MASTER OF BUSINESS ADMINISTRATION Information and Communication Technology

MASTER OF BUSINESS ADMINISTRATION Information and Communication Technology Contact details: Regenesys Business School Tel: +27 (11) 669-5000 Fax: +27 (11) 669-5001 Email: info@regenesys.co.za www.regenesys.co.za

Version Control: 11.4_e_f Date of Publication: January 2014 Publisher: Regenesys Management Place of Publication: Sandton Document Change History Date Version Initials Description of Change 28 September 2013 08 DL Rewritten 23 October 2013 8.1 PL & DL Reworked content and referencing 07 November 2013 9 DL Reworked content and referencing 12 December 2013 10 PL Final review 18 December 2013 10.1 DL Reworked content 31 December 2013 11 PL Final review 20 January 2014 11.1 AR SME review 21 January 2014 11.1_f FVS Formatting and implementing SME suggestions 22 January 2014 11.2_f PL Final review 24 January 2014 11.2_e LS Proofread 30 January 2014 11.3_e_f FVS Formatting, adding SME suggestions, amending graphics 30 January 2014 11.4 DL Implementing SME recommendations 31 January 2014 11.4_e_f FVS Final formatting This Study Guide highlights key focus areas for you as a student. Because the field of study in question is so vast, it is critical that you consult additional literature. Copyright Regenesys, 2014 All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise) without written permission of the publisher. Any person who does any unauthorised act in relation to this publication may be liable for criminal prosecution and civil claims for damages.

CONTENTS 1 WELCOME TO REGENESYS... 1 2 INTRODUCTION... 2 2.1 TEACHING AND LEARNING METHODOLOGY... 2 2.2 ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES... 3 3 ICONS USED IN THIS STUDY GUIDE... 4 4 STUDY MATERIAL FOR THE MODULE... 5 5 PRESCRIBED AND RECOMMENDED RESOURCES... 5 5.1 RECOMMENDED BOOK... 5 5.2 OPTIONAL BOOKS... 5 5.3 PRESCRIBED ARTICLES... 6 5.4 PRESCRIBED MULTIMEDIA... 6 5.5 ADDITIONAL SOURCES TO CONSULT... 8 6 LEARNING OUTCOMES... 9 7 CONTENT SCOPE AND LEARNING GUIDANCE... 10 7.1 INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY... 11 7.1.1 INTRODUCTION... 11 7.1.2 THE ROLE OF INFORMATION SYSTEMS IN ORGANISATIONS TODAY... 11 7.1.3 PERSPECTIVES ON INFORMATION SYSTEMS... 16 7.2 GLOBAL E-BUSINESS... 25 7.2.1 TRENDS IN ICT... 25 7.2.2 BUSINESS PROCESSES AND INFORMATION SYSTEMS... 28 7.2.3 TYPES OF INFORMATION SYSTEMS... 30 7.2.4 SYSTEMS THAT SPAN THE ENTERPRISE... 34 7.2.5 THE INFORMATION SYSTEMS FUNCTION IN BUSINESS... 40 7.3 INFORMATION SYSTEMS, ORGANISATIONS AND STRATEGIES... 42 7.3.1 ORGANISATIONS AND INFORMATION SYSTEMS... 42 7.3.2 HOW INFORMATION SYSTEMS IMPACT ORGANISATIONS... 45 7.3.3 USING INFORMATION SYSTEMS TO ACHIEVE COMPETITIVE ADVANTAGE... 47 7.3.4 USING SYSTEMS FOR COMPETITIVE ADVANTAGE: MANAGEMENT ISSUES... 55 7.4 IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES... 56 7.4.1 INTRODUCTION AND THE LAWS OF TELECOSM... 56 7.4.2 INFRASTRUCTURE... 59 7.4.3 INFRASTRUCTURE COMPONENT... 62 7.4.4 CONTEMPORARY HARDWARE PLATFORM TRENDS... 64 7.4.5 CONTEMPORARY SOFTWARE PLATFORM TRENDS... 66 7.4.6 MANAGEMENT AND ICT INTEGRATION... 69 7.4.7 INTEGRATION OF MANAGEMENT AND ICT CHALLENGES... 70 7.4.8 DATABASE MANAGEMENT PRINCIPLES... 75 7.4.9 THE DATABASE APPROACH TO DATA MANAGEMENT... 78 7.4.10 DATABASE WAREHOUSES... 83 7.4.11 MANAGING DATA RESOURCES... 86 7.5 OPERATIONAL EXCELLENCE AND CUSTOMER INTIMACY... 87 7.5.1 ENTERPRISE SYSTEMS... 87 7.5.2 SUPPLY CHAIN MANAGEMENT SYSTEMS... 88 7.5.3 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM... 92 7.5.4 ENTERPRISE APPLICATIONS: NEW OPPORTUNITIES AND CHALLENGES... 94 7.6 E-COMMERCE DIGITAL MARKETS, DIGITAL GOODS... 97 7.6.1 INTRODUCTION... 97 7.6.2 ELECTRONIC COMMERCE AND THE INTERNET... 97 7.6.3 ELECTRONIC BUSINESS... 101 7.6.4 M-COMMERCE... 102 8 QUESTIONS AND ANSWERS... 104

9 REFERENCES... 109 10 APPENDIX A: GENERAL GLOSSARY OF KEY TERMS... 112 11 APPENDIX B: E-BUSINESS FUNDAMENTALS GLOSSARY... 114 List of Tables TABLE 1: BUSINESS PROCESS... 29 TABLE 2: TEN ASPECTS THAT ADD VALUE TO INFORMATION... 31 TABLE 3: INFORMATION SYSTEMS... 33 TABLE 4: ORGANISATIONAL STRUCTURES... 45 TABLE 5: FOREIGN KEY TABLE... 80 TABLE 6: HOW THE INTERNET CHANGES THE MARKETS FOR DIGITAL GOODS... 99 List of Figures FIGURE 1: PERSWARE... 17 FIGURE 2: FUNCTIONS OF AN INFORMATION SYSTEM... 18 FIGURE 3: DIMENSIONS OF AN INFORMATION SYSTEM... 20 FIGURE 4: THE BUSINESS INFORMATION VALUE CHAIN... 23 FIGURE 5: ENTERPRISE SYSTEMS... 36 FIGURE 6: EXAMPLE OF A SUPPLY CHAIN MANAGEMENT SYSTEM... 37 FIGURE 7: CLOUD COMPUTING ARCHITECTURE MODEL... 39 FIGURE 8: THE ORGANISATION... 43 FIGURE 9: PORTER S COMPETITIVE FORCES MODEL (THE 5 FORCES)... 48 FIGURE 10: THE VALUE CHAIN MODEL... 50 FIGURE 11: THE VALUE WEB... 51 FIGURE 12: AN ECOSYSTEM STRATEGIC MODEL... 54 FIGURE 13: STAGES IN IT INFRASTRUCTURE EVOLUTION... 61 FIGURE 14: ICT INFRASTRUCTURE COMPONENTS... 62 FIGURE 15: REGENESYS INTEGRATED LEADERSHIP MODEL... 71 FIGURE 16: COMPETITIVE FORCES MODEL FOR IT INFRASTRUCTURE... 74 FIGURE 17: STUDENT DATABASE... 76 FIGURE 18: A RELATIONAL DATABASE TABLE... 79 FIGURE 19: COMPONENTS OF A DATA WAREHOUSE... 84 FIGURE 20: BUSINESS INTELLIGENCE... 85 FIGURE 21: INTRANETS AND EXTRANETS FOR SUPPLY CHAIN MANAGEMENT... 90 FIGURE 22: PUSH-VERSUS PULL-BASED SUPPLY CHAIN MODELS... 91 FIGURE 23: THE FUTURE INTERNET DRIVEN SUPPLY CHAIN... 91 FIGURE 24: CRM SOFTWARE CAPABILITIES... 93

1 WELCOME TO REGENESYS Have a vision. Think big. Dream, persevere and your vision will become a reality. Awaken your potential knowing that everything you need is within you. Dr. Marko Saravanja At Regenesys, we assist individuals and organisations to achieve their personal and organisational goals, by enhancing their management and leadership potential. We approach education and development holistically, considering every interaction not only from an intellectual perspective but also in terms of emotion and spirituality. Our learning programmes are designed to transform and inspire your mind, heart and soul, and thus allow you to develop the positive values, attitudes and behaviours, which are required for success. Having educated over 95 000 students based in highly reputable local and international corporations across over 100 countries since Regenesys' inception in 1998, we are now one of the fastest-growing and leading institutions of management and leadership development in the world. Regenesys ISO 9001:2008 accreditation bears testimony to our quality management systems meeting international standards. Regenesys is accredited with the Council on Higher Education. Our work is rooted in the realities of a rapidly changing world and we provide our clients with the knowledge, skills and values required for success in the 21st century. At Regenesys, you will be treated with respect, care and professionalism. You will be taught by business experts, entrepreneurs and academics who are inspired by their passion for human development. You will be at a place where business and government leaders meet, network, share their experiences and knowledge, learn from each other, and develop business relationships. You will have access to a campus, in the heart of Sandton, with the tranquillity of a Zen garden, gym and meditation room. We encourage you to embark on a journey of personal development with Regenesys. We will help you to awaken your potential and to realise that everything you need to succeed is within you. We will be with you every step of the way. We will work hard with you and, at the end celebrate your success with you. Areas of Expertise Regenesys Business School 1

2 INTRODUCTION Welcome to the module on Information and Communication Technology (ICT). This module focuses on the essential concepts of ICT and MIS/ IT management best practices. It provides you with an overview of ICT management. The overall aim of this Study Guide is to help you work through the recommended textbook. Where necessary, you are required to read additional articles that can be downloaded from Regenesys Online. Please read through this Study Guide carefully, as it will influence your understanding of the subject matter and the successful planning and completion of your studies. 2.1 TEACHING AND LEARNING METHODOLOGY Regenesys uses an interactive teaching and learning methodology that encourages self-reflection and promotes independent and critical thinking. Key to the approach utilised is an understanding of adult learning principles, which recognise the maturity and experience of participants, and the way that adult students need to learn. At the core of this is the integration of new knowledge and skills into existing knowledge structures, as well as the importance of seeing the relevance of all learning via immediate application in the workplace. Practical exercises are used to create a simulated management experience to ensure that the conceptual knowledge and practical skills acquired can be directly applied within the work environment of the participants. The activities may include scenarios, case studies, self-reflection, problem solving and planning tasks. Training manuals are developed to cover all essential aspects of the training comprehensively, in a user-friendly and interactive format. Our facilitators have extensive experience in management education, training and development. Regenesys Business School 2

2.2 ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES This course will draw on a model developed by Regenesys Management, which demonstrates how the external environment, the levels of an organisation, the team and the components of an individual are interrelated in a dynamic and systemic way. The success of an individual depends on his/her self-awareness, knowledge and ability to manage successfully these interdependent forces, stakeholders and processes. The degree of synergy and alignment between the goals and objectives of the organisation, the team and the individual determines the success or failure of an organisation. It is, therefore, imperative that each organisation ensures that team and individual goals and objectives are aligned with the organisation s strategies (vision, mission, goals and objectives, etc.); structure (organogram, decision-making structure, etc.); systems (HR, finance, communication, administration, information, etc.); culture (values, level of openness, democracy, caring, etc.). Hence, an effective work environment should be characterised by the alignment of organisational systems, strategies, structures and culture, and by people who operate synergistically. Regenesys Integrated Management Model Regenesys Business School 3

3 ICONS USED IN THIS STUDY GUIDE Icons are included in the Study Guide to enhance its usability. Certain icons are used to indicate different important aspects in the Study Guide to help you to use it more effectively as a reference guide in future. The icons in this Study Guide should be interpreted as follows: Definition The definitions provide an academic perspective on given terminology. They are used to give students a frame of reference from which to define a term using their own words. Examples The example icon is used to indicate an extra/additional text that illustrates the content under discussion. These include templates, simple calculation, problem solution, etc. Video clip or presentation This icon indicates a URL link to a video clip or presentation on the subject matter for discussion. It is recommended that students follow the link and listen/read the required sources. Interesting source to consult The source icon is used to indicate text sources, from the Internet or resource centre, which add to the content of the topic being discussed In a nutshell This icon indicates a summary of the content of a section in the workbook and to emphasise an important issue. Calculations This icon indicates mathematical or linguistic formulae and calculations. Self-reflection Students complete the action of selfreflection in their own time. It requires students to think further about an issue raised in class or in the learning materials. In certain instances, students may be required to add their views to their assignments. Tasks The task icon indicates work activities that contact students must complete during class time. These tasks will be discussed in class and reflected upon by students and facilitators. E-learning students can use these tasks simply to reinforce their knowledge. Note This icon indicates important information of which to take note. Regenesys Business School 4

4 STUDY MATERIAL FOR THE MODULE You have received material that includes the following: Study guide Prescribed and recommended readings Assignment These resources provide you with a starting point from which to study the contents of this module. In addition to these, other resources to assist you in completing this module will be provided online via the link to this module. Guidance on how to access the material is provided in the Academic Handbook that you received when you registered for this qualification. 5 PRESCRIBED AND RECOMMENDED RESOURCES A number of prescribed and recommended resources have been identified to assist you in successfully completing this module. 5.1 RECOMMENDED BOOK The following textbook is highly recommended, as it will assist you to complete the module: McNurlin, B., Sprague, R., and Bui, T. 2014, Information Systems Management: Pearson New International Edition, 8 th edition, New Jersey: Pearson Education. Please ensure you order, or download your textbook, before you start with the module. 5.2 OPTIONAL BOOKS The following books are optional but also recommended for this module: Brown, C.V., DeHayes, D.W., Hoffer, J.A., Martin, W.E., Perkins, W.C. 2012. Managing Information technology: International Edition. Seventh Edition. New Jersey: Pearson Education. Laudon, K.C. and Laudon, J.P. 2013, Management Information Systems: The digital age.13th International edition. Upper Saddle River, NJ: Pearson Education. Regenesys Business School 5

5.3 PRESCRIBED ARTICLES Where applicable, the following prescribed articles must be used to successfully complete this module: Baird, C.H., and Parasnis, G. 2011, 'From social media to social customer relationship management', Strategy and Leadership, 39(5): 30-37. Chanopas, A., Krairit, D., and Khang, D.B. 2006, 'Managing information technology infrastructure: A new flexibility framework', Management Research News, 29(10): 632-651. Futher, S.H. 2003, 'A strategy for the implementation of e-business and e-commerce to achieve a competitive advantage in the textile industry', Master Degree: Port Elizabeth Technikon. Gao, F., Li, M., and Clarke, S. 2008. 'Knowledge, management, and knowledge management in business operations', Journal of Knowledge Management, 12(2): 3-17. Kraemer, K.L., Dedrick, J., and Yamashiro, S. 2000, 'Refining and extending the business model with information technology: Dell Computer Corporation', The information society, 16: 5-21. Norton, D.P. 1995, 'Managing benefits from information technology', Information Management & Computer Security, 3(5): 29-35. The Boston Consulting Group. 2010, 'Managing IT for Business value: the new gold standard', The Boston Consulting group: Unknown. Westermeier, J.T., and Plave, L.J. 2004, 'E-Business: the e-business legal survival kit', Piper Rudnick: Washington. Additional articles that may prompt discussions and further assist you in completing this course will be saved on Regenesys Online under the relevant course. Please visit the site regularly to access these additional sources. 5.4 PRESCRIBED MULTIMEDIA APCICT Website. 2010, 'Asian and Pacific Training Centre for Information and Communication Technology for Development', Incheon City, http://www.unapcict.org/ (accessed 21 January 2014). BBC. 2011, 'BBC Documentary, Steve Jobs The Billion Dollar Hippy' [video] http://www.youtube.com/watch?v=oc3qftgeoge (accessed 4 November 2013). Blakeston School. n.d., Glossary, ICT Faculty, Blakestone Healthcare, http://www.blakeston.stockton.sch.uk/subjects/ict/ict_glossary.htm (accessed 21 January 2014). Regenesys Business School 6

C House Live Website. 2012, 'C House Live', http://www.chouselive.co.za/ (accessed 21 January 2014). CSAP. 2013, 'SAP Supply Chain Management: Overview Video' [video], http://www.youtube.com/watch?v=tzkmiwovhu0 (accessed 4 November 2013). Empowerment High Performance Centre. 2013, 'Pirates of Silicon Valley the Documentary' [video] http://www.youtube.com/watch?v=gqfysvxhzos (4 November 2013). GameBean, 2012, 'History of Nokia Mobile Phones' [video] http://www.youtube.com/watch?v=hiykpzf7ps0 (accessed 18 December 2013). Handsonerp, 2009, 'Introduction to Oracle Database Administration Oracle DBA' [video] http://www.youtube.com/watch?v=14y6mveaicw (accessed 4 November 2013). Hawkins, K. 2012, 'Google Car It Can Drive Itself', [video clip], http://www.youtube.com/watch?v=09hkbfzv8iw (accessed 21 January 2014). IBM, Autonomic Computing: IBM s Perspective on the State of Information Technology ; http://www- 1.ibm.com/industries/government/doc/content/resource/thought/278606109.html. (Accessed on 11 November 2013) Infonomia, 2008, 'Kevin Warwick, Cyborg Life' [video] http://www.youtube.com/watch?v=rb_l7sy_ngi (accessed 4 November 2013). Knewhok, N. 2013, 'The Evolution of Databases' [video] http://www.youtube.com/watch?v=x4tf5zrjqe0 (accessed 17 December 2013). Kurzwiel, R. 2009, 'Ray Kurzwiel and the future of Nanotechnology', Big Think [video] http://bigthink.com/videos/ray-kurzweil-on-the-future-of-nanotechnology (accessed 21 January 2014). Layer7tech, 2012, 'How to make your Enterprise Applications mobile ready' [video], http://www.youtube.com/watch?v=eek6eud35ye (accessed 17 December 2013). Mell, P., and Grance, T. 2011, 'The NIST of Cloud Computing', Recommendations of the National Institute of Standards and Technology, U.S Department of Commerce: Special Publication 800-145, http://csrc.nist.gov/publications/nistpubs/800-145/sp800-145.pdf (accessed 21 January 2014). Norton, L. 2013, 'How technology is evolving to help doctors keep up' [video] http://www.youtube.com/watch?v=fkm4yc64tiw (accessed 18 December 2013). Osorio, S. 2013, 'Mark Zuckerberg The Real Face Behind Facebook' [video] http://www.youtube.com/watch?v=u6akok7bupg (18 December 2013). Pendse, S. 2012, 'Modern Trends of ICT in Business' [video], Highbar Technologies, http://blog.highbartechnologies.com/modern-trends-of-ict-in-business/ (accessed 21 January 2014). PMR. 2014, IT & Telecommunications glossary, ICT market in CEE and CIS, http://www.ceeitandtelecom.com/glossary (accessed 21 January 2014). Regenesys Business School 7

Reznor, T, 2013 'The Social Network' [video] http://www.youtube.com/watch?v=82evbzdtugk (accessed 18 December 2013). Schneppat, J. 2008, 'Driving with Nanotechnology on your windshield' [video] http://www.youtube.com/watch?v=mp_omdhi0s8 (accessed 21 January 2014). Stetfocus1. 2012, 'Historical look at the types of Databases' [video] http://www.youtube.com/watch?v=ub8ldk2gmn0 (accessed 17 December 2013). Study Yaar.com. 2012, 'Object Orientated Database 1 Introduction to OIDs' [video] http://www.youtube.com/watch?v=5zmvvrpnpha (accessed 4 November 2013). The World Bank Group. 2012, Open Knowledge Repository, http://www.worldbank.org/ (accessed 21 January 2014). WakeUpCallPage, 2013, 'Walmart s RFID chips' [video] http://www.youtube.com/watch?v=xonukk4wtoy (accessed 4 November 2013). Weinman, E. 2013 'Mobile Commerce World 2013 Overview' [video] http://www.youtube.com/watch?v=iasdvundd7q (18 December 2013). Zellers, M. 2011, 'Introduction to Relational Databases' [video] http://www.youtube.com/watch?v=gzldqixdzhm (accessed 17 December 2013). 5.5 ADDITIONAL SOURCES TO CONSULT As a higher education student, you are responsible for sourcing additional information that will assist you in completing this module successfully. Below is a list of sources that you can consult to obtain additional information on the topics to be discussed in this module: Emerald: NetMBA: Mind Tools: Brunel Open Learning Archive: ProvenModels: This is an online database containing journal articles that are relevant to your modules. Please refer to the attached Emerald manual to assist you to download required articles. Information on how to access Emerald is provided to you in your Academic Handbook. You will receive access to the database once you register as a student. This is one of several web addresses that provide a selection of MBA constructs and discussion. It is one of the better of these addresses, http://www.netmba.com/ MindTools.com is a very useful source of ideas, constructs, management models, etc. with even more useful commentary and description. http://www.mindtools.com/ A Brunel University support-site that provides an easily accessible library of ideas, concepts, constructs techniques, tools, models, etc. http://www.brunel.ac.uk/ ProvenModels' Digital Model Book presents digitalised management models categorised in a clear, consistent and standardised information structure to improve the usability and reusability of management literature. Management models are important generalisations of business situations when applied in context and are powerful tools for solving business issues. http://www.provenmodels.com/ Regenesys Business School 8

12manage.com: The Free Management Library: Business Dictionary Business Day Live This is a website on which one can access numerous models as well as global comments on the models and principles. This could also serve as a place where you could voice your ideas and get feedback from all over the world. http://www.12manage.com/ The Free Management Library can be used to improve your organisation, and for your own personal, professional and organisational development. This is by far the most comprehensive overview of all aspects of management. http://www.managementhelp.org/ This site is useful for general terms and concepts. Enter your word or phrase in the search function (no need to log in). http://www.businessdictionary.com To keep up to date with business news National and World go to this site. Other useful selections include Opinions and Analysis, Markets, Economy, and Personal Finance. http://www.bdlive.co.za There are many more sites and articles available that can help you to successfully complete this module. You are encouraged to post the website addresses or URLs of any additional interesting sites that you come across on the Regenesys Learning Platform. In this way, you can assist other students to access the same wonderful information that you have discovered. A word of caution not all information available on the Internet is necessarily of a high academic standard. It is therefore recommended that you always compare information that you obtain with that contained in accredited sources such as articles that were published in accredited journals. 6 LEARNING OUTCOMES Upon completing this course, participants should be able to: Develop an advanced understanding of the role and importance of information and communication technology in management Evaluate international trends in using ICT to improve business performance and the quality of service Interrogate key challenges of integrating ICT with business processes and management systems Conceptualise, develop and implement a technology-driven customer relations strategy Justify the potential use and application of databases, call-centres and web-based technologies in improving customer relations management (CRM) Evaluate the utilisation of ICT in improving business effectiveness and efficiency Regenesys Business School 9

7 CONTENT SCOPE AND LEARNING GUIDANCE A number of topics will be covered to assist you in successfully achieving the learning outcomes of this module. These topics are dealt with in the prescribed textbook. Additional information on related topics is provided in the prescribed articles. It is important to study each of these sections to ensure that you expand your knowledge in the subject and are able to complete the required assessments. The sections that will be dealt with include: Section 1 Section 2 Section 3 Section 4 Section 6 Section 7 Information Systems in Global Business Today Global E-Business Information Systems, Organisations and Strategies IT Infrastructure and Emerging Technologies Operational Excellence and Customer Intimacy E-Commerce Digital Markets, Digital Goods A more detailed framework of what is required for each of these topics follows under each section heading. The content that follows will guide you towards the relevant chapter in your prescribed textbook as well as additional articles to be consulted. A number of questions to probe discussion and guide you towards comprehension and insight are also provided. The timetable under each section heading provides guidance on the time to be spent to study each section. It is recommended that you follow the given timetable to ensure that you spend the appropriate amount of time on each section. Following the timetable will ensure that you have covered the required sections relevant to each assignment and have appropriate time to prepare for the examination. Regenesys Business School 10

7.1 INFORMATION SYSTEMS IN GLOBAL BUSINESS TODAY Timeframe: Learning Outcomes: 16 hours Develop an advanced understanding of the role and importance of information and communication technology in management Chapter in textbook: Chapters 1 and 2 Additional sources to Norton, D.P. 1995, Managing benefits from information technology. Information consult: Management & Computer Security. 3(5): 29-35. This section examines the role of information systems in organisations today. It examines how information systems are transforming businesses and how management information systems have evolved. Key ways in which globalisation has created both opportunities and challenges Section overview for information systems are discussed. Critical issues related to the emergence of a digital organisation and how this impacts on the organisation s strategic objectives related to information systems are also explored. 7.1.1 Introduction It is currently apparent that since the introduction of computers, every aspect of our lives from social interactions to business dealings involves some form of information and communication technology. (Think of how distance learning like this ICT course has changed the way you can study.) The proliferation of negative news about the burst of the dot-com bubble (late 1990s through 2001) has greatly exaggerated the death of the Internet. You need only consider the 2012 listing of Facebook on the stock exchange to know that the Internet remains very much alive and well. The Internet / World Wide Web (WWW) is thriving and growing at an exponential rate. Many of the organisations that went into liquidation in the 1990s did so primarily because of poor business planning or simply because their product was not viable in the first place. Nowadays, many organisations are remodelling their organisations and information systems with the Internet in mind. Think about your own organisation has the Internet changed the way in which you do business and interact with customers and suppliers? 7.1.2 The Role of Information Systems in Organisations Today Ask managers in organisations to describe their most important resources and they will list money, equipment, materials, and people not necessarily in that order. It is very unusual for managers to consider information an important resource, and yet it is. As electronic business and electronic commerce grow in popularity and more organisations digitise their operations, having useful information is becoming even more important to the global business community. Regenesys Business School 11

This chapter gives you an overview of many of the subjects we will touch on in this course at Regenesys. As an ICT student, it will help you to understand how all organisations today, large and small, local and global, use Information and Communications Technology (ICT) to achieve important organisational objectives, such as operational efficiency, customer and supplier intimacy, better decision making, and new products and services. How information systems are transforming business Data volumes and our reliance on data to make more informed decisions, on both a personal and organisational level, have increased dramatically since the 1980s due to factors such as population expansion and urbanisation, to mention only but a few. This has created pressure on government and organisations to capture, store, retrieve and sort this data into useful information that can be used to make better informed decisions. The typical decisions are the ones we all make daily, such as deciding which shops are conveniently located in my suburb, what facilities are in that area, etc. Technology, especially mobile technology, has allowed both, individuals and organisations, to operate twenty-four hours, seven days a week without having a physical presence. Many offices have become virtual offices and you no longer have to commute to the office to get your work done. This has made our lives far simpler and more convenient. Information has become an essential and powerful resource in organisations today. Buyers have a vast amount of information available on their mobile devices to make better informed decisions and be more selective in purchasing products and services. Look at the simplicity of on-line booking for movies, flights, etc. Could you have studied for an ICT degree in your own home whenever it was convenient for you and still participate in a class session back in the 1980s? What has happened and what is new in Management Information Systems? In reading through Chapter One, it would appear that changes in technology are never-ending. Especially in the business world, the use of technology now extends far beyond the simple desktop computer. As the text points out, five interrelated developments are affecting organisations worldwide: The growth of the personal computer The growth of mobile technologies The emerging mobile digital platform The growth of online software as a service The growth of cloud computing and other platforms Globalisation Challenges and Opportunities: A Flattened World Next time you purchase a product, any product, look at the fine print and see where it is made. It could be China, or the Philippines, or a South American organisation, or even in the United States. You can disagree with the fact that many manufacturing jobs are being moved from the United States to foreign countries; but look at the vast number of jobs that are being created in this country. Regenesys Business School 12

Maybe they are not the traditional factory jobs we re used to. In fact, many of our new jobs are in the information industry. Many of them service whole new markets that did not exist just a few years ago. There was no position called Webmaster in 1991. That is because the Web did not exist. However, this particular job category is now one of the fastest growing in the United States and overseas. The global economy Brown (2012) talks about is being made possible by technology, and that is why it is so important that you understand how to use ICT instead of just computer technology. There is a big difference between the two, and we will talk about it more throughout this Module on ICT (McNurlin, et al., Sprague, and Bui, 2014). The Emerging Digital Firm Brown (2012: 1) argues that the utilisation of Information and Communication Technology (ICT) has become pervasive. He explains that a digital organisation is one in which nearly all of the organisation s significant business relationships with customers, suppliers, and employees are digitally enabled, and key corporate assets are managed through digital means and not through brick and mortar buildings. Digital organisations integrate ICT into their strategy and are able to integrate suppliers, buyers, government any other relevant organisation through integrated systems. This integration enables the organisation to automate the manual processes and reduce the time to execute processes. The application of digital organisations can be seen in the way organisations are able to order from suppliers over the Internet anywhere in the world. Organisations can also integrate with government departments, for example in terms of revenue services and for making on-line payment. This creates a paperless process with traceability. This has implications for organisations in terms of the need to rent offices and having employees coming into the office to do work. With a digital organisation, employees can work from anywhere as long as they have connectivity and are linked into the organisation's ICT systems. The digital organisation is therefore not bound to a physical location because staff can operate from anywhere in the world with the correct connectivity and ICT systems. The digital organisation can operate 27/7 all around the world. This gives the organisation its unique competitive advantage (Brown, 2012: 1, and McNurlin, et al., 2014: 28). Task Questions 1. Identify any digital organisation and motivate why you think this is a digital organisation. 2. What are digital organisations and do you think they can have a competitive advantage in the market place? Regenesys Business School 13

Strategic Business Objectives of Information Systems Although many managers are familiar with the reasons why managing their typical resources such as equipment and people are important, it is worthwhile to take a moment to examine the growing interdependence between an organisation's ability to use information technology and its ability to implement corporate strategies and achieve corporate goals. Business organisations in particular invest heavily in information to achieve six strategic business objectives (Brown, 2012): Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival Operational Excellence The rapid growth of ICT systems has assisted organisations to become digital and integrate key business processes (Lauden and Lauden, 2011). Digitalisation and integration reduce the time to complete the process and increase the consistency and reliability of the processes. This enhances the organisational excellence as well as the competitive position of the organisation. As an student at Regenesys you will notice that the advancement of ICT systems will assist you in your studies. The ability of any organisation to deliver operational excellence is now becoming more dependent on ICT systems. New Products, Services, and Business Models Brown (2012:3) discusses the emerging growth of Social Networking and the New App economy where Information systems and technologies are becoming a major enabling tool for organisations to create new products and services, as well as entirely new business models. The Regenesys student portal and the applications you can download onto mobile devices allow you greater flexibility in completing your studies, anywhere in the world. A business model describes how an organisation produces, delivers, and sells a product or service to create wealth. As successful as Apple Inc, NetFlix, and Wal-Mart were in their traditional brick-and-mortar existence, they have all introduced new products, services, and business models that have made them both competitive and profitable (McNurlin, et al., 2014). Regenesys Business School 14

Customer and Supplier Intimacy Brown (2013: 1) argues that ICT has become pervasive and that this is creating a greater link between the organisation, its customers and suppliers. This allows for a more integrated approach to conduct business and improve the levels of customer service. This is mainly due to the rising technological capability of ICT and the convergence of technology. As Brown (2013: 1) points out, we use GPS systems in our daily lives to navigate the best route from point A to point B. This impacts the effectiveness and efficiency of value chains in organisations, especially logistics organisations. Many organisations, such as Amazon.com, are good examples of how information systems and technologies are extensively used to better serve suppliers and retail customers. Improved Decision Making Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. Previously, managers did not have access to accurate and current data and as such relied on forecasts, best guesses, and luck. The inability to make informed decision resulted in increasing costs and losing customers. In this Regenesys ICT module we would encourage you to continually scan for new technologies and identify ways in which that technology can be used to improve the organisation. Competitive Advantage This ICT module makes every effort to give you the knowledge to use this information as a competitive tool in an organisation today as you strive to become more competitive in the marketplace. By using ICT as a competitive advantage in organisations, the time to market can be reduced through more integrated value chains. Brown (2012) and Laudon and Laudon (2013) both argue that ICT has integrated organisation more with their suppliers, customers, regulators, relevant industry experts and complementors. In turn, this has created a Value Web, which essentially locks in all members mentioned above (McNurlin, et al., 2014: 28-35). Task Questions 1. Read Chapter 1 of the recommended textbook by McNurlin, et al. (2014) and see how ICT has impacted on this organisation. Regenesys Business School 15

Survival Organisations also invest in information systems and technologies because they are the necessities of doing business. Information Communication Systems are not a luxury. In most organisations, ICT systems are core to the organisation's survival. Laudon and Laudon (2013) explain how Citibank was the first banking organisation to introduce ATMs. In doing so, Citibank gained a major competitive advantage over their competitors. In order to remain and survive in the retail banking industry, other banks had no choice but to provide ATM services to banking customers. Task Questions 1. Why do you think Banks have become dependent on ICT systems? Discuss at least 2 reasons. 7.1.3 Perspectives on Information Systems Information technology (IT) consists of all the hardware and software that an organisation needs to achieve its business objectives (Laudon and Laudon, 2013). What is an Information System? The majority of people today have many mobile devices such as notebooks, mobile phones, tablets and now also smart devices. These are preloaded with operating systems and appropriate application systems such as word processes and spread sheets which allow you to effectively collect, manipulate and report on data. This is required in organisations across various functional areas, such as accounting, production records and compliance to legislation within the respective country. You can have the fastest Internet connection. However, if the organisation does not take advantage of customer data to create new opportunities, then, all it has, is worthless data taking up unnecessary disk storage space. If the output report fails to assist management to identify problems, then all that has been accomplished is to kill a few more trees. If you do not know how to analyse the information from a website to take advantage of new business opportunities, then your organisation will begin to lose market share. Most of us think only of hardware and software when we think of an information system. There is another component of the triangle that should be considered, and that is the people side or Persware. Regenesys Business School 16

An organisation collects data, which it sorts into meaningful information. Unfortunately this is not enough to compete in the rapidly changing, global marketplace. We need to be able to interpret this information and create knowledge, which is meaningful data. Only this will give us the wisdom to identify causes and effects in the knowledge. The reality is that we depend on people who have the knowledge and skills to do this. During the course of your studies at Regenesys you will be provided with case studies. This will provide you with the relevant information, but you will need the knowledge to interpret this information to make a detailed analysis of the case study. This is where you will learn to integrate your thinking from various subjects to apply to the case study and generate valuable solutions McNurlin, et al. (2014). Task Questions 1. Study the persware diagram below and discuss how this relates to an organisation of your choice or to answer an ICT case study assignment. Figure 1: Persware People So(ware Hardware (Brown, 2012: 4-6 and Laudon and Laudon, 2010:35) In this section of the recommended text, Brown (2012: Chapter 1) and Laudon and Laudon (2013: Chapter 1) the components of an information system are discussed. These authors talk about input, processing, output, and feedback processes. It is important that there is effective and efficient feedback within this persware relationship. Regenesys Business School 17

Figure 2: Functions of an Information System (Yeung 1998:10) Figure 2 illustrates how information systems functions integrate and work together as a system. Brown (2012: 20) is of the opinion that, to be a good information systems manager, you must bring into the above model far more than just computer data. For instance, at an organisation such as the Receiver of Revenue, data is collected around source documents that have been combined into reports, such as a statement of comprehensive income and a statement of financial position. The organisation will use these reports to verify accuracy and compliance to regulations and Acts as well as to determine what will be allowed and rejected as claims made against taxation paid. The use of technology such as online efiling has lead to integration of information on databases at revenue services (McNurlin, et al., 2014). This has allowed revenue services to create knowledge and wisdom around clients in order to detect levels of compliance or fraud. For example, if there is non-compliance, clients may be required to submit a life style audit where this data will be triangulated with the bank s data and the current data at the revenue services. In the past, without information technology and information systems, this would have been an almost impossible task due to the amount of manual intervention and manual reports not on an integrated database system. The Enterprise Resource Planning system, such as SAP software, is an example of a fully integrated system between suppliers, customers and government. Task Questions 1. Identify any organisation of your choice. 2. Discuss and apply the model in Figure 2 to the organisation you selected. 3. How does Enterprise Resource Planning assist government to stop money laundering? To assist you in answering this question read McNurlin, et al. (2014: 5, 15, 22 and 29). Regenesys Business School 18

Application Case Study As an ICT student at Regenesys you will rely heavily on the portal as well as mobile technology to be able to access your study material and have chats with fellow students. This will allow you to study 24/7 from anywhere in the world at your convenience. This is the power that information systems have given students who have never before had access to classroom facilitation. As a Regenesys student, you will be able to benefit from using information technology by using virtual libraries and online articles to create your own knowledge database. All of this can be done without leaving the comfort of your home. With systems such as Skype, you can have direct video linkage to classmates and lecturers anywhere in the world. Regenesys has taken a further step in recording online video clips, available worldwide through the student portal and YouTube. This has allowed Regenesys to become an international player in the international arena by attracting students from any country in the world, regardless of time zone. This is aligned to Regenesys vision of bringing quality education to the world. During your ICT course, you will also view similar cases such as Amazon.com and Google.com that have used technology to gain competitor advantage in the market place. This aligns to the strategic thrust of their organisations. Task Questions 1. Read the case study above. 2. How have information systems changed the way you as a student view education? 3. Apply the principles extrapolated in the above question to your organisation. 4. What are the benefits of the growth of information technology and systems in today s society for your organisation? Dimensions of Information Systems There is a distinct difference between possessing information systems literacy and simple computer literacy. If you can combine information from internal sources and external environments; if you can use data to help you make better decisions; and if you can use information to help you improve your organisation, you can consider yourself information literate. During this ICT module and throughout your Regenesys MBA studies, you will notice that technology cannot be successful without effective and efficient resources. Management information systems deal with people s behavioural issues and with technical issues surrounding the development, use, and impact of information systems used by managers and employees in organisation. As such, MIS is defined as the study of information systems that focuses on its use in business and management. The dimensions of an information system are depicted in Figure 3 below. (McNurlin, et al., 2014). Regenesys Business School 19

Figure 3: Dimensions of an Information System Pragmatical Layer Semantical Layer Temporal Social Social (cultural) Layer Syntactical Layer Material Physical Layer Empirical Layer (Pulkkinen, 2003) Organisations Each organisation is unique and tends to have its own individual personality, yet share many commonalities with other organisations. Elaborate on the following key elements of an organisation: Strategy Structure Systems Business processes People Politics Culture In every organisation you will find senior managers making long-range decisions, middle managers carrying out the plans and goals set by senior managers, and operational managers handling the day-to-day operations of the organisation. As we will see, information systems' output must be geared to each of these levels of management. Just as every rugby team needs good players at different positions, a business organisation requires different employees to help it succeed. Knowledge workers help create new knowledge for the organisation while data workers help process the paperwork necessary to keep an organisation functioning. Without production or service workers, how would the organisation get its products and services to the customer? Regenesys Business School 20

A rugby team needs talented and well-trained players at different positions. Sometimes, the success of the team depends on a good, well-informed coach or manager. So it is also with the workplace organisation. By using information technology and information systems, team players can record, simulate and virtually walk through a game without physically having to play the game and improving their play. Examples of this would be simulation software. In pilot training, flight simulation is used to create scenarios and train pilots to handle these situations without putting real aircrafts and people s lives in danger. These simulation packages allow you to evaluate risks without having to lay out any upfront capital. Even games such as the Sims allow people to build up societies with different personalities and social conditions without physically having to do this. Business organisations have major business functions, which need many kinds of players with various talents. These players must be well-trained and well-informed, in order to succeed. The larger the organisation, the more it seems to formalised with rigid management structures. This then creates the need for standardised processes. Most of these business processes have been developed over time and help managers and employees to properly complete their tasks in a more efficient manner. Many organisations now integrate these business processes into their information systems to ensure uniformity, consistency, and compliance. As we will see in upcoming chapters, many organisations are even incorporating informal work processes into their information systems in an effort to capture as much corporate knowledge as possible. An organisation s culture is often an integral part of its information system. This was noted in the earlier discussions around Persware. Management Every good organisation needs effective and efficient managers. Take professional managers for rugby in South Africa. They do not actually play the game; they do not score a goal, take a try or corner, etc. They stay on the side lines during the game. Their real role is to develop the game plan by analysing their team s strengths and weaknesses. However, that is not all; they also determine the competition s strengths and weaknesses. Every good manager has a game plan before the team even comes out of the locker room. That plan may change as the game progresses, but managers pretty much know what they are going to do if they are losing or if they are winning. Technology As a student at Regenesys, you will have noticed the amount of technology available to assist you in your studies. There is the Internet, the Student Portal, On-line Library facilities, etc. This demonstrates the true meaning of technology, which is making life easier for all of us. During this ICT module you will learn more about technology trends and how these make life easier for us all. Regenesys Business School 21

Now put those thoughts into a much larger context of an organisation s information technology (IT) infrastructure. Yes, it would be nice if your organisation could purchase new computers every three months so you could have the fastest, best technology on the market; but it cannot. Not only is it expensive to buy the hardware and the software, but the costs of installing, maintaining, updating, integrating, and training must all be taken into account. We will look at the hardware and software sides of the information systems triangle in upcoming section, but it is important that you understand now how difficult it is for an organisation, large or small, to take advantage of all the latest technology. Task Questions 1. What do you think the organisational, management, and technology dimensions of information systems are? 2. Why are these dimensions of information systems important for managers? A Business Perspective on Information Systems Organisations use information systems to collect data, sort that data into categories and generate meaningful reports. These reports, for example an income and expense report, can be used to make better informed decisions around the following issues: Profitability of the organisation Sales revenue per product Cost per product Break even analysis per profit From the useful information, we can now gain knowledge (useful information) to make better informed decisions such as: Determining the correct sales mix Determining the width and depth of the product range to sell Allocating resources optimally for the product range Productivity analysis and ways to increase productivity Sales forecast per product Regenesys Business School 22

Figure 4: The Business Information Value Chain Business Processes Information Processing Activities Management Activities Supply Chain Management Enterprise Management Customer Management Knowledge Management Data collection and Storage Transformation into Business Systems Dissemination Planning Coordinating Controlling Modelling and decision making Firm Profitability and Strategic Position (Laudon and Laudon, 2010:55) Complementary Assets: Organisational Capital and the Right Business Model Technology has grown exponentially since the inception of the first Mainframe Computer sold by IBM back in the 1970s. You can view this evolution on many WEB sites, but here is one you may want to look at now: (About.com Money Inventors, 2014). As an ICT delegate, you need to understand that complementary assets associated with the information systems (such as developing new business models and processes, changing management behaviour and organisational culture) will ultimately change the way in which business is conducted within an organisation. By implication, there needs to be a greater emphasis on employee training to productively utilise the technology. New business alliances with suppliers, customers, and even competitors, may become a challenge in itself to implement and could require the business environment and paradigms to change. We discussed the challenge of new business alliances earlier where we looked at the move from a traditional Bricks and Mortar organisation to a Digital organisation. We can see this in the move from traditional book shops to on-line, digital stores. Apple changes the way in which music was sold. Now you can download only the music or video you want, any time, any place and pay online in any country. The organisation such as Apple who have the technology to download and play the music and videos now have the power over many of the suppliers in this industry. From a marketing perspective, this allows for mass customisation in that you do not have to buy the whole album, but only one song, and from there customise your own music playlist. Regenesys Business School 23

Just reflect on this for a moment and think about the impact this has had on all the various stakeholders and shareholders in the marketplace. Task Questions 1. Discuss how ICT has changed the way organisation's work. Think about technology today as opposed to in the 1990 s. 2. How do you think technology has affected the textbook industry? 3. Please provide supporting evidence for your answer. Regenesys Business School 24

7.2 GLOBAL E-BUSINESS Timeframe: Learning Outcomes: Chapter in recommended textbook: Additional sources to consult: Section Overview 16 hours Interrogate key challenges of integrating ICT with business processes and management systems Evaluate international trends in using ICT to improve business performance and the quality of service Understand the ICT trends and the impact they may have on individuals and organisations Chapter 1, 2 and 3 (note that there is some integration between these chapters and need to be read together. Kraemer, K.L., Dedrick, J., Yamashiro, S. 2000. Refining and extending the business model with information technology: Dell computer corporation. The information society. 16:5-21 Because ICT is transforming at such a rapid rate, newer trends are constantly replacing current trends. This section examines how these key trends in ICT impact on organisations and how they can be used to improve business performance and quality service delivery. This section also explores the key challenges of integrating ICT with business processes and management practices. 7.2.1 Trends in ICT The following research was conducted by strategic analyst, Robert Syputa (2011). 35 Current Trends in ICT In recent years the long anticipated convergence between mobile voice and IP data communications has unfurled at an accelerated pace, dramatically impacting individual industries as they are reshaped along many common fronts. This briefing outlines major trends and influences on of the converging Internet and mobile space. These are general observations, not evaluated for scale or timing of relevance for individual class of supplier, service provider, implementer or user. 1. The pace of change has accelerated, which itself becomes a factor considered in seeking market advantage of protection: a. Mobile broadband device saturation has increased rapidly in developed markets. b. The level of value priced WebPhones (smartphones) has dropped near targets of around US$150. Targets for sub-$125 Android devices within 18 months now look feasible. c. WebPhones and tablet sales now exceed the dollar volume of PC sales, making them the highest unit growth Internet access devices. 2. Mobile data usage will shortly overtake personal desktop Internet access, thus shifting and intensifying OS battles for applications dominance and focus within IT. a. Mobile devices are having and accelerating impact on shaping the cloud 4G/computing development. Regenesys Business School 25

3. Multiple attach rates of devices are driving market excitement and momentum as single OS and synched browser environments create a more uniform experience across screens (mobile, tablet, PC, TV). 4. Web device OS have taken precedent over much of the brand recognition of individual device suppliers and operators services. 5. Applications, and the OS environment common to them, increasingly drive subscriber loyalty and sway much premium content and service purchasing. 6. Applications influence on content and social portal interface is fragmenting and gaining share on native interfaces, web browsers, and premium content. 7. Security of mobile applications is a growing concern for all major OS, particularly Apple iphone and Android. 8. App Stores have become the most significant new content distribution sales channel. Apple s success with itunes music and video is now enabling content sharing across platforms (TV, PC, tablets, and mobile). 9. Personalization is being enabled via apps (consumer life dashboard). 10. Brick and mortar and Internet retailers, financial institutions, brokerages, real estate brokers, etc., are rushing to deliver mobile apps and seeing tremendous traction (i.e. ebay, Amazon). 11. The social game audience has segmented a major portion of the primetime viewing audience away from TV/cable. 12. Localization of the Internet is being enabled by mobile apps and content. While LBS (location based services) and mobile payments have made a modest impact, the socialization of the user experience (search, commerce, gaming, applications, advertising) is creating a new challenge to the creation of common portals, apps, content, and service development and marketing. 13. MIDs are now a reality: the simple definitions of form-factors needed for success are being broken by more useful combinations of screen resolutions and sizes combined with increasingly common or synched user experiences. A shift is occurring in which the right size and functionality varies depending on the target market and the combinations of other screens available or already owned. 14. Apple continues to lead the user interface and device finesse wars but is now being challenged in diversity and features. Motorola s Xoom provides an example of the trend that has begun to emerge as enabling components and software environments gain greater traction. 15. Multiple core processors capable of multi-tasking have reached a threshold to provide snappy performance at market enabling price levels. 16. Battery technology has improved but remains short of needs for small devices, particularly for video applications and device capabilities to advance. 17. Tighter integration of mobile devices with cloud 4G/ICT developers is needed. Innovations in ease of use will remain at the forefront of the how to cook book for device market share gains. This includes both tighter Internet and enterprise applications integration. 18. Social networking ecosystem integration has grown in importance and can be utilized for consumer data mining and influence. 19. Collaboration applications tied to social networking and popular email and messaging platforms are proliferating. This is part of a surge in mobile/anywhere enabled productivity tools. New forms of tools and aggregations may soon emerge into mainstream popularity. 20. The rise of the flatter world supply ecosystem (i.e. Mediatek in Asia is now delivering 400+ M phones a year plus a suite of white labelled services) means the field of competition for 3G/LTE multiple mode SoCs is broadly based. 21. OS shares of Apple and Google have quickly grown and appear to be consolidating apps Regenesys Business School 26

development. The quest of the remaining OS for mainstream contention remains in doubt, despite consolidation of Nokia s and Microsoft s efforts and entrenchment of RIM in enterprise markets. 22. A battle is brewing for online identity management that can be pivotal to consumer loyalty. Social networking sites like Facebook, Twitter and LinkedIn face contention with leading OS platform suppliers. 23. Emergence of HTML 5 enabled web apps enables a new paradigm of cross-platform applications. This has more implications for Apple s relatively tightly controlled user experience. 24. Increasing leverage of location awareness and the rising importance of mobile money, coupons and social-networking commerce apps. 25. Growing importance of mobile applications and social networking to government organization and participation. This has already become a catalyst for changes in the Middle East and is likely to influence both developed and developing country politics. 26. There is a trend to increasing monetization of the Internet as it becomes mobile (Facebook, Twitter, YouTube). 27. The rise of the Connected TV experience. Crowd sourced as well as user consumption of media is now shifting the balance of news and entertainment. 28. The long awaited rise of the home entertainment and communications hum will increase as a consumer focus. This will be driven both at the consumer price ranges as well high end product category. 29. Mobile advertising will become differentiated from conventional online by locality. 30. There is a plethora of entrants with ad platforms from amongst IT and telecom vendors, as ownership of ad networks becomes a battle ground for control of revenue streams. 31. A new frontier in merchandizing is group purchasing power and harnessing of social activity. 32. ebooks will embrace richer formats and interactivity on mobile media devices. The shared cost of functionality of devices will further increase. 33. Operation of networks is increasingly differing to their role as seeders of device markets. 34. Infrastructure sharing will become a means to more efficient capital utilization as apps driven device and service markets gain in strategic importance. 35. National developments bifurcate OS development environments. Particularly, China s efforts to establish leadership of the core Android open OS has potential to create both competition and incompatibility. These influences and trends are starting points to keep in mind when gauging how to anticipate changes in this dynamic industry. How each player can affect their own set of circumstances to harness change requires analysis of multiple factors n set within a forecast. Watch the following presentation to learn more about ICT trends: (Syputa, 2011) Pendse, 2012, Modern Trends of ICT in Business [video], http://blog.highbartechnologies.com/modern-trends-of-ict-in-business/ (accessed 7 November 2013). Regenesys Business School 27

Task Questions 1. Critically evaluate the trends listed above. Argue how these are transforming businesses. 2. Which ICT trends are relevant for your organisation? To what extent has your organisation adopted these ICT trends? What impact will it have on your organisation if you introduced these trends? 7.2.2 Business Processes and Information Systems As we have already discussed earlier in this Study Guide, the digital organisation means more than just installing a computer, loaded with all the latest software installed on it at each person s desk, or even having an ipad as an accessory. Information technology is the technological platform and infrastructure that allows the technologies to link together. This link is often referred to as the topology of the infrastructure. In simple terms, this is how the computers, peripherals and other devices link together through a shared file server, or how today they are linked into Cloud Technology. The name comes from the use of clouds as an abstraction for the complex infrastructure it contains in system diagrams. Cloud technology has reduced the need for very expensive information technology such as file servers and back up facilities within organisations. Cloud technology allows for collaboration across borders and time zones. Likewise, it ensures that data is safe protected. It has also reduced the cost of information systems and application software. An example of this would be on Blackberry where you pay a monthly subscription and have automatic access to application systems such as Word and Excel without having to lay out money to continually buy and update the software. Apple allows you to download a wide range of relevant applications at a very reasonable price. This is becoming a trend and as an MBA student in this subject, we would encourage you to continually look at the trends noted above to see how they will impact organisations across the world. Task Questions 1. Research and discuss the battle between Android and Apple. 2. What do you think will happen next? Cloud computing entrusts services with a user's data, software and computation over a network. This is simply a large array of computers or mainframe computer that acts as the main file server to all the various users of the system. This is usually connected through a wireless network. The rationale for cloud computing is to reduce the technology, especially the hardware costs for an organisation. This allows smaller organisations to have access to superior technology. They can also this to suit their budget limitations. Regenesys Business School 28

The digital organisation must connect each functional area and each management level to one another. Data input to the system in manufacturing must be made available to all the functional departments. Managers in the various departments must have access to appropriate information, regardless of its origin (McNurlin, et al., 2014: 61-65). Organisational or Business Processes Any organisation will have business processes such as the sales process, ordering process, etc. These processes vary from organisation to organisation, or from business to business. The processes are designed to give stability and structure within the system and to ensure standardisation within the operations of the organisation. Workflows are the primary method an organisation uses to accomplish activities, and the way it co-ordinates its activities among employees, customers, and suppliers determines its business processes (McNurlin, et al., 2014). Table 1 describes some typical business processes for each of the functional areas of business. We will see later in the chapter how these organisations processes are supported by enterprise systems. Let us look at an example of an educational institute such as Regenesys: Table 1: Business Process Function area in the educational institute Legal and Compliance Sales and marketing Finance and accounting Human resources Business process in the educational institute Accreditation process Quality systems processes Producing course outlines and alignment processes Identifying customers Making customers aware of the product Selling the product Receive and pay accounts Creating financial statements Managing cash accounts Hiring employees Evaluating employees job performance Enrolling employees in benefits plans (McNurlin, et al., 201461-70; Brown, 2012: 102; and Laudon and Laudon, 2010:73) How Information Technology Enhances Business Processes Some processes that may have contributed to an organisation s success have now outgrown their usefulness. Information systems can help an organisation to recognise processes that may need to be changed. An information system could be used to automate some of those processes or help managers determine that they are no longer needed. Regenesys Business School 29

Furthermore, a successful organisation will use an information system to determine which processes are working well. The key to using information systems to analyse, change, automate, or delete processes is to let the organisation determine the appropriateness of the recommendations and the right questions. Information systems enhance business processes in two ways: Increasing the effectiveness and efficiency of existing processes by standardising and automating them. Enabling re-engineered processes that are capable of transforming the business by changing the flow of information and improve reports. 7.2.3 Types of Information Systems This section is critical to the ICT module and for most of your MBA modules as it presents the logical flow of how data is converted into wisdom through a well structured ICT system. This is explained in detail below. Transaction Processing Systems (TPS) Any organisation will have business processes such as the sales process, ordering process, etc. These processes vary from organisation to organisation, or business to business. The processes are designed to give stability and structure within the system and ensure standardisation within the operations of the organisation. In the finance module of the ICT, you will see that sources documents are captured in the TPS system through the accounting processes. These processes generate data such as slips, receipts, etc. This data is generated automatically by the various processes within the organisation. These processes deal with routine operations in the organisation. TPS combine data in various ways to fulfil the hundreds of information needs an organisation requires to be successful. The data are very detailed at this level. The TPS records routine transactions which take place in the day-to-day operations of the organisation (McNurlin, et al., 2014: 19-21). Task Questions 1. What data are generated by your organisation s processes? 2. What functions do they perform? 3. Give examples of each. Regenesys Business School 30

Management information systems (MIS) are designed to produce information. The TPS collects the data through formal, often automated processes on a routine basis and the MIS system sorts and groups the data into logical categories to create meaningful reports, which will form the basis for decision making within the organisation. If there was a problem getting a shipment out to the convenience store in Sandton City, Gauteng or Harrods, London, the shipping manager may not have known about it until a customer cancelled her account six months later. A human resources department manager would likely not find out about new job opportunities in a different part of the organisation until the workers who were laid off had found other employment. Information has become a strategic resource. It is an exciting prospect for the information professional to add real value to information and to contribute more directly to an organisation's strategic decision making. A number of guidelines to develop this new strategic role are outlined below. They are based on the experience of many experts with a marketing approach and a service/customer orientation in this field. These development processes rely on activities beyond basic information service provision. Properly implemented, these guidelines should improve the strategic positioning and visibility of information units, enhance client satisfaction, be cost effective, and help to anticipate opportunities and threats. Table 2 below sets out the well-known Ten Aspects that Add Value to Information. In the finance module of the MBA, you will see that source documents are captured in the TPS system through the accounting processes. These are now sorted by the MIS into the Statement of Financial Position, the Statement of Comprehensive Income and the Cash Flow Statement (McNurlin, et al., 2014). A core issue around compiling reports for an organisation is to understand the dimensions of information below. The competitive advantage of organisations is now being derived through more effective and efficient knowledge transfer within organisations. Table 2: Ten Aspects that Add Value to Information Timeliness Accessibility: Usability: Utility: Quality: Customised: Medium: Repackaging: Flexibility: Reusability: Currency. Information is perishable. Different information has different half-lives ('sell by dates'). Some degrades rapidly Easy to find and retrieve -- no long-winded searches, good 'hits' Ease of use; user can manipulate to suit application Is suited and usable for multiple applications Accurate, reliable, credible, validated Filtered, targeted, appropriate style and format; needs minimum processing for specified application Appropriate for portability and on-going use Reformatted to match onward use Easy to process; can be used in different ways Can be reused; ideally extra use should refine its quality; the more people that can access and use, the better. (McNurlin, et al., 2014, Brown, 2012:111 and Laudon and Laudon, 2010:73) Regenesys Business School 31

Decision-support systems (DSS) use the information (reports) generated from the data to begin to make more informed decisions and ask what if? types of questions. The information is used managers to make managerial decisions around functional and tactical issues facing the organisations today. These are decisions around productivity, new product development; opening up new outlets, logistical changes required, etc. Interactive decisions are the primary reason for an organisation to use a DSS. During your Financial and Economics Modules, you will be required to collect, interpret and model the data to be able to make more quantitatively based decisions. In a DSS the level of the decisions are semi-structured and focused on many systems thinking questions, such as, how can we improve the value chain performance by using the new Enterprise Resource Planning (ERP) system. Not all decisions required for an organisation to function smoothly are clearly defined and well structured. The more an organisation is affected not only by what goes on solely within the organisation, but also by external forces not under its control, the more decision-support systems can help upper-level management. The DSS system looks at how external events can be put into context to make effective decisions. In your Strategic Management Module, you will look at internal and external environments and you will need to make extensive decisions around strategic moves for the organisation. This is where decision support systems such as statistical modelling and financial modelling systems would play a big role to ensure you implement the correct model for the business. Refer to the example of the finance module of the MBA, where the sources documents are captured in the TPS system and are sorted by the MIS into financial statements. Once this is done, management ratio analysis can be conducted on the financial statements by using the DSS to determine the SWOT analysis. What-if analysis can be conducted based on the ratios calculated. Executive Support Systems for Senior Management Top management uses Executive support systems (ESS) for scenario and strategic decisionmaking. The ESS uses the information from the MIS and the DSS to improve the accuracy levels in the scenario decision making process. The ESS will make decisions around mergers and acquisitions. Diversifying into new markets and other similar decisions can be made. It is essential to note that the ESS must be able to incorporate external information with internal data to offer concise, complete information for the imprecise and incomplete scenarios that executives face. Your elective on Mergers and Acquisitions will require you to make decisions around scenarios and their consequences for executives. Refer back to the example of the finance module of the MBA. Once the management ratio analysis can be conducted on the Financial Statements by using the DSS to determine the SWOT analysis, then the what-if analysis can be conducted (based on the ratios calculated). The ESS can then be used to make scenario decisions based on the DSS. This shows us how these systems are all interrelated and how they assist all levels of management to make effective decisions within the organisation (McNurlin, et al., 2014). Regenesys Business School 32

Summary of the Types of Information System Please read the notes below and then select an organisation to determine how the various types of Information Systems are, or may be used, to give the organisation a competitive advantage in the marketplace. Senior managers need information and output from the DSS to do scenario planning and to assist with the creation of strategic plans. Middle management needs more detailed information to help them manage and control operational plans. Employees with operational roles need information to help them carry out their duties. Organisations tend to have several "information systems" operating at the same time. This revision note highlights the main categories of information systems and provides some examples to help you distinguish between them. The main kinds of information systems in business, as identified by Laudon and Laudon (2010), are described briefly below: Table 3: Information Systems Executive Support Systems Description An Executive Support System ("ESS") is designed to help the senior management of an organisation to evaluate various scenarios and come up with more effective organisational strategic decisions. The purpose of the ESS is to gather analyses and summarise the key internal and external information required by the senior management in an organisation. This type of system is similar to what a pilot uses in terms of the instrumentation design and setup in the cockpit. The instrument panel shows them the status of all the key business activities. Management Information Systems Decision-Support Systems ESS typically involves effective information and modelled analysis such as "what-if" analysis to help strategic decision-making. A management information system ("MIS") is primarily concerned with grouping, clustering, sorting and converting the data into meaningful information. MIS takes data from the transaction processing systems (see below) and then summarises it into a series of meaningful, useful and categorised management reports. Various departments then use these MIS reports as a basis for understanding the as-is situation in the organisation. The MIS is essential for using the DSS system, as poor quality of information will lead to ineffective decisions. Decision-support systems ("DSS") are IS and IT systems and tools which are designed to aid the functional departments, and specifically management, to make better informed, more effective decisions around various situations where there is uncertainty about the possible outcomes of those decisions. These tools in the DSS assist managers to create "what-if" models and reduce the implementation risk of implementing the strategic plans. Regenesys Business School 33

Knowledge Management Systems Transaction Processing Systems Knowledge Management Systems ("KMS") are created to aid management in the organisation to create and share information in a more meaningful manner. This implies that there must be accurate MIS systems, as well as a meaning DSS to be able to use and create new knowledge and expertise. Examples include Medical research and diagnosis of patients, SARS and accountants to forecast and profile organisations. KMS are built around systems, which allow efficient categorisation and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spread sheets, PowerPoint presentations. Internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet. As the name implies, Transaction Processing Systems ("TPS") are current business processes and procedures which automatically collect data and are designed to process routine transactions efficiently and accurately. An organisation will have several (sometimes many) TPS; for example: Billing systems to send invoices to customers Systems to calculate the weekly and monthly payroll and tax payments Production and purchasing systems to calculate raw material requirements Inventory control systems to process all movements into, within and out of the business Office Automation Systems (OAS) Office Automation Systems are the systems used to fool proof the inputs from the TPS. The OAS strives to automate and improve the effectiveness and efficiency of the people using the process, as well as, reducing possible process input errors. Examples of OAS are bar code scanners, Card readers, MS word, excel and PPT templates. (Laudon and Laudon, 2013) Summary These various types of ICT (IT / IS) systems in an organisation assist in exchanging data with one another. TPS, especially MIS and DSS, are the main sources of data feeding into other systems. TPS are the operational-level systems that collect transaction data. The TPS provide data that are required by MIS to create useful reports and DSS to assist in decision-making, although these systems may also use other data. DSS not only uses the data from TPS but also from MIS. MIS is heavily dependent on data from TPS. ESS obtains most of the required internal data from MIS and DSS. 7.2.4 Systems that Span the Enterprise The evolution of information technology and information systems has created many different generations of technology that are being used in the same organisation. You will notice this when you complete your MIS assignments and analyse the organisation s ability to get an integrated system to share knowledge. For example, the BASIL requirement for banking around the world is to have a single view around a client and this will require major changes in information technology and information systems to be able to integrate across the organisation. Regenesys Business School 34

Task Questions Select an organisation of your choice and use the points below or your own points to identify and critically discuss the challenges of having an integrated IT and IS system. Here are some typical problems that may occur: Incompatible technologies with no integration between the systems Out-dated technologies and unavailable spare parts Out-dated backup systems Lack of systems integration and data sharing Complexity in generating reports Underperforming systems Enterprise Applications In the competitive marketplace today, no organisation can risk or afford data that is unreliable, inconsistent and non usable. Any disjointed information system, which does not integrate the systems across the entire organisation will cause the organisation to lose market share and its competitive advantage in the marketplace. Isolated pieces of information can adversely impact on the efficient and effective operations of the organisation if there is a lack of a single view of the data to make integrated decisions. To solve this, we need enterprise applications to share the same data and information universally where it is required. Enterprise systems (also known as enterprise resource planning (ERP) systems) are used to integrate all the processes, data and information between departments. This also integrates the users of the system to have a global view of the organisation and to better manage the organisation as a whole. Enterprise systems are becoming more sought after as the use of information is seen as an essential resource to maximise the profitability of the organisation. This is shown in Figure 5 below. Regenesys Business School 35

Figure 5: Enterprise Systems (Davenport, T. H. 1998) Task Questions Critically evaluate the diagram above (Figure 5) and explain why the database is in the centre of the diagram. Supply Chain Management Systems Supply chain management systems offer opportunities for organisations to integrate data and information with suppliers and customers and to ultimately lower costs for all organisations involved. Integration of the organisations reduces effort, time and paperwork in doing business. Figure 6 illustrates an example of a supply chain management system. It shows how a leading manufacturer of office furniture overhauled its supply chain management system to promote optimal lowest-cost delivery plans. With the emergence of IT/IS (ICT), the supply chains have the ability to become more integrate and thereby increasing the competitive advantage of the industry as a whole, not only for one organisation. Regenesys Business School 36

Look at this in terms of your ICT module where you can link into the complete supply chain from the supplier of textbooks to the final graduation process. This also allows you to collaborate with students from around the globe and enhance your learning experience. The supply chain is seen as an essential strategic tool used to get the product from the producer to the consumer. If this chain breaks down, the organisation cannot sell the product, no matter how good the production, marketing or other systems. Figure 6: Example of a supply chain management system (Laudon and Laudon, 2010:87) Customer Relationship Management Systems CRM systems are essential to manage the flow of goods and information in the supply chain. CRM gives to customer the confidence in the supplier and intermediaries when there are excellent levels of support delivered through effective and efficient CRM systems. CRM systems will always integrate with the organisation's processes in all the functional areas and every management level of the organisation. The ideal CRM system provides end-to-end customer care from receipt of order through product delivery. If you look at the value chain designed by Porter (1995) in his book Competitive Advantage, the last two blocks of the primary activities in the value chain were focussed around CRM systems. You will notice this when doing the Strategic Management Module. In government, supply chain management has become a major driver in the system in terms of service delivery. Regenesys Business School 37

Task Questions 1. What is customer relationship management? 2. Why is it so important to organisations? Knowledge Management Systems Knowledge management systems (KMS) enable organisations to use the data from the TPS which was converted into useful information through the MIS and to make knowledgeable decisions within the organisation. Knowledge works have specific skills to use and apply the knowledge management systems to solve complex problems. Architects may use simulation computer packages to demonstrate the impact of wind on a building. Intranets and Extranets Intranets (closed systems used only within the organisation) and extranets (systems used only within the organisation and its operating partners and suppliers or customers) are common practice today in most organisation. Extranets make portions of private corporate intranets available to outsiders. These assist in sharing information for more effective decision-making. Cloud Computing Cloud technology was briefly discussed earlier on in this study. Refer to some of the definitions of cloud computing that follows. Cloud computing is a technology that uses the Internet and central remote servers to maintain data and applications. Cloud computing allows consumers and organisations to use applications without installation and access their personal files at any computer with Internet access. This technology allows for much more efficient computing by centralising storage, memory, processing and bandwidth. A simple example of cloud computing is Yahoo email, Gmail, or Hotmail etc. You do not need software or a server to use them. All a consumer would need is just an Internet connection and you can start sending emails. The server and email management software is all on the cloud (internet) and is totally managed by the cloud service provider Yahoo, Google, etc. The consumer gets to use the software alone and enjoy the benefits. The analogy is: 'If you need milk, would you buy a cow?' All the users or consumers need is to get the benefits of using the software or hardware of the computer like sending emails, etc. (Wikinvest, 2011): Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. (Mell and Grance, 2011:2) Regenesys Business School 38

To examine the characteristics, service models and deployment models of cloud computing in more detail, refer to the article written by Mell and Grance (2011). Mell, P. and Grance, T. 2011, The NIST of Cloud Computing, National Institute of Standards and Technology, http://csrc.nist.gov/publications/nistpubs/800-145/sp800-145.pdf (accessed 5 November 2013). The three segments of cloud computing are application, storage and connectivity. Each segment has its own purpose and products, which aim to serve individuals and organisational alike (Wikinvest, 2011). Figure 7: Cloud Computing Architecture Model Source: IBM (2013) Cloud Computing, is in essence, moving back to the mainframe systems through a more intelligent network system. The reasons for moving to Cloud Computing are that it is agile and can improve with users' ability to re-provision technological infrastructure resources. It is also cost effective due to the volume of users and a remote location. Another big advantage is the fact that it is device and location independent and virtual, which allows servers and stored devices to be accessed anywhere at any time on a well maintained, safe and secure system. Regenesys Business School 39

Collaboration and Communication Systems: Interaction Jobs in a Global Economy Globalisation now allows organisations to work around the clock, around the world. It is not unusual for major corporations to shift work from one time zone to another, and from one country to another. Somehow, people in all geographically separated locations have to be able to easily communicate and share information with each other. Use the internet to gather more information on the following systems: Internet-based collaboration environments Email and instant messaging Cell phones and Smartphones, etc. Social networking Wikis Virtual worlds E-Business, E-Commerce, and E-Government Laudon and Laudon (2013) argue that the application of networking systems (such as the Internet, extranets, and intranets) can offer new opportunities for organisations that want to conduct business in cyberspace. These authors also argue that there are many problems associated with developing an organisation s electronic commerce and electronic business. Reflect on ways to integrate electronic commerce and electronic business into an organisation of your choice. 7.2.5 The Information Systems Function in Business Information systems departments, previously a small group of people usually assigned to the financial group, have moved into the mainstream of most organisations. The ICT Department According to Brown (2012) and Laudon & Laudon (2013), the core department in many organisations is the ICT department, which consists of a CIO, business analysts, systems analysts, systems architects, programmers, data analysts, and support staff. This multi-skilled team is responsible to deliver value-added to the business through creating effective and efficient ICT systems. Regenesys Business School 40

Systems analysts serve as the bridge between the technology and non-technology workers. They ultimately report to the Chief Information Officer (CIO). The CIO crafts the IT / IS strategy for the organisation as a whole. Perhaps the most important role of all, though, is the end user. The responsibility for successful integration of information systems has extended past the pure hardware and technical skills in ICT and become part of everyone s job. No one is isolated from the effects of ICT any longer. This can be seen by your dependence and knowledge on using ICT to assist you in completing the MBA at Regenesys. IT Governance Organisations develop a strategy and policies for using information technology under the label of IT governance. Basically, management wants to make sure that the use of information technology supports the organisation s overall strategies and objectives. Governance policies determine who makes what decisions about the way in which information technology will be used in the organisation. One of the major changes from the King III report for governance in South Africa is the focus on the board, which is now being held accountable for the IT/IS (ICT) strategy, where a Non-Executive Director should head up the ICT strategic portfolio. Recovery and disaster plans need to be formalised. If the King III report is not applicable to your country, ICT governance will be controlled by your relevant country s ICT Acts. As an MBA student, we would recommend that you keep abreast of all the latest ICT Acts. Task Questions 1. Select an organisation of your choice and review the ICT strategy and governance for that organisation. 2. Evaluate the strengths and weaknesses of the ICT strategy and governance. 3. Develop a plan that can be presented to the senior executives to address the weaknesses and improve the ICT strategy and governance of that organisation. Regenesys Business School 41

7.3 INFORMATION SYSTEMS, ORGANISATIONS AND STRATEGIES Timeframe: Learning Outcomes: Chapter in recommended textbook: Additional sources to consult: Section Overview 16 hours Interrogate key challenges of integrating ICT with business processes and management systems Evaluate the utilisation of ICT in improving business effectiveness and efficiency Chapters 3 and 4 Chanopas, A., Krairit, D., Khang, D.B. 2006. Managing information technology infrastructure: a new flexibility framework. Management Research News. 29(10): 632-651. This section examines how ICT affects the organisational elements such as organisational structure, culture, systems and strategy. There is a dynamic interrelationship between an organisation and its information systems. 7.3.1 Organisations and Information Systems An organisation, under the leadership of the Chief Information Officer (CIO) needs to design information systems that serve the existing organisation to implement the strategy and remain competitive in the marketplace. What Is An Organisation? An organisation is an open system, which interacts with the environment surrounding it. This may be a stable, formal social, structure that takes resources from the environment and processes them to produce outputs (Laudon and Laudon, 2010:107). Figure 8 depicts this process. As an ICT student you will interact in an open systems with a multitude of inputs for various sources. You will need to evaluate these inputs and process these effectively and efficiently to complete assignments and exams. ICT will be the enabler during this process of conversion from inputs to desired outputs. Regenesys Business School 42

Figure 8: The Organisation (Nowak, 2003) Organisations and Information Systems are systems, which interact with the environment and are interdependent on the environment and on one another. They both have hierarchical structures with clear functions and deliverables at various levels. The organisation depends on the information systems to make more effective and effective decisions, but the Information Systems depend on the people to capture and structure the IS to align to the organisational requirements. Both have explicit rules and procedures, which need to follow correct protocols. Routines and Business Processes Earlier in the Study Guide you took note of the types of information systems. This specifically refers to the transaction processing systems and office automating systems, which allow organisations to develop efficient routines, based on sound policies for producing goods and services. As an ICT student you will interact in an open systems with a multitude of inputs for various sources. You will need to evaluate these inputs and process these effectively and efficiently to complete assignments and exams. ICT will be the enabler during this process of conversion from inputs to desired outputs. Regenesys Business School 43

Organisational Politics As organisations are functionally structured in a hierarchal structure, conflicting goals and conflict occurs in the organisation often result. This conflict causes what is commonly referred to as organisational politics. This is often referred to as: The way things are done in this functional area'. Organisational politics was exacerbated in the early 1980s where ICT systems were fragmented due to the limited technological capabilities. This created a conflict between departments and this is where organisational politics started to fragment an organisation's focus on a common goal. Each person in an organisation ultimately has her or his own goals because she / he enters an organisation with different interests, concerns and perspectives. These different interest and concerns influence the extent to which the individual's personal goals may or may not be aligned with the organisational goals. The misalignment of goals could result in conflict and organisational politics. Organisational Culture and Environments Just as every society reflects cultural values like language, dress, and food, so too every organisation has its own culture. See if you can research two organisations with different types of organisational cultures (in terms of the way they do business and behave in business). Organisational Structure Structure follows strategy. This implies that organisations must understand their environment and create an appropriate organisational strategy as seen in Table 4 below. From an ICT perspective, the organisation needs to choose the appropriate Information and Communication Technology to be able to support the organisation, in terms of the strategic and human resources sides. This is why ICT is considered an enabler in organisations today. Regenesys Business School 44

Table 4: Organisational Structures Organisational Type Entrepreneurial Structure Machine bureaucracy Divisionalised bureaucracy Professional bureaucracy Adhocracy Description Young, small firm in a fast-changing environment. It has a simple structure and is managed by an entrepreneur serving as its single chief executive officer Large bureaucracy existing in a slowly changing environment, producing standard products. It is dominated by a centralised management team and centralised decision making Combination of multiple machine bureaucracies, each producing a different product or service, all topped by one central headquarters. Knowledge-based organisation where goods and services depend on the expertise and knowledge of professionals. Dominated by department heads with weak centralised authority Task force organisation that must respond to rapidly changing environments. Consists of large groups of specialists organised into short-lived multidisciplinary team and has weak central management. Examples Small start-up business Midsize manufacturing firm Fortune 500 organisations, such as General Motors Law organisations, school systems, hospitals Consulting organisations such as the Rand Corporation (Laudon and Laudon, 2010:114) Task Questions 1. Critically examine and discuss how the organisational elements in Figure 8 are interrelated. 2. Examine the impact of these above organisational elements on an organisation s strategy. 3. How would this impact on the effective and effective use of ICT within an organisation of your choice? 7.3.2 How Information Systems Impact Organisations In today s technological era it seems as if change is the only constant in the relationship between information systems and organisations. As technology evolves and changes, its introduction into organisations requires changes in the firm s infrastructure and the services it can provide to its employees, customers, and suppliers (Laudon and Laudon, 2013). Regenesys Business School 45

Economic Impacts Brown (2012) as well as Laudon and Laudon (2013) are of the opinion that ICT is becoming smarter, cheaper and more reliable. This trend shows how many jobs are automated by robots, computers, smart networks, etc. As this trend continues, many of the mundane routine jobs, usually done by unskilled workers, will disappear at a faster rate than what is happening today. This will increase productivity and reduce costs, but with less people working, will organisations survive? How will society cope? Think about these points as you go through this module. IT Flattens Organisations Rather than many layers of management in an organisation, information technology allows organisations to flatten the layers to three, or even two. This is achieved by integrated ERP systems, which reduce the number of levels required to make decisions. Systems often automate many reports and reduce the layer in the organisation who would usually do this work. This increased productivity and automation reduces the need for supervision, reducing that level within the organisation. Post-industrial Organisations In your module (Comparative Management Trend, CMT) you will evaluate the post-industrial theories and support the notion that IT should flatten hierarchies. Researchers argue that professional workers tend to be self-managing, and that decision making should become more decentralised as knowledge and information become more widespread throughout the organisation. This leads to the creation of communities of practice within organisations and technology enables this group to communicate more effectively and efficiently. Understanding Organisational Resistance to Change You should take cognisance of the behavioural theory and the integration of information systems in an organisation. This theory promotes the idea that that an organisation's political structure changes through access to information. The Internet and Organisations The Internet enables a common platform upon which ICT can operate effectively and efficiently. The Internet platform enables collaboration and the growth of convergence in organisations today. Think about how essential the Internet is to completing your ICT. Regenesys Business School 46

Implications for the Design and Understanding of Information Systems The integration of an information system into an organisation naturally causes change for the organisation. Refer to the triangle introduced in Section 1, when we discussed hardware, software and persware. Take cognisance of the role that human resources play in making ICT work in an organisation. Think about how social media such as Facebook can be used to make communication more effective in terms of the ICT modules you will be completing. Task Questions 1. Critically discuss how ICT would flatten an organisation s structure and why there would be resistance to this. 2. Evaluate your technology you have on you today. What percentage of that technology can you actually use with your current level of skills? 3. Can you track your IP address in class? Try this on your device now in class. 7.3.3 Using Information Systems to Achieve Competitive Advantage Research and review the strategies of organisations such as Amazon and e-bay the to see how they use technology. Porter s Competitive Forces Model Porter s competitive forces model contends that much of the success or failure of a business depends on its ability to respond to its external environment (Porter, 2008). Figure 9 below shows four external forces that every business must contend with at one time or another. These forces show us that the competitive forces interact with one another to demonstrate the competiveness of the environment in which the organisation is operating. There may be many competitors who compete with low inputs from suppliers all over the world. The buyers may be very price sensitive and not loyal. No specific patents or large amounts of capital will be required and this will lower the barriers to entry. As substitute products increase, the buyers will have greater choice, which in turn will cause more competition and lower prices in the marketplace. Regenesys Business School 47

Figure 9: Porter s competitive forces model (The 5 Forces) (Porter, 2008) Strategies for competing in the marketplace once the above forces are analysed An organisation must understand the above forces before deciding on a strategy. The strategy must include the ICT strategy to reflect the types of Information technology, as well as, the Information Systems to use. It is essential that, as an ICT delegate within Regenesys, you understand the integration of strategy and ICT (IT and IS). An organisation may decide to compete on cost or differentiation. These strategies will require that the ICT (IT and IS) strategy will assist this organisation to achieve this. Low-Cost Leadership By using ICT (IT and IS) to lower your operational costs you can lower your prices. That will make it difficult for traditional competitors and new market entrants to match your prices. This can be done through effective and efficient TPS (Transaction Processing Systems), which are largely automated and controlled by the OAS (Office Automation Systems). OAS use technologies such as bar code scanners, templates, scanners, etc. These OAS are essential in reducing errors in the TPS. Efficient customer response systems provide an organisation and its suppliers with an integrated view of customers. Regenesys Business School 48

Product Differentiation A very effective use of strategic information systems is to create products or services that are so differentiated for niche markets that they create barriers for the competitors. ICT (IT and IS) supports differentiation through CRM and KMS. These systems are designed to enhance the support level provided to customers. Strengthen Customer and Supplier Intimacy Supply chain management (SCM) systems increase supplier intimacy while customer relationship management systems increase customer intimacy. Porter (2008) argues that ICT enables the Supply and Value Chains to create switching costs between an organisation and its suppliers because of the investment of hardware and software necessary to make the ICT system work effectively and efficiently. The Internet s Impact on Competitive Advantage According to Porter (2008), consumers can readily find substitute products and services through the Internet. Customers can use information provided on the Internet to create new competition between organisations while suppliers can increase their market power. The Internet provides new opportunities for organisations to increase their customers and markets while reducing their costs. Organisations such as Google, Amazon, Regenesys and e-bay are continually creating new products and services through the Internet. They are successful because they use their strategic competitive forces and information systems to continually improve their competitive advantage. The advantage is that organisations can offer services wherever the Internet is available. The service can be offered on a 24/7 basis. The impact of the Internet on the five forces can impact on the educational environment as follows: The Internet creates a substitute for face-to-face classes. This is done through the student portal at Regenesys. The Internet allows suppliers of text books to make e-books available on-line 24/7 and 365 days a year. This reduces distribution, printing and increases availability of course material to all of the Regenesys students, wherever they are. The Internet impacts on the barriers to entry as students and study at a greater variety of universities throughout the world. The Internet increases the rivalry amongst competing universities, both local and internationally. The customers (students) also have more choice and this creates more pressure on universities to review prices and service levels. There are also complementors (such as lecturers and media organisations) who may influence the textbooks and other material used by the students. This may increase the rivalry between suppliers and limit the choice students have in their selection of the study material. Regenesys Business School 49

The Business Value Chain Model In the value chain there are primary activities supported by support activities. Note that the support activities human resources, accounting, and finance support the primary functions of production, shipping, and sales and marketing. The value chain model shown in Figure 10 below will help an organisation focus on these activities and determine where to focus their efforts the most. Value is created when the primary activities are streamlined (with effective and efficient TPS systems) and then supported with systems such as OAS to automate systems, MIS to generate effective reports, and KMS to make effective decisions. These must all be supported by the correct Human Resources skills and effective Procurement Systems. Figure 10: The Value Chain Model (Porter, 2008) Benchmarking provides a way for organisations to determine how they stand up against their competitors within the same industry. They can also research the best practices to improve the value chain integration. Regenesys Business School 50

Extending the Value Chain: The Value Web More and more organisations are incorporating the Internet in their business strategies through the use of value webs (See Figure 11). Ghemawat (who was an MBA student of Porter) and Collis (2001) argue that ICT is a complementor to the original Porter s Five Forces Model and that it allows organisations to create integrated webs, which link organisations throughout the world onto singly platforms of information to enhance the knowledge capability of organisations today. Earlier in the module, we looked at enterprise wide systems and the importance of a single shared database allowing you to have a single view of client. Figure 11: The Value Web Ghemawat and Collis (2001:171) Refer to the video clip below to see how ICT is integrating and complementing transport systems. Hawkins, K. 2013, Google Car It Can Drive Itself, http://www.youtube.com/watch?v=09hkbfzv8iw (Accessed 28 October 2013). Regenesys Business School 51

Task Questions 1. What is a strategic information system? 2. What is the difference between a strategic information system and a strategic-level system? 3. What is a Value Web? 4. Does having more information available allow you to gain a competitive advantage in the market place? 5. How can Google complement organisations today? Think for example of Google Earth, Google Maps, Gmail, etc. 6. Critically evaluate how your organisation uses information systems to achieve competitive advantage? Develop an integrated model to assist your organisation in using information systems to achieve competitive advantage. Synergies, Core Competencies and Network-Based Strategies The most successful organisations will determine the best synergies, core competencies and network-based strategies to reduce costs, improve products and services, and increase profits. Synergies Internet service providers have provided dial-up Internet access for consumers and organisations since the early 1990s. In addition to providing Internet access, it also creates specific content that is available only to its customers. The last few years has seen a huge increase in the demand for broadband access by customers across the world. Internet service providers simply do not have the necessary infrastructure to provide what its customers want. Enhancing Core Competencies For many years Ford Motor Organisation delivered motorcars to the dealerships. However, Ford formed an alliance with UPS because it wanted to concentrate on its core competency of manufacturing vehicles instead of delivering them. Ford allowed UPS to focus on its core competency of delivering products (Lauden and Lauden, 2010). You have just watched the Google car of the future, which would be a dramatic paradigm shift for UPS and the way they deliver parcels. In 2001, UPS Logistics indicated that (PR Newswire, 2013): By shaving four days off the delivery cycle and reengineering the network, Ford is realizing a $1 billion dollar reduction in vehicle inventory and more than $125 million in inventory carrying-cost reductions on an annualized basis. The savings will continue to grow as our precision, Webenabled system reaches maturity and we surface and eliminate more non-value-added activities, said Taylor. Ford and UPS Logistics Group launched the alliance a year ago to reengineer Ford s vehicle delivery system amid rising consumer demand for on-time vehicle delivery. UPS Logistics Group created UPS Autogistics as a business unit to manage the project. With a single network manager in place to analyse any potential problems before they occur, we ve managed to avoid bottlenecks, reduce the amount of assets in the supply chain, and cut inventory carrying costs, said Tom Kolakowski, manager of Ford North American Vehicle Logistics. Regenesys Business School 52

Network-Based Strategies ICT makes organisations more virtual due to integrated technology such as wireless where you no longer need bricks and mortar buildings in many organisations to conduct business. Technology makes virtual organisations more feasible, cheaper, and easier to set up and tear down than before. The Airbus A380 as well as the Boeing Corporation, manufacturer of airplanes, uses virtual organisations throughout its design and manufacturing processes. It contracts with other organisations for certain types of work such as the development of new seat configurations. When the process is completed, the outside vendor is released from the job. They depend heavily on effective ICT systems for making flights safer and fuel-efficient. As more organisations outsource work to other vendors, virtual organisations are becoming the norm. Network technologies based on Internet standards provide the infrastructure necessary to make them successful. Organisations are no longer tied to suppliers and business partners located in specific geographical areas but can find the best service provider or business partner around the world. For example, the majority of ICT work and call centres are outsourced to India and with technology they can work in a virtual world. Figure 12 below is an integrated model of Porter and Ghemawat s combined work. It differs in that industries in this model collaborate and also compete. For example, some cellular networks share the same network grid and charge switching fees between the networks. The benefits of this will be as follows: Customers will always be connected to the grid irrespective of the provider Shared costs of technology will produce economies of scale and reduce capital investment required Sharing of knowledge will generate more innovation and this will benefit the clients by having technology that will deliver greater benefits This collaboration can be done worldwide and this will increase connectivity between businesses and make business decisions happen more rapidly For example, the transition from telephones to pages to cell phones and now satellite phones has increased the speed and reach of telecommunications networks. Regenesys Business School 53

Figure 12: An Ecosystem Strategic Model New Market Entrants Subs9tute Products and Services Industry 1 Industry 2 Industry 3 Industry 4 Suppliers Customers (Ghemawat and Collis: 2001:177) Task Questions How have the value chain and competitive forces models changed as a result of the Internet and the emergence of digital organisations? As an ICT student, you may collaborate with students all over the world on the Regenesys portal. 1. What advantage would this give you in doing an assignment? 2. Think about all products and services available on the portal e.g. ebooks, chatroom, EBSCO, Skype chats, black board technology, etc. 3. Think about the video you saw above where Google may be a complementor and competitor to the motor industry. How would this impact on current industry organisations such as motor manufacturers and traffic authorities? Regenesys Business School 54

7.3.4 Using Systems for Competitive Advantage: Management Issues The link between the organisations strategy and the ICT (IT and IS) strategy is becoming more interdependent as the markets become more competitive and buyers become more informed through the abundance of information, which is instantly available on mobile devices. The correct use of ICT (IT and IS) is essential if the organisation is to sustain its competitive positioning in the marketplace. The ICT (IT and IS) strategy needs to enable the organisational strategy and the human resources to be able to effectively and efficiently execute the strategy to sustain and grow their strategic advantage in the marketplace. Aligning IT with Business Objectives Unfortunately the success rates for organisations aligning ICT (IT and IS) initiatives with their organisational goals and objectives are not well designed and effectively integrated with the ICT strategy. Many failures are directly attributable to people not understanding ICT (IT and IS) as well as they should and because they are simply trying to ignore it for as long as they can. The ICT (IT and IS) competency levels are often too low within the organisation due to a lack of a human resources capacity building strategy Brown (2012). Performing a Strategic Systems Analysis Brown (2012: 259) describes the forces to analyse in the Strategic Systems Audit. These are discussed as being an analysis of the industry structure, the supplier s power relative to the organisations power, and the customer s power relative to the organisation's power. The manner in which the organisations' ICT systems are designed and implemented will give rise to a competitive advantage. An example of this is to use ERP systems to enhance the collaboration in the Value Chain proposed by Porter (1998). Managing Strategic Transitions We often hear the saying adapt or die. This is very true in today s ever changing technological environment. As technology advances to organisations, strategy needs to also advance to be able to maintain the strategic growth. Look at how many industries have been affected by new technologies. Many organisations have had to change their core business models to survive today, or go out of business. You should keep in mind how organisations are structured, how information needs vary from one organisation to another, and how information systems can enhance or detract the characteristics of an organisation. The most important thing to remember is that there are people at the core of every organisation. These people use ICT (IT and IS) as a tool to enable them to do their jobs more effectively and efficiently within organisations (McNurlin, et al., 2014). The same applies to you completing your MBA degree at Regenesys. Regenesys Business School 55

7.4 IT INFRASTRUCTURE AND EMERGING TECHNOLOGIES Timeframe: Learning Outcomes: 16 hours To understand and evaluate the Laws of Telecosm To evaluate the evolution of ICT infrastructure Evaluate the utilisation of ICT in improving business effectiveness and efficiency Chapter in textbook: Chapters 4 and 5 Additional sources to consult: Section Overview Baird, C.H., Parasnis, G. 2011, From social media to social customer relationship management. Strategy and Leadership 39(5): 30-37 This section discusses and evaluates the laws of telecosm. Thereafter the evolution of ICT structure is evaluated. IT infrastructure and ICT utlisation is discussed with the intention of improving business effectiveness and efficiency. 7.4.1 Introduction and the Laws of Telecosm As information becomes a valuable resource of a digital firm, the infrastructure used to care for it takes on added importance. We will examine all of the components that comprise today s and tomorrow s IT infrastructure and how best to manage it. Read the extract for Kurswel (2001) below to gain a better understanding of the Laws of Telecosm. This excerpt reflects George Gilder's vision of the revolutionary impact of infinite bandwidth in the world. Kursweil, 2001, The Twenty Laws of the Telecosm, http://www.kurzweilai.net/the-twenty-laws-of-the telecosm (Accessed on 11 November 2013). Task Questions Read through the Laws of Telecosm below and discuss how these laws will impact on organisations today. Originally published September 2000 as part of Telecosm: How Infinite Bandwidth Will Revolutionize Our World. Published on KurzweilAI.net February 22, 2001. 1) The Law of the Telecosm The value of a network grows by the square of the processing power of all the terminals attached to it. In fact, this is a restatement of Metcalfe s law ( Network value rises by the square of the number of terminals ). As the power and store width of terminals rises, the value of reaching them soars. Internet traffic is a good proxy for this effect. Rising at least a thousand times every five years, the trajectory of traffic indicates that a current Internet company is confronting just one tenth of one percent of its potential volume half a decade hence. This phenomenon impels both the exponentially rising value and the (sometimes shocking) volatility of investments in the Telecosm. Regenesys Business School 56

2) Gilder s Law Bandwidth grows at least three times faster than computer power. While computer power doubles every eighteen months (Moore s law), communications power doubles every six months. This is a rough average; as with Moore s law, it may take a few years before the pace reaches its natural rate. Practical backbone bandwidth on a single cable is now a thousand times greater than the entire average traffic on the global communications infrastructure five years ago. More information can be sent over a single cable in a second than was sent over the entire Internet in 1997 in a month. 3) The Black Box Law Networks will become black boxes: dumb pipes, with intelligence spread to the machines at their peripheries. Past networks, including the phone system, have been smart and narrowband. Broadband flourishes with the reverse. 4) The Law of Bandwidth Efficiency Bandwidth usability, measured in digital efficiency, grows roughly by the square of the move up spectrum to higher frequencies. Both wired and wireless communications capacity rises as transmissions move from long wavelengths and low frequencies at the bottom of the spectrum to short wavelengths and high frequencies at the top. In the air, for example, bandwidth has moved from 900 megahertz analog cellular phones to 2 gigahertz digital personal communications systems (PCS) with web access, and to 24 and 38 gigahertz wireless services offering extremely rich links to urban buildings, and finally to TeraBeam s fiberless optics employing the same frequencies of infrared light now used in fiber. 5) Shannon s Law Digital communications efficiency declines as power increases, or, conversely, efficiency increases as power weakens. Increased electrical power means more dispersion and nonlinearity in fiber and more interference in the air. Reducing power expended per bit enables exponentially increasing bitrates. The rise of digital implies a constant preoccupation with reducing the power usage of every component of the information infrastructure. The future of networking lies in small, long-lasting batteries, powering lots of devices, joined together in a massive web. 6) The Bandwidth-Power Identity A corollary of Shannon s law is that bandwidth is a replacement for power. With enough bandwidth, communications engineers can simulate any powerful network architecture they please. Optical bandwidth will inexorably drive electronic switches and routers out of the center of the network where they just get in the way of bits and slow them down. In both fiber and air, the expansion of bandwidth geometrically increases communications efficiency. Bandwidth growth comes from using more of the electromagnetic spectrum and less electrical power. The spectrum is essentially infinite. 7) The Glass Mansions Law In the cities of the world, fiber trumps both copper and the airwaves. Fiber optics is some ten billion times more capacious and reliable than copper or air. Many companies claim to offer copper optics or satellites that compete with fiber. But these systems, for all their special advantages of installed base or mobile access or broadcast reach, are not even remotely competitive with fiber for bandwidth. One fiber thread can command a hundred times more bandwidth than all the satellites in the world put together. Satellites will be useful chiefly in rural areas that are too remote from fiber lines. 8) The Yellow Pages Law The telecosm demands better and better directories, and the companies that produce them will succeed. Bandwidth is created by hardware (optics, etc.), but the networks they enable will need better and better software. Hence, the telecosm opens huge opportunities for clever ways to cache, mirror, replicate, sort, and search for information. Regenesys Business School 57

9) The Law of Telecosmic Price Elasticity One unit decline in bandwidth price yields a five unit rise in demand. Fears of a bandwidth glut are groundless. Bandwidth multiplies its own demand. (As one example, business-to-business bandwidth has been exploding and price per bit plummeting, and business-to-business traffic on UUNet has been doubling every 90 to 120 days.) 10) The Law of Instantaneous Information This law is a commandment to save time: the companies that save their clients time will profit in the telecosm. Time to market, turnaround time, disk seek and rotate time, time to retirement, network delay time, memory access time all reduce to two key metrics: the speed of light and the span of life. A physical limit and a biological limit, these are the governing scarcities of the information age. 11) The Law of Wasted Bandwidth The governing abundance of the information age is bandwidth: communications capacity. This law is a commandment to waste bandwidth. The companies that exploit bandwidth recklessly will profit by it. 12) Amdahl s Law in the Telecosm A law defined by computer designer Gene Amdahl, known as Amdahl s law, ordains that system speed is determined by the slowest component in the datapath. Combining this with Drucker s law (by Peter Drucker) that profits migrate to the supplier of the missing component necessary to complete a system, the conclusion is clear: The missing components today are cheap chips that can operate at optical speeds. Profits will migrate to optical-speed chip makers. 13) The Single-Chip Law A corollary of the above is that the Telecosm requires single-chip systems. Chips operating at a billion cycles per second simply have no time to go off chip to retrieve instructions and data. 14) The Law of Hand-Held Devices When bandwidth is infinite, and the network is ubiquitous, digital cellular teleputers prevail. These devices will economize on power and silicon area. Power and silicon were two prime abundances of twentieth-century technology, when power came from outlets in your wall and silicon spread across computer backplanes and motherboards. In the twenty-first century, they are defining scarcities. 15) The Law of Network Computing In the telecosm, the network becomes the computer. Computers disaggregate across the net and software disaggregates into components on the net. 16) Huber s Law of Geodesic Networks Putting together Shannon s law with the law of bandwidth efficiency produces a vision of the kind of networks that will prevail. As coined by Peter Huber, they are geodesic : short-connection, multipoint, dense arrays. The higher the frequency, the shorter the wavelength, the wider the bandwidth, the lower the power, the smaller the antennae, the slimmer the cells, the cheaper and better the bandwidth. 17) The Low-Latency Law of Satellites Satellites will move from far and fast to low and slow, from the geosynchronous orbit 36,000 kilometers above the earth to far slower low earth orbit paths fifty times closer to the earth. To the geosynchronous orbit, signals take a quarter of a second-a showstopper amount of latency for interactive communications. Bouncing to low-earth orbits and back, signals move fast enough to race photons in fiber. Regenesys Business School 58

18) The Law of Television Obsolescence Television, high powered and low choice, will die. It is rapidly giving way to the Internet s low-powered bandwidth with myriad choices. A corollary of this law concerns advertising: TV advertisements are not adds; they are minuses. Most Internet banners are not adds either. They will give way to informational and transactional ads that people want. The Internet empowers the customer; in the future companies will not be able to tease or trick their customers into reading their ads. 19) The Law of Journalistic Victory Profits will migrate toward newspapers and magazines. Unlike television, newspapers already empower their customers. Newspaper readers can read at their own pace and schedule, respond to stories with letters, clip and save desired material, ignore undesired ads, and even advertise themselves in the classified section. All these functions become more effective on the net. It will be much easier for newspapers to acquire web technology and video than for television stations to acquire real news reporting and valuable editorial content. 20) The Law of Conduits and Content This law comes in the form of a commandment to divorce content from conduit. The less content a network owns the more content flows through it. If you are a content company, you want your content to travel on all networks, not just your own. If you are a conduit company, you want to carry everyone s content, not restrict yourself to your own. Companies that violate this rule (AU, AOL Time Warner) tear themselves apart. The dumber the network the more intelligence it can carry. Task Questions 1. Which law is most applicable when you chose your MBA? And why? 2. Identify the key issue in each law and evaluate an integrated effect on ICT in an organisation of your choice. 3. Refer to the work that you have just covered by Porter and Ghemawat. Evaluate its relevance in improving business effectiveness and efficiency in an organisation of your choice. 7.4.2 Infrastructure Brown (2012) views ICT Infrastructure as being the physical hardware used to interconnect computers and users. The ICT Infrastructure will include all the transmission media, including telephone lines, cable television lines, and satellites and antennas, and also the routers, aggregators, repeaters, and other devices that control transmission paths. Infrastructure also includes the software used to send, receive, and manage the signals that are transmitted. This in essence connects the organisation and the various organisations in the value chain together. It is further noted by Laudon and Laudon that ICT Infrastructure organisation play a significant part in evolving the Internet, both in terms of where the inter-connections are placed and made accessible and in terms of how much information can be carried how quickly (McNurlin, et al., 2014). Regenesys Business School 59

Task Questions 1. Research the Internet to identify what IT infrastructure is, as well as, what its components are. Evolution of IT Infrastructure Task Questions 1. Review the evolution of corporate IT infrastructure under the following headings: General-purpose mainframe and minicomputer era (1959 to present) Personal computer era (1981 to present) Client/server era (1983 to present) Enterprise Internet computing era (1992 to present) Cloud Computing era (2000 to present) Your research should reveal that each era builds upon previous advances made in hardware, software, and services. 2. Evaluate the technology that your organisation is using and how effective this is technology in ensuring that your organisation achieves its strategic priorities and remains competitive? Figure 13 below explains the changes in technology over the time period. You will notice that the technology has become smaller due to the move from valve technology to transistor technology. This is where Richard Moore of Silicon Valley who created Intel has become a pivotal driver in the rapidly driving technology. This is why in the diagram below, you will note that the devices are becoming smaller, more powerful and integrated as the microchips become smaller and more powerful. The key challenge that Intel faces today is to get more electronics onto the microchip. For example, a computer s central processing unit s (CPU) microchip has become more powerful because of the ability to fit more electronics onto the chip. Look at your computer where it may have an Intel logo on it. Regenesys Business School 60

Figure 13: Stages in IT Infrastructure Evolution (Pearson, 2014) Task Questions 1. Elaborate on the following reasons for why we have evolved so much in the last 20 years. Moore s Law and Micro Processing Power The law of mass digital storage Metcalfe s Law and Network economics Declining communications costs and the Internet Standards and network effects 2. What impact have the stages of technology drivers had on the way people socialise and organisations operate today? Regenesys Business School 61

7.4.3 Infrastructure Component The evolution we are now experiencing aims to solve the lack of integration in the ICT (IT / IS) systems of the past to make computing ubiquitous anytime, anywhere. Let us evaluate the major components of systems necessary to see us through to this goal (McNurlin, et al., 2014:147). Figure 14 below highlights the core ICT infrastructure competent and this is further discussed below this figure. Figure 14: ICT Infrastructure Components (Laudon and Laudon, 2013: 204) Computer Hardware Platforms Brown (2012: 20) discusses the role of the Central Processing Unit (CPU) as being the brain of the computer. This is depicted as being linked to the Arithmetic and Logic Unit (ALU) to give the CPU the computational ability. Two main organisations produce most of the micro processing chips, namely Intel and Advanced Micro Devices (AMD). This is where Intel made its first inroads into the ICT industry. I am sure many of you have seen the logo Intel on your computer. Operating System Platforms Operating systems instruct the computer hardware what to do, when to do it, and how. Operations such as logging on, file management, and network connectivity are all controlled by the operating system Brown (2012: 35). According to Laudon and Laudon (2013), they view the most prolific operating system as Microsoft Windows in various versions. Windows is also one of the operating systems used by mobile computing devices like hand-held PDAs and cell phones. Today, we have many competing systems in this market, such as Apple and Android operating systems. Regenesys Business School 62

Enterprise Software Applications Enterprise Software Applications essentially integrate many individual application systems into one collaborative system. This allows the Value Chain to operate seamlessly due to the various application software modules operating together. The HRM module integrates with the Finance module, the manufacturing and stores modules, as well as compliance modules. By having this integrated system, more integrated decision making is being made possible within organisation. This is further linked to suppliers and customers, etc. to further improve the integration and collaboration capabilities of the organisation (adapted from Porter, 2008 and Laudon and Laudon, 2013). According to Brown (2012), these applications are becoming popular and more affordable for even small and medium-size business thanks to the proliferation of networks. Data Management and Storage In the ever changing and rapidly growing global economy, data is growing exponentially and is becoming more essential to capture on a database so that data mining can be used to generate more knowledge within organisations. Brown (2012) argues that, managing and storing the data to be easily accessible and provide meaningful information to the organisation is becoming a science in and of itself. Laudon and Laudon (2013) view Storage area networks (SANs) as being an integrated, efficient and effective way of achieving cohesion. This, they argue, brings about a more economical way to consolidate data across many platforms and many different systems within an organisation. Networking/Telecommunications Platforms Brown (2012: 61) argues that networks will change everything. The rationale is that there is a drive by organisation globally towards achieving convergence in the digital era today. Rather than having one platform for networking computer devices and a separate platform for telecommunications, we will see one organisation providing a combination services all rolled into one. Authors such as Laudon and Laudon (2013) and Brown often refer to this as the 'Next Generation Network'. Brown (2012) points out the trend where telecommunication organisations are merging with Internet service providers to offer a complete package of digital services. This is why cloud technology and Java, the current programming languages are becoming so sought after. You will learn more about this in your ICT module at Regenesys. Internet Platforms As the technology levels increase and the Internet continues to become the de-facto standard in communication platforms, organisations will be empowered to provide their employees, customers, suppliers, and other stakeholders with a more converged network and create a value web as discussed earlier in this Study Guide. Brown (2012) believes that intranets and extranets are built on Internet technologies and that they will therefore allow organisations to easily and inexpensively provide services that are more cost effective than before the introduction of the Internet. This is the reason why many organisations go to Internet service providers to host their service such as web hosting facilities. This is now evolving to Cloud Based Technologies. Regenesys Business School 63

Consulting and System Integration Services According to Laudon and Laudon (2013), systems used in many medium and large-sized organisations are too complex. They believe organisations cannot manage all of these systems on their own. Integration services provided by ICT consulting companies are therefore required. These services become more critical as many organisations merge their old legacy systems with newer technologies such as wireless computing. The legacy systems, some as old as 20 or 30 years, simply cannot be thrown away but must work seamlessly with today s technologies. Organisations choose not to totally replace legacy systems because it is too expensive, involves too much training, and carries too much organisational change (Brown, 2013). In summary, we can say that there is a gap between information technology and information systems and that is why we need an integrated ICT strategy and collaboration IT and IS organisations. Task Questions 1. What are the current trends in computer hardware and software platforms? 2. Examine how these trends are relevant for your organisation. 7.4.4 Contemporary Hardware Platform Trends Laudon and Laudon (2013: 189) argue that the most dominant theme in hardware platforms today is the convergence of telecommunications and computer platforms to the point where they believe computing will take place over the network. As an ICT student at Regenesys you will most probably notice that users are demanding better, faster, and easier ways to use computers and more ways to communicate with each other on the MBA. Let us look at some of the newer hardware technologies that help organisations meet the growing technology demand of employees, customers, suppliers, and business partners. The Emerging Mobile Digital Platform Anytime, anywhere, 24/7, 365 -- this is what computer users expect nowadays. Technology manufacturers are meeting the demand with a host of new communication devices like cell phones and smart phones (Brown 2012: 31). Task Questions What are todays current Mobile Digital Platforms? Regenesys Business School 64

Grid Computing Grid computing can be likened to an electrical grid where you do not have to lay out large up-front capital to establish the grid. Users can then tap into this grid and then use their infrastructure to link in to the infrastructure and applications for a reasonable fee. This implies that you can access the latest technology and affordable prices. This is similar to linking onto the Blackberry network with your mobile device. Grid computing harnesses the unused processing cycles of all the computers linked onto the grid and thereby can be used to solve complex problems (Adapted from Buyya 2009). Cloud Computing and the Computing Utility In essence, cloud computing can best be described as the way in which an organisation gains advantage of storing and utilising virtual services through the Internet. This in turn saves the organisation the initial capital outlay and continual operating costs required for complex and expensive infrastructure and ICT support costs. Laudon and Laudon (2013) also refer to cloud computing as being an on-demand computing system. As a Regenesys ICT student using cloud computing, you will be able to store your information and retrieve the information from any location where you can connect to the Internet. There will also be many application systems to use to assist you in completing your MBA. Autonomic Computing According to Laudon and Laudon (2010) the trend in computing is to create computers that can configure themselves and therefore require less support from ICT specialists. This will allow ICT delegates at Regenesys to use complex devices without having an in-depth knowledge of how to configure them. This additional ICT will enhance more sophisticated technology within the MBA degree. For example, we can refer to the Google car. Refer to the video you saw on the Google car that drives itself. Another good example of this is when you set up your cell phone and the network provider sends an sms message with the settings to automatically configure your device. This may change the skills mix within an organisation. For example, you might require a digital marketing division or a Webmaster. These skills depend on systems that can automate service delivery by using available support such as automatic website development software or source generators (McNurlin, et al., 2014:140-147). Regenesys Business School 65

Task Questions 1. Go onto the Internet and read more about autonomic computing on the website below. 2. Identify key learning points and examine how these are relevant for your organisation. IBM, Autonomic Computing: IBM s Perspective on the State of Information Technology ; http://www- 1.ibm.com/industries/government/doc/content/resource/thought/278606109.html. (Accessed on 11 November 2013) Virtualisation and Multi-core Processors Virtualisation and multi-core computer systems allow multiple operating systems on a single computer and also allow for a greater diversity of application software to be used. This greatly enhances the organisation's capability to compete more effectively as it can use the ICT for a wider and more diverse range of operations. Laudon and Laudon (2011) argue that instead of an organisation having many expensive file servers running various different applications, virtualisation can consolidate the programs onto one or two servers. Task Questions 1. Go onto the Internet and read more about virtualisation and multi-core computer systems on the following web site: http://www.mouser.com/pdfdocs/freescale-multicore-processing.pdf (Accessed on 11 November 2013) 2. Write a brief summary on the above and examine how the key learning points are relevant for your organisation. 7.4.5 Contemporary Software Platform Trends According to Brown (2012) and Laudon and Laudon (2013), there are five major themes in contemporary software platform evolution: 1. Linux and open-source software 2. JAVA, AJAX and other web programming languages 3. Enterprise software 4. Web services and service-oriented architecture 5. Software outsourcing These will be discussed below. Regenesys Business School 66

Linux and Open-Source Software The history of Open Source Software can be traced back to the early 1990s when a young graduate student at the University of Finland wanted to build an operating system that anyone could download from the Internet. It would be a system that no one would own, and hundreds or thousands of people would work together on the creation, maintenance, and improvement. The student began working on what is now known as Linux, a Unix-like operating system (McNurlin, et al., 2014). He posted his programme to a Web page and allowed anyone to change and improve the code. The use of Linux expanded rapidly because its small size and low cost make it ideal for information appliances. It is also less crash prone than most other operating systems. This is a feature that makes it very attractive to organisations who run e-commerce Internet organisations (Torvalds: 2001). Open-source software allows free access to the source code of the software. For an ICT student at Regenesys this may be beneficial if you want to create your own computer applications, since the software is free and can be customised. The same benefits will apply to any organisation using this software. It is important to remember that Open-source software is not limited to Linux but will also comprise of applications such as the Mozilla Firefox web browser and free office suite software such as Open Office. OpenOffice.org 3 is the result of over twenty years' software engineering. Designed from the start as a single piece of software, it has a consistency other products cannot match. A completely open development process means that anyone can report bugs, request new features, or enhance the software. The result: OpenOffice.org 3 does everything you want your office software to do, the way you want it to. (OpenOffice.org) Software for the Web: JAVA, AJAX and other Web Programming Languages Short for Asynchronous JavaScript and XML, it is a term that describes a new approach to using a number of existing technologies together, including the following: HTML or XHTML, Cascading Style Sheets, JavaScript, the Document Object Model, XML, XSLT, and the XMLHttpRequest object. When these technologies are combined in the Ajax model, Web applications are able to make quick, incremental updates to the user interface without reloading the entire browser page. (Mozilla Development Centre, 2013) Java allows software developers to program in a more interactive and integrated manner over the Internet. Java is popular as it is an operating (system-independent and processor-independent) system. It can be used on multi-platforms and it reduces the cost of having to train software developers in many different languages. As an ICT student you will benefit in terms on the flexibility of Java if you programme or develop models to use in your dissertation. A major benefit to you will be that you will not need a large application programme to do a simple task. If you want to calculate simple ratios, you should simply use a Java applet instead of a spread sheet program. You would have noticed that Java is included with most Web browsers, working in the background to make it easier to accomplish tasks. Regenesys Business School 67

A new technique that enables and improves these processes is a combination of Asynchronous JavaScript and XML languages called 'Ajax' (Brown: 2012 and Laudon and Laudon, 2013). Task Questions 1. Go onto the Internet and read more about Java and Ajax on the following web site: Mozilla Development Network, 2014, Web technology for developers https://developer.mozilla.org/en/docs (Accessed on 24 January 2014) 2. Write a brief summary on the above. 3. How is this relevant for a manager in your organisation? Web Services and Service-Oriented Architecture Web services use Internet technology to link application programs together without having to create custom coding (Brown, 2012). Because they are web-based, they tend to be universally accepted by customers, suppliers, and business partners of organisations or across traditional organisational boundaries. As opposed to traditional manufacturing organisations, specifically customised production, the product would almost never be reused in generic applications. In the world of ICT, this is not always the case as Web services can be designed to have generic applications and can therefore be reused. This reduces development time and speeds up time to market. The level of serviceoriented architecture can be reused and through programmes that use Object-Orientation, the objects can be assembled in a more flexible manner. This implies that parts of the system can be reused and reworked where need be without creating a new design. Looking back at Porters Five Forces Model, we can see that this increases the number of Rival companies in this ICT market. The technology speeds up service delivery and reduces the barriers to entry. This also allows for substitutes, such as on-line organisations to enter the market. The suppliers of key technologies and ICT systems will also grow and change the supplier landscape. The Internet depends on the front-end applications drive by the (WWW) World Wide Web, which is the language that makes the Internet work. This is driven by Web Application languages, such as Hypertext mark-up language (HTML) and XHTML (Extensible Hypertext Mark-up Language). These are mostly used in graphic intense applications (McNurlin, et al., 2014: 85 115). As an MBA student at Regenesys doing this ICT module, you will need to understand that this is all part of the evolution of the Internet and that there are basically four software standards and communication protocols: XML stands for extensible Mark-up Language, which is used to describe data in Web pages and databases. SOAP stands for Simple Object Access Protocol: This allows the designed applications to exchange data and instructions. WSDL stands for Web Services Description Language: This will be used to describe the Web service so that when you design other applications these applications can link and integrate with these applications. UDDI, stands for Universal Description, Discovery, and Integration: This will be used to list the available and visible Web services in a directory so that users can find them. Regenesys Business School 68

Al of this implies that there needs to be a Web service-oriented architecture to combine the multitude of stand-alone applications into one integrated system (Laudon and Laudon, 2013). Software Outsourcing As an ICT student, you need to be aware of outsourcing software as the skills may leave the organisation. If this is not outsourced correctly, you will end up not being able to update or modify the system in future. In the earlier sections of the telecosm laws, you noted that technology is almost doubling every year. This will impact the ability to integrate current systems with future technologies if this is not part of your ICT strategy in your organisation. Major choices around operating platforms (such as Android, etc.) need to be viewed as a proper business case where your MBA integration of subjects (such as Economics, Strategy Human Resource Management and Skills) will become more significant in ensuring that your organisation remains competitive in the future. For example, open source allows easier adaptation but may not allow to be understood or correctly applied. The customisation of these open source software might require specialised skills where the customisation might not be integrated. Earlier we described how organisations were going to outside vendors to meet their hardware needs. 7.4.6 Management and ICT Integration Managing in the sixties was about structural organisations based on the industrial revolution theory of scientific management, where processes and machinery were driving organisations. For example, Henry Ford was able to produce one car every hour by setting up effective manufacturing processes and using machinery. The one downfall of this strategy was that people were not considered as being important and were often exploited. This gave rise to unionisation. In your Competitive Management Trends Module, you will study authors such as F. W. Taylor, Henry Gantt and Elton Mayo who regarded people almost as being robots and controlled them through work study and time study methods. This will also be discussed in your Financial Management Module when you look at standard costing and estimating product costs. The pressure from unions and employees gaining more skills led to management thinking's focus on the people dimension as opposed to the production dimension. This is where psychologists and sociologists started intervening in organisational design. The first major milestone was the Hawthorne experiments performed by Elton Mayo from Harvard University. Mayo studied the impact of improved working relationships between staff and management. This led us to where we are today in terms of integrating people, systems and processes within the organisation. Recently, ICT started to dominate the way people work in organisations by integrating systems such as SAP. This is an ERP system that allows people to capture data on a single database and then go through a formulised process to create knowledge that can be shared amongst employees in the organisation. It can also enhance the competitiveness of the organisation. In one of the latest modules in Regenesys, Knowledge Management, you will study this knowledge economy in more detail. Previously in this ICT module, we discussed the transformation of TPS into KMS. Regenesys Business School 69

A lot of the vision created in earlier movies by Steven Spielberg (special effects movies) has become a reality. This trend is likely to grow exponentially over the next few years. This is also evident in communication systems where for example cell phone technology has been used as a credit card with location-based technology inside it. View the video link on Walmart RFID tags. WakUpCallPage, 2013, Walmart s RFID chips, [video] http://www.youtube.com/watch?v=xonukk4wtoy (accessed 4 November 2013). Task Questions 1. Watch the video and review the impact this will have on society. 2. Is this an ethical strategy to apply? 3. What other organisations are pursuing this technology? 4. Would this type of control be good in government s hands? For example, should government be able to track your moves, your spending patterns, etc.? 5. What is the impact of this in terms of managing processes more effectively in your organisation? For example, think of managing inventory. 7.4.7 Integration of Management and ICT Challenges We have discussed the above ICT as a dominant emerging force within organisations and how this is impacting on the way in which organisations are competing and conducting business. You would have seen this in the Walmart case above. Below are some of the issues that you as an MBA delegate need to take cognisance of when integrating ICT with your strategic thinking in an organisation. This aligns to the ultimate objective of the MBA, which is to give you a holistic view as reflected in the Regenesys Integrated Leadership Model. Regenesys Business School 70

Figure 15: Regenesys Integrated Leadership Model Task Questions 1. Read the points below where we look at management challenges of integrating ICT in the workplace. 2. Reflect on how these management challenges in terms of ICT link to the above Regenesys Integrated Leadership Model. 3. Previously, you looked at ICT trends. Read the case study on the Cyborg Experiment by Professor Kevin Warwick, 2008, on the Cyborg experiment. Now watch the following video and discuss how this technology will impact the Regenesys model. 4. After watching these videos, what impact do you think this is going to have on organisations today? Which organisations will disappear and what will replace them? 5. How is this going to impact on managing people within organisations in the future? 6. Conduct a summary of the key issues noted above and link it to Regenesys Integrated Leadership Model. Regenesys Business School 71

Infonomia, 2008, Kevin Warwick, Cyborg Life [video], http://www.youtube.com/watch?v=rb_l7sy_ngi (accessed 4 November 2013). Kurzwiel, R. 2009, Ray Kurzwiel and the future of nanotechnology [video] http://bigthink.com/videos/ray-kurzweil-on-the-future-of-nanotechnology (accessed 4 November 2013). Schneppat, J, 2008, Driving with Nanotechnology on your windshield [video], http://www.youtube.com/watch?v=mp_omdhi0s8 (accessed 4 November 2013). Dealing with Platform and Infrastructure Change The rapid growth in technological innovation is changing the platforms used by ICT systems at a much more rapid pace than in the early 2000s. This can be seen in the move away from mainframes to smaller and more converged platforms. This scalability factor needs to be considered in the ICT strategy. The logic here is that organisations build smaller systems to test their capability and then as the organisation grows, the system is scaled up (McNurlin, et al., 2014). Management of Ethics and Governance The introduction of ICT has posed many ethical and moral questions around how this should be implemented into organisations. An example here would be the extent to which employees are tracked within organisations. The ICT strategy should critically evaluate the role of ethics in terms of the use and application of the ICT systems. If the ICT systems collect sensitive or confidential information, there should be sound policies and procedures in place, which are aligned to the different and relevant act to protect the data and information. The ICT infrastructure should have adequate security levels and anti-hacking protection in place to protect, preserve and ensure that the data is protected. ICT performs a critical role in organisations today, It is therefore essential that ethical sensitivity decisions and activities related to ICT. In particular organisations need to consider: The ICT role in terms of the organisations strategy and the alignment with the individual and organisational ethical issues; The ICT systems development life cycle must be aligned and integrated with ethical, economic and technological considerations made by the organisation; The ICT system must protect and preserve the organisations intellectual property issues surrounding the Information Technology and the Information Systems; The ICT strategy must be aligned to the ICT legal environment, such as, compliance to the Information Act. Disaster recovery systems should be in place for the ICT systems. Regenesys Business School 72

Making Wise Infrastructure Investments Electronic business, electronic commerce, and digitisation of the corporate world continue to grow. The Internet is touted as being 24/7, anytime, and anywhere. For that model to work, hardware, software, and data must also be available 24/7, anytime, and anywhere. Organisations are required to rethink their strategic models for creating, processing, storing, and delivering data to meet the demands of employees, customers, suppliers, and business partners. If an organisation fails to do so, they risk losing business and thousands or millions of dollars. Because of easy Internet access and competition, customers can simply go elsewhere if the organisation does not adjust to the new world. With the enforcement of the King III ICT governance standards, organisations will need to formalise their ICT strategy and implement disaster recovery and back-up strategies or the Board may be held liable for ICT disasters and data loss. This is why as an MBA student at Regenesys you need to ensure that you have the correct ICT infrastructure in place to ensure you protect your data and research. Competitive Forces Model for IT Infrastructure Investment King III requires a link between the organisations Strategy and the ICT Strategy. It requires the ICT capital and operational costs to be budgeted for. This should lead to maintaining and implementing the appropriate ICT systems and infrastructure to not forgo opportunities for new or improved products and services. By using a competitive forces model for IT infrastructure investment (Figure 16), your organisation could align its IT spending with its needs (Porter, 1998). This entails the following: Analysis of the market demand for your organisations good and services Analysis of the organisations strategic plans and budgets Analysis of the organisations ICT strategy Determine where your organisation ICT failure levels of the current technologies Benchmark against ICT best practices Laudon and Laudon (2013) are of the opinion that some of these tasks are very difficult because of the speed at which technology improvements come into the market place. Even so, it is worth the effort. Regenesys Business School 73

Figure 16: Competitive forces model for it infrastructure Internal Factors 3 Your firm's IT Strategy, Infrastructure, and Cost 4 Informa9on Technology 2 Your firm's Business Strategy Your firm's IT Services and Infrastructure 5 Compe9tor firms' IT Services 1 Market demand for your firm's customer Services, Supplier Services, and Enterprise Services 6 Compe9tor firms' IT Infrastructure Investments External Market Factors (Nikov, 2012: 536-544) Total Cost of Ownership (TCO) of Technology Assets The Total Cost of Ownership (TCO) should extend past the Rands spent on the total ICT strategy. This includes the total ICT cost, training and retention costs, the cost of communications wiring (telephone wires, fibre-optic cable, etc.) and security and access issues, etc. This must, according to King III, ensure that the organisation is able to execute and manage the essential and support functions required for ICT to deliver the strategic goals and strategy. Task Questions 1. Read the following article and critically evaluate the TCO budget spread sheet proposed in this article. Source: UNESCO, 2013, 'Deploying ICT: a practical budgeting tool based on Total Costs of Ownership (TCO) (National and / or sub-national scope' http://inesm.education.unesco.org/en/forums/deploying-ict-a-practical-budgeting-tool-basedtotal-costs-ownership-tco-national-andor-sub-n (accessed: 11 November 2013). Regenesys Business School 74

7.4.8 Database Management Principles Introduction The above sections have discussed the types of information systems. We will now focus on the information technology side of ICT. The outcome of this section is not to make you a technical expert but rather to give you an overview of the technology required to support the information systems you will use as an ICT delegate in your workplace. Database structures The following schematics will show you how databases are used within your ICT studies. You can imagine how important it is to have a database of all students with all their demographic records as well as academic records, which need to be captured, retrieved, sorted, analysed and reported on at any given point in time. This needs to be done in accordance with ICT security requirements such as effective backup systems and anti-hacking protection. In your MBA module Business Ethics and Corporate Governance, you will notice that the King III report requires the Board to have an ICT strategy with a non-executive accountable for implementation of this strategy. The rationale for this is that ICT is becoming a more dominant driver within organisations today. You have just completed questions on this, which has shown you the extent of ICT dominance. The structure of the database is shown below to allow you to understand database structures and interact with the ICT support staff within an organisation when creating databases within an organisation. The example below is typically how an education institute would structure their student database. The principles of this structure can be applied in most organisations (McNurlin, et al., 2014: Ch.5). Regenesys Business School 75

Figure 17: Student Database (Laudon and Laudon, 2010:226) The first few terms, field, record, file, database, are depicted in Figure 17, which shows the relationship between them (Laudon and Laudon, 2010:226). The database is a bottom up structured database where student details are built up into an ultimate database to show all relevant student information. You, the student will be the entity, and your subject choice will be the attribute. To understand databases, think of a manual filing system in an office: The filing cabinet is the database. The hanging files in the cabinet will be electronically compiled in the computer databases. Each student will have his or her own file. Each student file will be unique in terms of the records kept in the file (subject choice, demographic information, etc.). The records will have documents with fields you would have completed (name, subject, etc.). Regenesys Business School 76

Each word is a byte and each letter is a bit. The only difference between a manual and computer system is that the size of the office is reduced: A computer is more powerful and more capable of storing and retrieving the information at greater speeds than a manual system. Task Questions Discuss any one advantage and one disadvantage of a computerised database. Use your own example to illustrate the theory. Problems with the Traditional File Environment As early computers were limited in their ability to input, store and manipulate the data and produce useful output, the computerised databases were not very practical and were very structured with almost no flexibility. This meant that the early database systems were top-down hierarchical systems. This database structure limited the ability to search across database files and view relationships between the various files across different databases. Think about the earlier example used of the filing cabinet being the database (database). If student files for finance, academics, etc., (files) are kept in various filing cabinets, you would have to physically go to each filing cabinet and extract the relevant student file to gain an overall view of the student s records (records). Just imagine the time and effort wasted in doing this exercise. The more filing cabinets (databases), the more work and effort is required. This was to main motivation to move towards a computerised Data Based Management System (DBMS). Unfortunately the ICT database systems were limited by both the hardware and software constraints. The main constraints were computer memory, processing speed and storage space. This was further compounded by the limited integration of the various computers through computer networks. At this stage it might be a good idea to revisit the history of computers discussed earlier on in this Study Guide. Watch the videos below to gain more insight into the evolution of Databases. Knewhok, N, 2013 The evolution of Databases http://www.youtube.com/watch?v=x4tf5zrjqe0 (accessed 17 December 2013). Stetfocus1, 2012 Historical look at the types of Databases http://www.youtube.com/watch?v=ub8ldk2gmn0 (accessed 17 December 2013). Based on the above discussions and videos you will have noted that the major challenges in database design and architecture are: Data redundancy and inconsistency; program and data interdependence; lack of database design flexibility; security challenges; lack of ability to integrate with other application systems and computer applications; lack of ability to customise the database design and have relations between databases and records. These limitations can only really be overcome as the ICT becomes more advanced and more integrated. Regenesys Business School 77

This is why the challenge for many organisations is to run a shared a Data Based Management System on a shared and open platform. This will create a single view of the information across many databases, both locally and internationally (McNurlin, et al., 2014). Task Questions Do you think that databases can give an organisation a competitive advantage in the marketplace? Use your own example to argue your viewpoint. 7.4.9 The Database Approach to Data Management Database Management Systems We previously discussed the growing impact of ICT on the organisation and the need to convert data into knowledge, which is meaningful information. The major constraint in achieving this is to have a database management system, which allows integration of the ERP systems. Think about how essential a good database management system is at Regenesys to integrate all the data required by the multitude of stakeholders, all requiring different reports. A Database Management System (DBMS) is simply an application software programme. The essential difference is that DBMS software is more complicated: it permits an organisation to centralise data, manage it efficiently, and provide access to the stored data by application programs (Brown, 2012: Chapter 4). Physical views of data are often different from the logical views of the same data when they are actually being used. For example, in your MBA dissertation, you will be making decisions by using databases in Access or Excel where you are given information and are required to extract logical reports to make effective decisions. As an MBA student, you need to start preparing a database of responses to questions asked in your survey. The physical view of data will focus on where the data are physically stored in the record or in a file. The physical view is important to programmers who must manipulate the data as it is physically stored in the database. In the workplace, especially in the knowledge economy today, the speed at which decisions are made today will determine a company s competitive advantage (McNurlin, et al., 2014: Chapter 5). This knowledge relies on an effective data management system. For example, if a retailer has a large amount of information on purchases made by consumers they can model this data and perform more effective targeted advertising. As the databases become more integrated, data is shared between government organisations and suppliers to gain a better understanding of how organisations impact each other. Regenesys Business School 78

As ICT systems became more technologically advanced, databases evolved into relational database systems (RDMBS). The RDBMS is designed to store the data in tables. The data is then extracted and combined into any customisable format the user needs. The RDBMS tables are known as files; you can also have multiple tables in one file. This allowed for more effective integration of the database files and records across many different databases. This allowed organisations to view the sales across various geographical locations, per product, per sales person, etc. In turn, this created more dimensions to the information and improved the Management Information Systems (MIS) to create useful reports that could be converted into knowledge (useful information). Watch the videos below to gain more insight into the evolution of Relational Databases and then answer the task questions below. Zellers, M 2011 Introduction to Relational Databases http://www.youtube.com/watch?v=gzldqixdzhm (accessed 17 December 2013). Task Questions 1. Do you rely on information from various other MBA modules you may have completed to assist you in completing this ICT assignment? 2. List some benefits of a DBMS and its solutions for the problems of a traditional file environment. Figure 18: A relational database table (Laudon and Laudon, 2010:231) Regenesys Business School 79

Each record requires a key field, which is a critical reference point, or unique identifier (Laudon and Laudon, 2010). The best example of this is your student number on your MBA at Regenesys, or your identification number: there is only one such number per person. That explains in part why so many organisations and organisations ask for your identity number when you transact with them. A primary key is essential to create a reference point in a relational database as this is the main point of reference. This needs to be a unique reference, such as your Identity or Student number, which is unique to you only. Imagine two MBA students at Regenesys with the same student number on the same MBA, ICT module. What would happen in exams? Who would get the marks? You also require a foreign key to allow relations between tables to be set. In the customer table below the primary key is the unique customer ID. That primary key is then stored in the order table as the foreign key so that the two tables have a direct relationship. (Laudon and Laudon, 2010: 223-256). Table 5: Foreign Key Table Customer Table Order Table Field Name Description Field Name Description Customer Name Self-Explanatory Order Number Primary Key Customer Address Self-Explanatory Order Item Self-Explanatory Customer ID Primary Key Number of Items Ordered Self-Explanatory Order Number Foreign Key Customer ID Foreign Key (Laudon and Laudon, 2010: 223-256). If you create a relational database, you must to ensure that, besides having the correct primary and foreign keys, you have also defined the correct attributes (student modules, etc., for a particular entity (student) that applies only to that entity. You also need to create the smallest possible fields for each student record. For instance, you would create separate fields for a Regenesys student s first name and last name rather than a single field for the entire name. This will speed up the sort and search time to manipulate the records when you are creating reports (Laudon and Laudon, 2010: 223-256). Object-Oriented DBMS Many organisations are moving away from strictly text-based database systems. Data as objects can be pictures, groups of text, voice, and audio. Object-oriented databases bring the various objects from many different sources and get them working together. An object can be a person, etc. If you combine the attributes and capabilities of a truly relational DBMS and an effectively designed object-oriented database, you can create an object-relational DBMS. Regenesys Business School 80

The next time you go to your doctor s room, you might see a good example of an object-oriented database management system. Many sophisticated medical database programs include a traditional text-based record of your treatment history, and will also include objects such as computer-stored X-ray films, and maybe a digital photograph of the inside of your mouth. All these objects are maintained as a database record. When you visit your doctor, they can retrieve your record on the computer terminal, update your treatment history, and take new X-rays and a new digital photo, all on the computer. On the screen, the doctor can compare last year s X-rays with this year s, the doctor may be linked to the internet and collaborate with a variety of experts through the Web 2.0 applications. These are usually Blogs, wikis, and social networking and they are emerging as powerful tools to boost communication and productivity in the workplace. They are tools that even the doctor may use well. The doctor can use wikis to store information and share memos. The doctor may use social networking to help patients communicate better with each other and the doctor. The doctor may use corporate wikis to collaborate on medical trends related to meetings; to support brainstorming sessions, and to develop presentations (Laudon and Laudon, 2010: 223-256). Watch the video case study below on what we have discussed above to contextualise the use of ICT in the Medical Sector. Norton, L 2013, How technology is evolving to help doctors keep up [video], http://www.youtube.com/watch?v=fkm4yc64tiw (accessed 18 December 2013). Now watch the video below. Discuss how object orientated databases can influence the speed at which strategic decisions are made and how they can speed up operations in your organisation. Study Yaar.com, 2012, Object Orientated Database 1 Introduction to OIDs [video], http://www.youtube.com/watch?v=5zmvvrpnpha (accessed 4 November 2013). Capabilities of Database Management Systems As an ICT student, you need to understand the capabilities of these database management systems as this is will allow you to create knowledge and then wisdom to make more effective and efficient strategic decisions. There are three important capabilities of DBMS that traditional file environments lack: Data definition: In Regenesys, the ICT student addresses may differ from their invoicing address. This must be taken into account when ensuring that that all database users are aligned. Think of it this way: Marketing is speaking French, Production is speaking German, and Human Resources is speaking Japanese. They are all saying the same thing, but it is very difficult for them to understand each other. That is when it becomes critical to involve users in the development of the data definitions. Regenesys Business School 81

Data dictionary: Each data element or field should be carefully analysed when the database is first built or as the elements are later added. Determine what each element will be used for, who will be the primary user, and how it fits into the overall scheme of things. Then write down all the element s characteristics and make them easily available to all users. This is one of the most important steps in creating a good database. Each data definition is then included in the data dictionary (Laudon and Laudon, 2010: 223-256). Why is it so important to document the data dictionary? Let us say Suzy, who was in on the initial design and building of the database, moves on and Joe takes her place. It may not be so apparent to him what all the data elements really mean, and he can easily make mistakes from not knowing or understanding the correct use of the data. He will apply his own interpretation, which may or may not be correct. Once again, it ultimately comes down to a persware problem. Throughout this Study Guide, you would have noticed the integration between people, technology and processes that have become interdependent. This needs to be factored back to the Regenesys Integrated Leadership Model. Users and programmers can consult the data dictionary to determine what data elements are available before they create new ones that are the same or similar to those already in the data dictionary. This can eliminate data redundancy and inconsistency (McNurlin, et al., 2014: Chapter 5). Querying and Reporting A database system is ultimately used for collecting data, sorting, storing, manipulating and then reporting on the data to create information that is meaningful for making effective and efficient decisions. In order to query and report effectively and efficiently, you will need to use a Data Manipulation Language to manipulate the data within the database to produce useful information in the form of reports. You will have noticed in many organisations that SQL (Structured Query Language) seems to be the most commonly used language today and is now also embedded in the desktop applications such as Microsoft Access (Laudon and Laudon, 2013). Designing Databases As an MBA delegate, you will need to liaise with the ICT experts to visualise how data needs to be captured to generate the correct information. This information could be organised in a more structured manner for more logical decisions to be made in your organisation. Distributing Databases As discussed above, you would have understood that having relational databases with the advent of object orientated databases has allowed for more distributed databases throughout the organisation (McNurlin, et al., 2014: Chapter 5). Regenesys Business School 82

7.4.10 Database Warehouses In your MBA studies and throughout your organisation, you would have noticed a dependency on databases to restore and retrieve information. This is critical for completing your assignments and likewise critical for organisations to implement strategies. Living in the knowledge economy today, organisations go to great lengths to collect and store information about their suppliers, barriers to entry, substitutes, rivals and buyers. This enhances the organisation s strategic advantage in the market place. As organisations want and need more information about their organisation, their products, and their customers, the concept of data warehousing (Figure 19) has become very popular. Remember those islands of information we keep talking about? Unfortunately, too many of them have proliferated over the years and now organisations are trying to rein them in by using data warehousing. What is a Data Warehouse? Think of an inventory store in a retail environment. There are two options to structure the store. Option 1 would be to have fixed racks that are not able to move. The second option is to have racks on wheels creating a flexible environment. This is essentially what a data warehouse is, a database where you can decide how to layout the data. For example, refer to Oracle s website. Handsonerp, 2009, Introduction to Oracle Database Administration Oracle DBA [video], http://www.youtube.com/watch?v=14y6mveaicw (accessed 4 November 2013). Think of a physical warehouse which holds a large quantity of items, so do data ware houses which are simply large computer files that store old and new data about anything and everything that an organisation wants to maintain information on. Below you will see the components of the data warehouse and this would have been discussed in the video you have just watched. In your various MBA modules, you would have noticed how the functions in an organisation need to be integrated into a single data warehouse if effective and efficient decisions are to be made in the organisation. For this reason organisations need to create a more unified database management system. Regenesys Business School 83

Figure 19: Components of a data warehouse (Laudon and Laudon, 2010:240) As Figure 19 shows, the data come from a variety of sources, both internal and external to the organisation and are then stored together in a data warehouse from which they can be accessed and analysed to fit the user s needs (Laudon and Laudon, 2010: 223-256). Data Marts Since a data warehouse can become very cumbersome due to its size and large volumes of data, the organisation can overcome this limitation by sub-dividing the data and information into smaller groups, which are referred to as data marts. This is the same a sub-dividing a physical warehouse into sub-sections per product or type of raw material. This is used to create more logic within the system and to speed up the data base system (McNurlin, et al., 2014: Chapter 5). Business Intelligence, Multidimensional Data Analysis, and Data Mining As an MBA student you have most likely seen that organisations collect large volumes of data and information. Using the correct data base application and data base management tools, an organisation can use the data it has captured and stored to develop effective reports and thereby use Decision and Executive Support Systems to formulate more effective and sustainable competitive strategies. This was argued by Porter and Brown and was previously discussed. Business intelligence provides quantitative methods of analysing customer trends and buying requirements. This is what we have discussed earlier in the Knowledge Economy (McNurlin, et al., 2014: Chapter 5). Elaborate on the following benefits of using business intelligence: 1. Capability to a mass of information. 2. Development of knowledge about customers, competitors, and internal operations. 3. Changing decision-making behaviour to achieve higher profitability. Regenesys Business School 84

The above information that we have covered on databases is leading to business intelligence. Integrated databases will lead to integrated data and information, which can be mined and modelled to create scenarios and strategies for organisations. This is why you will notice the growth for positions in data administrators and data mining experts. Online Analytical Processing (OLAP) As technology improves, so does our ability to manipulate information maintained in databases. In theory, it is easy to change data to fit your needs. Figure 20: Business intelligence (Laudon and Laudon, 2010:241) Data Mining Data mining technology allows a digital organisation to get more information than ever before from its data. Task Questions 1. Refer to the Regenesys Integrated Leadership Model and discuss the impact of having accurate, reliable, validated and appropriate data, which is integrated throughout the organisation on this model. Regenesys Business School 85

7.4.11 Managing Data Resources At the beginning we said that as many users as possible should be brought together to plan the database. Data mining requires dealing with very sensitive information, which if it falls into the wrong hands may lead to an organisation s failure. For example, if one cellular network is able to access clients from another network, this could have serious strategic consequences for the organisation. For this reason, you need to be able to create an ICT policy in your organisation (McNurlin, et al., 2014: Chapter 5). Establishing an ICT Policy A well-written ICT policy outlines the rules for using this important resource, including how it will be shared, maintained, distributed, and updated. We concluded above that King III requires organisations to develop and maintain an ICT strategy with appropriate ICT policies. This has now become the sole responsibility of the Board. A data administration function, reporting to senior management, emphasises the importance of this resource. This function helps to define and structure the information requirements for the entire organisation to ensure that it receives the attention it deserves (McNurlin, et al., 2014: Chapter 5). Data administration is responsible for: Developing information policies for the ICT systems and users of the systems Planning for data structures, capturing, validating, mining, etc., to endure the data leads to effective information structuring and useful reports Overseeing logical database design to ensure the information in meaningfully clustered Developing data dictionaries to ensure correct structural design for the database Monitoring the capturing, usage, integrity and security of the data Data governance therefore is an integrated system of policies and processes for employing data within organisations. Users will be required to assume more responsibility for accessing data through query languages, such as SQL, if they understand the structure of the database. Users need to understand the role they play in treating data and information as an essential organisational resource. 1. Search the website for relevant ICT policies. 2. Review these ICT policies to identify principles and factors that would assist you to develop or review the ICT policy in your organisation. Regenesys Business School 86

7.5 OPERATIONAL EXCELLENCE AND CUSTOMER INTIMACY Timeframe: Learning Outcomes: 16 hours Conceptualise, develop and implement a technology-driven customer relations strategy To understand ERP and CRM systems for a management perspective Justify the potential use and application of databases, call-centres and web-based technologies in improving customer relations management (CRM) Chapter in textbook: Chapter 6, 7 and 8 These three chapters are related to each other. Additional sources to consult: Section Overview Westermeier, J.T., Plave, L.J. 2004. E-Business: the e-business legal survival kit. Piper Rudnick: Washington In this section, we will look at how important it is for information to be available in an enterprise. The use of technology to inform the customer relations strategy will also be examined. The value of ERP and CRM systems for managers and technologies to improve CRM will finally be explored. 7.5.1 Enterprise Systems In the previous sections we looked at enterprise resource planning and discovered the importance of efficiently and effectively maintaining data that organisations can develop into useful information. We can now say that it is best to have one database that supplies information where and when necessary across functional lines. What are Enterprise Systems? Enterprise systems aim to correct the problem of organisations not having integrated information. Also known as enterprise resource planning (ERP) systems, their main goal is to bridge the communication gap among all departments and all users of information within an organisation. This is linked to the Value Chain s secondary activities as proposed by Porter. Enterprise Software Enterprise software, such as SAP allows every functional area to share every process and every piece of data. A business can select specific processes in specific areas but eventually everything the organisation does will be shared across all lines. The software uses predefined processes and requires the organisation to adapt itself to the software. While many organisations may hesitate to change, the software is designed around the best practices for that particular function. The organisation can benefit from using the most successful solutions in a particular industry to help achieve its objectives. The software helps the organisation automate many of the steps taken from industry-wide best practices instead of having to do everything manually. Furthermore, the greatest benefits of the software are that it helps employees remember all of the necessary steps in a process. Regenesys Business School 87

Likewise, it provides the data to all who need it. In supporting an ICT student at Regenesys, the use of ERP software assists in supporting the student and integrating service delivery through seamless integration between finance, HRM, student results, the Regenesys portal, etc. Task Questions 1. Describe the relationships between TPS, MIS, DSS, and ESS. 2. Why is it important for a manager to understand these inter-relationships? 7.5.2 Supply Chain Management Systems According to Brown (2012), a supply chain includes all of the internal functions of an organisation, along with suppliers, distributors, retailers, and customers. Porter (1998) explains the Value Chain as an integration of the primary activities and the secondary activities being intertwined and as relying on information from each other to effectively meet the organisations goals and objectives. Porter (1998) also argues that it may be helpful to break the supply chain into three distinct groups (McNurlin, et al., 2014): Upstream: suppliers that deal directly with a manufacturer and their suppliers Downstream: distributors and those who deliver products to customers Internally: employees who transform materials, components, and services into actual products Information Systems and Supply Chain Management Brown (2012) argues that data is the foundation for effective and efficient supply and value chains. Lack of or faulty information can delay an entire chain from getting supplies into the manufacturing process and/or getting the final product to the customer. In a perfect world, just-in-time strategies for ordering and delivering supplies would be an ordinary process. Unfortunately, we do not live in a perfect world. This is often called expected value with perfect information. Natural disasters and dockworker strikes can disrupt even the most carefully planned supply chains in an instant. Organisations have to plan as best they can around these kinds of events but they cannot foresee every problem. Regenesys Business School 88

Supply Chain Management Software The main ICT systems in Supply Chain Management are systems that can integrate the primary and secondary activities in the value chain proposed by Porter and discussed in detail earlier in this Study Guide. The IC systems integrate not only the organisation's value chain, but also that of the organisation's suppliers, buyers and complementors. Watch the following video and see how Supply Chain Management Software can assist the value chain in an organisation. CSAP, 2013 SAP Supply Chain Management: Overview Video [video], http://www.youtube.com/watch?v=tzkmiwovhu0 (accessed 4 November 2013). Global Supply Chains and the Internet The islands of information that we have frequently mentioned do not exist just inside the corporation but also up and down the supply chain. Adapting the supply chain software to the Internet and opening up information to suppliers, logistical experts, and distributors can greatly help an organisation to reduce costs and ensure that products are delivered when needed to the right location. The same type of internal collaboration that organisations can generate through intranets can be extended to supply chain partners through extranets. Suppliers can log on to an organisation s extranet site and review the following week s production schedule. The supplier can ensure that enough production supplies are delivered to a manufacturer without over- or under-extending itself. Changes to the production schedule can be communicated easier to suppliers through Internet-enabled applications. Long-term forecasts can be posted to an extranet and schedules adjusted. Figure 21 demonstrates how intranets and the extranet provide the necessary communication channels to improve supply chain management. Regenesys Business School 89

Figure 21: Intranets and Extranets for Supply Chain Management (Laudon and Laudon, 2010:366) Global Supply Chain Issues Some of the issues that organisations will face if they choose to use global supply chains are listed below: Greater geographic distances and time differences Additional costs for transportation, inventory, and local taxes and fees Varying performance standards Foreign government regulations Cultural differences (McNurlin, et al., 2014) Demand-Driven Supply Chains Traditionally, customers purchase whatever products are available. While colours, sizes, and prices may vary somewhat, generally a manufacturer decides what to produce by forecasting what the potential demand might be through a push-based model. That is quickly changing to a pullbased model in which the customer tells the manufacturer ahead of time what he/she wants to buy. One of the best examples of this new pull-based model is Dell Computer s build-to-order business model. Dell does not build a computer until it receives a customer order. Then it builds the computer to the customer s specifications. Regenesys Business School 90

Figure 22 below shows the differences between the push-based and pull-based supply chain models. Figure 22: Push-Versus Pull-Based Supply Chain Models (Laudon and Laudon, 2010: 367) Automobile manufacturers are also adopting pull-based modelling for their customers. This system utilises an ERP systems to link in the total supply chain and then to create a value chain and value web through using ICT to collaborate and share information. This information sharing and collaboration creates a streamlined process, which in turn creates efficiency and effectiveness throughout the entire industry. See the collaboration in Figure 23 below. Figure 23: The Future Internet Driven Supply Chain (Laudon and Laudon, 2010: 367) Regenesys Business School 91

7.5.3 Customer Relationship Management System Brown (2102: 672) views a Customer Relationship Management System as being a computer application that attempts to provide an integrated approach to all aspects of integration an organisation has with its customers. In terms of Regenesys, the CRM system will include: Marketing, sales, student support, corporate support, after-sales support, the portal, etc. The goal of Customer Relationship Management Systems is to optimise the following: Revenue within the organisation -- by client driven ICT collaboration systems Profitability -- by utilising the client driven ICT collaboration systems Customer satisfaction and customer retention -- by utilising client driven ICT collaboration systems CRM systems gather customer information from all departments of an organisation. These CRM systems then consolidate data to create knowledge and predictions on clients' future needs. By offering a consolidated viewpoint of the customer to these clients' needs; an organisation can cater to the customer that offers the most profitability. Watch the following video and see how CRM Software can assist an organisation. Eli the Computer Guy, 2013 CRM Software Introduction [video], http://www.youtube.com/watch?v=oiytq_tq0dk (accessed 4 November 2013). CRM Software CRM application software ranges in size and complexity, which makes it possible for an organisation to select the type of software it needs the most. Partner relationship management systems are a reflection of internal customer relationship management systems but extend past the immediate borders of an organisation to its selling partners. The model below, proposed by Laudon and Laudon (2010:367), depicts the following common capabilities of CRM software: Sales force automation: The CRM system provides sales staff with the relevant information concerning the most profitable customer to focus on, etc. This, in turn, will reduce the cost per sale for acquiring new customers and retaining old ones. Customer service: CRM systems allow for data to be gathered from multiple sources to have integrated information readily available across organisational functions so that data is inputted only once. Marketing: The CRM system will enable cross-selling, up-selling, and bundling through better analysis of customer data. Regenesys Business School 92

Figure 24: CRM Software Capabilities (Laudon and Laudon, 2010: 373) Operational and Analytical CRM Operational CRM includes everything an organisation should provide those employees who interface directly or indirectly with the customer: The sales force, call centres, and support activities. Managers and decision makers use the analytical CRM to help them improve business performance. The analytical CRM uses data from the operational CRM and provides managers with the opportunity to target smaller, specific customer groups or market segmentation. Rather than trying to blanket a huge group of potential customers, many of whom are not interested, managers use the analytical CRM to focus their efforts on those customers who can offer the most profit at the least cost (Laudon and Laudon, 2010: 367). One of the most important benefits of analytical CRM is the ability to determine the customer lifetime value (CLTV). It costs six times more to gain a new customer than to keep an old one. By measuring the CLTV of customers, organisations can calculate customer profitability and determine which customers they should cater to (Laudon and Laudon, 2010). Regenesys Business School 93

Business Value of Customer Relationship Management Systems CRM systems can also help reduce the customer churn rate and identify which customers are most profitable. Hopefully CRM will help them discover which half of the ad budget is wasted. Once again, the benefits of using CRM systems are worth the challenges you will face. Benefits: Increased customer satisfaction Reduced marketing costs More effective marketing Lower costs for customer acquisition and retention Increased sales revenue Better response to customer needs Customer relationship management systems allow an organisation to focus all of its energy and attention to develop profitable customers and to forego the unprofitable ones. Useful information produced by CRM systems allows organisations to improve business performance while reducing costs associated with gaining and retaining customers. Information can be shared internally and externally (McNurlin, et al., 2014). 7.5.4 Enterprise Applications: New Opportunities and Challenges Before implementing enterprise application systems, organisations need a very clear picture of where they are now and where they want to go. Organisations must decide which processes provide the most value and which processes need the most improvement. Furthermore, the organisation must allocate the organisation resources where they are most needed. Enterprise Application Challenges The return on investment to organisations that implement enterprise systems can be enormous in terms of enhanced information between suppliers, employees, customers, and business partners (Laudon and Laudon, 2010: 367): Challenging implementation: Enterprise Resources Planning systems (ERP), inclusive of Customer Relationship Management Systems (CRM), involve the integration of all the departments within the organisation. Based on the earlier discussions around the evolution of ICT and Databases, many organisations will still be using fragmented, stand-alone systems. These will need to be integrated into one single ERP system. This often requires a structural change within organisations and the way they deal with suppliers and customers. This implies that the organisational structure and culture will change. As with any change process, there will be those who will support the changes and those who will resist the change. This will require a change management intervention. People will need to be trained, and processes and systems will have to be adapted. This all puts more pressure on the organisation and the costs to implement the ERP system. But in the end Regenesys Business School 94

organisations such SAP systems and many others argue that the benefits will outweigh the costs. Increased capital and operational expenditure to gain future benefits: The Hardware and Software is costly and needs to be capitalised. This involves drafting a detailed capital budget to determine the Net Present Value, Pay-Back Period, Internal Rate of Return and The Accounting Rate of Return. If you have completed the Regenesys MBA module in Financial Management, you would be familiar with these calculations. Brown (2012) and Laudon and Laudon (2013) are of the opinion that on average, it will take three to five years to fully implement an ERP system. Data Management systems: The key requirement as discussed earlier in the Study Guide, is that the data needs to be accurate, reliable, precise, correct, and up-to-date. From an ERP perspective, data needs to be captured on a single database that can be data-mined to extract useful reports. Inflexibility of customisation: As discussed above, ERP systems integrate the complete organisation. As such, any change made after implementation will impact on the entire systems. Next-Generation Enterprise Applications According to Brown (2012: Chapter 7), organisations get more comfortable with supply chain management and customer relationship management programs, and therefore realise the importance of branching out to enterprise solutions, enterprise suites, or e-business suites. Software manufacturers are creating these programs and ensuring that organisations can integrate data more easily with customers, suppliers, and business partners. We discussed open source and on-demand software earlier. Even though they are still in the early stages of development, it should not surprise you to learn that they are being developed for enterprise applications. Small- and medium-size organisations are the most likely ones to follow this path because it is more cost effective. Web 2.0 services that we described before are also becoming integral parts of enterprise software. Web 2.0 is a loosely defined intersection of web application features that facilitate participatory information sharing, interoperability, user-cantered design and collaboration on the World Wide Web. A Web 2.0 site allows users to interact and collaborate with each other in a social media dialogue as creators (prosumers) of user-generated content in a virtual community. This is in contrast to websites where users (consumers) are limited to passive viewing of content that was created for them (McNurlin, et al., 2014: Chapter 5). Examples of Web 2.0 include social networking sites, blogs, wikis, video sharing sites, hosted, web applications, mash-ups and folksonomies. Businesses use social networking sites to harvest a vast amount of information about users and their preferences. This is used for many different products and services and to create carefully targeted promotions. Businesses use these sites to interact with potential customers (Brown, 2012: Chapter 7). Regenesys Business School 95

Watch the following video and see how Next Generation Enterprise Applications can assist an organisation. Layer7tech, 2012 How to make your Enterprise Applications mobile ready [video], http://www.youtube.com/watch?v=eek6eud35ye (accessed 17 December 2013). Service Platforms At Regenesys we have been using service platforms to help provide the integration. Service platforms bring together all the applications used in all the organisation's functions, units, or partners and give customers, employees, managers, and external partners a consolidated view of the firm. Rather than implementing all new software applications, some organisations choose to use middleware, XML, and Web services to tie systems together. Regenesys has placed a portal front on the systems and just about everyone can access the information cheaper, faster, and easier (McNurlin, et al., 2014). Task Questions 1. Research either Dell Corporation or Amazon.com and critically review how ICT has impacted on their supply chain and the way they have improved their CRM systems. 2. Identify weaknesses in the way they use ICT to for their CRM systems and recommend solutions to address these weaknesses. 3. What can you learn from these organisations that you can apply in your own organisation? 4. Develop a model on how to use and/or introduce ICT innovations to improve your CRM strategy that you can present to senior executives in your organisation. Regenesys Business School 96

7.6 E-COMMERCE DIGITAL MARKETS, DIGITAL GOODS Timeframe: Learning Outcomes: Chapter in recommended textbook: Additional sources to consult: Section Overview 16 hours To understand the impact of the internet on people and organisations To evaluate and different types of digital and on-line strategies To understand Digital Business Models Chapter 6 and 7 are related chapters Futher, S.H. 2003. A strategy for the implementation of e-business and e- Commerce to achieve a competitive advantage in the textile industry. Master Degree: Port Elizabeth Technikon This section explores the impact of internet on people and organisations. 7.6.1 Introduction With the advent of the Internet, organisations have been able to reach consumers all around the world as long provided they are connected to the Internet. This has changed the organisation s strategy, as there are more and different strategies that can be adopted. We can this change in the number of on-line organisations that can offer products and services all around the world where people have access to the Internet. These products can be offered 24/7 and in a virtual location without bricks and mortar buildings. 7.6.2 Electronic Commerce and the Internet E-Commerce Today The Internet was developed by the USA military to transfer information between computers. After being taken over by private organisations the Internet became a tool for e-commerce. This was simply a mechanism to transfer money between organisations, customers and banks. As the World Wide Web (WWW), which creates applications to make the Internet more useful, became more powerful through HTML application languages, the Internet started to become a business tool. From here e-commerce originated in the 1990 s and this allowed organisations to create web sites and portals to gather information, advertise products and services, and trade over the Internet. As a result, many typical business functions became available on the Internet. Services such as on-line learning and on-line training were started. The Internet has also proved to be the best vehicle for e-commerce and e-business, due to its open standards and flexible structure. Regenesys Business School 97

As an MBA student on this ICT module you will notice that the Internet has allowed for simple and seamless interaction between organisations to Government, suppliers, consumers and various other role-players in the marketplace. The challenge for organisations, if they want to become sustainable in the marketplace, is to make their organisation accessible, easy to contact and trade with, reliable and cost effective, reputable, consistent and well known Why E-commerce is Different Ubiquity: 24/7 365 days a year, anytime, anywhere. Global Reach: The Internet opens markets to new customers. Universal standards: One of the primary reasons e-commerce has grown so quickly and has become so widespread is due to the open and universal standards upon which the technology is built. It is flexible and reliable through the foundations of the military design standards interwoven into its design architecture. Richness: The richness and quality of information available to customers, coupled with information that merchants are able to collect about them, is opening up new opportunities for both organisations and consumers. Interactivity: E-commerce is interactive as there are many chat pages, RSS feeds and applications to allow this instant 24/7 global interaction. Information Density: The Internet provides information density like no other medium. Personalisation/Customisation: That same relationship can now be extended to the Internet through a variety of personalisation and customisation technologies. Interactivity, richness, information density, and universal standards help make it possible. Social Technology: User Content Generation and Social Networking: Social networks are no longer limited to those people living in your immediate, physical neighbourhood or even the same town or city. Your social network can now extend to all four corners of the world. Users like video, audio, graphics, and pictures are generating more and more content. (Laudon and Laudon, 2013) Key Concepts in e-commerce: Digital Markets and Digital Goods in a Global Marketplace Disintermediation This involves the removal of the supply chain between the supplier and the consumer, also commonly referred to as the middleman. By reducing the middlemen, organisations have increased their profits while simultaneously reducing their prices. Examples of this would be Amazon.com and Dell computers who sell directly to the end users. Regenesys Business School 98

Digital Goods Laudon and Laudon (2010: 399) are of the opinion that because a product can be digitised, they can be sold and distributed on the Internet. This is what has happened to textbooks that are converted into digital books (e-books) that are sold by book suppliers directly to the end consumers. This has also led to complementors creating products such as the Kindle Reader to download and read such digital books. This is further discussed by Laudon and Laudon in Table 6 below, which shows how the Internet changes the costs of digital goods versus traditional goods. Table 6: How the Internet changes the markets for digital goods Digital Goods Traditional Goods Marginal cost/unit Zero Greater than zero, high Cost of production High (most of the cost) Variable Copying cost Approximately () Greater than zero, high Distribution delivery cost Low High Inventory cost Low High Marketing cost Variable Variable Pricing More variable (bundling, random pricing games) Fixed, based on unit costs (Laudon and Laudon, 2010: 399) Task Questions 1. Refer to the table above and see if you agree with the comparisons made between Traditional Goods and Digital Goods. Use the Digital books discussed above as an example. 2. How is this relevant for your organisation? Communication and Social Networking The Internet has also allowed organisations and consumers to establish new types of relationships not previously possible. That is richness and reach that neither the consumer nor the business was ever able to establish before the Internet. People tend to be social beings so it is not surprising to find they are using the Internet to fulfil their need to connect with other people socially and professionally. Social networking sites such as MySpace.com, Linkedin and Facebook.com allow people to meet one another and make new friends, search for new social groups, new opportunities and easily exchange information. This network spreads easily and quickly with a larger circle of people than through any other medium. Other sites allow users to engage in social shopping a twist on traditional trips to the mall with friends. While some of these sites pose slight personal danger if misused, they fulfil the basic need people have to communicate with others (McNurlin, et al., 2014). Regenesys Business School 99

Watch the following video and see the impact of the Social Network. Reznor, T, 2013 The Social Network [video], http://www.youtube.com/watch?v=82evbzdtugk (accessed 18 December 2013). Digital Content, Entertainment, and Services The key factor is that if it can be digitised then you can sell, buy and distribution through the Internet. Think of how this has changed the media industry and printing industry for a paper based to a digitally paperless industry. Now this industry can react faster to stories, upload that story while it happens and use a vast array of social media to distribute the message. They can use Facebook, Twitter, BBM, Podcasts and a wide variety of social media to provide accurate, realtime stories as they break. If you use a portal website such as Google.com as the first site up on your browser, it can store and assist you to select your preferences. Facebook and Google.com track your preferences through, software and determine that you much prefer music sites instead of gardening sites. Therefore, ads appearing on the pages will usually direct you to the relevant interest you have, that is, latest offerings of music. Some sites gather information from various sources and offer it to you in a consolidated format. These online syndicators relieve you from having to access many different sites to get the information you want. E-Bay is called the biggest garage sale in the world. It would be impossible for this type of dynamic pricing business to exist without the Internet (Laudon and Laudon, 2013). Watch the following video and see how you can use Facebook to advertise on. Syncaps, 2012 Always On Refresh your 2013 Facebook Ads Strategy [video], http://www.youtube.com/watch?v=ndt9lt8ebos (accessed 18 December 2013). After watch the video above, answer the questions below. Task Questions 1. How can the Internet facilitate sales and marketing to individual customers? 2. Describe the role played by Web personalisation market place? 3. Identify the key learning points and evaluate how these are relevant for your organisation. Regenesys Business School 100

7.6.3 Electronic Business As an ICT MBA student you will be faced with many electronic business strategies to review. You will be focused on understanding how the Internet can be used to assist organisations to market and support their goods or services. You need to understand that in the Strategic Management Module you are taught that a business model is simply the method of doing business by which the organisation will make a profit with a view to sustain itself -- that is, generate revenue. The business model is the business blueprint of how the organisation intends to make a profit and how it will position itself within the value chain. As ICT evolves and becomes more powerful, so too will Internet commerce become more pervasive. This will lead to new business models, as organisations will need to adapt to survive. This creates new thinking and paradigms around Business Models. Watch the following video and see how Nokia created a new business model. GameBean, 2012 History of Nokia Mobile Phones [video], http://www.youtube.com/watch?v=hiykpzf7ps0 (accessed 18 December 2013). As an MBA delegate you will also need to consider using and reinventing some of the more popular tried-and-true models. A good example of this is Auctions as they have been used since the early trading years and still used extensively today. Think of the Agricultural sector, which is said to have one of the oldest forms of brokering. Auctions have been widely used throughout the world to set prices for such items as agricultural commodities. This is also applied in the financial sector, for selling and buying of financial instruments such as shares and bonds. The Internet has adopted this business model and has made it applicability to a wide range of goods and services. The most popular business models used today are: Business-to-Government (B2G), Business-to- Business (B2B), Business-to-Consumer (B2C), or Consumer-to-Consumer (C2C) (McNurlin, et al., 2014). During the years, more Internet based business models have evolved. As an MBA student doing this ICT module you need to understand these models and how they can be used within organisations. These are discussed below: The Advertising Model is a web based advertising model, which is based on the marketing and promotional mixes you have studied in the MBA marketing module. This is simply an existing business model, which extends the traditional media broadcast model into a digital broadcasting business model. This implies that the broadcaster will be the web site, which provides the content and services. Regenesys could advertise for other organisations on their web page / portal and charge a fee for doing this. The adverts may be on the web pages themselves as static adverts or even as pop-ups and banner adverts. You need to be aware that this advertising business model works best when the volume of viewer traffic is large or the advert and web site are specifically and well targeted. Regenesys Business School 101

The Informediary Model is typically applied where the data about consumers and their consumption habits are very valuable, especially when that information needs to focus on a specific target market. Facebook is looking at the Business Model to be used in 2014 as it can provide an excellent fit between the user s profiles and shopping purchases. This type of date is invaluable for retailers. The Manufacturer or Direct Model states that the manufacturer or "direct model" is where the manufacturer sells to the consumers directly through their Internet web site. The manufacturer business model is usually focused on the organisation wanting to gain efficiency and improved customer service with a better understanding of customer preferences. The model also improves the profitability of the organisation as the number of intermediaries is reduced in the supply chain. The Affiliate Model focuses on using financial incentives to drive higher volumes of traffic to one site by creating purchase opportunities, with incentives, wherever people may be surfing the Internet. This affiliate s business model will focus on providing a purchase-point click-through to the merchant. Practical applications of this model may include innovations such as: banner exchanges, pay-per-click business revenue (also revenue sharing) generating models. A very popular business model is the Subscription Model, where users will typically pay a subscription fee to access the service. The business model may vary in the levels of fees and services. This implies that there may be a basic, intermediate and advanced subscription fee with various levels of services per level. In your MBA you will find that there are different subscription fees for accessing different types of detailed articles and research studies available on the Internet. The Utility Model is based on monitoring and metering usage, or introducing a "pay as you use" approach. As an MBA student you may decide to pay only for the articles you use or need to purchase. The other option as an MBA student is to subscribe to electronic journals on a yearly basis or a metered basis where you get a fixed number of articles to use per year. If you do not use all the articles allocated for the year, you will lose them after the end of the subscription year. (McNurlin, et al., 2014) 7.6.4 M-Commerce M-Commerce is an extension of e-commerce and simply implies that the technology to be used will be hand-held wireless devices, which will be used to communicate, interact, and transact through a suitable and reliable connection to the Internet. As a Regenesys MBA ICT delegate, you will see many of your classmates or people in your organisation with devices like the ipad, iphone and Android platform. They conduct transactions and buy and sell goods and services, as well as communicating with this technology. Some common applications of M-Commerce are: Mobile Banking, Mobile ticketing, Mobile Content Delivery, Mobile-based services. These service all allow the users of this technology to have more services where and when they want it (McNurlin, et al., 2014). Regenesys Business School 102

BBC, 2011, BBC Documentary, Steve Jobs The Billion Dollar Hippy [video], http://www.youtube.com/watch?v=oc3qftgeoge (accessed 4 November 2013) Empowerment High Performance Centre, 2013, Pirates of Silicon Valley the Documentary [video] http://www.youtube.com/watch?v=gqfysvxhzos (4 November 2013). Osorio, S, 2013, Mark Zuckerberg The Real Face Behind Facebook [video], http://www.youtube.com/watch?v=u6akok7bupg (18 December 2013). Weinman, E, 2013 Mobile Commerce World 2013 Overview [video], http://www.youtube.com/watch?v=iasdvundd7q (18 December 2013). Task Questions 1. Watch the three videos above. 2. Based on all the reading that you have done in this study guide, review how ICT has evolved to change the way organisations do business today. What do you think would be the next big ICT revolution? Motivate your answer. 3. Research social media organisations such as Facebook and Twitter and critically compare their strategic application of ICT as compared to the previous two movies. 4. Identify the key learning points and evaluate how these are relevant for your organisation. Regenesys Business School 103

8 QUESTIONS AND ANSWERS Evaluate the role of information systems in today s competitive business environment. Information systems have become essential for helping organisations deal with changes in global economies and the business enterprise. Information systems provide organisations with communication and analytic tools for conducting trade and managing organisations on a global scale. Information systems are the foundation of new knowledge-based products and services in knowledge economies and help organisations manage their knowledge assets. Information systems make it possible for organisations to adopt flatter, more decentralised structures and more flexible arrangements of employees and management. Organisations are trying to become more competitive and efficient by transforming themselves into digital organisations where nearly all core business processes and relationships with customers, suppliers, and employees are digitally enabled. Define an information system from both a technical and business perspective and distinguish between computer literacy and information systems literacy The purpose of a CBIS is to collect, store, and disseminate information from an organisation s environment and internal operations to support organisational functions and decision making, communication, coordination, control, analysis, and visualisation. Information systems transform raw data into useful information through three basic activities: input, processing, and output. From a business perspective, an information system represents an organisational and management solution, based on information technology, to a challenge posed by the environment. Computer literacy focuses on how computer-based technologies work. Information systems literacy requires an understanding of the organisational and management dimensions of information systems and the technical dimensions addressed by computer literacy. Information systems literacy draws on both technical and behavioural approaches to studying information systems. Both perspectives can be combined into a socio-technical approach to systems. Explain how information systems are transforming organisations and management. The kinds of systems built today are very important for the organisation s overall performance. Information systems drive both daily operations and organisational strategy. Powerful computers, software, and networks, including the Internet, have helped organisations become more flexible, eliminate layers of management, separate work from location, and restructure workflows, giving new powers to both line workers and management. Information technology provides managers with tools for more precise planning, forecasting, and monitoring of the business. To maximise the advantages of information technology, there is a much greater need to plan the organisation s information architecture and information technology (IT) infrastructure. Regenesys Business School 104

Assess the relationship between the digital firm, electronic commerce, electronic business, and Internet technology. The Internet provides the primary technology infrastructure for electronic commerce, electronic business, and the emerging digital firm. The Internet and other networks have made it possible for organisations to replace manual and paper-based processes with the electronic flow of information. In electronic commerce, organisations can exchange electronic purchase and sale transactions with each other and with individual customers. Electronic business uses the Internet and digital technology to expedite the exchange of information, which can facilitate communication and coordination both inside the organisation and between the organisation and its business partners. Digital organisations use Internet technology intensively for electronic commerce and electronic business to manage their internal processes and relationships with customers, suppliers, and other external entities. Identify the major management challenges to building and using information systems in organisations. There are five key management challenges in building and using information systems: (1) designing systems that are competitive, efficient, and more digitally-enabled; (2) understanding the system requirements of a global business environment; (3) creating an information architecture and IT infrastructure that support the organisation s goals; (4) determining the business value of information systems; and (5) designing systems that people can control, understand, and use in a socially and ethically responsible manner. Explain how Internet technology has transformed organisations and business models. Internet is rapidly becoming the infrastructure of choice for electronic commerce and electronic business, because it provides a universal and easy-to-use set of technologies and technology standards that can be adopted by all organisations, no matter what computer system or information technology platform they are using. Internet technology provides a much lower cost and easier to use alternative for coordination activities than proprietary networks. Organisations can use Internet technology to radically reduce their transaction costs. The Internet radically reduces the cost of creating, sending, and storing information while making that information more widely available. Information is not limited to traditional physical methods of delivery. Customers can find out about products on their own on the Web and buy directly from product suppliers instead of using intermediaries such as retail stores. Using the Internet and Web multimedia capabilities, organisations can quickly and inexpensively provide detailed product information and detailed information specific to each customer to very large numbers of people simultaneously. The Internet can help organisations create and capture profit in new ways by adding extra value to existing products and services or by providing the foundation for new products and services. Many different business models for electronic commerce on the Internet have emerged, including virtual storefronts, marketplace concentrators, information brokers, portals, content providers, digital content delivery, on-line exchanges, auctions, syndicators, and on-line service providers. Regenesys Business School 105

Evaluate the principal electronic payment systems. The principal electronic payment systems for Internet commerce are credit cards, electronic cash (e-cash), digital wallets, electronic checks, person-to-person payment systems, smart cards, and electronic billing systems. Smart cards and e-cash are useful for small micro-payments. Electronic checking and billing systems are useful in business-to-business electronic commerce. Demonstrate how Internet technology can support electronic business and supply chain management. Private, internal corporate networks called intranets can be created using Internet connectivity standards. Extranets are private intranets that are extended to selected organisations or individuals outside the firm. Intranets and extranets form the underpinnings of electronic business in that it provides low-cost technology to integrate different systems and different business processes in the enterprise. Organisations can use intranets to create collaboration environments for coordinating work and information sharing, and they can use intranets to make information flow between different functional areas of the firm. Intranets also provide a low-cost alternative for improving coordination among organisations internal supply chain processes. Extranets can be used to coordinate supply chain processes shared with external organisations. Assess the managerial and organisational challenges posed by electronic commerce and electronic business. New business models based on the Internet have not yet found proven ways to generate profits or reduce costs. Digitally enabling a firm for electronic commerce and electronic business requires far-reaching organisational change, including the redesign of business processes; recasting relationships with customers, suppliers, and other business partners; and new roles for employees. Channel conflicts may erupt as the firm turns to the Internet as an alternative outlet for sales. Security, privacy, and legal issues pose additional electronic commerce challenges. Identify the salient characteristics of organisations. All modern organisations are hierarchical, specialised, and impartial. They use explicit standard operating procedures to maximise efficiency. All organisations have their own culture and politics arising from differences in interest groups. Organisations differ in goals, groups served, social roles, leadership styles, incentives, surrounding environments, and types of tasks performed. These differences create varying types of organisational structures. Regenesys Business School 106

Analyse the relationship between information systems and organisations. The impact of information systems on organisations is not unidirectional. Information systems and the organisations in which they are used interact with and influence each other. The introduction of a new information system will affect organisational structure, goals, work design, values, competition between interest groups, decision making, and day-to-day behaviour. At the same time, information systems must be designed to serve the needs of important organisational groups and will be shaped by the organisation s structure, tasks, goals, culture, politics, and management. The power of information systems to transform organisations radically by flattening organisational hierarchies has not yet been demonstrated for all types of organisations, but information technology can reduce transaction and agency costs. The Internet has a potentially large impact on organisational structure and business processes, because it can further reduce transaction and agency costs. Contrast the classical and contemporary models of managerial activities and roles. Early classical models of management stressed the functions of planning, organising, coordinating, deciding, and controlling. Contemporary research has examined the actual behaviour of managers to show how managers get things done. Mintzberg found that managers real activities are highly fragmented, variegated, and brief in duration, with managers moving rapidly and intensely from one issue to another. Other behavioural research has found that managers spend considerable time pursuing personal agendas and goals and those contemporary managers shy away from making grand, sweeping policy decisions. Describe how managers make decisions in organisations. Decisions can be structured, semi-structured, or unstructured, with structured decisions clustering at the operational level of the organisation and unstructured decisions at the strategic planning level. The nature and level of decision-making are important factors in building information systems for managers. Decision making itself is a complex activity at both the individual and the organisational levels. Individual models of decision making assume that human beings can accurately choose between alternatives and consequences, based on the priority of their objectives and goals. The rigorous rational model of individual decision-making has been modified by behavioural research that suggests that rationality is limited. People select alternatives biased by their cognitive style and frame of reference. Organisational models of decision making illustrate that real decision making in organisations takes place in arenas where many psychological, political, and bureaucratic forces are at work. Thus, organisational decision-making may not necessarily be rational. Regenesys Business School 107

Evaluate the role of information systems in supporting various levels of business strategy. A strategic information system changes the goals, operations, products, services, or environmental relationships of organisations to help them gain an edge over competitors. Information systems can be used to support strategy at the business, firm, and industry level. At the business level of strategy, information systems can be used to help organisations become the low-cost producer, differentiate products, or serve new markets. Information systems can also be used to lock in customers and suppliers using efficient customer response and supply chain management applications. Value chain analysis is useful at the business level to highlight specific activities in the business where information systems are most likely to have a strategic impact. At the firm level, information systems can be used to achieve new efficiencies or to enhance services by tying together the operations of disparate business units so that they can function as a whole or by promoting the sharing of knowledge across business units. At the industry level, systems can promote competitive advantage by facilitating cooperation with other organisations in the industry, creating consortiums or communities for sharing information, exchanging transactions, or coordinating activities. The competitive forces model, information partnerships, and network economics are useful concepts for identifying strategic opportunities for systems at the industry level. Not all strategic systems make a profit; they can be expensive and risky to build. Other organisations easily copy many strategic information systems, so that strategic advantage is not always sustainable. Implementing strategic systems often requires extensive organisational change and a transition from one socio-technical level to another. Such changes are called strategic transitions and are often difficult and painful to achieve. (Lauden and Lauden, 2011) Regenesys Business School 108

9 REFERENCES About.com Money Investors, 2014, The history of computers, Money Investor, http://inventors.about.com/library/blcoindex.htm (accessed 23 January 2014). Baird, C.H. and Parasnis, G. 2011, From social media to social customer relationship management, Strategy and Leadership, 39(5), 30-37. Brown, C.V., DeHayes, D.W., Hoffer, J.A., Martin, W.E., Perkins, W.C. 2012, Managing Information technology: International Edition, Seventh Edition, New Jersey, Pearson Education. Buyya, Rajkumar and Kris Bubendorfer, 2009, Market Oriented Grid and Utility Computing. Wiley, ISBN 978-0-470-28768-2. Chanopas, A., Krairit, D. and Khang, D.B. 2006, Managing information technology infrastructure: A new flexibility framework, Management Research News, 29(10), 632-651. Davenport, T. H. 1998, Putting the enterprise into the enterprise system, Harvard Business Review, July-August, 121-131. Futher, S.H. 2003, A strategy for the implementation of e-business and e-commerce to achieve a competitive advantage in the textile industry, Masters Degree, Port Elizabeth Technikon. Gao, F., Li, M & Clarke, S. 2008, 'Knowledge, management, and knowledge management in business operations, Journal of Knowledge Management, 12(2), 3-17. Ghemawat, P., D. Collis, 2001. 'Mapping the Business Landscape.' In The Portable MBA in Strategy, edited by Liam Fahey and Robert Randall, pg. 171-188, John Wiley & Sons. Gilder, G. 2007, 'Ten Laws of the Telecosm Redux', http://www.forbes.com/2007/01/09/telecosmjdsu-intel-pf-soapbox-in_gg_0109soapbox_inl.html (Accessed 28 October 2013). IBM, 2013, Cloud computing you can trust, http://www.ibm.com/cloud-computing/us/en/?lnk=fktccom-usen (accessed 21 January 2014). IT NEXT, 2011, Top 10 ICT trends for 2012, http://www.itnext.in/content/top-10-ict-trends- 2012.html (accessed 5 November 2013). Kraemer, K.L., Dedrick, J. and Yamashiro, S. 2000, 'Refining and extending the business model with information technology', Dell Computer Corporation, The Information Society.16, 5-21 Laudon, K.C. and Laudon, J.P. 2010, Management Information Systems: The digital age. 11th edition. Upper Saddle River, NJ: Pearson Education. Regenesys Business School 109

Laudon, K.C. and Laudon, J.P. 2011, Management Information Systems: The digital age, 12th edition. Upper Saddle River, NJ: Pearson Education. Laudon, K.C. and Laudon, J.P. 2013, Management Information Systems: The digital age, 13th International edition, Upper Saddle River, NJ, Pearson Education. McNurlin, B., Sprague, R., and Bui, T. 2014, Information Systems Management: Pearson New International Edition, 8th edition, New Jersey, Pearson Education. Mell, P. and Grance, T. 2011, The NIST of Cloud Computing, National Institute of Standards and Technology, http://csrc.nist.gov/publications/nistpubs/800-145/sp800-145.pdf (accessed 5 November 2013). MIT Technology Review, 2012, http://www.technologyreview.com/special/emerging/ (accessed 5 November 2013). Mozilla Development Centre, 2013, Ajax https://developer.mozilla.org/en/docs/ajax (accessed 24 January 2014). Nikov A., Z. Ali, et al., Learner-oriented assessment and design of health-oriented e-learning, Jubilee X International Scientific Conference: Management and Engineering 12, Sozopol, Bulgaria, June 17-20, 2012, pp. 536-544. Norton, D.P. 1995, Managing benefits from information technology, Information Management & Computer Security, 3(5), 29-35. Nowak W.A., 2003, On the general theory of accounting, in: Dobija M., (ed.), General Accounting Theory in statu nascendi, Kraków: Akademia Ekonomiczna w Krakowie, pp. 63-76. Pearson, C. 2014, The evolution of computers, http://evolutionofcomputers.edublogs.org (accessed 24 January 2014). PR Newswire, 2013, 'Ford Motor Company and UPS Logistics Group Ahead of Schedule In Vehicle Delivery Improvements', http://www.prnewswire.com/news-releases/ford-motor-companyand-ups-logistics-group-ahead-of-schedule-in-vehicle-delivery-improvements-71421852.html (accessed 5 November 2013). Pulkkinen, J. 2003, The Paradigms of E-Education, An analysis of the communication structures in the research on information and communication technology integration in education in the years 2000 2001, Oulu, Oulu University Press. Raine, L. 2008, Why most Facebook users get more than they give, http://www.pewinternet.org/ (accessed 7 February 2012) The Boston Consulting Group, 2010, Managing IT for Business value: The new gold standard. Boston, The Boston Consulting group. Regenesys Business School 110

Torvalds, Linus and David Diamond, 2001, Just for Fun: The Story of an Accidental Revolutionary, 2001, New York, HarperBusiness. Westermeier, J.T. and Plave, L.J. 2004, E-Business: The e-business legal survival kit, Washington, DC, Piper Rudnick. Wikinvest, 2011, Cloud Computing, http://www.ibm.com/cloud-computing/us/en/ (accessed 5 November 2013). Yeung, Albert K. 1998, Data Organization and Structure, NCGIA Core Curriculum in GIScience, http://www.ncgia.ucsb.edu/giscc/units/u051/u051.html, posted October 15, 1998. Regenesys Business School 111

10 APPENDIX A: GENERAL GLOSSARY OF KEY TERMS In order to become more familiar with the terminology used in this ICT Module, please read through the glossary of terms (Laudon and Laudon, 2013) before you read through this module's Study Guide. You are also requested to review other glossaries on this subject. Some relevant website links (URLs) are provided below for you to explore. This is not an exhaustive list and you are encouraged to explore at least another two sources for ICT glossaries. Term Definition ADSL Application Anti-virus software Attachment Browser Domain name: Download: E-commerce Emails Encryption FTP: Font HTML Internet Internet Service Provider Merchant (Asymmetric Digital Subscriber Line) A high-speed technology that allows large volumes of data to be sent over existing copper telephone lines. ADSL allows data rates of 1.5 to 9 Mbps when receiving data (known as the downstream rate) and from 16 to 640 Kbps when sending data (known as the upstream rate). A programme or group of programmes (also known as software) designed to carry out a particular task. For example, a word processor is used for inputting and editing text. A software programme designed to identify and remove a known or potential computer virus A file that is sent as part of an email message but that is not part of the main message. Usually images, programmes, or word processor files are sent as attachments, because most email programmes allow only plain text in the body of a message. Software that allows you to read information and navigate on the Internet: The most important ones are Internet Explorer and Netscape. A website address that belongs exclusively to you and takes people straight to your website, wherever it is stored on the Internet. When you transfer information from the Internet to your computer. While there are many definitions for e-commerce, for me it is simply selling goods and services via the Internet. Electronic messages that are sent over the Internet, similar to letters. A process in which information is scrambled so no unauthorised person can read it. File Transfer Protocol - simply a method in which you can upload and download information to and from the Internet. Good shop building software takes care of this for you. However, specialised programmes can often do a better job. The name of a style of text. The name of the programming language used to create web pages. Shop building software will take care of this - so there is no need to know it. A worldwide network of computers. A company that gives you access to the Internet. Someone who sells goods. Regenesys Business School 112

Merchant account Meta tags Modem Network Online PGP Real-time payment service providers Redirect URL Search engine Shop building software SSL Traffic Upload URL Web host Web page Website Website address World Wide Web A bank account that allows people to accept credit card payments. Special information embedded in web pages, which allows search engines to index and classify your website better. A device that lets one computer talk to another computer via the telephone line. Several computers hooked together so they can exchange information with each other. When you have an active connection to the Internet. Software that encrypts important information so it can be sent over the Internet securely. PGP stands for Pretty Good Privacy - and goes up to military guard encryption. An online service that will process credit card transactions for you - for a commission. A website address that belongs almost exclusively to you - and finds your website no matter where it is stored on the Internet. A website that helps you to find other websites on the Internet. Computer programme that allows you to build a shop for the Internet. Software called Secure Sockets Layer that encrypts information before sending it via the Internet. It is included in all browsers. The amount of information being passed around the Internet. Transferring information from your computer to the Internet. Universal Resource Locator - the technical term for 'website address'. A company that rents out space on the Internet to allow you to place web pages on it. A 'page' on the World Wide Web. A 'page' or group of 'pages' on the World Wide Web. The address for a website - so you can find it on the Internet with your browser. All web-sites on the Internet combined - used also as term for Internet. (Laudon and Laudon, 2013) Regenesys Business School 113

11 APPENDIX B: E-BUSINESS FUNDAMENTALS GLOSSARY Term Access control list (ACL) Accessibility Address Resolution Protocol (ARP) Advanced Research Projects Agency Network (ARPANET) Advanced ship notice (ASN) Affiliate Aggregator Algorithms Analogue Applet Application Application architecture (AA) Definition A set of data associated with a file, directory, or other resource that defines the permissions that users and/or groups have for accessing it. The segment targeted must be able to be reached and served adequately by the firm s promotion and distribution system. Internet protocol (IP) used in IPv4 to map an IP address to a media access control (MAC) address. A MAC is a 48-bit code for layer 2 networking maintained by the Institute of Electrical and Electronics Engineers (IEEE) and hardwired into network adapters. Also called Ethernet address. The forerunner of the Internet that was a pioneering long-haul network. It served as the test bed for many areas of inter-network technology development and testing and acted as the central backbone during the development of the Internet. An electronic data interchange (EDI) transaction that identifies the contents of a container that is en route from a supplier to a customer. Organisations that sell other manufacturers or retailers (sponsoring merchants ) products on their websites. Users select a product at the affiliate website, but the sale is actually transacted at the sponsoring merchant s website. Enables buyers to select among goods and services from various vendors within a market by collecting information from the vendors websites and then making this information available through its own website. The consumer only has to visit the aggregator s website, not all the individual vendor sites. A clearly defined procedure for performing a complex process by carrying out a series of finite steps that lead to a specific result. Algorithms can be written in any computer language. Used primarily for broadcast and phone transmission, although these media are moving towards digital transmission today. Telephone transmissions are completed by turning voice vibrations into sound wave vibrations. A small programme that runs within an application. Applets are commonly used to make otherwise static World Wide Web pages more interactive. The term is sometimes used in place of application programme, software, or programme, which are used to process data for the user. Applications also refer to specific areas where computers are applied. Describes the layout of an application s deployment. This generally includes partitioned application logic and deployment to application server engines. They rely less on specific tool or language technology and more on standardised middleware options, communication protocols, data gateways, and platform infrastructures. Regenesys Business School 114

Application development (AD) Application integration Application layer Application service provider (ASP) Architecture Auction Authentication Authentication service Authorisation Automated clearinghouse (ACH) Available to promise Back-office (back-end) Bandwidth Banner ad A process that includes the following steps: 1. Identifying a need 2. Defining the requirements 3. Planning the overall application structure or architecture 4. Developing the code or programming instructions 5. Monitoring progress 6. Testing results The process of a) keeping redundant copies of data (in independently designed applications) consistent, and/or b) enabling end-users to access data and functionality from independently designed applications on a single user interface. The top of the seven-layer Open Systems Interconnection (OSI) model, generally regarded as offering an interface to, and largely defined by, the network user. An organisation that hosts software applications on its own servers within its own facilities. Customers access the application via private lines or the Internet. Also called a commercial service provider. The overall design of a computing system and the logical and physical interrelationships between its components. The architecture specifies the hardware, software, access methods, and protocols used throughout the system. An electronic market, which can exist in both a business-to-business and business-toconsumer context. Sellers offer products or services to buyers through a website with a structured process for price setting and fulfilment. A process that verifies the identity of the user at the other end of a link. A mechanism for the secure authentication of the identity of network clients by servers and vice versa, without presuming the operating system integrity of either. Occurs when the merchant, its merchant bank, and the customer s card-issuing bank work together to verify that the electronic payment should be permitted given the customer s credit limit or the amount in the customer s bank account. May also refer to the process that determines whether a requesting device is allowed to have access to a service on another device. An electronic funds transfer system governed by operating rules that provide clearance of electronic payments with participating financial institutions. The uncommitted portion of a company s inventory or planned production. This figure is frequently calculated from the master production schedule and is maintained as a tool for order promising. The business processes and operational functions that happen internally or through the supply chain. These functions often include inventory management, order processing and tracking, shipping and receiving, purchasing and distribution. The amount of information that can be effectively pushed through a particular communications pipe at a given time. It is typically measured in bits per second. A graphic image used on websites to advertise a product. Banner ads are typically rectangles of a standard height and width that the user can click on for further information. Regenesys Business School 115

Baseband Bearer service Biometrics Bit Bits per second (BPS) Bluetooth Branding Bricks and clicks Bricks and mortars Broadband Brochureware site Browser Bulletin board system (BBS) Describes the specifications of the digital signal processing part of the Bluetooth hardware that carries out the baseband protocols and other low-level link routines. The specific network technology or vendor that provides wireless transmission. Examples of such technologies are CDPD, GSM, and digital cellular/pcs packet services, including GPRS, EDGE, HSDPA and W-CDMA. The vendors are too numerous to mention but consist of the world's prominent vendors of GSM, TDMA, CDMA, packet radio, and paging. A method of identification or authentication that measures a unique physical or behavioural biological characteristic, such as a fingerprint, face, voice, or iris of the eye. The minimum unit of binary information as stored in a computer system. A bit can have only two states, on or off, which are commonly called ones (1) and zeros (0). The combination of ones and zeros determines which information is entered into and processed by the computer. The basic unit of measurement for serial data transmission capacity. Represented as Kbps, or kilobit/s, for thousands of bits per second; Mbps, or megabit/s, for millions of bits per second; Gbps, or gigabit/s, for billions of bits per second; Tbps, or terabit/s, for trillions of bits per second. wireless, low-cost radio solution that enables small devices such as personal digital assistants (PDAs), cell phones, and palmtops to communicate between one another and with the Internet. Bluetooth networking technology has a range of about 10 meters and a raw data transmission rate of 1 Mbps. It supports ad hoc networking of up to 80 devices within a 10-meter radius (supporting voice and data). Bluetooth consists of four basic components: 1) a radio unit; 2) a baseband unit; 3) a software stack; and 4) application software. A trademark or distinctive name identifying a product or a manufacturer. Traditional organisations that create a virtual counterpart of their brick and mortar business are sometimes referred to as hybrids. A traditional company with non-web channels (a physical building) as the sales outlet for its products or services. The diameter of the pipe through which information passes. Broad bandwidth technology will allow complex information to be transmitted to users, such as real-time sound and video. Establishes an Internet presence with basic features such as company information, directions, hours of operation, and product information. It does not allow transactions or interactivity. Considered to be Level 1 on the CRM continuum. A software programme used to locate and display information on an intranet, extranet or the Internet. Browsers are most often used to access Web pages and most display graphics, photographs, text, and multimedia information. An information systems communications initiative for sharing information and experience via a dial-up message centre. Regenesys Business School 116

Business continuity service provider (BCSP) Business driver Business intelligence (BI) Business process Business process architect Business process outsourcing (BPO) Business process reengineering (BPR) Business Process reengineering (BPR) analytical techniques Business process reengineering (BPR) methodology Business process reengineering (BPR) tools Business service providers (BSPs) Provides services, typically through subscription, to backup systems, storage facilities, workspaces, and networks services that are used when a catastrophic event occurs at a customer's location(s). Organisations can also use these resources for business continuity testing purposes, which is typically performed one or two times per year. The business or industry needs or changes which are the driving force behind making changes within an organisation. User-led (versus computer-led) process of exploring data, data relationships, and trends to improve business decision-making. Insights derived from BI s inquiry and analysis techniques are critical to enterprise-wide strategic planning efforts. BI technology is divided into interactive query tools, reporting tools, decision support systems, and executive information systems. An event-driven, end-to-end processing path that starts with an internal or external request and ends with a result for the customer. Business processes are often cross-departmental and can be enterprise wide. One who focuses on the structure and organisation of various business processes. Also, examines how the business process can be improved. The outsourcing of an entire business process(es). When outsourcing a business process, the business outsource provider (or business service provider BSP) manages one or several business processes as a whole for the enterprise. In most cases, this also includes management of the applications and the underlying IT infrastructure. People and assets are provided by the BSP or transferred as part of the deal. Business processes are individually designed for the enterprise. The pricing can be fixed, based on volume or per transaction, or can follow a risk/reward model. BPO can include comprehensive support for a specific business process, including the core processing platform, IT support, business planning, and customer service. The fundamental analysis and radical redesign of business practices and management systems, job definitions, organisational systems, and beliefs and behaviours to achieve dramatic performance improvements throughout the organisation. BPR uses objective, quantitative methods and tools to complete these transformations. Mathematical, graphical, logical, and managerial algorithms for describing and modelling business processes, information systems, or management decision-making systems. An integrated set of management policies and project management procedures for analysing existing business processes and systems, designing new processes and systems, testing and managing the implementation process. Combinations of techniques and software products that allow electronic capturing, analysis, testing, simulation, reconfiguration, and persistent memory of business and systems models. Vendors that deliver BPO services via the Internet. Regenesys Business School 117

Business-to-business Business-to-consumer Business-to-employee Business-togovernment Business unit Buy side Cache Call management Capacity planning Certificate (certification) authority (CA) Campaign management system (CMS) Cellular digital packet data (CDPD) The business model where transactions and interactions are primarily conducted from one business to another. Using electronic means to conduct business, each organisation is generally set up through a contractual agreement. Transactions are conducted through Web authorisation and control (WAC) for delivery of confidential information, order processing and tracking, and other internal processes available for each partner. The business model where electronic transactions and interactions are conducted from a business to its consumer. This commerce may include formal and informal relationships. Sometimes referred to as employee self-service; it is offered through intra-web portals (e.g. an HR portal). The business model where electronic transactions and interactions are conducted from a business to the government and vice versa. It may include transactions that involve funding, policies and laws, and other governmental business transactions. A single business or collection of organisations within a company that, in theory, could stand alone from the company. A business unit has its own competitors in the marketplace and a manager who is responsible for running the business unit. Processes enabling organisations to purchase products. Includes requisitioning, product catalogues, approvals, user identification, purchase order creation, payment processing, and integration with other systems. A temporary storage area for instructions and data near a computer s central processing unit (CPU), usually implemented in high-speed memory. It replicates information from main memory or storage in a way that facilitates quicker access, using fewer resources than the original source. The core functionality of customer service and support (CSS) applications. This component is used to log all incoming telephone calls and transactions and to manage the transaction from initiation through closure. The function of establishing, measuring, and adjusting limits for the amount of Internet traffic that can be accommodated at any one time. E-business sites need to plan for unpredictable spikes in usage and traffic. Either internal or third-party entities that affirm or electronically vouch for an individual s identity. They are used to vouch for the identity of a device, such as a Web server, a network router, or an application. The certificate is backed by a profile stored in a database that is referenced to retrieve a public key or to check attributes such as permissions and roles. A database management tool used by marketers to design single-channel or multi-channel marketing campaigns and to track the effects of those campaigns by customer segment over time. CMS applications are also used by sales organisations to execute sales campaigns, such as achieving a specific market share with a particular product by a certain date. Cellular data transmitted over a cellular network. In early deployments, packet data moved at 19.2 Kbps over ever-changing unused intervals in the voice channels. Modern deployments use dedicated data channels. CDPD is an IP-based network with RC4 encryption that allows cellular networks to offer remote and mobile computing. Regenesys Business School 118

Change management Channel Channel master Clearance Click through Clickstream tools Client Client/server (C/S) Client/server architecture Code Division Multiple Access (CDMA) Collaboration technologies Collaborative extranet Collaborative commerce (C- Commerce) Collaborative filtering Common gateway Automated support for development, rollout, and maintenance of system components (i.e. intelligent regeneration, package versioning, state control, library control, configuration management, turnover management, and distributed impact sensitivity reporting). In data communications, a one-way path along which signals can be sent between two or more points. In telecommunications, a transmission path (one-or two-way) between two or more points provided by a common carrier. In business terminology, a channel refers to the route by which a company s products or services are delivered to the marketplace or end-user. A channel can be referred to as a marketing, sales, or a distribution channel. The application used by trading partners that resides within a single company. An example would be a shared service provider that allows its partners to use an internal application to accomplish a business process. The routing of the payment information from the merchant bank to the card-issuing bank at the end of the business day. Occurs when an Internet user clicks the mouse to link through an ad s text or graphics in order to access the message of the ad or the ad s website. Tools that watch the pages a site visitor browses and keeps track of time spent at the particular location. A system or a programme that requests the activity of one or more other systems or programmes, called servers, to accomplish specific tasks. In a client/server environment, the workstation is usually the client. The splitting of an application into tasks performed on separate computing devices a programmable workstation such as a personal computer (PC) and a server. The PC (the client) does some of its own processing, while the server typically stores information and software. The two sides are connected by a local-area network (LAN) or wide-area network (WAN). The division of an application into separate processes capable of operating on separate central processing units (CPUs) connected over a network. A type of multiple access system used in radio communication for digital transmission between a mobile phone and a radio base station. Other multiple access methods include TDMA. Computer-mediated groupware that increases the productivity or functionality of person-to person processes. Occurs when all trading partners agree to use the same application functionality. This type is normally used for collaborative applications such as the development of products. Electronically enabled business interactions among an enterprise's internal personnel, suppliers, business partners, and customers throughout a given trading community. A marketing technique that automatically provides a consumer with a list of additional items similar to the current purchase. A data-passing specification used when a Web server must send or receive data from an Regenesys Business School 119

interface (CGI) Communication Communication protocol Community Concurrency Confidentiality Configuration management Connect Connectivity Consumer-to-consumer Contactless card Content management systems (CMS) Content provider Cookie Customer Customer analysis Customer lifetime value (CLTV) application such as a database. A CGI script passes the request from the Web server to a database, gets the output, and returns it to the Web client. Transmission of information between points of transmission and reception, without alteration of sequence or structure of the content. The exchange of a special sequence of control characters between a computer and a remote terminal to establish synchronous communications. A constantly changing group of people collaborating and sharing their ideas over an electronic network (e.g. the Internet). Communities optimise their collective power by affiliation around a common interest. Information can be shared via bulletin boards, chat rooms, list servers, etc. A measure of the number of users engaged in transactions at the same time. This information is critical for capacity planning. Protection of data from unauthorised viewing. A function that enables impact/dependency analysis of application components. To join to or by means of a communications circuit. In IT terms, it refers to the ability to connect to or communicate with another computer or computer system. In e-business the term often refers to connecting to the Internet, or the ability to connect to a website. A business model where consumers have the capability to conduct electronic transactions with other consumers. This often includes online auction or trading sites. A card that uses radio frequencies and needs no physical contact to be read by readers or terminals. Contactless cards are simply waved near the reader to record transactions or to identify the user. Systems are either passive, with the readers generating the frequency, or active, in which the card activates the reader. Also known as marketing content management (MCM) systems or marketing encyclopaedia systems (MES), this category of applications allow enterprises to view and access marketing content. An enterprise with information-based products. It also includes services to access and manage the content. A permanent code placed in a file on a client computer s hard disk by a server that the client has visited. The code uniquely identifies the client. When the PC user returns, they are automatically entered into the site without re-logging in. One that purchases a commodity or service. Many organisations are changing their focus towards the customer and attempting to best meet and satisfy their needs. An analysis of customer data by using historic records of customer behaviour to build estimates of future behaviour such as loyalty, responsiveness, and profitability. A metric that examines the strategic, long-term value of the customer as opposed to the value of a customer based only on short-term returns. Customers with high CLTV represent the greatest business opportunity for organisations. CLTV is often based on assumptions of likely retention and profitability. The more specific the data collected on a given customer or Regenesys Business School 120

customer segment, the more accurate the CLTV. Focusing on customer lifetime value in business planning fosters more strategic thinking with respect to allocation of resources, sales and marketing strategies, and customer service and support. Customer management systems An application or set of applications used by marketing professionals to design multichannel marketing campaigns and track the effect of those campaigns by customer segment over time. Customer profile A definition of the customer in terms of the various market segmentation variables. E- organisations must be able to identify each customer s preferences, behaviours, and demographics. Customer profitability Customer relationship cycle Customer relationship management (CRM) Customer response rate (CRR) Customer return on investment (CROI) Customer service and support (CSS) Defined as the total expected or realised profit (net profit) derived from a customer. A financial metric that focuses on the actual profits derived from doing business with a customer or customer segment, as opposed to profits derived from a particular product line or business unit. eorganisations can segment their customer base according to customer profitability, appropriately align marketing programmes with these segments, and more effectively convert interactions to sales events. A new approach to marketing and selling that migrates from a transaction-based view to a complete lifecycle view of customer relationships. The customer relationship cycle passes through four phases, from choosing customers to acquiring customers to retaining them and then to extending/enhancing the customer relationship: 1. Selection: Sets the criteria that determine who the most profitable customers will be. 2. Acquisition: Determines how customers can be acquired in the most efficient and effective ways. 3. Retention: Develops the strategy for keeping customers as long as possible. 4. Extension: Establishes the plan for increasing the loyalty, profitability, and lifetime value of each customer. An enterprise-wide business strategy designed to optimise profitability, revenue, and customer needs satisfaction. To accomplish this, the enterprise must organise operations around customer segments, fostering customer satisfying behaviours and linking processes from customers back through suppliers. A customer s actual or expected response rate over a lifetime of patronage of a company. CRR represents the ratio of customer-initiated interactions with the company divided by the total number of company-initiated communications targeted to that customer. Indicates the strength of the relationship between the customer and the company. May be a critical metric for optimising marketing efforts. The total expected or realised net profit derived from a customer, divided by the total or projected cost of the investments made for building the business of that customer. Organisations can use CROI for more strategic use of resources. To calculate CROI, enterprises need to fully integrate front-office and back-office operations so accurate and complete internal data relating to customers and investments in customers can be accessed. Systems, such as help desks, sales and marketing systems that provide front-line support with back-end linkage for interaction with customers (e.g. tracking, resolution and escalation).a CSS tracking system tracks and reports inquiries resolved during the initial Regenesys Business School 121

contact and those that require follow-up. Customer-centric Customisation Data integrity Data mart Data mining Data synchronisation Data warehouse Database administrator (DBA) Database management system (DBMS) Decision support systems Demand chain Demand planning The business strategy of CRM that clearly places the customer at the heart of an enterprise's strategy. Organisations that employ this strategy will not only enable themselves to provide greater value to customers but will be able to serve these customers faster and more accurately than any competitor. Occurs when a site permits choices among static categories. It involves features to allow Web visitors to select how certain pages are displayed. The user, not the website s content creator, is in control of the content. A performance measure based on the rate of undetected errors. A decentralised subset of data found in a data warehouse that is designed to support the unique business unit requirements of a specific decision support system. The process of identifying patterns from typically large amounts of business data and extracting useful information. It can be performed by people, intelligent agents, or other machine-based learning and analysis techniques. Data mining is often applied to data stored on a data warehouse. A form of embedded middleware that allows applications to update data on two systems so that the data sets are identical. These services can run via a variety of different transports but typically require some application-specific knowledge of the context and notion of the data being synchronised. A central computer repository that stores all (or significant portions of) the data collected by an enterprise s multiple business systems. Data from online transaction processing applications and other sources is selectively collected, extracted, sorted, and cleaned. Then it is stored in a data warehouse, which is usually housed in an enterprise mainframe server. The person responsible for managing data, namely data set placement, database performance, and data recovery and integrity at a physical level. A software package that enables end users or application programmers to share data. It provides a systematic method of creating, updating, retrieving, and storing information in a database (DB). DBMSs are generally also responsible for data integrity, data access control, and automated rollback, restart, and recovery. A system designed to support strategic (versus operating) decisions. Decision support systems allow the computer rather than the user to make decisions. The system tends to be user-friendly and emphasise ad hoc query, reporting, and analysis capabilities. This is in contrast to online transaction processing, which focuses on low-cost, fast-response, and predictably structured applications. The portion of the sales channel that generates/creates demand. Two parts of the demand chain are direct and indirect sales. Direct sales are to the end user through field sales, the Web, inside sales, and brick and mortar locations. Indirect sales include selling to the end user through intermediaries such as distributors, value-added resellers, resellers, retail outlets, and dealers, which then may use direct selling methods to reach the end user. (Demand chain should synchronise with supply chain operations for optimisation of enterprise-wide operations.) Order and market information flows upstream continuously from the point of sale, while Regenesys Business School 122

information on product availability and inventory levels flow downstream. Digital Digital certificate Digital money The generation, storing, processing, and transmission of all electronic data (e.g. words, numbers, even voices) in one of two states represented as 0s and 1s. Computers only understand and read digital data. An electronic document that is issued by a certificate authority to verify a public key for a company. Electronic money used on the Internet. Digital signature Directory services Disintermediation Distribution and logistics Domain Domain name Domain Name System (or Service) (DNS) Dot com Downtime Dynamic HTML E-business String of bits that identifies the originator of a message or transaction and is the result of the application of the originator s private key to a one-way hash of the (encrypted) message file. Also provides message integrity. Middleware that locates the correct and full network address for a mail addressee from a partial name or address. A directory service provides a naming service and extends the capabilities to include intelligent searching and location of resources in the directory structure The elimination of the middleman in the channel to market. The term has been used to focus on the theoretical advantages of purchasing directly from organisations on the Web, such as convenience, cost savings, and fast turnaround time. Involves product distribution management and warehousing functions, including the physical movement of parts, components, spares, and products between two or more locations. These processes include the rating and routing of both inbound and outbound freight, tracking and tracing of shipments, freight bill payment and auditing, import and export compliance and documentation, and load optimisation. Advanced concepts utilise logistics modelling, financial optimisation, and third-party logistics management tools. A group of nodes on a network forming an administrative entity. On the Internet, a part of the naming hierarchy that refers to groupings of networks based on organisation type or geography. A unique identifier for an Internet site. Consists of at least two (but sometimes more) parts separated by periods (e.g. http://www.anyname.com). Name resolution software that lets users locate computers on a UNIX network or the Internet (TCP/IP network) by domain name. The DNS root name servers maintain a database of domain names (host names) and their corresponding IP addresses and are responsible for one or more top level domain names, e.g. com or edu. A company that was started with the intent of doing business over the Internet. Also referred to as a virtual company. The time period during which a computer or system is not functioning due to hardware or software failure. Downtime is very costly to e-business sites because customers cannot transact business if they cannot access the site. HTML that supports real-time personalisation of Web page content. Involves any Internet-enabled business activity that transforms internal and external relationships to create new value and exploit market opportunities driven by new rules of Regenesys Business School 123

the connected economy. E-business external services provider (E- ESP) E-commerce (EC) E-commerce Modelling Language (ECML) E-coupon Electronic benefits transfer (EBT) Electronic bill presentment/payment (EBPP) Electronic data interchange (EDI) Electronic funds transfer (EFT) Electronic software distribution (ESD) Electronic wallet Email E-market maker A type of external service provider (ESP) that focuses on providing E-business related or enabling products and services to clients. There are several categories of E-ESPs, based on the types of services they specialise in: Strategy including an enterprise e-business strategy, as well as focused strategic e- business consulting Design and Development including the design and development of Web applications Integration and Implementation covering the integration of Web-developed applications into the enterprise's environment and implementation of the project's e- business functionality Managed Services covering the infrastructure operations and management of the new ebusiness environment. The use of communication technologies to transmit business information and transact business. Taking an order over the telephone is a simple form of EC. Internet commerce is also EC but is only one of several advanced forms of EC that use technology, integrated applications, and business processes to link enterprises. An open standard, rather than a programming language, that will function with any security protocol (e.g. SSL or SET) and support any type of consumer payment card. It was developed through collaboration with the credit card organisations. Electronic version of a coupon to be sent to a consumer's handheld device or mobile phone or the application that delivers such coupons. Users can carry the e-coupon in their devices for use at an online store or a traditional business. Also refers to the applications that enable e-coupons. The electronic delivery of government benefits to recipients by means of a special debit card issued to the recipient. The electronic capability for organisations to post bills online and allow their customers to pay the bill electronically. The electronic exchange of trading documents (e.g. invoices and orders) to enable ecommerce. Originally conducted only through value-added networks, EDI is gradually moving to the Internet. The electronic exchange of information between financial institutions, which results in debits and credits. Enables software to be installed by transmitting it over a network. ESD is designed to help users distribute programmes and files in their environments; especially important for client/server and mobile client/server applications. A place that holds digital money that has been purchased, or credit card information along with a digital certificate, that identifies the consumer as the authorised cardholder. Any communication service that permits the electronic transmission and storage of messages, (generally text or graphics), and attached or enclosed files. Intermediaries that develop a business-to-business e-marketplace of buyers and sellers within an industry, geographic region, or affinity group. Regenesys Business School 124

E-marketplace Enabling technologies Encryption Enhanced Data Rates for GSM Environments (EDGE) Enterprise resource planning (ERP) E-partner E-price E-purse E-sales E-service E-tailer E-team A website that enables buyers to select from many suppliers. The purpose is to put the buyer in control and provide decision support tools that enable a buyer to make the most informed decision. Technologies or systems that enable an organisation to become an e-business. The process of systematically encoding a bit stream before transmission so that an unauthorised party cannot decipher it. A radio interface technology with enhanced modulation designed to provide GSM and TDMA with the capacity to rival 3G cellular networks. EDGE is an integral part of the migration of TDMA networks to 3G and is being developed to support mobile services with maximum data rates of around 384 Kbps. In real-life conditions, throughputs will be considerably lower (e.g. 64bps) but much faster than today's GSM and TDMA networks. The integration of financial, manufacturing, and distribution functionality to balance and optimise the enterprise. Also known as extended selling enterprise (ESE), this includes applications and technologies provided by the enterprise to assist third-party selling channel partners (e.g. brokers, agents, distributors, and value-added resellers) in achieving selling objectives. An e-partner is a component of partner relationship management. A pricing model that is typically somewhere between the manufacturer's suggested retail price (MSRP) and the invoice price. E-prices can vary from region to region, depending on local demand for the particular goods or services. A key feature of online car sales. An application that allows low-value electronic currency (e.g. e-cash) to be loaded into a smart card or handheld device, which can then be used to make purchases. A device or card can hold multiple e-purse applications designated/restricted for specific uses (e.g. one e-purse on a student card or device can be restricted to purchases at a bookstore). Also known as technology-enabled buying (TEB), unassisted selling, or Web selling, this component of technology-enabled selling (TES) involves customer-direct, business or consumer Web-selling applications. These are customer-facing technologies and applications that allow consumers and organisations to "sell themselves" and conduct transactions without the assistance of a salesperson. E-sales are considered part of e- CRM, which is a part of e-business. Internet-based customer service. It is seen as a way to reduce the volume of calls to call centres and collect all customer inquiries and complaints into one streamlined place. Retail organisation that provides their customers with a virtual shopping experience as close to an in-store visit as possible. A team of people who are involved with the planning, development, and implementation of an ebusiness initiative. Regenesys Business School 125

Ethernet European Telecommunications Standards Institute (ETSI) Executive information systems (EIS) Extensible mark-up language (XML) Extranet Fat client Fault tolerance File Transfer Protocol (FTP) Financial products Mark-up Language (FpML) Firewall Front-office (front-end) Fully qualified domain name (FQDN) Fusion Gateway A base-band local-area network (LAN) developed by Xerox and supported by Intel, Digital Equipment, and Hewlett-Packard. It has a bus topology with carrier sense multiple access with collision detection (CSMA/CD) access control. A not-for-profit enterprise whose mission is to produce the telecommunications standards that will be used throughout Europe. The European Commission may adopt some of the ETSI standards as the technical base for directives or regulations. The ETSI's main task is to remove any possible variation from a global standard and to focus on a defined, European-specific set of requirements. The ETSI also ensures that interoperability exists between standards, such as ISDN, GSM, and UMTS. Application system designed for use by the corporate executive. The EIS acts as a usable interface to a database of company information. It automates high-level analysis and reporting and typically has a user-friendly graphical interface. A meta-language that provides a flexible way to create common information formats and share both the format and the data on the Web. A collaborative, Internet-based network to link an enterprise with its suppliers, customers or other external business partners and to facilitate inter-company relationships. Extranets use Internet derived applications and technology to become the secured extensions of internal business processes to external business partners. In the client/server environment, it is the client that performs the bulk of the data processing operations. This data is then stored on the server. Refers to the ability of the system to continue non-stop when a failure occurs. In the event one component fails, another takes over without a disruption in performance. A Transmission Control Protocol/Internet Protocol (TCP/IP) standard used to log on to a network, list directories, and copy files. It provides authentication of the user and lets users transfer files, list directories, delete and rename files on the foreign host, and perform wildcard transfers. A schema for a specific type of financial instrument in the financial services industry. An application or an entire computer that controls access to the network and monitors the flow of network traffic. A firewall can screen and keep out unwanted network traffic and ward off outside intrusion into a private network, which is particularly important when connected to the Internet. The business interactions that take place with the customer or an external body. It includes such functions as marketing, sales, product support, and order taking. The address of a network connection that identifies the owner of that address in a hierarchical format (e.g. www.whitehouse.gov). In e-business, fusion refers to the critical merging of business and IT, which results in the release of energy and creativity to develop and sustain new personal competencies and organisational capabilities. As ebusiness becomes mainstream, fusion becomes essential to stay in business. Software that can interpret and translate different protocols from two distinct networks. Regenesys Business School 126

Gateway/Trans coding servers General Packet Radio Service (GPRS) Global positioning system (GPS) Global System for Mobile Communications (GSM) Government-toconsumer Graphical user interface (GUI) GSM Anywhere Handheld Device Markup Language (HDML) Servers designed to transform data streams to better match device capabilities. Examples include WAP gateway servers that convert HTML to WML for wireless devices and a number of products that can reformat HTML for devices such as mobile phones and PDAs. At present, HTML-based servers predominate. HTML can be made aware of a unique device requesting content; but more often, shadow" Web server applications are created to draw off and reformat the native content. A packet-oriented overlay to GSM networks that supports connection- and connectionless oriented services and diverse quality-of-service mechanisms. The theoretical maximum speed can be as high as 171.2 Kbps using all eight time slots and CS 4 channel speeds. In reality, user throughput is expected to be much lower less than or equal to 56 Kbps. GPRS will likely become the bearer service of choice for most GSM-based WAP services, especially since it is "always on" nature brings immediacy to WAP services. A technology for assessing the precise location of any compatible receiver unit using satellites. GPS works on the principle of triangulation: By knowing its distance from three or more satellites, the receiver can calculate its position by solving a set of equations. Most commonly known as GPS, the satellite constellation used by the U.S. government (and most commercial GPS equipment) is known as Global Positioning Satellite System (GPSS). The Russian government operates a global positioning system called GLONASS, and the yet-to-be-created European global navigation satellite system is slated to be named Galileo. GSM (formerly Groupe Speciale Mobile) refers to mobile telephone networks, based on digital technology, which operate at 900MHz, 1,800MHz, and 1,900MHz frequencies. In Europe, GSM utilises the 905-915MHz and 950-960MHz reserved spectrum to provide the capability of roaming over 18 countries, with competition within and between countries. GSM 1900, the North American version of GSM, allows the standard to be used in the 1,900MHz frequency band, which the U.S. Federal Communications Commission and Industry Canada have allocated for PCS. A business model where the government interacts directly with the consumer through electronic means. This includes such areas as tax, social services, and government funding. A graphics-based operating system interface that uses icons, menus, and a mouse to manage interaction with the system. Application programme conformance with a single user interface style is the primary determinant of ease of learning and use, and thus, of application effectiveness and user productivity. An initiative supported by the ETSI to provide GSM network functionality using frequencies outside the 900MHz, 1,800MHz, and 1,900MHz frequency allocations. An example would be the reuse of analogue cellular phone frequencies in the 450MHz band in Scandinavian countries. A device- and network-independent language developed by Unwired Planet (now Phone.com) for Web programming on a handheld device with limited memory and display, such as a cellular phone or an organiser. Regenesys Business School 127

High-speed circuit switched data (HSCSD) Home Radio Frequency (HomeRF) Horizontal portal Hybrid business Hypertext Hypertext linking HyperText Markup Language (HTML) Hyper-Text Transport Protocol (HTTP) HyperText Transport Protocol Secure (HTTPS) Image understanding Individual consumerism Info-mediary Infrared Data Association (IrDA) Infrastructure A GSM bearer service, deployed in networks in Scandinavia, the United Kingdom, Hong Kong, and other countries, that permits circuit-switched connections with speeds of up to 56 Kbps. A 2.4-GHz wireless LAN technology based on a frequency-hopping modulation scheme, HomeRF is designed to transport voice, video, and data at an attractive price for consumers. A business-to-business site that sells goods and services across many different industries. A brick-and-mortar business that has responded to Internet threats by creating a Web frontend with links to back-end systems. It is also a dot com that is creating traditional infrastructure, such as a warehouse and logistics system, to meet customer expectations. Text (or graphics) with hidden coding (created with HTML). When you point and click on the hypertext it brings up a new Web page (or other objects such as graphics or sound files). Links in a Web page that let users jump from page to page, whether the pages are stored on the same server or on servers around the world. Sometimes referred to simply as hyperlinks. A document-formatting language derived from the Standard Generalised Mark-up Language (SGML), predominately used to create World Wide Web pages. The user s browser interprets HTML commands and formats the page layout, fonts, and graphics on the screen. One of the more powerful features of HTML is its ability to create hyperlinks. Dynamic HTML supports real-time personalisation of Web page content. The communications protocol used to connect to servers on the World Wide Web. It functions by establishing a connection with a Web server and transmitting HTML pages to the client browser. Addresses of websites begin with an http:// prefix. The protocol for accessing a secure Web server. Using HTTPS in the URL instead of HTTP directs the message to a secure port number rather than the universal default Web port. Systems that analyse captured, still video images and extract their content (e.g. colour, texture, shape) for indexing or other action. Image understanding is used for content-based retrieval of image archives. A demand for customised delivery of products and services that match the value definition of each unique customer served, not the homogeneous requirements of a generalised or mass market. An information provider that gathers content from several sources and functions as a data aggregator for a target audience to access via a website. Produces a standard for infrared data transmission (up to 4 Mbps). Because this technology's cost is extremely low, it is now embedded in a number of devices (e.g. in the head of handheld devices, such as PDAs and cellular phones). From a business perspective, the infrastructure is a shared resource, the state of which bounds the adaptability and change capacity of the enterprise. From a technology perspective, it is the enterprise wide technology used to support the e-business environment and includes the hardware, software, physical plant, communications platforms, network systems, and database architecture. Regenesys Business School 128

Infrastructure architect Infrastructure management (IM) Integration hubs Integration testing Integrity Intellectual assets Intermediary International Mobile Telecommunications- 2000 (IMT-2000) International Telecommunications Union (ITU) Internet Internet commerce Internet Control Message Protocol (ICMP) Internet Group Management Protocol (IGMP) Internet Protocol (IP) Internet service One whose role is to examine and manage the architecture (including the design and structure) of the organisation s IT infrastructure and how that relates to the rest of the organisation. The integration of an enterprise s IT infrastructure into the larger physical infrastructure, which includes facilities and shared services. An emerging form of super-processware; rather than a new technology, they are a way of architecting an integration solution. They provide real-time transformation, translation, and routing of messages across multiple enterprises. They support multiple data formats (including EDI formats and XML) and multidimensional views of the data. Putting together software and/or hardware components and testing to see that they work together until a whole integrated system is assembled. Protection of data from unauthorised modification. Intangible assets including employees' knowledge; data and information about processes, experts, products, customers, and competitors; brand names and image; and intellectual property, such as patented, trademarked, or copyrighted materials and regulatory licenses. A participant in the marketing or distribution channel used by organisations to get their products to the ultimate customer. Traditional intermediaries are wholesalers, distributors, brokers, and agents. The ITU's name for a family of 3G cellular standards. IMT-2000 is aimed at providing a standard framework for worldwide wireless access that links the diverse system of terrestrial- and/or satellite-based networks. The ITU is an international organisation founded in 1865 and headquartered in Geneva that sets communications standards. The ITU is comprised of over 150 member countries. (Seewww.itu.ch.) A loose confederation of independent yet interconnected networks that use the Transmission Control Protocol/Internet Protocol (TCP/IP) protocols for communications. The Internet evolved from research done during the 1960s on a network called the ARPANet. It provides universal connectivity and three levels of network services: connectionless packet delivery, full-duplex stream delivery, and application-level services (mainly electronic mail/ email). A subset of e-commerce, where transactions occur only over the Internet. It is only one of several advanced forms that use technology, integrated applications, and business processes to align enterprises. Sometimes called Web commerce. A route management protocol that is part of the Internet Protocol (IP) suite, handling error and control messages. IGMP is used for IP multicast, which is a communication between a single sender and multiple receivers on a network. IGMP is used to exchange membership status data between IP routers that support multicasting and members of multicast groups. A protocol that tracks the address of nodes, routes outgoing messages, and recognises incoming messages. A company that provides Internet access to its customers. Access to the Internet can be Regenesys Business School 129

provider (ISP) Interoperability Interstitial ad Intranet IP Security (IPSec) Java Joint application development (JAD) Joint capacity planning Just-in-time (JIT) Key Knowledge management (KM) Layer 2 Tunnelling Protocol (L2TP) Legacy systems and applications Link controller (LC) Link manager (LM) Link Manager Protocol provided either via modem or by direct connection, which offers far higher speeds. Internet service providers are different from online services, although these services sometimes also provide access to the Internet. The ability of one system to communicate or work with another. An advertisement on a website that is more like a TV commercial. Interstitial ads display in a separate window as a Web page is downloading. A network internal to an enterprise that uses the same methodology and techniques as the Internet. It is not necessarily connected to the Internet and is commonly secured from using firewalls. Intranets are often used in an organisation s local-area networks (LANs) or widearea networks (WANs). A working group of the Internet Engineering Task Force (IETF) that is developing a security standard for Internet Protocol (IP). Also, the security standard developed by a workgroup of the Internet Engineering Task Force (IETF). It defines protocols for authentication, privacy, and data integrity based on encryption and X.509 digital certificates. A programming language based on C and developed by Sun Microsystems that extends and complements the basic capabilities of Hypertext Markup Language (HTML). Java has become a viable alternative to other programming languages with the rapid growth of the Internet, as it has the potential to work on an unlimited number of computing devices and operating systems. A collaborative process for designing and developing software while ensuring high levels of functional quality, since it requires participation of the prospective end user. It is especially effective in developing graphical user interface (GUI) requirements. Collaboration on medium- to long-term material and capacity issues so that the supply chain can gear up or cut back large or long-lasting fluctuations in customer demand. A method of controlling and reducing direct and work-in-process inventory by having suppliers deliver material "just-in-time" to manufacturing. A password or table needed to decipher encoded data. An encryption key is a string of digits that when used with a cryptographic algorithm produces ciphertext. A business process that formalises management and leverage of a firm's intellectual assets. KM is an enterprise discipline that promotes a collaborative and integrative approach to the creation, capture, organisation, access, and use of information assets, including the tacit, un-captured knowledge of people. A tunnelling protocol that combines the features of PPTP and the ability to send private IP address traffic across a public IP network (the Internet). An information system that may be based on out-dated technologies but is critical to day-today operations. When updating to a new system, the legacy information must be recaptured or stored in a way that it can be accessed in the future. Manages the link to other Bluetooth devices and is the low-level base-band protocol handler. The software entity that carries out link setup, link authentication, link configuration, and setup of other protocols. Responsible for link setup between Bluetooth devices, which includes security issues and Regenesys Business School 130

(LMP) List servers Load testing Local-area network (LAN) Localisation Logical Link Control and Adaptation Protocol (L2CAP) Logistics Low-band Margins Market Market globalisation Market of One Marketing velocity Mass customisation Master unit Meta ad controlling power modes of the Bluetooth radio device. Low-technology tools that manage databases of user email accounts and automate the sending of messages to specified user groups. Putting together software and/or hardware components and testing their capacity and the amount and degree of simultaneous input the system can manage. Communications network that connects users within a defined area. A LAN is generally within a building and is managed and owned by the enterprise. The shorter distances within a building allow higher speed communications at a lower cost than in WANs. Conforming to end-user expectations in such areas as language, expected data formats, and cultural issues. Adapts the upper-layer protocols over the baseband. L2CAP is defined only for ACL links, even though the baseband Protocol is defined for ACL and SCO links. The systems and processes dealing with the procurement, maintenance, and transportation of products. Low-band technology is the technology that enables wireless Internet connectivity, such as devices like hand-held computers, personal data assistants, and cell phones, but does not support complex forms of information. The minimum return that an enterprise may earn and still pay for itself. All the buyers and potential buyers of a product who profess some level of interest in a specific product or service. The concept where an e-business enterprise s market can be considered global based on the expansion of the Internet. Continuous customisation of the content, services, and interactions with a customer to deliver exactly what he or she needs and to create the sense that he or she is an individual market. The concept where time is a critical factor in the development, exposure, and measurement of marketing efforts. It focuses on getting to the customer before the competitors. A cross between mass production and craft customisation. The device within a piconet whose clock and frequency-hopping sequence is used to synchronise all slave units within the piconet. A banner ad that appears on the results page of a search engine and is related to the subject of the search. Regenesys Business School 131

Meta tag Meta-aggregator Metadata Meta-language Metrics Micro-browser Middleware Mobile/wireless portal Multipoint Multi-channel Distribution Service (MMDS) Narrowband Net-enabled Network Network access point (NAP) Network access technology A construct placed in the HTML header of a Web page, providing information that is not visible to browsers. The most common meta tags (and those most relevant to search engines) are keywords and descriptions that relate to the domain name, including misspellings or alternate names a user might type to connect to the Web page s URL. Vertical aggregators that act as brokers for the sale/purchase of goods/services (the role these entities play in e-business, opening traditionally closed markets, such as travel services, to direct consumer participation, stimulating comparison shopping, driving down prices, lowering costs for consumers/suppliers, and increasing choices. Data that describes other data in dictionaries and repositories. The term may also refer to any file or database that holds information about another database s structure, attributes, processing, or changes. A language to define languages or applications. A standard unit of measurement for which performance of the organisation is measured against. Differs from a "standard" browser in its storage size and scaled-down functionality. Micro-browsers perform client-side functions required to render Web content to a particular device. They share responsibility with back-end servers for this task; i.e. the presentation layer is controlled at the server level, at the client level, or as a hybrid. The network-aware system software layered between an application, the operating system and the network transport layers whose purpose is to facilitate some aspect of cooperative processing. Examples of cooperative middleware include directory services, message-passing mechanisms, distributed TP monitors, object request brokers (ORBs), remote procedure call (RPC) services, and database gateways. A website with a wide range of content, services, and links designed for mobile devices. It acts as a value-added middleman by selecting the content sources and assembling them in a simple-to navigate, customisable interface for presentation to the end user's mobile device. A fixed wireless technology, commonly referred to as "wireless cable TV" or "wireless xdsl", MMDS operates between 2.5GHz and 2.7GHz and is used for broadcasting, personal communications, and interactive media services in metropolitan areas. That portion of bandwidth speed that is typically defined as 64 kbps. It is often referred to as the voice channel. The ability to conduct business over the Internet. Net-enabled technologies and processes allow a company to become an e-business. Any number of computers (e.g. PCs and servers) and devices (e.g. printers and modems) joined together by a physical communications link. In the corporate context, networks allow information to be passed between computers, irrespective of where those computers are located. The points from which Internet service providers (ISPs) drop down their lines and establish peering arrangements to provide Internet connectivity to their customers. The technology used to provide access to the network. Regenesys Business School 132

Network address translation (NAT) Network bandwidth Network File System (NFS) Networking (See also network) Non-repudiation Object One-to-one marketing Online analytical processing (OLAP) Online transaction processing systems (OLTP) Open database architectures Open profile standard (OPS) Open system Opportunity management system (OMS) Order fulfilment Original equipment manufacturer (OEM) Hides from view the IP addresses of client stations in an internal network by presenting one IP address to the outside world. The NAT also executes the address translation back and forth. The amount or volume of information that can be pushed through the network at any particular time. A method of sharing files across a computer network. Pioneered by Sun Microsystems, it is now a de facto standard in the Unix environment. NFS is built on Transmission Control Protocol/Internet Protocol (TCP/IP) and Ethernet. The linking of a number of devices, such as computers, workstations and printers, into a network (system) for the purpose of sharing resources. Proof that a message has been sent and received. This is extremely important in banking networks, where financial transactions must be verifiably completed, and in legal networks, where signed contracts are transmitted. The unit of information interchange in third-generation (3GL) office systems. An object contains both content and semantics describing how the content is to be interpreted or operated on. A network object is any entity in a network (e.g. a node, printer, or file server). Software objects may be files or pieces of data. Enterprises that treat individual customers as market segments of one. Enterprises practicing one-to-one marketing will capture market share, improve customer retention and satisfaction, and increase revenue. Decision support software that allows the user to quickly analyse information that has been summarised into multidimensional views and hierarchies. Computer processing that is designed to facilitate transaction-oriented applications. Unlike traditional batch data processing, which processes data only at specific times, transaction processing enables people using interactive terminals or PCs to query or update a database so that changes are reflected instantly. Technology infrastructure with database information that is public as opposed to proprietary. This includes officially approved standards as well as privately designed architectures, the specifications of which are made public by their designers. A framework with built-in privacy safeguards for the trustworthy exchange of profile information between consenting individuals and websites. One whose interfaces conform to formal, multilateral, generally available industry standards. A system that helps field sales organisations and call centres track and manage revenue generating selling activities. By modelling the key steps in the sales process, the OMS can measure the progress of sales opportunities, guide sales approaches (e.g. demonstrating the product, or creating a contract), promote team selling across multiple sales channels, and generate accurate forecasts. The process where management or ownership of inventory is transferred from the customer to the supplier. The manufacturer of a device that another vendor resells as part of a system. Regenesys Business School 133

Packet(s) Packet filter Parked units Partner relationship management (PRM) Password Payment gateway Personal communications services (PCS) Personal digital assistants (PDA) Personalisation Piconet Platform Point of sale (POS) Information that travels over the Internet is divided into compact pieces called packets. A packet is an information block identified by a label at Layer 3 of the OSI model. It is a collection of bits that contains both control information and data, and is the basic unit of transmission in a packet switched network. Control information is carried in the packet, along with the data, to provide for such functions as addressing sequence, flow control, and error control at each of several protocol levels. A packet can be of fixed or variable length, but generally has a specified maximum length. The way that data is divided up and reassembled is specified by the Internet Protocol. User information can be sent in streams using the Transmission Control Protocol (TCP/IP) or as a series of packets using the User Datagram Protocol (UDP). Blocks traffic based on IP address and/or port numbers. Also referred to as a screening router. Those devices within a piconet that are synchronised but do not have a MAC address. The CRM element that extends sales, marketing, customer service, and other enterprise business functions to partners to foster more collaborative channel-partner relationships. A word or code used to serve as a security measure against unauthorised access to data. It is normally managed by the operating system or DBMS. However, the computer can only verify the legitimacy of the password, not the legitimacy of the user. A computer that is affiliated with a financial institution where merchants execute transactions by communicating with them. Payment gateways also need software that can carry out SET procedures. A low-power, high-frequency cellular technology, operating in the 1.5-MHz to 1.8-MHz range. In the United States, PCS also operates at 1.9 GHz. Commonly known as palm computing devices, which provide real-time access to an array of information such as email, voicemail and the Internet. Refers to the ability of an e-business to present a site visitor with specific information based on his or her identity or behaviour. Dynamic HTML supports real-time personalisation of Web page content. A network of devices connected using Bluetooth wireless technology. A piconet may consist of two to eight devices. In a piconet, there will always be one master unit, while the others are slave units. An individual hardware or software architecture or operating system. Physically, the place and time that a sale occurs, e.g. a retail store checkout counter. In terms of IT systems and capabilities, POS refers to the ability to capture data at the time and place of sale. Most POS systems employ personal computers or specialised terminals that that are connected to other sales support devices, such as cash registers, bar code readers, optical scanners, and magnetic stripe readers for capturing and processing the transaction. The most sophisticated systems link POS to inventory control and product mix. Regenesys Business School 134

Point-to-point tunnelling protocol (PPTP) Portability Portals Post office protocol (POP3) Privacy Private Communications Technology (PCT) Private key Process ware Product life-cycle Programming language/structured query language (PL/SQL) Project management Project manager Project team Protocol Proxy server A protocol that establishes tunnels through an initiation at one location and a termination at another location in the shared network. The ability for an application to be moved from one platform to another in order to accommodate growth. A high-traffic, broadly appealing website with a wide range of content, services, and vendor links. It acts as a value-added middleman by selecting the content sources and assembling them together in a simple-to-navigate (and customise) interface for presentation to the end user. Portals typically include services such as email, community, and chat. An access path for browser-enabled users to communicate with mail to requests from Hypertext Mark-up Language (HTML). The level of protection an organisation provides for personal data that consumers supply when they use a website, register at a website, or buy from a website. A protocol developed by Microsoft that provides secure transactions over the World Wide Web. A key that is only known to the recipient that is used to encrypt and decrypt the messages. Also called a secret key. Systems that add inter-enterprise process management and off-the-shelf interfaces to message brokers (which provide translation, transformation, flow control, message warehouse, integration, and other functions). The resulting integration framework allows event-driven, message-oriented, machine-to-machine communication across heterogeneous environments. A concept that draws an analogy between the span of a human life and that of a product suggesting that, typically, a product's life consists of four stages introductory, growth, maturity, and decline. The concept is used as a tool to formulate marketing strategies appropriate to each of the stages. One of the two deliverables of Oracle Systems Transaction Processing Option (TPO). It is a 3GL-level extension of Structured Query Language (SQL) that groups SQL statements for transmission across the tools/database management system (DBMS) interface or across a network. PL/SQL must be used to take advantage of the Oracle version 6 performance enhancements. Approach used to manage work with the constraints of time, cost, and performance targets. The individual responsible for the day-to-day management of the project. Those who report to the project manager and play a role in the life of the project. A set of procedures in telecommunication connections that the terminals or nodes use to send signals back and forth. Transmission Control Protocol/Internet Protocol (TCP/IP) is the standard protocol for the Internet and related networks such as intranets and extranets. Networks and systems cannot communicate unless they use the same protocol or make use of a gateway. A relay between two networks that interrupts the physical connection between the two. Regenesys Business School 135

Public key Public key cryptography standard (PKCS) Public key encryption Public key infrastructure (PKI) Pull technology Push technology A key that is known to all parties in a transaction. A standard method of encryption that uses both a private and public key. Messages encoded with either key can be decoded by the other. Also called a symmetric key cryptography. Cryptography that uses a protected private key and a mathematically connected, openly shared public key. The public key enables the encrypted document, file, email, or data stream to be deciphered. What one key encrypts, the other decrypts. The software and/or hardware components necessary to manage and enable the effective use of public key encryption technology, particularly on a large scale. Involves a user specifically asking for something by performing a search; requesting an existing report, video, or other data type; or requesting that a vendor send an online newsletter or update to a favourite bookmark. A data distribution technology in which selected data is automatically delivered into a user s computer at prescribed intervals or based on some event. Quality of service (QoS) The ability to define a level of performance in a data communications system. In e- business, QoS governs access as the site reaches or exceeds capacity and sets priorities for user sessions. Rapid application development (RAD) Redundancy Redundant array independent drives (RAID) Relationship optimisation Request for comments (RFC) Return on investment (ROI) Robustness Rules-based systems Sales force automation (SFA) Scalability An application development (AD) approach that includes small teams (typically two to six people) using joint application development (JAD) and iterative-prototyping techniques to construct interactive systems of low to medium complexity within a time frame of 60 to 120 days. The design of a system, which eliminates a single point of failure by providing integrated backup functionality. An industry fault tolerance standard. Systems that maximise the customer's value to the organisation by providing a rules-based link between customer understanding and customer interaction. Format in which TCP/IP standards are published. Also provides insight into and describes the workings of the IETF organisation. Financial gain expressed as a percentage of funds invested to generate that gain. A term to capture the concepts of over-engineering, high-availability and survivability of the IT infrastructure. A system to build user profiles, but also incorporate business rules driven by the site owner. A process that takes routine sales activities within an organisation and integrates them into a comprehensive software package. When SFA is included in an overall corporate Enterprise Resource Planning (ERP) system, it combines sales functions with planning, marketing, and manufacturing and customer service activities. The measure of a system s ability to increase or decrease in performance and cost in response to changes in application and system processing demands. Regenesys Business School 136

Scatternet Screen resolution Search engine Secure electronic transaction (SET) Secure sockets layer (SSL) Security Sell side Two or more independent, non-synchronised piconets. The number of pixels (dots) across and down the screen. A very large, searchable index of the World Wide Web that is automatically updated by spiders or Webcrawlers and housed on a central server connected to the Internet. A multiparty protocol that secures online communication between all parties in a payment card transaction. It encrypts access to sensitive credit card information throughout the cardprocessing network, thus reducing potential points of exposure to online theft from the buyer or merchant. An Internet security standard from Netscape Communications, used for its browser and server software. A cryptographic protocol that secures bi-directional communication channels over the Internet. SSL connections are initiated through a Web browser and are signified by the URL prefix https. Processes for organisations to sell their products, including catalogues, transaction processors, payment processors, and supply chain management methods and tools. Server A system or a programme that receives requests from one or more client systems or programmes to perform activities that allow the client to accomplish certain tasks. Can refer to a physical computer, but more commonly to any machine that serves applications or information on the World Wide Web. Service Discovery Protocol (SDP) Service level agreement (SLA) Servlet Settlement Share of customer (SOC) Short-message service (SMS) Used to query a device for its service information, which is then used to determine if a connection will be made. A contract between a service provider and the user that specifies the level of service expected to be delivered during its term. SLAs are used by vendors and customers. SLAs between providers and e-organisations typically specify bandwidth availability, response times for routine and ad hoc queries, response times for problem resolution (e.g. system failure, machine failure, etc.), and provisions for disaster recovery in the event of failure. A form of server-based Java that operates in conjunction with a Web server and offers an alternative to using Common Gateway Interface (CGI) and server application programming interfaces (SAPIs) to communicate with Web server processes. In addition, servlets are independent of a given type of Web server, as the most prominent Web servers support servlets. Occurs when the actual funds are transferred from the card-issuing bank to the merchant bank. A measure of a company s level of penetration of a given customer s total expenditures in a given product or service category. SOC is the counterpart of a company s share of the market (market share). SOC represents the strength of the relationship between the customer and the enterprise, relative to competitors. As e-organisations collect specific data on high-cltv customers shopping behaviour, they will be better positioned to build higher value in these customer segments. A bidirectional paging function that is built into GSM systems. Each message can be up to 160 ASCII characters long. The network typically stores messages for a maximum of 72 hours and attempts to deliver them whenever the portable phone is switched on. Regenesys Business School 137

Confirmation of receipt is available as an option in some networks. Simple Mail Transfer Protocol (SMTP) Site sponsorship Slave units Smart card Sockets Software Spam Standards Stateful inspection Storefront Streaming media Structured query language (SQL) Subscriber identity module (SIM) Suppliers Supply chain execution The standard email protocol on the Internet. It is a TCP/IP protocol that defines the message format and the message transfer agent (MTA), which stores and forwards the mail. SMTP was originally designed for only ASCII text, but MIME and other encoding methods enable programme and multimedia files to be attached to email messages. SMTP servers route SMTP messages throughout the Internet to a mail server, such as POP3, which provides a message store for incoming mail. The logos and/or other information about the sponsors that are displayed prominently on the website. Any unit within a piconet that is not the master unit. A plastic card that contains a microprocessor and/or a memory chip. The microprocessor card has the ability to add, delete, and manipulate information on the card. A memory chip card, such as a phone card, can only add information. Specifies the end points of a two-way communications channel that connects two processes together so they can exchange information. Any computer instructions or data that can be stored electronically. This data is stored on devices called hardware. The two categories of software are systems software and application software. Usenet messages flooded to many newsgroups indiscriminately. The term is also loosely applied to junk mail. Specifications or styles that are widely accepted by users and adopted by several vendors. Standards are critical to the compatibility of hardware, software, and everything in between. Industry standards enable the essential elements of a computer and related infrastructure to work together. Tracks the transaction in order to verify that the destination of an inbound packet matches the source of a previous outbound request. Stateful inspection can effectively examine multiple layers of the protocol stack, including the data if required, and block transmission at any layer or depth. A traditional business (e.g. a retail store or other commercial business with physical real estate) that the customer interacts with to order and receive goods and services. A technique for transferring digital content such that it can be processed and viewed as a steady and continuous stream of data. A relational data language that provides a consistent, English keyword-oriented set of facilities for query, data definition, data manipulation, and data control. It is a programmed interface to relational database management systems (RDBMSs). Smart-card-based SIM is a critical part of GSM's security. It contains the subscriber's identity key. The SIM enables users to swap phones without changing their subscriptions. It is also possible to embed WAP browsers on SIMs to allow non-wap phones to provide WAP services. Individuals or organisations from which organisations purchase the goods and services they require to operate. A framework of intelligent execution-oriented applications that enables the efficient Regenesys Business School 138

(SCE) Supply chain management (SCM) Supply chain planning (SCP) Synchronous connection oriented (SCO) Technology-enabled content (TEC) Technology-enabled marketing (TEM) Technology-enabled relationship management (TERM) Technology-enabled selling (TES) Telephony Telnet Terrestrial Trunked Radio (TETRA) Thin client management of resources, which ensures delivery of goods, services, and information across enterprise boundaries to meet customer-specific demand. The process of optimising delivery of goods, services, and information from supplier to customer. A software suite focused on the process of coordinating assets to optimise the delivery of goods, services, and information from supplier to customer, balancing supply and demand. Used for audio only or for a combination of audio and data transmission. The integration of content with information technology to create value-added information that directly supports a business process. Examples of TEC in the workplace include desktop broadcasting and competitive intelligence. Automating aspects of the marketing process, which allows enterprises to improve the measurement and evaluation of their activities. The ultimate goal of technology-enabled marketing is to allocate marketing resources to the activities, channels, and media with the best potential return and impact on profitable customer relationships. The concept of forming one enterprise-wide view of the customer across all customer contact channels (i.e. sales, marketing, and customer service and support). It is a complex area, requiring complex solutions to problems of integration, data flow, data access, and marketing strategy. A critical component is the database that serves as the customer information repository. Automating aspects of the selling process, which allows enterprises to improve their interactions with the consumer on the front-end. It improves the overall selling process enterprise-wide. Technically, the science of converting sound into electrical signals, transmitting them, and then converting them back to sound, i.e. telephone technology. Often used to describe hardware and software that, when combined, function like a telephone. The Internet standard protocol for remote terminal connection. It allows a user at one site to interact with a remote device or system that expects terminal-mode traffic. An ETSI standard for digital private- and public-access mobile radio technology, designed for use by police and emergency and security services, as well as for other uses such as utilities, military, transport, and factory site services. TETRA uses TDMA technology with four user channels on one radio carrier and 25kHz spacing between carriers. In the client/server environment, it is designed so that the bulk of the application logic (software) and data processing are performed on the server. Regenesys Business School 139

Third Generation (3G) Time difference of arrival (TDOA) Time division multiple access (TDMA) Time of arrival (TOA) Trading hub/exchange Trading partners Transaction incident management (TIM) Transmission Control Protocol/Internet Protocol (TCP/IP) Transport layer security (TLS) Trigger-point planning Trivial file transfer protocol Trusted device Refers to the next generation of wireless communications technology "1G" being analogue cellular, and "2G" being digital PCS. An initiative of the ITU and regional standards bodies, 3G aims to provide universal, high-speed, high-bandwidth (up to 4 Mbps) wireless services supporting a variety of advanced applications. 3G-related specifications and technologies include UMTS, IMT-2000, and EDGE. Based on triangulation, TDOA is a method of processing cellular phone signals that allows the physical position of switched-on phones to be located. The position is determined by comparing the time difference of the arrival of the reverse control channel at various cell sites. A technology for digital transmission of radio signals between, for example, a mobile phone and a radio base station. TDMA breaks signals into sequential pieces of defined length, places each piece into an information conduit at specific intervals, and then reconstructs the pieces at the end of the conduit. Based on triangulation, TOA is a method of processing cellular phone signals that allows the physical position of switched-on phones to be located. The position is determined by comparing the time of arrival of the reverse control channel at various cell sites. Intermediaries that may be in specific industries and markets or across markets that broker sale of goods and services between buyers and suppliers, such as business-to-business or consumer-to-consumer business. Include all organisations within an enterprise s supply chain, from the raw material supplier to the end customer. The process that ensures that e-business transactions are performed securely, privately, and according to business specifications and service-level agreements (SLAs). TIM can detect any kind of incident, e.g. business system failure, site slowdown, unauthorised or malicious activity, or hacking, in real time. A key feature is the ability to resolve the incidents according to their level of business criticality. A set or suite (sometimes called a stack) of protocols covering the network and transport layers of the seven-layer Open Systems Interconnection (OSI) network model. Information that travels over the Internet gets divided into compact pieces called packets. TCP/IP specifies how the data are to be divided and reassembled. A security protocol from the IETF that is a hybrid of SSL and other protocols. TLS may become a major security standard on the Internet, possibly superseding SSL. An e-business planning model that defines a set of events or trigger points in a project plan. Once the triggers are met, the next event on the project plan can begin. A protocol used for basic file transfers, as well as booting systems that communicate with the Transmission Control Protocol/Internet Protocol (TCP/IP) suite using the TFTP boot protocol. A device that has been authenticated. Uniform resource locator (URL) The character string that identifies an Internet document s exact name and location, in the form http:// allowed by a domain name or IP address. Regenesys Business School 140

Universal Mobile Telecommunications System (UMTS) UNIX Unstructured Supplementary Services Data (USSD) Usability User Datagram Protocol (UDP) User forums User interface (UI) Value-added network (VAN) Verification Vertical portal Virtual company Virtual home environment (VHE) Virtual private network (VPN) WAP application environment (WAE) WAP browser WAP Forum The first of the 3G cellular networks, UMTS is being designed to offer speeds of at least 144 Kbps to fast-moving (e.g. vehicle-based) mobile devices and an initial speed of 2 Mbps to campus sites. An operating system originally designed by Bell Laboratories, UNIX is proven to be adaptable to a variety of platforms. It is the dominant operating system for critical applications, servers, and high-end workstations because of its scalability and support of complex processing. A GSM bearer service similar to SMS, but USSD messages are not stored and forwarded. USSD acts more like a transactional environment in which a message generates a nearreal-time reply. Refers to the ease of learning and using a user interface. A protocol within the Transmission Control Protocol/Internet Protocol (TCP/IP) suite technology that enables an application to send a message to one of several applications running in a destination machine. Used by customers to contribute reviews of products and services that they have purchased. Prospective customers of those goods and services can then read what others have to say about the products and make a more informed buying decision. Refers to a combination of menus, screen design, keyboard commands, command language, online help, and other input devices that creates the way a user interacts with a borrower and Web page. A private telecommunication line established between trading partners solely to transact business. Traditional EDI is transacted through VANs. Positive identification and authorisation of a particular communication, identification, authentication, and integrity must be accomplished before a message can be trusted completely. A business-to-business website that sells goods and services up and down the supply chain in a given industry. A company that was started with the intention of doing business over the Internet. Virtual organisations have outsourced the physical processes and administrative attributes of traditional business and expanded and combined intellectual activities (e.g. problem solving) with standard business processes such as marketing. Conceptual term that refers to the network infrastructure needed to support mobile users. VHE is part of IMT-2000 and UMTS. A system that delivers information and communications between organisations and trading partners over a shared public network infrastructure in a secure manner. Essentially consists of WML, WMLScript, and WTAI specifications the components that developers will use to build applications for wireless application protocol (WAP) devices. A micro-browser used to locate and display information on wireless application protocol (WAP)-enabled devices. WAP browsers perform client-side functions required to render Web content to a WAP device. Founded in June 1997 by Ericsson, Motorola, Nokia, and Unwired Planet (now Phone.com), the WAP Forum is responsible for publishing and developing wireless application protocol Regenesys Business School 141

(WAP) specifications. It works closely with the World Wide Web Consortium and the Telecommunications Industry Association. The goal of the WAP Forum is to provide an industry standard to foster interoperability among wireless devices. WAP identity module (WIM) Web Web authorisation control (WAC) Web browser Web clipping Web hosting Web log Web phone Web server Website Webcrawler Wide-area network (WAN) Wideband Code Division Multiple Access (W-CDMA) Windows CE Wireless Application Protocol (WAP) Wireless certificate services Used in WTLS and application-level security functions, a WIM can process and store user identification and authorisation information, store encryption and authentication keys, and perform encryption and digital-signature functions on the module. A WIM can be a hardware device, such as a smart card or SIM. Commonly used abbreviation for World Wide Web. Used for delivery of sensitive price, contract and content information for each partner; catalogues that provide custom views based on access control and parametric search for serious business buyers; and order entry functions. A client, system, or programme for use in accessing the World Wide Web on the Internet. The wireless browser technology used by Palm PDAs. The storage of data on a server for later access. In e-business, refers to a service provided by a third party that hosts and maintains a company s website. A tracking and analysis of traffic on a website, typically showing the number of visitors and the number and length of sessions, page views, etc. Important for customer profiling and certain aspects of personalisation. Refers to cell phones equipped with micro-browsers and network data capability through WAP and other website integration technologies. Web pages or websites are hosted on a Web server, which is a central location or computer that enables a remote client (system or programme) to access the page or site content. A collection of files accessed through a Web address, covering a particular theme or subject, and managed by a particular person or organisation. Its opening page is called a home page. Websites typically use the Hypertext Markup Language (HTML) to format and present information and to provide navigational facilities that make it easy for the user to move within the site and around the Web. A piece of software (also called a spider) designed to follow hyperlinks to their completion and to return to previously visited Internet addresses. Communications network that connects computing devices over a broad geographical area such as a region, state, or country. WANs use phone lines or dedicated communication lines. Transmission speeds are typically slower than those of LANs. A technology for wideband digital radio communications in Internet, multimedia, video, and other capacity-demanding applications. W-CDMA utilises the radio spectrum to provide a maximum data rate of 2 Mbps. Microsoft's version of its Windows operating system for its "Pocket PC" reference platform for portable devices, such as PDAs. Specifies two essential elements of wireless communication an end-to-end application protocol and an application environment based on a browser. WTLS will focus on the use of digital certificates at the WAP gateway to provide strong authentication to a cellular phone connected to a legitimate server. This will require cellular Regenesys Business School 142

phones being preloaded with root certificates signed by the wireless device manufacturer s established certificate authorities. Wireless data communication Wireless Datagram Protocol (WDP) Wireless Internet service provider (WISP) Wireless LAN Wireless local loop Wireless Mark-up Language (WML) Wireless office system Wireless Session Protocol (WSP) Wireless Telephony Application Interface (WTAI) Wireless Transaction Protocol (WTP) Wireless Transport Layer Security (WTLS) WMLScript World Wide Web (WWW) Communication that uses the radio spectrum rather than a physical medium. It may carry analogue or digital signals and may be used on LANs or WANs in one- or two-way networks. Allows WAP to be bearer-independent by adapting the transport layer of the underlying bearer service and presenting a consistent data format to the higher layer of the WAP protocol stack. Basically, a wireless gateway service that connects the wired Internet to one or more wireless bearer services. A LAN communication technology in which radio, microwave, or infrared links replace the use of physical cables. Three physical media types of wireless LAN are available. Two are based on radio technologies that are not interoperable direct-sequence spread spectrum (DSSS) and frequency-hop spread spectrum (FHSS). The third is based on infrared, a technology that relies on light waves in a specific band of the electromagnetic spectrum. Infrared can coexist with DSSS and FHSS radio-based systems in one enterprise network. In practice, internetworking issues between access points prevent an enterprise from mixing and matching wireless LAN devices from multiple vendors. A wireless connection of a telephone in a home or office to a fixed telephone network. A programming language similar to XML, used to create pages that can be displayed in a WAP browser (e.g. a WAP phone). A technology that allows the user to transfer calls to a mobile telephone. In the WAP framework, this layer links the WAE to two session services: a connectionoriented service operating above the WTP and a connectionless service operating above the WDP. Specifies how WAP applications can access mobile-phone functionality (e.g. to initiate a call or send an SMS message). In the WAP framework, WTP runs on top of a datagram service such as WDP to provide a simplified protocol suitable for low-bandwidth mobile applications. It offers three classes of transaction service: unreliable one-way request, reliable one-way request and reliable twoway request/respond. Provides security functions within the WAP framework similar to those of the SSL protocol used on the Web. A scripting language based on WAPWML programming language, similar to JavaScript. A hypertext-based global information system developed at the European Laboratory for Particle Physics (CERN) in Geneva. It is a subset of the Internet, technically defined as the community on the Internet where all documents and resources are formatted using Hypertext Markup Language (HTML). (Laudon and Laudon, 2013) Regenesys Business School 143