Chapter Eight: Organisational Information Systems

Section 8.1 - Before You Go On

1. What is a Transactional Processing and the role of TP systems. State the key objective of TP/TPSs.

Transactional processing systems are information systems that support routine, core business actions. These systems monitor, collect, store, and process data generated from all business transactions; the data is then stored into the organisations database. In the modern business environment, TPSs are also inputs to the functional information systems, decision support systems, customer relationship management, knowledge management and e-commerce.

Section 8.2 - Before You Go On

1. What is a functional area information system? List its major characteristics.

Functional area information systems (FAISs) provide information mainly to the lower and middle level management in the functional areas. This helps organise and control operations with information presented in a number of reports.

2. How does an FAIS support management by exception? How does it support on-demand reports?

Exception reports are those reports that include information that falls outside certain threshold standards. To implement management by exception using a functional area information system, management first creates performance standards. The company then sets up the FAIS to monitor performance, through the incoming data about business transactions such as expenditures. The company then compares actual performance to its standards and identifies predefined exceptions. Managers are alerted to the exceptions via exception reports.

On-demand (ad-hoc) reports are non-routine; they can be drill-down reports, key-indicator reports or comparative reports. Drill-down reports show a greater level of detail, whereas key-indicator reports summarise the performance of critical activities and comparative reports compare. The FAIS sends information to the corporate data warehouse and this data can be used for decision support and in the case of on-demand reports, FAIS is essential as it shows all the information needed for a unstructured management problem.

Section 8.3 - Before You Go On

1. Define ERP and describe its functionalities.

Enterprise resource planning (ERP) systems integrate the planning, management, and use of all the organisation’s resources. The major objective of ERP systems is to tightly integrate the organisation’s functional areas. ERP software includes a set of interdependent software modules, linked to a common database, that provide supports for internal business processes.

Enterprise resource planning (ERP) was created to control all major business processes with single software architecture in real time. ERP integrates all department and functional information flows across a company onto a single computer system that can serve all of the enterprise’s needs.

Business processes that are supported by ERP modules include financial and accounting processes (e.g. general ledger, accounts payable, financial reporting); sales and marketing processes (e.g. order processing, quotations, sales planning); manufacturing and production processes (e.g. procurement, transportation, plant and equipment maintenance); human resources processes (e.g. personnel administration; payroll, workforce planning).

2. List some drawbacks of ERP software.

ERP softwares do have some drawbacks, to begin with that can be extremely complex, expensive, and time consuming to implement. In addition, companies may need to change existing business processes to fit the predetermined business processes of the software. For companies with well-established procedures, this requirement can be a huge problem. Finally, companies must purchase the entire software package even if they require only a few of the modules. For these reasons, ERP software is not attractive to everyone.

Section 8.5 - Before You Go On…

1. Define a supply chain and supply chain management (SCM).

A supply chain refers to the flow of materials, information, capital, and services form raw material suppliers, through factories and warehouses, to the end customers. A supply chain also includes the organisations and processes that create and deliver products, information, and services to the end customers. The function for the supply chain management is to plan, organise, and optimise the supply and its distributors and customers.

2. List the major components of supply chains.

The supply chain consists of three parts: (1) Upstream supply chain, where sourcing or procurement from external suppliers occurs; (2) Internal supply chain, where packaging, assembly or manufacturing takes place; and (3) Downstream supply chains, where distribution or dispersal takes place, frequently be external distributors.

3. What is the bullwhip effect?

The bullwhip effect refers to erratic shifts in orders up and down the supply chain. Basically, customer demand variables can become magnified when they are viewed through the eyes of managers at each link in the supply chain.

Section 8.6 - Before You Go On

1. Define EDI and list its major benefits and limitations

Electronic data interchange (EDI) is a communication standard that enables the electronic transfer of routine documents, such as purchasing orders, between business partners. It formats these documents according to agreed-upon standards, and it reduces costs, delays, and errors inherent in a manual document delivery system.

EDI provides many benefits compared with manual delivery systems. To begin with, it minimises data entry errors because each entry is checked by the computer. In addition, the length of the message can be shorter, and the messages are secured. EDI also reduces cycle time, increases productivity, enhances customer service, and minimises paper usage and storage. Another issue is that some companies find the EDI traditional system inflexible, as they often require long startup periods. Business process may have to be restructured to fit EDI requirements and multiple standards exist.

Comparing Purchase Order Fulfillment Without EDI

Comparing Purchase Order Fulfillment With EDI

Chapter Four: Data and Knowledge Management

Question One: What are some of the difficulties in managing data?

Managing data in an organisation can be difficult for many reasons:

• Amount of data increases exponentially over time
• Much historical data must be kept for a long time
• New data is added rapidly
• New sources of data are constantly being developed and this data is generally unstructured (they cannot be truly represented in a computer record)
• Security, quality and integrity of data is critical but can be easily jeopardised
• Data has different legal requirements in different countries

Question Two: What are the various sources for data?

There are four major sources for data, these are:

• Internal sources (e.g. corporate databases)
• Personal sources (e.g. personal thoughts, opinions and experiences)
• External sources (e.g. commercial databases, government reports, and corporate websites)
• Web sources, through the form of clickstream data (data that visitors and customers produce when they visit a website and click on hyperlinks)

Question Three: What is a primary key and a secondary key?

A primary key is the identifier field or attribute that uniquely identifies a record and a secondary key is an identifier field or attribute that has some identifying information, but typically does not identify the file with complete accuracy

Question Four: What is an entity and a relationship?

An entity is a person, place, thing, or event about which information is maintained in a record. A relationship can be classified into three types: one to one (a single-entity instance of one type is related to a single entity instance of another); one to many (a single entity instance of one type can be related to many entities of another); many to many (many entities can be related to many other entities)

Question Five: What are the advantages and disadvantages of relational databases?

A relational database is based on the concept of two-dimensional tables. Advantages of this type of database include the database being deigned with a number of related tables that can be joined when they contain common columns; uniqueness of the primary key tells the database management system which records are joined with others in related tables; greater flexibility. Disadvantages include the overall design being complex and therefore have a slow search and access times.

Question Six: What is knowledge management?

Knowledge management is a process that helps organisations identify, select, organise, disseminate, transfer, and apply information and expertise that are a part of organisation’s memory and that typically reside within the organisation in an unstructured manner. For an organisation to be successful, knowledge, as a form of capital, must exist in a format that can be exchanged among persons. In addition, it must be able to grow

Question Seven: What is the difference between tacit knowledge and explicit knowledge?

Explicit knowledge deals with more objective, rational, and technical types of knowledge. In an organisation, explicit knowledge consists of the policies, procedural guides, reports, products, strategies, goals, core competencies of the enterprise and the IT infrastructure. It is the knowledge that has been documented in a form that can be distributed to others or transformed into a process or strategy.

In contrast, tacit knowledge is the cumulative store of subjective or experimental learning. In an organisation, tacit knowledge can consist of organisation’s experiences, insights, know-how, trade secrets, skill sets, understanding, and learning. It also includes the organisational culture, which reflects the past and present experiences of the organisation’s people and process, as well as prevailing values.

Chapter Seven: Mobile Computing and Mobile Commerce

Question One: Identify common wireless devices and their application to business

Common wireless devices include the following:

• Pagers
• Email handhelds
• Personal Digital Assistants (PDAs)
• Mobile phones
• Smart phones

Wireless technologies are fundamentally changing the ways organisations operate and do business. These devices allow quick and easy access to interact with different businesses. They make productive use of time that is otherwise wasted, makes users work locations flexible and enables users to allocate working time around their personal and professional obligations.

Question Two: Describe the various types and general characteristics of wireless transmission media/technologies - microwave, satellite, infrared and radio waves.

Microwave- is used for high volume, long distance, line of sight communication (the transmitter and the receiver must be in view from each other-this means that they are not able to be more than 30 miles apart).

Satellite- uses communication satellites. There also needs to be a line of sight but there earth larges surface area means there are little limitations in satellite transmissions. There are three types of satellites: geostationary (GEO), medium earth orbit (MEO) and low earth orbit (LEO) around the earth, global positioning system (GPS) and Internet over satellite (IOS).

Radio waves- uses radio-wave frequencies to send data directly between transmitter and receiver. This has a high bandwidth, the signals are sent and passed through normal office walls, it is inexpensive and is easy to install.

Infrared light- red light that is not commonly visible to human eyes. It has a low to medium bandwidth, and is only used for short distances. There must also be an unobstructed line of sight. Examples include remote control units for televisions, VCRs, DVDs and CD players.

Below is a diagram of some of the types of satellites used:

Question Three: What is bluetooth/how is it used?

Bluetooth is an industry specification used to create small personal networks. A personal area network is a computer network used for communication close to one person. Bluetooth can link up to eight devices within a 10 meter area using low power, radio based communication, transmitting up to 2.1 megabits per second. Common applications for bluetooth are wireless handsets for mobile phones, laptops and portable music players. The advantages of bluetooth includes its low power consumption and its use of omnidirectional radio waves.

Question Four: What are WLAN's, Wi-Fi, WWAN's, 3G?

WLANs are wireless local area networks that uses wireless transmission for communication. Wireless Fidelity (Wi-Fi) is a set of standards for wireless local networks based on the IEEE 802.11 standard. It is basically a wired LAN but without the cables. Wireless wide area network (WWAN) connects users to the Internet over geographically dispersed territory. They use portions of the wireless spectrum that are regulated by the government. In contrast, bluetooth and Wi-Fi operate over an unlicensed spectrum and are therefore prone to interference and security problems. Third Generation (3G) uses digital signals and can transmit voice and data. It supports video, web browsing and instant messaging.

Question Five: What are the drivers of mobile computing and mobile commerce?

Mobile computing is real- time, wireless connection between a mobile device and other computing environments, such as Internet or an intranet. Mobile commerce is electronic commerce transactions that are conducted in a wireless environment especially via the Internet.

The drivers of mobile computing and mobile commerce are the following:

• Widespread availability of mobile devices
• No need for a PC
• The mobile phone culture
• Declining prices
• Bandwidth improvement

Question Six: Explain the nature of RFID

Radio frequency identification (RFID) is the term used for technologies that use radio waves to automatically identify the location of individual items equipped with tags that contain embedded microchips. They are heavily used in Inventory tracking, they will eventually replace barcodes. Examples of RFID include:

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• Passports – that instantly transmit data to a national security database about the time, date, place of people entering & leaving the country.
• Transportation – think eTag, passive reader that sends toll charges to your account
• Travel – in Mumbai 3.5 million people use the train stations, RFID’s have automated the ticketing process
• Social Retailing – RFID, consumer tries on a garment, the RFID tells the LCD in the change room to show the garment being worn by a celebrity

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Chapter Six: E-Business and E-Commerce

Section 6.1 - Before You Go On…

Question One: Define e-commerce and distinguish it from e-business.

Electronic commerce (e-commerce, EC) describes the buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.

E-business is a broader definition of EC, including buying and selling of goods and services, it also services customers, collaborating with partners, conducting e-learning and conducting electronic transactions within an organization.

Quesiton Two: Distinguish among B2C, B2B, C2C and B2E electronic commerce.

Business-to-consumer (B2C): the sellers are organizations and the buyers are individuals

Business-to-business (B2B): both the sellers and buyers are business organizations. B2B represents the vast majority of e-commerce.

Consumer-to-consumer (C2C): an individual sells products or services to other individuals.

Business-to-employee (B2E): An organization uses e-commerce internally to provide information and services to its employees. Companies allow employees to manage their benefits, take training classes electronically; buy discounted insurance, travel packages, and event tickets.

Question Three: List some benefits and limitations of e-commerce.

E-commerce benefits organizations, customers and society as a whole. It benefits organisation by making national and international markets more accessible and by lowering costs of processing, distributing, and retrieving information. E-commerce benefits customers as there is access a vast number of products and services around the clock (24/7/365). E-commerce benefits society through its ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries.

E-commerce does have its limitations; these can be divided up into technological and non-technological. Technological limitations of e-commerce include the lack of universally accepted security standards, insufficient telecommunications bandwidth and expensive accessibility. The non-technological limitations of e-commerce include the perception that it is unsecure, the unresolved legal issues and it lacks a critical mass of sellers and buyers.

Section 6.2 - Before You Go On…

Question One: What are spamming, permission marketing and viral marketing?

Spamming is the indiscriminate distribution of e-mail without the receiver’s permission. Permission marketing is a method of marketing that asks consumers to give their permission to voluntarily accept online advertising and email whereas, viral marketing is the online word of mouth marketing.

Section 6.4 - Before You Go On…

Question One: What are micropayments?

Micropayments are small payments that can be made online or via a wireless device e.g. e-tag.

Question Two: What is Multichanneling?

Multichanneling is a process through which a company integrates its online and offline channels.

Section 6.5 - Before You Go On…

Question One: List some ethical issues in EC.

Ethical ecommerce issues include:

- piracy

- no human element (consumer/ seller unknown)

- web tracking (cookies)

Question Two: List the major legal issues of EC.

The value of domain names, taxation of online businesses and how to handle legal issues in a multi country environment are major legal concerns. Other legal issues include protection of customers, sellers and intellectual property is important.

Chapter Five: Network Applications

Question One: Describe the underlying technologies, applications and types of Web sites that comprise Web 2.0.

Information technologies and application used by Web 2.0 sites include:

· Blogs and Blogging: A weblog is a personal website, open to the public, in which a site creator expresses his or her feelings or opinions

· Wikis: a web site that anyone can post material and make changes to other material

· RSS (Really Simple Syndication): RSS allows anyone to syndicate (publish) his or her blog, or any other content, to anyone who has an interest in subscribing. When changes are made, the subscribers get a notification of the changes and an idea of what the new content contains. The subscriber can click on a link that will take them to the full text of the new content.

· Podcasts and Videocasts: Podcasts are a digital audio file that is distributed over the web using RSS for playback on portable media players or personal computers. A videocast us the same as a podcast except that it is a digital video file.

· AJAX: A web development technique that allows portions of web pages to reload with fresh data instead of requiring the entire web page to reload. This process speeds up time and increases user satisfaction.

· Tagging: Keyword/ term used to describe pieces of information; users typically choose tags that are meaningful to them.

· Social Networking: Social networking sites provide an easy, interactive way to communicate and collaborate with others on the web.

· Aggregators: Websites that that provide collections of content from the web.

· Mashups: Websites that takes content from other websites and mixes them together to create a new kind of content.

Question Two: Describe the function of Web services.

Web services are self-contained, self-describing applications, delivered over the Internet, that user can select and combine through almost any device. By using a set of protocols and standards, these applications permit different systems to talk to one another (i.e. to share data and services) without requiring human beings to translate the conversations.

Question Three: Describe how you see Social Networking being used in Business.

Businesses can use social networking as an easy and interactive way to communicate and collaborate with consumers and suppliers. For example, social networking can be used as a marketing tool for the business through uploading content to the web in the form of texts, voice, images and videos.

Technology Guide 4: Basics of Telecommunications and Networks

Question One: Describe the basic telecommunications system?

Telecommunications systems consists of hardware and software that transmit information form one location to another. These systems can transmit texts, data, graphics, voice, documents, or full-motion video information with two basic types of signals, analog and digital

Question Two: Compare and contrast the main wired communications channels? (Ethernet & Fibre Optic)

There are three main wired communication channels, they are:

• Twisted-pair Wire (also known as Ethernet): this is the most prevalent form of communication made up of strands of copper wire twisted in pairs. It is relatively inexpensive, widely available and easy to work with. However, there are significant disadvantages, it is relatively slow for transmitting data, it is subject to interference from other electrical sources and can be easily tapped by unintended receivers for gaining unauthorized access to data.

• Coaxial Cable: is made up of insulated copper wire. It is much less susceptible to electrical interference and can carry much more data than the twisted- pair wire. It is commonly used to carry high speed data traffic, however, it is more expensive, inflexible and more difficult to work with than the twisted-pair wire.

• Fiber Optics: consists of thousands of very thin filaments of glass fibers that transmits information via light pulses generated by lasers. The fiber optic is surrounded by cladding, a coating that prevents the light from leaking out of the fiber. These cables are significantly smaller and lighter, can transmit more data and provide more security from interference and tapping than traditional cable media. IT is typically used as the backbone for a network. One problem associated with fiber optics is attenuation which is the reduction in the strength of a signal.

Below is an image of a Fibre Optic Cable:

Question Three: What are the main business reasons for using networks?

Computer networks are essential to modern organisations for many reasons:

1. Networked computer systems enable organisations to be more flexible so that they can adapt to rapidly changing business conditions.
2. Networks enable companies to share hardware, computer applications and data across the organisation and among organisations
3. Networks make it possible for geographically dispersed employees and workgroups to share documents, ideas and creative insights. This encourages teamwork, innovation and more efficient and effective interactions
4. Networks are a crucial link between businesses and their customers

Question Four: What is the difference between LANs and WANs?

A local area networks (LANs) connects two or more devices in a limited geographical region, usually within the same building, so that every device on the network can communicate with every other device. Every device in a LAN has a network interface card that allows the device to physically connect to the LAN's communications medium. This medium is usually an unshielded twisted-pair wire.

Wide area networks (WANs) are networks that cover large geographic areas and typically connect multiple LANs. WANs generally are provided by common carriers such as telephone companies and the international networks of global communications services providers.

Question Five: What is a network protocol?

Computing devices that are connected to the network access and share the network to transit and receive data. These components are often referred to as ‘nodes’ of the network. They work together by adhering to a common set of rules that enable them to communicate with one another. This set of rules and procedures that govern transmission across a network is a protocol.

Question Six: Describe TCP/IP protocol.

Transmission Control Protocol/Internet Protocol (TCP/IP) is the protocol of the Internet. TCP/ IP uses a suite of protocols, the main ones being the Transmission Control Protocol and the Internet Protocol. The TCP performs three basic functions;

1. It manages the movement of packets between computers by establishing a connection between the computers
2. It sequences the transfer of packets
3. It acknowledges the packets that have been transmitted.

The IP is responsible for disassembling, delivering and resembling the data during transmission.

Chapter Three: Ethics, Privacy and Information Security

Question One: Provide an IT example that relates to the ethical issues for the ideas of privacy, accuracy, property, and accessibility.

Privacy Issues: Using information about individuals, when the information collected was not for that reason

Accuracy Issues: Incorrect information stored in a database that affects the authenticity, fidelity and accuracy of the results

Property Issues: Software piracy

Accessibility Issues: Security clearances for sensitive information

Question Two: What are the 4 general types of IT threats? Provide an example for each one.

The four general types of IT threats are:

• Human Error (examples include: tailgating, shoulder surfing, poor password selection and use)
• Natural Disasters (examples include: floods, earthquakes, terrorist attacks)
• Technical Failures (examples include: software bugs, hardware crashes)
• Deliberate Acts (examples include: sabotage and white collar crimes)

Below is a diagram of IT threats:

Question Three: Describe/discuss three types of software attack and a problem that may result from them.

Three types of software attacks and their resulting problems include:

• Distributed Denial-of-Service Attack: An attacker first takes over many computers typically by using malicious software. These computers are known as zombies or bots. The attacker uses these bots, which form a botnet, to deliver a coordinated stream of information requests to a target computer causing it to crash.

• Phishing Attack: Phishing attacks use deception to acquires sensitive personal information by masquerading as official looking emails or instant messages. Here sensitive personal information is gained by the attacker

• Back Door: Typically a password, known only to the attacker, that allows him or her to access a computer system at will, without having to go through any security procedures (also called a trap door); here sensitive information is gained by the attacker

Question Four: Describe the four major types of security controls in relation to protecting information systems.

1. Physical Controls: prevent unauthorized individuals from gaining access to company's facilities. Examples of physical controls include: walls, doors, fencing, gates, locks, guards and alarm systems. More advanced physical controls include pressure sensors, temperature sensors and motion detectors.
2. Access Controls: restrict unauthorized individuals from using information resources. These controls have to major functions: authorization and authentication. Examples include: passwords, voice recognition, biometrics and smart ID cards.
3. Communication Controls: secure the movement of data across networks. Examples of communication controls include firewalls, anti-malware systems, intrusion detection systems, encryption and virtual privacy networking.
4. Application Controls: security counter-measures that protect specific applications. There are three major categories of these controls: input, processing, and output controls. Input controls are programmed routines that are performed to edit input data for errors before they are processed. Processing controls balance the total number of transactions processed with the total number of transactions input or output. An example of output controls is the documentation specifying that authorized recipients have received their reports, paychecks, or other critical documents.

Question Five: Name one recent software threat and briefly discuss it's effects and resolutions?

A phishing attack on the social networking site Twitter has become one of the latest phishing attacks that use social networking sites to gain information into users accounts. It has been said that 70 per cent of these attacks are successful.

The phishing attack has been done through its direct messages saying “rofl this you on here?” followed by a link that appears to be a video on a Twitter page. Twitter acknowledged the scam through a tweet on Wednesday, 23^rd September 2009 saying: "A bit o'phishing going on--if you get a weird direct message, don't click on it and certainly don't give your login cred”

Twitter also advises those that have given their login password to immediately change their passwords.

Question Six: What is the difference between authentication and authorization and why are they important to e-Commerce/give an example of their relevance to e-Commerce

Authentication determines the identity of the person requiring access. Authorization determines which actions, rights, or privileges the person has, based on verified identity.

Authentication and authorization are important in e-commerce because without these security controls sensitive business information for example a business plan or customer information could be easily hacked into or sabotaged. If a business is not careful with this information they could lose their competitive advantages to competitors.

Technology Guide 2: Computer Software

Question One: What are main differences/distinction between system software and application software?

Systems software is a set of instructions that serves primarily as an intermediary between computer hardware and application programs. Systems software provides important self-regulatory functions for computer systems, such as loading itself when the computer is first turned on and providing commonly used sets of instructions for all applications

Applications software us a set of computer instructions that provide more specific functionality to a user. That functionality may be broad, such as a general word processing, or narrow, such as an organisation's payroll program. Essentially an application program applies to a computer to a certain need. Application programing refers to both the creation and modification and improvement of application software. Application software may be proprietary or off-the-shelf.

Question Two: What are the two main types of system software? Provide some examples of their functions.

There are two main types of system software based on function, these are:

• Control Programs (includes operating systems)- examples include: start up, file management, time management, scheduling, managing / running applications, file & print management, file recovery, memory management, scheduling tasks, network control

• System Support Programs: There are three types of system support programs, these are:

1. System Utilities (examples include: —file manager, uninstaller, disk scanner/defragmenter and backup)
2. System Performance Monitors (an example: task manager)
3. System Security Monitors (examples include: Windows Personal Firewall, various anti-spyware and anti-virus tools)

Question Three: What is the difference between proprietary and open source software? What considerations should be made when a business selects either software.

Proprietary software is software that is generally controlled by a single company (although the actual sale of products may be licensed to re-sellers/partners). It is usually protected by copyright and licenses, and sold commercially for profit

—Open source software is when the source code is made freely available to enable the further development of the software. Users can usually change, improve and re‐distribute the software to others. It is generally free to use, however business models exist that relate to buying it, installing and supporting it, providing training/certification, or in customising it.

When a business is selecting a software there are a several factors that influence this decision, these being:

• Size and location of the user base
• Availability of the system
• Costs (initial and subsequent)
• System capabilities
• Existing computing environment
• In-house technical skills

Question Four: What are some of the legal issues involved in acquiring and using software in most businesses/organizations?

Copyright laws and licensing are the main legal issues involved when it comes to buying and using software. Copying software is illegal and piracy is now a serious crime as it can cost software vendors up to $15 billion annually. When acquiring and using software for a business one needs to make sure they have bought the right amount of licenses needed for that business. In a recent trend, software companies are now using specialised firms to track all their software licenses when managing their assets.

Question Five: Choose an operating system, provide some details on it's developer, it license type and key benefits.

Operating System: Mac OSX

Developer: Apple Inc.

License Type: Proprietary, EULA

Some benefits:

• Increased responsiveness
• Quicker time machine backup
• Faster to wake up and shut down
• Faster, more reliable
• More disk space
• Advanced Quicktime technology
• More efficient file sharing

For more information about the Mac OSX:

www.apple.com/macosx

www.apple.com/macosx/refinements

www.apple.com/macosx/technology

www.apple.com/macosx/universal-access

www.apple.com/macosx/exchange/