Week 5 - Chapters 13-15

Chapter 13 - Building Information Systems

The chapter discusses how information technology can promote various degree of organizational change.  The most common form of IT-enabled organizational change is automation, but three additional kinds of change include: rationalization, business process redesign, and paradigm shifts.  Core activities in systems development are systems analysis, system design, programming, testing, conversion, production, and maintenance.  We also learned that the two principal methodologies for modeling and designing information systems are structured methodologies and object-oriented development.  A chapter-concluding Interaction Session on Technology mentioned USAA, a U.S. military financial services company.  I thought it was interesting how USAA is now using its relatively new (since ~2007) mobile services platform.  In particular, their mobile app allows customers to take a photo and submit an accident claim directly from the site of an accident.  They also allow their banking customers to deposit checks by simply taking a photo of the check, which allows for considerable savings in terms of labor and expense by not having to process the traditional paper checks.

Chapter 14 - Managing Projects

I found this chapter to be particularly interesting, especially the content regarding the typical failure rates of projects.  The authors note that there is a very high failure rate among information systems projects.  They point out that in nearly every organization, information systems projects take much more time and money to implement than originally anticipated, or it is possible that the completed system does not work as intended.  For one, they say that between 30 and 40 percent of all software projects are "runaway" projects that far exceed the original schedule and budget while failing to perform as originally specified.  This is quite the cautionary tale!  Thus, good project management is essential for ensuring that systems are delivered on time, on budget, and provide solid business benefits.  Fundamentally, the costs and benefits must be calculated to determine whether an information systems project may be a good benefit.

Chapter 15 - Managing Global Systems

We learned that a number of factors have driven the increasing internationalization of business including the expansion and prevalence of inexpensive international communication and transportation, political stability, and a growing global knowledge base that is widely shared.  The chapter summarizes four basic international strategies including: domestic exporter, multinational, franchiser, and transnational (all factors of production coordinated on a global scale).  However, the choice of strategy is a function of the type of business and product.  Global information systems pose challenges because cultural, political, and language diversity magnifies differences in organizational culture and business processes and encourages disparate local information systems that are difficult to integrate.  In an introductory case study, we learned about L’Oréal Cosmetics, which has more than 23 global brands in 130 countries and more than 67,000 employees worldwide.  The case study discusses how through a standarized ERP the company has become more efficient.  One particularly interesting example is that when the company had multiple versions of SAP running in different operating units, it could take two to five years for the entire company to upgrade to the latest version of the software  But now, with its global enterprise wide version of SAP/FlexNet, a recent L’Oréal’s upgrade took just one weekend!

Week 4 - Chapters 10-12

Chapter 10 - E-commerce: Digital Markets, Digital Goods

E-commerce involves digitally enabled commercial transactions between and among organizations and individuals.  As compared to traditional markets, digital markets offer more transparency, along with reduced search and transaction costs, while also offering opportunities for more dynamic updates based on changing market conditions.  Examples of digital goods include music, video, software, and books with contemporary providers including the likes of Apple iTunes, Netflix, and Amazon.  Once produced, the cost of delivering a digital product is extremely low, while the delivery speed is also fast and oftentimes available instantly upon purchase.  E-commerce has transformed marketing through the Internet via new ways of identifying and communicating with millions of potential customers at costs far lower than traditional media.  In particular from this chapter, I benefited from the discussion on the typical e-commerce revenue models.  The majority of companies rely on one or more of six revenue models: advertising, sales, subscription, free/freemium, transaction fee, and affiliate.  The advertising revenue model is the most widely used revenue model.  While self-experienced with the concept, I found the previously unfamiliar term of "freemium" to be quite clever to describe offerings of upgraded content beyond teaser free information and/or services.

Chapter 11 - Managing Knowledge

The chapter highlights the role of knowledge management, which refers to the set of business processes developed in an organization to create, store, transfer, and apply knowledge.   It also discusses what types of systems are used for enterprise-wide knowledge management and how they provide value for businesses.  It says there are essentially three major types of knowledge management systems including enterprise-wide knowledge management systems, knowledge work systems, and intelligent techniques.  There are a number of business benefits of using intelligent techniques for knowledge management, including speed and efficiency of problem identification and diagnosis.  In a manner similar to human behavior, artificial intelligence can be used to capture, codify, and extend organizational knowledge.  As the chapter discusses, I have found interactions with artificial intelligence agents to be increasingly common in my life, especially over the past five years or so.  Today alone, I have had interactions with Apple's Siri, was given customized web searches/advertising based on my personal search history, and offered assistance from an automated online shopping assistant just ahead of making an online purchase.

Chapter 12 - Enhancing Decision Making

The chapter discusses the different types of decisions and how the decision-making process works in an organization.  There are four stages in decision making: intelligence, design, choice, and implementation.  The chapter also discussed how information systems can support the activities of managers and aid in the management decision making process.  While not particularly surprising, I found it interesting that actual research of manager behavior reveals that mangers' activities tend to be highly fragmented, variegated, and brief in duration while shying away from grand, sweeping policy decisions.  Information systems help managers by providing support for their roles in disseminating information, offering better communication between organizational levels, and assistance in allocating resources.  Business intelligence and analytics can deliver correct, nearly real-time information to decision makers and the analytical tools to quickly understand the information and take action.   As a life-long fan of baseball and self-admitted statistical nut, the embedded early chapter inset commentary on "Moneyball" and the Oakland Athletics was particularly interesting.  Although I am traditional about baseball in many respects, I do believe that statistical analysis and so-called "sabermetrics" should have a consequential role in baseball, if nothing more than to explore market inefficiencies and player "value" while otherwise attempting to evaluate and confirm/deny some of baseball's longstanding conventional wisdom.  Late in the 2013 season, it would seem as if the Oakland A's are benefiting yet again from this sort of statistically-enhanced decision making.  The A's have a first-place record in the American League West while having the fourth lowest payroll within Major League Baseball.

Week 3 - Chapters 7-9

Chapter 7 - Telecommunications, the Internet and Wireless Technology

This chapter discussed the principle components of telecommunication networks, the different types of networks, different Internet technologies and how they work, principal technologies and standards for wireless networking/communication/Internet access, in addition to radio frequency identification (RFID) and how it can be valuable to a business.  The majority of this chapter was very familiar to me with exposure, if not a solid understanding, with all of its key topics.  I thought the excerpt on "The Battle Over Net Neutrality" provided a good discussion on a key issue.  While Internet speeds and capabilities continue to increase over time, people are similarly using and increasing amount of bandwidth.  Network neutrality is the idea that Internet service providers must allow customers equal access to content and applications, regardless of the source of the content.  This arrangement prevents cable and telecommunications companies from charging different prices based on the amount of bandwidth consumed by users, although many companies believe this is probably the fairest way to finance the necessary improvements to network infrastructure.  Some Internet providers, such as Comcast, have already slowed certain types of Internet traffic.  Proponents of net neutrality advocate against such restrictions based on the risk of censorship.

Chapter 8 - Securing Information Systems

The chapter discusses the vulnerability of information systems, the business value of security, the components of an organizational framework for security and control, and the most important tools and technologies for safeguarding information resources.  Digital data are vulnerable to destruction, misuse, fraud, and hardware or software failures.  The Internet is fundamentally designed to be an open system and this makes corporate systems potentially vulnerable to actions from outsiders.  The ramifications of security vulnerabilities were discussed in the embedded article on LinkedIn's newsworthy security breach in June 2012.  This security breach exposed the passwords of 6.5 million LinkedIn users and the passwords were posted on a Russian hacking forum.  Surprisingly, LinkedIn did not have a chief security officer to plan and account for potential security breaches.  Furthermore, they had not employed standard encryption techniques to protect user passwords.  As far as the monetary impacts that security breaches can pose, the average data breach costs companies $5.5 million according to a Symantec-sponsored study

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

The chapter highlights how enterprise software systems help businesses.  Enterprise systems support organizational centralization by utilizing uniform data standards and business processes throughout the company within a singular unified technology platform.  Other discussed topics include how supply chain management systems coordinate planning, production, production, and logistics with suppliers; customer relationship management systems; the challenges posed by enterprise applications; and how enterprise applications are taking advantage of new technologies.  A case highlighted within the chapter was that of Land O'Lakes, which is one of the largest producers of butter and cheese within the United States.  Land O'Lakes has utilized demand planning to become more efficient with its supply chain and inventory management.  Given the relatively short product shelf life of what it produces, it is important for the company to effectively plan its production while not incurring unnecessary costs related to excess inventory.  In particular, Land O'Lakes implemented Oracle's Demantra Demand Management software.  Order and inventory data are used by Demantra to create models for future demand with long-term, medium-term, and short-term reports available to aid in the planning process.  Seemingly well-worth its cost, this software has helped Land O'Lakes improve its demand forecasts from 40 percent to 70 percent accuracy, which has led to significant cost savings.

Week 2 - Chapters 4-6

Chapter 4 - Ethical and Social Issues in Information Systems

The chapter notes that information technology is introducing changes for which laws and rules of acceptable conduct have yet to be developed.  Increasing capabilities of storage, computing power, and networking capabilities only compound and magnify these issues.  The authors suggest that ethical, social, and political issues are closely linked and these relationships can be simplified into give general categories.  They include information rights and obligations (what rights do individuals have?), property rights and obligations (preservation of intellectual property), accountability and control (who is held liable when in inappropriate data is collected or is otherwise misused), system quality (standards of data system and quality), and quality of life (how and to what degree we preserve key values).  Undoubtedly like the majority of people in this era, I (or those close to me) have had my own share of impacts within this realm.  For one, my wife has been a prior victim of identity theft with someone trying to establish credit in her name.  I have wondered many times about the possible causation factors.  For instance, was it a compromise of credit card information stored within some shopping database?  If so, what about the associated obligation, accountability, and liability of those holding our sensitive data?  Another example is I have had a couple of photographer friends who have had their images and photos stolen online.  The modern available of online search and storage makes this much easier.  Furthermore, given the availability of pictures and other information online, many people may not even fully realize the ramifications of copyright laws and the potential damages that may be done to others when information is used or modified without permission.

Chapter 5 -  IT Infrastructure and Emerging Technologies

IT infrastructure was defined as the shared technological resources that provide the platform for specific information system applications, which include hardware, software, and services that a shared across the entire firm.  The "Should Businesses Move to the Cloud?" case study was particularly interesting in terms of its overview and the benefits/issues with ever-prevalent cloud computing.  For one, the case study highlights services provided through Amazon for game-maker Zynga.  This is a prime illustration of the flexibility that cloud services can provide small businesses.  Online cloud storage solutions, even including free services by Google, seemingly reduce the barrier of entry into the marketplace for those small businesses who may need such services while possibly not having the capital to invest in those resources.  I further thought about the productivity benefits that cloud computing offers educational platforms.  One obvious example is the Oklahoma Christian IT infrastructure and its associated reliance on Google Enterprise solutions (gmail e-mail, storage capabilities etc.).  Lastly, it was important of the case study to note that cloud services are not without flaws and that 100 percent uptime is not reality.  This was well-illustrated by an Amazon multiday outage that impacted many popular websites and online services including the likes of Netflix.  A study indicated that the majority of major cloud computing services were down about 10 hours per year with average availability at 99.9 percent or less. 

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

A fundamental point of the chapter was that an effective information system provides users with accurate (free of errors), timely, and relevant information.  It was noted that a surprising number of businesses lack these key characteristics because their information systems have been poorly organized and maintained.  Over time, traditional file management can create problems such as data redundancy and inconsistency, inflexibility, poor security, and lack of data sharing and availability.  A database management system (DBMS) is one tool that help in this process by permitting a centralization of data and data management.  The "Asking the Customer by Asking the Database" case study highlighted how companies such as Forbes, Monster.com, and Target utilize customer information.  In particular, I felt the Target information was especially insightful, if not a bit shocking or scary.  I was not surprised to learn that Target assigns a unique guest ID to its customers and retains and uses information such as age, martial status, number of children, what credit cards are used etc.  Target can even purchase additional information about your job history, ethnicity, and financial history such as bankruptcy's.  But, I was a bit taken back (but still impressed) to learn that Target has gone as far as creating a pregnancy prediction score based upon purchase habits.  Although they use the information to target baby-related coupons to women with high prediction scores, they are careful to not over-saturate in order to avoid the appearance of profiling and raising customer suspicions.

Week 1 - Chapters 1-3

Chapter 1 - Organizations, Management, and the Networked Enterprise

The first chapter of Management Information Systems by Laudon and Laudon introduces the major themes of the textbook, exposing us to what is an information system and what are its associated management, organization, and technological dimensions.  The chapter highlights the increasing prevalence and reliance upon information systems in the business world.  A cited study notes that business capital investment in information technology has grown from 32 percent to 52 percent between 1980 and 2011.  I found this statistic to be quite interesting in terms of being a specific tangible measure of something that otherwise seems likely, if not obvious.  These trends are tied to an increasing worldwide commonality of the Internet, cell phones, texting, and other means of instantaneous communication.  These trends have tremendous impacts on businesses and how they operate while posing both challenges and opportunities.  They changes are interrelated and generally relate to emerging mobile platforms, big data (web traffic, social media content etc.) and its management, as well as the growth of cloud computing.  As a practical and identifiable example of the necessity and utility of an informational system, I found the highlights of the United Parcel Service (UPS) to be insightful (p. 23-24).  For one, the importance and purpose of the bar-coded label and the tangible benefits in customer convenience and cost savings that this technology provides (UPS estimates its delivery trucks save 28 million mile and burn 3 million fewer gallons of fuel each year).

Chapter 2 - Global E-business and Collaboration

Information systems can largely automate many steps of necessary functional business processes, including enhancing information flow, payment processing, and supplier and/or customer interactions.  Business intelligence a terms that describes the data and software tools for organizing, analyzing, and providing access to help managers and enterprise users make more informed decisions.  A non-routine type of business intelligence system are decision-support systems (DSS).  DSS focus on problems that are rapidly changing, one in which the procedure for arriving at a solution may not be fully predetermined in advance.  DSS is actually something that my organization (National Weather Service) has become increasingly mindful and forward thinking about over the past five years or so in terms of unique and adaptable services we can provide.  This is contrast to the longstanding one-size-fits-all means of information dissemination.  Collaboration serves an increasingly important role for businesses in terms of enhancing innovation, productivity, quality, and customer service.  Tools for such collaboration include e-mail, instant messaging, social networks such as Twitter/Facebook, wikis, and virtual meetings.  I am somewhat relieved that I have been at least exposed to, if not readily utilize, all of the tools and technologies mentioned within the chapter.

Chapter 3 - Information Systems, Organizations, and Strategy

The chapter begins with an interesting synopsis on Sears-Roebuck.  After being the longstanding (around 40 years) largest retailer in the United States, Sears has steadily lost ground to its competitors.  As something I would not have expected, it was interesting to read that at one time Sears spent more on information technology and networking than all other non-computer firms in the United States, except for Boeing Corporation.  Sears used its huge customer databases (60 million) to target its offers and promotions.  However, it is noted that these efforts did not translate into a competitive advantage because Sear's cost structure was one of the highest in its industry.  The company has struggled to escape from its rut and new technology strategies have generally failed including online shopping, mobile apps, and an Amazon.com-like marketplace.  Sears CEO Lou D'Ambrosio believes that an even more intensive use of technology and data mining is the answer in terms of potentially making promotions, merchandising, and selling more effective.  Through a rewards program, customers are offered free deals for repeat purchases if they agree to share their personal shopping data with the company.  Since I rarely if ever shop at Sears, it was interesting to learn about their program and leveraging of customer information.  These incentives are frankly not something that will likely change my (or my family's) shopping habits any time soon, but I look forward to watching the viability of these changes and what they hope will contribute to a revitalization for Sears.