Bus Driven Information Systems

990 Pages·2007·9.429 MB·English

by  Paige Baltzan

Business Driven Information Systems
Paige Baltzan
Daniels College of Business, University of Denver
Amy Phillips
Daniels College of Business, University of Denver
Business Driven Information Systems
Boston Burr Ridge, IL Dubuque, IA Madison, WI New York San Francisco St. Louis
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Milan Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto
BUSINESS DRIVEN INFORMATION SYSTEMS
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Ameri-
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States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 CCI/CCI 0 9 8 7 6
ISBN 978-0-07-319558-2
MHID 0-07-319558-8
Editorial director: Brent Gordon
Executive editor: Paul Ducham
Developmental editor II: Trina Hauger
Marketing manager: Sankha Basu
Media producer: Greg Bates
Lead project manager: Mary Conzachi
Manager, New book production: Heather D. Burbridge
Senior designer: Kami Carter
Senior photo research coordinator: Jeremy Cheshareck
Photo researcher: Teri Stratford
Lead media project manager: Brian Nacik
Cover design: Jillian Linder
Interior design: Kami Carter
Typeface: 10/12 Utopia
Compositor: Laserwords Private Limited, Chennai, India
Printer: Courier Kendallville
Library of Congress Cataloging-in-Publication Data
Baltzan, Paige.
Business driven information systems/Paige Baltzan, Amy Phillips.
p. cm.
Includes bibliographical references and index.
ISBN-13: 978-0-07-319558-2 (alk. paper)
ISBN-10: 0-07-319558-8 (alk. paper)
1. Industrial management—Data processing. 2. Information technology—Management.
I. Phillips, Amy. II. Title.
HD30.2.B357 2008
658.4'038011—dc22
2006030375
www.mhhe.com
DEDICATION
To Tony, Hannah, Sophie, and Gus
What do you always remember?
That I Love You!
That I’m Proud of You!
Paige
To my colleagues, Jill, David, Hans, Don, Dick, Paul, KED, Dan, Paige, and Deb-
orah with respect. You are an exceptional group of professionals and friends.
Thank you very much for making Daniels a wonderful place to park my bike.
Amy
BRIEF CONTENTS
Chapter 1 Information Systems in Business
Chapter 2 Strategic Decision Making
Chapter 3 E-Business
Chapter 4 Ethics and Information Security
Chapter 5 IT Architectures
Chapter 6 Databases and Data Warehouses
Chapter 7 Networks, Telecommunications, and Wireless Computing
Chapter 8 Supply Chain Management
Chapter 9 Customer Relationship Management
Chapter 10 Enterprise Resource Planning and Collaboration Systems
Chapter 11 Systems Development
Chapter 12 Project Management and Outsourcing
Technology Plug-In Overview
Apply Your Knowledge
Notes
Glossary
Photo Credits
Index
CONTENTS
CHAPTER 1
Information Systems in Business 1
Opening Case: Apple—Merging Technology, Business, and Entertainment 2
INTRODUCTION 5
Section 1.1 Information Systems in Business 5
INFORMATION TECHNOLOGY’S ROLE IN BUSINESS 5
Information Technology’s Impact on Business Operations 5
INFORMATION TECHNOLOGY BASICS 8
Information versus Data 9
IT Resources 9
IT Cultures 9
ROLES AND RESPONSIBILITIES IN INFORMATION TECHNOLOGY 10
The Gap Between Business Personnel and IT Personnel 12
MEASURING INFORMATION TECHNOLOGY’S SUCCESS 13
Efficiency and Effectiveness Metrics 13
Benchmarking—Baseline Metrics 14
The Interrelationship Between Efficiency and Effectiveness IT Metrics 14
Section 1.2 Business Strategy 17
BUSINESS STRATEGY 17
THE FIVE FORCES MODEL—EVALUATING BUSINESS SEGMENTS 17
Buyer Power 18
Supplier Power 18
Threat of Substitute Products or Services 19
Threat of New Entrants 19
Rivalry Among Existing Competitors 20
THE THREE GENERIC STRATEGIES—CREATING A BUSINESS FOCUS 20
VALUE CHAIN ANALYSIS—TARGETING BUSINESS PROCESSES 21
Value Creation 21
Key Terms 24
Case Study One: Say “Charge It” with Your Cell Phone 25
Case Study Two: Innovative Business Managers 26
Case Study Three: The World Is Flat—Thomas Friedman 28
Making Business Decisions 29
CHAPTER 2
Strategic Decision Making 31
Opening Case: Revving Up Sales at Harley-Davidson 32
INTRODUCTION 35
Section 2.1 Decision-Making Systems 35
DECISION MAKING 36
TRANSACTION PROCESSING SYSTEMS 36
DECISION SUPPORT SYSTEMS 38
EXECUTIVE INFORMATION SYSTEMS 39
Digital Dashboards 40
Artificial Intelligence 43
Data Mining 45
Section 2.2 Enterprise Systems 46
ENTERPRISE SYSTEMS 46
SUPPLY CHAIN MANAGEMENT 46
CUSTOMER RELATIONSHIP MANAGEMENT 47
CRM Strategy 48
BUSINESS PROCESS REENGINEERING 49
Finding Opportunity Using BPR 50
Pitfalls of BPR 52
ENTERPRISE RESOURCE PLANNING 52
ERP Software 52
Finding the Right ERP Solution 53
Key Terms 54
Closing Case One: Consolidating Touchpoints for Saab 50
Closing Case Two: Made-to-Order Businesses 56
Closing Case Three: Delta Air Lines Plays Catch-Up 58
Making Business Decisions 60
CHAPTER 3
E-Business 62
Opening Case: Amazon.com—Not Your Average Bookstore 65
INTRODUCTION 65
Section 3.1 Business and the Internet 65
DISRUPTIVE TECHNOLOGY 65
Disruptive versus Sustaining Technology 66
The Internet—Business Disruption 67
EVOLUTION OF THE INTERNET 67
Evolution of the World Wide Web 69
ACCESSING INTERNET INFORMATION 70
Intranet 71
Extranet 71
Portal 71
Kiosk 72
PROVIDING INTERNET INFORMATION 72
Internet Service Provider 72
Online Service Provider 74
Application Service Provider 74
Section 3.2 E-Business 75
E-BUSINESS BASICS 75
E-BUSINESS MODELS 76
Business-to-Business (B2B) 76
Business-to-Consumer (B2C) 78
Consumer-to-Business (C2B) 79
Consumer-to-Consumer (C2C) 79
ORGANIZATIONAL STRATEGIES FOR E-BUSINESS 79
Marketing/Sales 80
Financial Services 80
Purchasing 82
Customer Service 83
Intermediaries 85
MEASURING E-BUSINESS SUCCESS 85
Web Site Metrics 86
E-BUSINESS BENEFITS AND CHALLENGES 87
NEW TRENDS IN E-BUSINESS, E-GOVERNMENT, AND M-COMMERCE 91
M-Commerce 91
Key Terms 93
Case Study One: eBay—The Ultimate E-Business 94
Case Study Two: Direct Groceries 97
Case Study Three: How Do You Value Friendster? 98
Making Business Decisions 99
CHAPTER 4
Ethics and Information Security 101
Opening Case: Sarbanes-Oxley: Where Information Technology, Finance, and Ethics Meet
102
INTRODUCTION 104
Section 4.1 Ethics 104
ETHICS 104
INFORMATION ETHICS 105
Information Has No Ethics 106
DEVELOPING INFORMATION MANAGEMENT POLICIES 108
Ethical Computer Use Policy 108
Information Privacy Policy 109
Acceptable Use Policy 109
E-Mail Privacy Policy 109
Internet Use Policy 111
Anti-Spam Policy 112
ETHICS IN THE WORKPLACE 113
Monitoring Technologies 113
Employee Monitoring Policies 114
Section 4.2 Information Security 115
PROTECTING INTELLECTUAL ASSETS 116
THE FIRST LINE OF DEFENSE—PEOPLE 117
THE SECOND LINE OF DEFENSE—TECHNOLOGY 121
Authentication and Authorization 121
Prevention and Resistance 122
Content Filtering 123
Encryption 124
Firewalls 124
Detection and Response 125
Key Terms 128
Closing Case One: Banks Banking on Security 129
Closing Case Two: Hacker Hunters 131
Closing Case Three: Thinking Like the Enemy 133
Making Business Decisions 134
CHAPTER 5
IT Architectures 136
Opening Case: Electronic Breaking Points 137
INTRODUCTION 140
Section 5.1 Hardware and Software Basics 140
HARDWARE BASICS 140
Central Processing Unit 140
Primary Storage 143
Secondary Storage 144
Input Devices 145
Output Devices 147
Communication Devices 148
COMPUTER CATEGORIES 148
SOFTWARE BASICS 149
System Software 149
Application Software 151
Section 5.2 Managing Enterprise Architectures 152
ENTERPRISE ARCHITECTURES 152
INFORMATION ARCHITECTURE 154
Backup and Recovery 155
Disaster Recovery 155
Information Security 157
INFRASTRUCTURE ARCHITECTURE 158
Flexibility 158
Scalability 159
Reliability 159
Availability 159
Performance 160
APPLICATION ARCHITECTURE 160
Web Services 160
Open Systems 162
Key Terms 163
Closing Case One: Chicago Tribune’s Server Consolidation a Success 164
Closing Case Two: UPS in the Computer Repair Business 166
Closing Case Three: Fear the Penguin 167
Making Business Decisions 169
CHAPTER 6
Databases and Data Warehouses 171
Opening Case: Searching for Revenue—Google 172
INTRODUCTION 176
Section 6.1 Database Fundamentals 176
UNDERSTANDING INFORMATION 176
Information Quality 177
DATABASE FUNDAMENTALS 180
DATABASE ADVANTAGES 180
Increased Flexibility 181