Turban 9e SM Ch02
Turban 9e SM Ch02
Turban 9e SM Ch02
IT at Work 2.1
When ISs Fail, the Problem May Be the IT Architecture
Questions
1. What problems did executives have with the EIS?
The executives found that half of the data generated from their EIS was irrelevant to
corporate-level decision making concerning their Strategic Business Units (SBU) and that
some of relevant timely data, crucial for decision making, was not available in the
manner in which they needed it.
2. What were the two reasons for those EIS problems?
The application architecture was not designed for customized report generation. In the
EIS system, the SBUs were reporting sales and revenue at different timeframes. In
addition, the user interfaces were too complicated to get to the required information; so
much so, that the analysts had to first extract KPI-related data and then work on them for
producing the information required by the executives.
3. How did the CIO improve the EIS?
The CIO put in place a dedicated team to redesign and redevelop a new system that had
an entirely new business-driven architecture (replacing financial-reporting driven
architecture). The new system used standardized data formatting across the company,
thus eliminating data inconsistencies.
4. What are the benefits of the new IT architecture?
The new system provided reliable KPI reports on inventory turns, cycle times and profit
margins of all SBUs. It was easy to modify reports that eliminated ad hoc analyses. There
was a reduction in resources required for maintaining the system. EIS use by executives
improved since they got reliable data from the system.
IT at Work 2.2
Gartners View of Enterprise Architecture
No questions.
IT at Work 2.3
Feedback and Incentives Improve Performance at 1-800-Contacts
Questions
1. What were the information and reporting problems the company faced?
The company had grown so much that the ISs could not provide the call center managers
and business analysts with quick and easy access to real-time (up-to-date) sales data. The
response time for access to data was several days, which caused an information
bottleneck that created knowledge blind spots regarding sales and inventory levels.
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IT at Work 2.4
Cloud Pro Leverages iPads touch: Benefits Start-Ups
Questions
1. Consider this statement: Cloud computing is about the flexible delivery of services at the
point of need. Explain how Cloud Pro offers flexible delivery of network management (the
service). Explain how it offers that service to network admins at the point of need (e.g.,
while on vacation or away from the office).
The Cloud Pro app allows network admins to use their mobile devices anytime anywhere
to: turn on server backups; create a new server from stored backups; manage backup
scheduling, and reboot, rename, resize and delete servers.
2. Discuss one benefit and one disadvantage of Cloud Pro for network admins.
There are several benefits such as allowing a network administrator to not be tethered to a
server room, making it possible for fewer people to manage more servers thus reducing
costs, and providing accessibility to resources that would not be affordable to smaller
businesses.
However, these benefits can also be seen as disadvantages, as a network administrator
might always be on call no matter where they are located; having fewer people manage
more servers puts more responsibility and stress on a few people and reduces the number
of IT jobs; and making applications available to more businesses increases the level of
competitive rivalry.
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3. Search and view a video demo of Rackspaces Cloud Pro for the iPad. Does the app have
amazing features, as Mike Mayo described?
The app has the features described and more when you read the spec page listed at:
http://www.rackspace.com/cloud/mobile/
IT at Work 2.5
Liberty Wines Improves Business Continuity with Virtualization
1. What business risks had Liberty Wines faced?
As their business grew, their IT facility could not handle the increased data volume. The
systems were slow and required greater maintenance efforts. This meant loss of employee
productivity, thus affecting its core business processes such as order processing and
inventory management
2. How does Liberty Wines IT infrastructure impact its competitive advantage?
The insufficient IT infrastructure negatively impacted their competitive advantage. The
lack of IT capacity could result in the loss of customers since their orders may not be
processed on time.
3. How did server virtualization benefit Liberty Wines and the environment?
The server virtualization reduced the number of physical servers from ten to four and the
applications ran faster through better utilization which, in turn, resulted in better customer
service and inventory management. The reduction in physical servers resulted in savings
in hardware replacement and reduction in power consumption.
REVIEW QUESTIONS
2.1 Information Management in the 2010s
1. Explain information management.
These days, the variety of information an organization needs to manage goes beyond the
structured types like numbers and texts and includes semi-structured and unstructured
contents like video and sound. The digital library includes contents from social media,
texts, photos, videos, music, documents; address books, events, and downloads.
Maintainingupdating, expanding, portingan organizations digital librarys contents
on a variety of platforms is termed here as Information Management. Specifically,
Information Management deals with how information is organized and stored; and the
speed and ease with which it is captured, analyzed and reported.
2. Why are information deficiencies still a problem in organizations?
The type of information stored, the technology for information management, and the load
on information handling for compliance of legal and security requirements are all
changing. The investments in IT changes with competing demands on an organizations
budget that cannot cope with the unforeseeable ways in which technology changes. The
other specific information deficiencies include: data silos (information trapped in
departments databases), data lost or bypassed during transit, user-fierce formats (poorly
designed user interfaces requiring extra effort from users for analysis), use of non-
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standardized data formats, and relying on fast changing data (that are expensive to keep
pace).
3. What is a data silo?
A data silo is one of the data deficiencies that can be addressed. It refers to the situation
where the databases belonging to different functional units in an organization are not
shared between the functional units because of a lack of integration. The lack of sharing
and exchange of data between functional units raises issues regarding reliability and
currency of data. Data silos exist when there is no overall IT architecture to guide IS
investments, data coordination and communication.
4. Explain KPIs and give an example.
Organizations have specific goals. To establish the achievement of these goals,
organizations identify measurable Key Performance Indicators (KPIs). KPIs help reduce
the complex nature of organizational performance to a small number of understandable
measures for specific purposes (for example, sales/marketing). It is easy to understand
achievement, or lack of achievement, in sales goals by comparing actual versus
forecasted or sales over current year versus sales over previous year.
5. What three factors are driving collaboration and information sharing?
Forrester (forrester.com) identified three factors driving the trend toward collaboration
and information sharing technology. These are:
1. Global, mobile workforce (a growing number of employees telecommute)
2. Mobility-driven consumerization (cloud-based collaboration solutions are on the rise)
3. Principle of any (there is growing need to connect anybody anytime anywhere and on
any device)
6. What are the benefits of information management?
The following four benefits have been identified:
1. Improves decision quality (due to timely response using reliable data)
2. Improves prediction (through pattern seeking, matching and discovery)
3. Reduces risk (due to improved compliance with regulation resulting from better
information quality and governance), and
4. Reduces cost (due to savings in time and effort through integration and optimization
of repositories)
2.2 IT Architecture
1. Explain the relationship between complexity and planning. Give an example.
Organizations use complex ISs that need constant maintenance and enhancements.
Complex ISs require appropriate long-range planning for realizing the benefits of IT
investments. Instead of getting into a reactionary mode, organizations should devise a
meaningful long-range plan for future IT investments.
2. Explain IT architecture.
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TPSs are critical systems. Transactions that do not get captured can result in lost sales,
dissatisfied customers, and many other types of data errors. For example, if accounting
issues a check as payment for an invoice (bill), and that transaction is not captured, the
amount of cash on the financial statements is overstated and the invoice may be paid a
second time. Or if services are provided, but not recorded, the company loses that service
revenue.
3. When is batch processing used?
Batch processing is used when there are several transactions that can be accumulated and
processed at one time. These transactions are not as time sensitive as those that need to be
processed in real time. The transactions may be collected for a day, a shift, or over a
period of time and then processed. Batch processing is often used to process payroll in a
weekly or bi-weekly manner.
4. When is real-time processing needed?
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models that enable sensitivity analysis, what if analysis, goal seeking, and risk
analysis
data from internal databases, external sources, and added by the decision maker
who may have insights relevant to the decision situation.
Having models is what distinguishes DSS from MIS. Some models are developed by end
users through an interactive and iterative process. Decision makers can manipulate
models to conduct experiments and sensitivity, what-if, and goal-seeking analyses.
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What-if analysis refers to changing assumptions or data in the model to see the impacts
of the changes on the outcome. For example, if sales forecasts are based on a 5 percent
increase in customer demand, a what if analysis would replace the 5 percent with higher
and/or lower demand estimates to determine what would happen to sales if the demands
were different. With goal seeking, the decision maker has a specific outcome in mind and
needs to figure out how that outcome could be achieved and whether its feasible to
achieve that desired outcome. A DSS can also estimate the risk of alternative strategies or
actions.
California Pizza Kitchen (CPK) uses a DSS to support inventory decisions. CPK has 77
restaurants located in various states in the U.S. Maintaining inventory of all restaurants at
optimal levels was challenging. A DSS has made it easy for the managers to keep records
updated and make decisions. Many CPK restaurants increased sales by 5 percent after
implementing a DSS.
Summary of Support Systems
TABLE 2.2 Main Types of Information Support Systems.
Information Systems
Engineers, drafts
people
Electronic records
management system
Office workers
Knowledge management Managers, knowledge Supports the gathering, organizing, and use of
system (KM)
workers
an organizations knowledge
Data mining and text
mining
Automated decision
support (ADS)
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Databases are used for recording and processing transactions. Due to the number of
transactions, the data in the databases are constantly in a state of change making it
difficult to use for complex decision making.
8. Define IT infrastructure.
IT infrastructure is the collection of hardware, software, processes, networks, and users.
What an organizations IT infrastructure can support is determined by five major
components: (1) hardware, (2) software, (3) networks and communication facilities,
including the Internet and intranets, (4) databases and data workers, and (5) information
management personnel. When making decisions about how to acquire hardware,
software, or any of these five components, the following four characteristics of an IT
infrastructure need to be considered.
Sales Cloud. Sales Cloud is used by almost 80,000 companies. Sales representatives
(reps) have almost everything they need to do their jobs in one place. They spend
less time on administrative work and have more time with customers and closing
deals. For sales managers, the Sales Cloud gives real-time visibility into their teams
activities.
Issues in moving workloads from the enterprise to the cloud There is a risk
of disrupting operations or customers in the process of moving operations to the
cloud. The network and WAN (wide area network) become more critical in the IT
infrastructure. Network bandwidth is also an issue as enough is needed to support
the increase in network traffic. Different management approaches as well as
different IT skills are needed to handle moving part of the IT architecture to the
cloud.
Strategic issues such as deciding which workloads to export to the cloud; which
set of standards to follow for cloud computing; how to resolve privacy and
security issues; and how departments or business units will get new IT resources.
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1. Memory-intensive: Since VMs have virtual hardware, they need a huge amount of
memory.
2. Energy-efficient: VMs minimize energy consumed running and cooling servers in the
data centerup to a 95 percent reduction in energy use per server.
3. Scalability and load balancing: The VMware infrastructure automatically distributes
the load across a cluster of physical servers to ensure the maximum performance of
all running VMs.
4. When is load balancing important?
When a big event happens such as the Super Bowl, millions of people hit a Web site at
the same time. Virtualization provides load balancing to handle the demand for requests
to the site.
5. Explain how software as a service (SaaS) reduces IT costs.
Software-as-a-Service (SaaS) is an increasingly popular IT model in which software is
available to users as needed. Other terms for SaaS are on-demand computing, utility
computing, and hosted services. The idea is basically the same: instead of buying and
installing expensive packaged enterprise applications, users can access software apps
over a network, with an Internet browser being the only absolute necessity. Usually there
is no hardware and software to buy since the apps are used over the Internet and paid for
through a fixed subscription fee, or payable per an actual usage fee. The SaaS model was
developed to overcome the common challenge to an enterprise of being able to meet
fluctuating demands on IT resources efficiently.
6. How does virtualization reduce TCO (total cost of ownership)?
Load balancing is key to solving many of todays IT challenges. Virtualization
consolidates servers, which reduces the cost of servers, makes more efficient use of data
center space, and reduces energy consumption. All of these factors reduce the total cost of
ownership (TCO). Over a three-year lifecycle, a VM costs approximately 75 percent less
to operate than a physical server.
In spite of having powerful technologies and devices, it is possible that the IT function
may not get the required budget appropriation. The investments in IT change with
competing demands on an organizations budget that cannot cope with the unforeseeable
ways in which technology changes. The IT unit needs to ensure that it efficiently supports
the information and decision needs of an organization. Information deficiencies can occur
by not having appropriate IT architecture, policies, and procedures for providing the
required information for the users at different levels. The other specific information
deficiencies that can be managed include: data silos (information trapped in departments
databases), data lost or bypassed during transit, user-fierce formats (poorly designed user
interfaces requiring extra effort from users), use of non-standardized data formats, and
relying on fast changing data (that are expensive to keep pace with).
3. Assume a banks data are stored in silos based on financial productchecking accounts,
saving accounts, mortgages, auto loans, and so on. What problems do these data silos create
for the banks managers?
Such silos are unable to share or exchange data, and they cannot consistently be updated.
When data are inconsistent across multiple enterprise applications, data quality cannot
(and should not) be trusted without extensive verification. Data silos support a single
function, and as a result, do not support an organizations cross-functional needs. With
data silos, Bank managers will waste a lot of time and effort for including data from these
silos in their business analysis. There is a greater chance of leaving out routinely messy
but important data in their analysis.
4. Identify four KPIs for a major airline (e.g., American, United, Delta) or an automobile
manufacturer (e.g., GM, Ford, BMW). Which KPI would be the easiest to present to
managers on an online dashboard? Explain why.
Answers could vary. Make sure the KPIs are related to goals such as cost reduction, and
profit optimization. Airlines: Trends on percentage of seat-occupancy and time lost in
breakdown-maintenance; Auto Manufacturer: sales trend by car model, and trends in
recall.
5. What factors are driving the trend toward collaboration and information sharing
technology?
Forrester (forrester.com) identified three factors driving the trend toward collaboration
and information sharing technology. These are
(1) Global, mobile workforce (a growing number of employees telecommute)
(2) Mobility-driven consumerization (cloud-based collaboration solutions are on the rise)
(3) Principle of any (there is growing need to connect anybody anytime anywhere and on
any-device)
6. Discuss how IT architecture can support managements top business concerns.
The following are the five business concerns identified earlier on:
1. Business productivity and cost reduction
2. IT and business alignment
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while the software and data are stored on the servers. Society continues to become more
mobile with people accessing data and applications using any type of mobile device from
anywhere, thus the value of cloud computing continues to increase.
11. What are the benefits of cloud computing?
Optimizing IT infrastructure became especially important during tough economic times
when cost-cutting became a priority. During challenging times, making the most of IT
assets becomes imperative for competitive advantage, and ultimately, survival. The cloud
typically offers a steep drop in IT costs because applications are hosted by vendors and
provided on demand, rather than via physical installations or seat licenses. This rental
arrangement with vendors is a key characteristic of cloud computing. Using cloud
computing, companies are able to be more agile and responsive while significantly
reducing costs and complexity through improved workload optimizations and service
delivery.
Cloud computing is often used to describe services such as Googles online wordprocessing application and Salesforce.coms customer-service software, which are
accessed online through a Web browser instead of stored on a computer. Another option
is to pay to use Amazon.coms computing infrastructure, in effect, renting it, rather than
buy more servers.
12. Explain virtualization and virtual machines.
Virtualization is a concept that has several meanings in IT and therefore several
definitions. The major type of virtualization is hardware virtualization, which remains
popular and widely used. Virtualization is often a key part of an enterprises disaster
recovery plan. In general, virtualization separates business applications and data from
hardware resources. This separation allows companies to pool hardware resourcesrather
than to dedicate servers to applicationsand assign those resources to applications as
needed. The major types of virtualization are the following:
o Storage virtualization is the pooling of physical storage from multiple network
storage devices into what appears to be a single storage device that is managed
from a central console.
o Network virtualization combines the available resources in a network by splitting
the network load into manageable parts, each of which can be assigned (or
reassigned) to a particular server on the network.
o Hardware virtualization is the use of software to emulate hardware or a total
computer environment other than the one the software is actually running in. It
allows a piece of hardware to run multiple operating system images at once. This
kind of software is sometimes known as a virtual machine.
Virtualization increases the flexibility of IT assets, allowing companies to consolidate IT
infrastructure, reduce maintenance and administration costs, and prepare for strategic IT
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The Cloud Pro mobile app allows a network administrator to be anywhere and still
manage network operations. The app provides greater freedom and mobility for network
administrators as well as helping fewer people monitor more server resources.
16. Visit oracle.com. Describe the types of virtualization services offered by Oracle.
Oracle provides several virtualization products and solutions including:
Server virtualization provides over 100 pre-built templates to provide fully integrated
enterprise management.
Data center virtualization reduces the complexity of enterprise management providing
centralized control of the entire computing environment.
Desktop virtualization provides users with access to desktops and applications from a
variety of client devices.
17. Visit oncloudcomputing.com. Click on one of the featured or recommended vendors.
Review the vendors cloud computing offerings. In a one-page report, explain what you
learned.
Answers will vary.
18. Visit YouTube.com and search for two videos on virtualization. For each video, report
what you learned. Specify the complete URL, video title, who uploaded the video and the
date, video length, and number of views.
Answers will vary.
BUSINESS CASE
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6. Visit and review the features of paulmccartney.com. Consider what Jan Zadak, an HP
executive vice president, said: Fans expect a richer and deeper experience than ever
before. Do you agree with this statement? Explain. What features of the portal
created a richer and deeper fan experience?
Debate
7. According to MPL, the online music player Jukebox is unique. Not only can fans listen to
songs and build their own playlists, but they can gain access to all information related
to any particular song or album. Fans can listen to full tracks, buy albums, make
dedications, and download Jukebox to their desktops. To encourage return visits, the
site lets fans create a custom personal page with their profile, playlists, blogs, private
messaging, and videos. Based on these features, debate whether or not the
paulmccartney.com portal is a competitor of Facebook. Your debate should include
the issue of whether or not it is a social media site.
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5. Research two enterprise cloud storage vendors or service providers that provide
sufficient information on the Web to assess them meaningfully. Compare and contrast at
least four characteristics of these vendors or service providers.
Answers will vary.
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3. You have just been promoted to a fleet manager in a food company that uses 300 cars of
different sizes. Prepare a DSS using Excel to show top management how to reduce gasoline
costs if the price is at $4.00, $4.50, $4.75, and $5.00 per gallon.
Answers will vary.
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