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Chapter one Answers to Discussion Questions

1. How can information systems support a companys business operations and decision-making, and give them a competitive advantage? Give examples to illustrate your answer. Information systems play a vital role in the success of an enterprise and there is a growing dependence on the use of these systems. Information systems certainly do support a companys business operations and decision-making by enabling companies to more effectively carry out their operations, and do it is more effective ways. Through the use of information systems, managers are better able to make decisions based on current data, and they often discover trends, opportunities, or even pitfalls that they were not aware of before. Operational efficiencies and profit margins can be dramatically increased through the use of information systems. People now have the tools that they can use to do their jobs better, faster, and more effective. Competitive advantage is capture through the ability to be better able to meet customers demands, offer then high quality products, and to do it better than your competitors can. Other examples include the increase use of the Internet, intranets, and extranets in ways in which they can be used to provide information infrastructure a business needs for efficient operations, effective management, and competitive advantage. 2. How does the use of the Internet, intranets, and extranets by an e-business enterprise support their e-commerce activities? In order to succeed today, organizations are increasingly competing in global markets. The increased use of technologies such as the Internet, intranets, and extranets have definitely revolutionized how businesses are operating and how they will continue to explore opportunities now available through these technologies in order to operate more effectively. Companies are rapidly extending their uses of these three technologies in order to compete by offering their customers, suppliers, and partners the ability to perform business transactions more effectively. 3. Refer to the Real World Case on General Electric in the chapter. If you were the new CEO of GE, what other e-business moves would you recommend for the company? proposals. Students answers will vary in response to this question. However, GE is using a number of strategies in order to gain a competitive edge and to work closer with their customers, suppliers, employees, and those that they outsource parts of their business to. These channels of communication enable GE to realize faster response times, constant up to date information on business throughout the entire organization. Improvements in efficiencies have increase their profit line, reduced operating costs, and opened the door to greater communication. Students may suggest other e-business moves for GE, which may include new Internet appliances for salespeople, customer service representatives and dealer contacts. 4. Why do big companies still fail in their use of information technology? What should they be doing differently? Defend your

Top Five Reasons for Success User involvement Executive management support Clear statement of requirements Proper planning Realistic expectations

Top Five Reasons for Failure Lack of user input Incomplete requirements and specifications Changing requirements and specifications Lack of executive support Technological incompetence

Certainly the reasons listed in the table above could account for the major causes of why companies fail in their use of information technology. However, it is important to note that the field of technology is changing at such a rapid pace that many large and successful companies are having difficulty keeping up with it. Other ideas may include such things as a demand for skilled employees in this area; the major expense involved in managing and developing systems and hardware acquisitions, increased and more aggressive competition from competitors both domestic and internationally. 5. How can a manager demonstrate that he or she is a responsible end user of information systems? Give several examples. Students answers will vary, however they must realize that information is a powerful resource that can be used in a variety of inappropriate manners. As a manager or other end user of information, we all must insure that we consider the ethical responsibilities of the use of information. For example, uses of information technology might be used in an improper, irresponsible, or in a harmful way, which can hurt other individuals or even society as a whole. Information systems must be managed to benefit society while at the same time meet the goals of the organization. Irresponsible use would include taking advantage of access to confidential data for personal gain or interest. 6. Refer to the Real World Case on Duke Energy in the chapter. What are some other methods for introducing e-business into a company? Which do you prefer? Why? Students answers will vary, however business benefits can include both tangible and intangible benefits. Better customer service, increased profits, greater market penetration, closer and richer communication with customers and suppliers, faster responses to market trends, more up to date information, attracting new customers, or reducing costs. 7. What is a major management challenge in developing IT solutions to solve business problems and meet new e-business opportunities? One only has to pick up any newspaper or business-related magazine to see a story about some

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facet of new e-business opportunities. Businesses are increasingly incorporating technology into their quest to survive and compete in the marketplace. The Internet and the WWW provide the enabling mechanisms to foster the growth of electronic commerce and electronic business. Electronic commerce is defined as the use of electronic transmission mediums (telecommunications) to engage in the exchange, including buying and selling, of products and services requiring transportation, either physically or digitally, from location to location. Electronic business opportunities include the exchange of information not directly related to the actual buying and selling of goods. Increasingly, businesses are using electronic mechanisms in order to distribute information and to provide better customer support. Management challenges in developing IT solutions to solve business problems and meet new e-business opportunities are daunting. Good decisions may spell the difference between successful or failure. 8. Why are there so many conceptual classifications of information systems? Why are they typically integrated in the information systems found in the real world? Conceptual classifications of information systems are designed to emphasize the many different roles of information systems. This can be done from various points of view, such as the level of management that the information systems serve, or the business functions they support. In practice, these roles are not always clearly divided, and in any case, information produced by one business activity may serve as input data to another activity. Thus it makes sense to integrate various roles into one information system. Clearly, no one system can possible meet all the needs of an organization, and no division of an organization works in isolation from the other divisions. 9. In what major ways have the roles of information systems applications in business expanded during the last 40 years? What is one major change you think will happen in the next 10 years? Data processing (1950s-1960s), management reporting (1960s-1970s), decision support (1970s1980s), strategic end user support (1980s-1990s), enterprise and global internetworking (1990s2000s). (See Figure 1.13). During the next 10 years we will experience dramatic growth in neural networks, fuzzy logic, artificial intelligence, robotics, biotechnology, space, and oceanic discoveries based on very advanced technologies. 10. Can the business use of the Internet technologies help a company gain a competitive advantage? Give an example to illustrate your answer. There is no doubt that the Internet can help a company gain a competitive advantage. Competing in the global markets are forcing firms to develop and utilize better and more innovative ways to gain market share. Areas such as market research, electronic commerce, electronic focus groups etc. are examples of how a company can use the Internet to gain a competitive advantage. The Internet is none major means whereby companies can actually get closer to their customers. This enables them to get immediate feedback on a product, make modifications to improve

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products, and essentially listen to the customers who are using the product.

A. ANSWERS TO APPLICATION EXERCISES

1. Using the Internet for Business Research a) Prepare a one-or two-page summary of some of your findings and the sources you used. b)End your paper with a few sentences describing one thing you have learned from your research that might help you in your future career in business. This is a subjective question, which will vary from student to student. Todays students are very adept at using search engines in order to locate information that would satisfy this question. Most websites offer users an easy way to research a wide array of information. One intriguing example of the business use of information technology is in the area of forensic science and the use of technology to solve crime even those which are a decade or more old.

2.

Visiting the Smart Business Supersite

) Prepare a one- or two-page summary describing the Computing in Business material you a
found most interesting and relevant as a business end user. b)End your paper with a few sentences describing one thing you have learned from your research that might help you in your future career in business. This is also a subjective question, which will vary from student to student. Students would find informative and interesting items on this site. One example that is interesting is the category is job careers. Students often find this area informative in gathering and informing themselves on current market demand and opportunities in this field. 3. Jefferson State University: Recognizing IS Components a) Identify the people, hardware, software, network, and data resources and the information products of this information system. The microcomputer system and printer are hardware, the word processing package and the networked operating system are the software, the student represents people resources of the system, the text entered by the student is data, and the final document produced is the information product. No specific network resources are discussed in this example. b) Identify the input, processing, output, storage, and control activities that occurred. The system accepts input in the form of text data typed by the student on the keyboard. The word processing software processes this input data to format it appropriately for display or

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printing, and facilitate editing of the input document. Output is in the form of a copy of the document file saved on disk, display of the document on the video screen, and a printed copy of the document. The document is temporarily stored in the computers primary memory and permanently stored on disk when it is saved. The warning message received when saving a file under a name that has already been used is an example of control. 4. Office Products Corporation: Recognizing IS Components

Identify the people, hardware, software, data, and network resources and the information products of this information system. People: customers, dealers, order entry clerks, warehouse personnel, president. Hardware: IBM AS/400, 60 PC workstations, printers, telecommunications links, video display terminals, dumb terminals (dealers), PC workstation for president, controller, sales manager, inventory manager, and other executives. Software: database management system Network: local area network Data resources: database Information products: orders

b)Identify the input, processing, output, storage, and control activities that occurred. Input: order entries Processing: AS/400 (checks the availability of ordered parts, allocates the stock, and updates customer and product databases). Output: order pick list on the warehouse printer, management reports (printed and viewed on screen). Storage: magnetic disk on AS/400 Control: Data entry procedures, formatted screens, AS/400 checks the order as it is entered. 5. Western Chemical Corporation: Recognizing the Types and Roles of Information Systems a) Make an outline that identifies how information systems support (1) business operations, (2) business decision-making, (3) strategic advantage, (4) an e-business enterprise, (5) electronic commerce at Western Chemical. The telecommunications system, word processing, and data from the chemical refinery process are designed primarily to support business operations. The use of the refinery data to suggest answers to problems to the engineer and the periodic, exception and demand reports generated by the system are designed to support managerial decision making. The text summaries and graphics displays provided to top management help support strategic decision-making. Overall, the systems improve operational efficiency, which helps the strategic position of Western Chemical in the industry. b) There are many different types of information systems at Western Chemical. Identify as many as you can in the preceding scenario. Refer to Figure 1.18, 1.20, and 1.22 to help you.

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Explain the reasons for your choices. Using the system to capture data about sales orders and purchases describes a transaction processing system. The electronic mail and word processing systems are office automation systems. The sensors capturing data about the refinery process are part of a process control system. The use of the data to suggest answers to complex refinery problems would represent an expert system. The reports sent to managerial end users represent an information reporting system. The use of computers by managerial end users to interactively assess the possible results of alternative decisions represents a decision support system. The text summaries and graphic displays provided to top management are an executive information system.

B. ANSWERS TO REAL WORLD CASES

Real World Case 1: General Electric Company: Implementing e-Business and e-Commerce Initiatives 1. Are the buy, sell, and make e-business and e-commerce initiatives of GE applicable to other companies both large and small? Give examples to support your answer. This case dramatizes just one of the countless examples of the business challenges and opportunities created by the growth of the Internet and the World Wide Web. Like many businesses, GE are moving forward in their desire to work in the new marketspace economy. It is also evident in this case that organizations are able to realize major competitive advantages, heightened efficiency, obtain greater market penetration, realize cost reductions, and increased profits through utilizing of new technologies. GE expects to save 1.6 billion in 2001 through their e-business initiatives. On the sell side and buy side GE are doing billions of dollars worth of business. They hope to realize major costs reductions by using Net-based collaboration tools what will enable them to get even closer to their employees and customers. 2. Could the business value of GEs Web-based collaboration tools be as great as their executives claim? Why or why not? Certainly, the business value of GEs Web-based collaboration tools can be as great as their executives claim. As the case states, these tools enable GE to realize faster workflow and quicker, smarter decisions. It also enables their employees as well as their customers to be an integral part of the total system. A vital link to successful innovation projects is through increased communication, and certainly GE has demonstrated that. 3. Evaluate the business value of Jeff Immelts e-business directives for GE. Do you agree with their strategic importance for GE at this time? Explain your answer. Jack Welch was the major driving force behind the commitment to radically transform business at GE. After his departure, Jeff Immelt became the new CEO. Welch had stressed four major business strategies: globalization, business services, e-business, and the total quality program known as Six Sigma. As the new CEO, Jeff Immelt chose to concentrate his driving forces into the strategies previously developed by Jack Welch. Immelt stressed digitising or outsourcing the parts of the business that did not touch the customer. He supported the development of digital

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cockpits or corporate information portals that let managers track the vitals of their business moment by moment. The strategic important of these two concepts appear to be leading factors for GE at the time of the writing of this case. Immelt is the new CEO, and his strategy to drive and support existing strategies is probably a smart move on his part. Real World Case 2: Duke Energy: Introducing e-Business into a Company 1. Should Duke Energys guerrilla approach to introducing e-business be adopted by other companies? Why or why not? Other companies can certainly adopt the approach used at Duke Energy to introduce e-business. The uniqueness of the approach is the total team involvement and commitment to ensure that a system is successful. In actuality, the commitment of the all of the members in this team is the basic reason for its success. Everyone is interested in the project; they give their best effort, and take pride in the successful outcome of the system. Involvement and commitment are set very high right from the onset of the team entering into a business unit. They dont order systems development, they work closely with the users to identify potential successes, and build from there. Group dynamics were and are critical to the success of a team environment. 2. Select and evaluate one of Duke Energys e-business projects. What are its business benefits and limitations? Students will choose different e-business projects. One of the e-business projects was the Duke Energy Trade and Marketing. This business unit was responsible for providing energy to very large customers, such as city power companies. Two team members were part of this project. Ted Schultz from strategic planning, and Elizabeth Henry from customer focus. Both Henry and Schultz realized that the needs of the two customer sets would be very similar. This team helped this business unit by helping they conduct comprehensive focus groups in order to gather information on what customers wanted. The result of this process was in discovering a The business benefits was the ability to give customisable Web portal that enabled clients to obtain services like online billing and account status as well as energy industry information. customers what they wanted today (however it does not address their future needs). 3. Are any of Duke Energys e-business initiatives applicable to other companies? Explain your answer. Certainly, Duke Energys e-business initiatives can be applicable to other companies. Any method of enhancing communication, improving efficiency, reducing costs, and increasing profits through the use of these technologies can have wide spread application. One of the greatest benefits is the ability to get closer to your final customer. They are the users of your product, and they are critical to your success. Finding out what suits their needs best gives you a competitive advantage over your competitors.

Real World Case 3: Ford and UPS Logistics: The Business Value of Information Technology 1. What are the business benefits to Ford of its partnership with UPS Logistics? One of the major business benefits of Fords partnership with UPS Logistics is the expert advice that UPS would be able to give them. UPS is a master in the logistic game. Fords association with them in this business venture would certainly give them access to cutting edge business practices that have proved highly successful for UPS. Ford would be able to have an expert system built that would be modelled after the best business practices realized at UPS. It would also cut their costs for development, and the time required to develop such a complex system. 2. How do Internet technologies help make e-business applications more feasible for local car dealers? Students may suggest the fact that the local car dealer has more accurate and up to date information on the progress of their delivery. By having this information the local car dealers are better able to keep their customers informed, which in turn makes for happier customers. Local dealers would not be required to incur major expenses to build these systems. The Internet is a very inexpensive way to conduct business, and is easily accessible to large groups of users.

3. What other e-business applications could Ford developed to help its local car dealers? Give an example.
Students will suggest a variety of ideas to answer this question. Their answers may include concepts such as electronic payments, stock reorder systems, inventory and warehouse tracking systems, supply chain management, just in time inventory, electronic suggestion boxes, value chain concepts, and a number of other e-business applications that would cover a number of functional areas such as finance, marketing, etc.

Real World Case 4: Hewlett-Packard and Staff-Leasing: Success and Failure with Customer Relationship Management 1. What are some of the potential benefits of CRM systems to a business? A variety of answers can be put forward in answering this question. Some listed in the case include:1)reducing call center costs, making a sales force dramatically more productive, 2)gluing together offline and online sales efforts, 3)allowing employees to work on more productive work, 4)gained efficiency throughout the organization, intangible benefits such as satisfied customers, and increased demand for products/service could all result in increase revenues.

2.

What are several reasons why many CRM systems fail to meet the expectations of their business users?

Again, students will provide a number of different responses to this question. One of the main reasons for failure of many of these efforts is the simple fact of not involving the right people right from the beginning of the project. This includes everyone who is a stakeholder, and especially the end users. Many times, the objective of the CRM system is not clear, and the project is attempted without have a firm strategy outlined before commencing the development. Chaos and confusion turns individuals off, and lack of interest or belief in the system can develop quickly which also is a major reason for system failures. Business users also attempt to overstate what they expect from the new system which results in making it difficult to design and implement. Overbuilt systems do not product the objectives that business users thought they would realize and this can also lead to system failure. 3. What are some possible solutions to such problems? Give an example to illustrate your answer.

Students will suggest a variety of ideas. Involving everyone who is a stakeholder in the proposed system allows for a better mix and understanding for the desired objectives of the system. Everyone gets to work together, and common goals are easier to obtain. A champion should be selected for the project, and this person must have the skills to be a major team leader who is capable of motivating and increasing interest in the new system. A high level of constant communication is required among the players. Above all, never forget to involve the employees who will be using the system.