PART ONE: THE INFORMATION AGE

THE DIGITAL AND ICT REVOLUTIONS What is the digital revolution? Technological breakthroughs have revolutionized communications and the spread of information. In 1875, for example, the invention of the telephone breached distance through sound. Between 1910 and 1920, the first AM radio stations began to broadcast sound. By the 1940s television was broadcasting both sound and visuals to a vast public. In 1943, the worlds first electronic computer was created. However, it was only with the invention of the microprocessor in the 1970s that computers became accessible to the public. In the 1990s, the Internet migrated from universities and research institutions to corporate headquarters and homes. All of these technologies deal with information storage and transmission. However, the one characteristic of computer technology that sets it apart from earlier analog technologies is that it is digital. Analog technologies incorporate a combination of light and sound waves to get messages across, while digital technology, with its system of discontinuous data or events, creates a universal model to represent information that is expressed by almost anything using light and sound waves.1 To use an analogy, a digital world is a world united by one language, a world where people from across continents share ideas with one another and work together to build projects and ideas. More voluminous and accurate information is accumulated and generated, and distributed in a twinkling to an audience that understands exactly what is said. This in turn allows the recipients of the information to use it for their own purposes, to create ideas and to redistribute more ideas. The result is progress. Take this scenario to a technological levelall kinds of computers, equipment and appliances interconnected and functioning as one unit. Even today, we

see telephones exchanging information with computers, and computers playing compressed audio data files or live audio data streams that play music over the Internet like radios. Computers can play mov ies and tune in to television. Some modern homes allow a person to control central lighting and air-conditioning through computers. These are just some of the features of a digital world. Box 1. Wearable Computer Systems Wearable computers are entire systems that are carried by the user, from the CPU and hard drive, to the power supply and all input/output devices. Such systems are under development here at the (MIT) Media Lab, where we are also working to create prototypes of uniquely affective wearable systems. The size and weight of these wearable hardware systems are dropping, even as [their] durability...is increasing. We are also designing clothing and accessories (such as watches, jewelry, etc.) into which these devices may be embedded to make them not only unobtrusive and comfortable to the user, but also invisible to others. Wearable computers allow us to create systems that go where the user goes, whether at the office, at home, or in line at the bank. More importantly, they provide a platform that can maintain constant contact with the user in the variety of ways that the system may require; they provide computing power for the all affective computing needs, from affect sensing to the applications that can interpret, understand and use the data; and they can store the applications and user input data in on-board memory. Finally, such systems can link to personal computers and to the Internet, providing the same versatility of communications and applications as most desktop computers.

Chapter 1 (Business information system)

For most businesses, there are a variety of requirements for information. Senior managers need information to help with their business planning. Middle management need more detailed information to help them monitor and control
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business activities. Employees with operational roles need information to help them carry out their duties. As a result, businesses tend to have several "information systems" operating at the same time. This revision note highlights the main categories of information system and provides some examples to help you distinguish between them.

The main kinds of information systems in business are described briefly below: Information System Executive Support Systems An Executive Support System ("ESS") is designed to help senior management make strategic decisions. It gathers, analyses and summarises the key internal and external information used in the business. A good way to think about an ESS is to imagine the senior management team in an aircraft cockpit - with the instrument panel showing them the status of all the key business activities. ESS typically involve lots of data analysis and modeling tools such as "what-if" analysis to help strategic decision-making. Management Information Systems A management information system ("MIS") is mainly concerned with internal sources of information. MIS usually take data from the transaction processing systems (see below) and summaries it into a series of management reports. MIS reports tend to be used by middle management and operational supervisors. Description

DecisionSupport Systems

Decision-support systems ("DSS") are specifically designed to help management make decisions in situations where there is uncertainty about the possible outcomes of those decisions. DSS comprise tools and techniques to help gather relevant information and analyze the options and alternatives. DSS often involves use of complex spreadsheet and databases to create "what-if" models.

Knowledge Management Systems

Knowledge Management Systems ("KMS") exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organization to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants. KMS are built around systems which allow efficient

categorization and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, Power Point presentations. INTERNET pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intra net. Transaction Processing Systems As the name implies, Transaction Processing Systems ("TPS") are designed to process routine transactions efficiently and accurately. A business will have several (sometimes many) TPS; for example: Billing systems to send invoices to customers

- Systems to calculate the weekly and monthly payroll and tax payments - Production and purchasing systems to calculate raw material

requirements - Stock control systems to process all movements into, within and out of the business

Office Automation Systems

Office Automation Systems are systems that try to improve the productivity of employees who need to process data and information. Perhaps the best example is the wide range of software systems that exist to improve the productivity of employees working in an office (e.g. Microsoft Office XP) or systems that allow employees to work from home or whilst on the move.

Chapter 2 (Strategic uses of information)

Should Architects aspire to be Product Managers? One of the interesting trends I am observing is that Architectures aspiring to be Product Managers. Have recently come across multiple PM who were architects and have also been approached my a few who are interested in becoming one. Following are my thoughts on when Architects should consider PM as their career path. 1. A true Business Architect with the ability to map the technology strategy to align with the Business Strategy

2. Good understanding and hopefully first hand experience interacting with the real customer (not the business units) 3. Good understanding of revenue and business model 4. Passionate and believe about the role of the products in the customers life (whatever they are using the product for) 5. Ability to influence cross-functional team and get everyone passionate and focused on the product 6. Willing to change course mid-stream based on customer/market feedback 7. Ability to ride up and down the market roller coaster 8. Ability to keep singularly focused on an single product/portfolio Do not take on the role: 1. by assuming that PM get to define the product and every one else will follow without any questions (the PM is responsible for bringing every one on board) 2. consider whether one would be a great Architect vs. a good Product Manager (focus on what one is better at doing - a great advise given to me by my manager) 3. do not want to deal with constant communication with customers / leadership teams 4. assume that the grass is greener there - doing what one does best shall reap the right rewards

The concept of Strategic Information Systems or "SIS" was first introduced into the field of information systems in 1982-83 by Dr. Charles Wiseman, President of a newly formed consultancy called "Competitive Applications," (cf. NY State records for consultancies formed in 1982) who gave a series of public lectures on SIS in NYC sponsored by the Datamation Institute, a subsidiary of Datamation Magazine.

In 1984 Wiseman published an article on this subject (co-authored by Prof. Ian MacMillan) in the Journal of Business Strategy (Journal of Business Strategy, fall, 1984) In 1985 he published the first book on SIS called "Strategy and Computers: Information Systems as Competitive Weapons" (Dow-Jones Irwin, 1985; translated into French by Bertrand Kaulek and into Italian by Professor Fabio Corno of Bocconi University). In 1988 an expanded version of this book called "Strategic Information Systems" was published by Richard D. Irwin. This book was translated into Japanese by Professor Shinroki Tsuji and published by Diamond Publishing. Over 50,000 copies have been sold. The following quotations from the Preface of the first book ("Strategy and Computers: Information Systems as Competitive Weapons") establishes the basic idea behind the notion of SIS: "I began collecting instances of information systems used for strategic purposes five years ago, dubbing them "strategic information systems" (Internal Memo, American Can Company (Headquarters), Greenwich, CT, 1980). But from the start I was puzzled by their occurrence. At least theoretically I was unprepared to admit the existence of a new variety of computer application. The conventional view at the time recognized only management information systems, and management support systems, the former used to automate basic business processes and the latter to satisfy the information needs of decision makers. (Cf. articles by Richard Nolan, Jack Rockart, Michael Scott Morton, et al. at that time)...But as my file of cases grew, I realized that the conventional perspective on information systems was incomplete, unable to account for SIS. The examples belied the theory,and the theory in general blinded believers from seeing SIS. Indeed, some conventional information systems planning methodologies, which act like theories in guiding the systematic search for computer

application opportunities, exclude certain SIS possibilities from what might be found. (ibid.)" "This growing awareness of the inadequacy of the dominant dogma of the day led me to investigate the conceptual foundations, so to speak, of information systems. At first, I believed that the conventional gospel could be enlarged to accommodate SIS. But as my research progressed, I abandoned this position and concluded that to explain SIS and facilitate their discovery, one needed to view uses of computer (information) technology from a radically different perspective." "I call this the strategic perspective on information systems (technology). The chapters to follow present my conception of it. Written for top executives and line managers, they show how computers (information technology) can be used to support or shape competitive strategy." Most of the second book, Strategic Information Systems, was exposed from 1985 to 1988 to MBA students at the Columbia University Graduate School of Business and to a large number of practitioners seeking to apply SIS concepts to disparate industry settings. Since that time the concept has stimulated journals on the subject, dissertations, and extensive critical research. (References: search Google Scholar, Clusty, et al. using the terms: Strategic Information Systems, SIS, Charles Wiseman, et al.) Strategic systems are information systems that are developed in response to corporate business initiative. They are intended to give competitive advantage to the organization. They may deliver a product or service that is at a lower cost, that is differentiated, that focuses on a particular market segment, or is innovative. Some of the key ideas of storefront writers are summarized. These include Michael Porters Competitive Advantage and the Value Chain, Charles Wisemans

Strategic Perspective View and the Strategic Planning Process, F. Warren McFarlans Competitive Strategy with examples of Information Services Roles, and Gregory Parsons Information Technology Management at the industry level, at the firm level, and at the strategy level. General Definition Strategic information systems are those computer systems that implement business strategies; They are those systems where information services resources are applied to strategic business opportunities in such a way that the computer systems have an impact on the organizations products and business operations. Strategic information systems are always systems that are developed in response to corporate business initiative. The ideas in several well-known cases came from information Services people, but they were directed at specific corporate business thrusts. In other cases, the ideas came from business operational people, and Information Services supplied the technological capabilities to realize profitable results. Most information systems are looked on as support activities to the business. They mechanize operations for better efficiency, control, and effectiveness, but they do not, in themselves, increase corporate profitability. They are simply used to provide management with sufficient dependable information to keep the business running smoothly, and they are used for analysis to plan new directions. Strategic information systems, on the other hand, become an integral and necessary part of the business, and directly influence market share, earnings, and all other aspects of marketplace profitability. They may even bring in new products, new markets, and new ways of doing business. They directly affect the competitive stance of the organization, giving it an advantage against the competitors. Most literature on strategic information systems emphasizes the dramatic breakthroughs in computer systems, such as American Airlines' Sabre System and

American Hospital Supplys terminals in customer offices. These, and many other highly successful approaches are most attractive to think about, and it is always possible that an equivalent success may be attained in your organization. There are many possibilities for strategic information systems, however, which may not be dramatic breakthroughs, but which will certainly become a part of corporate decision making and will, increase corporate profitability. The development of any strategic information systems always enhances the image of information Services in the organization, and leads to information management having a more participatory role in the operation of the organization. The three general types of information systems that are developed and in general use are financial systems, operational systems, and strategic systems. These categories are not mutually exclusive and, in fact, they always overlap to some. Welldirected financial systems and operational systems may well become the strategic systems for a particular organization. Financial systems are the basic computerization of the accounting, budgeting, and finance operations of an organization. These are similar and ubiquitous in all organizations because the computer has proven to be ideal for the mechanization and control or financial systems; these include the personnel systems because the headcount control and payroll of a company is of prime financial concern. Financial systems should be one of the bases of all other systems because they give a common, controlled measurement of all operations and projects, and can supply trusted numbers for indicating departmental or project success. Organizational planning must be tied to financial analysis. There is always a greater opportunity to develop strategic systems when the financial systems are in place, and required figures can be readily retrieved from them.

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Operational systems, or services systems, help control the details of the business. Such systems will vary with each type of enterprise. They are the computer systems that operational managers need to help run the business on a routing basis. They may be useful but mundane systems that simply keep track of inventory, for example, and print out reorder points and cost allocations. On the other hand, they may have a strategic perspective built into them, and may handle inventory in a way that dramatically impacts profitability. A prime example of this is the American Hospital Supply inventory control system installed on customer premises. Where the great majority of inventory control systems simply smooth the operations and give adequate cost control, this well-know hospital system broke through with a new version of the use of an operational system for competitive advantage. The great majority of operational systems for which many large and small computer systems have been purchased, however, simply help to manage and automate the business. They are important and necessary, but can only be put into the "strategic" category it they have a pronounced impact on the profitability of the business. All businesses should have both long-range and short-range planning of operational systems to ensure that the possibilities of computer usefulness will be seized in a reasonable time. Such planning will project analysis and costing, system development life cycle considerations, and specific technology planning, such as for computers, databases, and communications. There must be computer capacity planning, technology forecasting, and personnel performance planning. It is more likely that those in the organization with entrepreneurial vision will conceive of strategic plans when such basic operational capabilities are in place and are well managed. Operational systems, then, are those that keep the organization operating under control and most cost effectively. Any of them may be changed to strategic

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systems if they are viewed with strategic vision. They are fertile grounds for new business opportunities. Strategic systems are those that link business and computer strategies. They may be systems where a new business thrust has been envisioned and its advantages can be best realized through the use of information technology. They may be systems where new computer technology has been made available on the market, and planners with an entrepreneurial spirit perceive how the new capabilities can quickly gain competitive advantage. They may be systems where operational management people and Information Services people have brainstormed together over business problems, and have realized that a new competitive thrust is possible when computer methods are applied in a new way. There is a tendency to think that strategic systems are only those that have been conceived at what popular, scientific writing sometimes calls the "achtpunckt." This is simply synthetic German for "the point where you say acht! or thats it!" The classical story of Archimedes discovering the principle of the density of matter by getting into a full bathtub, seeing it overflow, then shouting "Eureka!" or "I have found it!" is a perfect example of an achtpuncht. It is most pleasant and profitable if someone is brilliant enough, or lucky enough, to have such an experience. The great majority of people must be content, however, to work step-by-step at the process of trying to get strategic vision, trying to integrate information services thinking with corporate operational thinking, and trying to conceive of new directions to take in systems development. This is not an impossible task, but it is a slow task that requires a great deal of communication and cooperation. If the possibilities of strategic systems are clearly understood by all managers in an enterprise, and they approach the development of ideas and the planning systematically, the chances are good that strategic systems will be result. These may not be as dramatic as American Airlines Sabre, but they can certainly be highly profitable.

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There is general agreement that strategic systems are those information systems that may be used gaining competitive advantage. How is competitive advantage gained?. At this point, different writers list different possibilities, but none of them claim that there may not be other openings to move through. Some of the more common ways of thinking about gaining competitive advantage are:
y

Deliver a product or a service at a lower cost. This does not necessarily mean the lowest cost, but simply a cost related to the quality of the product or service that will be both attractive in the marketplace and will yield sufficient return on investment. The cost considered is not simply the data processing cost, but is the overall cost of all corporate activities for the delivery of that product or service. There are many operational computer systems that have given internal cost saving and other internal advantages, but they cannot be thought of as strategic until those savings can be translated to a better competitive position in the market.

Deliver a product or service that us differentiated. Differentiation means the addition of unique features to a product or service that are competitive attractive in the market. Generally such features will cost something to produce, and so they will be the setting point, rather than the cost itself. Seldom does a lowest cost product also have the best differentiation. A strategic system helps customers to perceive that they are getting some extras for witch they will willingly pat.

Focus on a specific market segment. The idea is to identify and create market niches that have not been adequately filled. Information technology is frequently able to provide the capabilities of defining, expanding, and filling a particular niche or segment. The application would be quite specific to the industry.

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Innovation. Develop products or services through the use of computers that are new and appreciably from other available offerings. Examples of this are automatic credit card handing at service stations, and automatic teller machines at banks. Such innovative approaches not only give new opportunities to attract customers, but also open up entirely new fields of business so that their use has very elastic demand.

Almost any data processing system may be called "strategic" if it aligns the computer strategies with the business strategies of the organization, and there is close cooperation in its development between the information Services people and operational business managers. There should be an explicit connection between the organizations business plan and its systems plan to provide better support of the organizations goals and objectives, and closer management control of the critical information systems. Many organizations that have done substantial work with computers since the 1950s have long used the term "strategic planning" for any computer developments that are going to directly affect the conduct of their business. Not included are budget, or annual planning and the planning of developing Information Services facilities and the many "housekeeping" tasks that are required in any corporation. Definitely included in strategic planning are any information systems that will be used by operational management to conduct the business more profitably. A simple test would be to ask whether the president of the corporation, or some senior vice presidents, would be interested in the immediate outcome of the systems development because they felt it would affect their profitability. If the answer is affirmative, then the system is strategic. Strategic system, thus, attempt to match Information Services resources to strategic business opportunities where the computer systems will have an impact on

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the products and the business operations. Planning for strategic systems is not defined by calendar cycles or routine reporting. It is defined by the effort required to impact the competitive environment and the strategy of a firm at the point in time that management wants to move on the idea. Effective strategic systems can only be accomplished, of course, if the capabilities are in place for the routine basic work of gathering data, evaluating possible equipment and software, and managing the routine reporting of project status. The calendarized planning and operational work is absolutely necessary as a base from which a strategic system can be planned and developed when a priority situation arises. When a new strategic need becomes apparent, Information Services should have laid the groundwork to be able to accept the task of meeting that need. Strategic systems that are dramatic innovations will always be the ones that are written about in the literature. Consultants in strategic systems must have clearly innovative and successful examples to attract the attention of senior management. It should be clear, however, that most Information Services personnel will have to leverage the advertised successes to again funding for their own systems. These systems may not have an Olympic effect on an organization, but they will have a good chance of being clearly profitable. That will be sufficient for most operational management, and will draw out the necessary funding and support. It helps to talk about the possibilities of great breakthroughs, if it is always kept in mind that there are many strategic systems developed and installed that are successful enough to be highly praised within the organization and offer a competitive advantage, but will not be written up in the Harvard Business Review. Another way of characterizing strategic information systems is to point out some of the key ideas of the foremost apostles of such systems. Porters Competitive Advantage

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Dr. Michael E. Porter, Professor of Business Administration, Harvard Business School, has addressed his ideas in two keystone books. Competitive Strategy: Techniques for Analyzing Industries and Competitors, and his newer book, Competitive Advantage, present a framework for helping firms actually create and sustain a competitive advantage in their industry in either cost or differentiation. Dr. Porters theories on competitive advantage are not tied to information systems, but are used by others to involve information services technologies._In his book, Dr. Porter says that there are two central questions in competitive strategy:
y y

How structurally attractive is the industry? What is the firms relative position in the industry?

Both of these questions are dynamic, and neither is sufficient alone to guide strategic choices. Both can be influenced by competitor behavior, and both can be shaped by a firms actions. It is imperative that these questions be answered by analysis, which will be the starting point for good strategic thinking, and will open up possibilities for the role of information systems.Industry profitability is a function of five basic competitive forces:
y y y y y

the threat of new entrants the threat of substitute products or services the bargaining power of suppliers the bargaining power of buyers and the intensity of the rivalry among existing competitors

Porters books give techniques for getting a handle on the possible average profitability of an industry over time. The analysis of these forces is the base for estimating a firms relative position and competitive advantage. In any industry, the sustained average profitability of competitors varies widely. The problem is to determine how a business can outperform the industry average and attain a

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sustainable competitive advantage. It is possible that the answer lies in information technology together with good management._Porter claims that the principal types of competitive advantage are low cost producer, differentiation, and focus. A firm has a competitive advantage if it is able to deliver its product or service at a lower cost than its competitors. If the quality of its product is satisfactory, this will translate into higher margins and higher returns. Another advantage is gained if the firm is able to differentiate itself in some way. Differentiation leads to offering something that is both unique and is desired, and translates into a premium price. Again, this will lead to higher margins and superior performance._It seems that two types of competitive advantage, lower cost and differentiation, are mutually exclusive. To get lower cost, you sacrifice uniqueness. To get a premium price, there must be extra cost involved in the process. To be a superior performer,_however, you must go for competitive advantage in either cost or differentiation._Another point of Porters is that competitive advantage is gained through a strategy bases on scope. It is necessary to look at the breadth of a firms activities, and narrow the competitive scope to gain focus in either an industry segment, a geographic area, a customer type, and so on. Competitive advantage is most readily gained by defining the competitive scope in which the firm is operating, and concentrating on it._Based on these ideas of type and scope, Porter gives a useful tool for analysis which he calls The Value Chain (Figure No. 1). This value chain gives a framework on which a useful analysis can be hung. The basic notion is that to understand competitive advantage in any firm, one cannot look at the firm as a whole. It is necessary to identify the specific activities which the firm performs to do business. Each firm is a collection of the things that it does that all add up to the product being delivered to the customer. These activities are numerous and are unique to every industry, but it is only in these activities wherecost advantage or differentiation can be gained._The basic idea is that the firms activities can be divided into nine generic types. Five are the primary activities, which are the activities that create the product, market it and deliver it; four are the support activities that cross between the primary activities. The primary activities are:
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Inbound logistics, which includes the receipt and storage of material, and the general management of supplies.

y y

Operations, which are the manufacturing steps or the service steps. Outbound logistics, which are associated with collecting, storing, and physically distributing the product to buyers. In some companies this is a significant cost, and buyers value speed and consistency.

Marketing and sales includes customer relations, order entry, and price management.

After-sales services covers the support of the product in the field, installation, customer training, and so on.

The support activities are shown across the top of Figure No. 1 because they are a part of all of the firms operations. They are not directed to the customer, but they allow the firm to perform its primary activities. The four generic types of support activities are:
y

Procurement, which includes the contracting for and purchase of raw materials, or any items used by the enterprise. Part of procurement is in the purchasing department, but it is also spread throughout the organization.

Technology development may simply cover operational procedures, or many be involved with the use of complex technology. Today, sophisticated technology is pervasive, and cuts across all activities; it is not just an R&D function.

Human resource management is the recruiting, training, and development of people. Obviously, the cuts across every other activity.

Firm infrastructure is a considerable part of the firm, including the accounting department, the legal department, the planning department, government relations, and so on.

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The basic idea is that competitive advantage grows out of the firms ability to perform these activities either less expensively than its competitors, or in a unique way. Competitive advantage should be linked precisely to these specific activities, and not thought of broadly at a firm-wide level. This is an attractive way of thinking for most information Services people, as it is, fundamentally, the systems analysis approach. Computer people are trained to reduce systems to their components, look for the best application for each component, then put together an interrelated system._Information technology is also pervasive throughout all parts of the value chain. Every activity that the firm performs has the potential to imbed information technology because it involves information processing. As information technology moves away from repetitive transaction processing and permeates all activities in the value chain, it will be in a better position to be useful in gaining competitive advantage. Figure No. 2, Value Chain: Key Activities, gives a brief example of a typical analysis of a value chain for a manufacturing company. It is obvious that information processing plays an important role in all these key activities._Porter emphasizes what he call the linkages between the activities that the firm performs. No activities in a firm are independent, yet each department is managed separately. It is most important to understand the cost linkages that are involved so that the firm may get an overall optimization of the production rather than departmental optimizations. A typical linkage might be that if more is spent in procurement, less is spent in operations. If more testing is done in operations, after-sales service costs will be lower. Multifunctional coordination is crucial to competitive advantage, but it is often difficult to see. Insights into linkages give the ability to have overall optimization. Any strategic information system must be analyzed across all departments in the organization._Cost and Competitive Advantage. Cost leadership is one of Porters two types of competitive advantage. The cost leader delivers a product of acceptable quality at the lowest possible cost. It attempts to open up a significant and sustainable cost gap over all other competitors. The cost advantage is achieved through superior position in relation to the key cost drivers._Cost leadership translates into above19

average profits if the cost leader can command the average prices in the industry. On the other hand, cost leaders must maintain quality that is close to, or equal to, that of the competition. Achieving cost leadership usually requires trade-offs with differentiation. The two are usually incompatible._Note that a firms relative cost position cannot be understood by viewing the firm as a whole. Overall cost grows out of the cost performing discrete activities. Cost position is determined by the cumulative cost of performing all value activities._To sustain cost advantage, Porter gives a number of cost drivers which must be understood in detail because the sustainability of cost advantage in an activity depends on the cost drivers of that activity. Again, this type of detail is best obtained by classical systems analysis methods. Some of the cost drivers which must be analyzed, understood, and controlled are:
y

Scale. The appropriate type of scale must be found. Policies must be set to reinforce economies of scale in scale-sensitive activities.

Learning. The learning curve must be understood and managed. As the organization tries to learn from competitors, it must strive to keep its own learning proprietary.

y y

Capacity Utilization. Cost can be controlled by the leveling of throughput. Linkages. Linkages should be exploited within the value chain. Work with suppliers and channels can reduce costs.

y y

Interrelationships. Shared activities can reduce costs. Integration. The possibilities for integration or de-integration should be examined systematically.

Timing. If the advantages of being the firs mover or a late mover are understood, they can be exploited.

Policies. Policies that enhance the low-cost position or differentiation should be emphasized.

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Location. When viewed as a whole, the location of individual activities can be optimized.

Institutional Factors. Institutional factors should be examined to see whether their change may be helpful.

Care must be taken in the evaluation and perception of cost drivers because there are pitfalls if the thinking is incremental and indirect activities are ignored. Even though the manufacturing activities, for example, are obvious candidates for analyses, they should not have exclusive focus. Linkages must be exploited and cross-subsidies avoided. Porter gives five steps to achieving cost leadership:
y y y

Identify the appropriate value chain and assign costs and assets to it. Identify the cost drivers of each value activity and see how they interact. Determine the relative costs of competitors and the sources of cost differences.

Develop a strategy to lower relative cost position through controlling cost drivers or reconfiguring the value chain.

est the cost reduction strategy for sustainability.

Differentiation Advantage Differentiation is the second of Porters two types of competitive advantage. In the differentiation strategy, one or more characteristics that are widely value by buyers are selected. The purpose is to achieve and sustain performance that is superior to any competitor in satisfying those buyer needs._A differentiator selectively adds costs in areas that are important to the buyer. Thus, successful differentiation leads to premium prices, and these lead to above-average profitably if there is approximate cost parity. To achieve this, efficient forms of differentiation must be picked, and costs must be reduced in areas that are irrelevant to the buyer needs._Buyers are like sellers in that they have their own value chains. The product

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being sold will represent one purchased input, but the seller may affect the buyers activities in other ways. Differentiation can lower the buyers cost and improve the buyers performance, and thus create value, or competitive advantage, for the buyer. The buyer may not be able to assess all the value that a firm provides, but it looks for signals of value, or perceived value. A few typical factors which may lower the buyers costs are:
y y y y y y

Less idle time Lower risk of failure Lower installation costs Faster processing time Lower labor costs Longer useful life, and so on.

Figure No. 3 Representative Sources of Differentiation, shows a number of typical examples of activities that should be considered. It indicates the breadth and detail that must be involved in the study._Porter points out that differentiation is usually costly, depending on the cost drivers of the activities involved. A firm must find forms of differentiation where it has a cost advantage in

differentiating._Differentiation is achieved by enhancing the sources of uniqueness. These may be found throughout the value chain, and should be signaled to the buyer. The cost of differentiation can be turned to advantage if the less costly sources are exploited and the cost drivers are controlled. The emphasis must be on getting a sustainable cost advantage in differentiating. Efforts must be made to change the buyers criteria by reconfiguring the value chain to be unique in new ways, and by preemptively responding to changing buyer or channel

circumstances._Differentiation will nor work if there is too much uniqueness, or uniqueness that the buyers do not value. The buyers ability to pay a premium price,

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the signaling criteria, and the segments important to the buyer must all be understood. Also, there cannot be over reliance on sources of differentiation that competitors can emulate cheaply or quickly. Porter lists seven steps to achieving differentiation:
y y

Determine the identify of the real buyer. Understand the buyers value chain, and the impact of the sellers product on it.

y y y y

Determine the purchasing criteria of the buyer. Assess possible sources of uniqueness in the firms value chain. Identify the cost of these sources of uniqueness. Choose the value activities that create the most valuable differentiation for the buyer relative to the costs incurred.

Test the chosen differentiation strategy for sustainability.

Focus Strategies for Advantage. Porters writings also discuss focus strategies. He emphasizes that a company that attempts to completely satisfy every buyer does not have a strategy. Focusing means selecting targets and optimizing the strategies for them. Focus strategies further segment the industry. They may be imitated, but can provide strategic openings._Clearly, multiple generic strategies may be implemented, but internal inconsistencies can then arise, and the distinctions between the focused entities may become blurred._Porters work is directed towards competitive advantage in general, and is not specific to strategic information systems. It has been reviewed here at some length, however, because his concepts are frequently referred to in the writings of others who are concerned with strategic information systems. The value chain concept has been widely adopted, and the ideas of low cost and differentiation are accepted. This section, therefore, is an introduction into a further

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discussion of strategic information systems. The implementation of such systems tends to be can implementation of the factors elucidated by Porter. Wisemans Strategic Perspective View Charles Wiseman has applied the current concepts of Strategic Information Systems in work at GTE and other companies, and in his consulting work as President of Competitive Applications, Inc. His book, Strategy and Computers: Information Systems as Competitive Weapons, extends Porters thinking in many practical ways in the Information Systems area, and discusses many examples of strategic systems. Wiseman emphasizes that companies have begun to use information systems strategically to reap significant competitive advantage. He feels that the significance of these computer-based products and services does not lie in their technological sophistication or in the format of the reports they produce; rather, it is found in the role played by these information systems in the firms planning and implementation in gaining and maintaining competitive advantage. Wiseman points out that although the use of information systems may not always lead to competitive advantage, it can serve as an important tool in the firms strategic plan. Strategic systems must not be discovered haphazardly. Those who would be competitive leaders must develop a systematic approach for identifying strategic information systems (SIS) opportunities. Both business management and information management must be involved. He emphasizes that information technology is now in a position to be exploited competitively. A framework must be developed for identifying SIS opportunities. There will certainly be competitive response, so one should proceed with strategic thrusts based on information technology. These moves are just as

24

important as other strategic thrusts, such as acquisition, geographical expansion, and so on. It is necessary to plan rationally about acquisition, major alliances with other firms, and other strategic thrusts. IMBS Business Systems Planning (BSP) and MITs Critical Success Factor (CSF) methodologies are ways to develop information architectures and to identify conventional information systems, which are primarily used for planning and control purposes. To identify SIS, a new model or framework is needed. The conventional approach works within the perceived structures of the organization. An effective SIS approach arises from the forging of new alliances that expand the horizon of expectation. Such an approach is most difficult to attain, and can only work with top management support. Innovations, however, frequently, come from simply a new look at existing circumstances, from a new viewpoint. Information Services people must start to look systematically at application opportunities related to managers. Wiseman believes that the range of opportunities is limited by the framework adopted. He contrasts the framework for Conventional IS Opportunities (Figure No. 4) with the framework for Strategic IS Opportunities (Figure No. 5). In the conventional view, there are two information system thrusts: to automate the basic processes of the firm, or to satisfy the information needs of managers, professionals, or others. There are three generic targets: strategic planning, management control, and operational control. In this perspective, there are, thus, six generic opportunity areas. In the strategic view of IS opportunities, there are five strategic information thrusts and three strategic targets. This gives fifteen generic opportunity areas. This opens up the range and perspective of management vision.

25

Sustainable competitive advantage can mean many things to different firms. Competitive advantage may be with respect to a supplier, a customer, or a rival. It may exist because of a lower price, because of desirable features, or because of the various resources that a firm possesses. Sustainability is also highly relative, depending upon the business. In established businesses, it may refer to years, and the experience that the firm develops may be quite difficult to emulate. In other industries, a lead of a few weeks or months may be all that is necessary. There is an advantage in looking at Figure No. 5 as a study group, and brainstorming through it to find out what information may be needed to do a job better. One can find competitive advantage in information systems when the subjects are broken down to specifics. Strategic Thrusts. Wiseman uses the term strategic thrusts for the moves that companies make to gain or maintain some kind of competitive edge, or to reduce the competitive edge of one of the strategic targets. Information technology can be used to support or to shape one or more of these thrusts. Examining the possibilities of these thrusts takes imagination, and it is helped by understanding what other firms have done in similar situations. This is why so many examples are presented in the literature. Analogy is important. There is no question that there is considerable overlap between conventional information systems and strategic information systems. Systems are complex and a great deal of data is involved. The idea is to look at this complexity in a new light, and see where competitive advantage might possibly be gained. Note that Wiseman takes Porters three generic categories: low cost producer, differentiation, and focus, and extends them to five categories: differentiation, cost, innovations, growth, and alliance.

26

Cost may be move that not only reduces the costs, but also reduces the costs of selected strategic targets so that you will benefit form preferential treatment. A strategic cost thrust may also aim at achieving economies of scale. The examples always seem obvious when they are described, but the opportunities can usually only be uncovered by considerable search. Innovation is another strategic thrust that can be supported or shaped by information technology in either product or process. In many financial firms, the innovative product is really an information system. Innovation requires rapid response to opportunities to be successful, but this carries with it the question of considerable risk. There can be no innovation without risk, whether information systems are included or not. Innovation, however, can achieve advantage in product or process that results in a fundamental transformation in the way that type of business is conducted. Grown achieves an advantage by expansion in volume or geographical distribution. It may also come from product-time diversification. Information systems can be of considerable help in the management of rapid growth. Alliance gains competitive advantage by gaining growth, differentiation, or cost advantages through marketing agreements, forming joint ventures, or making appropriate acquisitions. The Strategic Planning Process. Wiseman advocates brainstorming and the systematic search for SIS opportunities. He has had considerable success with a formalized framework for surfacing ideas. He describes his SIS Planning Process in five phases:

27

Phase A: Introduce the Information Services management to SIS concepts. Give an overview of the process describe cases. Gain approval to proceed with an idea-generation meeting in Information Service.

Phase B: Conduct an SIS idea-generation meeting with Information Services middle management. Test the SIS idea-generation methodology. Identify significant SIS areas for executive consideration.

Phase C: Conduct an SIS idea-generation meeting with senior Information Services management. Identify SIS ideas, and evaluate them together with the ideas from the previous meeting

Phase D: Introduce the top business executives to the SIS concept. Discuss some of the SIS ideas that were considered for the business. Gain approval to proceed with the SIS idea-generation meetings with business planners.

Phase E: Conduct an SIS idea-generation meeting with the corporate planners. Identify some SIS ideas and evaluate them together with the ideas that have emerged from the previous meeting.

Wiseman points out that the whole idea is designed to introduce the strategic perspective on information systems, stimulate the systematic search for SIS opportunities, and evaluate and select a set of projects that are expected to secure the greatest competitive advantage for the firm. In the idea-generation meetings of Phases B, C, and E of the process, there are always seven explicit steps:
y

Give a Tutorial on Competitive Strategy. Introduce the concepts of strategic thrusts, strategic targets, and competitive strategy.

Apply SIS Concepts to Actual Cases. Develop an understanding of SIS possibilities and their strategic thrusts and targets.

Review the Companys Competitive Position. Try to understand its presents business position and its strategies.

Brainstorm for SIS Opportunities. Generate SIS ideas in small groups.

28

Discuss the SIS Opportunities. Use the experience of the group to correlate and condense the SIS ideas.

Evaluate the SIS Opportunities. Consider the competitive significance of the SIS ideas.

Detail the SIS Blockbusters. Select the best SIS ideas, and detail their competitive advantages and key implementation issues.

Wiseman says that typical SIS idea-generation meetings will last for days. Each step takes about two hours, at least. The process generates many good SIS ideas, and a few will always be considered well worth implementation. Top management begins to focus their attention on SIS opportunities. The ideas that are generated can produce significant competitive advantage.

Chapter 3 (Business Functions and Supply Chains)

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996).[1] Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain). Another definition is provided by the APICS Dictionary when it defines SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally."

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In an economy that produces and consumes so much information, professionals must know how to use information systems in virtually every business activity. Managers must have an overall understanding of all elements of a system, so that they know what options are available to control quality, costs, and resources. Modern information systems encompass whole business cycles, often called supply chains. When you finish this chapter, you will be able to: y y y Identify various business functions and the role of ISs in these functions. Explain how ISs in the basic business functions relate to each other. Articulate what supply chains are and how information technology supports management of supply chains. y y Enumerate the purposes of customer relationship management systems. Explain the notion of enterprise resource planning systems.

Something had to give: Eats2Gos business expansion to more carts and to chip manufacturing had worked so well that Juan Moreno was drowning in piles of sales receipts. He had hired a part-time assistant to help him input the receipts to the businesss spreadsheet program, but that solution was no longer enough. The laborintensive process simply had to go. Luckily, Juan, Kendra Banks, and Dave Slater found a solution in a handheld personal digital assistant (PDA) with wireless mobile printer software. The sales staff manning the carts keyed the customers menu selections into the PDAs and printed a receipt. Later, the information was downloaded from the PDAs to the businesss main accounting system. The time saved by automating the sales transactions allowed Juan to concentrate on bigger issues the partners faced: tracking sales, costs, and profitability. As part of his monthly sales analysis, Juan printed sales reports segregated by each of the three carts. When he did so, he noticed that sales from the Robbins Park pushcart were dropping. Their Subwich competitor was drawing customers from the Robbins Park cart. Also, Juan noticed that business was even worse during colder months and bad weather. The partners needed to turn the situation around.

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A New Opportunity Appears Earlier Juan, Kendra, and Dave had decided to find their own kitchen space to handle their increased food volume. When they were looking for rental space, they ran across a vacant storefront in Campus Town. Instead of simply renting kitchen space, they decided theyd open a small restaurant with its own kitchen. That way, they could meet their Subwich competitor head on, offering dinners as well as lunches and not worrying about the change of seasons or weather. They could also use the restaurants kitchen for chip manufacturing when the restaurant was closed. The telephones at the offices of Capital One Financial Corp., a leading credit-card issuer, ring more than a million times per week. Cardholders call to ask about their balance or to ensure that the company received their recent payment. While callers almost immediately hear a human voice at the other end, computers actually do the initial work. The computers use the callers telephone number to search the companys huge databases. Inferring from previous calls and numerous recorded credit-card transactions of the caller, the computers predict the reason for calling. Based on the assumed reason, the computers channel the call to one of 50 employees who can best handle the situation. Important information about the caller is brought up on the employees computer monitor. Although callers usually do not contact the company to make purchases, the computer also brings up information about what the caller might want to purchase. As soon as the customer service representative provides the caller with satisfactory answers, he or she also offers the cardholder special sales. Many callers do indeed purchase the offered merchandise. All of these stepsaccepting the call, reviewing and analyzing the data, routing the call, and recommending merchandisetake the computers a mere tenth of a second. It is often said that the use of information technology makes our work more effective, more efficient, or both. What do these terms mean? Effectiveness defines the degree to which a goal is achieved. Thus, a system is more or less effective depending on (1) how much of its goal it achieves, and (2) the degree to which it achieves better outcomes than other systems do.
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Efficiency is determined by the relationship between resources expended and the benefits gained in achieving a goal. Expressed mathematically, One way to look at business functions and their supporting systems is to follow typical business cycles, which often begin with marketing and sales activities (see Figure 3.1). Serving customers better and faster, as well as learning more about their experiences and preferences, is facilitated by customer relationship management (CRM) systems. When customers place orders, the orders are executed in the supply chain. Customer relationship management continues after delivery of the ordered goods in the forms of customer service and more marketing. When an organization enjoys the support of CRM and supply chain management (SCM) systems, it can plan its resources well. Combined, these systems are often referred to as enterprise resource planning (ERP) systems.

32

Shows some of the

most

common

business activities and their

interdependence. For example, cost accounting systems are linked to payroll, benefits, and purchasing systems to accumulate the cost of products manufactured by a company; and information from purchasing systems flows to both cost accounting and financial reporting systems. The following discussion addresses the role of information systems, one business function at a time.

PART TWO: INFORMATION TECHNOLOGI

Information technology (IT) is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics based combination of computing and telecommunications The term in its modern sense first appeared in a 1958 article published in the Harvard Business Review, in which authors Leavitt and Whisler commented that "the new technology does not yet have a single established name. We shall call it information technology(IT)."

General information
IT is the area of managing technology and spans wide variety of areas that include but are not limited to things such as processes, computer software, information systems, computer hardware, programming languages, and data constructs. In short, anything that renders data, information or perceived knowledge in any visual format whatsoever, via any multimedia distribution mechanism, is considered part of the domain space known as Information Technology (IT). IT professionals perform a variety of functions (IT Disciplines/Competencies) that range from installing applications to designing complex computer networks and information databases. A few of the duties that IT professionals perform may include
33

data management, networking, engineering computer hardware, database and software design, as well as management and administration of entire systems. Information technology is starting to spread further than the conventional personal computer and network technology, and more into integrations of other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs.

Chapter 4 (Business Hardware)

IBM business hardware products offer the best of both worlds IBM's heritage of technical innovation and reliability in hardware tailored to meet your business needs and resources. You can rely on our business hardware products to be affordable and easy to use, deploy and manage.

Chapter 5 (Business software)

This article is about software made for business, if you were looking for the business of selling software Software business. Business software is generally any software program that helps a business increase productivity or measure their productivity. The term covers a large variation of uses within the business environment, and can be categorized by using a small, medium and large matrix:

34

The small business market generally consists of home accounting software, and office suites such as Microsoft Office and OpenOffice.org.

The medium size, or SME, has a broader range of software applications, ranging from accounting, groupware, customer relationship management, human resources software, outsourcing relationship management, loan origination software, shopping cart software, field service software, and other productivity enhancing applications.

The last segment covers enterprise level software applications, such as those in the fields of enterprise resource planning, enterprise content management (ECM), business process management (BPM) and product lifecycle management. These applications are extensive in scope, and often come with modules that either add native functions, or incorporate the functionality of third-party software programs.

Chapter 6 (Business network and telecommunications)

Some students take to networking naturally, but many find it the most difficult course conceptually in their information systems (IS) program. In programming, your learn to write code in projects of various sizes. Database also tends to have projects in which you build something. In networking, however, your learn more abstract skills, especially design and troubleshooting. In both skills, you must understand a large number of different concepts and use them together. If there is something you do not know, your network design will almost certainly be wrong, and your troubleshooting will be ineffective.

35

In particular, you must not study concepts in isolation. When you design, you must know the pros and cons of alternatives. So when you study several technologies, be able to compare and contrast them very well. Also, be very cautious about cramming. There are a lot of similar concepts you must distinguish. When people cram just before an exam, similar concepts tend to run together. At the same time, most students do very well in networking. It just takes a lot of work.

Chapter 7 (Databases and data warehouses)

So how is a data warehouse different from you regular database? After all, both are databases, and both have some tables containing data. If you look deeper, you'd find that both have indexes, keys, views, and the regular jing-bang. So is that 'Data warehouse' really different from the tables in you application? And if the two aren't really different, maybe you can just run your queries and reports directly from your application databases! Well, to be fair, that may be just what you are doing right now, running some EOD (end-of-day) reports as complex SQL queries and shipping them off to those who need them. And this scheme might just be serving you fine right now. Nothing wrong with that if it works for you. But before you start patting yourself on the back for having avoided a data warehouse altogether, do spend a moment to understand the differences, and to appreciate the pros and cons of either approach. The primary difference betwen you application database and a data warehouse is that while the former is designed (and optimized) to record , the latter has to be designed (and optimized) to respond to analysis questions that are critical for your business. Application databases are OLTP (On-Line Transaction Processing) systems where every transaction has to be recorded, and super-fast at that. Consider the scenario where a bank ATM has disbursed cash to a customer but was unable to record this event in the bank records. If this started happening frequently, the bank

36

wouldn't stay in business for too long. So the banking system is designed to make sure that every trasaction gets recorded within the time you stand before the ATM machine. This system is write-optimized, and you shouldn't crib if your analysis query (read operation) takes a lot of time on such a system.

A Data Warehouse (DW) on the other end, is a database (yes, you are right, it's a database) that is designed for facilitating querying and analysis. Often designed as OLAP (On-Line Analytical Processing) systems, these databases contain read-only data that can be queried and analysed far more efficiently as compared to your regular OLTP application databases. In this sense an OLAP system is designed to be readoptimized. Separation from your application database also ensures that your business intelligence solution is scalable (your bank and ATMs don't go down just because the CFO asked for a report), better documented and managed (god help the novice who is given the application database diagrams and asked to locate the needle of data in the proverbial haystack of table proliferation), and can answer questions far more efficietly and frequently. Creation of a DW leads to a direct increase in quality of analyses as the table structures are simpler (you keep only the needed information in simpler tables), standardized (well-documented table structures), and often denormalized (to reduce the linkages between tables and the corresponding complexity of queries). A DW drastically reduces the 'cost-per-analysis' and thus permits more analysis per FTE. Having a well-designed DW is the foundation successful BI/Analytics initiatives are built upon.

If you are still running your reports off the main application database, answer this simple question: Would the solution still work next year with 20% more customers, 50% more business, 70% more users, and 300% more reports? What about the year after next? If you are sure that your solution will run without any changes, great!!

37

However, if you have already budgeted to buy new state-of-the-art hardware and 25 new Oracle licenses with those partition-options, and the 33 other cool-sounding features, good luck to you. (You can probably send me a ticket to Hawaii, since it's gonna cost you just a minute fraction of your budget) A data warehouse (DW) is a database used for reporting. The data is uploaded from the operational systems for reporting. The data may pass through an operational data store for additional operations before it is used in the DW for reporting. A data warehouse maintains its functions in three layers: staging, integration, and access. Staging is used to store raw data for use by developers (analysis and support). The integration layer is used to integrate data and to have a level of abstraction from users. The access layer is for getting data out for users. This definition of the data warehouse focuses on data storage. The main source of the data is cleaned, transformed, catalogued and made available for use by managers and other business professionals for data mining, online analytical processing, market research and decision support (Marakas & OBrien 2009). However, the means to retrieve and analyze data, to extract, transform and load data, and to manage the data dictionary are also considered essential components of a data warehousing system. Many references to data warehousing use this broader context. Thus, an expanded definition for data warehousing includes business intelligence tools, tools to extract, transform and load data into the repository, and tools to manage and retrieve metadata.

So how is a data warehouse different from your regular database? After all, both are databases, and both have some tables containing data. If you look deeper, youd find that both have indexes, keys, views, and the regular jing-bang. So is that Data warehouse really different from the tables in you application? And if the two arent really different, maybe you can just run your queries and reports directly from your application databases!

38

Well, to be fair, that may be just what you are doing right now, running some EOD (end-of-day) reports as complex SQL queries and shipping them off to those who need them. And this scheme might just be serving you fine right now. Nothing wrong with that if it works for you. But before you start patting yourself on the back for having avoided a data warehouse altogether, do spend a moment to understand the differences, and to appreciate the pros and cons of either approach. The primary difference betwen you application database and a data warehouse is that while the former is designed (and optimized) to record , the latter has to be designed (and optimized) to respond to analysis questions that are critical for your business. Application databases are OLTP (On-Line Transaction Processing) systems where every transation has to be recorded, and super-fast at that. Consider the scenario where a bank ATM has disbursed cash to a customer but was unable to record this event in the bank records. If this started happening frequently, the bank wouldnt stay in business for too long. So the banking system is designed to make sure that every trasaction gets recorded within the time you stand before the ATM machine. This system is write-optimized, and you shouldnt crib if your analysis query (read operation) takes a lot of time on such a system. A Data Warehouse (DW) on the other end, is a database (yes, you are right, its a database) that is designed for facilitating querying and analysis. Often designed as OLAP (On-Line Analytical Processing) systems, these databases contain read-only data that can be queried and analysed far more efficiently as compared to your regular OLTP application databases. In this sense an OLAP system is designed to be readoptimized.

39

PART THREE: WEB-ENABLED COMMERCE

Commerce Generation is the premier provider of e-Commerce solutions on Microsoft Commerce Server platform. Our e-Commerce Solution Framework provides the latest industry trends and features that maximize conversion rates. Our ever evolving platform utilizes the latest SEO principles to ensure optimum placement. Commerce Generations Solution Framework empowers business users through feature-rich merchandizing, marketing and customer service dashboards as well as a Content Management System.

Chapter 8 (The Web-Enabled Enterprise)

y y

The Web provides a universal standard Enables seamless integration of information exchanges

Within the business Between business and customers/suppliers

y y y y y

Unbundling of products and product info Reductions in search costs for both buyer and seller Information asymmetry for buyers Richness and reach New business models (discussed later)

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Chapter 9 (Challenges of Global Information System)

ABSTRACT

In a global economy, organizations are increasingly selling online in multiple markets, as well as coordinating work teams distributed across geopolitical, cultural, and language boundaries. These factors play an important role in informing the design of effective and appropriate human-computer interfaces. In this paper we explore issues in interface localization, and the challenge of designing for multiple markets and audiences. We use a high-speed low cost analysis of different national and linguistic versions of the home pages of Yahoo! and Google to illustrate the power and speed of this approach.

Many organizations are exploiting the opportunities of networked technologies to sell their products and services not just in domestic markets but internationally. Just as domestic e-commerce can open up dramatic cost savings and potential for new niches and modes of selling, so too can international e-commerce. While creating immense opportunities for growth and diversification, the resultant pressures from new international competitors are also impelling many organizations to expand not just their sales but also their operations from a domestic to a multinational perspective. Online systems are especially valuable for multinational organizations whose members are geographically distributed and may be culturally diverse. These online systems can help fill the structural holes in networks (Burt, 1992; Ardichvili, Page and Wentling, 2003) to get richer information and solve problems more quickly.

41

PART FOUR

DEECISION SUPPORT AND BUSINESS INTELLEGENT

Chapter 10

Decision support and expert systems

Covers Information Systems to support managers and other decision makers in organizations. As a Business School student, you will be responsible for exercising judgment and making decisions throughout your personal and professional lives. From site locations and personnel decisions to selecting new advertising campaigns and deciding to accept a new position, the ability to make effective decisions and employ and deploy Decision Support Systems and other Management Support Systems is a necessary skill for professionals in marketing, finance, accounting, government, law, music, medicine, etc. I'm not trying to turn you into Excel whizzes or Visual Basic programmers (though the course requirements include Excel-related assignments and Excel and Visual Basic for Applications (VBA) projects). You should have prior experience with Excel, but prior knowledge of VBA is not a prerequisite for the course. By the end of the course, you should be more aware of the influences of cognitive biases and group think on decision makers, be able to identify both potential uses of Information Technology to support decision makers and potential effects of Information Technology on the decision process and decisions, and be able to employ Excel and VBA to structure and analyze data for decision making purposes.

42

Chapter 11

Business intelligence and knowledge management

Nowdays, economic organizations are subject to external forces that they must live with and react to: increasing sophistication of competitors, customers and suppliers, globalization of business, international competition. Perhaps the most critical component for success of the modern enterprise is its ability to take advantage of all available information - both internal and external. Its a real challenge, due to the tremendous flow of information its facing every day. Also, the nature of information itself has changed, in terms of volume, availability and importance. The data to be considered becomes more and more complex in both structure and semantics. With the Internet, Intranets, Groupware systems the volume of available data increases each day customer communications, internal research reports or competitors web sites are just some sources of electronic data. Intellectual property and assets, knowledge are contained within the huge volumes of information and leveraging this value is increasingly important in the competitive market. Making sense of all this information, gaining value and competitive advantage through represents real challenges for the enterprise. The IT solutions designed to address these challenges have been developed in two different approaches: structured data management and unstructured content management. We can even think at these approaches in a more general perspective as being information management technologies and knowledge management technologies being aware in the same time that information management its a part of knowledge management, as information can be considered a type of knowledge (explicit knowledge).

43

PART FIVE: PLANNING, ACQUISITION, AND CONTROLS

The acquisition program baseline is established at the final investment decision coincident with approval of an investment program for implementation. The cost and schedule baselines are developed during final investment analysis by the service organization (working within the investment analysis team) that will implement and manage the program throughout its lifecycle. The performance baseline contains the key performance parameters and their associated values that are essential to meet the mission need. The key performance parameters are obtained from the program requirements document for the IDA-selected solution. Certain critical parameters within each baseline in the APB are designated for IDA control. These parameters define the empowerment boundaries of the service team during solution implementation. They relate to corporate FAA's commitment to satisfying the mission need, achieving needed operational capability, and meeting the schedule requirements of interdependent programs. IDA controls are identified during final investment analysis by the investment analysis team and approved by the IDA.

Chapter 12 (Systems planning and development)

The Transportation Systems Planning and Development Branch is responsible for:
y

Developing strategic plans and policies for sustainable transportation systems to meet the present and future needs of the province.

Identifying emerging planning issues and developing strategic options for policy consideration.

44

Directing transportation system studies and undertaking economic and service analysis of infrastructure projects as an input to highway investment decision making

Advancing strategic initiatives to enhance the safety, security, effectiveness, efficiency and sustainability of Manitobas transportation network.

Reviewing major provincial and local land use policies and documents to ensure that the provincial transportation system and adjacent land uses are compatible; and the safe, efficient operation of the provincial transportation system is not jeopardized.

Leading the process of public/stakeholder consultations on transportation infrastructure planning, in particular, inter-jurisdictional discussions with other Canadian and US transportation authorities to ensure that our transportation systems and policies complement each other and facilitate the safe and efficient movement of people and freight.

Ensuring that economic development, land use, social considerations and other issues are incorporated into transportation infrastructure planning.

Developing innovative highway financing strategies and technical information and policy advice, toward achieving sustainable highway systems.

Providing technical information and advice on transportation costs, service and other information to public and private sector organizations and agencies.

Chapter 13

Choices in System Acquisition

The focus of this session is on different types or categories of information system there are in organizations. The aim of the session is to give you a better understanding of what types of information system there are, what they do and the choices that need to be faced when developing or acquiring such systems.

45

By the end of this session you should have:

y

an improved understanding of the range of different types of information system that are available to organizations

an appreciation of the range of options that face an organization that wishs to make use such systems

an appreciation of the social, tactical and strategic implications of the choices made when deploying them

This session will begin to look at these issues more closely. In many ways this session itself will be a 'classic' example of this type of course; we will look at what types of information systems are available, the ways in which they can be obtained and the choices that need to be made in doing so. This is not a technical course, nor is it a course on engineering. We will not look at the technical details of the different types of system, instead we will examine how they can affect the way an organization operates, the different ways in which an organization can go about obtaining the systems it needs and analyze the implications of the choices that managers make when attempting to align their technological and business strategies.

Chapter 14 (Risks Security and Disaster Recovery)

The IT Disaster Recovery Test as part of the Business Continuity testing is becoming an annual event for most IT departments. It is mandated by a lot of regulators, nearly insisted upon by internal audit and of course a very healthy thing to do. But performing the IT DRP test without proper risk management can put your organization at significant risk.

46

To put things into perspective, let's analyze the steps, risks and countermeasures of an IT Disaster Recovery test: DRP Test Step Activity Risks 1. Databases not closed properly/dama ged due to forced shutdown or forced power failure 2. Hardware components failing due to forced shutdown or power failure 3. Spilt-brain cluster due to uncontrolled sequence of failures of servers and storage 1. Actual failure of primary system during the test 2. Failure of the primary system while the DR system is concluded to be nonfunctional Countermeasures

1. Failure of primary systems

In order to perform a disaster situation, the Primary systems need to be caused to fail on some level

1. Full backup prior to the initiation of the DRP test 2. Backup components and Vendor presence at ready during the entire test. 3. Not performing a direct forced shutdown but forcing a network level isolation at therouters

Severing any relation between the 2. Activation DR and the of Disaster primary Recovery systems and systems running the DR systems as temporary primary

1. Full awareness of the test of every interested party - business custodians, directors of divisions and top management to initiate the real Business Continuity Plan 2. Full backup prior to the initiation of the

47

DRP test at DRP site, and full vendor support. 1. Error in reconfiguratio n which may cause the enduser to input test data into the primary systems 2. Error in reconfiguratio n which may cause the primary system to stop functioning. 1. Error in reconfiguratio n which may cause the primary system to stop functioning. 2. Copying of test data that was input into the DR test system back into the primary location3. Failure of primary systems during resumption

Intervening in the end-user 3. environment Reconfiguring in a way that the user will make environment them use the DR system

1. , 2. Scripted and documented steps of reconfiguration. All steps should be performed by 2 persons one observing the others actions

Resuming the primary systems at some level 4. Reverting and to the primary reestablishing systems the relation between the DR and the primary systems

1. Scripted and documented steps of reconfiguration. All steps should be performed by 2 persons one observing the others actions. 2. Fully controlled and documented process of resumption, which guarantees that only the primary system is data master. 3. Full backup prior to the

48

initiation of the DRP test, Backup components and Vendor presence at ready during the entire test.

49