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Activities Activity 5.1 (P. 171) Describe the order in which a message passes from one piece of hardware to the next when a home user in the UK sends an e-mail via the Internet to someone in a large corporation in the USA. You should refer to the following terms: (a) mail server; (b) client PC; (c) modem; (d) hub; (e) network cable; (f) network card; (g) gateway server (telecommunications processor); (h) router. Treat the Internet transmission as a single stage. The order in which messages are passed is from: (b) client PC to (c) modem to phone line connected to an Internet Service Provider (ISP) who will be connected to the Internet. The ISP will also contain many of the other devices referred to below which will occur in the corporation in the US, in particular it will probably pass through (a) a mail server, (g) a gateway server and (h) a router. The Internet links will occur by the message being sent by many routers and over different media. The Internet will be connected to a server in the corporation known as the: (g) gateway server that will be connected to the Internet and will act as a firewall between the corporation and the Internet beyond. It may be connected to the mail server by: (h) router (optional) and (e) network cable linked to (f) network card in the (a) mail server this will be a separate server specifically used to process e-mail (h) router used to route the mail message in the organisation along the correct network segment (e) network cable (d) hub this may be used to link a segment of the network directly to a PC (e) network cable sometimes known as patch cable connected to (f) network card in the (b) client PC. Activity 5.2 (P. 176) Rank the following in terms of their data transmission speeds: (a) Ethernet LAN (10 Mbit/sec); (b) modem attached to a phone line (28 800 baud); (c) ISDN2 link to the home operating at 128 Kbit/sec; (d) fibre-optic cable used for video conferencing at a speed of 10Gbit/sec. 85
Solution: (b) Modem attached to a phone line (28800 baud); (c) An ISDN2 link to the home operating at 128 Kbit/sec; (a) Ethernet LAN (10 Mbit/sec); (d) A fibre-optic cable used for videoconferencing at a speed of 10Gbit/sec. Activity 5.3 (P. 185) To provide an example of the services provided by cybermediaries and explore their viability as businesses. 1. Kelkoo provides a price-comparison service. The desired product is typed in and a database is searched for suppliers who have this product. Different prices and other extras such as delivery and guarantees are then listed. Typically the consumer will pick the supplier with the lower price. 2. The main revenue will come from commission for products bought. Kelkoo will be an affiliate of each of the e-tailers it is linked to and will be paid a small percentage of the product purchase price by the e-tailer from which the product is purchased. Other revenue models include general banner advertising on the site, together with advertisements from the manufacturers of products (e.g. book publishers) or from the e-tailers (a small banner ad may be placed by the e-tailer to establish its credibility). 3. A problem with the business model of such intermediaries is that only a small percentage is paid by the e-tailer, so many transactions must be purchased. This is also a problem for the similar service from Lastminute.com (www.lastminute.com). It is forecast that the next stage will be a shake-out as many of the cybermediaries and B2B marketplaces fail leaving room for a handful of key players in each sector. As a consequence intermediaries such as Kelkoo are spending a large proportion of their funding capital on advertising to build their market share. 86
Case Studies Case Study 5.1: Choosing the right Internet connection (P. 173) 1. Using the article and research using the Internet assess the different options for a small medium company to connect to the Internet. 2. From the article and the relevant section in the text briefly define what an ASP is and explain the benefits and disadvantages for an SME. 1. Connections to the Internet for any business should be separated into access for staff and hosting of web services for customers and other third parties. Access For the smallest businesses, a dial-up connection using phone lines or the ubiquitous twisted copper pairs referred to in the article is the lowest cost option. This is similar to how the home user connects to the Internet. The problems are the low speed and that the facility is not always on. These problems are reduced by the use of ADSL referred to in the article. See ADSL guide (www.adslguide.org) for more details. A more expensive option (costing hundreds of pounds but giving faster speeds and guaranteeing connectivity) is the leased lines or virtual private networks (VPN). Satellite connections are mentioned as a possible future option. Hosting Hosting of static content is best managed externally for SMEs since this reduces the hardware costs and more importantly the need to employ staff to maintain the web server. The article also refers to ASPs (see below) which can be viewed as hosting dynamic web applications for customers. 2. An ASP arrangement is when software applications are hosted as external web services which do not require maintenance by a company. ASP applications can vary from e-mail management (e.g. checking for viruses) to office applications and accounting applications. Rather than starting up an application loading from their own hard disk, users of ASP services effectively run the application on a remote server which they log-on to gain its facilities. Case Study 5.2: What went wrong with WAP? (P. 203) 1. Describe the evidence for the failure of WAP and explain reasons for this according to the article. 2. What are the lessons of the relative failure of WAP for a manager? How would you advise a manager at a news magazine publisher to assess the relevance of the next generation of wireless technology such as 3G? 1. The second paragraph explains the limited adoption of WAP. This can be contrasted with data such as that from E-Mori (www.e-mori.co.uk) that shows that over 75% of the UK population own a mobile phone. Reasons for limited uptake include: Poor proposition long time to dial-up, slow to download, limited screen area. Lack of content (in part due to lack of demand). 87
When discussing this article, students can also look at how some of these barriers may be overcome by the always-on, faster services such as GPRS and 3G with improved colour displays. Of course these have their own barriers, such as the need for new handsets and high cost. 2. In plain terms, don t be swept away by the hype. Look at research based on consumer surveys that looks at what people are prepared to pay for these services and how they would use them. Often general research by analysts can overestimate demand, so it is important to look at the detailed research from consumers. A wait and see approach, where the success of early adopters is monitored may be best. It is not necessary to wait for exactly the same technology arriving in a country. For example, we can learn from i-mode in Japan and the use of ebooks in the US. 88
Exercises (PP. 214 215) Self-assessment exercises 1. Specify the components required for a client/server based LAN for a company of 10 people. The answer should start by identifying the need for a single, more powerful server computer to share information between the staff. One server is sufficient due to the number of staff. However, if there were more than 100 people then the use of departmental or workgroup servers would be appropriate. The server could be connected directly to the ethernet network using a hub as the telecomms processor. Client PCs will be needed by the number of staff who require access to a PC. The PCs will be connected to the network by a network interface card. Modems are not appropriate. A bus arrangement ethernet is most suitable for this number of staff given its low cost. A tokenring network might be required for a larger company. 2. Distinguish between a local area network (LAN) and a wide area network (WAN). The answer should stress the difference in scale, with the LAN used to connect computers within an organisation based on a single site and the WAN used to connect people on multiple sites. Note that the WAN can be used to connect users who are in different organisations such as suppliers and distributors of products. 3. What are the main business benefits delivered by a local area computer network? Information sharing and collaboration between staff; cost reduction through sharing of peripherals, such as printers and tape storage, and through sharing of information which will result in lower consumable costs such as printer toner and paper; a capability for new techniques of communication and control which are available through e- mail. Students could use the 6Cs framework (Chapter 8) to indicate benefits such as cost reduction, new capability, control by managers, improved communications. 4. What are the main components of a telecommunications system? The main components are the client access device the remote device where the information is stored and transmitted (the server). In between the origin and destination of communications are the telecommunications processors such as routers which are used to select the best pathway for information and the physical media used to transmit information (the cables and other media such as satellite). 89
5. What is the purpose of a network operating system? The NOS is systems software (Chapter 4) which is used to manage the network. It controls: security through the use of user names and passwords; sharing of information between users in different locations; access to information according to the permission granted to different users; communications and passing of data between different components on the network; sharing of devices, enabling, for example, the backup to tape of data on the server, or printer sharing. 6. What is the difference between the Internet and the World Wide Web? The Internet refers to the physical network that links computers across the globe. It consists of the infrastructure of network servers and communication links between them that are used to hold and transport information between the client PCs and web servers. The World Wide Web is a method for storing (web servers), transmitting (the http protocol) and displaying (through web browsers) information across the Internet. It is effectively the publishing mechanism. Using the TV analogy, the Internet is the network for transmitting data globally, while the Web is the method of delivering the content (channels). 7. Describe the two main functions of an Internet service provider (ISP). How do they differ from applications service providers? Internet Service Provider (ISP) definition. A provider enabling home or business users a connection to access the Internet (1). They can also host web-based applications (2). Application server definition. An application server provides a business application on a server remote from the user. An ISP simply offers access and hosting, they do not typically provide access to specific business functions such as finance services which are provided by software providers such as Microsoft and Oracle (although this may change as ISP sell a wider range of software services). 8. Distinguish between intranets, extranets and the Internet. In summary they refer to different levels of access the Internet is public, the intranet is restricted to organisations employees, while an extranet is restricted access beyond the company. Intranet definition A private network within a single company using Internet standards to enable employees to share information using e-mail and web publishing. 90
Extranet definition Formed by extending the intranet beyond a company to customers, suppliers and collaborators. 9. Describe the standards involved when a web page is served from a web server to a user s web browser. Request page and deliver page (HTTP), transfer request and information (TCP/IP), render page in the browser (HTML). TCP/IP definition The Transmission Control Protocol is a transport layer protocol that moves data between applications. The Internet protocol is a network layer protocol that moves data between host computers. HTTP (Hypertext transfer protocol) definition HTTP is a standard which defines the way information is transmitted across the Internet between web browsers and web servers. HTML (Hypertext Markup Language) definition HTML is a standard format used to define the text and layout of web pages. HTML files usually have the extension.html or.htm. 91
Discussion questions 1. Do you think that the introduction of client/server (C/S) systems has been worthwhile to businesses? This question is a straight analysis of the business benefits compared to the disadvantages of client/server system. It is a specific instance of a general issue facing businesses with the introduction of any new technology. Client/server systems can be compared to a previous situation in a business where the PCs are not networked or more likely a mainframe is used with character-based dumb terminals. The key benefits of C/S are: cost reduction available through downsizing to lower-cost hardware and software improved flexibility for the end user to deploy specialised applications and write their own applications using tools such as MS Excel or Access improved ease of use on the client side since traditional applications tend to be character-based rather than using a WIMP interface (Chapter 4). The main disadvantages are: The cost reduction argument is not clear. The experience of implementing client/server systems is that although the purchase price of hardware and software may be lower, the lifetime or total cost of ownership (TCO) may be higher. Much analysis of TCO has been conducted by the Gartner Group (www.gartner.com) and is briefly referred to in Chapter 6. The high TCO of C/S systems arises from the cost of supporting them since it is easy to modify the configuration, it is also possible to stop applications working. This problem is compounded by the range of networking drivers and software applications that are available from different vendors. In a traditional mainframe environment, the software would typically be sourced from a smaller number of vendors. The stability or reliability of C/S system is questionable. There are many examples of C/S system failures mentioned in the UK trade papers such as www.computerweekly.co.uk and www.computingnet.co.uk. A recent example is that of the rollout of a UK-wide system for the National Westminster bank which is based on Windows NT. This rollout has experienced technical difficulties resulting from software incompatibilities. the control and administration of traditional mainframe systems tend to be easier since they are more centralised with less opportunity for the end user to configure the software. This is similar to the TCO argument. The security of C/S systems may be less robust than mainframe systems. System designers are still learning about the best way to construct C/S systems. Early implementations tended to be error prone and difficult to maintain since a two-tier architecture had been adopted in which the application logic and data access routines are mixed with the program code for interacting with the user. Many of the disadvantages of C/S systems result from the relatively new introduction of C/S techniques in the late 1980s and 1990s. Mainframe technology has been in existence for 30 years and many of the mistakes currently being made with C/S systems have already been learnt and rectified for mainframes. This is true for many new technologies. For example, both UNIX and 92
Windows NT operating systems can be used as a basis for developing C/S, but UNIX has a reputation for being more secure and reliable since it has existed longer. So it can be argued that some of the disadvantages of C/S systems are greater if the Windows NT environment is used for the implementation. Since there is no clear cost-reduction argument either way, the overall balance in this discussion is governed by how important a business thinks the improved usability and flexibility of C/S systems are in comparison to the likelihood of poorer reliability and control. Students should consider figures on the adoption of C/S systems. Since many businesses have now adopted them it could be argued that the business benefits are clear, but there are still many disadvantages inherent in deploying C/S systems. 2. There are many possible benefits of company-wide networks. Is it possible for them to be achieved without changing working practices? Discussion of this issue can be in two main parts. A brief review of the benefits and disadvantages of adopting networks. The benefits are mentioned in Essay question 1 below. The principal disadvantages are the cost and potential disruption during implementation and the need to change working practices. This discussion should focus on the disruption and the changed working practices. The arguments in favour of the need to change working practices are based on taking advantage of the new technology. Gains to the business will not occur if existing bad practices are continued. Reasons for the need for change in practices include: New software systems will often be introduced as part of the installation of a network. This might include tools such as e-mail or groupware, or enterprise resource planning (ERP) software (Chapters 6 and 19). Such software will often require new working practices. For example, e-mail will only work effectively for a business if there are guidelines stating it is used in preference to paper or ensuring replies within a set period. This is particularly true for e-mails received from customers a company could introduce a rule stating that each e-mail should be replied to within two days. ERP software may require new business structures to be adopted as part of a business process redesign exercise (Chapter 14). A network can be used to help a company move towards a paperless office. This will only occur if there is management commitment to this. If commitment does not occur the advantages of the network may be wasted. A network can also help promote teamwork in an organisation using groupware (Chapter 6) and intranets (Chapter 17). These help staff to collaborate, communicate and work in new ways. For example, the need for travel to meetings can be reduced through the use of videoconferencing and discussion forums. A change in purchasing policy is needed to buy shared devices such as printers, rather than them being purchased by individual departments. Arguments against changing working practices are weak, but could include: the cost of training and disruption; the risk of the new working practices being resented by staff. 93
3. Discuss the merits and disadvantages of locating company e-business services inside a company, in comparison with outsourcing to an ISP or ASP. Suggested approach: Select particular type(s) of e-business services to refer to in answering this question e.g. site hosting, e-mail management for questions, accounting packages Review the benefits of external location: maintenance costs, expertise, responsiveness to short term problems e.g. a new virus and longer-term technological trends Review the benefits of internal location: control and security Assess the benefits and risks overall. 94
Essay questions 1. You are a newly installed IT manager in a company of 100 staff. You want to convince the directors of the benefits of adopting a local area network across the whole company. How would you present your case? It is unlikely that any business of this size would not have any network facilities, but the use of networks may be variable across the company. Despite this, the essay should draw out the business benefits of local area networks. How the case is presented would vary according to the requirements of the individual directors. The finance director would be most interested in the cost reductions that are available to the company through using the network. The sales and marketing director might be more interested in the opportunities the network could provide. The opportunities for the marketing director might include: sharing information on customers and sales performance using the network for electronic diaries which would make it easier to schedule sales conferences, client meetings and internal meetings collaborating on new promotional campaigns. Given these different standpoints the presentation should cover the full range of benefits. A suitable framework for justifying the benefits of any IS is provided by the 6Cs. Each of the following headings should be expanded on: Competitive advantage Although IS can give a company the edge over its rivals, it is not clear in this instance exactly how this would be achieved. Competitive advantage can be obtained by any of the other methods mentioned below such as customer service or providing a new capability. A competitive advantage can only be obtained if their competitors do not already have a network. However, if their competitors do have a network then there may an argument for purchasing a network to remain competitive. Customer service Assuming the company is a manufacturer of products, the network may help customer service since it will enable customer orders to be processed more efficiently. It will also enable customers to query the status of their order. Capability The new network could provide a new capability to achieve a facility that has not been possible previously. For example, the network could be used to share information using an intranet (Chapter 17). Without such a network there will be islands of information in the organisation which will make it difficult for the directors to analyse the performance of the business. 95
Communication Installing the network can be coupled with installing software to improve communication; e-mail is an obvious example of this. Groupware such as Lotus Notes and Domino or Microsoft Exchange could be purchased to provide tools for workers in different departments to collaborate. Control Improved control will be delivered through better information delivery to managers. The sales manager will be able to receive weekly reports on the performance of the sales force via the network and take corrective action if sales staff are under-performing. Cost reduction Cost reduction can be achieved through introducing a network since it will reduce the need for duplicate equipment such as printers and faxes around the organisation. Through reducing the use of paper by transmitting documents and reports electronically, the cost of paper and printing can be reduced. 2. Explain the benefits that a company deciding to downsize to a client/server architecture as part of its IT strategy could derive. What management initiatives will be necessary to ensure that the introduction of the new system is a success? The principal benefits of downsizing are a combination of cost reduction and new capabilities provided as a result. The benefits can be described under the same headings as those for the network given in Essay question 1: Competitive advantage this could be achieved through improved customer service and capabilities, but it will only occur if competitors are not adopting a similar approach. Customer service achieved through new software which provides more relevant information to customers and helps queries be answered faster than was possible before. Capability the main capabilities provided by downsizing are for the users to select, develop and configure their own specialised applications, i.e. to improve their control over what they use IT for. Communication downsizing is unlikely to provide greatly enhanced communication if a company already has a network. It may improve communication if the use of PCs provides users with e-mail or groupware facilities that are less readily available for mainframes. Control downsizing provides the end user with more control over which applications they use and how they are configured. Less centralised control occurs. Cost reduction downsizing will reduce the cost of purchase, rental and maintainenance of mainframe computers and software for PC-based systems also tends to be cheaper. The issues involved with downsizing have also been described in Discussion question 1, which considers the introduction of client/server systems technology which is usually part of downsizing. The management initiatives necessary to ensure the introduction of the new system is a success are covered in detail in Chapter 13 in the sections on managing implementation of new systems. They include: education and training of the users, including an explanation of why the change is being made as well as hands-on training on the new software 96
a competent project manager will be necessary to manage the technological and organisational changes associated with downsizing careful analysis of the requirements of the new system to assess how it will impact users appropriate testing of the new system to ensure it does not result in reduced customer service downsizing can sometimes result in slower systems drawing up of new guidelines on working practices to ensure the new system is successful support from management to ensure the above actions are achieved. 3. You are consultant to a small retailer interested in setting up a transactional e- commerce site. Create a summary guide for the company about the stages that are necessary in the creation of a web site and the management issues involved. A summary of the different tasks that needs to be explained in the guide: Domain name registration ensure this is undertaken ASAP to avoid others taking the most suitable names. Content and e-mail hosting decide on the supplier where content will be hosted. Define strategy what are the aims of the online presence. What resources are used (financial and people) to manage the web site. Content development decide on the content and design of the site to achieve its aims. Promotion / launch of site to generate visitors to the site. Response management managing requests and support from the web site. Maintenance of the site. 97
Examination questions 1. Name three ways in which installing a local area network can reduce costs. Explain how this is achieved. Reduced cost of printing. Reports and documents that were formerly printed before distribution around the organisation do not need to be printed since information can be viewed electronically. Reduced cost of peripheral devices such as printers and tape streamers. If there is no network, then each group of PCs must have their own printer, perhaps shared by a printer sharer. With a network a central printer can be used. An indirect cost saving is that staff time spent searching for information will be reduced since it can be searched for electronically. 2. Which features would you need to specify for a company network for a company of 100 people working at a single site? The server machine(s) used to control the network and host the network operating system. The media and network transport, for example, will ethernet or fibre-optic cables be used? The topology of the network, in other words, how it is arranged e.g. bus, star or token-ring. The use of telecommunications processors to join the different parts of the network and manage the flow of data packets e.g. the hubs, bridges and routers. The client machines (PCs) and how they will be connected using network interface cards. 3. Computer networks exist on different scales. Distinguish between the following types: (a) local area network; (b) wide area network; (c) metropolitan area network; (d) value-added network. (a) local area network: typically single site, single organisation, single network. (b) wide area network: typically multiple site, one or several organisations and multiple interlinked networks. (c) metropolitan area network: similar to a WAN, but is a managed service within a city which connects many finance businesses for example. (d) value-added network: also similar to a WAN, but here the WAN links are shared between many companies to reduce the cost of use. 4. Explain, with the aid of diagrams, the difference between the following network topologies: (a) star; (b) bus; (c) ring. 98
(a) star: used for larger networks, the star topology consists of each PC connected via a cable to a central location such as a hub or server. (b) bus: this is a simple topology often used by small businesses. It consists of a serial or daisychain arrangement of nodes. (c) ring: in this topology there is a continuous ring of network cable. The topology of the network typically describes the layout of a LAN within a company. Refer to Figure 5.25 on P. 211 for diagrams of these topologies. 5. Distinguish between the following different types of servers: (a) network; (b) applications; (c) database. (a) network: used to host the network operating system to permit user access to the system and managing the sharing of resources such as files and printers. (b) applications: stores programs such as general purpose applications including word processors or specific business applications such as accounting systems which are then accessed by end users. (c) database: used to store data in a structured way and controls the insertion of new records, modification, deletion and querying of data. Performs these functions in response to requests from client PCs. 6. What are the advantages of the following types of media? Is each more likely to be found in a local or wide area network? (a) copper cable; (b) fibre-optic; (c) satellite; (d) microwave. (a) copper cable: low cost, relatively good performance. LAN. (b) fibre-optic: rapid speed. LAN or WAN. (c) satellite: rapid, large-capacity transmission across large distances. WAN. (d) microwave: rapid, large-capacity transmission across large distances. Cheaper than satellite. WAN. 7. Networked communications in business occur through wide area networks and local area networks. (a) How do the two types of network differ? (b) What is the difference between a local area network and an intranet? (a) Difference of scale as described in Question 3 above. (b) An intranet describes a particular type of local area network which uses the technologies of the Internet such as TCP/IP data transfer and access to information via a web browser. 99
8. You have been tasked with arranging Internet access for other employees in your company. Summarise the hardware and software needed. Software: web browser, operating system, TCP/IP stack on each PC (part of the operating system to enable connectivity). Hardware: PC plus network card to connect to modem for each user. Plus a gateway PC to connect to the Internet including a firewall for security reasons. 9. How would you explain to a friend what they need to purchase to access the World Wide Web using the Internet? Explain the hardware and software needed. Software: web browser, operating system, TCP/IP stack. Hardware: PC plus modem. 10. Explain the term electronic data interchange. What is its relevance to companies now that the Internet is widely used for data exchange? Electronic Data Interchange (EDI) is the exchange, using digital media, of structured business information, particularly for sales transactions such as purchase orders and invoices between buyers and sellers. It is still relevant since it can be used as a method of structured data transfer for purchasing across the Internet and has evolved as Internet EDI to support new standards such as XML. 100