Chapter 9 Summary: Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

          Information technology is the hub of all of a business’s activities from finance to distribution, however, a system had to be created in order to centralize and conglomerate all of the different software and applications within a company. Enterprise systems came about to do just that. Enterprise software is built around thousands of predefined business processes that reflect best practices. Companies implementing this software must first select the functions of the system they wish to use and then map their business process to the predefined business processes in the software (Laudon 338).  Enterprise systems can help a company see a snapshot of the inflows and outflows of the company in real time, thus better equipping leadership to make informed decisions.

            A supply chain is a network of organizations and business processes for procuring raw materials, transforming these materials into intermediate and finished products, and distributing the finished products to customers (Laudon 340). A supply chain is important to the flow of business and creates the ability to use a just-in-time strategy, however, due to poor lack of communication a bullwhip effect can be created and results in an overstock of product. It makes perfect sense for a company to use supply chain software to streamline these processes and hopefully prevent the bullwhip effect. There are two types of supply chain management systems set-ups, the first is the push-based model in which items are pushed to consumers based on a projected demand and the second is the pull-based model in which the demand creates the product schedule. Implementing a supply chain management system can help a company save money, improve business processes, and increase profits.

            Another use for enterprise systems is to enhance the customer relationship. I used to work for a marketing department for a hospital in Ohio. It’s hard to market to people who aren’t sick or don’t need your services, so you instead focus on getting and keeping them as a customer. The idea is that if a patient needed a heart surgery or stitches, they would choose your hospital and doctors over another hospital nearby. This marketing strategy is called customer relationship management and IT has also created customer relationship management (CRM) systems to improve the customer relationship. CRM systems can be used for sales force automation, customer service, and marketing to improve the customer experience as well as collect valuable consumer data.
           

            While enterprise systems can change the way you do businesses, there are challenges such as expense, time for implementation, major changes to business processes, operating problems and losses, switching costs, differing definitions of organization-wide data, and finding a software that meets the needs of your company depending on size and customizations. In the end, it really boils down to what your leadership team decides is best for the company and for what it can afford. Changing the way you do business comes with a price and the question is, are enterprise systems worth that price?

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 8 Summary: Securing Information Systems

With billions of users with private information of both individuals and corporations, how can all of the valuable data be protected? In what ways can the data be compromised? If you are a manager or business owner, system vulnerability is a real issue that could bring your business down overnight.

Security refers to the policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems. Controls are methods, policies, and organizational procedures that ensure the safety of the organization’s assets; the accuracy and reliability of its records; and operational adherence to management standards. (Laudon 293). Security is so important for a company to make their priority because it would be like someone leaving their credit card or purse sitting in the front seat of their car with the windows down and doors unlocked; it’s putting you in a compromising position.

Networks are vulnerable at any access point and are open to programs such as malware, Trojan horse, computer viruses, and worms. A hacker is an individual who intends to gain unauthorized access to a computer system. (Laudon 298). The hacking community refers to someone as a “cracker” if they are a hacker with criminal intent. Terms such as cyber vandalism have been created to describe the malicious and criminal activity that hackers do on the Internet. They might destroy websites or an entire company’s network as well as steal valuable data. Hackers try to hide their identities through spoofing or using different e-mail addresses or IP addresses.

For managers in business, it’s important to do a risk assessment before investing enormous amounts of money in security and controls to determine where the majority of the money should be allocated depending on potential threats and risks. Once the risks have been determined, the company will need to create a security policy and acceptable use policy (AUP) for all users within the company to understand how to use the assets. Identity management is used to enhance security and identify users and their security levels. Businesses can use various types of protection against vulnerability such as firewalls, intrusion detection systems, antivirus and antispyware software, unified threat management systems, etc. 

            With any business, it’s important to plan for disaster recovery or emergency preparedness. It’s also vital to incorporate IT recovery within the master plans because most of the company’s today use so much IT technology and even a few hours with the network being down or destruction of IT assets could be detrimental to a company’s every day business processes, also called business continuity planning.

            Auditing is also important to test and evaluate the information systems security and controls on a regular basis. It’s also vital to test the systems to its limits and the disaster recovery plans to help the company improve overall processes. The safety and security of your company depends on the protection you invest in.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 7 Summary: Telecommunications, the Internet, and Wireless Technology

The chapter dives into the nuts and bolts of networking, the Internet, and telecommunications. Back in the day, we used traditional telephone networks, snail mail, and fax for business communication but today technology has advanced into wireless computer networks, the Internet, e-mail, and smart phones.

Every computer in a network has a network interface card (NIC) built into the motherboard. The computer is then connected via a coaxial cable or through wireless local area networks (Wi-Fi networks). (Laudon 248). The network also has a network operating system (NOS), which coordinates and communicates the network’s resources. It can be on each computer or on a dedicated server. A network server can helps perform network functions such as storing data, housing web pages, and maintaining the network operating system such as Microsoft Windows Server, Linus, and Novell Open Enterprise Server.

There are four types of networks, the local area network (LAN) for an office or one floor of a building, the campus area network (CAN) for a college campus or corporate facility, metropolitan area network (MAN) for a city, and a wide area network (WAN) a transcontinental or global area.

Using the Internet on a daily basis, for me, didn’t become popular until I was in middle school and at the time I just used it for e-mail or instant messenger to chat with friends. However, I didn’t fully understand the concept of the Internet. What is it really? It’s simply a public communication system that has connected billions of people around the world. We use Internet service providers (ISP) such as AT&T, Time Warner, and Cox to provide us with Internet at home, on our iPads, or through a wireless 4G networks on our smart phones. Every computer is assigned an Internet protocol (IP) address that is used to decode messages sent to and from the computer.

How would one company manage the Internet and be the governing body across all of the countries and nations of the world? There isn’t one company but instead there are different professional organizations and government bodies such as the Internet Architecture Board (IAB), the Internet Corporation for Assigned Names and Numbers (ICANN), and the World Wide Web Consortium (W3C). The nation in which the Internet is being operated is responsible for making laws and the Internet and its users in that county must adhere to those laws.

            Wireless communication has become the most popular form of network use and has revolutionized our ability to do business 24/7 from anywhere in the world. Smart phones have basically provided us mini-personal computers. Wireless carriers offer 3G and now 4G speed networks that allow us to stream high quality HD videos and have lightening fast Internet on our phones anywhere in the world. Networks like Wi-Fi, Bluetooth, and Hotspots allow users to have cheap or free Internet access away from their traditional home Internet provider. All of these types of networks, servers, and the Internet help us to do business faster and more efficiently which has increased the popularity and changed our culture.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Google Glass Critique

          Google glass is an amazing new piece of technology and will have significant implications to our society. I have never heard of it before until watching the promotional videos from YouTube and was completely shocked that someone has even thought of this concept. The idea is that the technology of a smart phone will be put into a small computer inside sunglasses to create a hands free visual experience. The glasses will allow users to take photos, videos, chat, share their view, and ask any questions that people would ask Google.

The implications of this technology will continue the mobility of the smart phone technology and will revolutionize the way we experience life and share it. However, Google Glass is much more advanced than a smart phone. According to Wikipedia, users will be able to convert verbal text into another language just by simply asking Glass to translate. The technology is really advanced and quite remarkable. I couldn’t find online how long Google Glass has been in development but they are supposed to release it possibly in 2013.

Google Glass could be a positive technology because it’s hands free but my biggest problem with Glass is that it’s not a phone. The hands free technology already exists with Bluetooth. The ability to communicate with your smart phone via Siri on the iPhone also already exists. I can’t really picture people using Google Glass and their smart phones. The negative implications include people continuing down the path of slowly losing their ability to communicate with people face to face. This has been a growing trend among the younger generations and is affecting our everyday lives and especially business.

Overall, my opinion of Google Glass is that it’s a really cool concept and a lot of people will be interested in purchasing one. However, I would only buy one if I was rich and had money to blow but for me, my smart phone is enough. Plus, I’m not so sure I could pull off the look. Now the real question is, how much is Google Glass?

Chapter 6: Foundations of Business Intelligence: Databases and Information Management

How do you organize the files on your computer? Perhaps in folders sorted by date, category, alphabetically, or maybe even scattered about on your desktop. The differences in database organization between one employee can be completely different than the next and this is why IT implements a database management system (DBMS). DBMS solves the problems of files that are miss-labeled, duplicated, and hard to protect. A DBMS is defined as, “software that permits an organization to centralize data, manage them efficiently, and provide access to the stored data by application programs.” (Laudon 212).

I work at Chesapeake Energy, an oil and gas company, and we have a data warehouse called the Enterprise Data Warehouse (EDW) to house all information on millions of oil and gas wells. The data comes from various parts of the company. The Land Department has information regarding leases, production volumes come from the Operations Department, and all of the financial information for each well comes from the Accounting and Revenue Departments.  Data is flowing constantly into the EDW and all of the different software applications that each department use must interface with the others for the information to be dumped in the EDW. This ultimately streamlines all of the data and makes it accessible to all departments within the company. The EDW is a wonderful IT tool that makes our jobs a lot easier.

In addition to data warehouses, some companies build data marts. Data marts are smaller data warehouses for a particular group of users. One example might be a data mart for human resources that contains personal employee information and another data mart for payroll that incorporates some of the personal information but also includes salaries. Some companies might be large enough to combine the two into one data warehouse or for the sake of managing and protecting the data, they may choose to leave it separate.

Once the data is comprised into a central location, IT can build tools for reporting, online analytical processing, and data mining. Online analytical processing (OLAP), “supports multidimensional data analysis, enabling users to view the same data in different ways using multiple dimensions.” (Laundon 224). Data mining dives deeper into the data to find hidden patterns and links using associations, sequences, classifications, clusters, and forecasts.

The IT department within a firm is responsible for creating an information policy. When all of the valuable, personal, and financial information of a company is stored in one place, it’s quite possible that someone will try to use this information in a negative way. A clearly defined information policy will help employees understand the firm’s rules for using, changing, and sharing the vital data. The data administration group is responsible for ensuring the policy is updated and managed. Another area of the IT department will be responsible for maintaining the data within the warehouse and upgrading it to meet the needs of the firm.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 5: IT Infrastructure and Emerging Technologies

Information technology infrastructure is defined as, "the shared technology resources that provide the platform for the firm’s specific information systems application. IT infrastructure includes investments in hardware, software, and services-such as consulting, education, and training.” (Laudon 165). The infrastructure extends beyond just the number of desktops and printers a company owns but instead incorporates all of the equipment, software, application, buildings used to house the servers, telecommunications, extra education and trainings, research and development, and much more. Companies spend trillions of dollars on new infrastructure as well as updating old infrastructures.

It’s important that the new systems work with the old systems, often referred to as legacy systems. There are five stages in the IT infrastructure evolution including the mainframe era, the personal computer era, the client/server era, the enterprise computing era, and the cloud and mobile computing era.

My favorite out of the five is the most current, cloud computing. It essentially means that companies are able to purchase or rent software, storage, and networking over the Internet. There’s no need for constantly updating your hard drive to the next available gigabyte or terabyte but instead you use the Internet to store your files. I use iCloud which is the same concept as cloud computing, only for personal use. Now you can safely store millions of pictures, videos, and personal files online instead of worrying about your computer crashing and losing your valuable content. You can also access this information from any type of computer or device as long as you have Internet.

This concept has revolutionized the way we are able to do business by providing on-demand network access from anywhere in the world. The best part for companies is that this type of infrastructure is not as expensive as owning all of the hardware and storage. The company is buying into a service and therefore does not have to make large investments.

Choosing how to invest in the IT infrastructure of a company is an important and challenging decision for managers. What will an IT manager do when the company downsizes and they still have large investments from previous IT purchases or expensive subscription fees to maintain? Managers have a critical decision when debating between renting or buying the IT assets. If they spend too much, the firm’s finances will be tied up and inaccessible but if they spend too little, the firm won’t be able to provide all of the services that their competitors will be able to. Managers can use the total cost of ownership (TCO) model to evaluate the costs associated with the technology and determine whether it is best to rent or buy.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 4: Ethical and Social Issues in Information Systems

With any advancement in technology, members of society have an option to choose good or evil when using the new tools, ideas, and equipment. In information technology, new developments advance so rapidly and are constantly changing that lines between what is ethical or not often become blurred and laws and policies can’t keep up. This poses new challenges for managers and employees as IT is utilized within a company but also for consumers and all Internet users in general. 

One of the biggest concerns for all Internet users is privacy. Privacy is defined as, “the claim of individuals to be left alone, free from surveillance or interference from other individuals or organization, including the state.” (Laudon 131). The first federal privacy law was called the Fair Information Practices (FIP) and it was written in 1973 to provide the government guidelines for collecting personal information about individuals. Since 1973, there have been an additional seven federal privacy laws established but these laws still can’t keep up with the continuous updates to IT and the Internet. Traditional copyright laws are also not applicable because of the speed in which information is transferred and updates are made.

Many times when Internet users are on a website, they don’t even realize that their every move is being tracked. I personally forget about the “Big Brother” mentality of the online stores and websites that I visit. Information is stored through cookies on your computer’s hard drive that help website companies better understand you as a consumer. This explains why when I click on “recommended products for you” on Amazon.com that I usually end up purchasing the suggested merchandise. It’s as though Amazon.com is in my head…and my wallet!

As IT has evolved over the years, some people are concerned about the negative social aspects of the Internet and how the use of computers might affect our ability to have work and life balance. Some of the potential impacts are reduced response time to competition and center verses periphery balance in business. More simply put, when employees have more empowerment, what will they do with it? Also, how can your company keep up with global competition if it changes overnight? Computers can create a dependence and vulnerability to private information. Now, the technology dependence has extended to our smart phones and iPads. I don’t go anywhere without my iPhone and I look at it all the time, for no reason other than dependency.

Another negative social issue is computer crime and abuse. This is probably the biggest issue that we hear about the most through news media. We hear about the latest online predator that tries to meet up with a thirteen-year-old girl or the use of the Internet and social media to spread unauthorized naked images of celebrities. It’s unfortunate that so many people resort to using technology in a negative way when it was created to spread positive information and connect people around the world.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 3 Summary: Information Systems, Organizations, and Strategy

Information technology (IT) is an integral part of an organization or firm and affects the overall economics of the business. IT reduces costs of capital and labor by improving efficiency. As new technology is developed and the cost decreases, it becomes a wiser choice for investment by management as well as replacing traditional capital costs. The text states that IT flattens organizations, meaning that valuable decision making information is more accessible to all levels of the organization, therefore reducing the need for so many levels of management. As company wide information and reports are accessed in real-time, managers are also able to make quicker decisions. These factors reduce the need for additional managers and provide lower-level employees with more knowledge and growth opportunities.

As with any new change, there comes resistance. Often times, IT brings about unwanted change because people will have to re-learn their jobs or new software and this can be challenging and frustrating. However, it is in the best interest of the company to streamline business processes, reduce labor, and implement new technology. It’s important for the IT team to keep in mind the culture and hierarchy of the company when designing new tools and implementing new applications. A good IT team will also recognize the fears and frustrations that may be a result of the new changes brought about and will try to ease those emotions prior to implementation as well as encourage the organization’s leadership to be an avid supporter of the technology.

The text describes Michael Porter’s competitive forces model to show the advantages to competition in a market and in many of the areas, information technology brings a better organization forward. The different areas of competition are: traditional competitors, new market entrants, substitute products, suppliers, and customers. Essentially, the model represents a basic understanding of economics in a market. In order for a firm to exceed its competition, it will need to excel in all of these areas and the most helpful resource for success is information technology.

Information technology can reduce operational costs by creating systems specifically tailored to an organization’s products and services. An example would be companies such as Netflix, Hulu, and Apple TV that provide new technologies in which many consumers are choosing over traditional cable services because of the accessibility and low costs. IT also helps firms with product differentiation. Nearly everyone knows the difference between an iPhone and Android phone because of the different types of operating systems, media market, branding, and through the promotion of the items via commercials and social media. Through focusing on a market niche, companies like Shutterfly can tailor online products, marketing, and coupon offers to consumers based on data collected from a DSS information system during each transaction. Finally, information systems strengthen customer and supplier intimacy and reduce the risk of losing customer loyalty by linking the consumer and supplier. Businesses utilize different information systems to obtain and keep their competitive advantages.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010. 

Chapter 2 Summary: Global E-business and Collaboration

One of the first pieces to understanding why information systems are important to the daily aspects of business is to first understand what business process are. Simply put, business processes are the responsibilities of each department and the steps they follow to achieve the desired results.

If I work in Human Resources, my business process to hire employees doesn’t start with offering a potential candidate the job before first interviewing them. Instead, there is a clear and defined process to hire a new employee. In business, sometimes leadership will refer to best practices or other proven business models to improve processes within their own company. If a similar process works for thousands of other companies in the same industry, why aren’t you using it?

In business, we are often asking our teams these questions: How can we make this process better? Are there any processes to streamline and cut costs? How can technology help us achieve success? Is there new technology available to complete this same task but in a faster way and with less errors?

The answer is, information technology. Information systems automate business processes, change the flow of information, eliminate delays, and give managers higher quality information that results in more informed decisions.

There are four major types of information systems. Transaction Processing Systems (TPS) are used to automate the daily tasks and flow of activities throughout the company. Examples are payroll, accounting, and inventory systems. TPS would be the computerized system that the majority of employees within the company would have access to and would use regularly. Management Information Systems (MIS) are computerized systems and software programs that are developed to assist middle management with viewing the overall performance of their department and to help them make decisions. The information systems produce reports such as dashboards, Excel spreadsheets, and graphs to help this group of managers see the bigger picture.

Decision-Support Systems (DSS) are information systems are more complex than TPS and MIS because they often utilize external factors and data from several different systems are incorporated into the DSS system. These systems help predict outcomes while factoring in different variables. DSS systems can also analyze the behavior of customers to best market a company’s products and services. Lastly, there is Executive Support Systems (ESS) and these systems are designed specifically for senior management. They often contain a dashboard or graphs and can be viewed through a portal.

Implementing enterprise applications will be necessary to allow all of the applications and different systems to work together. There are also many tools available for collaboration and teamwork within a company such as e-mail, instant messaging, Microsoft SharePoint, and virtual meetings. All in all, the Information Systems department primarily runs the various systems and applications and this group is an essential piece to the overall success of the company.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010.