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									Instructor's Manual        Management Information Systems, Eighth Edition                 6-1

                        Chapter 6
           Managing Hardware and Software Assets

Teaching Objectives

    To identify and explain the computer processing and storage capability needed by an
     organization to handle its information and business transactions.
    To discuss the arrangement of computers and computer processing that would best
     benefit a specific organization.
    To select the kinds of software and software tools needed to run one's business, and
     discuss the criteria needed to select the software technology needed by the
    To recognize and explain new software technologies we need to be aware of, and
     state how they would benefit the organization.
    To discuss the processes of acquiring and managing the firm's hardware and
     software assets.

Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.

Application Service Provider (ASP), 210          MP3 (MPEG3), 189
Application software, 193                        Multimedia, 189
Arithmetic-logic unit (ALU), 183                 Natural language, 198
Batch processing, 188                            Network-attached storage (NAS), 187
Bit, 183                                         Network computer (NC), 192
Byte, 183                                        Object-oriented programming, 200
C, 197                                           Office 2000 and Office XP, 204
C++, 198                                         Online processing, 188
Capacity planning, 207                           Open-source software, 196
CD-ROM (compact disk read-only memory), 186      Operating system, 193
CD-RW (CD-ReWriteable), 186                      Parallel processing, 185
Central processing unit (CPU), 183               Peer-to-peer computing, 192
Centralized processing, 191                      Personal computer (PC), 190
Client, 191                                      Presentation graphics, 204
Client/server computing, 191                     Primary storage, 183
COBOL (COmmon Business Oriented Language), 196 Program, 193
Compiler, 194                                    Radio-frequency identification (RFID), 187
Computer, 182                                    Query language, 198
Control unit, 184                                RAID (Redundant Array of Inexpensive Disks), 186
Data management software, 203                    RAM (random access memory), 184
Digital video disk (DVD), 187                    Reduced instruction set computing (RISC), 185
Distributed processing, 191                      ROM (read-only memory), 184
Downsizing, 191                                  Scalability, 208
Electronic mail (e-mail), 205                    Secondary storage, 186
Enterprise application integration software, 207 Server, 190
Instructor's Manual       Management Information Systems, Eighth Edition                      6-2

Enterprise software, 206                                Server farm, 190
Floppy disk, 186                                        Software package, 202
Fourth-generation language, 198                         Source code, 194
Graphical user interface (GUI), 194                     Spreadsheet, 203
Grid computing, 192                                     Storage area network (SAN), 187
Groupware, 205                                          Storage service provider (SSP), 209
Hard disk, 186                                          Streaming technology, 189
Hypertext markup language (HTML), 201                   Supercomputer, 191
Integrated software package, 204                        System software, 193
Java, 200                                               Total cost of ownership (TCO), 208
Linux, 196                                              UNIX, 196
Machine cycle, 184                                      Utility computing, 211
Machine language, 196                                   Visual Basic,
Magnetic disk, 186                                      Visual programming, 200
Magnetic tape, 187                                      Web browser, 205
Mainframe, 190                                          Web server, 207
Massively parallel computers, 185                       Windows 2000, 196
Megahertz, 184                                          Windows 98, 195
Microprocessor, 184                                     Windows .Net server, 196
Middleware, 206                                         Windows XP, 195
Midrange computer, 190
Minicomputer, 190                                       XHTML(Extensible Hypertext Markup Language),
                                                        XML (extensible Markup Language), 201

Teaching Suggestions
Since your student's knowledge and comfort level with technology is likely to vary, this
chapter can be difficult to teach and test. The technically adept know most of this
material, and some of the non-technical types may not find the chapter's contents
particularly interesting. However, it is important that you demonstrate the importance of
this chapter to your students, since the students must understand the role of computer
technology in the success of the organization and its objectives.

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 which simply failed. This might also be a
good place to reiterate the Kmart example.

The opening vignette, ―Bank of America (Asia) Upgrades Its IT Infrastructure,‖ nicely
illustrates how the right technology can make a company more efficient and competitive.
As you discuss this chapter with your students, ask them to identify the types of
Instructor's Manual        Management Information Systems, Eighth Edition                 6-3

technology that are mentioned in the vignette. To facilitate class discussion, ask your
students the following questions:

  1. Why did the Bank of America (Asia) need to modify its information technology
  2. What types of computers were mentioned in the vignette?
  3. What type of software is Bank of America (Asia) using?
  4. What function does the Clarity EAI software serve?
  5. How will the new information technology infrastructure enhance organizational
  6. What management challenges might Bank of America (Asia) face?

Section 6.1, ―Computer Hardware and Information Technology Infrastructure,‖ introduces
students to essential computer hardware terminology and concepts. Students are
introduced to a contemporary computer system, the CPU and primary storage, computer
processing, secondary storage, input and output technology, and batch and online input
and processing. If possible, bring a system unit to class and allow students to see the
computer system's parts. Students are often eager to see the inside of a computer and
also see that the machine is not as mysterious as it first appears. 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.

Ask your students to review local or national ads for computer systems. Alternatively,
ask your students to visit the Web sites for several computer companies, such as Dell
and Gateway. Ask your students to evaluate the different computer systems and make
recommendations about which system they would recommend purchasing.
Alternatively, give your students a scenario and ask the students to select the most
appropriate system for the scenario. Ask your students to discuss the factors that
influenced their purchasing decisions.

Technology is changing so quickly that by the time students read this chapter, new
hardware and software products will be out on the market. Students may naturally feel
more comfortable with this chapter’s material because hardware and software are the
components with which they are most familiar. If they recognize the basic hardware
components and understand their uses, they can better communicate with the
technicians who are critical to decisions on the uses of the computer, which after all are
business decisions. Students (and future managers) need to know the limitations and
possibilities of the computer, and the vistas and limitations of the hardware are critical to
that understanding. If they can understand the different kinds of software – from off-the-
shelf application software to program-it-yourself software – and that it is not necessary to
be a programmer in order to use software on information systems, then they really have
one of the two main points of the chapter. Secondly, students should learn that there
are a variety of tools to solve information system problems — different applications
generators or different programming languages.

Section 6.2 introduces students to the different categories of computers and computer
systems. You should spend some time discussing the capabilities of the different
computer types. This is a good place to discuss the trends that are occurring with
technology. One part that is familiar to many of us is the continual increasing memory,
Instructor's Manual        Management Information Systems, Eighth Edition                 6-4

speed, and storage capabilities of personal computers. Also, you may want to note the
change in interfaces. Another trend that this writer finds interesting is what could be
called the shrinking of supercomputers. Most supercomputers in use now are parallel
computers. It is possible to link together Intel processors running Linux to form a
supercomputer using the Beowolf and Extreme Linux set of tools. One version offered
by IBM costs $1.25 million compared with the over $10 million a year that Cray
supercomputers cost. Not everyone needs a parallel processing supercomputer, but the
decrease in price may increase the use of supercomputers for mathematical and
graphical processing, data visualization, and pattern recognition.

Section 6.3 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. Most of the answers will probably revolve around the Windows
operating systems and Microsoft Office suite. However, it is possible that some of your
students may use software that the rest of the class is not as familiar with. If this occurs,
have your students explain why they use that particular operating system and application

Students need to understand the business implications of choosing an operating system,
since computer systems depend upon operating systems and business capabilities are
affected by operating systems. Some operating systems are better designed for
networking, and other operating systems are better for speed. You do not need to beat
up on MS-DOS. In fact, you may find it helpful to explain how the limitations of the
operating systems and the initial hardware of PCs created many problems with which we
are still contending. This explanation can help students understand the importance of
the operating systems and the choice of operating systems. Note, however, that
memory problems are no longer a major issue.

Table 6-4 provides a list of the leading PC operating systems. Ask your students to
research these different operating systems. As part of their research, ask your students
to identify 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 Table 6-5.
Which is the most appropriate programming language?

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. Unfortunately,
for many managers, the answer may be simple–which application software I can get –
and that selection may harm the business or at least may not help it. Students need to
learn that (almost) anything that can be done in one language can be done in another,
but one may be faster for this application while another may be easier to use. You
should talk about the superiority of some languages for some tasks. For instance, in
Web database development applications, Visual Basic is the language of choice. In fact,
the release in early 2001 of VB.NET is the first version of the language that is truly
object-oriented. Point out to students that you can make a mistake in choosing a
language. There are many examples of companies, organizations, and governments
choosing the wrong language for the wrong problem and creating disaster.
Instructor's Manual       Management Information Systems, Eighth Edition               6-5

Section 6.4 is an important section to discuss with your students. This section stresses
the importance of understanding the technology requirements for the digital firm and
electronic commerce, discusses how to determine the total cost of ownership, and
discusses the decision to own and maintain technology assets or use external
technology service providers. To reinforce the contents of this section, have your
students research the total cost of ownership for your college's computer lab. Likewise,
ask your university's information technology director to speak to your class about the
total cost of ownership for the university's technology assets.

“Window On” Boxes
Window on Technology: Can Linux Go Mainstream?

Should a company select Linux as an operating system for its major business

Before making the move to Linux, the company should determine how such a move can
promote organizational efficiency and productivity. The company should also consider
the total cost of ownership. Many companies are selecting Linux as their operating
system of choice. Tradeworx, Dreamworks, Boeing, Western Geco, CS First Boston,
and E*Trade are just a few of the companies that are using Linux. Since Linux is
nonproprietary, inexpensive, stable, portable, and based on Unix, the operating system
provides many benefits to companies wishing to use it as their operating system.

What are the business as well as the technology issues that should be addressed
when making that decision?

The issues include total cost of ownership, employee training, types of computer
hardware that will run the operating system, what modifications are needed, and who will
manage and modify the software.

Window on Management: United Technologies Corporation Overhauls Its
IT Infrastructure

What were the management benefits of consolidating UTC's information
technology infrastructure?

Management benefits include common standards, consistent quality of information
technology people, lower technology management costs, fewer software applications
(reduced from 160,000 to 5,000), tighter security, better and regular backup and
maintenance, consolidated computer systems (from 20 to 3), consolidated help desks
into one center running one system, and annual savings of approximately $1 billion.

What management, organization, and technology issues had to be addressed
when making the decision to overhaul the infrastructure?

Management's goal was to streamline UTC's IT infrastructure. UTC also wanted to
centralize and standardize its hardware and software resources. Management made
Instructor's Manual       Management Information Systems, Eighth Edition               6-6

decisions regarding the acquisition and maintenance of UTC's technology assets.
Specific management issues involved making decisions about capacity, scalability, how
data are backed up and stored, the quality of its IT people, standardizing its PC and
software platform, security procedures, how the consolidation of the computer centers
would be handled, and help desk operations. Management also made decisions about
installation, training, support, maintenance, infrastructure, downtime, and space and
energy issues.

The organizational issues involved connecting 152,000 employees in 2,000 locations
located in 180 countries. The standardized infrastructure caused organizational
changes in the operating procedures, information and workflow, politics, and perhaps

Technology issues involved selecting the appropriate hardware, software,
communications technology, and storage technology to support UTC's information
technology infrastructure. Technology issues also involved the selection, acquisition,
and maintenance of UTC technology assets, the types and number of computers to use,
how the computers should be networked, the selection of software, and deciding how
data should be stored and backed up.

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