Managing Information Technology Carol V. Brown

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Managing Information Technology Carol V. Brown Powered By Docstoc
					MANAGING
INFORMATION
TECHNOLOGY
SIXTH EDITION




Carol V. Brown
Howe School of Technology Management, Stevens
Institute of Technology

Daniel W. DeHayes
Kelley School of Business, Indiana University

Jeffrey A. Hoffer
School of Business Administration, The University of Dayton

E. Wainright Martin
Kelley School of Business, Indiana University

William C. Perkins
Kelley School of Business, Indiana University




 PEARSON
  Prentice
       Hall      Upper Saddle River, New Jersey 07458
     CONTENTS: CHAPTERS AND


       Preface                                                                     xvi
     CHAPTER l      M A N A G I N G IT IN A N E - W O R L D                         1
                      Recent Information Technology Trends                          2
                         Computer Hardware: Faster, Cheaper, Mobile                 2
                         Computer Software: Custom and Prewritten,
                           Standardized and Integrated                               2
                         Computer Networks: High Bandwidth, Global, and Wireless     3
                      New Ways to Compete                                            3
                      New Ways to Work                                               4
                      Managing IT in Organizations                                   4
                         Three IT Assets                                             5
                         IT Leadership Roles                                         6
                      The Topics and Organization of This Textbook                   7
                      Review Questions                                               8
                      Discussion Questions                                           8
                      References                                                     8
     Case Study 1   Midsouth Chamber of Commerce (A): The Role
                    of the Operating Manager in Information Systems                 10

     PART I         INFORMATION TECHNOLOGY                                         19
     CHAPTER 2      COMPUTER HARDWARE                                              21
                      Evolution of Computer Systems                                 22
                        Mainframes and Minicomputers                                22
                         The Development of Microcomputers                          23
                      Basic Components of Computer Systems                          23
                         Underlying Structure                                       24
                         Input/Output                                               24
                         Computer Memory                                            27
                         Arithmetic/Logical Unit                                    29
                         Computer Files                                             29
                         Control Unit                                               31
                      The Stored-Program Concept                                    33
                      Extensions to the Basic Model                                 35
                         Cache Memory                                               35
                         Multiple Processor Configurations                          36
                      Types of Computer Systems                                     37
                         Microcomputers                                             38
                         Midrange Systems                                           39
                         Mainframe Computers                                        42
                         Supercomputers                                             43
                      Summary                                                       44

IV
                                                                CONTENTS: CHAPTERS AND CASES



             Review Questions                                                 45
             Discussion Questions                                             45
             References                                                       46
CHAPTER 3   COMPUTER SOFTWARE                                                  48
             Evolution of Computer Programming                                48
                First and Second Generation Languages                         48
                Third and Fourth Generation Languages                         50
             Key Types of Software                                            51
             Applications Software                                            52
                Examples of Applications Products                             53
                Personal Productivity Software                                55
             Support Software                                                 59
                The Operating System                                          59
                Third Generation Languages                                    64
                Fourth Generation Languages                                   69
                Markup Languages                                              70
                Object-Oriented Programming                                   72
                Languages for Developing Web Applications                     77
                Database Management Systems                                   79
                CASE Tools                                                    83
                Communications Interface Software                             83
                Utility Programs                                              84
             The Changing Nature of Software                                  84
                Less Concern with Machine Efficiency                          84
                More Purchased Applications                                   84
                More Programming Using Object-Oriented Languages              85
                More Emphasis on Applications That Run on Intranets
                 and the Internet                                             85
                More User Development                                         85
                More Use of Personal Productivity Software                    85
             The Software Component of the Information Systems Industry       86
             Summary                                                          86
             Review Questions                                                 87
             Discussion Questions                                             88
             References                                                       88
CHAPTER 4   TELECOMMUNICATIONS AND NETWORKING                                 9O
             The Need for Networking                                      .    91
               Sharing of Technology Resources                                 91
               Sharing of Data                                                 91
               Distributed Data Processing and Client/Server Systems           92
               Enhanced Communications                                         92
               Marketing Outreach                                              92
             An Overview of Telecommunications and Networking                  92
             Key Elements of Telecommunications and Networking                 93
               Analog and Digital Signals                                      93
               Speed of Transmission                                           95
               Types of Transmission Lines                                     95
               Transmission Media                                              96
               Topology of Networks                                           100
               Types of Networks                                              102
               Network Protocols                                              117
VI   CONTENTS: CHAPTERS AND CASES



                                      The Exploding Role of Telecommunications and Networking         121
                                         Online Operations                                            121
                                         Connectivity                                                 121
                                         Electronic Data Interchange and Electronic Commerce          121
                                         Marketing                                                    122
                                      The Telecommunications Industry                                 123
                                      Summary                                                         124
                                      Review Questions                                                125
                                      Discussion Questions                                            125
                                      References                                                      126

                   CHAPTER 5        THE DATA RESOURCE                                                 128
                                      Why Manage Data?                                                129
                                      Technical Aspects of Managing the Data Resource                  13 0
                                         The Data Model and Metadata                                  130
                                         Data Modeling                                                131
                                         Database Programming                                         132
                                      Managerial Issues in Managing Data                              134
                                         Principles in Managing Data                                  134
                                         The Data Management Process                                  139
                                         Data Management Policies                                     142
                                      Summary                                                         145
                                      Review Questions                                                146
                                      Discussion Questions                                            146
                                      References                                                      147

                   Case Study 1-1   IMT Custom Machine Company, Inc.:
                                    Selection of an Information Technology Platform                   148
                   Case Study 1-2   VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier    160
                   Case Study 1-3   The VoIP Adoption at Butler University                            176
                   Case Study 1-4   Data Governance at InsuraCorp                                     188
                   Case Study 1-5   Midsouth Chamber of Commerce (B):
                                    Cleaning Up an Information Systems Debacle                        192

                   PART II          APPLYING INFORMATION TECHNOLOGY                                   2O1
                   CHAPTER 6        ENTERPRISE        SYSTEMS                                         2O3
                                       Application Areas                                               203
                                       Critical Concepts                                               205
                                          Batch Processing Versus Online Processing                    205
                                          Functional Information Systems                               206
                                          Vertical Integration of Systems                              206
                                          Distributed Systems                                          207
                                          Client/Server Systems                                        207
                                          Service-Oriented Architecture and Web Services               208
                                       Transaction Processing Systems                                  209
                                          Payroll System                                               210
                                          Order Entry System                                           210
                                       Enterprise Resource Planning Systems                            211
                                          An Example ERP System: SAP ERP                               213
                                       Data Warehousing                                                216
                                                                CONTENTS: CHAPTERS AND CASES   VII


             Customer Relationship Management Systems                      218
             Office Automation                                             219
                 Word Processing and Application Suites                    221
                Electronic Mail                                            221
                Future Developments                                        222
             Groupware                                                     224
                An Example Groupware System: Lotus Notes                   224
             Intranets and Portals                                         228
             Factory Automation                                            230
                Engineering Systems                                        231
                Manufacturing Administration                               231
                Factory Operations                                         231
                Robotics                                                   232
             Supply Chain Management Systems                               232
             Summary                                                       233
             Review Questions                                              234
             Discussion Questions                                          234
             References                                                    235
CHAPTER 7   MANAGERIAL SUPPORT SYSTEMS                                     237
             Decision Support Systems                                      237
             Data Mining                                                   239
             Group Support Systems                                         242
             Geographic Information Systems                                243
                Business Adopts Geographic Technologies                    244
                What's Behind Geographic Technologies                      245
                Issues for Information Systems Organizations               247
             Executive Information Systems/Business Intelligence Systems   248
             Knowledge Management Systems                                  251
                Two Recent KMS Initiatives Within a Pharmaceutical Firm    253
                KMS Success                                                254
             Artificial Intelligence                                       254
             Expert Systems                                                255
                Obtaining an Expert System                                 255
                Examples of Expert Systems                                 256
             Neural Networks                                               257
             Virtual Reality                                               259
             Summary                                                       262
             Review Questions                                              263
             Discussion Questions                                          263
             References                                                    264
CHAPTER 8   E-BUSINESS SYSTEMS                                             266
             Brief History of the Internet                                 267
                E-Business Technologies                                    268
                Legal and Regulatory Environment                           271
             Strategic E-Business Opportunities (and Threats)              272
             B2B Applications                                              275
             B2C Applications                                              277
                Two Dot-Com Retailers                                      278
                Two Traditional Catalog Retailers                          280
 '              Two Traditional Store Retailers                            281
                Summary: B2C Retailing           '                         282
VIII   CONTENTS: CHAPTERS AND CASES



                                        Dot-Com Intermediaries                                     284
                                           Summary: Successful Online Intermediary Models          289
                                        Special Issue: What Makes a Good Web Site?                 289
                                        Summary                                                    292
                                        Review Questions                                           292
                                        Discussion Questions                                       293
                                        References                                                 293
                   Case Study II-l    Vendor-Managed Inventory at NIBCO                            295
                   Case Study II-2    The Challenges of Local System
                                      Design for Multinationals: The MaxFli Sales Force
                                      Automation System at BAT                                     300
                    Case Study II-3   Real-Time Business Intelligence at
                                      Continental Airlines                                         313
                    Case Study II-4   The Cliptomania ™ Web Store: An E-Tailing
                                      Start-up Survival Story                                      323
                    Case Study H-5    Meridian Hospital Systems, Inc.: Deciding
                                      Which IT Company to Join                                     333

                    PART I I I        ACQUIRING INFORMATION SYSTEMS                                339

                    CHAPTER 9         BASIC INFORMATION SYSTEMS CONCEPTS                           342
                                         The Systems View                                          342
                                            What Is a System?                                      343
                                            Seven Key System Elements                              344
                                            Organizations as Systems                               347
                                            Systems Analysis and Design                            348
                                         Business Processes                                        349
                                            Identifying Business Processes                         349
                                            Business Process Redesign                              349
                                         Processes and Techniques to Develop Information Systems   352
                                            The Information Systems Development Life Cycle         352
                                            Structured Techniques for Life Cycle Development       353
                                            Procedural-Oriented Techniques                         354
                                            Techniques for the As-Is Model                         355
                                            Techniques for the Logical To-Be Model                 356
                                            Techniques for Documenting the Physical To-Be System   361
                                            Object-Oriented Techniques                             363
                                            Core Object-Oriented Concepts                          365
                                            Unified Modeling Language (UML) for O-O Modeling       366
                                            Summary of Processes and Techniques to Develop
                                              Information Systems                                  366
                                         Information Systems Controls to Minimize Business Risks   369
                                            Types of Control Mechanisms                            369
                                            Controls in the Definition and Construction Phases     370
                                            Controls in the Implementation Phase                   371
                                         Summary                                                   373
                                         Review Questions                                          373
                                         Discussion Questions                                      374
                                         References                                                374
                                                                     CONTENTS: CHAPTERS AND CASES   IX


CHAPTER 1O     METHODOLOGIES FOR CUSTOM SOFTWARE
               DEVELOPMENT                                                    375
                 Systems Development Life Cycle Methodology                     375
                    The SDLC Steps                                              376
                    Initiating New Systems Projects                             377
                    Definition Phase                                            377
                    Construction Phase                                          379
                    Implementation Phase                                        381
                    The SDLC Project Team                                       383
                    Managing an SDLC Project                                    385
                    SDLC Advantages and Disadvantages                           386
                 Prototyping Methodology                                        387
                    The Prototyping Steps                                       387
                    The Prototyping Project Team                                388
                    Managing a Prototyping Project                              389
                    Prototyping Advantages and Disadvantages                    389
                    Prototyping Within an SDLC Process                          390
                 Newer Approaches                                               391
                    Rapid Application Development (RAD)                         391
                    Agile Methodologies                                         392
                 Managing Software Projects Using Outsourced Staff              395
                 Summary                                                        396
                 Review Questions                                               396
                 Discussion Questions                                           397
                 References                                                     397
CHAPTER 11     METHODOLOGIES FOR PURCHASED
               SOFTWARE PACKAGES                                              399
                 The Make-or-Buy Decision                                      400
                 Purchasing Methodology                                        400
                    The Purchasing Steps                                       401
                    Project Team for Purchasing Packages                       409
                    Managing a Purchased System Project                        410
                    Purchasing Advantages and Disadvantages                    411
                 Special Case: Enterprise System Packages                      412
                 Open Source Software                                          414
                 New Purchasing Option: Application Service
                  Providers (ASPs)                                              415
                 Summary                                                        417
                 Review Questions                                               417
                 Discussion Questions                                           417
                 References                                                     418

CHAPTER   12   IT PROJECT MANAGEMENT                                          419
                 IT Portfolio Management                                       420
                 Project Management Roles                                      421
                    Project Manager                                            421
                    Project Sponsor and Champion Roles                         422
                 Project Initiation                                            423
                 Project Planning                                              424
                    Scheduling                                                 424
                    Budgeting                                                  425
CONTENTS: CHAPTERS AND CASES



                                        Staffing                                           426
                                        Planning Documents                                 428
                                     Project Execution and Control                         429
                                        Managing Project Risks                             430
                                        Managing Business Change                           432
                                     Project Closing                                       435
                                     Special Issue: Managing Complex IT Projects           435
                                   . Special Issue: Managing Virtual Teams                 435
                                     Summary                                               437
                                     Review Questions                                      438
                                     Discussion Questions                                  438
                                     References                                            439
               CHAPTER 1 3        SUPPORTING COMPUTER USERS                               44 1
                                    Supporting User Application Development (UAD)          442
                                       Advantages and Disadvantages of User-Developed
                                        Applications                                       442
                                       Assessing the Risks from UAD                        443
                                       Guidelines for User Developers                      445
                                    Providing Desktop Support                              447
                                       Strategies for User Computing                       448
                                       Support Services                                    449
                                       Control Policies and Procedures                     451
                                    Special Case: Supporting Telecommuters                 452
                                    Special Case: Managing Intranets                       454
                                    Summary                                                455
                                    Review Questions                                       455
                                    Discussion Questions                                   456
                                    References                                             456
               Case Study III-l   Managing a Systems Development
                                  Project at Consumer and Industrial Products, Inc.        458
               Case Study III-2   Development of an Interorganizational
                                  System at Zeus, Inc.                                     468
               Case Study III-3   A Make-or-Buy Decision at Baxter
                                  Manufacturing Company                                    476
               Case Study III-4   ERP Purchase Decision at Benton
                                  Manufacturing Company, Inc.                              482
               Case Study III-5   The Kuali Financial System: An Open
                                  Source Project                                           487
               Case Study III-6   Naval Surface Warfare Center, Crane
                                  Division: Implementing Business Process Reengineering
                                  Recommendations                                          499
               Case Study III-7   NIBCO's "BigBang": An SAP
                                  Implementation                                           514
               Case Study III-8   BAT Taiwan: Implementing SAP for a
                                  Strategic Transition                                     530
               Case Study III-9   A Troubled Project at Modern Materials, Inc.             544
                                                                       CONTENTS: CHAPTERS AND CASES   XI



Case Study 111-10 Purchasing a Student Management
                  System at Jefferson County School System (Revised)               557

PART IV           THE INFORMATION MANAGEMENT
                  SYSTEM                                                          561

CHAPTER      14   PLANNING INFORMATION SYSTEMS
                  RESOURCES                                                       563
                     The Need for a Direction for Information Resources           564
                     The Outputs of the Direction-Setting Process                 564
                        Information Resources Assessment                          565
                        Information Vision and Architecture                       565
                        Information Resources Plans                               565
                     The Process of Setting the Direction                         566
                        IS and Business Planning                                  566
                        Assessment                                                566
                        Vision                                                    566
                        Strategic Planning                                        567
                        Operational Planning                                      567
                        Traditional Planning in the IS Organization               567
                     Assessing Current Information Resources                      568
                        Measuring IS Use and Attitudes                            568
                        Reviewing the IS Organizational Mission                   569
                        Assessing Performance versus Goals                        569
                     Creating an Information Vision                               570
                     Designing the IT Architecture                                571
                     The Strategic IS Plan                                        572
                        The Strategic IS Planning Process                         572
                        Tools for Identifying IT Strategic Opportunities          573
                     The Operational IS Plan                                      578
                     Guidelines for Effective IS Planning                         580
                     Benefits of Information Resources Planning                   580
                        Better IS Resource Allocation                             580
                        Communicating Budget Needs with Top Management            580
                        Creating a Context for IT Decisions                       581
                        Achieving Both Integration and Innovation                 581
                        Evaluating Vendor Options                                 581
                                                                              r
                        Meeting Management Expectations                           581
                     Summary                                                      581
                     Review Questions                                             581
                     Discussion Questions                                         582
                     References                                                   582
CHAPTER     15    LEADING THE INFORMATION SYSTEMS
                  FUNCTION                                                        584
                     The Evolving IS Role                                         584
                     Designing the IS Organization Structure and Governance       586
                     Managing IT Service Delivery                                 587
                       Chargeback Systems                                         589
                        Service Level Agreements (SLAs)                           589
                        Service Delivery Process Improvements with ITIL           590
                       Outsourcing IT Service Delivery                            590
XII   CONTENTS: CHAPTERS AND CASES



                                       Managing IT Applications                                     591
                                          An Applications Portfolio Approach                        591
                                          Metrics for IT Applications Management                    592
                                       Managing IT Human Resources                                  592
                                          Insourcing and Outsourcing IT Skills                      595
                                       Managing the IT-Business Relationship                        596
                                          Partnering with Horizontal Mechanisms                     597
                                       Measuring Overall IS Performance                             598
                                       Special Issue: Managing a Global IS Organization             599
                                       Special Issue: Managing Offshore Outsourcing Arrangements    600
                                       Summary                                                      602
                                       Review Questions                                             603
                                       Discussion Questions                                         603
                                       References                                                   603

                   CHAPTER 16        INFORMATION SECURITY                                          6O5
                                       E-Crime                                                      606
                                       Information Risk Management                                  609
                                       Compliance with Current Information Security Laws            611
                                          Sarbanes-Oxley (SOX)                                      611
                                          Gramm-Leach-Bliley Act of 1999 (GLBA)                     612
                                          Health Insurance Portability and Accountability
                                            Act(HIPAA)                                              612
                                          The PATRIOT Act                                           612
                                       Developing an Information Security Policy                    613
                                       Planning for Business Continuity                             615
                                       Electronic Records Management (ERM)                          616
                                       The Chief Information Security Role                          617
                                       Summary                                                      617
                                       Review Questions                                             618
                                       Discussion Questions                                         618
                                       References                                                   618

                   CHAPTER 17        LEGAL, ETHICAL, AND SOCIAL ISSUES                             62O
                                       The Legal Environment                                        620
                                       Ethics Frameworks                                            621
                                          Identifying Ethical Problems                              621
                                          Analyzing Ethical Problems           .                    622
                                       Privacy                                                      623
                                          Privacy Problems                                          624
                                          E-Commerce Privacy Concerns                               625
                                          Workplace Privacy                                         626
                                          Ethics of Invasion of Privacy                             627
                                          Laws on Privacy                                           627
                                       Identity Theft                                               629
                                          Impact of Identity Theft                                  630
                                          Punishment of Identify Theft                              630
                                          Laws on Identity Theft                                    630
                                          Preventing Identity Theft                                 631
                                       Intellectual Property Rights                                 631
                                          Software Piracy                                           632
                                          Copyright Protection                                      632
                                                                    CONTENTS: CHAPTERS AND CASES   XIII



                       Patent Protection                                       632
                       Digital Entertainment Piracy                            633
                       Internet File Sharing                                   633
                       Ethical Questions                                       634
                    Other Social Issues                                        635
                       Computer Crime                                          635
                       Access to the Technology                                635
                       Freedom of Speech                                       636
                       Hazards of Inaccuracy                                   636
                       Impact on Workers                                       636
                    The Future                                                 637
                    Review Questions                                           637
                    Discussion Questions                                       638
                    References                                                 638
Case Study IV-1   The Clarion School for Boys, Inc.—
                  Milwaukee Division: Making Information Systems Investments   640
Case Study IV-2   Teletron, Inc.: Using Information Technology to
                  Transform a Company                                           658
Case Study IV-3   FastTrack IT Integration for the Sallie Mae Merger            672
Case Study IV-4   IT Infrastructure Outsourcing at
                  Schaeffer (A): The Outsourcing Decision                      687
Case Study IV-5   IT Infrastructure Outsourcing at Schaeffer (B):
                  Managing the Contract                                        692
Case Study IV-6   Systems Support for a New Baxter Manufacturing
                  Company Plant in Mexico                                      699
Case Study IV-7   BATAPSS: Shared Services at a Multinational Firm             704
Case Study IV-8   Mary Morrison's Ethical Issue (Revised)                      711
Case Study IV-9   A Security Breach on the Indiana
                  University Computer Network                                  713
                  Glossary                                                     715
                  Index                                                        745

				
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