PART 1: Introduction to MIS 25. 1: Ml! 26 Q7 2021? 43

(1)

I n t e r n a t i o n a l E d i t i o n

David M. Kroenke

Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto

(2)

PART 1: Introduction to MIS 25

1: Ml!

26

Q1 Why Is Introduction to MIS the Most Important Class in the Business School? 28

Are There Cost-Effective Business Applications of Facebook and Twitter? 29 How Can I Attain Job Security? 29

How Can Intro to MIS Help You Learn Nonroutine Skills? 30 Q2 What Is MIS? 32

Components of an Information System 32 Development and Use of Information Systems 33 Achieving Business Goals and Objectives 33

Q3 How Can You Use the Five-Component Model? 34 The Most Important Component—YOU 35

High-Tech Versus Low-Tech Information Systems 35 Understanding the Scope of New Information Systems 35

Using MIS InClass 1: A Group Exercise 36

Components Ordered by Difficulty and Disruption 37 Q4 What Is Information? 37

Definitions Vary 37

Information Is Subjective 37

9 Ethics Guide: Ethics of Misdirected Information Use 38

Q5 What Makes Some Information Better Than Other Information? 40

Accurate 41 Timely 41 Relevant 41

Just Barely Sufficient 41 Worth Its Cost 42

Q6 Why Is the Difference Between Information Technology and Information Systems Important? 42

Q7 2021? 43

0 Guide: Understanding Perspectives and Points of View 0 Guide: Passwords and Password Etiquette 46

wmi Case Study 1: Requirements Creep at the IRS 50

(3)

2: Information Systems for Teamwork 52

Q1 What Is Collaboration? 54

The Importance of Feedback and Iteration 54 Critical Collaboration Drivers 54

Q2 What Are the Components of a Collaboration Information

System? 55

Hardware 55 Software 55 Data 56 Procedures 56 People 58

Q3 How Can You Use Collaboration Systems to Improve Team

Communication? 59

Q4 How Can You Use Collaboration Systems to Manage

Content? 62

Shared Content with No Control 63

Shared Content with Version Management 63 Shared Content with Version Control 66 Using MIS InClass 2: A Group Exercise 67

Q5 How Can You Use Microsoft SharePoint for Team Projects? 69

SharePoint Features Recommended for Student Teams 69

Q6 How Do Businesses Use Collaboration Systems? 73

Using Collaboration Systems for Problem Solving 73 • Ethics Guide: Virtual Ethics? 74

Using Collaboration Systems for Project Management 76 Using Collaboration Systems for Decision Making 76

Q7 2021? 78

• Guide: Securing Collaboration 80

m Guide: Egocentric Versus Empathetic Thinking 82

Case Study 2: Microsoft SharePoint at Intermountain Healthcare 87

90 Q1 How Does Organizational Strategy Determine Information

Systems Structure? 92

Q2 What Five Forces Determine Industry Structure? 92

Q3 How Does Analysis of Industry Structure Determine

Competitive Strategy? 94

(4)

Q4 How Does Competitive Strategy Determine Value Chain Structure? 95

Primary Activities in the Value Chain 95 Support Activities in the Value Chain 96 Value Chain Linkages 96

Q5 How Do Business Processes Generate Value? 97

Q6 How Does Competitive Strategy Determine Business Processes and the Structure of Information Systems? 99

0 Ethics Guide: Yikes! Bikes 100

Q7 How Do Information Systems Provide Competitive Advantages? 103

Competitive Advantage via Products 103

Competitive Advantage via Business Processes 104

How Does an Actual Company Use IS to Create Competitive Advantages? 104 How Does This System Create a Competitive Advantage? 106

Q8 2021? 107

0 Guide: Limiting Access to Those Who Have Access 108 ° Guide: Your Personal Competitive Advantage 110

rmmk Case Study 3: Bosu Balance Trainer 115

PART 2: Fundamentals of Technology 117

118 Q1 What Do Business Professionals Need

to Know About Computer Hardware? 120 Basic Components 120

Computer Data 121

In Fewer Than 300 Words, How Does a Computer Work? 123 Why Does a Manager Care How a Computer Works? 123 What Is the Difference Between a Client and a Server? 124 Cloud Computing 125

0 Ethics Guide: Churn and Burn 126

Q2 What Do Business Professionals Need to Know About Software? 128

What Are the Four Major Operating Systems? 129 Own Versus License 130

Virtualization 130

What Types of Applications Exist, and How Do Organizations Obtain Them? 132

What Is Firmware? 133

(5)

Q3 Is Open Source Software a Viable Alternative? 135 Why Do Programmers Volunteer Their Services? 135

Using MIS InClass 4: A Group Exercise 136 How Does Open Source Work? 137

So, Is Open Source Viable? 138

Q4 How Can You Use This Knowledge? 138 What Buying Decisions Do You Make? 138

What Process Should I Use to Establish a Computer Budget? 139

Q5 2021? 141

9 Guide: Keeping Up to Speed 144 0 Guide: QuestioningYour Questions 146

• • • Case Study 4: Dell Leverages the Internet, Directly, but for How Long? 152

Q1 What Is the Purpose of a Database? 156 Q2 What Is a Database? 157

What Are Relationships Among Rows? 158 Metadata 160

Q3 What Are the Components of a Database Application System? 162

What Is a Database Management System? 162 0 Ethics Guide: Nobody Said I Shouldn't 164

Q4 How Do Database Applications Make Databases More Useful? 167

What Are Forms, Reports, and Queries? 167

Why Are Database Application Programs Needed? 168 Multi-User Processing 169

Enterprise DBMS Versus Personal DBMS 169

Q5 How Are Data Models Used for Database Development? 170 What Is the Entity-Relationship Data Model? 171

Q6 How Is a Data Model Transformed into a Database Design? 174 Normalization 174

Representing Relationships 176

Q7 What Is the Users'Role in the Development of Databases? 179 Q8 2021? 180

0 Guide: No, Thanks, I'll Use a Spreadsheet 182 e Guide: Immanuel Kant, Data Modeler 184

(6)

Q1 What Is a Computer Network? 194

Q2 What Are the Components of a LAN? 195 ATypicalSOHOLAN 195

Q3 What Are the Alternatives for Connecting to a WAN? 198 DSL Modems 199

Cable Modems 200

WAN Wireless Connection 200

Q4 What Are the Fundamental Concepts You Should Know About the Internet? 202

An Internet Example 202

The TCP/IP Protocol Architecture 203 Application-Layer Protocols 203 TCP and IP Protocols 204 IP Addressing 205

Q5 What Processing Occurs on a Typical Web Server? 206 Three-Tier Architecture 207

Watch the Three Tiers in Action! 208 Hypertext Markup Language (HTML) 209 0 Ethics Guide: Personal Work at Work? 210

XML, Flash, Silverlight, and HTML 5 213

Q6 How Do Organizations Benefit from Virtual Private Networks (VPNS) and Firewalls? 213

Virtual Private Network 213 Firewalls 215

Q7 2021? 216

0 Guide: Thinking Exponentially Is Not Possible, but... 218 6 Guide: Human Networks Matter More 220

mm Case Study 6: Keeping Up with Wireless 224

PART 3: IS and the Enterprise 227

7: IS and Organizations 228

Q1 How Do Information Systems Vary by Scope? 230 Personal Information Systems 230

Workgroup Information Systems 231 Enterprise Information Systems 232 Interenterprise Information Systems 232

(7)

Q2 When Are Information Silos a Problem? 232 How Do Information Silos Arise? 232

What Are Common Departmental Applications? 234 What Problems Do Information Silos Cause? 235

Q3 How Do Enterprise Information Systems Eliminate Silos? 237 An Enterprise System at Fox Lake 237

0 Ethics Guide: Dialing for Dollars 238

An Enterprise System for Patient Discharge 240 Business Process Reengineering 240

Q4 How Do CRM, ERP, and EAI Support Enterprise Processes? 241

Customer Relationship Management (CRM) 242 Enterprise Resource Planning (ERP) 243

Using MIS InClass 7: A Group Exercise 244 Enterprise Application Integration (EAI) 247

Q5 What Are the Elements of an ERP System? 248 ERP Application Programs 248

ERP Databases 249

Business Process Procedures 249 Training and Consulting 250 Industry-Specific Solutions 251

Q6 How Do the Major ERP Vendors Compare? 251 ERP Vendor Market Ranking 251

ERP Products 252

Q7 What Are the Challenges When Implementing New Enterprise Systems? 254

Collaborative Management 254 Requirements Gaps 254

Transition Problems 255 Employee Resistance 255 Q8 2021? 255

» Guide: The Flavor-of-the-Month Club 260

• Guide: ERP and the Standard, Standard Blueprint 262 i i i i i Case Study 7: Process Cast in Stone 268

^ s t e r n s 270

Q1 How Do Organizations Use E-Commerce? 273 E-Commerce Merchant Companies 273

Nonmerchant E-Commerce 274

How Does E-Commerce Improve Market Efficiency? 274 What Economic Factors Disfavor E-Commerce? 275

(8)

Q2 How Do Organizations Use Web 2.0? 276 What Is Web 2.0? 276

How Can Businesses Benefit from Web 2.0? 278

Q3 How Do Social Networking Information Systems Increase Social Capital? 279

What Is Social Capital? 279

How Do Social Networks Add Value to Businesses? 280 Using MIS InClass 8: A Group Exercise 281

Using Social Networking to Increase the Number of Relationships 281 Using Social Networks to Increase the Strength of Relationships 284 Connecting to Those with More Assets 285

0 Ethics Guide: Hiding the Truth? 286

Q4 What Are Business Applications for Facebook, Twitter, and User-Generated Content (UGC)? 288

Facebook 288 Twitter 291

User-Generated Content 293

Q5 How Does Social CRM Empower Customers? 295 What Are the Characteristics of Enterprise 2.0? 295

Social CRM Is Enterprise 2.0 CRM 296

Q6 How Can Organizations Manage the Risks of Social Networking Applications? 296

Problem Sources 297

Responding to Social Networking Problems 298 Q7 2021? 298

0 Guide: Blending the Personal and the Professional 300 ® Guide: Interorganizational Information Exchange 302

mm Case Study 8: Tourism Holdings Limited (THL) 306

308 Q1 Why Do Organizations Need Business Intelligence? 310 Q2 What Business Intelligence Systems Are Available? 311

Business Intelligence Tools 311

Tools Versus Applications Versus Systems 312

Q3 What Are Typical Reporting Applications? 312 Basic Reporting Operations 313

RFM Analysis 315

Online Analytical Processing 316

Q4 What Are Typical Data-Mining Applications? 318 Unsupervised Data Mining 320

(9)

Market-Basket Analysis 321 Decision Trees 323

9 Ethics Guide: The Ethics of Classification 326

Q5 What Is the Purpose of Data Warehouses and Data Marts? 328 Problems with Operational Data 329

Data Warehouses Versus Data Marts 330

Q6 What AreTypicai Knowledge Management Applications? 331 Sharing Document Content 332

Expert Systems 334

Q7 How Are Business Intelligence Applications Delivered? 336 What Are the Management Functions of a BI Server? 336

What Are the Delivery Functions of a BI Server? 337 Q8 2021? 338

• Guide: Semantic Security 340

0 Guide: Data Mining in the Real World 342

mm Case Study 9: THL (cont.) 347

PART 4: MIS Management 351

10: Froe®sses for Managing 352

Q1 Why Do Organizations Need to Manage Business Processes? 354

A Sample Ordering Business Process 354 Why Does This Process Need Management? 355 Q2 What Are the Stages in Business Process

Management (BPM)? 357

Q3 How Can BPMN Process Diagrams Help Identify and Solve Process Problems? 358

Need for Standard for Business Processing Notation 358 Documenting the As-Is Business Order Process 358 Using Process Diagrams to Identify Process Problems 359 How Can Business Processes Be Improved? 361

Fox Lake Wedding Planning and Facility Maintenance Processes 362 Q4 Which Comes First, Business Processes or Information

Systems? 363

How Are Business Processes and Information Systems Related? 364 Which Comes First? 366

(10)

Q5 What Are Systems Development Activities? 368 Define the System 369

° Ethics Guide: Estimation Ethics 370 Determine Requirements 373 Design System Components 374 Implementation Activities 375

What Are the Tasks for System Maintenance? 376 Using MIS InClass 10: A Group Exercise 378

Q6 Why Are Business Processes and Systems Development Difficult and Risky? 378

The Difficulty of Requirements Determination 379 Changes in Requirements 380

Scheduling and Budgeting Difficulties 380 Changing Technology 380

Diseconomies of Scale 380

Q7 What Are the Keys for Successful Process and Systems Development Projects? 381

Create a Work-Breakdown Structure 381 Estimate Time and Costs 381

Create a Project Plan 383 Adjust Plan via Trade-offs 384

Manage Development Challenges 385

Q8 2021? 387

° Guide: Dealing with Uncertainty 388 . ° Guide: The Real Estimation Process 390

'mm Case Study 10: Slow Learners, or What? 394

11: Managing information Systems 396

Q1 What Are the Functions and Organization of the IS Department? 398

How Is the IS Department Organized? 398 What IS-Related Job Positions Exist? 400

Q2 How Do Organizations Plan the Use of IS? 402 Align Information Systems with Organizational Strategy 402 Communicate IS Issues to the Executive Group 402

Develop Priorities and Enforce Them Within the IS Department 402 Sponsor the Steering Committee 403

Q3 What Tasks Are Necessary for Managing Computing Infrastructure? 403

Align Infrastructure Design with Organizational Structure 403 0 Ethics Guide: Using the Corporate Computer 404

Create, Operate, and Maintain Computing Infrastructure 407 Establish Technology and Product Standards 407

(11)

Track Problems and Monitor Resolutions 408 Manage Computing Infrastructure Staff 408 Using MIS InClass 11: A Group Exercise 409

Q4 What Tasks Are Necessary for Managing Enterprise Applications? 409

Develop New Applications 410 Maintain (Legacy) Systems 410

Adapting Systems to Changing Requirements 410 Tracking User Problems and Monitoring Fixes 410 Integrate Enterprise Applications 410

Manage Development Staff 411 Administer Data 411

Q5 What Are the Advantages and Disadvantages of Outsourcing? 413

Outsourcing Information Systems 414 International Outsourcing 415

What Are the Outsourcing Alternatives? 416 What Are the Risks of Outsourcing? 416

Q6 What Are Your User Rights and Responsibilities? 418 Your User Rights 419

Your User Responsibilities 420

Q7 2021? 420

• Guide: Is Outsourcing Fool's Gold? 422 9 Guide: What If You Just Don't Know? 424

• H Case Study 11: Marriott International, Inc. 428

430 Q1 What Are the Threats to Information Security? 432

What Are the Sources of Threats? 432

What Are the Types of Security Problems? 432

What Are the Components of an Organization's Security Program? 435 Using MIS InClass 12: A Group Exercise 436

Q2 What Is Senior Management's Security Role? 437 The NIST Handbook of Security Elements 437

What Are the Elements of a Security Policy? 438 How Is Risk Managed? 438

9 Ethics Guide: Security Privacy 440

Q3 What Technical Safeguards Are Available? 442 Identification and Authentication 442

Encryption 444 Firewalls 448

Malware Protection 448

Design Secure Applications 451

(12)

Q5 What Human Safeguards Are Available? 452

Human Safeguards for Employees 452

Human Safeguards for Nonemployee Personnel 454 Account Administration 455

Systems Procedures 456 Security Monitoring 457

Q6 How Should Organizations Respond to Security Incidents? 458

Disaster-Recovery Backup Sites 458 Incident-Response Plan 459

Q7 What Is the Extent of Computer Crime? 459 Q8 2021? 461

0 Guide: Security Assurance, Hah! 462 0 Guide: The Final, Final Word 464

H ^ Case Study 12: The ChoicePoint Attack 468

The International Dimension 470 Application Exercises 486

Glossary 503 Index 521