ITC 3303, Information Systems Management 1

ITC 3303, Information Systems Management 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

4. Explain how Information Systems (IS) can be used to gain and sustain competitive advantage. 4.1 Examine how an organization can use enterprise resources planning (ERP) systems to

maintain a competitive advantage.

6. Assess the key issues involved in managing the components of IT infrastructure. 6.1 Define the term information silo. 6.2 Discuss how the cloud can help organizations manage resources and eliminate information

silos. 6.3 Explain why implementation of ERP systems may require business process reengineering.

Required Unit Resources Chapter 6: The Cloud, Q6-1 – Q6-7 Chapter 8: Processes, Organizations, and Information Systems, Q8-1 – Q8-7 Unit Lesson In Unit III, we discussed the basic concepts of hardware and software. We also discussed open source software development and database management systems and compared the differences between native and thin-client applications. Lastly, we explored mobile systems and the characteristics of quality mobile user experiences. In this unit, we will discuss the cloud and how the cloud works, the types of business processes, and enterprise resources planning (ERP) systems.

The Cloud Many of you already use the cloud and may not be aware of it. So, what is the cloud? When we use the term, the cloud we are not referring to a weather phenomenon, but instead, to a technology (Figure 1). This technology is a service that provides storage for data such as documents and images, synchronization

UNIT IV STUDY GUIDE The Cloud, Processes, Organizations, and Information Systems

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capabilities for electronic devices such as smartphones and tablets, and other resources that can be obtained over the Internet (Kroenke & Boyle, 2020).

If an organization chooses to utilize in-house computing, it retains control over its physical computing resources and knows exactly how its computing resources are secured and protected. For most organizations, cloud-based hosting is a viable option. Any organization that is not required by law to have physical controls on data could benefit from cloud computing. If an organization is required by law to have control of its data, it may have to create its own infrastructure. A financial institutional may be one example; this type of institution may need control over its data because of requirements (Kroenke & Boyle, 2020).

SaaS, PaaS, and IaaS Be careful not to confuse the cloud with the Internet. The Internet can be described as a

collection of computers connected together using internet protocol (IP) to link devices such as computers, servers, smartphones, and tablets from around the world. The Internet can also be described as the largest network in the world. Unlike the Internet, the cloud is computing technology that provides resources and services over the internet (Kroenke & Boyle, 2020). Another service is SaaS (software as a service), which eliminates the need for proprietary email and local servers. Instead, businesses can choose SaaS cloud services, like Google or Outlook, for email rather than setting up local email servers. Another example is Microsoft (MS) Office. Users can use the online version of MS Office instead of downloading the entire suite to their computer and then having to download and install updates to the software every time Microsoft releases an update (Kroenke & Boyle, 2020). An organization that provides software as a service (SaaS) provides an operating system and application programs in addition to the hardware infrastructure. The second category of cloud hosting is platform as a service (PaaS). In this platform, hosted computers, an operating system, and sometimes a database management system (DBMs) are provided by the vendors. An example of this can be seen with Microsoft Windows Azure. This is further discussed in your textbook. The third category of cloud hosting is infrastructure as a service (IaaS), which when a bare server, computer, or disk drive is hosted in the cloud. A bare server or computer is where a blank virtual machine is provided to customers so the customers can install their own software. The Amazon Elastic Computer Cloud (EC2) provides bare servers, and its Simple Storage Server provides, in essence, an unlimited, reliable disk drive in the cloud (Kroenke & Boyle, 2020).

Further Discussion Because of the availability of cheap computing infrastructure, such as those available in the cloud, there may be more startup businesses that can quickly and cheaply acquire the computing infrastructure they need. In turn, the demand for people who know how to create, use, and manage information systems will continue to be strong. Also, companies will still need help in determining the right cloud-based computing options. They

Figure 1 – The cloud

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will need help in building their databases on the cloud. They will need help in learning to use the cloud-based resources, and they will still need training so that their people are comfortable with the systems obtained from the cloud vendors. Under existing conditions, the business emphasizes technical expertise. In the near future, the business will need to emphasize detailed understanding of their customers’ needs for the cloud-based environment. The focus will be on what you can DO with cloud-based offerings to make the business more efficient and effective, instead of just providing the technical expertise to create the infrastructure. Services will be very people-oriented and will be much less technically-oriented. It is not likely that everyone on the information technology (IT) staff can adapt to the more people-centered focus of the business. Unfortunately, some highly technical people are not well suited to providing training and support to business people (Kroenke & Boyle, 2020). What was learned here is that technology continues to evolve. For some, these changes may confuse and frighten them, but business professionals should recognize change as opportunities for the future and let go of the past. Business professionals should also recognize that, like technology, businesses also change and evolve.

Processes Why is it important to understand processes? Processes are essential for developing IT systems because processes detail day-to-day operations. In order to build a successful IT system, developers must understand how the business operates. One way to document processes is to use a data flow diagram. A data flow diagram uses symbols to represent how a system should function. For example, before you can build a system, you will need to understand how the current system works and what the users of the system expect it to do. Once you have this information, you can create what is called a process modeling diagram that outlines how the new system will work. This involves creating a dataflow diagram that illustrates all this information (Kroenke & Boyle, 2020). Figure 2 below is an example of a dataflow diagram with logical steps in a process for developing a system.

Figure 2 – Using a modeling process for developing a system.

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Problem with Information Silos Information silos are instances where information is stored and isolated from other information systems. For example, let’s say that your organization has four locations, one in Los Angeles, New York, Dallas, and Philadelphia. In Dallas, the IT team successfully developed a database system essential for documenting and recording customer testimonials. In Los Angeles and Philadelphia, the IT teams have been struggling for several months to implement a similar system, but there was no repository of information or any sharing of information between the three locations to help the organization implement the system successfully in those locations (Kroenke & Boyle, 2020).

To sum up, information silos prevent the sharing of information. Successful organizations cannot operate in information silos. Organizations must share information in order to obtain high levels of achievement and sustainable results (Figure 3).

Enterprise Resource Planning (ERP) You are probably wondering why you need to understand enterprise resource planning, or ERP. Well, it is important to understand ERP because it is used to improve customer relations through better business processes. ERP systems can be used to forecast customer demands, helping companies to anticipate inventory, product, and service trends. ERP systems are a software infrastructure, usually software that integrates the organization’s business processes such as budgeting, customer services, human resources, supply chains, and manufacturing (Figure 3). For example, when organizations combine an ERP system with another core process such as a supply chain management system (SCM), this can help improve supply chain performance and better management of inventory (Kroenke & Boyle, 2020) See Figure 4 below for examples of the different modules of ERP.

Figure 3 – Sharing resources between organizational locations.

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Summary

Information silos prevent organizations from performing efficiently because the data is stored in separate information systems. This happens when each department in an organization works with and stores its own version of data. For example, at a grocery store, the accounting department processes sales and payroll, the delivery department processes deliveries and inventory, the human resources department processes employee data and so on. An information silo occurs when the human resources department changes an employee’s pay rate but does not make this information available to the accounting department. As a result, the employee does not get his or her new pay rate for the next pay period. To fix this problem, the organization needs to consolidate all of its data in one place such as in a single database (enterprise application). In addition, the old way of doing things will need to be discarded and a new business process will need to be developed for using that database. The organization can reduce costs (implementing and maintaining the system) by using cloud services such as a cloud database. In essence, this information system can also be described as a distributed system because the data can be distributed among the departments using computing devices, such as laptops, tablets, and smartphones. The grocery store solution was an example of an enterprise application. There are three types of enterprise applications: customer relationship management (CRM), enterprise resource planning (ERP), and enterprise application integration (EAI). Using an ERP solution will integrate all of this disparate data so that each department knows what the other is doing and access data in real-time.

Figure 4 – ERP modules (Yeung, 2013)

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References

Kroenke, D. M. & Boyle, R. J. (2020). Using MIS (11th ed.). Pearson. Yeung, S. H. (2013, August 25). ERP modules [Image].

https://commons.wikimedia.org/wiki/File:ERP_Modules.png Suggested Unit Resources The following sections from Chapters 6 and 8 in the textbook (located in uCertify) are not required for this unit, but still contain beneficial information. You are highly encouraged to read them. Chapter 6: Q6-8 Chapter 8: Q8-8 Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. To test your knowledge of the material covered in this unit, complete the following activities: Chapter 6 Active Review Chapter 6 Using Your Knowledge Chapter 6 Collaboration Exercise Chapter 6 Review Questions Chapter 6 Study Cards Chapter 8 Active Review Chapter 8 Using Your Knowledge Chapter 8 Collaboration Exercise Chapter 8 Review Questions Chapter 8 Study Cards The activities are located within the chapter readings in uCertify. The Active Review, Using your Knowledge, Application Exercise, Review Questions, and Study Cards are located at the end of the chapter.