Wednesday, May 27, 2009

Chapter 10 - week 12

What are some problems associated with assessing the costs of IT?

Placing a dollar value on the cost of IT investment may not be as simple as it sounds. One of the major challenges that companies face is to allocate fixed costs among different IT projects. Fixed costs are those costs that remain the same regardless of any change in the activity level. For IT, fixed costs include infrastructure cost, cost of IT services, and IT management cost. For example, the salary of the director is fixed, and adding one more application will not change it. Another complication is that the cost of a system does not end when the system is installed. Costs for maintaining, debugging, and improving the system can accumulate over many years. In some cases the company does not even anticipate them when it makes the investment.

What difficulties accompany the intangible benefits from IT?

Evaluating the benefits of IT projects is more complex than calculating their costs. Benefits may be hard to quantify, especially because many of them are intangible (for example, improved customer or partner relations or improved decision making). Also, the fact that organizations use IT for a variety of purposes further complicates benefit analysis. In addition to obtain a return from an IT investment, the company must implement the technology successfully.

Define NPV and ROI, and business case approaches.

Net present value (NPV) calculation are used for cost-benefits analyses. Using the NPV method, analysts convert future values of benefits to their present-value equivalent by “discounting” them at the organization’s cost of funds. They then can compare the present value of the future benefits to the cost required to achieve those benefits and determine whether the benefits exceed the costs.
Return on investment (ROI) measures management’s effectiveness in generating profits with its available assets. The ROI measure is a percentage, and the higher the percentage return, the better. ROI is calculated by dividing net income attributable to a project by the average assets invested in the project. In the case of IT the company would divide the income generated by an IT investment by the costs of that investment.
Finally a different method used to justify investment projects is the business case approach. A business case is a written document that managers use to justify funding one or more specific applications or projects. The business case approach is usually employed in existing organisations that want to embark on new IT projects. A business case provides the bridge between the initial plan and its execution. Its purpose is not only to get approval and funding but also to provide the foundation for tactical decision making and technology risk management.

What type of companies provide outsourcing service?

Small or medium sized companies with a few IT staff and limited budgets are best served by outside contractors. Acquiring IT applications from outside contractors or external organization is referred to as outsourcing. Large companies may also choose this strategy in certain circumstances, for example, they might want to experiment with new IT technologies without making a substantial up-front investment. They may also use outsourcing to protect their internal networks and to gain access to outside experts.

Define ASPs and list their advantages to companies using them.

An Application service provider (ASP) is an agent or a vendor who assembles the software needed by enterprise and packages the software with services such as development, operations, and maintenance. The customer then accesses these applications via the Internet or VANs through a standard Web browser interface. For companies using ASP the adavantages are:

-It saves various expenses (such as labour costs) in the initial development stage.
-Helps reduce the costs of software maintenance and upgrading and user training over the long run.
-The company is able to select another software product from the vendor to meet changing needs.
-Saves time.
-Saves the company the costs of upgrading the existing software.
-Makes the company more competitive by enhancing the company’s ability to adapt to changing market conditions.

List some disadvantages of ASPs.

- May produce excessive documentation.
-Users may be unwilling or unable to study the specifications they approve.
-Takes too long to go from the original idea to a working system.
-Users have trouble describing requirements for a proposed system.
-Not practical with large number of users.

List the major steps of selection of a vendor and a software package.

-Identify Potential Vendors.
-Determine the Evaluation Criteria.
-Evaluate Vendors and Packages.
-Choose the Vendor and Package.
-Negotiate a Contract.
-Establish a Service Level Agreement.

Describe a request for proposal (RFP).

A Request for proposal (RFP) is a document that is sent to potential vendors inviting them to submit a proposal that describes their software package and explains how it would meet the company’s needs. The RFP provides vendors with information about the objectives and requirements of the system.

Describe SLAs

Service level agreements (SLAs) are formal agreements that specify how work is to be divided between the company and its vendors. These divisions are based on a set of agreed upon milestones, quality checks, and what-if situations. They describe how quality checks will be made and what is to be done in case of disputes. They accomplish these goals by defining responsibility of both partners, providing a framework for designing support services, and allowing the company to retain as much control as possible over its own systems.
Chapter 9

Describe the decision-making process proposed by Simon.

Simon (1977) described the process as composed of three major phases: intelligence, design and choice. A fourth phase, implementation was added later.
The decision-making process starts with the intelligence phase, in which managers examine a situation and identify and define the problem. In the design phase, decision makers construct a model that simplifies the problem. They do this by making assumptions that simplify reality and by expressing the relationships among all the relevant variables. Managers than validate the model by using test data. Finally, decision makers set criteria for evaluating all potential solutions that are proposed. The choice phase involves selecting a solution which is tested “on paper”. Once this proposed solution seems to be feasible, decision making enters the last phase, implementation. Implementation is successful if the proposed solution actually resolves the problem. Failure leads to a return to the previous phases. Computer based decision support attempts to automate several tasks in the decision making process, in which modelling is the core.

Why do managers need IT support?

It is difficult to make decisions without having the relevant information. Information is vital for each phase and activity in the decision-making process. Despite the widespread of information, making decisions is becoming increasingly difficult owing to the following trends:

- The number of alternatives to be considered is constantly increasing, due to innovation in technology, improved communications, the development of global markets, and the use of the internet and e-business. The more alternatives that exist, the more computer-assisted search and comparisons are needed.
- The decisions must be made under time pressure. Frequently, it is not possible to process information manually fast enough to be effective.
- Due to increased uncertainty in the decision environment, decisions are becoming more complex. It is usually necessary to conduct a sophisticated analysis in order to make a good decision. Such analysis requires the use of modelling.
- It is often necessary to access remote information rapidly, consult with expert, or conduct a group decision-making session, all without incurring large expenses. Decision makers can be different locations, as can the information. Bringing them all together quickly and inexpensively may be a difficult task.
These trends create major difficulties in decision-making. Fortunately a computerised analysis can be of enormous help.

Describe the decision matrix.

The three primary classes of problem structure and the three broad categories of the nature of decisions can be combined in a decision support matrix that consists of nine cells. Lower- level managers usually perform the structured and operational control oriented tasks (cells 1, 2 and 4). The tasks in cells 3, 5 and 7 are usually the responsibility of middle managers and professional staff. Finally, tasks in cells 6, 8, and 9 are generally the responsibility of senior executives.

Describe the capabilities of data mining.

Data mining can perform two basic operations: predicting trends and behaviours and identifying previously unknown patterns. Multidimensional view provides the users with a view of what is happening whereas data mining provides a view of why it is happening and what will happen in the future. In most cases the intent of data mining is to identify a business opportunity in order to create a sustainable competitive advantage.

Further capabilities of data mining include:
- Retailing and Sales: Predicting sales, preventing theft and fraud, and determining correct inventory levels and distribution schedules among outlets.
- Banking: Forecasting levels of bad loans and fraudulent credit card use, predicting credit card spending by new customers, and determining which kinds of customers will best respond to (and quality for) new loan offers.
- Manufacturing and Production: Predicting machinery failures and finding key factors that help optimize manufacturing capacity.
- Insurance: Forecasting claim amounts and medical coverage costs, classifying the most important elements that affect medical coverage, and predicting which customers will buy new insurance policies.
- Policework: Tracking crime patterns, locations, and criminal behaviour; identifying attributes to assist in solving criminal cases.
-Health care: Correlating the demographics of patients with critical illness and development better insights on how to identify and treat symptoms and their causes.
-Marketing: Classifying customer demographics that can be used to predict which customers will respond to a mailing or buy a particular product.

What are some of the capabilities of digital dashboards?

The capabilities if digital dashboard include:
- Drill-down: the ability to go to details, at several levels; can be done by a series of menus or by directed queries (using intelligent agents and natural language processing).
- Critical success factors (CSFs): the factors most critical for the success of business, they may be organizational, industry, department, etc.
- Key performance indicators (KPIs): The specific measures of CSFs.
- Status access: The latest data available on KPI or some other metric, ideally in real time.
- Trend Analysis: Short- medium and long-term trend of KPIs or metrics, which are projected using forecasting methods.
- Adhoc analysis: Analyses made anytime, upon demands and with any desired factors and relationships.
- Exception Reporting: Reports the highlight deviations larger than certain threshold. Reports may include only deviations.
Chapter 8

What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.

Transactional Processing Systems monitor, collect, store as well as process data that is generated from all business transactions. These data are inputs to the organization’s database. They are also inputs to the functional information systems, decision support systems, customer relationship management, knowledge management, and e-commerce. TPSs have to handle high volume and large variations in volume (e.g. during peak times), efficiently, avoid errors and downtime, record results accurately and securely, as well as maintain privacy and security.
A fairly standard procedure occurs, whether in a manufacturing firm, service firm or a government organisation. First data is collected by people or sensors and are entered into the computer via any input device. Next, the system processes data in one of two basic ways: batch processing (placing data into groups). The system then prepares and processes the batches periodically (e.g. every night).

What is a functional area information system? List its major characteristics.

Functional area information systems (FAIS) provide information mainly to lower and middle level managers in the functional areas. They use this information to help them plan, organise and control operations. The information is provided in a variety of reports. The FAIS can also use data from external database to create the management reports.

How does a FAIS support management by exception? How does it support on-demand reports?
FAISs generates reports in its functional area. The FAISs also sends information to the corporate data warehouse and can be used for decision support. A FAIS produces primarily three types of reports: routine, ad hoc (on demand), and exception.
FAIS support management by exception as some managers prefer exception reports. Exception reports include only information that falls outside certain threshold standards. To implement management by exception, managers first create performance standards. The company must set up systems to monitor performance, compare actual performance to the standards, and identify predefined exceptions. Managers are altered to the exceptions via exception reports.
Ad hoc are on demand reports (out of the routine), they include requests for the following types of information:
- Drill down reports – show a greater level of detail
- key indicator reports – summarise the performance of critical activities
- comparative reports – compare e.g the performance of different business units

Define ERP and describe its functionalities.

Enterprise Resource Planning (ERP) Systems integrate the planning, management, and use of all an organisations resources. The major objectives of ERP systems are to tightly integrate the functional areas of the organisation and enable information to flow seamlessly across the functional areas. Tight integration means that changes in one functional area are immediately reflected in all other pertinent functional areas.
ERP provide the information necessary to control the business processes of the organisation. A business process is a set of related steps or procedures designed to produce a specific outcome. Business processes can be located entirely within one functional area, such as approving a credit card application or hiring a new employee. They can also span multiple functional areas, such as fulfilling a large order from a new customer.
ERP software included a set of interdependent software modules, linked to a common database that provides support for the internal business processes in the following functional areas: finance and accounting, sales and marketing, manufacturing and production, and human resources. These modules are built around predefined business processes, and users access them through a single interface.

List some drawbacks of ERP
The major drawbacks of ERP are as follows, they can be extremely complex, expensive, and time consuming to implement. For companies with well-established procedures this can be a problem. Finally companies must purchase the entire software package even if they require only a few of the modules.

Define a supply chain and supply chain management (SCM).

A Supply Chain refers to the flow of materials, information, money and services from raw material suppliers, through to factories and warehouses and then to the end customer. A supply chain also includes the organisations and processes that create and deliver products, information, and services to end customers.
Supply Chain Managements (SCM) function is to plan, organise, and optimise the supply chains activities. Like other functional areas, SCM utilises information systems. The goal of SCM systems is to reduce friction along the supply chain. Friction can involve increased time, costs, and inventories as well as decreased customer satisfaction. SCM systems then reduce uncertainty and risks by decreasing inventory levels and cycle time and improving business processes and customer service. All these benefits contribute to increased profitability and competitiveness.

List the major components of supply chains.

There are three main segments to the supply chain and they are:
1) Upstream: where sourcing or procurement from external suppliers occurs (e.g. orders, information, payments, returns)
2) Internal: where packaging, assembling, or manufacturing takes place
3) Downstream: where distribution takes place, frequently by external distributors (e.g. products, services, information)

There are several tiers of suppliers in the supply chain. A suppliers may have one or more subsupplier, and the subsupplier may also have its own subsupplier and so on.

There are typically three flows in the supply chain (material, information and financial):

1- Material Flows: are the physical products, raw materials, suppliers, and so forth that flow along the chain. Material flows also includes reverse flows – returned products, raw materials, supplies and so forth.
2- Information Flows: consist of data that are related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data.
3- Financial Flows: involve money transfers, payments, credit card information and authorisation, payment schedules, e-payments, credit-related data.

What is the bullwhip effect?
The bullwhip effect refers to erratic shifts in orders up and down the supply chain. Basically, customer demand variables can become magnified when they are viewed through the eyes of managers at each link in the supply chain. If each distinct entity that makes ordering and the inventory decisions places its own interests above those of the chain, then stockpiling can occur at as many as seven or eight locations along the supply chain.

Define EDI and list its major benefits and limitations

Electronic Data Interchange (EDI) is a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically. EDI formats these documents according to agreed-upon standards (for example, data formats) and then transmits message using a converter, called a translator. The message travels over either a value added network (VAN) or the internet.


- Minimizes data entry errors because each entry is checked by the computer.
- The length of the message can be shorter and the messages are secured
- Reduces cycle time
- Increases productivity
- Enhances customer service
- Minimises paper usage and storage


- Implementing an EDI system involves a significant initial investment.
- Ongoing operation costs are high due to use of expensive, private VANs.
- Traditional EDI systems are inflexible. For example it is difficult to make quick changes, such as adding business partners.
- Requires a long start up period.
- Business processes must sometimes be restructured to fit EDI requirements
- Also due to the fact that many EDI standards are in use today, one company might have to use several standards in order to communicate with different business partners.
Chapter 4

What are some of the difficulties in managing data?
Difficulties in managing data include:
- Amounts of available data boosts exponentially with time
- Despite the fact that new data is added rapidly, most historic data is kept for a long time causing an even larger build up of data.
- New sources of data emerge.
- Overtime there begins to be data delays
- Data security, quality, and integrity are critical, yet they are easily jeopardised.
- Data can be scattered throughout organisations.

What are the various sources for data?

- Internal Data --> e.g. corporate databases
- External Data --> e.g. commercial databases
- Personal Data --> e.g. personal thoughts, opinions and experiences
- Data also comes from the web in the form of Clickstream data. Clickstream data are those data that visitors and customers produce when they visit a website and click on hyperlinks.

What are a primary key and a secondary key?

Primary key is the identifier field that uniquely identifies a record so that it can be retrieved, updated and sorted. Secondary keys are other fields that have some identifying information but typically do not identify the file with complete accuracy. For example, the students major might be a secondary key if a user wanted to find all students in a particular major field of study.
(primary key shown)

What is an entity and a relationship?

An entity is a person, place, thing, or event about which information is maintained. Entities are associated with one another in relationships, which can include many relationships. The number of entities in a relationship is the degree of relationship.

What are the advantages and disadvantages of relational databases?

An advantage is that this feature allows user’s great flexibility in the variety of queries they can make. A disadvantage is that due to large scales being composed of interrelated tables, the overall design can be complex hence have slow search and access times

What is knowledge management?

Knowledge management is a process that helps organisations identify, select, organise, disseminate, transfer, and apply information and expertise that are part of the organisations memory and that typically reside within the organisation in an unstructured manner.

What is the difference between tacit knowledge and explicit knowledge?

Tacit knowledge is the cumulative store of subjective or experiential learning; highly personal and hard to formalise knowledge. On the other hand explicit knowledge encompasses more objective, rational, and technical knowledge.
Chapter 6
Define e-commerce and distinguish it from e-business.
E- commerce describes the process of buying, selling, and transferring, or exchanging products, services, or information via computer networks, including the internet. E-business is a much broader concept. In addition to the buying and selling of goods and services, e-business also refers to the servicing customers, collaborating with business partners, and performing electronic transactions within an organisation.

Distinguish among B2C, B2B, C2C and B2E electronic commerce.
- B2C -->the sellers are an organisation, and the buyers are individuals.(business to consumer)
- B2B --> both the sellers and the buyers are business organisations (business to business)
- C2C --> an individual sells a product or services to another individual (consumer to consumer)
- B2E -->an organisations uses EC internally to provide information and services to its employees. Companies allow employees to manage their benefits and to take training classes electronically.

List some benefits and limitations of e-commerce.
E-commerce benefits an organisation by making national and international markets accessible and by lowering the costs of processing, distributing and retrieving information. Customers benefit by being able to access a vast number of products and services, around the clock. The major benefit to society is the ability to easily and conveniently deliver information, services, and products to people in cities, rural areas and developing countries.

What are spamming, permission marketing and viral marketing?
· Spamming -is the abuse of electronic messaging systems. It is the indiscriminate distribution of electronic ads without the permission of the receiver.
· Permission marketing asks consumers to give their permission to voluntarily accept online advertising and email. Permission marketing is the basis of many Internet marketing strategies.
· Viral marketing refers to online ‘word-of-mouth’ marketing. The idea behind viral marketing is to have people forward messages to friends, suggesting that they “check this out”. For example a marketer can distribute a small game program embedded with a sponsor’s email that it is easy to forward. Viral marketing allows companies to build brand awareness at a minimal cost.

What are micropayments?

Micropayments are when people, having to pay for something very expensive, pay small payments over a periods of time. It is used to replace the impractical means of paying large amounts of money at once.
For further information see

What is Multichanneling?

Multichanneling is a process in which a company integrates its online and offline channels.

List the major ethical issues in EC
- Threats to privacy
- Protection through encryption
- cookies
- Replaces workers
- Tracking

List the major legal issues of EC.

- Fraud
- Domain names
- other fees
- Copyright
- Taxes
- cyber squatting
Week 7
Describe the basic telecommunications system?

Telecommunication system consists of hardware and software that transmit information from one location to another. These systems can transmit text, data, graphics, voice, documents or full-motion video information with two basic types of signals, analog and digital. The major components of telecommunication systems include the following: devices, communication processors, and communications channels and media.

Compare and contrast the main wired communications channels ? (Ethernet & Fibre Optic)
Ethernet is a common LAN protocol. Most large corporations use gigabit Ethernet in which the network provides data transmission speeds of a 1 billion bits per second. On the other hand fibre optics consist of thousands of very thin filaments of glass fibers that transmit information via light pulses generated by lasers. The thin fibre-optic cable is surrounded by cladding, a coating that prevents the light from leaking out of the fiber.

What are the main business reasons for using networks?

A computer system that connects computers via communications media so that data can be transmitted among them. Computer networks are essential to modern organisations for many reasons. First, networked computer systems enable organisations to be more flexibke so that they can adapt rapidly to changes in business conditions. Second, networks enable companies to share hardware, computer applications, and data across the organisations and among the organisations. Third, networks make it possible for geographically dispersed employees and workgroups to share dpocumentrs, ideas, and creative insights. This sharing encourages teamwork, innovation, anfd more efficient and effective interactions. Finally, networks are a critical link between businesses and their customers.
What is the difference between LANs and WANs?

LANs connects two or more devices in a limited geographical region, usually within the same building, so that every device on the network can communicate with every other device. Every device in a LAN network has a network interface card (NIC) that allows the device to physically connect to the LAN’s communication medium. Whereas WAN’s are networks that cover large geographic areas and typically connect multiple LAN’s. WAN’s generally are provided by common carriers such as telephone companies and the international networks of global communications service providers. WAN’s have a large capacity, and they typically combine multiple channels.

What is a network protocol?

The set of rules and procedures that govern transmission across a network is a protocol. Computing devices that are connected to the networks access and share the network to transmit and receive data. Components known as nodes, work together by adhering to a common set of rules that enable them to communicate with one another.

Describe TCP/IP protocol.

The Transmission Control Protocol/Internet Protocol is the protocol of the internet. TTCP/IP uses a suite of protocols, the main ones being Transmission Control Protocol and the Internet Protocol. The TCP perform three functions the first function is, it manages the movement of packets between computers by establishing a connection between the computers. Secondly, it sequences the transfer of packets and thirdly, it acknowledges the packets that have been transmitted. The internet protocol (IP) is responsible for disassembling, delivering and reassembling the data during transmission.

Chapter 5
Describe the underlying technologies, applications and types of Web sites that comprise Web 2.0.
Web 2.0 is a loose collection of information technologies and applications, and of all the websites that use them. These websites enrich the user experience by encouraging user participation, social interaction and collaboration. Web 2 sites harness collective intelligence; deliver functionality as services, rather than packaged software; and feature remixable applications and data.
Some of the underlying technologies, applications and types of websites that comprise web 2.0 are as follows:
1. AJAX – Web development technique, this allows portions of webpage to reload with fresh data instead instead of requiring the whole webpage to reload.
2. Tagging – Tagging, this permits users to place information in multiple overlapping associations rather than in rigid associations.
3. Blogs and blogging - A web blog is a personal website open to the public in which the site creator expresses his or her feeling or opinions.
4. Wikis- A wiki is a website on which anyone can post material and make changes to other material. Wikis have an edit link on each page that enables users to alter material fostering any collaboration.
5. Really simple syndication – this allows users to receive information they want when they want it without having to surf numerous of websites. RSS allows anyone to publish his or her blog, or any other content to anyone who is interested in subscribing.
6. Podcast and video casts – A podcast is a digital audio file that is distributed over the web using RSS for playback on portable media players or personal computers. A video cast is the same as a podcast except it is a digital video file.
7. Social networking – allows users to upload their contents to the web in form of texts e.g. blogs, voice e.g. podcasts, images and videos e.g. video casts. Social network sites provide an easy and interactive way to communicate and collaborate with others.
8. Aggregators – are websites that provide collections of content from the web e.g.
9. Mashups – Mashups means to mix and match content from other parts of the web. A mash up is a website that takes content from a number of websites and mixes them together to make a new kind of content.

Describe the functions of the Web services

Web services are applications, delivered over the internet, that users can select and combine through almost any device, from personal computers to mobile phones. By using a set of shared protocols and standards, these applications permit different systems to “talk” with one another, that is to share data and services – without requiring human beings to translate the conversation.

Describe how you see Social Networking being used in Business.

Social networking are web sites that allow users to upload their content on to the web, in the form of text (for example blogs), voice (for example, podcasts), images, and videos (for example, videocasts).
Social networking also is being used to help small businesses around the world. For example Kiva, Kiva is a website through which people can loan money to small businesses in the developing world. Kiva’s objective is to help poor working people in those countries achieve economic independence