r.j*v.-t #** Using Ml David M. Kroenke PEARSON Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
CONTENTS Part 1 :Why MIS? 1 1 : THE IMPORTANCE OF MIS 3 Q1 Q3 Q4 Why Is Introduction to MIS the Most Important Class in the Business School? 5 What Are Cost-Effective Business Applications of Facebook or Twitter or Whatever Else Will Soon Appear? 6 How Can I Attain Job Security? 6 How Can Intro to MIS Help You Learn Nonroutine Skills? 7 What is the Bottom Line? 9 What Is MIS? 10 Components ofan Information System 10 Management and Use of Information Systems 11 Achieving Strategies 12 How Can You Use the Five-Component Model? 12 The Most Important Component YOU 13 ' High-Tech Versus Low-Tech Information Systems 13 Using MIS InClass 1: A Group Exercise 14 Understanding the Scope of New Information Systems 15 Components Ordered by Difficulty and Disruption 15 Why Is the Difference Between Information Technology and Information Systems Important? 15 Q5 What Is Information? 16 Q6 Definitions Vary 16 Where Is Information? 16 What Are Necessary Data Characteristics? 17 Accurate 17 o Ethics Guide: Ethics of Information From Misdirected Data 18 Timely 20 Relevant 20 XI
XII Contents Just Barely Sufficient 20 Worth Its Cost 20 Q7 2023? 21 o Security Guide: Passwords and Password Etiquette 22 o Guide: Five-Component Careers 24 Case Study 1: The Amazon of Innovation 29 g: COLLABORATION INFORMATION SYSTEMS 31 Q1 What Are the Two Key Characteristics of Collaboration? 33 Importance of Effective Critical Feedback 34 Guidelines for Giving and Receiving Critical Feedback 35 Warning! 35 QS What Are Three Criteria for Successful Collaboration? 36 Successful Outcome 36 Growth in Team Capability 36 Meaningful and Satisfying Experience 37 Q3 What Are the Four Primary Purposes of Collaboration? 37 Q4 Q5 Becoming Informed 38 Making Decisions 38 Problem Solving 40 Project Management 40 What Are the Components and Functions of a Collaboration Information System? 42 The Five Collaboration System Components 42 Primary Functions: Communication and Content Sharing 42 How Can You Use Collaboration Tools to Improve Team Communication? 43 Q6 How Can You Use Collaboration Tools to Share Content? 47 Shared Content with No Control 47 o Ethics Guide: Virtual Ethics? 48 Shared Content with Version Management 50 Shared Content with Version Control 52 Using MIS InClass 2: A Group Exercise 54 Q7 Which Collaboration IS Is Right for Your Team? 55 Three Sets of Collaboration Tools 56 Choosing the Set for Your Team 57 Don't Forget Procedures and People! 58 2023? 59 o Security Guide: Securing Collaboration 60 o Guide: Egocentric Versus Empathetic Thinking 62 Case Study 2: Eating Our Own Dog Food 67
Contents XIII 3: StRATEGY AND INFORMATION SYSTEMS "71 Gil How Does Organizational Strategy Determine Information Systems Structure? 73 QS What Five Forces Determine Industry Structure? 74 Q3 How Does Analysis of Industry Structure Determine Competitive Strategy? 75 o Ethics Guide: Yikes! Bikes 76 Q4 How Does Competitive Strategy Determine Value Chain Structure? 78 Primary Activities in the Value Chain 78 Support Activities in the Value Chain 79 Value Chain Linkages 80 Q5 How Do Business Processes Generate Value? 80 Q6 How Does Competitive Strategy Determine Business Processes and the Structure of Information Systems? 82 Using MIS InClass 3: A Group Exercise 84 Q7 How Do Information Systems Provide Competitive Advantages? 85 Competitive Advantage via Products 85 Competitive Advantage via Business Processes 85 How Does an Actual Company Use IS to Create Competitive Advantages? 86 How Does This System Create a Competitive Advantage? 87 QS 2023? 89 o Security Guide: Differentiating on Security! 90 o Guide: Your Personal Competitive Advantage 92 Case Study 3: Fulfillment by Amazon (FBA) 97 Part 2: Information Technology 99 4: HARDWARE, SOFTWARE, AND MOBILE SYSTEMS 1D1 Q1 What Do Business Professionals Need to Know About Computer Hardware? 103 Hardware Components 104 Types of Hardware 104 Computer Data 105
XIV Contents What Do Business Professionals Need to Know About Software? 107 What Are the Major Operating Systems? 108 Virtualization 110 Own Versus License 112 What Types of Applications Exist, and How Do Organizations Obtain Them? 112 Using MIS InClass 4: A Group Exercise 114 What Is Firmware? 116 Q3 Q4 Is Open Source Software a Viable Alternative? 116 Why Do Programmers Volunteer Their Services? 116 How Does Open Source Work? 117 So, Is Open Source Viable? 117 What Are the Differences Between Native and Thin-client Applications? 118 Developing Native Applications 118 Developing Thin-client Applications 120 o Ethics Guide: "Because It's Where the Money is..."122 Which Is Better? 124 Q S Why Are Mobile Systems Increasingly Important? 124 Hardware 126 Software 126 Data 126 Procedures 127 People 127 QG What Characterizes Quality Mobile User Experiences? 128 Feature Content 128 Use Context-sensitive Chrome 129 Provide Animation and Lively Behavior 129 Design to Scale and Share 130 Use the Cloud 130 Q7 What Are the Challenges of Personal Mobile Devices at Work? 132 Advantages and Disadvantages of Employee Use of Mobile Systems at Work 133 Survey of Organizational BYOD Policy 134 QS 2023? 135 o Security Guide: Churn and Burn 138 o Guide: Keeping Up to Speed 140 Case Study 4: The Apple of Your i 145
Contents XV 5: DATABASE PROCESSING 149 Q1 What Is the Purpose of a Database? 151 OS What Is a Database? 152 Q3 Q 4 Q5 Relationships Among Rows 153 Metadata 155 o Ethics Guide: Nobody Said I Shouldn't 156 What Are the Components of a Database Application System? 158 What Is a Database Management System (DBMS)? 158 Using MIS InClass 5: A Group Exercise 159 How Do Database Applications Make Databases More Useful? 161 What Are Forms, Reports, and Queries? 161 Why Are Database Application Programs Needed? 162 Multi-User Processing 163 Enterprise DBMS Versus Personal DBMS 164 How Are Data Models Used for Database Development? 164 What Is the Entity-Relationship Data Model? 165 QG How Is a Data Model Transformed into a Database Design? 168 Q7 Normalization 168 Representing Relationships 170 What Is the Users' Role in the Development of Databases? 173 QS 2023? 173 o Security Guide: No, Thanks, I'll Use a Spreadsheet 176 o Guide: Immanuel Kant, Data Modeler 178 - Case Study 5: Fail Away with Dynamo, Bigtable, and Cassandra 184 S: DATA COMMUNICATION AND THE CLOUD Q1 What Is a Computer Network? 189 QS What Are the Components of a LAN? 190 A Typical SOHO LAN 190 Connecting Your LAN to the Internet 192 Using MIS InClass 6: A Group Exercise 194
XVI Contents Q3 What Are the Fundamental Concepts You Should Know About the Internet? 195 An Internet Example 195 The TCP/IP Protocol Architecture 196 Application-Layer Protocols 197 TCP and IP Protocols 198 IP Addressing 198 Virtual Private Network 200 o Ethics Guide: Is it Spying or Just Good Management? 202 Q 4 What Processing Occurs on a Typical Web Server? 204 Three-Tier Architecture 204 Watch the Three Tiers in Action! 205 Hypertext Markup Language (HTML) 206 Q5 Why Is the Cloud the Future for Most Organizations? 208 Why Is the Cloud Preferred to In-House Hosting? 209 Why Now? 210 When Does the Cloud Not Make Sense? 210 QB How Can Organizations Use the Cloud? 211 Q7 2023? 212 o Security Guide: You Said What? AboutMe? In Class? 214 o Guide: Thinking Exponentially is Not Possible, But... 216 Case Study 6:Turbulent Air in Those Azure Clouds 220 Part 3: Using IS for Competitive Advantage 223 V: PROCESSES, ORGANIZATIONS, AND INFORMATION SYSTEMS 225 Gil What Are the Basic Types of Processes? 227 How Do Structured Processes Differ from Dynamic Processes? 227 How Do Processes Vary by Organizational Scope? 228 Q S How Can Information Systems Improve Process Quality? 231 Q 3 How Can Processes Be Improved? 231 How Can Information Systems Improve Process Quality? 232 How Do Enterprise Systems Eliminate the Problem of Information Silos? 233 What Are the Problems of Information Silos? 233 How Do Organizations Solve the Problems of Information Silos? 234
Contents XVII p An Enterprise System for Patient Discharge 234 o Ethics Guide: Dialing For Dollars 236 Q4 How Do CRM, ERP, and EAI Support Enterprise Processes? 238 The Need for Business Process Engineering 238 Emergence of Enterprise Application Solutions 238 Customer Relationship Management (CRM) 239 Enterprise Resource Planning (ERP) 240 Using MIS InClass 7: A Group Exercise 242 Enterprise Application Integration (EAI) 245 Q5 What Are the Elements of an ERP System? 246 Q6 ERP Application Programs 247 ERP Databases 247 Business Process Procedures 247 Training and Consulting 248 Industry-Specific Solutions 249 What Companies Are the Major ERP Vendors? 249 What Are the Challenges of Implementing New Enterprise Information Systems? 250 Collaborative Management 250 Requirements Gaps 250 Transition Problems 250 Employee Resistance 251 Q 7 How Do Inter-enterprise IS Solve the Problems of Enterprise Silos? 251 Q8 2023? 253 o Security Guide: One-Stop Shopping 254 o Guide: ERP and the Standard, Standard Blueprint 256 Case Study 7: Using the PRIDE Database 262 8: SOCIAL MEDIA INFORMATION SYSTEMS 265 Q1 What Is a Social Media Information System (SMIS)? 267 Three SMIS Roles 267 SMIS Components 270 OS How Do SMIS Advance Organizational Strategy? 273 Social Media and the Sales and Marketing Activity 273 Social Media and Customer Service 275 Social Media and Inbound and Outbound Logistics 275 Social Media and Manufacturing and Operations 276 Social Media and Human Resources 277 Q3 How Do SMIS Increase Social Capital? 277 What Is the Value of Social Capital? 277
XVIII Contents How Do Social Networks Add Value to Businesses? 278 Using Social Networking to Increase the Number of Relationships 278 Using Social Networks to Increase the Strength of Relationships 279 Connecting to Those with More Assets 280 Q 4 What Roles Do SMIS Play in the Hyper-Social Organization? 281 Consumers Become Humans 281 Market Segments Becomes Tribes 282 Channels Become Networks 282 Structure and Control Becomes Messy 283 How Can SMIS Foster Hyper-Social Organizations? 283 Q 5 Does Mobility Affect Social Media Economics? 285 Key Characteristics of Web 2.0 285 o Ethics Guide: Hiding the Truth? 286 Does Mobility Reduce Online Ad Revenue? 288 Q 6 How Can Organizations Manage the Risks of Social Media? 289 Using MIS InClass 8: A Group Exercise 284 * Managing the Risk of Employee Communication 291 Managing the Risk of User- Generated Content 292 Q7 2023? 293 o Security Guide: Social Recruiting 296 o Guide: Blending the Personal and the Professional 298 Case Study 8: Sedona Social 302 9: BUSINESS INTELLIGENCE SYSTEMS 3O5 Q 1 How Do Organizations Use Business Intelligence (Bl) Systems? 307 QS What Are the Three Primary Activities in the Bl Process? 309 Using Business Intelligence for Problem-Solving at GearUp 310 Acquire Data 311 Analyze Data 311 Publish Results 315 Q3 How Do Organizations Use Data Warehouses and Data Marts to Acquire Data? 315 Problems with Operational Data 317 Data Warehouses Versus Data Marts 318 Q 4 How Do Organizations Use Reporting Applications? 319 Basic Reporting Operations 319 RFM Analysis 320 Online Analytical Processing (OLAP) 320
Contents XIX Q 5 How Do Organizations Use Data Mining Applications? 322 Unsupervised Data Mining 324 Supervised Data Mining 324 Market-Basket Analysis 325 Decision Trees 327 o Ethics Guide: The Ethics of Classification 328 Q6 How Do Organizations Use BigData Applications? 330 MapReduce 330 Hadoop 330 Using MIS InClass 9: A Group Exercise 332 Q 7 What Is the Role of Knowledge Management Systems? 333 What Are Expert Systems? 333 What Are Content Management Systems? 335 What Are the Challenges of Content Management? 335 What Are Content Management Application Alternatives? 335 How Do Hyper-Social Organizations Share Knowledge? 336 Hyper-social KM Alternative Media 337 Resistance to Hyper-social Knowledge-Sharing 337 QS What Are the Alternatives for Publishing Bl? 338 Characteristics of Bl Publishing Alternatives 338 What Are the Two Functions of a Bl Server? 339 OS 2023? 340 o Security Guide: Semantic Security 342 o Guide: Data Mining in the Real World 344 Case Study 9: Hadoop the Cookie Cutter 349 Part A\ Information Systems Management 353 1O: DEVELOPMENT PROCESSES 355 Q1 How Are Business Processes, IS, and Applications Developed? 357 How Do Business Processes, Information Systems, and Applications Differ and Relate? 357 Which Development Processes Are Used for Which? 359 Q S How Do Organizations Use Business Process Management (BPM)? 360 Why Do Processes Need Management? 361 What Are BPM Activities? 362
XX Contents Q 3 Q4 How is Business Process Modeling Notation (BPMN) Used to Model Processes? 363 Need for Standard for Business Processing Notation 364 Documenting the As-Is Business Order Process 365 What are the Phases in the Systems Development Life Cycle (SDLC)? 367 Define the System 368 o Ethics Guide: Estimation Ethics 370 Determine Requirements 372 Design System Components 374 System Implementation 375 Maintain System 377 QS What Are the Keys for Successful SDLC Projects? 377 Create a Work-Breakdown Structure 378 Estimate Time and Costs 378 Create a Proj ect Plan 379 Adjust Plan via Trade-offs 380 Manage Development Challenges 382 Using MIS InClass 10: A Group Exercise 384 Q6 How Can Scrum Overcome the Problems of SDLC? 384 What Are the Principles of Agile Development Methodologies? 385 What Is the Scrum Process? 386 How Do Requirements Drive the Scrum Process? 388 Q-7 2023? 390 o Security Guide: Psst. There's Another Way, You Know... 392 o Guide: The Real Estimation Process 394 Case Study 10: The Cost of PRIDE? 399 1 1 : INFORMATION SYSTEMS MANAGEMENT 4G1 Q1 What Are the Functions and Organization of the IS Department? 403 How Is the IS Department Organized? 403 What IS-Related Job Positions Exist? 405 QS How Do Organizations Plan the Use of IS? 407 Align Information Systems with Organizational Strategy 407 Communicate IS Issues to the Executive Group 407 Develop Priorities and Enforce Them Within the IS Department 407 Using MIS InClass 11: A Group Exercise 408 Sponsor the Steering Committee 408
Contents XXI Q3 What Are the Advantages and Disadvantages of Outsourcing? 409 Outsourcing Information Systems 409 o Ethics Guide: Using the Corporate Computer 410 International Outsourcing 412 What Are the Outsourcing Alternatives? 413 What Are the Risks of Outsourcing? 414 Q4 What Are Your User Rights and Responsibilities? 416 Your User Rights 416 Your User Responsibilities 417 Q5 2023? 418 o Security Guide: Are We Protecting Them From Me or Me From Them? 420 o Guide: Is Outsourcing Fool's Gold? 422 Case Study 11: iapp$$$$ 4 U 425 12: INFORMATION SECURITY MANAGEMENT 427 Q 1 What Is the Goal of Information Systems Security? 429 The IS Security Threat/Loss Scenario 429 What Are the Sources of Threats? 430 What Types of Security Loss Exist? 431 Goal of Information Systems Security 433 QS How Big is the Computer Security Problem? 434 Q3 How Should You Respond to Security Threats? 436 Q 4 Q 5 Using MIS InClass 12: A Group Exercise 438 How Should Organizations Respond to Security Threats?. 439 o Ethics Guide: Securing Privacy 440 How Can Technical Safeguards Protect Against Security Threats? 442 Identification and Authentication 442 Single Sign-on for Multiple Systems 443 Encryption 443 Firewalls 444 Malware Protection 445 Design for Secure Applications 446 QG How Can Data Safeguards Protect Against Security Threats? 447
XXII Contents Q 7 Q 8 How Can Human Safeguards Protect Against Security Threats? 447 Human Safeguards for Employees 448 Human Safeguards for Nonemployee Personnel 449 Account Administration 450 Systems Procedures 451 Security Monitoring 452 How Should Organizations Respond to Security Incidents? 453 QS 2023? 454 o Security Guide: Metasecurity 456 o Guide: The Final, Final Word 458 Case Study 12: Moore's Law, One More Time... 462 The International Dimension 465 Application Exercises 481 Glossary 498 Index 514