website helps her educate her customers about curtain design.

Customer service - the website allows customers to more easily match materials, select colors, and
learn about her product's "care and feeding."

Cost accounting - Duckett tracks production workflows and more accurately calculate costs.

Business process reengineering - workflow information helps identify useful process changes and
provides feedback to help Duckett evaluate the results.
2. If you were a management consultant to Sew What? Inc., what would you advise Megan Duckett to do at
this point to be even more successful in her business? What role would information technology play in your
proposals? Provide several specific recommendations.
The article provides no information about Duckett's current challenges, though recommendations should focus
on them. In general, Duckett should give scalability and flexibility significant consideration when making
future IT decisions. Her reputation may lead to continued growth and/or expansion into new areas. She will
not want to find herself limited by her own information systems. Lastly, Duckett should not get too carried
away with industry prizes. While it's great to get a pat on the back now and then, the real prize is profitability.
Profitability turns into big annual bonuses and pats on the back from people she cares about the most, her
employees.
3. How could the use of information technology help a small business you know be more successful? Provide
several examples to support your answer.
Organizations don't want information systems, they are expensive and distracting. However, organizations
usually need information systems in order to accomplish specific goals. Answers should focus primarily on
those goals and how the proposed system will help. For example, a car mechanic would want to ensure he or
she meets her quota of billable hours. By keeping a customer database with vehicle maintenance schedules, the
mechanic can contact customers and schedule them for routine service during anticipated slack times.
Real World Activities
1. Search the Internet to help you evaluate the business performance of Sew What? Inc. and its competitors
at the present time. What conclusions can you draw from your research about Sew What?'s prospects for the
future? Report your findings and recommendations for Sew What?'s continued business success to the class.
Marketplace:
Sew What? operates in a highly competitive market. Competitors include:
ShowBiz Enterprises, Inc.2
Rose Brand3
Universal Stars Incorporated4
Gerriets International5
2

http://www.theatricaldrapery.com/
http://www.rosebrand.com/
4
http://www.ledstarcloth.com/
5
http://www.gi-info.com/
3

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Findings:
Sew What?'s competitors offer a spectrum of products far broader than just curtains. If customers prefer a one-stop
solution for their staging needs, then they would not consider Sew What? as a potential vendor. Therefore, Duckett
should consider expanding her company's product line.
2. Small businesses have been slower to integrate information technology into their operations than larger
companies. Break into small groups with your classmates to discuss the reasons for this state of affairs, identifying
several possible IT solutions and their business benefits that could help small businesses be more successful.
Reasons:
Most small companies are focused on their survival and don't have time to plan for the long term.
Smaller companies have proportionally smaller IT budgets.
Many information technology solutions require considerable startup costs, steep learning curves, and long
payback periods.
Solutions:
ASP application suites reduce start-up costs because the software is leased rather than purchased.
Small businesses should ensure they hire people who are IT literate. These people would require less training
when the business get around to implementing new technology, and the best of them may even be able to take a
leadership role in training other users and in helping acquire appropriate systems.
Ensure IT purchases are scalable. For example, Salesforce.com provides an automated upgrade path. Other
vendors charge per user and feature rather than tiered fees.

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RWC 4: JetBlue and the Veterans Administration

Case Study Questions
1. Eric Brinker of JetBlue noted that the database developed during the crisis had not been needed before because
the company had never experienced a meltdown. What are the risks and benefits associated with this approach to
IT planning? Provide some examples of each.
Risks:
The risks to this ad-hoc, as-needed planning approach include not being able to function during the middle of a
crisis. For example, JetBlue didn't know where many of its employees were and therefore had significant
difficulty finding them and organizing a recovery. This could result in loss of business and longer-term damage
to its reputation.
A hastily developed system, though useful at the moment, may not be well designed. Yet such a system may
become part of JetBlue's application portfolio due to its utility. In the end, JetBlue may be stuck maintaining a
poorly designed (inefficient) system.
Benefits:
By designing its systems with flexibility in mind, JetBlue retains the nimbleness to respond quickly to
unforeseen events whether they involve a system failure or simply a new competitive threat. In the case at
hand, JetBlue was able to quickly design a new database to meet their newest need, and they were able to
incorporate this database into their ongoing operations once it proved useful.
2. With hindsight, we now know that the decision made by Eric Raffin of the VA not to fail over to the Denver site
was the correct one. However, it involved failing to follow established backup procedures. With the information he
had at the time, what other alternatives could he have considered? Develop at least two of them.
Alternatives:
1) Continue operations using a paper based approach. This would require creating a phone system to
manually look up and communicate records on demand as well as require an extensive post-recovery data entry
effort. This assumes paper records are accessible.
2) Since he didn't know the failure was hardware induced, he might have opted to restore the system from
backups created at a point in time immediately prior to the failure. This would remove any software or data bug
from the system, but it would do nothing to correct a hardware induced failure.
3) Run the system via a mirror site. This would solve most hardware induced problems. Further data
corruption could be reduced by using the mirror site in read-only mode until the problem had been fixed. In this
way, doctors could still access critical patient information.
3. A small, undocumented change resulted in the collapse of the VA system, largely because of the high
interrelationship between its applications. What is the positive side of this high degree of interconnection, and how
does this benefit patients? Provide examples from the case to justify your answer.
Indirect patient benefits:
The organization benefitted from the consolidation security, infrastructure administration and maintenance, and
disaster recovery. These indirectly benefit the patient by enabling increased system reliability.
Direct patient benefits: the interrelationships between systems provide doctors, pharmacists, and other medical
professionals with faster access to a complete patient view, increased safety (better order-checking), and better
care (event alerts, reminders).
Real World Activities
1. Go online and search for reports on the aftermath of these two incidents. What consequences, financial and
otherwise, did the two organizations face? What changes, if any, were implemented as a result of these problems?
Prepare a report and present your findings to the class.
JetBlue:

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JetBlue apologized to its customers, promised to do better,6 and created a passenger's bill of rights.7 JetBlue's
stock remained highly correlated with AMR's, the parent company for JetBlue's main IT service provider, from
2007 through 2008. Southwest Airlines and United Airlines, both with independent IT operations, significantly
outperformed JetBlue during this same period.
Veteran's Administration:
A ComputerWorld article8 appears to be the source for this case and provides additional details. The failure
highlights the difficulty associated with reorganizing infrastructure from decentralized to centralized
management. The system's failure provided the reorganization's critics with ample fodder. Fallout included an
internal review, external review, a temporary hold on additional migrations, enhancement to documentation
technologies, and congressional hearings. 9
2. Search the Internet for examples of problems that companies have had with their IT processes. Break into small
groups with your classmates to discuss your findings and what solutions you can propose to help organizations
avoid the problems you discovered.
CIO.com makes an excellent resource for this assignment.

http://garysteinblog.blogspot.com/2007/02/jetblue-failure-in-competencebenevolenc.html
http://www.chron.com/disp/story.mpl/business/steffy/4568445.html
8
http://www.computerworld.com/action/article.do?command=printArticleBasic&articleId=9047898
9
http://www.modernhealthcare.com/apps/pbcs.dll/article?AID=/20071001/FREE/310010001/0/FRONTPAGE
7

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