Download - MIS Mancosa Lectures
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Management Management Information SystemsInformation Systems
MBA ProgrammeMBA Programme
MANCOSAMANCOSA
Management Management Information SystemsInformation Systems
MBA ProgrammeMBA Programme
MANCOSAMANCOSA
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• In the emerging, fully digital firm– Significant business relationships are digitally
enabled and mediated– Core business processes are accomplished
through digital networks– Key corporate assets are managed digitally
• Digital firms offer greater flexibility in organization and management
The Role of Information Systems in Business Today
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• Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals
• Business firms invest heavily in information systems to achieve six strategic business objectives:
– Operational excellence– New products, services, and business models– Customer and supplier intimacy– Improved decision making– Competitive advantage– Survival
The Role of Information Systems in Business Today
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The Role of Information Systems in Business Today
The Interdependence Between Organizations and The Interdependence Between Organizations and Information TechnologyInformation Technology
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Perspectives on Information Systems
Functions of an Information SystemFunctions of an Information System
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Perspectives on Information Systems
Levels in a FirmLevels in a Firm
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• Management dimension of information system
– Managers set organizational strategy for responding to business challenges
– In addition, managers must act creatively:• Creation of new products and services• Occasionally re-creating the organization
Perspectives on Information Systems
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• Examples of functional business processes– Manufacturing and production
• Assembling the product
– Sales and marketing• Identifying customers
– Finance and accounting• Creating financial statements
– Human resources• Hiring employees
Business Processes and Information Systems
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Business Processes and Information Systems
• Information technology enhances business processes in two main ways:
• Increasing efficiency of existing processes• Automating steps that were manual
• Enabling entirely new processes that are capable of transforming the businesses• Change flow of information• Replace sequential steps with parallel steps• Eliminate delays in decision making
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• Systems from a constituency perspective
– Transaction processing systems: supporting operational level employees
– Management information systems and decision-support systems: supporting managers
– Executive support systems: supporting executives
Types of Business Information Systems
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• Transaction processing systems– Perform and record daily routine
transactions necessary to conduct business
• E.g. sales order entry, payroll, shipping
– Allow managers to monitor status of operations and relations with external environment
Types of Business Information Systems
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• Management information systems– Serve middle management
– Provide reports on firm’s current performance, based on data from TPS
– Provide answers to routine questions with predefined procedure for answering them
– Typically have little analytic capability
Types of Business Information Systems
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How Management Information Systems Obtain their How Management Information Systems Obtain their Data from the Organization’s TPSData from the Organization’s TPS
Types of Business Information Systems
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• Decision support systems– Serve middle management
– Support nonroutine decision making• E.g. What is impact on production schedule if
December sales doubled?
– Often use external information as well from TPS and MIS
Types of Business Information Systems
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• Executive support systems
– Support senior management– Address nonroutine decisions requiring
judgment, evaluation, and insight– E.g. ESS that provides minute-to-minute
view of firm’s financial performance as measured by working capital, accounts receivable, accounts payable, cash flow, and inventory.
Types of Business Information Systems
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Interrelationships Among SystemsInterrelationships Among Systems
Types of Business Information Systems
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Decision Making and Information Systems
• Types of decisions:
• Unstructured: Decision maker must provide judgment, evaluation, and insight to solve problem
• Structured: Repetitive and routine; involve definite procedure for handling so they do not have to be treated each time as new
• Semistructured: Only part of problem has clear-cut answer provided by accepted procedure
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Information Requirements of Key Decision-Making Information Requirements of Key Decision-Making Groups in a FirmGroups in a Firm
Decision Making and Information Systems
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Stages in Decision MakingStages in Decision Making
Decision Making and Information Systems
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Systems for Decision Support
• Four kinds of systems for decision support
• Management information systems (MIS)
• Decision support systems (DSS)
• Executive support systems (ESS)
• Group decision support systems (GDSS)
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Systems for Decision Support
• Management information systems (MIS)
• Help managers monitor and control business by providing information on firm’s performance and address structured problems
• Typically produce fixed, regularly scheduled reports based on data from TPS
• E.g. exception reports: Highlighting exceptional conditions, such as sales quotas below anticipated level
• E.g. California Pizza Kitchen MIS
• For each restaurant, compares amount of ingredients used per ordered menu item
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Systems for Decision Support
• Decision-support systems (DSS)
• Support unstructured and semistructured decisions
• Model-driven DSS
• Earliest DSS were heavily model-driven
• Data-driven DSS
• Some contemporary DSS are data-driven
• Use OLAP and data mining to analyze large pools of data
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Systems for Decision Support
• Components of DSS
• Database used for query and analysis
• Current or historical data from number of applications or groups
• May be small database or large data warehouse
• User interface
• Often has Web interface
• Software system with models, data mining, and other analytical tools
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Systems for Decision Support
• Model:
• Abstract representation that illustrates components or relationships of phenomenon; may be physical, mathematical, or verbal model
• Statistical models
• Optimization models
• Forecasting models
• Sensitivity analysis models
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A Pivot Table that Determines Regional Distribution of CustomersA Pivot Table that Determines Regional Distribution of Customers
Systems for Decision Support
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Executive Support Systems (ESS)
• Executive support systems (ESS)• Integrate data from different functional systems for firmwide
view
• Incorporate external data, e.g. stock market news, competitor information, industry trends, legislative action
• Include tools for modeling and analysis
• Facilities for detecting signals of problems, threats, or strategic opportunities
• Able to drill down from summary information to lower levels of detail
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• What Is a GDSS?
• Interactive, computer-based system used to facilitate solution of unstructured problems by set of decision makers working together as group
• Designed to improve quality and effectiveness of decision-making meetings
• Make meetings more productive by providing tools to facilitate:• Planning, generating, organizing, and evaluating ideas
• Establishing priorities
• Documenting meeting proceedings for others in firm
Group Decision-Support Systems (GDSS)
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• Components of GDSS
• Hardware
• Facility: Appropriate facility, furniture, layout
• Electronic hardware: Audiovisual, computer, networking equipment
• Software
• Electronic questionnaires, electronic brainstorming tools, idea organizers
• Tools for voting or setting priorities, stakeholder identification and analysis tools, policy formation tools,
• Group dictionaries
• People
• Participants and trained facilitator, support staff
Group Decision-Support Systems (GDSS)
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• Overview of GDSS meeting
• Each attendee has workstation, networked to facilitator’s workstation and meeting’s file server
• Whiteboards on either side of projection screen
• Seating arrangements typically semicircular, tiered
• Facilitator controls use of tools during meeting
• All input saved to server, kept confidential
• After meeting, full record (raw material and final output) assembled and distributed
Group Decision-Support Systems (GDSS)
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Group System ToolsGroup System Tools
Group Decision-Support Systems (GDSS)
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• Why do some firms become leaders within their industry?
• Michael Porter’s competitive forces model• Provides general view of firm, its competitors, and
environment• Five competitive forces shape fate of firm
Using Information Systems to Achieve Competitive Advantage
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Porter’s Competitive Forces ModelPorter’s Competitive Forces Model
Using Information Systems to Achieve Competitive Advantage
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• Traditional competitors• All firms share market space with competitors who
are continuously devising new products, services, efficiencies, switching costs
• New market entrants • Some industries have high barriers to entry, e.g.
computer chip business• New companies have new equipment, younger
workers, but little brand recognition
Using Information Systems to Achieve Competitive Advantage
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• Substitute products and services• Substitutes customers might use if your prices
become too high, e.g. iTunes substitutes for CDs
• Customers • Can customers easily switch to competitor’s
products? Can they force businesses to compete on price alone in transparent marketplace?
• Suppliers• Market power of suppliers when firm cannot raise
prices as fast as suppliers
Using Information Systems to Achieve Competitive Advantage
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• Four generic strategies for dealing with competitive forces, enabled by using IT
• Low-cost leadership
• Product differentiation
• Focus on market niche
• Strengthen customer and supplier intimacy
Using Information Systems to Achieve Competitive Advantage
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• Low-cost leadership• produce products and services at a lower price than
competitors while enhancing quality and level of service.
• Product differentiation• Enable new products or services, greatly change
customer convenience and experience
Using Information Systems to Achieve Competitive Advantage
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• Focus on market niche
• Use information systems to enable a focused strategy on a single market niche; specialize.
• Strengthen customer and supplier intimacy’
• Use information systems to develop strong ties and loyalty with customers and suppliers
Using Information Systems to Achieve Competitive Advantage
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Understanding Ethical and Social Issues Related to Systems
• Five moral dimensions of information age
• Major issues raised by information systems include:
• Information rights and obligations
• Property rights and obligations
• Accountability and control
• System quality
• Quality of life
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• Health risks:• Repetitive stress injury (RSI)
• Largest source is computer keyboards
• Carpal Tunnel Syndrome (CTS)
• Computer vision syndrome (CVS)
• Technostress
• Role of radiation, screen emissions, low-level electromagnetic fields
The Moral Dimensions of Information Systems
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The Data HierarchyThe Data Hierarchy
Organizing Data in a Traditional File Environment
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Organizing Data in a Traditional File Environment
• Problems with the traditional file processing (files maintained separately by different departments)• Data redundancy and inconsistency
• Data redundancy: Presence of duplicate data in multiple files
• Data inconsistency: Same attribute has different values
• Program-data dependence:• When changes in program requires changes to data accessed by
program
• Lack of flexibility• Poor security• Lack of data sharing and availability
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• Database: • Collection of data organized to serve many applications by
centralizing data and controlling redundant data
• Database management system: • Interfaces between application programs and physical data files
• Separates logical and physical views of data
• Solves problems of traditional file environment• Controls redundancy
• Eliminated inconsistency
• Uncouples programs and data
• Enables central management and security
The Database Approach to Data Management
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The Database Approach to Data Management
Human Resources Database with Multiple ViewsHuman Resources Database with Multiple Views
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• Relational DBMS• Represent data as two-dimensional tables called relations or files
• Each table contains data on entity and attributes
• Table: Grid of columns and rows• Rows (tuples): Records for different entities
• Fields (columns): Represents attribute for entity
• Key field: Field used to uniquely identify each record
• Primary key: Field in table used for key fields
• Foreign key: Primary key used in second table as look-up field to identify records from original table
The Database Approach to Data Management
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The Database Approach to Data Management
Relational Database TablesRelational Database Tables
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The Database Approach to Data Management
Relational Database Tables (cont.)Relational Database Tables (cont.)
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Components of a Data WarehouseComponents of a Data Warehouse
Using Databases to Improve Business Performance and Decision Making
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Using Databases to Improve Business Performance and Decision Making
• Business Intelligence: • Tools for consolidating, analyzing, and providing access
to vast amounts of data to help users make better business decisions
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Managing Data Resources
• Managing data resources:• Establishing an information policy
• Information policy: Specifies firm’s rules, procedures, roles for sharing, standardizing data
• Data administration: Responsible for specific policies and procedures; data governance
• Database administration: Database design and management group responsible for defining, organizing, implementing, maintaining database
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Communications Networks
• Signals: digital vs. analog• Analog: Represented by continuous waveform
• Digital: Discrete, binary waveform
• Data as strings of two states: one bit, zero bits / on-off electrical pulses
• Modem needed to translate between analog and digital
• Types of networks (geographic scope)• Local area network (LAN)
• Campus area network (CAN)
• Metropolitan area network (MAN)
• Wide area network (WAN)
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Functions of the ModemFunctions of the Modem
Communications Networks
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Network TopologiesNetwork Topologies
Communications Networks
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Communications Networks
• Physical transmission media
• Twisted wire• Pairs of twisted copper wire
• Older type of transmission medium
• Most common LAN cabling: Cat5 cable
• Coaxial cable• Single, thickly insulated copper wire
• Used for longer runs
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Communications Networks
• Physical transmission media
• Fiber optics and optical networks
• Strands of clear glass fiber
• Used for Internet backbone
• Optical networks can boost capacity by using multiplexing -
using different wave lengths to carry separate streams of data
over same strand
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Communications Networks
• Wireless transmission media
• Microwave systems
• High-frequency radio signals that follow straight line and require
transmission stations or satellites to act as relay
• Cellular telephones
• Radio towers placed in adjacent geographic areas (cells)
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Communications Networks
• Transmission speed
• Bits per second (bps): Used to measure total amount
of data that can be transmitted
• Hertz (cycles per second): Frequency of medium,
affects transmission capacity
• Bandwidth: Difference between highest and lowest
frequencies that can be accommodated on channel
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The Internet
• What is the Internet?
• World’s most extensive public communication system, rivaling
global telephone system
• World’s largest implementation of:
• Client/server network
• Internetworking
• Internet service provider:
• Commercial organization with permanent connection to Internet
• Sells temporary connections to retail subscribers
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The Internet
• Internet addressing
• IP address
• Assigned to each computer on Internet
• 32-bit number: four strings of numbers ranging from 0 to 255
separated by periods
• E.g. 207.46.250.119
• Messages decomposed into packets, each carrying
destination IP address
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The Internet
• Domain Name System• Converts IP addresses to domain names
• DNS servers maintain database of domain names mapped to IP
addresses
• Domains: E.g. www.google.com
• Root domain (“.”)
• Top-level domain (.gov, .com, .edu, etc.)
• Second-level domain (e.g. “google”)
• Third-level domains/hosts (“www”)
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• World Wide Web: Most popular Internet service
• Web pages: Formatted using Hypertext Markup Language
(HTML) with embedded links that connect documents to one
another and that also link pages to other objects, such as sound,
video, or animation files
• Hypertext Transfer Protocol (HTTP): Communications
standard used to transfer pages on Web
• Uniform resource locator (URL): Full address of web page,
including protocol, domain name, directory path, and file name
• E.g.: http://www.megacorp.com/content/features/082602.html
The Internet
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• Web servers: Software for locating and managing stored Web pages, typically run on dedicated computers
• Web site: Collection of Web pages linked to home page
• Webmaster: Person in charge of organization’s Web site
• Search engines: Allow finding information on Web of 50 billion+ pages nearly instantly
The Internet
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• Intranets: Private networks using Internet standards
• Protected from public visits by firewalls
• Extranets: Limited area of intranet designed for access by authorized vendors and customers
• Technologies and tools for communication and e-business• E-mail• Chat, instant messaging• Electronic discussions• Groupware• Electronic conferencing
The Internet
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• Internet telephony:
• Telephone voice transmission over Internet or private networks
• Voice over IP (VoIP): Uses Internet Protocol (IP) to deliver voice
information using packet switching, avoiding tolls charged by local
and long-distance telephone networks
• Can reduce communication and network management costs by 20
to 30 percent
• Flexible technology: Phones can be added or moved to different
offices without rewiring or reconfiguring network
The Internet
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Systems Vulnerability and Abuse
• Security
• Policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems
• Controls
• Methods, policies, and organizational procedures that ensure:
• Safety of organization’s assets
• Accuracy and reliability of accounting records
• Operational adherence to management standards
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Systems Vulnerability and Abuse
• Why systems are vulnerable
• Electronic data vulnerable to more types of threats than manual data
• Networks
• Potential for unauthorized access, abuse, or fraud is not limited to single location but can occur at any access point in network
• Vulnerabilities exist at each layer and between layers
• E.g. user error, viruses, hackers, radiation, hardware or software failure, theft
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Systems Vulnerability and Abuse
• Malicious software (malware)• Computer virus
• Rogue software program that attaches to other programs or data files
• Payload may be relatively benign or highly destructive
• Worm:
• Independent program that copies itself over network
• Viruses and worms spread via:• Downloaded software files
• E-mail attachments
• Infected e-mail messages or instant messages
• Infected disks or machines
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Systems Vulnerability and Abuse
• Trojan horse• Software program that appears to be benign but then does
something other than expected
• Does not replicate but often is way for viruses or malicious code to enter computer system
• Spyware • Small programs installed surreptitiously on computers to monitor
user Web surfing activity and serve advertising
• Key loggers• Record and transmit every keystroke on computer
• Steal serial numbers, passwords
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Systems Vulnerability and Abuse
• Hacker • Individual who intends to gain unauthorized access to
computer system
• Cybervandalism• Intentional disruption, defacement, or destruction of Web
site or corporate information system
• Sniffer:• Eavesdropping program that monitors information
traveling over network
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Systems Vulnerability and Abuse
• Denial-of-service (DoS) attack:
• Flooding network or Web server with thousands of false
requests so as to crash or slow network
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Systems Vulnerability and Abuse
• Computer crime
• Computer as target of crime
• Accessing computer without authority
• Breaching confidentiality of protected computerized data
• Computer as instrument of crime
• Theft of trade secrets and unauthorized copying of software or copyrighted intellectual property
• Using e-mail for threats or harassment
• Most economically damaging computer crimes
• DoS attacks and viruses
• Theft of service and disruption of computer systems
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Systems Vulnerability and Abuse
• Identity theft• Using key pieces of personal information (social security
numbers, driver’s license numbers, or credit card numbers) to impersonate someone else
• Phishing• Setting up fake Web sites or sending e-mail messages that look
like those of legitimate businesses to ask users for confidential personal data
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Systems Vulnerability and Abuse
• Internal threats: Employees• Company insiders pose serious security problems
• Access to inside information– like security codes and passwords
• May leave little trace
• User lack of knowledge: Single greatest cause of network security breaches• Compromised passwords
• Social engineering
• Errors introduced into software by:• Faulty data entry, misuse of system
• Mistakes in programming, system design
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• Security policy• Statements ranking information risks, identifying acceptable
security goals, and identifying mechanisms for achieving these goals
• Chief Security Officer (CSO)• Heads security group in larger firms• Responsible for enforcing security policy
• Security group • Educates and trains users• Keeps management aware of security threats and
breakdowns• Maintains tools chosen to implement security
Technologies and Tools for Security
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• Disaster recovery planning• Restoring computing and communication services after
earthquake, flood, etc.
• Can be outsourced to disaster recovery firms
• Business continuity planning• Restoring business operations after disaster
• Identifies critical business processes and determines how to handle them if systems go down
• Business impact analysis • Use to identify most critical systems and impact system outage
has on business
Technologies and Tools for Security
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• Access control• Policies and procedures used to prevent improper access to
systems by unauthorized insiders and outsiders
• Users must be authorized and authenticated
• Authentication: • Typically established by password systems
• New authentication technologies:• Tokens
• Smart cards
• Biometric authentication
Technologies and Tools for Security
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• Firewalls:
• Hardware and software controlling flow of incoming and outgoing network traffic
• Prevents unauthorized access
• Screening technologies
Technologies and Tools for Security
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• Intrusion detection systems:
• Full-time, real-time monitoring tools
• Placed at most vulnerable points of corporate networks to detect and deter intruders
• Scanning software looks for patterns such as bad passwords, removal of important files, and notifies administrators
Technologies and Tools for Security
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• Antivirus software, antispyware software
• Antivirus software:
• Checks computer systems and drives for presence of computer viruses
• To remain effective, antivirus software must be continually updated
• Antispyware software tools:
• Many leading antivirus software vendors include protection against spyware
Technologies and Tools for Security
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• Three major e-commerce categories• Business-to-consumer (B2C)
• E.g. Barnesandnoble.com
• Business-to-business (B2B)• E.g. ChemConnect.com
• Consumer-to-consumer (C2C)• E.g. eBay.com
• M-commerce• Use of handheld wireless devices for purchasing goods
and services from any location
Electronic Commerce
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The Growth of International Information Systems
• Strategy when building international systems
• Understand global environment
• Business drivers pushing your industry toward global competition
• Inhibitors creating management challenges
• Develop corporate strategy for competition
• How firm should respond to global competition
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The Growth of International Information Systems
• Strategy when building international systems (cont.)
• Develop organization structure and division of labor
• Where will production, marketing, sales, etc. be located
• Consider management issues
• Design of business procedures, reengineering
• Consider technology platform
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International Information Systems ArchitectureInternational Information Systems Architecture
The Growth of International Information Systems
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The Growth of International Information Systems
• Challenges and obstacles to global business systems
• General, cultural challenges
• Cultural particularism
• Regionalism, nationalism, language differences
• Social expectations:
• Brand-name expectations, work hours
• Political laws
• Transborder data flow
• Transborder data and privacy laws, commercial regulations
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The Growth of International Information Systems
• Specific challenges
• Standards
• Different EDI, e-mail, telecommunication standards
• Reliability
• Phone networks not uniformly reliable
• Speed
• Different data transfer speeds, many slower than U.S.
• Personnel
• Shortages of skilled consultants
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Managing Global Systems
• Principle management problems posed by developing international systems
• Agreeing on common user requirements
• Introducing changes in business processes
• Coordinating application development
• Coordinating software releases
• Encouraging local users to support global systems
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Managing Global Systems
1. Define core business processes
2. Identify core systems to coordinate centrally
3. Choose an approach• Grand design approaches tend to fail
• Evolve transnational applications incrementally from existing applications
4. Make benefits clear• Global flexibility
• Gains in efficiency
• Global markets
• Optimizing corporate funds over much larger capital base
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Managing Global Systems
• The management solution
• Agreeing on common user requirements
• Introducing changes in business processes
• Coordinating applications development
• Coordinating software releases
• Encouraging local users to support global systems
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• Technology challenges of global systems
• Computing platforms and systems integration
• How new core systems will fit in with existing suite of applications developed around globe by different divisions
• Standardization: Data standards, interfaces, software, etc.
• Connectivity
• Internet does not guarantee any level of service
• Many firms use private networks and VPNs
• Low penetration of PCs, outdated infrastructures
Technology Issues and Opportunities for Global Value Chains
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• Technology challenges of global systems (cont.)
• Software
• Integrating new systems with old
• Human interface design issues, languages,
• Standardizing business processes
• Software applications that enhance productivity of international work teams
• Solutions include
• EDI, SCM systems
• Groupware, e-mail, videoconferencing
• Internet-based tools
Technology Issues and Opportunities for Global Value Chains