Program Portfolio Project – Course CIS 3304C: ?.? Throughout this course, you have addressed different aspects of a management information system. ? Using the research you have gathered

Information Systems for Business and Beyond

David T. Bourgeois, Ph.D.

Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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Information Systems for Business and Beyond © 2014 David T. Bourgeois, is licensed under a Creative Commons Attribution (CC BY) license made possible by funding from The Saylor Foundation's Open Textbook Challenge in order to be incorporated into Saylor.org's collection of open courses available at http://www.saylor.org. Full license terms may be viewed at: http://creativecommons.org/licenses/by/3.0/legalcode

Contents

1Introduction

Part 1: What Is an Information System? Chapter 1: What Is an Information System?

5David T. Bourgeois

Chapter 2: Hardware 14David T. Bourgeois

Chapter 3: Software 26David T. Bourgeois

Chapter 4: Data and Databases 39David T. Bourgeois

Chapter 5: Networking and Communication 52David T. Bourgeois

Chapter 6: Information Systems Security 64David T. Bourgeois

Part 2: Information Systems for Strategic Advantage Chapter 7: Does IT Matter?

76David T. Bourgeois

Chapter 8: Business Processes 85David T. Bourgeois

Chapter 9: The People in Information Systems 94David T. Bourgeois

Chapter 10: Information Systems Development 104David T. Bourgeois

Part 3: Information Systems Beyond the Organization Chapter 11: Globalization and the Digital Divide

120David T. Bourgeois

Chapter 12: The Ethical and Legal Implications of Information Systems 129David T. Bourgeois

Chapter 13: Future Trends in Information Systems 144David T. Bourgeois

150Answers to Study Questions 162Bibliography

iv Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

Introduction

Welcome to Information Systems for Business and Beyond. In this book, you will be introduced to the concept of information systems, their use in business, and the larger impact they are having on our world.

Audience

This book is written as an introductory text, meant for those with little or no experience with computers or information systems. While sometimes the descriptions can get a little bit technical, every effort has been made to convey the information essential to understanding a topic while not getting bogged down in detailed terminology or esoteric discussions.

Chapter Outline

The text is organized around thirteen chapters divided into three major parts, as follows:

• Part 1: What Is an Information System? Chapter 1: What Is an Information System? – This chapter provides an overview of information systems, including the history of how we got where we are today. Chapter 2: Hardware – We discuss information systems hardware and how it works. You will look at different computer parts and learn how they interact. Chapter 3: Software – Without software, hardware is useless. In this chapter, we discuss software and the role it plays in an organization. Chapter 4: Data and Databases – This chapter explores how organizations use information systems to turn data into information that can then be used for competitive advantage. Special attention is paid to the role of databases. Chapter 5: Networking and Communication – Today’s computers are expected to also be communication devices. In this chapter we review the history of networking, how the Internet works, and the use of networks in organizations today. Chapter 6: Information Systems Security – We discuss the information security triad of confidentiality, integrity, and availability. We will review different security technologies, and the chapter concludes with a primer on personal information security.

• Part 2: Information Systems for Strategic Advantage Chapter 7: Does IT Matter? – This chapter examines the impact that information systems have on an organization. Can IT give a company a competitive advantage? We will

1Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

discuss seminal works by Brynjolfsson, Carr, and Porter as they relate to IT and competitive advantage. Chapter 8: Business Processes – Business processes are the essence of what a business does, and information systems play an important role in making them work. This chapter will discuss business process management, business process reengineering, and ERP systems. Chapter 9: The People in Information Systems – This chapter will provide an overview of the different types of people involved in information systems. This includes people who create information systems, those who operate and administer information systems, those who manage information systems, and those who use information systems. Chapter 10: Information Systems Development – How are information systems created? This chapter will review the concept of programming, look at different methods of software development, review website and mobile application development, discuss end- user computing, and look at the “build vs. buy” decision that many companies face.

• Part 3: Information Systems beyond the Organization Chapter 11: Globalization and the Digital Divide – The rapid rise of the Internet has made it easier than ever to do business worldwide. This chapter will look at the impact that the Internet is having on the globalization of business and the issues that firms must face because of it. It will also cover the concept of the digital divide and some of the steps being taken to alleviate it. Chapter 12: The Ethical and Legal Implications of Information Systems – The rapid changes in information and communication technology in the past few decades have brought a broad array of new capabilities and powers to governments, organizations, and individuals alike. This chapter will discuss the effects that these new capabilities have had and the legal and regulatory changes that have been put in place in response. Chapter 13: Future Trends in Information Systems – This final chapter will present an overview of some of the new technologies that are on the horizon. From wearable technology to 3-D printing, this chapter will provide a look forward to what the next few years will bring.

For the Student

Each chapter in this text begins with a list of the relevant learning objectives and ends with a chapter summary. Following the summary is a list of study questions that highlight key topics in the chapter. In order to get the best learning experience, you would be wise to begin by reading both the learning objectives and the summary and then reviewing the questions at the end of the chapter.

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For the Instructor

Learning objectives can be found at the beginning of each chapter. Of course, all chapters are recommended for use in an introductory information systems course. However, for courses on a shorter calendar or courses using additional textbooks, a review of the learning objectives will help determine which chapters can be omitted.

At the end of each chapter, there is a set of study questions and exercises (except for chapter 1, which only offers study questions). The study questions can be assigned to help focus students’ reading on the learning objectives. The exercises are meant to be a more in-depth, experiential way for students to learn chapter topics. It is recommended that you review any exercise before assigning it, adding any detail needed (such as length, due date) to complete the assignment.

Introduction 3

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

Part 1: What Is an Information System?

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

Chapter 1: What Is an Information System?

David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• define what an information system is by identifying its major components; • describe the basic history of information systems; and • describe the basic argument behind the article “Does IT Matter?” by Nicholas Carr.

Introduction

If you are reading this, you are most likely taking a course in information systems, but do you even know what the course is going to cover? When you tell your friends or your family that you are taking a course in information systems, can you explain what it is about? For the past several years, I have taught an Introduction to Information Systems course. The first day of class I ask my students to tell me what they think an information system is. I generally get answers such as “computers,” “databases,” or “Excel.” These are good answers, but definitely incomplete ones. The study of information systems goes far beyond understanding some technologies. Let’s begin our study by defining information systems.

Defining Information Systems

Almost all programs in business require students to take a course in something called information systems. But what exactly does that term mean? Let’s take a look at some of the more popular definitions, first from Wikipedia and then from a couple of textbooks:

• “Information systems (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create, and distribute data.”1

• “Information systems are combinations of hardware, software, and telecommunications networks that people build and use to collect, create, and distribute useful data, typically in organizational settings.”2

• “Information systems are interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and viualization in an organization.”3

1. Wikipedia entry on "Information Systems," as displayed on August 19, 2012. Wikipedia: The Free Encyclopedia. San Francisco: Wikimedia Foundation. http://en.wikipedia.org/wiki/Information_systems_(discipline).

2. Excerpted from Information Systems Today – Managing in the Digital World, fourth edition. Prentice-Hall, 2010. 3. Excerpted from Management Information Systems, twelfth edition, Prentice-Hall, 2012.

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As you can see, these definitions focus on two different ways of describing information systems: the components that make up an information system and the role that those components play in an organization. Let’s take a look at each of these.

The Components of Information Systems

As I stated earlier, I spend the first day of my information systems class discussing exactly what the term means. Many students understand that an information system has something to do with databases or spreadsheets. Others mention computers and e-commerce. And they are all right, at least in part: information systems are made up of different components that work together to provide value to an organization.

The first way I describe information systems to students is to tell them that they are made up of five components: hardware, software, data, people, and process. The first three, fitting under the category technology, are generally what most students think of when asked to define information systems. But the last two, people and process, are really what separate the idea of information systems from more technical fields, such as computer science. In order to fully understand information systems, students must understand how all of these components work together to bring value to an organization.

Technology

Technology can be thought of as the application of scientific knowledge for practical purposes. From the invention of the wheel to the harnessing of electricity for artificial lighting, technology is a part of our lives in so many ways that we tend to take it for granted. As discussed before, the first three components of information systems – hardware, software, and data – all fall under the category of technology. Each of these will get its own chapter and a much lengthier discussion, but we will take a moment here to introduce them so we can get a full understanding of what an information system is.

Hardware

Information systems hardware is the part of an information system you can touch – the physical components of the technology. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware. We will spend some time going over these components and how they all work together in chapter 2.

Software

Software is a set of instructions that tells the hardware what to do. Software is not tangible – it cannot be touched. When programmers create software programs, what they are really doing is simply typing out lists of instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone. Examples of application software are Microsoft Excel and Angry Birds. Software will be explored more thoroughly in chapter 3.

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Data

The third component is data. You can think of data as a collection of facts. For example, your street address, the city you live in, and your phone number are all pieces of data. Like software, data is also intangible. By themselves, pieces of data are not really very useful. But aggregated, indexed, and organized together into a database, data can become a powerful tool for businesses. In fact, all of the definitions presented at the beginning of this chapter focused on how information systems manage data. Organizations collect all kinds of data and use it to make decisions. These decisions can then be analyzed as to their effectiveness and the organization can be improved. Chapter 4 will focus on data and databases, and their uses in organizations.

Networking Communication: A Fourth Technology Piece?

Besides the components of hardware, software, and data, which have long been considered the core technology of information systems, it has been suggested that one other component should be added: communication. An information system can exist without the ability to communicate – the first personal computers were stand-alone machines that did not access the Internet. However, in today’s hyper-connected world, it is an extremely rare computer that does not connect to another device or to a network. Technically, the networking communication component is made up of hardware and software, but it is such a core feature of today’s information systems that it has become its own category. We will be covering networking in chapter 5.

People

When thinking about information systems, it is easy to get focused on the technology components and forget that we must look beyond these tools to fully understand how they integrate into an organization. A focus on the people involved in information systems is the next step. From the front-line help-desk workers, to systems analysts, to programmers, all the way up to the chief information officer (CIO), the people involved with information systems are an essential element that must not be overlooked. The people component will be covered in chapter 9.

Process

The last component of information systems is process. A process is a series of steps undertaken to achieve a desired outcome or goal. Information systems are becoming more and more integrated with organizational processes, bringing more productivity and better control to those processes. But simply automating activities using technology is not enough – businesses looking to effectively utilize information systems do more. Using technology to manage and improve processes, both within a company and externally with suppliers and customers, is the ultimate goal. Technology buzzwords such as “business process reengineering,” “business process management,” and “enterprise resource planning” all have to do with the continued improvement of these business procedures and the integration of technology with them. Businesses hoping to gain an advantage over their competitors are highly focused on this component of information systems. We will discuss processes in chapter 8.

Ch.1:What Is an Information System? 7

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IBM 704 Mainframe (Copyright: Lawrence Livermore National Laboratory)

Registered trademark of International Business Machines

The Role of Information Systems

Now that we have explored the different components of information systems, we need to turn our attention to the role that information systems play in an organization. So far we have looked at what the components of an information system are, but what do these components actually do for an organization? From our definitions above, we see that these components collect, store, organize, and distribute data throughout the organization. In fact, we might say that one of the roles of information systems is to take data and turn it into information, and then transform that into organizational knowledge. As technology has developed, this role has evolved into the backbone of the organization. To get a full appreciation of the role information systems play, we will review how they have changed over the years.

The Mainframe Era

From the late 1950s through the 1960s, computers were seen as a way to more efficiently do calculations. These first business computers were room-sized monsters, with several refrigerator-sized machines linked together. The primary work of these devices was to organize and store large volumes of information that were tedious to manage by hand. Only large businesses, universities, and government agencies could afford them, and they took a crew of specialized personnel and specialized facilities to maintain. These devices served dozens to hundreds of users at a time through a process called time-sharing. Typical functions included scientific calculations and

accounting, under the broader umbrella of “data processing.”

In the late 1960s, the Manufacturing Resources Planning (MRP) systems were introduced. This software, running on a mainframe computer, gave companies the ability to manage the manufacturing process, making it more efficient. From tracking inventory to creating bills of materials to scheduling production, the MRP systems (and later the MRP II systems) gave more businesses a reason to want to integrate computing into their processes. IBM became the dominant mainframe company. Nicknamed “Big Blue,” the company became synonymous with business computing. Continued improvement in software and the availability of cheaper hardware eventually brought mainframe computers (and their little sibling, the minicomputer) into most large businesses.

The PC Revolution

In 1975, the first microcomputer was announced on the cover of Popular Mechanics: the Altair 8800. Its immediate popularity sparked the imagination of entrepreneurs everywhere, and there were quickly dozens of companies making these “personal computers.” Though at first just a niche product for computer hobbyists, improvements in usability and the availability of practical software led to growing sales. The most prominent of these early personal computer makers was a little company known as Apple Computer, headed by Steve Jobs and Steve Wozniak, with the hugely successful “Apple II.” Not wanting to be left out of the revolution, in 1981 IBM (teaming with a little company called Microsoft for their operating-

8 Information Systems for Business and Beyond

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Registered trademark of SAP

system software) hurriedly released their own version of the personal computer, simply called the “PC.” Businesses, who had used IBM mainframes for years to run their businesses, finally had the permission they needed to bring personal computers into their companies, and the IBM PC took off. The IBM PC was named Time magazine’s “Man of the Year” for 1982.

Because of the IBM PC’s open architecture, it was easy for other companies to copy, or “clone” it. During the 1980s, many new computer companies sprang up, offering less expensive versions of the PC. This drove prices down and spurred innovation. Microsoft developed its Windows operating system and made the PC even easier to use. Common uses for the PC during this period included word processing, spreadsheets, and databases. These early PCs were not connected to any sort of network; for the most part they stood alone as islands of innovation within the larger organization.

Client-Server

In the mid-1980s, businesses began to see the need to connect their computers together as a way to collaborate and share resources. This networking architecture was referred to as “client-server” because users would log in to the local area network (LAN) from their PC (the “client”) by connecting to a powerful computer called a “server,” which would then grant them rights to different resources on the network (such as shared file areas and a printer). Software companies began developing applications that allowed multiple users to access the same data at the same time. This evolved into software applications for communicating, with the first real popular use of electronic mail appearing at this time.

This networking and data sharing all stayed within the confines of each business, for the most part. While there was sharing of electronic data between companies, this was a very specialized function. Computers were now seen as tools to collaborate internally, within an organization. In fact, these networks of computers were becoming so powerful that they were replacing many of the functions previously performed by the larger mainframe computers at a fraction of the cost.

It was during this era that the first Enterprise Resource Planning (ERP) systems were developed and run on the client-server architecture. An ERP system is a software application with a centralized database that can be used to run a company’s entire business. With separate modules for accounting, finance, inventory, human resources, and many, many more, ERP systems, with Germany’s SAP leading the way, represented the state of the art in information systems integration. We will discuss ERP systems as part of the chapter on process (chapter 9).

The World Wide Web and E-Commerce

First invented in 1969, the Internet was confined to use by universities, government agencies, and researchers for many years. Its rather arcane commands and user applications made it unsuitable for mainstream use in business. One exception to this was the ability to expand electronic mail outside the confines of a single organization. While the first e-mail messages on the Internet were sent in the early 1970s, companies who wanted to expand their LAN-based e-mail started hooking up to the Internet in the 1980s. Companies began connecting their internal networks to the Internet in order to allow communication between their employees and employees at other companies. It was with these early Internet connections that the computer truly began to evolve from a computational device to a communications device.

In 1989, Tim Berners-Lee developed a simpler way for researchers to share information over the network at CERN laboratories, a concept he called the World Wide Web.4 This invention became the launching point of the growth of the Internet as a way for businesses to share information about themselves.

Ch.1:What Is an Information System? 9

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As web browsers and Internet connections became the norm, companies rushed to grab domain names and create websites.

In 1991, the National Science Foundation, which governed how the Internet was used, lifted restrictions on its commercial use. The year 1994 saw the establishment of both eBay and Amazon.com, two true pioneers in the use of the new digital marketplace. A mad rush of investment in Internet-based businesses led to the dot-com boom through the late 1990s, and then the dot-com bust in 2000. While much can be learned from the speculation and crazy economic theories espoused during that bubble, one important outcome for businesses was that thousands of miles of Internet connections were laid around the world during that time. The world became truly “wired” heading into the new millenium, ushering in the era of globalization, which we will discuss in chapter 11.

As it became more expected for companies to be connected to the Internet, the digital world also became a more dangerous place. Computer viruses and worms, once slowly propagated through the sharing of computer disks, could now grow with tremendous speed via the Internet. Software written for a disconnected world found it very difficult to defend against these sorts of threats. A whole new industry of computer and Internet security arose. We will study information security in chapter 6.

Web 2.0

As the world recovered from the dot-com bust, the use of technology in business continued to evolve at a frantic pace. Websites became interactive; instead of just visiting a site to find out about a business and purchase its products, customers wanted to be able to customize their experience and interact with the business. This new type of interactive website, where you did not have to know how to create a web page or do any programming in order to put information online, became known as web 2.0. Web 2.0 is exemplified by blogging, social networking, and interactive comments being available on many websites. This new web-2.0 world, in which online interaction became expected, had a big impact on many businesses and even whole industries. Some industries, such as bookstores, found themselves relegated to a niche status. Others, such as video rental chains and travel agencies, simply began going out of business as they were replaced by online technologies

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