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- Structure
- Business processes
- Politics
- Culture
- Environment
- Management decisions

Tech:
- Formal social structure that processes resources from environment to produce outputs
- A formal legal entity with internal rules and procedures, as well as a social structure
Behavioral:
- A collection of rights, privileges, obligations, and responsibilities that is delicately balanced over a period of time through conflict and conflict resolution

- Substitute products that perform as well as or better than existing product
- Technology that brings sweeping change to businesses, industries, markets
Ex: personal computers, word processing software, the Internet. markets

First mover - inventors of disruptive technologies
Fast followers - firms with the size and resources to capitalize on that technology

1. Entrepreneurial
2. Machine bureaucracy
3. Divisionalized bureaucracy
4. Professional bureaucracy
5. Adhocracy

Information system often reflects organizational structure

- Environment
- Structure (Hierarchy, specialization, routines, business processes)
- Culture and politics
- Type of organization and style of leadership
- Main interest groups affected by system; attitudes of end users
- Tasks decisions, and business processes the system will assist

- Low-cost leadership
- Product differentiation
- Focus on market niche
- Strengthen customer and supplier intimacy

Produce products and services at a lower price than competitors
Ex: Walmart´s efficient customer response system

- Enable new products or services, greatly change customer convenience and experience
Ex: Google, Nike, Apple
- Mass customization

- Use information systems to develop strong ties and loyalty with customers and suppliers
- Increase switching costs
Ex: Chrysler, Amazon, Starbucks

Growing use of Internet-connected sensors in products

Refers to a set of capabilities enabled when physical things are connected to the Internet via sensors. It is not just gathering data, but also about analysis and use of data.

- Firm´s value chain is linked to value chain of suppliers, distributors, customers
- Industry value chain

- Value Web --> Collection of independent firms using highly synchronized collectively. More customer driven, less linear operation than traditional value chain

When output of some units are used as inputs to others, or organizations pool market and expertise
Ex. merger of Bank of NY and JPMorgan Chase
- Purchase of Youtube by Google

1. Network economics
2. Virtual company model
3. Business ecosystem

- Sustaining competitive advantage
- Aligning IT with business objectives
- Managing strategic transitions

Use information systems to enable a focused strategy on a single market niche; specialize
Ex: Hiltons Hotels´OnQ system

Telephone networks and computer networks converging into single
digital network using Internet standards

• Two or more connected computers
• Major components in simple network
– Client and server computers
– Network interfaces (NICs)
– Connection medium
– Network operating system (NOS)
– Hubs, switches, routers

• Software-defined networking (SDN)
– Functions of switches and routers managed by central program

–Distributed computing model
–Clients linked through network controlled by network server computer
–Server sets rules of communication for network and provides every client with an address so others can find it on the network
–Has largely replaced centralized mainframe computing
– The Internet: largest implementation of client/server computing

– Method of slicing digital messages into parcels (packets), sending packets along different communication paths as they become available, and then reassembling packets at destination
– Previous circuit-switched networks required assembly of complete point- to-point circuit
– Packet switching more efficient use of network’s communications capacity


Practical:
Technology that breaks messages into small, fixed bundles of data and routes them in the most economical way through any available communications channel.

– Protocols: rules that govern transmission of information between two points
– Transmission Control Protocol/Internet Protocol (TCP/IP)
• Common worldwide standard that is basis for the Internet

– Department of Defense reference model for TCP/IP
• Four layers
1. Application layer
2. Transport layer
3. Internet layer
4. Network interface layer

– Local area networks (LANs)
• Ethernet
• Client/server vs. peer-to-peer

– Wide area networks (WANs)
– Metropolitan area networks (MANs)
– Campus area networks (CANs)

–New addressing scheme for IP numbers
–Will provide more than a quadrillion new addresses
–Not compatible with current IPv5 addressing

–Advanced networking consortium
• Universities, businesses, government agencies, other institutions

–Developed high-capacity 100 Gbps testing network
–Testing leading-edge new technologies for Internet

– E-mail
– Chatting and instant messaging
– Newsgroups
– Telnet
– File Transfer Protocol (FTP)
– World Wide Web

Digital voice communication using IP, packet
switching

The Internet has also become a popular platform for voice transmission and corporate networking. Voice over IP (VoIP) technology delivers voice information in digital form using packet switching*, avoiding the tolls charged by local and long- distance telephone networks

Communications systems that integrate voice,
data, e-mail, conferencing

– Secure, encrypted, private network run over Internet
– PPTP
– Tunneling

Software for locating and managing web pages

–Hypertext Markup Language (HTML)
–Hypertext Transfer Protocol (HTTP):
–Uniform resource locator (URL):
• http://www.megacorp.com/content/features/082602.html

• Search engines
– Google’s PageRank System
• Mobile search
• Semantic search
• Social search
• Visual search and the visual web
– Tagging – Pinterest
• Intelligent agent shopping bots
• Search engine marketing
• Search engine optimization (SEO)
– Link farms
• Search engine algorithms

Collaborative websites where visitors can add, delete, or modify content on the site

• More tools to make sense of trillions of pages on the Internet
• Pervasive web
• Internet of Things (IoT aka IoD)
• Internet of People (IoP)
• App Internet
• Increased cloud computing and SaaS
• Ubiquitous mobile connectivity
• Greater seamlessness of web as a whole

• Networks of hundreds or thousands of interconnected wireless devices
• Used to monitor building security, detect hazardous substances in air, monitor environmental changes, traffic, or military activity
• Devices have built-in processing, storage, and radio frequency sensors and antennas
• Require low-power, long-lasting batteries and ability to endure in the field without maintenance
• Major sources of “Big Data” and fueling “Internet of Things”

– Knowledge is a firm asset.
• Intangible
• Creation of knowledge from data, information, requires organizational resources
• As it is shared, experiences network effects

– Knowledge has different forms.
• May be explicit (documented) or tacit (residing in minds) • Know-how, craft, skill
• How to follow procedure
• Knowing why things happen (causality)

– Knowledge has a location.
• Cognitive event
• Both social and individual
• “Sticky” (hard to move), situated (enmeshed in firm’s culture), contextual (works only in certain situations)

– Knowledge is situational.
• Conditional: Knowing when to apply procedure
• Contextual: Knowing circumstances to use certain tool

– Process in which organizations learn
• Gain experience through collection of data, measurement, trial and error, and feedback
• Adjust behavior to reflect experience

–Create new business processes
–Change patterns of management decision making

Set of business processes developed in an organization to
create, store, transfer, and apply knowledge

– Each stage adds value to raw data and information as they are transformed into usable knowledge
– Knowledge acquisition
Documenting tacit and explicit knowledge. Storing documents, reports, presentations, best practices. Unstructured documents (e.g., e-mails). Developing online expert networks. Creating knowledge. Tracking data from TPS and external sources

– Knowledge storage
Databases. Document management systems. Role of management: Support development of planned knowledge storage systems. Encourage development of corporate-wide schemas for indexing documents. Reward employees for taking time to update and store documents properly.

– Knowledge dissemination
Portals, wikis. E-mail, instant messaging. Search engines. Collaboration tools
• A deluge of information?
Training programs, informal networks, and shared management experience help managers focus attention on important information.

– Knowledge application
To provide return on investment, organizational knowledge must become systematic part of management decision making and become situated in decision-support systems ; New business practices, New products and services, New markets

1. Enterprise-wide knowledge management systems
• General-purpose firm-wide efforts to collect, store, distribute, and apply digital content and knowledge

2. Knowledge work systems (KWS)
• Specialized systems built for engineers, scientists, other knowledge workers charged with discovering and creating new knowledge

3. Intelligent techniques
• Diverse group of techniques such as data mining used for various goals: discovering knowledge, distilling knowledge, discovering optimal solutions

1. Structured documents
• Reports, presentations • Formal rules

2. Semistructured documents
• E-mails, videos

3. Unstructured, tacit knowledge
• 80% of an organization’s business content is semistructured or unstructured

– Help capture, store, retrieve, distribute, preserve
• Documents, reports, best practices • Semistructured knowledge (e-mails)

– Bring in external sources • News feeds, research

– Tools for communication and collaboration • Blogs, wikis, and so on

– Key problem—Developing taxonomy
• Knowledge objects must be tagged with categories for retrieval

– Digital asset management systems
• Specialized content management systems for classifying, storing, managing unstructured digital data
• Photographs, graphics, video, audio

– Provide online directory of corporate experts in well-
defined knowledge domains

– Search tools enable employees to find appropriate expert in a company

– Some knowledge networking capabilities included in leading enterprise content management and collaboration products

– Social bookmarking
• Sharing and tagging bookmarks

– Folksonomies
• User-created taxonomies for tagging

– Examples:
• Delicious • Slashdot • Pinterest

- Social networks
- Crowdsourcing
- Shared workspaces
- Blogs and wikis
- Social commerce
- File sharing
- Social marketing
- Communities

– Provide tools for management, delivery, tracking, and assessment of various types of employee learning and training

– Support multiple modes of learning
• CD-ROM, Web-based classes, online forums, live instruction,
and so on

– Automates selection and administration of courses

– Assembles and delivers learning content

– Measures learning effectiveness

Systems for knowledge workers to help create new
knowledge and integrate that knowledge into business

– Researchers, designers, architects, scientists, engineers who
create knowledge for the organization

– Three key roles:
1. Keeping organization current in knowledge
2. Serving as internal consultants regarding their areas of expertise
3. Acting as change agents, evaluating, initiating, and promoting change projects

– Sufficient computing power for graphics, complex
calculations

– Powerful graphics and analytical tools

– Communications and document management

– Access to external databases

– User-friendly interfaces

– Optimized for tasks to be performed (design engineering, financial analysis)

CAD (computer-aided design):
• Creation of engineering or architectural designs • 3-Dprinting

Virtual reality systems:
• Simulate real-life environments
• 3-D medical modeling for surgeons
• Augmentedreality(AR)systems
• VRML

Investment workstations:
• Streamline investment process and consolidate internal, external data for brokers, traders, portfolio managers

Used to capture individual and collective knowledge and to extend
knowledge base:

– To capture tacit knowledge: Expert systems, case-based reasoning, fuzzy logic

– Knowledge discovery: Neural networks and data mining

– Generating solutions to complex problems: Genetic algorithms

– Automating tasks: Intelligent agents

Computer-based systems that emulate human behavior

– Capture tacit knowledge in very specific and limited
domain of human expertise

– Capture knowledge of skilled employees as set of rules in software system that can be used by others in organization

– Typically perform limited tasks that may take a few minutes or hours, for example:
• Diagnosing malfunctioning machine
• Determining whether to grant credit for loan

– Used for discrete, highly structured decision making

– Descriptions of past experiences of human specialists (cases),
stored in knowledge base

– System searches for cases with characteristics similar to new one and applies solutions of old case to new case

– Successful and unsuccessful applications are grouped with case

– Stores organizational intelligence: Knowledge base is continuously expanded and refined by users

– CBR found in
• Medical diagnostic systems • Customer support

– Rule-based technology that represents imprecision used in linguistic categories (e.g., “cold,” “cool”) that represent range of values

– Describe a particular phenomenon or process linguistically and then represent that description in a small number of flexible rules

– Provides solutions to problems requiring expertise that is difficult to represent with IF-THEN rules
• Autofocus in cameras
• Detecting possible medical fraud
• Sendai’s subway system acceleration controls

How computer programs improve performance without
explicit programming
• Recognizing patterns
• Experience
• Prior learnings (database)

Contemporary examples; Google searches
• Recommender systems on Amazon, Netflix

– Find patterns and relationships in massive amounts of
data too complicated for humans to analyze

– “Learn” patterns by searching for relationships, building models, and correcting over and over again

– Humans “train” network by feeding it data inputs for which outputs are known, to help neural network learn solution by example

– Used in medicine, science, and business for problems in pattern classification, prediction, financial analysis, and control and optimization

– Useful for finding optimal solution for specific problem by examining very large number of possible solutions for that problem

– Conceptually based on process of evolution
• Search among solution variables by changing and
reorganizing component parts using processes such as inheritance, mutation, and selection

– Used in optimization problems (minimization of costs, efficient scheduling, optimal jet engine design) in which hundreds or thousands of variables exist

– Able to evaluate many solution alternatives quickly

Work without direct human intervention to carry out specific, repetitive, and predictable tasks for user, process, or application
– Deleting junk e-mail
• Finding cheapest airfare

Use limited built-in or learned knowledge base; Some are capable of self-adjustment, for example: Siri

Agent-based modeling applications:
• Systems of autonomous agents
• Model behavior of consumers, stock markets, and supply chains; used to predict spread of epidemics

– Genetic algorithms, fuzzy logic, neural networks, and expert systems integrated into single application to take advantage of best features of each

– For example: Matsushita “neurofuzzy” washing machine that combines fuzzy logic with neural networks

The value chain model highlights specific activities in the business where competitive strategies can best be applied and where information systems are most likely to have a strategic impact.

Primary activities are most directly related to the production and distribution of the firm’s products and services, which create value for the customer.
Support activities make the delivery of the primary activities possible.

An IT infrastructure consists of a set of physical devices and software applications that are required to operate the entire enterprise.
But an IT infrastructure is also a set of firmwide services budgeted by management and comprising both human and technical capabilities.

Cloud infrastructure as a service:
Customers use processing, storage, networking, and other computing resources from cloud service providers to run their information systems.

Cloud platform as a service:
Customers use infrastructure and programming tools supported by the cloud service provider to develop their own applications.

Cloud software as a service:
Customers use software hosted by the vendor on the vendor’s cloud infrastructure and delivered over a network.

Public cloud:
A cloud maintained by an external service provider (eg Amazon), accessed through the Internet, and available to the general public.

Private cloud:
A proprietary network or a data center that ties together servers, storage, networks, data, and applications as a set of virtualized services that are shared by users inside a company.

Hybrid:
Computing model where firms use both their own IT infrastructure and also public cloud computing services.

Capacity planning:
Companies need to determine acceptable levels of computer response time and availability for the firm’s mission-critical systems.

Scalability:
The ability of a computer, product, or system to expand to serve a large number of users without breaking down.

TCO:
Original cost of acquiring and installing hardware and software plus ongoing administration costs

Policies, procedures, and technical measures used to prevent unauthorized access, alteration, theft, or physical damage to information systems

Methods, policies, and organizational procedures that ensure safety of organization’s assets; accuracy and reliability of its accounting records; and operational adherence to management standards

• Commercial software contains flaws that create security vulnerabilities
–Bugs (program code defects)
–Zero defects cannot be achieved because complete testing is not possible
with large programs
–Flaws can open networks to intruders


• Patches
–Small pieces of software to repair flaws
–Exploits often created faster than patches can be released and implemented

1. Identity management software
– Automates keeping track of all users and privileges
–Authenticates users, protecting identities, controlling access •

2. Authentication
–Password systems
–Tokens
–Smart cards
–Biometric authentication
–Two-factor authentication

3. Firewall
–Combination of hardware and software that prevents unauthorized users from accessing private networks
–Technologies include:
• Packet filtering
• Stateful inspection
• Network address translation (NAT)
• Application proxy filtering

WEP security
– Static encryption keys are relatively easy to crack
–Improved if used in conjunction with VPN

WPA2 specification
–Replaces WEP with stronger standards
–Continually changing, longer encryption keys

–Transforming text or data into cipher text that cannot be read by
unintended recipients

–Two methods for encryption on networks

- Two methods of encryption
1. Symmetric key encryption
• Sender and receiver use single, shared key
2.  Public key encryption
• Uses two, mathematically related
keys: public key and private key
• Sender encrypts message with recipient’s public key
• Recipient decrypts with private key

- Digital certificate : Data file used to establish the identity of users and electronic assets for protection of online transactions

- Public key infrastructure (PKI): Use of public key cryptography working with
certificate authority

Automation (low return, low risk)

Rationalization

Redesign

Paradigm shift  (High return, high risk)

Variety of tools, methodologies to analyze, design, optimize processes. Used by firms to manage business process redesign

Steps in BPM
1. Identify processes for change
2. Analyze existing processes
3. Design the new process
4. Implement the new process
5. Continuous measurement

Rapid application development (RAD)
– Process of creating workable systems in a very short period of time

Joint application design (JAD)
– Used to accelerate generation of information requirements and to develop initial
systems design

Agile development
– Focuses on rapid delivery of working software by breaking large project into several
small subprojects

DevOps
– Builds on Agile development principles as an organizational strategy

• Mobile websites
• Mobile web apps
• Native apps
• Special requirements for mobile platform
–Smaller screens, keyboards, multitouch gestures, saving resources (memory, processing)

• Responsive web design
–Websites programmed so that layouts change automatically according to user’s computing device

1. Ubiquity
– Marketspace is virtual
– Transaction costs reduced • Global reach
– Transactions cross cultural and national boundaries

2. Universal standards
– One set of technology standards: Internet
standards

3. Richness
– Supports video, audio, and text messages

4. Interactivity

5. Information density
– Greater price and cost transparency – Enables price discrimination

6. Personalization/customization
– Technology permits modification of messages,
goods

7. Social technology
– Promotes user content generation and social networking

• Goods that can be delivered over a digital network • Cost of producing first unit is almost entire cost of
product
• Costs of delivery over the Internet very low
• Marketing costs remain the same; pricing highly variable
• Industries with digital goods are undergoing revolutionary changes (publishers, record labels, etc.)

• Three major types
1. Business-to-consumer (B2C) Example: BarnesandNoble.com
2. Business-to-business (B2B) Example: ChemConnect
3. Consumer-to-consumer (C2C) Example: eBay

• E-commerce can be categorized by platform –Mobile commerce (m-commerce)

• Portal
• E-tailer
• Content provider
• Transaction broker
• Market creator
• Service provider
• Community provider
• Advertising
• Sales
• Subscription
• Free/Freemium
• Transaction fee
• Affiliate

• Internet provides new ways to identify and communicate with customers
• Long tail marketing
• Internet advertising formats
• Behavioral targeting
– Tracking online behavior of individuals
• Programmatic ad buying
• Native advertising

• Computer-to-computer exchange of standard transactions such as invoices, purchase orders
• Major industries have EDI standards
• More companies are moving toward web-enabled private networks

1. Private industrial networks
– Private exchanges
– Large firm using a secure website to link to suppliers and partners

2. Net marketplaces (e-hubs)
– Single digital marketplace for many buyers
and sellers
– May focus on direct or indirect goods
– May be vertical or horizontal marketplaces

3. Exchanges
– Independently owned third-party Net marketplaces for spot purchasing