Essentials of MIS, 15th edition By Kenneth C Laudon Instructor Manual

Essentials of MIS, 15th edition BY Kenneth C. Laudon

Email: Richard@qwconsultancy.com

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

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Essentials of Management Information Systems, 15e Chapter 1 Business Information Systems in Your Career Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link:

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Figure Videos and Video Case) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter introduces students to information systems and helps them to understand why information systems are essential to running a managing a business. It defines an information system, explains how it works and identifies its people, organizational, and technology components. Throughout the text, we ask students to consider these elements as they assess information system challenges and solutions. It also introduces a four-step method for business problem solving that students can use to solve information .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

2 system-related problems. It concludes with a description of the information system skills and knowledge that are essential for business careers and a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Smart Shelves Reinvent the Retail Space The opening case introduces a number of important themes that are reinforced throughout the book.

The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How do AWM’s systems change retail operations?

• How do AWM’s systems improve customer experience • What ethical concerns do AWM’s systems raise?

Section 1-1: Understand why information systems are essential for running and managing a business.

This section gives students a feel for the importance of information systems in business today and how they have transformed businesses on the world stage. A good discussion of the seven important business objectives outlined in Section 1-1 allows the instructor and students to discuss why businesses have become so dependent on information systems today and the importance of these systems for the survival of a firm. Stress to students that information systems are not a luxury. In most businesses they are the core to survival. This would be a good time to ask students to discuss how their own schools are using information systems to enhance their product offering.

Table 1-1 is a great way to introduce students to much of the new IT jargon that has developed over the last several years, including cloud computing, Big Data, the Internet of Things (IoT), and AI. All the technologies listed in the table will be discussed in greater depth in subsequent chapters. Ask students how much hands-on experience they’ve had with some of the new business tools as either an employee or a customer.

Video Cases: The Essentials of MIS Video Case package for each chapter consists of a short video in which a senior manager describes how a business is using opportunities from new information technology to pursue strategic goals and enhance business performance. The video is accompanied by a case study that expands on the video along with 3 multiple choice questions and 2 short essay questions.

There is a video case in each chapter. There are number of ways that you can use the text’s Video Cases to engage students, including: • assigning a Video Case as material to review prior to a lecture, and engaging students with questions regarding the material as it comes up in the lecture.

• viewing the video with the class and then having groups of students present their answers to the questions in class.

• using the Video for discussion in class, or online in discussion boards, and then using the questions as prompts for student discussion.

Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

3 questions) are also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions are available in each chapter’s Instructor’s Manual.

Discussion of business drivers of information systems provides an opportunity to examine the Chapter 1 Video Case, The New HQ Is in the Cloud: Salesforce President. This Video Case deals with Salesforce’s business strategy to give businesses the tools they need to operate using its cloud computing tools rather than traditional offices. You might ask students how acquiring Slack helps Salesforce achieve its major business objectives. You might also ask students to give examples of how tools like Salesforce and Slack are changing the way people work. See page 17 of this Instructor’s Manual for answers to the Video Case questions.

Section 1-2: Define an information system, explain how it works, and identify its people, organizational, and technology components.

Note that the chapter’s definitions and terms help prepare students to discuss information systems as an intricate part of business systems. Encourage students to see that technology is subordinate to the organization and its purposes.

Figure Videos 1.1 and 1.2: This is an appropriate time for the class to review and discuss Figures 1.1 and 1.2 and their accompanying Figure Videos. Figure 1.1 illustrates the difference between information and data, while Figure 1.2 shows the functions of an information system and the 3 basic activities an information system performs. Figure Videos are available in the eText and MyLab MIS. This is also a good place to reinforce the differences between information systems literacy and computer literacy. When asked to describe company information systems, students often depict information systems in terms of technology. It is important to stress that information systems are more than just technology, and that they have people, organization, and technology dimensions. The diagram at the beginning of the chapter can be used to illustrate this point.

As you describe the technology components of information systems, review Figure 1.4 since cloud computing Big Data, and the Internet of Things (IoT) are such important technologies today. Ask students to identify how they interact with each one of these technologies in their everyday lives. For example, they may live in a house or apartment that has a Ring camera (IoT). They may watch a film recommended to them by Netflix (analysis of Big Data). They may use Apple iCloud to store photos (cloud computing). There are many more potential examples.

The Spotlight on Technology case, UPS Competes Globally with Information Technology, describes some of the typical technologies used in information systems today. There are two short “Spotlight on” cases in each chapter, focused on people, organizations, or technology, that can be used to stimulate student interest and active learning. Each case concludes with case study questions that can provide topics for discussion or written assignments. Answers to the case study questions for the “Spotlight on” cases are available in the Instructor’s Manual (see page 5)

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

4 Section 1-3: Apply a four-step method for business problem solving to solve information systemrelated problems.

Too often, information systems are thought to be all about hardware and software. Issues that focus on human behavioral aspects of information systems are overlooked or minimized. That can lead to disaster.

Review with students the chapter-opening diagram, which shows how to analyze a problem using people, organization, and technology dimensions because it provides a framework for analyzing an information system-related problem that is used throughout the text.

Instructors should also review with students the four-step approach to problem-solving (1) problem identification, 2) solution design, 3) solution evaluation and choice, and 4) implementation) and discuss how it addresses the people, organization, and technology dimensions of systems. Emphasize problem solving as a process and not a single event. Ask students why it is so important to use critical thinking.

Section 1-4: Describe the information systems skills and knowledge that are essential for business careers.

In this section, we describe how specific occupations will be affected by information systems and what skills students should be building to benefit from the current and future labor market. Careers and categories include accounting, finance, marketing, operations management in services and manufacturing, management, information systems, and outsourcing and offshoring.

You may want to send your students an “MIS Word of the Day” to help them become more familiar with IS-related terminology. Check out http://www.whatis.com, http://whatis.techtarget.com, or one of the many other online IT terminology dictionaries to locate words and definitions that supplement the Laudon text.

The Spotlight on People case, Will a Robot Steal Your Job?, examines some of the differing views on how new information technologies like robotics and some other forms of automation may impact employment in coming years. Students are likely to be keenly interested in this topic, especially with all of the current focus on the impact of ChatGPT and other artificial intelligence technologies on jobs in the future. Answers to the case study questions for this case and the Spotlight on Technology case follow.

Section 1-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as a financial client support and sales assistant. This section, which recurs in each chapter, provides a good opportunity for a class discussion focusing on how MIS can help students with their current or future careers. Would any in the class be interested in a job like this? What do they think are the most important skills the employer is looking for? How would they answer the interviewer questions? There are additional Career Resources available in Instructor Resources and MyLab MIS, including jobhunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

5 portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: UPS Competes Globally with Information Technology ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What are the inputs, processing, and outputs of UPS’s package tracking system?

Inputs: The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while enroute), and billing and customer clearance documentation.

Processing: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria.

Outputs: The outputs include pickup and delivery times, location while enroute, and package recipient.

The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.

2. What technologies does UPS use? How are these technologies related to UPS’s business strategy?

Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPS’s central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts, and managing logistics, as well as software to access the World Wide Web. UPS has used the same strategy for more than 100 years. Its strategy is to provide the “best service and lowest rates.” One of the most visible aspects of technology is the customer’s ability to track his/her package via the UPS website. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.

3. What strategic business objectives do UPS’s information systems address?

UPS’s information systems address the following strategic business objectives: • Operational excellence: UPS has maintained leadership in small-package delivery services despite stiff competition from FedEx and the U.S. Postal Service by investing heavily in advanced information technology. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

6 • New products, services, and business models: For example, in June 2009, UPS launched a new web-based Post-Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfillment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.

• Customer and supplier intimacy: Customers can download and print their own labels using special software provided by UPS or by accessing the UPS website. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations. UPS also provides tools that enable customers, such Cisco Systems, to embed UPS functions, such as tracking and cost calculations, into their own websites so that they can track shipments without visiting the UPS site.

• Improved decision making: Special software creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology.

• Competitive advantage: UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. Its Supply Chain Solutions division provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure.

4. What would happen if UPS’s information systems were not available?

Arguably, UPS might not be able to compete effectively without technology. If the technology were not available, then UPS would, not be able to provide that information to its customers at the moment it is needed, Manual systems would be much slower and also much more costly. From the customers’ perspective, these technologies provide value because they help customers complete their tasks more efficiently. Customers view UPS’s technology as value-added services as opposed to increasing the cost of sending packages.

Spotlight on People: Will a Robot Steal Your Job? Case Study Questions: Answers ACCSB: Written and oral communication; Ethical reasoning and understanding; Analytical thinking, Application of knowledge; Reflective thinking 1. How does automating jobs pose an ethical dilemma?

Automating jobs pose an ethical dilemma because it illustrates two sets of competing interests.

Companies provide a benefit to the community by providing jobs. However, to be competitive, companies also need to be competitive and automating helps reduce the number of workers needed, especially in manufacturing. According to source from this case, “for every robot per thousand workers, up to six workers lost their jobs and wages fell as much as 0.75 percent.”

Chapter 4 of this text focuses on ethical issues raised by information systems: Ethics refers to the principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 their behavior. Information systems raise new ethical questions for both individuals and societies because they create opportunities for intense social change and, thus, threaten existing distributions of power, money, rights, and obligations.

1a. Who are the stakeholders? Identify the options that can be taken and the potential consequences of each.

There are several stakeholders involved when discussing the automating of jobs.

• Employees and their families are directly impacted by automation when job losses occur. These individuals have the option to take other jobs that are more difficult to automate, but many replacement jobs consist of low-paying service sector jobs in hotels, restaurants, and nursing homes.

• Shareholders and management are positively impacted where automation helps reduce costs and creates efficiencies. Moving forward, these stakeholders will identify additional areas where automation can lower costs and improve efficiency.

• Certain individuals benefit as they help design, develop, and implement automation technologies.

Other individuals, including Black and Latinx workers, are, according to some researchers, likely to negatively affected on a disproportionate basis in job occupations that have the highest risk of being automated.

• Entire communities are also impacted by automation. For example, according to a source cited in the case, specific local economies, such as Detroit, can be especially hard hit.

2. If you were the owner of a factory deciding on whether to acquire robots to perform certain tasks, what people, organization, and technology factors would you consider Current and future research on which tasks are better performed with artificial intelligence should be compared to the type of factory I own. The research mentioned in the case examined 964 occupations with each job consisting of 20 to 32 tasks. The results of this research found many jobs and associated tasks that would be better performed by artificial intelligence. However, many jobs remain where humans excel.

The people, organization, and technology factors raise an interesting question in terms of the ethical dilemmas described in question one, and strategy as an organization. If I automate, will other job opportunities arise to help retain displaced employees? What impact will automating have on the community? What are the business benefits of using robots? Can they be quantified? How much business process change and disruption would result from replacing employees with robots? I would also prioritize tasks that would be best lend themselves to automation. Based on the information provided in this case, the question seems to be focused on the degree I would automate, and not whether to automation Is needed.

3. How has the Covid-19 pandemic impacted the process of automation?

The pandemic has accelerated automation and use of robots because it provides a way to get work done

without exposing humans to Covid. For example, Texas grocery chain H-E-B has installed several automated micro fulfillment systems from robotics company AutoStore to support its curbside pickup and delivery services. These robots could reach areas humans could not that are only 6 inches apart and then deliver the needed parts to stations for workers to assemble. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

8 4. What types of work and workers are likely to be among the most affected by the increasing use of robots and other forms of automation A 2021 report by McKinsey Global Institute on the post-Covid-19 labor force predicted that more than 45 million US workers could be displaced by automation by 2030, but it is important to note that this number is not the same as actual jobs lost. The report further notes that it expects that 90 percent of those workers would transition to jobs within the same occupational category. Workers in manufacturing, transportation, warehousing, and food preparation and service, which involve welldefined, simple, repetitive tasks are the most likely candidates for replacement by robots. Job occupations that have the highest risk of being automated in the next two decades: those that are characterized as “middle-skilled,” which often require specialization in routine tasks. In contrast, highskill jobs that involve nonroutine cognitive tasks and low-paying service-sector jobs in hotels, restaurants, and nursing homes are much less likely to be automated. Much of this service work is difficult to automate, and employers have less incentive to replace low-wage workers with machines.

Review Questions: Answers ACCSB: Written and oral communication; Application of knowledge 1-1 Understand why information systems are essential for running and managing a business.

List and describe seven reasons information systems are so important for business today.

Seven reasons why information systems are so important for business today include: 1.

Operational excellence 2.

New products, services, and business models 3.

Customer and supplier intimacy 4.

Improved decision making 5.

Competitive advantage 6.

Survival 7.

ESG leadership Information systems are the foundation for conducting business today. In many industries, survival and even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing productivity. Although information technology has become more of a commodity, when coupled with complementary changes in organization and management, it can provide the foundation for new products, services, and ways of conducting business that provide firms with a strategic advantage and help them pursue ESG goals.

Describe the challenges and opportunities of globalization.

Customers no longer need to rely on local businesses for products and services. They can shop 24/7 for virtually anything and have it delivered to their door or desktop. Companies can operate 24/7 from any geographic location around the world. Jobs can just as easily move across the state or across the ocean.

Employees must continually develop high-level skills through education and on-the-job experience that cannot be outsourced. Business must avoid markets for goods and services that can be produced offshore .

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9 much cheaper. The emergence of the Internet into a full-blown international communications system has drastically reduced the costs of operating and transacting business on a global scale.

1-2 Define an information system, explain how it works, and identify its people, organizational, and technology components.

List and describe the organizational, people, and technology dimensions of information systems.

• Organization: The organization dimension of information systems involves issues such as the organization’s hierarchy, functional specialties, business processes, culture, and political interest groups.

• People: The management dimension of information systems involves setting organizational strategies, allocating human and financial resources, creating new products and services, and re-creating the organization if necessary.

• Technology: The technology dimension consists of computer hardware, software, data management technology, and networking/telecommunications technology.

Define an information system and describe the activities it performs.

The textbook defines an information system as a set of interrelated components that work together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. In addition to supporting decision making, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.

Distinguish between data and information and between information systems literacy and computer literacy.

• Data are streams of raw facts representing events occurring in organizations or the physical environment before they have been organized and arranged into a form that people can understand and use.

• Information is data that have been shaped into a form that is meaningful and useful to human beings.

• Information systems literacy is a broad-based understanding of information systems. It includes a behavioral as well as a technical approach to studying information systems.

• In contrast, computer literacy focuses primarily on knowledge of information technology. It is limited to understanding how computer hardware and software works.

Explain how the Internet and the World Wide Web are related to the other technology components of information systems.

The Internet and World Wide Web have had a tremendous impact on the role information systems play in organizations. These two tools are responsible for the increased connectivity and collaboration within and outside the organization. The Internet, World Wide Web, and other technologies have led to the redesign and reshaping of organizations. They have helped transform the organization’s structure, scope of operations, reporting and control mechanisms, work practices, workflows, and products and services. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

10 Which three recent developments in information technology are especially important today? How are these developments interrelated?

Internet of Things (IoT), Big Data, and cloud computing. Connected IoT devices as well as data from websites and other sources generate many millions of data points that can be analyzed to create predictions or unearth patterns of behavior. Such large quantities of structured and unstructured data provide useful information but are often too vast or complex to process using traditional methods and are called Big Data. Cloud computing is a centralized system for storing, managing, and processing data across the Internet using a network of remote computing centers. Organizations and individuals can store, analyze, and access their data from these cloud computing. Centers (rather than on-site) using an Internet-connected device such as a desktop, laptop, or mobile device.

1-3 Apply a four-step method for business problem solving to solve information system-related problems.

List and describe each of the four steps for solving business problems.

• Problem identification involves understanding what kind of problem is being presented— whether it stems from people, organizational, or technology factors or a combination of these.

• Solution design involves designing several alternative solutions to the problem that has been identified.

• Solution evaluation and choice entails selecting the best solution, taking into account its cost, available resources, and skills in the business.

• Implementation entails purchasing or building hardware and software, testing the software, providing employees with training and documentation, managing change as the system is introduced into the organization, and measuring the outcome.

Give some examples of people, organizational, and technology problems found in businesses.

In answering this question students may draw on examples given in Table 1.2. Examples of people, organizational, and technology problems in businesses are as follows: • People: Information systems require skilled people to build and maintain them, and they need people who can understand how to use the information in a system to achieve business objectives.

Typical people problems include: • Lack of employee training • Difficulties of evaluating performance • Legal and regulatory compliance • Work environment • Lack of employee support and participation • Ergonomics • Poor or indecisive management • Organization: In order to understand how a specific business firm uses information systems, you need to know something about the structure, history, and culture of the company. Typical organizational .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

11 problems include: • Poor/outdated business processes (usually inherited from the past) • Unsupportive culture and attitudes • Political in-fighting • Turbulent business environment/changes in the organization’s surrounding environment • Complexity of task • Inadequate resources • Technology: Information technology is one of many tools managers use to cope with change.

Elements of technology include computer hardware, computer software, data management technology, networking and telecommunications technology. Other technology elements include the Internet, intranets, extranets, and the World Wide Web. Typical technology problems include: • Insufficient or aging hardware • Outdated software • Inadequate database capacity • Insufficient telecommunications capacity • Incompatibility of old systems with new technology • Rapid technological change Describe the relationship of critical thinking to problem solving.

Critical thinking can be briefly defined as the sustained suspension of judgment with an awareness of multiple perspectives and alternatives. It involves at least four elements: • Maintaining doubt and suspending judgment. By doubting all solutions at first and refusing to rush to a judgment, you create the necessary mental conditions to take a fresh, creative look at problems, and you keep open the chance to make a creative contribution.

• Being aware of different perspectives. Recognize that business problems have many dimensions and that the same problem can be viewed from different perspectives. You have to decide which major perspectives are useful for viewing a given problem.

• Testing alternatives or modeling solutions to problems and letting experience be the guide. Not all contingencies can be known in advance, and much can be learned through experience. Therefore, experiment, gather data, and reassess the problem periodically.

• Being aware of organizational and personal limitations.

Describe the role of information systems in business problem solving.

There are a number of reasons why business firms invest in information systems and technologies.

Seven business objectives of information systems include: operational excellence; new products, services, and business models; customer/supplier intimacy; improved decision making; strategic advantage; survival, and meeting ESG goals. When firms cannot achieve these objectives, they become “challenges” or “problems” that receive attention. Managers and employees who are aware of these challenges often turn to information systems as one of the solutions or the entire solution.

1-4 Describe the information systems skills and knowledge that are essential for business careers. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

12 Describe the role of information systems in careers in accounting, finance, marketing, management, and operations management and explain how careers in information systems have been affected by new technologies and outsourcing?

Each of the major business fields requires an understanding of information systems.

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Accounting: Accountants need to understand future changes in hardware, software, and network security essential for protecting the integrity of accounting systems along with new technologies for reporting in online and wireless business environments.

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Finance: Financial people need to understand future IT changes, financial database systems, and online trading systems for managing investments and cash.

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Marketing: Marketing personnel require an understanding of marketing database systems and systems for customer relationship management as well as web-based systems for online sales.

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Operations management: These individuals need knowledge of changing hardware, software, and database technologies used in production and services management and an in-depth understanding of how enterprise-wide information systems for production management, supplier management, sales force management, and customer relationship management achieve efficient operations.

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Careers in information systems: The individuals clearly need to understand the central role databases play in managing information resources of the firm and how new hardware and software technologies can enhance business performance. They also need skills for leading the design and implementation of new management systems, working with other business professionals to ensure systems meet business objectives, and working with software packages providing new system solutions.

List and describe the information system skills and knowledge that are essential for all business careers.

Common information systems skills and knowledge for all business careers include an understanding of how information systems help firms achieve major business objectives; an appreciation of the central role of databases; skills in information analysis and business intelligence; sensitivity to the ethical, social, and legal issues raised by systems; and the ability to work with technology specialists and other business professionals in designing and building systems.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 1-5 What are the implications of globalization when you have to look for a job? What can you do to prepare yourself for competing in a globalized business environment? How would knowledge of information systems help you compete?

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

13 Student answers to this question will vary. However, being a good problem-solver, using critical thinking skills, and knowing how to analyze and design information system solutions would make people more competitive in general and especially in a globalized business environment. Also important is the ability to understand the role of information systems in organizations and how information technology can increase the effectiveness of a business by improving operations, creating new products and services, improving decision making, increasing customer intimacy, promoting competitive advantage and survival, and furthering ESG goals.

1-6 If you were setting up the website for a new minor league baseball team, what people, organizational, and technology issues might you encounter?

Student answers to this question will vary. People, organizational, and technology issues include the following: People issues: • End user instructions for using the app • Ease of use: user interface • IT staff capabilities and training Organizational issues: • Business objectives • Data required • Information output • End user groups Technology issues • Appropriate hardware, software, networking technology, web browsers, apps.

•

•

IT platform on premises or in cloud Access via mobile devices or laptops

1-7 Identify some of the people, organizational, and technology issues that UPS had to address when creating its successful information systems.

Student answers to this question will vary. People, organizational, and technology issues include the following: People issues: • Customers and drives: Ease of use; user interface • Customer and driver training • Possible resistance to new technology and procedures Organizational issues • Business objectives, strategy • Business process changes • Data required • New services .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

14 •

Organizational culture

Technology issues • Appropriate hardware, software, networking technology, data management technology web browsers, apps • • •

IT platform on premises or in cloud Access via mobile devices as well as laptop Data capture devices

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements as well as develop software application solutions. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and solution files are available in Instructor Resources.

1-7 Management Decision Problem: Brooklyn Navy Yard AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences.

This Management Decision Problem asks students to use the four-step problem solving method introduced in the chapter to identify Brooklyn Navy Yard’s problem and analyze its business impact.

The problem: The Brooklyn Navy Yard, (BNY), which encompasses more than 450 businesses, is not able to keep track of the thousands of visitors and nearly 10,000 employees who are on the premises each day. Its internally hosted website used antiquated technology, and visitor registration and security checks had to be performed manually, leading to long lines, congested traffic, and diminished employee productivity and customer service. The existing system could not handle BNY’s projected growth.

Business functions affected: sales, marketing, customer acquisition, human resources. This is a technology problem but also an organizational problem.

Solution design: The solution needs to provide a convenient check-in process as well as a high standard of security.

Alternative 1: BNY should keep the existing system but hire more employees to check in visitors and establish more check-in locations so lines won’t be as long. Make it mandatory for BNY business tenants to pre-register visitors.

Alternative 2: Implement a more powerful, on-premises system that is easier to use and has more up to date technology to support visitor registration and management, Alternative 3: Implement a new cloud-based system with an improved user interface and the power and flexibility to handle a rapidly growing visitor and employee population.

Solution evaluation and choice: BNY will definitely benefit from more up to date technology, a more user-friendly system interface, and better business procedures for checking in and monitoring employees .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

15 and visitors. A cloud solution would be most desirable because it is more likely to have the most leading-edge technology and the flexibility to expand as BNY visitors and employees grow in number.

Implementation: BNY will need to change its organizational procedures for checking in and monitoring visitors and employees. Employees using the new system and the IT staff will need training, and visitors may need some instruction. The new software will have to be tested and user and technical documentation prepared. BNY will need to evaluate the solution after it is deployed to see if it is working properly; some additional changes may be required before the solution is accepted by management and finalized.

1-9 Achieving Operational Excellence: Creating an Executive Payroll Register Using Spreadsheet Software AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Formulas; absolute and relative addressing; worksheet formatting; SUM; AVERAGE Business skills: Payroll accounting This Hands-on Software Project helps students understand how they can use spreadsheet software to produce not only a list of a company’s most highly paid employees but also information such as the total amount of compensation paid to these employees and the average amount of compensation. The report also shows totals for various deductions such as Medicare contributions and the firm’s group health insurance and profit-sharing plans. The question file for this project (EMIS15Chap1 Question File) can be found in MyLab MIS and the solution file (EMISChap1Solution File) can be found in Instructor Resources 1-10 Improving Decision Making Solution: Using the Internet to Locate Jobs Requiring Information Systems Knowledge AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking Software skills: Internet-based software Business skills: Job searching This Internet Project asks students to use the web to locate jobs that require information systems knowledge. In addition to having students research jobs in their chosen career field, it may be quite interesting to have them research jobs in other career fields so they can see that virtually every job and/or career requires information systems skills.

Student answers may vary. Answers should include action-based steps to build skills listed.

1-11 Collaboration and Teamwork Project: Selecting Team Collaboration Tools AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge

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16 This Collaboration and Teamwork Project introduces students to some of the Google tools that can be used for collaboration work. Students will also have the experience of setting up a team and working together with team members to select the collaboration tool of their choice and then using that tool to document their findings. Students should identify the capabilities they want for team collaboration and then determine which tool best provides those capabilities. Google Drive has a file sharing capability, with a focus on document-sharing/editing. Google Sites has capabilities for building a team website and is more elaborate-probably better for a larger team than the groups in this class.

Business Problem Solving Case: Will Hybrid Work Be the New Normal?

AACSB: Written and oral communication; Analytical thinking, Application of knowledge NOTE: The Chapter 1 Business Problem Solving Case has been updated and revised for the eText. In the printed text, the title of the case is “Will the Covid-19 Pandemic Make Working from Home the New Normal?” The Case Study Questions and Answers are the same for both versions.

Case Study Questions: Answers 1-12 Define the problem described in this case. What are the people, organization, and technology issues raised by this problem?

The problem is that the Covid-19 pandemic forced many employees to work remotely. Information technology tools to do so were very useful, but not always available or appropriate for the tasks at hand.

People issues: What do you do when people don’t have Internet access or a computer at home or they work in industries that require on-site work? How do you deal with issues such as employee isolation and “Zoom fatigue?

Organization issues: How do you manage an entire workforce remotely? How do you deal with employees who do not have home Internet access or who work in industries that require on-site work?

Technology issues: How much can information technology make it possible for people working on-site to work remotely? Are IT tools appropriate for the task at hand? Although email and text messaging are very useful, they are not effective tools for communication compared to the information exchange and personal connection of face-to-face conversations. Remote work also inhibits the creativity and innovative thinking that take place when people interact with each other face-to-face, and videoconferencing is only a partial solution.

1-13 Identify the information technologies used to provide a solution to this problem. Was this a successful solution? Why or why not?

Information technologies driving these changes include broadband high-speed Internet connections, laptop computers, tablets, smartphones, email, messaging, and videoconferencing tools. As companies shifted their work from face-to-face to remote, video conferencing has become the new normal for meetings. There are definite benefits to remote work: lower overhead, more flexible schedules, reductions in employee commuting time and attrition rates, and increases in productivity. (Many companies reported that productivity did not suffer when employees worked at home during the .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

17 pandemic.) According to Global Workplace Analytics, a typical company saves about $11,000 per halftime telecommuter per year. On the other hand, information technology can’t provide a solution for those employees who lack home Internet access or have jobs requiring on-site work, nor could it prevent “Zoom fatigue” or compensate for face-to-face interactions.

1-14 not?

Will working from home become the dominant way of working in the future? Why or why

At the pandemic peak in early May 2020, 52 percent of people employed in the United States reported always working from home, and another 18 percent reported sometimes working from home, for a total of 70 percent, according to a Gallup Poll survey. Prior to the pandemic, the number of people regularly working from home remained in the single digits, with only about 4 percent of the US workforce working from home at least half the time. However, the trend of working from home had been slowly gaining momentum thanks to advances in information technology for remote work and changes in corporate work culture. The coronavirus pandemic may mark a tipping point.

It is likely that many, but not all people who started working from home during the pandemic will continue to do so thereafter. Many businesses that had employees working at home have called them back to the office or have adopted hybrid work schedules.

Video Case: The New HQ Is in the Cloud: Salesforce President AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1. Which of the following is true about Salesforce?

A) All Salesforce software is developed in-house.

B) Slack is used for instant messaging.

C) It is difficult to integrate Slack with other applications D) Salesforce Customer 360 requires extensive customization to create a unique profile for each customer.

Answer: B 2. Which of the following is not true?

A) All Salesforce applications reside in the cloud.

B) Salesforce Customer 360 helps companies integrate Salesforce customer data with that from thirdparty applications.

C) Slack can’t be used for messaging if the message sender and recipient are using two different applications.

D) Salesforce integrates customer data from Salesforce and third-party applications Answer: C 3. Which of the following best describes Salesforce’s business strategy?

A) To expand more globally B) To provide superior customer service C) To broaden its product offering .

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18 D) To increase spending on marketing Answer: C Video Case Essay Questions: Answers 1.

Which of the major business objectives does Salesforce help its customers achieve?

Answer: Salesforce helps companies achieve greater customer intimacy, improved operational excellence, and improved decision making.

Salesforce is the world’s leading supplier of customer relationship management (CRM) systems.

Salesforce helps companies strengthen their customer relationships by providing a multitude of software services that help companies understand and engage with their customers. manage customer information and interactions, run marketing campaigns, and improve sales and customer service, all on a single platform accessible from any desktop or device.

Salesforce is able to integrate customer data from many different sources so that all parts of the organization have the same 360-degree view of a customer and customer data flows smoothly and instantaneously between sales, marketing, service, and related business functions. This eliminates bottlenecks and time-consuming manual procedures that impede operational efficiency when organizations have to piece together data fragmented among different systems.

Salesforce also provides a powerful set of tools for analyzing customer data, leading to improved decision making. For example, Salesforce can provide insight into a customer’s purchasing habits or identify the best channels for interacting with that customer.

2.

What are the advantages and disadvantages of Salesforce acquiring Slack?

Answer: The advantages of Salesforce acquiring Slack include: • Slack has more powerful messaging and collaboration capabilities than existing Salesforce products.

• Slack users from different teams, business functions, and organizations can collaborate with each other while simultaneously working with different applications.

• Slack has tools for facilitating integration with other applications.

The disadvantages of Salesforce acquiring Slack include: • The acquisition was very expensive, and it is unclear whether Salesforce will obtain sufficient benefits from this product to justify the price tag ($27.7 billion).

• Many Salesforce customers use other messaging and collaboration tools such as Microsoft Teams and do not see any benefits for them to switch to Slack.

• Slack adds to the number of features in the Salesforce platform, which requires companies to hire more tech workers to manage a larger number of tools, which can be too costly for many companies.

Dirt Bike Running Case: Understanding Information System Requirements AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences

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19 There is running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions Students will need to answer. The Dirt Bikes question and data files can be found in MyLab MIS and the solution files can be found in Instructor Resources.

Software skills: Presentation software Business skills: Management analysis and information system recommendations How do you know what information systems are really needed by a business and which are the most important? How should a company’s structure or culture affect the building and use of information systems?

Dirt Bikes’s management has asked you to prepare a management analysis of the company to help it assess the firm’s current situation and future plans. Review Dirt Bikes’s company history, organization chart, products and services, and sales and marketing in the Introduction to Dirt Bikes. Then prepare a report that addresses these questions: Use presentation software to display your findings.

1.

What are the company goals and culture?

Dirt Bikes appears to have a very democratic, employee-friendly culture, emphasizing ongoing learning, quality, attention to detail, and employee contributions.

2.

What products and services does Dirt Bikes USA provide? How many types of products and services are available to customers? How does Dirt Bikes sell its products?

Dirt Bikes specializes in off-road and motocross motorcycles that emphasize racing performance, styling, and best quality parts sourced from all over the world. It is a small company producing only 4 models. Dirt Bikes sells through a network of authorized dealers. Its sales department is responsible for working with these distributors and finding ways to promote Dirt Bikes.

3.

How many employees are managers, production workers, or knowledge workers? Are there levels of management?

The company is very small and not very hierarchical. Most of the employees are in production. Many of its departments have less than 10 people. Production is probably the only department that warrants more than 1 manager. One might expect to see separate managers for Service, Shipping & Receiving, Parts, and Design and Engineering and perhaps several additional managers for Manufacturing.

4.

What kinds of information systems and technologies would be the most important for a company such as Dirt Bikes?

One would expect to see information systems supporting manufacturing and production and sales and marketing being the most important for this company. Such systems would help the company monitor work on the assembly line, obtain parts from suppliers, monitor orders from distributors, and provide .

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20 parts and servicing information. A company website to publicize the unique features of this brand and its connection to motorcycle racing events would also be very valuable.

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1

Essentials of Management Information Systems, 15e Chapter 2 Global E-business and Collaboration Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Figure Videos and Video Case) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project: Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter introduces the major features of a business that are important for understanding the role of information systems. It then explains how information systems serve different management groups in a business and how systems that link the enterprise improve organizational performance. It then focuses on why systems for collaboration, social business, and knowledge management are so important and the

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2 technologies they use. Finally, it describes the role of information systems function in a business. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Microsoft Teams Helps Toyota Motor North America (TMNA) Do Even Better Consider using this case to highlight the impact of information systems on collaboration in a global business environment in addition to coordinating work from home and other remote work arrangements that are increasingly more common. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How did Microsoft Teams make it possible for TMNA workers to work remotely?

• How effective was Teams in promoting collaboration and employee engagement?

• How did using Microsoft Teams reinforce corporate coulter and change the way work was performed at TMNA? Additional classroom discussion could center around student’s own experiences working remotely for school or work during the pandemic and their observations of the tools they use and the improvement of those tools over a few short years. If possible, ask students to share any experiences they had collaborating virtually.

Section 2-1: Identify the major features of a business that are important for understanding the role of information systems.

Table 2.1 may help students understand that every business, large and small, uses the same basic business processes. Referring to this table may help as you examine information needs for each functional area. You could have students select a business with which they are familiar and identify some of the business processes involved in each of the basic functional areas.

Another good classroom exercise is to use Figure 2.2 to compare how the order fulfillment process can be accomplished sequentially, as the figure shows, versus simultaneously, as a new information system would allow.

Figure Video 2.2: This is also an appropriate time for the class to review and discuss Figure 2.2, which illustrates the business functions and activities involved in the business process of fulfilling a customer order, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. The explanation of firm hierarchies sets the basis for the rest of the text as it explains the various levels of management. Senior management requires a different type of information than do middle management, operational management, knowledge workers, data workers, and production or service workers. Throughout the text, students will need this information to understand how and why each type of information system is necessary.

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3 The business environment is a complex interaction where many forces push and pull on an organization.

Highlighting Figure 2.4 will demonstrate this environment visually. Have students discuss examples of how each entity interacts with the others in the diagram.

Section 2-2: Explain how information systems serve different management groups in a business, and how systems that link the enterprise improve organizational performance.

This section focuses on how information systems serve various management levels in companies. The ultimate goal is for students to realize that one system helps serve other systems and, working together, all the systems serve the entire organization. Most importantly, students need to understand that each type of information system supports the different kinds of decisions made at each managerial level.

Type of System Transaction Processing Systems (TPS)

Information Inputs Transactions; daily events

Information Outputs Detailed reports; lists; summaries

Users Operations personnel; firstline supervisors

Management Information Systems (MIS)

Summary transaction data; high-volume data; simple models

Summary and exception reports

Middle managers

Decision Support Systems (DSS)

Optimized for data analysis, analytic models and data analysis tools.

Interactive; simulations; analysis

Professionals, staff managers

Executive Support Systems (ESS)

Aggregate data; external, internal

Projections; responses to queries

Senior managers

It’s likely that students’ main encounter will be with TPS systems when they first begin their careers.

Stress the importance of accurate data at the TPS level since it serves as the initial source for the other systems.

Figure Video 2.5: This is an appropriate time for the class to review and discuss Figure 2.5, which illustrates how a transaction processing system (TPS) for payroll processing works, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Typically, DSS and ESS systems will be the least familiar. Students may better understand them if you ask these types of questions: Why do national retail chains open stores in certain locations and not others? How can a retail chain determine which type of clothing to stock at different geographic locations? The Spotlight on Organizations case, Carbon Lighthouse Light Up with the Internet of Things (IoT), Big Data, and Cloud Computing, provides an interesting example of a business intelligence system that is being used to achieve ESG goals. Carbon Lighthouse offers services that use Big Data, the Internet of Things (IoT), and cloud computing to analyze data from large commercial building heating

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4 and cooling systems to improve decisions about how to reduce energy consumption and lower costs.

Answers to the case study questions for this case can be found on page 6 of this Instructor’s Manual.

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Enterprise systems: Enterprise systems, also known as enterprise resource planning (ERP) systems, use a single central data repository in order to supply all users with a consolidated view of employees, customers, suppliers, and vendors. The key to effectively using enterprise systems is to eliminate redundancy and duplication, not just in the information systems but also in business processes.

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Supply chain management systems: Students should understand the importance of a business managing its relationships with suppliers through a free-flowing exchange of information. The concept may seem foreign to those students who think a company is a closed entity and shouldn’t share data or information with anyone outside the organization. Ask students to describe a supply chain with which they are familiar, such as one for sourcing, producing, and delivering goods and services such as a new computer. What role does information play in the functioning of the supply chain? It may also be helpful to engage the students in an exercise that lists all the entities involved in producing and delivering goods and services.

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Customer relationship management systems: Ask students how many times they’ve quit doing business with a company because of poor customer service. Ask them how many times they’ve had to supply a business with the same information simply because they talked to a different department in the company. Discuss how important it is for every functional area in a business to have the same consolidated view of its customers to avoid these kinds of problems.

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Knowledge management systems: Point out that businesses are beginning to realize how much expertise and experience is locked away in employees’ heads as well as corporate documents and emails and that it’s imperative to find a way to capture that information. Moreover, it’s important that businesses find a way to make the expertise and experience available to a wide range of users. On the other hand, students should understand that employees are very reluctant to impart their individual knowledge due to fear or self-preservation.

Intranets and Extranets: As Internet-based technologies continue to expand the basic platforms for disseminating information, smaller businesses that cannot afford to implement enterprise applications can turn to intranets and extranets. Your difficulty will be getting students to understand the difference between the two since they operate basically the same way. Intranets are limited to internal users; extranets are available to authorized external users as well as internal users. Both are an inexpensive way to quickly disseminate information and data across functional lines and organizational boundaries, although careful planning and development work will be required to ensure that these platforms are working smoothly and producing benefits.

E-business, e-commerce, and e-government: Have students give examples of their own experiences with each of these. Students are most often confused between e-business and e-commerce. Stress that ebusiness refers to the use of digital technology and the Internet to execute major business processes inside and outside the firm, while e-commerce is more narrowly centered on the buying and selling of goods and services over the Internet.

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5 Section 2-3: Understand why systems for collaboration, social business, and knowledge management are so important and the technologies they use.

Students have probably used most of these systems without even realizing their business value. Your task is to relate these increasingly common technologies to business processes and needs. Discuss how they can use cell phones, instant messaging, social networking sites, and wikis in a business setting to communicate, collaborate, and share ideas with team members, business partners, customers, and suppliers.

Table 2.2 describes important applications of social business inside and outside the firm. You can have teams of students explore one or two of them and then present to the class a list of characteristics, capabilities, advantages, and disadvantages for each one.

Table 2.3 emphasizes the benefits of collaboration and social business while Figure 2.10 highlights the necessity of having the appropriate organization structure and culture, along with the right technology, to successfully use collaboration in an organization. Discuss how the absence of even one of these three can hinder or prevent collaboration. Ask students to draw on their own experiences to compare and contrast firms with a collaborative culture to those without.

Video Case: The discussion of Slack and other collaboration technologies in Section 2-3 is an ideal place to use the Chapter 2 Video Case, How Slack Is Preparing for the Future of Work. This Video Case provides more

detail on Slack, a multipurpose messaging tool acquired by Salesforce that has emerged as a leading platform for digital collaboration in today’s anytime, anywhere work environment. You might want to ask students to describe Slack’s features for communication and collaboration and whether Slack makes a good “digital first” toolkit. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on page 20 to 21 of this Instructor’s Manual.

The Spotlight on Technology case, Zoom: Quality Videoconferencing for Every Budget, provides a further look at Zoom, a very popular videoconferencing system. Answers to the case study questions for this case can be found on page 7 of this Instructor’s Manual.

Many times, people and businesses decide which collaborative tools to use based on which ones they are most familiar with, rather than which are the most appropriate tool for the task at hand. You can have student teams evaluate one or more collaborative programs for an organization to which they belong like a sports team, sorority/fraternity, workplace, or even their use in your classroom. Have them use the time/space matrix in Figure 2.11 and the information in the section, Checklist for Managers: Evaluating and Selecting Collaboration and Social Software Tools, to help select the best tool.

Enterprise content management (ECM) systems help manage company knowledge including semistructured, semistructured, and unstructured types of information. EMCs help to capture, store, retrieve, distribute, and preserve vast amounts of data.

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6 Section 2-4: Describe the role of the information systems function in a business.

If possible, arrange a session with the school’s information systems department to allow students to see first-hand how such a department works and who is responsible for running the systems. Have the IS staff and students participate in a Question and Answer forum about how typical processes are handled.

Many students have a better appreciation of how these complex departments work when they actually see one in operation rather than just reading about it. Stress to students that in all but the smallest of firms, these systems are critical to the operational efficiency and sheer survival in a very competitive marketplace.

Most importantly, students should understand that the IS staff is responsible for the well-being of all users in an organization. Users and the IS staff are teammates not polarizing opposites.

Section 2-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as a customer success analyst. You could ask students what types of information systems might be used in this job, which entails responding to and assisting the support desk, analyzing data for a variety of purposes, assisting in new system implementations, providing ongoing training, conducting testing and quality assurance, and monitoring usage and feedback. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Organizations: Carbon Lighthouse Lights Up with the Internet of Things (IoT). Big Data, and Cloud Computing ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Identify the problem described in this case study. Is it a people problem, an organizational problem, or a technology problem? Explain your answer.

According to the US Environmental Protection Agency (EPA), more carbon emissions come from operating commercial, residential, and industrial properties than from transportation. 68 % of total carbon emissions comes from generation of electric power, (manufacturing)industry, commercial and residential property, and agriculture.

This is an organizational problem of solving how to limit carbon emissions. Many businesses complain that it costs more money to be environmentally responsible. This does not have to be so. Acting on findings from advanced data analytics, commercial and building owners can reduce carbon emissions while producing cost savings.

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7 2. What role have the IoT, Big Data analytics, and cloud computing played in developing a solution for this problem?

Carbon Lighthouse uses a software platform called Carbon Lighthouse Unified Engineering System (CLUES) to analyze more than 100 million square feet of clients’ commercial and industrial real estate and 5 billion data points. Carbon Lighthouse uses Amazon’s cloud services to run its computers and store data such as building addresses and square footage, along with time-series data such as the data collected on-site at buildings. Internet of Things (IoT) sensors, Big Data, cloud computing, and powerful data analysis software rather than expensive capital upgrades allow Carbon Lighthouse to unlock hidden returns in existing building mechanical systems and translate energy efficiency into tangible long-term savings.

3. Describe Carbon Lighthouse’s problem-solving methodology for reducing both carbon emissions and costs.

Carbon Lighthouse first examines the location using a sensor kit to start new data streaming from the client’s buildings. Then recommendations generated are more complex than just turning off lights or lowering the heat. Recommendations focus instead on making existing equipment work a little better. As CLUES collects more data, its algorithms become more accurate and provide additional zone isolation and central plant measure, generating more energy efficiency and cost savings than projected.

Spotlight on Technology: Zoom: Quality Videoconferencing for Every Budget ACCSB: Written and oral communication; Analytical thinking, Application of knowledge; Reflective thinking Case Study Questions: Answers 1. How is videoconferencing related to the business models and business strategies of the organizations described in this case?

Videoconferencing created an inexpensive and convenient channel for both companies to serve customers and also lower operating costs. It enabled Butler Health to expand its reach and serve a much larger patient population at a very low cost. It enabled Blue Yonder to not only communicate with employees and customers during the Covid pandemic, but also to provide a permanent communication tool to increase customer service and engagement. Blue Yonder provides software to help companies manage their supply chains, and much of the information its customers use is very time-critical.

2. Describe the specific ways in which Zoom helped each of the organizations in this case improve their operations and decision making.

Butler Health System used Zoom to expand its telehealth services during the Covid-19 pandemic. Zoom for Healthcare provided a solution, enabling providers to offer much of the clinical experience without having to see patients in person. (Zoom for Healthcare is Zoom’s secure, web-based virtual care videoconferencing platform.) It enabled BHS to start offering expanded telehealth appointments to patients in their homes within three days. Using Zoom’s Scheduling Privilege feature, office staff can schedule appointments for multiple providers at the same time. Staff also use Zoom’s Waiting Room feature to simulate an urgent care setting. Patients with acute symptoms who can’t wait for a scheduled appointment are given a meeting link to a physician’s personal meeting ID and placed in a “virtual waiting room” queue.

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8 Blue Yonder used Zoom to create a communications platform that could support both its employees working from home and its customers around the globe during the Covid-19 pandemic and thereafter.

Zoom helped Blue Yonder transition to a remote work environment and support customers facing pandemic-induced demand spikes, transportation disruptions, and labor shortages. Tools such as Zoom Meetings, Zoom Rooms, and Zoom Webinar enabled the company to maintain business continuity and communication with employees and customers. Blue Yonder uses Zoom to train employees in new products and product updates and for monthly meetings with the CEO and leadership to update them on the company and customers. Blue Yonder’s marketing team uses Zoom to stage webinars for customers and sales prospects about successful customer experiences with Zoom tools.

3. If you were a small or medium-sized business, what people, organization, and technology criteria would you use to determine whether to use Zoom videoconferencing?

Student answers will vary. A sample answer might be as follows: Zoom provides companies with the opportunity to conference via tablets and smartphones. As such, small businesses can participate in meetings and collaborations from remote locations. I would weigh how workers needed to communicate given the type or organization and industry we work in and the business benefits Zoom videoconferencing could provide. If people needed to communicate with suppliers or customers at length, face to face Zoom may be a good option to provide them. If workers were remote, I would evaluate the technology for work from home employees and make sure that Zoom was an appropriate tool for them. The collaboration software should be easy for employees to learn and use and for the organization to implement and maintain. Additional employee training may be required.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 2-1 Identify the major features of a business that are important for understanding the role of information systems.

Define a business and describe the major business functions.

A business is a formal organization whose aim is to produce products or provide services for a profit.

That is, to sell products at a price greater than the costs of production. Every business, large or small, has these four major functions: manufacturing and production; sales and marketing; human resources; and finance and accounting.

Define business processes and describe the role they play in organizations.

A business process is a logically related set of activities that define how specific business tasks are performed. Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services.

Business processes for the manufacturing and production area include product assembling, quality checking, and producing bills of materials. For the sales and marketing area, business processes include identifying customers, making customers aware of the product, and selling the product. For finance and accounting, business processes include paying creditors, creating financial statements, and managing .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

9 cash accounts. For human resources, business processes include hiring employees, evaluating employees’ job performance, and enrolling employees in benefits plans.

Identify and describe the different levels in a business firm and their information needs.

From highest to lowest, the three levels of the organizational hierarchy are senior, middle, and operational management.

• Senior managers make long-range strategic decisions about products and services and ensure financial performance of the firm. Senior managers need summary information that quickly informs them about the overall performance of the firm, such as gross sales revenues, sales by product group and region, and overall profitability.

• Middle managers carry out the programs and plans of senior management. Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm, and frequently work with middle management. Middle managers need more specific information on the results of specific functional areas and departments of the firm, such as sales contacts by the sales force, production statistics for specific factories or product lines, employment levels and costs, and sales revenues for each month or even each day. Knowledge workers may need access to external scientific databases or internal databases with organizational knowledge.

• Operational managers need transaction-level information, such as the number of parts in inventory each day or the number of hours logged on Tuesday by each employee. Production or service workers actually produce the product and deliver the service. Production workers need access to information from production machines. Service workers need access to customer records so they can take orders and answer questions from customers.

Types of information systems include transaction processing at the operational level, decision-support systems and management information systems at the middle level, and executive support systems at the senior level.

Explain why environments are important for understanding a business.

Business environments are constantly changing. New developments in technology, politics, customer preferences, and regulations happen all the time. In general, when businesses fail, it is often because they failed to respond adequately to changes in their environments. A firm must monitor changes in its environment and share information with key entities in that environment in order to stay in business.

External business environmental forces include technology and science, the economy, international change, and politics.

Internal business environmental forces include customers, suppliers, stockholders, regulations, and competitors.

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10 2-2 Explain how systems serve different management groups in a business and how systems that link the enterprise improve organizational performance.

Define business intelligence systems.

Business intelligence systems focus on delivering information to support management decision making.

These systems use data and software tools for organizing, analyzing, and providing access to data to help managers and other enterprise users make more informed decisions. Business intelligence addresses the decision-making needs of all levels of management.

Business intelligence systems for middle management help with monitoring, controlling, decision making, and administrative activities in an organization.

Describe the characteristics of transaction processing systems (TPS) and the role they play in a business.

Transaction processing systems (TPS) are computerized systems that perform and record daily routine transactions necessary in conducting business; they serve the organization’s operational level. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organization.

• At the operational level, tasks, resources, and goals are predefined and highly structured.

• Managers need TPS to monitor the status of internal operations and the firm’s relationship with its external environment.

• TPS are major producers of information for other types of systems.

• Transaction processing systems are often so central to a business that TPS failure for a few hours can lead to a firm’s demise and perhaps that of other firms linked to it.

Describe the characteristics of management information systems (MIS), decision support systems (DSS), and executive support systems (ESS) and explain how each type of system helps managers make decisions.

Middle management needs systems to help with monitoring, controlling, decision making, and administrative activities.

• MIS provide middle managers with reports on the organization’s current performance. This information is used to monitor and control the business and predict future performance.

• MIS summarize and report the company’s basic operations using data supplied by TPS. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule.

• MIS serve managers primarily interested in weekly, monthly, and yearly results, although some MIS enable managers to drill down to see daily or hourly data if required.

• MIS generally provide answers to routine questions that have been specified in advance and have a predefined procedure for answering them.

• MIS generally are not flexible and have little analytical capability.

• Most MIS use simple routines, such as summaries and comparisons, as opposed to sophisticated mathematical models or statistical techniques.

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11 Examples include sales and profit per customer and per region, relocation summary and analysis, inventory control, capital investment analysis, and even a report on students who were here in the fall but did not return in the spring.

While MIS have an internal orientation, DSS will often use data from external sources, as well as data from TPS and MIS. DSS support “what-if” analyses rather than a long-term structured analysis of MIS. Whereas MIS are generally not flexible and provide little analytical capabilities, DSS are designed for analytical purposes and are flexible.

Decision-support systems (DSS) support non-routine decision making for middle managers.

• DSS provide sophisticated analytical models and data analysis tools to support semi-structured and unstructured decision-making activities.

• DSS use data from TPS, MIS, and external sources, in condensed form, allowing decision makers to perform “what-if” analysis.

• DSS focus on problems that are unique and rapidly changing; procedures for arriving at a solution may not be fully predefined.

• DSS are designed so that users can work with them directly; these systems include interactive, userfriendly software.

Executive support systems help senior managers address strategic issues and long-term trends, both in the firm and in the external environment.

• ESS address non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution.

• ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems.

• ESS are designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. • ESS are designed for ease-of-use and rely heavily on graphical presentations of data.

Explain how enterprise applications improve organizational performance.

An organization operates in an ever-increasing competitive and global environment. The successful organization focuses on the efficient execution of its processes, customer service, and speed to market.

Enterprise applications provide an organization with a consolidated view of its operations across different functions, levels, and business units. Enterprise applications allow an organization to efficiently exchange information among its functional areas, business units, suppliers, and customers.

Define enterprise systems, supply chain management systems (SCM), customer relationship management systems (CRM), and knowledge management systems (KMS), and describe their business benefits.

Enterprise systems integrate the key business processes of an organization into a single central data repository. This makes it possible for information that was previously fragmented in different systems to be shared across the firm and for different parts of the business to work more closely together.

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12 This changes the workflow of an organization: • Information flows seamlessly throughout an organization, improving coordination, efficiency, and decision making.

• Gives companies the flexibility to respond rapidly to customer requests while producing and stocking only that inventory necessary to fulfill existing orders.

• Increases customer satisfaction by improving product shipments, minimizing costs, and improving a firm’s performance.

• Improves decision making by improving the quality of information for all levels of management.

That leads to better analyses of overall business performance, more accurate sales and production forecasts, and higher profitability.

Supply chain management systems help businesses better manage relationships with their suppliers. The objective of SCM is to get the right number of products from the companies’ source to their point of consumption with the least amount of time and with the lowest cost. SCM provide information to help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently. SCM helps organizations achieve great efficiencies by automating parts of these processes or by helping organizations rethink and streamline these processes. SCM is important to a business because through its efficiency, it can coordinate, schedule, and control the delivery of products and services to customers.

Business benefits include: • Deciding when and what to produce, store, and move • Rapidly communicating orders • Tracking the status of orders • Checking inventory availability and monitor inventory levels • Reducing inventory, transportation, and warehousing costs • Tracking shipments • Planning production based on actual customer demand • Rapidly communicating changes in product design Customer relationship management systems enable a business to better manage its relationships with existing and potential customers. With the growth of the web, potential customers can easily comparison shop for retail and wholesale goods and even raw materials, so treating customers better has become very important.

Business benefits include: • Providing information to coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This information helps firms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales.

• Consolidating customer data from multiple sources and providing analytical tools for answering questions such as: What is the value of a particular customer to the firm over his/her lifetime?

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13 • •

Integrating customer-related processes and consolidate customer information from multiple communication channels, giving the company a 360-degree view of each customer.

Providing detailed and accurate knowledge of customers and their preferences to help firms increase the effectiveness of their marketing campaigns and provide higher-quality customer service and support.

Knowledge management systems enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge.

• KMS support processes for acquiring, storing, distributing, and applying knowledge, as well as processes for creating new knowledge and integrating it into the organization.

• KMS include enterprise-wide systems for managing and distributing documents, graphics, and other digital knowledge objects; systems for creating corporate knowledge directories of employees with special areas of expertise; and knowledge work systems to facilitate knowledge creation.

• KMS use intelligent techniques that codify knowledge and experience for use by other members of the organization and tools for knowledge discovery that recognize patterns and important relationships in large pools of data.

Explain how intranets and extranets help firms improve business performance.

Because intranets and extranets share the same technology and software platforms as the Internet, they are easy and inexpensive ways for companies to increase integration and expedite the flow of information within the company (intranets alone) and with customers and suppliers (extranets). They provide ways to transact with suppliers, distribute information. And store corporate policies, programs, and data. Both types of nets can be customized by users and provide a single point of access to information from several different systems. Businesses can connect the nets to transaction processing systems easily and quickly. Interfaces between the nets and TPS, MIS, DSS, and ESS provide input and output for users.

2-3 Understand why systems for collaboration, social business, and knowledge management are so important and the technologies they use.

Define collaboration and social business and explain why they have become so important in business today.

Collaboration is working with others to achieve shared and explicit goals. It focuses on task or mission accomplishment and usually takes place in a business or other organizations, and between businesses.

Collaboration can be short-lived or longer term, depending on the nature of the task and the relationship among participants. It can be one-to-one or many-to-many.

Social business uses social networking platforms to engage employees, customers, and suppliers. The goal of social business is to deepen interactions with groups inside and outside a company to expedite and enhance information-sharing, innovation, and decision making.

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14 Collaboration and social business are important because: • Changing nature of work. More jobs are becoming “interaction” jobs. These kinds of jobs require face-to-face interaction with other employees, managers, vendors, and customers. They require systems that allow the interaction workers to communicate, collaborate, and share ideas.

• Growth of professional work. Professional jobs require close coordination and collaboration.

• Changing organization of the firm. Work is no longer organized in a hierarchical fashion as much as it is now organized into groups and teams who are expected to develop their own methods for accomplishing tasks.

• Changing scope of the firm. Work is more geographically separated than before.

• Emphasis on innovation. Innovation stems more from groups and teams than it does from a single individual.

• Changing culture of work and business. It is widely believed that diverse teams produce better outputs, faster, than individuals working on their own.

List and describe the business benefits of collaboration and social business.

The general belief is that the more a business firm is collaborative in nature, the more successful it will be, and that collaboration within and among firms is more essential than in the past. The overall economic benefits of collaboration and social business are significant.

The business benefits of collaboration and social business include: • Productivity: people working together accomplish tasks faster, with fewer errors, than those working alone.

• Quality: people can communicate errors and correct them faster when working together versus working alone.

• Innovation: people working in groups can generate more innovative ideas than if they were working alone.

• Customer service: people working in teams can solve customer complaints and issues faster and more effectively versus working in isolation.

• Financial performance: collaborative firms have superior sales, sales growth, and financial performance.

Describe a supportive organizational culture for collaboration.

Historically, organizations were built on hierarchies which did not allow much decision making, planning, and organizing at lower levels of management or by employees. Communications were generally vertical through management levels rather than horizontal between groups of employees.

A collaborative culture relies on teams of employees to implement and achieve results for goals set by senior managers. Policies, products, designs, processes, and systems are much more dependent on teams at all levels of the organization to devise, to create, and to build. Rather than employees being rewarded for individual results, they are rewarded based on their performance in a team. The function of middle managers in a collaborative business culture is to build the teams, coordinate their work, and monitor their performance. In a collaborative culture, senior management establishes collaboration and teamwork as vital to the organization, and it actually implements collaboration for the senior ranks of

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15 the business as well.

List and describe the various types of collaboration and social business tools.

Some of the more common enterprise-wide information systems that businesses can use to support interaction jobs include: • Email and Instant Messaging (IM) are reliable methods for communicating whenever and wherever around the globe.

• Virtual worlds such as the metaverse can be used for online meetings where real-world people represented as avatars meet, interact, and exchange ideas.

• Wikis are ideal tools for storing and sharing company knowledge and insights. They are often easier to use and cheaper than more proprietary knowledge management systems. They also provide a more dynamic and current repository of knowledge than other systems.

• Virtual meeting Systems such as Zoom and Microsoft Teams reduce travel expenses and help people in different locations to meet and collaborate. Many companies, both large and small, have adopted videoconferencing and web conferencing technology.

• Mobile devices give professionals and other employees an easy way to talk with one another, with customers and vendors, and with managers. These devices have grown exponentially in sheer numbers and in applications available.

• Google Drive, Google Docs, Google Workspace, Google Sites, and other cloud collaboration services and tools allow users to share files and create online group-editable websites.

• Microsoft SharePoint software makes it possible for employees to share documents and organize information using Microsoft documents as the foundation.

• Enterprise social networking tools include capabilities for supporting social business, including specialized social tools such as Salesforce Chatter, Microsoft Yammer, Meta’s Workplace, and IBM Connections. Enterprise social networking connects members of an organization through profiles, updates, and notifications similar to Facebook features but tailored to internal corporate uses.

Describe how knowledge management systems help organizations make better use of their structured, semistructured, and unstructured knowledge and also their tacit knowledge assets.

Knowledge management and their associated enterprise content management systems help manage company knowledge including semistructured, semistructured, and unstructured types of information.

The ability of an organization to capture, store, retrieve, distribute, and preserve vast amounts of data is critically important in this data-driven marketplace to be competitive. Semistructured and unstructured types of information used to be difficult for organizations to effectively manage. Given the value of semistructured and unstructured data, knowledge management and ECMs help organizations make better use of these massive data troves.

Unfortunately, tacit knowledge is rarely written down. Some enterprise-wide KMS provide features and capabilities for addressing the challenges of tacit knowledge and provide assistance for locating employees that are experts within an organization that may help document important knowledge that is currently in tacit form.

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16 2-4 Describe the role of the information systems function in a business.

Describe how the information systems function supports a business.

The information systems department is the formal organizational unit responsible for information technology services. The information systems department is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure.

Compare the roles programmers, systems analysts, information systems managers, the chief information officer (CIO), chief security officer (CSO), chief data officer (CDO), chief privacy officer (CPO), and chief knowledge officer (CKO) play.

• • • • •

•

• •

Programmers are highly trained technical specialists who write the software instructions for computers.

Systems analysts constitute the principal liaisons between the information systems groups and the rest of the organization. The systems analyst’s job is to translate business problems and requirements into information requirements and systems.

Information systems managers lead teams of programmers and analysts, project managers, physical facility managers, telecommunications managers, or database specialists.

Chief information officer is a senior manager who oversees the use of information technology in the firm.

Chief security officer is responsible for information systems security in the firm and has the principal responsibility for enforcing the firm’s information security policy. The CSO is responsible for educating and training users and IS specialists about security, keeping management aware of security threats and breakdowns, and maintaining the tools and policies chosen to implement security.

Chief data officer is responsible for enterprise-wide governance and utilization of information to maximize the value the organization can realize from its data. The CDO ensures the firm is collecting appropriate data, analyzing it appropriately, and using the results to support business decisions.

Chief privacy officer is responsible for ensuring that the company complies with existing data privacy laws.

Chief knowledge officer helps design programs and systems to find new sources of knowledge or to make better use of existing knowledge in organizational and management processes.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 2-5 How could information systems be used to support the order fulfillment process illustrated in Figure 2.2? What are the most important pieces of information these systems should capture?

Explain your answer.

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17 Information systems could automate and potentially streamline the steps in the order fulfillment process.

For example, the steps of generating and submitting an order could be combined. Student answers to this question will vary.

2-6 Identify the steps that are performed in the process of selecting and checking a book out from your college library and the information that flows among these activities. Diagram the process. Are there any ways this process could be improved to improve the performance of your library or your school? Diagram the improved process.

Student answers to this question will vary, and there can be varying degrees of automation and streamlining of this process, especially if the book requested by the student is in digital form.

The process of obtaining a book from an older traditional library might look like: • Visit library • Find book in physical card catalog or on library computer • Select book title • Write down title and identification number • Hand selection to librarian • Librarian searches for book in the stacks • If book available. Librarian brings it to checkout area • Librarian checks out book using student’s library card • If book not immediately available, librarian could reserve the book for the student • Student takes book home At a computerized library, the process of obtaining a digital book could be: • Login to library computer system • Search online database of library holdings from your home or remote location using your own computer • Select book title from database • If book is available, check the book out online. If not available, instruct the library system to put a hold on the book.

• Student downloads the book or reads it online in the cloud.

2-7 Use the Time/Space Collaboration and Social Tool Matrix to classify the collaboration and social technologies Toyota Motor North America uses.

• Same Time Same Place: face-to-face interactions, shared tables • Same Time Different Place: remote interactions: videoconferencing, audioconferencing, Teams phone, chat • Different Time Same Place: continuous tasks: team rooms • Different Time Different Place: Communication and coordination: chat. Email, bulletin boards, asynchronous conferencing

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Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and solution files are available in Instructor Resources.

2-8 Management Decision Problem: US Census Bureau AACSB: Written and oral communication; Analytical thinking; Reflective thinking; Application of knowledge; Integration of real-world business experiences This Management Decision Problem asks students to identify some of the people, organizational, and technology issues that the US Census Bureau had to address in modernizing a massive, important paperbased system, Student answers will vary. In addition to the issues identified below, it is important to note that the scope of this system is very large, and the Census system has enormous economic, political, and social impact. Census data are used to determine how many seats will be allocated to each state in the House of Representatives and the composition of the Electoral College. The results of the Census will also determine how much federal funding each state will receive for important services such as infrastructure and education. Some members of the population may be difficult to locate or reluctant to provide data either online or to a Census taker using the telephone and paper forms. It is challenging to establish completeness and accuracy of Census data.

People issues: • End user instructions for online Census data input • Ease of use, user interface • Resistance to automated system • Lack of Internet access • Difficulty locating people needed to participate in Census

Organizational issues: • Business process changes • Locating all sources of Census data

Technology issues: • Appropriate hardware, software, networking, data management technology, web browsers, apps.

• IT platform on premises or in cloud

• New services • Organizational culture

• Access via mobile devices or laptop • Data capture devices • Data capture procedures • IT staff capabilities and training

2-9 Improving Decision Making: Using a Spreadsheet to Create a Town Budget AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Spreadsheet charts, formulas, assumptions Business skills: Preparing a town budget This Hands-on Software Project provides an opportunity for students to use spreadsheet software to develop budget projections for a small town. They also prepare a pie chart to visually illustrate the relative size of important budget cost components. The question file for this project (EMIS15Chap2 Question File) can be found in MyLab MIS and the solution file (EMISCha2 Solution File can be found in Instructor Resources.

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19 2-10 Achieving Operational Excellence: Using Internet Software to Plan Efficient Transportation Routes AACSB: Written and oral communication; Analytical thinking; Application of knowledge This Internet Project asks students to use Google Maps to plan efficient transportation routes for a business and select the most efficient route. Student answers will vary, but here is one possibility: The shortest amount of time is more cost effective than the shortest distance since there’s only a difference of 27.05 miles. Saving the 27 miles will take 2 hours, 24 minutes longer. Encourage students to use the Advanced Tools option to quickly change back and forth between “shortest time” and “shortest distance.” Only to show how convenient these kinds of online tools are, ask students to use a regular map and calculator to draw out the two routes.

Shortest Distance and time: 7 hours, 57 min; 532 miles (Tolls included) Via I-80E and I-76 Alternate: 9 hours, 26 minutes; 595 miles (No Tolls) Via I-70E

2-11 Collaboration and Teamwork Project: Identifying Management Decisions and Systems AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to form a team to search business publications on the web to identify management decisions and systems. Student solutions will vary, but they should identify a manager, the organization where the manager works, the manager’s job responsibilities, the organizational level and business functions the manager supports, examples of several decisions this manager would make, and the kind of information required by these decisions. Students can find examples of managers and their organizations in online publications such as Fortune, Bloomberg Business Week, and CIO. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem-Solving Case: How Much Does Technology Help Collaboration?

AACSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 2-12 How do virtual meeting technologies enhance collaboration?

Instead of meeting face-to-face, many organizations have turned to virtual meeting systems such as Zoom and Microsoft Teams so that employees can perform their jobs away from the office. Virtual meeting tools enable teams to collaborate even when physical offices are closed. For example, Zoom Meetings brings teams together with face-to-face video interactions, breakout rooms, screen sharing, document sharing, chat, digital whiteboards, and captioning. These capabilities, along with the low cost, ease of use, and widespread avail ability of virtual meeting software help employees work and collaborate remotely and give managers a tool for managing employees from afar. Virtual meeting

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20 systems were especially helpful during the Covid pandemic when offices were shuttered all over the world.

2-13 How do virtual meeting technologies hinder collaboration? Identify the people, organization, and technology factors that contribute to this problem.

People: People aren’t used to the unnatural lack of nonverbal cues, prolonged eye contact, or overload of faces to process on the screen. Seeing our own faces as we talk or listen, and awareness of how we appear online is stressful. The amount of effort required to process all of these stimuli while simultaneously thinking and communicating is fatiguing. The term “Zoom fatigue” is now part of our vocabulary. Constant connectedness and overuse of virtual communication platforms, particularly videoconferencing, cause many people to experience feelings of tiredness, anxiety, or burnout.

Collaboration technologies can create conditions for self-censorship, even if the technology is perceived to be user-friendly.

Organization: Studies show that spending too much time in meetings negatively affects people’s psychological, physical, and mental well-being. Having too many meetings diverts workers during their most productive hours, interrupts people’s train of thought, and detracts from effective collaboration.

Regardless of company size, both the number of collaborative demands and the diversity of them are overwhelming people. This is a serious problem.

Technology: Recent research has found that videoconferencing technology can actually make it harder for people to collaborate, communicating via video can draw attention away from audio cues in many cases, reducing capacity to carry out the work itself.

2-14 What can organizations do to improve the effectiveness of collaboration technology?

Answers will vary, each organization has its own specific needs, recommendations for making virtual meetings more effective and less tiring include the following: • Cancel unnecessary meetings and make necessary meetings shorter.

• Use breakout rooms for problem solving, discussions, and social interactions.

• Use asynchronous meetings, such as by creating a shared Google Doc for employees to contribute to throughout the day.

• Build in breaks during long meetings and in between back-to-back meetings.

• Moderate and facilitate virtual meetings more actively, moving topics along when needed and ensuring that everyone has an opportunity to contribute.

• Turn off “self-view,” if possible, on your meeting platform and make camera use optional for some meetings.

• Implement meeting free blocks of time or days 2-15 If a midsized company wants to implement virtual meeting technology to support remote work and collaboration, what issues should be considered?

Answers will vary, but should include among others: cost to implement, and maintain, usability, specific needs of the business, technology needs for employees, employee attitudes and training,, impact on

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21 business processes and workflows, hardware/software requirements, internal vs external use, IT support needed for customers, clients, and employees.

Video Case: How Slack Is Preparing for the Future of Work AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1) What are the advantages of organizing information into channels?

A) The information is presented more simply.

B) It helps keep information more focused and organized.

C) It prevents people from outside the organization from disrupting conversations.

D) It is less expensive than email for storing information.

Answer: B 2) Which of the following is true?

A) Information can be obtained more quickly from Slack than from email B) One has to schedule an appointment to have a conversation using Slack C) Slack charges for video calls D) Slack does not keep track of data for a project for more than 3 years Answer: A 3) All of the following is true for Slack except: A) Slack has a version that can be used for free.

B) Slack uses bots for certain automated tasks.

C) Slack can be used with Zoom.

D) Individual Slack users can use up to 15 channels.

Answer: D Video Case Essay Questions: Answers 1. What are the features that distinguish Slack from other workplace communication tools?

Answer: There are other workplace instant messaging systems, but Slack appears to have better integration with other applications and the ability to allow Slack users communicate instantaneously with other Slack users even if they are working with different applications at the moment. Slack seamlessly integrates with countless apps (including custom user apps) and software making it easier to keep track of everything from a single place. Business tools, such as Google Drive, Asana, Salesforce, and even Zoom can be integrated into Slack. Slack has more apps integrated with it than competitors.

There are over 2,400 apps in the Slack App Directory.

2. What people, organization, and technology issues should a business address when deciding whether to use Slack?

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22 Answer: The people, organization, and technology issues that a business should address when deciding whether to use Slack include the following: • • •

People: User training, potential user resistance to new technology, Slack impact on user productivity, impact on the work environment and job satisfaction Organization: Change in business processes and organizational performance from using Slack; business costs and benefits of implementing Slack, business functions impacted by Slack; compatibility of Slack with organizational culture.

Technology: New hardware, software, networking technology required by Slack, requirements for integrating other applications with Slack, IT team’s expertise and technical knowledge of Slack, compatibility of Slack with existing systems; number and type of app integrations with Slack required.

Dirt Bikes Running Case: Analyzing Financial Performance AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer. The Dirt Bikes question and data files can be found in MyLab MIS and the solution files can be found in Instructor Resources.

Software skills: Spreadsheet charts and formulas Business skills: Financial statement analysis Use the Chapter 2 instructions in MyLab MIS and your spreadsheet software to calculate the gross and net margins in Dirt Bikes’s income statements from 2020 to 2022. You can also create graphs showing trends in selected pieces of Dirt Bikes’s income statement and balance sheet data if you wish. (You may want to rearrange the historical ordering of the data if you decide to do this.)

Prepare an addition to your management report that answers these questions: • What are Dirt Bikes’s best- and worst-performing products? What is the proportion of domestic to international sales? Have international sales grown relative to domestic sales?

• Are sales (revenues) growing steadily, and, if so, at what rate? What is the cost of goods sold compared to revenues? Is it increasing or decreasing? Are the firm’s gross and net margins increasing or decreasing? Are the firm’s operating expenses increasing or decreasing? Is the firm heavily in debt? Does it have assets to pay for expenses and to finance the development of new products and information systems?

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(Optional) Use presentation software to summarize your analysis of Dirt Bikes’s performance for management.

The spreadsheet solution file for this case (EMIS15Ch02_solutionfile.xls) uses a line chart to show the 5year trend in Dirt Bikes’ total sales and a stacked column chart of 5-year sales trends to show how much international and domestic sales (measured by units sold) contribute to the total. One can see from these graphs that unit sales dipped slightly during 2022 but that overall, sales have been growing. The portion of overall sales represented by international sales has not changed significantly, suggesting that there may be opportunities for Dirt Bikes to grow its international sales. The income statement data show a continuing rise in operating expenses and cost of goods sold combined with declines in gross and net margins. Dirt Bikes needs some way to bring down its costs, and new information systems might help.

The balance sheet shows that Dirt Bikes has sufficient assets so that it could afford to invest in new product development and new information systems.

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Essentials of Management Information Systems, 15e Chapter 3 Achieving Competitive Advantage with Information Systems Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Project o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Question: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter focuses on how organizations can achieve competitive advantage with information systems. It examines Porter’s competitive forces model, the value chain model, synergies, core competencies, and network-based strategies that help companies to do so. It also describes how .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

2 information systems help businesses compete globally and how they help businesses compete using quality and design. It also explains the role of business process management (BPM) in enhancing competitiveness. It concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Walmart’s Supercenter Strategy The opening case illustrates some of the ways that information systems help businesses sustain a competitive advantage and use technology to improve the in-store customer experience. It also shows how a company can revise its business strategy to capitalize on existing strengths, using existing Walmart supercenters to offer new services that further monetize its strong physical store retail presence. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • What are the components of Walmart’s supercenter business strategy?

• How much does technology support that strategy.

You could also ask students if they have ever visited a Walmart Supercenter and whether it is used for any of the services described in the case.

Section 3-1: Demonstrate how Porter’s competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage.

This section is one of the most critical sections in the text. Understanding business strategy and how information systems can aid employees in making far-reaching and deep-rooted decisions is critical to the long-range success of any corporation. At this point, students need to focus on business level strategies and the various ways firms achieve an advantage over other firms. They will learn how to use these strategies in order to address a key question: How can we compete effectively in a particular market?

Figure Video 3.1: This is an appropriate time for the class to review and discuss Figure 3.1, which illustrates Porter’s competitive forces model and the competitive forces that shape the strategic position of the firm, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS The firm-level and industry-level strategies are analyzed in this section, and a key analytical tool, the competitive forces model, is introduced: traditional competitors, new market entrants, substitute products and services, and customer and supplier intimacy.

Take the opportunity to remind students that “Basic Strategy 101: Align the IT with the Business Objectives” is one of the most important concepts they’ll learn in this class. Technology must serve the business, and businesspeople must take an active role in helping shape IT in a business.

It’s a great exercise to have students name businesses and companies that use information system strategies for dealing with competitive forces: low-cost leadership, product differentiation, focus .

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3 on market niche, and strengthening customer and supplier intimacy. Ask your working students to describe the strategies pursued by their organizations. The Spotlight on People case, Customer Experience: A New Strategic Weapon, illustrates use of “customer experience” as product differentiation strategy. Answers to the case study questions for this case can be found on pages 5 to 7 of this Instructor’s Manual.

Use Figure 3.2 to raise class discussion on the value chain model. The text defines “value chain” and its critical role in the success of a company, including its relationship to how companies think about and relate to their customers. Use Figure 3.3 to stimulate class discussion on the value web and how interconnected these entities are.

Ask your students to apply the value chain model to your university to see where technology is applied. Note the emphasis on tying together the customers, manufacturers, and suppliers.

Retailers such as Walmart also apply value chain and supply chain management principles.

Walmart’s systems allow it to track in-store sales down to the department and item level, thus one can see why Walmart is such a strong competitor.

Students may identify closely with the section on disruptive technologies since they are likely to have experienced some of them firsthand. Table 3.4 can be a great start to a lively discussion about the phenomenon. Ask your students how Chat GPT is a disruptive technology and to guess others that might be coming in their lifetimes.

Section 3-2: Describe how information systems help businesses compete globally.

In this section, you can highlight the concept of competing in what has been referred to as the “global village” or the more expansive term, “globalization.” With a click of a mouse, customers can connect to websites and browse catalogs, order products, and obtain general or specific information. This arena is growing exponentially and is expected to continue to grow even faster.

The breadth and depth of this coverage will depend on faculty preferences, student backgrounds, and the orientation of the course. You may wish to point out that competing on the global scale is tempting but also very complex to set up and maintain. Specifically, this external environment is composed of foreign, international, and domestic components. An array of cultural, legal, political, economic, and technological characteristics that may directly influence the IS function can be incorporated in the context of this discussion. Ask students why organizations want to compete on a global scale. Let them consider all the business drivers that motivate firms and other organizations to “go global.” Have students list how many of their friends and relatives work for organizations that do business on a global scale. Ask them how they are using the Internet to expand their operations in foreign countries.

You might want to have students examine the difficulties of doing business in places like China.

Political turmoil and cultural hostility are just as big a barrier as the lack of an information infrastructure. What business drivers are encouraging firms to move to countries that have inherent political and cultural barriers?

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4 The business challenges need to be considered in some detail. Cultural barriers and misunderstandings mean that some nations or nationalist movements within a country are not interested in globalization. The unwillingness of certain countries to allow unfettered intercommunication and Internet access is an example of a problem global companies are likely to face. While there has been some deregulation of the national telephone systems, it is still more difficult to hook up phones, use modems, or set up data and telecommunication systems than in the United States. Further, some nations have local content rules that make it more costly or difficult to internetwork.

Using some of the sources found in business magazines and journals, such as The Wall Street Journal, Bloomberg Business Week, Fortune, or Forbes, have students examine some stories of businesses who are successfully competing on a global scale. Have them determine which system strategy the companies likely use: domestic exporter, multinational strategy, franchisers, or transnational.

Section 3-3: Describe how information systems help businesses compete using quality and design.

This section provides students with an introduction to the methodology of competing on quality and design. In many instances, this process results in redesigning the organization. Although some of the techniques and methods are considered older or less satisfactory, students have a good chance of seeing these methods in the workplace. It is not a good idea to engage in a lengthy, philosophical discussion of the superiority of methods. However, it is a good idea to help students understand that there is no one best method, that each method is appropriate depending upon the situation and the requirements.

Section 3-4: Explain the role of business process management (BPM) in enhancing competitiveness.

Change certainly should be a theme throughout the entire course. It takes a change agent to manage major changes, such as those brought on by business process management (BPM) and business process reengineering (BPR). Highlight the difference between the two terms: BPM is incremental and ongoing; BPR is a more radical approach to rethinking and redesigning business processes. Business process reengineering is a good example of the problems that information systems can face. First, people react negatively to what they may view as a buzzword. Secondly, business process reengineering implies, probably correctly, that the organization is either not doing things correctly or that the environment has changed, and the old ways will not work anymore. It takes some crises or changes in the environment to induce or engender the call for reengineering.

The Spotlight on Organizations case, Signet Jewelers Sparkles with a Virtual Sales Process, illustrates how a company can benefit from new technology and business processes. Answers to the case study questions for this case can be found on pages 7 to 9 of this Instructor’s Manual.

Video Case: The Video Case, Celonis Tops $11 Billion Valuation with New Round of Funding illustrates how information technology can be used to improve business processes and would be .

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5 appropriate to assign when covering Section 3-4. Celonis provides tools for improving business processes by analyzing and acting on event log data. You might want to explain to students that an event log in this context is a collection of time-stamped event records produced by the execution of a business process. Each event record tells something about the execution of a task of the process. If you have the class time, ask your students to investigate recent horror stories of BPM and BPR projects that went wrong. Have them share their findings with the class and analyze why the projects failed. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 21 to 22 of this Instructor’s Manual.

Section 3-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help secure a position as an entrylevel business development representative. These types of jobs are becoming more popular as information technology becomes more important in the workplace. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on People: Customer Experience Management: A New Strategic Weapon ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What is customer experience management? How can it contribute to competitive advantage?

Customer experience management (CEM) is a strategy that companies use to manage and optimize all interactions between their customers and the company throughout the customer journey. CEM focuses on creating positive, meaningful, and emotional connections with customers to deliver a personalized experience that meets or exceeds their expectations. This includes all aspects of customer interaction, from awareness and discovery to advocacy, purchase, and service.

CEM can contribute to a competitive advantage by creating a strong emotional connection between the customer and the brand. Customers are willing to pay higher prices and remain loyal to companies that provide a great customer experience. By focusing on CEM, companies can differentiate themselves from their competitors, build brand loyalty, and increase customer satisfaction, retention, and advocacy. Moreover, companies that implement successful CEM strategies can achieve increased revenue growth, reduced customer turnover, and improved profitability. .

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6 2. How does information technology support customer experience management? Give some examples.

Information technology (IT) plays a crucial role in supporting customer experience management (CEM) by providing tools and platforms to collect, analyze, and act on customer data. Some examples of how IT supports CEM include: Amazon: Amazon Prime, a paid subscription service that gives users access to services that would otherwise be unavailable or cost extra, such as free two-day delivery, music streaming, and video. Amazon’s shipping times were too long, so Amazon created its own Prime shipping network.

Netflix: Binge viewing has become more popular, causing Netflix to re-examine customer data and the customer experience for this type of viewer. The company found that the old openingcredit format degraded the experience for people watching several episodes of the same show in a row. Netflix allowed some members to use a skip button, and they loved it.

3. How did information technology and customer experience management change operations and decision making at the organizations described in this case?

Information technology and customer experience management have had a significant impact on the operations and decision making of the organizations described in this case.

For example, Mastercard created a new position of Chief Experience Officer (CXO) to manage customer experience, which indicates that the company recognizes the importance of customer experience and has made it a priority. The CXO is responsible for managing the entire customer journey and ensuring that all interactions between the customer and the company are positive.

This role was created because Mastercard understands that customers are looking for more than just a transaction; they want a positive experience with the company. This decision shows how technology can support customer experience management by allowing companies to create new roles that focus on improving the customer experience.

Amazon has also used technology to support customer experience management. For example, Amazon Prime is a paid subscription service that provides users with access to services such as free two-day delivery, music streaming, and video. This service was created to improve the customer experience by offering a more convenient and faster way to shop. Amazon also introduced one-click ordering for Prime customers to simplify the checkout process. These changes show how technology can be used to improve the customer experience by making it easier and more convenient. More decisions such as these on how to run the company now take customer experience into account.

Another change Netflix has made to manage and improve the customer experience was to display a large preview box highlighting coming attractions, which the company repositioned when it learned it was interfering with customers’ ability to access programs.

Overall, information technology has allowed organizations to collect and analyze large quantities of data about their customers, enabling them to better understand their customers and what they want and create a better experience for them. By using technology to improve the customer .

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7 experience, companies have been able to differentiate themselves from their competitors, increase customer satisfaction, and achieve higher revenues.

Spotlight on Organizations: Signet Jewelers Sparkles with a Virtual Sales Process ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Describe Signet’s traditional business strategy and business model. How did they change when the company embraced e-commerce and digital technology?

Signet is a jewelry retailer that operates in the United States, Canada, and the United Kingdom.

The company's traditional business strategy and business model focused on operating physical stores in malls and shopping centers, as well as offering a wide variety of jewelry products across different price points.

Their traditional business strategy was centered around creating a differentiated customer experience through in-store services like custom jewelry design, engraving, and repair. Signet also sought to differentiate itself by offering a variety of well-known and private label brands of jewelry.

When Signet embraced e-commerce and digital technology, the company's business strategy and business model changed significantly. Signet began to focus more on creating an omnichannel customer experience, where customers could browse and buy products both online and in-store.

The company invested in developing a robust e-commerce platform and improved their website's user experience to make it easier for customers to find and purchase products online. Signet introduced virtual consultations in which customers can communicate with a sales consultant via text, voice, or video to ask questions. Potential buyers can use computers and smartphones to book one-hour, virtual appointments with a consultant by visiting the website of a Signet brand such as Zales.

2. Compare the in-store process of buying a diamond ring with Signet’s virtual sales process. Diagram or list the steps in each process.

In Store Customer visits a physical jewelry store Greeted by a salesperson Salesperson pulls out pieces of interest from a display case Customer examines and tries on jewelry The salesperson may educate the customer about selecting a diamond.

Customer might have to wait one or two weeks for the ring to be properly sized or

Virtual Potential buyers can book one-hour, virtual appointments with a consultant

Shoppers can upload a picture to find that product or something similar online Co-browsing technology allows sales or service agents to access a customer’s browser and navigate it in real time. .

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8 perhaps a month or two if the ring has to be custom-made.

Once the ring is ready, the buyer completes payment, The ring can then be picked up in the store or shipped to the buyer’s home.

After making a selection, the customer can complete the purchase online, and the product will be shipped to the customer’s home.

3. What people, organization, and technology issues had to be addressed when Signet designed its virtual sales process?

People Issues: • Training: Sales associates needed to be trained to engage with customers online and use digital sales tools.

• Customer experience: Signet had to ensure that customers received the same level of service and personal attention virtually as they would in a physical store.

• Trust: Customers needed to trust that they would receive high-quality products and secure transactions online.

• Some initial resistance of both sales reps and customers to the new virtual sales process.

Organization Issues: • Logistics: Signet had to carefully manage logistics and distribution to ensure that products were shipped on time and in good condition.

• Organizational processes such as clienteling and endless aisle had to be redesigned for virtual sales • Integration: The virtual sales process had to be integrated into the overall sales process, including inventory management, customer service, and sales reporting.

Technology Issues: • E-commerce platform: Signet needed to build a robust e-commerce platform that could handle high volumes of online sales and provide a seamless user experience.

• Security: Signet had to ensure that its e-commerce platform was secure, and that customer data were protected.

• Digital Tools: Signet had to provide sales associates with digital tools to assist with virtual sales, such as video conferencing, chatbots, and product visualization tools.

4. What are the advantages and disadvantages of selling items such as high-end jewelry virtually?

Advantages: • Reach a wider audience: By selling high-end jewelry virtually, you can reach a global audience, which can potentially increase sales and revenue.

• Lower overhead costs: Virtual sales don't require physical retail space, which can significantly reduce overhead costs such as rent, utilities, and staffing.

• Increased convenience: Virtual sales allow customers to shop from the comfort of their own homes, making it more convenient for them to browse and purchase high-end jewelry. .

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9 •

Customization and personalization: Selling high-end jewelry virtually can allow for more customization and personalization options, such as virtual try-ons or personalized engraving services.

Disadvantages: • Trust issues: High-end jewelry purchases are often a significant investment, and customers may be hesitant to make such purchases online, without seeing the product in person and verifying its authenticity.

• Limited sensory experience: Virtual sales don't allow customers to touch or feel the jewelry, which can be a disadvantage for high-end products that rely on their tactile qualities to sell.

• Technical difficulties: Virtual sales require a reliable Internet connection and technical equipment, which can pose challenges for customers who may not be tech-savvy.

• Returns and Exchanges: virtual sales can complicate the process of returns and exchanges, which can be a hassle for both the customer and the seller.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 3-1 Demonstrate how Porter’s competitive forces model, the value chain model, synergies, core competencies, and network-based strategies help companies use information systems for competitive advantage.

Define Porter’s competitive forces model and explain how it works.

This model provides a general view of the firm, its competitors, and the firm’s environment.

Porter’s model is all about the firm’s general business environment. In this model, five competitive forces shape the fate of the firm: • Traditional competitors • New market entrants • Substitute products and services • Customers • Suppliers List and describe four competitive strategies enabled by information systems that firms can pursue.

The four generic strategies, each of which often is enabled by using information technology and systems include: • Low-cost leadership: Lowest operational costs and the lowest prices.

• Product differentiation: Enable new products and services, or greatly change the customer convenience in using existing products and services.

• Focus on market niche: Enable a specific market focus and serve this narrow target market better than competitors.

• Strengthen customer and supplier relationships: Tighten linkages with suppliers and develop intimacy with customers. .

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10 Describe how information systems can support each of these competitive strategies and give examples.

• • •

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Low-cost leadership: Use information systems to improve inventory management, supply management, and create efficient customer response systems. Example: Walmart.

Product differentiation: Use information systems to create new products and services or ones that are customized and personalized to fit the precise specifications of individual customers.

Examples: Google, Apple, Crayola..

Focus on market niche: Use information systems to produce and analyze data for finely tuned sales and marketing techniques. Analyze customer buying patterns, tastes, and preferences closely in order to efficiently pitch advertising and marketing campaigns to smaller target markets. Examples: Hilton Hotels, Harrah’s.

Strengthen customer and supplier intimacies: Use information systems to facilitate direct access from suppliers to information within the company Example, Toyota and other auto manufacturers.). Increase switching costs and loyalty to the company. Examples: Amazon.com.

Explain why aligning IT with business objectives is essential for strategic use of systems.

The basic principle of IT strategy for a business is to ensure that the technology serves the business and not the other way around. The more successfully a firm can align its IT with its business goals, the more profitable it will be. Businesspeople must take an active role in shaping IT to the enterprise. They cannot ignore IT issues. They cannot tolerate failure in the IT area as just a nuisance to work around. They must understand what IT can do, how it works, and measure its impact on revenues and profits.

Define and describe the value chain model.

The value chain model highlights specific activities in the business where competitive strategies can best be applied and where information systems will most likely have a strategic impact. The model identifies specific, critical leverage points where a firm can use information technology most effectively to enhance its competitive position. The value chain model views the firm as a series of basic activities that add a margin of value to a firm’s products or services. The activities are categorized as either primary or support activities. Primary activities are most directly related to production and distribution of the firm’s products and services, which create value for the customer. Support activities make the delivery of primary activities possible and consist of organization infrastructure. A firm’s value chain can be linked to the value chains of its suppliers, distributors, and customers.

Explain how the value chain model can be used to identify opportunities for information systems.

Information systems can be used at each stage of the value chain to improve operational efficiency, lower costs, improve profit margins, and forge a closer relationship with customers and suppliers. Organizations can use information systems to help examine how value-adding .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

11 activities are performed at each stage of the value chain. Information systems can improve the relationship with customers (customer relationship management systems) and with suppliers (supply chain management systems) who may be outside the value chain but belong to an extended value chain. Information systems can help businesses track benchmarks in the organization and identify best practices of their particular industries. After analyzing various stages in the value chain, an organization can devise a list of candidate applications for information systems.

Define the value web and show how it is related to the value chain.

A value web is a collection of independent firms that use information technology to coordinate their value chains to collectively produce a product or service. It is more customer driven and operates in a less linear fashion than the traditional value chain. The value web is a networked system that can synchronize the business processes of customers, suppliers, and trading partners among different companies in an industry or in related industries.

Describe how the Internet has changed competitive forces and competitive advantage.

The Internet increases the accessibility, storage, and distribution of information and knowledge for organizations; nearly any information can be available anywhere at any time. It lowers the cost and raises the quality of information and knowledge distribution. That is, it lowers transaction costs and information acquisition costs.

The Internet has nearly destroyed some industries and severely threatened others. The Internet has also created entirely new markets and formed the basis of thousands of new businesses. The Internet has enabled new products and services, new business models, and new industries to rapidly develop.

Because of the Internet, competitive rivalry has become much more intense. Internet technology is based on universal standards that any company can use, making it easy for rivals to compete on price alone and for new competitors to enter the market. Because information is available to everyone, the Internet raises the bargaining power of customers, who can quickly find the lowest-cost provider on the web.

Explain how information systems promote synergies and core competencies that enhance competitive advantage.

A large corporation is typically a collection of businesses that are organized as a collection of strategic business units. Information systems can improve the overall performance of these business units by promoting synergies and core competencies.

The concept of synergy is that when the output of some units can be used as inputs to other units, or two organizations can pool markets and expertise, these relationships lower costs and generate profits. In applying synergy to situations, information systems are used to tie together the operations of disparate business units so that they can act as a whole.

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12 A core competency is an activity for which a firm is a world-class leader. In general, a core competency relies on knowledge that is gained over many years of experience and a first-class research organization or simply key people who stay abreast of new external knowledge. Any information system that encourages the sharing of knowledge across business units enhances competency.

Explain how businesses benefit by using network economics.

In a network, the marginal costs of adding another participant are almost zero, whereas the marginal gain is much larger. The larger the number of participants in a network, the greater the value to all participants, because each user can interact with more people.

The availability of the Internet and networking technology has inspired strategies that take advantage of the abilities of the firm to create networks or network with each other. In a network economy, information systems facilitate business models based on large networks of users or subscribers that take advantage of network economies. Internet sites can be used by firms to build communities of users that can result in greater customer loyalty and enjoyment, and build unique ties to customers, suppliers, and business partners.

Define and describe a virtual company and the benefits of pursuing a virtual company strategy.

A virtual company uses networks to link people, assets, and ideas, enabling it to ally with other companies to create and distribute products and services without being limited by traditional organizational boundaries or physical locations. One company can use the capabilities of another company without being physically tied to that company. The virtual company model is useful when a company finds it cheaper to acquire products, services, or capabilities from an external vendor or when it needs to move quickly to exploit new market opportunities and lacks the time and resources to respond on its own.

Define and describe a business ecosystem and how it can provide competitive advantage.

Instead of participating in a single industry, some of today’s firms participate in industry sets— collections of industries that provide related services and products that deliver value to the customer. Business ecosystem is another term for these loosely coupled but interdependent networks of suppliers, distributors, outsourcing firms, transportation service firms, and technology manufacturers. Information technology plays an important role in enabling a dense network of interactions among the participating firms. Business ecosystems typically have one or a few keystone firms that dominate the ecosystem and create the platforms used by other niche firms.

Explain how disruptive technologies create strategic opportunities.

A disruptive technology and its resulting business innovation radically changes the business landscape and environment. In some cases, disruptive technologies are substitute products that

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13 perform as well as or better than anything currently produced. The automobile substituted for the horse-drawn carriage, the Apple iPod for portable CD players. players, digital photography for process film photograph. In these cases, entire industries are put out of business or significantly challenged. In other cases, disruptive technologies simply extend the market, usually with less functionality and much less cost than existing products. Eventually they turn into low-cost competitors for whatever was sold before. Disk drives are an example: Disruptive technologies caused by technological changes can have different effects on different companies depending on how they handle the changes. Some companies create the disruptions and succeed very well. Other companies learn about the disruption and successfully adopt it.

Other companies are obliterated by the changes because they are very efficient at doing what no longer needs to be done. Some disruptions mostly benefit the firm. Other disruptions mostly benefit consumers.

3-2 Describe how information systems help businesses compete globally.

Describe how globalization has increased opportunities for businesses.

Information systems and the Internet help companies operate internationally by facilitating coordination of geographically dispersed units of the company and communication with faraway customers and suppliers. Businesses today want to be competitive in the world economy because it opens up new markets, provides avenues to new suppliers, and decreases (in some cases) the costs of doing business. Firms that can sell their products on a global scale can reach a much larger marketplace; firms that can produce goods and services on a global scale can also achieve extraordinary cost reductions, permitting them to reduce costs or at least keep the costs down. Firms that cannot compete on this global scale are disadvantaged.

List and describe the four main ways of organizing a business internationally and the types of systems configuration for global business organizations.

There are four main ways of organizing a business internationally: •

• • •

Domestic exporter: heavy centralization of corporate activities in a home country.

Production, sales, marketing, finance, and other such functions are set up to optimize resources in the home country. Foreign marketing is totally reliant on the domestic home base.

Multinational: concentrates financial management and control in a central home base, but decentralizes production, sales, and marketing to suit local market conditions.

Franchiser: create, design, and finance the product in the home country, but rely on foreign operations for further production, marketing, and human resources. Often, the product must be produced locally because it is perishable.

Transnational: a stateless, truly globally managed firm. It has no single national headquarters, but instead has many regional headquarters and perhaps a world headquarters.

Nearly all of the value-added activities are managed from a global perspective without

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14 reference to national borders.

There are four different system configurations: • • • •

Centralized: systems development and operations occur totally at the domestic home base.

Duplicated: systems development occurs totally at the home base, but operations are handed over to autonomous units in foreign locations.

Decentralized: each foreign unit designs its own, totally unique solutions and systems.

Networked: systems development and operations occur in an integrated and coordinated fashion across all units.

3-3 Describe how information systems help businesses compete using quality and design.

Define quality and compare the producer and consumer definitions of quality.

Quality is a form of differentiation. It can be defined from both producer and customer perspectives.

• •

Producer definition of quality: Signifies conformance to specifications or the absence of variation from those specifications.

Customer definition of quality: First, customers are concerned with the quality of the physical product, which means its durability, safety, ease of use, and installation. Second, customers are concerned with the quality of service, by which they mean the accuracy and truthfulness of advertising, responsiveness to warranties, and ongoing product support.

Finally, customer concepts of quality include psychological aspects: the company’s knowledge of its products, the courtesy and sensitivity of the sales and support staff, and the reputation of the product.

Describe the various ways in which information systems can improve quality.

Information systems can enhance quality by: • • • •

•

Simplifying a product or service and the production process. The fewer steps in a process, the less time and opportunity for an error to occur.

Facilitating benchmarking. To set strict standards for products, services, and other activities, and then measure performance against those standards.

Using customer demands to improve products and services. By improving customer service and making it the number one priority, the quality of the product itself will improve.

Reducing product development cycle time. Shorter cycle times mean that problems are caught earlier in the process, often before the production of a defective product is completed, saving some of the hidden costs of producing it. Employees are less likely to make mistakes with shorter cycle times.

Improving design quality and precision. Computer-aided design (CAD) software has been a major contributor to quality improvements in many companies. CAD systems automate the creation and revision of designs, using computers and sophisticated graphics software. .

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15 •

Improving production precision and tightening production tolerances. Quality can be enhanced by making the production process more precise, thereby decreasing the amount of variation from one part to another.

3-4 Explain the role of business process management (BPM) in enhancing competitiveness.

Define BPM and explain how it helps firms become more competitive.

Business process management (BPM) aims to continuously improve business processes using a variety of tools and methodologies to understand existing processes, design new processes, and optimize those processes. BPM is never concluded because continuous improvement requires continual change. Organizations often have to change their business processes in order to execute their business strategies successfully. If these business processes use technology, they can be redesigned to make the technology more effective.

Distinguish between business process management (BPM) and business process reengineering (BPR).

Business process management (BPM) is generally incremental and ongoing. Business process reengineering (BPR) is a more radical approach to rethinking and redesigning business processes. Both of them pose many managerial challenges. BPR is defined as the radical redesign of business processes, combining steps to cut waste and eliminating repetitive, paperintensive tasks to improve cost, quality, and service and to maximize the benefits of information technology.

BPR combines and streamlines the steps in a business process to eliminate repetitive and redundant work and to achieve dramatic improvements in quality, service, and speed. BPR is most effective when it is used to strengthen a good business model and when it strengthens processes that have a major impact on firm performance.

Executives report that the largest single barrier to successful business process change is organizational culture. Employees do not like unfamiliar routines, and often try to resist change.

This is especially true of business process reengineering projects because the organization changes are so far-reaching.

List and describe the steps companies should take to make sure BPM is successful.

Steps companies can take to make sure BPM is successful include: 1. Identify processes for change: organizations need to understand what business processes need improvement. Managers need to determine what business processes are the most important and how improving these processes will help business performance.

2. Analyze existing processes: existing business processes should be modeled and documented, noting inputs, outputs, resources, and the sequence of activities. The process design team identifies redundant steps, paper-intensive tasks, bottlenecks, and other .

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16 inefficiencies.

3. Design the new process: the process design team will try to improve the process by designing a new one. A new streamlined “to-be” process will be documented and modeled for comparison with the old process. The new process design needs to be justified by showing how much it reduced time and cost or enhanced customer service and value.

4. Implement the new process: The new process must be translated into a new set of procedures and work rules. New information systems or enhancements to existing systems may have to be implemented to support the redesigned process. The new process and supporting systems are rolled out into the business organization.

5. Continuous measurement: The new process must be continually measured because some process may deteriorate over time as employees fall back on old methods, or they may lose their effectiveness if the business experiences other changes.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 3-5 It has been said that there is no such thing as a sustainable competitive advantage. Do you agree? Why or why not?

Student answers to this question will vary. One possibility is that in many instances a competitive product or service can be replicated so that it is no longer unique and possibly that competitor products are superior. Competitive advantage has traditionally been very hard to sustain over a long period of time.

3-6 What are some of the issues to consider in determining whether the Internet would provide your business with a competitive advantage?

There are several issues to consider in determining whether the Internet would provide your business with a competitive advantage, including: Market demand: You need to assess whether there is sufficient market demand for your products or services online. If there is high demand, then having an online presence can help you tap into a wider audience.

Competition: You need to consider the competition in your industry and how established they are in the online space. If your competitors are already well-established online, it may be difficult for you to gain a competitive advantage.

Costs: You need to consider the costs associated with establishing an online presence. These can include website design and development costs, social media presence, online advertising costs, and ongoing maintenance costs. If the costs are too high, it may not be feasible to establish an online presence. .

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17 Technology: You need to assess whether your business has the technological infrastructure to support an online presence. This includes website design and development, e-commerce capabilities, and data security.

Customer behavior: You need to assess whether your target audience is comfortable with purchasing products or services online. If they prefer to make purchases in person, then an online presence may not provide a competitive advantage.

Legal and regulatory considerations: You need to consider any legal and regulatory requirements that apply to your industry, such as data privacy laws and regulations around online transactions.

3-7 It has been said that the advantage that leading-edge retailers such as Walmart have over competitors isn’t technology – it’s their management. Do you agree? Why or why not?

Student answers to this question will vary. However, it can be said that Walmart’s outstanding systems are the result of management decisions and a strong sense of how to streamline and improve business processes, identify the best opportunities for applying technology, and understand how this can provide the company with a competitive advantage. It’s not the technology itself, it’s the understanding of how to use it competitively.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and solution files are included in Instructor Resources.

3-8 Management Decision Problem: Entrust Corporation AACSB: Analytical thinking, Reflective thinking, Application of knowledge; Integration of real-world business experiences This Management Decision Problem asks students to assess the impact of its previous process on Entrust’s business performance, and suggest some people, organization, and technology issues that would need to be addressed by a solution. The manual process of distributing pricing for Entrust’s products had a negative impact on the company’s business performance. It was time-consuming and error-prone, which led to delays in pricing updates and reduced the efficiency of the company’s sales process and increased costs. In addition, the process was dependent on human input, which increased the risk of errors and inconsistencies in the data.

To address this issue, Entrust could implement a technology-based solution such as a web portal or an API (Application Programming Interface) that would allow partners to access pricing data in real-time. This would eliminate the need for manual input and reduce the risk of errors. In addition, the web portal or API could be integrated with partners’ systems, making the process of updating pricing information faster and more efficient. .

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18 However, implementing a technology-based solution would require addressing some people, organization, and technology issues. For example, the company would need to train its employees and customers in how to use the new system and ensure that it is user-friendly. It would also need to ensure that the system is secure, and that partners’ data are protected.

Furthermore, the company would need to consider the impact of the new system on its existing business processes and those of its customers and make necessary adjustments to ensure that the new system integrates smoothly with existing processes.

3-9 Improving Decision Making: Solution Using a Database to Analyze Sales Performance (AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Database querying and reporting; database design.

Business skills: Sales trend analysis This Hands-on Software Project helps students understand how they can use database software to produce valuable information from raw data and that some of that data can produce information that will help managers with strategic decision making. The solutions provided here were created using the query wizard and report wizard capabilities of Microsoft Access and sales transaction data from EMIS15Chap3 Question File, which can be found in MyLab. Students can, of course, create more sophisticated reports if they wish, but useful information can be obtained from simple query and reporting functions. The main challenge is to get students to ask the right questions about the information such as.

• Which Sales Regions have the highest and lowest number of product sales?

• Which products are selling well and selling poorly in the East Sales Region?

• Based on the numbers for the East Sales Region, which products should be tracked to determine whether they should be promoted or eliminated from inventory?

The answers to these questions can be found in the Microsoft Access file named EMIS15Chap3 Solution File, which can be found in Instructor Resources.

3-10 Improving Decision Making Solution: Using Web Tools to Configure and Price an Automobile AACSB: Written and oral communication; Analytical thinking; Application of knowledge Software skills: Internet-based software Business skills: Researching product information and pricing This Internet Project asks students to use web tools to configure and price an automobile.

Answers will vary a great deal, and with the option of choosing a car other than the Ford Escape, each student will more than likely turn in a different report. You might suggest that the students use an Excel spreadsheet to compare the auto information from each of the websites.

This will allow them to see line-by-line, the differences and similarities between the prices, safety ratings, features, etc. Also, have the students write a brief summary of the reviews they read concerning the car and, in their final report, identify which decision they made, referring .

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19 back to the reviews. The final report should also include a review of the websites with suggestions for improvement.

3-11 Collaboration and Teamwork Project: Identifying Opportunities for Strategic Information Systems AACSB: Written and oral communication; Analytical thinking; Application of knowledge This Collaboration and Teamwork Project asks students to work as a team to analyze a business.

Answers will vary and will depend on the company the team has chosen to analyze but should include includes a description of the organization’s features, such as important business processes, culture, structure, and environment, as well as its business strategy, as well as suggesting strategic information systems appropriate for that particular business, including those based on Internet technology, if appropriate. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem-Solving Case: Shipping Wars AACSB: Written and oral communication; Analytical thinking, Reflective thinking, Application of knowledge Case Study Questions: Answers 3-12 Why is shipping so important for e-commerce? Explain your answer.

Convenient and seamless online ordering and shipping processes, along with free or low-cost delivery or two-day delivery, are a source of competitive advantage for online merchants over traditional brick-and-mortar retailers. Especially important in logistics is the “last mile,” which refers to the last step in a delivery that takes the package to the customer’s doorstep.

3-13 Compare the shipping strategies of Amazon, FedEx, UPS, and the USPS. How are they related to each company’s business model?

Amazon: Instead of using the USPS, FedEx, or UPS for the last mile, Amazon has been building its own network of warehouses, trucks, airlines, and delivery vans. Amazon eventually wants to perform 80 to 90 percent of last-mile deliveries but will use the other delivery services for the hardest-to-reach places. Amazon wants to upstage these shippers but not replace them entirely. It especially wants more control over logistics. Amazon saves $2 to $4 per package, amounting to $2 billion annually, when it uses its own fleet. Its shipping system enables it to continue providing a high level of customer service with lower costs.

UPS: UPS invests heavily in IT and offers an array of technology- based shipping and logistics services for large and small businesses, some of which are described in the Chapter 1 Spotlight on Technology case. It, too, has powerful Big Data analytics tools to capture and analyze customer, operational, and planning data to track the real-time status of every package as it moves across the company’s shipping network, feeding other systems for better planning and .

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20 management of the network. Leading-edge technology investments help UPS compete effectively against FedEx and the USPS, and UPS does some shipping and packaging work for Amazon, but it is generally more expensive to ship via UPS than via Amazon.

FedEx: In addition to consolidating delivery locations, FedEx is hoping to attract more commercial shipping customers by offering logistics management services that many companies can’t develop on their own. These services make better use of the Big Data that FedEx collects on shipments and customers to provide customers with more real-time information that will improve how FedEx moves goods. In June 2019 FedEx and Dollar General announced a strategic alliance to offer new, convenient access to FedEx drop-off and pickup services at thousands of Dollar General stores. The effort is designed to increase access to FedEx for all customers, particularly those living in rural communities where Dollar General has a large footprint.

USPS: the USPS was designed primarily for delivering paper letters by human carriers who walk door-to-door, and it has more of a public service orientation than the private carriers. There are more than 35,000 different Post Office locations, each of which has to be staffed to transact with individual customers buying stamps, sending letters, and sending packages, each of which must be measured for shape and size. Thanks to email and the Internet, there are fewer letters to deliver, so the USPS cannot recover the cost of the mail delivery person who drops off mail to your house each day. Even though the USPS’s shipping and packages revenue has been increasing, the USPS continues to operate at a loss ($4.9 billion in fiscal year 2021) 3-14 Will FedEx succeed in its push into ground shipping? Will Amazon become a major logistics service supplier? Why or why not?

Answers may vary.

Fed Ex’s partnership with Dollar General increases the success of their shipping. FedEx and Dollar General began rolling out the service in more than 1,500 Dollar General stores in late summer 2019. That move put more than 90 percent of Americans within 5 miles of a FedEx-hold retail location. Customers will be able to drop off pre-packaged and pre-labeled FedEx Express or FedEx Ground shipments at Dollar General stores and pick up packages sent to their neighborhood Dollar General stores. FedEx has similar arrangements with Walgreens, Target, and other retail chains. Using convenient drop-off points reduces the number of expensive, doorto-door deliveries FedEx has to make.

FedEx has 50 years of delivery experience, and UPS has been in the delivery business for more than a century. Although Amazon has been in business for a much shorter time period, it has much greater resources to leverage for fulfillment and delivery services. Extremely profitable sectors and subsidiaries (like Amazon Web Services, which is responsible for the majority of Amazon’s operating income), enable Amazon to outspend or undercut competitors. UPS and Amazon provide more of a seamless experience for customers, and they are also price competitive.

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Video Case: Celonis Tops $11 Billion Valuation with New Round of Funding AACSB: Written and oral communication; Analytical thinking, Reflective thinking, Application of knowledge) Video Case Multiple Choice Question: Answers 1) Which of the following is true?

A) Celonis is not able to work on top of existing systems.

B) Process mining is only used in a few industries.

C) Execution management shows what actions can fix problems.

D) Celonis cannot work with ERP or CRM systems.

Answer: C 2) Which of the following best describes how Kraft Heinz used Celonis?

A) To improve the integration between its ERP and CRM systems B) To identify inefficiencies in its customer payment processes c) To reduce duplicate payments to suppliers D) To identify early supplier deliveries Answer: B 3) Celonis process mining: A) identifies only the most important steps in a business process.

B) identifies process inefficiencies and bottlenecks.

C) can only deal with processes that are based on business functions.

D) can only focus on one process at a time.

Answer: B Video Case Essay Questions: Answers 1. What major business objectives could Celonis help organizations pursue?

Answer: Major business objectives that Celonis could help organizations pursue include: • Operational excellence: Identify and streamline inefficient business processes; reduce costs of identifying inefficiencies and bottlenecks and improving processes. For example,Celonis helped Deutsche Telekom identify and eliminate execution gaps and inefficiencies in their Procure-to-Pay process that produced duplicate payments and cash discount losses.

• Better decision making: Improve information and business processes for better decision making. For example, Celonis helped Kraft Heinz analyze Accounts Receivable (A/R) activity and improve and make better decisions about cash discounts to customers.

• Find undiscovered sources of value in existing business processes.

• Eliminate or redesign processes and inefficiencies that were harming the environment.

2. Should a business use Celonis tools? What people, organizational, and technology factors should be addressed when making this decision? What kinds of businesses are most likely to benefit from using Celonis tools? .

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22 Answer: Celonis is better suited for large and medium-sized businesses rather than small momand-pop operations that have a handful of employees and business processes involving fewer steps and organizational actors than large organizations. The decision to use Celonis tools should examine the following factors: •

People: Would the system be easy for employees to use or require extensive training? Which business functions and employees should be involved in the decision to implement Celonis?

Would employees be resistant to changing business processes or cling to the old way of doing things?

•

Organization: Would the costs of acquiring and implementing Celonis software outweigh the benefits?

How much business process change does the organization expect to accomplish using Celonis? Would the software be able to identify the business processes of most concern to management? How much would Celonis change the way employees perform their jobs and workflows/

•

•

Technology: Does the organization have the technology expertise and financial resources to implement Celonis tools? In addition to Celonis software, are hardware and networking upgrades required? Are Celonis tools compatible with the organization’s IT infrastructure?

Dirt Bike Running Case: Analyzing Competitive Strategy AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer. The Dirt Bikes question and data files can be found in MyLab MIS and the solution files can be found in Instructor Resources.

Software skills: Web browser software and presentation software Business skills: Value chain and competitive forces analysis, business strategy formulation This project provides an opportunity for you to develop the competitive strategy for a real-world business. You’ll use the web to identify Dirt Bikes’s competitors and the competitive forces in its industry. You’ll use value chain analysis to determine what kinds of information systems will provide the company with a competitive advantage. .

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23 Dirt Bikes’s management wants to be sure it is pursuing the right competitive strategy.You have been asked to perform a competitive analysis of the company using the web to find the information you need. Prepare a report that analyzes Dirt Bikes using the value chain and competitive forces models. You report should include the following: 1. What activities at Dirt Bikes create the most value?

The most valuable activities include inbound activities (primarily supply chain management but also including locating appropriate, high quality parts anywhere in the world)), manufacturing (which is mostly assembling the proper materials that come from elsewhere, but also include the testing of each product as it comes off the assembly line), marketing (including some advertising, its racing commitment and accompanying publicity, coverage in appropriate journals, and an attractive and helpful website), sales (both ordering systems and systems support for its dealers), and service (again, support for its dealers, plus availability of parts and service information for owners who are too far away from dealers).

2, How does Dirt Bikes provide value to its customers?

The value Dirt Bikes’ customers receive comes from the quality of the bikes, their off-road and racing performance, effective and valuable user groups, and available servicing when needed.

3. What other companies are Dirt Bikes’ major competitors? How do their products compare in price to those of Dirt Bikes? What are some of the product features they emphasize?

Dirt Bikes models and prices are: The Enduro 250 retails for $6250, the Enduro 550 retails for $8800, the Moto 300 retails for $7295 and the Moto 450 retails for $9395. Dirt Bikes has appealed primarily to serious trail and Enduro riders, although it is making inroads into the motocross market. Major Dirt Bikes competitors include Honda, Husqvarna, Kawasaki. Suzuki, KTM, Bultaco, and Yamaha. Students should check the web for these companies’ most recent dirt bike models and prices and see how well Dirt Bikes can compete with these companies in terms of price, performance, and styling. Dirt Bikes needs to continue emphasizing its American brand name, styling, and quality. Can it also compete on price?

4. What are the competitive forces that can affect the industry?

The industry could be affected by changing economic conditions and demographics, which could depress the market for dirt bikes and put more emphasis on competing on the basis of cost.

Young populations in Japan, USA, and Europe who make up most of the customers for dirt bikes are declining (although many baby-boomers and retirees are flocking to Harley Davidson and other brands for highway cruising.) The market for dirt bikes worldwide is not very big and there are already many competitors, so Dirt Bikes is not likely to see competition from new entrants into the market. The ability to use the Internet to search worldwide for suppliers could help Dirt Bikes keep its supplier costs in line.

5. What competitive strategy should Dirt Bikes pursue? .

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24 Students will differ in their answers to this question. Like all motorcycle manufacturers, Dirt Bikes will try to keep its costs down, but it clearly is not a low-cost producer. It is, however, a company that emphasizes the uniqueness and quality of its product. Through better marketing, contact with customers and use of web and demographic data, it could also do more by focusing on market niche.

6. What information systems best support that strategy?

If students believe Dirt Bikes could benefit from a strategy emphasizing product differentiation and finely tuned marketing to target dirt bikes enthusiasts, then computer-aided design systems, systems for promoting quality, customer relationship management systems, and other systems for marketing and customer service would be appropriate.

(Optional) Use presentation software to summarize your findings for management.

Student presentations will vary.

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Essentials of Management Information Systems, 15e Chapter 4 Ethical and Social Issues in Information Systems Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

• • •

Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answer descriptions Hands-on MIS Projects o Management Decision Problem: Solution o Hands-on Software Projects: Solution descriptions (solution files available in Instructor Resources) o Internet Project: Solution description o Collaboration and Teamwork Project: Solution description Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter introduces the major ethical, social, and political issues raised by information systems and describes principles for conduct that can be used to guide ethical decision making. It explains how contemporary information system technologies and the Internet pose challenges to .

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2 the protection of individual privacy and intellectual property, and then discusses the issues such systems raise with respect to system quality, accountability and control, and the quality of everyday life. It concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

This is an interesting, stimulating chapter that provides an opportunity to engage in dynamic discussions. Students will have a variety of opinions about the issues presented in this chapter.

You may want to open the discussion by asking if any students have had first-hand experiences with personal data compromises. You may also ask students how they defend themselves against misuse of information systems and data and how they feel about threats to their privacy in the online environment.

Opening Case: Apps That Track: A Double-Edged Sword The opening case illustrates how technology can be a source of new business opportunities and consumer benefits while at the same time creating ethical challenges, in this case regarding privacy issues. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • Does analyzing location data create an ethical dilemma? Why or why not?

• Should there be new privacy laws to protect personal data collected from mobile device users? Why or why not?

The case also provides a good starting place for a discussion of the trade-offs between the positive and negative impacts of technology, as well as how to analyze an ethical dilemma involving information systems.

Section 4-1: Identify the ethical, social, and political issues raised by information systems.

Many people do not focus on technology-related ethical and social issues until an incident occurs that may affect them personally, such as having their personal data exposed in a data breach.

Throughout this chapter it is imperative that you help students see both the positive and negative sides of technology. It’s important for students to understand that almost every technological improvement opens the door to potential misuse and abuse. You also should help students to understand that they themselves, both as an individual and a member of an organization, need to be aware of ethical challenges. Table 4.1 (page 120) illustrates some recent failures in ethical business judgement that have resulted in sanctions of both organizations and their employees.

You can ask students to come up with some additional recent examples.

Figure Video 4.1: This is an appropriate time for the class to review and discuss Figure 4.1, which illustrates the relationship among ethical, social, and political issues in today’s information society, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Ask your students to use Figure 4.1 to identify what they feel would be the five moral dimensions of information systems as they relate to their school. Stress to them that the main challenges posed by the ethical and social impact and the accompanying Video of information systems are the need to understand the moral risk of new technology and the .

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3 difficulty of establishing ethics policies that address information systems’ issues. For each of the five moral dimensions of information systems, businesses should develop an ethics policy statement to guide individuals and to encourage appropriate decision making. The policy areas are: (1) information rights and obligations, (2) property rights and obligations, (3) system quality, (4) quality of life, and (5) accountability and control.

Table 4.2 discusses technology trends that have helped create some of the ethical issues our society is now facing. You can ask students to choose one of the trends and provide some specific examples of the ethical issues that it raises.

Section 4-2: Describe principles for conduct that can be used to guide ethical decisions.

This section discusses the basic concepts of responsibility, accountability, liability, and due process as they apply to information systems’ issues. It’s easy to blame problems on a information system but you should remind students that, ultimately, behind every information system is a human being. People have the responsibility to make wise decisions about how information systems are used and how data are protected against abuse and misuse. Using the five-step process outlined in the subsection “Ethical Analysis” leads the way to abiding by ethical principles. You should also mention the role of professional codes of conduct as a way society has attempted to enforce ethical behavior.

Section 4-3: Explain how contemporary information systems technologies and the Internet pose challenges to the protection of individual privacy and intellectual property.

This section is designed to illustrate the challenges that information technologies, including the Internet, create in terms of the protection of individual privacy and intellectual property, and the role that individuals and organizations have in the protection of those rights.

Regardless of how many laws governments pass, they are only as effective if people abide by them. Compare the privacy practices of U.S. companies vs. the privacy policies practiced in European Union countries, which are governed by the EU’s GDPR. Have students give examples of how U.S. companies would have to change their business processes to accommodate EU rules.

Because most students probably have an Instagram account, it’s a good way to discuss the impact of a company’s privacy policies. Ask students if they are aware of Instagram’s privacy policy. Have they even read it? If not, why not? Are they concerned about the massive amount of data Meta (Instagram and Facebook’s parent company) collects on them and that it uses their information to sell advertising, enriching the company but not the individual? Ask students to research Instagram’s privacy policies and give their opinion.

Many students may have an Amazon Alexa at their home that listens for voice activation and is synced up to an Amazon account. Students may recognize the impact of a personal technology device in the home as young children have ordered candy and toys without their parents’ knowledge.

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4 It’s important for students to understand that intellectual property rights extend to most of the content they’ll find on the Internet. Ask students how they would feel if they spent hours and hours creating content only to find out that someone else had swiped it and used it without permission or remuneration.

Video Case: The Chapter 4 Video and Video Case, Australia Passes Law Forcing Tech Giants to Pay for News, discuss Australia’s 2021 landmark law requiring Facebook and Google to pay news media to use their content in their search results and news feeds. It would be appropriate to assign when covering the topics of intellectual property in Section 4-3 and/or Big Tech in Section 4-4. You might ask students whether Facebook, Google, and other websites should be allowed to link to other online content sources without paying. The topic of the video case remains much in the news, in June 2023, Canada enacted a similar law and with both Google and Meta saying it will remove news content as a result. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on Answers to the video case study questions can be found on pages 18 to 20 of this Instructor’s Manual.

Section 4-4: Discuss the issues that contemporary information systems raise with respect to system quality, accountability and control, and the quality of everyday life.

When discussing system quality and accountability and control, ask students if they have firsthand experience with data errors. Examples might include credit bureau errors, checking account errors, or incorrect information recorded in their student records. If so, ask them to explain the kinds of problems they experienced because of the errors. Then ask them to explain who they think should be responsible for detecting and correcting the errors. The remainder of this section reviews a variety of issues that may impact the quality of everyday life. You can ask students if they have any personal experience with any of the issues mentioned.

The Spotlight on Organizations case, Section 230: Should the Law that “Created” Today’s Internet Be Repealed or Revised?, examines the complex question of whether a website or social network such as Facebook or Twitter be held liable and accountable for the content a user posts, when that content contains false, offensive, or potentially harmful material, or should it be held harmless from any liability with respect to that content?

The Spotlight on Technology case: Immersed in the Metaverse: What Will It Mean for the Future?, explores the new physical and mental health risks that the metaverse may pose.

Answers to the case study questions for both of these cases can be found on pages 5 to 6 of this Instructor’s Manual.

Section 4-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as a junior privacy analyst that helps ensure compliance with relevant European and US federal and state privacy laws. These types of jobs are becoming more commonplace as technology-related .

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5 privacy issues create increasing concerns. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Organizations: Section 230: Should the Law that “Created” Today’s Internet be Repealed or Revised?

ACCSB: Written and oral communication; ethical understanding and reasoning; Analytical thinking, Application of knowledge; Reflective thinking Case Study Questions: Answers 1. What are the ethical, social, and political issues that Internet platforms face with respect to user content?

In the years that followed the passage of Section 230, courts interpreted it as creating broad immunity with respect to any claims based on user content, even if the platform knew the content was unlawful. Doing so enabled business models based on user content, such as social media, to flourish. The technology companies want Section 230 to remain as it has always been, with some companies viewing any kind of reform effort as an existential threat to the Internet.

In the current, heightened political climate, Section 230 has been attacked from both sides. Many Republicans have called for its repeal or reform because they believe that Big Tech companies are biased against conservative viewpoints and that, enabled by Section 230(c)(2), they act to censor certain voices. Many Democrats also want reform, but for a different reason.

They contend that Section 230(c) (1), by granting Internet platforms legal immunity with respect to user content, reduces their incentive to proactively remove content that causes social harm, especially when that content can be economically valuable to them.

Ethical concerns around Internet moderation include the difficulty of deciding who defines “good” or “bad.” The moderating authority and responsibility is unclear. Still others warn that any Section 230 reform itself may have unintended and harmful side effects, pointing to a previous amendment aimed at fighting online sex trafficking that reportedly actually made prosecuting such crimes more difficult. The Internet Society warns that Section 230 impacts not just platforms such as Facebook and Google but also underlying infrastructure providers, such as cloud providers, that move content and data from one place to another.

2. Do you think Section 230 should be repealed or amended? Why or why not?

Student answers will vary but should be supported by data and logical arguments. This topic in a classroom could bring political views into the conversation, so be prepared to focus on the issue.

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6 3. In what ways does the controversy over Section 230 illustrate the difficulties of creating laws governing the use of new digital technologies?

Student answers will vary. Agreement is difficult with many people, stakeholders, and power brokers with varied interests involved in the conversation about the future. With the future unclear, governing new technologies before they are understood could limit or expand business growth depending on the technology. Given the polarized views about Section 230 (according to Pew Research, 56 percent of US adults say people should not be able to sue social media companies for content that users post on their platforms, while 46 percent say people should be able to do so), it’s unclear if enough bipartisan support can be developed to either repeal or amend Section 230 anytime soon. However, if and when that time comes, just as the initial passage of Section 230 helped create the Internet of today, its repeal or amendment will shape the Internet of the future.

Spotlight on Technology: Immersed in the Metaverse: What Will it Mean for the Future?

ACCSB: Written and oral communication; ethical understanding and reasoning; Analytical Thinking, Application of knowledge; Reflective thinking Case Study Questions: Answers 1. What are some of the issues that the metaverse poses for quality of life??

Some of the simplest risks to describe are the physical ones. Meta’s current health and safety warnings for its Oculus VR system provide a long list of potential physical risks, ranging from seizures to dizziness, nausea, vomiting, and visual issues.

Psychological impacts are potentially more complex. Immersion is a more potent experience than merely observing and interacting with 2-D content through a flat screen. It is possible that, similar to the impact of compulsive social media use, participating in an intensely immersive world will make some people prefer it to “real” life and replace behaviors that are healthy and supportive to mental health, such as appropriate exercise, engagement in real-life relationships, healthy sleep, and time spent outside.

Exposure to harmful content on these platforms is another issue such as graphic sexual content, racist and violent language, bullying, and other forms of harassment on various games.

2. What ethical dilemmas do companies who want to create the metaverse face?

Student answers may vary. The potential impact of the metaverse on privacy and government surveillance is another concern. The privacy issues are particularly acute because metaverse companies may track and retain user biometric data, as well as data about their actual actions, and ultimately may be able to learn how users uniquely think and act. Tellingly, while Meta has stopped using facial recognition technologies on its Facebook platform, it continues to do so on its Oculus VR platform.

Companies must decide between profits and privacy in some cases. They must also grapple with the potential harm versus benefits to customers and weigh the value and risk. Meta’s current business model is built on trying to engage user attention for as long as possible, making it more likely than not that its version of the metaverse will also evolve into something that focuses on .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 hooking both kids’ and adults’ attention. Critics don’t trust Meta to create a metaverse that protects people if that protection conflicts with its business goals of maximizing profit, especially as it grapples with declining use of its Facebook platform.

3. Do you think industry self-regulation will be an effective method for safeguarding the metaverse? Why or why not?

Student answers may vary. This question should generate lively discussion. Consider some guiding questions: • Studies indicate that there is the potential for harm. Do we know enough yet to devise helpful regulations?

• Who would be responsible for applying regulation?

• How would regulation be enforceable?

What would a technological solution look like?

• What would a social-cultural solution look like?

• What would a legal solution look like?

• Would the solution need to be developed as a combination of the above?

Review Questions: Answers AACSB: Written and oral communication; ethical understanding and reasoning; Application of knowledge 4-1 Identify the ethical, social, and political issues raised by information systems.

Explain how ethical, social, and political issues are connected and give some examples.

Figure 4.1 can be used to answer this question. Information technology has raised new possibilities for behavior for which laws and rules of acceptable conduct have not yet been developed. The introduction of new information technology has a ripple effect, raising new ethical, social, and political issues that must be dealt with on the individual, social, and political levels. Ethical, social, and political issues are closely related. Ethical issues confront individuals who must choose a course of action, often in a situation in which two or more ethical principles are in conflict (a dilemma). Social issues spring from ethical issues as societies develop expectations in individuals about the correct course of action. Political issues spring from social conflict and are mainly concerned with using laws that prescribe behavior to create situations in which individuals behave correctly.

In giving examples, students can identify issues surrounding the five moral dimensions of the information age. These include information rights and obligations, property rights and obligations, accountability and control, system quality, and quality of life.

List and describe the key technological trends that heighten ethical concerns.

Table 4.2 summarizes the six key technological trends responsible for heightening ethical concerns. These trends include: .

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8 • • • • • •

Computing power doubles every 18 months Data storage costs rapidly decline Data analysis advances Networking advances Mobile devices proliferate Artificial Intelligence

Increasing computer power, storage, and networking capabilities including the Internet, can expand the reach of individual and organizational actions and magnify their impacts. The ease and anonymity with which information can be communicated, copied, and manipulated in online environments are challenging traditional rules of right and wrong behavior. Mobile devices such as cell phones enable tracking and data collection without user consent or knowledge. Increased reliance on various forms of AI in decision making substitutes data-driven calculations for human judgment.

Differentiate between responsibility, accountability, and liability.

Responsibility is a key element of ethical actions. Responsibility means that you accept the potential costs, duties, and obligations for the decisions you make. Accountability is a feature of systems and social institutions. It means that mechanisms are in place to determine who took responsible action. Liability is a feature of political systems in which a body of laws is in place that permits individuals to recover the damages done to them by other actors, systems, or organizations.

4-2 Describe principles for conduct that can be used to guide ethical decisions.

List and describe the five steps in an ethical analysis.

The five steps in ethical analysis include: 1.

2.

3.

4.

5.

Identify and describe the facts clearly.

Define the conflict or dilemma and identify the higher-order values involved.

Identify the stakeholders.

Identify the options that you can reasonably take.

Identify the potential consequences of your options.

Identify and describe six ethical principles.

Six ethical principles are available to judge conduct. These principles are derived independently from several cultural, religious, and intellectual traditions and include: • Golden Rule—Do unto others as you would have them do unto you.

• Immanuel Kant’s Categorical Imperative—If an action is not right for everyone to take, it is not right for anyone.

• Slippery slope rule—If an action cannot be taken repeatedly, it is not right to take at all.

• Utilitarian Principle—Take the action that achieves the higher or greater value. .

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Risk Aversion Principle—Take the action that produces the least harm or the least potential cost.

“No free lunch” rule—Assume that virtually all tangible and intangible objects are owned by someone else unless there is a specific declaration otherwise.

These principles should be used in conjunction with an ethical analysis to guide decision making.

The ethical analysis involves identifying the facts, values, stakeholders, options, and consequences of actions. Once completed, you can consider which ethical principle to apply to a situation to arrive at a judgment.

4-3 Explain how contemporary information systems technologies and the Internet pose challenges to the protection of individual privacy and intellectual property.

Define privacy and fair information practices.

Privacy is the claim of individuals to be left alone, free from surveillance or interference from other individuals or organizations, including the state. Claims of privacy are also involved at the workplace. Fair information practices are a set of principles governing the collection and use of information about individuals. FIP are based on the notion of a mutuality of interest between the record holder and the individual.

Explain how the Internet challenges the protection of individual privacy and intellectual property.

Contemporary information systems technology, including Internet technologies, challenges traditional regimens for protecting individual privacy and intellectual property. Data storage and data analysis technology enable companies to easily gather personal data about individuals from many different sources and analyze these data to create detailed electronic profiles about individuals and their behaviors. Data flowing over the Internet can be monitored at many points.

The activities of website visitors can be closely tracked using cookies, web beacons, and other web monitoring tools. Not all websites have strong privacy protection policies, and they do not always allow for informed consent regarding the use of personal information.

Explain how informed consent, legislation, industry self-regulation, and technology tools help protect the individual privacy of Internet users.

The term informed consent refers to consent given with the knowledge of all the facts needed to make a rational decision. The Federal Trade Commission’s Fair Information Practices (FIP) principles incorporate the concept of informed consent into its core principles: Notice/awareness and Choice/consent.

Although as of 2023, there is no general federal privacy law protecting the individual privacy of Internet users, in the United States, privacy is protected by the U.S. Constitution in a variety of ways, and also through various specific statutes, that set forth the conditions for how private institutions handle information about individuals in such areas as credit reporting (Fair Credit Reporting Act), educational records (Family Educational Rights and Privacy Act) financial .

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10 records (Right to Financial Privacy Act; Financial Services Modernization Act [Gramm-LeachBliley Act)), the cable industry (Cable Communications Act), video (Video Privacy Protection Act), health (Health Insurance Portability and Accountability Act), among others. There are also a number of privacy laws regulating how the federal government deals with personal information, such as the Privacy Act and the Electronic Communications Privacy Act, among others. In Europe, the General Data Protection Regulation (GDPR) provides widespread protections for protecting the individual privacy of Internet users.

In the United States, the online industry has resisted efforts to enact such laws, and instead maintains that it can protect the individual privacy of Internet users through self-regulation. For instance, members of the online advertising industry have created an industry association called the Network Advertising Initiative (NAI) to develop privacy policies to help consumers opt out of advertising network programs and to provide redress from abuses. Individual firms such as Apple, Google, and Microsoft have also launched privacy initiatives in an effort to address public concern about tracking people online. In general, however, most businesses do little to protect the privacy of their customers, and consumers do not do as much as they should to protect themselves.

The online industry has also turned to technological solutions to help protect user privacy. Tools include Apple’s App Tracking Transparency initiative, Apple’s Intelligent Tracking Prevention for the Safari web browser, Google’s Privacy Sandbox, differential privacy software, privacy default browsers, message encryption apps, spyware blockers, pop-up and ad blockers, secure email, anonymous remailers, anonymous surfing tools, cookie managers, and public key encryption. For the most part, technological solutions thus far have failed to provide effective protection for online privacy, in part because most of them require users to be proactive in implementing them.

List and define four different types of law that protect intellectual property rights.

Intellectual property refers to products of the mind created by individuals or corporations.

Intellectual property is subject to a variety of protections under four different legal traditions: • Copyright protects creators of intellectual property from having their work copied by others for any purpose for a certain period of time, depending on several factors. As a general rule, copyright protection lasts for the life of the author, plus an additional 70 years after the author’s death. For corporate-owned works, copyright protection generally lasts for 95 years after initial creation. Copyright protects literary, dramatic, musical, and artistic works, such as novels, poetry, songs, plays, maps, drawings, and artwork. The intent behind copyright laws has been to encourage creativity and authorship by ensuring that creative people receive the financial and other benefits of their work.

• Patent law grants the owner an exclusive monopoly on the ideas behind an invention for a certain period of time, typically 20 years. The congressional intent behind patent law was to ensure that inventors of new machines, devices, or methods receive the full financial and other rewards of their labor and yet to make widespread use of the invention possible by providing detailed diagrams for those wishing to use the idea under license from the patent’s owner. The granting of a patent is determined by the United States Patent and Trademark Office and relies on court rulings. .

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11 •

•

Trademarks are the marks, symbols, and images used to distinguish products in the marketplace. Trademark laws protect consumers by ensuring that they receive what they paid for. These laws also protect the investments that firms have made to bring products to market.

Trade secrets Any intellectual work product—a formula, device, pattern, or compilation of data—used for a business purpose can be classified as a trade secret, provided that it is not based on information in the public domain. Protections for trade secrets vary from state to state. In general, trade secret laws grant a monopoly on the ideas behind a work product, but the monopoly can be very tenuous.

4-4 Discuss the issues that contemporary information systems raise with respect to system quality, accountability and control, and the quality of everyday life.

Explain why it is so difficult to hold software services liable for failure or injury.

Liability for software-related problems is a complicated issue from a legal standpoint. If someone suffers a personal injury or property damage because of a defective physical product, the seller, distributor, and/or manufacturer of that product can normally be held liable, under the concept of strict product liability, whether any of those parties were negligent or not. Whether software is a “product” that is subject to strict product liability remains unsettled. Courts that have grappled with the question have generally found that software is not a product. This finding is important because it is typically very difficult to prove negligence, which is an alternative legal standard that might provide a basis for a lawsuit. However, when software is an essential part of a machine, such as a car, plane, or robot, it is more likely to be considered a product and potentially be subject to strict product liability laws or other types of liability. For example, Boeing has admitted to full responsibility for the 2019 crash of its 737 Max in Ethiopia because of a faulty software system.

Software vendors and software service providers typically use contracts and end-user license agreements to limit any potential liability they may have for defective software. Unfortunately, very few users actually read such agreements before using the software and, even when they do read them, most users do not understand that the agreements effectively exempt software vendors from almost all liability. Courts have typically upheld such agreements, severely impacting the ability of software users to recover for any damages they may have suffered.

List and describe the principal causes of system quality problems.

Three principal sources of poor system performance are: • Software bugs and errors • Hardware or facility failures caused by natural or other causes • Poor input data quality Zero defects in software code of any complexity cannot be achieved and the seriousness of remaining bugs cannot be estimated. Hence, there is a technological barrier to perfect software, and users must be aware of the potential for catastrophic failure. The software industry has not yet arrived at testing standards for producing software of acceptable but not perfect performance. .

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12 Although software bugs and facility catastrophes are likely to be widely reported in the press, by far the most common source of business system failure is data quality. Few companies routinely measure the quality of their data, but individual organizations report data error rates ranging from 0.5 to 30 percent.

Another source of poor system performance includes outages at cloud computing service providers. More and more firms rely on cloud providers and centralize their data and operations with a small group of cloud providers. Outages have called into question the reliability and quality of cloud services.

Name and describe four quality-of-life impacts of computers and information systems.

Areas where technology creates potential quality of life issues include: Big Tech: Concentration of Economic and Political Power Big Tech firms become oligopolies and monopolies that dominate the Web and mobile platforms. The wealth created by these firms translates into political influence: these firms have amassed an army of lobbyists in Washington and state capitals to ensure legislation, or legislative inquiries, that might affect their market and tax concerns, reflects their interests. Small companies and competitors can be crushed, preventing new, innovative companies from market access, or surviving long enough to prosper as independent firms.

Equity and Access: Increasing Racial and Social Class Cleavages Does everyone have an equal opportunity to participate in the digital age? Will the social, economic, and cultural gaps that exist in the United States and other societies be reduced by information systems technology? Or will the cleavages be increased, permitting the better-off to become even more better-off relative to others? Left uncorrected, this digital divide could lead to a society of information haves, who are computer literate and skilled, versus a large group of information have-nots, who are computer illiterate and unskilled.

Employment: Trickle-Down Technology and Reengineering Job Loss The reengineering of work is typically hailed in the information systems community as a major benefit of new information technology. It is much less frequently noted that redesigning business processes has caused millions of people to lose their jobs. Other economists believe that new technologies create as many or more jobs than they destroy. These economists also believe that bright, educated workers who are displaced by technology will move to better jobs in fast-growth industries.

Rapidity of Change: Reduced Response Time to Competition Information systems have helped to create much more efficient national and international markets. Today’s rapid-moving global marketplace has reduced the normal social buffers that permitted businesses for many years to adjust to competition. Time-based competition has an ugly side; businesses may not have enough time to respond to global competitors and may be wiped out in a year along with jobs. We run the risk of developing a just-in-time society with just-in-time jobs and just-in-time workplaces, families, and vacations.

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13 Maintaining Boundaries: Family, Work, and Leisure Ubiquitous computing, remote work and telecommuting, nomad computing, mobile computing and the do-anything-anywhere computing environment weaken traditional boundaries that separate work from family and leisure. Family and friends historically have provided powerful support mechanisms for individuals, and they act as balance points in a society by preserving private life, providing a place for people to collect their thoughts, think in ways contrary to their employer, and dream.

Physical, Mental, and Cognitive Health Risks A common occupational disease today is repetitive stress injury (RSI). RSI occurs when muscle groups are forced through repetitive actions that are often made with high-impact loads (such as playing tennis) or tens of thousands of repetitions under low-impact loads (such as working at a computer keyboard). The single-largest source of RSI is computer keyboards. The most common kind of computer-related RSI is carpal tunnel syndrome (CTS), in which pressure on the median nerve through the wrist’s bony structure, called a carpal tunnel, produces pain. The pressure is caused by the constant repetition of keystrokes.

Much has also been written about the challenges that the Internet, mobile apps, and social media pose for mental health, particularly that of children and young adults. The impact of the increase in screen time and time spent with digital devices during the Covid-19 pandemic has further highlighted this issue. Potential negative impacts include increased exposure to negative online social interactions (cyberbullying, feelings of missing out, and social comparisons); reduced physical activity; sleep disruption; isolation from in-person contact; and the possibility of Internet/social media addiction.

Information technology also may be harming our cognitive functions or at least changing how we think and solve problems. Although the Internet has made it much easier for people to access, create, and use information, some experts believe that it is also preventing people from focusing and thinking clearly on their own. They argue that excessive use of computers and smartphones reduces intelligence.

Define and describe computer vision syndrome and repetitive stress injury (RSI) and explain their relationship to information technology.

Computer vision syndrome (CVS) refers to any eyestrain condition related to display screen use in desktop computers, laptops, e-readers, smartphones, and handheld video games. CVS affects about 90 percent of people who spend three hours or more per day at a computer or using a computing device. Its symptoms, which are usually temporary, include headaches, blurred vision, and dry and irritated eyes. To combat the syndrome, computing users should take frequent breaks and rest their eyes.

Repetitive stress injury (RSI) is avoidable. Three management actions that could reduce RSI injuries include: • Designing workstations for a neutral wrist position, using proper monitor stands, and footrests all contribute to proper posture and reduced RSI. • Using ergonomically designed devices such as keyboards and mice are also options. .

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Promoting and supporting frequent rest breaks and rotation of employees to different jobs.

Discussion Questions: Answers AACSB: Written and oral communication; Ethical understanding and reasoning; Analytical thinking; Application of knowledge 4-5 Should producers of software-based services, such as ATMs, be held liable for economic injuries suffered when their systems fail?

Student answers to this question will vary. However, answers should include a discussion of both the issues surrounding system quality, as well as liability for software-related problems. For example, a sample answer might assert that because it is impossible to ensure that software has zero defects, producers of software-based services should not be held liable if they have taken reasonable efforts to ensure the software is acceptable, and that holding software producers to a higher standard might mean that innovative software is not released.

4-6 Should companies be responsible for unemployment caused by their information systems? Why or why not?

Student answers to this question will vary. However, answers should include a discussion of issues surrounding the reengineering of work.

4-7 Discuss the pros and cons of allowing companies to amass personal data for behavioral targeting.

Student answers to this question will vary. However, answers should include a definition of behavioral targeting, the reasons why companies engage in behavioral targeting, and the privacy issues that behavioral targeting presents.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and solution files are included in Instructor Resources.

4-8 Management Decision Problem: InfoFree AACSB: Written and oral communication; Ethical understanding and reasoning; Application of knowledge; Analytical thinking; Reflective thinking; Integration of real-world business experiences This Management Decision Problem asks students to consider the privacy issues raised by data brokers such as InfoFree.

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15 Student answers will vary but should include a recognition that data brokers such as InfoFree raise privacy issues. Most consumers are not aware that personal data is being consolidated from a multitude of sources and stored in a massive database and then potentially sold to third parties without their knowledge. Student answers will vary as to the limitations on access by potential users, such as government agencies, employers, private business firms, or other individuals, that they might want in order to preserve their privacy. For example, some students might be willing for government agencies to access certain personal information in compliance with various legislation but not their employer or a private business firm, and vice versa.

4-9 Achieving Operational Excellence: Creating a Simple Blog AACSB: Written and oral communication, Application of knowledge Software skills: Blog creation Business skills: Blog and webpage design In this Hands-on Software Project, students are asked to create a simple blog of their own design using online blog creation software available at Blogger.com. Student blogs will vary, but the blog should have a title, at least 4 entries with a label for each posting, capabilities for authorized blog viewers to post comments, and a photograph or other image. A sample solution can be found at https://ericasgardennativeplants.blogspot.com/. The student should briefly describe how their blog could be useful to a company selling products or services related to the theme of the blog-in this case native plants. Businesses might find the Stats feature of Blogger.com useful as well as capabilities for using Google AdSense and Google Analytics. Companies selling natural plants or garden equipment might want to place on this blog text, banner, or video ads or links to their Web sites.

4-10 Improving Decision Making: Analyzing Web Browser Privacy AACSB: Ethical understanding and reasoning; Written and oral communication, Application of knowledge; Analytical thinking Software skills: Web browser software Business skills: Analyzing web browser privacy protection features In this Internet Project, students are asked to analyze the privacy protection features and settings of two leading web browsers, such as Microsoft Edge, Mozilla Firefox, or Google Chrome.

Student answers will vary but should include a table comparing the features of the two browsers they choose in terms of the functions they provide and ease of use and should address the following questions: How do these privacy protection features protect individuals?

A sample answer might be as follows: Mozilla Firefox offers the following privacy features: Enhanced Tracking Protection blocks known trackers that gather information about online activity and that are hidden in the website .

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16 users visit. Cookie protection creates a “cookie jar” where cookies placed by different websites are isolated to keep them from tracking a user’s online activity across different websites. DNS over HTTP sends domain names typed into Firefox’s address bar to a DNS server using an encrypted HTTP connection, which prevents third parties from seeing what websites the user is trying to access. Firefox fingerprinting protections warns the user against websites that collect settings from the user’s browser and computer to profile the user. Firefox’s private browsing feature enables users to browse without saving browsing information, such as history and cookies, and leaves no trace after the session is ended. By default, private browsing shields users from third-party cookies and content trackers. Firefox also offers additional privacy and securityfocused add-ons.

Microsoft Edge offers the following privacy features: three different levels of tracking prevention (Basic, balanced and strict); the ability to clear history and cookies; and keep track of permissions.

Google’s Chrome browser offers the following privacy features: Google offers a Privacy Guide that identifies Chrome’s basic privacy features. Users can choose if and how cookies are used by the websites the user visits, with options to block third-party cookies in regular or Incognito mode (private browsing), and to block all cookies on some or all websites. Users can also control what data is shared with Google. Users can also delete their browsing data. Similar to Firefox, Google also uses DNS over HTTP to shield the sites that are being visited from third parties.

How do these privacy protection features impact what businesses can do on the Internet?

The privacy features disrupt the normal collection of individual data while they are in use. The features may not block the total collection of data, however. Businesses may be prevented from gaining a complete picture of an individual’s browsing habits rendering other data less useful in fully identifying a person.

Which does the best job of protecting privacy? Why? Answers will vary based on individual preferences and experiences. However, Firefox’s default privacy settings are more protective of privacy than Edge’s or Chrome’s and also offers more additional privacy protection features. For example, users who use the Edge browser would need to disable Bing and Bing-related interactions with Edge to prevent their search data from being sent to Microsoft and prevent Bing from tracking them.

4-11 Collaboration and Teamwork Project: Developing a Corporate Code of Ethics AACSB: Written and oral communication; Ethical understanding and reasoning; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge In this Collaboration and Teamwork Project, students are asked to participate as a team in the development of a corporate ethics code on privacy. Answers will vary, but should address both employee privacy and the privacy of customers and users of the corporate website, as well as .

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17 email privacy and employer monitoring of worksites, and corporate use of information about employees concerning their off-the-job behavior (e.g., lifestyle, marital arrangements, and so forth). If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem Solving Case: Facebook ‘s Many Ethical Challenges AACSB: Ethical understanding and reasoning; Analytical thinking, Reflective thinking; Application of knowledge Case Study Questions: Answers 4-13 Choose an ethical dilemma discussed in this case, and perform an ethical analysis of it.

The stakeholders involved in an ethical analysis of Facebook include Facebook (obviously), advertisers, data collecting agencies, privacy advocates, and individual users.

Facebook collects an incredible amount of personal data on its users. It is using its ability to track online activity of its members to develop a frighteningly accurate picture of their lives. It gathers personal information about users, both with and without their consent, which can be used against them in other ways. Facebook’s goal is to get its users to share as much data as possible, because the more Facebook knows, the more accurately it can serve relevant advertisements and thus, charge higher fees to advertisers.

Facebook’s critics are concerned that the repository of personal data of the size that Facebook has amassed requires protections and privacy controls that extend far beyond those that Facebook currently offers.

4-14 Will Facebook be able to have a successful business model without invading users’ privacy? Explain your answer.

The less privacy Facebook offers to its users, the more valuable and useful its business model becomes. By providing more privacy to its users, the less data it collects, stores, and provides to advertisers. That makes its business model less valuable because advertisements cannot be as fully developed for individual users.

Facebook CEO Mark Zuckerberg says that people want the world to be more open and connected. He also wants the world to be more open and connected because his company stands to make more money in that world.

It is unlikely that Facebook will be able to have a successful business model without invading users' privacy. Facebook has historically prioritized revenue generation over user privacy and has repeatedly been embroiled in conflicts over user privacy. Despite its repeated privacy violations, Facebook's various platforms produced over $115 billion in total revenue in 2021, indicating that its current business model is financially successful. Moreover, many Facebook users may not realize the full extent of the data collected about them or the purposes for which that data may be .

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18 used. Therefore, Facebook's revenue model is tied to user data, and it is unlikely that Facebook can maintain its current level of financial success without continuing to collect and monetize user data, which will involve invading users' privacy. ) 4-15 Investigate the ESG movement. How might it impact Facebook’s future?

The ESG (Environmental, Social, and Governance) movement is gaining momentum, and it is likely to impact Facebook's future. ESG investors consider companies' ethical, social, and environmental records before investing, and companies that perform poorly on these metrics may face challenges in attracting investors. Facebook's history of privacy violations and other ethical issues may make it less attractive to ESG investors. In addition, regulators and governments are increasingly scrutinizing the company's practices and policies, which could result in more fines and restrictions on its operations. These challenges could affect Facebook's ability to grow and expand in the future. Therefore, Facebook may need to invest more in addressing its ethical challenges and improving its ESG performance to maintain its competitive position and attract ESG investors.

4-16 Would you want to work for Facebook? Why or why not?

Opinions on personal employment at Facebook may vary but may include personal views on ethics, profit, socioeconomic status etc. Be prepared for student conversation that may have conflict of deeply held personal values.

Video Case: Australia Passes Law Forcing Tech Giants to Pay for News AACSB: Written and oral communication; Ethical understanding and reasoning, Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1. What is identified as a key concession to Facebook in the Australian bill?

A) If Facebook and Google choose, at their discretion, to enter into commercial agreements with traditional media, they may not be subjected to regulation.

B) An agreement to totally exempt Facebook and Google from regulation C) A requirement that Facebook and Google enter into commercial agreements with traditional media as a condition to not being subjected to regulation.

D) A requirement for broad collective bargaining across the media landscape.

Answer: A 2. Which of the following statements is about the impact of the Internet on the newspaper industry is not true?

A) Today, revenue from subscriptions is higher than revenue from advertising.

B) Newspapers are able to charge higher prices for digital advertising than print advertising.

C) Google and Facebook’s dominance of the digital advertising ecosystem has adversely affected newspaper revenues D) Almost all news organizations rely on Google and Facebook to reach readers.

Answer: B

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19 3. Australia’s News Media and Digital Platforms Mandatory Bargaining Code was designed to help sustain which of the following?

A) The ability of Australia’s journalists to report on international news B) Traditional print newspapers C) Local and public interest journalism D) Facebook and Google’s digital advertising ecosystem Answer: C Video Case Essay Questions: Answers 1. What is the ethical dilemma presented by this case? Define the conflict or dilemma and identify the higher-order values involved. Who are the stakeholders and what arguments might they make to support their positions?

Answer: This case illustrates the ethical dilemma created by allowing Big Tech companies such as Google and Facebook (Meta) to use content from newspaper publications in their search results and news feeds free of charge. This ethical dilemma pits the newspaper/news publisher rights to charge fees for use of its intellectual property against the power of Big Tech and the belief that making the news content available for free benefits the public and also the news companies themselves by driving more visitors to their websites.

The stakeholders are news publishing companies throughout the world pitted against Big Tech companies such as Facebook (Meta) and Google that now control digital advertising, which is their major source of revenue. Newspaper revenue has declined over the past 20 years as advertisers have switched to digital advertising using other sources, such as Facebook, Google, Realtor.com, or Craigslist. Payment from reader subscriptions or digital ads on the news media platforms is insufficient compensation for newspapers’ ad revenue losses.

Companies using some of the newspapers’ content in the headlines and article summaries for search results and news feeds argue that they are providing a useful and valuable service to the public for free and that this benefits the public and society as a whole. They also claim they are helping the newspaper publishers by calling attention to the content on the publishers’ websites and driving more visitors to those websites. Some of those visitors will become online newspaper subscribers. Almost all news publishers depend on Google and Facebook to reach readers.

The news publishers argue that the Big Tech companies rely on news content to keep users on their platforms but do not want to pay for it. The news media is shouldering the cost of creating news content and are entitled to be compensated for their time, effort, and ownership of the content. They also desperately need more revenue to stay afloat if they can’t get enough from their own digital advertising. They argue that the Big Tech companies and other companies have enormous financial resources, enough to pay for all the news content they use.

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20 2.Identify the options that can be taken for this ethical dilemma and their potential consequences.

Answer: Options that can be taken for this ethical dilemma and their potential consequences include: •

Retain the status quo. Big Tech companies would continue their current practices for using news publisher content free of charge. This option primarily benefits the Big Tech companies because they have so much leverage in the online marketplace. The benefit the newspaper publishers obtain from appearing on Big Tech search results and news feeds is insufficient to compensate for the costs of that content, and relying on subscriber revenue and their own digital ads is not enough to keep them in business.

•

Pass legislation forcing companies who want to use news media content such as news article summaries and links to news media sites to pay for that content. This is starting to happen, but it encourages retaliatory action from the Big Tech companies. In response to Australia’s proposed News Media and Digital Platforms Mandatory Bargaining Code, Facebook removed all news items from Australians’ Facebook News Feeds. This move prevented people and publishers in Australia from sharing or viewing any news from local or international outlets on the Facebook platform. This was a major issue because millions of people in Australia get their news from Facebook, and it decreased the number of people who would have been directed to the news media sites.

•

Pass legislation encouraging but not forcing the Big Tech sites to negotiate with news media publishers on how much to pay for using their content. The News Media and Digital Platforms Mandatory Bargaining Code, which passed in Australia in February 2021, does not “force” Facebook and Google to pay for news, but tries to enable news publishers to negotiate more effectively with the big online platforms. If no agreement is reached within a set time period, news publishers are allowed to seek “final offer” binding arbitration, in which an arbitrator selects one of the two offers made by the parties. Even if arbitration is not used, the fact that it is a possibility incentivizes all parties to engage in meaningful negotiations. This approach seems to be working in Australia. Online platforms publishers have entered into numerous new agreements with news publishers. None of the negotiations have required arbitration to reach an agreement.

•

Litigation. HD Media, along with 17 newspaper organizations representing about 150 newspapers filed a federal antitrust lawsuit against Google and Facebook claiming both were manipulating the digital-advertising market, making it difficult the Charleston Gazette-Mail, and other newspapers to survive. If the newspapers win, this could make Google and Facebook more receptive to paying newspapers for their content.

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21

Dirt Bike Running Case: Achieving Operational Excellence: Developing a Website Privacy Policy AACSB: Written and oral communication; Ethical understanding and reasoning, Analytical thinking, Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructors related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Web browser software and presentation software Business skills: Corporate privacy policy formulation Dirt Bikes’s management wants to make sure it has policies and procedures in place to protect the privacy of visitors to its website. You have been asked to develop Dirt Bikes’swebsite privacy policy. On the Web you can find material on privacy best practices and model privacy policies that you can review to help you draft Dirt Bikes’s privacy policy. You can also examine specific companies’ privacy policies by searching for website privacy policies on Yahoo, Google or another search engine. Prepare a report for management that addresses the following issues: 1. How much data should Dirt Bikes collect on visitors to its website, and why that data?

What information could it find out by tracking their activities at its website? What value would this information provide the company? What are the privacy problems raised by collecting such data?

DB could benefit from using its website to learn more about its customers’ tastes and interests.

The website could collect information such as visitors’ age, location, marital status, occupation, income level, hobbies, and specific motorcycle interests (including why they might purchase a motorcycle and how they would use it—races, transportation, joining a motorcycle group). Such information will help DB to know the types of people interested in its products and how it can communicate to them, create more targeted and personalized advertising and even affect DB’s plans for the future, including designing new products to better fit their interests.

If DB collects such personal data through its website, privacy problems would arise if DB tried to share that information with other companies without the knowledge and explicit consent of the website visitors. The company would have to state clearly its privacy policy and then carefully follow that policy in order to avoid privacy problems. Otherwise, many visitors might find themselves inundated by advertisements from DB and from any other companies with which DB might have shared the information. It could even cause DB to lose sales and its good reputation. .

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22 2.

Should Dirt Bike use cookies? What are the advantages of using cookies for both Dirt Bikes and its website visitors? What privacy issues do they create for Dirt Bikes?

Cookies could be very useful for both DB and visitors to its site. The visitors would find their return to DB’s site easier and more personal, while DB could use the cookie data to provide to them with information of greatest interest to them. Moreover, it might induce visitors to return more often. However, website visitor information collected from cookies could be misused by DB and by companies the collect that data, creating problems for both the visitor and for DB’s reputation.

3.

Should Dirt Bikes adopt an “opt-in” or “opt-out” model of informed consent?

Obviously the “opt-in” approach puts more power in the hands of site visitors and therefore does not enable DB to collect as much information. DB would have to make the choice between collecting more information and having some visitors not being happy with the policy choice or collecting less information but leaving more of its visitors happy to have been there.

4.

Include in your report a short (2-3 pages) privacy statement for the Dirt Bikes website.

Students’ privacy statements would address the following: what personally identifiable information the company or a third party collects from website visitors; how the companies use this information; and whether Dirt Bikes shares such information with other companies. The privacy policy might go into more detail about whether website visitors will know the organization collecting the information, how the information is used, with whom the information may be shared, what choices are available to visitors regarding collection, use and distribution of their information; the kind of security procedures that are in place to protect the loss, misuse or alteration of visitor information; and finally how users can access and correct any inaccuracies in the information collected about them.

5.

(Optional) Use presentation software to summarize your recommendations for management.

Student presentations will vary.

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Essentials of Management Information Systems, 15e Chapter 5 IT Infrastructure: Hardware and Software Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

• • •

Teaching suggestions (including how to use the chapter’s Video Case) [Note: there is no Figure Video for this chapter] “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter introduces students to IT infrastructure. It describes the major computer hardware, data storage, input and output technologies used in business and major hardware trends, and the major types of computer software used in business and major software trends. It also examines the principal issues in .

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2 managing hardware and software technology. It concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Your students’ knowledge and comfort level with technology is likely to vary, making this chapter difficult to teach and test. The technically-adept know most of this material, and some of the nontechnical types may not find the chapter’s contents particularly interesting. You may want to approach the chapter from a business standpoint—the role of technology in the success of an organization.

One way to begin the chapter discussion is to present several horror stories. (Your students may even be able to provide stories of their own.) For example, many firms have found moving to a client/server architecture is not the dream they had been led to believe. The shortage of support, programming, and management tools, as well as the shortage of staff who understand the technology and programs in such an environment, has doomed many such changes to client/server architecture. Also, you should mention to your students that programming problems have cost organizations millions of dollars and provide examples of programming projects that simply failed.

Opening Case: QRyde Rides High with the Cloud The opening case demonstrates the benefits of using cloud computing to replace outdated hardware and software that prevented the business from expanding and serving more customers. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How did using cloud computing help QRyde serve its customers better?

• What were the business benefits for QRyde of using a cloud computing infrastructure?

Section 5-1: Identify the components of IT infrastructure.

This section familiarizes students with essential computer hardware terminology and concepts. Students are introduced to the five major components that make up an IT infrastructure. These include computer hardware, computer software, data management technology, networking and telecommunications technology, and technology services. Point out that services are an essential component of IT infrastructure as well as technology.

Section 5-2: Describe the major computer hardware, data storage, input, and output technologies used in business and major hardware trends.

If possible, you should consider organizing a tour of your university’s IT facilities or the facilities of a local company. Students are often eager to see information technology in action.

Students should understand that organizations need to select the most appropriate hardware to handle their business requirements. The text introduces the different categories of computers and computer systems. You should spend some time discussing the capabilities of the different types of computers.

Consider spending most of your and your students’ time on hardware trends: the mobile platform, consumerization of IT and BYOD, virtualization, cloud computing, edge computing, green computing, .

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3 and high-performance computing and processors (including quantum computing and nanotechnology).

That’s where many businesses are headed, and students are likely to bump into these trends when they enter the workforce.

The Spotlight on People case, The Mobile Platform Comes to Healthcare, illustrates some of the ways that mobile devices are improving healthcare. Answers to the case study questions for this case can be found on pages 4 to 6 of this Instructor’s Manual.

Video Case: The Chapter 5 Video Case, IBM Expands Cloud to Daimler, provides more detail on the features of private and public clouds, virtualization, and open-source software. It would be appropriate to assign when covering virtualization and cloud computing in this section. The Video Case could also be assigned when covering Choosing Cloud Services in Section 5-4. You might ask students what they learned about public and private clouds from this Video Case. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 19 to 20 of this Instructor’s Manual.

The Spotlight on Technology case, Smart Cities Become Smarter with Edge Computing, provides some interesting examples of edge computing applications. Answers to the case study questions for this case can be found on pages 6 to 8 of this Instructor’s Manual.

Section 5-3: Describe the major types of computer software used in business and major software trends.

This section introduces students to the different types of software. You might take a quick survey of your students to see what operating systems and application software they currently use. Many will probably use Windows operating systems and Microsoft 365, but you will also find students using MacBook laptops or Chromebooks with the Chrome operating system and Google productivity software. Have your students explain why they use that particular operating system and application software.

Explain the business implications of choosing an operating system because of the effect on business capabilities. Some operating systems are better designed for networking, and other operating systems are better for speed.

Table 5.3 provides a list of the leading PC and server operating systems. Ask your students to research these different operating systems, identifying the features of the operating systems, as well as the market share for each operating system. Which is the most appropriate operating system? Also, ask your students to investigate the application programming languages mentioned in the text (C, C++, COBOL, and Visual Basic). Which is the most appropriate programming language for business?

Many of the more technically adept students might argue over what should be the appropriate operating system or the appropriate programming language. Students should be warned that in their managerial careers, they may have to sort out these issues because the selection of the proper operating system or software package must support the business, and the technical people may not understand that. You should talk about the superiority of some languages for some tasks. Point out to students that there are .

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4 many examples of companies, organizations, and governments choosing the wrong language for the wrong problem and creating disaster.

This section also describes operating systems for the web and mobile devices: Chrome, iOS, and Android. Have students research these operating systems on the web and then compare them.

The most interesting part of this section, and students may not be familiar with it, deals with opensource software, web services, cloud software services, apps, and mashups. Since most students use the web and Internet daily, you can have them explore how new software technologies are making their experiences richer and more efficient. Have them explore software as a service (SaaS), , mashups, and apps on the websites they use the most. Ask students to demonstrate how they might be using these new technologies on Facebook or any of the other social networking sites.

Section 5-4: Identify the principal issues in managing hardware and software technology.

This section discusses business issues that most students will not be familiar with. It stresses the importance of understanding the technology requirements for the digital firm and e-commerce. Students may be surprised to learn that the total cost of ownership (TCO) of technology assets extends beyond the purchase price of hardware and software. It’s not something many of them (or us) really think about.

Outsourcing has gotten such a bad rap over the years that you may find some preconceived notions about it among your students. Have them research several different ways in which a business can outsource its technology needs such as web hosting services and on-demand computing.

Section 5-5: Understand how MIS can help your career.

This section addresses how the material in this chapter can help students secure a position as a coordinating project manager at an online streaming services platform. You might want to ask students how what they learned in this chapter would help them secure this type of job. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on People: The Mobile Platform Comes to Healthcare ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What kinds of applications are described here? What business functions do they support? How do they improve operational efficiency and decision making?

The text describes various applications of mobile technology in healthcare, including medical, health, and fitness apps, proprietary mobile health apps offered by hospitals, wearables and other mHealth tools, mobile telehealth visits, and mobile IT applications. These applications support business functions such .

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5 as patient engagement, patient care, patient education, communication with team members, access to electronic health records, reference information, and schedule management.

These applications improve operational efficiency by enabling healthcare workers to move from room to room without having to log out of the system they are using or access another computer to enter or extract information. With the necessary data at their fingertips, doctors and nurses can focus more easily on the patient. They also improve decision-making by providing patients with more information about their conditions and treatments, and by enabling healthcare professionals to utilize video interpretation services in sign language as well as spoken language, which is especially helpful when treating people with hearing impairments.

In summary, mobile technology applications in healthcare support various business functions such as patient care, patient engagement, patient education, communication, access to electronic health records, and schedule management. They improve operational efficiency by enabling healthcare workers to access necessary information more easily and improve decision-making by providing patients with more information about their conditions and treatments and by enabling healthcare professionals to utilize video interpretation services in sign language as well as spoken language.

2. Identify the problems that healthcare organizations in this case study solved by using mobile digital devices.

The healthcare organizations in the case study solved several problems by using mobile digital devices, including: Patient education and engagement: Mobile devices such as iPads and iPhones helped patients learn about their conditions and treatments and play a big role in patient care. Patients waiting for a procedure or to talk with their doctor can learn more about their conditions or their test results even before they see their physician. Patients can also upload their medical records to their smartphones. Children in the hospital who are heading to surgery can download their favorite games onto the iPads. This provides a distraction that can relieve the stress of facing surgery or tests. Young patients entertaining themselves with games or shows on the tablets before surgery often require less sedation and pain medication, which promotes faster recovery. Patients who use iPads during their stay are more knowledgeable about their conditions.

Access to medical information: Mobile devices provide access to electronic health records, reference information, and managing schedules. Physicians use smartphones at work to access electronic health records, communicate with their team members, and reference information. With the necessary data at their fingertips, doctors and nurses can focus more easily on the patient.

Telehealth visits: Mobile telehealth visits have exploded because of the Covid-19 pandemic, increasing patient engagement and well-being.

Patient communication and interpretation: Tablets such as iPads can help bridge the communication gap between healthcare professionals and people with different abilities. Tablets enable physicians to utilize video interpretation services in sign language as well as spoken language. The iPad and iPhone

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6 have a Translate app that can translate text, voice, and conversations between any two of the languages it supports.

Patient engagement and well-being: Wearables and other mHealth tools help patients cope with and manage their conditions. Studies show that patients who are engaged with their care are more likely to follow healthcare plans, attend more appointments, and fill more prescriptions.

Efficiency: Smartphones and tablet applications enable healthcare workers to move from room to room

without having to log out of the system they are using or access another computer to enter or extract information. It is much more efficient to be able to access a patient’s full medical profile than to carry around a stack of papers.

3. How did the mobile platform change patient care at the organizations described in this case study?

The mobile platform has greatly impacted patient care at Geisinger Medical Center (GMC) by improving many facets of healthcare. Mobile technology has made it possible for patients to learn about their conditions and treatments, access their lab results and medical records on hospital-issued iPads, and download apps for games, news, weather, and social media through a service portal that patients can download. Pediatric patients can download their favorite games onto iPads to relieve the stress of facing surgery or tests, which reduces the need for sedation and pain medication and promotes faster recovery.

GMC also uses a robot with an iPad attached on top to enable hospitalized students to see their friends and attend classes remotely. Mobile technology also helps bridge the communication gap between healthcare professionals and people with different abilities, such as people with hearing impairments or those who speak different languages, by utilizing video interpretation services and translation apps.

Additionally, mobile technology enables healthcare workers to access patient medical profiles more efficiently and focus more easily on the patient.

Spotlight on Technology: “Smart” Cities Become Smarter with Edge Computing ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What problems did the organizations described in this case address by using edge computing, Big Data, and IoT? The organizations described in this case addressed several problems by using edge computing, Big Data, and IoT technologies. For example: Cities and governments needed to improve their operational efficiency, share information with the public, and provide better services to citizens. IoT sensors help them gather Big Data from operations throughout the city for tasks such as monitoring traffic patterns or lighting outages. Edge computing enabled these organizations to perform Big Data analytics and processing at the network's edge, where the data were generated and captured. As a result, they obtained insights and made informed decisions more quickly that helped them improve service delivery and efficiency.

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7 Many smart city applications require real-time data analysis, and sending data to distant data centers for analysis or storing it in the cloud may not be feasible. By moving data analytics to the edge, organizations were able to analyze many types of data in near real-time, as the data were generated. This enabled intelligent systems to take immediate actions based on the results of data analytics, which helped municipalities address issues related to traffic management, parking, public safety, and security, among others.

The organizations were also able to improve service delivery and provide better access to services more equitably. For example, the City of Syracuse replaced all streetlights with LED lights connected over a Wi-Fi network, which improved service delivery and provided more visibility in other infrastructure such as underground power feeds and conduit. The City also monitored lights using an automated, realtime, central dashboard, which enabled it to resolve outages quickly and improve service delivery more equitably.

2. What people, organization, and technology issues should a municipality address when building a smart city application?

People issues include ensuring that the public is aware of the benefits and risks of smart city applications and how they can participate in the decision-making process. It is also important to ensure that smart city applications are inclusive and accessible to all members of the community.

Organizational issues include ensuring that there is a clear vision and strategy for smart city applications, building partnerships with other organizations, and establishing governance structures that promote collaboration and accountability. New business processes are required for implementing smart city applications and using their output to strengthen operations and decision making.

Technology issues include ensuring that the technology infrastructure is reliable, secure, and scalable to handle Big Data from IoT devices and edge computing.. It is also important to ensure that data privacy and security are protected and that there are mechanisms in place to manage the risks associated with new technologies.

3. How did information technology improve operations and decision making for the organizations described in this case?

The organizations described in the case used edge computing, Big Data, and IoT to address various problems, such as improving operational efficiency, providing better government services, reducing transmission delays, and enabling informed decision-making. For example, the City of St. Petersburg, Florida, used IoT and edge computing to capture and analyze data on its most dangerous intersection to monitor driver behaviors and activities and provide real-time traffic data visualization and insights.

Similarly, the City of Syracuse replaced its streetlights with LED lights connected over a Wi-Fi network and monitored them using an automated, real-time, central dashboard to resolve outages within three days and improve service more equitably.

A municipality should address several people, organization, and technology issues when building a smart city application. For example, it should involve stakeholders from the public and private sectors, establish clear goals and objectives, ensure data privacy and security, develop scalable and flexible .

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8 infrastructure, and adopt interoperable technologies. Additionally, it should address issues related to data ownership, governance, and management, as well as the skills and capabilities of its workforce to effectively manage and analyze the data generated by smart city applications.

Review Questions: Answers (AACSB: Written and oral communication; Application of knowledge) 5-1 Identify the components of IT infrastructure.

Define information technology (IT) infrastructure and describe each of its components.

A firm’s IT infrastructure provides the foundation, or platform, for supporting all the information systems in the business. The five major components of an information technology (IT) infrastructure are: • • • • •

Computer hardware: technology for computer processing, data storage, input, and output.

Computer software: includes both system software and application software.

Data management technology: organizes, manages, and processes business data concerned with inventory, customers, and vendors.

Networking and telecommunications technologies: provide data, voice, and video connectivity to employees, customers, and suppliers.

Technology services: external consultants who run and manage infrastructure components.

5-2 Describe the major computer hardware, data storage, input, and output technologies used in business and major hardware trends.

List and describe the various types of computers available to businesses today.

• Personal computers (PCs): Generally used when working alone or with a few other people in a small business.

• Workstations: Desktop computers with more powerful mathematical and graphics-processing capabilities than a PC. Used primarily for advanced design or engineering work requiring powerful graphics or computational capabilities.

• Servers: Specifically optimized to support a computer network, enabling users to share files, software, peripheral devices, or other network resources.

• Mainframes: Large-capacity, high performance computers that process vast amounts of data very rapidly.

• Supercomputers: Specially designed and more sophisticated computers used for tasks requiring extremely rapid and complex calculations with thousands of variables, millions of measurements, and thousands of equations.

• Grid computing: Geographically remote computers connected into a single network to create a “virtual supercomputer” by combining the computational power of all computers on the grid.

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9 Define the client/server model of computing and describe the difference between a two-tiered and N-tier client/server architecture.

Client/server computing splits processing between “clients” and “servers.” Both are on the network, but each machine is assigned functions it is best suited to perform. The client is the user point of entry for the required function and is normally a desktop computer, workstation, or laptop computer. The user generally interacts directly only with the client portion of the application, often to input data or retrieve data for further analysis. The server provides the client with services. Servers store and process shared data and also perform back-end functions not visible to users, such as managing network activities.

Two-tiered client/server architecture is the simplest form of client/server network. It consists of a client computer networked to a server computer, with processing split between the two types of machines.

N-tier client/server architecture is more complex than the simple two-tiered client/server network. In this type of architecture, the work of the entire network is balanced over several different levels of servers, depending on the kind of service being requested.

Define and describe the mobile platform, BYOD, nanotechnology, grid computing, cloud computing, virtualization, green computing, and multicore processing.

Mobile platform: More and more business computing is moving from PCs and desktop machines to mobile devices like tablets and smartphones. Data transmissions, web surfing, email and instant messaging, digital content displays, and data exchanges with internal corporate systems are all available through a mobile digital platform.

BYOD: Bring Your Own Device: Is a concept in which companies allow employees to use personal computing devices on the job and access corporate networks. Devices may include smartphones, tablet computers, or other handheld computing devices. It’s one aspect of the ‘consumerization of IT’ in which new information technology that first emerges in the consumer market spreads into business organizations.

Nanotechnology: Uses individual atoms and molecules to create computer chips and other devices that are thousands of times smaller than current technologies permit. Nanotechnology shrinks the size of transistors down to the width of several atoms.

Grid computing: Connects geographically remote computers into a single network to create a “virtual supercomputer” by combining the computational power of all computers on the grid.

Cloud computing: A model of computing where firms and individuals obtain computing power and software applications as shared resources over the Internet, rather than purchasing their own hardware and software. Data are stored on powerful servers in massive data centers and can be accessed by anyone with an Internet connection and standard web browser. Cloud computing consists of three types of services: •

Cloud infrastructure as a service: customers use processing, storage, networking, and other computing resources from cloud service providers to run their information systems. .

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10 • •

Cloud platform as a service: customers use infrastructure and programming tools hosted by the service provider to develop their own applications.

Cloud software as a service: customers use software hosted by the vendor.

Virtualization: Is the process of presenting a set of computing resources (such as computing power or data storage) so that they can all be accessed in ways that are not restricted by physical configuration or geographic location. Server virtualization enables companies to run more than one operating system at the same time on a single machine.

Green computing: Refers to the practices and technologies for designing, manufacturing, using and disposing of computers, servers, and associated devices such as monitors, printers, storage devices, and networking and communications systems to minimize their impact on the environment. Reducing computer power consumption has been a very high “green” priority because technology is responsible for about two percent of the total U.S. power demand.

Multicore processing: Uses integrated circuits to which two or more processors have been attached for enhanced performance, reduced power consumption, and more efficient simultaneous processing of multiple tasks.

5-3 Describe the major types of computer software used in business and major software trends.

Distinguish between application software and system software and explain the role the operating system of a computer plays.

System software surrounds and controls access to the hardware. It manages and controls a computer’s activities. Some types of system software consist of computer language translation programs that convert programming languages into machine language that can be understood by the computer and utility programs that perform common processing tasks, such as copying, sorting, or computing a square root. The operating system allocates and assigns system resources, schedules the use of computer resources and computer jobs, and monitors computer system activities.

Application software works through the system software in order to develop specific business applications. This type of software includes traditional programming languages, fourth-generation languages, application software packages and desktop productivity tools, software for developing Internet applications, and software for enterprise integration.

List and describe the major PC, server, mobile and cloud operating systems.

The leading PC and server operating systems include:

• • • •

Windows 11: Most recent Windows operating system.

Windows Server: Windows OS for servers.

UNIX: Used for powerful PCs, workstations, and network servers. Supports multitasking, multi-user processing, and networking. It is portable to different models of computer hardware.

Linux: Open source, reliable alternative to UNIX and Windows OS that runs on many different types of computer hardware. Can be modified by software developers. .

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11 •

MacOS: OS for Macintosh computers that is stable and reliable, with powerful search capabilities, support for video and image processing, and an elegant user interface. Most recent version is macOS Sierra.

Mobile and cloud operating systems include: • Google’s Chrome OS provides a lightweight cloud-based operating system for Google’s Chromebook laptop and tablet computers. Programs are not stored on the user’s computer but are used over the Internet and accessed through the Chrome web browser. User data reside on cloud servers.

• Android is an open-source operating system for mobile devices such as smartphones and tablet computers developed by the Open Handset Alliance led by Google. It has become the most popular smartphone platform worldwide, • iOS, Apple’s mobile operating system for the iPhone, iPad, and Apple Watch.

Name and describe the major desktop productivity software tools.

Word processing: Allows users to make changes in the document electronically in memory, eliminating the need to retype entire pages to make corrections. It often includes advanced features such as spelling checkers and thesaurus programs.

Spreadsheets: Composed of a grid of columns and rows, spreadsheets are good at performing calculations on interrelated pieces of data. Used for applications in which numerous calculations with pieces of data must be related to each other. When you change a value or values, all other related values on the spreadsheet will be automatically recomputed. Spreadsheets provide computerized versions of traditional financial modeling tools and provide an easy-to-use method of performing what-if analysis.

Data management: Used for creating and manipulating lists and for combining information from different fields. Data management software typically has facilities for creating files and databases to store, modify, and manipulate data for reports and queries.

Presentation graphics: Allow users to create professional quality graphics presentations. This software can convert numeric data into charts and other types of graphics and can include multimedia displays of sound, animation, photos, and video clips.

Software suites: Combine the functions of the most important desktop software packages, such as spreadsheets, word processing, graphics, and data management. Microsoft 365 (cloud-based) is an example. This integration provides a more general-purpose software tool and eliminates redundant data entry and data maintenance. Some low-cost desktop productivity suites (such as Apache OpenOffice)can be downloaded from the web.

Web browsers: Easy-to-use software tools for accessing the web and the Internet. Web browsers have become the primary interface for accessing the Internet or for using networked systems based on Internet technology.

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12 Explain how Java, JavaScript, HTML and HTML5 are used in building applications for the web.

Java is used for building applications that run on the web and HTML is used for creating webpages.

Java is an operating system that is processor independent. Its object-oriented programming language has become the leading interactive programming environment for the web. Java enables users to manipulate data on networked systems using web browsers, reducing the need to write specialized software.

JavaScript is a client-side programming language that is used for creating interactive web pages. It can be used to create animations, handle user input, and perform complex calculations. JavaScript is often used in conjunction with HTML and CSS to create dynamic and responsive user interfaces.

Hypertext markup language (HTML) is a page description language for specifying how text, graphics, video, and sound are placed on a webpage and for creating dynamic links to other webpages and objects. HTML programs can be custom written, but they also can be created using the HTML authoring capabilities of web browsers or of popular word processing, spreadsheet, data management, and presentation graphics software packages. HTML editors are more powerful HTML authoring tool programs for creating webpages.

Hypertext markup language 5 (HTML5) is the latest version of HTML and includes new features that enable developers to create more sophisticated web applications. It includes new elements for handling video and audio, as well as new APIs for creating interactive applications. HTML5 also includes new features for mobile devices, such as support for touch-based input and geolocation, and the ability to function across different display devices.

In summary, Java is used for building server-side applications, JavaScript is used for creating interactive web pages, and HTML and HTML5 are used for creating the structure and content of web pages.

Together, these technologies enable developers to create dynamic, data-driven web applications that can provide a rich user experience.

Define web services, describe the technologies they use, and explain how web services benefit businesses.

Web services are sets of loosely coupled software components that exchange information with each other using universal web communications standards and languages. They can be used as components of web-based applications linking the systems of two different organizations or to link disparate systems of a single company. Web services are not tied to a particular operating system or programming language.

Different applications can use them to communicate with each other in a standard way without timeconsuming custom coding.

XML is the foundation technology for web services. This language makes it possible for computers to manipulate and interpret their data automatically and perform operations on the data without human intervention.

Businesses use web services to tie their websites with external websites, creating an apparently seamless experience for users. The benefit derives from not having to re-create applications for each business partner or specific function within a single company. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

13 Explain why open-source software is so important today and what its benefits for business are.

Open-source software is software that anyone can inspect, modify, and enhance. and is not owned by any company or individual. A global network of programmers and users manage and modify the software, fix errors in it, or make improvements to its functionality. Open-source software is not restricted to any specific operating system or hardware technology. Several large software companies are converting some of their commercial programs to open source.

Linux is the most well-known open-source software. It’s a UNIX-like operating system that can be downloaded from the Internet, free of charge, or purchased for a small fee from companies that provide additional tools for the software. It is reliable, compactly designed, and capable of running on many different hardware platforms, including servers, handheld computers, and consumer electronics. Linux has become popular during the past few years as a robust low-cost alternative to UNIX and the Windows operating system.

Thousands of open-source programs are available from hundreds of websites. Businesses can choose from a range of open-source software including operating systems, office suites, web browsers, and games. Open-source software allows businesses to reduce the total cost of ownership. It provides more robust software that’s often more secure than proprietary software.

Define and describe cloud computing software services, mashups, and apps and explain how they benefit individuals and businesses.

Cloud computing provides computer processing, storage, software, and other services as virtualized resources over a network, primarily the Internet, on an as-needed basis. It is becoming popular for describing web-based applications that are stored and accessed via the “cloud” of the Internet. The software and the data they use are hosted on powerful servers in massive data centers and can be accessed by anyone with an Internet connection and standard web browser. The best examples are Google Apps desktop productivity tools and the Microsoft 365 software suite.

A mashup is a software application that integrates functionality and data from multiple applications to create a new, customized application The idea is to take different sources and create a new work that is “greater than the sum” of its parts. Web mashups combine the capabilities of two or more online applications to create a kind of hybrid that provides more customer value than the original sources alone.

An app is a software program that can be accessed via the Internet. Most of the attention goes to the apps that have been developed for the mobile platform. Apps turn smartphones and other mobile devices into general-purpose computing tools.

Businesses benefit most from these new tools and trends by not having to re-invent the wheel. Apps have already been developed by someone else and a business can use them for its own purposes.

Mashups let a business combine previously developed web applications into new ones with new purposes. They don’t have to re-invent the previous applications from scratch—merely use them in the new processes. Organizations using cloud computing generally do not own the infrastructure. Instead, they purchase their computing services from remote providers and pay only for the amount of computing power they actually use. .

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14 5-4 Identify the principal issues in managing hardware and software technology.

Explain why managers need to pay attention to capacity planning and scalability of technology resources.

The principal issues in managing hardware and software assets include capacity planning and scalability.

Capacity planning is the process of predicting when a computer hardware system becomes saturated. It considers factors such as the maximum number of users that the system can accommodate at one time; the impact of existing and future software applications; and performance measures, such as minimum response time for processing business transactions. Capacity planning ensures that the firm has enough computing power for its current and future needs.

Scalability refers to the ability of a computer, product, or system to expand to serve a large number of users without breaking down. Organizations must ensure they have sufficient computer processing, storage, and network resources to handle surging volumes of digital transactions and to make such data immediately available online.

Describe the cost components used to calculate the total cost of ownership (TCO) of technology assets.

When calculating the total cost of ownership of technology assets, a business must include the original cost of the hardware and software, installation costs, ongoing administration costs for hardware and software upgrades, maintenance, technical support, training, downtime, and even utility and real estate costs for running and housing the technology.

“Hidden costs” for support staff, downtime, and additional network management can make distributed client/server architectures—especially those incorporating handheld computers and wireless devices— more expensive than centralized mainframe architectures.

Identify the benefits and challenges of using outsourcing, cloud computing services, and mobile platforms.

In the past, most companies ran their own computer facilities and developed their own software. Today, more and more companies are obtaining their hardware and software technology from external service vendors.

Outsourcing: The most important benefit of outsourcing technology management is that it allows a business to concentrate on its core competencies rather than focusing on technology issues. Instead of purchasing all the necessary hardware and software for hosting a website, a business can use a web hosting service that maintains a large web server, or a series of servers, and provides fee-paying subscribers with space to maintain their websites.

Outsourcing custom software development or maintenance to outside firms benefits a company because it won’t have to hire programmers, analysts, and managers with the necessary skills. An outsourcer often has the technical and management skills to do the job better, faster, and more efficiently. Even though it’s often cheaper to outsource the maintenance of an IT infrastructure and the development of new .

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15 systems to external vendors, a business must weigh the pros and cons carefully. Service level agreements are formal contracts between customers and service providers that define the specific responsibilities of the service provider and the level of service expected by the customer.

Cloud computing services: Refer to services that deliver and provide access to hardware and software remotely as a web-based service. A business can rent online software from another firm and avoid the expense and difficulty of installing, operating, and maintaining the hardware and software on its own. A business must carefully assess the costs and benefits of the service, weighing all people, organizational, and technology issues. It must ensure it can integrate the software with its existing systems and deliver a level of service and performance that is acceptable for the business.

Small and medium-sized businesses may find it more advantageous to use cloud computing services because of the minimal overhead and upfront costs. Large businesses will have to factor in whether cloud computing capabilities are sufficiently secure or reliable for their most critical systems. These firms may choose to handle their average processing loads in-house and pay for only as much additional computing power as the market demands. This arrangement enables firms to have a more flexible infrastructure, some of it owned by the firm, and some of it rented from giant computer centers run by technology specialists.

Mobile platforms: Integrating mobile platforms with the firm’s existing IT infrastructure and applications may be quite a challenge for many organizations. Central coordination and oversight are essential. Firms must inventory the mobile devices and develop policies and tools for tracking, updating, and securing them and for controlling the data and applications that run on them. Gains in employees’ productivity and efficiency must be balanced against increased costs of integrating the devices into the firm’s IT infrastructure and from providing technical support. The total cost of ownership for each device is much higher than typical IT hardware.

Explain why software localization has become an important management issue for global companies.

A global organization must create systems that can be realistically used by multiple business units in different countries. Software applications may require local language interfaces including menu bars, commands, error messages, reports, queries, online data entry forms, and system documentation. The interfaces must be easily understood and mastered quickly in a variety of languages. Global systems must also consider differences in local cultures and business processes.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 5-5 Why is selecting computer hardware and software for the organization an important business decision? What people, organization, and technology issues should be considered when selecting computer hardware and software?

Student answers to this question will vary. Selecting hardware and software for the organization is an extremely important business decision because now, more than ever, an organization’s ability to execute depends on the kind of hardware and software it has to support operations, improve decision making, .

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16 grow, and prosper. This book is full of examples of businesses problems resulting from inadequate or outdated hardware and software or mismatches of hardware and software with the organization’s business processes. The chapter-opening case on QRyde is one example.

5-6 Should organizations use software service providers (including cloud services) for all their software needs? Why or why not? What people, organization, and technology factors should be considered when making this decision?

Student answers to this question will vary. Companies considering using cloud software services need to identify and assess the costs and benefits of external services carefully, weighing all people, organizational, and technology issues. These issues include the level of service and performance that is acceptable for the business and the expertise required to deploy and manage a new cloud-based IT infrastructure. Additional training will be required for users and IT staff. New cloud users often overlook additional costs for networking, data conversion. changes in organizational procedures. data transfer and storage, and the additional work required to upgrade or replace business application systems to run in a cloud environment. The business needs to clearly understand how well cloud software meets the business’s information requirements.

5-7 What are the advantages and disadvantages of cloud computing?

Student answers to this question will vary., but here are some of the considerations: Cloud computing advantages include cost-savings, scalability and flexibility such as • Variable expenses instead of fixed expenses • Benefitting from the extensive buying power of large cloud providers • The scalability of computing resource • Opportunity to reduce IT costs • Rapid worldwide deployment.

Cloud computing has some drawbacks. Unless users make provisions for storing their data locally, the responsibility for data storage and control is in the hands of the cloud provider. Although cloud systems, if set up and used properly, have strong security, some businesses worry about so much of their data stored off-premises along with the data of other organizations, making them tempting targets for data theft and denial of service attacks. The organization will still have to manage its own applications and understand how responsibilities are shared with cloud vendors. It may be more expensive to run a cloud application than one that is on-premises.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and the solution files are in Instructor Resources.

5-8 Management Decision Problem: Easy Jet AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences

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17 This Management Decision Problem asks students to consider how cloud computing services could provide a solution to Easy Jet’s need for a reliable and robust system for booking and managing reservations while keeping costs low, as well as identifying the people, organization, and technology factors and management decisions need to be considered when designing the solution.

To design the solution, several factors and management decisions need to be considered, including: People: EasyJet would need to ensure that their IT team has the skills and knowledge to work with cloud-based technologies. Additionally, training would be required to ensure that employees are able to use the new system effectively. Customers would need some instruction in how to use the new system.

Organization: EasyJet would need to evaluate their organizational structure to determine how the new cloud-based solution would fit in with their existing processes and procedures. This would require evaluating the impact on staffing, roles, and responsibilities.

Technology: EasyJet would need to select a cloud provider that can meet their requirements for scalability, availability, and performance. Additionally, they would need to consider the integration of the new solution with their existing IT systems.

Management decisions: Key management decisions would include determining the level of control EasyJet wants over their cloud-based solution, deciding on the appropriate service model (e.g., SaaS, PaaS, IaaS), and selecting the appropriate pricing model.

By considering these factors and making the appropriate management decisions, EasyJet can design a cloud-based solution that meets their requirements for seat selection capability while keeping costs low.

Additionally, the cloud-based solution would provide the flexibility and scalability needed to handle future growth and changing business requirements.

5-9 Improving Decision Making: Using a Spreadsheet to Evaluate Total Cost of Ownership (TCO) for PC Desktop Systems AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Spreadsheet formulas, SUM, VLOOKUP Business skills: Technology pricing This Hands-on Software Project requires students to use their web research skills to obtain desktop hardware and software pricing information, and then use spreadsheet software to calculate total cost of ownership (TCO) for various system configurations. There are 2 question files for this project: EMIS15Chap5 Specifications and EMIS15Chap 5 Question File, available in MyLAb. Answers may vary, depending on when students access vendor websites to obtain pricing information and which PC models they select. This problem asks students to use a price sheet for various PC models and their prices and use the VLOOKUP function to find the price of each alternative PC/printer option.This problem has been simplified for instructional purposes. The solution worksheet compares the TCO of 2 options. For purposes of this exercise, recurring costs are identical for each alternative and there is only 1 printer option. .

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18 The sample solution file EMIS15Chap5 Solution File, which can be found in Instructor Resources, is for purposes of illustration and may not reflect the most recent prices for desktop hardware and software products. Other considerations in the selection process might be the functionality reputation, and reliability of the hardware and software products, ease of use, and compatibility with other software tools in the organization.

5-10 Improving Decision Making: Using Web Research to Budget for a Sales Conference AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Internet-based software Business skills: Researching transportation and lodging costs This Internet Project asks students to use the Hilton and Marriott websites to select a hotel in whichever of Miami or Marco Island, Florida would enable the company to hold its sales conference within its budget and to meet its other sales conference requirements, to locate flights meeting certain criteria, and to determine costs of each airline ticket from these cities, and when. finished, to create a budget for the conference that includes the cost of each airline ticket, the room cost, and $85 per attendee per day for food.

Students should write a brief report detailing why they chose the hotel they did, and price should not be the only issue. Some students will go directly to an airline site and others will go to aggregate websites like Expedia or Travelocity. Ask them to rate the use of the website in their report as well.

5-11 Collaboration and Teamwork Project: Evaluating Server and Mobile Operating Systems AACSB: Written and oral communication; Application of knowledge, Reflective thinking, Analytical thinking This Collaboration and Teamwork Project asks students to participate as part of a team in choosing and evaluating two server or mobile operating systems. Answers will vary but should consider factors such as cost (Total Cost of Ownership-TCO), functionality, ease of use, training requirements, compatibility with the organization’s corporate software and IT infrastructure. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem-Solving Case: How Green is the Cloud?

AACSB: Written and oral communication; Analytical thinking, Application of knowledge.

Case Study Questions: Answers 5-12 How environment-friendly are data centers? Explain your answer.?

Data centers are not very environment-friendly as they consume a lot of energy for powering and .

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19 cooling their servers. The cooling process is responsible for up to 40% of total energy consumption in a data center. Additionally, disposing of outdated or malfunctioning equipment from data centers adds to e-waste, which is harmful to the environment.

5-13 How green is cloud computing? How much does it help or hurt the environment? Explain your answer.

Cloud computing can be considered green as it uses resources more efficiently than on-premises data centers. Businesses sharing the resources of a cloud data center use 77% fewer servers, consume 84% less power, and reduce carbon emissions by 88%, compared to on-premises data centers. Cloud computing can also reduce the need for large office spaces and commuting, which lowers carbon dioxide emissions. Research suggests that cloud computing could potentially remove 1 billion metric tons of CO2 between 2021 and 2024. However, the increasing use of cloud data centers has led to even more cloud data centers, which means that overall greenhouse gas emissions from data centers are expected to increase.

5-14 What solutions have been proposed to make data centers greener? How effective are they?

Several solutions have been proposed to make data centers greener, including using renewable energy sources like solar, wind, or hydropower, implementing energy-efficient hardware and software, and using artificial intelligence to optimize cooling and power usage. These solutions have been effective to some extent, but there is still room for improvement. Examples of cloud computing success stories include Emirates Group, Yedpay, and DataProphet, which have reduced their computing costs and faulty parts by moving to the cloud. Crowley Carbon uses the AWS cloud to help businesses reduce their carbon footprints and lower their costs.

Video Case: IBM Expands Cloud to Daimler AACSB: Written and oral communications; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1) Mercedes-Benz wanted to use cloud infrastructure for its global sales services portal because: A) The company’s on-premises data center was not secure.

B) IBM’s cloud solution was very scalable.

C) IBM’s public cloud infrastructure was easier to use than competitors.

D) IBM’s public cloud infrastructure was less expensive than competitors.

Answer: B 2) Which of the following is not true?

A) Red Hat open-source software tools make it easier for enterprises to work across different platforms and environments.

B) Red Hat provides tools for virtualization.

C) Red Hat provides services such as training and support.

D) Red Hat does not use Linux.

Answer: D

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20 3) IBM’s public cloud is widely used in banking and healthcare because: A) IBM has special cloud tools for those industries.

B) These industries use confidential data requiring a high level of security.

C) IBM’s public cloud is less expensive to implement than competitors.

D) These industries want to use Red Hat tools and open-source software.

Answer: B Video Case Essay Questions: Answers 1. Why would Mercedes’ global sales portal be an appropriate application for a public cloud?

Answer: Mercedes-Benz Group derives a substantial portion of its revenue from after-sales services such as warranties, servicing, and repairs that take place after a vehicle is purchased, contributing as much as 50 percent to automakers’ overall profit and more than 40 percent to the gross profit of large, full-range auto dealerships. After-sales services also provide opportunities for dealers to engage more with their customers and cement loyalty to their brand. After-sales services are growing and contributing an increasingly growing portion of automaker revenue.

Mercedes-Benz Group’s global sales portal was becoming an increasingly important part of the business. The company needs a more leading-edge technology platform that would scale as the company’s after-sales business grew and also enable the company to quickly launch new products and services to meet user demand. IBM’s public cloud provided this elasticity, along with a high level of security, that would be appropriate for a critical workload such as Mercedes-Bez’s global sales portal.

2. What were the benefits of Mercedes-Benz switching to IBM’s public cloud platform for Mercedes and for IBM? Answer: Benefits for Mercedes-Benz include: • More up-to-date technology that could support critical workloads such as the company’s global sales portal and was scalable.

• High level of public cloud security.

• Access to IBM expertise in hybrid clouds and integrating products from multiple cloud providers.

• Access to Red Hat open-source software products and expertise Benefits for IBM include: • Opportunity to grow its cloud computing business and become a major player in the cloud computing market.

• Ability to develop hybrid cloud expertise and expand its range of services.

• Ability to acquire new customers for its hybrid cloud services and promote the open-source services of its subsidiary Red Hat Software.

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21

Dirt Bike Running Case: Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Spreadsheet formulas, electronic presentation software (optional) Business skills: Technology rent vs. buy decision, TCO analysis This project provides an opportunity for you to help a company make a decision about whether to rent or buy new technology. You’ll use spreadsheet software to compare the total three-year cost of licensing and maintaining new manufacturing software or renting the software from an online software Analytical thinking, service provider.

Dirt Bikes would like to implement new production planning, quality control, and scheduling software for use by 25 members of its manufacturing staff. Management is trying to determine whether to purchase the software from a commercial vendor along with any hardware required to run the software or to use a hosted software solution from a software service provider. (The hosted software runs on the service provider’s computer.) You have been asked to help management with this rent vs. buy decision by calculating the total cost of each option over a three-year period.

The costs of purchasing the software (actually for purchasing a 3-year license from the vendor to use its software package) includes the initial purchase price of the software (licensing fee of $100,000 paid in the first year), the cost of implementing and customizing the software in the first year ($20,000), one new server to run the software (a first-year purchase of $7000), one information systems specialist devoting half of his or her time to supporting the software ($65,000 in full-time annual salary and benefits with a 3% annual salary increase each year after the first year), user training in the first year ($10,000 first year and 3000 second and third years), and the cost of annual software upgrades ($5,000).

The costs of renting hosted software are the rental fees ($2000 annually per user), implementation and customization costs ($12,000 in the first year), and training ($10,000 in the first year, $2000 in second and third years), and technical support one-eighth annual $65,000 salary).

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Use your spreadsheet software to calculate the total cost of renting or purchasing this software over a three-year period. Identify the lowest-price alternative that meets Dirt Bikes’s requirements. .

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22 • •

What other factors should Dirt Bikes consider besides cost in determining whether to rent or buy the hardware and software?

(Optional) If possible, use presentation software to summarize your findings for management.

Student solutions will vary. We provide one example. The spreadsheet solution file (EMIS15Ch05_ solutionfile.xls) shows that the total 3-year cost of renting hosted software is less expensive than purchasing it and using hosted software requires less management than Dirt Bikes owning and running its software. However, there are other factors to consider-the functionality of the hosted software versus purchased software, the flexibility of the hosted software compared to in-house resources, and the reliability and reputation of the hosted software vendor.

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Essentials of Management Information Systems, 15e Chapter 6 Foundations of Business Intelligence: Databases and Information Management Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter introduces students to the foundations of business intelligence: databases and database management. It defines a database and explains how a relational database organizes

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2 data, describes the principles of a database management systems, and identifies the principal tools and technologies for accessing information from databases to improve business performance and decision making. It also explains why data governance and data quality assurance are essential for managing a firm’s data resources. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MISrelated job.

The essential message of this chapter is that how businesses store, organize, and manage their data has a tremendous impact on organizational effectiveness. Data have now become central and even vital to an organization’s survival. Ask students why this might be one of the most important chapters of this book.

Opening Case: Better Data, Better Decision for the State of Maine.

The experience of the state of Maine illustrates the importance of data management.

Business performance depends on what a firm can or cannot do with its data. Both operational efficiency and decision making were hampered by the State of Maine’s fragmented data stored in outdated legacy systems that were difficult to access and analyze. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • What was the business impact of Maine’s data management problem?

• How did better data management technology improve operational efficiency and management decision making?

Section 6-1: Define a database and explain how a relational database organizes data.

This section introduces basic key terms like field, record, file, database, entity, and attribute. Try using a simple spreadsheet print out to demonstrate these terms. If you have access to a relational DBMS during class time, you can demonstrate several of the concepts presented in this section.

If you have time and as a class activity, ask your students to prepare an entity-relationship diagram, as well as normalize the data. Your students will need guidance from you to complete this activity, but it will help them see and understand the logical design process.

Figure Video 6.1 This is an appropriate time for the class to review and discuss Figure 6.1, which illustrates the hierarchy into which data are organized in a computer system, and its accompanying Figure Video. Figure Videos are available in the eText and in MyLab MIS This section introduces database design and management requirements for database systems.

Help your students see how a logical design allows them to analyze and understand the data from a business perspective, while physical design shows how the database is arranged on direct access storage devices. At this point, you could use the enrollment process at your university as an example.

Figure Videos 6.2 and 6.3: This is an appropriate time for the class to review and discuss Figures 6.2 and 6.3 and their accompanying Figure Videos. Figure 6.2 depicts the features of a .

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3 relational database table. Figure 6.3 illustrates another table storing data related to the Figure 6.2 table, and how the two tables can be linked using a foreign key. Figure Videos are available in the eText and MyLab MIS. Consider carefully reviewing the section on Establishing Relationships, including entityrelationship diagrams, normalization, and referential integrity. Many students have trouble grasping these concepts.

Section 6-2: Describe the principles of a database management system.

Discuss the three operations of a relational DBMS: select, project, and join. A database management system is comprised of three components: a data definition language, data dictionary, and data manipulation language. If you have access to a relational DBMS during class time, you can demonstrate several of the concepts presented in this section. Alternatively, you could review Figures 6.10 –6.12 illustrating how these components are handled by Microsoft Access.

The concept of using databases stored in cloud computing data centers is introduced in this section and piggybacks on cloud computing concepts introduced earlier in the text. Nonrelational database management systems (i.e., NoSQL) that are used for large volumes of structured and unstructured data that is difficult to use with traditional SQL-based tools is also introduced in this section.

The Spotlight on Technology case, New Cloud Database Tools Help Vodafone Fiji Make Better Decisions, focuses on Vodafone Fiji’s adoption of Oracle Autonomous Data Warehouse Cloud and Oracle Analytics Cloud services to make better decisions about customer which deals to offer which customers and the right times to do so. Answers to the case study questions for this case can be found on page 5 to 6 of this Instructor’s Manual.

Section 6-2 also includes a section on blockchain, a distributed database technology and Figure 6.13 illustrates how a blockchain works. Consider reviewing this section with students and asking them to suggest other appropriate applications for blockchain.

Section 6-3: Identify the principal tools and technologies for accessing information from databases to improve business performance and decision making.

This section focuses on how data management technologies are actually used: data warehouses, data marts, business intelligence, multidimensional data analysis, and data mining. Regardless of their career choice, students will probably use some or all of these tools in their jobs. For example, data warehouses and data marts are important to many business functions. They are critical for those who want to use data analytics tools, which have many uses in management analysis and business decisions. Figure 6.14 (page 214) is an important diagram for illustrating how all these technologies work together.

Keep in mind as you teach this chapter that managing data resources can be very technical, but many students will need and want to know the business uses and business values. In the end,

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4 effectively managing data is the goal. Doing it in a way that will enable your students to contribute to the success of their organization is the reason why most students are in this course.

The discussion of Big Data expands on the definition in Chapter 1 to help students understand why Big Data is one of the key technologies everyone is likely to encounter-and perhaps use- in their future jobs. Ask students to explain how Big Data differs from that in a traditional relational database.

Video Case: The Video Case, Stitch Fix CEO Sees Business of Personalization as Key to Success; Stitch Fix President on Booming Growth Amid Pandemic. focuses on Stitch Fix, an online retail company with a business strategy based heavily on Big Data and personalization. It would be appropriate to assign this Video Case when covering Big Data and Analytical Tools Relationships, Trends in Section 6-3, or to supplement the discussion of Business Intelligence and Analytics Capabilities in Section 11-2 of Chapter.11. You might want to ask students what makes Stitch Fix’s business model so data-driven, and does being heavily data-driven give Stitch Fix a competitive advantage? The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 17 to 18 of this Instructor’s Manual.

This section also discusses text mining and web mining that are taking on significance as more data and information is stored in text documents and on the web. Web mining is divided into three categories: content mining, structure mining, and usage mining. Each one provides specific information on patterns in web data. Sentiment mining has become a popular application of AI. Section 6-4: Explain why data governance and data quality assurance are essential for managing the firm’s data resources.

This section introduces students to some of the critical issues surrounding the management of corporate data. Students should realize that setting up the database is only the beginning of the process. Managing the data is the real challenge. In fact, the main point is to show how data management has changed and the reason why data must be organized, accessed easily by those who need access, and protected from the wrong people accessing, modifying, or harming the data.

Developing a database environment requires much more than selecting database technology. It requires a formal information policy governing the maintenance, distribution, and use of information in the organization. The organization must also develop a data administration function and a data-planning methodology. The organization should use data planning techniques to make sure that the organization’s data model delivers information efficiently for its business processes and enhances organizational performance. There is political resistance in organizations to data management, especially the sharing of information that has been controlled exclusively by one organizational group. Creating a database environment is a long-term endeavor requiring large up-front investments and organizational change.

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5 The text asks students to think of all the times they have received several pieces of the same direct mail, or several e-mails that are duplicates. This would be a good question to raise as most students would have experienced this problem. However, problems like these are just the proverbial tip of the iceberg as studies indicate that more than 25 percent of the critical data in large Fortune 1000 companies’ databases are inaccurate. Earlier in the chapter, referential integrity is introduced as a way to ensure relationships between coupled tables remain constant.

This part of the chapter would be a good time to review how principles such as referential integrity help improve data quality assurance.

The Spotlight on Organizations case, Higher Data Quality Helps Vyaire Save Lives, illustrates how poor data quality can pose problems for manufacturing, health, and safety. Answers to the case study questions for this case can be found on pages 6 to 7 of this Instructor’s Manual.

Section 6-5: Understand how MIS can help your career.

This section addresses how the material in this chapter can help students secure a position as an entry-level data analyst. Ask students what they learned from this chapter that could help them secure such a position. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: New Cloud Database Tools Help Vodafone Fiji Make Better Decisions ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

Define the problem faced by Vodafone Fiji. What people, organization, and technology factors contributed to the problem?

Vodafone Fiji, a wireless telecommunications services provider with 800,000 subscribers and 267 employees, faced the problem of inadequate computing power, storage, and data management tools. The company could not analyze data quickly to make informed decisions about which deals to offer to which customers, and the right times to do so. The data was stored on premises in multiple databases, and the recent acquisition of several other telecommunications companies serving nearby markets increased the amount of data to be managed and mined for insights threefold. The problem was exacerbated by the fact that all these businesses had different types of data in different systems and formats.

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6 2.

Evaluate Oracle Autonomous Data Warehouse and Oracle Analytics Cloud as solutions for Vodafone Fiji.

Oracle Autonomous Data Warehouse and Oracle Analytics Cloud were evaluated as solutions for Vodafone Fiji. Oracle Autonomous Data Warehouse Cloud is a fully managed, highperformance elastic cloud service that provides analytical capability for data stored in the Oracle database. The environment is optimized for data warehouse workloads and supports all standard SQL and business intelligence (BI) tools. The Oracle Autonomous Data Warehouse provides an easy-to-use, fully autonomous database that scales elastically as workloads increase, delivers fast query performance, and requires no database administration. Oracle Analytics Cloud is a cloudbased platform that can handle data in almost any shape or size from almost any source and has capabilities for collecting, consolidating, and transforming the data and for creating transactional and analytical reports and dashboards.

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How did the new Oracle tools change decision making at Vodafone Fiji?

The new Oracle tools changed decision making at Vodafone Fiji by allowing the company to obtain insights from the data collected and adjust its promotions to changing market dynamics.

The company is also able to target customers who are at risk of canceling Vodafone services as well as those most likely to respond to a special offer. The data warehouse system can produce reports on call patterns to make sure customers are signed up for the optimal set of services or to target customers who have 4G plans and might be enticed by free trials to subscribe to a faster data plan. Promotional campaigns customized to specific cell sites can encourage customers to go online during low utilization periods. The tools also enabled the company to automate many routine tasks required to manage Oracle databases, freeing up database administrators to do higher-level and more strategic work.

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Was using cloud services advantageous for Vodafone Fiji? Explain your answer..

Using cloud services was advantageous for Vodafone Fiji. It allowed the company to obtain insights from the data collected more quickly and easily, adjust its promotions to changing market dynamics, target specific customers, and customize promotional campaigns.

Additionally, the Oracle tools enabled Vodafone Fiji to automate many routine tasks required to manage Oracle databases, freeing up database administrators to do higher-level and more strategic work. Finally, the cloud services were more cost-effective than upgrading the company's on-premises systems.

Spotlight on Organizations: Higher Data Quality Helps Vyaire Save Lives ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

Identify the problem in this case study. What people, organization, and technology factors contributed to this problem?

The problem in this case study was the low data quality that Vyaire faced. The company had basic capabilities for data management and data analytics, and numerous data quality issues. The

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7 data issues were causing difficulties in decision-making, particularly in scaling up ventilator production during the COVID-19 pandemic. The people, organization, and technology factors that contributed to this problem were employees' practices of choosing data from systems and sending Excel spreadsheets around, data quality issues, and the lack of a unified platform for maintaining high-quality data.

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Describe the business impact of low data quality at Vyaire.

The business impact of low data quality at Vyaire was that it prevented the company from scaling up production of ventilators during the COVID-19 pandemic. Only 20 percent of ventilator devices were getting through all the stages for a complete first pass yield. With such a low level of quality, Vyaire would never be able to meet the increasing demand for ventilators.

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Describe the solution Vyaire selected. What was the role of data quality in the solution? How effective was it?

Vyaire selected a solution that involved creating a Business Intelligence Center of Excellence to optimize the use of data across the organization using AWS cloud services such as Amazon Redshift and Amazon QuickSight. Additionally, the company deployed the Talend Data Fabric platform to achieve a high level of data quality throughout the enterprise. The role of data quality in the solution was to ensure accuracy and consistency of data from multiple sources. The solution was effective as Vyaire was able to generate consistent, clean data from multiple sources, leading to improved sales, customer relationship management, and supply chain management, as well as the company’s ability to take advantage of new growth opportunities.

Vyaire went from producing 6 ventilators per day to 600 per day for healthcare providers around the world.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 6-1 What is a database and how does a relational database organize data?

Define a database.

A group of related files makes up a database. Databases are at the heart of all information systems because they keep track of the people, places, and things that a business must deal with on a continuing, often instant basis.

Define and explain the significance of entities, attributes, and key fields.

• Entity is a person, place, thing, or event on which information can be obtained.

• Attribute is a piece of information describing a particular entity.

• Key field is a field in a record that uniquely identifies instances of that record so that it can be retrieved, updated, or sorted. For example, a person’s name cannot be a key field because there can be another person with the same name, whereas a social security number is unique.

Also, a product name may not be unique, but a product number can be designed to be unique.

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8 Define a relational database and explain how it organizes and stores information.

The relational database is the primary method for organizing and maintaining data in most modern information systems. It organizes data in two-dimensional tables with rows and columns called relations. Each table contains data about an entity and its attributes. Each row represents a record and each column represents an attribute or field. Each table also contains a key field to uniquely identify each record for retrieval or manipulation.

Explain the role of entity-relationship diagrams and normalization in database design.

Relational databases organize data into two-dimensional tables (relations) with columns and rows. Each table contains data on an entity and its attributes. An entity-relationship diagram graphically depicts the relationship between entities (tables) in a relational database. A welldesigned relational database will not have many-to-many relationships, and all attributes for a specific entity will only apply to that entity.

Normalization is the process of creating small stable data structures from complex groups of data when designing a relational database. Normalization streamlines relational database design by removing redundant data, such as repeating data groups. A well-designed relational database will be organized around the information needs of the business and will probably be in some normalized form. A database that is not normalized will have problems with insertion, deletion, and modification.

6-2 Describe the principles of a database management system.

Define a database management system (DBMS), describe how it works, and explain how it benefits organizations.

A database management system (DBMS) is a specific type of software for creating, storing, organizing, and accessing data from a database. DBMS software that permits centralization of data and data management so that businesses have a single, consistent source for all their data needs. A single database services multiple applications. The most important feature of the DBMS is its ability to separate the logical and physical views of data. The user works with a logical view of data. The DBMS retrieves information so that the user does not have to be concerned with its physical location.

Define and compare the logical and physical views of data.

The DBMS relieves the end user or programmer from the task of understanding where and how the data are actually stored by separating the logical and physical views of the data. The logical view presents data as end users or business specialists would perceive them, whereas the physical view shows how data are actually organized and structured on physical storage media, such as a hard disk.

Define and describe the three operations of a relational database management system.

In a relational database, three basic operations are used to develop useful sets of data: select, project, and join.

• Select operation: Creates a subset consisting of all records in the file that meet stated criteria. In other words, select creates a subset of rows that meet certain criteria.

• Join operation: Combines relational tables to provide the user with more information than .

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9 is available in individual tables.

• Project operation: Creates a subset consisting of columns in a table, permitting the user to create new tables that contain only the information required.

Name and describe the three major capabilities of a DBMS. A DBMS includes capabilities and tools for organizing, managing, and accessing the data in the database. The principal capabilities of a DBMS include a data definition language, data dictionary, and data manipulation language: • The data definition language specifies the structure and content of the database.

• The data dictionary is an automated or manual file that stores information about the data in the database, including names, definitions, formats, and descriptions of data elements.

• The data manipulation language, such as SQL, is a specialized language for accessing and manipulating the data in the database.

Define non-relational databases and explain how it differs from a relational DBMS. Non-relational database management systems use a more flexible data model and are designed for managing large data sets across many distributed machines and for easily scaling up or down.

There are four main reasons for the rise in non-relational databases: cloud computing, unprecedented data volumes, massive workloads for web services, and the need to store new types of data.

Non-relationship databases can process structured and unstructured data captured from websites, social media, and graphics. Traditional relational databases aren’t able to process data from most of those sources. Non-relational databases can also accelerate simple queries against large volumes of structured and unstructured data. There’s no need to pre-define a formal database structure or change that definition if new data are added later.

A nonrelational database management system (NDBMS), also known as a NoSQL database, is a type of database management system that uses a flexible data model and does not rely on the traditional tabular relationships used in relational database management systems (RDBMS).

Unlike a relational DBMS, an NDBMS does not use a fixed schema, which means that data can be stored in a variety of ways, such as key-value pairs, document-based, graph-based, or columnfamily-based. This allows for more flexibility in storing and querying data, and can be particularly useful for managing large amounts of unstructured or semi-structured data, such as social media feeds or sensor data.

Another key difference between NDBMS and RDBMS is their approach to data consistency and scalability. NDBMS often prioritize availability and partition tolerance over consistency, meaning that they can handle high volumes of data and scale horizontally across multiple servers, but may sacrifice consistency in some cases. In contrast, RDBMS prioritize consistency over availability and partition tolerance, meaning that they enforce strict data consistency rules but may be less scalable and have limited ability to handle large amounts of data.

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10 Overall, the choice between an NDBMS and RDBMS will depend on the specific needs of the organization and the type of data they are managing.

6-3 Identify the principal tools and technologies for accessing information from databases to improve business performance and decision making.

Define big data and describe the technologies for managing and analyzing big data.

Traditional databases rely on neatly organized content into rows and columns. Much of the data collected nowadays by companies don’t fit into that mold.

Big Data describes data sets with volumes so huge they are beyond the ability of typical database management systems to capture, store, and analyze. The term doesn’t refer to any specific quantity of data, but it’s usually measured in the petabyte and exabyte range. It includes structured and unstructured data captured from web traffic, email messages, and social media content like tweets and status messages. It also includes machine-generated data from sensors.

Big data contains more patterns and interesting anomalies than smaller data sets. That creates the potential to gain new insights into customer behavior, weather patterns, financial market activity, and other phenomena.

Hadoop: Open-source software framework that enables distributed parallel processing of huge amounts of data across inexpensive computers. The software breaks huge problems into smaller ones, processes each one on a distributed network of smaller computers, and then combines the results into a smaller data set that is easier to analyze. It uses non-relational database processing and structured, semi-structured, and unstructured data.

In-memory computing: Rather than using disk-based database software platforms, this technology relies primarily on a computer’s main memory for data storage. It eliminates bottlenecks that result from retrieving and reading data in a traditional database and shortens query response times. Advances in contemporary computer hardware technology makes inmemory processing possible.

Analytic platforms: These platforms use both relational and non-relational technology that’s optimized for analyzing large data sets. They feature preconfigured hardware-software system designed for query processing and analytics.

List and describe the components of a contemporary business intelligence infrastructure.

Business intelligence (BI) infrastructures include an array of tools for obtaining useful information from all the different types of data used by businesses today, including semistructured and unstructured big data in vast quantities. Data warehouses, data marts, Hadoop, inmemory processing, and analytical platforms are all included in BI infrastructures.

Powerful tools are available to analyze and access information that has been captured and organized in data warehouses and data marts. These tools enable users to analyze the data to see new patterns, relationships, and insights that are useful for guiding decision making. These tools for consolidating, analyzing, and providing access to vast amounts of data to help users make

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11 better business decisions are often referred to as business intelligence. Principal tools for business intelligence include software for database query and reporting tools for multidimensional data analysis and data mining.

Describe the capabilities of online analytical processing (OLAP).

Data warehouses support multidimensional data analysis, also known as online analytical processing (OLAP), which enables users to view the same data in different ways using multiple dimensions. Each aspect of information represents a different dimension.

OLAP represents relationships among data as a multidimensional structure, which can be visualized as cubes of data and cubes within cubes of data, enabling more sophisticated data analysis. OLAP enables users to obtain online answers to ad hoc questions in a fairly rapid amount of time, even when the data are stored in very large databases. Online analytical processing and data mining enable the manipulation and analysis of large volumes of data from many perspectives – for example, sales by item, by department, by store, or by region – in order to find patterns in the data. Such patterns are difficult to find with normal database methods, which is why a data warehouse and data mining are usually parts of OLAP. Define data mining, describe what types of information can be obtained from it, and explain how it differs from OLAP. Data mining provides insights into corporate data that cannot be obtained with OLAP by finding hidden patterns and relationships in large databases and inferring rules from them to predict future behavior. The patterns and rules are used to guide decision making and forecast the effect of those decisions. The types of information obtained from data mining include associations, sequences, classifications, clusters, and forecasts.

Explain how text mining and web mining differ from conventional data mining.

Conventional data mining focuses on data that have been structured in databases and files. Text mining concentrates on finding patterns and trends in unstructured data contained in text files.

The data may be in emails, memos, call center transcripts, survey responses, legal cases, patent descriptions, and service reports. Text mining tools extract key elements from large unstructured data sets, discover patterns and relationships, and summarize the information.

Web mining helps businesses understand customer behavior, evaluate the effectiveness of a particular website, or quantify the success of a marketing campaign. Web mining looks for patterns in data through: • Web content mining: Extracting knowledge from the content of webpages.

• Web structure mining: Examining data related to the structure of a particular website.

• Web usage mining: Examining user interaction data recorded by a web server whenever requests for a website’s resources are received.

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12 Explain how users can access information from a company’s internal databases through the web.

Conventional databases can be linked via middleware to the web or a web interface to facilitate user access to an organization’s internal data. Web browser software on a client PC or other devive is used to access a corporate website over the Internet. The web browser software requests data from the organization’s database, using HTML commands to communicate with the web server. Because many back-end databases cannot interpret commands written in HTML, the web server passes these requests for data to special middleware software that then translates HTML commands into SQL so that they can be processed by the DBMS working with the database. The DBMS receives the SQL requests and provides the required data. The middleware transfers information from the organization’s internal database back to the web server for delivery in the form of a webpage to the user. The software working between the web server and the DBMS can be an application server, a custom program, or a series of software scripts.

6-4 Why are data governance and data quality assurance essential for managing the firm’s data resources?

Define data governance and explain how it helps organizations manage their data Data governance consists of policies and procedures for treating data as an organizational resource. Data governance establishes rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information. Information policy lays out specific procedures and accountabilities, identifying which users and organizational units can share information, where information can be distributed, and who is responsible for updating and maintaining the information.

Data governance is responsible for information policy, as well as for data planning, data dictionary development, and monitoring data usage in the firm.

List and describe the most common data quality problems.

Data that are inaccurate, incomplete, or inconsistent create serious operational and financial problems for businesses because they may create inaccuracies in product pricing, customer accounts, and inventory data, and lead to inaccurate decisions about what actions an organization should take. Firms must take special steps to make sure they have a high level of data quality.

These include using enterprise-wide data standards, databases designed to minimize inconsistent and redundant data, data quality audits, and data cleansing software.

List and describe the most important tools and techniques for assuring data quality.

A data quality audit is a structured survey of the accuracy and level of completeness of the data in an information system. Data quality audits can be performed by surveying entire data files, surveying samples from data files, or surveying end users for their perceptions of data quality.

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13 Data cleansing consists of activities for detecting and correcting data in a database that are incorrect, incomplete, improperly formatted, or redundant. Data cleansing not only corrects data but also enforces consistency among different sets of data that originated in separate information systems.

Discussion Questions: Answers 6-5 It has been said that you do not need database management software to create a database environment. Discuss.

Student answers to this question will vary. One response might be that the database software alone can’t manage data or create an effective database. If one populates a DBMS with data that are redundant, disorganized and inconsistent, if the database structure (entities, attributes, etc.) has not been defined, the database won’t be able to produce any meaningful information.. One can have a database environment using manually gathered data if the data have been properly classified and organized. The thought and organization that is put into the database design is what makes a database environment successful.

6-6 To what extent should end users be involved in the selection of a database management system and database design?

Student answers to this question will vary. However, it is obvious that end users should be involved in database design and DBMS selection because they have the knowledge of what information they need from the database and how it would be used. User information requirements would drive database design and DBMS selection.

6-7 What are the consequences of an organization not having an information policy?

Student answers to this question will vary. Information policy establishes the organization’s rules for sharing, disseminating, acquiring, standardizing, classifying, and inventorying information.

These rules include identifying which users and organizational units can share information, where information can be distributed, who is responsible for updating and maintaining the information, and how data resources should be secured. Without a formal information policy, there would be organizational mayhem, including data security problems, improper use of data, and delays cause by uncertainty about who is allowed to update and use the data.ng that data.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the concepts in the chapter. Hands-on MIS Project descriptions and data files can be found in MyLab MIS, and solution descriptions and data files can be found in Instructor Resources.

6-8 Management Decision Problem: Industrial Supply Company AACSB: Written and oral communication; Analytical thinking; Reflective thinking; Application of knowledge; Integration of real-world business experiences

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14 This Management Decision Problem asks students to answer various questions about the creation of a data warehouse for an industrial supply company Students can review the proposed format for the data warehouse along with sample files from the two systems that would supply the data for the data warehouse, and then answer the following questions: •

What business problems are created by not having these data in a single, standard format?

Without a single, standard format, creating a consolidated view of critical sales information can be challenging. It may lead to inconsistencies and discrepancies in the data, which can affect the accuracy of the decision-making process. This can result in lost sales opportunities, poor customer service, and ineffective marketing strategies. In addition, data management and analysis can become time-consuming and complicated, as different formats require different tools and approaches.

• How easy would it be to create a database with a single, standard format that could store the data from both systems? Identify the problems that would have to be addressed.

Creating a database with a single, standard format that consolidates data from both systems can be challenging. Data from different systems may have different structures, formats, and data types. For example, in this instance, the field with product identification information is called Prod_NO in one system and Product_ID in another. Information in the two Product_Description fields is disparate. Sales_Territory is called Sales_Region in the other system and the fields have different values. Only one system has a field for Customer_ID and only one system has a field for Division.) The data may require extensive data cleaning, transformation, and integration processes to ensure that data supplied by both systems are compatible with the new format.

Additionally, the database must be designed to ensure data integrity, security, and availability.

The descriptions of the files displayed in this exercise show discrepancies in data names, naming conventions, and the content • Should the problems be solved by database specialists or general business managers?

Explain.

Database specialists should be responsible for solving problems related to creating a single, standard format for the data warehouse. They have the technical expertise to design and implement the database and ensure data quality, security, and integrity. However, general business managers should be involved in the process to provide input and feedback on the data requirements and usage. This collaboration can help ensure that the data warehouse meets the needs of the business.

• Who should have the authority to finalize a single, corporate-wide format for this information in the data warehouse?

The authority to finalize a single, corporate-wide format for the information in the data warehouse should be given to a cross-functional team consisting of representatives from different

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15 business units, such as sales, marketing, finance, and IT. The team should have the authority to make decisions about the data format, structure, and content, as well as ensure that the data warehouse meets the needs of the business. The team should also ensure that the database design adheres to industry standards and best practices.

6-9 Achieving Operational Excellence: Building a Relational Database for Inventory Management AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Database design, querying, and reporting Business Skills: Inventory Management This Hands-on Software Project requires that students know how to create queries and reports using information from multiple tables. The tables can be found in EMIS15Chap6 Question File, downloadable from MyLab MIS. The solutions provided were created using the query wizard and report wizard capabilities of Access. Students can, of course, create more sophisticated reports if they wish. The requested reports and queries can be found in the Microsoft Access file named EMIS15Chap6 Solution File in Instructor Resources.

6-10 Improving Decision Making: Searching Online Databases for Overseas Business Resources AACSB: Written and oral communication; Analytical thinking; Application of knowledge Software skills: Online databases Business skills: Researching services for overseas operations This Internet Project asks students to use online databases to research services for an overseas operation, and to rate the databases used for accuracy of name, completeness, ease of use and general helpfulness.

Student answers will vary based on the companies they choose to contact. Students may not understand that the web is one massive data warehouse, but in non-technical terms that is exactly what it is. Remind them of this when they are completing this assignment. This assignment may best be accomplished in groups, where students can consolidate their findings into a written or oral presentation.

6-11 Collaboration and Teamwork Project: Identifying Entities and Attributes in an Online Database This Collaboration and Teamwork Project asks students to work as a team to select an online database to explore to see what information it provides, and then tolist the entities and attributes that the company running the website must keep track of in its databases. Diagram the relationships among the entities you have identified. If possible, use Google Docs and Google

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16 Drive or Google Sites to brainstorm, organize, and develop a presentation of your findings for the class.

Student solutions will vary. It might be useful for the instructor to work through this exercise with students using another organization as an example before they tackle the assignment on their own.

Business Problem-Solving Case: Pursuing Sustainability with Blockchain Case Study Questions: Answers 6-12 Why is supply chain traceability so important for sustainability?

Supply chain traceability is essential for sustainability because it allows companies to identify and address any unethical, unsustainable, or environmentally harmful practices within their supply chains. With traceability, companies can track products and materials from the source to the final product, ensuring that they are sustainably sourced and produced. It also enables companies to identify any potential risks and vulnerabilities in their supply chain, such as labor abuses or environmental violations, and take action to address them. Traceability can also help companies identify areas where they can improve their sustainability efforts, such as reducing waste, improving energy efficiency, and using more sustainable materials.

6-13 Why is blockchain a useful technology for traceability?

Blockchain is a useful technology for traceability because it enables secure, transparent, and immutable record-keeping of transactions and data. Blockchain creates an unchangeable and tamper-proof ledger that records every transaction, making it easy to track the movement of goods and materials throughout the supply chain. Because the information is decentralized, it is less susceptible to fraud or manipulation, and all parties involved in the supply chain can access the information in real-time. This level of transparency and security makes it easier for companies to ensure that their products are sustainably sourced and produced.

6-14 What people, organizational, and technology challenges should Unilever anticipate as it deploys blockchain for supply chain management?

Unilever should anticipate several challenges when deploying blockchain for supply chain management. These challenges include resistance from suppliers who are not yet ready or willing to embrace the technology, the need for interoperability and standardization across different blockchain platforms, potential privacy and security concerns, and the costs of implementing and maintaining the technology. Additionally, deploying blockchain may require significant organizational and cultural changes, as well as changes in business processes, to ensure that the technology is being used effectively and efficiently.

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17 6-15 Should all businesses use blockchain? Explain your answer.

Not all businesses need to use blockchain. The decision to adopt blockchain should be based on the specific needs and challenges of the business. Blockchain can be a useful tool for companies with complex supply chains or those that need to track the movement of goods and materials from multiple sources. However, smaller businesses with simpler supply chains may not require the same level of traceability and may be better served by simpler, more cost-effective solutions.

Ultimately, the decision to adopt blockchain should be based on a careful analysis of the business's needs, goals, and resources.

Video Case: Stitch Fix CEO Sees Business of Personalization as Key to Success; Stitch Fix President on Booming Growth Amid Pandemic Video Case Multiple Choice Questions: Answers 1) Which of the following best describes Stitch Fix’s Freestyle strategy?

A) Freestyle helps Stitch Fix differentiate its service from competitors.

B) Stitch Fix uses style quizzes and algorithms to recommend items for customers to buy directly online but does not use human stylists.

C) Freestyle has helped Stitch Fix increase purchases from first-time visitors.

D) Freestyle has helped Stitch Fix lower costs.

Answer: B 2) Stitch Fix claims that it knows 100 percent of who buys what and that ____percent of the time it also knows why.

A) 70 B) 75 C) 80 D) 85 Answer: C 3) Which of the following is not true?

A) Customers can only purchase clothing from Stitch Fix by subscribing to the service.

B) Stitch Fix charges customers who order a styling fee but return shipping is free.

C) Stitch Fix’s sales were highest during the Covid pandemic.

D) Stitch Fix is able to identify popular trends and styles as well as individual customer preferences.

Answer: A Video Case Study Essay Questions: Answers 1. What role do people play in Stitch Fix’s business model and business strategy?

Answer: Stitch Fix’s accessories business model is based on actively using human stylists along with artificial intelligence (AI) algorithms and Big Data to make recommendations to clients on

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

18 items of clothing, shoes, or accessories. Selections for customers are first narrowed down by the computer, and then finalized by a human stylist. In preparing each curated box, or “fix,” the stylist also uses the notes on clients’ taste that they write when they sign up for Stitch Fix. Stitch Fix’s styling algorithms team also works closely with human stylists when designing new items of clothing. Stitch Fix AI algorithms identify combinations of consumers’ favorite colors, patterns and textiles, which are then sent as data inputs to guide human designers. Both automated and human coaching are offered to stylists to let them know how they are doing in keeping clients happy with their choices.

2. Describe how Stitch Fix learns why customers purchased a certain item.

Answer: In addition to deploying machine learning algorithms, Stitch Fix collects many pieces of data from its customers, who fill out in-depth profiles when signing up for the styling service.

Over 85 data points are collected this way. Stitch Fix asks its customers questions ranging from height, weight, and clothing size to style/taste-focused questions on various preferences such sleeve length and fabric type). It also asks about personal traits (for example, are you a risk taker or are you risk averse?) and lifestyle (for example, do you work from home, are you a full-time mom, do you commute to work?).

Stitch Fix also collects data about the merchandise itself. Each item of clothing in Stitch Fix's inventory is tagged multiple times with "match scores" derived from client preferences, and then ranked. Additional data is collected from customer feedback, which is solicited every time a customer receives a curated box in order to glean insights as to how each item matched their style, fit, and price preferences.

Stitch Fix obtains considerable client preference data from a “Style Shuffle,” a Tinder-like online quiz in which clients are encouraged to give their quick reactions to a series of clothing items.

All client responses, particularly rejections of mailed items, are incorporated into styling algorithms. Stitch Fix uses its customer data repeatedly to continually improve its customer experiences.

Dirt Bike Running Case: Improving Decision Making: Redesigning the Customer Database AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

19 will list the software tools that students will need to use, and the questions students will need to answer. The question data file for the project is EMIS15Ch06.Customer Database and can be found in MyLab MIS. The solution files are EMIS15Ch06_solutionfile and EMIS15Ch06_solution description.in Instructor Resources.

Software skills: Database design; querying and reporting Business skills: Customer profiling Dirt Bikes U.S.A. sells primarily through its distributors. It maintains a small customer database with the following data: customer name, address (street, city, state, zip code), telephone number, model purchased, date of purchase, and distributor. You can find the customer database in MyLab MIS. These data are collected by its distributors when they make a sale and are then forwarded to Dirt Bikes. Dirt Bikes would like to be able to market more aggressively to its customers.

The Marketing Department would like to be able to send customers e-mail notices of special racing events and of sales on parts. It would also like to learn more about customers’ interests and tastes: their ages, years of schooling, another sport in which they are interested, and whether they attend dirt bike racing events. Additionally, Dirt Bikes would like to know whether customers own more than one motorcycle. (Some Dirt Bikes customers own two or three motorcycles purchased from Dirt Bikes U.S.A. or other manufacturer.) If a motorcycle was purchased from Dirt Bikes, the company would like to know the date of purchase, model purchased, and distributor. If the customer owns a non–Dirt Bikes motorcycle, the company would like to know the manufacturer and model of the other motorcycle (or motorcycles) and the distributor from whom the customer purchased that motorcycle.

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Redesign Dirt Bikes’s customer database so that it can store and provide the information needed for marketing. You will need to develop a design for the new customer database and then implement that design using database software. Consider using multiple tables in your new design. Populate each new table with 10 records.

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Develop several reports that would be of great interest to Dirt Bikes’s marketing and sales department (for example, lists of repeat Dirt Bikes customers, Dirt Bikes customers who attend racing events, or the average ages and years of schooling of Dirt Bikes customers) and print them.

The solution file (EMIS15Ch06_solutionfile) represents one of many alternative database designs that would satisfy Dirt Bikes’ requirements. The design shown here consists of 4 tables: Customer, Distributor, Purchase, and Model. Dirt Bikes’s old customer database was modified by breaking it down into these tables and adding new fields to these tables. Data on both Dirt Bike customer purchases captured from distributors and customer purchases of non- Dirt Bike models are stored in the Purchase table. The Customer table no longer contains purchase data but it does contain data on e-mail addresses, customer date of birth, years of education, additional sport of interest, and whether they attend dirt bike racing events. As they create new tables, students will have to populate their new tables with data for the new fields they have created. This particular design tracks repeat Dirt Bikes customers through reports of customer .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

20 purchases showing which customers have purchased more than 1 Dirt Bike. We added data on repeat Dirt Bikes purchases and on non-Dirt Bikes purchases in order to produce the report on Purchases shown here. Reports for this solution were developed using Access query and report wizards.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

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Essentials of Management Information Systems, 15e Chapter 7 Telecommunications, the Internet, and Wireless Technology Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

• • •

Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resource) o Management Decision Problem o Hands-on Software Project o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and associated case material (case description and questions) are embedded within the eText. Video Cases (in PDF/Word file format, with a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions Chapter 7 presents crucial concepts and terminology since telecommunications, networks, and the Internet now form the backbone of almost all businesses. The chapter introduces students to the principal components of telecommunications networks and key networking technologies and

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

2 compares the different types of networks. It explains how the Internet and Internet technology work, and how they support communications and e-business. It also identifies the principal technologies and standards for wireless network, communication, and Internet access. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: The National Hockey League Scores with Wireless Technology and the Internet of Things (IoT) The opening case illustrates some of the new capabilities and opportunities provided by wireless technology in an interesting context: the sport of hockey. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • Why has wireless technology played such a key role in the NHL’s games?

• How has technology changed the way the NHL provides and uses data from its games/ You can also ask students if they have ever watched a hockey game, and if so, whether they feel the capabilities discussed in the case would enhance that experience.

Section 7-1: Identify the principal components of telecommunications networks and key networking technologies.

Telecommunications and networks are vital to the majority of businesses today, and this section explains why. Because telecommunications technology serves as the foundation for e-commerce and the digital economy, the concepts and terminology in Chapter 7 are important for both MIS and business majors. This section explains the basic configuration of networks, regardless of their size.

You may want to contrast the origin and history of telephone networks and computer networks.

Then diagram how the two are converging into one pipeline for all types of communication transmissions. Convergence is leading to more efficient transmission of traffic and ubiquitous communications thanks to the Internet.

A contemporary corporate network infrastructure relies on both public and private infrastructures to support the movement of information across diverse technological platforms. It includes the traditional telephone system, mobile cellular communications, wireless local area networks, videoconferencing systems, a corporate website, intranets, extranets, and an array of local and wide area networks, including the Internet.

One exercise you may try to help show how much we rely on communications today is to ask students to count the number of text messages, phone calls, emails, and IM messages they either sent or received in the last 24 hours or the last week. You could even go so far as to ask them not to send or receive any of these communications for a day to prove how reliant we’ve become on telecommunications.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

3 Figure Video 7.1: After reviewing networking and communication trends, it is time to discuss the components that comprise a computer network. This is an appropriate time for the class to review and discuss Figure 7.1, which illustrates the components of a simple computer network, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Figure Video 7.2 This is an appropriate time for the class to review and discuss Figure 7.2, which illustrates the components of a large corporate computer network, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Contemporary networks have been shaped by the rise of client/server computing, the use of packet switching, and the adoption of TCP/IP as a universal communications standard for linking disparate networks and computers. Client/server networks have distributed much of organizations’ computing power to the desktop and factory floor. Packet switching makes more efficient use of network communications capacity by breaking messages into small packets that are sent independently along different paths in a network and then reassembled at their destination. Protocols provide a common set of rules that enable communication among diverse components in a telecommunications network. TCP/IP is a suite of protocols that has become the dominant model of achieving connectivity among different networks and computers. It is the connectivity model used by the Internet.

Figure Video 7.3 This is an appropriate time for the class to review and discuss Figure 7.3, which illustrates how packet switching works, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Section 7-2: Compare the different types of networks.

It may help to bring several props to show the different transmission media explained in this section. For example, if possible, bring twisted wire, coaxial cable, and fiber-optic cable to show to the class and discuss the advantages and disadvantages of each type of media. Students should note the different ranges (frequencies) of wireless media. Also, you should discuss bandwidth and its connection to frequencies, as this is a critical concept today. Table 7.1 compares the range of four different area networks.

This section describes the different network topologies and how they pass data across a network.

If you have students working in business, ask them to identify the network topologies used in their organizations.

Section 7-3: How do the Internet and Internet technology work and how do they support communication and e-business?

Most students are familiar with the Internet and motivated to discuss it. You might begin this section by asking students how they spend their time on the Internet and how their online activities have changed since they started using the Internet. Also, ask them to identify which client platforms they currently use or have used. Ask your students to identify several of the many benefits that the Internet offers to organizations. Ask them to provide specific examples

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

4 that they have read about in the text or have personally observed. Students might not be as familiar with the technology that underlies the Internet, such as Internet addressing, the Domain Name System, and Internet architecture, so spend some time covering this material. The Spotlight on Technology case, Can Low Earth Orbit (LEO) Satellite Internet Systems Solve the Digital Divide? focuses on a new form of Internet access technology that students should find very interesting. Answers to the case study questions for this case can be found on pages 5 to 6 of this Instructor’s Manual.

The principal Internet services and communication tools are email, instant messaging, and the web (Telnet and FTP are rarely used today). Most students will probably be familiar with these services, having used them in their personal life. What they may not understand or relate to quite yet is how effective the tools are in a business setting. These tools reduce time and cost when firms must manage organizational activities and communicate with many employees. If you have students working in businesses, ask them to discuss the communications tools their organization uses. This section introduces a fairly new concept, unified communications. It also discusses the future Internet/Web ecosystem.

Make students aware that while the new information technology infrastructure provides many benefits and capabilities, it does require careful management and planning. Challenges posed by networking and the Internet include loss of management control over information systems; the need for organizational change; and the difficulty of ensuring infrastructure scalability and reliability.

The Spotlight on People case, Monitoring Employees on Networks: Unethical or Good Business? examines some of the ethical issues that the use of email, instant messaging, and the Internet in a business context can raise, Answers to the case study questions for this case can be found on pages 6 to 9 of this Instructor’s Manual.

Section 7-4: Identify the principal technologies and standards for wireless networking, communication, and Internet access.

Ask your students how many of them use cellular phones, smartphones, wireless laptops, tablet computers, or wireless e-book readers. Most students are excited to demonstrate their “latest devices,” and you may wish to ask one of them to discuss the capabilities of theirs. Ask them to discuss what they like or dislike about the features found on their appliance.

Video Case: The Chapter 5 Video Case, Nokia CEO Suri Sees 5G Market Maturity in 2021, provides more detail about 5G wireless technology, describing its powerful new capabilities and important 5G applications across different industries. It would be appropriate to assign when covering 5G technology in Section 7-4. You might want to ask students where they have found or used 5G applications and what role was played by this networking technology. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the video case study questions can be found on pages 18 to 19 of this Instructor’s Manual.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

5 If you have the class time, you can ask the campus IT director to discuss the telecommunications technology used on your campus, take a tour of the campus facilities, or invite an IT director from a local company to discuss his company’s telecommunications technology. Ask your students to find out what their university does in order to support mobile wireless communications. Have them investigate applications where Bluetooth, Wi-Fi, or hotspot technology is used and how it benefits them. Are they able to use their own personal appliances to connect and utilize these technologies on their campus?

Section 7-5: Understand how MIS can help your career.

This section addresses how the chapter’s elements and information can help in securing a position as a web developer. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: Can Low Earth Orbit (LEO) Satellite Internet Systems Solve the Digital Divide?

ACCSB: Written and oral communication; Ethical understanding and reasoning, Analytical thinking, Application of knowledge Case Study Questions: Answers 1. How does Internet access relate to the concept of a digital divide? In what ways may LEO satellite Internet systems help bridge that divide??

The digital divide refers to the gap between people and businesses that have access to broadband Internet and those that do not. In the United States, an estimated 42 million people lack any broadband Internet access, and more than 120 million people do not have access to broadband Internet that operates at speeds of at least 25 Mbps. The digital divide disproportionately affects those who live in rural areas or have low incomes. LEO satellite Internet systems can help bridge the digital divide by providing broadband Internet access to places where it was previously unavailable or where traditional broadband Internet access is cost-prohibitive. LEO satellite Internet systems can provide faster broadband speeds, less latency, expanded coverage to higherand lower-latitude areas, and eventually, less expensive costs for consumers.

2. How do LEO satellite Internet systems differ from traditional satellite Internet systems?

LEO satellite Internet systems differ from traditional satellite Internet systems in several ways.

LEO satellites orbit at a much lower height, between 300 and 1,200 miles above the Earth, move more quickly than the Earth’s rotation, and are not restricted to orbiting over the equator. In contrast, traditional satellite Internet systems rely on geostationary (GEO) satellites that orbit .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

6 over the Earth’s equator at a very high altitude of 22,236 miles above the Earth and move at the speed of the Earth's rotation, remaining at a fixed location relative to the Eart’. LEO satellite Internet systems rely on a network of satellites that provide continuous, uninterrupted coverage, similar to how a cellular network deals with a moving person. Users connect their devices via specially designed antennas directly to the satellites, which communicate with each other and are linked to the Internet on Earth via ground stations. LEO satellite Internet systems offer faster broadband speeds, much less latency, expanded coverage to higher- and lower-latitude areas, and are less likely to be impacted by the weather than traditional satellite Internet systems.

3. What ethical, legal, and political issues are raised by LEO satellite Internet systems?

Ethical, legal, and political issues raised by LEO satellite Internet systems include concerns over satellite overcrowding and interference, cybersecurity risks, and regulatory challenges.

Firstly, satellite overcrowding, and interference are concerns as more and more companies launch satellites into orbit. The increasing number of satellites can lead to collisions, and the debris generated can pose a threat to other satellites and spacecraft. Additionally, there is a risk of interference between satellite signals, which can disrupt communication networks and lead to a loss of data.

Secondly, cybersecurity risks are a concern as LEO satellite Internet systems rely on a network of interconnected satellites, ground stations, and data centers. These systems can be vulnerable to cyber-attacks, such as hacking and data breaches, which can compromise sensitive data and personal information.

Thirdly, regulatory challenges exist as LEO satellite Internet systems operate across national borders, making it difficult to determine which country has jurisdiction over them. This can create legal and political issues related to data privacy, cybersecurity, and international cooperation.

In terms of bridging the digital divide, LEO satellite Internet systems have the potential to provide broadband access to people and businesses in remote and underserved areas, thereby reducing the digital divide. However, issues related to affordability and accessibility may still remain, as these systems may not be accessible to everyone due to the cost of equipment and subscription fees. Additionally, there may be concerns over the environmental impact of launching and operating large numbers of satellites in space.

Spotlight on People: Monitoring Employees on Networks: Unethical or Good Business?

ACCSB: Written and oral communication; Ethical understanding and reasoning, Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Should managers monitor employee email and Internet usage? Why or why not?

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 The decision to monitor employee email and Internet usage is complex and can depend on various factors. On one hand, monitoring can help ensure that employees are not engaging in inappropriate behavior, wasting company time, or leaking sensitive information. This can ultimately protect the company's reputation and financial interests. On the other hand, excessive monitoring can erode trust between employees and management, infringe on employees' privacy rights, and create a culture of surveillance and micromanagement.

Ultimately, the decision to monitor employee email and Internet usage should be based on a balance of factors such as the company's size, industry, security risks, and employee culture.

Employers should also clearly communicate their monitoring policies to employees, obtain their consent, and ensure that the monitoring is legal and ethical.

2. Describe an effective email and web use policy for a company.

An effective email and web use policy for a company should clearly outline what is acceptable and unacceptable behavior for employees when using company resources. The policy should also explain the consequences of violating these rules. Here are some key elements that such a policy might include: Define what is considered acceptable email and web use. For example, the policy might prohibit using company email and Internet access for personal use during work hours or accessing inappropriate websites or content.

Explain the company's monitoring practices and the reasons behind them. This can help employees understand why the company is monitoring their email and web use and what information is being monitored.

Outline the consequences of violating the policy. This might include disciplinary action, termination, or legal action if an employee's actions lead to harm to the company or its employees.

Emphasize the importance of confidentiality and protecting sensitive information. This might include reminding employees of their legal obligations to protect confidential information and explaining the steps the company takes to ensure the security of its network and data.

Provide guidelines for how to report suspected violations of the policy. Employees should know how to report suspicious behavior or security threats to their supervisors or IT staff.

Make sure employees understand their rights and responsibilities when it comes to email and web use. This might include reminding them of their privacy rights and explaining how they can access and delete their own personal data on company systems.

3. Should managers inform employees that their web behavior is being monitored? Or should managers monitor secretly? Why or why not?

The decision of whether managers should inform employees that their web behavior is being .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

8 monitored or monitor secretly is a complex one that depends on various factors, including the company culture, the legal environment, and the ethical implications of such monitoring.

However, in general, it is advisable for managers to inform employees that their web behavior is being monitored, as this can help establish trust, avoid legal issues, and promote transparency.

Informing employees of the monitoring can also help to prevent abuse of the monitoring system by managers and protect employee privacy rights. Furthermore, it can encourage employees to adhere to the company's web usage policy and improve their productivity. Employees who are aware that their activities are being monitored are more likely to focus on work-related tasks and avoid engaging in non-work-related activities, such as social networking or online shopping.

An effective email and web use policy for a company should outline the guidelines for the acceptable use of company equipment and networks, including email and the web. It should specify what activities are permitted and what activities are prohibited, as well as the consequences of violating the policy. The policy should also include information on the company's monitoring practices, the legal framework surrounding monitoring, and the employees' rights and responsibilities in this regard. Finally, the policy should be communicated to all employees and regularly reviewed to ensure its relevance and effectiveness.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 7-1 Identify the principal components of telecommunications networks and key networking technologies.

Describe the features of a simple network and the network infrastructure for a large company.

A simple network consists of two or more connected computers. Basic network components include computers, network interfaces, a connection medium, network operating system software, and either a hub or a switch. The networking infrastructure for a large company relies on both public and private infrastructures to support the movement of information across diverse technological platforms. It includes the traditional telephone system, mobile cellular communication, wireless local-area networks, videoconferencing systems, a corporate website, intranets, extranets, and an array of local and wide-area networks, including the Internet. This collection of networks evolved from two fundamentally different types of networks: telephone networks and computer networks.

Name and describe the principal technologies and trends that have shaped contemporary telecommunications systems.

Client/server computing, the use of packet switching, and the development of widely used communications standards such as TCP/IP are the three technologies that have shaped contemporary telecommunications systems.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

9 Client/server computing has extended to networking departments, workgroups, factory floors, and other parts of the business that could not be served by a centralized architecture. The Internet is based on client/server computing. Packet switching technology allows nearly full use of almost all available lines and capacity. This was not possible with the traditional dedicated circuitswitching techniques that were used in the past. TCP/IP is a suite of protocols that has become the dominant standard of network communications. Having a set of protocols for connecting diverse hardware and software components has provided a universally agreed upon method for data transmission.

7-2 Compare the different types of networks.

Define an analog and a digital signal.

Analog: a continuous waveform that passes through a communications medium and has been used for voice communication. Traditionally used by telephone handsets, computer speakers, or earphones.

Digital: a discrete, binary waveform, rather than a continuous waveform, represented by strings of two states: one bit and zero bits, which are represented as on-off electrical pulses. Computers use digital signals and require a modem to convert these digital signals into analog signals that are transmitted across telephone lines, cable lines, or wireless media.

Distinguish between a LAN, MAN, and WAN. LAN (Local Area Network): a telecommunications network that is designed to connect personal computers and other digital devices within a half-mile or 500-meter radius. LANs typically connect a few computers in a small office, all the computers in one building, or all the computers in several buildings in close proximity. LANs require their own dedicated channels.

MAN (Metropolitan Area Network): a network that spans a metropolitan area, usually a city and its major suburbs. Its geographic scope falls between a WAN and a LAN. WAN (Wide Area Network): spans broad geographical distances – entire regions, states, continents, or the entire globe. The most universal and powerful WAN is the Internet. Computers connect to a WAN through public networks, such as the telephone system or private cable systems, or through leased lines or satellites.

7-3 How do the Internet and Internet technology work and how do they support communication and e-business?

Define the Internet, describe how it works, and explain how it provides business value.

The Internet is a vast network of computers that connects millions of people all over the world.

The Internet uses the client/server model of computing and the TCP/IP network reference model.

Every computer on the Internet is assigned a unique numeric IP address. No one owns the Internet, and it has no formal management organization. However, worldwide Internet policies

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

10 are established by organizations and government bodies, such as the Internet Architecture Board (IAB), the Internet Corporation for Assigned Names and Numbers (ICANN), and the World Wide Web Consortium (W3C). The Internet must also conform to the laws of the sovereign nation-states in which it operates, as well as the technical infrastructure that exists within the nation-state.

The Internet enables employees to gain remote access to the company’s internal systems through its website. They are able to better service customers and suppliers, improve operational efficiency, increase productivity, lower operational costs, have a broader market base, and reach more individual customers on a global scale by establishing a web presence. The cost of email and other Internet services tend to be far lower than equivalent voice, postal, or overnight delivery costs, making the Internet a very inexpensive communication medium. It is also a very fast method of communication, with messages arriving anywhere in the world in a matter of seconds or minutes.

Explain how the Domain Name System (DNS) and IP addressing system work.

The Internet is based on the TCP/IP networking protocol suite. Every computer on the Internet is assigned a unique Internet Protocol (IP) address, which consists of a string of numbers. There are two versions of IP addressing currently in us. An IPv4 Internet address is a 32-bit number represented by four strings of numbers ranging from 0 to 255, separated by periods. However, IPv4 is now being replaced by a new version of IP addressing called IPv6, which contains 128bit addresses.

A domain name is the English-like name that corresponds to the unique 32-bit numeric IP address for each computer connected to the Internet. The Domain Name System (DNS) converts IP addresses to domain names so that users only need to specify a domain name to access a computer on the Internet, instead of typing the numeric IP address. DNS servers maintain a database containing IP addresses mapped to their corresponding domain names.

When a user sends a message to another user on the Internet, the message is first decomposed into packets using the TCP protocol. Each packet contains its destination address. The packets are then sent from the client to the network server and from there on to as many other servers as necessary to arrive at a specific computer with a known address. At the destination address, the packets are reassembled into the original message.

List and describe the principal Internet services.

The principal major Internet services include the following: • Email—person-to-person messaging; document sharing.

• Instant messaging—interactive conversations.

• Telnet—Enables remote login on another computer. Rarely used today because of security concerns.

• File Transfer Protocol (FTP)—transferring files from computer to computer. Has been mostly supplanted by more secure protocols such as FTP over SSL (FTPS) and SSH File Transfer Protocol (SFTP).

• World Wide Web (the web)—retrieving, formatting, and displaying information (including .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

11 text, audio, graphics, and video) using hypertext links.

Define and describe VoIP and virtual private networks and explain how they provide value to businesses.

• Voice over Internet Protocol (VoIP) enables Internet technology to be used for telephone voice transmission over the Internet or private networks. VoIP offers the advantage of avoiding tolls charged by local and long-distance telephone networks. VoIP provides businesses an opportunity to reduce costs because they no longer have to maintain separate networks or provide support services and personnel for each different type of network. It gives organizations flexibility because phones can be added or moved to different offices without rewiring or reconfiguring networks.

• Virtual private networks (VPN) are secure, encrypted, private networks that have been configured within a public network to take advantage of the economies of scale and management facilities of large networks, such as the Internet. VPNs are low-cost alternatives to private WANs. VPNs give businesses a more efficient network infrastructure for combining voice and data networks.

List and describe alternative ways of locating information on the web.

• Search engines are facilities on the web that help you find sites with the information and/or services you want. Examples: Google and Bing. Search engines now include mobile search, semantic search, and visual search functionality. Search engines have also become major advertising platforms and shopping tools.

• Intelligent agent shopping bots use intelligent agent software for searching the Internet for shopping information. Examples: MySimon and Froogle.

Describe how online search technologies are used for marketing.

Search engine marketing monetizes the value of the search process. Searching is one of the web’s most popular activities with billions of queries performed each month. Search engines are the foundation for the most lucrative form of online marketing and advertising. When users enter a search term in a search engine, they receive two types of listings: sponsored links, for which advertisers have paid to be listed, and unsponsored organic search results. Advertisers can also purchase small text boxes on the side of search results pages. Paid, sponsored advertisements are the fastest growing form of Internet advertising and are powerful new marketing tools that precisely match consumer interests with advertising messages at the right moment.

7-4 What are the principal technologies and standards for wireless networking, communications, and Internet access?

Define Bluetooth, Wi-Fi, WiMax, and 3G and 4G and 5G networks.

Standards for wireless computer networks include Bluetooth (802.15) for small personal-area networks (PANs), Wi-Fi (802.11) for local-area networks (LANs), and WiMax (802.16) for metropolitan-area networks (MANs). Bluetooth can link up to eight devices within a 10-meter area using low-power, radio-based communication, and can transmit up to 722 Kbps in the 2.4

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12 GHz band. Wireless phones, keyboards, computers, printers, and PDAs using Bluetooth can communicate with each other and even operate each other without direct user intervention.

Wi-Fi is useful for creating wireless LANs and for providing wireless Internet access. Its access range is limited to anywhere between 300 feet and three miles. Hotspots are public access points individuals use to obtain high speed Internet access.

WiMax has a wireless access range of up to 31 miles and a transmission speed of 30-40 Mbps (and up to 1 Gbps for fixed stations). The 802.16 specification also has robust security and quality-of-service features to support voice and video.

3G is a short term for third-generation wireless technology. 3G networks, which have transmission speeds ranging from 144 Kbps for mobile users in, say, a car, to more than 2 Mbps for stationary users, offer transmission speeds appropriate for email and web browsing but are too slow for videos. 3G networks are currently being phased out by the major telecommunications carriers in the United States.

4G is a short term for fourth-generation wireless technology. 4G networks have much higher speeds, up to 100 Mbps for downloading and 50 Mbps for uploading, with more than enough capacity for watching high- definition videos on your smartphone.

5G is a short term for fifth-generation wireless technology. It is designed to support transmission of very large amounts of data (within the gigabit range) with fewer transmission delays and the ability to connect to many more devices than existing cellular systems.

Describe the capabilities of each principal technology and for which types of applications each is best suited.

• Bluetooth: Access very limited; useful for creating small personal-area networks.

• Wi-Fi: Access is limited to 30–50 meters; useful for creating small local area networks.

• WiMax: Access is limited to a range up to 31 miles: useful for creating wide area networks.

• 3G networks: Has been superseded by newer systems and is being phased out in the United States.

• 4G networks: Provides premium quality for voice, data, and streaming video from cellular telephone carriers.

• 5G networks: Will be used for self-driving vehicles, smart cities, extensive use of the Internet of Things, cloud computing applications, and applications where latency is an important issue.

Define RFID, explain how it works, and describe how it provides value to businesses.

Mobile wireless technology facilitates supply chain management by capturing data on the movement of goods in real-time and by providing detailed, immediate information as goods move among supply chain partners. Radio frequency identification (RFID) systems provide a microchip that contains data about an item and its location. The tags transmit radio signals over a short distance to special RFID readers. The RFID readers then pass the data over a network to a computer for processing.

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13 RFID gives businesses an opportunity to further automate their supply chain networks. The technology allows more data on an RFID chip than typical barcodes. RFID systems track each pallet, lot, or unit item in a shipment. The technology helps companies improve receiving and storage operations by improving their ability to “see” exactly what stock is stored in warehouses or on retail store shelves.

Define WSNs, explain how they work, and describe the kinds of applications that use them.

Wireless sensor networks (WSNs) are networks of interconnected wireless devices with some processing and radio-transmitting capability that are embedded into the physical environment to provide measurements of many points over large spaces.

Wireless sensor networks are valuable for monitoring environmental changes, traffic patterns, security incidents, or supply chain events. Wireless sensor networks can be placed in the field for years without any maintenance or human intervention. That reduces costs to businesses using them.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge 7-5 It has been said that within the next few years, smartphones will become the single most important digital device we own. Discuss the implications of this statement.

Student answers to this question will vary. However, answers should address the impact that smartphones have on communications and connectivity, access to information, the role they play as the “computer in your pocket”, and the ability to use smartphones as a platform for ecommerce.

7-6 Should all major retailing and manufacturing companies switch to RFID? Why or why not?

Student answers to this question will vary. However, answers should include a definition of RFID and address both the advantages, such as the role it can play in enabling more efficient inventory control and supply chain management, and disadvantages of RFID, such as cost considerations, issues with integration with legacy applications, and so forth.

7-7 What are some of the issues to consider in determining whether the Internet would provide your business with a competitive advantage?

Student answers to this question will vary. However, answers should address issues such as the business’s existing technology infrastructure, how it can leverage the Internet to lower costs and become more efficient; how it can use the Internet to differentiate itself from the competition; and understanding the impact of various legal and regulatory issues.

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Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and the solution files are included in Instructor Resources.

7-8 Management Decision Problem: San Juan AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences This Management Decision Problem asks students to analyze San Juan’s choice of Facebook Terragraph as a solution to Old San Juan’s broadband connectivity issues. Facebook Terragraph provided a good solution for Old San Juan because it is a wireless broadband technology that operates in the 60GHz frequency band, which can penetrate buildings and other obstacles while providing high-speed connectivity. This was ideal for the narrow, winding streets and old buildings of the historic district, where laying fiber-optic cables would have been difficult and expensive.

When selecting a solution, the city had to address several issues related to people, organization, and technology.

People issues included concerns about privacy and security, as the Wi-Fi network would be accessible to both residents and tourists. The city had to ensure that the network was secure and that users' personal information was protected. Additionally, the city had to consider how the network would be managed and maintained, and how to provide support to users who may have technical difficulties.

Organization issues included working with local businesses and property owners to gain access to buildings and other structures to install the necessary equipment. The city also had to ensure that the Wi-Fi network was compliant with local regulations and laws, and that it would not interfere with other wireless services operating in the area.

Technology issues included selecting the right equipment and software to enable the Wi-Fi network and ensuring that it could handle the bandwidth demands of users. The city also had to ensure that the network was scalable and could be expanded in the future if needed.

Overall, by implementing a broadband Wi-Fi network using Facebook Terragraph technology, the city was able to provide residents and tourists with high-speed connectivity without the need for expensive and complex infrastructure upgrades.

7-9 Improving Decision Making: Using Spreadsheet Software to Evaluate Wireless Services AACSB: Analytical thinking, Reflective thinking, Application of knowledge.)

Software skills: Spreadsheet formulas, formatting Business skills: Analyzing telecommunications services and costs .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

15 This Hands-on Software Project asks students to use the web to research wireless services and spreadsheet software to calculate various costs. Answers will vary since plan rates and costs of smartphones are constantly changing. A sample answer can be found in the solution file called EMIS15Chap7 Solution File. There is no question file for this chapter. A complete description of project requirements can be found in the Hands-on MIS section at the end of Chapter 7.

7-10 Achieving Operational Excellence: Using Web Search Engines for Business Research AACSB: Written and oral communication, Application of knowledge; Analytical thinking Software skills: Web search tools Business skills: Researching new technologies This Internet Project asks students to use search engines to obtain information about biofuels as an alternative fuel for motor vehicles. Answers will vary according to the search phrases students enter in the search engines. For example, one search string might be: ethanol “motor vehicles”.

Students should understand how to use quotation marks around phrases to limit the search to include the specific phrase. Students might also try ChatGPT as a search engine. The object of this question should be for students to explore and not stick with “what they already know.” To that end, encourage students to use a different search engine than what they normally use and explore how their search results are framed—sponsored links or organic listings. Also encourage them to search for audio and video files, blogs, wikis, and other sorts of content about the subject. Is the information more useful, less useful, pertinent, or trustworthy?

7-11 Collaboration and Teamwork Project: Evaluating Smartphones AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to form a team and evaluate the capabilities of a smartphone that competes with a comparable Apple iPhone model. Student answers will vary, but should consider the purchase cost of each device, the wireless networks where each device can operate, the plan costs, and the services available for each device, as well as the other capabilities of each device, including available software, security features, and the ability to integrate the device with existing corporate or PC applications. Students should also indicate the device they would select and the criteria on which they would base their selection? If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem Solving Case: Google, Apple, and Meta Battle for Your Internet Experience AACSB: Written and oral communication; Analytical thinking, Reflective thinking; Application of knowledge Case Study Questions: Answers 7-12 Compare the business models and core competencies of Google, Apple, and Meta.

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16 Google: Its business model has always focused on the Internet and the web. It began as one of many search engines. It quickly ran away from the pack with its patented PageRank search algorithm. Today, more than 85 percent of web searches on laptop and desktop cpmputers and more than 90 percent of mobile searches take place on Google Search. Google also has developed extensive online advertising services for businesses of all sizes. Monetization of personal data drives Google’s online-advertising dominated business model. Google provides value to the user by using an inexpensive, flexible infrastructure to speed up web searches and provide its users with a vast array of web-based services and software tools.

Apple: Its business model focuses on centralized control of almost all aspects of its hardware and software. It believes smartphones and tablets should have proprietary standards and be tightly controlled. It only allows apps from its App store that have been vetted by the company to be loaded to its products. Apple has a very loyal user base that has steadily grown and most likely will stay with Apple products in the future.

Meta: Meta has built its business around social networking better than any other company. It has more worldwide users than any other company. Meta Platform enables developers to build applications and websites that integrate with Meta to reach its global network of users, and to build pesonalized and social products. Similar to Google, monetization of personal data drives Meta’s business model.

7-13 Why is mobile computing so important to these three firms? Evaluate the mobile strategies of each firm.

This case demonstrates the fundamental paradigm shift from primarily desktop PC computing to mobile computing devices accessing services through the Internet that is currently taking place.

Mobile devices with advanced functionality have overtaken tradtional desktop computers as the most popular form of computing and method of Internet access. Each company is vying for the lead in a world of ubiquitous computing based on Internet access. The leader stands to make untold profits from advertising but in order to do that, the leader needs to claim the largest user base. Apps greatly enrich the experience of using a mobile device. Whoever creates the most appealing set of devices and applications will derive a significant competitive advantage over rival companies.

Google: It has introduced the Android mobile operating system for a host of non-Apple devices.

The Android system adds features that Apple devices don’t have – the ability to run multiple apps at the same time. Uses an open non-proprietary system that allows users to grab apps from any source. Command of the smartphone operating system market provides built-in channels for serving ads to mobile devices. Google has successfully tailored its search results to respond to mobile searchers needs and accommodate smartphone functionality.

Apple: Apple has more than 1.65 billion active IoS devices in circulation, creating a huge installed base of users willing to purchase services and a source of new revenue streams. Uses a closed proprietary system and apps that only provide “one way in.” It unveiled Siri in 2011, which had the potential to serve as a market disruption technology by combining search,

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17 navigation, and personal assistant tools.

Meta: Realized that much of its advertising revenue will come from mobile device searches. It overhauled its home page to increase the size of both photos and links and allow users to create topical streams. It de-cluttered smartphone screens. It gave advertisers more opportunties and more interesting information with which to target markets.

7-14 Which company and business model do you think is most likely to dominate the Internet and why?

Student answers will vary, but should consider these principles in their answers: • The size, complexity, and bureaucracy of organizations affect the ability of any company to continue to innovate, grow, and expand its reach (see Chapter 3). As all three companies continue to expand into mobile computing, their ability to “turn on a dime” in the face of other competitors may be in serious jeopardy.

• Google currently has the major share of the online advertising market, however Metai is also a significant facort in this market. Apple has had a significant lead in mobile computing for several years. However, as more companies—Google, Meta, and others—continue to expand into the arena, its lead will be threatened. Legal and regulatory compliance will be a major issue as this market grows and more concerns are expressed from external environments.

• History is not on anyone’s side. Every major company that’s been a force in technology in one era has lost its lead in the next. For example, IBM was king of mainframe computing in the 1940s and 1950s. DEC was king in the mini-computer era during the 1970s. Microsoft was king in the 1980s and 1990s during the reign of desktop computers. Google reigns in the 2000s with its web-based services. Apple began as king of mobile computing devices. Will it remain on top as technology continues to evolve?

• Increasing concerns about privacy are likely to impact both Meta’s and Google’s business models, while concerns about industry dominance and increasing calls for regulation of “Big Tech” are also likely to have a significant impact on all three companies.

7-15 What difference would it make to a business or to an individual consumer if Apple, Google, or Meta dominated the Internet experience? Explain your answer.

Open, non-proprietary systems historically have beat closed, proprietary systems because developers and users have a wider range of choices. Business managers must try to forecast which platform will provide the right choices for employees. Consumers must choose which platform will best fulfill their personal needs for the next two to three years. Switching costs play into both scenarios, not just in terms of phone purchases but the price of apps. Once a user purchases and adjusts to using a certain platform, it’s difficult and expensive to switch to a whole different system.

Apps greatly enrich the experience of using a mobile device, and without them, the predictions for the future of mobile Internet would not be nearly as bright. Whoever creates the most appealing set of devices and applications will derive a significant competitive advantage over

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18 rival companies.

Video Case: Nokia CEO Suri Sees 5G Market Maturity in 2021 Video Case Multiple Choice Questions: Answers 1) 5G is up to _____ times faster than 4G technology.

A) 10 B) 50 C)100 D) 1000 Answer: C 2) Which of the following is not a major challenge for 5G? A) Insufficient radio frequency spectrum B) Compatibility with existing 4G networks C) Managing 5G networks D) Finding enough useful applications for 5G Answer: D 3) All the following statements are true except: A) 5G is only used for wireless mobile networks.

B) 5G makes it easier to transmit and manage Big Data C) 5G is well-suited for industrial and business applications.

D) 5G technology is useful for meeting the growing consumer demand for data Answer: A Video Case Essay Questions: Answers 1. Why is low latency important? How does it help consumers? How does it help businesses?

Answer: Low latency reduces delays that occur at many points when a packet of data travels from source to destination over a network. A low latency network is optimized to reduce these delays as much as possible. Low latency is valued by consumers because it enables applications to run faster and more fluidly. Today’s customers expect to interact with technology in real time with no delays, and low latency enables applications to run faster and more fluidly. Applications such as live event streaming or video streaming benefit from low latency, as does video gaming, because players can react more quickly to what is going on in the game.

For businesses, low latency also enhances network applications in the cloud. which often transmit data over long distance between their source and remote servers. Low latency makes cloud services and applications more responsive and capable, giving workers and equipment near-instant access to the data they depend on. For example, manufacturing applications with wireless networks connecting robotic equipment, computer-controlled machines, monitoring

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19 sensors, and other parts of the production line benefit from low latency because processes can run more rapidly and smoothly.

2. What people, organization and technology issues should you address when deciding whether to implement a 5G network for your company?

Answer: The following people, organization, and technology issues should be addressed when deciding whether to implement a 5G network: •

People: How will using a 5G network change jobs and job responsibilities? How will a 5G network improve decision-making? Are the 5G applications being considered easy to use? Will employees resist the new technology?

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Organization: How will a 5G network improve organizational performance? What business functions and business processes will benefit from a 5G network? Will any be negatively impacted by this technology? What are the financial costs and benefits of implementing a 5G network?

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Technology: Does the organization have the technological expertise to implement and support a 5G network? How will other parts of the firm’s IT infrastructure be impacted by a 5G network? How will the 5G network impact existing systems?

Dirt Bike Running Case: Achieving Operational Excellence: Using Internet Tools to Increase Efficiency and Productivity AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is running case assignment accompanying each chapter of the text. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on the instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Web browser software and presentation software Business skills: Employee productivity analysis In this project, you’ll suggest applications of Internet technology to help employees at a realworld company work more efficiently.

Dirt Bikes’ management is concerned about how much money is being spent communicating with people inside and outside the company and on obtaining information about developments in

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20 the motorcycle industry and the global economy. You have been asked to investigate how Internet tools and technology could be used to help Dirt Bikes employees communicate and obtain information more efficiently. Dirt Bikes provides Internet access to all its employees who use desktop computers.

1. How could the various Internet tools help employees at Dirt Bikes? Create a matrix showing what types of employees and business functions would benefit from using each type of tool and why.

The Internet is far easier and less expensive to use for many telecommunications needs compared to more traditional technologies. In addition, the cost of installation and training is very low.

Students must also recognize that DB is still a relatively small company. Internet tools can reduce costs but students should not expect DB to make the large-sized gains larger companies can achieve. Nonetheless, the Internet and its many tools should be of help to DB now and even more as it grows.

A SAMPLE MATRIX: Tool E-mail

Instant messaging

Department

Benefit

Sales

Communicate and share documents with customers and dealers Exchanging orders, invoices, and other necessary documents

Accounting

Sales Management Production

Web FTP

Finance Design Supplies

Salespersons on road discuss problems with home staff Consult with management of DB’s suppliers Facing production problems, researching the experiences of others Following the markets, interest rates and own investments Sharing large design files with distant colleagues Making large DB design documents available to suppliers

Mobile devices and Wi-Fi enabled PCs can be useful when employees need to be away from their home base. Instant messaging can be an excellent tool for communicating with other employees and with customers, suppliers and all the other non-employees the company will have to deal with. Students may find other uses for Internet tools and services not covered here.

2. How could Dirt Bikes benefit from intranets for its sales and marketing, human resources, and manufacturing and production departments? Select one of these departments and describe the kind of information that could be provided by an intranet for that department. How could this intranet increase efficiency and productivity for that department?

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21 Again, there are a multitude of responses students can give. Students must realize that intranets are internal, and they inexpensively allow connectivity for all computers, a very valuable facility for sharing information within the company. An intranet can, for example, be used to make easily (and widely, where appropriate) available sales reports and reports on attendance at races, and even racing videos. Human resources can instantly update employee handbooks and benefits information, not only making this rapidly available but also saving on printing and distribution costs. Finance and accounting can integrate its information online for management and to help sales and production monitor revenues and costs. The marketing and sales staff can share their reports, leads, and insights with design about changing ideas on motorcycle design. The supply chain staff can monitor production’s status while accounting can obtain all necessary information on the purchase of supplies.

One area where productivity can be increased and costs reduced is through the use of an intranet by production. The production unit can monitor possible design changes and even offer input on ways to make the proposed changes that will be easier and cheaper to manufacture. Moreover, the whole design process can be significantly speeded up when proposals and changes to the design are instantly shared. Management can also use the design and production information on the intranet to monitor the whole process. While all of this is useful for large companies and small, it can make the whole company more efficient and effective.

Another example is in marketing. For marketing to be successful, marketers need to both understand what is successful in stimulating sales and to communicate to sales the information they need (two-way communication). We mentioned human resources in answering the questions above. Manufacturing needs close contact with designers, those managing their supply chain, and even accounting. Sales must also communicate information that manufacturing needs so that it can plan for and execute its production. Even finance and accounting needs some information from these various departments, and students should identify the specific information needed by the department they select, where it comes from, and how communicating it on a timely basis can increase productivity and efficiency. For just one example, the timely arrival of needed supplies can lower inventory costs while helping production to keep operating without delays.

This obviously requires not only constant communications with suppliers—extranets can be helpful here—but also communications between the production department and those within DB responsible for the supply chain.

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1

Essentials of Management Information Systems, 15e Chapter 8 Securing Information Systems Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

• • •

Teaching suggestions (including how to use the chapter Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Sample answer descriptions Hands-on MIS Projects o Management Decision Problem: Solution o Hands-on Software Project: Solution descriptions (solution files available in Instructor Resources) o Internet Project: Solution description o Collaboration and Teamwork Project: Solution description Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter focuses on a high-profile topic: information system security. It explains why information systems are vulnerable to destruction, error, and abuse. It describes the business value of security and control and identifies an organizational framework for security and control. .

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2 It also examines the most important tools and technologies for safeguarding information resources. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Ransomware Everywhere The opening case examines the vulnerabilities in information technology systems and illustrates some of the reasons organizations need to pay special attention to information system security.

The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • What security vulnerabilities were exploited by the hackers?

• What people, organizational, and technological factors contributed to these security weaknesses? What was the business impact of these problems? Could the ransomware attacks against Colonial Pipeline and JBS have been prevented?

You can also ask students if they, or any organizations with which they are familiar, have been subjected to ransomware attacks.

Section 8-1: Explain why information systems are vulnerable to destruction, error, and abuse.

Corporate systems using the Internet are especially vulnerable because the Internet is designed to be an open system. As wireless systems become more popular, security challenges associated with them increase exponentially. Internal corporate systems are just as vulnerable to malicious actions from insiders as they are from those outside the system.

Figure Video 8.1: This is an appropriate time for the class to review and discuss Figure 8.1, illustrating the numerous points of vulnerability in contemporary information systems, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Students should understand how common viruses, Trojan horses, and wardriving are. They should understand how to protect themselves from these intrusions and, in turn, protect themselves from all the problems resulting from the threats.

Ask your students to research some of the latest malware threats. They can find information on malware using a search engine such as Google to research this request. The Spotlight on Technology case, Race Against Time: The Scramble to Fix the Log4Shell Zero-Day Vulnerability discusses a critical software vulnerability that allows attackers to take control of susceptible servers. Answers to the case study questions for this case can be found on pages 5 to 6 of this Instructor’s Manual.

Video Case: The Chapter 8 Video Case, Fastly Internet Outage Exposes Vulnerability of Major Websites; Ransomware Is a Worldwide Problem: Palo Alto Networks, provides more detail on how major Internet outages and ransomware pose major cybersecurity and business problems.

The Video Case would be appropriate to assign when covering the chapter-opening case on .

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3 ransomware, the discussions of ransomware in Section 8-1, the chapter-ending case, and Section 8-3 (to illustrate the importance of having digital resiliency and an effective disaster recovery plan). You might want to ask students if they or someone they know has had an experience with ransomware or an Internet outage and the problems they experienced. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the video case study questions can be found on pages 21 to 23 of this Instructor’s Manual.

Section 8-2: Describe the business value of security and control.

Security and control are important but often neglected areas for information systems investments. Most companies today are naïve about how vulnerable their assets are. When developing and managing information security systems, the organization’s primary concern is acquiring new weapons to fight and win the battle for system security. Remind your students that knowledge is the best first line of defense against the army of hackers, frauds, tricksters, saboteurs, and thieves who threaten the organization’s precious information resources.

Most students and instructors alike have all been affected at one time on another with a software virus. Ask students what malware they may have had on their computer systems, what problems it created for them, and how they were able to solve it.

Section 8-3: Identify the components of an organizational framework for security and control.

Firms must use appropriate technologies to effectively protect their information resources. The best place to start is by establishing a well-defined set of general and application controls. Ask your students to research what types of security and control methods are employed by their university or workplace. In groups, ask them to present their findings in class.

Security policies and acceptable use policies are only as good as their enforcement. Many organizations, including universities, have acceptable use policies but, unfortunately, not many people know they exist, read them, or abide by them. Have students research the acceptable use policy for your university and explain it to the other students. Discuss the implications of following or not following the policy.

Security audits, both internal and external, are more important than ever in helping to secure corporate information systems. The Enron/Anderson scandal and the resultant federal laws have resulted in positive changes in how executives and managers view security. Stress this throughout the chapter as you discuss it with the students.

Table Video 8.4 This is an appropriate time for the class to review and discuss Table 8.4 describing the general controls for information systems, and its accompanying Table Video.

Figure and Table Videos are available in the eText and MyLab MIS.

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4 Section 8-4: Identify the most important tools and technologies for safeguarding information resources.

While students or their employers may say they want software quality or controls in information systems, few want to be bothered with the extra steps that quality assurance requires, or the limits on their freedom, funds, and extra time it takes to install controls and security.

Discuss with students how biometrics—such as the use of fingerprint imaging, retinal scans, or voice maps to authenticate users—can increase security. Ask your students to investigate the latest biometric systems and devices.

Establishing a good framework for security and control requires skillful balancing of risks, rewards, and the firm’s operational capabilities. Designing systems that are neither overcontrolled nor under-controlled and implementing an effective security policy are major management challenges. Solutions include making security and control a higher management priority and installing security awareness throughout the firm. Key management decisions include determining an appropriate level of control for the organization and establishing standards for system accuracy and reliability.

When processing takes place in the cloud, accountability and responsibility for protection of sensitive data still reside with the company owning that data. Understanding how the cloud computing provider organizes its services and manages the data is critical. Cloud computing is highly distributed. When you use the cloud, you may not know precisely where your data are being hosted.

Cloud users need to confirm that regardless of where their data are stored, they are protected at a level that meets their corporate requirements. They should stipulate that the cloud provider store and process data in specific jurisdictions according to the privacy rules of those jurisdictions.

Cloud clients should find out how the cloud provider segregates their corporate data from those of other companies and ask for proof that encryption mechanisms are sound.

Cloud users should also ask whether cloud providers will submit to external audits and security certifications. These kinds of controls can be written into the service level agreement (SLA) before signing with a cloud provider. The Cloud Security Alliance (CSA) has created industrywide standards for cloud security, specifying best practices to secure cloud computing.

Figure Video 8.6 This is an appropriate time for the class to review and discuss Figure 8.6, which illustrates how public key encryption works, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. The Spotlight on Organizations case, PayPal Ups Its Digital Resiliency, examines how PayPal took steps to increase its digital resiliency. Answers to the case study questions for this case can be found on pages 6 to 7 of this Instructor’s Manual.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

5 Section 8-5 Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as an entry-level identity and access management (IAM) support specialist. You could ask students what types of information systems might be used in this job, which involves monitoring the company’s IAM system to ensure the company is meeting its audit and compliance requirements.

There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: Race Against Time: The Scramble to Fix the Log4Shell Zero-Day Vulnerability ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What people, organization, and technology factors were responsible for the Log4j software vulnerability?

People: The vulnerability was introduced due to a coding error made by a Log4j developer. The developer failed to sanitize the user input in a particular method, allowing attackers to execute arbitrary code.

Organization: The Apache Software Foundation, which maintains Log4j, did not prioritize security in their development process, which led to a delay in identifying and addressing the vulnerability.

Technology: Log4j used a feature called the “JNDI Lookup” that allowed it to fetch configuration data from external sources, such as network servers or databases. This feature was designed to be a convenient way for administrators to manage logging settings across multiple servers, but it also created a vulnerability that could be exploited by attackers.

2. Why is open-source software a potential security risk??

Open-source software can be a potential security risk because its source code is freely available for anyone to view, modify, and distribute. While this collaborative and transparent development model has many benefits, it also means that vulnerabilities in the code can be easily discovered and exploited by malicious actors. Additionally, open-source software often has a large user base, which means that vulnerabilities can potentially impact a wide range of organizations and individuals. Furthermore, open-source projects may not have the same level of resources and funding for security as commercial software, which can lead to vulnerabilities being overlooked or not addressed as quickly. Finally, because open-source software can be incorporated into a .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

6 wide range of products and services, vulnerabilities in the code can potentially be hidden and difficult to identify, making it challenging for organizations to know if they are impacted and how to address the issue.

3. What steps could be taken in the future to prevent future open-source software vulnerabilities?

It is difficult to speculate on prevention, below are a few steps that can limit vulnerabilities.

Conduct regular code reviews: One of the most effective ways to catch vulnerabilities in opensource software is to conduct regular code reviews. This involves analyzing the code line by line to identify any potential security issues.

Use automated tools: Automated tools can help identify vulnerabilities in open-source software before they become a problem. These tools can scan code for known vulnerabilities, identify areas of concern, and provide suggestions for remediation.

Perform regular security assessments: Regular security assessments can help identify vulnerabilities and assess the overall security of the software. This can include vulnerability scans, penetration testing, and other security assessments.

Ensure timely patching: When vulnerabilities are identified, it’s important to patch them as soon as possible. This can involve working with the open-source community to develop patches or implementing temporary workarounds until a permanent fix can be implemented.

Encourage responsible disclosure: Encouraging responsible disclosure of vulnerabilities can help ensure that they are addressed before they can be exploited. This involves creating channels for users to report vulnerabilities and ensuring that they are addressed in a timely manner.

Provide security training: Providing security training for developers and users can help raise awareness of potential vulnerabilities and encourage best practices for secure coding and use of open-source software.

Spotlight on Organizations: PayPal Ups Its Digital Resiliency ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Why is digital resiliency so important for a company such as PayPal? Digital resiliency is crucial for PayPal because it operates as a payment processor for online vendors, auction sites, and many other commercial users, and it enables person-to-person payments. It is a widely accepted payment system, and its services must be ultrasecure and available 24/7 throughout the world. PayPal maintains very high standards of security and reliability, but management wants to ensure that the company is doing the best job possible.

Thus, they turned to Uptime Institute to evaluate the way PayPal runs its data centers and its .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 level of digital resiliency. PayPal wanted to achieve a high level of digital resiliency and 99.999 percent availability across all data centers, and also to ensure that colos working with PayPal were sufficiently resilient as well. PayPal has a high level of data center sophistication and maturity, and it uses more colocation companies to add to its computing capacity. Thus, digital resiliency is crucial for PayPal to ensure that its payment services are available 24/7, are ultra secure, and operate with minimal downtime.

2. How did PayPal benefit from measuring its digital resiliency? What issues did PayPal address?

PayPal benefited from measuring its digital resiliency in several ways. Firstly, it helped the company to ensure that it was maintaining the highest possible standards of security and reliability for its online payments system. This was achieved through an evaluation of the way PayPal ran its data centers and its level of digital resiliency by the Uptime Institute, a consulting group focusing on improving the performance, efficiency, and reliability of business-critical infrastructure. The evaluation revealed areas of weakness in the company’s operational plans, staffing, maintenance, training, and overall rigor of operation, which were addressed by the company. Secondly, PayPal’s Director of Data Center Architecture and Engineering, Sean Tugwell, wanted to ensure that the company had achieved a high level of digital resiliency and 99.999 percent availability across all data centers. This was also achieved through Uptime Institute’s M&O Assessment, which measures the operational effectiveness of the teams within a data center, focusing on five behaviors that should be proactive, practiced, and informed. PayPal received Uptime Institute’s M&O Stamp of Approval for its PHX01 data center, earning a very high first-time score of 96.2 percent. Lastly, the evaluation helped PayPal to evaluate its colocation data center vendors, and new vendor contracts now require a data center vendor to achieve Uptime Institute’s M&O Stamp of Approval and maintain that rating as long as PayPal is a customer.

3.

What steps can organizations take to make their cloud-based systems more secure?

Management and organizational issues play a crucial role in making an organization’s IT infrastructure more resilient. In the case of PayPal, Uptime Institute’s M&O Assessment measures the operational effectiveness of the teams within a data center, focusing on five behaviors that should be proactive, practiced, and informed: staffing and organization, maintenance, training, planning, coordination, and management, and operating conditions.

PayPal’s Facilities Operations group has at least three facilities technicians on site at all times, and these technicians undergo rigorous training to ensure they have comprehensive and in-depth knowledge of a variety of systems and equipment. PayPal also has a training program for vendors who will be performing on-site maintenance. To promote effective planning, coordination, and management that will result in greater uptime, PayPal has developed various procedures and standards, which are available in its ServiceNow Knowledge Base. PayPal’s financial team creates, reviews, and tracks budgets to ensure that the budget for each data center is appropriate for supporting the firm’s business objectives. Consistency has become even more important for PayPal as it uses more colocation companies to add to its computing capacity.

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Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 8-1 Explain why information systems are vulnerable to destruction, error, and abuse.

List and describe the most common threats against contemporary information systems.

The most common threats against contemporary information systems include technical, organizational, and environmental factors compounded by poor management decisions. Figure 8.

1 includes the following: • Technical: Unauthorized access, introducing errors.

• Communications: Tapping, sniffing, message alternation, theft and fraud, radiation.

• Corporate servers: Hacking, malware, viruses, and worms, theft and fraud, vandalism, denial of service attacks.

• Corporate systems: Theft of data, copying data, alteration of data, hardware failure, and software failure. Power failures, floods, fires, or other natural disasters can also disrupt computer systems.

• Poor management decisions: Poorly designed safeguards that protect valuable data from being lost, destroyed, or falling into the wrong hands.

Define malware and distinguish among a virus, a worm, and a Trojan horse.

Malware (for malicious software) is any program or file that is harmful to a computer user. Thus, malware includes computer viruses, worms, Trojan horses, and also spyware programs that gather information about a computer user without permission.

• Virus: A program or programming code that replicates itself by being copied or initiating its copying to another program, computer boot sector, or document.

• Worm: A self-replicating virus that does not alter files but resides in active memory and duplicates itself without human intervention.

• Trojan horse: A program in which malicious or harmful code is contained inside apparently harmless programming or data. A Trojan horse is not itself a virus because it does not replicate but is often a way for viruses or other malicious code to be introduced into a computer system.

Define hacker and explain how hackers create security problems and damage systems.

A hacker is an individual who gains unauthorized access to a computer system by finding weaknesses in security protections used by websites and computer systems. Hackers not only threaten the security of computer systems, but they also steal goods and information, damage systems, and commit cybervandalism. They may intentionally disrupt, deface, or even destroy a website or corporate information system.

Define computer crime. Provide two examples of crime in which computers are targets and two examples in which computers are used as instruments of crime.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

9 The Department of Justice defines computer crime as “any violations of criminal law that involve a knowledge of computer technology for their perpetration, investigation, or prosecution.” Computer crime is defined as the commission of illegal acts through the use of a computer or against a computer system. Table 8.2 provides examples of computer crimes.

Computers as targets of crime: • Breaching the confidentiality of protected computerized data.

• Accessing a computer system without authority.

• Knowingly accessing a protected computer to commit fraud.

• Intentionally accessing a protected computer and causing damage, negligently or deliberately.

• Knowingly transmitting a program, program code, or command that intentionally causes damage to a protected computer.

• Threatening to cause damage to a protected computer.

Computers as instruments of crime: • Theft of trade secrets.

• Unauthorized copying of software or copyrighted intellectual property, such as articles, books, music, and videos.

• Schemes to defraud.

• Using email for threats or harassment.

• Internationally attempting to intercept electronic communication.

• Illegally accessing stored electronic communications, including email and voice mail.

• Transmitting or processing child pornography using a computer.

• Click fraud: when an individual or computer program fraudulently clicks an online ad without any intention of learning more about the advertiser or making a purchase.

Define identity theft and phishing and explain why identity theft is such a big problem today.

Identity theft is a crime in which an imposter obtains key pieces of personal information, such as social security identification number, driver’s license number, or credit card numbers, to impersonate someone else. The information may be used to obtain credit, merchandise, or services in the name of the victim or to provide the thief with false credentials.

It is a big problem today as the Internet has made it easy for identity thieves to use stolen information because goods can be purchased online without any personal interaction. Credit card files are a major target of website hackers. Moreover, e-commerce sites are wonderful sources of customer personal information that criminals can use to establish a new identity and credit for their own purposes.

Phishing involves setting up fake websites or sending email messages that look like those of legitimate businesses to ask users for confidential personal data. The email instructs recipients to update or confirm records by providing social security numbers, bank and credit card information, and other confidential data either by responding to the email message or by entering .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

10 the information at a bogus website. New phishing techniques such as evil twins and pharming are very hard to detect.

Describe the security and system reliability problems employees create.

The largest financial threats to business institutions come from employees. Some of the largest disruptions to service, destruction of e-commerce sites, and diversion of customer credit data and personal information have come from insiders. Employees have access to privileged information, and in the presence of sloppy internal security procedures, they are often able to roam throughout an organization’s systems without leaving a trace.

Many employees forget their passwords to access computer systems or allow other coworkers to use them, which compromises the system. Malicious intruders seeking system access sometimes trick employees into revealing their passwords by pretending to be legitimate members of the company in need of information (social engineering). Employees can introduce errors by entering faulty data or by not following proper instructions for processing data and using computer equipment. Information specialists can also create software errors as they design and develop new software or maintain existing programs.

Explain how software defects affect system reliability and security.

Software can fail to perform, perform erratically, or give erroneous results because of undetected bugs. A control system that fails to perform can lead to medical equipment that fails or telephones that do not carry messages or allow access to the Internet. A business system failing could mean customers are under- or over-billed. Or, it could mean that the business orders more inventory than it needs. Or an automobile’s braking system may fail.

Major quality problems are the bugs or defects caused by incorrect design. The other problem is maintenance of old programs caused by organizational changes, system design flaws, and software complexity. Bugs in even mildly complex programs can be impossible to find in testing, making them hidden bombs.

8-2 Describe the business value of security and control.

Explain how security and control provide value for businesses.

Security refers to the policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems.

Controls consist of all the methods, policies, and organizational procedures that ensure the safety of the organization’s assets; the accuracy and reliability of its account records; and operational adherence to management standards.

The business value of security and control: • Firms relying on computer systems for their core business functions can lose sales and productivity. .

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11 •

Information assets, such as confidential employee records, trade secrets, or business plans, lose much of their value if they are revealed to outsiders or if they expose the firm to legal liability.

Describe the relationship between security and control and recent U.S. government regulatory requirements and computer forensics.

Legal actions requiring electronic evidence and computer forensics also require firms to pay more attention to security and electronic records management. Computer forensics is the scientific collection, examination, authentication, preservation, and analysis of data held on or retrieved from computer storage media in such a way that the information can be used as evidence in a court of law. It deals with the following problems: • • • •

Recovering data from computers while preserving evidential integrity.

Securely storing and handling recovered electronic data.

Finding significant information in a large volume of electronic data.

Presenting the information to a court of law.

Recent U.S. government regulatory requirements include: • • •

Health Insurance Portability and Accountability Act (HIPAA) Gramm-Leach-Bliley Act Sarbanes-Oxley Act

These laws require companies to practice stringent electronic records management and adhere to strict standards for security, privacy, and control.

8-3 Identify the components of an organizational framework for security and control.

Define general controls and describe each type of general control.

General controls govern the design, security, and use of computer programs and the security of data files in general throughout the organization’s information technology infrastructure. They apply to all computerized applications and consist of a combination of hardware, software, and manual procedures that create an overall control environment.

General controls include software controls, physical hardware controls, computer operations controls, data security controls, controls over implementation of system processes, and administrative controls. Table 8-3 (page 277) describes each type of general control.

Define application controls and describe each type of application control.

Application controls are specific controls unique to each computerized application. They include both automated and manual procedures that ensure that only authorized data are completely and accurately processed by that application. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

12 Application controls can be classified as: • Input controls: Check data for accuracy and completeness when they enter the system.

There are specific input controls for input authorization, data conversion, data editing, and error handling.

• Processing controls: Establish that data are complete and accurate during updating.

• Output controls: Ensure that the results of computer processing are accurate, complete, and properly distributed.

Describe the function of risk assessment and explain how it is conducted for information systems.

A risk assessment determines the level of risk to the firm if a specific activity or process is not properly controlled. Business managers working with information systems specialists can determine the value of information assets, points of vulnerability, the likely frequency of a problem, and the potential for damage. Controls can be adjusted or added to focus on the areas of greatest risk. An organization does not want to over-control areas where risk is low or undercontrol areas where risk is high.

Security risk analysis involves determining what you need to protect, what you need to protect it from, and how to protect it. It is the process of examining all the firm’s risks and ranking those risks by level of severity. This process involves making cost-effective decisions on what you want to protect. The old security adage says that you should not spend more to protect something than it is actually worth. Two elements of a risk analysis that should be considered are: (1) identifying the assets and (2) identifying the threats. For each asset, the basic goals of security are availability, confidentiality, and integrity. Each threat should be examined with an eye on how the threat could affect these areas. One step in a risk analysis is to identify all the things that need to be protected. Some things are obvious, like all the various pieces of hardware, but some are overlooked, such as the people who actually use the systems. The essential point is to list all things that could be affected by a security problem.

Define and describe the following: security policy, acceptable use policy, and identity management.

A security policy consists of statements ranking information risks, identifying acceptable security goals, and identifying the mechanisms for achieving these goals. The security policy drives policies determining acceptable use of the firm’s information resources and which members of the company have access to its information assets.

An acceptable use policy (AUP) defines acceptable uses of the firm’s information resources and computing equipment, including desktop and laptop computers, wireless devices, telephones, and the Internet. The policy should clarify company policy regarding privacy, user responsibility, and personal use of company equipment and networks. A good AUP defines unacceptable and acceptable actions for each user and specifies consequences for noncompliance.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

13 Identity management consists of business processes and software tools for identifying valid system users and controlling their access to system resources. It includes policies for identifying and authorizing different categories of system users, specifying what systems or portions of systems each user is allowed to access, and the processes and technologies for authenticating users and protecting their identities.

Explain how information systems auditing promotes security and control.

Comprehensive and systematic MIS auditing organizations determine the effectiveness of security and controls for their information systems. An MIS audit identifies all the controls that govern individual information systems and assesses their effectiveness. Control weaknesses and their probability of occurrence will be noted. The results of the audit can be used as guidelines for strengthening controls, if required.

8-4 Identify the most important tools and technologies for safeguarding information resources.

Name and describe three authentication methods.

Authentication refers to the ability to know that a person is who he or she claims to be. Some methods are described below: • What you know: Passwords known only to the authorized users.

• What you have: o A token is a physical device that is designed to provide the identity of a single user. o A smart card is a device that contains a chip formatted with access permission and other data.

• What you are: Biometrics is based on the measurement of a physical or behavioral trait that makes each individual unique.

Describe the roles of firewalls, intrusion detection systems, and anti-malware software in promoting security.

A firewall is a combination of hardware and software that controls the flow of incoming and outgoing network traffic. Firewalls prevent unauthorized users from accessing internal networks.

They protect internal systems by monitoring packets for the wrong source or destination; by offering a proxy server with no access to the internal documents and systems; or by restricting the types of messages that get through (for example, email). Further, many authentication controls have been added for webpages as part of firewalls.

Intrusion detection systems monitor the most vulnerable points or “hot spots” in a network to detect and deter unauthorized intruders. These systems often also monitor events as they happen to look for security attacks in progress. Sometimes they can be programmed to shut down a particularly sensitive part of a network if it receives unauthorized traffic.

Anti-malware software is designed to check computer systems and drives for the presence of .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

14 computer malware, viruses, and worms and often eliminates the malicious software, whereas antispyware software combats intrusive and harmful spyware programs. Often the software can eliminate the malware from the infected area. To be effective, anti-malware software must be continually updated.

Explain how encryption protects information.

Encryption, the coding and scrambling of messages, is a widely used technology for securing electronic transmissions over the Internet and over Wi-Fi networks. Encryption offers protection by keeping messages or packets hidden from the view of unauthorized readers. Encryption is crucial for ensuring the success of electronic commerce between the organization and its customers, and between the organization and its vendors.

Describe the role of encryption and digital certificates in a public key infrastructure.

Digital certificates combined with public key encryption provide further protection of electronic transactions by authenticating a user’s identity. Digital certificates are data fields used to establish the identity of the sender and to provide the receiver with the means to encode a reply.

They use a trusted third party known as a certificate authority to validate a user’s identity. Both digital signatures and digital certificates play a role in authentication. Authentication refers to the ability of each party to know that the other parties are who they claim to be.

Distinguish between disaster recovery planning and business continuity planning.

Disaster recovery planning devises plans for the restoration of computing and communications services after they have been disrupted by an event such as an earthquake, flood, or terrorist attack. Disaster recovery plans focus primarily on the technical issues involved in keeping systems up and running, such as which files to back up and the maintenance of backup computer systems or disaster recovery services.

Business continuity planning focuses on how the company can restore business operations after a disaster strikes. The business continuity plan identifies critical business processes and determines action plans for handling mission-critical functions if systems go down.

Define digital resiliency, and describe its benefits for an organization.

Digital resiliency refers to an organization's ability to withstand and recover from disruptions or failures in its digital systems and infrastructure, including hardware, software, and networks. It involves having the necessary technology, processes, and people in place to quickly detect, respond to, and recover from incidents such as cyber attacks, hardware failures, or natural disasters.

The benefits of digital resiliency for an organization are numerous. Firstly, it can help to minimize downtime and ensure that critical business operations continue to function, even in the face of disruptions. This helps to maintain customer satisfaction and prevents financial losses that can result from extended periods of downtime. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

15 Secondly, digital resiliency can help to mitigate risks associated with cyber attacks and data breaches. By having effective security measures in place and being able to quickly detect and respond to incidents, organizations can reduce the likelihood of data loss, reputational damage, and regulatory fines.

Finally, digital resiliency can help organizations to be more agile and adaptive in the face of changing business needs and market conditions. By having a robust and flexible digital infrastructure, organizations can respond more quickly to new opportunities or challenges, and better position themselves for long-term success.

Identify and describe the security problems cloud and mobile computing pose.

Accountability and responsibility for protection of sensitive data reside with the company owning that data, even though it’s stored offsite. The company needs to make sure its data are protected at a level that meets corporate requirements. The company should stipulate to the cloud provider how its data are stored and processed in specific jurisdictions according to the privacy rules of those jurisdictions. The company needs to verify with the cloud provider how its corporate data are segregated from data belonging to other companies and ask for proof that encryption mechanisms are sound. The company needs to verify how the cloud provider will respond if a disaster strikes. Will the cloud provider be able to completely restore the company’s data and how long will that take? Will the cloud provider submit to external audits and security certifications?

If mobile devices are performing many of the functions of computers, they need to be secured like desktops and laptops against malware, theft, accidental loss, unauthorized access, and hacking attempts. Mobile devices accessing corporate systems and data require special protection. Companies will need mobile device management tools to authorize all devices in use; to maintain accurate inventory records on all mobile devices, users, and applications; to control updates to applications; and to lock down or erase lost or stolen devices so they can’t be compromised.

Describe measures for improving software quality and reliability.

Using software metrics and rigorous software testing are two measures for improving software quality and reliability.

Software metrics are objective assessments of the system in the form of quantified measurements. Metrics allow an information systems department and end users to jointly measure the performance of a system and identify problems as they occur. Metrics must be carefully designed, formal, objective, and used consistently. Examples of software metrics include: • • •

Number of transactions that can be processed in a specified unit of time.

Online response time.

Number of known bugs per hundred lines of program code. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

16 • • • •

Early, regular, and thorough testing will contribute significantly to system quality. Testing can prove the correctness of work but also uncover errors that always exist in software.

Testing can be accomplished through the use of: Walkthroughs: A review of a specification or design document by a small group of people.

Coding walkthroughs: Once developers start writing software, these can be used to review program code.

Debugging: When errors are discovered, the source is found and eliminated.

Discussion Questions: Answers AACSB: Written and oral communication; Ethical understanding and reasoning; Analytical thinking; Application of knowledge 8-5 Security isn’t simply a technology issue, it’s a business issue. Discuss.

Student answers to this question will vary. However, answers should include a discussion of the business implications of security issues, such as the financial implications of security issues, as well as the impact that such issues may have on customers and the ability to continue operating the business. Security issues can also have legal and regulatory implications that may impact the company’s business.

8-6 If you were developing a business continuity plan for your company, where would you start? What aspects of the business would the plan address?

Student answers to this question will vary. However, answers should include a definition of business continuity planning. Steps include a risk assessment, identifying critical business functions, and determining action plans for handling mission-critical functions if systems go down.

8-7 Suppose your business had an e-commerce website where it sold goods and accepted credit card payments. Discuss the major security threats to this website and their potential impact. What can be done to minimize these threats?

Student answers to this question will vary. However, answers should include a recognition that ecommerce websites face a wide variety of security threats as set forth in Section 8-1. With respect to what can be done to minimize these threats, answers should refer to the material set forth in Section 8-3 (components for an organizational framework for security and control) and Section 8-4 (tools and technologies for safeguarding information resources).

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands-on MIS Project data files can be found in MyLab MIS and solution files are included in Instructor Resources.

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17 8-8 Management Decision Problem: Scopely AACSB: Written and oral communication; Application of knowledge; Analytical thinking; Integration of real-world business experiences This Management Decision Problem asks students to prepare a security report for Scopely, a leading online gaming company, detailing the kinds of threats it should anticipate, their impact on its business, and the steps Scopely can take to prevent damage to its operations. Student answers will vary. A sample answer is as follows: Threats include: • Hackers and crackers • File sharing over peer-to-peer networks • Malware including worms and Trojan horses • Denial-of-service attacks • Botnet attacks on network servers The company should determine the impact on its business by performing a risk assessment.

Business managers working with information systems specialists should determine the value of information assets, points of vulnerability, the likely frequency of a problem, and the potential for damage.

Steps the company can take to prevent damage include: • Access controls: Prevent improper access to all the organization’s systems by unauthorized insiders and outsiders.

• Firewalls: Prevent unauthorized users from accessing private networks.

• Intrusion detection systems: Full-time monitoring tools placed at the most vulnerable points or “hot spots” to detect and deter intruders.

• Anti-malware/antispyware: Check computer systems and drives for the presence of computer malware, viruses, and spyware.

• Unified threat management systems: Combines all these tools into a single appliance.

Since this seems to be a relatively small company, a UTM system would make security management much easier.

• Recovery-oriented computing: Design the system to recover quickly and implement capabilities and tools to help operators pinpoint the sources of faults in multi-component system. ( 8-9 Improving Decision Making: Using Spreadsheet Software to Analyze Security Events AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking; Integration of real-world business experiences Software skills: Spreadsheet sorting and data filtering Business skills: Monitoring and analyzing security events The purpose of this Hands-on Software Project is to familiarize students about IT security audit tools. The exercise is based on a list of security events that might appear on a Windows Server .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

18 security audit log. Students use the spreadsheet data sorting and filtering capabilities to sort events according to their level of criticality and to display all events of High Potential Criticality.

They are also asked to research a High Potential Criticality event on the web and write a brief description of the potential problems posed by this event. Results of this research assignment will vary. The question file for this project (EMIS15Chap8 Question File) can be found in MyLab MIS and the solution file (EMISChap8 Solution File can be found in Instructor Resources.

8-10 Improving Decision Making: Evaluating Security Outsourcing Services: Solution AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking; Integration of real-world business experiences Software skills: Web browser and presentation software Business skills: Evaluating business outsourcing services This Internet Project asks students to use the web to research and evaluate security outsouring services. Student answers will vary but should include a brief summary of the arguments for and against outsourcing computer security, a comparison of two firms that offer computer security outsourcing services and of the services they offer; and a PowerPoint and other form of presentation for management, summarizing the student’s findings, and that addresses whether the company should or should not outsource security services as well as a justification for the decision. If the choice is to not outsource, the answer should identify the security tools that should be used to ensure appropriate security.

8-11 Collaboration and Teamwork Project: Evaluating Security Software Tools AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge; Reflective knowledge This Collaboration and Teamwork Project asks students to work as a team to research and evaluate two competing vendors’ security projects, such as anti-malware software, firewalls, or intrusion detection and prevention software. Answers will vary, but should include describe each product’s capabilities, for what types of businesses it is best suited, and its cost to purchase and install. The team should also identify which product they feel is best and explain why. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

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Business Problem Solving Case: SolarWinds Shines a Light on Software Supply Chain Attacks AACSB: Written and oral communication; Analytical thinking; Application of knowledge Case Study Answers 8-12 Identify and describe the security and control weaknesses discussed in this case.

The case discusses various security and control weaknesses that led to the SolarWinds hack, which allowed hackers to infiltrate the networks of several companies and organizations, including US federal agencies. Some of the weaknesses are: 1. Vulnerabilities in SolarWinds’ Orion network and applications monitoring platform allowed hackers to infiltrate the platform build server, providing them access to SolarWinds’ internal systems and development environment.

2. The hackers had compromised credentials that allowed them to access SolarWinds’ systems and conduct research and surveillance for at least nine months before the attack.

3. The malware implant that enabled the backdoor in the Orion software remained undetected for several months before it was discovered, giving hackers access to about 100 networks, including those of various US federal agencies.

4. The attack was sophisticated, focusing on detection evasion and leveraging existing trust relationships.

5. The attack exploited the software supply chain, which involves many different parties involved in different software phases, including design, development and production, distribution, acquisition and deployment, maintenance, and disposal.

6. The attack took advantage of trusted mechanisms such as the update or patch process, making it harder to detect.

7. The hack of a single software vendor provided hackers with a springboard into the networks of hundreds or even thousands of the vendor’s customers.

8. Other techniques used in software supply chain attacks include the corruption of tools used to create software, the targeting of open-source code, and the addition of malicious code into legitimate code libraries.

8-13 What people, organization, and technology factors contributed to these problems?

The SolarWinds hack was a result of a software supply chain attack that exploited vulnerabilities in SolarWinds' Orion platform. The attackers gained entry to the software vendor's network via a .

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20 backdoor in the network and applications monitoring software platform. The attack was perpetrated

by APT29, a group believed to be affiliated with the hacking arm of Russia's foreign intelligence service.

People: Most attacks are the work of highly skilled professionals. However, when people don’t take the problem seriously and aren’t constantly on alert for hacking incidents and other network vulnerabilities, cyberattacks can go unnoticed until it’s too late. In this case, known web-security issues were identified and problems could have been prevented.

Organization: One of the key factors was the failure of SolarWinds to detect the attack in a timely manner. The company's security protocols were inadequate to detect and prevent a sophisticated attack of this kind. Another factor was the use of compromised credentials to access SolarWinds' software development environment and internal systems. This allowed the attackers to conduct research and surveillance on SolarWinds' systems and gain access to the software development environment. The lack of global cybersecurity standards and regulations also contributed to the problems. There is a need for more comprehensive and coordinated cybersecurity regulations and standards to address the growing threat of cyber attacks.

Technology: Additionally, the attackers focused on detection evasion and leveraging existing trust relationships, making the attack very hard to detect. Other factors that contributed to the problems include the increasing complexity of IT infrastructures, the increasing sophistication of cyber attacks, and the increasing interconnectedness of IT systems. The software supply chain attack is a relatively new and menacing threat that has the potential to compromise the security of many organizations. The hack of a single software vendor can provide hackers with a springboard into the networks of hundreds or even thousands of the vendor's customers.

8-14 Discuss the impact of the SolarWinds hack.

The SolarWinds hack was a significant event in cybersecurity as it impacted several high-profile organizations, including government agencies and private sector networks. The hack was initiated by a group called APT29, which is believed to be affiliated with Russia's foreign intelligence service. The attack involved a supply chain attack, where the hackers infiltrated the software supply chain during the development and production phase and compromised the software before it was acquired and deployed by customers. The attackers inserted a backdoor into the SolarWinds Orion software, which was downloaded by customers, giving the attackers access to their networks and data. The attack is considered an act of nation-state cyberwarfare and highlights the need for better supply chain security in software development. The impact of the hack is far-reaching, with some systems continuing to be vulnerable, even after being patched, because the attackers could have maintained a presence in other areas of a company's network without the company knowing it.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

21 8-15 How can future software supply chain attacks like those discussed in the case be prevented? Explain your answer.

Software supply chain attacks like the SolarWinds attack can be prevented by implementing the following measures: 1. Risk Assessment: Companies should assess the risks associated with each software vendor, identify critical software components, and determine the sensitivity of data that is managed by these software components.

2. Third-party Risk Management: Companies should implement third-party risk management programs to ensure that their vendors meet certain security requirements, monitor their compliance, and conduct regular audits to ensure that vendors adhere to the security standards.

3. Code Review: Companies should review the code of software components to detect any vulnerabilities or malicious code.

4. Access Management: Companies should implement access management policies to ensure that only authorized personnel have access to critical systems and data.

5. Monitoring and Detection: Companies should implement monitoring and detection mechanisms to identify unusual behavior or activities on their network, including suspicious network traffic, unknown devices, or unauthorized access attempts.

6. Incident Response Plan: Companies should have an incident response plan in place to respond to potential security breaches or attacks quickly and minimize the impact.

7. Encryption and Segmentation: Companies should implement encryption and segmentation to protect critical data and prevent attackers from moving laterally within the network.

Video Case: Fastly Internet Outage Exposes Vulnerability of Major Websites; Ransomware Is a Worldwide Problem: Palo Alto Networks AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1. Which of the following best describes the source of the Fastly outage?

A) Fastly’s networking software was not up to date.

B) Fastly’s network was penetrated by hackers.

C) Fastly’s content delivery network malfunctioned.

D) Fastly’s website was overwhelmed by a DDoS attack.

Answer: C .

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22 2. Which of the following statements is not true?

A) Ransomware attacks can be launched by less skilled hackers.

B) RaaS is similar to SaaS but is used for malicious software.

C) Not all organizations that pay ransomware demands are able to recover their data.

D) Ransomware payments are not made with bitcoin.

Answer: D 3. Which of the following statements best describes what happens to organizations suffering ransomware attacks?

A) They don’t need to pay the ransom if they have good backup systems.

B) Ransomware attacks are only aimed at large companies.

C) The percentage of organizations that recovered from a ransomware attack without paying is about the same as that for organizations that paid but could not recover.

D) The effects of ransomware attacks are so devastating that the ransom should always be paid.

Answer: C Video Case Essay Questions: Answers 1, Why was the Fastly outage so devastating?

Answer: The Fastly outage of June 8, 2021 only lasted an hour but it affected half the web. A single Fastly customer updating its settings triggered a software bug that shut down Fastly. When Fastly failed, the websites it supported could not retrieve their data and were forced offline.

These included high profile and highly trafficked websites, such as Amazon, The New York Times, CNN, Spotify, and Walt Disney World. The outage revealed just how dependent, centralized, and vulnerable the infrastructure supporting the Internet actually is, especially cloud computing providers that the average user doesn’t directly interact with. With the Internet routed through fewer and fewer channels. When one of those major channels fails, the results are dramatic, disruptive, and incredibly costly.

2. Why does ransomware pose such a problem for organizations using the Internet?

Answer: Ransomware has become one of the most serious threats on the Internet. Ransomware attacks can cause costly disruptions to an organization’s operations and loss of critical information and data as well as large amounts of money if the attackers are paid off.

Ransomware attacks target smaller organizations, startups, government agencies and individuals as well as large corporations. Ransomware malware infects computers and inhibits or severely restricts users or external software from accessing devices or entire systems until the attacker’s ransom demands have been met. The ransom demands have been as high as 40 million.

Ransomware as a Service (RaaS) makes it even easier to launch ransomware attacks. Using RaaS, minimally skilled attackers can launch more sophisticated and targeted attacks.

The results of ransomware attacks are very unpredictable, and organizations are not always able to recover their data even if the ransom was paid. The Veeam 2022 Ransomware Trends

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

23 Report found that 24 percent organizations it surveyed paid the ransom but were still not able to recover their data.

Dirt Bike Running Case: Achieving Operational Excellence: Developing a Disaster Recovery Plan AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is running case assignment accompanying each chapter of the text. To complete the assignment, Students should review the corresponding text chapter and any information provided by students’ instructor related to the topic. Students can complete each project individually or in teams, depending on instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Web browser and presentation software Business skills: Disaster recovery planning Management is concerned that Dirt Bikes’s computer systems could be vulnerable to power outages, cybervandalism, computer viruses, natural disasters, or telecommunications disruptions.

You have been asked to perform an analysis of system vulnerabilities and disaster recovery planning for the company. Your report should answer the following questions: 1. What are the most likely threats to the continued operation of Dirt Bikes’ systems?

The single most likely threat is for power outages, which can easily occur because of rain and snowstorms, particularly in regions like the Rocky Mountains area. Outages can be very harmful because they can disrupt the operation of computers and telecommunications systems. Longlasting outages could affect Dirt Bikes’ supply chain and sales and marketing work. Computer malware should be rare if the company protects against them. Vandalism should be rare if the company takes appropriate protective steps. As a young company with employee turnover, Dirt Bikes might have system problems caused by employee errors.

2. What would you identify as Dirt Bikes’ most critical systems? What is the impact on the company if these systems can’t operate? How long could the company survive if these systems were down? Which systems are the most important to back up and restore in the event of a disaster?

The most critical systems are the production and supply chain systems. These are the most important because the company cannot continue to operate without these systems. The company probably can survive for one or two weeks if these systems are down, but it would suffer greatly if its inventory gets too low. Sales systems are very important, but sales can probably continue for days if sales systems disruptions do occur because actual sales are conducted by local dealers. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

24 Financial and human resources systems, while very important, are not as critical in the short run, although with no backups, the total loss of these systems could be very expensive and could cause production, sales and delivery delays if they are lost for a long period of time. Therefore, these systems must be backed up although they are of lower priority for restoration than production and supply chain systems.

3. Use the web to locate two disaster recovery services that could be used by a small business such as Dirt Bikes. Compare them in terms of the services they offer. Which should Dirt Bikes use? Exactly how could these services help Dirt Bikes recover from a disaster?

Student answers will vary. Some of the criteria students should use are whether data are continuously backed up or backed up only periodically, whether data are backed up on tape or online, cost of the service, whether additional hardware is provided or data are synchronized over communications lines, and the amount of time it would take a subscribing company to recover if the service was used. Students should determine whether a company like Dirt Bikes needs immediate recovery capability given the cost of such services. Some disaster recovery vendors to explore are IBM, Acronis, and Microsoft Azure Site recovery.

4.(Optional) Use presentation software to summarize your findings for management.

Student presentations will vary.

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Essentials of Management Information Systems, 15e Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Project o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions The chapter focuses on the use of enterprise applications to achieve operational excellence and customer intimacy. It explains how enterprise systems help businesses achieve operational excellence, how supply chain management systems can be used to coordinate planning, production, and logistics with suppliers, .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

2 and how customer relationship management systems help firms achieve customer intimacy. It also describes the challenges that enterprise applications pose and how enterprise applications are taking advantage of new technologies. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Lenzing Sustainably Balances Supply and Demand The opening case illustrates how systems that integrate different business functions and provide consistent information throughout the company and its supply chain can boost productivity, save money AND also help the environment. It demonstrates how information systems can help businesses achieve both sustainability and profitability, The way Lenzing Group had previously managed its supply chain was highly wasteful and ran counter to its corporate mission to promote sustainability. Implementing Blue Yonder software tools for Sales & Operations Planning has made it much easier for Lenzing’s managers to access and analyze data accurately for forecasting, inventory planning, and fulfillment, greatly improving both decision making and operational efficiency across the enterprise.

The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How was Lenzing’s business model and objectives affected by having an inefficient supply chain?

• How did Blue Yonder software tools improve operations and decision making at Lenzing?

You can also ask students if they know of other businesses that have been profitable while promoting environmentally friendly practices. They can also research these topics on the web and share their findings with the class. Information systems helped Lenzing run a leaner supply chain that cut down waste. What are some other ways information systems might help a company become more sustainable?

Section 9-1: Explain how enterprise systems help businesses achieve operational excellence.

This section introduces enterprise systems and explains the benefits and disadvantages of implementing them. There have been success stories as well as horror stories about companies who have used enterprise systems.

Figure Video 9.1: This is an appropriate time for the class to review and discuss Video 9.1, which shows how enterprise systems work, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS Use Table 9.1 to discuss various business processes that enterprise systems support. This table shows students how an enterprise system permeates every functional area in a business.

Section 9-2: Describe how supply chain management systems coordinate planning, production, and logistics with suppliers.

Section 9.2 goes into great depth about supply chain processes and how information can help managers control the supply chain better. Have your students give you examples of following the supply chain with .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

3 retail purchases that they make. It discusses the increased difficulties of managing global supply chains and how using the Internet can improve the flow of information. Be sure to point out the management challenges of effectively implementing a successful supply chain system.

Figure Video 9.2: This is an appropriate time for the class to review and discuss Figure 9.2, which shows a simplified supply chain for Nike sneakers and how supply chains work, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Figure Video 9.3: The discussion of Information Systems and Supply Chain Management is an appropriate opportunity for the class to review and discuss Figure 9.3, which illustrates the bullwhip effect in supply chains and how supply chains can react to minor fluctuations in demand, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS. Section 9-3: Explain how customer relationship management systems help firms achieve customer intimacy.

The Internet and e-commerce have put more power in the hands of customers. Consider for example the increased amount of information available on the Internet about automobiles, their pricing, and availability of purchasing options. You can also point to the availability of online banking to demonstrate the ability to comparison shop for financial services. Because everyone has been a customer, you can discuss personal horror stories and how companies could have prevented them by having a good CRM system in place. This is a good time to actively engage Marketing majors in the class. They may have already taken a marketing class with CRM or may be planning to take one in the near future.

The Spotlight on Organizations case, MillerKnoll Uses Salesforce.com to Transform Its Business Strategy, illustrates the business value of customer relationship systems. Answers to the case study questions for this case can be found on pages 4 to 5 of this Instructor’s Manual.

Video Case: The Chapter 9 Video Case describes Freshworks, a California-headquartered software startup company specializing in user-friendly tools for managing and centralizing customer interactions and increasing customer engagement. It would be appropriate to assign this case when covering customer relationship management (CRM) systems in Section 9-3. You might want to ask students to give examples of how businesses have engaged with them as customers. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the video case study questions can be found on pages 19 to 20 of this Instructor’s Manual.

Section 9-4: Describe the challenges that enterprise applications pose and how enterprise applications are taking advantage of new technologies.

This section explains the difficulties of implementing CRM, SCM, and enterprise systems and integrating them with other systems. New business processes must be built on enterprise-wide service platforms. The trend toward next-generation enterprise applications includes open source and on-demand solutions— popular solutions with small and medium-sized businesses that can’t afford expensive licensing fees.

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4 The Spotlight on Technology case, Versum’s ERP Transformation, describes how Versum Materials was able to transform its business using a new, cloud-based ERP system. Answers to the case study questions for this case can be found on pages 5 to 6 of this Instructor’s Manual.

Section 9-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as a supply chain analyst. Ask students how this chapter could help prepare them for such a job. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Chapter 9 Spotlight on Organizations: MillerKnoll Uses Salesforce.com to Transform Its Business Strategy ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. What is MillerKnoll’s business strategy? What is the role of customer relationship management in that strategy?.

MillerKnoll’s business strategy is to provide a frictionless omni-channel experience that is more convenient and personalized for customers. The company aims to engage with customers from the first moment of design inspiration, operate a user-friendly, leading-edge digital storefront, and provide exceptional customer service during and after the purchase process. To manage relationships with customers, MillerKnoll uses Salesforce.com, which provides cloud-based tools for customer relationship management (CRM) and application development. The role of CRM in MillerKnoll’s strategy is to identify key customer segments, develop closer ties to those customers, and design differentiated experiences tailored to each customer’s needs. CRM tools make it possible for MillerKnoll to have a single, consistent view of each customer across all the various channels through which that person interacts with the company.

2. How did using Salesforce.com change the way MillerKnoll ran its business?

Using Salesforce.com changed the way MillerKnoll ran its business in several ways. First, the company was able to provide a more personalized and convenient customer experience by using Salesforce Marketing Cloud to develop complex customer journeys and sophisticated email campaigns. Second, MillerKnoll was able to automate service processes, streamline workflows, and locate key articles, topics, and experts with information to help the company's 1,100 customer service agents by using Service Cloud.

Finally, MillerKnoll was able to centralize customer information, log interactions with the company, and automate many of the tasks salespeople do every day by using Sales Cloud. Overall, using Salesforce.com helped MillerKnoll to have unified customer data with a powerful platform to manage customer relationships. .

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5 3. Give examples of two business decisions at MillerKnoll that were improved by using Salesforce.com.

Salesforce Marketing Cloud helped the company decide how to treat each of its brands and the customers for those brands differently, taking into account customer preferences across different channels. Salesforce Service Cloud can “listen” and respond to customers across a variety of social platforms and automatically decide which customer service cases should be routed to the appropriate agent.

Spotlight on Technology: Versum’s ERP Transformation ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Define the problem in this case study. What people, organization, and technology factors contributed to the problem?

The problem was that Versum’s old systems did not support its new business model after it separated from its parent company Air Products. Versum had to come up with a new system solution very quickly.

People factors: • Lack of time: Versum Materials had an ambitious deadline of 18-24 months to have its own IT infrastructure and enterprise system in place, which put pressure on the implementation process.

• Inadequate training: If Versum had tried to put in a totally new, non-SAP ERP system, employees and IT staff would have had to learn an entirely new, unfamiliar system, which could not be easily accomplished in short order.

• Resistance to change: Employees who were used to the old system may have been resistant to the change and could have caused disruptions to the implementation process.

Organization factors: • Legacy ERP system: The legacy ERP system had been heavily customized with various upgrades over the years, and most of those customizations were for the parent company’s industrial gas division, which had very different information requirements than the new Versum.

• Global supply chain: Versum Materials has a global supply chain spanning more than 10 countries, so a phased rollout would have required putting temporary interfaces in place to feed data from the previous system to the new system to enable the new system to go live country by country.

• Tight transition services agreement (TSA): The transition services agreement (TSA) between Versum and its former parent company Air Products did not allow enough time for a phased rollout.

Technology factors: • ERP system selection: Versum Materials selected SAP S/4HANA as the foundation of its new system because it had all the capabilities for satisfying the industry’s legal regulatory .

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requirements and because it appeared to be the quickest and easiest to implement in a short timeframe.

Implementation complexity: Implementing a new ERP system is a complex process that requires significant planning and resources.

System integration: Rolling out other SAP solutions, including modules for SAP Business Warehouse optimized for SAP HANA, SAP Business Planning and Consolidation, SAP Global Trade Services, the SAP Advanced Planning and Optimization component of SAP Supply Chain Management, SAP Solution Manager, SAP Process Integration, SAP Data Services, and SAP Governance, Risk, and Compliance, required integration with the new ERP system, which added complexity to the implementation process.

2. Was the SAP S/4HANA SaaS solution a good one for Versum? Explain your answer.

The SAP S/4HANA SaaS solution was a good one for Versum. The company needed an integrated ERP system that could satisfy the industry’s legal regulatory requirements and was quick and easy to implement in a short timeframe. SAP S/4HANA provided these capabilities and allowed the company to wipe the slate clean and implement processes that worked for its specific business. The decision to implement SAP S/4HANA instead of a totally new, non-SAP ERP system was advantageous because it saved the company from having to train employees and IT staff to learn an entirely new, unfamiliar system, which could not be easily accomplished in short order. Furthermore, the decision to roll out the new system in a private cloud with a hosting provider that would manage the cloud SAP S/4HANA platform running in its own physical data center saved the company from making a large up-front capital investment in the new system and the responsibility for managing the system.

3. What challenges did Versum encounter when implementing the new system?

The challenges that Versum encountered when implementing the new system include the need to replace its existing IT infrastructure and enterprise system, which had been provided by its former parent company, Air Products, and was not suited for Versum's new business model. Versum also had a very ambitious deadline of 18-24 months to get off the transition service agreement (TSA) with Air Products and have its own system in place. Versum had problems converting data from the old system to the new, due to large data quality problems and disparities between the data structures of the SAP system and the old system.

Another challenge was to find a suitable ERP system. Versum had to choose between copying Air Products' existing 20+-year-old SAP ERP system, bringing the same customizations and functionality to a new SAP ERP system, or starting completely from scratch with all-new servers, software, and processes.

Versum ultimately decided to start from scratch and implement processes that worked specifically for its business.

4. How did the new system change the way Versum ran its business?

The new system changed the way Versum ran its business in several ways. It allowed the company to have its own IT infrastructure and enterprise system, which was better suited for its business model. The new system was also more efficient and effective, allowing Versum to streamline its business processes and reduce costs. It also provided the company with the capabilities to satisfy the industry’s legal regulatory

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 requirements. Overall, the new system enabled Versum to improve its operations, enhance its competitiveness, and support its plans for growth.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 9-1 Explain how enterprise systems help businesses achieve operational excellence.

Define an enterprise system and explain how enterprise software works.

Enterprise software consists of a set of interdependent software modules that support basic internal business processes. The software allows data to be used by multiple functions and business processes for precise organizational coordination and control. Organizations implementing this software would have to first select the functions of the system they wish to use and then map their business processes to the predefined business processes in the software. A particular firm would use configuration tables provided by the software to tailor a particular aspect of the system to the way it does business. Table 9.1 describes some of the major business processes supported by enterprise software. These include financial and accounting processes, human resources processes, manufacturing and production processes, and sales and marketing processes.

Describe how enterprise systems provide value for a business.

Enterprise systems provide value both by increasing operational efficiency and by providing firmwide information to help managers make better decisions. Large companies with many operating units in different locations have used enterprise systems to enforce standard practices and data so that everyone does business the same way. Enterprise systems help firms respond rapidly to customer requests for information or products. Manufacturing is better informed about producing only what customers have ordered, procuring exactly the right amount of components or raw materials to fill actual orders, staging production, and minimizing the time that components or finished products are in inventory.

Enterprise software includes analytical tools for using data captured by the system to evaluate overall organizational performance. Enterprise system data have common standardized definitions and formats that are accepted by the entire organization. Enterprise systems allow senior management to easily find out at any moment how a particular organizational unit is performing or to determine which products are most or least profitable.

Companies can use enterprise systems to support organizational structures that were not previously possible or to create a more disciplined organizational culture. They can also improve management reporting and decision making. Furthermore, enterprise systems promise to provide firms with a single, unified, and all-encompassing information system technology platform and environment. Lastly, enterprise systems can help create the foundation for a customer-driven organization.

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8 9-2 Describe how supply chain management systems coordinate planning, production, and logistics with suppliers. ( Define a supply chain and identify each of its components.

A supply chain is defined as a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products, and distributing the finished products to customers. It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers to supply goods and services from source through consumption. Supply chain management is the integration of supplier, distributor, and customer logistics requirements into one cohesive process.

Explain how supply chain management systems help reduce the bullwhip effect and how they provide value for a business.

The bullwhip effect occurs when information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain. It can also result from “gaming,” as purchasers present manufacturers or suppliers with a false picture of consumer demand. It can be dealt with by reducing uncertainties about demand and supply when all the players in a supply chain have accurate and up-todate information.

Define and compare supply chain planning systems and supply chain execution systems.

Supply chain planning systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product. They help companies make better operating decisions such as determining how much of a specific product to manufacture in a given time period; establishing inventory levels for raw materials, intermediate products, and finished goods; determining where to store finished goods; and identifying the transportation mode to use for product delivery. One of the most important functions is demand planning, which determines how much product a business needs to make to satisfy all of its customers’ demands. These functions are referred to as order planning, advanced scheduling, demand planning, distribution planning, and transportation planning.

Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner. They track the physical status of goods, the management of materials, warehouse and transportation operations, and financial information involving all parties. These functions are referred to as order commitments, final production, replenishment, distribution management, and reverse distribution. .

Describe the challenges of global supply chains and how Internet technology can help companies manage them better.

Global supply chains extend across multiple countries and regions, which leads to additional complexities and challenges. Global supply chains typically span greater geographic distances and time differences than domestic supply chains do and have participants from a number of countries.

Performance standards may vary from region to region or from nation to nation. Supply chain management may need to reflect foreign government regulations and cultural differences. .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

9 Firms use intranets to improve coordination among their internal supply chain processes, and they can use extranets to coordinate supply chain processes shared with their business partners. Using intranets and extranets (both based on Internet technology), all members of the supply chain can instantly communicate with each other, using up-to-date information to adjust purchasing, logistics, manufacturing, packaging, and schedules. A manager can use a web interface to tap into suppliers’ systems to determine whether inventory and production capabilities match demand for the firm’s products. Business partners can use web-based supply chain management tools to collaborate online with suppliers and customers. Sales representatives can access suppliers’ production schedules and logistics information to monitor customers’ order status. The Internet has introduced new ways of managing warehousing, shipping, and packaging based on access to supply chain information that can give companies an edge in delivering goods and services at a reasonable cost.

Distinguish between a push-based and pull-based model of supply chain management and explain how contemporary supply chain management systems facilitate a pull-based model.

In a push-based model, production master schedules are based on forecasts or best guesses of demand for products, and products are “pushed” to customers. In a pull-based model, actual customer orders or purchases trigger events in the supply chain.

In contemporary supply chain management systems, the Internet and Internet technology make it possible to move from sequential supply chains, where information and materials flow sequentially from company to company, to concurrent supply chains, where information flows in many directions simultaneously among members of a supply chain network. Members of the network immediately adjust to changes in schedules or orders.

9-3 Explain how customer relationship management systems help firms achieve customer intimacy.

Define customer relationship management and explain why customer relationships are so important today.

Customer relationship management: A business and technology discipline that uses information systems to coordinate all of the business processes surrounding all the firm’s interaction with its customers in sales, marketing, and service.

Importance of customer relationships: Globalization of business, the Internet, and electronic commerce have put more power in the hands of customers. Companies realize that their only enduring competitive strength may be their relationships with their customers. Some say that the basis of competition has switched from who sells the most products and services to who “owns” the customer, and that customer relationships represent the firm’s most valuable asset.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

10 Describe the tools and capabilities of customer relationship management software for sales, marketing, and customer service.

Customer relationship management systems typically provide software and online tools for sales, customer service, and marketing. Refer to Figure 9-8 for a diagram of the business processes that CRM software supports for sales, marketing, and service. Capabilities include the following: Sales: • Sales force automation modules in CRM systems help sales staff increase their productivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services.

• Providing sales prospect and contact information, product information, product configuration capabilities, and sales quote generation capabilities.

• Enabling sales, marketing, and delivery departments to easily share customer and prospect information.

• Increasing salespeople’s efficiency in reducing the cost per sale as well as the cost of acquiring new customers and retaining old ones.

• Capabilities for sales, forecasting, territory management, and team selling.

• Support for direct-marketing campaigns through capabilities for capturing prospect and customer data, providing product and service information, qualifying leads for targeted marketing, and scheduling and tracking direct-marketing mailings or email.

Customer Service: • Providing information and tools to make call centers, help desks, and customer support staff more efficient.

• Includes capabilities for assigning and managing customer service requests.

• May also include web-based self-service capabilities.

Marketing: • Supporting direct-marketing campaigns with capabilities for capturing prospects and customer data, providing product and service information for qualifying leads for targeted marketing, and scheduling and tracking direct-marketing mailings or email.

• Includes tools for analyzing marketing and customer data. Identifies profitable and unprofitable customers, designs products and services to satisfy specific customer needs and interests, and identifies opportunities for cross-selling, up-selling, and bundling.

Describe how partner relationship management (PRM) and employee relationship management (ERM) are related to customer relationship management (CRM)?

The more comprehensive CRM packages contain modules for partner relationship management (PRM) and employee relationship management (ERM). PRM uses many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners. If a company does not sell directly to customers but rather works through distributors or retailers, PRM helps these channels sell to customers directly. ERM software deals with employee issues that are closely related to CRM, such as

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11 setting objectives, employee performance management, performance-based compensation, and employee training.

Distinguish between operational and analytical CRM. Operational CRM includes customer-facing applications such as tools for sales force automation, call center and customer service support, and marketing automation.

Analytical CRM includes applications that analyze customer data generated by operational CRM applications to provide information for improving business performance management. Applications are based on data warehouses that consolidate data from operational CRM systems and customer touch points. The database serves online analytical processing, data mining, and other data analysis techniques, and provides information related to customer lifetime values.

9-4 Describe the challenges that enterprise applications pose and how enterprise applications are taking advantage of new technologies.

List and describe the challenges enterprise applications pose.

Enterprise applications are very difficult to implement successfully. They require extensive organizational change, expensive new software investments, and careful assessment of how these systems will enhance organizational performance. Enterprise applications require both deep-seated technological changes and fundamental changes in business operations. Employees must accept new job functions and responsibilities. They must learn new work activities and understand how data they enter into the system can affect other parts of the company. Enterprise applications introduce switching costs that make it very expensive to switch vendors. Multiple organizations will share information and business processes. Management vision and foresight are required to take a firm- and industry-wide view of problems and to find solutions that realize strategic value.

Explain how these challenges can be addressed.

Enterprise applications create new interconnections among myriad business processes and data flows inside the firm (and in the case of supply chain management systems, between the firm and its external supply chain partners). Employees require training to prepare for new procedures and roles. Attention to data management is essential. Management must understand the impact that implementing enterprise applications will have on every facet of the business. Executives must not underestimate the time and costs of implementation, not just on the organization but also on customers, suppliers, and business partners.

Describe how enterprise applications are taking advantage of cloud computing and business intelligence.

Enterprise application vendors are delivering more value by developing systems that help managers obtain more meaningful information from the massive amounts of data these systems generate. These systems make it possible for enterprise applications to use HANA in-memory computing technology, making them capable of much more rapid and complex data analysis. These systems include tools for .

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12 flexible reporting, ad hoc analysis, interactive dashboards, what if scenario analysis, machine learning, and data visualization.

These next generation enterprise applications also include cloud solutions that increase functionality on mobile platforms. Many large enterprise software vendors now feature cloud versions of their ERP systems. More companies, including large Fortune 500 firms, are choosing to run all or part of their enterprise applications in the cloud.

Define social CRM and explain how customer relationship management systems are using social networking.

Social CRM tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes, rather than having them in separate “silos.” The tools help organizations identify new ideas more rapidly, improve team productivity, and deepen interactions with customers. When employees interact with customers via social networking sites, they are often able to provide faster and cheaper customer service functions than when using telephone conversations or email. Customers have come to expect rapid responses to their questions and complaints and aren’t willing to wait on slower, outdated technologies.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 9-5 Supply chain management is less about managing the physical movement of goods and more about managing information. Discuss the implications of this statement.

Student answers to this question will vary, but essentially one cannot manage a supply chain of goods and services without information: what is being produced, how much, suppliers, when available, transportation schedules, distributors, etc. The more precise. available and accurate this information, the easier a supply chain will be to manage. Ask students what would happen if there were no information at all available for the components of a supply chain. Would the supply chain be able to function?

9-6 If a company wants to implement an enterprise application, it had better do its homework.

Discuss the implications of this statement.

Student answers to this question will vary. The idea is that there is a lot of groundwork required before a company can successfully implement an enterprise application such as ERP, SCM, or CRM since it fundamentally changes many deep-seated business processes in various functional areas and levels of the organization. Below are some of the things that have to be done: • Identify business benefits of changing those processes and provide metrics • Identify changes required to existing systems as well as those required for the enterprise application, note all business process changes as well as software changes • Develop a change management strategy. ...

• Prepare for data conversion and migration • Identify processes that need changing.

• Determine how the organization will be impacted-employees, jobs, responsibilities, etc. .

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13 9-7 Which enterprise application should a business install first: ERP, SCM, or CRM? Explain your answer.

Answers to this question will vary and it depends on the business priorities of the organization. Many experts believe that financial management modules are the first and most important modules that businesses should have in their ERP software: profit tracking, accounts payable, accounts receivable, fixed asset management, procurement etc. Once these functions have been implemented in the ERP system, a business could turn to other functions or the other enterprise applications.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands on MIS Project data files can be found in MyLab MIS. Solution files are in the Instructor Resources.

9-8 Management Decision Problem: Agricultural Chemicals Corporation AACSB: Written and oral communication; Analytical thinking; Reflective thinking; Application of knowledge; Integration of real-world business experiences This Management Decision Problem asks students to complete the following tasks associated with production planning at an agricultural chemicals corporation: • Draw a diagram of the existing production process.

• Analyze the problems this process creates for the company.

• Describe how an enterprise system could solve these problems. In what ways could it lower costs?

• Diagram what the production planning process might look like if the company implemented enterprise software.

Diagram of existing production planning process: Orders Totaled -> Production Planning System (Manually Entered) -> Sales Department and Production Department Analysis -> High-level Planning Meeting -> Finalized Production Master Schedule Problems with the existing production planning process: 1. Relies heavily on past data and guesses, which can result in stock-outs or unnecessary inventory costs.

2. Lack of flexibility in adjusting production plans when unexpected orders or changes are made.

3. Manual batch data entry at end of month and analysis is time-consuming. out of date, and prone to errors.

4. Sales and production targets are often not aligned and require high-level meetings to reconcile, causing delays in finalizing the production master schedule.

5. Overall, the process takes 17 business days to complete, which can lead to delays in meeting customer demands and increased costs.

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14 How an enterprise system could solve these problems and ways it could lower costs: 1.

An enterprise system can automate the production planning process by integrating data from various sources, such as sales, production, and inventory systems, to provide real-time visibility into demand and supply. This would eliminate the need for best guesses and reliance on past data, resulting in accurate production plans that meet customer demands.

2.

An enterprise system can also provide flexibility in adjusting production plans when unexpected orders or changes are made, as real-time data would allow for quick and efficient decision-making.

3.

Automation of data entry and analysis would save time and reduce errors, leading to increased efficiency and productivity.

4.

An enterprise system would provide a unified platform for sales and production teams to collaborate and align their targets, reducing the need for high-level meetings and delays in finalizing the production master schedule.

5.

Overall, an enterprise system would lead to reduced costs by eliminating unnecessary inventory costs, reducing delays in meeting customer demands, and increasing efficiency and productivity.

Diagram of production planning process with enterprise system: Real-time Data Integration -> Order entry automated->.Order management system updated in real time -> Automated Production Planning -> Unified Sales and Production Collaboration -> Finalized Production Master Schedule 9-9 Improving Decision Making: Using Spreadsheet Software to Select Suppliers Software skills: Spreadsheet date functions, data filtering, AVERAGE function Business skills: Analyzing supplier performance and pricing In this Hands-on Software Project, students filter transactional data about suppliers to rank and select the best aircraft component suppliers for their company. Preferred suppliers are those taking the least amount of time to deliver a product, the suppliers offering the best accounts payable terms, and suppliers producing a specific component such as gaskets and their pricing. Students also use the AVERAGE function to calculate the average number of days for all suppliers to deliver. You may want to explain the meaning of accounts payable terms, the maximum number of days by which the vendor expects payment. The longer the number of days, the more favorable the terms.) The number of days it takes the vendor to deliver is calculated by subtracting the order date from the arrival date. You might also want to discuss with students how this information helps the company manage its supply chain. The question file for this project (EMIS15Chap9 Question File) can be found in MyLab MIS and the solution file (EMISChap9 Solution File can be found in Instructor Resources.

9-10 Achieving Operational Excellence: Evaluating Supply Chain Management Services Software skills: Web browser and presentation software Business skills: Evaluating supply chain management services .

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15 In this Internet Project, students are asked to use the web to research and evaluate two companies tha offer supply chain management services and then prepare a presentation that responds to the following questions: What supply chain processes can each of these companies support for their clients?

UPS Logistics Taken from the UPS Logistics website: No matter your product or your market, we've got the expertise to help make your business run better. Benefit from our established network of facilities and world-class technology and let our logistics team help you reduce costs and increase your global reach.

Success requires you to be in the right place, at the right time, with the right tools. Logistics puts you there.

Services Offered: • Distribution • Transportation Management • Post Sales/Service Parts • Supplier Management • Finished Vehicle Transportation • Supply Chain Design and Planning Services

Schneider Taken from the Schneider website: You have a set of logistic challenges.

Schneider Logistics has the solutions.

Managing supply chains is a complicated business. You know it isn’t just about moving goods. It’s about replacing inventory with information. It’s about creating product-level visibility. It’s about staying connected with your supply chain partners.

Schneider Logistics helps you manage your supply chain to its maximum efficiency.

Services Offered: • Freight Management • Hosted Applications • Financial Services • Supply Chain Engineering • Business Intelligence • SUMIT CVA • SUMIT for Shippers • Schneider ExpressTrack

How can customers use the websites of each company to help with supply chain management?

UPS Logistics Supply Chain Services What They Can Do for You: • • • •

Streamline your distribution network, reducing costs, and improving customer service.

Provide insight into logistics design, re-engineering, and supply chain management.

Implement leading-edge information systems.

Implement benchmarking processes to measure productivity.

From site analysis and selection to supply chain modeling, network optimization, and parts planning, our services can help you start the process of making your supply chain a more effective part of your business operations. If you are looking to outsource your entire transportation network, we can provide the knowledge, experience, and relationships to help you design and manage your supply chain.” .

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16 Schneider Logistics Schneider Logistics helps manage your supply chain to its maximum efficiency. Schneider promotes the idea that you do not need a one-size-fits-all template created for a “typical” supply chain. They view every customer and their needs as being unique.”

Compare the supply chain management services these companies provide. Which company would you select to help your firm manage its supply chain? Why? Responses to the question will vary. Perhaps those who do not possess an in-depth background with this type of technology will find the UPS Logistics site relatively easy to use. If they run into difficulties, they can easily access one of the many tutorials and determine what they need to do. The Schneider Logistics site might be more difficult to use at first but after exploring it, it’s relatively straightforward.

The site has a powerful presentation and points out that they are a company that has years of operating knowledge; a large provider network; and leading-edge technology that helps the customer gain control over their supply chain partners, develop global, product-level visibility, lower costs and improve their service levels to their customers.

9-11 Collaboration and Teamwork Project: Analyzing Enterprise Application Vendors AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to work as a team to use the web to research and evaluate the products of two vendors of enterprise application software, such as the SAP and Oracle enterprise systems, the supply chain management systems from Blue Yonder and SAP, or the customer relationship management systems of Oracle and Salesforce.com.

Answers will vary but should compare the software products selected in terms of business functions supported, technology platforms, cost, and ease of use, and identify which vendor the team would select and why., and explain whether the team would select the same vendor for a small business (50–300 employees) as for a large one? If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem Solving Case: The Coronavirus Pandemic Disrupts Supply Chains Around the World AACSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 9-12 Define the problem described in this case study. What people, organization, and technology factors contributed to this problem?

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

17 The problem described in this case study is the disruption of global supply chains caused by the Covid19 pandemic. The pandemic led to a sudden increase in demand for certain products such as hand sanitizers, while other products experienced large drops in demand. The isolation and quarantine of entire populations created bottlenecks that paralyzed companies all over the world. Supply chain shortages continued, especially for computer chips, automobiles, exercise equipment, and breakfast cereal. Changes in consumer spending behavior upended predictive models as customers shifted their spending to new stores, channels, and product lines.

Many factors contributed to this problem, including people, organization, and technology factors.

People factors include the change in customer behavior and the labor component of manufacturing.

Organizational factors include the prevailing wisdom in supply chain management that embraces "lean" principles, concentrating sourcing in a few countries, and not eliminating dependence on sourcing from a single supplier, region, or country. Technology factors include the lack of supply chain visibility, with most enterprises having only 20 percent visibility into their supply chains. The modern supply chain is incredibly fragile, with companies having created global supply chains based on outsourcing to external suppliers and incredibly thin margins of safety stock.

9-13 To what extent can information technology solve this problem? Explain your answer.

Information technology can play a significant role in solving supply chain disruptions caused by the COVID-19 pandemic. However, it cannot solve the problem on its own entirely. Supply chain disruptions were caused by multiple factors, including factory shutdowns, disruptions to air cargo, trucking, and rail services, port congestion, and spikes in demand for certain products. Many companies lacked visibility into their supply chains, making it challenging to respond flexibly to disruptions.

Information technology can help improve supply chain visibility, which is critical to responding quickly and flexibly to disruptions. Technologies such as the Internet of Things (IoT), Radio Frequency Identification (RFID), and blockchain can help companies track their products from the manufacturer to their final destination. Data analytics can be used to analyze the data collected from these technologies and identify potential disruptions before they occur. For example, predictive analytics can help companies identify which suppliers are at the highest risk of disruption and plan accordingly.

Additionally, artificial intelligence (AI) and machine learning (ML) can be used to optimize supply chain operations. These technologies can help companies better predict demand, optimize inventory, and improve transportation planning. They can also help companies identify potential supply chain disruptions and recommend solutions to mitigate them.

However, information technology cannot solve all supply chain disruptions caused by the pandemic.

Companies may need to diversify their suppliers, build regional supply chains, and hold more safety stock to absorb shocks. These solutions may increase costs, but they can also make supply chains more resilient to disruptions. Ultimately, a combination of technology and strategic business decisions will be required to solve the problem of supply chain disruptions caused by the COVID-19 pandemic.

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18 9-14 What people, organization, and technology issues should be addressed to redesign supply chains to deal with major disruptions such as the coronavirus pandemic?

To redesign supply chains to deal with major disruptions such as the coronavirus pandemic, organizations need to address several people, organization, and technology issues. These issues include: People: 1.

Collaboration and communication: Collaboration and communication among suppliers, distributors, and customers are essential to managing supply chain disruptions effectively. Companies need to establish open lines of communication and build collaborative relationships with their suppliers and customers.

2.

Dependence on single suppliers, regions, or countries: To make supply chains more resilient, businesses need to eliminate their dependence on sourcing from a single supplier, region, or country.

3.

Customer behavior and predictive models: Changes in customer behavior during the pandemic upended predictive models as customers shifted their spending to new stores, channels, and product lines. Companies need to stay agile and responsive to changing customer behavior.

Organization: 1.

Supply chain visibility: Most companies do not have supply chain visibility. Experts believe 70 to 80 percent visibility is required to deal with major supply chain disruptions.

2.

Inventory optimization: Many companies have created global supply chains based on outsourcing to external suppliers and incredibly thin margins of safety stock. To make supply chains more resilient, companies should consider pulling back from inventory-optimization and safety stock calculations that optimize costs by keeping stock to a minimum and building some level of reserves to absorb shocks, even if doing so increases costs.

3.

Regional supply chains: Large companies can build regional supply chains and diversify the location of their manufacturing plants and their suppliers. This can help reduce dependence on a single supplier, region, or country.

4.

Safety stock: Companies should have some level of reserves to absorb shocks, even if doing so increases costs.

Technology: 1.

Automation: The cost of manufacturing has been one of the key justifications for moving manufacturing offshore. However, the labor cost component of manufacturing has been steadily growing smaller as new automation tools have been developed. The trend is toward more automated factories, which lower the labor component and reduce profit-and-loss pressures.

2.

Just In Time Delivery: The prevailing wisdom in supply chain management has embraced "lean" principles that try to optimize costs by minimizing safety stock, using just-in-time delivery to keep only 15-30 days of products on hand. Companies need to reconsider the wisdom of just-in-time delivery in light of major disruptions like the coronavirus pandemic.

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19

Chapter 9 Video Case: Software Startup Freshworks Not in a Rush to Raise Capital AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions 1. All of the following are true except: A) Freshworks uses bots.

B) Freshworks only uses cloud computing for its CRM system.

C) Salesforce can be used by small businesses.

D) Freshworks saves money on software development costs.

Answer: B 2. Which of the following is not one of Freshwork’s competitive strengths?

A) Low cost B) Minimal need for IT technical support for the system C) User-friendly tools D) Large number of apps Answer: D 3. Which of the following best describes Freshservice?

A) Freshservice is built as an IT-support tool, whereas Freshdesk is a customer service solution.

B) Freshservice software enables firms to obtain information about all of ways they interact with a customer.

C) Freshservice is an optional add-on to Freshdesk.

D) Freshservice has a single fixed price.

Answer: A Video Case Essay Questions: Answers 1.What are the sources of competitive advantage for Freshworks?

Answer: Freshworks has morphed from a tiny startup in India into a fast-growing provider of customer relationship management (CRM), IT service, and customer service software for the global market. It has been able to flourish in a highly competitive market by focusing on products that are very easy to use and that cost much less than those of competitors such as Salesforce. Freshworks SaaS products are used by businesses of all sizes, but they are especially appealing to small and midsize companies because of its simplicity and low cost. Freshworks provides products that are out of the box, do not require an implementation team, and have a simple user interface. They are much easier to install and use than Salesforce. Freshworks users can get started immediately with a very short learning curve and very little training. (Salesforce has more features and pricing plans than Freshworks, requires the services of IT professionals to implement, and thus is geared towards bigger businesses.) Freshworks wanted to provide an unmet need for the millions of small and mid-size businesses that need business software to work out-of-the-box. This lets end-users be productive without much training to learn the software.

One reason Freshworks is able to prosper while charging lower fees for its software is that its major development costs are in India, while most of its revenue is generated in North America.

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20 Cloud computing has given start-ups access to technologies that were previously available only to large enterprises. Freshworks software was purposely built for the cloud and also for its end users, making it easy to set up and run. Freshworks wanted to provide an unmet need for the millions of small and midsize businesses that need business software to work out-of-the-box. This lets end-users be productive without much training to learn the software.

2. What people, organization, and technology factors should a business address when deciding whether to use Freshworks?

Answer: People, organization, and technology factors that a business should address when deciding whether to use Freshworks include the following: •

People: How many people would be using this software? How would the software help people perform their jobs? Would there be any user resistance to the new software? How would the software impact user productivity, impact the work environment, and job satisfaction?

•

Organization: What business functions and processes does Freshworks software support? Would the software deliver the information the company needs for its work? What business processes would be affected by the software? Which would be improved? Which would be negatively impacted? Is the Freshworks system compatible with the organization’s culture?

•

Technology: Is the software easy to install and implement? What size IT staff would be required? How much does the technology cost? Would new hardware and additional software or networking technology be required? Would Freshworks have to be integrated with other applications? How compatible is Freshworks with existing systems?

Dirt Bikes Running Case: Improving Operational Excellence: Identifying Supply Chain Management Solutions There is running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Web browser and presentation software Business skills: Locating and evaluating suppliers In this project you’ll use the web to identify the best suppliers for one component of a dirt bike and appropriate supply chain management software for a small manufacturing company.

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21 A growing number of Dirt Bikes orders cannot be fulfilled on time because of delays in obtaining some important components and parts for its motorcycles, especially their fuel tanks. Complaints are mounting from distributors who fear losing sales if the dirt bikes they have ordered are delayed too long.

Dirt Bikes’s management has asked you to help it address some of its supply chain issues.

1.

Use the Internet to locate alternative suppliers for motorcycle fuel tanks. Identify 2 or 3 suppliers. Find out the amount of time and cost to ship a fuel tank (weighing about 5 pounds) via ground (surface delivery) from each supplier to Dirt Bikes in Carbondale, Colorado. Which supplier is most likely to take the shortest amount of time and least cost to ship the fuel tanks?

A good place to start is MotorcycleGuide.net. This site is useful for finding information on fuel tanks because it offers links to other sites for motorcycle-related products. In the case of fuel tanks, it has links to many appropriate sites. Once having found this site, students can explore a number of sites relatively quickly to answer the assignment questions.

Students should explore the offerings of 2-3 vendors they select and establish the price for each fuel tank. Students should be able to estimate shipping costs for the fuel tanks based on their weight and distance from Carbondale.

2.

Dirt Bikes’s management would like to know if there is any supply chain management software for a small business that would be appropriate for Dirt Bikes. Use the Web to locate two supply chain management software providers for companies such as Dirt Bikes. Briefly describe the capabilities of the two pieces of software and indicate how they could help Dirt Bikes. Which supply chain management software product would be more appropriate for Dirt Bikes? Why? Student answers will vary, but they could explore the small business SCM offerings of SAP and Oracle.

3.

(Optional) Use presentation software to summarize your findings for management.

Student answers will vary.

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1

Essentials of Management Information Systems, 15ee Chapter 10 E-commerce: Digital Markets, Digital Goods Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

• • •

Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter focuses on e-commerce. Students are probably very familiar with most of the ideas presented in this chapter from a user’s standpoint. The task is to look behind the scenes and analyze how businesses are using technology to gain a competitive advantage and expand their

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2 operations to incorporate new channels that e-commerce provides. The chapter identifies the unique features of e-commerce, digital markets, and digital goods, and compares the principal ecommerce business and revenue models. It explains how e-commerce has transformed marketing, describes how it has affected business-to-business transactions, and examines the role m-commerce has in business and the most important m-commerce applications. It also identifies the issues that must be addressed when building an e-commerce presence. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Chewy Blends B2C and B2B E-commerce The opening case focuses on Chewy, a pet supplies company that students are likely at least somewhat familiar with if they have or have had a pet. Chewy is using a variety of Internetenabled e-commerce business models and also exemplifies the use of unique e-commerce technologies such as personalization and customization, so the case provides an engaging lead-in to a discussion of these topics. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • What people, organization, and technology issues did Chewy need to address in expanding into, first, services and then into B2B e-commerce?

• What are the potential advantages and disadvantages of Chewy’s decision to do so?

Section 10-1: Identify the unique features of e-commerce, digital markets, and digital goods.

Section 10-1 focuses on the use of the Internet and the web for e-commerce and business. Ask your students to identify several of the many benefits that the Internet offers to organizations.

Ask them to provide specific examples that they have read about in the text or have personally observed. If you have a student in your class who works for a company that participates in ebusiness and e-commerce, ask him/her to explain the company’s activities.

Figure Video Table 10.2 This is an appropriate time for the class to review and discuss Table 10.2, which describes the unique features of e-commerce technology and its accompanying Video. Figure and Table Videos are available in the eText and MyLab MIS Benefits of using Internet technology include lowering transaction and agency costs, bypassing intermediaries, allowing trading partners to directly communicate with each other and connect disparate systems, reducing delivery time for goods and services, making e-commerce available 24 hours a day, and replacing existing distribution channels.

Table 10-3 provides a good way to compare digital markets with traditional markets. To help students understand the true impact of digital markets, have them name companies or products/services for each line item in the table. For instance, information asymmetry exposes the difference in shopping for cars or insurance. A good example of delayed gratification can be found in shopping for clothes or toys. The difference in switching costs can be found with banks or stockbrokers who have all your assets and/or liabilities combined into one account. .

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3 Discuss with your students how the Internet has unbundled the information about products and services from the actual products and services. Ask the students to compare how they would shop for a car today, as opposed to how they might have shopped for a car ten years ago. Use this discussion to illustrate how the unbundling of information is disrupting traditional business models. If you have the time, ask your students to visit the Carmax.com website and determine how these kinds of sites reduce information asymmetry.

Section 10-2 Compare the principal e-commerce business and revenue models.

Students are introduced to e-commerce categories and related terminology. Even though millions of people use the web every day, many companies have found ways to personalize their interfaces with individual customers. That is a remarkable feat when you think about it. Have students visit websites that offer such personalization and report on the products or features they find. For instance, Yahoo and Google let users customize the home page to fit their personal needs. Other e-commerce sites like Shutterfly (www.shutterfly.com) specialize in customers ordering one-of-a-kind items that have been personalized just for them with their own photos.

Ask students to investigate how retailers can afford to offer these kinds of services.

This section reviews business models and revenue models that have emerged on the web in the last ten years.

Figure Videos Table 10.5 This is an appropriate time for the class to review and discuss Table 10-5, which describes the major e-commerce business models, and its accompanying Video.

Table 10.5 is especially useful for exploring Internet business models and gives excellent examples to help discern the ways businesses generate revenue. Figure and Table Videos are available in the eText and MyLab MIS The Spotlight on Technology case, Lemonade Disrupts the Insurance Industry with “Insurtech,” focuses on a fintech firm that is using cutting-edge technology to disrupt the insurance industry.

Answers to the case study questions for this case can be found on pages 5 to 6 of this Instructor’s Manual.

Video Case: The Chapter 10 Video Case, Shopify Is Writing the Future of Commerce, Says President, discusses Shopify, a SaaS subscription-based, user-friendly e-commerce platform with a full array of online (and a few in-person) selling tools. It would be appropriate to assign when covering e-commerce business models (service provider) and revenue models (subscription service) in Section 10-2 and also building an e-commerce presence in Section 10-6. You might want to ask students whether Shopify makes a good “retail operating system” that can write the future of e-commerce. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 17 to 19 of this Instructor’s Manual.

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4 Section 10-3: Explain how e-commerce has transformed marketing.

The Internet and web have turned traditional marketing methods on their head. Because so much data are gathered on almost every Internet user, marketers can target potential customers much easier than ever before through behavioral targeting messages. The sections on social networks and the wisdom of crowds helps students understand social media. Rather than looking at social networks from a personal, user point of view, students should explore the business opportunities social networks provide.

Figure Videos 10.5 This is an appropriate time for the class to review and discuss Figure 10.5, which illustrates how an advertising network works, and its accompanying Figure Video.

Videos are available in the eText and MyLab MIS. The Spotlight on Organizations case, Engaging “Socially” with Customers on TikTok provides an example of how companies are using social media to connect with their customers, and the challenges that this presents. Answers to the case study questions for this case can be found on pages 7 to 8 of this Instructor’s Manual.

Section 10-4: Describe how e-commerce has affected business-to-business transactions.

Students should pay close attention to this section because most of them will probably use some form of it in their careers. From electronic data interchanges (EDI) to private B2B networks and B2B e-commerce marketplaces, B2B e-commerce has changed the way businesses do business.

Figure 10.8 is a great example of net marketplaces that connect thousands of buyers to thousands of sellers.

Section 10-5: Describe the role m-commerce has in business and the most important mcommerce applications.

M-commerce consists of selling anything over a mobile device. It is also a method used by marketers to target advertising more directly to consumers. M-commerce is the fastest growing form of e-commerce, with six main areas of growth: location-based services, software application sales, entertainment downloads, mobile display advertising, direct shopping services, and e-book sales. It might be interesting to take a poll of your students to see which one they think is the most popular service now and which one they think will be most popular two years from now.

A section on mobile app payment systems documents the three main types of mobile payment apps: • Near-field communications-driven systems o Smartphones and mobile devices make contactless payments o Examples include Apple Pay and Google Pay • QR Code o Uses a two-dimensional barcode o Examples include Starbucks, Target, Walmart .

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Peer-to-Peer (P2P) o Allows transfer of funds via the Internet o Examples include Venmo, Zelle

Section 10-6: Identify the issues that must be addressed when building an e-commerce presence.

This may be the first time students are exposed to the mechanics of designing and building an ecommerce website. No doubt they all have used e-commerce websites before, but they’ve probably never thought about the challenges facing business managers who are responsible for building a successful online business. While this section doesn’t offer a step-by-step guide to building a website, it does outline some of the organizational and technological decisions that need to be made before the site goes live. Successful e-commerce sites consider business objectives and use the right technology to meet them. Figure 10-10 provides alternatives to consider about building and hosting an e-commerce site in-house or outsourcing part or all of the operation.

If you have time, divide students into teams and have them work through the decisions associated with developing business objectives for an e-commerce site and then choosing the right technology to meet the objectives. They don’t need to actually build the site – just complete all the preliminary work that must be done ahead of time.

Section 10-7: How will MIS help my career?

This section addresses how the chapter’s elements and information can help in securing a good job as a junior e-commerce associate. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: Lemonade Disrupts the Insurance Industry with “Insurtech.”

ACCSB: Written and oral communication; Analytical thinking, Reflective thinking; Application of knowledge Case Study Questions: Answers 1. What distinguishes the “insurtech” services described in this case from traditional insurers? Explain your answer.

Lemonade distinguishes itself from traditional insurers by relying on a completely digital platform that uses cutting-edge technologies such as Big Data analysis, artificial intelligence, chatbots, and a sophisticated mobile app. Unlike traditional insurers, Lemonade seeks to simplify

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6 the insurance process and eliminate complex application forms, relying on a chatbot to collect only the necessary information from customers. Furthermore, Lemonade uses AI to streamline the claims process, allowing claims to be resolved in as little as three seconds, with human claims experts handling the remaining cases. Lemonade's digital infrastructure is also driven by three proprietary applications that utilize Big Data, artificial intelligence, and behavioral economics to predict, detect, and block fraud throughout the customer application process.

2. How has Lemonade used information technology to innovate?

Lemonade uses information technology to innovate in several ways. First, Lemonade has developed a digital platform that spans marketing to customer care to claims processing, collecting and deploying data at each step along the way. The platform uses cutting-edge technologies such as Big Data analysis, artificial intelligence, chatbots, and a sophisticated mobile app to streamline the insurance process and provide customers with personalized quotes quickly. Second, Lemonade has pioneered a fundamentally different approach to the application process, dispensing with traditional forms and relying on a chatbot named AI Maya to collect only the necessary information from customers. Third, Lemonade uses AI to streamline the claims process, allowing claims to be resolved in as little as three seconds. Fourth, Lemonade has developed three proprietary applications, Forensic Graph, Blender, and Cooper, that utilize Big Data, artificial intelligence, and behavioral economics to predict, detect, and block fraud throughout the customer application process.

3. What issues are raised by Lemonade’s use of artificial intelligence?

Lemonade's use of artificial intelligence raises several issues, including concerns about algorithmic bias and fairness, as well as concerns about the potential for AI to replace human decision-making in the claims process. Lemonade's tweet in May 2021 also raised concerns about the use of AI to automatically deny claims based on analyzing videos submitted by customers, highlighting the potential for AI to be misused or misunderstood.

4. What factors would you consider in deciding whether to use an “insurtech: service such as Lemonade’s?

Several factors should be considered when deciding whether to use an "insurtech" service such as Lemonade's. These factors include the cost of the service, the coverage provided, the reputation of the company, the quality of customer service, and the reliability of the technology.

Potential customers should also consider the potential risks and benefits of relying on a completely digital platform that uses cutting-edge technologies such as Big Data analysis, artificial intelligence, chatbots, and a sophisticated mobile app, and weigh these against the potential risks and benefits of using a more traditional insurer.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

7 Spotlight on Organizations: Engaging “Socially” with Customers on TikTok ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1. Assess the people, organization, and technology issues for using social media technology to engage with customers.

People: issues include ensuring that employees have the necessary skills to use social media effectively and that they understand the company's brand values and messaging.

Organization: issues include developing a social media strategy, assigning roles and responsibilities, and integrating social media into the company's overall marketing and communication plans. Technology issues include selecting the appropriate social media platforms and tools, ensuring that data is secure, and analyzing social media data effectively.

Technology: include selecting the appropriate social media platforms and tools, ensuring that data is secure, and analyzing social media data effectively.

2. What are the advantages and disadvantages of using social media for advertising, brand building, market research, and customer service?

Advantages: • Advertising: Using social media offers myriad opportunities for companies to engage with consumers, amplify product messages, and increasingly • Brand Building: Social media monitoring helps companies and marketers build brand awareness and understand what people are saying about a brand (positive or negative sentiment) • Market Research: Social media monitoring helps companies and marketers discover trends and influencers, understand more about buyers’ likes, dislikes, and companies concerning products, and additional products or product modifications customers want.

• Customer Service: Social media monitoring helps companies and marketers respond more quickly to customer requests, recommendations, and complaints Disadvantages: • Social media campaigns can be tricky to orchestrate, and the results are not always predictable.

• Risk of Negative comments • Potential for loss of control over brand messaging • Need for ongoing monitoring and management of social media channels 3. What kinds of companies are best suited to use social network platforms for marketing and customer service?

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

8 Companies that are best suited to use social network platforms for marketing and customer service are those that have a strong online presence, a large social media following, and a target audience that is active on social media. Companies that sell products or services that lend themselves to visual content, such as fashion, beauty, and food, may also be well-suited to social media marketing. Additionally, companies that are willing to engage with customers in real-time and have a transparent approach to communication may find success on social media. However, companies must also be aware of the potential risks associated with social media and have a plan in place to mitigate them.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 10-1 Identify the unique features of e-commerce, digital markets, and digital goods.

Name and describe four business trends and three technology trends shaping e-commerce today.

Business Transformation • E-commerce remains the fastest-growing form of commerce, with. mobile, social, and local e-commerce becoming major channels.

• The breadth of e-commerce offerings is growing, especially in the services economy. Ondemand services like Uber, Lyft, and Airbnb; meal delivery services and pet care services have further expanded online service offerings.

• E-commerce business models are refined further to achieve higher levels of profitability.

Traditional retail firms such as Walmart, Target, and Home Depot, have developed omnichannel business models to strengthen their dominant physical retail assets.

• Small businesses and entrepreneurs continue to flood the e-commerce marketplace, often riding on infrastructures created by industry giants such as Amazon, Apple, Google, and eBay and are increasingly employing cloud-based computing resources.

• Mobile e-commerce (m-commerce) has taken off in the United States with location-based services and entertainment downloads, including those of e-books, movies, music, and television shows. Mobile retail e-commerce is expected to generate more than $415 billion in 2022.

• The traditional advertising industry is disrupted because online advertising now comprises more than 70 percent of all ad spending; Google, Yahoo, and Facebook display trillions of ads a year.

• Two-thirds of the US population has joined an online social network, created blogs, and shared photos and music. In 2022, social networks will account for an estimated 15 percent of time spent with digital media. Social networks have become the primary gateway to news, music, and, increasingly, products and services.

• The growth of online entertainment business models is enabled by the cooperation of the major copyright owners in Hollywood and New York, as well as the movement of companies such as Netflix, Amazon, Apple, and YouTube into movie and TV production. Cable television is in decline, as some viewers cut or reduce their cable subscriptions and rely on Internet-based streaming alternatives such as Hulu or YouTube TV.

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9 •

Newspapers and other traditional media adopt online, interactive models but continue to lose advertising revenues despite gaining online readers. Book publishing continues to grow slowly because of the growth in e-books and the continuing appeal of traditional trade books.

Technology Foundations • Wireless Internet connections (Wi-Fi, WiMax, 4G, and 5G smartphones) continue to expand.

• Smartphones and tablet computers provide access to music, web surfing, and entertainment, as well as voice communication. Streaming and podcasting take off as platforms for distribution of video, radio, and user-generated content.

• Mobile devices expand to include wearable computers such as Apple Watch and Fitbit trackers along with in-home devices such as Amazon Alexa and Google Assistant.

• The Internet broadband foundation becomes stronger in households and businesses as communication prices fall.

• Social networks such as Facebook, Twitter, LinkedIn, Instagram, TikTok, and others are becoming major new platforms for e-commerce, marketing, and advertising.

• Internet-based models of computing, such as smartphone apps, cloud computing, software as a service (SaaS), and platform as a service (PaaS), reduce the costs of building and maintaining e-commerce websites.

List and describe the eight unique features of e-commerce.

The eight unique features of e-commerce are as follows: • E-commerce technology is ubiquitous, meaning that it is available just about everywhere a computer can connect to the Internet.

• It has global reach, permitting commercial transactions to cross cultural and national boundaries far more conveniently and cost effectively than is true in traditional commerce.

• It operates according to universal standards shared by all nations around the world, whereas most traditional commerce technologies differ from one nation to the next.

• It provides information richness, enabling an online merchant to deliver to an audience of millions complex and rich marketing messages with text, video, and audio in ways not possible with traditional commerce technologies, such as radio, television, or magazines.

• It is interactive, meaning it allows for two-way communication between merchant and consumer, and enables the merchant to engage a consumer in ways similar to a face-to-face experience but on a massive, global scale.

• It increases information density (the total amount and quality of information available to all market participants).

• It permits personalization and customization – merchants can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases.

• Social technology enables user content creation and distribution and supports social networks.

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10 Define a digital market and digital goods and describe their distinguishing features.

Digital markets are said to be more “transparent” than traditional markets. Table 10-3 describes distinguishing features of digital markets. The Internet has created a digital marketplace where millions of people are able to exchange massive amounts of information directly, instantly, and for free. Information asymmetry is reduced. Digital markets are very flexible and efficient, with reduced search and transaction costs, lower menu prices, and the ability to change prices dynamically based on market conditions. Digital markets provide many opportunities to sell directly to the consumer, bypassing intermediaries, such as distributors or retail outlets. Other features include delayed gratification, price discrimination, market segmentation, switching costs, and network effects.

Digital goods are goods that can be delivered over a digital network and include music, video, software, newspapers, magazines, and books. Once a digital product has been produced, the cost of delivering that product digitally is extremely low. New business models based on delivering digital goods are challenging bookstores, publishers, music labels, and film studios that depend on delivery of traditional goods.

10-2 Compare the principal e-commerce business and revenue models.

Name and describe the principal e-commerce business models.

The principal e-commerce business models are as follows: • E-tailer: Sells physical products directly to consumers or individual businesses.

• Transaction broker: Saves users money and time by processing online sales transactions and generates a fee each time.

• Market creator: Provides a digital environment where buyers and sellers meet, search for and display products, and establishes prices for those products.

• Content provider: Creates revenue by providing digital content, such as news, music, photos, or video over the web.

• Community provider/social network: Provides an online meeting place where people with similar interests can communicate and find useful information.

• Portal: Provides an initial point of entry to the web along with specialized content and other services.

• Service provider: Provides online services such as financial services, career services, ondemand services and online data storage and backup.

Name and describe the e-commerce revenue models.

There are six basic e-commerce revenue models: • Advertising: Generates revenue by attracting a large audience of visitors who can then be exposed to advertisements. It’s the most widely used revenue model in e-commerce.

• Sales: Companies derive revenue by selling goods, information, or services to customers.

• Subscription: A website offering content or services charges a subscription fee for access to some or all of its offerings on an ongoing basis.

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11 • • •

Free/freemium: Basic services or content are free while advanced or special features cost extra.

Transaction fee: A company receives a fee for enabling or executing a transaction.

Affiliate: Sites that steer customers to an affiliate business receive a referral fee or percentage of the revenue from any resulting sales.

10-3 Explain how e-commerce has transformed marketing.

Explain how social networks and the wisdom of crowds help companies improve their marketing.

Social networks sell ads; sell user preference information to marketers; and sell products such as music, videos, and e-books. Businesses set up their own social network profiles to interact with potential customers and “listen” to what users are saying about their products and obtain valuable feedback from consumers. At user-generated content sites, high-quality video content is used to display advertising. Online communities are ideal venues to employ viral marketing techniques.

Creating sites where thousands, even millions, of people can interact offers business firms new ways to market and advertise products and services, and to discover who likes or dislikes their products. In a phenomenon called “the wisdom of crowds,” some argue that large numbers of people can make better decisions about a wide range of topics or products than a single person or even a small committee of experts. In marketing, the wisdom of crowds concept suggests that firms should consult with thousands of their customers, first as a way of establishing a relationship with them, and secondly to better understand how their products and services are used and appreciated. Actively soliciting customer comments builds trust and sends the message to customers that the company cares about what they are thinking, and that customer advice is valuable.

Define behavioral targeting and explain how it works at individual websites and on advertising networks.

Behavioral targeting refers to tracking the clickstreams of individuals for the purpose of understanding their interests and intentions and exposing them to advertisements which are uniquely suited to their behavior. Ultimately, this more precise understanding of the customer leads to more efficient marketing and larger sales and revenues. Behavioral targeting of millions of web users also leads to the invasion of personal privacy without user consent.

Behavioral targeting takes place at two levels: at individual websites and on various advertising networks that track users across thousands of websites. Most e-commerce websites collect data on visitor browser activity and store it in a database. They have tools to record the site that users visited prior to coming to the website, where these users go when they leave that site, the type of operating system they use, browser information, and even some location data. They also record the specific pages visited on the particular site, the time spent on each page of the site, the types of pages visited, and what the visitors purchased. Firms analyze this information about customer interests and behavior, to develop precise profiles of existing and potential customers.

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12 Define the social graph and explain how it is used in e-commerce marketing.

A social graph is a depiction of all the people you know and all the people they know. A digital social graph is a mapping of all significant online social relationships. It’s synonymous with the idea of a “social network” used to describe offline relationships. The small world theory believes any person is only six links away from any other person on earth.

The products and services you buy will influence the decisions of your friends, and their decisions will in turn influence you. It’s the “word of mouth is the best advertising” theory in digital format.

10-4 Describe how e-commerce has affected business-to-business transactions.

Explain how Internet technology supports business-to-business e-commerce.

Business-to-business transactions can occur via a company website, net marketplace, or private exchange. Websites make it easy to sell and buy direct and indirect goods over the Internet, compare suppliers, products, and prices, and even find out how others feel about the product.

Further, supply chain linkages through intranets and extranets can reduce cycle times, and support other practices of continuous improvement. Because of the ease and efficiencies brought by the Internet, business-to-business participants can save a significant amount of money and time.

Define and describe B2B e-commerce marketplaces and explain how they differ from private industrial networks (private exchanges).

A B2B e-commerce marketplace is a single digital marketplace based on Internet technology linking many buyers to many sellers. Some B2B e-commerce marketplaces serve vertical markets for specific industries, while others serve horizontal markets, selling goods that are available in many different industries. B2B e-commerce marketplaces can sell either direct or indirect goods. B2B e-commerce marketplaces are more transaction-oriented and less relationship-oriented than private industrial networks.

10-5 Describe the role m-commerce has in business and the most important m-commerce applications.

List and describe important types of m-commerce services and applications.

The most popular categories of m-commerce services and applications for mobile computing include: • Location-based services: Includes geosocial, geoadvertisng, and geoinformation services.

• Mobile app payment systems: Mobile app payment systems are becoming popular with Apple Pay, Google Pay, Starbucks, Walmart, Target, and Venmo representing examples of widely used payment systems.

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13 10-6 Identify the issues that must be addressed when building an e-commerce presence.

List and describe the four types of e-commerce presence.

Four types of e-commerce presence businesses should consider are: • Websites/apps: Traditional, mobile, and/or tablet platforms with search, display, apps, affiliates, and sponsorships as possible activities.

• Email: Internal lists and/or purchased lists as a platform with newsletters, updates, and sales as possible activities.

• Social media: Facebook/Instagram, Twitter, and/or blogs as a platform with conversation, engagement, sharing, and/or advice as possible activities.

• Offline media: Print and/or TV and radio as the platform with education, exposure, and/or branding as possible activities.

Discussion Questions AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 10-7 How does the Internet change consumer and supplier relationships?

Student answers to this question will vary. However, answers should include a discussion of the impact of the unique features of Internet and e-commerce technology, such as ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, and social technology on a company’s relationship with consumers and suppliers.

10-8 The Internet may not make corporations obsolete, but the corporations will have to change their business models. Do you agree? Why or why not?

Student answers to this question will vary. However, answers should include a discussion of how the Internet has changed consumer behavior, how it has enabled the creation of new business models, and the role that the Internet has played in digital transformation.

10-9 How have social technologies changed e-commerce?

Student answers to this question will vary. However, answers should include a definition of the various social technologies that are discussed in the chapter, and a discussion of the development of social networks and social e-commerce, the impact of user-generated content that is enabled by social technology, and use of social media for advertising and marketing.

Hands-On MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands on MIS Project data files can be foundin MyLab MIS and solution files are included in the Instructor Resources

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14 10-10 Management Decision Problem: T.J. Maxx AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences This Management Decision Problem asks students to examine the problems T.J. Maxx has had in implementing an e-commerce site for online sales, using the problem-solving steps outlined in Chapter 1 and to suggest a solution, addressing the people, organization, and technology factors that should be considered.

Student answers will vary. A sample answer might be as follows: Define the problem: The problem facing TJ Maxx is that they are experiencing difficulties implementing an e-commerce site for online sales. As an off-price retailer with constantly changing inventory, they are concerned that an online storefront may cannibalize their in-store sales. However, ignoring e-commerce can result in losing market share to competitors.

Identify the causes: The causes of TJ Maxx’s e-commerce problem are that their business model involves buying small lots of excess inventory and last year’s fashions, which makes it difficult to maintain a consistent and predictable inventory for online sales. Additionally, the constantly changing inventory can lead to customer dissatisfaction if items are out of stock or unavailable for online purchase.

Generate possible solutions: Possible solutions for TJ Maxx’s e-commerce problem include implementing an online storefront with limited inventory, using the website to promote in-store sales, creating a loyalty program for customers to encourage in-store visits, or partnering with other retailers to offer a broader selection of online inventory.

Evaluate the solutions: To evaluate the solutions, TJ Maxx should consider factors such as cost, feasibility, potential impact on sales, and customer preferences.

Choose a solution: Based on the evaluation of the solutions, TJ Maxx should choose the solution that is most likely to meet their business goals while minimizing potential negative effects on instore sales.

People: The impact of e-commerce on employees, including potential changes to job roles and responsibilities The need for additional training and support for employees involved in online sales Organization: The potential impact of e-commerce on the company’s overall strategy and brand image. The need for coordination between the online storefront and in-store sales Technology: The selection and implementation of an appropriate e-commerce platform The development of an effective inventory management system to accommodate the constantly changing inventory.

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Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

15 10-11 Improving Decision Making: Using Spreadsheet Software to Analyze an E-commerce Business AACSB: Written and oral communication, Analytical thinking, Reflective thinking, Application of knowledge.)

Software skills: Spreadsheet downloading, formatting, and formulas Business skills: Financial statement analysis This Hands-on Software Project asks sutdents to use spreadsheet software to analyze an ecommerce business. Student answers will vary, depending on the company students select and the time period over which it is analyzed. The solution files provided (EMIS15Chap10 Spreadsheet Solution File and EMIS15Chap10 PowerPoint Solution File) are merely for purposes of illustration and the income statement and balance sheet have been simplified. If students lack prior knowledge of financial statements, you may have to devote extra time to explaining income statements, balance sheets, and financial ratios. Alternatively, students can find material on understanding financial statements on financial websites such as Investopedia.

10-12 Achieving Operational Excellence: Evaluating E-commerce Hosting Services AACSB: Written and oral communication, Analytical thinking, Reflective thinking, Application of knowledge) Software skills: Web browser software Business skills: Evaluating e-commerce hosting services This Internet Project asks students to use web research to evaluate commercial services for hosting an e-commerce site for a small startup company and write a brief report indicating their choice and explaining the strengths and weaknesses of each.

Student answers will vary. In addition to writing a report that compares the range of e-comemrce services offered by each of eHost.com, GoDaddy, and iPage, explaining the strengths and weaknesses of each of the companies, and choosing a preferred vendor, students should apply the concepts of this chapter to their reports.

10-13 Collaboration and Teamwork Project: Performing a Competitive Analysis of E-commerce Sites AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to work as a team to perform a competitive analysis of two e-commerce businesses. Student answers will vary but should compare two businesses that are competitors in the same industry and that use their websites for e- commerce and include an evaluation of each business’s website in terms of its functions, user- friendliness, and ability to support the company’s business strategy. Answers should identify which website does a better job and explain why, as well as include some recommendations to improve these websites. If possible, students should use Google Docs

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16 and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem-Solving Case: Can Uber be the Uber of Everything?

AACSB: Ethical understanding and reasoning; Analytical thinking, Reflective thinking; Application of knowledge Case Study Questions: Answers 10-4 Analyze Uber using the competitive forces and value chain models. What is its competitive advantage?

Uber can claim two competitive forces: it is both a substitute service for regular taxis and other public transportation services, and it’s a new market entrant.

Instead of trying to hail a cab, you pull out your smartphone and tap the Uber app. A Google map pops up displaying your nearby surroundings. You select a spot on the screen designating an available driver, and the app secures the ride, showing how long it will take for the ride to arrive and how much it will cost. Once you reach your destination, the fare is automatically charged to your credit card. No fumbling for money. That can also increase customer intimacy.

Uber runs much “leaner” than a traditional taxi company does. Uber does not own taxis and has no maintenance and financing costs. It does not have employees, so it claims, but instead calls the drivers independent contractors, who receive a cut of each fare. Uber is not encumbered with employee costs such as workers’ compensation, minimum wage requirements, background checks on drivers, driver training, health insurance, or commercial licensing costs. Uber has shifted the costs of running a taxi service entirely to the drivers and to the customers using their cell phones. Drivers pay for their own cars, fuel, and insurance. What Uber does is provide a smartphone-based platform that enables people who want a service—like a taxi—to find a provider who can meet that need.

10-15 What is the relationship between information technology and Uber’s business model?

Explain your answer.

Rates consider the typical factors of time and distance but also demand. Uber’s software predicts areas where rides are likely to be in high demand at different times of the day. This information appears on a driver’s smartphone so that the driver knows where to linger and, ideally, pick up customers within minutes of a request for a ride. Uber also offers a higher-priced town car service for business executives, as well as a ride-sharing service. Under certain conditions, if demand is high, Uber can be more expensive than taxis, but it still appeals to riders by offering a reliable, fast, convenient alternative to traditional taxi services.

10-16 How disruptive is Uber?

Uber’s success has created its own set of challenges. By digitally disrupting a traditional and highly regulated industry, Uber has ignited a firestorm of opposition from existing taxi services in the United States and around the world. .

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17 Critics fear that Uber and other on-demand firms have the potential for creating a society of parttime, low-paid, temp work, displacing traditionally full-time, secure jobs—the so-called Uberization of work. Uber responds to this fear by saying it is lowering the cost of transportation, expanding the demand for ride services, and expanding opportunities for car drivers, whose pay is about the same as other taxi drivers.

10-17 Are any ethical and social issues raised by Uber and its business model? Explain your answer. Does Uber’s business model create an ethical dilemma?

According to this case, many Uber drivers are making less than the minimum wage. Drivers are independent contractors who do not receive health insurance or other benefits. In fact, drivers pay for their own cars, maintenance and fuel. Further, to be profitable, many analysts believe Uber will need to take advantage of self-driving vehicles. This will reduce the number of available low paying jobs.

10-18 Is Uber a viable business? Explain your answer.

The company is still not profitable, although if Uber continues to increase revenues, the answer could ultimately be yes. But Uber has a number of competitors, including Lyft in the United States and local firms in Asia and Europe. Established taxi firms in New York and other cities are launching their own hailing apps and trumpeting their fixed-rate prices. Although Uber began business solely as an alternative to traditional taxis, it has expanded its horizons to envisioning itself as a platform for a variety of different services associated with the movement of people and things from one point to another. While its flagship offering is still mobility services that provide rides for consumers in a variety of vehicles, it now is almost as equally focused on restaurant food delivery services and freight services. It sees itself as the “Amazon” of transportation, with the potential to become the dominant force in all forms of transportation services. But Uber faces significant challenges in each of these areas and has made some major missteps along the way that have impacted its profitability. It is still too early to tell whether Uber will ultimately be able to consistently turn a profit.

Video Case: Shopify Is Writing the Future of Commerce, Says President AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1. All of the following are true for Shopify except: A) Shopify can be used by large businesses.

B) Shopify payment services are only available to merchants on Shopify.

C) Shopify is stickier than other e-commerce selling platforms.

D) Shopify can be further customized using apps.

Answer: B 2. Which of the following is not one of the reasons small businesses on Shopify have s a high failure rate: .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

18 A) The technology for setting up a Shopify store is not easy to master.

B) Small businesses are often unclear about their business objectives.

C) It is difficult for new businesses to manage orders and inventory.

D) Small businesses are less likely to have good production quality controls.

Answer: A 3). Which of the following Shopify services competes with Amazon’s Buy with Prime service?

A) Product Reviews B) ShipStation C) POS Go D) Shop Pay Answer: D Video Case Essay Questions: Answers 1. What are the business benefits of Shopify? What are the social benefits?

Answer: Shopify is a user-friendly all-in-one e-commerce platform that helps small businesses build an online store and sell online through one streamlined dashboard. Its low cost and ease of use enables even very small businesses to participate in the global e-commerce marketplace, on social media sites, seller marketplaces, other blogs and websites and via email, text and chat.

Shopify also supports in-person selling with its built-in point-of-sale (POS) for retail stores and pop-up shops. E-commerce businesses that use Shopify make significantly more sales thn those using other platforms and have a high rate of return customers.

E-commerce is no longer limited to retail giants such as Amazon who have huge resources to invest in e-commerce. With Shopify you can create a full-function e-commerce platform on a shoestring. Shopify helps democratize e-commerce. Businesses also benefit from being in the Shopify e-commerce ecosystem. For example, Shopify has spawned other businesses that build apps or provide fulfillment services for its users.

2. List and describe three e-commerce services Shopify offers and how they make Shopify more competitive.

Answer: Three e-commerce services that Shopify offers that make Shopify more competitive are: • Shop Pay: an accelerated online checkout and payment service that lets buyers securely save their email address, credit card, and shipping and billing information and use it to autofill checkout fields on return visits to a website. Small businesses can use Shop Pay on their websites to help customers pay faster and Shop Pay is also available on Facebook, Instagram, and Google.

•

POS Go: Offline payments feature allowing in-store merchants to use a piece of mobile equipment with a built-in barcode scanner to do checkouts anywhere in a participating store. POS Go lets shoppers build a cart in the physical store and then check out and purchase either in the store or back home, POS Go helps merchants sell omnichannel. .

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19 •

Shopify App Store: has over 9000 apps such as Product Reviews and ShipStation built by third-party developers to customize users’ stores or provide additional e-commerce functionality,

Dirt Bike Running Case: Achieving Operational Excellence: Developing an Ecommerce Strategy AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is a running case assignment accompanying each chapter of the text. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions students will need to answer.

Software skills: Web browser software, Web page development software Business skills: Strategic analysis This project provides an opportunity for you to develop an e-commerce strategy for a real-world business and to use a web page development tool to create part of the company’s website.

Dirt Bikes’ management believes that the company could benefit from e-commerce. The company has sold motorcycles and parts primarily through authorized dealers. Dirt Bikes advertises in various magazines catering to dirt bike enthusiasts and maintains booths at important off-road motorcycle racing events. You have been asked to explore how Dirt Bikes could benefit from e-commerce and a Dirt Bikes Web site. Prepare a report for management that answers the following questions: 1. How could Dirt Bikes benefit from e-commerce? Should it sell motorcycles or parts over the web? Should it use its website primarily to advertise its products and services?

Should it use the web for customer service?

Today using the web can benefit most companies of any size, and DB is no exception. However, e-commerce is not so clear for DB. Students may want DB to sell its bikes over the Net, but that does not seem feasible because most potential customers will want to question sales people and test ride the bikes. Moreover, selling over the web would undoubtedly create channel conflict because Dirt Bikes relies so heavily on dealers for its sales. However, because DB is a relatively small company with a limited number of dealers, some students may see it helpful if DB were to sell parts over the web so that owners not living near a dealer can handle repairs and upgrades locally. In that case it would also make available maintenance information and directions over the web, as well as details on such specifics as detailed engine.

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20 Students should realize that the company might also benefit from potential or current customers gathering information on its motorcycles and parts, including photographs and brief motion clips, obtaining answers to their questions, and even communicating with other owners through a forum or bulletin board site. DB should maintain a voluntary mailing list where it can spread news and new product information useful to owners and potential owners alike. The site could also offer information on dealers, on technical information, including giving visitors and customers the ability to ask general and technical questions. The site should also offer corporate information, including its history. Students may even suggest DB-sponsored biking tours, and web connections to related merchandise. Clearly, done properly the site can be helpful in advertising its bikes and parts; and many students will see a site as helpful in improving and spreading its image, including reports on such developments as the opening of new dealerships, participation in and victories in bike races, stories on current users, and so forth. As for launching customer service over the web, many companies are benefiting from this use, even improving customer service while lowering its costs.

2. How would a website provide value to Dirt Bikes? Use the web to research the cost of an e-commerce site for a small to medium-sized company. How much revenue or cost savings would the website have to produce to make it a worthwhile investment for Dirt Bikes?

Many sites would be helpful for this research. For example a search by Google on “website costs” will bring back more good sites than the students can possibly use, but they will offer the students a wide variety of approaches and information. Also they could examine sites of other motorcycle companies for ideas. A good website can make the company more well known while it also could reduce advertising and customer service costs, including mailing expenses, by offering information, pictures, Q and A, and conversations with current customers and others considering purchases (see the answer to question 1 above). The site could also help advertise its dealers, thereby contributing to their success.

3. Prepare specifications describing the functions that should be performed by Dirt Bikes’ website. Include links to other websites or system in your specifications.

Again, answers will vary, as indicated in responses to question 1. Individual students will want to link to internal sites for communications and chatting (see question 1), parts sales, dealer locations and services, maintenance information, and even information on product changes and developments. It could also contain links to other sites for racing magazines and actual races, articles about DB in newspapers and journals, companies manufacturing parts for DB, and sites where they can learn about motorcycle riding, racing, bike safety, and other related issues.

4. Design the Home Page and an important secondary page linked to the Home Page using the capabilities of word processing software.

Students with the skills could use other software to build the sites, but for many students Word is feasible, enabling them to respond to this question. Designs will vary widely, although the Home Page must be appropriate for greeting individuals warmly and offering adequate information and

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21 links to DB sites for information, e-commerce, and even customer service. The instructor should recommend that students indicate on their home page links to other appropriate websites although for this exercise they need only create one actual link while the others could be just mentioned.

5. (Optional) Use Wix to design a website for the company and share it with the class.

Student website designs will vary.

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Essentials of Management Information Systems, 15e Chapter 11 Improving Decision Making and Managing Artificial Intelligence Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • •

Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) “Spotlight on” Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers ▪ Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources)Management Decision Problem ▪ Hands-on Software Projects ▪ Internet Project ▪ Collaboration and Teamwork Project o Business Problem-Solving Case Questions: • Video Case Questions: Answers • Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources) Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS

Teaching Suggestions This chapter focuses on improving decision making and managing artificial intelligence (AI).

Stories about ChatGPT and other forms of AI are being highlighted in the news, so students are likely to be very interested in this topic. The chapter identifies the different types of decisions .

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2 and explains how the decision-making process works. It describes business intelligence and business analytics that support decision making. Then it delves into AI, defining AI and explaining how it differs from human intelligence. It identifies the major types of AI techniques and shows how they benefit organizations. The chapter concludes with a section that illustrates how students can use the material in the chapter to help find an MIS-related job.

Opening Case: Big Data Analytics: A New Way to Fight Wildfires The opening case is especially timely because wildfires have become a very widespread and recurrent problem in the United States and other countries. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How did using Big Data analytics change the way wildfires are fought and managed?

• What are the social, environmental, and business benefits of using Big Data analytics for this purpose?

You can also ask students how why Big Data analytics would be an effective tool for addressing this problem.

Section 11-1; Identify the different types of decisions and explain how the decision-making process works.

This section of the text focuses on the management aspects of information systems, and how the main contribution of information systems has been to improve decision making, both for individuals and groups. As an exercise, randomly ask your students to classify different types of decisions and at what management level they would expect those decisions to be made. For example, the location of a new plant would be an unstructured type of decision and made at the senior management level, whereas, the daily production of pea soup would be a structured decision and made at the operational management level. Ask students to determine the management level of their school, and give examples of structured, semistructured, and unstructured decisions.

Figure 11.1 depicts the types of decisions made at three management levels. Figure 11.2 breaks down the decision-making process into four concrete stages. Have students diagram a decision such as where they will go on spring break or what they will do during their summer recess.

When they are done, ask them to evaluate their decision based on the qualities listed in Table 11.2: accuracy, comprehensiveness, fairness, speed (efficiency), coherence, and due process.

Figure Video 11.1: This is an appropriate time for the class to review and discuss Figure 11.1, which shows the types of decisions that typically take place at each level of management, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS.

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3 Section 11-2: Describe how business intelligence and business analytics support decision making.

This section builds on information presented in previous chapters. You might have students critically analyze how they may take information about a situation they are in (or have been in) from the environment, understand its meaning, and then attempt to act on that information. Then have them correlate the process to how a business would do the same.

Students should be encouraged to do web searches on BI and BA vendors and compare the various products available to businesses. SAP, Oracle, IBM, SAS Institute, and Microsoft are a good list of vendors from which to start. What makes one stand out more than the others? Which would work well for small- or medium-sized businesses and which would work better for largesized businesses? What decisions do managers have to make when selecting one vendor over another? Discuss the pros and cons of selecting a one-stop integrated solution for BI and BA capabilities versus multiple best-of-breed vendor solutions.

Section 11-3: Define artificial intelligence (AI) and explain how it differs from human intelligence.

This section introduces students to artificial intelligence and relates it to the way that humans think and act. Help your students understand the difference between human intelligence and artificial intelligence, and how we haven’t yet been able to develop AI systems that fully demonstrate human intelligence. Explain how AI systems are being implemented in many industries and are transforming how business is conducted.

The section goes on to discuss the evolution of AI, pointing out major developments within the last decade such as the development of Big Data databases, e-commerce, the Internet of Things, (IoT), and social media. Lastly, the section points out examples of AI that students may be more familiar with, such as personal assistants on their smartphones, as well as speech-activated systems in automobiles.

Section 11-4: Identify the major types of AI techniques and show how they benefit organizations.

In this section, students are introduced to expert systems, machine learning systems, neural networks and “deep learning” systems, genetic algorithms, natural language processing systems, computer vision systems, robotics, and intelligent agents. Expert systems are an older AI technology and most of today’s AI applications deal with developing sophisticated algorithms to see and deal with patterns in Big Data. Many organizations are developing AI applications based on these newer approaches.

Figure Video 11.8: Discussion of expert systems is an appropriate time for the class to review and discuss Figure 11.8, which shows how an expert system works using rules, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS.

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4 As students learn about IT applications for each of these AI techniques, here are some questions they should think about: What does this system do? What data does it use? What can it do with the data? What can’t it do? In what sense are such systems “intelligent? The Spotlight on Technology case, What Happened to Watson Health?, examines the technology used in IBM’s Watson, one of the most famous examples of natural language processing, and the challenged IBM encountered when attempting to develop Watson applications for healthcare. Answers to the case study questions for this case can be found on pages 5 to 7 of this Instructor’s Manual.

You could also ask students to share examples of AI applications they have seen or used in daily life, For example, AI-powered imaging systems for medical diagnosis, facial recognition systems such as the iPhone’s FaceID, intelligent agents such as Apple Siri, Amazon Alexa, and Google Assistant. As students if they have ever had a credit card purchase denied. This may have been the output of a machine learning application that scans for differences in credit card transactions that do not fit the card holder’s buying patterns. The Spotlight on People case, Do You Know Who Is Using Your Face?, discusses some of the issues surrounding the use of facial recognition technology. Answers to the case study questions for this case can be found on pages 7 to 9 of this Instructor’s Manual.

Students will no doubt pepper you with questions about Chat GPT. What is Chat GPT? How does it work? What can it do and what are its limitations? What is a large language model and what is generative AI? There is a discussion of Chat GPT in the eText, and there are many sources of information on this topic on the web.

Video Case: The Chapter 11 Video Case describes how businesses in the oil and gas industry can profitably use C3.ai’s artificial intelligence platform for predictive maintenance. It would be appropriate to assign when covering predictive analytics, Big Data analytics, aned operational intelligence in Section 11-2 and also machine learning in Section 11-4. You might want to ask students to give examples of other businesses or products that would benefit from predictive analytics. How would predictive maintenance change the way you buy and use a car? The video and Video Case can be accessed via a link in the eText. The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 21 to 22 of this Instructor’s Manual.

Section 11-5: Understand how MIS can help your career.

This section addresses how the chapter’s elements and information can help in securing a good job as an entry-level data analyst. These types of jobs are becoming more popular as information technology becomes more important in the workplace. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

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“Spotlight on” Case Studies Spotlight on Technology: What Happened to Watson Health?

ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

One critic has described Watson Health as “a hammer looking for a nail” and said that it is more effective to define and understand a problem before building an AI application. Discuss.

The critic’s comment that Watson Health is “a hammer looking for a nail” suggests that IBM built the AI tool without understanding the problem it was trying to solve. This is a common criticism of AI, that developers are creating solutions without understanding the problem fully.

The Watson Health project was aimed at revolutionizing healthcare by using AI to improve diagnoses, recommend treatment options, and match patients with clinical trials. IBM acquired a vast amount of data through acquisitions to train Watson. However, despite the hype and huge investment, Watson Health did not live up to expectations. Participating physicians reported that there was not enough data for the program to make sound recommendations, and Watson had trouble with the complexity of patient files. They also said that Watson was not telling them anything they didn’t already know. Watson’s recommendations were not always relevant to the patient’s situation or location, and high-profile hospital partners terminated their collaborations with Watson.

The critic's comment is valid in that building an AI tool without understanding the problem it is meant to solve can lead to wasted resources and ineffective solutions. It is essential to define and understand a problem fully before building an AI application. This means gathering data, understanding the context of the problem, and engaging stakeholders to identify the key issues that need to be addressed. Only then can AI be used effectively to solve complex problems.

However, this does not mean that using AI in healthcare is too difficult. Microsoft and a group of hospitals have formed a coalition to promote the use of AI in healthcare, providing recommendations, tools, and best practices. The key is to build AI solutions that are designed with the problem in mind and have the potential to make a real impact on patient care.

2.

How could IBM Watson Health have benefited from using the four-step problemsolving method introduced in Chapter 1?

IBM Watson Health could have benefited greatly from using the four-step problem-solving method introduced in Chapter 1. This approach emphasizes understanding the problem, generating potential solutions, evaluating those solutions, and implementing the best one. By following these steps, IBM could have better understood the challenges facing the healthcare industry and identified specific areas where Watson could make a difference. The company could have generated potential solutions that were tailored to the needs of healthcare providers and evaluated those solutions to determine which ones were most likely to succeed. By carefully implementing the best solutions, IBM could have avoided some of the problems that ultimately derailed its Watson Health initiative. For example, the company might have been more

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6 successful if it had focused on specific applications of Watson, such as drug development or clinical trial matching, rather than trying to solve all of healthcare’s problems at once.

Additionally, the four-step method could have helped IBM identify potential pitfalls and limitations of Watson in healthcare, such as the need for representative data and the potential for recommendations to be irrelevant or impractical for local healthcare providers. By following this approach, IBM might have been able to build a more successful and sustainable healthcare business around Watson.

3.

To what extent was Watson Health a technology problem? A people problem? An organizational problem? Explain your answer.

Watson Health was a combination of a technology problem, a people problem, and an organizational problem. While the technology was impressive and had the potential to transform healthcare, it was not ready to handle the complexity of healthcare data and was not tailored to the needs of healthcare providers. In addition, IBM’s approach to developing Watson Health was flawed, as it focused on acquiring data and companies instead of building partnerships with healthcare providers and engaging them in the development process. This led to a lack of trust between IBM and its partners, who felt that Watson Health was not delivering value and was not meeting their needs. Finally, IBM’s organizational culture was not conducive to innovation, as it was slow-moving and bureaucratic, which made it difficult for Watson Health to adapt to changing market conditions and customer needs.

4.

How can organizations using AI in healthcare avoid the mistakes IBM made?

Have realistic expectations: Organizations should not hype their AI technology before fully testing and validating it. They should have realistic expectations of the capabilities of their AI system.

Validate the AI system: Before deploying an AI system in a clinical setting, it is essential to test and validate it thoroughly. The AI system should be tested with real-world data to see if it can handle the complexity and variety of data found in a clinical setting.

Involve clinicians in the development process: Clinicians should be involved in the development process to ensure that the AI system is clinically relevant and useful.

Clinicians can provide valuable insights into the types of data and analytics that are most useful in a clinical setting.

Use representative data: Organizations should ensure that their AI system is trained on a representative sample of data. This can help avoid the problem of the AI system making recommendations that are not relevant or applicable in a specific context.

Provide explanations: AI systems should provide explanations for their recommendations to build trust with clinicians and patients. This can help clinicians understand why the AI system is making certain recommendations and help build confidence in the system.

Continuously monitor and evaluate: Organizations should continuously monitor and evaluate their AI systems to ensure that they are performing as expected. This can help

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7 detect any issues or errors and allow organizations to make adjustments or improvements as needed.

Spotlight on People: Do You Know Who Is Using Your Face?

ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

Explain the key technologies used in facial recognition systems.

Facial recognition systems use various technologies to identify and compare faces, including: Biometrics: Facial recognition systems use biometrics to map facial features, such as the distance between the eyes and the shape of the chin, from a photograph or video.

Computer algorithms: The system uses computer algorithms to highlight specific, distinctive details about a person's face. The system converts these details to a mathematical representation and compares these details to data on other faces stored in a face recognition database.

Neural networks: Facial recognition technology learns how to identify people by analyzing as many digital pictures as possible using neural networks, which are complex mathematical systems that require vast amounts of data to build pattern recognition.

Image databases: Image databases are an essential component of facial recognition technology.

Companies and labs have gathered facial images for more than a decade, and these databases are used to train and test facial recognition algorithms.

Real-time processing: Some facial recognition systems are capable of real-time processing, which allows the system to compare faces in real-time with "hot lists" of people suspected of illegal activity.

Surveillance cameras: Facial recognition systems can be integrated into surveillance cameras in stores, parks, and other public places.

Cloud computing: Facial recognition systems can be run on cloud computing platforms, which allows for faster and more efficient processing of large amounts of data.

It's important to note that facial recognition technology raises serious privacy concerns, and there is a growing need for regulation and oversight to ensure that this technology is not misused.

2.

What are the benefits of using facial recognition systems? How do they help organizations?

Facial recognition systems offer several benefits to organizations, including: .

Laudon_ Essentials of Management Information Systems, 15th edition Instructor’s Manual

8 Enhanced security: Facial recognition systems can help increase security by providing an additional layer of identity verification. They can be used to identify and authenticate individuals for access to secure areas, systems, or data.

Improved efficiency: Facial recognition systems can help organizations streamline their operations by automating certain tasks, such as attendance tracking or employee verification.

Cost savings: By automating certain tasks, facial recognition systems can help organizations save money on labor costs.

Enhanced customer experience: Facial recognition systems can be used to provide personalized services and experiences to customers, such as targeted advertising or customized recommendations.

Crime prevention: Facial recognition systems can help law enforcement agencies to identify and apprehend suspects, making it easier to prevent crime and keep communities safe.

Overall, facial recognition systems can help organizations improve security, increase efficiency, and provide better services to customers. However, it’s important to note that these systems also raise privacy concerns and must be implemented carefully to avoid misuse or abuse.

3.

Identify and describe the disadvantages of using facial recognition systems and facial databases.

The disadvantages of using facial recognition systems and facial databases are: Privacy Concerns: Facial recognition technology poses a significant threat to personal privacy.

The technology can be used to collect, store, and analyze people's facial data without their consent or knowledge. This has led to concerns about the misuse of the technology by government agencies, law enforcement, and private companies.

Bias: Facial recognition systems can be biased, leading to false positives and false negatives.

These systems tend to perform poorly for certain demographic groups, such as people with darker skin tones and women. The bias can result in misidentification, which can have serious consequences, such as wrongful arrest.

Inaccuracy: Facial recognition systems are not always accurate, and their effectiveness can be affected by various factors such as lighting, angle, and the quality of the image. This can lead to incorrect identification and false accusations.

Lack of Regulations: There are no standard regulations governing the use of facial recognition technology. This has led to the unchecked proliferation of facial recognition systems, which has raised concerns about the potential for abuse.

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9 Surveillance: Facial recognition systems can be used for surveillance, which can violate people's privacy rights. The technology can be used to track people's movements, and in some cases, monitor their behavior.

Security: Facial recognition databases can be vulnerable to cyber attacks, which can compromise people's personal information. These databases contain sensitive information, such as facial images, which can be used for identity theft or other criminal activities.

Ethical Concerns: There are ethical concerns regarding the use of facial recognition technology.

For example, the use of facial recognition systems in law enforcement raises questions about the right to privacy, due process, and equal protection under the law.

Review Questions: Answers 11-1 Identify the different types of decisions and explain how the decision-making process works.

List and describe the different decision-making levels and groups in organizations and their decision-making requirements.

Figure 11.1 illustrates the answer to this question. Each of these levels has different information requirements for decision support, and responsibility for different types of decisions.

• Senior management deals mainly with unstructured decisions.

• Middle management deals with semistructured decisions.

• Operational management deals with structured decisions.

Distinguish among an unstructured, semistructured, and structured decision.

Decisions are classified as structured, semistructured, and unstructured.

• Unstructured decisions are those in which the decision maker must provide judgment, evaluation, and insight to solve the problem. Each of these decisions is novel, important, and nonroutine, and there is no well-understood or agreed-on procedure for making them.

• Structured decisions are repetitive and routine, and they involve a definite procedure for handling them so that they do not have to be treated each time as if they were new.

• Semistructured decisions have elements of both unstructured and structured decisions.

Only part of the problem has a clear-cut answer provided by an accepted procedure.

List and describe the stages in decision making.

Stages in the decision-making process include: • Intelligence consists of discovering, identifying, and understanding the problems occurring in the organization. (Why is there a problem, where, and what effects is it having on the firm?)

• Design involves identifying and exploring various solutions to the problem.

• Choice consists of choosing among solution alternatives.

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10 • Implementation involves making the chosen alternative work and continuing to monitor how well the solution is working.

11-2 Describe how business intelligence and business analytics support decision making.

Define and describe business intelligence and business analytics.

Business intelligence: The infrastructure for warehousing, integrating, reporting, and analyzing data from the business environment. It collects, stores, cleans, and makes relevant information available to managers. It includes databases, data warehouses, and data marts.

Business analytics: Focuses on the tools and techniques for analyzing and understanding data and information. It includes online analytical processing (OLAP), statistics, models, and data mining.

List and describe the elements of a BI environment.

• Data from the business environment: Structured and unstructured data from many different sources, including mobile devices and the internet, that are integrated and organized so that they can be analyzed and used by human decision makers.

• Business intelligence infrastructure: Powerful database systems that capture relevant data stored in transactional databases or are integrated into an enterprise-data warehouse or interrelated data marts.

• Business analytics toolset: Software tools used to analyze data and produce reports, respond to managers' questions, and use key indicators of performance to track a business' progress.

• Managerial users and methods: Business performance management and balanced scorecard approaches that focus on key performance indicators; industry strategic analyses that focus on changes in the general business environment with special attention to competitors.

Managerial oversight ensures that business analytics focus on the right issues for the organization.

• Delivery platform – MIS, DSS, ESS: One suite of hardware and software tools in the form of a business intelligence and analytics package that integrate information from MIS, DSS, and ESS systems and disseminate it to the appropriate manager's desktop or mobile computing device.

• User interface: Business analytics software suites emphasize visual techniques like dashboards and scorecards that can be viewed on mobile computing devices, desktop computers, or web portals.

List and describe the analytic functionalities BI systems provide.

• Production reports: Predefined reports based on industry-specific requirements.

• Parameterized reports: Users enter several parameters in a pivot table to filter data and isolate impacts of the parameters.

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11 • Dashboards/scorecards: Visual tools for presenting performance data as defined by users.

• Ad hoc query/search/report creation: Users create their own reports based on queries and searches.

• Drill down: The ability to move from a high-level summary to a more detailed view.

• Forecasts, scenarios, models: Include the ability to perform linear forecasting and whatif scenario analysis, and analyze data using standard statistical tools.

Describe how virtual reality and augmented reality enhance data visualization and decision making.

Virtual reality systems provide the ability to create three-dimensional data visualizations. These interactive visualizations provide new opportunities such as helping customers visualize products before they buy them or teaching factory workers how to use complex equipment in a test environment.

Augmented reality works in a similar fashion by laying digital data and images onto a physical real-world environment. This allows for the enhancement of the perception of reality, making the surrounding real world of the user more interactive and meaningful. Companies can use this technology to provide more context and information with their product or service, such as the yellow first down lines on televised football games, image-guided surgeries, engineering design, and many others.

Define predictive analytics and location analytics and give two examples of each.

Predictive analytics use statistical analysis, data mining techniques, historical data, and assumptions about future conditions to predict future trends and behavior patterns. It includes the ability to model future events and behaviors based on past events and behaviors. Two examples of the uses of predictive analytics include: 1) insurance companies can predict driver behavior based on age, gender, geographic location, and driving records to help establish the proper cost of policies; and 2) retailers can predict the probability of customers responding to price changes and product offers based on past purchases, location, buying habits, and marketing campaigns.

Location analytics allow companies to gain insight from the geographic locations of current and potential customers to make decisions on product offers, new business locations, or how well products and services are working. Two examples of location analytics include: 1) where to open new stores based on current buying patterns of potential customers in the area; and 2) street maintenance requirements of local governments based on the number of vehicles transiting a particular area.

List each of the types of BI users and describe the kinds of systems that provide decision support for each type of user.

There are two basic types of business intelligence users:

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12 • Power users: About 20 percent of employees who produce reports, new analyses, models, and forecasts. This group includes IT developers, super users, business analysts, and analytical modelers.

• Casual users: The other 80 percent of employees that include customers/suppliers, operational employees, senior managers, managers/staff, and business analysts.

Senior executives take advantage of business intelligence to monitor firm activities with dashboards and scorecards. Middle managers and analysts immerse themselves in data and software, entering queries, and slicing and dicing the data along different dimensions.

Operational employees, along with customers and suppliers, use pre-packaged reports.

Define and describe the balanced scorecard method Balanced scorecard method: A framework for operationalizing a firm's strategic plan by focusing on measurable outcomes on four dimensions of the organization's performance: financial, business process, customer, and learning and growth. This method causes managers to focus on more than just financial performance. It includes things managers can influence on a day-to-day basis, like business process efficiency, customer satisfaction, and employee training.

11-3 Define artificial intelligence (AI) and explain how it differs from human intelligence.

Define artificial intelligence (AI).

Artificial intelligence involves the attempt to build computer systems that think and act like humans. At a very basic level, artificial intelligence programs take data input, process that data, and produce outputs.

Explain how AI differs from human intelligence.

Humans feel emotions such as love and hate. These emotions we feel play a role in choosing what objectives we pursue. This is commonly referred to as “human intelligence” or “common sense. Artificial intelligence differs from human intelligence in that no computer programs have yet been able to demonstrate generalized human intelligence or common sense or the range of knowledge in so many different areas exhibited by humsnd. Human intelligence is vastly more complex and sophisticated.

11-4 Identify the major types of AI techniques and show how they benefit organizations.

Define an expert system, describe how it works, and explain its value to business.

Expert systems are an intelligent technique for capturing tacit knowledge in a very specific and limited domain of human expertise. These systems capture the knowledge of skilled employees in the form of a set of rules in a software system that can be used by others in the organization.

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13 Expert systems model human knowledge as a set of rules that are collectively called the knowledge base. The strategy used to search through the collection of rules and formulate conclusions is called the inference engine. The inference engine works by searching through the rules and “firing” those rules that are triggered by facts gathered and entered by the user.

Expert systems can provide benefits, helping organizations make high-quality decisions with fewer people. They are used in business in discrete, highly structured, decision-making situations. They are used in decision-making situations where expertise is expensive or in short supply. However, they must be constantly updated and they can only capture a very limited domain of knowledge. They have been eclipsed by machine learning systems.

Define machine learning, explain how it works, and give some examples of the kinds of problems it can solve.

Machine learning is the study of how computers can improve their performance, without explicit commands programmed by humans, by training algorithms to learn patterns from previous data and examples provided by humans. A machine that learns can recognize patterns in data based on its experience or prior learnings.

A business can benefit from machine learning technology by not having to program every minor detail or concept into a computer, but rather rely on the computer to learn some things on its own. Google’s ability to recognize the meaning and intent behind user queries rather than merely matching keywords is based on machine learning.. Other examples of machine learning include identification of illegal uploads and/or hoaxes, online personalized recommendations for products and services, and predicting machines that need maintenance.

Compare supervised and unsupervised learning.

Supervised learning is when the system is “trained” by humans. The system is provided specific examples of desired inputs and outputs identified by humans in advance. The system learns from these examples and is then able to take similar inputs and determine outputs.

In unsupervised learning there is no feeding of examples from humans. The system is asked to process the data and report whatever patterns it finds.

Define neural networks and deep learning neural networks, describing how they work and how they benefit organizations.

Neural networks are used for solving complex, poorly understood problems for which large amounts of data have been collected. They find patterns and relationships in massive amounts of data that would be too complicated and difficult for a human being to analyze. Neural networks discover this knowledge by using hardware and software that parallel the processing patterns of the biological or human brain. Neural networks “learn” patterns from large quantities of data by sifting through data, searching for relationships, building models, and correcting over and over again the model’s own mistakes.

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14 Neural network applications in medicine, science, and business address problems in pattern classification, prediction, financial analysis, and control and optimization. In medicine, neural network applications are used for screening patients for coronary artery disease, for diagnosing patients with epilepsy and Alzheimer’s disease, and for performing pattern recognition of pathology images. The financial industry uses neural networks to discern patterns in vast pools of data that might help investment firms predict the performance of equities, corporate bond ratings, or corporate bankruptcies. Visa International uses a neural network to help detect credit card fraud by monitoring all Visa transactions for sudden changes in the buying patterns of cardholders.

Deep learning neural networks are more complex. They have many layers of transformation of the input data to produce a target output. These networks are used almost exclusively for pattern detection on unlabeled data where the system is not told what to look for specifically. They’re still in their infancy, but some believe that deep learning neural networks will help us come closer to the “Grand Vision” of AI, where ML systems are able to learn like a human being.

Define and describe genetic algorithms and intelligent agents. Explain how each technology works and the kinds of problems for which each is suited.

Genetic algorithms (adaptive computation) are useful for finding the optimal solution for a specific problem by examining a very large number of alternative solutions for that problem.

They are based on techniques inspired by evolutionary biology, such as inheritance, mutation, selection, and crossover (recombination). A genetic algorithm works by representing a solution as a string of 0s and 1s. The genetic algorithm searches a population of randomly generated strings of binary digits to identify the right string representing the best possible solution for the problem. As solutions alter and combine, the worst ones are discarded, and the better ones survive to go on to produce even better solutions. Genetic algorithms are used to solve problems that are very dynamic and complex, involving hundreds or thousands of variables or formulas.

The problem must be one where the range of possible solutions can be represented genetically, and criteria can be established for evaluating fitness. Genetic algorithms expedite the solution because they can evaluate many solution alternatives quickly to find the best one.

Intelligent agents are software programs that use a built-in or learned knowledge base to carry out specific, repetitive tasks for an individual user, business process, or software application. By watching the user of a program or system, an intelligent agent may customize the software system to meet the user’s needs, reducing software support costs. Intelligent agents can be used as wizards to help users do or learn how to perform a given task. Intelligent agents can be used to carry out “smart” searches of the database, data warehouse, or the internet, reducing search costs, and avoiding the problems of misdirected searches.

Chatbots are software agents designed to simulate a conversation with one or more human users via textual or auditory methods Chat GPT is an intelligent conversational agent that uses advanced AI algorithms to engage in natural language conversations with humans. Unlike traditional chatbots, Chat GPT is capable of learning and adapting to new information,

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15 Define and describe computer vision systems, natural language processing systems, and robotics and give examples of their business applications.

Computer vision systems deal with how computers can emulate the human visual system to view and extract information from real-world images. Such systems also incorporate image processing, pattern recognition, and image understanding. An example is Facebook’s facial recognition tool called DeepFace, which is nearly as accurate as the human brain in recognizing a face. DeepFace will help Facebook improve the accuracy of Facebook’s existing facial recognition capabilities. Computer vision systems are also used in autonomous vehicles such as drones and self-driving cars, industrial machine vision systems (e.g. inspecting bottles), military applications, and robotic tools.

Natural language processing is a technology that makes it possible for a machine to understand spoken or written words expressed in human (natural) language, and to process that information.

You can see natural language processing at work in the voice search feature of contemporary search engines such as Google or Yahoo!, spam filtering systems, and in-text mining sentiment analysis. Siri, Cortana, and Alexa use natural language processing as does Chat GPT. Robotics deals with the design, construction, operation, and use of movable machines that can substitute for humans, as well as computer systems for their control, sensory feedback, and information processing. Robots cannot substitute entirely for people but are programmed to perform a specific series of actions automatically. They are often used in dangerous environments (such as bomb detection and deactivation), manufacturing processes, military operations (drones), and medical procedures (surgical robots). Of special interest today are robots used in manufacturing, which are increasingly taking over more production functions that used to be performed by humans.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 11-5 If businesses used DSS and ESS more widely, would they make better decisions? Why or why not?

Student answers to this question will vary. One responsemight be that although DSS and ESS can be very helpful, not all decisions can be supported by DSS or ESS if they are too unstructured, there is no available dat,a or the information requirements have not been properly defined.. Such systems will be more successful with decision making if users clearly define the problem to be solved, the decision that has to be made, the data required to make the decision, the sources of such data., and the structured and unstructured components of the decision.

11-6 How much can business intelligence and business analytics help companies refine their business strategy? Explain your answer.

Student answers to this question will vary. One response might be that BI and BA systems have helped some, but not all companies refine their business strategy (successful examples would be Harrah’s; Netflix). McDonalds used BI working with its rich store of customer data to redirect

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16 its business strategy to put more emphasis on the customer experience. These companies all have a wealth of customer data and the analytics expertise for finding patterns in customer sentiment and behaviors that would help refocus the company.

11-7 How intelligent are AI techniques? Explain your answer.

Student answers to this question will vary. Humans see, hear, and communicate with natural languages, make decisions, plan for the future, achieve goals, perceive patterns in their environments, and learn, among many other capabilities. Humans also love, hate, and choose what objectives they want to pursue.

These are the foundations of what is called “human intelligence” and what is called “common sense” or generalized intelligence. AI systems can do some, but not all of these things in more limited knowledge domains than humans. Human intelligence is vastly more complex than the most sophisticated computer programs and covers a broader range of activities than is currently possible with “intelligent” computer systems and devices.. However, AI systems today can perform many tasks that would be impossible for humans to accomplish and can equal or come close to humans in tasks such as interpreting CT scans, recognizing faces and voices, playing games like chess or Go, or besting human experts in certain well-defined tasks. AI is finding many new applications for improving business operations and decision making, in some cases transforming how business is done, where people are employed, and how people do their jobs.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands on MIS Project data files can be found in MyLab MIS and the solutions can be found in Instructor Resources.

11-8 Management Decision Problem: Samsung AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences.

This Management Decision Problem asks students to use the four-step problem-solving methodology introduced in Chapter 1 to identify Samsung’s problem and suggest a solution, including identifying the people, organizational, and technology issues that need to be addressed by the solution.

Problem: Samsung's marketing and analytics teams have access to massive amounts of complex customer data from millions of active devices, but traditional business intelligence tools couldn't keep up with the volume and complexity of the data. As a result, it took too long to analyze the data with hundreds of variables, which prevented the team from understanding user preferences across demographics, location, mobile device profiles, carrier loyalty, past interactions with Samsung products, and customers to be targeted by a new product launch.

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17 Solution: The solution to Samsung's problem is to implement a more advanced analytics platform that can handle the volume and complexity of their data. Specifically, Samsung should invest in a machine learning platform that can quickly analyze large datasets and identify patterns and insights that traditional business intelligence tools might miss.

Understand the problem: The problem is that Samsung's marketing and analytics teams are struggling to analyze the massive amounts of customer data they have access to. Traditional business intelligence tools are too slow and can't handle the complexity of the data, which prevents the team from understanding user preferences and making informed decisions.

Identify potential solutions: One potential solution is to invest in a machine learning platform that can quickly analyze large datasets and identify patterns and insights that traditional business intelligence tools might miss.

Evaluate the solutions: Samsung should evaluate the different machine learning platforms available in the market and select one that best suits their needs. The platform should be scalable, easy to use, and have the ability to handle the complexity and volume of Samsung's data.

Implement the solution: Samsung should implement the selected machine learning platform and provide training to their marketing and analytics teams on how to use it effectively. The implementation process may involve integrating the new platform with existing systems and processes, which will require close collaboration between the IT department and the marketing and analytics teams.

Organizational and Technology Issues: The implementation of a machine learning platform will require collaboration between different departments within Samsung. The IT department will need to ensure that the new platform is integrated with existing systems and processes and become familiar with machine learning technology. Samsung’s hardware and data management platform may need to be upgraded to handle the large amount of data used in machine learning.

People Issues: The implementation of a new platform may require additional resources, which could impact the budget of the marketing and analytics teams. Additionally, team members may need to learn new skills to effectively use the new platform, which could lead to resistance or frustration. To address these issues, Samsung should provide adequate training and support to team members and communicate the benefits of the new platform clearly to stakeholders. The marketing and analytics teams will need to be trained on how to use the new platform effectively.

11-9 Improving Decision Making: Using Pivot Tables to Analyze Sales Data AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Pivot tables Business skills: Analyzing sales data

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18 This Hands-on Software Project gives students the opportunity to learn how to use Excel’s PivotTable functionality to analyze a database or data list. Students should use the data file for Online Management Training Inc. described earlier in the chapter. This is a list of the sales transactions at OMT for one day. This file is called EMIS15Chap11 Question File and is downloadable from MyLab MIS. The solution file EMIS15Chap11 Solution File can be found in the Instructor Resources.

11-10 Improving Decision Making: Using Intelligent Agents for Comparison Shopping AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Web browser and shopping bot software Business skills: Product evaluation and selection This Internet Project give students experience using shopping bots to search online for products, find product information, and find the best prices and vendors. Students should select a digital camera they might want to purchase, such as the Canon PowerShot SX530 or the Olympus Tough TG-5 and visit MySimon, BizRate.com, and Google Shopping to do price comparisons.

Students should evaluate these shopping sites in terms of their ease of use, number of offerings, speed in obtaining information, thoroughness of information offered about the product and seller, and price selection, and then prepare a report on which site or sites they would use and why, which camera they would select and why, and how helpful were these sites were in making their decision?

Answers will vary on which camera to purchase. The point of the question is for students to explore the idea of using bots to help them navigate all the various sites and gather as much information as possible, as quickly and easily as possible. It doesn’t matter which camera they choose, or even which shopping bot they like best. The idea is to critically examine the technology and determine how it helps them make better decisions.

11-11 Collaboration and Teamwork Project: Investigating Data-Driven Analytics in Sports AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to work as a team to select a sport, such as football, baseball, basketball, or soccer, and use the web to research how the sport uses data and analytics to improve team performance or increase ticket sales to events. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Student solutions will vary.

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Business Problem-Solving Case: Should An Algorithm Make Our Decisions?

AACSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 11-12 What are the problems in using algorithms and automated systems for decision making?

The use of algorithms and automated systems for decision making can lead to several problems.

One of the main issues is that these systems can be biased, perpetuating and even amplifying preexisting discrimination against certain groups of people based on race, gender, income, or other factors. The biases can arise from the way the algorithm is designed, the data used to train it, and the objectives set for the algorithm.

Another problem is that the decision-making process becomes opaque, and the people affected may not understand why they are being treated in a certain way. Automated systems may use complex models and algorithms that are difficult to interpret or explain, and the criteria for decision-making may be hidden from the public or even from the decision-makers themselves.

This lack of transparency makes it difficult to challenge decisions or correct mistakes.

Moreover, automated systems are often built with limited feedback loops, meaning that errors or biases may go unnoticed until they cause significant harm. For example, in the case of the Dutch childcare benefits scandal, the algorithm was falsely labeling claims as fraudulent, but it took several years before the problem was detected, leading to widespread harm to families and children.

In addition, the use of algorithms and automated systems can lead to a reduction in human interaction and empathy. In the case of Darnell Gates, the probation officer's visits were impersonal and perfunctory, and there was little attempt to understand his rehabilitation. This lack of human interaction can limit the ability to assess individuals' situations accurately and make fair decisions.

Overall, the use of algorithms and automated systems for decision making can lead to a range of problems, including bias, lack of transparency, limited feedback loops, and reduced human interaction. These problems need to be addressed to ensure that automated decision-making is fair, transparent, and accountable.

11-13 What people, organizational, and technology factors have contributed to the problem?

People factors: Probation officers who are responsible for interacting with individuals on probation may have lacked empathy and human engagement skills. The lack of a personal touch and failure to understand the rehabilitation of the person could have made it difficult to make sound judgments about the risks and actions to be taken. Similarly, civil servants in the Dutch tax agency who rubber-stamped fraud labels also failed to critically analyze the information generated by the algorithm, leading to a situation where thousands of families were wrongly

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20 penalized. Automated systems are not perfect and may not always get it right. Charlene Richardson and Desmond Brown, two city workers who have been responsible for aiding young people flagged by the software in Bristol, England, acknowledged that the computer doesn't always get it right, so they haven't relied on it entirely. The lack of a human override and the overreliance on the algorithm to make decisions could lead to unintended consequences.

Organizational factors: There is a lack of transparency in the decision-making processes and criteria used by automated systems in many countries and states. Few rules require the disclosure of algorithm formulas, and even when governments provide explanations of how the systems arrive at their decisions, the algorithms are often too difficult for a layperson to understand. In the case of the Dutch tax agency, the lack of transparency led to institutional bias and authorities hiding information or misleading the Parliament about the facts.

Technology factors: Algorithms are created by humans, and as such, can reflect the biases of their creators. Studies have shown that poorly designed algorithms can reinforce racial and gender biases. The algorithms used to make decisions about people's lives in the United States and Europe, such as determining prison sentences, probation rules, and police patrols, often use subjective decisions that go into setting up the problem in the first place. For example, the algorithm used in the Impact Pro program from Optum, United Health Group's health services arm, to identify patients with heart disease favored white patients over black patients.

11-14 Should automated systems be used to make decisions? Explain your answer.

The use of automated systems to make decisions is a complex issue. On one hand, such systems can be more efficient and consistent than human decision-making, and they can help eliminate human biases. However, automated systems can also reinforce biases and make errors that have serious consequences for individuals, particularly those who are already marginalized or disadvantaged. In the cases mentioned in the passage, the use of automated systems led to unjust treatment and harm to individuals and their families.

Therefore, the decision to use automated systems should be made with great care, and the systems should be subject to close oversight and monitoring. It is important to ensure that the algorithms used are transparent and can be audited, that they are subject to ethical and legal standards, and that they are regularly evaluated for accuracy and fairness. In addition, human decision makers should be involved in the process to provide oversight, accountability, and the ability to make decisions based on context and individual circumstances. Ultimately, the use of automated systems should be guided by the principle of doing no harm and ensuring that justice is served.

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Video Case: Predictive Tech Can Save $3B-$4B A Year: Tom Siebel AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1)The oil and gas industry is a good candidate for predictive maintenance operations because A) its equipment is often in many different faraway locations.

B) unplanned downtime due to an equipment malfunction seriously disrupts production.

C) the industry is accustomed to using Big Data.

D) oil and gas companies can afford to invest in predictive maintenance technology.

Answer: B 2)Which of the following is true: A) Shell’s predictive maintenance program can make up to 10 million predictions per day.

B) Baker Hughes’ C3.ai suite is making 175 million predictions per day across 24 Fortune 500 oil and gas organizations.

C) Predictive maintenance is capable of producing up to $2.5 billion in annual savings across the energy industry value chain.

D) About 55 percent of transmission pipeline in the United States was installed before 1970 Answer: B 3) Which of the following is not true: A) Predictive maintenance helps oil and gas companies avoid environmental disasters that are triggered by equipment failure.

B) Shell has made its AI predictive maintenance applications built with C3.ai software available to the general market.

C) Plant Operations Advisor prevents unplanned downtime by helping engineering teams respond quickly to problems as they occur in real time.

D) C3.ai’s artificial intelligence applications are limited to the oil and gas industry.

Answer: D Video Case 11 Essay Questions: Answers 1. What roles do Big Data, AI, and the Internet of Things (IoT) play in predictive maintenance?

Answer: Big Data: Very large quantities of data from machines are required for analysis that identifies patterns embedded in the data that provide insights on the condition and performance of equipment, including patterns of equipment malfunction.

Internet of Things (IoT) Much of the Big Data analyzed for preventive maintenance are generated by sensors attached to machines. Vital equipment statistics such as vibration, temperature, sound, and pressure captured by sensors are compared with historical records of similar equipment to detect signs of deterioration. Data from the sensors are used to model equipment performance and predictions of when a machine will break down.

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22 Artificial Intelligence (AI): Machine learning algorithms are used to detect patterns in very large quantities of data that can be used to make predictions about future events, such as when a particular piece of equipment will fail, based on based on historical information and data collected from its sensors. The machine learning algorithm analyzes the sensor data and looks for patterns that indicate when an asset is likely to fail. These predictions become more accurate over time as the system learns and grows.

2. How does predictive maintenance provide savings across an energy company’s value chain?

Answer: The ability to identify equipment failure before it happens could produce as much as $3-4 billion in annual savings across the energy industry value chain, according to Tom Siebel, CEO of C3.ai. Failure of a small piece of equipment on an offshore oil rig can halt the entire extraction and production process and the losses are incalculable. Exploration, production, transportation, storage, refining and retail sales could all experience costly bottlenecks and delays when oil rig equipment malfunctions.

Traditional reactive maintenance techniques repair equipment after it has stopped working or once it begins showing clear signs of poor performance. This practice leads to unnecessarily long downtimes and higher costs. By implementing predictive AI algorithms, a business can reduce unplanned downtimes. Predictive maintenance can also reduce operating costs because companies don’t need to replace equipment on a fixed schedule when the data show it could last longer before it fails.

Dirt Bikes Running Case: Improving Decision Making: Analyzing the Impact of Component Price Changes AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is an assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic.

Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions Students will need to answer.

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23 The EMIS15 Chapter 11 Running Case Assignment and the EMIS15Ch11 Bill of Materials data file for this project can be found in MyLab MIS. The solution file EMIS15 Ch11_solutionfile can be found in Instructor Resources, Software skills: Spreadsheet formulas, two-variable data table Business skills: Manufacturing bill of materials sensitivity analysis A bill of materials is used in manufacturing and production to show all of the parts and materials required to manufacture a specific item or for the subassembly of a finished product, such as a motorcycle. The information in the bill of materials is useful for determining product costs, coordinating orders, and managing inventory. It can also show how product costs will be affected by price changes in components or raw materials. This project provides you with an opportunity to use spreadsheet software to perform a sensitivity analysis showing the impact of various prices for component parts on the total costs of a dirt bike brake system and the total cost of the entire dirt bike. The bill of materials for this project has been simplified for instructional purposes.

Dirt Bikes’s management has asked you to explore the impact of changes in some of its parts components on production costs. Review the spreadsheet file containing bill of materials information for the brake system for Dirt Bikes’s Moto 300 model, which can be found in MyLabMIS. The completed bill of materials contains the description of the component, the identification number of each component, the supplier (source) of the component, the unit cost of each component, the quantity of each component needed to make each finished brake system, the extended cost of each component, and the total materials cost. The extended cost is calculated by multiplying the quantity of each component needed to produce the finished brake system by the unit cost. The prices of components are constantly changing, and you will need to develop a spreadsheet application that can show management the impact of such price changes on the cost to produce each brake system and on total production costs for the Moto 300 model.

• Complete the bill of materials by calculating the extended cost of each component and the total materials cost for each brake system.

• Dirt Bikes has found a good alternative supplier for the Moto 300 brake pipe and front brake caliper. The supplier believes it can provide the brake pipe for a cost of $22 to $25 per unit and the front brake caliper for $99 to $102 per unit. Develop a sensitivity analysis to show the impact on total brake system materials costs if the front brake caliper unit cost ranges from $99 to $102 and if the brake pipe unit cost ranges from $22 to $25.

• What is the most Dirt Bikes could save by switching the supplier for these 2 brake system components? What is the least it could save?

• The brake system represents 30 percent of the total materials cost for one Moto 300 motorcycle. Use sensitivity analysis again to show the impact of the changes in front brake caliper unit costs and brake pipe unit costs described previously on total materials costs for this motorcycle model.

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Essentials of Management Information Systems Chapter 12 Making the Business Case for Information Systems and Managing Projects Online Resources Online resources for the text, including Instructor Resources (Instructor’s Manual, PowerPoint slides, Image Library, Test Bank and TestGen, Video Cases, Hands-on MIS application data files, Dirt Bikes running case data files, and Career Resources) and MyLab MIS can be accessed via this link: https://media.pearsoncmg.com/ph/bp/bridgepages/teamsite/laudon/#mis

MyLab MIS Resources MyLab MIS resources for the text include the eText, Figure Videos, Video Cases, scenario-based Videos, scenario-based MIS simulations, Dirt Bikes USA running case files, Hands-on MIS application data files, Career Resources, Chapter warm-ups and quizzes, Excel and Access activities, Dynamic Study Modules (DSM), and Learning Catalytics.

Instructor’s Manual: Contents • • • • •

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Teaching suggestions (including how to use the chapter’s Video Case and Figure Videos) Spotlight on Case Study Questions: Answers Review Questions: Answers Discussion Questions: Answers Hands-on MIS Projects: Solutions/Solution descriptions (solution files, as applicable, are available in Instructor Resources) o Management Decision Problem o Hands-on Software Projects o Internet Project o Collaboration and Teamwork Project Business Problem-Solving Case Questions: Answers Video Case Questions: Answers Dirt Bikes Running Case Questions: Solution descriptions (solution files are available in Instructor Resources)

Student data files for these learning resources can be accessed via Instructor Resources and MyLab MIS. Video Case videos and case material are embedded within the eText. Video Cases and associated material (a link to the video, case description, and questions) are also available in Instructor Resources and MyLab MIS.

Teaching Suggestions This chapter focuses on the design and implementation of new information systems, including various methodologies for building systems. determining their benefits and the managing information system projects. It applies the problem-solving methodology introduced in Chapter t to the process of

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2 identifying an information system problem, analyzing the problem, designing an information system solution and introducing the solution into the organization.

Opening Case: Angostura Builds a Mobile Sales System The opening case illustrates some of the steps required to design and build new information systems. It also illustrates some of the benefits of a new system solution. The problem described in this case is an example of the typical problems associated with manual systems: they’re time consuming, error-ridden, very cumbersome, with very little ability to manipulate data and glean information. The opening case diagram is a great way to highlight the people, organization, and technology elements that worked together to create an information system solution to the business challenges discussed in the case. You can ask students to think about the following questions as they read the case: • How did Angostura’s Mobile Sales App meet its information requirements?

• How effective a solution was Angostura’s Mobile Sales App? Why? • How much did the new system change the way Angostura ran its business?

Section 12-1: Explain how managers should build a business case for the acquisition and development of a new information system.

This section reviews how companies consider many alternatives for solving problems and improving performance, including the development of new information systems or the enhancement of existing ones. Companies select the systems solution that promises the greatest benefit to the business within its budgetary constraints.. One key to getting the project approved is to make the business case for why the solution selected provides the greatest value to the organization when compared to other solutions.

It might be useful to review Figure 12.1 with students and ask them which of the 7 business goals depicted here would be addressed by the business case for Angostura’s new system.

Figure Video 12.2: This is an appropriate time for the class to review and discuss Figure 12.2, which shows how portfolio analysis can help firms evaluate the potential costs and benefits of alternative information systems projects, and its accompanying Figure Video. Figure Videos are available in the eText and MyLab MIS Section 12-2: Identify the core problem-solving steps for developing a new information system.

This section reviews the four steps in the problem-solving process: define and understand the problem; develop alternative solutions; choose the best solution; and implement the solution, applying them to solving an information systems problem. Often, organizations believe they know exactly what problem they want to solve so they fail to fully work through the first step. One exercise you might try is to have students form small groups, determine a problem on campus, and work through the four-step problemsolving process from all three facets – people, organization, and technology.

Section 12-3: Compare the alternative methods for building information systems.

This section compares the various methods for building information system solutions, noting the kinds of problems for which each method is best suited: the traditional systems life cycle (SDLC), prototyping, end-user development, application software packages, and cloud software services. Also .

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3 covered are newer approaches for developing mobile apps, rapid application development (RAD), and agile development.

The Spotlight on Technology case, McAfee Turns to Automated Testing, examines how automated testing helped security software company McAfee use an agile methodology in its projects. Answers to the case study questions for this case can be found on pages 4 to 5 of this Instructor’s Manual.

Video Case: The Video Case, Software Design Is ”Really On a Tear,” describes collaborative webbased software tools for designers created by Figma, a young San Francisco-based company. The tech industry has switched to a design-heavy product development approach for software, and Figma tools meet this need. This Video Case would be appropriate to assign when covering the topics of prototyping and rapid application development for e-business in section 12-3. You might ask students to give examples of physical products where the presentation made the product more appealing or software products where the user interface made them more approachable and easier to use. The video and Video Case can be accessed via a link in the eText The Video Case video and case materials can be accessed via a link in the eText. The Video Case (in PDF/Word file format, with a link to the video, case description, and questions) is also available in Instructor Resources and MyLab MIS. Answers to the Video Case questions can be found on pages 23 to 25 of this Instructor’s Manual.

Section 12-4: Describe how information systems projects should be managed.

Spend some time discussing why so many information system projects fail. Was it because the system wasn’t built correctly or was it how the project was managed or mismanaged that caused the failure?

This section provides students with an introduction to the methodology of project management.

Although some of the techniques and methods are considered older or less satisfactory, students have a good chance of seeing these methods in the workplace. It is not a good idea to engage in a lengthy, philosophical discussion of the superiority of methods. However, it is a good idea to help students understand that there is no one best method, that each method is appropriate depending upon the situation and the requirements.

Ask students to describe any problems they’ve had with systems that do not work or do not work very well., or turned out to be too costly for the organization to build and maintain. Try to identify the causes of these problems and what people, organizational, and technology factors were involved.

You should remind students of the biggest problems: It takes too long to build systems and they often do not work as intended. Very large systems with complex requirements and that affect many parts of the organization and organizational processes pose the most risk. Of course, this is not always true, but building systems is difficult and labor intensive. Change certainly should be a theme throughout the entire course. The user-designer communication gap is a good example of a common problem that can cause an information systems project to fail. The last portion of the section provides some suggestions about managing global projects.

The Spotlight on Organizations case, Sauder Woodworking Gets ERP Implementation Right, describes how Sauder Woodworking implemented a new, state-of-the art ERP system. Answers to the case study questions for this case can be found on pages 5 to 7 of this Instructor’s Manual.

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4 Section 12-5: Understand how MIS can help your career.

This section addresses how the material in the chapter can help students secure a position as a junior business systems analyst. Ask students what they learned from this chapter that could help them secure an entry-level junior business systems analyst position. There are additional Career Resources available in Instructor Resources and MyLab MIS, including job-hunting guides and instructions on how to build a Digital Portfolio demonstrating the business knowledge, application software proficiency, and Internet skills acquired from using the text. The portfolio can be included in a student’s resume or job application, or you can use it as a learning assessment tool.

“Spotlight on” Case Studies Spotlight on Technology: McAfee Turns to Automated Software Testing ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

Why would a company such as McAfee benefit from automated software testing?

McAfee would benefit from automated software testing for several reasons. Firstly, it has many systems projects that require testing, including the migration to SAP S/4HANA and the implementation of SAP Revenue Accounting and Reporting. McAfee is also a security software provider, and therefore must carefully test all the software tools it sells. The adoption of an agile methodology for all of its IT projects also requires software modules to be constantly created, tested, demonstrated for feedback, and revised with shorter timeframes than the traditional waterfall approach. Secondly, McAfee had been using manual processes for software testing, which is costly and time-consuming, and cannot easily handle an increased amount of testing. Thirdly, other application changes, such as replacing its customdeveloped system for configure, price, and quote processes with a third-party non-SAP system, require testing to ensure that the systems behaved as they should. Automated testing allows time for agile development teams to focus on each scenario and ensure that back-end systems were working as expected to complete customer orders. Finally, Worksoft Certify, the automated testing software selected by McAfee, uses a framework for SAP testing that comes prebuilt within the software, is codefree, and can be applied to areas beyond the company’s on-premises SAP system, including new custom applications.

2. What people, organization, and technology factors did McAfee address in moving to automated software testing??

People: McAfee's 13-member automation team consisting of automation engineers and business analysts played a crucial role in selecting the automated testing software for the company. They were charged with selecting the automated testing product and ensured that it could handle SAP testing and business process automation, and that it was easy to use.

Organization: McAfee was juggling multiple systems projects while adopting an agile methodology for all of its IT projects. McAfee is a primarily partner-based organization that works through many

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5 resellers and distributors, and it needed to ensure that these partners could quickly and easily enter orders into the SAP system.

Technology: McAfee selected Worksoft Certify as its automated testing software because it used a framework for SAP testing that came prebuilt within the software and because its testing framework could be applied to areas beyond the company's on-premises SAP system, including new custom applications. Worksoft Certify is an industry-leading test automation solution for enterprise applications including SAP, Workday, Salesforce, Oracle, and web apps.

3. Was Worksoft Certify a good solution for McAfee? Why or why not?

Worksoft Certify was a good solution for McAfee. McAfee needed to do a large amount of testing in a short time period due to the various systems projects they were managing, as well as the need to automate testing to keep up with increased testing needs. Worksoft Certify was selected because it provided a pre-built framework for SAP testing and could be applied to areas beyond the company's onpremises SAP system, including new custom applications. Worksoft Certify is also designed to test complex business processes that span multiple applications and is code-free. Therefore, it appears that Worksoft Certify met McAfee's needs and helped them to achieve their testing goals more efficiently.

4. How did automated software testing change the way McAfee runs its business?

Automated software testing has changed the way McAfee runs its business by allowing the company to handle an increased amount of testing that could not be easily managed with manual processes. McAfee has been trying to juggle multiple systems projects, such as migrating to SAP S/4HANA and implementing SAP Revenue Accounting and Reporting, and automating testing has allowed the company to complete a very large amount of testing in a short time period, enabling agile development teams to focus on each scenario and ensure that back-end systems were working as expected to complete customer orders. McAfee opted for Worksoft Certify, an industry-leading test automation solution for enterprise applications including SAP, Workday, Salesforce, Oracle, and web apps, which is designed to test complex business processes that span multiple applications and is code-free.

Spotlight on Organizations: Sauder Woodworking Gets ERP Implementation Right ACCSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 1.

Why is an ERP system so important for Sauder Woodworking? Why did Sauder want to switch to a newer ERP system?

An ERP system is essential for Sauder Woodworking because it provides an integrated view of the company's business processes, improving operational efficiency and decision-making. Sauder had been using the SAP ERP Central Component (ECC) system since 2004. In 2015, Sauder had completed the implementation of all the main SAP ECC modules. However, SAP had released SAP S/4HANA, a newer version of the ERP system that offered improved functionality. Sauder decided to switch to the new version of SAP ERP software, SAP S/4HANA, which would require a brownfield implementation, converting the existing system to the new one, using the data from the ECC system. Sauder opted for the

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6 brownfield approach to minimize the impact on the company's employees who would be impacted by having to deal with an entirely new system. The system was successfully converted within the 72-hour downtime window, including conversion of the production planning and detailed scheduling functionality of the SAP Advanced Planning and Optimization component within SAP S/4HANA. 2.

Were there any risks in undertaking this project? How did Sauder deal with them?

Yes, there were risks in undertaking this project. One of the main risks was the narrow timeframe of 72 hours to convert the existing SAP ECC system to SAP S/4HANA. There was no room for error, and the project had to be completed within the allotted time to avoid business disruptions. Additionally, the decision to go brownfield rather than greenfield was also a risk, as a completely new system might have been more efficient, but it would have required more significant change management and employee training.

To deal with these risks, Sauder took several steps. The company opted for an on-premises version of SAP S/4HANA, which gave it more control over the project timeline and allowed it to implement the new system on its own schedule. Additionally, Sauder utilized Symmetry consultants and SAP Enterprise Support to assist with the project, ensuring that it had access to expert advice and guidance throughout the process. Finally, the company chose to go with the brownfield approach, which minimized change management and employee training. Overall, these steps helped Sauder successfully complete the project within the allotted timeframe and without major disruptions to the business.

3.

Was SAP S/4HANA a good choice for Sauder? Why or why not?

SAP S/4HANA was a good choice for Sauder for several reasons. First, the company was already using SAP ERP Central Component (ECC) software for enterprise resource planning (ERP), and switching to S/4HANA allowed them to take advantage of its new features and functionality, such as in-memory computing. Second, Sauder management chose to implement the on-premises version of SAP S/4HANA so that they could implement the new suite on their own timeline rather than wait and then be pressured to change software when SAP withdrew support for the older ECC system. Third, Sauder opted for the brownfield approach to implementation, converting the existing system to the new one, using the data from the ECC system. This approach minimized the impact on employees who might have trouble learning an entirely new system. Fourth, Sauder was already quite familiar with SAP software, and their SAP system supported more than 1,600 users conducting business transactions with the software. Fifth, Sauder utilized Symmetry consultants and SAP Enterprise Support, which provided advice from SAP experts about business process improvement and data volume management. Finally, the transition to the new S/4HANA system went very smoothly, with minimal disruption to the business, and the project was delivered on time and within budget.

4.

Evaluate the advantages and disadvantages of a brownfield implementation for Sauder.

Was going brownfield the right approach for Sauder?

Advantages of Brownfield Implementation for Sauder: • Cost-effective as it saves money on purchasing new hardware and software.

• Less risky as the existing system has already been tested and used by the organization.

• Minimal disruption to the business as employees are already familiar with the system.

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7 • The conversion process is faster than a greenfield implementation as the data from the existing system can be reused.

• The organization can leverage its existing investment in the ERP system and avoid additional training costs.

Disadvantages of Brownfield Implementation for Sauder: • The new system may not be fully compatible with the existing system, leading to technical issues.

• The conversion process may be complex and time-consuming, especially if the existing system is outdated.

• Brownfield implementation may limit the organization's ability to adopt new features and functions of the new system.

• The organization may not be able to take full advantage of the new system's capabilities due to limitations in the existing system.

• There may be a risk of data corruption or loss during the conversion process.

In the case of Sauder, going brownfield was the right approach as the organization had a large number of employees who would be impacted by a completely new system. They were also quite familiar with the SAP software, which made the transition to the new version easier. Additionally, the brownfield approach allowed the organization to leverage its existing investment in the ERP system and avoid additional training costs. The successful conversion of the system within the 72-hour downtime window also indicates that the brownfield approach was the right decision.

Review Questions: Answers AACSB: Written and oral communication; Application of knowledge 12-1 Explain how managers should build a business case for the acquisition and development of a new information system.

The business case for an IT investment describes the problem facing the organization that can be solved by investing in a proposed system solution. It provides an analysis of whether an information system project is a good investment and the justification for that proposed course of action. It provides an analysis of all the costs, benefits, and risks associated with s proposed system solution and identifies any risks that could negatively affect outcomes. The business case identifies alternative solutions, along with the deciding factors for selecting the preferred option. A good business case will also describe how the proposed solution may require changes in organizational culture, systems, processes, and jobs. The business case shows how the investment supports the firm’s strategic goals and business objectives and how it fits in with the overall information systems plan of the firm. It also provides the information necessary to make an informed decision about whether to proceed with the investment and in what form.

Portfolio analysis and scoring models can be used to evaluate alternative information systems projects. traditional systems lifecycle is a formal methodology for managing the development of systems and is still used for very large projects.

Define and describe the components of a business case for a proposed systems investment.

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8 Figure 12.1 summarizes the seven major factors that are used in making the business case for a specific new system. (Review the discussion of business drivers of information systems in Chapter 1.) These factors are: (1) long-term strategic (lowering production costs, differentiating products and services, increasing the scope of the firm [e.g., global expansion], and matching or exceeding competitor capabilities); (2) improved decision making; (3) customer and supplier relationships; (4) survival (required by the market and ESG goals); (5) new products and services; (6) financial rationale; and (7) fitting with the long-term IT plan of the firm.

List and describe the major components of an information systems plan.

Organizations should develop an information systems plan that describes how information technology supports the company’s overall business plan and strategy. Plan components include: 1. Purpose of the Plan • Current business organization and future organization • Key business processes • Management strategy 2. Strategic Business Plan Rationale • Current situation • Current business organization • Changing environments • Major goals of the business plan • Firm’s strategic plan 3. Current Systems • Major systems supporting business functions and processes • Current infrastructure capabilities • Hardware • Software • Database • Networking and Internet • Cloud services • Security • Difficulties meeting business requirements • Anticipated future demands 4. New Developments • New system projects • Project descriptions • Business rationale • Applications’ role in strategy • New infrastructure capabilities required • Hardware • Software

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9 • • • •

Database Networking and Internet Cloud services Security

5. Management Strategy • Acquisition plans • Organizational realignment • Management controls • Major training initiatives • Human Resources strategy 6. Implementation of the Plan • Anticipated difficulties in implementation • Progress reports and milestones 7. Budget Requirements • Resources • Potential savings • Financing • Acquisition cycle

Explain the difference between tangible and intangible benefits.

Tangible benefits are quantifiable, and intangible benefits cannot be immediately quantified but may provide quantifiable benefits in the future. Benefits that exceed costs should then be analyzed using capital budgeting methods to make sure they represent a good return on the firm’s invested capital.

List six tangible benefits and six intangible benefits of an IT investment.

Tangible Benefits (Cost Savings) • Increased productivity • Lower operational costs • Reduced workforce • Lower computer expenses • Lower outside vendor costs • Lower clerical and professional costs • Reduced rate of growth in expenses • Reduced facility costs Intangible Benefits • Improved asset utilization • Improved resource control

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10 • • • • • • • • • • •

Improved organizational planning Increased organizational flexibility More timely information Improved customer experience Increased organizational learning Legal requirements attained Enhanced employee goodwill Increased job satisfaction Improved decision making Higher client satisfaction Better corporate image

Describe how portfolio analysis and scoring models can be used to establish the worth of systems.

Figure 12.2 illustrates how firms can use a portfolio analysis matrix to evaluate whether the firm should undertake a project. Obviously, you begin first by focusing on systems of high benefit and low risk.

These promise early returns without much risk. Second, high-benefit, high-risk systems should be examined; low-benefit, high-risk systems should be totally avoided; and low-benefit, low-risk systems should be re-examined for the possibility of rebuilding and replacing them with more desirable systems having higher benefits. By using portfolio analysis, management can determine the optimal mix of investment risk and reward for their firms, balancing riskier, high-reward projects with safer, lowerreward ones.

Scoring models give alternative systems a single score based on the extent to which they meet selected objectives. A scoring model identifies the criteria that decision makers use to evaluate the systems, weights that decision makers attached to the decision criteria, and the percentage of requirements for each function that each alternative system solution meets. Each alternative’s score is calculated by multiplying the percentage of requirements met for each function by the weight attached to that function. System-builders would want to use the solution with the highest score.

12-2 Identify the core problem-solving steps for developing a new information system.

List and describe the problem-solving steps for building a new system.

Figure 12.4 outlines the four steps of the problem-solving process: • Defining and understanding the problem entails defining the problem and identifying its causes, solution objectives, and information requirements.

• Developing alternative solutions entails defining alternative solutions and most likely paths to follow given the nature of the problem.

• Choosing the best solution entails an assessment of the technical, financial, and organizational feasibility of each alternative and selection of the best solution.

• Implementing the solution entails finalizing design specifications, acquiring hardware and software, testing, providing training and documentation, conversion, and evaluating the system once it is in production.

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11 Define information requirements and explain why they are important for developing a system solution.

Information requirements involve identifying who needs what information, where, when, and how. They define the objectives of a new or modified system and contain a detailed description of the functions the new system must perform. Gathering information requirements is perhaps the most difficult task of the systems analyst, and faulty requirements analysis is a leading cause of systems failure and high systems development costs.

List the various types of design specifications required for a new information system.

Systems design shows how the chosen solution should be realized. A system design is the model or blueprint for an information system solution and consists of all the specifications that will deliver the functions identified during systems analysis. These specifications should address all of the technical, organizational, and people components of the system solution. Table 12.4 lists the types of specifications that would be produced during system design. They include: output, input, user interface, database, processing, manual procedures, security and controls, conversion, training and documentation, and organizational changes.

Explain why the testing stage of systems development is so important. Name and describe the three stages of testing for an information system.

• Testing is critical to the success of a system because it is the only way to ascertain whether the system will produce the right results. Three stages of information system testing are: • Unit testing: separately testing or checking the individual programs.

• System testing: testing the entire system as a whole to determine whether program modules are interacting as planned.

• Acceptance testing: the system undergoes final certification by end users to ensure that it is ready for installation.

Describe the roles of documentation, conversion, production, and maintenance in systems development.

• Documentation shows how the system works from both a technical and end-user standpoint.

• Conversion is the process of changing from the old system to the new system.

• Production is the operation of the system once it has been installed and conversion is complete.

The system will be reviewed during production by both users and technical specialists to determine how well it has met its original objectives and to decide whether any revisions or modifications are needed.

• Maintenance involves modifications to hardware, software, documentation, or procedures to a production system to correct errors, meet new requirements, and improve processing efficiency.

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12 12-3 Compare the alternative methods for building information systems.

Define the traditional systems lifecycle and describe its advantages and disadvantages for systems building.

The traditional systems lifecycle is a formal methodology for managing the development of systems and is still the principal methodology for large projects. The overall development process is partitioned into distinct stages, each of which consists of activities that must be performed in a certain order. The stages are usually sequential with formal “sign-off” agreements among end users and IT specialists to validate that each stage has been completed. Users, managers, and IT staff have specific responsibilities in each stage. The approach is slow, expensive, inflexible, and is not appropriate for many small desktop systems.

The systems lifecycle consists of systems analysis, systems design, programming, testing, conversion, and production and maintenance. Systems analysis requires an organization to define a problem that needs solving. Technical specialists identify the problem, gather information requirements, develop alternative solutions, and establish a project management plan. Business users provide information requirements, establish financial or operational constraints, and help select the solution. During systems design, technical specialists model and document design specifications and select the hardware and software technologies for the solution. Business users approve the specifications.

Technical specialists translate the design specifications into software during the programming phase.

After that, technical specialists develop test plans and conduct unit, system, and acceptance tests.

Business users provide test data and scenarios and validate test results.

During the conversion phase, technical specialists prepare a conversion plan and supervise conversion.

Business users evaluate the new system and decide when the new system can be put into production.

During the production and maintenance phase, technical specialists evaluate the technical performance and perform maintenance. Business users use the system and evaluate its functional performance.

The main advantages of using this method for building information systems are: • It is highly structured.

• It has a rigorous and formal approach to requirements and specifications and tight controls over the system building process.

• It is appropriate for building large complex systems.

Disadvantages are: • It is very costly and time-consuming.

• It is inflexible and discourages change even though requirements will change during the project due to the long time this method requires.

• It is ill-suited to decision-oriented applications that can be rather unstructured and for which requirements are difficult to define.

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13 Define information system prototyping and describe its benefits and limitations. List and describe the steps in the prototyping process.

Information system prototyping is an explicitly interactive system design methodology that builds an experimental model of a system as a means of determining information requirements. Prototyping builds an experimental system quickly and inexpensively for demonstration and evaluation so that users can better determine information requirements. A preliminary model of a system (or important parts of the system) is built rapidly for users to experiment with. The prototype is modified and refined until it conforms precisely to what users want. Information requirements and design are determined dynamically as users interact with and evaluate the prototype.

Prototyping is most valuable when requirements are uncertain and cannot be entirely pre-specified or when the appropriate design solution is unclear. Prototyping is especially helpful for designing end-user interfaces (screens and reports) and for determining elusive requirements of decision-support type applications. Prototyping can help reduce implementation costs by capturing requirements more accurately at an earlier point in the implementation process. It is not so useful for very structured, wellunderstood, or routine problems.

The steps in prototyping include identifying the users’ basic requirements; developing a working prototype of the system outlined in the basic requirements, using the prototype, and revising and enhancing the prototype based on the users’ reactions. The third and fourth steps are repeated until the users are satisfied with the prototype.

Prototyping is best suited for smaller applications oriented toward simple data manipulation. Large systems with complex processing may only be able to have limited features prototyped. The prototype may be built so rapidly that design is not well thought out or must be reworked for a production environment. Problems arise when the prototype is adopted as the production version of the system without careful analysis and validation. Prototypes are built so rapidly that documentation and testing are glossed over. The system is so easily changed that documentation may not be kept up to date.

Define end-user development and explain its advantages and disadvantages.

End-user development refers to the development of information systems by end users with minimal or no assistance from professional systems analysts or programmers. This is accomplished through sophisticated user-friendly software tools and gives end users direct control over their own computing.

Advantages include improved requirements determination, realizing large productivity gains when developing certain types of applications, enabling end users to take a more active role in the systems development process, many can be used for prototyping, and some have new functions such as graphics, modeling, and ad-hoc information retrieval.

Disadvantages include not being suited for large transaction-oriented applications or applications with complex updating requirements, standards for testing and quality assurance may not be applied, and proliferation of uncontrolled data and private information systems.

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14 End-user development is suited to solving some of the systems backlog problem because the end users can develop applications themselves. It is suited to developing low-transaction systems. End-user development is valuable for creating systems that access data for such purposes as analysis (including the use of graphics in that analysis) and reporting. It can also be used for developing simple data-entry applications.

Describe the advantages and disadvantages of developing information systems based on application software packages and cloud software services (SaaS).

If a cloud software service or application software package can fulfill most of an organization’s requirements, the company does not have to write its own software. The company saves time and money by using prewritten, predesigned, pretested software programs from package and SaaS vendors, who also provide ongoing maintenance and upgrades for the system. Many packages include capabilities for customization to meet unique requirements not addressed by the prewritten software. Customization features allow prewritten software to be modified to meet an organization’s unique requirements without destroying the integrity of the software. If extensive customization is required, however, additional programming and customization work may become so expensive and time consuming that it negates many of the advantages of software packages or services. If the software cannot be customized, the organization will have to adapt by changing its procedures Software packages and software services provide several advantages: • The vendor has already established most of the design that may easily consume up to 50 percent of development time.

• Programs are pretested, reducing testing time and technical problems.

• The vendor often installs or assists in the installation of the software • Periodic enhancement or updates are supplied by the vendor.

• Vendors also maintain a permanent support staff well versed in the package, reducing the need for individual organizations to maintain such expertise in-house.

• The vendor supplies documentation.

The disadvantages of application software packages are: • There are high conversion costs for systems that are sophisticated and already automated.

• They may require extensive customization or reprogramming if they cannot easily meet unique requirements and this may negate some of the benefits of using packaged software.

• If the software cannot be customized, the organizati owill have to adapt by changing its procedures

Define outsourcing. Describe the circumstances in which it should be used for building information systems. List and describe the hidden costs of offshore software outsourcing.

Outsourcing is the process of turning over an organization’s data center operations, telecommunications networks, or applications development to external vendors who provide these services. Outsourcing is seen as a way to control costs or to acquire application expertise rather than try to use in-house staff.

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15 Advantages of outsourcing are: • Outsourcing firms possess skills, resources, and assets that clients don’t.

• It may be less costly than hiring, training, and maintaining in-house staff.

• The Internet and networking technologies have drastically reduced costs associated with using offshore outsourcing firms.

The main disadvantage is that firms hiring outsourcers tend to underestimate costs of: • Identifying and evaluating vendors.

• Transitioning to a new vendor.

• Improving internal software development methods to match those of vendors.

• Monitoring vendors to make sure they are meeting contract requirements.

• Coping with cultural differences.

• Handling human resources issues, such as terminating or relocating domestic employees.

These hidden costs undercut some of the anticipated benefits from outsourcing. Firms should be especially cautious when using an outsourcer to develop or operate applications that give some type of competitive advantage.

Explain how businesses can rapidly develop e-business applications using rapid application development, agile development, automated software testing, and low-code/no-code development.?

Rapid application development (RAD) refers to the process of creating workable systems in a very short period of time with some flexibility to adapt as a project evolves. RAD includes the use of visual programming and other tools for building graphical user interfaces, iterative prototyping of key system elements, automation of program code generation, and close teamwork among end users and information systems specialists. Simple systems often can be assembled from prebuilt components. The process does not have to be sequential, and key parts of development can occur simultaneously.

Agile development focuses on rapid delivery of working software by breaking a large project into a series of small subprojects that are completed in short periods of time using iteration, continuous feedback, and ongoing user involvement. Iterations, called sprints, are short timeframes that typically last from one to four weeks. Each mini-project is worked on by a cross-functional team (consisting of programmers, testers, a user representative, and other people required by the project) and regularly released to the client. Improvement or addition of new functionality takes place within the next iteration as developers clarify requirements.

Testing occurs early and often throughout the entire development process. Agile methods emphasize face-to-face communication, encouraging people to collaborate and make decisions quickly and effectively, rapid and flexible response to change, and the production of working software rather than elaborate documentation. Instead of a separate testing phase, as in the traditional waterfall approach, testing occurs continuously in agile development during each sprint, and testing is encouraged. This often means that more development time will be spent on testing than when using traditional approaches.

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16 Although essential, continuous testing can be very time consuming, especially since developing test scripts, executing test steps, and evaluating the results used to be largely manual. Automated testing tools are now available to meet this need.

Automated testing tools perform examinations of the software, report outcomes, and compare results with earlier test runs.

Low-code/no-code development enables software applications to be developed more rapidly and by a wider range of people. Working applications can be created quickly and with minimal hand coding using visual modeling in a graphical interface to assemble and configure applications. No-code development tools are even easier for non-IT businesspeople to use. Everything the software vendor thinks the user needs to create an app is already built into the tool, with no coding required. No-code tools are suited for simple business applications and have limited functionality.

Describe the issues that must be addressed when developing mobile applications.

Because mobile devices have a much smaller screen size, it’s easier to use fingers and multi-touch gestures rather than a keyboard to maneuver through websites and applications. Mobile apps must be optimized for specific tasks, but not too many. Saving resources like bandwidth, screen space, memory, processing, data entry, and user gestures is a top priority.

Website designers must design the sites specifically for mobile interfaces and create multiple mobile sites to meet the needs of smartphones, tablets, and desktop browsers. Responsive web design enables websites to automatically change layouts according to the visitor’s screen resolution, whether on a desktop, tablet, or smartphone. A mix of flexible grids and layouts, flexible images, and media queries that optimize the design for different viewing contexts is necessary. Users across a broad range of devices and browsers will have access to a single source of content, laid out to be easy to read, and navigate with minimum resizing, panning, and scrolling.

12-4 Describe how information systems projects should be managed.

Information systems projects and the entire implementation process should be managed as planned organizational change using an organizational impact analysis.

Explain the importance of implementation for managing the organizational change surrounding a new information system.

A broader definition of implementation refers to all the organizational activities working toward the adoption and management of an innovation, such as a new information system. Successful implementation requires a high level of user involvement in a project and management support. If users are heavily involved in the development of a system, they have more opportunities to mold the system according to their priorities and business requirements. They also are more likely to react positively to the completed system because they have been active participants in the change process .and to control the outcome. They also are more likely to react positively to the completed system because they have been active participants in the change process.

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17 Define the user-designer communication gap and explain the kinds of implementation problems it creates.

The user-designer communication gap deals with the relationship that exists between end users and information systems specialists. These two groups have different backgrounds, interests, and priorities, which have traditionally been a problem for information systems implementation efforts. These differences create user-designer communications gaps. Information systems specialists often have a highly technical orientation to problem solving, focusing on technical solutions in which hardware and software efficiency is optimized at the expense of ease of use or organizational effectiveness. End users prefer systems that are oriented toward solving business problems or facilitating organizational tasks.

List and describe the factors that influence project risk and describe strategies for minimizing project risks.

Strategies you can follow to increase the chances of a successful system include: • New systems that involve challenging and complex technology can be helped by recruiting project leaders with strong technical and administrative experience.

• If the firm does not have staff with the required technical skills or expertise, outsourcing or using external consultants are options that may be pursued.

• Using formal planning and control tools, such as Program Evaluation and Review Technique (PERT) or Gantt charts, improves project management by listing the specific activities that make up a project, their duration, and the sequence and timing of task.

• Promote user participation by making user education and training easily available, and by providing better incentives for users who cooperate.

• Exercise sensitivity to ergonomic issues.

• Solve organizational problems prior to introducing new systems.

Discussion Questions: Answers AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Reflective thinking 12-5 Discuss It has been said that systems fail when systems builders ignore people problems. Why might this be so?

Student answers to this question will vary. One response might be that systems are used by people and organizations. In addition to creating value and profitability, they must be designed and implemented so that people will like to use them and can use them effectively, and that they are compatible with organizational culture. Many failed systems-those that don’t deliver anticipated business benefits, are not used or not used properly are the result of system builders not paying enough attention to people and organizational issues.

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18 12-6 Why is building a system a form of organizational problem-solving?

Student answers to this question will vary. One response might be that an information system represents a solution to some problem or challenge the organization is experiencing. The information system solution is supposed to provide information to improve decision making or to drive change in business processes that are holding the organization back. One way of classifying information systems is in terms of the organizational problem they are meant to solve.

12-7 Discuss the roles of business end users and information system professionals in developing a system solution. How do both roles differ when the solution is developed using prototyping or enduser development?

Student answers to this question will vary. Business end users are supposed to supply the system’s business information requirements, identify changes to business processes and the organization, and evaluate how the system operates from a business standpoint. They are supposed to help IT professionals evaluate alternative solutions, select a solution, and provide information and feedback about the system design, testing, conversion, and implementation. IT professionals are more involved with technical aspects of systems development, including hardware and software selection, logical and physical design specifications, programming, testing at all levels, conversion, installation, and evaluating the performance of the system from a technical standpoint.

With prototyping, business users play a more active role in working with the IT specialists to provide specifications for a system prototype, evaluating the prototype, and providing feedback for each iteration of the design. Requirements specification and system design are less formal and more iterative than the SDLC. In end-user development business users work with user-friendly software tools to do much of the design, program code generation, testing, and evaluation for simple applications. This minimizes the role played by IT professionals, although the users may still need some technical support.

Hands-on MIS Projects: Solutions This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Hands on MIS Project data files can be found in MyLab. MIS. 12-8 Management Decision Problem: Miami Heat AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences.

This Management Decision Problem asks students to describe the mobile application development issues a mobile app project for the NBA Miami Heat basketball team raised and identify the management decisions that had to be made?

A sample answer might be as follows: The mobile app project for the Miami Heat basketball team raised several mobile application development issues. These include: .

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19 Integration with CRM and third-party systems: The app needed to be integrated with the Heat’s CRM system as well as third-party systems such as TicketMaster SafeTix. This required coordination with multiple vendors and the development of APIs to connect the different systems.

Security: The app had to ensure that the customer’s personal data, payment information, and digital tickets were secure. The integration with third-party systems such as TicketMaster SafeTix had to be done in a way that ensured the security and authenticity of mobile tickets.

User experience: The app had to provide an intuitive and engaging user experience that would encourage users to use it regularly. This required careful design and testing to ensure that the app was easy to use and provided value to users.

Management decisions that had to be made included: Budget: Management had to decide on the budget for the app development project, including development costs, vendor fees, and ongoing maintenance costs.

Project timeline: Management had to determine the project timeline, including development milestones and launch dates. They also had to consider the potential impact of delays on the app’s success.

Features: Management had to decide on the features that the app would include, such as personalized content, digital ticketing, and marketing messages. They had to balance the need for a comprehensive app with the risk of overwhelming users with too many features.

Vendor selection: Management had to select vendors to develop and integrate the app with the CRM and third-party systems. They had to evaluate vendor proposals and select the best fit for the project.

Overall, the mobile app development project for the Miami Heat basketball team required careful planning, coordination with multiple vendors, and management decision-making to ensure the app’s success.

12-9 Improving Decision Making: Using a Database to Clarify Business Strategy AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Database querying and reporting, querying a multi-table database Business skills: Reservation systems, customer analysis This Hands-on Software Project encourages students to develop queries and reports to help them make better use of transaction data to understand their business. From analyzing these data, the hotel owners should be able to find ways of generating more revenue. The existing database (EMIS15Chap12 Question File), available in MyLab MIS, can be queried to find the average length of stay per room type, the average number of visitors per room type, and which room and type of room has been assigned to each guest along with the guest’s name and start and end dates for that guest’s stay. One can see from

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20 these queries and reports that rooms with limited ocean views appear to have the most occupants per room and longer average stays, suggesting that they are used by families who want some view of the ocean but at a lower price. The owners could emphasize affordable ocean views in their advertising and promotions. Additionally, they could step up promotions of family vacation packages to increase occupancy rates for rooms with ocean views and side views. They could also query the database to identify repeat customers and send them special promotions.

To answer questions more precisely about the strongest customer base or what types of packages to promote, additional information is required. The database would have to be modified to capture information on whether the rooms were actually rented using the vacation package, business discount package, or romantic weekend package options. The database could also be modified to more clearly identify discounts for long stays or extra charges for more than four guests. (The existing database reflects such discounts and charges in the room rate.) Students should be encouraged to think creatively about what other pieces of information should be captured on the database that would help the owners think strategically. The answers for the report can be found in the Microsoft Access file named EMIS15Chap12 Solution File in Instructor Resources.

12-10 Achieving Operational Excellence: Analyzing Website Design and Information Requirements AACSB: Written and oral communication; Analytical thinking; Application of knowledge; Integration of real-world business experiences Software skills: Web browser software Business skills: Information requirements analysis, website design This Internet Project asks students to visit the website of their choice, explore it thoroughly, and prepare a report analyzing the various functions provided by that website and its information requirements. The report should answer these questions: What functions does the website perform? What data does it use?

What are its inputs, outputs, and processes? What are some of its other design specifications? Does the website link to any internal systems or systems of other organizations? What value does this website provide the firm?

Because web systems play such a central role in today’s information systems world, the purpose of this project is to give students experience in evaluating a web system and thinking through how well it meets business requirements. After selecting a website, students should begin this project by developing a set of requirements they think the system will meet (strengths and weaknesses must be measured against some standards).

Students should use Table 12.4 Design Specifications, to evaluate the website and develop system specifications that will deliver the functions they developed in the requirements analysis. Probably the most important specifications will be output, input, user interface, and connectivity.

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21

12-11 Collaboration and Teamwork Project: Identifying Implementation Problems AACSB: Written and oral communication; Analytical thinking; Interpersonal relations and teamwork; Application of knowledge This Collaboration and Teamwork Project asks students to form a team to select a system described in this text. Student solutions will vary but should include a a description of the implementation problems that might be encountered with such a system and the steps that should be taken to solve or prevent these problems. If possible, students should use Google Docs and Google Drive or Google Sites to brainstorm, organize, and develop a presentation of the team’s findings for the class.

Business Problem-Solving Case: JEDI and JWCC: A Cloud of Controversy AACSB: Written and oral communication; Analytical thinking, Application of knowledge Case Study Questions: Answers 12-12 Describe the JEDI Project. Why was it so important? What problems was it meant to solve?

Evaluate its pros and cons The JEDI (Joint Enterprise Defense Infrastructure) Project was a plan by the US Department of Defense (DOD) to modernize its IT infrastructure, which would create a unified cloud infrastructure across the entire DOD that would speed the flow of data and analysis to combat troops. The project aimed to replace the military’s branch-specific systems and networks with a more efficient and manageable enterprise model. The JEDI contract presented a 10-year, $10 billion government contract to go to a single cloud computing vendor, which would serve as the exclusive cloud computing provider for the US Department of Defense.

The JEDI project was essential because it sought to create a unified cloud infrastructure across the entire DOD, replacing branch-specific systems and networks, which were slowing the decision-making process both at home and abroad. It aimed to provide worldwide support for DOD operations and a cloud that supported rapid data-driven decision making.

However, the project was controversial, and some experts opposed the use of a single cloud vendor, claiming it conflicted with established best practices and industry trends in the commercial marketplace.

They feared that by awarding the JEDI contract to a single vendor, the DOD would be locked into that vendor long term and lose access to changes in technology. They also worried about security since having a single cloud enterprise from a single vendor is a significant vulnerability risk. Having multiple clouds allows for each cloud to be more readily protected while also containing any security breaches.

In conclusion, the JEDI project was a significant step forward for the US Department of Defense's IT infrastructure. It aimed to replace outdated and fragmented systems and networks with a unified cloud infrastructure that would speed up decision-making processes and provide rapid data-driven decision making. However, the project was controversial, and some experts opposed the use of a single cloud vendor, claiming it was a significant vulnerability risk.

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22 12-13 How did JWCC differ from JEDI? JWCC and JEDI are both enterprise cloud computing programs initiated by the US Department of Defense to modernize its IT infrastructure. JWCC (Joint Warfighting Cloud Capability) is the new cloud computing program developed by the Pentagon after it cancelled JEDI (Joint Enterprise Defense Infrastructure) in 2021 due to legal disputes. JWCC aims to create a multi-cloud environment across the entire Department of Defense and enable warfighters to access and manipulate data at the speed of modern enterprises. Unlike JEDI, which was a 10-year, $10 billion contract to go to a single cloud computing vendor, JWCC will be a multi-vendor contract that allows the Department of Defense to use cloud services from multiple vendors. The purpose of JWCC is to create a more flexible and agile cloud infrastructure using the most up to date commercial technology that is capable of supporting modern military operations.

12-14 Identify the key risk factors in the JWCC project. What people, organization, and technology problems could the project encounter?

The key risk factors in the JWCC project are the following: Security risks: A single cloud enterprise from a single vendor is a significant vulnerability risk, and the size of this system would make it difficult to secure. A single intrusion could result in catastrophic consequences.

Vendor dependence: If the JEDI contract is awarded to a single vendor, the DOD would be locked into that vendor long-term and lose access to changes in technology. Having multiple clouds allows for each cloud to be more readily protected while also containing any security breaches.

Organizational and people-related issues: The acquisition regulations of the Pentagon could serve as barriers to innovation, and internal acquisition policies needed to be revised to take full advantage of the commercial cloud platform. There could be resistance from within the organization towards adapting to new technology.

Technology risks: The DOD wants to remain in pace with industry and be able to take advantage of new commercial software solutions., which are based on multiple cloud technologies. There could be challenges in implementing and integrating these solutions with the existing systems or replacing existing systems. Many DOD systems are outdated and based on decentralized clouds. Like JEDI, JWCC is a very big system of considerable technical and organizational complexity.

Legal issues: Oracle America and IBM filed pre-award bid protests against the JEDI Cloud solicitation, claiming it favored Amazon and Microsoft. These protests were dismissed by the General Accounting Office (GAO) in late 2018. If such legal issues persist, they could delay the project and increase costs.

Financial risks: If there are cost overruns or budget constraints, which is likely in a project of this size, the project may be delayed or have to be scaled down. The project seems very open-ended with out many targets specified in advance—something of a “learn as you go” situation.

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23 Integration risks: The DOD maintains more than 500 public and private cloud infrastructures that support Unclassified and Secret requirements. The current DOD systems are fragmented, slowing the decision-making process within the DOD both at home and abroad. Integration of these systems with the new cloud infrastructure could be challenging, as well as getting all the different cloud platforms to work together..

Data management risks: The DOD's current cloud services are decentralized, creating an additional level of complexity for managing data and services at an enterprise-wide level. Effective management of data would be essential for the success of the project.

Cultural risks: There could be resistance from employees and soldiers towards adapting to new technology, which could hinder the adoption and success of the project.

12-16 What could be done to mitigate JWCC’s risks?

If the DOD used multiple cloud vendors instead of relying on a single vendor. this would reduce the vulnerability risks associated with having a single cloud enterprise from a single vendor. On the other hand, it would add to infrastructure complexity and require the DOD to manage multiple cloud platforms and make sure they all work together. The DOD could take steps to ensure that the acquisition process was fair and transparent to all bidders, which would minimize the chances of protests from other vendors. Additionally. the DOD could fine-tune its acquisition policies to be more precise about the specific benefits and drawbacks of each cloud platform, perhaps reducing the number of clouds it had to work with and integrate if there was too much overlap. The DOD could conduct a comprehensive risk assessment to identify and address any potential security vulnerabilities and project implementation risks associated with JWCC. Some of the targets for JWCC are murky, and the project plan should be more specific about deliverables and try to limit the amount of time assigned to vendors for experimenting with their technologies.

Video Case: Software Design Is “Really on a Tear,” Figma CEO Says AACSB: Written and oral communication; Analytical thinking, Application of knowledge Video Case Multiple Choice Questions: Answers 1) Which of the following is not a use for Figma?

A) prototyping B) user interface design C) Measuring designer productivity D) Testing program code Answer: D 2) Figma focuses on A) Database design B) User experience design C) Project management D) Debugging software Answer: B .

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24 3) Which of the following is not true?

A) Figma is only appropriate for medium and large companies.

B) Figma is an appropriate tool for end users.

C) Enabling people to use the same file can increase productivity.

D) Figma can be used to design workflow changes.

Answer: A Video Case Questions Essay Questions: Answers 1. Why has Figma become such a popular software tool?

Answer: Figma has become popular because it satisfies the need for inexpensive, easy-to-use tools to improve user interface and user experience design, which have now become a major trend in software and product development.

Figma is relatively easy to implement and use. It enables multiple teams to collaborate in real time on creating, testing, and deploying user interfaces or product designs that are intuitive, easy to use, and visually appealing. The Figma mobile app for Android and IOS allows viewing and interacting with Figma prototypes in real-time on mobile and tablet devices.

Figma is cloud-based and built for collaboration. It is easy for non-designers to collaborate using the tool. It offers a basic interface for users to create and edit graphics, and it has a wide range of features and tools for more experienced designers. It's not just for designers, and can be used for prototyping web layouts, product animations, or e-commerce site design Figma is used by companies of all sizes, from startups to multinational corporations.

2. How did using Figma change the way BT Group worked?

Answer: BT Group has always paid attention to product design and its user experience in order to remain competitive. However, the tools and processes its product designers used were not always well-coordinated. Design teams were hampered too many different tools, inefficient processes, and communication bottlenecks. Team members spent more time moving content and design files between tools and managing multiple feedback streams than on the design work itself. Inefficient processes and tools made it hard to collaborate and design cohesively across teams and multiple product lines.

BT reorganized its product, engineering and design teams into a product squad model, where smaller, more flexible teams are responsible for end-to-end delivery of their product. With Figma as the enterprise-wide design platform, it became easier to collaborate in real-time. Design hand-offs became easier, and squad members stopped having to move design files from tool to tool. They were able to design, prototype, and present design work all from one place. Product designers, content designers, and engineers are able to provide input earlier in the design process. Using Figma has enabled product squads to ship new products and features faster and feel more confident in their decisions. There is more design consistency. Replacing multiple design tools with Figma

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25 reduced design costs by 50 percent. With stakeholders having more visibility into the design process, design is now more often at the forefront of business decisions and investments.

Dirt Bike Running Case: Achieving Operational Excellence: Designing an Employee Training and Skills Tracking System and Database AACSB: Written and oral communication; Analytical thinking, Application of knowledge; Integration of real-world business experiences There is running case assignment accompanying each chapter of the text, focusing on Dirt Bikes USA (DB), a small company headquartered in Carbondale, Colorado that manufactures and sells its own brand of off-road motorcycles. To complete the assignment, students should review the corresponding text chapter and any information provided by their instructor related to the topic. Students can complete each project individually or in teams, depending on their instructor’s requirements. To develop solutions, students may need to do Web research and to use spreadsheet, database, or Web browser software tools. Many projects recommend students use presentation software, if possible, to summarize findings for management. Each assignment will list the software tools that students will need to use, and the questions Students will need to answer. The Dirt Bikes question and data files can be found in MyLab MIS and the solution files can be found in Instructor Resources.

This project requires you to perform a systems analysis and then design a system solution using database software.

Software skills: Database design, querying, and reporting Business skills: Employee training and skills tracking Dirt Bikes promotes itself as a “learning company.” It pays for employees to take training courses or college courses to help them advance in their careers. As employees move on, their job positions become vacant and Dirt Bikes must quickly fill them to maintain its pace of production. Dirt Bikes’s human resources staff would like to find a way to quickly identify qualified employees who have the training to fill vacant positions. Once the company knows who these employees are, it has a better chance of filling open positions internally rather than paying to recruit outsiders. Dirt Bikes would like to track each employee’s years of education and the title and date completed of training classes that each employee has attended.

Students will have to perform a systems analysis and then design a system solution using database software. They will need to identify information requirements and then map out entities, attributes, and relationships to guide the design of database tables. They will need to populate the database and generate queries and reports that satisfy management information requirements. This project should not be assigned unless students have the requisite database skills.

A great deal of Dirt Bikes’s employee data are paper-based. The employee database is very small and limited. (see EMIS15Ch12). Human resource specialists must sift through paper files to identify employees with training or skills in important specialties. Dirt Bikes could save time and money if information on employee training and educational levels was automated. There would be time savings

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26 for human resources staff who could access the information instantaneously. The company could save on outside employee recruiting costs if it could identify internal candidates for open positions.

Employee motivation and morale would be boosted if workers knew they would be considered first for promotions. (This is an intangible benefit.)

The solution calls for enhancing Dirt Bikes’ employee database so that it captures employee educational level and training data. The new system could help Dirt Bikes management identify employees of interest much more rapidly. Information from the system could also help Dirt Bikes identify skills that are in short supply to help it beef up its training programs in those areas.

Key information requirements include the ability to identify employee educational levels, and the ability to identify the training classes employees have taken.

Some organizational changes will be required. Human resource associates will need to make sure that the required training, performance rating, and educational data have been entered into the database.

They will also have to learn how to use the database for promotion and staffing decisions. The organization will need to modify its human resources policies to emphasize recruitment from within.

The solution file (EMIS15Ch12_solutionfile) represents one of many alternative database designs that would satisfy Dirt Bikes’ requirements. The design shown here consists of 2 tables: Employee and Training History. Dirt Bikes’ old employee database was modified to capture educational level data.

We populated the tables with data to produce sample reports for this solution.

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Additional Career Resources The web offers abundant information resources for researching job openings, skills required to be hirable, industry trends. To search for a job, visit job database Web sites, job hunting sites, and the Web sites of companies in the industry where you are interested. Some of these resources are listed below.

Actively use your college career counseling office. Take advantage of its workshops on resume writing, interviewing, networking. The majority of all job positions today are filled without employer advertising, so networking is especially important in your job search. You will, however, need a resume no matter how you search for a job, and your resume should, if possible, be tailored to each specific job for which you are applying.

Data Center Career Pathfinder Uptime Institute, which provides data center certifications and other IT consulting services, offers a free online service designed to encourage more people to pursue careers in data centers and related areas of IT. The Data Center Career Pathfinder (datacenterpathfinder.com) was developed in collaboration with major data center employers Google, Meta, and Microsoft.

The Data Center Career Pathfinder lists 232 examples of real-world job roles in data center design, construction and operation, along with their minimum education requirements and key competencies. Many of these jobs are for college graduates. You can filter by "Key Competencies" which include Communication, Critical Thinking, Discipline, Leadership, and Problem Solving, Job Hunting Sites for College Graduates Here are some additional job hunting sites that are particularly useful for college graduates: www.monster.com www.collegegrad.com www.indeed.com www.careerrookie.com www.livecareer.com www.craigslist.com www.campuscareercenter.com www.aftercollege.com www.aboutjobs.com www.internshipprograms.com

Creating Resumes, Cover Letters, and Electronic Resumes The web now features many sites with tools and instructions for creating cover letters and resumes, including electronic resumes and online portfolios.

Monster.com includes advice on how to prepare resumes and professional resume writing services.

Collegegrad.com specializes in entry-level jobs, with tools for preparing resumes as well as searching job postings. Includes a Quickstart Resume Generator.

LiveCareer.com provides advice for building strong resumes, along with resume and cover letter builders.

Helpful Books on Job-Hunting, Resume Preparation, and Interviewing There are hundreds of books and online guides on writing resumes and cover letters, interviewing, and job hunting. Here are a few recommendations.

Martin Yate. Knock ‘em Dead 2018. The Ultimate Job Search Guide. Adams Media (2017).

Richard N. Bolles. What Color Is Your Parachute? 2022. Your Guide to a Lifetime of Meaningful Work and Career Success. Ten Speed Press (2021).

Andrea Edwards. 10 Steps to an All-Star LinkedIn Profile: How to Get Started on LinkedIn. Kindle Edition (2022).

Career Resources for Essentials of Management Information Systems 15e Our Career Resources are designed to show you how to demonstrate what you have learned in this course in your resume, cover letter, and job interview to improve your chances for success in the job market. We will also show you how to incorporate what you’ve learned into a portfolio of skills and accomplishments to show to future employers. The Career Resources consist of the following: • • • • • •

Your Resume Sample resumes The Cover Letter The Interview Your Digital Portfolio Additional Career Resources

To further help you find a job and build your career, we have added a new Career Opportunities section to each chapter of our Management Information Systems text itself.

Career Opportunities features a description of an entry-level job for a recent college graduate based on a real-world job description. The job requirements are related to the topics covered in that chapter. The job description shows the required educational background and skills, lists business-related questions that might arise during the job interview, and provides author tips for answering the questions and preparing for the interview.

Sample Resumes for Accounting and Human Resources 1. Sample Accounting Resume John Q. Graduate 123 Main Street Anytown, GA 12345 777-888-9999 johngraduate@hotmail.com PROFILE:

Recent college graduate with B.B.A. in accounting. Strong analytical and communication skills. Able to solve problems requiring proficiency in MS Office and business application knowledge of accounting, finance, and marketing. .

EDUCATION:

Bachelor of Business Administration in Accounting, May 2023 Georgia State University, Atlanta, GA ▪ GPA of 3.4 ▪ Relevant courses and skills: Managerial Accounting; Corporate Audit and Reconciliation; Accounting I & II; Financial Management; Managerial Economics; and Business Information Systems.

EXPERIENCE: Accounting Intern, ABC and Associates, Alpharetta, Georgia, May 2022August 2022 ▪ Reviewed and corrected accounting entries ▪ Developed Excel application for auditing client records ▪ Generated reports for financial planning Bookkeeping Assistant, #1Sport Sporting Goods Store, Atlanta, Georgia, May 2021-August 2021 ▪ Managed accounts payable and receivable ▪ Reconciled payment discrepancies ▪ Resolved client billing and credit issues Sales Assistant, #1 Sport Sporting Goods Store, Atlanta, Georgia, May 2020August 2020 • Helped set up in-store promotional displays • Audited daily cash register receipts

COMPUTER

SKILLS:

Microsoft Excel, Access, Word, PowerPoint, Edge. Ability to use Microsoft 365 tools for developing business applications and conducting Web research.

ACTIVITIES: • Vice President, Student Accountancy Chapter, 2021-2023 • Dorm Resident Assistant, 2020-2021

2. Sample Human Resources Resume Jane Q. Graduate 123 Main Street Anytown, UT, 12345 777-888-9999 janegraduate@hotmail.com PROFILE:

EDUCATION:

Recent college graduate with B.S. in human resources and internship experience in compensation and benefits. Strong analytical skills and knowledge of statistical analysis, human resources management, and Microsoft Office.

Bachelor of Science in Human Resources Management, May 2023 Utah State University, Logan, Utah ▪ GPA 3.5/3.9 ▪ Relevant courses and skills: Statistics, Human Resources Management, Labor Relations, Compensation Management, Management Theory, and Information Technology for Business. Able to solve problems requiring proficiency in MS Excel, Access, and PowerPoint and business application knowledge of human resources, finance, and marketing.

EXPERIENCE: Compensation Intern, ABC and Associates, Salt Lake City, Utah, May 2022August 2022 ▪ Assisted with analysis of compensation figures, benchmarking each position with salary survey statistics and industry research.

▪ Developed an Excel application to compare planned salaries with industry salary surveys ▪ Generated and audited all employee salary increase letters following annual performance reviews Human Resources Intern , XYZ Corporation, Provo, Utah, May 2021August 2021 • Helped deliver employee opinion survey on new flexible benefits plan • Created graphic PowerPoint presentation of opinion survey results for review and use by director of HR Office Assistant, #1 Commercial Bank, Ogden, Utah, May 2020-August 2020 • Assisted with processing and distribution of monthly account statements

ACTIVITIES:

Member, SHRM student chapter, Utah State University, 2020-2022

Volunteer reading tutor, Green Spring Elementary School, Logan, Utah (September 2020-present)

The Cover Letter You’ll need cover letter to accompany your resume for each job for which you are applying. The purpose of the cover letter is to announce your interest in the position, call attention to your resume, and briefly state what you can bring to that company as an employee. Cover letters are never longer than one page.

The cover letter should be tailored to each company where you are submitting an application and directed to the specific individual handling your application. It should name the position for which you are applying, indicate your knowledge and interest in the work of the company and your qualification for the position. The cover letter should close by requesting an interview or visit to the employer.

Inform the recipient why you want to work at that specific company, why you fit with that company, and how you qualify for the position for which you are applying. The cover letter should also highlight your most important and relevant accomplishments and explain why your background and experience qualify you for the job. You may want to briefly mention in the letter the business application knowledge and software skills you acquired in the Information Systems course. You might say something such as: “According to the job description, your position requires excellent communication skills, computer literacy, and a degree in business or economics. I will be graduating from Anystate University this month with a BBA degree in accounting. My studies included course work in Management Information Systems, where I worked on projects requiring business knowledge of accounting and finance as well as proficiency in Microsoft Access and Excel. I believe my educational and internship experiences fit nicely with the job requirements, and I believe I could make a significant contribution to your firm.”

Here is a sample cover letter that references your information systems course work and problem-solving skills.

Sample Cover Letter John Q. Graduate 123 Main Street Anytown, GA, 12345 Warren Peterson XYZ Group 221 Anystreet Atlanta, GA, 30303

Dear Mr. Peterson: I am applying for the position of accounting and auditing specialist, which was advertised April 7 in the Atlanta Business Chronicle. The position seems to fit in very well with my education, experience, and career interests.

According to the advertisement, your position requires excellent communication skills, computer literacy, and a bachelor’s degree in business or economics. I will be graduating from Georgia State University in May 2023 with a BBA degree in accounting.

My studies have included courses in accounting, finance, and management information systems. I understand the position also requires a candidate who is detail-oriented, works well under pressure, and has some working knowledge of Microsoft Excel and Access business applications. These are skills I developed in both my course work and in my recent internship at ABC and Associates.

I believe my background and goals match your requirements well. I am excited about working in a dynamic firm where I can apply my problem-solving skills.

If you would like to schedule an interview or otherwise discuss my interest in this position, please call me at 777-888-9999. I will be available at your convenience.

Thank you for your consideration.

Sincerely,

John Q. Graduate

The Interview The job interview provides an opportunity for you to personally demonstrate your strengths and skills and what you can bring to the organization. Interviewers will be looking for how well you present yourself, whether you can speak clearly and articulately, and whether you have the technical and business skills required for the job.

Many interviewers based their questions on the resume content. If they ask a more openended question, such as “Tell me about yourself.” it’s an opportunity to speak about your background and problem-solving skills (rather than just tell about your life history) and to call attention to what you think you can do for the company.

Prepare for the interview beforehand. Read as much as you can about the company, attend the company’s on-campus information session, and visit the company’s Web site. Try to find out about its products and services, competitors, divisions, locations, jobs, how it makes a profit, even the company’s history and culture. If the company is publicly-traded, read a copy of its annual report.

It also helps to have some knowledge of the business area in which you will be working. So if you are interviewing for a job in the Purchasing Department, read all you can about procurement. Use the web to locate companies selling software for procurement and supply chain management and to learn how the procurement process works. Sometimes it’s useful to ask questions based on something you have read about the firm, such as a recently-launched new product or impending acquisition.

Think about how your experiences in work, classes and activities relate to the job you’re seeking. The interviewer might tell you something about some areas where the company needs improvement that are related to the job you are applying for. If the problem deals with, for example, delayed shipments from suppliers or difficulty tracking shipments from suppliers, you might be able to say something like “In my Information Systems course, I worked on a spreadsheet project to identify suppliers with the best ontime delivery records. I would be interested in working on this problem for your company.” You can find out more about interview preparation for specific jobs in the Career Opportunities section of each chapter of the Laudon Management Information Systems text.

You should realize that the problems presented in the projects for Management Information Systems are not nearly as large and complex as the ones you will typically encounter on the job. So your expertise is limited and you should not give the impression that you know more than you actually do. But if you’ve done your homework, you may be have enough knowledge about the firm or the business area that is hiring to show that you have some background and that you want to learn and do more.

The Follow-Up After the interview, follow up with a brief thank-you note. Thank the person who interviewed you for his or her time, expressing interest in the position and restate why you would be a good fit and what you could contribute. This provides an opportunity to restate your qualifications, add any important points you didn’t have a chance to bring up during the interview, and again point to problem-solving skills.

Your Digital Portfolio Many career counselors advise students and new graduates to take a portfolio of work with them to job interviews. Your portfolio would contain evidence of your experience and achievements, including samples of what you’ve worked on or accomplished at school, at a job, or volunteer work. The portfolio presents an ideal opportunity for showcasing your work in the MIS course and perhaps other courses of interest to your prospective employer.

The key to success is knowing what items to include in your portfolio and how to present the contents of the portfolio at the right time during your interview. The pieces in your portfolio should be your best work and demonstrate skills for the job you are seeking. One portfolio may not work for all interviews, although you’ll probably use many of the same pieces over again. There is no “right” number of pieces to include in your portfolio either. You don’t need to show everything you’ve brought, and you also don’t want your portfolio to be too thick and full.

To prepare your portfolio for an interview, review the job description and choose of examples of your work that relate to the skills the job requires. Select four or five of pieces of work that best demonstrate the skills and problem-solving capability your employer is looking for. For example, if you’re looking for a job in sales and marketing, you might want to present your solutions to the Laudon Management Information Systems software projects developing business skills in sales trend analysis, customer profiling, and sales lead and customer analysis plus a few of your Internet Skills projects.

Review the pieces you’ve selected to include in the portfolio for this specific interview and order them within the portfolio according to topic. You need to be as organized as possible so that you can easily locate what you want to show. If possible, practice answering questions while pulling out examples from your portfolio.

If necessary, rearrange your portfolio for each interview. The projects you completed for the MIS course using this text can be classified in alternative ways. The Integrating Business with Technology matrix in the opening pages of Management Information Systems show these skills classified first by business application knowledge and then within each type of business problem, by software skills.

If you are looking at jobs that are more interested in your software skills, reorganize the projects you completed based on the software skills they develop. Make a list of all the projects you completed and the software skills they required. Then reorganize these projects by software skill.

For example, the project for analyzing supplier performance in Chapter 9 demonstrates familiarity with spreadsheet date functions, data filtering, and database functions. Projects for employee training and skills tracking (Chapter12 Running Case) demonstrate proficiency in database design, querying and reporting. The project for financial statement analysis (Chapter 2 Running Case) demonstrates proficiency in Microsoft Excel skills for formulas and charting.

For each project you select for your portfolio, add a description of the project and the problem to be solved. Place this description right before the solution you created.

For example, if you wish to present your solution to the Application Software Exercise concluding Chapter 3 on Sales Trend Analysis, here is an example of how this project should be presented.

___________________________________________________________________ Sample Portfolio Project Problem: How to determine best-selling products, retail stores, and sales territories using point-ofsale data.

Software skills: Microsoft Access querying and reporting Business skills: Sales trend analysis Project Name: Using Databases to Analyze Sales Trends In this exercise, you will start out with raw transactional sales data and then use Microsoft Access database software to develop queries that help managers make better decisions about product pricing, sales promotions, and inventory replenishment. In MyLab MIS, you can find a Store and Regional Sales Database developed in Microsoft Access. The database contains raw data on weekly store sales of computer equipment in various sales regions. The database includes fields for store identification number, sales region, item number, item description, unit price, units sold, and the weekly sales period when the sales were made. Use Access to develop some queries to make this information more useful for running the business. This information includes the following: • All 24-inch monitor sales by Sales Region for the week ending 11/24/2022, sorted within region from highest to lowest number of units sold.

• All 24-inch monitor sales by store for the East Sales Region, sorted by Store No. and Week Ending in ascending order.

• All sales of all products for the East Sales Region, sorted from highest to lowest total number of units sold by item number Then describe how the information in these queries could be used for management decision making.

Solution:

[Put your solution results here] _____________________________________________________________________ Here’s how to present your portfolio during the job interview. The interviewer will ask you a question. Take a moment to think about the answer and see if you can pinpoint something in your portfolio that relates specifically to the answer. Answer the question and then say “I have an example of this in my portfolio.” Then locate the document as quickly as possible and show it to the interviewer. You might say something like “In my Information Systems course, I worked on a project to analyze data to identify sales trends that I believe demonstrates the skills we have been talking about.”

Another opportunity might come at the end of the interview, when the prospective employer asks “is there anything else you want to share with us?” You can then show a project from your portfolio that you feel especially proud of or you can ask the interviewer, “May I share with you any other items from my portfolio?”

Your Digital Portfolio on the Web You can also put your portfolio, resume, and other supporting documents – samples of your writing, research work, demonstrations of analytical or management skills, or electronic presentations on your own personal website for prospective employers to review. This website should include a home page that provides an overview of the entire website and links to your resume, your portfolio, and any other appropriate supporting materials. Microsoft Office tools can save Excel spreadsheet files, Access database files, Word word processing files and PowerPoint presentation files in web page format. You may want to use a more sophisticated web page development tool for your website’s home page.

Your Resume Your resume is a concise way of describing your skills and value to your prospective employer. The resume shouldn’t just detail your work and educational background-- it should be targeted to the specific position for which you are applying and clearly communicate you have the knowledge and experience required to perform the job.

If you’re job-hunting for multiple types of positions and industries, you may need to tailor a separate resume for each.

A good resume is short and easy to read and understand Organize your information in a logical fashion, keeping descriptions clear and to the point. Use active verbs and strong statements such as “reviewed and corrected accounting entries” or “developed publicity and promotional campaigns.” If you don’t have any job experience directly related to the position for which you’re applying, focus on showing you have the necessary skills and abilities to perform the job duties. Make a connection between your education and experience and the position.

No resume gets read and no one ever gets hired unless someone is trying to solve a problem. The goal of the resume is to show you are a problem solver. Your resume should be phrased in terms of what you can do for the organization. Whenever possible, show that you produced tangible results for your previous employers, such as increasing sales by 15 percent or reducing billing errors by 25 percent. You can also point to some of the information systems projects you completed using this text as evidence of your problem-solving capabilities. Review the sample resumes we have provided here.

The examples we provide here are for entry-level positions for business school graduates and use a more or less chronological resume format. A functional resume format, which focuses on job-related skills rather than when or where you acquired them, is also a good choice for entry-level jobs or people changing careers. There are many good books and Web sites to show you how to create strong resumes using either format and you can find some of them listed in our Additional Career Resources.

Note that directly below the candidate’s name and contact information on our sample resumes is a Summary or Profile of four to five sentences. The Summary or Profile is placed at the beginning of the resume to quickly summarize your key strengths and qualifications, and you can use it if you wish to call attention to your problemsolving skills.

Always lead with your most important credentials. If you’ve had a distinguished work history in an area related to the job you’re seeking, start off with that. If your education will impress your prospective employer, start with that. Start with your most recent experience first and work backward.

If you’re a college senior with little job experience, you will probably want to place your educational qualifications near the top of your resume. As you gain more experience, your educational background will gravitate toward the bottom. Describe special courses or training programs that help qualify you for the job, including your Information Systems course.

Businesses today value employees who are tech-savvy, so it’s usually a good idea to specify the software programs, operating systems, and programming languages that you’ve used. List as well any college activities or honors that relate directly to your target job.

Keywords and Electronic Resumes Your resume must contain the buzzwords for your industry and job description to get noticed as more and more resumes are electronically scanned. People reading paper resumes also scan them for keywords and phrases. Keywords are the nouns or short phrases that describe the essential knowledge, abilities, and skills required to do your job that might be used to find your qualifications in a keyword search of a resume database.

Examples of keywords are budgeting, accounts payable, benefits management, schedule management, or direct marketing. Do not include any keywords that aren’t true or don’t accurately represent your experience.

Most companies today still evaluate job applicants by visually reviewing resumes.

However, firms are increasingly using automated resume tracking systems which collect electronic resumes and store them in databases where they can be quickly queried to identify applicants who have the appropriate experience, education, or skills to meet the requirements of open job positions. Today you need both a hard copy paper resume formatted for human readers and a digital version designed to be scanned and read by computers. If you’re planning to put your resume on a personal website along with your skills portfolio, you’ll also need the resume in HTML web-page readable format. Make sure your resume is in a very simple format so it can be easily scanned or converted to digital form. Fancy bullets, italics, or type fonts do not convert well in an electronic application. Our Additional Career Resources include instructions on creating both paper-based and electronic resumes.

Bill of Materials: Moto 300 Brake System

Component Brake cable Brake pedal Brake pad Front brake pump Rear brake pump Front brake caliper Rear brake caliper Front brake disc Rear brake disc Brake pipe Brake lever cover

Component No. M0593 M0546 M3203 M0959 M4739 M5930 M7942 M3920 M0588 M0943 M1059

Source Nissin Harrison Billet Russell Brembo Brembo Nissin Nissin Russell Russell Harrison Billet Brembo

Unit Cost Quantity 27.81 1 6.03 2 27.05 2 66.05 1 54.00 1 105.20 1 106.78 1 143.80 1 56.42 1 28.52 1 2.62 1

Chapter 2 Running Case Assignment: Analyzing Financial Performance Software skills: Spreadsheet charts and formulas Business skills: Financial statement analysis As part of your analysis of the company for management, you have been asked to analyze data on Dirt Bikes’s financial performance. Review Dirt Bikes’s selected financial and sales data in the Introduction to Dirt Bikes, which can be found in MyLabMIS. There you will find Dirt Bikes’s income statement and summary balance sheet data from 2020 to 2022, annual sales of Dirt Bikes models between 2018 and 2022 (measured in units sold), and total domestic versus international sales between 2018 and 2022 (measured in units sold).

Use your spreadsheet software to create graphs of Dirt Bikes’s sales history from 2018 to 2022 and its domestic versus international sales from 2018 to 2022. Select the type of graph that is most appropriate for presenting the data you are analyzing.

Use the instructions in MyLabMIS and your spreadsheet software to calculate the gross and net margins in Dirt Bikes’s income statements from 2020 to 202. You can also create graphs showing trends in selected pieces of Dirt Bikes’s income statement and balance sheet data if you wish. (You may want to rearrange the historical ordering of the data if you decide to do this.)

Prepare an addition to your management report that answers these questions: •

What are Dirt Bikes’s best- and worst-performing products? What is the proportion of domestic to international sales? Have international sales grown relative to domestic sales?

•

Are sales (revenues) growing steadily, and, if so, at what rate? What is the cost of goods sold compared to revenues? Is it increasing or decreasing? Are the firm’s gross and net margins increasing or decreasing? Are the firm’s operating expenses increasing or decreasing? Is the firm heavily in debt? Does it have assets to pay for expenses and to finance the development of new products and information systems?

•

(Optional) Use electronic presentation software to summarize your analysis of Dirt Bikes’s performance for management.

Chapter 3 Running Case Assignment: Improving Decision Making: Analyzing Competitive Strategy Software skills: Web browser software and presentation software Business skills: Value chain and competitive forces analysis, business strategy formulation This project provides an opportunity for you to develop the competitive strategy for a real-world business. You’ll use the web to identify Dirt Bikes’s competitors and the competitive forces in its industry. You’ll use value chain analysis to determine what kinds of information systems will provide the company with a competitive advantage.

Dirt Bikes’s management wants to be sure it is pursuing the right competitive strategy.

You have been asked to perform a competitive analysis of the company using the web to find the information you need. Prepare a report that analyzes Dirt Bikes using the value chain and competitive forces models. You report should include the following: • Which activities at Dirt Bikes create the most value?

• How does Dirt Bikes provide value to its customers?

• What other companies are Dirt Bikes’s major competitors? How do their products compare to those of Dirt Bikes? What are some of the product features they emphasize?

• What are the competitive forces that can affect the industry?

• What competitive strategy should Dirt Bikes pursue?

• What information systems best support that strategy?

• (Optional) Use electronic presentation software to summarize your findings for management.

Chapter 4 Running Case Assignment: Achieving Operational Excellence: Developing a EMIS15website Privacy Policy Software skills: Web browser software and presentation software Business skills: Corporate privacy policy formulation Dirt Bikes’s management wants to make sure it has policies and procedures in place to protect the privacy of visitors to its website. You have been asked to develop Dirt Bikes’s website privacy policy. On the web you can find material on privacy best practices and model privacy policies that you can review to help you draft Dirt Bikes’s privacy policy.

You can also examine specific companies’ privacy policies by searching for website privacy policies on Yahoo!, Google or another search engine. Prepare a report for management that addresses the following issues: • How much data should Dirt Bikes collect on visitors to its website and why?

What information could it discover by tracking visitors’ activities at its website?

What value would this information provide the company? What are the privacy problems raised by collecting such data?

• Should Dirt Bike use cookies? What are the advantages of using cookies for both Dirt Bikes and its website visitors? What privacy issues do they create for Dirt Bikes?

• Should Dirt Bikes adopt an opt-in or opt-out model of informed consent?

• Include in your report a short (two to three pages) privacy statement for the Dirt Bikes website.

• (Optional) Use electronic presentation software to summarize your recommendations for management.

Chapter 5 Running Case Assignment: Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software Software skills: Spreadsheet formulas, electronic presentation software (optional) Business skills: Technology rent vs. buy decision, TCO analysis This project provides an opportunity for you help a real-world company make a decision about whether to rent or buy new technology. You’ll use spreadsheet software to compare the total three-year cost of licensing and maintaining new manufacturing software or renting the software from an online software service provider.

Dirt Bikes would like to implement new production planning, quality control, and scheduling software for use by 25 members of its manufacturing staff. Management is trying to determine whether to purchase the software from a commercial vendor along with any hardware required to run the software or to use a hosted software solution from a software service provider. (The hosted software runs on the service provider’s computer.) You have been asked to help management with this rent vs. buy decision by calculating the total cost of each option over a three-year period.

The costs of purchasing the software (actually for purchasing a 3-year license from the vendor to use its software package) includes the initial purchase price of the software (licensing fee of $100,000 paid in the first year), the cost of implementing and customizing the software in the first year ($20,000), one new server to run the software (a first-year purchase of $7000), one information systems specialist devoting half of his or her time to supporting the software ($65,000 in full-time annual salary and benefits with a 3% annual salary increase each year after the first year), user training in the first year ($10,000 first year and 3000 second and third years), and the cost of annual software upgrades ($5,000).

The costs of renting hosted software are the rental fees ($2000 annually per user), implementation and customization costs ($12,000 in the first year), and training ($10,000 in the first year, $2000 in second and third years), and technical support one-eighth annual $65,000 salary).

•

Use your spreadsheet software to calculate the total cost of renting or purchasing this software over a three-year period. Identify the lowest-price alternative that meets Dirt Bikes’s requirements.

•

What other factors should Dirt Bikes consider besides cost in determining whether to rent or buy the hardware and software?

•

(Optional) If possible, use electronic presentation software to summarize your findings for management.

Chapter 6 Running Case Assignment: Improving Decision Making: Redesigning the Customer Database Software skills: Database design; querying and reporting Business skills: Customer profiling Dirt Bikes U.S.A. sells primarily through its distributors. It maintains a small customer database with the following data: customer name, address (street, city, state, zip code), telephone number, model purchased, date of purchase, and distributor. You can find the database in MyLabMIS. These data are collected by its distributors when they make a sale and are then forwarded to Dirt Bikes. Dirt Bikes would like to be able to market more aggressively to its customers.

The Marketing Department would like to be able to send customers e-mail notices of special racing events and of sales on parts. It would also like to learn more about customers’ interests and tastes: their ages, years of schooling, another sport in which they are interested, and whether they attend dirt bike racing events. Additionally, Dirt Bikes would like to know whether customers own more than one motorcycle. (Some Dirt Bikes customers own two or three motorcycles purchased from Dirt Bikes U.S.A. or other manufacturer.) If a motorcycle was purchased from Dirt Bikes, the company would like to know the date of purchase, model purchased, and distributor. If the customer owns a non–Dirt Bikes motorcycle, the company would like to know the manufacturer and model of the other motorcycle (or motorcycles) and the distributor from whom the customer purchased that motorcycle.

•

Redesign Dirt Bikes’s customer database so that it can store and provide the information needed for marketing. You will need to develop a design for the new customer database and then implement that design using database software.

Consider using multiple tables in your new design. Populate each new table with 10 records.

•

Develop several reports that would be of great interest to Dirt Bikes’s marketing and sales department (for example, lists of repeat Dirt Bikes customers, Dirt Bikes customers who attend racing events, or the average ages and years of schooling of Dirt Bikes customers) and print them.

Chapter 7 Running Case Assignment: Achieving Operational Excellence: Using Internet Tools to Increase Efficiency and Productivity Software skills: Web browser software and presentation software Business skills: Employee productivity analysis In this project, you’ll suggest applications of Internet technology to help a employees at real-world company work more efficiently.

Dirt Bikes’s management is concerned about how much money is being spent communicating with people inside and outside the company and on obtaining information about developments in the motorcycle industry and the global economy. You have been asked to investigate how Internet tools and technology could be used to help Dirt Bikes employees communicate and obtain information more efficiently. Dirt Bikes provides Internet access to all its employees who use desktop computers.

• How could Internet tools help employees at Dirt Bikes? Create a matrix showing what types of employees and business functions would benefit from using each type of tool and why.

• (Optional) If possible, use electronic presentation software to summarize your findings for management.

Chapter 8 Running Case Assignment: Achieving Operational Excellence: Developing a Disaster Recovery Plan Software skills: Web browser and presentation software Business skills: Disaster recovery planning Management is concerned that Dirt Bikes’s computer systems could be vulnerable to power outages, cybervandalism, computer viruses, natural disasters, or telecommunications disruptions. You have been asked to perform an analysis of system vulnerabilities and disaster recovery planning for the company. Your report should answer the following questions: • What are the most likely threats to the continued operation of Dirt Bikes’s systems?

• What would you identify as Dirt Bikes’s most critical systems? What is the impact on the company if these systems cannot operate? How long could the company survive if these systems were down? Which systems are the most important to back up and restore in the event of a disaster?

• Use the web to locate two disaster recovery services that could be used by a small business such as Dirt Bikes. Compare them in terms of the services they offer.

Which should Dirt Bikes use and why? Exactly how could these services help Dirt Bikes recover from a disaster?

• (Optional) If possible use electronic presentation software to summarize your findings for management.

Chapter 9 Running Case Assignment: Improving Operational Excellence: Identifying Supply Chain Management Solutions Software skills: Web browser and presentation software Business skills: Locating and evaluating suppliers In this project you’ll use the Web to identify the best suppliers for one component of a dirt bike and appropriate supply chain management software for a small manufacturing company.

A growing number of Dirt Bikes orders cannot be fulfilled on time because of delays in obtaining some important components and parts for its motorcycles, especially their fuel tanks. Complaints are mounting from distributors who fear losing sales if the dirt bikes they have ordered are delayed too long. Dirt Bikes’s management has asked you to help it address some of its supply chain issues.

•

Use the Internet to locate alternative suppliers for motorcycle fuel tanks. Identify two or three suppliers. Find out the amount of time and cost to ship a fuel tank (weighing about five pounds) by ground (surface delivery) from each supplier to Dirt Bikes in Carbondale, Colorado. Which supplier is most likely to take the shortest amount of time and cost the least to ship the fuel tanks?

•

Dirt Bikes’s management would like to know if there is any supply chain management software for a small business that would be appropriate for Dirt Bikes. Use the Internet to locate two supply chain management software providers for companies such as Dirt Bikes. Briefly describe the capabilities of the two software applications and indicate how they could help Dirt Bikes. Which supply chain management software product would be more appropriate for Dirt Bikes?

Why?

•

(Optional) Use electronic presentation software to summarize your findings for management.

Chapter 10 Running Case Assignment: Achieving Operational Excellence: Developing an E-Commerce Strategy Software skills: Web browser software, web page development software Business skills: Strategic analysis This project provides an opportunity for you to develop an e-commerce strategy for a real-world business and to use a web page development tool to create part of the company’s website.

Dirt Bikes’s management believes that the company could benefit from e-commerce. The company has sold motorcycles and parts primarily through authorized dealers. Dirt Bikes advertises in various magazines catering to dirt bike enthusiasts and maintains booths at important off-road motorcycle racing events. You have been asked to explore how Dirt Bikes could benefit from e-commerce and a Dirt Bikes Web site. Prepare a report for management that answers the following questions: • How could Dirt Bikes benefit from e-commerce? Should it sell motorcycles or parts over the web? Should it use its website primarily to advertise and market its products and services? Should it use the web for customer service?

• Use the web to research the cost of an e-commerce site for a small to medium-sized company. How much revenue or cost savings would the website have to produce to make it a worthwhile investment for Dirt Bikes?

• Prepare specifications describing the functions that should be performed by Dirt Bikes’s website. Include links to other websites or other systems in your specifications.

• (Optional) Use Wix to design a website for the company and share it with the class.

Chapter 12 Running Case Assignment: Improving Decision Making: Analyzing the Impact of Component Price Changes Software skills: Spreadsheet formulas, two-variable data table Business skills: Manufacturing bill of materials sensitivity analysis A bill of materials is used in manufacturing and production to show all of the parts and materials required to manufacture a specific item or for the subassembly of a finished product, such as a motorcycle. The information in the bill of materials is useful for determining product costs, coordinating orders, and managing inventory. It can also show how product costs will be affected by price changes in components or raw materials.

This project provides you with an opportunity to use spreadsheet software to perform a sensitivity analysis showing the impact of various prices for component parts on the total costs of a dirt bike brake system and the total cost of the entire dirt bike. The bill of materials for this project has been simplified for instructional purposes.

Dirt Bikes’s management has asked you to explore the impact of changes in some of its parts components on production costs. Review the spreadsheet file containing bill of materials information for the brake system for Dirt Bikes’s Moto 300 model, which can be found in MyLabMIS. The completed bill of materials contains the description of the component, the identification number of each component, the supplier (source) of the component, the unit cost of each component, the quantity of each component needed to make each finished brake system, the extended cost of each component, and the total materials cost. The extended cost is calculated by multiplying the quantity of each component needed to produce the finished brake system by the unit cost. The prices of components are constantly changing, and you will need to develop a spreadsheet application that can show management the impact of such price changes on the cost to produce each brake system and on total production costs for the Moto 300 model.

• Complete the bill of materials by calculating the extended cost of each component and the total materials cost for each brake system.

• Dirt Bikes has found a good alternative supplier for the Moto 300 brake pipe and front brake caliper. The supplier believes it can provide the brake pipe for a cost of $22 to $25 per unit and the front brake caliper for $99 to $102 per unit.

Develop a sensitivity analysis to show the impact on total brake system materials costs if the front brake caliper unit cost ranges from $99 to $102 and if the brake pipe unit cost ranges from $22 to $25.

• What is the most Dirt Bikes could save by switching the supplier for these 2 brake system components? What is the least it could save?

• The brake system represents 30 percent of the total materials cost for one Moto 300 motorcycle. Use sensitivity analysis again to show the impact of the changes in front brake caliper unit costs and brake pipe unit costs described previously on total materials costs for this motorcycle model.

Chapter 12 Running Case Assignment: Achieving Operational Excellence: Designing an Employee Training and Skills Tracking System and Database Software skills: Database design, querying, and reporting Business skills: Employee training and skills tracking This project requires you to perform a systems analysis and then design a system solution using database software.

Dirt Bikes promotes itself as a “learning company.” It pays for employees to take training courses or college courses to help them advance in their careers. As employees move on, their job positions become vacant and Dirt Bikes must quickly fill them to maintain its pace of production. Dirt Bikes’s human resources staff would like to find a way to quickly identify qualified employees who have the training to fill vacant positions. Once the company knows who these employees are, it has a better chance of filling open positions internally rather than paying to recruit outsiders. Dirt Bikes would like to track each employee’s years of education and the title and date completed of training classes that each employee has attended.

• Dirt Bikes currently cannot identify such employees. Its existing employee database is limited to basic human resources data, such as employee name, identification number, birth date, address, telephone number, marital status, job position, and salary. A portion of this database is illustrated here. You can find some sample records from this database in MyLabMIS. Dirt Bikes’s human resources staff keeps skills and training data in paper folders.

•

Prepare a systems analysis report describing Dirt Bikes’s problem and a system solution that can be implemented using PC database software. Then use the database software to develop a simple system solution. Your report should include the following: 1) Description of the problem and its organizational and business impact.

2) Proposed solution and solution objectives.

3) Information requirements to be addressed by the solution.

4) Management, organization, and technology issues to be addressed by the solution, including changes in business processes.

•

•

On the basis of the requirements you have identified, design the solution using database software and populate it with at least 10 records per table. Consider whether you can use or modify the existing employee database in your design.

Print out the design for each table in your new application. Use the system you have created to create queries and reports that would be of most interest to management, such as which employees have college education or which employees have training in project management or advanced computer-aided design [CAD] tools.

If possible, use electronic presentation software to summarize your findings for management.

Chapter 1 Running Case Assignment: Understanding Information System Requirements Software skills: Presentation software Business skills: Management analysis and information system recommendations How do you know what information systems are really needed by a business and which are the most important? How should a company’s structure or culture affect the building and use of information systems?

Dirt Bikes’s management has asked you to prepare a management analysis of the company to help it assess the firm’s current situation and future plans. Review Dirt Bikes’s company history, organization chart, products and services, and sales and marketing in the Introduction to Dirt Bikes. Then prepare a report that addresses these questions: • • • • •

What are the company’s goals and culture?

What products and services does Dirt Bikes U.S.A. provide? How many types of products and services are available to customers? How does Dirt Bikes sell its products?

How many employees are managers, production workers, or knowledge or information workers? Are there levels of management?

What kinds of information systems and technologies would be the most important for a company such as Dirt Bikes?

(Optional) Use electronic presentation software to summarize for management your analysis of Dirt Bikes’s performance.

This worksheet shows the number of Dirt Bikes motorcycles sold between 2018 and 2022 Worksheet name: Sales Amounts are in units sold

Model Enduro 250 Enduro 550 Moto 300 Moto 450 TOTAL

Sales by Model 2018 2019 2020 1201 1663 2291 2832 3290 3759 1755 1932 2454 463 598 661 6251 7483 9165

2021 2312 4078 2615 773 9778

2022 2195 3647 2627 823 9292

This worksheet shows Dirt Bikes' income statements and summary balance sheets from 2020-2022.

Worksheet name: Financial Statements Amounts are in thousands Consolidated Satements of Income (in thousands) 2022 2021 2020 Revenue Net sales Cost of goods sold Gross profit/(loss) Gross margin Operating expenses Sales and markering Engineering and product development General and administrative Total operating expenses Operating income/loss Other income/expense Interest income/expense Other income/(expense) Income before provision for income taxes Income taxes Net income/(loss) Net margin

60,144 45,835 14,309

64,063 43,155 20,908

61,529 41,072 20,457

4,733 3,141 1,913 9,787 4,522

4,537 2,992 1,601 9,130 11,778

3,944 2,339 1,392 7,675 12,782

1,747 (6,254) 15 1,459 (1,444)

175 (2,914) 9,039 1,729 7,310

80 (3,080) 9,782 535 9,247

Summary Balance Sheet Data At December 31 Current assets Cash and cash equivalents Accounts reveivable Inventories Total current assets

2022

2021

2020

6,994 13,083 6,315 26,392

7,197 12,981 5,931 26,109

6,891 12,872 5,843 25,606

Property plant, and equipment Other assets Total assets

36,920 1,765 65,077

34,515 1,903 62,527

32,002 1,834 59,442

Current liabilities Accounts payable Accrued expenses and other liabilities Total current liabilities

8,943 10,877 19,820

8,694 9,382 18,076

7,592 8,654 16,246

Long-term debt Total liabilities

9,772 29,592

9,338 27,414

8,890 25,136

Shareholders' equity Total liabilities + shareholders' equity

35485 65,077

35113 62,527

34306 59,442

This worksheet shows number of Dirt Bikes' domestic vs. interational motorcycles sold between 2018-2022 Worksheet name: Domestic vs. International Sales Amounts are in units sold

Domestic International TOTAL % International

Domestic vs. International Sales 2018 2019 2020 2021 5723 6843 8254 8889 528 640 911 889 6251 7483 9165 9778 8.4% 8.6% 9.9% 9.1%

2022 8530 762 9292 8.2%

Introduction to Dirt Bikes Dirt Bikes USA is a small company headquartered in Carbondale Colorado that manufactures and sells its own brand of off-road motorcycles. It was founded in 1996 to produce dirt bikes that could be customized for racing and off-road recreational riding using the best quality components and parts from all over the world. The company has continued to grow and now faces a new set of challenges and opportunities. You have been asked to serve as a consultant to apply your information systems knowledge to help Dirt Bikes solve some of the problems it is encountering.

There is an assignment awaiting you to accompany each chapter of the Laudon and Laudon Essentials of Management Information Systems text. In order to complete the assignment, you should review the corresponding text chapter and any information provided by your instructor related to the topic you are investigating. You can complete each project individually or in teams, depending on your instructor’s requirements. To develop solutions, you may need to do web research and to use spreadsheet, database, or web browser software tools, and you will need to use word processing software to write up your findings. Many projects recommend you use electronic presentation software, if possible, to summarize your findings for management. Each assignment will list the software tools that you will need to use and the questions you will need to answer.

In order to complete your assignments, you should familiarize yourself with Dirt Bikes.

To learn more about the company and how it works, review each of these topics in this document: Company History and Background Organization Chart and Employees Products and Services Sales and Marketing Selected Financial Data The following is a list of Dirt Bikes projects for each chapter. This list includes links to the data files for these assignments.

Chapter 1 Assignment: Understanding Information System Requirements [Data File: Dirt Bikes Org Chart] Chapter 2 Assignment: Analyzing Financial Performance [Data File: Dirt Bikes Financial and Sales Data] Chapter 3 Assignment: Analyzing Competitive Strategy Chapter 4 Assignment: Developing a Web Site Privacy Policy Chapter 5 Assignment: Improving Decision Making: Making the Rent vs. Buy Decision for Hardware and Software Chapter 6 Assignment: Improving Decision Making: Redesigning the Customer Database [Data File: MIS17Ch06 Customer Database] Chapter 7 Assignment: Achieving Operational Excellence: Using Internet Tools to Increase Efficiency and Productivity Chapter 8 Assignment: Achieving Operational Excellence: Developing a Disaster Recovery Plan

Chapter 9 Assignment: Achieving Operational Excellence: Identifying Supply Chain Management Solutions Chapter 10 Assignment: Achieving Operational Excellence: Developing an E-Commerce Strategy Chapter 11 Assignment: Achieving Operational Excellence: Identifying Opportunities for Knowledge Management Chapter 112 Assignment: Improving Decision Making: Analyzing the Impact of Component Price Changes [Data File: MIS17Ch12 Bill of Materials] Chapter 123 Assignment: Achieving Operational Excellence: Designing an Employee Training and Skills Tracking System and Database [Data File: MIS17Ch13 Employee Database] Chapter 14 Assignment: Improving Decision Making: Using Spreadsheet Software to Analyze the Return on a New System Investment Chapter 15 Assignment: Achieving Operational Excellence: Expanding International Sales.

Company History and Background Dirt Bikes USA was founded in 1996 by Carl Schmidt and Steven McFadden, two young but experienced bikers with engineering backgrounds who saw that dirt bikes were becoming very popular in the United States as both sporting and racing motorcycles.

They developed frames for dirt bikes that were more suited to off-road handling and started using these frames to build their own dirt bike models using motorcycle engines manufactured by other companies, such as Honda and Rotax Motors of Austria. Riding on one of their customized dirt bikes, Steven finished first in the famous Barstow to Las Vegas race. There was so much interest in Carl and Steve’s bikes that they decided to open a production facility that could manufacture large numbers of their dirt bikes for the retail market. They opened a small production facility in Carbondale which has since expanded to house 120 workers involved in production, design, and engineering and a corporate sales and administrative staff of close to 20 employees. Over the years Dirt Bikes USA has enhanced and expanded its product line to include dirt bike models optimized for racing and for off-road recreational use. Its racing models have placed well-and often placed first-- in the many dirt bike races staged throughout the United States, including the Barstow-Las Vegas race and competitions at Daytona Bike Week.

Organization Chart and Employees Dirt Bikes USA is still privately owned with Carl serving as CEO and Steven as President and Chief Operating Officer. About 120 employees work in design, engineering and production, including 3 full-time product designers and 3 engineers. In addition to a 4-person Parts department, Dirt Bikes maintains a ten-person service department to service warranties and customer problems with parts and motorcycle performance. Five employees work in Dirt Bikes’ shipping and receiving department.

Dirt Bikes’ sales staff consists of a marketing manager and 5 sales representatives, two for the West coast and Western United States, one for the Midwest, one for the Northeast

and one for the South. The corporate administrative staff consists of a controller, one accountant, one administrative assistant, two human resources staff members, three secretaries, and two information systems specialists to support systems servicing all of the business functional areas. The data file Dirt Bikes Org Chart shows Dirt Bikes’s organization chart.

The company maintains a very friendly family atmosphere, encouraging teamwork, attention to detail and quality, and continual learning and innovation. Employees, distributors, and retail customers are urged to contribute ideas on how to improve Dirt Bikes’ products and service.

Products and Services Dirt Bikes’ founders realized that the most popular dirt bikes were foreign brands and wanted to capitalize on their proximity to the dirt bikes racing circuit and market in the United States. Carl and Steve hoped they could develop bikes that performed and looked better than the competition by using the best custom parts available. Dirt Bikes does not hesitate to use quality components from all over the world. The engines for Dirt Bikes are Rotax engines from Austria and tires are from Dunlop, but many of their parts, such as shock absorbers, front wheel forks, exhaust pipes, and headlights, are from the United States. Dirt Bikes makes its own frames, shaping them to give them the unique spirited style for which the company is noted. The company’s parts and service business accounts for about 20% of its total revenue.

Manufacturing and selling dirt bikes is a complex business. Dirt bike racing has many forms, including racing specifically for different size bikes, for short distances, long distance, and even for up to six days. Enduro bikes are for cross-country racing and motocross bikes are specially designed for racing in an enclosed dirt course that can consist of a variety of terrains; uphill, downhill, corners, jumps, and so forth. Dirt Bikes currently produces four models: the Enduro 250, the Enduro 550, the Moto 300 and the Moto 450. The two Enduros are endurance racers, while the Motos are for motocross racing. All four are very modern, with such technology as both kick and electric starters, steering stabilizers, and liquid cooling. The large majority of these bikes are sold in the United States for between $6,250 and $10,000 retail. The Enduro 250 retails for $6250, the Enduro 550 retails for $8800, the Moto 300 retails for $7295 and the Moto 450 retails for $9395. Dirt Bikes has appealed primarily to serious trail and Enduro riders, although it is making inroads into the motocross market.

Sales and Marketing Dirt Bikes does not sell directly to retail customers, relying on a network of 40 distributors concentrated in the Western and Midwestern United States. A small percentage of Dirt Bikes are sold in Europe using independent distributors that sell other brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes’ motorcycles, parts, and service, including warranty repairs, can only be obtained through an authorized

Dirt Bikes dealer. All motorcycle and spare parts sales, shipping and set-up must be handled by a certified dealer. If a potential customer lives more than 50 miles from the nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or Dirt Bike parts through a certified independent motorcycle dealer. Retail customers can purchase spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles from an authorized Dirt Bikes dealer.

Dirt Bikes’ sales department works closely with Dirt Bikes’ distributors. One of its key responsibilities is to aggressively promote Dirt Bikes at dirt bike racing and other events.

Many Dirt Bikes employees are dirt bike racing enthusiasts themselves. Several are official company racers representing the company in dirt bike racing competition. Dirt Bikes recently established a Dirt Bikes USA Owners’ Group to promote stronger relationships with customers and to make it easier for them to share their Dirt Bikes USA experiences. Dirt Bikes also advertises in magazines devoted to motorcycle racing and dirt bikes. It uses a small public relations firm to place articles about new company products or racing victories in these magazines. Dirt Bikes also pays for ads in these publications.

Selected Financial Data The data file Dirt Bikes Financial and Sales Data provides a spreadsheet with three worksheets containing Dirt Bikes financial data for you to review: • Income statement and summary balance sheet data from 2020-2022 • Annual sales (units sold) of each Dirt Bikes model between 2018 and 2022 • Total domestic vs. international motorcycle sales (units sold) between 2018 and 2022 The income statement and balance sheet are the primary financial statements used by management to determine how well a firm is performing. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. The gross profit represents the difference between the firm’s revenue (or sales) and the cost of goods sold. The gross margin is calculated by dividing gross profit by revenues (or sales). Net profit (or loss) is calculated by subtracting all other expenses, including operating expenses and income taxes from gross profit. Operating expenses are all business costs (such as expenditures for sales and marketing, general and administrative expenditures, and depreciation) other than those included in the cost of goods sold. Net margins are calculated by dividing net profit (or loss) by revenues (or sales).

A balance sheet provides a snapshot of a company’s financial assets and liabilities on a given date, usually the close of an accounting period. It lists what material and intangible assets the business owns and what money the business owes either to its creditors (liabilities) or to its owners (shareholders’ equity, also known as net worth).

We have included here are only the most important pieces of balance sheet data for you to review. At any given time a business’s assets equals the sum of its liabilities plus its net worth. Current assets include cash, securities, accounts receivable, or other investments that are likely to be converted into cash within one year. Current liabilities

are debts that are due within one year. Long-term debt consists of liabilities that are not due until after a year or more. If too much debt has been used to finance the firm’s operations, problems may arise in meeting future interest payments and repaying outstanding loans.

By examining a series of financial statements one can identify and analyze trends in the financial strength of a business. When examining Dirt Bikes’ income statement and balance sheet data, pay special attention to the company’s three-year trends in revenue (sales), costs of goods sold, gross margins, operating expenses, and net income (or loss). Pay attention to whether the company’s short and long-term liabilities are growing and whether they exceed assets. If a company has more current assets than current liabilities, it is a sign that it probably has enough working capital to fund investments in new equipment or information systems.

The two other spreadsheets present motorcycle unit sales data between 2018 and 2022, which can be used to gauge motorcycle sales. When examining these spreadsheets, pay attention to the trends in sales. This includes the sales trends for each product Dirt Bikes sells, overall sales trends, and the proportion of international to domestic sales.

Dirt Bikes USA Organization Chart

CEO and COO

Production

Parts

Shipping & Receiving

Manufacturing

Administration

Service

Sales & Marketing

Design & Engineering

CHAPTER 1 Business Information Systems in Your Career VIDEO CASE The New HQ Is in the Cloud: Salesforce President VIDEO TITLE: The New HQ Is in the Cloud: Salesforce President https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-new_hq_in_cloud Read the case here: Salesforce is the world's leading customer relationship management (CRM) platform, with over 70,000 employees and $31.352 billion in annual revenue for 2023. More than 150,000 companies across different industries use Salesforce CRM to grow their businesses by strengthening customer relationships. Salesforce provides a multitude of services that helps companies understand and engage with their customers, manage customer information and interactions, run marketing campaigns, and improve sales and customer service—all on a single platform accessible from any desktop or device.

The Salesforce App Exchange offers thousands of pre-built applications that integrate with Salesforce and further extend its capabilities. For example, PowerSync is an app that syncs data between Salesforce and e-commerce platform Magento, eliminating the need for duplicated manual data entry. Salesforce has also acquired companies such as Tableau, a data analytics and visualization tool, that provide complementary services or enable Salesforce to move into new markets. Acquisitions have been a major driver of Salesforce’s growth, Now Salesforce wants to become the platform of choice for “digital first” ways of working, which took off during the Covid-19 pandemic. Large numbers of people were working offsite and trying to coordinate operations from multiple locations. Some companies have continued to operate from the cloud after the pandemic.

Salesforce has pioneered innovations in cloud, mobile, social networking, analytics. and artificial intelligence (AI), to help companies of every size and industry to make their businesses more digital. The products and services it is currently promoting for digital transformation are Customer 360 and Slack.

Salesforce Customer 360 helps its business customers develop a deeper connection with their customers and promote more integrated internal operations. The Customer 360 platform connects and integrates customer data from Salesforce and third-party applications across multiple systems, apps, devices, and organizations to present a single 360-degree view of customers spanning every interaction. Every group in the company has the same version of data about the customer. The purpose of this integration is to avoid problems that arise when customer data are not shared between teams or departments, impeding organizational coordination. Businesses using Customer 360 are able to connect all of their Salesforce apps across multiple organizations to create a single global ID and profile for every customer.

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A major challenge posed by Salesforce’s SaaS portfolio expansion is building the communication layer that sits between all applications. This is not only about how data flows from Sales applications to Marketing applications but also about how multiple teams are communicating and collaborating with each other while operating out of different applications. Slack makes this possible.

Salesforce acquired Slack in July 2021 for $27.7 billion to flesh out its communication capabilities for a digital work-anywhere environment. Slack is an instant messaging system providing a single platform connecting employees, customers and partners and the apps they use every day, all within existing work flows. Slack users from different teams, business functions, and organizations are able to collaborate with each other while simultaneously working with different applications. Managers in Sales can easily collaborate with users in Marketing or Finance.. Salesforce wants to use Slack as the central work hub for all the collaboration within Salesforce. Salesforce refers to Slack as a "Digital HQ" and foundation for all collaboration features that exist within Salesforce.

Slack can be bundled with Salesforce or work as a standalone application.

Salesforce management believes that Slack and Salesforce Customer 360 will give every company in the world a “single source of truth” for their business and a single platform for connecting employees, customers, and partners with each other and the apps they use every day. For example, IBM’s 250,000 global employees are working together in Slack, with numerous workflows across Salesforce Sales Cloud and Service Cloud across locations and time zones.

Salesforce management also believes that Salesforce Customer 360 and Slack provide the right toolkit for businesses to rethink and reshape the way we work. To date, this has not happened. Companies in the market for customer relationship management software don’t appear to be swayed one way or another by the addition of Slack’s messaging and collaboration features, according to Liz Herbert, a vice president and principal analyst at Forrester Research Inc. Katrina August, CIO of Carhartt, which uses Salesforce sales, service, and marketing clouds, noted that the Slack acquisition has so far not made Salesforce more useful or valuable to her company. Slack’s features and functions are similar to Microsoft Teams, Microsoft’s collaboration app, which Carhartt was already investing in. Slack has been losing ground to Microsoft Teams and to Zoom, which has developed more products around video.

The Salesforce ecosystem of products has grown larger and more complex over the years. However, bundling a widening range of IT software and services into a single platform can backfire, according to Jason Wong, an analyst at Gartner Inc., a research and consulting firm. As the number of features multiplies, companies are increasingly required to hire more tech workers to manage an ever-wider range of tools—which can be too costly for many companies.

Sources: Salesforce.com, accessed March 9, 2023; Slack.com, accessed March 7, 2023; Angus Loten, “Salesforce Customers Not Swayed by Slack, Analysts Say,” Wall 2

Street Journal, January 5, 2023; “A Complete History of Slack,” FoundHQ.com, November 7, 2022; “Salesforce: Customer 360 Picks Up the Slack,” Seekingalpha.com, June 3, 2021.

Multiple Choice Questions 1. Which of the following is true about Salesforce?

A) All Salesforce software is developed in-house.

B) Slack is used for instant messaging.

C) It is difficult to integrate Slack with other applications D) Salesforce Customer 360 requires extensive customization to create a unique profile for each customer.

2. Which of the following is not true?

A) All Salesforce applications reside in the cloud.

B) Salesforce Customer 360 helps companies integrate Salesforce customer data with that from third-party applications.

C) Slack can’t be used for messaging if the message sender and recipient are using two different applications.

D) Salesforce integrates customer data from Salesforce and third-party applications 3. Which of the following best describes Salesforce’s business strategy?

A) To expand more globally B) To provide superior customer service C) To broaden its product offering D) To increase spending on marketing Essay Questions 1. Which of the major business objectives does Salesforce help its customers achieve?

2. What are the advantages and disadvantages of Salesforce acquiring Slack?

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CHAPTER 2 Global E-Business and Collaboration VIDEO CASE How Slack Is Preparing for the Future of Work VIDEO TITLE: How Slack Is Preparing for the Future of Work https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15eslack_preparing_future_work

Length: 7:46

Read the case here:

Slack is a leading channel-based messaging system with tools for team messaging, file sharing, screen sharing, video/voice calls, and the ability to integrate with many applications. Slack users can collaborate with individuals and groups inside and outside the organization. Slack offers a secure, enterprise-grade environment that can scale with the largest companies in the world but can be used by small and midsized businesses as well.

Slack started out as an internal communication channel for the co-founders’ previous video game development company. Since that time, it has morphed into an enterprisewide workplace collaboration tool, a single place for messaging, tools, and files. Think of Slack as an instant messaging platform like Skype or Google Chat, but with integrated file sharing, video and phone calls, and screen sharing directly through its platform, along with the ability to invite others from outside your organization to collaborate.

Slack’s instant messaging tools help employees communicate immediately, rather than waiting for an email response. You can use Slack for real-time communication among a group or for one-on-one discussions. Slack also helps to keep important information out of documents and email. This can not only improve productivity but also improves security.

Slack was designed explicitly as an antidote to email—the formality, the overload of useless messages and endless replies where attachments often get lost. It organizes information by topic (like a message board), not by conversation (like email). Users can search for information by topic rather than poring through countless emails. Everything is saved by default, so all the details of daily work are captured in a type of running daily ledger. Slack works on the desktop and on mobile phones and makes switching between the two seamless.

By making communications easier, more intuitive, and less taxing, Slack became the de facto digital headquarters for many employees during the Covid pandemic. Not every communication has to be a scheduled Zoom meeting. Slack helps reduce non-critical meetings and Zoom burnout. Slack has been adopted by more than 100,000 companies, including Airbnb, Venmo, Tumblr, Target, Liberty Mutual, IBM, The New York Times, and, AstraZeneca,

Slack is able to provide a flexible, secure, and multifunction digital work platform based on the following key features: • Organized conversations: With Slack, information flows in channels. Slack channels have made it much easier for users to keep their discussions focused and organized, using different channels for each purpose. Users can create as many channels as they want, keeping in mind the organization’s size and the number of teams that are working on a project.

• Trackable history: Slack keeps track of all the work for a project or a team and makes it easier to go back to a channel and see what has been posted before.

The data once uploaded on Slack is always ready for future reference.

• Secure work environment: Slack employs identity and device management through single sign-on and data protection by encrypting user data. Users are allowed to log on to multiple web applications after logging into an identity provider.

• Integration: Slack seamlessly integrates with countless apps (including custom user apps) and software, making it easier to keep track of everything from a single place. Business tools, such as Google Drive, Asana, Salesforce, and even Zoom can be integrated into Slack as well. Some organizations have built an app inside Slack, allowing users to stay on the platform, while others simply inform users of any changes or updates to files. There are over 2,400 apps in the Slack App Directory.

• Audio and video calls: You can use Slack to make audio or video calls for free, with up to 15 people at a time. There is no need to switch between Skype, Google Meet and Slack to make a call.

• Bots: Slack has hundreds of bots to perform various automated tasks for users.

These include a Slackbot to assist with note-taking and setting reminder; a DiggBot that delivers interesting websites and news to a channel; and several other bots.

Wealthsimple, a Toronto-based investment service for 175,000 Canadian individual investors, eliminated email and made Slack the platform for its day-to-day operations.

Although Wealthsimple’s online platform offers algorithm-driven investments, customers can engage with human investment advisors whenever they need assistance.

Wellssimple’s customer success team relays customer requests through Slack, dramatically reducing turnaround time for customer service on even the most complex investment issues. This helps assure customers that their concerns are being speedily addressed.

Slack follows a freemium revenue model, offering a free version. Users can convert into a paid subscription if they want unlimited usage or advanced functionality. In 2021 Slack generated $902 million. Salesforce predicted Slack’s revenue would reach $1.5 billion for the next year. However, Slack faces very stiff competition from Microsoft Teams, which also has both free and paid versions.

Although instant messaging platforms like Slack and Microsoft Teams have made business communication easier, they can be counterproductive. Instant messaging

users are continually stretched with tools that require them to react immediately in real time. They are pulled between the conversation they're in and the actual work that they need to get done, and can end up dreading working with people, because they drain that time even more. Fast-paced conversations can be hard to keep track of. Information overload and fear of missing a message can increase anxiety. All of this adds to workplace stress and burnout: Slack fatigue. In addition, constant Slack usage makes it even more likely for work to spill over into home life. The line between work life and home life can start to blur when a message ping comes through, and you are compelled to respond.

Slack has already had a huge impact, but will it become the all-purpose tool for the digital work world?

Sources: “Slack Revenue and Usage Statistics,” Businessofapps.com, accessed March 4, 2023; Slack Overview: What You Need to Know and Why You Should Integrate,” Friday.app, accessed March 2, 2003; Ananya Saraswat, “How Does Slack Work & Make Money? Slack Business Model,” Feedough.com, February 20, 2023; “Slack.com, accessed February 16, 2023; “; Conor Cawley, “Are Instant Messaging Apps like Slack an Instant Productivity Killer?” Tech.co, August 24, 2022.

Multiple Choice Questions 1. What are the advantages of organizing information into channels?

A) The information is presented more simply.

B) It helps keep information more focused and organized.

C) It prevents people outside the organization from disrupting conversations.

D) It is less expensive than email for storing information.

2. Which of the following is true?

A) Information can be obtained more quickly from Slack than from email.

B) One must schedule an appointment to have a conversation using Slack.

C) Slack charges for video calls.

D) Slack does not keep track of data for a project for more than 3 years.

3. All of the following is true about Slack except: A) Slack has a version that can be used for free.

B) Slack uses bots for certain automated tasks.

C) Slack can be used with Zoom.

D) individual Slack users can use up to 15 channels.

Essay Questions 1. What are the features that distinguish Slack from other workplace communication tools?

2. What people, organization, and technology issues should a business address when deciding whether to use Slack?

CHAPTER 3 Achieving Competitive Advantage with Information Systems VIDEO CASE Celonis Tops $11 Billion Valuation with New Round of Funding VIDEO TITLE: Celonis Tops $11 Billion Valuation with New Round of Funding https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-celonis_funding Length: 5:42 Read the case here: Business processes are not static, nor do they always follow the path defined for them.

Without attention to continuous process improvement and business process management, these deviations can become the rule, degrading organizational performance. Dynamic markets also force change. Customer expectations, new product lines, acquisitions, changing geographies, and other factors can impact the ability of a process to be performed at full capacity.

Celonis pioneered a technology called “process mining,” which analyzes data from a company’s event logs to identify problems with certain processes and figure out ways to streamline them. Enterprise applications such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) software create audit trails of work processes that are recorded as log data. Process mining takes that log data and creates models that show the visualization of a process from end to end. The process map uncovers the details and all the variations that a process can take. Sometimes what process mining uncovers does not match up with the company’s definition of that particular process.

Prior to Celonis technology being available, companies would bring in human consultants to hold workshops to identify inefficiencies. This requires a significant investment in high-priced consultants and quantitative analysts, and also takes a great deal of time. Using Celonis software, companies are able to easily identify inefficiencies in a matter of 4-8 weeks at much lower cost. Process mining enables organizations to find and fix inefficiencies in their business processes by giving them complete real-time visibility.

Celonis offers solutions by system (Salesforce and SAP) as well as by core company functions, including accounts payable, accounts receivable, procurement, order management, inventory management, and opportunity management. The software is available in both on-premise and online SaaS versions. Companies also like how Celonis Process Mining works on top of existing systems. Celonis process mining software helps companies better understand how work flows through various company systems. Celonis software helps identify bottlenecks in production, loops in logistics, and inefficiencies in purchasing that drag down performance and generate excess operational costs. Celonis tools identify inefficiencies in real-time in areas where company performance is suffering.

For example, Celonis helped Deutsche Telekom Services Europe (DTSE) save over €66 million (about U.S. $70 million) by identifying execution gaps and inefficiencies in their Procure-to-Pay process that produced duplicate payments and cash discount losses. (Procure to Pay, or P2P, is the full cycle of actions and events that a business engages in to obtain goods or services from an outside supplier.) DTSE’s P2P process handles over 2 million order items and processes almost 9 million invoices a year.

Problems with this process had created many millions of dollars in losses.

In 2019, Celonis reached $100 million in annual recurring revenue. By 2022, Celonis generated $365 million in annual recurring revenue and had 500 customers. CEO Rinke notes that Celonis is one of the fastest-growing tech companies in the world. Celonis claims it has over 2,500 enterprise deployments worldwide and works with 10,000 consultants and 2,000 consulting firms and tech partners (among them IBM, Accenture, PWC, KPMG and ServiceNow). It is still privately-owned.

Celonis has expanded beyond process mining into execution management systems (EMS), which help businesses manage and improve their business processes. Process mining pinpoints where there are process inefficiencies and silos, as well as untapped value inside workflows. Execution management works from within the same platform as process mining but takes it a step further, by showing what actions can fix problems. It then allows users to take those actions. Employees can accept recommended improvements and make changes directly through an easy-to-use question-and-answerbased interface.

Celonis tools helped Avnet, a global leader of electronic components and services, free up over €6 million (about U.S.$6.3 million) in working capital and reduce costs by finding and fixing early supplier deliveries and making adjustments in Accounts Payable. For example, the Celonis software issues real-time alerts to purchasers so they can cancel their orders if a product is withdrawn from the market. Avnet has about 14,500 employees around the globe. The company has integrated Celonis into many departments, including Procurement, Sales, and Finance, to deliver €10-15 million (about U.S. $10.5-15.75) million) of value year-on-year in working capital impact, productivity gains, and revenue increases.

Food and beverage giant Kraft Heinz initially adopted the Celonis EMS to analyze Accounts Receivable (A/R) activity and improve how cash discounts were offered and managed across the company’s customer base. The company gained more visibility into customer payment behavior, which has helped it renegotiate many discounts, and optimize how new discounts are offered, recovering a great deal of lost money in the process. Overdue payments have been reduced by 30 percent.

Process mining with Celonis can now focus on more than one process at a time.

Celonis Execution Graph uses graph data structures to tie together data from across business processes to see how they influence each other across systems and suppliers. Celonis Execution Graph technology enables companies to easily evaluate

trade-offs as well as optimize different processes simultaneously. Another new feature, the Multi-Event Log, spots inefficiencies that cross multiple processes.

In 2021, IBM purchased process mining software company myInvenio. IBM believes the acquisition will provide organizations with data-driven software that will help them identify the most impactful business processes to automate and streamline using artificial intelligence (AI). However, IBM also partners with Celonis for execution management services.

SAP acquired workflow and process intelligence vendor Signavio in early 2021. Celonis had enjoyed a close and successful partnership with SAP before this acquisition.

However, SAP’s acquisition of Signavio frees Celonis to work with all of Signavio’s previous partners without worrying about tiptoeing around SAP. Sources: David Essex “Process Mining Software,” Techtarget.com, accessed November 38, 2022; Celonis.com, accessed November 27, 2022; Kyle Wiggers, Celonis Secures Another $1B to Find and Fix Process Problems in Enterprise Systems, Techcrunch.com, August 23, 2022; Joe Williams and Aisha Counts, “ServiceNow and SAP Tried to Buy Celonis. CEO Alex Rinke Vows to Stay Independent,” Protocol.com, May 18, 2022; IBM Consulting, “Process Mining and Execution Management: An X-ray Diagnosis and Treatment for Business Performance,” Ibm.com, June 28, 2021.

Multiple Choice Questions 1. Which of the following is true?

A) Celonis is not able to work on top of existing systems.

B) Process mining is only used in a few industries.

C) Execution management shows what actions can fix problems D) Celonis cannot work with ERP or CRM systems.

2. Which of the following best describes how Kraft Heinz used Celonis?

A) To improve the integration between its ERP and CRM systems B) To identify inefficiencies in its customer payment processes C) To reduce duplicate payments to suppliers D) To identify early supplier deliveries 3. Celonis process mining: A) identifies only the most important steps in a business process.

B) identifies process inefficiencies and bottlenecks.

C) can only deal with processes that are based on business functions.

D) can only focus on one process at a time.

Essay Questions 1. What major business objectives could Celonis help organizations pursue?

2. Should a business use Celonis tools? What people, organization, and technology factors should be addressed when making this decision? What kinds of businesses are most likely to benefit from using Celonis tools?

CHAPTER 4 Ethical and Social Issues in Information Systems VIDEO CASE Australia Passes Law Forcing Tech Giants to Pay for News Video 1: Australia Passes Law Forcing Facebook, Google to Pay for News Pearson Clips URL: https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareersIT-2023-laudon_emis15e-australia_law_facebook_google_pay_news Length: 2:59 Video 2: Why Facebook Removed News in Australia Pearson Clips URL: https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareersIT-2023-laudon_emis15e-facebook_removed_news_australia Length: 1:30 Read the case here: After 20 years of shrinking ad sales, much of the print and online news media now depend more on readers than on advertisers. At most major newspapers such as the New York Times, subscriber revenue now outstrips advertising revenue. U.S. print newspaper advertising peaked in 2000 with classified ads generating more than $19 billion, about one-third of the newspaper industry’s ad revenue at that time. But soon, advertisers began shifting their focus to the Internet. For instance, Craigslist, an online classified website which began to rapidly expand in the early 2000s, offered a better service for a lower price. Other sites such as Monster.com, Realtor.com and Cars.com came along later and helped siphon off even more classified business. By 2019 classified ad revenue had plummeted to only $2.3 billion. Competition for online advertising was also intense. Newspapers sold digital ads but couldn’t charge anywhere near what they had charged for print ads. As the saying went, print advertising dollars were replaced by digital dimes and then by mobile pennies, as smartphones became the dominant method for accessing the internet.

Google and Facebook delivered the next blow. Google and Facebook control the digital advertising ecosystem, collecting the vast majority of ad revenues. They rely in part on news content to keep users on their platforms but have little incentive to pay for it.

Instead, they use the content that news publishers create and post it on their platforms without compensation. For instance, if you search for a recent news story using Google, headlines and article summaries from the major news publishers will appear with links to the story. The news publishers receive no compensation for this link, and while they can show ads once people arrive at their sites, they are not paid for the headlines and summaries that fill Google’s pages. At the same time, almost all news publishers, large and small, depend on Google and Facebook to reach readers. The News Media Alliance, a leading trade industry group of 2,000 news organizations, argues that as a result, Google and Facebook have significant leverage over news organizations when it comes to defining the terms of their relationships with them.

Australia was one of the first countries to directly address this issue. From 2020 through February 2021, the Australian government worked on passing the News Media and

Digital Platforms Mandatory Bargaining Code, aimed at ensuring that news businesses would be fairly remunerated for the content they generated, helping to sustain local and public interest journalism in Australia. Community Press Australia, a collective of 81 community news publishers, representing 160 newspapers, was instrumental in spearheading the initiative. As discussed in the video, “Why Facebook Removed News In Australia,” after months of tension with the Australian government, and as a reaction to the proposed new law, Facebook removed all news items from Australians’ Facebook News Feeds, preventing people and publishers in Australia from sharing or see any news from local or international outlets on the Facebook platform. This was a major issue because millions of people in Australia get their news from Facebook. The action provided stark evidence of Facebook’s willingness to use its market power and leverage to push back against legislation that it believed harmed its business prospects. Doing so was effective, leading to further discussions with the Australian government and some concessions to Facebook. Facebook then agreed to reverse its decision, returning news to Australians’ News Feeds.

On February 24, 2021, the Australia legislature passed the News Media and Digital Platforms Mandatory Bargaining Code, which is discussed in the video, "Australia Passes Law Forcing Facebook, Google to Pay for News”. The law does not actually “force” Facebook and Google to pay for news, but tries to level the playing field between news publishers and online platforms such as Facebook and Google, by enabling news publishers to negotiate more effectively (collectively, if necessary) with the platforms. If no agreement is reached within a set time period, news publishers are allowed to seek “final offer” binding arbitration, in which an arbitrator selects one of the two offers made by the parties. Even if arbitration is not used, the fact that it is a possibility creates significant incentive for all parties to engage in meaningful negotiations. Prior to enactment of the law, Facebook and Google often refused to do so.

According to a report authored by Rod Sims, former Chair of the Australian Competition and Consumer Commission, the News Media Bargaining Code is a resounding success. The Code has resulted in over AU$200 million in payments by Google and Facebook’s parent company Meta from numerous new agreements that they have entered into with news publishers. None of the negotiations have required arbitration to reach an agreement.

One of the platforms’ major concerns has been that the law in Australia would encourage other countries to create similar legislation. legislation modeled on the law has been introduced in both the United States and Canada, with a similar bill on the cusp of being introduced in the United Kingdom as of March 2023. Similar laws are also under consideration in India and Brazil.

In the United States, passage of the proposed bill, known as the Journalism Competition and Preservation Act (JCPA) has thus far been stymied, although there is some activity to develop legislation on the state level. Meta has warned that it might be forced to again consider removing news from Facebook. In its view, “governmentmandated” negotiation unfairly disregards the value that it says Facebook provides to

news organizations in the form of increased traffic and subscriptions. Prospects for passage of the JCPA remain uncertain.

In Canada, the Online News Act establishes a framework similar to Australia’s. Once again, Meta has stated that it will end availability of news content for Canadians on its platforms if the Act passes. Similarly, in February 2023, Google started blocking news content for some Canadians as a purported test run of a potential response to the bill.

Prospects for the passage of this law also remain uncertain.

On a different front, in January 2021, HD Media, which owns West Virginia’s Charleston Gazette-Mail newspaper, filed a federal antitrust lawsuit against Google and Facebook claiming both were manipulating the digital-advertising market, making it difficult the Charleston Gazette-Mail and other newspapers like it to survive. Seventeen other newspaper organizations representing about 150 newspapers have also joined the lawsuit. As of March 2023, the lawsuit is still pending.

Sources: Ray Schulz, “Biden Urged to Push Trudeau on Online News Act,” Mediapost.com, March 22, 2023; Ray Schulz, “California Bill Would Force Tech Giants to Pay ‘Journalism Use’ Fee,” Mediapost.com, March 20, 2023; “Australia’s News Media Bargaining Code Is a Major Success that the U.S. Can Emulate,”” by Johaness Munter, Newsmediaalliance.org, August 25, 2022; Gretchen Peck and E&P Staff, "A Deep Dive into the Class Action Antitrust Lawsuit Against Facebook & Google, Editorandpublisher.com, December 14, 2021; Sara Fischer and Kristal Dixon, “Scoop: Over 200 Papers Quietly Sue Big Tech,” Axios.com, December 7, 2021.

Multiple Choice Questions 1. What is identified as a key concession to Facebook in the Australian bill?

A) If Facebook and Google choose, at their discretion, to enter into agreements with traditional media publishers, they may not be subjected to regulation.

B) An agreement to totally exempt Facebook and Google from regulation C) A requirement that Facebook and Google enter into commercial agreements with traditional media publishers as a condition to not being subjected to regulation D) A requirement for broad collective bargaining across the media landscape.

2. Which of the following statements is about the impact of the Internet on the newspaper industry is not true?

A) Today, revenue from subscriptions is higher than revenue from advertising.

B) Newspapers are able to charge higher prices for digital advertising than print advertising.

C) Google and Facebook’s dominance of the digital advertising ecosystem has adversely affected newspaper revenues D) Almost all news organizations rely on Google and Facebook to reach readers.

3. Australia’s News Media and Digital Platforms Mandatory Bargaining Code was designed to help sustain which of the following?

A) the ability of Australia’s journalists to report on international news B) traditional print newspapers

C) local and public interest journalism D) Facebook and Google’s digital advertising ecosystem Essay Questions 1. What is the ethical dilemma presented by this case? Define the conflict or dilemma and identify the higher-order values involved. Who are the stakeholders and what arguments might they make to support their positions?

2. Identify the options that can be taken for this ethical dilemma and their potential consequences.

CHAPTER 5 IT Infrastructure: Hardware and Software VIDEO CASE IBM Expands Cloud to Daimler VIDEO TITLE: IBM Expands Cloud to Daimler https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15eibm_expands_cloud_daimler

Length: 5:17

Read the case here:

Mercedes-Benz Group AG, formerly Daimler AG, is headquartered in Stuttgart, Germany and one of the leading global suppliers of premium luxury cars and vans, such as Mercedes-Benz Cars and Mercedes-Benz Vans. It has around 173,000 employees worldwide and fiscal year 2022 revenue of nearly U.S. 154 billion. Mercedes-Benz Group sells its vehicles and services in nearly every country of the world and has production facilities in Europe, North and Latin America, Asia, and Africa. MercedesBenz Mobility AG, the financial and mobility services division of Mercedes-Benz, offers services for cars and vans in the areas of financing, leasing and insurance.

Like other automotive companies, Mercedes-Benz Group derives a substantial portion of its revenue from after-sales services such as warranties, servicing, and repairs that take place after a vehicle is purchased. Today, the after-sales business contributes as much as 50 percent to the overall profit of some automakers and more than 40 percent to the gross profit of large, full-range dealerships. After-sales services also provide opportunities for dealers to engage more with their customers and cement loyalty to their brand.

Mercedes-Benz had a global after-sales portal that it wanted to move to a more leadingedge technology platform that would scale as the company’s after-sales business grew and also enable the company to quickly launch new products and services to meet user demand. The portal is a critical workload requiring a high level of security to protect it from hacking attempts.

IBM worked with Mercedes to host the global sales portal on IBM’s public cloud, beating out other major public cloud vendors such as Amazon Web Services (AWS) and Microsoft. IBM had been struggling in the competitive cloud market dominated by AWS, Microsoft, and Google. IBM’s cloud computing business was not growing at anywhere near the rate of its competitors, and it didn’t want to lose any more ground in the cloud computing race.

The IBM public cloud is known for its high level of security and is often used in heavilyregulated industries such as banking and healthcare that need especially strong safeguards for confidential data. Mercedes selected IBM because it had the strongest security for public clouds. IBM also has strength in hybrid clouds. With ability to

integrate the cloud products of different vendors. IBM understands that most businesses want to work with multiple cloud providers. It also understands that what it is doing for Mercedes is not merely porting applications to the cloud. Both companies are aiming for genuine digital transformation and improved business processes. IBM is counting on its work on hybrid clouds with Mercedes and other companies to showcase its potential as a leader in hybrid cloud technology.

IBM also brings to the table the capabilities of its subsidiary Red Hat, which provides open-source software products that make it easier for enterprises to work across different platforms and environments. Red Hat’s products include its enterprise operating system Red Hat Enterprise Linux and Red Hat Virtualization, an enterprise virtualization tool. Red Hat provides storage, operating system platforms, middleware, applications, and management products, along with support, training, and consulting services. IBM and Red Hat will be able to offer a next-generation hybrid multi-cloud platform based on open-source technologies such as Linux where businesses can securely deploy, run, and manage data and applications on-premises and on private and multiple public clouds. Joining forces with IBM gives Red Hat the opportunity to bring more open-source innovation to an even broader range of organizations.

Just about all of IBM’s clients are running clouds, with many running multiple clouds. In order to move more of their business applications to the cloud, they need to be able to deploy applications and services more easily among their multiple cloud environments.

Some have been hesitant to do so because the proprietary nature of the cloud market and security concerns make deployment very difficult in multi-cloud environment, and because of inconsistent cloud management. Red Hat and IBM are best-in-class hybrid cloud providers, and together, are now able to pool their resources to help clients address these issues.

Most enterprises today are approximately 20 percent along in their transition to the cloud. In this first stage of their cloud journey, businesses have made great strides in reducing costs, boosting productivity and revitalizing their customer-facing programs.

The next stage is about shifting mission-critical workloads to the cloud and optimizing everything from supply chains to core banking systems.

To succeed in the next stage of cloud evolution, businesses need to manage their entire IT infrastructure, on and off-premises and across different clouds — private and public – in a way that is simple, consistent and integrated. Businesses are seeking one common platform they can build once and deploy in any of the appropriate environments to be faster and more agile. IBM’s offerings have evolved to reflect these new customer needs and drive greater growth. The acquisition of Red Hat further strengthens IBM as the leader in hybrid cloud for the enterprise.

Sources: Redhat.com, accessed February 21, 2023; Mercedes-benz.com, accessed January 21, 2023; Ibm.com, accessed January 20, 2023; Jonathan Greig, and “Bank of America, Daimler, and Apple Partnering with IBM for Confidential Computing,” Cloud,

August 20, 2020; Zacks Equity Research, “IBM Public Cloud to Accelerate Daimler’s Digital Overhaul,” Nasdaq.com, July 2, 2020.

Multiple Choice Questions

1. Mercedes-Benz wanted to use cloud infrastructure for its global sales services portal because: A) The company’s on-premises data center was not secure.

B) IBM’s cloud solution was very scalable.

C) IBM’s public cloud infrastructure was easier to use than competitors.

D) BM’s public cloud infrastructure was less expensive than competitors.

2. Which of the following is not true?

A) Red Hat open-source software tools make it easier for enterprises to work across different platforms and environments.

B) Red Hat provides tools for virtualization.

C) Red Hat provides services such as training and support.

D) Red Hat does not use Linux.

3. IBM’s public cloud is widely used in banking and healthcare because A) IBM has special cloud tools for those industries.

B) These industries use confidential data requiring a high level of security.

C) IBM’s public cloud is less expensive to implement than competitors.

D) These industries want to use Red Hat tools and open-source software.

Essay Questions 1. Why would Mercedes’ global sales portal be an appropriate application for a public cloud?

2. What were the benefits of Mercedes-Benz switching to IBM’s public cloud platform for Mercedes and for IBM?

CHAPTER 6 Foundations of Business Intelligence: Databases and Information Management VIDEO CASE Stitch Fix CEO Sees Business of Personalization as Key to Success Video 1: Stitch Fix CEO Sees Business of Personalization as Key to Success https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-business_of_personalization_success Length: 5:45 Video 2: Stitch Fix President on Booming Growth Amid Pandemic https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-booming_growth_amid_pandemic Length: 6:25

Read the case here: Stitch Fix is an online personal clothes styling service headquartered in San Francisco, California. The company started out in 2011 as a pure-play subscription service where customers received a monthly set of curated, styled apparel. The company has morphed into offering non-subscription experiences, buying experiences at chosen intervals, and finally allowing customers to purchase clothes a la carte whenever they wish, with the ability to choose their own pieces from a personalized selection.

Stitch Fix’s business model is based on actively using artificial intelligence (AI) algorithms, Big Data, and human stylists working in combination to make recommendations to clients on items of clothing, shoes, or accessories. Stitch Fix’s business model originally drew on these sources of information to provide clients with a mailed box of five personalized clothing choices that match their style, size, and price preferences. Clients can keep the selections or send them back at no cost. Clients can either continue to receive mailed boxes, or they can now directly order items from the Stitch Fix website that are recommended for them. A styling fee of $20 is charged for each order. Stitch Fix claims that it knows 100 percent of who buys what and that 80 percent of the time it knows why.

In addition to deploying sophisticated machine learning algorithms, Stitch Fix excels at collecting data from its customers, who fill out in-depth profiles when signing up for the styling service. Over 85 data points are collected this way. Stitch Fix asks its customers questions ranging from height, weight, and clothing size to style/taste-focused questions on various preferences such sleeve length and fabric type. It also asks about personal traits (for example, are you a risk taker or are you risk averse?) and lifestyle (for example, do you work from home, are you a full-time mom, do you commute to work?).

Stitch Fix also collects data about the merchandise itself. Each item of clothing in Stitch Fix's inventory is tagged multiple times with "match scores" derived from client preferences, and then ranked. Even more data is collected from customer feedback, which is solicited every time a customer receives a curated box - known as a "Fix" - in order to glean insights as to how each item matched their style, fit, and price preferences.

Stitch Fix obtains considerable client preference data from a “Style Shuffle,” a Tinderlike online quiz in which clients are encouraged to give their quick reactions to a series of clothing items. All client responses, particularly rejections of mailed items, are incorporated into styling algorithms. Stitch Fix uses its customer data repeatedly to continually improve its customer experiences.

Stitch Fix’s styling algorithms team works closely with human stylists. Both automated and human coaching are offered to stylists to let them know how they are doing in keeping clients happy with their choices. General statements such as “I only like denim with elastane, polyester, and cut on the bias,” or “I want a V-neck top,” can be interpreted by a natural language processing (NLP) algorithm and acted upon (for example, by adding a V-neck top to the initial recommendation or purposefully selecting denim made from the right materials.

Stitch Fix algorithms are also able to identify trends and styles missing from its inventory. Its machine learning algorithms identify combinations of consumers’ favorite colors, patterns and textiles, which are then sent as data inputs to human designers.

Stitch Fix has a Model Lifecycle team that allows data scientists to easily use and monitor the models.

Stitch Fix flourished during the early stages of the coronavirus pandemic, but then began to decline. In 2021, the company attempted to revive sales and attract more customers with a new strategy called Freestyle, which uses style quizzes and algorithms to recommend items for customers to buy directly online without using human stylists. According to various sources, a test in the summer of 2021 showed that this approach wasn’t resonating with first-time visitors to Stitch Fix’s site. Freestyle erodes the strategic differentiation Stitch Fix originally maintained over its competitors.

With its Freestyle strategy, Stitch Fix is now competing with apparel retailers that don’t operate box subscription business or require style quizzes.

There is also concern that the number of active clients is dropping 5 percent year over year. As pandemic-era buyers return to in-store shopping. Stitch Fix must continually search for new customers, who are its highest spenders, focusing on customer acquisition while retaining existing customers and encouraging them to continue spending. Stitch Fix’s future success seems to be hinged on whether it will be able to scale its Freestyle shopping feature. Rising costs and diminishing demand make for a difficult operating environment.

As Stitch Fix struggles to profitably grow revenue and attract more clients, competition is further heating up. Pinterest is moving aggressively into the personalized online shopping space and in June 2022 acquired The Yes, an AI-powered fashion platform that gives shoppers a personalized feed based on their input on brands and styles. The Yes was retired and its top personnel and proprietary fashion-finding technology were absorbed by Pinterest. Pinterest will use these resources to sell not only fashion but other categories of products, such as home goods, beauty, and food. Another major source of competition is Amazon, which launched its Personal Shopper by Prime Wardrobe service in late July 2019. The service is exclusively for Prime members, and features both men’s and women’s fashions. Other prominent competitors include subscription services Wantable and Daily Look.

On January 5, 2023 Stitch Fix founder and former CEO Katrina Lake announced that the company was laying off 20 percent of its 1700 salaried employees. Elizabeth Spaulding, the firm’s CEO at that time, stepped down and Lake became interim CEO. Spaulding had led the rollout of the failing Freestyle strategy. Retail analyst Neil Saunders stated that the company appears to have “lost its way” and that the issues it’s facing are neither temporary nor immediately solvable. Are powerful algorithms and a rich supply customer data enough of a competitive advantage for Stitch Fix to survive?

Sources: Gabrielle Fonrouge,"Stitch Fix Plans 20% Job Cuts As CEO Steps Down, Founder Katrina Lake to Reassume Post,” Cnbc.com, January 5, 2023; “Algorithms Tour,” Algorithms-tour.stitchfix.com, accessed December 16, 2022; eTail, “How Stitch Fix Uses Data Science and Machine Learning to Deliver Personalization at Scale,” Etailwest.wbresearch.com, accessed Nov. 23, 2022; Gary Alexander, “Stitch Fix’s Worries Are Multiplying,” Seekingalpha.com, November 9, 2022; Laurice Wardini, “11 Best Stitch Fix Alternatives in 2022,” Clothedup.com, October 12, 2022; Beth McKenna, “Stitch Fix Could Be Further Knocked Down by This Pinterest Move,” Fool.com, July 4, 2022; Sarah Perez, “Pinterest Acquires AI-Powered Shopping Startup The Yes, CoFounded by Former Stitch Fix Exec,” Techcrunch.com, June 2, 2022; Tom Davenport, “The Future Of Work Now: AI-Assisted Clothing Stylists At Stitch Fix,” Forbes.com, May 12, 2021.

Multiple Choice Questions 1. Which of the following best describes Stitch Fix’s Freestyle strategy?

A) Freestyle helps Stitch Fix differentiate its service from competitors.

B) Stitch Fix uses style quizzes and algorithms to recommend items for customers to buy directly online but does not use human stylists.

C) Freestyle has helped Stitch Fix increase purchases from first-time visitors.

D) Freestyle has helped Stitch Fix lower costs.

2. Stitch Fix claims that it knows 100 percent of who buys wat and that __ percent of the time it also knows why.

A) 70 B) 75 C) 80 D) 85 3. Which of the following is not true?

A) Customers can only purchase clothing from Stitch Fix by subscribing to the service.

B) Stitch Fix charges customers who order a styling fee but return shipping is free.

C) Stitch Fix’s sales were highest during the Covid pandemic.

D) Stitch Fix is able to identify popular trends and styles as well as individual customer preferences.

Essay Questions 1. What role do people play in Stitch Fix’s business model and business strategy?

2. Describe how Stitch Fix learns why customers purchased a certain item.

CHAPTER 7 Telecommunications, the Internet, and Wireless Technology VIDEO CASE Nokia CEO Suri Sees 5G Market Maturity in 2021 VIDEO TITLE: Nokia CEO Suri Sees 5G Market Maturity in 2021 https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15e5g_market_maturity

Length: 4:11

Read the case here:

Nokia Corporation (Nokia) is a Finland-based communications and information technology company specializing in network infrastructure and advanced technologies, including fixed and wireless networks. CEO Rajeev Suri states that Nokia is pursuing a comprehensive 5G strategy of having an end-to-end portfolio of 5G network elements.

Consumers and businesses can reap significant benefits from fixed wireless 5G as a broadband replacement and also from mobile 5G. 5G offers increased speed and bandwidth. Compared to existing 4G LTE wireless technology, 5G is expected to be 10 to 100 times faster and transmit larger amounts of data. Businesses will be able to utilize more devices and sensors in more locations and take advantage of Big Data collection and artificial intelligence (AI) machine learning.

One of the most discussed features of 5G is increased speed and bandwidth. Under the right conditions, 5G is expected to be 10 to 100 times faster than existing 4G LTE wireless technology. When businesses combine 5G wireless technology with softwaredefined wide area networking (SD-WAN), businesses will be able to utilize more devices and sensors in more locations without the heavy investment required in the past for fixed-line, high data consumption technologies. Before 5G, remote connectivity would entail smaller amounts of data, smaller data volume, and limited scheduled feeds. 5G allows IoT projects to have more flexibility, broader capabilities, and richer inputs for Big Data collection. It also opens the door for artificial intelligence (AI) and machine learning to access denser data for processing. which should result in more accurate outputs.

Another key benefit is 5G’s low latency. Latency describes the amount of delay on a network or Internet connection when a packet of data travels from source to destination.

Even some processes that seem immediate actually have a measurable delay. These requests for data are processed locally and then sent over the network to a server. At the network server, the request is processed again, and a response is formed. A reply transmission process is created for the return trip back to the user. In each direction are network components such as switches, routers, protocol changes, translators, and changes between wireless transmission, network cabling and fiber. At each of these components, tiny delays can build up resulting in significant wait times for the user. A low latency network is a network optimized to reduce these delays as much as possible.

Low latency is important to businesses to improve user experience and support customer satisfaction by enabling applications to run faster and more fluidly. Low latency also enhances network applications in the cloud, including manufacturing applications with wireless networks connecting robotic equipment, monitoring sensors, and the entire production line 5G promises low latency under 5 milliseconds, while 4G latency ranges from 60 milliseconds to 98 milliseconds.

The retail industry could potentially be the greatest beneficiary of 5G by 2030, with enormous opportunities to engage with consumers in novel ways, including dataintensive virtual reality and augmented reality applications. 5G will make it easier to immerse customers in experiences that let them interact with a product before they buy it. They can remodel a room or design a new kitchen and see how their cabinet or furniture choices will look and fit in their spaces.

Visionaries 777 uses 5G to create augmented reality and real-time 3D applications for omnichannel retail companies. The company helped Cartier’s E-Commerce Team replace product packshots with real-time 3D visualizers to deliver a luxurious online experience that customers expect from visiting a Cartier boutique in-person. (A packshot is a photograph or short piece of film showing a product and its packaging in a way that can be used to advertise the product.)

Within shipping and logistics are huge benefits to reap from 5G. DHL plans to implement 5G networks to minimize its supply chain risks and provide more visibility for packages in international transit routes. 5G will enable instant communication with carriers, distributors, and manufacturers in the transportation and logistics ecosystem.

The Port of Livorno in Italy is currently testing a new 5G-enabled digital platform that uses sensors, cameras, and devices all connected to a network to form an integrated communications system. This is combined with intelligent unmanned ground vehicles that automatically load and unload their cargo and simultaneously communicate their cargo inventory information.

Autonomous vehicles can collect more than 1 terabyte of data per day. 5G has the data transmission capacity for new forms of vehicle-to vehicle (V2V) communication interactions. 5G will also be critical for cars to communicate with traffic management systems, objects, and pedestrians. Objects will transmit signals to cars guiding vehicles around them and cars will be able to sense pedestrians from signals being emitted from their 5G smartphones.

5G technology is a key component of smart buildings, and it is already enabling a more comprehensive implementation of Internet of Things (IoT) and other emerging technologies in the real estate industry. 5G technology paired with private network capabilities enables commercial real estate building owners to automate critical building operations through sensors including elevator maintenance, automated lighting, and temperature-setting controls based on the movement of people.

It will be challenging to both deploy and manage 5G networks. The massive deployment of 5G networks must work well with existing 4G networks. Network operators will need to find ways to meet consumer demands for various data-consuming 5G services and to use 5G wireless spectrum as efficiently as possible. Governments and regulatory bodies are concerned whether existing antitrust tools are adequate to analyze the consumer benefits involved in the highly dynamic, innovative 5G market. Traditional static competition models may no longer be relevant.

Sources: “What Is Low Latency?,” Cisco.com, accessed February 12, 2023; Grand View Research; Rishi Vaish and Sky Matthews, “5G Will Accelerate a New Generation of IoT Applications,” Newsroom.IBM.com, accessed November 14, 2022; “5G and What It Means for Logistics,” Dhl.com, accessed November 14, 2022, “6 Ways 5G Will Accelerate Possibilities in Transportation and Supply Chain Logistics,” T-mobile.com, accessed October 31, 2022; “5G Infrastructure Market to be Worth $95.88 Billion by 2030,” Bloomberg.com, May 9, 2022; Kelly Hill, "Six Operational Challenges for 5G,” RCRWirelessNews.com, May 4, 2022; “Competition Highlights Future Retail Use Cases for 5G XR,” Pymnts.com, April 7, 2022; Tyler Lacoma and Jeremy Kaplan, “What Is Fixed Wireless 5G?” Here’s Everything You Need to Know,” Digitaltrends.com, March 4, 2021.

Multiple Choice Questions 1) 5G is up to _____ times faster than 4G technology.

A) 10 B) 50 C) 100 D) 1000 2) Which of the following is not a major challenge for 5G? A) Insufficient radio frequency spectrum B) Compatibility with existing 4G networks C) Managing 5G networks D) Finding enough useful applications for 5G 3) All the following statements are true except: A) 5G is only used for wireless mobile networks.

B) 5G makes it easier to transmit and manage Big Data.

C) 5G is well-suited for industrial and business applications.

D) 5G technology is useful for meeting the growing consumer demand for data Essay Questions 1. Why is low latency important? How does it help consumers? How does it help businesses?

2. What people, organization and technology issues should you address when deciding whether to implement a 5G network for your company?

CHAPTER 8 Securing Information Systems VIDEO CASE Fastly Internet Outage Exposes Vulnerability of Major Websites; Ransomware Is a Worldwide Problem: Palo Alto Networks Video 1: Fastly Internet Outage Exposes Vulnerability of Major Websites; https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-internet_outage_exposes_vulnerability Length: 4:53 Video 2: Ransomware Is a Worldwide Problem: Palo Alto Networks https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-ransomware_worldwide_problem Length: 4:36

Read the case here:

Fastly is an American cloud computing services firm providing real-time content delivery network (CDN) services. The company was founded in March 2011 and is headquartered in San Francisco, with nearly 1,000 employees.

A content delivery network (CDN) is a geographically distributed group of servers that work together to provide fast delivery of Internet content. The CDN enables the quick transfer of assets needed for loading Internet content including HTML pages, JavaScript files, stylesheets, images, and videos. The majority of web traffic is served through CDNs, including traffic from major sites like Facebook, Netflix, and Amazon. Fastly uses an “edge cloud” platform, placing its infrastructure closer to the location where it’s needed to offer users faster response times.

CDNs route Internet traffic and services through nodes in order to balance the load of traffic, prevent bottlenecks, and promote high availability and faster content delivery.

Requests for content are directed by an algorithm that routes traffic through the most available or highest performing node, allowing traffic to take the fastest network route to the requestor.

Fastly claims its outage on June 8, 2021 was caused by a single customer updating its settings. A May 2021 Fastly software deployment had introduced a bug, which could be triggered by a specific customer configuration under very specific circumstances. When this unnamed customer updated its settings, it triggered the flaw. When Fastly failed, the websites it supported could not retrieve their data and were forced offline.

Fastly’s outage only lasted about an hour, but it brought the Internet to its knees. It affected half of the web, including high profile and highly-trafficked websites, such as Amazon, The New York Times, CNN, Spotify, and Walt Disney World. The outage highlights just how dependent, centralized, and susceptible the infrastructure supporting

the Internet actually is, especially cloud computing providers that the average user doesn’t directly interact with.

With the Internet routed through fewer and fewer channels, when one of those major channels fails, the results are dramatic, disruptive, and incredibly costly. The Fastly outage hasn’t been lost on cybercriminals, who know that one targeted hack can bring down or breach a number of organizations simultaneously. It’s urgent that this significant vulnerability be addressed to another global Internet meltdown caused by criminals instead of faulty code.

Cyberattacks on business networks by criminals pose another major problem, and one of the most prominent types of attacks is the ransomware attack. Ransomware attacks also target smaller organizations, startups, government agencies and individuals.

Ransomware malware infects computers and inhibits or severely restricts users or external software from accessing devices or entire systems until the attacker’s ransom demands have been met. The four key types of ransomware are locker ransomware, crypto ransomware, double extortion ransomware, and Ransomware As a Service (“RaaS”).

Locker ransomware blocks access to computer systems entirely. This variant uses social engineering techniques and compromised credentials to infiltrate systems.

Once inside, threat actors block users from accessing the system until a ransom is paid. A pop-up on the victim's screen may appear saying, "Your computer was used to visit websites with illegal content. To unlock your computer, you must pay a $100 fine," or "Your computer has been infected with a virus. Click here to resolve the issue."

Crypto ransomware is more common and widespread than locker ransomware. It encrypts all or some files on a computer and demands a ransom from the victim in exchange for a decryption key. Some newer variants also infect shared, networked and cloud drives. Crypto ransomware spreads through various means, including malicious emails, websites, and downloads.

Double extortion ransomware encrypts files and exports data to extort blackmail from victims and force them to pay a ransom. Attackers threaten to publish stolen data if their blackmail demands are not met. Even if a victim is able to restore their data from a backup server, the attacker still has power to blackmail the victim. Unfortunately, paying the ransom does not guarantee any protection of the victim’s stolen data. Attackers still have access to the stolen data.

Ransomware as a Service (RaaS) enables attackers to rent access to a ransomware strain from the ransomware author, who is offering it as a pay-for-use service. RaaS creators host their ransomware on dark websites where they cannot be easily detected.

The cost and subscription fees depend on the ransomware’s complexity and features. In addition to collecting ransom payment. RaaS attackers usually pay a portion of ransomware payments they collect to the RaaS creator.

RaaS is gaining in popularity as cyberattackers see RaaS as a less risky and expensive method to launch attacks. Using RaaS, minimally skilled attackers can launch more sophisticated and targeted attacks. In targeted attacks, perpetrators spend more time, resources, and effort to infiltrate a network and steal information. Such attacks often take advantage of well-known security weaknesses to gain access, with attackers spending days and even months burrowed inside a network.

According to the Palo Alto Networks “2022 Unit 42 Ransomware Threat Report”, the average ransomware demand increased 144% over 2021, with an 85% increase in the number of victims who had their names and other details posted publicly on dark web The Veeam 2022 Ransomware Trends Report found that in barely half of the ransomware attacks experienced by the organizations it surveyed, the victims paid the ransom and were able to recover their data. One in four (24%) organizations paid the ransom, but were still not able to recover their data, and one in five (19%) organizations did not pay any ransom but were able to recover their data anyway. In other words, almost as many organizations were able to recover without paying as there were that paid but could not recover.

Here are some of the biggest ransomware payouts: • In March of 2021, insurance giant CNA Financial sustained a ransomware attack causing widespread network disruption and impacting several internal systems, including corporate email. The attackers made use of the Phoenix CryptoLocker malware. CNA Financial was forced to pay $40 million to the ransomware culprits.

•

In May 2021, chemical distribution company Brenntag had 150 GB of data stolen from its North American division. The culprit, DarkSide, initially demanded $7.5 million but accepted $4.4 million in bitcoin after several days of negotiation.

•

On May 6, 2021, Colonial Pipeline, which transports nearly half the fuel for the U.S. East Coast, suffered a serious ransomware attack from the DarkSide cybercriminal group. Colonial had to halt pipeline operations to stop further spread. After initially stating they wouldn’t pay the ransom, Colonial was eventually forced to pay out $4.4 million in bitcoin.

•

On May 30, 2021, a ransomware attack forced JBS Foods, the world’s largest meat packing company, to halt operations at all 13 US processing plants, threatening supply shortages, which posed a financial risk to grocery stores, farms, and other industries. Although JBS had backed up all of its data and was able to restart operations using backup systems it nevertheless agreed to pay $11 million in bitcoin to the Russian-based REvil group to avoid future trouble.

Cybercriminals continually study companies they want to target and the tools they use, learning how to circumvent them. Companies today need to understand they must continually think ahead, upskill, be on the lookout for new threats, and learn how to combat these threats. The Center for Internet Security has identified 18 basic,

commonsensical “Critical Security Controls” for fending off RaaS and other types of ransomware attacks and mitigating damage.

Sources: Palo Alto Networks, “2022 Unit 42 Ransomware Threat Report,” Startpaloaltonetworks.com, accessed March 8, 2023; Isabella Harford and Aswin Krishnan, “4 Types of Ransomware and a Timeline of Attack Examples,” Techtarget.com, accessed December 12, 2022; “What Is a CDN? How Do CDNs Work?” Cloudflare.com, accessed December 10, 2022; Veeam Software, “2022 Ransomware Trends Report,” USA Edition, 2022; Carly Page, “Ransomware Is a Global Problem that Needs a Global Solution,” Techcrunch.com, November 18, 2022; “Neil Miller, “Inside the Fastly Outage: A Firm Reminder on Internet Redundancy,” Datacenterdynamics.com, June 22,2021; Katie Collins, “Fastly Internet Outage: How One Customer Broke Amazon, Reddit, and Half the Web,” Cnet.com, June 9, 2021.

Multiple Choice Questions 1. Which of the following best describes the source of the Fastly outage?

A) Fastly’s networking software was not up to date.

B) Fastly’s network was penetrated by hackers.

C) Fastly’s content delivery network malfunctioned.

D) Fastly’s website was overwhelmed by a DDoS attack.

2. Which of the following statements is not true?

A) Ransomware attacks can be launched by less skilled hackers.

B) RaaS is similar to SaaS but is used for malicious software.

C) Not all organizations that pay ransomware demands are able to recover their data.

D) Ransomware payments are not made with bitcoin.

3. Which of the following statements best describes what happens to organizations suffering ransomware attacks?

A) They don’t need to pay the ransom if they have good backup systems.

B) Ransomware attacks are only aimed at large companies.

C) The percentage of organizations that recovered from a ransomware attack without paying is about the same as that for organizations that paid but could not recover.

D) The effects of ransomware attacks are so devastating that the ransom should always be paid.

Essay Questions 1, Why was the Fastly outage so devastating?

2. Why does ransomware pose such a problem for organizations using the Internet?

CHAPTER 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications VIDEO CASE Software Startup Freshworks Not in a Rush to Raise Capital: CEO Says VIDEO TITLE: Software Startup Freshworks Not in a Rush to Raise Capital: CEO

Says https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15esoftware_startup_freshworks

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Businesses are increasingly engaging with their customers digitally, and Freshworks provides easy-to-use software to help companies obtain a 360-degree view of their customers. Freshworks also helps businesses automate and engage with customers on social platforms like WhatsApp and Facebook as well as traditional channels such as email and live chat.

Now headquartered in San Mateo, California, Freshworks has become the poster child for thriving CRM digital start-ups. In September 2021, Freshwork had a $10.1 billionvaluation and had about 4,300 employees. Its primary product offerings include Freshdesk, a customer experience (CX) product; Freshservice, an IT service management (ITSM) product; and customer relationship management (CRM) solutions, which include Freshsales and Freshmarketer for sales and marketing automation.

Freshworks software is typically used by small to midsize businesses (SMBs), combining a reasonable price with an approachable and intuitive user interface.

Freshworks provides a product that is out of the box, doesn't require an implementation team, and has a simple user interface, which is critical to success for SMB players. It is much easier to install and use than Salesforce. Freshworks users can get started immediately with a very short learning curve and very little training.

Freshworks’s pricing model is geared towards small and middle-sized businesses while Salesforce, for example, is geared towards bigger businesses. Salesforce can be used by small businesses but it has many more features and tools than Freshworks, making it more suitable for large enterprises. Each of Freshworks’s products has several tiers of subscription plans ranging from free to enterprise. The free version has a few core features and can accommodate up to 10 agents, while the enterprise version, costing $79 per agent per month, includes a full set of features, including bots for enterpriselevel support. Salesforce, in contrast, has many different pricing plans for its products and many more products. Pricing for its Sales CRM runs from $25 per user per month for the Essentials version (a stripped-down version for SMBs), with a maximum of 10 users, up to $300 per user per month for its Unlimited version with a very full feature set for an unlimited number of users.

One reason Freshworks is able to prosper while charging lower fees for its software is that its major development costs are in India. The majority of its revenue is generated in North America. As of June 2021, 88 percent of Freshworks employees were based in India while 42% of its revenue came from customers in North America.

Cloud computing has given start-ups access to technologies that were previously available only to large enterprises. Freshworks software was purposely built for the cloud and also for its end users, making it easy to set up and run. Freshworks wanted to provide an unmet need for the millions of small and mid-sized businesses that need business software to work out-of-the-box. This allows end users be productive without much training to learn the software.

In 2022, Freshworks launched Freshworks CRM for e-commerce. This enhancement connects marketing, sales, and support functions to provide a complete view of the customer journey. It also equips digital retailers with the tools to communicate with customers through digital channels such as email, SMS, WhatsApp, and chat.

Freshworks uses AI to help users make data-driven decisions and have more personalized conversations with its customers. Freshworks recently added new autocomplete responses into Freshchat that turns it into a high-speed engagement solution for customer experience. (Freshchat is messaging software built for customer support teams to connect with customers on a website, mobile app, or social tool.) It also added its Freddy AI auto-triage into Freshdesk to enable the system to automatically categorize, prioritize, and route service tickets to the correct customer support agent .This significantly reduces the manual effort required for agents to solve critical issues efficiently.

Even though Salesforce has a larger feature set, Freshworks CRM offers superior customer support, easy migration of customer records into its CRM database, and a comprehensive client account activity feed. The simple interface and uniform customer support integrated into the Freshworks CRM platform lets clients get up and running quickly with less frustration.

Freshworks has personality, a low price point, and very usable tools. However, it not only has to compete with Salesforce, the market leader, but also with many other CRM software companies such as Zendesk and Monday.com. Its revenues are growing, but it is still not profitable. (Freshworks reported 2022 revenue of $498.0 million, but an operating loss of $233.4 million.) The marketplace is extremely competitive, with more than 1,500 CRM system providers in the United States alone in early 2023. Only a handful will survive and gather enough market share to become profitable in the long run. Will Freshworks be one of them?

Sources: “CRM System Providers in the U.S., ibisworld,.com, accessed March 8, 2023; Freshworks.com, accessed March 5, 2023; Jeff White and Cassie Bottorff, “Salesforce Pricing 2023: What You Need to Know,” Forbes Advisor, December 31, 2022; Tar, “The Business of Freshworks,” Invest Karo India, September 30, 2021; Richa Bhatia, “Deep

Dive: How Freshworks Made a Big Leap in the Competitive SaaS CRM Market,” Analytics India Magazine, January 29, 2019.

1. All of the following are true except: A) Freshworks uses bots.

B) Freshworks only uses cloud computing for its CRM system.

C) Salesforce can be used by small businesses.

D) Freshworks saves money on software development costs.

2. Which of the following is not one of Freshwork’s competitive strengths?

A) Low cost B) Minimal need for IT technical support for the system C) User-friendly tools D) Large number of apps 3. Which of the following best describes Freshservice?

A) Freshservice is built as an IT-support tool, whereas Freshdesk is a customer service solution.

B) Freshservice software enables firms to obtain information about all of ways they interact with a customer.

C) Freshservice is an optional add-on to Freshdesk.

D) Freshservice has a single fixed price.

Essay Questions 1. What are the sources of competitive advantage for Freshworks?

2. What people, organization, and technology factors should a business address when deciding whether to use Freshworks>

CHAPTER 10 E-commerce: Digital Markets, Digital Goods VIDEO CASE Shopify is Writing the Future of Commerce Video 1: Shopify Earnings Soar Even as Economies Reopen https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-shopify_earnings_soar Length: 5:35 Video 2: Shopify is Writing the Future of Commerce, Says President https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023laudon_emis15e-shopify_future_of_commerce Length: 4:10

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Shopify is a user-friendly all-in-one e-commerce platform that helps small businesses build an online store and sell online through one streamlined dashboard. Shopify merchants sell on social media sites, seller marketplaces, other blogs and websites and via email, text and chat. Shopify also supports in-person selling with its built-in point-ofsale (POS) for retail stores, pop-up shops, market sales and more.

Shopify provides ready-to-use online store templates that are fully customizable to make each online store look distinctive. A small business can choose from a myriad of store templates that are pre-designed and optimized for maximum sales. Shopify makes it possible for entrepreneurs, independent brands, and small businesses to compete against online retail giants such as Amazon. Consumers are now able to more easily discover new brands, merchants can find what they need for their store, and developers can build their businesses supporting these merchants and entrepreneurs. Shopify has helped democratize e-commerce by making it possible for players of all kinds and sizes to participate online and offline.

Shopify believes e-commerce is wherever the customers are and has developed capabilities for mobile and in-person sales. Just under seven out of every 10 sales on Shopify are made by mobile users. Shopify regularly launches new apps, tools, customizations, effective payment systems, and numerous redesigns.

Shopify’s Shop Pay is an accelerated online checkout and payment service that lets buyers save their email address, credit card, and shipping and billing information and use it to autofill checkout fields on return visits to a website. Customer payment information is encrypted and securely stored. Small businesses can use Shop Pay on their websites to help customers pay faster. However, the product goes beyond the Shopify ecosystem. It is also now available on Facebook, Instagram, and Google.

E-commerce businesses that use Shopify make significantly more sales than those using other platforms. The average Shopify shopper buys 3.8 times from the same store, indicating that stores on this platform are delivering a sticky customer experience.

More shoppers have a propensity to return to the same Shopify store, deepening the relationship with the customer over time.

Consumers still crave a traditional and physical retail experience but with the same expectation for seamless immediacy. In 2022, Shopify launched an offline payments feature called POS Go, allowing in-store merchants to use a piece of mobile equipment with a built-in barcode scanner to do checkouts anywhere in the store. In the first half of 2022, sales made using Shopify’s point-of-sale system grew 60% from 2021. Shopify’s POS Go lets shoppers build a cart in the physical store and then check out and purchase either in the store or back at home. The technology also gives merchants a more comprehensive view of their business. For example, some shoppers enjoy buying in-person and returning online or vice versa. These hybrid interactions are often difficult to track for many merchants. Shopify’s POS Go breaks down the walls between ecommerce and traditional brick and mortar commerce. This is the type of sophisticated experience you would find at an Apple store but is now available on Shopify for small and medium businesses.

Shopify has been building out its own Shopify Fulfillment Network (SFN) to challenge Amazon's fulfillment services and its own marketplace through the Shop app to better compete with the Amazon marketplace. Amazon has not taken Shopify's growth efforts lightly. Fulfillment By Amazon (FBA) and the Amazon marketplace are key elements of Amazon's moat, which it is leveraging against Shopify and other e-commerce website developers to defend its dominance and fend off growing competition. Buy With Prime competes directly with Shopify’s Shop Pay service. Shopify has sought to expand the feature beyond its own platform, striking deals with Facebook and Google to let their customers use Shop Pay to make purchases.

Shopify’s App Store has over 9000 features built by third-party developers to customize stores or provide additional e-commerce functionality. For example, The GLD Shop, which sells high-quality affordable gold jewelry inspired by athletes and celebrities online, uses several Shopify apps to enhance its business processes. It uses Product Reviews

by Shopify to obtain direct feedback from customers on specific products, which helps it make better decisions about what items to add or to drop. It uses ShipStation by Shopify to make shipping operations more streamlined and effortless. Shopify also has several versions, with pricing starting at $29 per month and a Shopify+ version with more features and integrations for larger businesses.

Will Shopify be able to “write” the future of e-commerce, as its CEO believes? Small and independent businesses are definitely benefiting from this ready-made selling platform and Shopify now has over 2 million daily active users. But like small businesses everywhere, Shopify stores have a high failure rate (some sources say as high as 95 percent) due to factors such as low traffic footprint, unclear objectives, poor production

quality, increased competition, and difficulty managing orders and inventory, with small and independent businesses especially vulnerable.

Sources: Shopify.com, accessed March 9, 2023; Sajini Annie John, “10 Major Reasons Why 95 Percent of Shopify Stores Fail,” iDentixweb.com, February 27, 2023; Tina Orem and Lisa Anthony, “Shop Pay: What It Is, Benefits, and How It Works in 2023,” Nerdwallet.com, January 3, 2023; “Krista Fabregas and Kelly Main, “What Is Shopify and How Does It Work (2023 Guide),” Forbes Advisor, December 30, 2022.

Multiple Choice Questions 1. All of the following are true for Shopify except: A) Shopify can be used by large businesses.

B) Shopify payment services are only available to merchants on Shopify.

C) Shopify is stickier than other e-commerce selling platforms.

D) Shopify can be further customized using apps.

2. Which of the following is not one of the reasons small businesses on Shopify have s a high failure rate: A) The technology for setting up a Shopify store is not easy to master.

B) Small businesses are often unclear about their business objectives.

C) It is difficult for new businesses to manage orders and inventory.

D) Small businesses are less likely to have good production quality controls.

3). Which of the following Shopify services competes with Amazon’s Buy with Prime service?

A) Product Reviews B) ShipStation C) POS Go D) Shop Pay Essay Questions 1. What are the business benefits of Shopify? What are the social benefits?

2. List and describe three e-commerce services Shopify offers and how they make Shopify more competitive.

CHAPTER 11 Improving Decision Making and Managing Artificial Intelligence VIDEO CASE Predictive Tech Can Save Companies $3-$4 Billion a Year: Tom Siebel VIDEO TITLE: Predictive Tech Can Save Companies $3-$4 Billion a Year: Tom

Siebel https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15epredictive_tech

Length: 5:35

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C3.ai is a software company that provides a range of machine learning-driven solutions that are tailored to specific industries and aimed at larger companies. C3.ai’s pre-built applications for a variety of industries include predictive maintenance, fraud detection, supply network optimization, energy management, and anti-money laundering. The biggest users of C3.ai include some of the largest oil and gas companies. This sector represents 35% of C3.ai’s customer base.

Predictive maintenance is a practice that is implemented to help manage maintenance plans of a company’s assets, such as offshore oil platforms or factories, by predicting their equipment failures ahead of time with data-driven techniques. Large quantities of data are collected over a certain period of time to monitor the state of equipment. The goal is to find a correlation and pattern that might be helpful in predicting and hopefully preventing failures. Much manufacturing equipment is used without a planned maintenance process. The resulting unexpected downtime due to parts malfunctioning because there was no information available prior to a part failing can lead to serious operational inefficiencies and huge costs.

This is especially true of the oil and gas sector, which is deeply affected by unplanned downtime, when equipment cannot operate because of a malfunction. A single unproductive day on a platform can cost a liquefied natural gas (LNG) facility as much as $25 million, and an average midsized LNG facility experiences about five down days a year. That’s $125 million to $150 million potentially lost. Minimizing downtime is critical and predictive maintenance systems can help.

Sensors in oil fields and in oil and natural gas pipelines produce a vast amount of data that can be analyzed for predictive maintenance. McKinsey & Company estimates that a typical offshore production platform can have more than 40,000 data tags. Energy companies have been using oil field sensors to monitor real-time operations status, and now they are starting to use IoT data to predict equipment failure and address issues before they become costly problems. Physical inspection of equipment in remote locations is typically an expensive process. This lack of visibility can lead to equipment failure and costly unscheduled maintenance and non-productive time, as well as oil spills, leakages, or accidents resulting from failing equipment.

Predictive maintenance tools evaluate the condition of operational equipment and predict its maintenance requirements in order to achieve optimum performance and prevent malfunction. The insights gained from predictive maintenance programs enable decision makers to schedule maintenance activities without disrupting routine production operations and to determine which repairs are the highest priority.

In 2019, Baker Hughes, one of the world’s largest oil field service companies, invested in C3.ai. Baker Hughes provides products and services for oil well drilling, formation evaluation, completion, production, and reservoir consulting. Both companies partnered to build a suite of AI applications specifically for the oil and gas industry, including BHC3 Reliability. BHC3 Reliability provides comprehensive monitoring across critical and noncritical assets and enables proactive, AI-based predictive maintenance. BHC3 Reliability identifies anomalous behavior across systems and assets, provides prioritized alerts, recommends prescriptive actions, and enables collaboration through an integrated workflow.

One of Baker Hughes’s key goals has been early failure detection by analyzing massive amounts of data to predict potential equipment faults alerting operators when they need immediate attention. This saves money but also is a revolutionary tool in helping to prevent environmental catastrophes that have become associated with the industry.

Baker Hughes’ C3.ai suite is making 175 million predictions per day across 24 Fortune 500 oil and gas organizations.

Baker Hughes also partnered with British oil and gas company BP to equip 650 of BP’s thousands of oil wells with GE sensors linked to GE’s Predix cloud platform. Predix provided services for developing and running IoT applications that collect data from industrial sensors and analyze the data in the cloud, providing real-time information to schedule maintenance checks, improve machine efficiency, and reduce downtime. Each BP well was outfitted with 20 to 30 sensors to measure pressure and temperature, transmitting 500,000 data points to the Predix cloud every 15 seconds. BP hoped to use the data to predict well flows and the useful life of each well and ultimately to obtain an enterprise-wide view of its oil fields’ performance.

The BP partnership with Baker Hughes produced an application called Plant Operations Advisor (POA), which was launched in 2017. POA prevents unplanned downtime by helping engineering teams respond quickly to problems as they occur in real time. BP first used POA to help manage the performance of four operation production platforms in the Gulf of Mexico and then deployed this tool at other BP facilities around the world.

GE identified pipeline risk management as a major challenge for the oil and gas industry. There are 2 million miles of transmission pipe throughout the globe, moving liquid oil or gas from its point of extraction to refining, processing, or market. About 55 percent of transmission pipeline in the United States was installed before 1970. Pipeline spills are infrequent, but when they occur, they create serious economic and environmental damage as well as negative publicity for pipeline operators and energy

companies. Pipeline operators are always anxious to know where their next rupture will be, but they had lacked the data to measure pipeline fitness.

GE developed a pipeline-management software suite for accessing, managing, and integrating critical data for the safe management of pipelines, including a risk assessment tool to monitor aging infrastructure. GE’s risk-assessment solution combines internal and external factors (such as flooding) to provide an accurate, up-tothe minute visual representation of where risk exists in a pipeline. This risk assessment tool enables pipeline operators to make real-time decisions about where field service crews should be deployed along the pipeline.

Shell plc uses a predictive maintenance program powered by C3 ai technology to monitor and maintain more than 10,000 pieces of equipment in upstream, manufacturing, and integrated gas assets across its global asset base. Monitored equipment includes control valves, pumps, compressors, and other critical components.

To monitor all that equipment, 3 million sensors gather 20 billion rows of data every week, while nearly 11,000 machine-learning models allow the system to make more than 15 million predictions each day.

In the past, Shell relied on physics-based models to make these predictions. The company would typically replace parts after a predefined period. Parts were often replaced while they were still in good condition or replaced when something failed.

Production had to be shut down temporarily for repairs.

To benefit the entire energy industry, Shell has commercialized its AI predictive maintenance applications built with C3.ai software. The solutions are available to the general market through the Open Energy AI initiative (OAI), an open ecosystem with the goal of advancing the use and adoption of AI in the energy sector, of which Shell, C3 AI, Baker Hughes, and Microsoft are founding members.

Sources: c3.ai, accessed February 18, 2023; Bp.com, accessed February 17, 2023; Omer Mahmood, “What Does C3.ai Do?”, Towardsdatascience.com, January 20, 2022; Anthony DiPizio “How C3.ai Is Transforming Big Oil,” Fool.com, July 8, 2021; “Predictive Maintenance Gains Greater Significance in Oil and Gas Industry,” Oil & Gas Engineering, May 24, 2019.

Multiple Choice Questions 1. The oil and gas industry is a good candidate for predictive maintenance operations because: A) its equipment is often in many different faraway locations.

B) unplanned downtime due to an equipment malfunction seriously disrupts production.

C) the industry is accustomed to using Big Data.

D) oil and gas companies can afford to invest in predictive maintenance technology.

2. Which of the following is true?

A) Shell’s predictive maintenance program can make up to 10 million predictions per day.

B) Baker Hughes’ C3.ai suite is making 175 million predictions per day across 24 Fortune 500 oil and gas organizations.

C) Predictive maintenance is capable of producing up to $2.5 billion in annual savings across the energy industry value chain.

D) About 55 percent of transmission pipeline in the United States was installed before 1970.

3. Which of the following is not true: A) Predictive maintenance helps oil and gas companies avoid environmental disasters that are triggered by equipment failure.

B) Shell has made its AI predictive maintenance applications built with C3.ai software available to the general market.

C) Plant Operations Advisor prevents unplanned downtime by helping engineering teams respond quickly to problems as they occur in real time.

D) C3.ai’s artificial intelligence applications are limited to the oil and gas industry.

Essay Questions 1. What roles do Big Data, the Internet of Things (IoT), and AI play in predictive maintenance?

2. How does predictive maintenance provide savings across an energy company’s value chain?

CHAPTER 12 Building Systems and Managing Projects VIDEO CASE Software Design Is “Really on a Tear,” Figma CEO Says VIDEO TITLE: Software Design Is “Really on a Tear,” Figma CEO Says https://mediaplayer.pearsoncmg.com/assets/_video.true/HE_ProfCareers-IT-2023-laudon_emis15esoftware_design

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As Figma CEO Dylan Field notes in this video, design is on a tear. At the time Figma was started in 2012, IBM employed one designer for every 72 engineers. By 2019, IBM had one designer for every eight engineers, and the ratio went to 1:3 for mobile applications. The entire tech industry has switched to a design-heavy product development approach where product presentation and user experience receive just as much, if not more attention, than the product itself. Figma’s business model takes advantage of this shift.

Figma is a collaborative cloud-based application for user interface and user experience design. It enables multiple teams to collaborate in real time on creating, testing, and deploying user interfaces or product designs that are intuitive, easy to use, and visually appealing. The Figma mobile app for Android and IOS allows viewing and interacting with Figma prototypes in real-time on mobile and tablet devices. Figma is available for macOS, Windows, and Linux.

Figma was created in 2012 by Brown University computer science students Dylan Field and Evan Wallace, who wanted to unleash people’s creativity by providing free, simple, creative tools in a browser. Figma became a popular tool for creating prototypes and user interfaces. It is easy to use, fast to work with, has many features, and is built for collaboration. It is easy for non-designers to collaborate using the tool.

It offers a basic interface for users to create and edit graphics, and it has a wide range of features and tools for more experienced designers. It's not just for designers, and can be used for prototyping web layouts, product animations, or e-commerce site design. Figma was publicly released in 2015, and this design company’s growth in an extremely competitive industry has been phenomenal. Figma generated $81.1 million in revenue with 50,000 customers in 2022. On September 15 of that year, Adobe announced plans to acquire Figma for $20 billion.

Figma is used by companies of all sizes, from startups to multinational corporations.

Some of the world’s biggest companies in the world use Figma, including Google, Facebook, Uber, and Netflix, to create beautiful designs and user interfaces. Figma is also popular with small businesses and freelancers. Its low price and easy-to-use interface appeal to those who want to create professional-looking designs without spending a lot of money. Figma is very well-suited for creating logos, websites, and even illustrations.

UK-headquartered BT Group (formerly British Telecom) is one of the world’s largest communications services providers, with customers in 180 countries. The company operates in a highly competitive industry where consumers have more power than ever to choose the brands and products they prefer and to switch service providers. BT must compete not only on performance and features, but also on the quality of its user experience. BT teams are constantly working together to deliver better products for customers.

BT had over 180 product designers, a testimony to how seriously BT took design. The tools and processes the designers used were not always well-coordinated. Design teams were hampered by workflow issues, such as too many different tools, inefficient processes, and communication hurdles. Team members spent more time moving content and design files between tools and managing multiple feedback streams than on the design work itself. Inefficient processes and tools made it hard to collaborate and design cohesively across teams and multiple product lines.

BT redesigned how its teams build and ship products, creating a more efficient workflow. It reorganized its product, engineering, and design teams into a product squad model, where smaller, more flexible teams are responsible for end-to-end delivery of their product. The product squads included product owners, engineers, content designers, and others, as well as designers.

To further support a collaborative approach. BT selected Figma as its enterprise-wide design platform. The company first implemented a pilot version for one product squad and then rolled it out to the rest of the company. The product squad found that Figma made it easier to collaborate in real-time. Design hand-offs became easier, and squad members stopped having to move design files from tool to tool. They were able to design, prototype, and present design work all from one place. Product owners and engineers had more visibility into design work, allowing them to provide input earlier in the design process. Using a simple link, BT’s executive stakeholders can now view and comment on in-progress design work from any device.

Designers, product owners, content designers, and engineers all use Figma to design together. This has enabled product squads to ship new products and features faster and feel more confident in their decisions. There is more design consistency. Replacing multiple design tools with Figma reduced design costs by 50 percent. With stakeholders having more visibility into the design process, design is now more often at the forefront of business decisions and investments.

Spotify, headquartered in Stockholm, Sweden, and one of the world's largest music streaming service providers, uses Figma to measure and evaluate designer productivity without compromising the creative process. Measuring productivity for a creative job is tricky. Much more is involved than just counting the number of screens, components, or solutions a designer creates, or the time it takes to produce each one.

Working with Elsewhen, a UK-based digital product consultancy, Spotify created a framework called the Design Productivity Blueprint that would help design teams understand current workflow challenges and locate key opportunities. The framework

is an open-source Figma file containing a collection of workshops and interview templates that any team can use. Spotify and Elsewhen expect this solution will help design teams spend more of their time designing and less time on the tasks that slow them down.

Spotify uses a product squad model optimized for autonomy, which can result in designers working in isolation. Designers can be spread out among cross-functional squads as well as multiple product areas and numerous offices around the world. The company also used Figma to reorganize its work to improve collaboration among designers. Allowing multiple people to use the same file doesn’t automatically lead to better collaboration. Increasing visibility can be detrimental, as it introduces more people, more structure, more rules, and more thinking to simple tasks. Spotify wanted to make sure its files are organized in a way that is clearly visible to everyone and that its more open workflow did not slow work down.

Sources: Figma.com, accessed March 3, 2022; How 5 Simple Words Pushed Figma to a $10 B+ Valuation,” Foundationinc.co, accessed December 4, 2022; ; “Adobe Is Buying Figma Because Building Collaborative Experiences Is Hard,” Ably.com, September 16, 2022; “Figma’s Business Model: How Figma Makes Money,” Whatisthebusinessmodelof.com, August 28, 2021; “Alex Conrad, “How Figma Became Design’s Hottest Startup, Valued at $10 Billion,’ Forbes, August 10, 2021.

Multiple Choice Questions 1. Which of the following is not a use for Figma?

A) Prototyping B) User interface design C) Measuring designer productivity D) Testing program code 2. Figma focuses on: A) database design.

B) user experience design.

C) project management.

D) debugging software.

3. Which of the following is not true?

A) Figma is only appropriate for medium and large companies.

B) Figma is an appropriate tool for end users.

C) Enabling people to use the same file can increase productivity.

D) Figma can be used to design workflow changes.

Essay Questions 1. Why has Figma become such a popular software tool?

2. How did using Figma change the way BT Group worked?