CHAPTER 13: UNDERSTANDING INFORMATION SYSTEMS AND COMMUNICATION TECHNOLOGY

INFORMATION MANAGEMENT
Information Manager: the manager responsible for the activities needed to generate, analyze, and disseminate information that a company needs to make a good decision Information Management: an internal operation that arranges the firms information resources to support business performance and outcomes Data: raw facts and figures Information: a meaningful, useful, interpretation of data

Information Systems (IS):

Is an organized method of transforming data into information that can be used for decision making IS managers must first determine what information is needed, gather the relevant data, convert that data into information, and finally see that the information goes to those people who need it The information that is supplied varies according to such factors as the functional areas in which people work and their management levels Managers use IS to solve technical problems, analyze management control and planning problems (i.e. applying quality control standards to production, comparing costs against budgeted amounts, etc) SKU = stock-keeping units

Key Users of Information Systems:

Four different groups top, middle, first-line managers, and knowledge workers have different information needs Top managers need information to carry out long-range planning for the entire organization, to assess the business environment and to improve overall company performance Middle managers need summaries and analyses for setting intermediate and long-range goals for the departments or projects under their supervision First-line managers need information to oversee the day-to-day details of their department or projects Knowledge workers need special information for conducting technical projects

Types of Information Systems:

The IS is several systems that share information while serving different levels of the organization, different departments, and different operations Several of the most well-known and highly developed IS are discussed below

1. Transaction Processing Systems (TPS) Are applications of information processing for basic day-to-day business transactions Typically, the TPS for first-level (operational) activities is well defined with predetermined data requirements and follows the same steps to complete all transactions in the system 2. Systems for Knowledge Workers and Office Applications Support the activities of both knowledge workers and employees in clerical positions IS knowledge workers include both system analysts (who design systems that meet users requirements) and system programmers (who write the software instructions that tell computers what to do) People who run the companys computer equipment are called system operations personnel, who ensure that the right programs are run in the right sequence and monitor equipment to ensure that it is operating properly Support systems like word processing, document imaging, desktop publishing, computer-aided design, and simulation modelling have increased the productivity of both office and knowledge workers Computer-Aided Design (CAD): computer analysis and graphics programs that are used to create new products (i.e. 3D graphics) Products ranging from cell phones to auto parts are created using CAD because it creates faster designs at lower cost than manual modelling methods Computer-Aided Manufacturing (CAM): computer systems used to design and control all the equipment and tools for producing goods Computer Operational Control: refers to any system for managing the day-to-day production activities for either goods or service production 3. Managing Information Systems (MIS) Support an organizations managers by providing reports, schedules, plans, and budgets Each managers information activities vary according to his or her functional area and management level Mid-level managers focus mostly on internal activities and information while higher-level managers are engaged in external activities Middle managers largest IS user group need information to plan upcoming activities and to know the current status of jobs and projects being carried out in their departments 4. Decision Support Systems (DSS) Is an interactive system that locates and presents information needed to support the decisionmaking process, received by middle- and top-level managers DSSs are devoted to specific problems, others serve more general purposes, allowing managers to analyze different types of problems

5. Executive Support Systems (ESS) is a quick-reference, easy-access application of information systems specially designed for upperlevel managers an ESS uses a wide range of internal information and external sources 6. Artificial Intelligence (AI) Is the development of computer systems to imitate human thought and behaviour In other words, systems that perform physical tasks, use though processes, and learn Some AI systems possess sensory capabilities, such as lasers that see, hear, and feel A special form of AI is the expert system a form of artificial intelligence in which a program draws on the rules an expert in a given field has laid out to arrive at a solution for a problem

INFORMATION TECHNOLOGY
No matter where we go, we cant escape the impact of information technology (IT) the various devices for creating, storing, exchanging, and using information in diverse modes, including visual images, voice, multimedia, and business data IT developments also had a major impact on how individual managers do their jobs

Information Technology and Organizational Processes:

The rapid growth of new information technologies has changed organizational processes and operations in many different ways, some of which are discussed below

1. Better Service Through Coordination of Remote Deliveries With access to the internet, company activities may be geographically scattered but remain coordinated through a networked system that provides better service for customers 2. Leaner, More Efficient Organizations Networks and technology are also leading to leaner companies with fewer employees and simpler structures Because networks enable firms to maintain information linkages between employees and customers, more work and customer satisfaction can be accomplished with fewer people 3. Increased Collaboration Collaboration among internal units with outside firms is greater when firms use collaboration software and IT communications devices Companies are learning that complex problems can be solved better though IT-support collaboration, either with formal teams or through spontaneous interaction among people and departments

4. Improved Global Exchange global reach of IT is enabling business collaboration on a scale that was unheard of a few years ago 5. Greater Independence of a Company and Workplace Many employees no longer work at the office or the factory, and not all of a companys operations are performed at one location 6. Improved Management Processes IT has also changed the nature of the management process At one time, upper-level managers didnt concern themselves with all of the detailed information filtering upward from the workplace because it was expensive and slow in coming, but now instantaneous information is accessible and useful to all levels of management 7. Improved Flexibility for Customization IT has also created new manufacturing capabilities that enable businesses to offer customers greater variety and faster delivery cycles Mass-Customization: producing large volumes of products or services, but giving customers the choice of features and options they want 8. Providing New Business Opportunities IT is creating entirely new businesses where none existed before For big businesses, this means developing new products, offering new services, and reaching new clients Small businesses have ebusiness opportunities 9. Improving the World and Our Lives Hospitals and medical equipment companies think that IT can make the world a better place E.g. vitamin-sized cameras that patients swallow provide doctors with computer images of the inside of the human body, helping them to make better diagnoses for such ailments as ulcers and cancer

IT Building Blocks:
The tools that make IT work are things like internet, email, and other communications technologies, networks, hardware devices, and software

1. The Internet and Other Communication Technologies Internet: the gigantic network of networks that serves millions of computers; offers information on business, science, and government, and provides communication flows among more than 170,000 separate networks around the world World Wide Web: a standardized code for accessing information and transmitting data over the internet, which provides the common language that allows information sharing on the internet

For many businesses, the internet is replacing the telephone, fax machine, and standard mail as the primary communication tool Internet has spawned a number of other business communication technologies, including intranets, extranets, electronic conferencing, and VSAT satellite communications

a) Intranets Is a companys private network that is accessible only to employees via entry through electronic firewalls b) Extranets Is a network that allows outsiders limited access to a firms internal information system Most common application allows buyers to enter a system to see which products are available for sale and delivery Industrial suppliers are often linked into customers information networks so that they can see planned production schedules and prepare supplies for customers upcoming operations c) Electronic Conferencing Allows groups of people to communicate simultaneously from different locations via telephone, video, or mail group software One form, data conferencing, allows people in remote locations to work simultaneously on one document Video conferencing allows participants to see one another on video screens while the conference is in progress Electronic conferencing is good because it eliminates travel and saves money d) VSAT (Very Small Aperture Terminal) Satellite Communications Is a transmitter-receiver (transceiver) that sits outside doors with a direct line of sight to a satellite. The hub a ground station computer at the companys headquarters sends signals to and receives signals from the satellite, exchanging voice, video, and data transmissions A company that operates its own VSAT system has total control over its communications without dependence on other companies A firm might use VSAT to exchange sales and inventory information, advertising messages, and visual presentations between headquarters and store managers at remote sites 2. Networks: System Architecture Computer Network: a group of two or more computers linked together by some form of cable (fibreoptic, coaxial, or twisted wire) or by wireless technology to share data or resources The more common type of network used in business is a client-server network a network composed of both clients (users) and servers that allows the clients to access various services without costly and unnecessary duplication Servers = computers that provide the services shared by users

a) Wide Area Networks (WANs) Are computers that are linked over long distances province-wide or even nationwide through telephone lines, microwave signals, or satellite communications Firms can lease lines from communication vendors or maintain private WANs b) Local Area Networks (LANs) Are computers linked in a smaller area, such as all of a firms computers within a single building c) Wireless Networks Use airborne electronic signals to link network computers and devices They can reach across long distances or exist within a single building or small area Are called wireless wide area networks (WWANs) A firewall = provides privacy protection

d) Wi-Fi (Wireless Fidelity) Is an access point in a specific location, such as a coffee shop, hotel, or airport terminal, that provides wireless internet connections for people on the go Wireless Local Area Network (Wireless LAN or WLAN): the individual network that provides Wi-Fi Benefit of Wi-Fi is that youre not tethered to a wire for accessing the internet But Wi-Fi also has limitations, including a short range of distance 3. Hardware and Software Any computer or system needs hardware the physical components of a computer, such as keyboards, monitor, system units, and printers The other essential in any computer system is software programs that tell the computer how to function Software includes system software (like Microsoft Windows) which tells the computers hardware how to interact with the software, as well as application software (like word-processing programs, i.e. Microsoft Word) which meets the needs of specific users a) Computer Graphics Is an example of a software program Are programs that convert numeric and character data into pictorial information like charts and graphs These allow managers to see relationship more easily and generate clearer and more persuasive reports and presentations b) Groupware Is software that connects group members for email distribution, electronic meetings, message and storing, appointments and schedules, and group writing Makes collaboration between a firms internal units and outside firms possible

c) Electronic Spreadsheets Arrange date across and down the page in rows and columns Payroll records, sales projections, and a host of other financial reports can be prepared in this manner Spreadsheets are good planning tools because they let managers see how making a change in one item affects related items

IT RISKS AND THREATS

Hackers:
Are cyber-criminals who gain unauthorized access to a computer or network, either to steal information, money, or property or to tamper with data One common reason hackers break into a computer network is to launch denial of service (DOS) attacks DOS attacks flood networks or websites with bogus requests for information and resources, thereby shutting down the networks or websites and making it impossible for legitimate users to access them Such attacks cost companies millions in lost productive time and revenue Wireless mooching is also a growing problem once hackers get inside an unsecured wireless network, they use it to commit identity theft and to steal credit card numbers, among other activities

Software Piracy:
is the unauthorized use of software such as a word processing and spreadsheets CAAST = Canadian Alliance Against Software Theft

Identity Theft:
Is the unauthorized stealing of personal information (such as social insurance numbers and addresses) to get loans, credit cards, or other monetary benefits by impersonating the victim Phishing or pharming = emailing a deceptive, real-looking imitation of a popular website (i.e. AOL or your local bank) as bait, to masses of recipients, tricking them into giving up personal information

Intellectual Property Theft:

Nearly every company faces the dilemma of protecting product plans, new inventions, and industrial processes Intellectual Property: a product of the mind something produced by the intellect, with great expenditure of human effort that has commercial value Its ownership may be protected by patent, copyright, trademark, and other means

Computer Viruses, Worms, and Trojan Horses:

Another IT risk facing businesses is rogue programmers who disrupt IT operations by contaminating and destroying software, hardware, or data files Viruses, worms, and Trojan horses are three kinds of malicious programs that once installed, can shut down any computer system A computer virus exists in a file that attaches itself to a program and migrates from computer to computer as a shares program or as an email attachment, activated by opening the file Worms can spread from computer to computer without needing to have the file opened Unlike viruses and worms, a Trojan horse does not replicate itself; it masquerades as a harmless, legitimate software product or date file and once installed, begins the damage

Spyware:
Is software masquerading as a friendly file available as a giveaway or shared among individual users on their PCs that monitors the host computers activities

Spam:
Is junk email sent to a mailing list or a newsgroup

IT PROTECTION MEASURES
Security measures against intrusion and viruses are a constant challenge Businesses guard themselves against intrusion theft and viruses by using firewalls, special software, and encryption

Firewalls:
Are security systems with special software or hardware devices designed to keep computers safe from hackers It contains two components for filtering each incoming message: The companys incoming security policy access rules that identify each type of message that the company doesnt want to have pass through the firewall A router a type of available routes or paths, a traffic switch that determines which routes or paths on the network to send each message through after it is tested against the security policy Only those messages that meet the conditions of the users security policy are routed through the firewall and permitted to flow between the two networks

Preventing Identity Theft:

One possibility is infocard which would act like a credit card and would allow websites to verify a customers identity without keeping personal information on the customer

Also, people can visit the Identity Theft Resource Center (www.identitytheftcenter.org)

Preventing Viruses: Anti-Virus Software

Installation of anti-virus software products protects systems by searching incoming email and data files for signatures of known viruses and for virus-like characteristics Contaminated files are discarded or placed in quarantine for safekeeping

Encryption Software:
Unprotected email can be intercepted, diverted to unintended computers, and upon opening, revealing contents to intruders Protective software is available to fight against these intrusions Encryption System: the use of a secret numerical code to scramble characters in a message, so that the message is not understandable during transmission

Avoiding Spam and Spyware:

Businesses often install anti-spyware and spam filtering software on their systems But they must be continually updated to keep pace with new spyware techniques Spam is abated by many internet service providers (ISPs) commercial firms that maintain a permanent connection to the internet and sell temporary connections to subscribers that ban the spamming of ISP members