PART 1 An Overvlew 1
1 An Introduction to Information Systems 2
Merck-Medco:A Pharmacy for the Future 3
Information Concepts 5
Data Versus Information 5
The Characteristics of Valuable Information 6
The Value of Information 8
System and Modeling Concepts 8
System Components and Concepts 9
System Performance and Standards 10
System Variables and Parameters 11
Modeling a System 11
What is an Information System? 13
Input,Processing,Output,Feedback 14
Manual and Computerized Information Systems 15
Computer-Based Information Systems 16
Business Information Systems 18
Electronic Commerce 19
Ethical and Societal Issues:DoubleClick Tempers Marketing with Customer Privacy 20
Transaction Processing Systems,Workflow Systems,and ERP 21
Management Information and Decision Support Systems 23
IS Principles in Action:Home Depot Invests Big in Information Systems 26
Special-Purpose Business Information Systems:Artificial Intelligence,Expert Systems,and Virtual Reality 26
Systems Development 28
Systems Investigation and Analysis 28
Systems Design,Implementation,and Maintenance and Review 29
Why Learn About Information Systems? 29
Information Systems in the Functional Areas of Business 30
Computer and Information Systems Literacy 30
Information Systems in Industry 31
Case 1 States Vie for#1 Technology Rating 37
Case 2 Technology in Abundance at the 2002 Winter Olympics 38
Case 3 Expert Systems Simplify Life for Automotive Manufacturers 39
2 Information Systems in Organizations 42
Citibank:Seeking Competitive Advantage with a Major Information System Upgrade 43
Organizations and Information Systems 44
Organizational Structure 47
Organizational Culture and Change 50
Reengineering 51
Continuous Improvement 53
Technology Diffusion,Infusion,and Acceptance 54
Total Quality Management 54
Outsourcing and Downsizing 55
IS Principles in Action：Ford Resorts to Downsizing and In-sourcing 56
Competitive Advantage 57
Factors That Lead Firms to Seek Competitive Advantage 57
Strategic Planning for Competitive Advantage 58
Performance-Based Information Systems 61
Productivity 62
Return on Investment and the Value of Information Systems 62
Justifying Information Systems 64
Careers in Information Systems 64
Roles,Functions,and Careers in the Information Systems Department 65
Ethical and Societal Issues:Xylo,Inc.,Creates Work/Life Solutions 66
Typical IS Titles and Functions 69
Other IS Careers 71
Case 1 GE Medical Systems Builds Nation s First All-Digital Hospital 76
Case 3 Pressplay:Defining the Internet Music Industry 77
Case 2 Delta and Tellabs Seek Higher Return on Investment 77
Part 1 World Views Case On-Line Presence Gives Mortgage Broker Global Reach 80
PART 2 Information Technology Concepts 83
3 Hardware:Input,Processing,and Output Devices 84
Celera Genomics:Supercomputers Are Key to Future Profitability 85
Computer Systems:Integrating the Power of Technology 86
Hardware Components 87
Hardware Components in Action 88
Processing and Memory Devices:Power,Speed,and Capacity 89
Processing Characteristics and Functions 89
Memory Characteristics and Functions 93
Multiprocessing 96
Secondary Storage 97
Access Methods 97
Devices 98
IS Principles in Action:Las Vegas Casinos Cover Their Bets with Highly Reliable Computers 101
Input and Output Devices:The Gateway to Computer Systems 104
Characteristics and Functionality 104
Input Devices 105
Output Devices 109
Special-Purpose Input and Output Devices 111
Computer System Types,Standards,Selecting,and Upgrading 112
Computer System Types 112
Ethical and Societal Issues:European Weather Forecasters Rely on Blue Storm 118
Standards 119
Selecting and Upgrading Computer Systems 119
Case 1 Australia Experiments with Electronic Voting 127
Case 2 Information Systems Support Future Soldiers 128
Case 3 Saving Data Center Space with Smaller Servers 128
4 Software:Systems and Application Software 130
Flextronics:Global Deployment of Software Improves Key Business Process 131
An Overview of Software 132
Systems Software 132
Application Software 132
Supporting Individual,Group,and Organizational Goals 133
Systems Software 134
Operating Systems 134
Personal Computer Operating Systems 138
Workgroup Operating Systems 141
Enterprise Operating Systems 142
Consumer Appliance Operating Systems 144
Utility Programs 145
Application Software 146
Types and Functions of Application Software 147
Personal Application Software 149
Workgroup Application Software 155
IS Principles in Action:Honda Uses Collaboration Software to Speed Product Development 156
Enterprise Application Software 157
Programming Languages 159
The Evolution of Programming Languages 159
Object-Oriented Programming Languages 161
Selecting a Programming Language 163
Software Issues and Trends 163
Software Bugs 163
Open Source Software 165
Opensourcing 165
Antitrust Issues for Software 165
Software Licensing 166
Global Software Support 167
Software Upgrades 167
Ethical and Societal Issues:Oracle Tries to Recover from Pricing Miscue 168
Case 1 Infosys Uses Offshore Outsourcing Model to Provide Contract Software 174
Case 2 Crystal Flash Opts for Application Service Provider 175
Case 3 Microsoft Takes Action to Eliminate Software Bugs 175
5 Organizing Data and Information 178
Valio:Building Brand Loyalty with Better Decision-Making Data 179
Data Management 180
The Hierarchy of Data 180
Data Entities,Attributes,and Keys 181
The Traditional Approach Versus the Database Approach 182
Data Modeling and Database Models 186
Data Modeling 186
Database Models 187
Database Management Systems(DBMSs) 192
Providing a User View 193
Creating and Modifying the Database 193
Storing and Retrieving Data 195
Manipulating Data and Generating Reports 197
Database Administrator 198
Popular Database Management Systems 199
Selecting a Database Management System 199
Database Applications 202
Linking the Company Database to the Internet 202
Data Warehouses,Data Marts,and Data Mining 203
Business Intelligence 206
Ethical and Societal Issues:Database Technology Used to Improve Airport Security 208
Distributed Databases 209
On-Line Analytical Processing(OLAP) 210
IS Principles in Action:Sears Competes Using Data Warehouse and OLAP Tools 212
Open Database Connectivity(ODBC) 212
Object-Relational Database Management Systems 213
Case 1 VNU,International Media and Information Company 221
Case 2 Wells Fargo Bank Uses Predictive Analysis to Improve Profits 221
Case 3 J.Crew Turns to Data Warehousing to Increase On-line Sales 222
6 Telecommunications and Networks 224
DHL:Implementing a Global Network 225
An Overview of Communications Systems 226
Communications 226
Telecommunications 227
Networks 228
Channel Bandwidth and Information-Carrying Capacity 229
Basic Communications Channel Characteristics 229
Telecommunications 229
IS Principles in Action:Penske Uses Satellite Communications to Meet Customer Needs 233
Connectors 235
Devices 235
Carriers and Services 236
Ethical and Societal Issues:Telemarketers-Please Do Not Call! 240
Networks and Distributed Processing 242
Basic Processing Strategies 242
Network Concepts and Considerations 243
Network Types 245
Terminal-to-Host,File Server,and Client/Server Systems 247
Communications Software and Protocols 250
Bridges,Routers,Gateways,and Switches 255
Electronic Software and Document Distribution 257
Voice Mail 257
Linking Personal Computers to Mainframes and Networks 257
Telecommunications and Applications 257
Telecommuting 258
Videoconferencing 258
Electronic Data Interchange 259
Public Network Services 260
Distance Learning 260
Specialized Systems and Services 261
Case 1 Starbucks Deploys Wireless LANs 268
Case 2 Bear,Stearns＆Co.Builds Redundant Telecommunications Network 269
Case 3 Networks Support Collaborative Product Design 269
7 The Internet,Intranets,and Extranets 272
Lands End:Attracting Customers with High-Tech Internet Services 273
Use and Functioning of the Internet 275
How the Internet Works 277
Accessing the Internet 278
Internet Service Providers 279
Ethical and Societal Issues:The Digital Divide 280
Internet services 282
E-Mail and Instant Messaging 282
Telnet and FTP 284
Usenet and Newsgroups 284
Chat Rooms 286
Internet Phone and Videoconferencing Services 286
Content Streaming 287
Shopping on the Web 287
Web Auctions 288
Music,Radio,and Video on the Internet 288
Internet Sites in Three Dimensions 289
Office on the Web 289
Free Software and Services 290
Other Internet Services 290
The World Wide Web 291
Web Browsers 293
Search Engines 294
Java 295
Push Technology 297
Business Uses of the Web 297
Developing Web Content 298
Intranets and Extranets 299
IS Principles in Action:Web Services Take the Web to a New level 300
Management Issues 302
Service and Speed Issues 302
Net Issues 302
Privacy,Fraud,Security,and Unauthorized Internet Sites 303
Case 1 Google Uses New Approach to Web Advertising 311
Case 2 The Web in Three Dimensions 312
Case 3 Hummingbird Provides Leading Enterprise Information Portal(EIP)Solutions 313
Part 2 World Views Case From Railway Station to Whaleway Station 315
PART 3 Business Information Systems 317
8 Electronic Commerce 318
Tesco:Grocer Implements Successful E-Commerce Business Model 319
An Introduction to Electronic Commerce 320
Multistage Model for E-Commerce 321
Ethical and Societal Issues:PayPal Service Runs into Start-Up Problems 324
E-Commerce Challenges 325
The E-Commerce Supply Chain 326
Business to Business(B2B) 328
Business to Consumer(B2C) 328
Global E-Commerce 329
Consumer to Consumer(C2C) 329
E-Commerce Applications 330
Retail and Wholesale 330
Manufacturing 331
Marketing 333
Investment and Finance 334
Auctions 336
Technology Infrastructure 336
Hardware 337
Web Server Software 337
E-Commerce Software 339
E-Commerce Transaction Processing 340
Network and Packet Switching 340
Secure Sockets Layer 341
Electronic Payment Systems 341
Electronic Cash 342
Electronic Wallets 342
Smart,Credit,Charge,and Debit Cards 343
Threats to E-Commerce 344
E-commerce Incidents 344
Theft of Intellectual Property 344
IS Principles in Action:Visa Implements Smart Card Technology 345
Fraud 346
Invasion of Consumer Privacy 347
Strategies for Successful E-Commerce 349
Developing an Effective Web Presence 349
Putting Up a Web Site 350
Building Traffic to Your Web Site 351
Maintaining and Improving Your Web Site 351
Case 2 Lowe s Fights Tooth and Nail to Be No.1 358
Case 1 DaimlerChrysler Joins Covisint Exchange 358
Case 3 Port of Seattle Turns to E-Commerce 359
9 Transaction Processing and Enterprise Resource Planning Systems 362
Wal-Mart and Kmart:Transaction Processing Systems Distinguish Major Retailers 363
An Overview of Transaction Processing Systems 364
Traditional Transaction Processing Methods and Objectives 365
IS Principles in Action:Financial Industry Considers Move to Trade Plus One Day(T+1) 368
Transaction Processing Activities 371
Control and Management Issues 374
Traditional Transaction Processing Applications 376
Order Processing Systems 376
Purchasing Systems 384
Accounting Systems 388
International Issues 392
An Overview of Enterprise Resource Planning 395
Enterprise Resource Planning 395
Advantages and Disadvantages of ERP 396
Ethical and Societal Issues:Nike Stumbles Implementing ERP 399
Example of an ERP System 399
Case 1 MetLife Implements CRM 407
Case 2 Verizon Restores Telecommunications Service in Wake of 9/11 Disaster 408
Case 3 Upgrade Required for Sabre Transaction Processing Systems 408
10 Information and Decision Support Systems 410
Shearman＆Sterling:Using Intormation Systems to Harness the Knowledge of the Firm 411
Decision Making and Problem Solving 412
Decision Making as a Component of Problem Solving 412
Programmed Versus Nonprogrammed Decisions 413
Optimization,Satisficing,and Heuristic Approaches 414
Inputs to a Management Information System 415
An Overview of Management Information Systems 415
Management Information Systems in Perspective 415
Outputs of a Management Information System 416
Characteristics of a Management Information System 419
Ethical and Societal Issues:The Energy-Conscious MIS 420
Functional Aspects of the MIS 421
Financial Management Information Systems 421
Manufacturing Management Information Systems 424
Marketing Management Information Systems 429
Human Resource Management Information Systems 432
Other Management Information Systems 435
An Overview of Decision Support Systems 436
IS Principles in Action:Geographic Information System Saves Trees 437
Characteristics of a Decision Support System 438
Capabilities of a Decision Support System 439
A Comparison of DSS and MIS 440
Components of a Decision Support System 441
The Database 442
The Model Base 443
The Dialogue Manager 443
Group Decision Support Systems 443
Characteristics of a GDSS That Enhance Decision Making 444
GDSS Software 446
GDSS Alternatives 446
Executive Support Systems 448
Executive Support Systems in Perspective 448
Capabilities of Executive Support Systems 449
Case 1 Marketing MIS Gives Entertainment UK the Upper Hand 456
Case 2 CampusShip Provides a Centralized Shipping System for Distributed Organizations 457
Case 3 Storebrand Uses WebService to Automate Data Entry 458
11 Specialized Business Information Svstems:Artificial Intelligence,Expert Systems,Virtual Reality,and Other Specialized Systems 460
Artificial Life,Inc.:Intelligent Bots:The New Citizens of Cyberspace 461
An Overview of Artificial Intelligence 462
Artificial Intelligence in Perspective 462
The Nature of Intelligence 462
The Difference between Natural and Artificial Intelligence 464
The Major Branches of Artificial Intelligence 464
Ethical and Societal Issues Cyc:The System That Is an Expert at Common Sense 466
An overview of Expert Systems 470
Characteristics of an Expert System 470
Capabilities of Expert Systems 472
When to Use Expert Systems 473
Components of Expert Systems 473
Expert Systems Development 477
Applications of Expert Systems and Artificial Intelligence 481
IS Principles in Action:Beating Wall Street with an Intelligent Supercomputer 482
Integrating Expert Systems 484
Virtual Reality 484
Interface Devices 484
Forms of Virtual Reality 485
Useful Applications 486
Other Specialized Systems 488
Case 1 PixAround.com Brings 3-D Worlds to Your Desktop 494
Case 2 Transco Uses Gensym s Expert System to Control Natural Gas Flow 495
Case 3 IBM s eLiza:Computer Systems That Care for Themselves 496
Part 3 World Views Cases A Happy Valentine s Day in Virtual China 498
Staff Rostering System at the Hospital Authority of Hong Kong 500
PART 4 Systems Development 503
12 Systems Investigation and Analysis 504
Comcast Corporation:The Challenges of Providing Broadband Internet Access 505
An Overview of Systems Development 506
Participants in Systems Development 506
Initiating Systems Development 508
Information Systems Planning and Aligning Corporate and IS Goals 509
IS Principles in Action:British Telecommunications Adopts On-Line Account Management and Billing System 511
Establishing Objectives for Systems Development 513
Systems Development and E-Commerce 514
Trends in Systems Development and Enterprise Resource Planning 515
Systems Development Life Cycles 516
The Traditional Systems Development Life Cycle 517
Prototyping 518
Rapid Application Development,Agile Development,and Joint Application Development 519
Outsourcing 522
The End-User Systems Development Life Cycle 522
Factors Affecting Systems Development Success 524
Degree of Change 524
Ethical and Societal Issues:Information Systems Running Amok? 525
Quality and Standards 526
The Capability Maturity Model(CMM) 527
Use of Project Management Tools 528
Use of Computer-Aided Software Engineering(CASE)Tools 530
Object-Oriented Systems Development 531
Systems Investigation 532
Initiating Systems Investigation 532
Participants in Systems Investigation 533
Feasibility Analysis 533
The Systems Investigation Report 535
Object-Oriented Systems Investigation 535
Systems Analysis 536
General Considerations 536
Participants in Systems Analysis 537
Data Collection 537
Data Analysis 539
Requirements Analysis 541
Object-Oriented Systems Analysis 543
The Systems Analysis Report 544
Case 1 General Motors Reduces Dealer Costs with Procurement System 552
Case 2 Staples Provides Convenience with In-Store Kiosks 553
Case 3 Wesco Distribution Adds Links to the Supply Chain 554
13 Systems Design,Implementation,Maintenance,and Review 556
FedEx Corp.:Simplitying International Shipping 557
Logical and Physical Design 559
Systems Design 559
Special System Design Considerations 562
Object-Oriented Design 564
Emergency Alternate Procedures and Disaster Recovery 565
Systems Controls 569
The Importance of Vendor Support 570
Generating Systems Design Alternatives 570
Evaluating and Selecting a System Design 571
Evaluation Techniques 573
Freezing Design Specifications 575
The Contract 576
The Design Report 576
Systems Implementation 577
Acquiring Hardware from an Information Systems Vendor 577
Externally Developed Software 579
Acquiring Software:Make or Buy? 579
Ethical and Societal Issues:Open Source vs.Proprietary Software 580
In-House-Developed Software 581
Tools and Techniques for Software Development 584
Acquiring Database and Telecommunications Systems 587
User Preparation 587
IS Personnel:Hiring and Training 588
Site Preparation 589
Data Preparation 589
Installation 589
Testing 589
Start-up 590
User Acceptance 591
Types of Maintenance 592
Reasons for Maintenance 592
Systems Maintenance 592
IS Principles in Action:Supply Chain Management Software Delivers-Despite Resistance 593
The Request for Maintenance Form 593
Performing Maintenance 594
The Financial Implications of Maintenance 594
The Relationship Between Maintenance and Design 595
Systems Review 596
Types of Review Procedures 596
Factors to Consider During Systems Review 597
System Performance Measurement 597
Case 1 Lenox Revamps Web Site for Improved Customer Satisfaction 605
Case 2 Corning Display Technologies Sheds New Light on the Systems Deveiopment Process 606
Case 3 State Street Corp.Speeds Financial Trading with State-of-the-Art Financial Transaction Management System 606
Part 4 World Views Cases Event-Driven Review of the University of Nairobi s Student Management Information System 609
Song Book Music 610
PART 5 Information Systems In Business and Soclety 613
14 Security,Privacy,and Ethical Issues in Information Systems and the Internet 614
U.S.Government:Recommending Strong Medicine to Combat Cybercrime 615
Computer Waste and Mistakes 616
Computer Waste 616
Computer-Related Mistakes 617
Preventing Computer-Related Waste and Mistakes 617
Computer Crime 620
The Computer as a Tool to Commit Crime 622
The Computer as the Object of Crime 624
IS Principles in Action:Building Alliances to Combat Software Piracy 629
Preventing Computer-Related Crime 631
Privacy 637
Privacy Issues 638
Ethical and Societal Issues:Personal Data Sold to Law Enforcement Agencies 639
Fairness in Information Use 641
Federal Privacy Laws and Regulations 641
State Privacy Laws and Regulations 644
Corporate Privacy Policies 644
Individual Efforts to Protect Privacy 644
The Work Environment 645
Health Concerns 645
Avoiding Health and Environmental Problems 647
Ethical Issues in Information Systems 648
Case 1 The Role of the CERT/CC 655
Case 2 Australia Struggles to Implement Internet Laws 656
Case 3 E-Mail Monitoring-A Necessary Evil? 656
Glossary 659
Subject Index 673
Name and Company Index 691