Information Systems for Business and Beyond (2019)

Information Systems for Business and Beyond (2019)

Information systems, their use in business, and the larger impact they are having on our world.

DAVID BOURGEOIS

JOSEPH MORTATI, SHOUHONG WANG, AND JAMES SMITH

Information Systems for Business and Beyond (2019) by David Bourgeois is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

This book was initially developed in 2014 by Dr. David Bourgeois as part of

the Open Textbook Challenge funded by the Saylor Foundation. This 2019

edition is an update to that textbook.

This book was produced with Pressbooks (https://pressbooks.com) and

rendered with Prince.

Information Systems for Business and Beyond

Updated edition: August 1, 2019

DAVID T. BOURGEOIS, PH.D.

JAMES L. SMITH, PH.D.

SHOUHONG WANG, PH.D.

JOSEPH MORTATI, MBA

Title Page | v

Copyright

Information Systems for Business and Beyond (2019) by David Bourgeois is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License, except where otherwise noted.

vi | Copyright

Book Contributors

Information Systems for Business and Beyond was originally

developed in 2014 by David T. Bourgeois Ph.D.

Updates for the 2019 edition were graciously contributed by:

• James L. Smith Ph.D. (all chapters)

• Shouhong Wong, Ph.D. (chapters 4 and 8)

• Joseph Mortati, MBA (chapter 10)

Book Contributors | vii

Changes from Previous Edition

Information Systems for Business and Beyond was written by Dr.

David Bourgeois and originally published in 2014 as part of the

Open Textbook Challenge at the Saylor Foundation. Since then, it

has been accessed thousands of time and used in many courses

worldwide. This 2019 update to the textbook brings it up to date

and adds many new topics. True to its open textbook roots, many

of the updates have come from the community of instructors and

practitioners who are passionate about information systems. See

the page Book Contributors to see the primary contributors to this

edition. A majority of the changes listed below were made by Dr.

James Smith, who did a revision to this text in 2018.

Here is a summary of the changes made:

Overall

• New and updated images, especially those related to statistics,

in order to bring them up to date.

• References brought up to date.

• Added labs for every chapter.

• Added an index.

• Editing for consistency.

Chapter 1: What is an information system?

• Added video: Blum’s fibre optic TED Talk

viii | Changes from Previous Edition

Chapter 2: Hardware

• Removed text which discussed increasing dependency on

tablets and decreasing use of desktops

• Clarification of bit vs. byte, binary vs. digital. Added tables to

Understanding Binary sidebar

• Added Huang’s Law on graphics processor units

• Modified text regarding Moore’s Law to state that his law is no

longer able to be maintained

Chapter 3: Software

• Added information about Ubuntu Linux

• Added Eclipse IDE

• Added information about Tableau

• Supply Chain Management: added an emphasis on use of

Information Systems up and down supply chain by Walmart to

gain competitive advantage

Chapter 4: Data and Databases

• Database schemas redesigned

• Data types added

• SQL examples include output

• NoSQL described

• Data Dictionary re-ordered to column name

• New section on “Why database technology?”

• Differentiation of data, information, and knowledge

• Section on Data models

• Changed illustrative example of database tables and

relationships.

Changes from Previous Edition | ix

• Updated section on Business Intelligence to focus on the rise

of analytics and data science. Includes a new “What is Data

Science?” sidebar.

Chapter 5: Networking and Communication

• History of ARPANET initial four nodes, etc.

• Metcalfe’s Law

Chapter 6: Information Systems Security

• Added information on blockchain and Bitcoin.

Chapter 8: Business Processes

• Introduce tools (DFD, BPMN, UML) of business process

modeling

• Introduce examples of DFD.

Chapter 10: Information Systems Development

• Java sample code

• Mismanaging Change side bar

• Added section on mobile development.

• Added sidebar on risks of end-user computing

x | Information Systems for Business and Beyond (2019)

Chapter 11: Globalization and the Digital Divide

• World 3.0 written by economist Pankaj Ghemawat; also his

TED talk video

Chapter 12: The Ethical and Legal Implications of Information Systems

• Facebook and Cambridge Analytics data privacy

• General Data Protection Regulation section

Chapter 13: Trends in Information Systems

• Waze mapping app

• Drone video

• Drone blood delivery in Kenya video

• Added sidebar on Mary Meeker and her Internet Trends report

Changes from Previous Edition | xi

How you can help

This is an open textbook and relies on the support of its users to

stay relevant and available. Here’s how you can help:

1. Let us know you are using this textbook.

◦ If you are an instructor, please let us know you’ve adopted

this textbook by filling out the instructor survey.

◦ If you are not an instructor, please fill out the student

survey.

2. Let us know how to improve the textbook. If you have

suggestions, please let us know by filling out our feedback

form.

3. Finally, the domain, web hosting, security, backup and export

tools used by this textbook are not free. Please consider

supporting us financially through PayPal. Please note: this

donation goes directly to Imperial Digital LLC, the company

hosting and supporting this open textbook project. All

contribution are marked as donations towards this open

textbook project.

xii | How you can help

Introduction

Welcome to Information Systems for Business and Beyond. In this book, you will be introduced to the concept of information systems, their use in business, and how information systems can be used to gain competitive advantage.

Audience

This book is written as an introductory text, meant for those with

little or no experience with computers or information systems.

While sometimes the descriptions can get a bit technical, every

effort has been made to convey the information essential to

understanding a topic while not getting overly focused in detailed

terminology.

Chapter Outline

The text is organized around thirteen chapters divided into three

major parts, as follows:

• Part 1: What Is an Information System?

◦ Chapter 1: What Is an Information System? – This chapter

provides an overview of information systems, including

the history of how information systems got to where it is

today.

◦ Chapter 2: Hardware – This is a discussion of information

Introduction | 1

systems hardware and how it works. You will look at

different computer parts and learn how they interact.

◦ Chapter 3: Software – Without software, hardware is

useless. This chapter covers software and the role it plays

in an organization.

◦ Chapter 4: Data and Databases – This chapter explores

how organizations use information systems to turn data

into information that can then be used for competitive

advantage. Special attention is paid to the role of

databases.

◦ Chapter 5: Networking and Communication – Today’s

computers are expected to also be communication

devices. This chapter reviews the history of networking,

how the Internet works, and the use of networks in

organizations today.

◦ Chapter 6: Information Systems Security – This chapter

discusses the information security triad of confidentiality,

integrity, and availability. Different security technologies

are reviewed, and the chapter concludes with a primer on

personal information security.

• Part 2: Information Systems for Strategic Advantage

◦ Chapter 7: Does IT Matter? – This chapter examines the

impact that information systems have on an organization.

Can IT give a company a competitive advantage? This

chapter discusses the seminal works by Brynjolfsson, Carr,

and Porter as they relate to IT and competitive advantage.

◦ Chapter 8: Business Processes – Business processes are the

essence of what a business does, and information systems

play an important role in making them work. This chapter

will discuss business process management, business

process reengineering, and ERP systems.

◦ Chapter 9: The People in Information Systems – This

chapter will provide an overview of the different types of

people involved in information systems. This includes

2 | Information Systems for Business and Beyond (2019)

people who create information systems, those who

operate and administer information systems, those who

manage information systems, and those who use

information systems.

◦ Chapter 10: Information Systems Development – How are

information systems created? This chapter will review the

concept of programming, look at different methods of

software development, review website and mobile

application development, discuss end-user computing,

and look at the “build vs. buy” decision that many

companies face.

• Part 3: Information Systems beyond the Organization

◦ Chapter 11: Globalization and the Digital Divide – The rapid

rise of the Internet has made it easier than ever to do

business worldwide. This chapter will look at the impact

that the Internet is having on the globalization of business

and the issues that firms must face because of it. It will

also cover the concept of the digital divide and some of

the steps being taken to alleviate it.

◦ Chapter 12: The Ethical and Legal Implications of

Information Systems – The rapid changes in information

and communication technology in the past few decades

have brought a broad array of new capabilities and powers

to governments, organizations, and individuals alike. This

chapter will discuss the effects that these new capabilities

have had and the legal and regulatory changes that have

been put in place in response.

◦ Chapter 13: Future Trends in Information Systems – This

final chapter will present an overview of some of the new

technologies that are on the horizon. From wearable

technology to 3-D printing, this chapter will provide a look

forward to what the next few years will bring.

Introduction | 3

For the Student

Each chapter in this text begins with a list of the relevant learning

objectives and ends with a chapter summary. Following the

summary is a list of study questions that highlight key topics in the

chapter. In order to get the best learning experience, you would

be wise to begin by reading both the learning objectives and the

summary and then reviewing the questions at the end of the

chapter.

For the Instructor

Instructors: if you have adopted this book for your course, would

you be so kind as to let us know in the instructor survey?

Learning objectives can be found at the beginning of each

chapter. Of course, all chapters are recommended for use in an

introductory information systems course. However, for courses on

a shorter calendar or courses using additional textbooks, a review

of the learning objectives will help determine which chapters can be

omitted.

At the end of each chapter, there is a set of study questions and

exercises (except for chapter 1, which only offers study questions).

The study questions can be assigned to help focus students’ reading

on the learning objectives. The exercises are meant to be a more

in-depth, experiential way for students to learn chapter topics. It

is recommended that you review any exercise before assigning it,

adding any detail needed (such as length, due date) to complete the

assignment. Some chapters also includes lab assignments.

As an open textbook, support for supplemental materials relies

on the generosity of those who have created them and wish to

share them. Supplemental materials, including slides and quizzes,

are located on the home page for this book. If you wish to contribute

4 | Information Systems for Business and Beyond (2019)

materials that you have created, please fill out the instructor survey

and communicate that fact.

Introduction | 5

PART I: WHAT IS AN INFORMATION SYSTEM?

Part I: What is an information system? | 7

Chapter 1: What Is an Information System?

Learning Objectives

Upon successful completion of this chapter, you will be

able to:

• define what an information system is by identifying

its major components;

• describe the basic history of information systems;

and

• describe the basic argument behind the article

“Does IT Matter?” by Nicholas Carr.

Introduction

Welcome to the world of information systems, a world that seems to

change almost daily. Over the past few decades information systems

have progressed to being virtually everywhere, even to the point

where you may not realize its existence in many of your daily

activities. Stop and consider how you interface with various

components in information systems every day through different

Chapter 1: What Is an Information System? | 9

electronic devices. Smartphones, laptop, and personal computers

connect us constantly to a variety of systems including messaging,

banking, online retailing, and academic resources, just to name a

few examples. Information systems are at the center of virtually

every organization, providing users with almost unlimited

resources.

Have you ever considered why businesses invest in technology?

Some purchase computer hardware and software because everyone

else has computers. Some even invest in the same hardware and

software as their business friends even though different technology

might be more appropriate for them. Finally, some businesses do

sufficient research before deciding what best fits their needs. As

you read through this book be sure to evaluate the contents of each

chapter based on how you might someday apply what you have

learned to strengthen the position of the business you work for, or

maybe even your own business. Wise decisions can result in stability

and growth for your future enterprise.

Information systems surround you almost every day. Wi-fi

networks on your university campus, database search services in

the learning resource center, and printers in computer labs are

good examples. Every time you go shopping you are interacting

with an information system that manages inventory and sales. Even

driving to school or work results in an interaction with the

transportation information system, impacting traffic lights,

cameras, etc. Vending machines connect and communicate using

the Internet of Things (IoT). Your car’s computer system does more

than just control the engine – acceleration, shifting, and braking

data is always recorded. And, of course, everyone’s smartphone is

constantly connecting to available networks via Wi-fi, recording

your location and other data.

Can you think of some words to describe an information system?

Words such as “computers,” “networks,” or “databases” might pop

into your mind. The study of information systems encompasses a

broad array of devices, software, and data systems. Defining an

10 | Information Systems for Business and Beyond (2019)

information system provides you with a solid start to this course

and the content you are about to encounter.

Defining Information Systems

Many programs in business require students to take a course in

information systems. Various authors have attempted to define the

term in different ways. Read the following definitions, then see if

you can detect some variances.

• “An information system (IS) can be defined technically as a set

of interrelated components that collect, process, store, and

distribute information to support decision making and control

in an organization.” 1

• “Information systems are combinations of hardware, software,

and telecommunications networks that people build and use to

collect, create, and distribute useful data, typically in

organizational settings.”2

• “Information systems are interrelated components working

together to collect, process, store, and disseminate

information to support decision making, coordination, control,

analysis, and visualization in an organization.”3

As you can see these definitions focus on two different ways of

describing information systems: the components that make up an

information system and the role those components play in an

organization. Each of these need to be examined.

1. [1]

2. [2]

3. [3]

Chapter 1: What Is an Information System? | 11

The Components of Information Systems

Information systems can be viewed as having five major

components: hardware, software, data, people, and processes. The

first three are technology. These are probably what you thought

of when defining information systems. The last two components,

people and processes, separate the idea of information systems

from more technical fields, such as computer science. In order to

fully understand information systems, you will need to understand

how all of these components work together to bring value to an

organization.

Technology

Technology can be thought of as the application of scientific

knowledge for practical purposes. From the invention of the wheel

to the harnessing of electricity for artificial lighting, technology has

become ubiquitous in daily life, to the degree that it is assumed

to always be available for use regardless of location. As discussed

before, the first three components of information systems –

hardware, software, and data – all fall under the category of

technology. Each of these will be addressed in an individual chapter.

At this point a simple introduction should help you in your

understanding.

Hardware

Hardware is the tangible, physical portion of an information system

– the part you can touch. Computers, keyboards, disk drives, and

flash drives are all examples of information systems hardware. How

12 | Information Systems for Business and Beyond (2019)

these hardware components function and work together will be

covered in Chapter 2.

Software

Software comprises the set of instructions that tell the hardware

what to do. Software is not tangible – it cannot be touched.

Programmers create software by typing a series of instructions

telling the hardware what to do. Two main categories of software

are: Operating Systems and Application software. Operating

Systems software provides the interface between the hardware and

the Application software. Examples of operating systems for a

personal computer include Microsoft Windows and Ubuntu Linux.

The mobile phone operating system market is dominated by Google

Android and Apple iOS. Applicatio