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EBTM 337 Midterm Study Guide

by: Gilmarys Bernal

EBTM 337 Midterm Study Guide EBTM 337

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These notes cover EBTM 337 Midterm
Enterprise Information Systems
James Otto
Study Guide
midterm, towson, University
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This 27 page Study Guide was uploaded by Gilmarys Bernal on Sunday October 9, 2016. The Study Guide belongs to EBTM 337 at Towson University taught by James Otto in Fall 2016. Since its upload, it has received 77 views. For similar materials see Enterprise Information Systems in Project management at Towson University.


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Date Created: 10/09/16
Chapter 1 – The Information Age in Which You Live Outrageous Industry Transformation • Newspapers subscriptions are declining rapidly • Revenue for printing advertising in magazines is declining as well • People are building homes without land-based phone lines • Movie rentals largely happen online Management Information systems (MIS): deals with the panning for, development, management, and use of information technology tools to help people perform all tasks related to information processing and management. Deals with the coordination and use of three very important organizational resources: • Information • People People use information technology to work with • Information technology information. Organization Resources 1. Information 1.1. Data (datum for singular) Raw facts that describe a particular phenomenon such as the current temperature, the price of a movie rental, or your age. 1.2. Information Data that have a particular meaning within a specific context. The current temperature becomes information if you are deciding what to wear. Your age becomes information when a company created a list of their customers ages. • Business Intelligence: is a collective information – about your customers, competition, business partners, competitive environment, and your own internal operations – that gives you the ability to make effective, important, and often strategic decisions. • Information Quality: pertinent, relevant, and useful. v Timeliness having access to the information when you need it and the information describing the time period you are considering. v Location being able to access the information. v Form the information being in a form that is most useful to you (audio, text, video, etc.) and it being free of errors. If the information is in bad form, therefore you will make a bad decision is called Garbage-in garbage-out (GIGO). v Validity credibility of information • Information from an Organizational Perspective Information flows in four basic directions: 1. v Upward describes the current state of the organization based on its daily transactions. The information originates at the lowest level of the organization and is passed upward through various levels. Along the way, the information takes on a finer level of granularity. o Information granularity refers to the extent of detail within the information. At the lowest levels of a company the information exhibits fine granularity because it has to be explained in detail. At the upper levels it is summarized, therefore, of coarser granularity. v Downward strategies, goals, and directives that originate at a higher level are passed to lower levels in downward information flows. v Horizontal information flows horizontally between functional business units and work teams. The goal is to eliminate the “right hand not knowing what the left hand is doing”. v Outward/Inward information is communicated from and to customers, suppliers, and distributors for the purpose of doing business. This is what electronic commerce is all about. 2. v Internal information: describes specific operational aspects of an organization (information about your company’s customers) v External information: describes the environment surrounding the organization (what the competition is doing) v Objective information: quantifiably describes something that is known (facts) v Subjective information: attempts to describe something that is unknown (estimates, projections, guesses) 2. People In business your most valuable asset is not technology but rather your mind. IT is simply a set of tools that helps you work with and process information. • Technology Literacy Technology-literate knowledge worker knows how and when to apply technology. The “how” includes knowing which technology to purchase, how to exploit the benefits of application software, and what technology infrastructure is required to get businesses connected. • Information Literacy Information-literate knowledge worker can define what information is needed, knows how and where to obtain the information, understands the information once it is received (transforming information into business intelligence), and can act appropriately based on the information to help the organization achieve the greatest advantage. • Ethical Responsibilities Ethics are principles and standards that guide our behavior toward other people. Being socially and ethically responsible in the information age involves not only the actions you initiate yourself but also what you do to protect yourself and your organizations against the actions of others. 3. Information Technology Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization. • Hardware the physical devices that make up a computer 1. Input device tool you use to enter information and commands. (mouse, bar code scanner) 2. Output device tool you use to see, hear, or otherwise recognize the results of your information-processing requests. (monitor, printer) 3. Storage device tool you use to store information for use at a later time. (DVD, flash memory) 4. Central processing unit hardware that interprets and executes the system and application software instructions and coordinates the operation of all the hardware. RAM (random access memory) is a temporary holding area for the information you are working with as well as the system and application software instructions that the CPU currently needs. 5. Telecommunications device tool you use to send information to and receive it from another person or computer in a network. (modem, satellite) 6. Connecting device include such things as a USB port into which you could connect a printer and internal connecting devices on the motherboard. (port, cord) • Software set of instructions that your hardware executes to carry out a specific task for you. 1. Application software enables you to solve specific problems and perform specific tasks. (Microsoft word, inventory, payroll) 2. System software handles tasks specific to technology management and coordinates the interaction of all technology devices. (technology management, coordination) v Operating system software (windows, mac OS, Linux) v Utility system software (anti-virus software, disk optimization software) Financial Impact of IT: Break-Even Analysis • Fixed cost: the total of all costs that you incur whether or not you sell anything. (Rent) • Variable cost: the amount it costs to acquire/produce one unit that you will eventually sell to your customer • Revenue: how much you sell that one unit for • Break-even point: the amount in dollars or products that you should sell just to cover your fixed cost. Reducing Fixed Costs Technology play a part in helping reduce fixed costs: 1. Digital storefronts – having presence in the virtual world. Amazon vs retail stores 2. Telecommuting – creating a technology infrastructure that allows employees to work from home reduces expenses related to office space. 3. VoIP, or Voice over IP – allows you to use the Internet for making phone calls instead of leasing traditional telephone lines from the phone company. (Skype) 4. Cloud computing – replaces the need of buying hardware infrastructure by renting them on an as-needed basis “in the cloud”. Reducing Variable Costs 1. Virtual goods – digital goods have no variable cost. (Farmville, Habbo) 2. Crowdsourcing – through crowdsourcing you get non-paid non-employees to do work. eBay does not pay anyone to buy, sell, post picture, ship, listing items, and bidding. Increasing Revenue 1. Recommendation engines – these engines make recommendations to you based on your likes, dislikes, and past purchases. 2. Long-tail economics – helps overcome the 80/20 rules that states that only 20 percent of the total available products are worth selling. These 20% is the products that everyone wants and everyone sells. Long tail economics helps to provide a wider variety than just the hottest products. Industry Impact of IT: Porter's Five Forces Model In the business world, businesses carefully scrutinize their technology purchases, seeking to find and justify competitive advantage. Competitive advantage is providing a product or service in a way that customers value more than what your competition is able to do. First-mover advantage gaining market share by being the first to market with a competitive advantage. 1. Buyer Power: high when buyers have many choices from whom to buy, and low when their choices are few. How companies reduce your buying power: Loyalty programs, reward programs, etc. Whatever forces you to stay purchasing from the same company. 2. Supplier Power: high when buyers have few choices from whom to buy, and low when their choices are many. In order to increase supplier power, companies obtain patents and trademarks to minimize the extent to which products and services can be duplicated and offered by other organization. How the industry can reduce supplier power: 1. Threat of substitute products or services: high when there are many alternatives to a product or service, and low when there are few alternatives from which to choose. v Switching costs: are costs that make customers reluctant to switch to another product or service suppliers. It does not have to be monetary. When you buy from Amazon they store all the information of previous purchases, likes, dislikes. If you change to eBay you will have to start from zero. 2. Threat of new entrants: high when it is easy for new competitors to enter a market, and low when there are significant entry barriers to entering a market. v Entry barrier: is a product or service feature that customers have come to expect from organizations in a particular industry and that must be offered by an entering organization to compete and survive. 3. Rivalry among existing competitors: high when competition is fierce in a market, and low when competition is more complacent. Strategy Impact of IT Three approaches or strategies to beating the competition in any industry 1. Overall cost leadership: offering the same or better quality product or service at a price that is less than what any of the competitions is able to do. Example: Walmart offers everything from women’s lingerie to car batteries at a lower price. 2. Differentiation: offering a product or service that is perceived as being “unique” in the market place. Example: Hummer’s unique design and eye- appeal of its H1, H2, and H3 vehicle lines and slogan “Like nothing else”. 3. Focus: focusing on offering products and services (1) to a particular market segment, (2) within a segment of a product line, and/or (3) to a specific geographic market. The opposite of “all things to all people” Run-Grow-Transform Framework: allocate in terms of percentages how will you spend your IT dollars on various types of business strategies. • Run: optimize the execution of activities and processes already in place. • Grow: increase market reach, product and services offerings expand market share • Transform: innovate business processes and products in a completely new way Chapter 2 – Major Business Initiatives: Gaining Competitive Advantage with IT Outrageous Industry Transformation • In the past, to book a flight to had to (1) call an airline directly, or (2) call or visit a travel agent. Since Expedia, Priceline, and Travelocity came along the travel agency business has considerably declined. Implementation of Business Processes to Support Business Strategies 1. Supply Chain Management: is an IT system that supports supply chain management activities by automating the tracking of inventory and information among business processes and across companies. Distribution chain is simply the path a product or service follows from the originator of the product or service to the end customer. *Dell Computer’s supply chain management system is the envy of the industry. Dell follows the “sell, source, and ship” instead of “buy, hold, and sell”.* Primary focus of Supply Chain Management: • Overall cost leadership (from Porter’s three generic strategies) • Running the organization (run-grow-transform framework) v Just-In-Time: is a method for producing and delivering a product or service just at the time the customer wants it. v Inter-modal Transportation: the use of multiple channels of transportation to move products from origin to destination. Lower costs in the supply chain lead to lower prices for consumers, which in turn increase market share and top-line revenue. A well designed supply chain management system helps organizations by optimizing the following specific supply chain activities: • Fulfillment – right quantity of parts for production or products arrive at the right time • Logistics – keeping the cost of transportation as low as possible consistent with safe and reliable delivery • Production – ensuring production lines function smoothly because high-quality parts are available when needed • Revenue and profit – ensuring no sales are lost because shelves are empty • Cost and price – keeping the cost of purchased parts and prices of products at acceptable levels v Information partnership: two or more companies cooperating by integrating their IT systems, thereby providing customers with the best of what each can offer. 2. Customer Relationship Management: uses information about customers to gain insights into their needs, wants, and behaviors in order to serve them better. Primary focus of Customer Relationship Management is: • Differentiation and focus (Porter’s three generic strategies) • Growing the organization (run-grow-transform framework) v Multi-channel service delivery: is the term that describes a company’s offering multiple ways in which customers can interact with it. A fundamental goal for a CRM system is the management and tracking of all these interactions. CRS systems typically include such functions as: v Sales force automation v Customer service and support v Marketing campaign management v Analytics Sales force automation systems automatically track all the steps in the sales process and empowers sales representatives with information and business intelligence focused on customer buying patterns and needs. Analytics are hard-core, numerical data that allow people to analyze operations and processes and make better decisions. IT support for Customer Relationship Management v Front office systems are the primary interface to customers and sales channels; they send all the customers information they collect to the database. v Back office systems are used to fulfill and support customer orders and they also send all their customer information to the database. Software-as-a-service (SaaS) is a delivery model for software in which you pay for software on a pay-per-use basis instead of buying the software outright. 3. Enterprise Resource Planning: is a collection of integrated software for business management, accounting, finance, human resources management, project management, inventory management, service and maintenance, transportation, e- business, supply chain management, customer relationship management and e- collaboration. The dominating ERP software suppliers are SAP, Oracle/PeopleSoft, Infor, and Microsoft. What exactly do ERP does? Replaces “islands of information and processes” with a single, packaged software solution that integrates all the traditional enterprise management functions such as financials, human resources, and manufacturing and logistics. History of ERP the early stage of ERP was carried out in the 1970s through a system called Materials Requirement Planning (MRP). The focus of the MRP was on internal production planning, calculating time requirements components. It did not focus on any type of service orientation. The next generation was introduced in 1980s under the name Manufacturing Resources Planning II (MRPII) and served as decision support systems (DSS) as well as executing information systems (EIS). In the 1990s appeared the Enterprise Resource Planning (ERP). Its functionality allows transparent integration of functions, providing flows of information among all areas within the enterprise in a consistently visible manner. Allows to implement a Legacy Information System (LIS) which represents a massive, long-term business investment in a software system with a single focus ERP characteristics: v Modular design comprising many distinct business functions such as financial, manufacturing, and distribution. v A centralized database that organizes and manages information v Integrated functions that provide seamless information flow among them v Flexible best practices v Functions that work in real time v Internet-enables ERP software for market size v Small businesses – less than 100 seats v Medium-size businesses – 100-500 seats v Large businesses – more than 500 seats 4. Social Media: is a collection of Web-based and mobile technologies that create true interactivity among users, most usually allowing users to be both creators and consumers of content. It is fueled by Web 2.0 which is the so-called second generation of the Web and focuses on online collaboration, users as both creators and modifiers of content. v Social networking • Social networking site is a site on which you post information about yourself, create a network of friends, read about other people, etc. v Social shopping • Groupon, Webtab, etc v Social playing • Multiplayer online role-playing games games in which thousands or perhaps millions of people play and interact in a robust virtual world. (cityville, Farmville, zynga poker) v Social “Saving The World” • The pepsi refresh project • Toyota idead for good • Epic win v Social Locationing Is the use of a mobile device and its location to check into locations such as businesses and entertainment venues. (Foursquare) Chapter 3 – Databases and Data Warehouse: Supporting the Analysis-Driven Organization Outrageous Industry Transformation Apple launched iTunes and outrageously transformed music retail sales. There will never again be a time when the sale of physical music (CDs, etc.) is greater than that of digital downloads. To people music has a deep meaning, to computers music is just data. Business Intelligence: - collective information – about your customers, your competitors, your business partners, your competitive environment, your own internal operations – that gives you the ability to make effective, important, and often strategic business decisions. You need data and information then you need the right IT Tools to define and analyze various relationship within the information. Analytics: - the science of fact-based decision making. Business intelligence is a resource/component of the overall framework of analytics. Online transaction processing (OLTP) is the gathering of input information, processing the information and updating existing information to reflect the gathered and processed information. Operational databases: technology tool that directly supports OLTP. Inside these operational databases is valuable information that forms the basis for business intelligence. Online Analytical Processing (OLAP) manipulation of information to support decision making. Date warehouse a special form of a database that contains information gathered from operational databases for the purpose of supporting decision-making tasks. When you build a data warehouse and use data-mining tools to manipulate the data warehouse’s information, you are actively engaging in analytics. INFORMATION BUSINESS INTELLIGENCE • Product database • Advertising database DATAWAREHOUSE • Customer database OLTP OLAP The Relational Database Model There are actually four primary models for creating a database . The object-oriented database model is the newest and holds great promise. However, we are going to focus in the relational database model. • Database: is a collection of information that you organize and access according to the logical structure of that information. Relational database: is uses a series of logically related two -dimensional tables or files to store information in the form of a database. Relation describes each two-dimensional table or file in the relational model. It is composed of two distinct parts 1. Collections of Informat ion: in each file, you can see specific pieces of information or attributes such as (order number, order date, customer number, delivery address, concrete type, amount in cubic yards, truck number, and driver ID. 2. Created with logical structures: organizing and accessing information according to its logical structure, no its physical position. • Data dictionary: contains the logical structure for the information in the database. For example, tells you that “Date of Hire” for employee needs a month, date, and year. 3. With logical ties within the information: before creating ties or relationships in the information you must specify the primary key of each file. A primary key is a field that uniquely describes each record. The name of a customer is the primary key for a customer file, and the number of an order is the primary key for an order file. Each name and order number has to be unique. A foreign key is a primary key of one file that appears in another file. Example: o Customer file ü Customer number – primary key o Truck file ü Truck number – primary key o Employee file ü Employee ID – primary key o Order file ü Order number – primary key ü Customer number – foreign key ü Truck number – foreign key 4. With built-in Integrity Constrains Integrity constraints are rules that help ensure the quality of the information. For example, by saying the customer number is primary key of the customer file and foreign key of the order file you are saying (1) that no two customers can have the same customer number and (2) that a customer number that is entered into the order file must have a matching customer number in the customer file. Database Management System Tools As you use word processing and spreadsheet to work with documents and wordbooks, you use database management system software (DBMS) to work with databases. It helps you specify the logical organizational for a database and access and use the information within a database . A DBMS contains five important software components: • DBMS engine accepts logical requests from the various other DBMS subsystems, coverts them into their physical equivalent, and actually accesses the database and data dictionary as they exist on a storage device. o Physical view deals with how information is physically arranged, stored, and accessed on some type of storage device such as a hard disk. o Logical view focuses on how you as a knowledge worked need to arrange and access information to meet your particular business needs • Data definition subsystem helps you create and maintain the data dictionary and define the structure of the files in a database. With a workbook, you can immediately begin typing in information and creating formulas and functions. You can’t do that with a database , you must define its logical structure before you can begin typing in any information. o Logical Properties ü Field name (customer number, order date) ü Type (alphabetic, numeric, date, time) ü Form (is an area code required for a phone number?) ü Default value (if no Order Date is entered, the default is today’s date) ü Validation rule (can Amount exceed 8?) ü Is an entry required? (must you enter Delivery Address for an order or can it be blank?) ü Can there be duplicates? (primary keys cannot be duplicates; but what about amounts?) • Data manipulation subsystem helps you add, change, and delete information in a database and query it for valuable information. While the DBMS engine handles your information requests from a physical point of view, it is the data manipulat ion tools within a DBMS that allow you to specify your logical information requirements. Tools: o Views allows you to see the contents of a database file, make whatever changes you want, perform simple sorting, and query to find the location of specific inf ormation. o Report generators help you quickly define formats of reports and what information you want to see in a report. You can save a report format that you use frequently . o Query-by-example tools (QBE) help you graphically design the answer to a question. When you perform a QBE you (1) identify the files in which the needed information is located, (2) drag any necessary fields from the identified files to the QBE grid, and (3) specify selection criteria. o Structured query language (SQL) Performs the same function as QBE, except that you perform the query by creating a statement instead of pointing, clicking, and dragging. After the SELECT, you list the fields of information you want; after the FROM, you specify what logical relationships to use; and after the WHERE, you specify any selection criteria. • Application generation subsystem contains facilities to help you develop transaction-intensive applications. As with SQL, application generation facilities a re most often used by IT specialists. • Data administration subsystem helps you manage the overall database environment by providing facilities for: o Backup and recovery – provide a way for you to (1) periodically back up information and (2) restart or recover a database and its information in case of a failure. o Security management – allow you to control who has access to what information and what type of access those people have. Always remember CRUD – Create, Read, Update, and Delete. o Query optimizatio n – find the “shortest route” to the information you want so you don’t have to. o Reorganization facilities – continually maintain statistics concerning how the DBMS engine physically access information and reorganizes how information is physically stored. o Concurrency control – ensure the validity of database updates when multiple users attempt to access and change the same information. o Change management – allow you to assess the impact of proposed structural changes to a database. Data Warehouse and Data Mining Data warehouse is a logical collection of information used to create business intelligence that supports business analysis activities and decision -making tasks. Characteristics: • Data warehouses are Multidimensional – they contain layers of columns and rows. This multidimensional representation of information is referred to as a hypercube. • Data warehouses support decision making, not transaction processing – they exist to support decision-making tasks in your organization, therefore they only support online analytical processing (OLAP). You process transactions with your operational database. The tool set of the Analytics Professional Data-mining tools are the software tools you use to query information in a data ware-house. They support the concept of OLAP – manipulation of information to support decision making. • Query-and-reporting tools are similar to QBE tools, SQL, and report generators in the typical database environment. Most often, data warehouse use these type of tools to generate simple queries and reports. • Artificial intelligence includes tools such as neural networks and fuzzy logic to form the basis of “information discovery” and build business intelligence in OLAP. Represents the growing converge nce of various IT tools for working with information. • Multidimensional analysis tools slice-and-dice techniques that allow you to view multidimensional information from different perspectives. Within the context of a data warehouse, we refer to this proce ss as “turning the cube” • Digital dashboards display key information gathered from several sources on a computer screen in a format tailored to the needs and wants of an individual knowledge worker. The key items of information are called key performance indicators (KPIs), that are the most essential and important quantifiable measures used in analytics initiatives to monitor success of a business activity. • Statistical Tools help you apply various mathematical models to the information stored in a data warehouse to discover new information. For example, you can perform a time -series analysis to project future trends. The Analytics Life Cycle 1. Gather analytics needs • Interview users • Determine key performance indicators 2. Find the data • Identify sources – internally or externally – of data from which key performance indicators can be derived 3. ETL • Extract the data from its sources • Transform the data into a standardized format • Load the data into a data warehouse 4. Mine the data • Apply data-mining tools • Generate KPIs for the decision maker Data marts: Smaller data warehouses Data mart is a subset of a data warehouse in which only a focused portion of the data warehouse information is kept . Contains only merchandising-specific information that would be unique, for instance, to the financial department. Important considerations in using a data warehouse 1. Do you need a data warehouse? Before getting a data warehouse you should consider (1) they are expensive, (2) they may not be necessary since some businesses can easily extract all the business intelligence they need from databases, (3) they require extensive and often expensive support. 2. Do all your employees need an entire data warehouse? If not, consider data marts. 3. How up-to-date must the information be? You take “snapshots” of database information and load it into a data warehouse. If crucial information changes every second, this may not be possible. 4. What data-mining tools do you need? Information Ownership Strategic Management Support • CIO (chief information officer) – responsible for overseeing every aspect or an organization’s information resources. • CTO (chief technology officer) – responsible for overseeing both the underlying IT infrastructure within an organization and the user-facing technologies. • CSO (chief security officer) – responsible for the technical aspects of ensuring the security of information such as the development and use of firewalls, intranets, extranets, and anti-virus software. • CPO (chief privacy officer) – responsible for ensuring that information is used in an ethical way and that only the right people have access to certain types of information such as financial records, payroll, and healthcare. Data administration is the function in an organization that plans for, oversees the development of, and monitors the information resources. Database administration is the function in an organization that is responsible for the more technical and operational aspects of managing the information contained in organizational information repositories. Chapter 4 – Analytics, Decision Support, and Artificial Intelligence Outrageous Industry Transformation: Online Learning Students that take online classes growth has been of 1.2 and 2 percent per year, which represents a 37% from 2004 to 2005. Decisions and Decision Support Decisions Models: A. Decisions Phases Model 1. Intelligence (find what to fix): Also called the diagnostic phase of decision making. Involves detecting and interpreting signs that indicate a situation which needs your attention. a. Example of signs: consistent customer requests for new products features, the threat of new competitors, declining sales, rising costs 2. Design (find fixes): Consider possible ways of solving the problem, filling the need, or taking advantage of the opportunity. In this step, you develop all the possible solutions you can. a. Examples of solutions: break-even point analysis. 3. Choices (find a fix): Also called the prescriptive phase of decision making. Examine and weigh the merits of each solution, estimate the consequences of each, and choose the best one. a. Examples of analytics: build a spreadsheet that shows the outcome of each solution. 4. Implementation (apply the fix): Carry out the chosen solution, monitor the results, and make adjustments as necessary. B. Satisfying Model Making a choice that meets your needs and is satisfactory without necessarily being the best possible choice available. Maximum growth: optimizing strategy High growth: satisficing strategy Decision Types: 1. Structured decision: involves processing a certain kind of information in a specified way so that you will always get the right answer. These are the kinds of decisions you can program. Example: calculating gross pay for hourly workers 2. Non-structured decisions: there may be several “right” answers, and there is no precise way to get a right answer. Example: deciding whether to introduce a new product line, employ a new marketing campaign, or change the corporate image. 3. Recurring decisions: one that happens repeatedly, and often periodically, whether weekly, monthly, quarterly, or yearly. Example: deciding how much inventory to carry and deciding at what price to sell the inventory. 4. Nonrecurring/Ad hoc decisions: a decision that you make infrequently (perhaps only once), and you may even have different criteria for determining the best solution each time. Decision Support Systems Highly flexible and interactive IT system that is design to support decision making when the situation includes non-structured elements. Primary objectives of a DSS is providing with: • A simple and easy-to-use graphical user interface (GUI) • Access to large amounts of information • Models and tools (statistical and analytical) that you can use to message the information Components of a DSS: 1. User Interface Management Component (UIMC): allows you to communicate with the DSS. The user interface is the part of the system you see; through it you enter information, commands, and models. For Excel, the UIMC include things like buttons, menu options, formulas and functions, etc. 2. Data Management Component (DMC): performs the functions of storing and maintaining information and also that of giving you access to information you want your DSS to use. In Excel, you can build store, retrieve workbooks, and each wordbook can contain numerous worksheets. • Organizational information: you can design your DSS to access information directly from your company’s databases, data warehouses, and a host of specialized systems such as CRM and SCM. • External information: Various branches of the federal government, Dow Jones, and the Internet can provide additional information for use with a DSS. • Personal information: You can incorporate your own insights and experience your personal information into your DSS. 3. Model Management Component (MMC): consists of a wide variety of statistical and analytical tools, techniques, and models. Excel contains basic descriptive statistics tools, goal-seek, solver, financial functions, math and trigonometry functions, engineering functions, etc. Geographic Information Systems A GIS is a decision support system designed specifically to analyze spatial information. Spatial information is any information that can be shown in a map form. Business geography is when businesses use GIS software to generate maps showing information of interest. It has many dimensions or layers called themes. With themes you can show any combination of layers you need according to the decision at hand. Data Mining Tools and Models 1. Databases and DBMSs – the heat of every organization and any analytics initiative. These help gather, store, and organize a wealth of information from which business intelligence can be derived 2. Query-and-reporting tools – similar to QBE tools, SQL, and report generators in the typical database environment. 3. Multidimensional analysis (MDA) tools – slice-and-dice techniques that allow you to view multidimensional information from different perspectives 4. Digital dashboards – display key information gathered from several sources on a computer screen in a format tailored to the needs and wants of an individual knowledge worker. 5. Statistical tools – help you apply various mathematical models to information to discover new information 6. Geographic information systems – decision support systems designed specifically to analyze spatial information. 7. Specialized analytics like predictive analytics and text analytics – these have broad application to all industries and a variety of business domains 8. Artificial intelligence – the science of making machines imitate human thinking and behavior. Data mining Tools and Models tasks: 1. Association or Dependency Modeling – for example, a grocery store may find that one purchase, say, peanut butter, is mostly done in conjunction with another product, jelly. It allows for coupons offering and cross-selling opportunities. 2. Clustering – discovering groups of entities (like customers) that are in some way or another “similar” without using any priori and known statement. 3. Classification – also known as prediction. You attempt to evaluate historical, known data to derive structures and inferences that can be applied to newly gathered or perhaps future data 4. Regression – the goal is to find corollary and often casual relationships between sets of data 5. Summarization – sums, averages, standard deviations, histograms, frequency distributions, and many other forms of descriptive statistics can be very revealing Predictive Analytics Highly computational data-mining technology that uses information and business intelligence to build a predictive model for a given business application. Using historical information to predict the future. Prediction goal is the question you want to address by the predictive analytics model. Prediction indicator is a specific measurable value based on an attribute of the entity under consideration. These facts are important for making the right prediction • Frequency of purchases • Proximity of date of last purchase • Presence on Facebook • Presence on Twitter Text Analytics Is a process of using statistical, artificial intelligence, and linguistic techniques to conver information content in a textual source – like surveys, e-mails, blogs, and social media – into structured information. Most definitely falls within the categories of analytics in general and more specifically decision support systems because it works primarily with non-structured elements. Handles: • Lexical analysis • Named entity recognition • Disambiguation • Coreference • Sentiment analysis Endless Analytics • Web analytics – analytics related to the Internet focused on optimizing web page usage. Search Engine Optimization (SEO) improves the visibility of a web site through the use of tags and key terms found by search engines • HR analytics – the analysis of human resource or talent management data for purposes of work-force capacity planning, training, etc. • Marketing analytics – improve marketing efforts including product placement, marketing mix, and customer identification and classification • CRM analytics – the analysis of CRM data to improve functions such as sales force automation and customer service and support. • Social media analytics – the analysis of data related to social media use, mainly by customers or competitors. • Mobile analytics – the analysis of data related to the use of mobile devices Artificial Intelligence The science of making machines imitate human thinking and behavior. Categories: 1. Expert Systems also called knowledgeable-based system, is an artificial intelligence system that applies reasoning capabilities to reach a conclusion. They are excellent for diagnostic and prescriptive problems. It is usually built for a specific application area called domain. 2. Neural Networks and Fuzzy Logic simulates human abilities to classify things without taking prescribed steps leading to the solution. A neural network (often called an artificial neural network) is an artificial intelligence system that is capable of finding and differentiating patterns. Fuzzy logic is a mathematical method of handling imprecise or subjective information; the basic approach is to assign values between 0 and 1 to vague or ambiguous information. 3. Genetic Algorithms is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions for a problem. It is an optimizing system: it finds the combination of inputs that gives the best outputs. Agent-Based Technologies Is small pieces of software that acts on your behalf performing tasks assigned to it. Essentially, an agent-based technology is an “agent”, much like an agent that represents a movie star or athlete, performing assigned tasks like negotiating contract. • Autonomous agent software agent that can adapt and alter the manner in which it attempts to achieve its assigned task • Distributed agent software agent that works on multiple distinct computer systems • Mobile agent software agent that can relocate itself onto different computer systems • Intelligent agent software agent that incorporates artificial intelligence capabilities such as learning and reasoning. o Information agents intelligent agents that search for information in some kind and bring it back. The best known are buyer agents which are on a web site that help you find products and services you need o Monitoring-and-surveillance agents constantly observe and report on some entity of interest, a network, or manufacturing equipment o User agents (personal agents) take action on your behalf, such as sorting your e-mail by priority, dumping unsolicited e-mail into your spam folder, and playing computer games as your opponent. Data-mining agents operates in a data warehouse discovering information. • Multi-agent system by observing parts of the ecosystem artificial intelligence scientists can use hardware and software models that incorporate characteristics and behavior to (1) learn how people-based systems behave; (2) predict how they will behave under a given set of circumstances; and (3) improve human systems to make them more efficient and effective. Biomimicry is the concept of learning from ecosystems and adapting their characteristics to human and organizational situations. Swarm Intelligence is the collective behavior of groups of simple agents that are capable of devising solutions to problems as they arise, eventually leading to coherent global patterns. Chapter 6 – System Development (Phases, Tools, and Techniques) Outrageous Industry Transformation: Cameras Use Film? The original device was a camera with a film in it. Then it changed to a digital camera. Later on, it came the phones with camera capabilities. Kodak, the largest organization in the camera and film industry saw its sales slashed from $7 billion in 2004 to $1.9 billion in 2010. System Development There are three primary choices as to who will build your system: 1. Insourcing Involves in-house IT specialists within your organization to develop systems 2. Self-sourcing (End-user development) The development and support of IT systems by end users (knowledge workers) with little or no help from IT specialists. 3. Outsourcing The delegation of specific work to a third party for a specified length of time, at a specified cost, and at a specified level of service Insourcing and the Systems Development Life Cycle Systems Development Life Cycle is a structured step-by-step approach for developing information systems. It is also referred to as waterfall methodology – which is a sequential, activity-based process in which one phase of the SDLC is followed by another. 1. Planning 1.1 Define the system to be developed Identify and select the system for development or determine which system is required to support the strategic goals of your organization. A critical success factor (CSF) is simply a factor critical to your organization’s success. 1.2 Set the project scope Define the project’s scope and create a project scope document for your systems development effort. A project scope document is a written document and is usually no longer than a paragraph. Project scope helps you avoid scope creep and feature creep. Scope creep occurs when the scope of the project increases beyond its original intentions. Feature creep occurs when developers (and end users) add extra features that were not part of the initial requirements. 1.3 Develop the project plan including tasks, resources, and timeframes The project plan defines the what, when, and who questions of systems developments including all activities to be performed. A project manager is an individual who is an expert in project planning and management, defines and develops the project plan and tracks the plan to ensure that all key project milestones are completed on time. Project milestones represent key dates by which you need a certain group of activities performed. 2. Analysis 2.1 Gather the business requirements for the system Business requirements are the detailed set of end-users requests that the system must meet to be successful. It states what the system must do from the business perspective. A way to gather business requirements is using a joint application development (JAD) in which session users and IT specialists meet to define and review the business requirements for the system. 2.2 Prioritize the requirements Organize requirements in order of business importance and place them in a formal comprehensive document – the requirements definition document. Users receive this document for their sign-off. Sign-off is the users’ actual signatures indicating they approve all the business requirements. One of the key things to think about when reviewing business requirements is the cost to the company of fixing errors if the business requirement is unclear or inaccurate. 3. Design 3.1 Design the technical architecture required to support the system The technical architecture defines the hardware, software, and telecommunications equipment required to run the system. 3.2 Design system models Modeling is the activity of drawing a graphical representation of a design. During the design phase, the end user begins to take less active role and divert its attention to “quality control”. 4. Development 4.1 Build the technical architecture Before building the system, you must first build the platform on which the system is going to operate. You purchase and implement equipment necessary to support the technical architecture. 4.2 Build the database and programs Initiate and complete the creation of supporting databases and writing the software required for the system. 5. Testing 5.1 Write the test conditions Test conditions are the detailed steps the system must perform along with the expected results of each step. The tester will execute each test condition and compare the expected results with the actual results to verify that the system functions correctly. If there is a difference between the actual and expected results, a bug is generated. 5.2 Perform the testing on the system A few of the most common tests include: • Unit testing tests individual units or pieces of code for a system • System testing verifies that the units or pieces of code written for a system function correctly when integrated into the total system • Integration testing verifies that the separate systems can work together • User acceptance testing determines if the system satisfies the business requirements and enables users to perform their job 6. Implementation 6.1 Write detailed user documentation User documentation highlights how to use the system. 6.2 Provide training for the system users • Online training runs over the internet or off a CD or DVD. Employees perform the training any time, on their own computers, at their own pace. • Workshop training is held in a classroom environment and is led by an instructor. 6.3 Choose the implementation method • Parallel implementation uses both the old and new systems until you’re sure that the new system performs correctly • Plunge Implementation discards the old system completely and immediately uses the new system • Pilot implementation has only a small group of people using the new system until you know it works correctly and then the remaining people are added to the system • Phased implementation installs the new system in phases until you are sure it works correctly and then the remaining phases of the new system are implemented 7. Maintenance 7.1 Build a help desk to support the system users A help desk is a group of people who respond to users’ questions. 7.2 Provide an environment to support system changes Assessing changes’ impact on the system. Component-Based Development Is a general approach to systems development that focuses on building small self-contained blocks of code that can be reused across a variety of applications within an organization. It requires users to (1) look through the software library for reusable code that already exists and (2) build new software in the form of components that can be reused later in other software development projects. Rapid application development (RAD) also called rapid prototyping, emphasizes extensive user involvement in the rapid and evolutionary construction of working prototypes of a system to accelerate the systems development process. • Perform the planning and analysis phases • Review the software library to determine if components already exist • Create prototypes that look and act like aspects of the desired system • Integrate the software components from the previous two steps and test them as a complete system • Implement the new system • Provide ongoing support and maintenance Extreme programming methodology (XP) breaks a project into tiny phases and developers cannot continue on to the next phase until the current phase is complete. XP divides its phases into iterations. XP stresses customer satisfaction Agile Methodology is a form of XP that aims for customer satisfaction through early and continuous delivery of useful software components. It is similar to XP but with less focus on team coding and more in limiting project scope. Service-Oriented Architecture (SOA) is a software architecture perspective that focuses on the development, use, and reuse of small self-contained blocks of code to meet all the application software needs of an organization. It is a high- level, holistic organizational approach to how your organization views and acts on all its software needs. Self-sourcing (End-user Development) The major tools for self-sourcing have been and still continue to be, spreadsheets and database management systems and Web development. A successful strategy for self- sourcing relies on two keys: (1) knowing which application are good candidates and (2) providing end users with the right tools (easy to use, support multiple platforms, offer low cost of ownership, and support a wide range of data types). Self-sourcing Process It is very similar to the phases in the SDLC, however the self-sourcing process encompasses prototyping. 1. Planning 2. Analysis 3. Identify basic requirements 4. Develop initial prototype 5. End user reviewing 6. Revise and enhance the prototype 7. Maintenance § Aligning your self-sourcing efforts with organizational goals § Determining what external support you will require § Documenting the system once complete § Provide ongoing support Advantages of Self-sourcing • Improves requirements determination – during insourcing end users tell IT specialists what they want. During self-sourcing end users essentially tell themselves what they want. • Increases end user participation and sense of ownership • Increases speed of systems development – insourcing may be slower than self-sourcing for smaller projects • Reduces the invisible backlog – the invisible backlog is the list of all systems that an organization needs to develop but never get funded because of the lack of organizational resources. Potential pitfalls and risks of self-sourcing • Inadequate end user expertise leads to inadequately developed systems • Lack of organizational focus creates “privatized” IT systems • Insufficient analysis of design alternatives leads to subpar IT systems • Lack of documentation and external support leads to short-lived systems Prototyping Process of building a model that demonstrates the features of a proposed product, service, or system. A prototype is simply a model of a proposed product, service, or system. Uses of prototyping: • Gathering requirements: start by prototyping the basic system requirements. Then you allow end users to add more requirements (information and processes) as you revise the prototype • Helping determine requirements: help end users determine their exact requirements. • Providing that a system is technically feasible: proof-of-concept prototype. • Selling the idea of a proposed system: a prototype you use to convince people of the worth of a proposed system is selling a prototype. The prototyping process: 1. Identify basic requirements 2. Develop initial prototype 3. End user reviewing 4. Revise and enhance the prototype Advantages of prototyping: • Encourages active end user participation • Helps resolve discrepancies among end users • Gives end users a feel for the final system • Helps determine technical feasibility • Helps sell the idea of a proposed system Disadvantages of prototyping: • Leads people to believe the final system will follow shortly • Gives no indication of performance under operational conditions • Leads the project team to forgo proper testing and documentation Outsourcing The delegation of specific work to a third party for a specified length of time, at a specified cost, and at a specified level of service. Reasons for growth of outsourcing: • Globalization • The Internet • Growing economy and low unemployment rate • Technology • Deregulation IT outsourcing forms: • Purchasing existing software • Purchasing existing software and paying the publisher to make certain modifications • Purchasing existing software and paying the publisher for the right to make m


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