The major ethical issues related to IT are privacy, accuracy, property (including intellectual property), and accessibility to information. Privacy may be violated when data are held in database or are transmitted over networks. Privacy policies that address issues of data collection, data accuracy, and data confidentiality can help organizations avoid legal problems.
Information technology can make organizations after flatter and change authority, job content, and status of employees. As a result the manager's job methods of supervision and decision making may drastically change. Also, many middle managers may lose their jobs.
The major negative impacts of IT are in the areas of job loss, invasion of pr4ivacy, and dehumanization. In terms of their impact on health and safety, computers can increase stress and health risks to eyes, back, bone, and muscles. Ergonomically designed computing facilities can greatly reduce the risks with computer use. Properly planned information systems can decrease the dehumanization, and shifts in workloads can reduce stress.
The major positive impacts of IT are its contribution to employment of the disabled, improvements in health care, delivery of education, crime fighting, and increased productivity. However, the effect on employment levels in general is debatable. In one view, IT will cause massive unemployment because of increased productivity. In another view, IT will increase employment levels because automation will make products and services more affordable, thus increasing demand, and because the process of disseminating automation is slow to allow the economy to adjust to information technologies. Telecommuting options will lessen automobile traffic and pollution, as well as present certain managerial challenges in some organizations.
Data software, hardware and networks can be threatened by many internal and external hazards. The damage to an information system can be caused either accidentally or intentionally. Also, computer criminals are driven by economic, ideological, egocentric or psychological factors and are difficult to identify. Most computer criminals are insiders, but outsiders (such as hackers and crackers) can cause major damage as well.
Information systems are protected with controls such as security procedures, physical guards, or detecting software. These can be classified as controls used for prevention, deterrence, detection, damage control, recovery and correction of information systems. Biometric controls are used to control access by checking physical characteristics (e.g. fingerprints and retinas) to identify authorized users.
Auditing is done in a similar manner to accounting/finance auditing, around, through, and with the computer. A detailed internal and external IT audit may involve hundreds of issues and can be supported by both software and checklists. Related to IT auditing is the preparation for disaster recovery, which specifically addresses how to avoid, plan for, and quickly recover from a disaster.
Strategic information systems (SISs) support or shape competitive strategy. They can be outward (customers) or inward (organization) oriented. They provide an organization with a competitive edge in its industry.
Porter's model of competitive industry forces is frequently used to explain how companies can increase their competitiveness. It lists five forces that shape competition. Response strategies and related SIS cab be used to lessen these forces. To counter the forces one can use strategies such as cost leadership, differentiation, and focus, which can be facilitated by SIS.
SIS can be used by both suppliers of goods and suppliers of services. A variety of companies use SIS to complete in their respective industries in cost leadership, quality, speed, growth, innovation, internal efficiency, and customers orientation. An SIS may provide support for more than one strategy. Today companies use the Internet, intranets, EDI, global ISDN networks, decision support systems, and intelligent systems to increase quality, productivity, and speed.
Continual incremental improvements in business processes are necessary but are frequently insufficient to deal with today's business pressures. One reason is that hierarchical organizations tend to be bureaucratic and inflexible and have difficulty in responding to cross-functional needs. BPR is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements. IT is the major enabler of BPR.
The trend is for organizations that are reengineered to behave like networks and operate in an online, real-time, empowered mode of operation. BPR applications include: (a) mass customization, which enables production of customized goods by methods of mass production at a low cost; (b) cycle time reduction, which is an essential part of many BPR projects and is usually attainable only by IT support; (c) self-directed teams, which can be permanent and are then dissolved; (d) empowerment of employees, which is done by providing them with IT-supported information and knowledge so they can work autonomously to make the necessary decisions.
One of the innovative BPR strategies is the creation of business alliances and virtual corporations. A virtual corporation is an organization composed of several business partners sharing costs and resources for the purpose of producing a product or service. The VC can be temporary or it can be permanent. It is supported by telecommunications, extranets, EDI, and groupware software.
INFORMATION SYSTEMS DEVELOPMENT
Information systems planning begins with the strategic plan of the organization, which states the firm's overall mission, the goals that follow from the mission, and the board steps necessary to reach these goals. The organizational strategic plan and the existing IT architecture provide the inputs in developing the information systems strategic plan. The IS strategic plan is a set of long-range goals that describe the IT architecture and major IS initiatives needed to achieve the goals of the organization. The IS strategic plan states the mission of the IS department, which defines its underlying purpose. The IS strategic plan may require a new IT architecture, or the existing IT architecture may be sufficient. In either case, the IS strategic plan leads to the IS operational plan, which is a clever set of projects that will be executed by the IS/IT department and by functional area managers in support of the IS strategic plan.
The systems development life cycle is the traditional systems development method used by most organizations today. The SDLC is a structured framework that consists of distinct sequential processes: systems investigation, systems analysis, systems design, programming, testing, implementation, operation, and maintenance. These processes, in turn, consist of well-defined tasks. Some of these tasks are present in most projects, while others are present in only certain types of projects. That is, smaller development projects may require only a subset of the tasks, and large projects typically require all tasks.
Development managers who must develop large applications find it useful to mix and match development methods and tools in order to reduce development time, costs, and complexity. Also, they may switch from one methodology to another for different parts of a large system, depending on a variety of considerations. Manager's Checklist 14.1 summarizes the specific advantages and disadvantages of the various alternative methods of systems development.
The advantages of CASE tools are that they can produce systems with a longer effective operational life that more closely m3eet user requirements, can speed up, the development process and result in systems that are flexible and adaptable to changing business conditions, and can produce systems with excellent documentation. The disadvantages are that CASE tools can produce initial systems that are more expensive to build and maintain, require more extensive and accurate definition of user needs and requirements, are difficult to customize, and may be difficult to use with existing systems.
In-house systems development requires highly skilled employees to undertake a complex process, which result in a backlog in application development and a relatively high failure rate. Organizations may sometimes find it preferable to purchase already-existing applications packages than to develop them. The three main methods for developing systems outside the information systems department are end-user development, external acquisition, and outsourcing. In addition, application service providers (ASPs) are becoming popular.
Internet and intranet development uses Web browsers with open, nonproprietary standards, making it easy to adapt to any any operating system and to any personal computer hardware. Web browsers are nearly universal and the interface is easy to learn to use, so applications can be developed rapidly. The simplicity of the browser and the HTML language reduce the risks of failure in development, so most organizations do not use the SDLC approach for Internet/intranet development. But they should have specialized Webmasters to operate and maintain Web sites, and these sites must have adequate security. Internet and intranet development often uses the Java programming language and applets.
Managerial decision making is synonymous with management. It can be viewed as a process involving four major phases: intelligence, design, choice, and implementation. These process can serve as a guide for the design of computerized decision support system. Data are the foundation of any information system. They exist in internal and external sources, including the Internet. Many factors that impact the quantity of data must be recognized and controlled. Data frequently are transformed into information and knowledge via data warehouse. Information can be transformed into useful knowledge through analysis or data mining and can be stored in an organization's knowledge base. Decisions can also be classified along a continuum from structured to unstructured. They can also be classified as strategic, operational, or managerial. This creates a nine-cell matrix of decision support against which problems can be mapped. DSS is a methodology that models situation for a quick computerized analysis of semi-structured and unstructured complex problems. The major components of a DSS are the database and its management system, the model base and its management system, and a user-friendly interface. A knowledge (intelligent) component can be added. An EIS is a corporatewide decision support system designed for executives but used by others as well. It allows quick and easy analysis, communication, ad hoc report generation, and detailed inquiries (drill down). Groups DSS is a methodology for supporting the process of making decisions in a group. The members can be in one room or in several locations. The method facilitates idea generation and collaboration and lesse3ns negatives aspects of face-to-face meetings. Online Analytical Processing (OLAP) allows sophisticated querying of specialized database. Data mining refers to a family of tools based on different algorithms that can be used to discover otherwise-unnoticed relationships among data in large database. Data visualization is important for better understanding of data relationships and for compressions of information. A geographical information system (GIS) captures, stores, manipulates, and displays data using digitized maps. A GIS can support decisions related to mapping, such as where to open a store or where to advertise. Knowledge management refers to a process of discovering knowledge and preserving it in an organizational knowledge base for future sharing among company employees (and sometimes externally).An organizational knowledge base contains all the relevant know-how and best practices and can be reused by employees when needed. Idea generation is frequently necessary for finding solutions to problems. Using IT, it is possible to significantly increase the number of ideas and to facilitate brainstorming. The primary objective of Artificial Intelligence (AI) is to build computers that will perform tasks that can be characterized as intelligent. The major characteristics of AI are symbolic processing (in contrast with numerical processing in conventional systems), use of heuristics (instead of algorithms), and the application of inference techniques.Expert systems technology attempts to transfer knowledge from experts and documented sources to the computer's knowledge base, in order to make the knowledge available to nonexperts for the purpose of solving problems quickly and effectively. The inference engine, or thinking mechanism, is a program that uses the knowledge base to solve problems. Expert systems can provide many benefits. The most important are improvements in productivity and/or quality, preservation of scare expertise, enhancing other systems, coping with incomplete information, and providing training. Limitations of expert systems include the inability to learn from mistakes, the development cost, and legal/ethical issues in their applications. Natural language processing (NPL) provides an opportunity for a user to communicate with a computer in day-to-day spoken language. Speech recognition enables people to communicate with computers by voice. Voice-synthesis technology enables computers to reply in a humanlike voice. Voice portals provide access to the Internet by using voice via telephone. There are many applications and benefits of these emerging technologies. Neural systems are organized and operated in a way similar to biological neural networks. Artificial neurons receive, process, and deliver information. A group of connected neurons forms an artificial neural network that can be used to discover patterns in historical data and makes predications accordingly. Neural networks are especially useful in data and Web mining in e-commerce. Intelligent agents are software entities that can sense the environment and carry out a set of operations with some degree of autonomy, using a knowledge base in the process. They can perform many mundane tasks, saving a considerable amount or time and improving quality. Virtual reality is a 3-D interactive computing environment that is belonging to support business simulation applications.
Supply chains connect suppliers to a manufacturing company, departments inside a company, and a company to its customers. To properly manage the supply chain, it is necessary to assure superb customer service, low cost, and short cycle time. The supply chain must be completely managed, from the raw material to the end-customers.
The major types of supply chains are: manufacture to inventory, build-to-order, and continuous replenishment. Each type can be global or local.
It is difficult to manage the supply chain due to the uncertainties in demand and supply and the need to coordinate several business partners' activities. One of the major problems is known as 'the bullwhip effect, where lack of coordination results in large, unnecessary inventories.
Solutions to SCM (supply chain management) problems are provided via SCM functional software, ERP (Enterprise Resource planning) integrated software, and e-commerce applications. Innovative solutions also require cooperation and coordination with business partners, which are facilitated by IT innovations such as extranets that allow suppliers to view a company's inventories in real time.
Functional software is designed for departments, and it is difficult to integrate it for enterprisewide applications. Therefore, during the last fifty years, software integration has increased both in coverage and scope, from MRP to MRP II, to ERP, to enhanced ERP. Today, ERP software, which is designed to improve standard business transaction, is enhanced with decision-support capabilities as well as Web interfaces.
E-Commerce (EC) is available to provide new solutions to problems along the supply chain by automating processes and integrating the companies' major business activities with both upstream and downstream entities via an electronic infrastructure.
Order fulfillment in EC is difficult due to the need to ship small packages to many customers' doors. Outsourcing the logistics and delivery jobs is common, especially when same-day delivery is needed. Special large and automated warehouses also help in improving EC order fulfillment.
E-commerce can be conducted on the Web, by e-mails and on other networks. It is divided into the following major types: business-to-consumer, consumer-to-consumer, business-to-business, e-government, collaborative commerce and intra-business. In each type you can find several business models. E-commerce offers many benefits to the organizations, customers and society, but it also has limitations (technical and nontechnical). The current technical limitations are expected to lessen with time.
The major application areas of B2C commerce are in direct retailing, banking, securities trading, job markets, travel and real state. Several issues slow the growth of B2C, notably channel conflict, order fulfillment, and customer acquisition. B2C e-tailing can be pure (such as Amazon.com), or part of a click-and-mortar organization. Direct marketing is done via solo storefronts, in malls, and by using electronic auctions. The Internet provides an infrastructure for executing auctions at lower cost, and with many more sellers and buyers involved, including both individual consumers and corporations. Forward auctions and reverse auctions are the two major types.
Understanding consumer behavior is critical to e-commerce. Finding out what customers want can be done by asking them, in questionnaires, or by observing what they do online. Other forms of market research can be conducted on the Internet by using intelligent agents. Like any commerce, EC requires advertising support, much of which can be done online by methods such as banner advertisements and customized ads. Permission marketing, interactive and viral marketing, electronic catalogs and online coupons offer ways for vendors to reach more customers. Customer service occurs before, during and after purchasing, and during disposal of products.
The major B2B applications are selling from catalogs and by forward auctions, buying in reverse auctions and in group purchasing, and trading in exchanges. In addition, most organizations employ collaborative commerce usually along the supply chain.
E-government commerce can take place between government and citizens or between businesses and governments. It makes government operations more effective and efficient. Using a wireless environment allows new mobile commerce applications as well as more convenient access to the Internet. EC can also be done between consumers (C2C), but should be done with caution. Finally EC can be done within organizations (intra business).
The major EC infrastructure components are networks, Web servers, Web tools, electronic catalogs, programming languages, transactional software and security devices. Therefore, electronic payment systems are used. Electronic payment can be made by e-checks, e- credit cards, e-cash, and smart cards, and EFT. Order fulfillment is especially difficult in B2C.
FUNCTIONAL INFORMATION SYSTEMS are designed to support functional areas such as accounting, marketing and finance. They are comprised of several subsystems for specialized applications, and they interface with each other. A major portion of functional system is made up of MISs, whose major role is to provide routine and demand reports to functional area managers.
The core operations of organizations involve transactions such as ordering and billing. The information system that handles these transactions is called the transaction processing system (TPS). The TPS must provide all the information needed for effective operations in an efficient manner. The major transactions processed are preparing and maintaining, ledger, accounts payable and receivable and generating periodic records and statement.
Accounting information systems cover applications in the area of cost control, tax and auditing. In industry, accounting and finance are frequently in the same department. Financial information systems deal with topics such as investment management, financing operations, raising capital, risk analysis and credit approval.
Channel systems deal with all activities related to customer orders, sales, advertising and promotion, market research, customer service and product and service pricing. IT can assist marketing personnel in planning, advertising and pricing decisions, and sales activities such as ordering, telemarketing and efficient retailing.
Production and Operations Management (POM) activities are much diversified ranging from materials management and quality control to capacity planning and just-in-time (JIT) management. The major area of IT support to POM is in logistics and inventory management, quality control and planning: MRP, MRP II, Project Management, CAD, CAM and CIM.
All tasks related to human resources acquisition and development can be supported by human resources information systems. These tasks include employee selection, hiring, performance evaluation, salary and benefits administration, training and development, labor negotiations, and work planning. Web technologies and especially intranets are helpful in improving training, dissemination of information, fringe benefit management, recruitment and testing, and managing health benefits and insurance.
Integrated information systems are necessary to ensure effective and efficient execution of activities that cross functional lines or require functional cooperation. While supply chain software integrates several tasks in a functional area, or in a few areas, enterprise resource planning (ERP) software integrates all the tasks along the supply chain, frequently extending the integration to business partners. SAP software is designed to integrate across functional areas so that whatever resource or information is required from any functional area, it can be gathered and coordinated with all other inputs e.g., integrating HRM with supply chain management, so that human resources as well as materials for production can be ensured.
An interorganizational and/or global information system (IOS) involves information flow between two or more organizations, which may or may not be located in the same country. Its major objective is efficient processing of transactions. Interorganizational systems have developed in direct response to two business pressures (DRIVERS): the growing desirability to reduce costs and to improve the effectiveness and timeliness of business processes. IOSs enable effective communication at a reasonable cost, and collaboration to overcome differences in distance, time and language. They provide partners with access to each other's databases and frequently enable to work on the same projects while their members are in different locations.
Telecommunications systems are composed of computers (both client on the desktop and host computers, such as servers and mainframes), communication processors, communication media and communication software.
The eight basic types of communications media are twisted-pair wire, coaxial cable, fiber optic cable, microwave, satellite, radio, cellular radio and infrared transmission. The first three media are cable media and the remaining five are broadcast media.
A local area network (LAN) connects two or more connecting devices within 2000 feet (typically within the same building). Every user device on the network can communicate to every other device.
Wide area networks (WANs) are long haul, broadband (analog), generally public-access networks covering wide geographic areas, provided by common carriers.
Value-added and virtual private networks are types of WANs. VANs are private, multipath, data-only, third-party-managed networks that can provide economies in the cost of service and in network management because they are used by multiple organizations. A virtual private network (VPN) is a WAN operated by a common carrier that provides what appear to be dedicated lines when used, but that actually consists of backbone trunks shared among all customers, as in a public network. The three types of distributed processing are terminal-to-host, file server, and client/server. In terminal-to-host processing, the applications and databases reside on the host computer, and the users interact with the applications with dumb terminals. With file server processing, the applications and databases reside on the host computer, called the file server. The database management system runs on the users' PC. When the user needs data from the file server, the file server sends to the user the entire data file, and the downloaded data can be analyzed and manipulated on the user's personal computer. Client/server architecture divides processing between clients and servers. Both are on the network, but each processor is assigned functions it is based suited to perform. In a client/server approach, the components of an application (i.e. presentation, application, and data management) are distributed over the enterprise rather than being centrally controlled.
The eight telecommunications applications include electronic mail, video conferencing, electronic data interchange, electronic funds transfer, facsimiles, telecommuting, distance learning, and telematics.
Electronic mail is the transmission of computer-based messages that can be electronically manipulated, stored, combined with other information, and transmitted through telephone wires or wireless networks. Video conferencing allows two or more people to have face-to-face communication with a group in another location(s) without having to be present in person. Electronic data interchange (EDI) is the electronic transmission of routine, repetitive business documents directly between the computer systems of separate companies doing business with each other. Electronic funds transfer (EFT) is the electronic transmission of funds, debits, credits, charges, and payments among banks and between banks and customers. Facsimile (Fax) equipment encodes documents and then transmits them electronically to a receiving fax machine. Telecommuting means that employees work at home, using personal computers and telecommunications technology to communicate electronically with other workers and to send and receive business work. Distance learning is the use of telecommunications technology to connect teachers and students outside the classroom, either all at the same time or at different times. Telematics systems facilitates internet and wireless cellular services, which provide services for location, navigation, traffic monitoring and control, toll collection, safety, and traveler information.
THE INTERNET
The Internet is a network of networks, which exchange information seamlessly by using open, nonproprietary standards and protocols. It is a collection of more than one million individual computer networks owned by government, universities, nonprofit groups and companies. The internet is a packet-switched network that uses the Transmission Control Protocol (TCP/IP). Users can connect to the Internet via a LAN server, SLIP/PPP or through an online service (an Internet service provider).
The Internet provides three major types of services: communications, information retrieval, Web services and the World Wide Web. Communications services include E-mail, USENET newsgroups, LISTSERVs, chatting, telnet, internet telephony and internet fax. Information retrieval services include gophers, Archie, WAIS, File Transfer Protocol (FTP) and Veronica. Web services are software applications delivered as services over the Internet.
The Web is a system with universally accepted standards for storing, retrieving, formatting and displaying information via client/server architecture. The Web handles all types of information including text, hypermedia, graphics and sound and is very easy to use because it uses graphical user interfaces. The Web is not synonymous with the Internet. The Internet functions as the transport mechanism, and the Web is an application that uses those transport functions. Other applications also run on the Internet, with e-mail being the most widely used.
Users primarily access the Web through software applications called browsers. Offline browsers (or pull method) enable a user to retrieve pages automatically from websites at predetermined times, often during the night. Search engines are programs that return a list of Web sites or pages (designated by URLs) that match some user-selected criteria. Metasearch engines automatically enter search queries into a number of other search engines and return the results.
Internet challenges include security and all aspects of electronic commerce, the rapid evolution of new technologies, Internet regulation and expansion, and concerns about privacy. New technologies are being developed faster than they can be employed over the internet. The Internet is not regulated by any one government or agency. The Internet Engineering Task force and the World Wide Web Consortium have been instrumental in the development of the Internet, but are not formally charged in any legal or operational sense with responsibility for the Internet. However they define the standards that govern the internet's functionality. Recent government attempts to regulate the content of Internet-connected computers have generated concerns about privacy, security and the legal liability of service providers. The massive growth of Internet traffic has strained some elements of the network, manifested by slowdowns in retrieval time, unreliable transmission of streamed data and denial of service by overloaded servers. Cookie technology and Web-site registration have caused privacy concerns.
INTRANET
An intranet is a private network that uses Internet software and TCP/IP protocols. In essence, an intranet is a private Internet, or group of private segments of the public Internet network, reserved for use by people who have been given the authority to use that network. Companies are putting numerous applications on their intranets, including policies and procedures, document sharing, corporate telephone directories, human resources forms, training programs, search engines, customer databases, product catalogs and manuals, groupware, customer records, document routing and data warehouse and decision support access.
EXTRANET
An extranet is a network that links business partners to each other over the Internet by providing access to certain areas of one another's corporate intranets. An extranet is open to selected suppliers, customers and other business partners who access it through the internet. Using an extranet, external business partners and telecommuting employees can enter the corporate intranet via the Internet to access data, place orders, check status and send e-mails. The Internet-based extranet is far less costly than proprietary networks.
Enterprise Information Portals (EIPs) are Web-based applications that enable companies to unlock internally and externally stored information, and provide users a single gateway to personalized information needed to make informed business-decisions. EIPs consolidate content management, business intelligence, data warehouse, and data mart and data management applications.
MOBILE INTERNET
The mobile Internet refers to the use of wireless communications technologies to access network-based information and applications from mobile devices. Mobile Internet applications include location-based services and presence-based services. Mobile
Internet devices know they are somewhere in particular and use that knowledge to perform that take advantage of geographic information. These applications are called LOCATION-BASED SERVICES. Mobile Internet devices also know the type of location they are in and allow the user to act in ways that make sense only in that location. These applications are called PRESENCE-BASED SERVICES.
