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INTRODUCTION TOINFORMATIONSYSTEMSSixteenth EditionGEORGE M. MARAKASKU School of BusinessUniversity ofKansasJAMES A. O'BRIENCollege of Business AdministrationNorthern Arizona UniversityI McGraw-HillI irwin
Information System ResourcesFoundations of Information Systemsin BusinessFOUNDATION CONCEPTS:INFORMATION SYSTEMS INBUSINESSThe Real World of Information SystemsREAL WORLD CHALLENGE: ModernizingLegacy Systems at Crescent Healthcare Inc.What Is an Information System?2Hardware Resources30Software Resources31Data Resources31Network Resources33Information System Activities33Input of Data Resources3333Output of Information Products343Storage of Data Resources34Control of System Performance344Recognizing Information Systems6REAL WORLD SOLUTION: Crescent HealthcareInc.: From Green Screens to Online Access35Trends in Information Systems9The Role of e-Business in Business11Types of Information Systems12Operations Support Systems12Management Support Systerfts14Other Classifications of Information Systems1517Developing IS Solutions18Challenges and Ethics of IT19Challenges of IT and IS Careers20The IS Function2342REAL WORLD CASE 2: The New York Timesand Boston Scientific: Two Different Ways ofInnovating with Information Technology45DCompeting with Information TechnologyFUNDAMENTALS OF STRATEGICADVANTAGE48Strategic I T49Competitive Strategy Concepts49Competitive Forces and Strategies25System Concepts: T h e Foundation for2534REAL WORLD CASE 1: eCourier, Cablecom,and Bryan Cave: Delivering Value throughBusiness Intelligence16Success and Failure with ITBusiness Processes29Processing of Data into Information7FOUNDATION C O N C E P T S : T H EC O M P O N E N T S O F INFORMATIONSYSTEMSPeople Resources3The Fundamental Roles of IS in BusinessManagerial Challenges of Information Technology294949REAL WORLD CHALLENGE: CenterPointProperties—Creating a New Company for aNew Business50Strategic Uses of Information Technology53Other Strategic Initiatives53What Is a System?25Feedback and Control26Building a Customer-Focused Business5726The Value Chain and Strategic IS59Other System CharacteristicsComponents of Information Systems28Value Chain Examples60ix
ContentsUSING INFORMATIONTECHNOLOGY FOR STRATEGICADVANTAGE61Strategic Uses of I T61Reengineering Business Processes61The Role of Information Technology62Becoming an Agile Company64Creating a Virtual Company65Virtual, Company Strategies65COMPUTER PERIPHERALS:INPUT, OUTPUT, AND STORAGETECHNOLOGIESRFID Privacy IssuesPredictions for the FutureREAL WORLD SOLUTION: BudwayEnterprises Inc.—Custom Technology withStandard Components122Speech Recognition SystemsOptical ScanningOther Input TechnologiesOutput TechnologiesBuilding a Knowledge-Creating Company67Knowledge Management Systems67REAL WORLD SOLUTION: CenterPointProperties—Reinventing a Company with theHelp of I TVideo OutputPrinted OutputStorage Trade-Offs69REAL WORLD CASE 1: How to Win Friendsand Influence Business People: Quantify I TRisks and ValueComputer Storage FundamentalsDirect and Sequential AccessSemiconductor Memory76REAL WORLD CASE 2: For Companies BothBig and Small: Running a Business on Smartphones79ReadyBoostSolid-State DriveMagnetic DisksRAID StorageMagnetic TapeOptical Disks .Radio Frequency IdentificationComputer Hardware82COMPUTER SYSTEMS-END USERAND ENTERPRISE COMPUTING83Introduction83A Brief History of Computer Hardware83REAL WORLD CASE 1: Budway EnterprisesInc.—Looking for a Low-Cost, High-ReturnAlternative to PaperTypes of Computer SystemsMicrocomputer SystemsComputer TerminalsNetwork ComputersInformation AppliancesMidrange, Mainframe, and Supercomputer SystemsThe Next Wave of ComputingTechnical Note: The Computer System ConceptComputer Processing SpeedsMoore's Law: Where Do We Go from alsInput TechnologiesREAL WORLD CASE 1: AstraZeneca,United Health, and Others: I T AssetManagement—Do You Know What You've Got?REAL WORLD CASE 2: I T in Health Care:Voice Recognition Tools Make Roundsat HospitalsComputer SoftwareAPPLICATION SOFTWARE:END-USER APPLICATIONSIntroduction to SoftwareWhat Is Software?Types of SoftwareApplication Software for End UsersREAL WORLD CHALLENGE: Japan PostNetwork—from Government Entity to PrivateCompany12813113413 5135135135135136
ContentsBusiness Application SoftwareSoftware Suites and Integrated PackagesWeb Browsers and MoreElectronic Mail, Instant Messaging, and BlogsWord Processing and Desktop PublishingSpreadsheetsPresentation GraphicsPersonal Information ManagersGroupwareSoftware Alternatives139140141142144145146147148149Cloud Computing150Software Licensing152SYSTEM SOFTWARE: COMPUTERSYSTEM MANAGEMENT153System Software Overview153153Operating Systems174181183 D147Application Service ProvidersOverviewREAL WORLD SOLUTION: Japan PostNetwork—Savings and Competitive Advantagewith Software as a ServiceREAL WORLD CASE 1: GE, H.B. Fuller Co.,and Others: Successful Implementations ofSoftware as a ServiceREAL WORLD CASE 2: U.S. Department ofDefense: Enlisting Open-Source ApplicationsXIData Resource ManagementTECHNICAL FOUNDATIONS OFDATABASE MANAGEMENTDatabase Management SystemFundamental Data Concepts186186186Character186Field186REAL WORLD CHALLENGE: U.S. Xpress—Lots of Data, Not Enough Quality187153Record189154File189Microsoft Windows155Database190UNIX157Linux157Hierarchical Structure191Open-Source Software157Network Structure191OpenOjftce.org 3159Relational Structure192Mac OS X159Relational Operations193Application Virtualization ' 159Multidimensional Structure194161Object-Oriented Structure194162Evaluation of Database Structures195Operating System FunctionsOther System Management ProgramsProgramming LanguagesxDatabase Structures191Machine Languages162Assembler Languages162High-Level Languages163MANAGING DATA RESOURCES203Fourth-Generation Languages163165Data Resource ManagementTypes of Databases203Object-Oriented Languages166Operational Databases203166Distributed Databases204167External Databases205169Hypermedia Databases205Web and Internet Languages and ServicesHTMLXMLJava and.NETWeb ServicesProgramming SoftwareLanguage Translator ProgramsProgramming Tools170172172173Database DevelopmentData Planning and Database DesignData Warehouses and Data MiningData MiningTraditional File ProcessingProblems of File Processing197199203207208210210
XIIContentsThe Database Management Approach213Local Area Networks250Database Management System213Virtual Private Networks251Database Interrogation215Clien t/Server Networks253Database Maintenance217Network Computing253Application Development217Peer-to-Peer NetworksREAL WORLD SOLUTION: U.S. Xpress—Data Quality Drives Millions in SavingsREAL WORLD CASE 1: Beyond Street Smarts:Data-Driven Crime Fighting218225REAL WORLD CASE 2: Duke UniversityHealth System, Beth Israel Deaconess MedicalCenter, and Others: Medical I T Is Getting Personal 227")254Digital and Analog Signals256Telecommunications Media256Wired Technologies257Twisted-Pair Wire257Coaxial Cable257Fiber Optics257uThe Problem of The Last Mile "Wireless Technologies258258Telecommunications and Networks230Terrestrial Microwave259THE NETWORKED ENTERPRISE231Communications Satelites259Networking the Organization231Cellular and PCS Systems260The Concept of a Network231Wireless LANs260Bluetooth261The Wireless Web261REAL WORLD CHALLENGE: Adena HealthSystem and Cherokee Health Systems—TheChallenge of Medicine in the Rural United StatesMetcalfe's LawTrends in Telecommunications232234234Industry Trends234Technology Trends234Business Application Trends236Internet2236The Business Value of TelecommunicationsNetworks237The Internet RevolutionTelecommunications Processors262Modems263Inter-Network Processors263Multiplexers264Telecommunications SoftwareNetwork Management264265Network Topologies266Network Architectures and Protocols267238Protocols267Internet Service Providers239Network Architectures267Internet Applications239The OSI Model267Business Use of the Internet241The Internet's TCP/IP269The Business Value of the Internet241Voice over IP270242Bandwidth Alternatives272243Switching Alternatives272The Role of Extranets245Network Interoperability273TELECOMMUNICATIONSNETWORK ALTERNATIVES248Telecommunications Alternatives248REAL WORLD SOLUTION: Adena HealthSystem and Cherokee Health Systems—ReachingFar Away with the Help of Technology2 74A Telecommunications Network Model248Types of Telecommunications Networks249The Role of IntranetsThe Business Value ofIntranetsWide Area Networks249Metropolitan Area Network250REAL WORLD CASE 1: DLA Piper, PepsiCo,and Others: Telepresence Is Finally Coming of Age 281REAL WORLD CASE 2: Brain SavingTechnologies, Inc. and the T-Health Institute:Medicine through Videoconferencing283
ContentsBusiness across the Enterprise324G E T T I N G ALL T H E GEESELINED UP: MANAGING AT T H EENTERPRISE LEVEL325e-Business Systems286Introductione-BUSINESS SYSTEMS287Introduction287Cross-Functional Enterprise Applications287CUSTOMER RELATIONSHIPMANAGEMENT: T H E BUSINESSFOCUSREAL W O R L D C H A L L E N G E : Q u a l c o m m —Silos, Silos, Everywhere288290Enterprise Application ArchitectureEnterprise Application Integration291Transaction Processing Systems293The Transaction Processing Cycle295xiii325326Introduction326W h a t is C R M326Contact and Account Management326Sales326REAL W O R L D C H A L L E N G E : Jelly BellyCandy Company—Getting Your Arms Around Sales327Marketing and Fulfillment329Enterprise Collaboration Systems296Customer Service and Support329Tools for Enterprise Collaboration296Retention and Loyalty Programs330FUNCTIONAL BUSINESS SYSTEMSIntroduction299T h e T h r e e Phases of C R M3 31299Benefits and Challenges of C R M332IT in Business299CRM Failures333Marketing Systems300Trends in C R M334Interactive Marketing;301ENTERPRISE RESOURCEPLANNING: T H E BUSINESSBACKBONETargeted Marketing301Sales Force WhatlsERP?Benefits and Challenges of ERP337339Manufacturing SystemsComputer-Integrated337306The Costs of ERP339HRM and the Internet306Causes of ERP Failures341HRM and Corporate Intranets307Trends in E R P342308SUPPLY CHAIN MANAGEMENT:T H E BUSINESS N E T W O R K345Human Resource SystemsAccounting SystemsOnline Accounting Systems310Financial Management Systems310REAL W O R D S O L U T I O N : Q u a l c o m m —Breaking Down Silos and Integrating ApplicationsREAL W O R L D CASE 1: Toyota Europe,Campbell Soup Company, Sony Pictures,and W.W. Grainger: Making the Case forEnterprise ArchitectsREAL W O R L D CASE 2: Nationwide Insurance:Unified Financial Reporting and " O n e Versionof the Truth"Introduction345W h a t is S C M345Electronic Data Interchange347T h e Role of S C M349Benefits and Challenges of S C M351Trends in S C M354319REAL W O R L D S O L U T I O N : Jelly BellyCandy C o m p a n y — C o m p e t i n g with C R M356321REAL W O R L D CASE 1: Kennametal,Haworth, Dana Holding, and Others: ERPsG e t a Second Lease on Life362312
XIVContentsREAL WORLD CASE 2: Cisco Systems,Black & Decker, and O'Reilly Auto Parts:Adapting Supply Chains to Tough Times364)e-Commerce Systems367e-COMMERCE FUNDAMENTALS368Introduction to e-Commerce368The Scope of e-Commerce368e-Commerce Technologies368REAL WORLD CHALLENGE:Ticketmaster—New Clients, New Outlets,New NeedsREAL WORLD CASE 1: Sony, 1-800-Flowers,Starbucks, and Others: Social Networks, MobilePhones, and the Future of Shopping405REAL WORLD CASE 2: Linked In, Umbria,Mattel, and Others: Driving the "Buzz" onthe Web408Supporting Decision Making411SUPPORTING DECISIONMAKING412Introduction412369Information, Decisions, and Management412Categories of e-Commerce372Information Quality412Essential e-Commerce Processes373Access Control and Security374Profiling and Personalizing374Decision Structure415Search Management374Decision Support Trends417Content and Catalog Management374Decision Support Systems420Workflow Management376Example420Event Notification377DSS Components420Collaboration and Trading378Electronic Payment Processes378Web Payment Processes378Electronic Funds Transfer379OLAP Examples425Secure Electronic Payments379Geographic Information and DataVisualization Systems428e-COMMERCE APPLICATIONSAND ISSUES381REAL WORLD CHALLENGE: DeutschePost DHL—The Challenges of Creating andManaging a Global BrandManagement Information SystemsManagement Reporting AlternativesOnline Analytical ProcessingUsing Decision Support itivity Analysis431382Goal-Seeking Analysis432386Optimization Analysis432Getting Customers to Find You387Data Mining for Decision Support433Serving Your Customers388Managing a Web Store389e-Commerce TrendsBusiness-to-Consumer e-Commercee-Commerce Success FactorsWeb Store RequirementsBusiness-to-Business e-Commerce e-Commerce Marketplaces390391Executive Information SystemsFeatures of an EISEnterprise Portals and Decision SupportEnterprise Information Portals436436438438393Knowledge Management Systems440e-Commerce Integration394Other Clicks-and-Bricks Strategies396ADVANCED TECHNOLOGIESFOR DECISION SUPPORT442e-Commerce Channel Choices396Business and AI442An Overview of Artificial Intelligence442Clicks and Bricks in e-CommerceREAL WORLD SOLUTION: Ticketmaster—Changing the Way Tickets Are Sold398The Domains of Artificial Intelligence444
ContentsExpert SystemsComponents of an Expert System447.447Identifying Business/IT StrategiesBusiness Application PlanningBusiness/ITA rchitecture PlanningExpert System Applications448Benefits ofExpert Systems449IMPLEMENTATION CHALLENGESLimitations ofExpert Systems449Implementation451Implementing Information TechnologyDeveloping Expert SystemsKnowledge Engineering452Neural Networks452Fuzzy Logic Systems454Fuzzy Logic in Business455459REAL WORLD CASE 1: I T Leaders: I T /Business Alignment Takes on aWhole New Meaning511462REAL WORLD CASE 2: Centene, Flowserve,and Shaw Industries: Relationships, Collaboration,and Project Success514Virtual Reality456REAL WORLD SOLUTION: DeutschePost DHL—Decision Support forLocal Brand InvestmentsA Change Management Process505455Intelligent AgentsChange Management490492493496496496497499501REAL WORLD SOLUTION: Sloan ValveCompany—IT and the Redesign of theNew Product Development ProcessGenetic AlgorithmsVR ApplicationsEnd-User Resistance and Involvementxv458REAL WORLD CASE 1: Valero Energy, ElkayManufacturing, J&J, and Overstock.com: The MoveToward Fact-Based Decision Making469REAL WORLD CASE 2: Kimberly-Clark Corp.:Shopping for Virtual Products in Virtual Stores472Developing Business/IT SolutionsDEVELOPING BUSINESS SYSTEMSIS DevelopmentThe Systems ApproachSystems ThinkingDew REAL WORLD CHALLENGE: StarwoodHotels and Resorts—Success and GrowthBring on I T ChallengesBusiness/IT Strategies for Development476IT PLANNING FUNDAMENTALS477Introduction477Organizational Planning477The Scenario Approach477Systems Analysis and DesignThe Systems Development Life CycleStarting the Systems Development ProcessFeasibility StudiesOperational FeasibilityEconomic FeasibilityREAL WORLD CHALLENGE: Sloan ValveCompany—ERP, Business Processes, and theNeed to Change478Human Factors FeasibilityPlanning for Competitive Advantage483Legal/Political FeasibilitySWOT AnalysisTechnical Feasibility484Systems 525526526526527Business Models and Planning485Organizational AnalysisBusiness/IT Architecture Planning488Analysis of the Present SystemInformation Technology Architecture488Logical AnalysisBalanced Scorecard489Functional Requirements Analysis and Determination 528
XVIContentsSystems Design528Prototyping529The Prototyping Process530User Interface Design531System Specifications533End-User Development533Focus on IS ActivitiesSecurity and Ethical ChallengesDoing End-User Development535Technical Note: Overview of Object-OrientedAnalysis and Design537SECURITY, ETHICAL, A N D SOCIETALCHALLENGES OF I T567Introduction567The Nexus ofIT, Ethics, Security, and SafetyI M P L E M E N T I N G STRATEGICBUSINESS SYSTEMS539Ethical Responsibility of Business ProfessionalsThe World of Systems Implementation539Implementing New Systems539REAL WORLD CHALLENGE: HarlandClarke—Reinventing the Company,Project Management541What Is a Project?541The Process of Project Management541Evaluating Hardware, Software, and Services543Hardware Evaluation Factors544Software Evaluation Factors546Evaluating IS Services547Other Implementation Activities,547Testing547Data Conversion548Documentation549Training566534 System Conversion StrategiesDirect ConversionParallel Conversion549550551551567567Reinventing Security568Business Ethics570Ethical Use ofTechnology571Ethical Guidelines571Computer Crime573Hacking and rfare577Unauthorized Use at Work579Software Piracy580Theft ofIntellectual Property581Computer Viruses and Worms582Adware and Spyware585Privacy Issues586Pilot Conversion551Privacy on the Internet587Phased Conversion552Computer Matching589Postimplementation Activities552Privacy Laws589Systems Maintenance552Computer Libel and Censorship590Postimplementation Review553The Current State of Cyber Law590Other Challenges591REAL WORLD SOLUTION: StarwoodHotels and Resorts—Toward a CompletelyNew InfrastructureREAL WORLD CASE 1: Microsoft, SiCortex,and Others: How Virtualization HelpsSoftware DevelopersREAL WORLD CASE 2: JetBlue Airways,West Jet Airlines, and Others: The DifficultPath to Software Upgrades554561Employment Challenges591Computer Monitoring592Challenges in Working Conditions593Challenges of Individuality593Health Issues563593Ergonomics594Societal Solutions594
Contents IOrganizing I TManaging Application Developmentxvii632633SECURITY MANAGEMENT OFINFORMATION TECHNOLOGY596Introduction596Managing IS Operations633Tools of Security Management596IT Staff PlanningInter-Networked Security Defenses598The CIO and Other IT ExecutivesEncryption598Technology Management634635636Firewalls599Managing User Services636Denial of Service Attacks600E-mail Monitoring602Outsourcing637Viral Defenses603Offshoring638Other Security Measures605Trends in Outsourcing and Offshoring639Outsourcing and Offshoring I T and IS637Security Codes605Failures in I T Management640Backup Files606Management Involvement641Security Monitors606IT Governance642Biometric Security607MANAGING GLOBAL IT645Computer Failure Controls607The International Dimension645Fault-Tolerant Systems608Global I T Management645Disaster Recovery609609Cultural, Political, and GeoeconomicChallenges646Information System Controls609Global Business/IT Strategies648Auditing IT Security610Global Business/IT Applications649Global I T Platforms651System Controls and AuditsREAL WORLD SOLUTION: HarlandClarke—Toward a Comprehensive RiskManagement Program613REAL WORLD CASE 1: Texas HealthResources and Intel: Ethics, IT, and Compliance620REAL WORLD CASE 2: Wyoming MedicalCenter, Los Angeles County, and RaymondJames: End-Point Security Gets ComplicatedEnterprise and Global Management ofInformation TechnologyThe Internet as a Global IT Platform626627Business and I T627Managing Information Technology627REAL WORLD CHALLENGE: State StreetCorporation—The Need to Reshape I TInfrastructure628Business/IT Planning630Manaeinff the I T Function654Internet Access Issues655Systems Development StrategiesMANAGING IT FOR THEENTERPRISEInformation Technology ArchitectureGlobal Data Access IssuesGlobal Systems Development623631632652656657REAL WORLD SOLUTION: State StreetCorporation—Changing the "Where, Whenand How" of I TREAL WORLD CASE 1: Reinventing I T at BP659665REAL WORLD CASE 2: Cadbury, ForresterResearch, A.T. Kearney, and Others: I T LeadersFace New Challenges in a Globalized World667Review Quiz AnswersSelected ReferencesGlossary for Business ProfessionalsName IndexCompany IndexSubject Index670673679705709713
COMPUTER SYSTEMS-END USER AND ENTERPRISE COMPUTING Introduction A Brief History of Computer Hardware REAL WORLD CASE 1: Budway Enterprises Inc.—Looking for a Low-Cost, High-Return Alternative to Paper Types of Computer Systems Microcomputer Systems Computer Terminals Network Comp
