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Information Systems for Business and Beyond

David T. Bourgeois, Ph.D.

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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Information Systems for Business and Beyond © 2014 David T. Bourgeois, is licensed under a Creative Commons Attribution (CC BY) license made possible by funding from The Saylor Foundation's Open Textbook Challenge in order to be incorporated into Saylor.org's collection of open courses available at http://www.saylor.org. Full license terms may be viewed at: http://creativecommons.org/licenses/by/3.0/legalcode
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Contents

1Introduction

Part 1: What Is an Information System? Chapter 1: What Is an Information System?

5David T. Bourgeois

Chapter 2: Hardware 14David T. Bourgeois

Chapter 3: Software 26David T. Bourgeois

Chapter 4: Data and Databases 39David T. Bourgeois

Chapter 5: Networking and Communication 52David T. Bourgeois

Chapter 6: Information Systems Security 64David T. Bourgeois

Part 2: Information Systems for Strategic Advantage Chapter 7: Does IT Matter?

76David T. Bourgeois

Chapter 8: Business Processes 85David T. Bourgeois

Chapter 9: The People in Information Systems 94David T. Bourgeois

Chapter 10: Information Systems Development 104David T. Bourgeois

Part 3: Information Systems Beyond the Organization Chapter 11: Globalization and the Digital Divide

120David T. Bourgeois

Chapter 12: The Ethical and Legal Implications of Information Systems 129David T. Bourgeois

Chapter 13: Future Trends in Information Systems 144David T. Bourgeois

150Answers to Study Questions 162Bibliography

iv Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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Saylor URL: http://www.saylor.org/courses/bus206 Attributed to: David T. Bourgeois, Ph.D.

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 the larger impact they are having on our world.

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 little bit technical, every effort has been made to convey the information essential to understanding a topic while not getting bogged down in detailed terminology or esoteric discussions.

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 we got where we are today. Chapter 2: Hardware – We discuss information 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. In this chapter, we discuss 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. In this chapter we review the history of networking, how the Internet works, and the use of networks in organizations today. Chapter 6: Information Systems Security – We discuss the information security triad of confidentiality, integrity, and availability. We will review different security technologies, 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? We will

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discuss 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 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.

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.

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For the Instructor

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.

Introduction 3

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Part 1: What Is an Information System?

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Chapter 1: What Is an Information System?

David T. Bourgeois

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

If you are reading this, you are most likely taking a course in information systems, but do you even know what the course is going to cover? When you tell your friends or your family that you are taking a course in information systems, can you explain what it is about? For the past several years, I have taught an Introduction to Information Systems course. The first day of class I ask my students to tell me what they think an information system is. I generally get answers such as “computers,” “databases,” or “Excel.” These are good answers, but definitely incomplete ones. The study of information systems goes far beyond understanding some technologies. Let’s begin our study by defining information systems.

Defining Information Systems

Almost all programs in business require students to take a course in something called information systems. But what exactly does that term mean? Let’s take a look at some of the more popular definitions, first from Wikipedia and then from a couple of textbooks:

• “Information systems (IS) is the study of complementary networks of hardware and software that people and organizations use to collect, filter, process, create, and distribute data.”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 viualization in an organization.”3

1. Wikipedia entry on "Information Systems," as displayed on August 19, 2012. Wikipedia: The Free Encyclopedia. San Francisco: Wikimedia Foundation. http://en.wikipedia.org/wiki/Information_systems_(discipline).

2. Excerpted from Information Systems Today - Managing in the Digital World, fourth edition. Prentice-Hall, 2010. 3. Excerpted from Management Information Systems, twelfth edition, Prentice-Hall, 2012.

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http://en.wikipedia.org/wiki/Information_systems_(discipline)
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 that those components play in an organization. Let’s take a look at each of these.

The Components of Information Systems

As I stated earlier, I spend the first day of my information systems class discussing exactly what the term means. Many students understand that an information system has something to do with databases or spreadsheets. Others mention computers and e-commerce. And they are all right, at least in part: information systems are made up of different components that work together to provide value to an organization.

The first way I describe information systems to students is to tell them that they are made up of five components: hardware, software, data, people, and process. The first three, fitting under the category technology, are generally what most students think of when asked to define information systems. But the last two, people and process, are really what separate the idea of information systems from more technical fields, such as computer science. In order to fully understand information systems, students must 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 is a part of our lives in so many ways that we tend to take it for granted. 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 get its own chapter and a much lengthier discussion, but we will take a moment here to introduce them so we can get a full understanding of what an information system is.

Hardware

Information systems hardware is the part of an information system you can touch – the physical components of the technology. Computers, keyboards, disk drives, iPads, and flash drives are all examples of information systems hardware. We will spend some time going over these components and how they all work together in chapter 2.

Software

Software is a set of instructions that tells the hardware what to do. Software is not tangible – it cannot be touched. When programmers create software programs, what they are really doing is simply typing out lists of instructions that tell the hardware what to do. There are several categories of software, with the two main categories being operating-system software, which makes the hardware usable, and application software, which does something useful. Examples of operating systems include Microsoft Windows on a personal computer and Google’s Android on a mobile phone. Examples of application software are Microsoft Excel and Angry Birds. Software will be explored more thoroughly in chapter 3.

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Data

The third component is data. You can think of data as a collection of facts. For example, your street address, the city you live in, and your phone number are all pieces of data. Like software, data is also intangible. By themselves, pieces of data are not really very useful. But aggregated, indexed, and organized together into a database, data can become a powerful tool for businesses. In fact, all of the definitions presented at the beginning of this chapter focused on how information systems manage data. Organizations collect all kinds of data and use it to make decisions. These decisions can then be analyzed as to their effectiveness and the organization can be improved. Chapter 4 will focus on data and databases, and their uses in organizations.

Networking Communication: A Fourth Technology Piece?

Besides the components of hardware, software, and data, which have long been considered the core technology of information systems, it has been suggested that one other component should be added: communication. An information system can exist without the ability to communicate – the first personal computers were stand-alone machines that did not access the Internet. However, in today’s hyper-connected world, it is an extremely rare computer that does not connect to another device or to a network. Technically, the networking communication component is made up of hardware and software, but it is such a core feature of today’s information systems that it has become its own category. We will be covering networking in chapter 5.

People

When thinking about information systems, it is easy to get focused on the technology components and forget that we must look beyond these tools to fully understand how they integrate into an organization. A focus on the people involved in information systems is the next step. From the front-line help-desk workers, to systems analysts, to programmers, all the way up to the chief information officer (CIO), the people involved with information systems are an essential element that must not be overlooked. The people component will be covered in chapter 9.

Process

The last component of information systems is process. A process is a series of steps undertaken to achieve a desired outcome or goal. Information systems are becoming more and more integrated with organizational processes, bringing more productivity and better control to those processes. But simply automating activities using technology is not enough – businesses looking to effectively utilize information systems do more. Using technology to manage and improve processes, both within a company and externally with suppliers and customers, is the ultimate goal. Technology buzzwords such as “business process reengineering,” “business process management,” and “enterprise resource planning” all have to do with the continued improvement of these business procedures and the integration of technology with them. Businesses hoping to gain an advantage over their competitors are highly focused on this component of information systems. We will discuss processes in chapter 8.

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IBM 704 Mainframe (Copyright: Lawrence Livermore National Laboratory)

Registered trademark of International Business Machines

The Role of Information Systems

Now that we have explored the different components of information systems, we need to turn our attention to the role that information systems play in an organization. So far we have looked at what the components of an information system are, but what do these components actually do for an organization? From our definitions above, we see that these components collect, store, organize, and distribute data throughout the organization. In fact, we might say that one of the roles of information systems is to take data and turn it into information, and then transform that into organizational knowledge. As technology has developed, this role has evolved into the backbone of the organization. To get a full appreciation of the role information systems play, we will review how they have changed over the years.

The Mainframe Era

From the late 1950s through the 1960s, computers were seen as a way to more efficiently do calculations. These first business computers were room-sized monsters, with several refrigerator-sized machines linked together. The primary work of these devices was to organize and store large volumes of information that were tedious to manage by hand. Only large businesses, universities, and government agencies could afford them, and they took a crew of specialized personnel and specialized facilities to maintain. These devices served dozens to hundreds of users at a time through a process called time-sharing. Typical functions included scientific calculations and

accounting, under the broader umbrella of “data processing.”

In the late 1960s, the Manufacturing Resources Planning (MRP) systems were introduced. This software, running on a mainframe computer, gave companies the ability to manage the manufacturing process, making it more efficient. From tracking inventory to creating bills of materials to scheduling production, the MRP systems (and later the MRP II systems) gave more businesses a reason to want to integrate computing into their processes. IBM became the dominant mainframe company. Nicknamed “Big Blue,” the company became synonymous with business computing. Continued improvement in software and the availability of cheaper hardware eventually brought mainframe computers (and their little sibling, the minicomputer) into most large businesses.

The PC Revolution

In 1975, the first microcomputer was announced on the cover of Popular Mechanics: the Altair 8800. Its immediate popularity sparked the imagination of entrepreneurs everywhere, and there were quickly dozens of companies making these “personal computers.” Though at first just a niche product for computer hobbyists, improvements in usability and the availability of practical software led to growing sales. The most prominent of these early personal computer makers was a little company known as Apple Computer, headed by Steve Jobs and Steve Wozniak, with the hugely successful “Apple II.” Not wanting to be left out of the revolution, in 1981 IBM (teaming with a little company called Microsoft for their operating-

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Registered trademark of SAP

system software) hurriedly released their own version of the personal computer, simply called the “PC.” Businesses, who had used IBM mainframes for years to run their businesses, finally had the permission they needed to bring personal computers into their companies, and the IBM PC took off. The IBM PC was named Time magazine’s “Man of the Year” for 1982.

Because of the IBM PC’s open architecture, it was easy for other companies to copy, or “clone” it. During the 1980s, many new computer companies sprang up, offering less expensive versions of the PC. This drove prices down and spurred innovation. Microsoft developed its Windows operating system and made the PC even easier to use. Common uses for the PC during this period included word processing, spreadsheets, and databases. These early PCs were not connected to any sort of network; for the most part they stood alone as islands of innovation within the larger organization.

Client-Server

In the mid-1980s, businesses began to see the need to connect their computers together as a way to collaborate and share resources. This networking architecture was referred to as “client-server” because users would log in to the local area network (LAN) from their PC (the “client”) by connecting to a powerful computer called a “server,” which would then grant them rights to different resources on the network (such as shared file areas and a printer). Software companies began developing applications that allowed multiple users to access the same data at the same time. This evolved into software applications for communicating, with the first real popular use of electronic mail appearing at this time.

This networking and data sharing all stayed within the confines of each business, for the most part. While there was sharing of electronic data between companies, this was a very specialized function. Computers were now seen as tools to collaborate internally, within an organization. In fact, these networks of computers were becoming so powerful that they were replacing many of the functions previously performed by the larger mainframe computers at a fraction of the cost.

It was during this era that the first Enterprise Resource Planning (ERP) systems were developed and run on the client-server architecture. An ERP system is a software application with a centralized database that can be used to run a company’s entire business. With separate modules for accounting, finance, inventory, human resources, and many, many more, ERP systems, with Germany’s SAP leading the way, represented the state of the art in information systems integration. We will discuss ERP systems as part of the chapter on process (chapter 9).

The World Wide Web and E-Commerce

First invented in 1969, the Internet was confined to use by universities, government agencies, and researchers for many years. Its rather arcane commands and user applications made it unsuitable for mainstream use in business. One exception to this was the ability to expand electronic mail outside the confines of a single organization. While the first e-mail messages on the Internet were sent in the early 1970s, companies who wanted to expand their LAN-based e-mail started hooking up to the Internet in the 1980s. Companies began connecting their internal networks to the Internet in order to allow communication between their employees and employees at other companies. It was with these early Internet connections that the computer truly began to evolve from a computational device to a communications device.

In 1989, Tim Berners-Lee developed a simpler way for researchers to share information over the network at CERN laboratories, a concept he called the World Wide Web.4 This invention became the launching point of the growth of the Internet as a way for businesses to share information about themselves.

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As web browsers and Internet connections became the norm, companies rushed to grab domain names and create websites.

In 1991, the National Science Foundation, which governed how the Internet was used, lifted restrictions on its commercial use. The year 1994 saw the establishment of both eBay and Amazon.com, two true pioneers in the use of the new digital marketplace. A mad rush of investment in Internet-based businesses led to the dot-com boom through the late 1990s, and then the dot-com bust in 2000. While much can be learned from the speculation and crazy economic theories espoused during that bubble, one important outcome for businesses was that thousands of miles of Internet connections were laid around the world during that time. The world became truly “wired” heading into the new millenium, ushering in the era of globalization, which we will discuss in chapter 11.

As it became more expected for companies to be connected to the Internet, the digital world also became a more dangerous place. Computer viruses and worms, once slowly propagated through the sharing of computer disks, could now grow with tremendous speed via the Internet. Software written for a disconnected world found it very difficult to defend against these sorts of threats. A whole new industry of computer and Internet security arose. We will study information security in chapter 6.

Web 2.0

As the world recovered from the dot-com bust, the use of technology in business continued to evolve at a frantic pace. Websites became interactive; instead of just visiting a site to find out about a business and purchase its products, customers wanted to be able to customize their experience and interact with the business. This new type of interactive website, where you did not have to know how to create a web page or do any programming in order to put information online, became known as web 2.0. Web 2.0 is exemplified by blogging, social networking, and interactive comments being available on many websites. This new web-2.0 world, in which online interaction became expected, had a big impact on many businesses and even whole industries. Some industries, such as bookstores, found themselves relegated to a niche status. Others, such as video rental chains and travel agencies, simply began going out of business as they were replaced by online technologies. This process of technology replacing a middleman in a transaction is called disintermediation.

As the world became more connected, new questions arose. Should access to the Internet be considered a right? Can I copy a song that I downloaded from the Internet? How can I keep information that I have put on a website private? What information is acceptable to collect from children? Technology moved so fast that policymakers did not have enough time to enact appropriate laws, making for a Wild West–type atmosphere. Ethical issues surrounding information systems will be covered in chapter 12.

The Post-PC World

After thirty years as the primary computing device used in most businesses, sales of the PC are now beginning to decline as sales of tablets and smartphones are taking off. Just as the mainframe before it, the PC will continue to play a key role in business, but will no longer be the primary way that people interact and do business. The limited storage and processing power of these devices is being offset by a move to “cloud” computing, which allows for storage, sharing, and backup of information on a massive scale. This

4. CERN's "The Birth of the Web." http://public.web.cern.ch/public/en/about/web-en.html

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will require new rounds of thinking and innovation on the part of businesses as technology continues to advance.

The Eras of Business Computing

Era Hardware Operating System Applications

Mainframe (1970s)

Terminals connected to mainframe computer.

Time-sharing (TSO) on MVS

Custom-written MRP software

PC (mid-1980s)

IBM PC or compatible. Sometimes connected to mainframe computer via expansion card.

MS-DOS WordPerfect, Lotus 1-2-3

Client-Server (late 80s to early 90s)

IBM PC “clone” on a Novell Network.

Windows for Workgroups Microsoft Word, Microsoft Excel

World Wide Web (mid-90s to early 2000s)

IBM PC “clone” connected to company intranet.

Windows XP Microsoft Office, Internet Explorer

Web 2.0 (mid-2000s to present)

Laptop connected to company Wi-Fi.

Windows 7 Microsoft Office, Firefox

Post-PC (today and beyond)

Apple iPad iOS Mobile-friendly websites, mobile apps

Can Information Systems Bring Competitive Advantage?

It has always been the assumption that the implementation of information systems will, in and of itself, bring a business competitive advantage. After all, if installing one computer to manage inventory can make a company more efficient, won’t installing several computers to handle even more of the business continue to improve it?

In 2003, Nicholas Carr wrote an article in the Harvard Business Review that questioned this assumption. The article, entitled “IT Doesn’t Matter,” raised the idea that information technology has become just a commodity. Instead of viewing technology as an investment that will make a company stand out, it should be seen as something like electricity: It should be managed to reduce costs, ensure that it is always running, and be as risk-free as possible.

As you might imagine, this article was both hailed and scorned. Can IT bring a competitive advantage? It sure did for Walmart (see sidebar). We will discuss this topic further in chapter 7.

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Sidebar: Walmart Uses Information Systems to Become the World’s Leading Retailer

Walmart is the world’s largest retailer, earning $15.2 billion on sales of $443.9 billion in the fiscal year that ended on January 31, 2012. Walmart currently serves over 200 million customers every week, worldwide.5 Walmart’s rise to prominence is due in no small part to their use of information systems.

One of the keys to this success was the implementation of Retail Link, a supply-chain management system. This system, unique when initially implemented in the mid-1980s, allowed Walmart’s suppliers to directly access the inventory levels and sales information of their products at any of Walmart’s more than ten thousand stores. Using Retail Link, suppliers can analyze how well their products are selling at one or more Walmart stores, with a range of reporting options. Further, Walmart requires the suppliers to use Retail Link to manage their own inventory levels. If a supplier feels that their products are selling out too quickly, they can use Retail Link to petition Walmart to raise the levels of inventory for their products. This has essentially allowed Walmart to “hire” thousands of product managers, all of whom have a vested interest in the products they are managing. This revolutionary approach to managing inventory has allowed Walmart to continue to drive prices down and respond to market forces quickly.

Today, Walmart continues to innovate with information technology. Using its tremendous market presence, any technology that Walmart requires its suppliers to implement immediately becomes a business standard.

Summary

In this chapter, you have been introduced to the concept of information systems. We have reviewed several definitions, with a focus on the components of information systems: technology, people, and process. We have reviewed how the business use of information systems has evolved over the years, from the use of large mainframe computers for number crunching, through the introduction of the PC and networks, all the way to the era of mobile computing. During each of these phases, new innovations in software and technology allowed businesses to integrate technology more deeply.

We are now to a point where every company is using information systems and asking the question: Does it bring a competitive advantage? In the end, that is really what this book is about. Every businessperson should understand what an information system is and how it can be used to bring a competitive advantage. And that is the task we have before us.

Study Questions

1. What are the five components that make up an information system? 2. What are three examples of information system hardware?

5. Walmart 2012 Annual Report.

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3. Microsoft Windows is an example of which component of information systems? 4. What is application software? 5. What roles do people play in information systems? 6. What is the definition of a process? 7. What was invented first, the personal computer or the Internet (ARPANET)? 8. In what year were restrictions on commercial use of the Internet first lifted? When were eBay and Amazon founded? 9. What does it mean to say we are in a “post-PC world”? 10. What is Carr’s main argument about information technology?

Exercises

1. Suppose that you had to explain to a member of your family or one of your closest friends the concept of an information system. How would you define it? Write a one-paragraph description in your own words that you feel would best describe an information system to your friends or family. 2. Of the five primary components of an information system (hardware, software, data, people, process), which do you think is the most important to the success of a business organization? Write a one-paragraph answer to this question that includes an example from your personal experience to support your answer. 3. We all interact with various information systems every day: at the grocery store, at work, at school, even in our cars (at least some of us). Make a list of the different information systems you interact with every day. See if you can identify the technologies, people, and processes involved in making these systems work. 4. Do you agree that we are in a post-PC stage in the evolution of information systems? Some people argue that we will always need the personal computer, but that it will not be the primary device used for manipulating information. Others think that a whole new era of mobile and biological computing is coming. Do some original research and make your prediction about what business computing will look like in the next generation. 5. The Walmart case study introduced you to how that company used information systems to become the world’s leading retailer. Walmart has continued to innovate and is still looked to as a leader in the use of technology. Do some original research and write a one-page report detailing a new technology that Walmart has recently implemented or is pioneering.

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Chapter 2: Hardware

David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• describe information systems hardware; • identify the primary components of a computer and the functions they perform; and • explain the effect of the commoditization of the personal computer.

Introduction

As we learned in the first chapter, an information system is made up of five components: hardware, software, data, people, and process. The physical parts of computing devices – those that you can actually touch – are referred to as hardware. In this chapter, we will take a look at this component of information systems, learn a little bit about how it works, and discuss some of the current trends surrounding it.

As stated above, computer hardware encompasses digital devices that you can physically touch. This includes devices such as the following:

• desktop computers • laptop computers • mobile phones • tablet computers • e-readers • storage devices, such as flash drives • input devices, such as keyboards, mice, and scanners • output devices such as printers and speakers.

Besides these more traditional computer hardware devices, many items that were once not considered digital devices are now becoming computerized themselves. Digital technologies are now being integrated into many everyday objects, so the days of a device being labeled categorically as computer hardware may be ending. Examples of these types of digital devices include automobiles, refrigerators, and even soft- drink dispensers. In this chapter, we will also explore digital devices, beginning with defining what we mean by the term itself.

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Digital Devices

A digital device processes electronic signals that represent either a one (“on”) or a zero (“off”). The on state is represented by the presence of an electronic signal; the off state is represented by the absence of an electronic signal. Each one or zero is referred to as a bit (a contraction of binary digit); a group of eight bits is a byte. The first personal computers could process 8 bits of data at once; modern PCs can now process 64 bits of data at a time, which is where the term 64-bit processor comes from.

Sidebar: Understanding Binary

As you know, the system of numbering we are most familiar with is base-ten numbering. In base-ten numbering, each column in the number represents a power of ten, with the far-right column representing 10^0 (ones), the next column from the right representing 10^1 (tens), then 10^2 (hundreds), then 10^3 (thousands), etc. For example, the number 1010 in decimal represents: (1 x 1000) + (0 x 100) + (1 x 10) + (0 x 1).

Computers use the base-two numbering system, also known as binary. In this system, each column in the number represents a power of two, with the far-right column representing 2^0 (ones), the next column from the right representing 2^1 (tens), then 2^2 (fours), then 2^3 (eights), etc. For example, the number 1010 in binary represents (1 x 8 ) + (0 x 4) + (1 x 2) + (0 x 1). In base ten, this evaluates to 10.

As the capacities of digital devices grew, new terms were developed to identify the capacities of processors, memory, and disk storage space. Prefixes were applied to the word byte to represent different orders of magnitude. Since these are digital specifications, the prefixes were originally meant to represent multiples of 1024 (which is 210), but have more recently been rounded to mean multiples of 1000.

A Listing of Binary Prefixes

Prefix Represents Example

kilo one thousand kilobyte=one thousand bytes

mega one million megabyte=one million bytes

giga one billion gigabyte=one billion bytes

tera one trillion terabyte=one trillion bytes

Tour of a PC

All personal computers consist of the same basic components: a CPU, memory, circuit board, storage, and input/output devices. It also turns out that almost every digital device uses the same set of components, so examining the personal computer will give us insight into the structure of a variety of digital devices. So let’s take a “tour” of a personal computer and see what makes them function.

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Processing Data: The CPU

As stated above, most computing devices have a similar architecture. The core of this architecture is the central processing unit, or CPU. The CPU can be thought of as the “brains” of the device. The CPU carries out the commands sent to it by the software and returns results to be acted upon.

The earliest CPUs were large circuit boards with limited functionality. Today, a CPU is generally on one chip and can perform a large variety of functions. There are two primary manufacturers of CPUs for personal computers: Intel and Advanced Micro Devices (AMD).

The speed (“clock time”) of a CPU is measured in hertz. A hertz is defined as one cycle per second. Using the binary prefixes mentioned above, we can see that a kilohertz (abbreviated kHz) is one thousand cycles per second, a megahertz (mHz) is one million cycles per second, and a gigahertz (gHz) is one billion cycles per second. The CPU’s processing power is increasing at an amazing rate (see the sidebar about Moore’s Law). Besides a faster clock time, many CPU chips now contain multiple processors per chip. These chips, known as dual-core (two processors) or quad-core (four processors), increase the processing power of a computer by providing the capability of multiple CPUs.

Sidebar: Moore’s Law

We all know that computers get faster every year. Many times, we are not sure if we want to buy today’s model of smartphone, tablet, or PC because next week it won’t be the most advanced any more. Gordon Moore, one of the founders of Intel, recognized this phenomenon in 1965, noting that microprocessor transistor counts had been doubling every year.1 His insight eventually evolved into Moore’s Law, which states that the number of transistors on a chip will double every two years. This has been generalized into the concept that computing power will double every two years for the same price point. Another way of looking at this is to think that the price for the same computing power will be cut in half every two years. Though many have predicted its demise, Moore’s Law has held true for over forty years (see figure below).

1. Moore, Gordon E. (1965). "Cramming more components onto integrated circuits" (PDF). Electronics Magazine. p. 4. Retrieved 2012-10-18.

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A graphical representation of Moore’s Law (CC-BY-SA: Wgsimon)

There will be a point, someday, where we reach the limits of Moore’s Law, where we cannot continue to shrink circuits any further. But engineers will continue to seek ways to increase performance.

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Motherboard (click image to enlarge)

Memory DIMM (click image to enlarge)

Motherboard

The motherboard is the main circuit board on the computer. The CPU, memory, and storage components, among other things, all connect into the motherboard. Motherboards come in different shapes and sizes, depending upon how compact or expandable the computer is designed to be. Most modern motherboards have many integrated components, such as video and sound processing, which used to require separate components.

The motherboard provides much of the bus of the computer (the term bus refers to the electrical connection between different computer components). The bus is an important determiner of the computer’s speed: the combination of how fast the bus can transfer data and the number of data bits that can be moved at one time determine the speed.

Random-Access Memory

When a computer starts up, it begins to load information from the hard disk into its working memory. This working memory, called random-access memory (RAM), can transfer data much faster than the hard disk. Any program that you are running on the computer is loaded into RAM for processing. In order for a computer to work effectively, some minimal amount of RAM must be installed. In most cases, adding more RAM will allow the computer to run faster. Another characteristic of RAM is that it is “volatile.” This means that it can store data as long as it is receiving power; when the computer is turned off, any data stored in RAM is lost.

RAM is generally installed in a personal computer through the use of a dual-inline memory module (DIMM). The type of DIMM accepted into a computer is dependent upon the motherboard. As described by Moore’s Law, the amount of memory and speeds of DIMMs have increased dramatically over the years.

Hard Disk

While the RAM is used as working memory, the computer also needs a place to store data for the longer term. Most of today’s personal computers use a hard disk for long-term data storage. A hard disk is where data is stored when the computer is turned off and where it is retrieved from when the computer is turned on. Why is it called a hard disk? A hard disk consists of a stack of disks inside a hard metal case. A floppy disk (discussed below) was a removable disk that, in some cases at least, was flexible, or “floppy.”

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Hard disk enclosure (click image to enlarge) Solid-State Drives

A relatively new component becoming more common in some personal computers is the solid-state drive (SSD). The SSD performs the same function as a hard disk: long-term storage. Instead of spinning disks, the SSD uses flash memory, which is much faster.

Solid-state drives are currently quite a bit more expensive than hard disks. However, the use of flash memory instead of disks makes them much lighter and faster than hard disks. SSDs are primarily utilized in portable computers, making them lighter and more efficient. Some computers combine the two storage technologies, using the SSD for the most accessed data (such as the operating system) while using the hard disk for data that is accessed less frequently. As with any technology, Moore’s Law is driving up capacity and speed and lowering prices of solid-state drives, which will allow them to proliferate in the years to come.

Removable Media

Besides fixed storage components, removable storage media are also used in most personal computers. Removable media allows you to take your data with you. And just as with all other digital technologies, these media have gotten smaller and more powerful as the years have gone by. Early computers used floppy disks, which could be inserted into a disk drive in the computer. Data was stored on a magnetic disk inside an enclosure. These disks ranged from 8″ in the earliest days down to 3 1/2″.

Floppy-disk evolution (8″ to 5 1/4″ to 3 1/2″) (Public Domain)

Around the turn of the century, a new portable storage technology was being developed: the USB flash drive (more about the USB port later in the chapter). This device attaches to the universal serial bus (USB) connector, which became standard on all personal computers beginning in the late 1990s. As with all other storage media, flash drive storage capacity has skyrocketed over the years, from initial capacities of eight megabytes to current capacities of 64 gigabytes and still growing.

Network Connection

When personal computers were first developed, they were stand-alone units, which meant that data was brought into the computer or removed from the computer via removable media, such as the floppy disk. Beginning in the mid-1980s, however, organizations began to see the value in connecting computers together via a digital network. Because of this, personal computers needed the ability to connect to these networks. Initially, this was done by adding an expansion card to the computer that enabled the network connection, but by the mid-1990s, a network port was standard on most personal computers. As wireless

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USB connector (click image to enlarge)

technologies began to dominate in the early 2000s, many personal computers also began including wireless networking capabilities. Digital communication technologies will be discussed further in chapter 5.

Input and Output

In order for a personal computer to be useful, it must have channels for receiving input from the user and channels for delivering output to the user. These input and output devices connect to the computer via various connection ports, which generally are part of the motherboard and are accessible outside the computer case. In early personal computers, specific ports were designed for each type of output device. The configuration of these ports has evolved over the years, becoming more and more standardized over time. Today, almost all

devices plug into a computer through the use of a USB port. This port type, first introduced in 1996, has increased in its capabilities, both in its data transfer rate and power supplied.

Bluetooth

Besides USB, some input and output devices connect to the computer via a wireless-technology standard called Bluetooth. Bluetooth was first invented in the 1990s and exchanges data over short distances using radio waves. Bluetooth generally has a range of 100 to 150 feet. For devices to communicate via Bluetooth, both the personal computer and the connecting device must have a Bluetooth communication chip installed.

Input Devices

All personal computers need components that allow the user to input data. Early computers used simply a keyboard to allow the user to enter data or select an item from a menu to run a program. With the advent of the graphical user interface, the mouse became a standard component of a computer. These two components are still the primary input devices to a personal computer, though variations of each have been introduced with varying levels of success over the years. For example, many new devices now use a touch screen as the primary way of entering data.

Besides the keyboard and mouse, additional input devices are becoming more common. Scanners allow users to input documents into a computer, either as images or as text. Microphones can be used to record audio or give voice commands. Webcams and other types of video cameras can be used to record video or participate in a video chat session.

Output Devices

Output devices are essential as well. The most obvious output device is a display, visually representing the state of the computer. In some cases, a personal computer can support multiple displays or be connected to larger-format displays such as a projector or large-screen television. Besides displays, other output devices include speakers for audio output and printers for printed output.

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Sidebar: What Hardware Components Contribute to the Speed of My Computer?

The speed of a computer is determined by many elements, some related to hardware and some related to software. In hardware, speed is improved by giving the electrons shorter distances to traverse to complete a circuit. Since the first CPU was created in the early 1970s, engineers have constantly worked to figure out how to shrink these circuits and put more and more circuits onto the same chip. And this work has paid off – the speed of computing devices has been continuously improving ever since.

The hardware components that contribute to the speed of a personal computer are the CPU, the motherboard, RAM, and the hard disk. In most cases, these items can be replaced with newer, faster components. In the case of RAM, simply adding more RAM can also speed up the computer. The table below shows how each of these contributes to the speed of a computer. Besides upgrading hardware, there are many changes that can be made to the software of a computer to make it faster.

Component Speed measured by

Units Description

CPU Clock speed

gHz The time it takes to complete a circuit.

Motherboard Bus speed

mHz How much data can move across the bus simultaneously.

RAM Data transfer rate

MB/s The time it takes for data to be transferred from memory to system.

Access time

ms The time it takes before the disk can transfer data.

Hard Disk Data transfer rate

MBit/s The time it takes for data to be transferred from disk to system.

Other Computing Devices

A personal computer is designed to be a general-purpose device. That is, it can be used to solve many different types of problems. As the technologies of the personal computer have become more commonplace, many of the components have been integrated into other devices that previously were purely mechanical. We have also seen an evolution in what defines a computer. Ever since the invention of the personal computer, users have clamored for a way to carry them around. Here we will examine several types of devices that represent the latest trends in personal computing.

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A modern laptop

Portable Computers

In 1983, Compaq Computer Corporation developed the first commercially successful portable personal computer. By today’s standards, the Compaq PC was not very portable: weighing in at 28 pounds, this computer was portable only in the most literal sense – it could be carried around. But this was no laptop; the computer was designed like a suitcase, to be lugged around and laid on its side to be used. Besides portability, the Compaq was successful because it was fully compatible with the software being run by the IBM PC, which was the standard for business.

In the years that followed, portable computing continued to improve, giving us laptop and notebook computers. The “luggable” computer has given way to a much lighter clamshell computer that weighs from 4 to 6 pounds and runs on batteries. In fact, the most recent advances in technology give us a new class of laptop that is quickly becoming the standard: these laptops are extremely light and portable and use less power than their larger counterparts. The MacBook Air is a good example of this:

it weighs less than three pounds and is only 0.68 inches thick! Finally, as more and more organizations and individuals are moving much of their computing to the

Internet, laptops are being developed that use “the cloud” for all of their data and application storage. These laptops are also extremely light because they have no need of a hard disk at all! A good example of this type of laptop (sometimes called a netbook) is Samsung’s Chromebook.

Smartphones

The first modern-day mobile phone was invented in 1973. Resembling a brick and weighing in at two pounds, it was priced out of reach for most consumers at nearly four thousand dollars. Since then, mobile phones have become smaller and less expensive; today mobile phones are a modern convenience available to all levels of society. As mobile phones evolved, they became more like small computers. These smartphones have many of the same characteristics as a personal computer, such as an operating system and memory. The first smartphone was the IBM Simon, introduced in 1994.

In January of 2007, Apple introduced the iPhone. Its ease of use and intuitive interface made it an immediate success and solidified the future of smartphones. Running on an operating system called iOS, the iPhone was really a small computer with a touch-screen interface. In 2008, the first Android phone was released, with similar functionality.

Tablet Computers

A tablet computer is one that uses a touch screen as its primary input and is small enough and light enough to be carried around easily. They generally have no keyboard and are self-contained inside a rectangular case. The first tablet computers appeared in the early 2000s and used an attached pen as a writing device for input. These tablets ranged in size from small personal digital assistants (PDAs), which were handheld,

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to full-sized, 14-inch devices. Most early tablets used a version of an existing computer operating system, such as Windows or Linux.

These early tablet devices were, for the most part, commercial failures. In January, 2010, Apple introduced the iPad, which ushered in a new era of tablet computing. Instead of a pen, the iPad used the finger as the primary input device. Instead of using the operating system of their desktop and laptop computers, Apple chose to use iOS, the operating system of the iPhone. Because the iPad had a user interface that was the same as the iPhone, consumers felt comfortable and sales took off. The iPad has set the standard for tablet computing. After the success of the iPad, computer manufacturers began to develop new tablets that utilized operating systems that were designed for mobile devices, such as Android.

The Rise of Mobile Computing

Mobile computing is having a huge impact on the business world today. The use of smartphones and tablet computers is rising at double-digit rates each year. The Gartner Group, in a report issued in April, 2013, estimates that over 1.7 million mobile phones will ship in the US in 2013 as compared to just over 340,000 personal computers. Over half of these mobile phones are smartphones.2 Almost 200,000 tablet computers are predicted to ship in 2013. According to the report, PC shipments will continue to decline as phone and tablet shipments continue to increase. 3

Integrated Computing

Along with advances in computers themselves, computing technology is being integrated into many everyday products. From automobiles to refrigerators to airplanes, computing technology is enhancing what these devices can do and is adding capabilities that would have been considered science fiction just a few years ago. Here are two of the latest ways that computing technologies are being integrated into everyday products:

• The Smart House • The Self-Driving Car

The Commoditization of the Personal Computer

Over the past thirty years, as the personal computer has gone from technical marvel to part of our everyday lives, it has also become a commodity. The PC has become a commodity in the sense that there is very little differentiation between computers, and the primary factor that controls their sale is their price. Hundreds of manufacturers all over the world now create parts for personal computers. Dozens of companies buy these parts and assemble the computers. As commodities, there are essentially no differences between computers made by these different companies. Profit margins for personal computers are razor-thin, leading hardware developers to find the lowest-cost manufacturing.

There is one brand of computer for which this is not the case – Apple. Because Apple does not make computers that run on the same open standards as other manufacturers, they can make a unique product that no one can easily copy. By creating what many consider to be a superior product, Apple can charge more

2. Smartphone shipments to surpass feature phones this year. CNet, June 4, 2013. http://news.cnet.com/8301-1035_3-57587583-94/ smartphone-shipments-to-surpass-feature-phones-this-year/

3. Gartner Press Release. April 4, 2013. http://www.gartner.com/newsroom/id/2408515

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Electronic waste (Public Domain)

for their computers than other manufacturers. Just as with the iPad and iPhone, Apple has chosen a strategy of differentiation, which, at least at this time, seems to be paying off.

The Problem of Electronic Waste

Personal computers have been around for over thirty-five years. Millions of them have been used and discarded. Mobile phones are now available in even the remotest parts of the world and, after a few years of use, they are discarded. Where does this electronic debris end up?

Often, it gets routed to any country that will accept it. Many times, it ends up in dumps in developing nations. These dumps are beginning to be seen as health hazards for those living near them. Though many manufacturers have made strides in using materials that can be recycled, electronic waste is a problem with which we must all deal.

Summary

Information systems hardware consists of the components of digital technology that you can touch. In this chapter, we reviewed the components that make up a personal computer, with the understanding

that the configuration of a personal computer is very similar to that of any type of digital computing device. A personal computer is made up of many components, most importantly the CPU, motherboard, RAM, hard disk, removable media, and input/output devices. We also reviewed some variations on the personal computer, such as the tablet computer and the smartphone. In accordance with Moore’s Law, these technologies have improved quickly over the years, making today’s computing devices much more powerful than devices just a few years ago. Finally, we discussed two of the consequences of this evolution: the commoditization of the personal computer and the problem of electronic waste.

Study Questions

1. Write your own description of what the term information systems hardware means. 2. What is the impact of Moore’s Law on the various hardware components described in this chapter? 3. Write a summary of one of the items linked to in the “Integrated Computing” section. 4. Explain why the personal computer is now considered a commodity. 5. The CPU can also be thought of as the _____________ of the computer. 6. List the following in increasing order (slowest to fastest): megahertz, kilohertz, gigahertz. 7. What is the bus of a computer?

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8. Name two differences between RAM and a hard disk. 9. What are the advantages of solid-state drives over hard disks? 10. How heavy was the first commercially successful portable computer?

Exercises

1. Review the sidebar on the binary number system. How would you represent the number 16 in binary? How about the number 100? Besides decimal and binary, other number bases are used in computing and programming. One of the most used bases is hexadecimal, which is base-16. In base-16, the numerals 0 through 9 are supplemented with the letters A (10) through F (15). How would you represent the decimal number 100 in hexadecimal? 2. Review the timeline of computers at the Old Computers website. Pick one computer from the listing and write a brief summary. Include the specifications for CPU, memory, and screen size. Now find the specifications of a computer being offered for sale today and compare. Did Moore’s Law hold true? 3. The Homebrew Computer Club was one of the original clubs for enthusiasts of the first personal computer, the Altair 8800. Read some of their newsletters and then discuss some of the issues surrounding this early personal computer. 4. If you could build your own personal computer, what components would you purchase? Put together a list of the components you would use to create it, including a computer case, motherboard, CPU, hard disk, RAM, and DVD drive. How can you be sure they are all compatible with each other? How much would it cost? How does this compare to a similar computer purchased from a vendor such as Dell or HP? 5. Review the Wikipedia entry on electronic waste. Now find at least two more scholarly articles on this topic. Prepare a slideshow that summarizes the issue and then recommend a possible solution based on your research. 6. As with any technology text, there have been advances in technologies since publication. What technology that has been developed recently would you add to this chapter? 7. What is the current state of solid-state drives vs. hard disks? Do original research online where you can compare price on solid-state drives and hard disks. Be sure you note the differences in price, capacity, and speed.

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Chapter 3: Software

David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• define the term software; • describe the two primary categories of software; • describe the role ERP software plays in an organization; • describe cloud computing and its advantages and disadvantages for use in an organization; and • define the term open-source and identify its primary characteristics.

Introduction

The second component of an information system is software. Simply put: Software is the set of instructions that tell the hardware what to do. Software is created through the process of programming (we will cover the creation of software in more detail in chapter 10). Without software, the hardware would not be functional.

Types of Software

Software can be broadly divided into two categories: operating systems and application software. Operating systems manage the hardware and create the interface between the hardware and the user. Application software is the category of programs that do something useful for the user.

Operating Systems

The operating system provides several essential functions, including: 1. managing the hardware resources of the computer; 2. providing the user-interface components; 3. providing a platform for software developers to write applications.

All computing devices run an operating system. For personal computers, the most popular operating systems are Microsoft’s Windows, Apple’s OS X, and different versions of Linux. Smartphones and tablets run operating systems as well, such as Apple’s iOS, Google’s Android, Microsoft’s Windows Mobile, and Blackberry.

Early personal-computer operating systems were simple by today’s standards; they did not provide multitasking and required the user to type commands to initiate an action. The amount of memory that early

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Linux logo (Copyright: Larry Ewing)

operating systems could handle was limited as well, making large programs impractical to run. The most popular of the early operating systems was IBM’s Disk Operating System, or DOS, which was actually developed for them by Microsoft.

In 1984, Apple introduced the Macintosh computer, featuring an operating system with a graphical user interface. Though not the first graphical operating system, it was the first one to find commercial success. In 1985, Microsoft released the first version of Windows. This version of Windows was not an operating system, but instead was an application that ran on top of the DOS operating system, providing a graphical environment. It was quite limited and had little commercial success. It was not until the 1990 release of Windows 3.0 that Microsoft found success with a graphical user interface. Because of the hold of IBM and IBM-compatible personal computers on business, it was not until Windows 3.0 was released that business users began using a graphical user interface, ushering us into the graphical-computing era. Since 1990, both Apple and Microsoft have released many new versions of their operating systems, with each release adding the ability to process more data at once and access more memory. Features such as multitasking, virtual memory, and voice input have become standard features of both operating systems.

A third personal-computer operating system family that is gaining in popularity is Linux (pronounced “linn-ex”). Linux is a version of the Unix operating system that runs on the personal computer. Unix is an operating system used primarily by scientists and engineers on larger minicomputers. These are very expensive computers, and software developer Linus Torvalds wanted to find a way to make Unix run on less expensive personal computers. Linux was the result. Linux has many variations and now powers a large percentage of web servers in the world. It is also an example of open-source software, a topic we will cover later in this chapter.

Sidebar: Mac vs. Windows

Are you a Mac? Are you a PC? Ever since its introduction in 1984, users of the Apple Macintosh have been quite biased about their preference for the Macintosh operating system (now called OS X) over Microsoft’s. When Microsoft introduced Windows, Apple sued Microsoft, claiming that they copied the “look and feel” of the Macintosh operating system. In the end, Microsoft successfully defended themselves.

Over the past few years, Microsoft and Apple have traded barbs with each other, each claiming to have a better operating system and software. While Microsoft has always had the larger market share (see sidebar), Apple has been the favorite of artists, musicians, and the technology elite. Apple also provides a lot of computers to elementary schools, thus gaining a following among the younger generation.

Sidebar: Why Is Microsoft Software So Dominant in the Business World?

If you’ve worked in the world of business, you may have noticed that almost all of the computers run a version of Microsoft’s Windows operating system. Why is this? On almost all college campuses, you see a preponderance of Apple Macintosh laptops. In elementary schools, Apple reigns as well. Why has this not extended into the business world?

As we learned in chapter 1, almost all businesses used IBM mainframe computers back in the 1960s and 1970s. These same businesses shied away from personal computers until IBM released the PC in 1981.

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http://commons.wikimedia.org/wiki/File:Linux_logo.jpg
http://commons.wikimedia.org/wiki/File:Linux_logo.jpg
VisiCalc running on an Apple II. (Public Domain)

When executives had to make a decision about purchasing personal computers for their employees, they would choose the safe route and purchase IBM. The saying then was: “No one ever got fired for buying IBM.” So over the next decade, companies bought IBM personal computers (or those compatible with them), which ran an operating system called DOS. DOS was created by Microsoft, so when Microsoft released Windows as the next iteration of DOS, companies took the safe route and started purchasing Windows.

Microsoft soon found itself with the dominant personal-computer operating system for businesses. As the networked personal computer began to replace the mainframe computer as the primary way of computing inside businesses, it became essential for Microsoft to give businesses the ability to administer and secure their networks. Microsoft developed business-level server products to go along with their personal computer products, thereby providing a complete business solution. And so now, the saying goes: “No one ever got fired for buying Microsoft.”

Application Software

The second major category of software is application software. Application software is, essentially, software that allows the user to accomplish some goal or purpose. For example, if you have to write a paper, you might use the application-software program Microsoft Word. If you want to listen to music, you might use iTunes. To surf the web, you might use Internet Explorer or Firefox. Even a computer game could be considered application software.

The “Killer” App

When a new type of digital device is invented, there are generally a small group of technology enthusiasts who will purchase it just for the joy of figuring out how it works. However, for most of us, until a device can actually do something useful we are not going to spend our hard-earned money on it. A “killer” application is one that becomes so essential that large numbers of people will buy a device just to run that application. For the personal computer, the killer application was the spreadsheet. In 1979, VisiCalc, the first personal-computer spreadsheet package, was introduced. It was an immediate hit and drove sales of the Apple II. It also solidified the value of the personal computer beyond the relatively small circle of technology geeks. When the IBM PC was released, another spreadsheet program, Lotus 1-2-3, was the killer app for business

users.

Productivity Software

Along with the spreadsheet, several other software applications have become standard tools for the workplace. These applications, called productivity software, allow office employees to complete their daily work. Many times, these applications come packaged together, such as in Microsoft’s Office suite. Here is a list of these applications and their basic functions:

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http://commons.wikimedia.org/wiki/File:Visicalc.png
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• Word processing: This class of software provides for the creation of written documents. Functions include the ability to type and edit text, format fonts and paragraphs, and add, move, and delete text throughout the document. Most modern word-processing programs also have the ability to add tables, images, and various layout and formatting features to the document. Word processors save their documents as electronic files in a variety of formats. By far, the most popular word- processing package is Microsoft Word, which saves its files in the DOCX format. This format can be read/written by many other word-processor packages.

• Spreadsheet: This class of software provides a way to do numeric calculations and analysis. The working area is divided into rows and columns, where users can enter numbers, text, or formulas. It is the formulas that make a spreadsheet powerful, allowing the user to develop complex calculations that can change based on the numbers entered. Most spreadsheets also include the ability to create charts based on the data entered. The most popular spreadsheet package is Microsoft Excel, which saves its files in the XLSX format. Just as with word processors, many other spreadsheet packages can read and write to this file format.

• Presentation: This class of software provides for the creation of slideshow presentations. Harkening back to the days of overhead projectors and transparencies, presentation software allows its users to create a set of slides that can be printed or projected on a screen. Users can add text, images, and other media elements to the slides. Microsoft’s PowerPoint is the most popular software right now, saving its files in PPTX format.

• Some office suites include other types of software. For example, Microsoft Office includes Outlook, its e-mail package, and OneNote, an information-gathering collaboration tool. The professional version of Office also includes Microsoft Access, a database package. (Databases are covered more in chapter 4.)

Microsoft popularized the idea of the office-software productivity bundle with their release of Microsoft Office. This package continues to dominate the market and most businesses expect employees to know how to use this software. However, many competitors to Microsoft Office do exist and are compatible with the file formats used by Microsoft (see table below). Recently, Microsoft has begun to offer a web version of their Office suite. Similar to Google Drive, this suite allows users to edit and share documents online utilizing cloud-computing technology. Cloud computing will be discussed later in this chapter.

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Comparison of office application software suites

Utility Software and Programming Software

Two subcategories of application software worth mentioning are utility software and programming software. Utility software includes software that allows you to fix or modify your computer in some way. Examples include antivirus software and disk defragmentation software. These types of software packages were invented to fill shortcomings in operating systems. Many times, a subsequent release of an operating system will include these utility functions as part of the operating system itself.

Programming software is software whose purpose is to make more software. Most of these programs provide programmers with an environment in which they can write the code, test it, and convert it into the format that can then be run on a computer.

Sidebar: “PowerPointed” to Death

As presentation software, specifically Microsoft PowerPoint, has gained acceptance as the primary method to formally present information in a business setting, the art of giving an engaging presentation is becoming rare. Many presenters now just read the bullet points in the presentation and immediately bore those in attendance, who can already read it for themselves. The real problem is not with PowerPoint as much as it is with the person creating and presenting. Author and thinker Seth Godin put it this way: “PowerPoint could be the most powerful tool on your computer. But it’s not. It’s actually a dismal failure. Almost every PowerPoint presentation sucks rotten eggs.”1 The software used to help you communicate should not duplicate the presentation you want to give, but instead

1. From Why are your PowerPoints so bad? available for download at http://www.sethgodin.com/freeprize/reallybad-1.pdf.

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it should support it. I highly recommend the book Presentation Zen by Garr Reynolds to anyone who wants to improve their presentation skills. Software developers are becoming aware of this problem as well. New digital presentation technologies are being developed, with the hopes of becoming “the next PowerPoint.” One innovative new presentation application is Prezi. Prezi is a presentation tool that uses a single canvas for the presentation, allowing presenters to place text, images, and other media on the canvas, and then navigate between these objects as they present. Just as with PowerPoint, Prezi should be used to supplement the presentation. And we must always remember that sometimes the best presentations are made with no digital tools.

Sidebar: I Own This Software, Right? Well . . .

When you purchase software and install it on your computer, are you the owner of that software? Technically, you are not! When you install software, you are actually just being given a license to use it. When you first install a software package, you are asked to agree to the terms of service or the license agreement. In that agreement, you will find that your rights to use the software are limited. For example, in the terms of the Microsoft Office Excel 2010 software license, you will find the following statement: “This software is licensed, not sold. This agreement only gives you some rights to use the features included in the software edition you licensed.”

For the most part, these restrictions are what you would expect: you cannot make illegal copies of the software and you may not use it to do anything illegal. However, there are other, more unexpected terms in these software agreements. For example, many software agreements ask you to agree to a limit on liability. Again, from Microsoft: “Limitation on and exclusion of damages. You can recover from Microsoft and its suppliers only direct damages up to the amount you paid for the software. You cannot recover any other damages, including consequential, lost profits, special, indirect or incidental damages.” What this means is that if a problem with the software causes harm to your business, you cannot hold Microsoft or the supplier responsible for damages.

Applications for the Enterprise

As the personal computer proliferated inside organizations, control over the information generated by the organization began splintering. Say the customer service department creates a customer database to keep track of calls and problem reports, and the sales department also creates a database to keep track of customer information. Which one should be used as the master list of customers? As another example, someone in sales might create a spreadsheet to calculate sales revenue, while someone in finance creates a different one that meets the needs of their department. However, it is likely that the two spreadsheets will come up with different totals for revenue. Which one is correct? And who is managing all of this information?

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http://www.amazon.com/gp/product/0321811984
Registered trademark of SAP

Enterprise Resource Planning

In the 1990s, the need to bring the organization’s information back under centralized control became more apparent. The enterprise resource planning (ERP) system (sometimes just called enterprise software) was developed to bring together an entire organization in one software application. Simply put, an ERP system is a software application utilizing a central database that is implemented throughout the entire organization. Let’s take a closer look at this definition:

• “A software application”: An ERP is a software application that is used by many of an organization’s employees.

• “utilizing a central database”: All users of the ERP edit and save their information from the data source. What this means practically is that there is only one customer database, there is only one calculation for revenue, etc.

• “that is implemented throughout the entire organization”: ERP systems include functionality that covers all of the essential components of a business. Further, an organization can purchase modules for its ERP system that match specific needs, such as manufacturing or planning.

ERP systems were originally marketed to large corporations. However, as more and more large companies began installing them, ERP vendors began targeting mid-sized and even smaller businesses. Some of the more well-known ERP systems include those from SAP, Oracle, and Microsoft. In order to effectively implement an ERP system in an organization, the organization must be ready to make a full commitment. All aspects of the organization are affected as old

systems are replaced by the ERP system. In general, implementing an ERP system can take two to three years and several million dollars. In most cases, the cost of the software is not the most expensive part of the implementation: it is the cost of the consultants! So why implement an ERP system? If done properly, an ERP system can bring an organization a good return on their investment. By consolidating information systems across the enterprise and using the software to enforce best practices, most organizations see an overall improvement after implementing an ERP. Business processes as a form of competitive advantage will be covered in chapter 9.

Sidebar: Y2K and ERP

The initial wave of software-application development began in the 1960s, when applications were developed for mainframe computers. In those days, computing was expensive, so applications were designed to take as little space as possible. One shortcut that many programmers took was in the storage of dates, specifically the year. Instead of allocating four digits to hold the year, many programs allocated two digits, making the assumption that the first two digits were “19″. For example, to calculate how old someone was, the application would take the last two digits of the current year (for 1995, for example, that

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would be “95″) and then subtract the two digits stored for the birthday year (“65″ for 1965). 95 minus 65 gives an age of 30, which is correct.

However, as the year 2000 approached, many of these “legacy” applications were still being used, and businesses were very concerned that any software applications they were using that needed to calculate dates would fail. To update our age-calculation example, the application would take the last two digits of the current year (for 2012, that would be “12″) and then subtract the two digits stored for the birthday year (“65″ for 1965). 12 minus 65 gives an age of -53, which would cause an error. In order to solve this problem, applications would have to be updated to use four digits for years instead of two. Solving this would be a massive undertaking, as every line of code and every database would have to be examined.

This is where companies gained additional incentive to implement an ERP system. For many organizations that were considering upgrading to ERP systems in the late 1990s, this problem, known as Y2K (year 2000), gave them the extra push they needed to get their ERP installed before the year 2000. ERP vendors guaranteed that their systems had been designed to be Y2K compliant – which simply meant that they stored dates using four digits instead of two. This led to a massive increase in ERP installations in the years leading up to 2000, making the ERP a standard software application for businesses.

Customer Relationship Management

A customer relationship management (CRM) system is a software application designed to manage an organization’s customers. In today’s environment, it is important to develop relationships with your customers, and the use of a well-designed CRM can allow a business to personalize its relationship with each of its customers. Some ERP software systems include CRM modules. An example of a well-known CRM package is Salesforce.

Supply Chain Management

Many organizations must deal with the complex task of managing their supply chains. At its simplest, a supply chain is the linkage between an organization’s suppliers, its manufacturing facilities, and the distributors of its products. Each link in the chain has a multiplying effect on the complexity of the process: if there are two suppliers, one manufacturing facility, and two distributors, for example, then there are 2 x 1 x 2 = 4 links to handle. However, if you add two more suppliers, another manufacturing facility, and two more distributors, then you have 4 x 2 x 4 = 32 links to manage.

A supply chain management (SCM) system manages the interconnection between these links, as well as the inventory of the products in their various stages of development. A full definition of a supply chain management system is provided by the Association for Operations Management: “The design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.”2 Most ERP systems include a supply chain management module.

Mobile Applications

Just as with the personal computer, mobile devices such as tablet computers and smartphones also have operating systems and application software. In fact, these mobile devices are in many ways just smaller versions of personal computers. A mobile app is a software application programmed to run specifically on a mobile device.

2. http://www.apics.org/dictionary/dictionary-information?ID=3984

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As we saw in chapter 2, smartphones and tablets are becoming a dominant form of computing, with many more smartphones being sold than personal computers. This means that organizations will have to get smart about developing software on mobile devices in order to stay relevant.

These days, most mobile devices run on one of two operating systems: Android or iOS. Android is an open-source operating system purchased and supported by Google; iOS is Apple’s mobile operating system. In the fourth quarter of 2012, Android was installed on 70.1% of all mobile phones shipped, followed by 21.0% for iOS. Other mobile operating systems of note are Blackberry (3.2%) and Windows (2.6%). 3

As organizations consider making their digital presence compatible with mobile devices, they will have to decide whether to build a mobile app. A mobile app is an expensive proposition, and it will only run on one type of mobile device at a time. For example, if an organization creates an iPhone app, those with Android phones cannot run the application. Each app takes several thousand dollars to create, so this is not a trivial decision for many companies.

One option many companies have is to create a website that is mobile-friendly. A mobile website works on all mobile devices and costs about the same as creating an app. We will discuss the question of whether to build a mobile app more thoroughly in Chapter 10.

Cloud Computing

Historically, for software to run on a computer, an individual copy of the software had to be installed on the computer, either from a disk or, more recently, after being downloaded from the Internet. The concept of “cloud” computing changes this, however.

To understand cloud computing, we first have to understand what the cloud is. “The cloud” refers to applications, services, and data storage on the Internet. These service providers rely on giant server farms and massive storage devices that are connected via Internet protocols. Cloud computing is the use of these services by individuals and organizations.

You probably already use cloud computing in some forms. For example, if you access your e-mail via your web browser, you are using a form of cloud computing. If you use Google Drive’s applications, you are using cloud computing. While these are free versions of cloud computing, there is big business in providing applications and data storage over the web. Salesforce (see above) is a good example of cloud computing – their entire suite of CRM applications are offered via the cloud. Cloud computing is not limited to web applications: it can also be used for services such as phone or video streaming.

Advantages of Cloud Computing

• No software to install or upgrades to maintain. • Available from any computer that has access to the Internet. • Can scale to a large number of users easily. • New applications can be up and running very quickly. • Services can be leased for a limited time on an as-needed basis. • Your information is not lost if your hard disk crashes or your laptop is stolen. • You are not limited by the available memory or disk space on your computer.

3. Taken from IDC Worldwide Mobile Phone Tracker, February 14, 2013. Full report available at http://www.idc.com/ getdoc.jsp?containerId=prUS23946013

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http://www.idc.com/getdoc.jsp?containerId=prUS23946013
http://www.idc.com/getdoc.jsp?containerId=prUS23946013
Disadvantages of Cloud Computing

• Your information is stored on someone else’s computer – how safe is it? • You must have Internet access to use it. If you do not have access, you’re out of luck. • You are relying on a third-party to provide these services.

Cloud computing has the ability to really impact how organizations manage technology. For example, why is an IT department needed to purchase, configure, and manage personal computers and software when all that is really needed is an Internet connection?

Using a Private Cloud

Many organizations are understandably nervous about giving up control of their data and some of their applications by using cloud computing. But they also see the value in reducing the need for installing software and adding disk storage to local computers. A solution to this problem lies in the concept of a private cloud. While there are various models of a private cloud, the basic idea is for the cloud service provider to section off web server space for a specific organization. The organization has full control over that server space while still gaining some of the benefits of cloud computing.

Virtualization

One technology that is utilized extensively as part of cloud computing is “virtualization.” Virtualization is the process of using software to simulate a computer or some other device. For example, using virtualization, a single computer can perform the functions of several computers. Companies such as EMC provide virtualization software that allows cloud service providers to provision web servers to their clients quickly and efficiently. Organizations are also implementing virtualization in order to reduce the number of servers needed to provide the necessary services. For more detail on how virtualization works, see this informational page from VMWare.

Software Creation

How is software created? If software is the set of instructions that tells the hardware what to do, how are these instructions written? If a computer reads everything as ones and zeroes, do we have to learn how to write software that way?

Modern software applications are written using a programming language. A programming language consists of a set of commands and syntax that can be organized logically to execute specific functions. This language generally consists of a set of readable words combined with symbols. Using this language, a programmer writes a program (called the source code) that can then be compiled into machine-readable form, the ones and zeroes necessary to be executed by the CPU. Examples of well-known programming languages today include Java, PHP, and various flavors of C (Visual C, C++, C#). Languages such as HTML and Javascript are used to develop web pages. Most of the time, programming is done inside a programming environment; when you purchase a copy of Visual Studio from Microsoft, it provides you with an editor, compiler, and help for many of Microsoft’s programming languages.

Software programming was originally an individual process, with each programmer working on an entire program, or several programmers each working on a portion of a larger program. However, newer

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http://www.vmware.com/virtualization/virtualization-basics/how-virtualization-works.html
http://www.vmware.com/virtualization/virtualization-basics/how-virtualization-works.html
methods of software development include a more collaborative approach, with teams of programmers working on code together. We will cover information-systems development more fully in chapter 10.

Open-Source Software

When the personal computer was first released, it did not serve any practical need. Early computers were difficult to program and required great attention to detail. However, many personal-computer enthusiasts immediately banded together to build applications and solve problems. These computer enthusiasts were happy to share any programs they built and solutions to problems they found; this collaboration enabled them to more quickly innovate and fix problems.

As software began to become a business, however, this idea of sharing everything fell out of favor, at least with some. When a software program takes hundreds of man-hours to develop, it is understandable that the programmers do not want to just give it away. This led to a new business model of restrictive software licensing, which required payment for software, a model that is still dominant today. This model is sometimes referred to as closed source, as the source code is not made available to others.

There are many, however, who feel that software should not be restricted. Just as with those early hobbyists in the 1970s, they feel that innovation and progress can be made much more rapidly if we share what we learn. In the 1990s, with Internet access connecting more and more people together, the open- source movement gained steam.

Open-source software is software that makes the source code available for anyone to copy and use. For most of us, having access to the source code of a program does us little good, as we are not programmers and won’t be able to do much with it. The good news is that open-source software is also available in a compiled format that we can simply download and install. The open-source movement has led to the development of some of the most-used software in the world, including the Firefox browser, the Linux operating system, and the Apache web server. Many also think open-source software is superior to closed- source software. Because the source code is freely available, many programmers have contributed to open- source software projects, adding features and fixing bugs.

Many businesses are wary of open-source software precisely because the code is available for anyone to see. They feel that this increases the risk of an attack. Others counter that this openness actually decreases the risk because the code is exposed to thousands of programmers who can incorporate code changes to quickly patch vulnerabilities.

There are many arguments on both sides of the aisle for the benefits of the two models. Some benefits of the open-source model are:

• The software is available for free. • The software source-code is available; it can be examined and reviewed before it is installed. • The large community of programmers who work on open-source projects leads to quick bug-

fixing and feature additions. Some benefits of the closed-source model are:

• By providing financial incentive for software development, some of the brightest minds have chosen software development as a career.

• Technical support from the company that developed the software.

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Today there are thousands of open-source software applications available for download. For example, as we discussed previously in this chapter, you can get the productivity suite from Open Office. One good place to search for open-source software is sourceforge.net, where thousands of software applications are available for free download.

Summary

Software gives the instructions that tell the hardware what to do. There are two basic categories of software: operating systems and applications. Operating systems provide access to the computer hardware and make system resources available. Application software is designed to meet a specific goal. Productivity software is a subset of application software that provides basic business functionality to a personal computer: word processing, spreadsheets, and presentations. An ERP system is a software application with a centralized database that is implemented across the entire organization. Cloud computing is a method of software delivery that runs on any computer that has a web browser and access to the Internet. Software is developed through a process called programming, in which a programmer uses a programming language to put together the logic needed to create the program. While most software is developed using a closed-source model, the open-source movement is gaining more support today.

Study Questions

1. Come up with your own definition of software. Explain the key terms in your definition. 2. What are the functions of the operating system? 3. Which of the following are operating systems and which are applications: Microsoft Excel, Google Chrome, iTunes, Windows, Android, Angry Birds. 4. What is your favorite software application? What tasks does it help you accomplish? 5. What is a “killer” app? What was the killer app for the PC? 6. How would you categorize the software that runs on mobile devices? Break down these apps into at least three basic categories and give an example of each. 7. Explain what an ERP system does. 8. What is open-source software? How does it differ from closed-source software? Give an example of each. 9. What does a software license grant? 10. How did the Y2K (year 2000) problem affect the sales of ERP systems?

Exercises

1. Go online and find a case study about the implementation of an ERP system. Was it successful? How long did it take? Does the case study tell you how much money the organization spent?

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http://sourceforge.net
2. What ERP system does your university or place of employment use? Find out which one they use and see how it compares to other ERP systems. 3. If you were running a small business with limited funds for information technology, would you consider using cloud computing? Find some web-based resources that support your decision. 4. Download and install Open Office. Use it to create a document or spreadsheet. How does it compare to Microsoft Office? Does the fact that you got it for free make it feel less valuable? 5. Go to sourceforge.net and review their most downloaded software applications. Report back on the variety of applications you find. Then pick one that interests you and report back on what it does, the kind of technical support offered, and the user reviews. 6. Review this article on the security risks of open-source software. Write a short analysis giving your opinion on the different risks discussed. 7. What are three examples of programming languages? What makes each of these languages useful to programmers?

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http://openoffice.org
http://sourceforge.net
http://www.zdnet.com/six-open-source-security-myths-debunked-and-eight-real-challenges-to-consider-7000014225/
Chapter 4: Data and Databases

David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• describe the differences between data, information, and knowledge; • define the term database and identify the steps to creating one; • describe the role of a database management system; • describe the characteristics of a data warehouse; and • define data mining and describe its role in an organization.

Introduction

You have already been introduced to the first two components of information systems: hardware and software. However, those two components by themselves do not make a computer useful. Imagine if you turned on a computer, started the word processor, but could not save a document. Imagine if you opened a music player but there was no music to play. Imagine opening a web browser but there were no web pages. Without data, hardware and software are not very useful! Data is the third component of an information system.

Data, Information, and Knowledge

Data are the raw bits and pieces of information with no context. If I told you, “15, 23, 14, 85,” you would not have learned anything. But I would have given you data.

Data can be quantitative or qualitative. Quantitative data is numeric, the result of a measurement, count, or some other mathematical calculation. Qualitative data is descriptive. “Ruby Red,” the color of a 2013 Ford Focus, is an example of qualitative data. A number can be qualitative too: if I tell you my favorite number is 5, that is qualitative data because it is descriptive, not the result of a measurement or mathematical calculation.

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By itself, data is not that useful. To be useful, it needs to be given context. Returning to the example above, if I told you that “15, 23, 14, and 85″ are the numbers of students that had registered for upcoming classes, that would be information. By adding the context – that the numbers represent the count of students registering for specific classes – I have converted data into information.

Once we have put our data into context, aggregated and analyzed it, we can use it to make decisions for our organization. We can say that this consumption of information produces knowledge. This knowledge can be used to make decisions, set policies, and even spark innovation.

The final step up the information ladder is the step from knowledge (knowing a lot about a topic) to wisdom. We can say that someone has wisdom when they can combine their knowledge and experience to produce a deeper understanding of a topic. It often takes many years to develop wisdom on a particular topic, and requires patience.

Examples of Data

Almost all software programs require data to do anything useful. For example, if you are editing a document in a word processor such as Microsoft Word, the document you are working on is the data. The word- processing software can manipulate the data: create a new document, duplicate a document, or modify a document. Some other examples of data are: an MP3 music file, a video file, a spreadsheet, a web page, and an e-book. In some cases, such as with an e-book, you may only have the ability to read the data.

Databases

The goal of many information systems is to transform data into information in order to generate knowledge that can be used for decision making. In order to do this, the system must be able to take data, put the data into context, and provide tools for aggregation and analysis. A database is designed for just such a purpose.

A database is an organized collection of related information. It is an organized collection, because in a database, all data is described and associated with other data. All information in a database should be related as well; separate databases should be created to manage unrelated information. For example, a database that contains information about students should not also hold information about company stock prices. Databases are not always digital – a filing cabinet, for instance, might be considered a form of database. For the purposes of this text, we will only consider digital databases.

Relational Databases

Databases can be organized in many different ways, and thus take many forms. The most popular form of database today is the relational database. Popular examples of relational databases are Microsoft Access, MySQL, and Oracle. A relational database is one in which data is organized into one or more tables. Each table has a set of fields, which define the nature of the data stored in the table. A record is one instance of a set of fields in a table. To visualize this, think of the records as the rows of the table and the fields as the columns of the table. In the example below, we have a table of student information, with each row representing a student and each column representing one piece of information about the student.

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Rows and columns in a table

In a relational database, all the tables are related by one or more fields, so that it is possible to connect all the tables in the database through the field(s) they have in common. For each table, one of the fields is identified as a primary key. This key is the unique identifier for each record in the table. To help you understand these terms further, let’s walk through the process of designing a database.

Designing a Database

Suppose a university wants to create an information system to track participation in student clubs. After interviewing several people, the design team learns that the goal of implementing the system is to give better insight into how the university funds clubs. This will be accomplished by tracking how many members each club has and how active the clubs are. From this, the team decides that the system must keep track of the clubs, their members, and their events. Using this information, the design team determines that the following tables need to be created:

• Clubs: this will track the club name, the club president, and a short description of the club. • Students: student name, e-mail, and year of birth. • Memberships: this table will correlate students with clubs, allowing us to have any given student

join multiple clubs. • Events: this table will track when the clubs meet and how many students showed up.

Now that the design team has determined which tables to create, they need to define the specific information that each table will hold. This requires identifying the fields that will be in each table. For example, Club Name would be one of the fields in the Clubs table. First Name and Last Name would be fields in the Students table. Finally, since this will be a relational database, every table should have a field in common with at least one other table (in other words: they should have a relationship with each other).

In order to properly create this relationship, a primary key must be selected for each table. This key is a unique identifier for each record in the table. For example, in the Students table, it might be possible to use students’ last name as a way to uniquely identify them. However, it is more than likely that some students will share a last name (like Rodriguez, Smith, or Lee), so a different field should be selected. A student’s e-mail address might be a good choice for a primary key, since e-mail addresses are unique. However, a primary key cannot change, so this would mean that if students changed their e-mail address we would have to remove them from the database and then re-insert them – not an attractive proposition. Our solution is to create a value for each student — a user ID — that will act as a primary key. We will also do this for each of the student clubs. This solution is quite common and is the reason you have so many user IDs!

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You can see the final database design in the figure below:

Student Clubs database diagram

With this design, not only do we have a way to organize all of the information we need to meet the requirements, but we have also successfully related all the tables together. Here’s what the database tables might look like with some sample data. Note that the Memberships table has the sole purpose of allowing us to relate multiple students to multiple clubs.

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Normalization

When designing a database, one important concept to understand is normalization. In simple terms, to normalize a database means to design it in a way that: 1) reduces duplication of data between tables and 2) gives the table as much flexibility as possible.

In the Student Clubs database design, the design team worked to achieve these objectives. For example, to track memberships, a simple solution might have been to create a Members field in the Clubs table and then just list the names of all of the members there. However, this design would mean that if a student joined two clubs, then his or her information would have to be entered a second time. Instead, the designers solved this problem by using two tables: Students and Memberships.

In this design, when a student joins their first club, we first must add the student to the Students table, where their first name, last name, e-mail address, and birth year are entered. This addition to the Students table will generate a student ID. Now we will add a new entry to denote that the student is a member of a specific club. This is accomplished by adding a record with the student ID and the club ID in the Memberships table. If this student joins a second club, we do not have to duplicate the entry of the student’s name, e-mail, and birth year; instead, we only need to make another entry in the Memberships table of the second club’s ID and the student’s ID.

The design of the Student Clubs database also makes it simple to change the design without major modifications to the existing structure. For example, if the design team were asked to add functionality to the system to track faculty advisors to the clubs, we could easily accomplish this by adding a Faculty Advisors table (similar to the Students table) and then adding a new field to the Clubs table to hold the Faculty Advisor ID.

Data Types

When defining the fields in a database table, we must give each field a data type. For example, the field Birth Year is a year, so it will be a number, while First Name will be text. Most modern databases allow for several different data types to be stored. Some of the more common data types are listed here:

• Text: for storing non-numeric data that is brief, generally under 256 characters. The database designer can identify the maximum length of the text.

• Number: for storing numbers. There are usually a few different number types that can be selected, depending on how large the largest number will be.

• Yes/No: a special form of the number data type that is (usually) one byte long, with a 0 for “No” or “False” and a 1 for “Yes” or “True”.

• Date/Time: a special form of the number data type that can be interpreted as a number or a time. • Currency: a special form of the number data type that formats all values with a currency indicator

and two decimal places.

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• Paragraph Text: this data type allows for text longer than 256 characters. • Object: this data type allows for the storage of data that cannot be entered via keyboard, such as

an image or a music file.

There are two important reasons that we must properly define the data type of a field. First, a data type tells the database what functions can be performed with the data. For example, if we wish to perform mathematical functions with one of the fields, we must be sure to tell the database that the field is a number data type. So if we have, say, a field storing birth year, we can subtract the number stored in that field from the current year to get age.

The second important reason to define data type is so that the proper amount of storage space is allocated for our data. For example, if the First Name field is defined as a text(50) data type, this means fifty characters are allocated for each first name we want to store. However, even if the first name is only five characters long, fifty characters (bytes) will be allocated. While this may not seem like a big deal, if our table ends up holding 50,000 names, we are allocating 50 * 50,000 = 2,500,000 bytes for storage of these values. It may be prudent to reduce the size of the field so we do not waste storage space.

Sidebar: The Difference between a Database and a Spreadsheet

Many times, when introducing the concept of databases to students, they quickly decide that a database is pretty much the same as a spreadsheet. After all, a spreadsheet stores data in an organized fashion, using rows and columns, and looks very similar to a database table. This misunderstanding extends beyond the classroom: spreadsheets are used as a substitute for databases in all types of situations every day, all over the world.

To be fair, for simple uses, a spreadsheet can substitute for a database quite well. If a simple listing of rows and columns (a single table) is all that is needed, then creating a database is probably overkill. In our Student Clubs example, if we only needed to track a listing of clubs, the number of members, and the contact information for the president, we could get away with a single spreadsheet. However, the need to include a listing of events and the names of members would be problematic if tracked with a spreadsheet.

When several types of data must be mixed together, or when the relationships between these types of data are complex, then a spreadsheet is not the best solution. A database allows data from several entities (such as students, clubs, memberships, and events) to all be related together into one whole. While a spreadsheet does allow you to define what kinds of values can be entered into its cells, a database provides more intuitive and powerful ways to define the types of data that go into each field, reducing possible errors and allowing for easier analysis.

Though not good for replacing databases, spreadsheets can be ideal tools for analyzing the data stored in a database. A spreadsheet package can be connected to a specific table or query in a database and used to create charts or perform analysis on that data.

Structured Query Language

Once you have a database designed and loaded with data, how will you do something useful with it? The primary way to work with a relational database is to use Structured Query Language, SQL (pronounced “sequel,” or simply stated as S-Q-L). Almost all applications that work with databases (such as database management systems, discussed below) make use of SQL as a way to analyze and manipulate relational data. As its name implies, SQL is a language that can be used to work with a relational database. From a

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simple request for data to a complex update operation, SQL is a mainstay of programmers and database administrators. To give you a taste of what SQL might look like, here are a couple of examples using our Student Clubs database.

• The following query will retrieve a list of the first and last names of the club presidents:

SELECT "First Name", "Last Name" FROM "Students" WHERE "Students.ID" = "Clubs.President"

• The following query will create a list of the number of students in each club, listing the club name and then the number of members:

SELECT "Clubs.Club Name", COUNT("Memberships.Student ID") FROM "Clubs" LEFT JOIN "Memberships" ON "Clubs.Club ID" = "Memberships.Club ID"

An in-depth description of how SQL works is beyond the scope of this introductory text, but these examples should give you an idea of the power of using SQL to manipulate relational data. Many database packages, such as Microsoft Access, allow you to visually create the query you want to construct and then generate the SQL query for you.

Other Types of Databases

The relational database model is the most used database model today. However, many other database models exist that provide different strengths than the relational model. The hierarchical database model, popular in the 1960s and 1970s, connected data together in a hierarchy, allowing for a parent/child relationship between data. The document-centric model allowed for a more unstructured data storage by placing data into “documents” that could then be manipulated.

Perhaps the most interesting new development is the concept of NoSQL (from the phrase “not only SQL”). NoSQL arose from the need to solve the problem of large-scale databases spread over several servers or even across the world. For a relational database to work properly, it is important that only one person be able to manipulate a piece of data at a time, a concept known as record-locking. But with today’s large-scale databases (think Google and Amazon), this is just not possible. A NoSQL database can work with data in a looser way, allowing for a more unstructured environment, communicating changes to the data over time to all the servers that are part of the database.

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Screen shot of the Open Office database management system

Database Management Systems

To the computer, a database looks like one or more files. In order for the data in the database to be read, changed, added, or removed, a software program must access it. Many software applications have this ability: iTunes can read its database to give you a listing of its songs (and play the songs); your mobile-phone software can interact with your list of contacts. But what about applications to create or manage a database? What software can you use to create a database, change a database’s structure, or simply do analysis? That is the purpose of a category of software applications called database management systems (DBMS).

DBMS packages generally provide an interface to view and change the design of the database, create queries, and develop reports. Most of these packages are designed to work with a

specific type of database, but generally are compatible with a wide range of databases. For example, Apache OpenOffice.org Base (see screen shot) can be used to create, modify, and

analyze databases in open-database (ODB) format. Microsoft’s Access DBMS is used to work with databases in its own Microsoft Access Database format. Both Access and Base have the ability to read and write to other database formats as well.

Microsoft Access and Open Office Base are examples of personal database-management systems. These systems are primarily used to develop and analyze single-user databases. These databases are not meant to be shared across a network or the Internet, but are instead installed on a particular device and work with a single user at a time.

Enterprise Databases

A database that can only be used by a single user at a time is not going to meet the needs of most organizations. As computers have become networked and are now joined worldwide via the Internet, a class of database has emerged that can be accessed by two, ten, or even a million people. These databases are sometimes installed on a single computer to be accessed by a group of people at a single location. Other times, they are installed over several servers worldwide, meant to be accessed by millions. These relational enterprise database packages are built and supported by companies such as Oracle, Microsoft, and IBM. The open-source MySQL is also an enterprise database.

As stated earlier, the relational database model does not scale well. The term scale here refers to a database getting larger and larger, being distributed on a larger number of computers connected via a network. Some companies are looking to provide large-scale database solutions by moving away from the relational model to other, more flexible models. For example, Google now offers the App Engine Datastore, which is based on NoSQL. Developers can use the App Engine Datastore to develop applications that access data from anywhere in the world. Amazon.com offers several database services for enterprise use, including Amazon RDS, which is a relational database service, and Amazon DynamoDB, a NoSQL enterprise solution.

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Big Data

A new buzzword that has been capturing the attention of businesses lately is big data. The term refers to such massively large data sets that conventional database tools do not have the processing power to analyze them. For example, Walmart must process over one million customer transactions every hour. Storing and analyzing that much data is beyond the power of traditional database-management tools. Understanding the best tools and techniques to manage and analyze these large data sets is a problem that governments and businesses alike are trying to solve.

Sidebar: What Is Metadata?

The term metadata can be understood as “data about data.” For example, when looking at one of the values of Year of Birth in the Students table, the data itself may be “1992″. The metadata about that value would be the field name Year of Birth, the time it was last updated, and the data type (integer). Another example of metadata could be for an MP3 music file, like the one shown in the image below; information such as the length of the song, the artist, the album, the file size, and even the album cover art, are classified as metadata. When a database is being designed, a “data dictionary” is created to hold the metadata, defining the fields and structure of the database.

Data Warehouse

As organizations have begun to utilize databases as the centerpiece of their operations, the need to fully understand and leverage the data they are collecting has become more and more apparent. However, directly analyzing the data that is needed for day-to-day operations is not a good idea; we do not want to tax the operations of the company more than we need to. Further, organizations also want to analyze data in a historical sense: How does the data we have today compare with the same set of data this time last month, or last year? From these needs arose the concept of the data warehouse.

The concept of the data warehouse is simple: extract data from one or more of the organization’s databases and load it into the data warehouse (which is itself another database) for storage and analysis. However, the execution of this concept is not that simple. A data warehouse should be designed so that it meets the following criteria:

• It uses non-operational data. This means that the data warehouse is using a copy of data from the active databases that the company uses in its day-to-day operations, so the data warehouse must pull data from the existing databases on a regular, scheduled basis.

• The data is time-variant. This means that whenever data is loaded into the data warehouse, it receives a time stamp, which allows for comparisons between different time periods.

• The data is standardized. Because the data in a data warehouse usually comes from several different sources, it is possible that the data does not use the same definitions or units. For example, our Events table in our Student Clubs database lists the event dates using the mm/dd/

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yyyy format (e.g., 01/10/2013). A table in another database might use the format yy/mm/dd (e.g., 13/01/10) for dates. In order for the data warehouse to match up dates, a standard date format would have to be agreed upon and all data loaded into the data warehouse would have to be converted to use this standard format. This process is called extraction-transformation-load (ETL).

There are two primary schools of thought when designing a data warehouse: bottom-up and top-down. The bottom-up approach starts by creating small data warehouses, called data marts, to solve specific business problems. As these data marts are created, they can be combined into a larger data warehouse. The top- down approach suggests that we should start by creating an enterprise-wide data warehouse and then, as specific business needs are identified, create smaller data marts from the data warehouse.

Data warehouse process (top-down)

Benefits of Data Warehouses

Organizations find data warehouses quite beneficial for a number of reasons:

• The process of developing a data warehouse forces an organization to better understand the data that it is currently collecting and, equally important, what data is not being collected.

• A data warehouse provides a centralized view of all data being collected across the enterprise and provides a means for determining data that is inconsistent.

• Once all data is identified as consistent, an organization can generate one version of the truth. This is important when the company wants to report consistent statistics about itself, such as revenue or number of employees.

• By having a data warehouse, snapshots of data can be taken over time. This creates a historical record of data, which allows for an analysis of trends.

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• A data warehouse provides tools to combine data, which can provide new information and analysis.

Data Mining

Data mining is the process of analyzing data to find previously unknown trends, patterns, and associations in order to make decisions. Generally, data mining is accomplished through automated means against extremely large data sets, such as a data warehouse. Some examples of data mining include:

• An analysis of sales from a large grocery chain might determine that milk is purchased more frequently the day after it rains in cities with a population of less than 50,000.

• A bank may find that loan applicants whose bank accounts show particular deposit and withdrawal patterns are not good credit risks.

• A baseball team may find that collegiate baseball players with specific statistics in hitting, pitching, and fielding make for more successful major league players.

In some cases, a data-mining project is begun with a hypothetical result in mind. For example, a grocery chain may already have some idea that buying patterns change after it rains and want to get a deeper understanding of exactly what is happening. In other cases, there are no presuppositions and a data-mining program is run against large data sets in order to find patterns and associations.

Privacy Concerns

The increasing power of data mining has caused concerns for many, especially in the area of privacy. In today’s digital world, it is becoming easier than ever to take data from disparate sources and combine them to do new forms of analysis. In fact, a whole industry has sprung up around this technology: data brokers. These firms combine publicly accessible data with information obtained from the government and other sources to create vast warehouses of data about people and companies that they can then sell. This subject will be covered in much more detail in chapter 12 – the chapter on the ethical concerns of information systems.

Business Intelligence and Business Analytics

With tools such as data warehousing and data mining at their disposal, businesses are learning how to use information to their advantage. The term business intelligence is used to describe the process that organizations use to take data they are collecting and analyze it in the hopes of obtaining a competitive advantage. Besides using data from their internal databases, firms often purchase information from data brokers to get a big-picture understanding of their industries. Business analytics is the term used to describe the use of internal company data to improve business processes and practices.

Knowledge Management

We end the chapter with a discussion on the concept of knowledge management (KM). All companies accumulate knowledge over the course of their existence. Some of this knowledge is written down or saved,

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but not in an organized fashion. Much of this knowledge is not written down; instead, it is stored inside the heads of its employees. Knowledge management is the process of formalizing the capture, indexing, and storing of the company’s knowledge in order to benefit from the experiences and insights that the company has captured during its existence.

Summary

In this chapter, we learned about the role that data and databases play in the context of information systems. Data is made up of small facts and information without context. If you give data context, then you have information. Knowledge is gained when information is consumed and used for decision making. A database is an organized collection of related information. Relational databases are the most widely used type of database, where data is structured into tables and all tables must be related to each other through unique identifiers. A database management system (DBMS) is a software application that is used to create and manage databases, and can take the form of a personal DBMS, used by one person, or an enterprise DBMS that can be used by multiple users. A data warehouse is a special form of database that takes data from other databases in an enterprise and organizes it for analysis. Data mining is the process of looking for patterns and relationships in large data sets. Many businesses use databases, data warehouses, and data- mining techniques in order to produce business intelligence and gain a competitive advantage.

Study Questions

1. What is the difference between data, information, and knowledge? 2. Explain in your own words how the data component relates to the hardware and software components of information systems. 3. What is the difference between quantitative data and qualitative data? In what situations could the number 42 be considered qualitative data? 4. What are the characteristics of a relational database? 5. When would using a personal DBMS make sense? 6. What is the difference between a spreadsheet and a database? List three differences between them. 7. Describe what the term normalization means. 8. Why is it important to define the data type of a field when designing a relational database? 9. Name a database you interact with frequently. What would some of the field names be? 10. What is metadata? 11. Name three advantages of using a data warehouse. 12. What is data mining?

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Exercises

1. Review the design of the Student Clubs database earlier in this chapter. Reviewing the lists of data types given, what data types would you assign to each of the fields in each of the tables. What lengths would you assign to the text fields? 2. Download Apache OpenOffice.org and use the database tool to open the “Student Clubs.odb” file available here. Take some time to learn how to modify the database structure and then see if you can add the required items to support the tracking of faculty advisors, as described at the end of the Normalization section in the chapter. Here is a link to the Getting Started documentation. 3. Using Microsoft Access, download the database file of comprehensive baseball statistics from the website SeanLahman.com. (If you don’t have Microsoft Access, you can download an abridged version of the file here that is compatible with Apache Open Office). Review the structure of the tables included in the database. Come up with three different data-mining experiments you would like to try, and explain which fields in which tables would have to be analyzed. 4. Do some original research and find two examples of data mining. Summarize each example and then write about what the two examples have in common. 5. Conduct some independent research on the process of business intelligence. Using at least two scholarly or practitioner sources, write a two-page paper giving examples of how business intelligence is being used. 6. Conduct some independent research on the latest technologies being used for knowledge management. Using at least two scholarly or practitioner sources, write a two-page paper giving examples of software applications or new technologies being used in this field.

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http://wiki.openoffice.org/w/images/3/3c/0108GS33-GettingStartedWithBase.pdf
http://www.seanlahman.com/baseball-archive/statistics/
http://www.saylor.org/site/wp-content/uploads/2014/02/lahman.odb
Chapter 5: Networking and Communication

David T. Bourgeois

Learning Objectives

Upon successful completion of this chapter, you will be able to:

• understand the history and development of networking technologies; • define the key terms associated with networking technologies; • understand the importance of broadband technologies; and • describe organizational networking.

Introduction

In the early days of computing, computers were seen as devices for making calculations, storing data, and automating business processes. However, as the devices evolved, it became apparent that many of the functions of telecommunications could be integrated into the computer. During the 1980s, many organizations began combining their once-separate telecommunications and information-systems departments into an information technology, or IT, department. This ability for computers to communicate with one another and, maybe more importantly, to facilitate communication between individuals and groups, has been an important factor in the growth of computing over the past several decades.

Computer networking really began in the 1960s with the birth of the Internet, as we’ll see below. However, while the Internet and web were evolving, corporate networking was also taking shape in the form of local area networks and client-server computing. In the 1990s, when the Internet came of age, Internet technologies began to pervade all areas of the organization. Now, with the Internet a global phenomenon, it would be unthinkable to have a computer that did not include communications capabilities. This chapter will review the different technologies that have been put in place to enable this communications revolution.

A Brief History of the Internet

In the Beginning: ARPANET

The story of the Internet, and networking in general, can be traced back to the late 1950s. The US was in the depths of the Cold War with the USSR, and each nation closely watched the other to determine which would gain a military or intelligence advantage. In 1957, the Soviets surprised the US with the launch of Sputnik, propelling us into the space age. In response to Sputnik, the US Government created the Advanced Research Projects Agency (ARPA), whose initial role was to ensure that the US was not surprised again. It was from ARPA, now called DARPA (Defense Advanced Research Projects Agency), that the Internet first sprang.

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http://history.nasa.gov/sputnik/
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ARPA was the center of computing research in the 1960s, but there was just one problem: many of the computers could not talk to each other. In 1968, ARPA sent out a request for proposals for a communication technology that would allow different computers located around the country to be integrated together into one network. Twelve companies responded to the request, and a company named Bolt, Beranek, and Newman (BBN) won the contract. They began work right away and were able to complete the job just one year later: in September, 1969, the ARPANET was turned on. The first four nodes were at UCLA, Stanford, MIT, and the University of Utah.

The Internet and the World Wide Web

Over the next decade, the ARPANET grew and gained popularity. During this time, other networks also came into existence. Different organizations were connected to different networks. This led to a problem: the networks could not talk to each other. Each network used its own proprietary language, or protocol (see sidebar for the definition of protocol), to send information back and forth. This problem was solved by the invention of transmission control protocol/Internet protocol (TCP/IP). TCP/IP was designed to allow networks running on different protocols to have an intermediary protocol that would allow them to communicate. So as long as your network supported TCP/IP, you could communicate with all of the other networks running TCP/IP. TCP/IP quickly became the standard protocol and allowed networks to communicate with each other. It is from this breakthrough that we first got the term Internet, which simply means “an interconnected network of networks.”

Sidebar: An Internet Vocabulary Lesson

Networking communication is full of some very technical concepts based on some simple principles. Learn the terms below and you’ll be able to hold your own in a conversation about the Internet.

• Packet: The fundamental unit of data transmitted over the Internet. When a device intends to send a message to another device (for example, your PC sends a request to YouTube to open a video), it breaks the message down into smaller pieces, called packets. Each packet has the sender’s address, the destination address, a sequence number, and a piece of the overall message to be sent.

• Hub: A simple network device that connects other devices to the network and sends packets to all the devices connected to it.

• Bridge: A network device that connects two networks together and only allows packets through that are needed.

• Switch: A network device that connects multiple devices together and filters packets based on their destination within the connected devices.

• Router: A device that receives and analyzes packets and then routes them towards their destination. In some cases, a router will send a packet to another router; in other cases, it will send it directly to its destination.

• IP Address: Every device that communicates on the Internet, whether it be a personal computer, a tablet, a smartphone, or anything else, is assigned a unique identifying number called an IP