ITM - Lecture 5

INFORMATICSInformation Technology Management

Lecture 5

9th January 2008ITM Lecture 5 Advanced Diploma (Thames College)

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Information Tec o ogy Management o at o Technology a age e t

Unit 10: U it 10 Electronic Commerce

ITM Lecture 5 Advanced Diploma (Thames College)

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W at s ect o c Co What is Electronic Commerce? e ce?Electronic Commerce (E-commerce) or Electronic ( ) Business (E-business) means shopping on the part of the Internet called the World Wide Web (the Web). For decades, banks have been using Electronic Funds Transfers (EFT, also called Wire Transfer), which are electronic transmissions of account exchange information over l t i t i i f t h i f ti private communications networks. Businesses also have been engaging in a form of electronic commerce, known as Electronic Data Interchange (EDI), for yy many years. Electronic commerce is defined as the use of electronic data y transmission to implement or enhance any business process.ITM Lecture 5 Advanced Diploma (Thames College) 3

E-commerce Business Model co e ce us ess odeBusiness to Customer (B2C)Sale of goods to the public. E.g. Amazon.com

Customer to Customer (C2C) ( )Sale of goods from one consumer to another E.g. E-bay E g E bay

Business to Business (B2B)Sale of goods from one business to another E.g. BigBoxXITM Lecture 5 Advanced Diploma (Thames College) 4

Advantages of Electronic Commerce gAccess to a global market at 24x7 g Instantaneous feedback Paperless transactions p Real time updates to information Removal of the middleman function No geographic boundaries Large potential market g p Fast turnaround time Access to a wide range of suppliers Online customer support Reduced costs of distribution and processingITM Lecture 5 Advanced Diploma (Thames College) 5

Disadvantages of Electronic Commerce gStem from the newness and rapidly developing pace of the underlying technologies. d l i t h l i The costs and benefits have been hard to quantify. Had trouble recruiting and retaining employees with the technological, design, and business process skills needed to create an effective electronic commerce presence. Difficulty of integrating existing databases and transactionprocessing software designed for traditional commerce into the software that enables electronic commerce. commerce Face cultural and legal impediments to electronic commerce. The legal environment in which electronic commerce is conducted is full of unclear and conflicting laws.ITM Lecture 5 Advanced Diploma (Thames College) 6

Risks for the Growing Use of Internet gMisuse of P Mi f Personal Information lI f i Virus attack on computer systems Online criminal activities Hacking


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Revenue Streams in E-commerce eve ue St ea s co e ceDirect sales Di l Software downloads Software rentals Advertising Backup/Storage /


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E-Commerce Market Sectors Co e ce a et Secto sOnline banking O li b ki Online trading Entertainment Media Online trainingDistribution o B2B Marketplaces s bu o of e p ces in Operation or Announced by Sector (As of August 2000)ITM Lecture 5 Advanced Diploma (Thames College) 9

International Electronic CommerceThe predominant language on the Web is English, once the English language barrier is overcome, the technology exists for any business to conduct electronic commerce with any other business or consumers, anywhere in the world. b i h i h ld The political structures of the world have not kept up with Internet technology: currency conversions tariffs import and conversions, tariffs, export restrictions, local business customs, tax and laws of each country in which a trading partner resides can each make international electronic commerce difficult. i i l l i diffi l The main technological development that has allowed electronic commerce to grow beyond its beginnings in bank EFT and B2B-EDI is the emergence of the Internet and the Web.ITM Lecture 5 Advanced Diploma (Thames College) 10

Economic Forces in E-CommerceReduce Transaction CostsBusinesses and individuals can use electronic commerce to reduce transaction costs by improving information flows and increasing coordination of actions to reduce uncertainty. y

Reduce Cost of Searching for InformationBy reducing the cost of searching for information about potential buyers and sellers and increasing the number of potential market participants, electronic commerce participants can change the attractiveness of vertical integration for many firms. yITM Lecture 5 Advanced Diploma (Thames College) 11

Netwo O ga at o s Network OrganizationsMany companies and strategic business units operate in an economic structure that exists between markets and hierarchies. Firms coordinate their strategies, resources, and skill sets by forming a long-term, stable relationship based on a shared purpose. f i l t t bl l ti hi b d h d Network organizations are particularly well-suited to technology industries that are information intensive. Electronic commerce can make such networks, which rely extensively on information sharing, much easier to construct and maintain. maintain These network forms of organizing commerce will become predominant in the near future. One interesting role for electronic commerce is in the improvement of existing markets and the creation of completely new markets.ITM Lecture 5 Advanced Diploma (Thames College)

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Example of E-Commerce Electronic Data Int r h n El tr ni D t Interchange (EDI)Electronic data interchange occurs when one business transmits computer-readable data in a standard format to another business. Business realized that they were spending a good deal of time and money entering these data into their computers, computers printing paper forms, and then reentering the data on the other side of the transaction. By creating a set of standard formats for transmitting that information electronically, businesses were able to reduce y, errors, avoid printing and mailing costs, and eliminate the need to reenter the data.ITM Lecture 5 Advanced Diploma (Thames College) 13

Steps in Making Money in EC (1) p g y ( )Step 1 S 1: Write a business proposal Answer the following 11 questions


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Steps in Making Money in EC (2) p g y ( )? ? () ? ? ? ?ITM Lecture 5 Advanced Diploma (Thames College)

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Steps in Making Money in EC (3) p g y ( )


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Steps in Making Money in EC (4) p g y ( ) ? ? ?


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Steps in Making Money in EC (5) p g y ( )Step 2 S b i h S 2: Submit the proposal l contact @sbcvc.com


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Steps in Making Money in EC (6) p g y ( )Step 3 A di i S 3: Auditing and processing d i Step 4: 3-4 weeks time to complete If accepted, a legal document will be issued d d b d and the money injectedITM Lecture 5 Advanced Diploma (Thames College) 19


Unit 11: U it 11 Issues in E-Commerce E Commerce


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Electronic Payment System ect o c Pay e t SysteImplementation of electronic payment systems is in its infancy and still evolving. Electronic payments are far cheaper than using the dead-tree method of mailing out paper invoices and then later processing received payments. Electronic billing and payment systems is a win win win-win situation:It is convenient for customers and it saves companies a lot of money.ITM Lecture 5 Advanced Diploma (Thames College) 21

Electronic Payment Systems -Payment Method y y yThere are currently three basic ways to pay for your purchases:Cash Cheque Credit card

Electronic cash distribution and payment can be handled by wallets, wallets smart cards or through proprietary limited-use scrip cards, proprietary, (Scrip is a digital cash minted by a small number of thirdparty organizations). Electronic checks are encrypted representations that resemble electronic cash. Over O er 80% of Internet purchases are paid for with credit (or p rchases ith debit) cards.ITM Lecture 5 Advanced Diploma (Thames College)

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Electronic Cash ect o c CasCredit card issuing banks make money by charging card-issuing money, merchants a processing fee ranging from 1-3% of the value of the transaction. Small purchases are not profitable for merchants who accept only credit cards for payment. payment Compaq and IBM are among several companies that think electronic cash schemes are in their infancy, and these infancy companies envision a rosy future for such methods. Electronic cash is attractive in the sale of goods and services of Micropayments (Internet payments for items cos g US$ o ess a e ca ed c opay e s) costing US$1 or less are called Micropayments)ITM Lecture 5 Advanced Diploma (Thames College) 23

Co ce s o Concerns on Electronic Cash ect o c CasAll electronic payment schemes have some issues that must be satisfactorily resolved to allay consumers'fears and give them confidence in the methodology. Concerns about electronic payment methods include Privacy and Security, Independence, Portability, Divisibility d Convenience. Di i ibili and C i These issues are particularly important when considering electronic cash payment systems. pa ment s stems Privacy and security questions are probably the most important issues that have to bee addressed with any consumer.ITM Lecture 5 Advanced Diploma (Thames College) 24

C a acte st cs o ect o c Cas Characteristics of Electronic CashElectronic cash should have two important characteristics in common with real currency.It must be possible to spend electronic cash only one, just as real currency is. Security procedures should be in place to guarantee that the entire electronic cash transaction occurs between two parties such that the recipient knows that the electronic currency being received is not y g counterfeit or being used in two different transactions.ITM Lecture 5 Advanced Diploma (Thames College) 25

An Effective Web Presence ect ve P ese ceThe nl Th only contact that customers and other nt t th t t m r nd th r stakeholders have with a firm on the Web might be through its presence there. Creating an effective Web presence can be critical even for the smallest and newest firm operating on the Web, and the tasks are:Identifying Web Presence Goals Achieving Web Presence GoalsITM Lecture 5 Advanced Diploma (Thames College) 26

Identifying Web Presence Goals de t y g P ese ce Goa sWhen a business creates a physical space in which to conduct its activities, its managers focus on very specific objectives. They must find a location that will be convenient for customers to find, with sufficient floor space and features find to allow the selling activity to occur, and they must balance the need for room to store inventory and provide employee y p p y working space with the costs of obtaining that space. The presence of a p y p physical business location results from satisfying these other objectives and is rarely a main goal of designing the space. g g pITM Lecture 5 Advanced Diploma (Thames College) 27

Achieving Web Presence Goals c ev g P ese ce Goa sAn effective site is one that creates an attractive presence that meets the objectives of the business or other organization. These objectives include:Attracting visitors to the Web site Making the site interesting enough that visitors stay and explore Convincing visitors to follow the site's links to obtain information Creating an impression consistent with the organization's desired image Reinforcing positive images that the visitor might already have about the organizationITM Lecture 5 Advanced Diploma (Thames College)

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Important of Web Presence po ta t o P ese ceOn the Web, businesses and other organizations have the Web luxury of intentionally creating a space that creates a distinctive presence. A Web site can perform many image-creation and imageenhancing tasks very effectively - it can serve as a sales brochure, brochure a product showroom, a financial report, an showroom report employment ad, or a customer contact point. Each entity that establishes a Web presence should decide which tasks the Web site must accomplish and which tasks are the most important to include. Different firms, even those in the same industry, might firms industry establish different Web presence goals.ITM Lecture 5 Advanced Diploma (Thames College)

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Web Presence for Not-for-profit Organizations Or niz ti nUse their Web sites as a central resource for integrated communications with their varied and often geographically disperse constituencies. Integrate information dissemination with fund-raising while providing a two way contact channel with persons engaged two-way in the organization's work. This combination of information dissemination with a two twoway contact channel is a key element in any successful electronic commerce Web site. Use the Web to stay in touch with existing stakeholders and identify new opportunities for serving them. de y ew oppo es o se v g e .ITM Lecture 5 Advanced Diploma (Thames College) 30

Issues in Setting up a Website ssues Sett g Webs teUse f E-commerce software U of E r ft r Development o the website evelop ent of webs te Digital cash: Payment Delivery CRM facility f ili


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Strategies for Purchasing, Logistic and S pp rt A ti iti nd Support ActivitiesBusinesses use electronic commerce to improve their primary activity of purchasing and all of the support activities creating p g a Web presence and selling to new customers on the Web. An emerging characteristic of purchasing, logistics and support activities is that they need to be flexible. Economic organizations are evolving from the hierarchical structures they have used since the Industrial Revolution to new, more fl ibl network structures. flexible k These network structures are made possible by the reductions in t i transaction costs caused by the emergence of the Internet ti t d b th f th I t t and the Web.ITM Lecture 5 Advanced Diploma (Thames College) 32

Pu c as g ct v t es Purchasing ActivitiesPurchasing activities include identifying vendors, evaluating vendors vendors, selecting specific products, placing order, and resolving any issues that arise after receiving the ordered goods or services. These issues might include late deliveries, incorrect deliveries quantities shipped, incorrect items shipped, and defective items. The term Procurement generally includes all purchasing activities, plus the monitoring of all elements of purchase ,p g p transactions. It also includes the job of managing and developing relationships with key suppliers. p g p ppITM Lecture 5 Advanced Diploma (Thames College) 33

Pu c as g ct v t es St ateg es Purchasing Activities StrategiesA number of manufacturers that deal in general industrial merchandise and standard machine tools that are used i a variety of i d i h h d in i f industries have created d Web sites through which businesses can purchase items to f lf ll recurring needs. fulfill d Many of the products that companies buy on a y p p y recurring basis are commodities; that is, standard items that buyers usually select using price as their b y y gp main criterion.ITM Lecture 5 Advanced Diploma (Thames College) 34

Pu c as g ct v t es St ateg es Purchasing Activities StrategiesThese products are often called Maintenance Maintenance, Repair and Operating (MRO) supplies. By using a Web site to process orders, the vendors in this market can save the cost of printing and shipping catalogs, and the cost of handling telephone orders. Office equipment and supplies are also items that are used by a wide variety of b i db id i f businesses. Well-designed Web sites devoted to helping business purchasing d b i h i departments b these routine buy h i items are easily as possible.ITM Lecture 5 Advanced Diploma (Thames College) 35

W at s og st cs ct v t es? What is Logistics Activities?Logistics activities include managing the inbound movements of materials and supplies and the outbound movements of finished goods and services. services The activities of Receiving, Warehousing, Inventory Control, V hi l S h d li and C C l Vehicle Scheduling d Control, and Fi i h d l d Finished Goods Distribution are all logistics activities. The classic objective of logistics is providing the right goods in the right quantities in the right place at the right time.ITM Lecture 5 Advanced Diploma (Thames College)

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Logistics Activities Strategies og st cs ct v t es St ateg esBusinesses have been increasing their use of information technology to achieve this objective. Information system delivers real-time shipment information y p to Web browsers on its customers' computers. Firms that run their own tracking operations have also begun i l b implementing tracking systems that use satellite i ki h lli global positioning technology to monitor vehicle movements. The Web and the Internet are providing an increasing number of opportunities to better manage these activities as pp g they lower transaction costs and provide constant connectivity between firms engaged in logistics management. managementITM Lecture 5 Advanced Diploma (Thames College) 37

Suppo t ct v t es Support ActivitiesSupport activities include the general S t ti iti i l d th l g categories likeFinance and Administration Human R H Resources Technology Development gy p


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F a ce a d d Finance and Administration st at oFinance and Administration includes activities such as making payments, processing payments received from customers, planning capital i df l i i l expenditures, and the budgeting and planning that ensure sufficient funds will be available to meet the organization's obligations as they come due. g g y The operation of the computing infrastructure of the organization is also an administration activity activity.ITM Lecture 5 Advanced Diploma (Thames College)

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Hu a esou ce ct v t es Human Resource ActivitiesHuman R H Resource activities include hiring, ti iti i l d hi i g g p y training, and evaluating employees; benefits administration, and complying with government record-keeping record keeping regulations.


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Developing Technology eve op g Tec o ogyDeveloping Technology can include a wide variety of activities, depending on the nature of the business or organization. It can include the networking of research t ca c ude t e etwo g o esea c scientists into virtual collaboration work-groups, posting of research results, publishing research results papers online, and providing connections to outside sources of research and development id f h dd l services.ITM Lecture 5 Advanced Diploma (Thames College) 41

Support Activities - Training Strategies pp g gThe training function can be handled by the human resources department, or decentralized and administered by individual departments. In addition to saving the costs of running classroom sessions in multiple locations, many companies found that the training was producing sales increases in specific product lines. lines The company also began tracking the courses that a salesperson or reseller's salesperson had taken and began assigning sales leads for p g g g specific products to the salespersons that had taken the course for that product. To k T keep salespersons updated after they have taken a course, they l d d f h h k h send course graduates an e-mail notification whenever new information about a product becomes available. pITM Lecture 5 Advanced Diploma (Thames College) 42

Business Plan for Implementing E-Commerce E C mm rSetting Obj ti S tti Objectives Benefit Objectives Cost Objectives Comparing Benefits to Costs


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Sett g Object ves Setting ObjectivesObjectives for e-commerce initiatives should include expected benefits and expected costs. It can inspire businesses to undertake activities:Building brands Enhancing existing marketing programs Selling products and services Selling d S lli advertising ii Improving after-sales service and support Purchasing p g products and services Managing supply chains Operating auctions Creating i t l C ti virtual communities and Web portals iti dW b t l

Although the success of each of these activities is measurable to some degree, many companies have undertaken these activities on the Web without setting specific, measurable goals.ITM Lecture 5 Advanced Diploma (Thames College) 44

Cost and Benefit Evaluation a d e e t va uat oIn the early days of e-commerce (the mid-1990s), companies that y y ( ), p had good ideas could launch a business activity on the Web and not face competition. As A e-commerce i now beginning to mature, more companies are is b i i i taking a closer look at the benefits and costs of their electronic commerce projects. p j A good business plan will set specific objectives for benefits to be achieved and costs to be incurred. A company will create a pilot Web site to test an electronic commerce idea, and then release a production version of the site when it works well well. These companies must specify clear goals for the pilot test so that they know when the site is ready to scale up. y y pITM Lecture 5 Advanced Diploma (Thames College) 45

Benefit Objectives e e t Object vesSome companies build Web sites to build their brands or enhance p existing marketing programs in order to increased brand awareness, as measured by market research surveys and opinion polls. Companies that want to sell goods or services on their sites can C i h ll d i h i i measure sales volume in units or dollars. A good marketing staff or outside consulting firm can help a company sort out the causes and effects of marketing and sales programs and may be needed to help set and evaluate these kinds of goals for electronic commerce initiatives. Companies that want to use their Web sites to improve customer service or after sales support might set goals of increasing customer after-sales satisfaction or reducing the cost of providing the customer service or support.ITM Lecture 5 Advanced Diploma (Thames College) 46

Measurement of Benefit easu e e t o e e tThe benefits of other electronic commerce initiatives can be assessed by using a variety of measurements. Supply chain managers can measure supply cost reductions, quality improvements, or faster deliveries of ordered goods. Auction sites can set goals for the number of auctions, the number of bidders and sellers the dollar volume of items sold, sellers, sold the number of items sold, or the number of registered participants. Virtual communities and Web portals measure the number of visitors and try to measure the quality of their visitors' experiences. experiences Some sites use online surveys to gather these data; most settle pp p y g g for approximations provided by measuring the length of time each visitor remains on theITM Lecture 5 how often visitors return. site andAdvanced Diploma (Thames College)

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Cost Object ves ObjectivesManagers found that the cost of information technology g gy projects can be equally difficult to estimate and control. Since Web development uses relatively new hardware and software technologies, managers have little experience on ft t h l i h littl i which they can draw to make estimates. E Commerce E-Commerce initiatives tend to have a shorter timeframe than many other information technology projects, the rapid changes in Web technology can destroy a manager's best-laid plans very quickly. i kl In addition to hardware and software costs, the project budget must include the costs of hiring, training, and paying the personnel who will design the Web site, write or customize the software, create the content, and operate and maintain the site. itITM Lecture 5 Advanced Diploma (Thames College) 48

Co pa g e e ts Comparing Benefits to CostsMost companies have p p procedures that call for an evaluation of any major expenditure of funds. These major investments in equipment, personnel, and other assets are called capital projects or capital h ll d i l j i l investments. The techniques that companies use to evaluate proposed capital projects range from very simple calculations to complex computer simulation models. p p No matter how complex the technique, it always reduces to a comparison of benefits and costs. If the benefits exceed the cost of a project by a comfortable margin, the company invests in the project.ITM Lecture 5 Advanced Diploma (Thames College) 49

Cost-Benefit Evaluation of ECommerce Strategy El m nt C mm r Str t ElementsA key part of creating a business plan for e-commerce yp g p initiatives is the process of identifying potential benefits, identifying the costs required to generate those benefits, y g q g and evaluating whether the benefits exceed the costs. Companies should evaluate each element of their ep commerce strategies using this cost-benefit approach.


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E-Commerce: Go or Stop? pCapital project evaluation (such as the payback method or the net present value method) provide a quantitative expression of what a comfortable benefit-to-cost p margin is for a specific company. Managers often use the term Return on Investment g (ROI) calculation to describe any capital investment evaluation technique. The value of early position in a new market is so great that many companies are willing to invest very large amounts of money with no near-term prospects of profit.ITM Lecture 5 Advanced Diploma (Thames College) 51


Unit 12: U it 12 Data Files and Databases


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Data F es & Databases ata Files atabasesBefore databases were introduced, all data introduced was stored in files. Files are still used today, but are much less common. A file stores only 1 type of record. Databases can store different types of records.ITM Lecture 5 Advanced Diploma (Thames College)

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Data F es ata FilesManual office systems used files to structure the information and computer systems to group common data together in files. files The way in which data files for computerized systems are structured follows a set pattern. patternThe file is divided into records. Each record is divided into fields. E h r rd i di id d i t fi ld The field is a particular data item which relates to a record. record Each record in a file would have the same set of fields.ITM Lecture 5 Advanced Diploma (Thames College) 54

Sto g ata F es Storing Data in FilesTraditional MethodKeep paper documents in 2-ring binder or file. Each file contains information about a particular subject E.g. students data, there could be many g registration forms. Each form may include name, student number, address, etc...

Earlier application system each had their own fileITM Lecture 5 Advanced Diploma (Thames College) 55

F e O ga at o File OrganizationData files must be organized logically into files and b accessible and updated as needed. d be ibl d d d d d There are three major methods of file organizationSequential O S i l Organization i i Direct Organization Indexed-sequential OrganizationITM Lecture 5 Advanced Diploma (Thames College) 56

Seque t a F e O ga at o Sequential File OrganizationThis is the simplest form of file organization. organization Records are stored in sequential order by a particular record key. keyFor example, if the file contains employee data, then the p y data field chosen to be the record is the Employee Number.

Sequential Files can be stored on both magnetic tape and magnetic disks. Data which is stored sequentially can only be accessed q y y sequentially is called Sequential Access Method (SAM) file.ITM Lecture 5 Advanced Diploma (Thames College) 57

Direct File Organization ect F e O ga at oIn a direct file, the data management systems is able to , g y determine the exact location on the disk (address) where the data record is stored. This method of access is called direct access and the file is called Direct Access Method (DAM) file which is only found in disks. The data management system determine the address on the disk to store and retrieve a particular data record by using a program specially created for this purpose. i ll d f hi The input will be the record key field, and the output from this program is the address. f hi i h ddITM Lecture 5 Advanced Diploma (Thames College) 58

Indexed-Sequential File Organization q gData records are stored sequentially by record key. A few data records are stored on any one t k track. An index is created by the data management system. g y When a particular record is to be accessed, the index is looked up to find the track where the record can be found. Then the records in this track are read sequentially until the d i ll il h particular record desired is found. It is found only on disks.


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Redundancy in Data Files edu da cy ata F esIn the traditional data files, the same data may be files stored in several functional files. This situation duplicates data unnecessarily, unnecessarily creating what is referred to as Redundancy.


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Databases atabasesA Database is a data store for accepting, accepting storing and providing on demand data for multiple independent users. lti l i d d t It is essentially a means of organizing data in y g g related file structure to allow quick, user p d d p data. specified access and manipulation of the d They are controlled by systems software called Database Management Systems S stems (DBMS).ITM Lecture 5 Advanced Diploma (Thames College) 61

DBMS SThe Database Management System (DBMS) is the software that manage (builds and maintains) the database. database This includes Adding, Deleting and Changing records in the database. The DBMS will also control access to the data.A financier user, for example, may not be able to view p personnel data, even though both finance and personnel , g p data are kept in the same database.ITM Lecture 5 Advanced Diploma (Thames College)

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DBMS SThe DBMS makes it easier for programmers to develop application systems.


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Fu ct o s o Functions of a DBMS SWhat are the functions performed by a DBMS?Record C d Creation and Updates d d Record Selection by Search Criteria y Minimize Data Redundancy Security


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Record Creation and Updates eco d C eat o a dThe database is maintained by the user creating, deleting or amending records. The Database Management S Th D b M System will also ill l allow the user to process selected groups of records, the whole file or individual records. This is accomplished by selecting the required option from a menu displayed on the video screen or by keying in the relevant command from the keyboard.ITM Lecture 5 Advanced Diploma (Thames College) 65

Record Selection by Search CriteriaInvolve the extraction of information from the selected records according to specified search criteria. A database has searching facilities ranging from limited searches on keywords to full text searching. This facility provides the means of extracting from a large volume of data useful facts which could not possibly b l fd f lf hi h ld ibl be found by physical search methods in sufficient time to make a decision decision. A query language is used to specify the search criteria. This language facilitates enquiries using English-style word to define commands, so greatly assisting users to find the information they are seeking. y gITM Lecture 5 Advanced Diploma (Thames College) 66

Minimize Data Redundancy e ata edu da cyIf a data element or record (e g an (e.g. employee address) appears twice in an organization's records, this is called D t i ti ' d thi i ll d Data Redundancy, since logically, it should not be necessary to hold the data twice, hence py one copy is redundant. In a database, data redundancy should be eliminated, or at least, minimized and this li i t d t l t i i i d d thi is the task of the DBMS.ITM Lecture 5 Advanced Diploma (Thames College) 67

Security yThe Database Management System is also responsible for providing security for the database, ensuring against unauthorized d t b i i t th i d access and data corruption.For example, if many end-users are given , y access to common data, there must be a way of controlling that access to ensure that no w b g two users are able to change the data simultaneously.ITM Lecture 5 Advanced Diploma (Thames College) 68

Data Dictionary ata ct o a yA data dictionary contains details of the data in a y database. J Just like an English-language dictionary, each data item g g g y, is recorded together with its definition and explanation. The dictionary assists in the design of a database since y g the meaning of various types of data are easily located. It can be used to reduce the level of redundancy to a y necessary minimum. It is easier to identify synonyms (data groups having y y y ( g p g more than one name).ITM Lecture 5 Advanced Diploma (Thames College) 69

Example a pe


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Advantages of Databases dva tages o atabasesReduces data duplication which occurs using conventional file structure. Avoids duplicating input data to update p y p multiple functionality independent files holding the same date. Offers Off r useful query and r p rt generation f l r d report r ti languages. Provides fast and flexible access to information. informationITM Lecture 5 Advanced Diploma (Thames College) 71

Disadvantages of Database sadva tages o atabaseData structures in a database are complex and therefore takes a longer time to design and i l d implement. t Costs more than conventional file systems. y Requires high caliber, experienced and specialized p r p i liz d personnel. l


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C eat g Creating a Database Environment atabase v o e tDepartments have all along maintained their own data p g and have been jealous of it. Inter-departmental rivalry leads to reluctance to divulge p y g data, let alone make it available in a central database. There must be a change of attitude in terms of who g actually owns data. Appointing a Chief Information Officer is one way to pp g y give direction and focus, as the CIO will be responsible for the overall use of data and information in the company. A data administration function must be established and the CIO must plan the current5 and future data needs. ITM LectureAdvanced Diploma (Thames College)

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P ys ca a d og ca eco ds Physical and Logical RecordsThe form in which data which is actually stored is not the same as the form presented to the application program. t d t th li ti The data structure that is actually on the y computer media (e.g. disk, tape ) is called a Physical Structure. Structure The structure that the application program uses is a Logical Structure.ITM Lecture 5 Advanced Diploma (Thames College) 74

Data F es and Databases ata Files a d atabasesDatabase Management Systems (DBMS) do not replace the traditional method of storing data in data files. The data is still stored in sequential, direct or indexed sequential file structure even though a database management system is used to provide greater flexibility in accessing data. There are a variety of methods that could be used by a DBMS to logically structure the data. Two methods that will be discussed areMulti-lists Inverted FilesITM Lecture 5 Advanced Diploma (Thames College) 75

Multilist u t stA list links common items in a database. database A list is like a chain and each link in that chain is a record with the desired attribute. By starting at the first record, the DBMS record can retrieve, one by one, the records in the chain which share th d ir d attribute. h i hi h h r the desired ttrib t


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Multilist u t stA list links common items in a database. database A list is like a chain and each link in that chain is a record with the desired attribute. By starting at the first record, the DBMS record can retrieve, one by one, the records in the chain which share th d ir d attribute. h i hi h h r the desired ttrib t


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Inverted Files ve ted F esIn an inverted file, the , addresses of each record with a desired attribute are stored in an index. In a fully inverted file, there will be one index for h f each type of data fd item. In I a partially inverted i ll i d file, only some of the attributes are indexed. indexedITM Lecture 5 Advanced Diploma (Thames College) 78


Unit 13: U it 13 Computer Configurations


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Co pute Co gu at o s Computer ConfigurationsA computer processing center will be set up in a company to control and manage the computer servers. servers In a company with multiple sites, there are different p ibl h rd r t p depending diff r t possible hardware setups, d p di on the number of computer servers and their location. l ti The computer systems could be Centralized or Decentralized.ITM Lecture 5 Advanced Diploma (Thames College) 80

Ce t a ed v o e t Centralized EnvironmentFacilities, Facilities systems & resources installed in a central location Other business units gain access thr h through telecommunications networks t k User interface through dumb terminals or PCs with terminal simulation softwareITM Lecture 5 Advanced Diploma (Thames College) 81

Benefits for Centralized EnvironmentProvides Access to Large Systems Sharing of Resources Easier to Manage E i rt M Monitor Lower Cost Faster Delivery of Output y p Elimination of Redundancy Increased Security Greater ResponsivenessITM Lecture 5 Advanced Diploma (Thames College) 82

Decentralized Processing ece t a ed P ocess gW With the availability of cheaper computers ( g y p p (e.g. minicomputers), it becomes possible for each department or branch of a company to have its own computer system. Each site can then carry out their processing independently.


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Distributed Processing st buted P ocess gDistributed processing involves having computers systems p g g p y at each site, but these systems work together to achieve the same business objectives. There could be sharing of corporate databases as well as h ld b h i f d b ll local processing. Distributed processing has increased in popularity. popularity It is seen as a viable alternative to centralized processing and decentralized processing. Both local and shared data processing are possible. Each site may need to process data unique to its own location. At the same time, transactions can span across sites.ITM Lecture 5 Advanced Diploma (Thames College) 84

Reasons for Implementing Distributed S t m Di trib t d SystemsImproved Response Time Reduced Costs Improve Accuracy Reduced Mainframe Costs Smoother Growth Increased Reliability I d R li bili Resource Sharing g Increased User SatisfactionITM Lecture 5 Advanced Diploma (Thames College) 85

Developing a Telecommunications System p g yIn any large organization, communications and y g g , information sharing depends on a good telecommunications system and facilities. The computer network depends on the telecommunications infrastructure for the transmission of data. In developing a telecommunications plan for your company, it is important to start with the requirements of your company rather than just looking at the desirable features. d i bl f A telecommunications system must advance the business objectives of the organization. b i bj i f h i iITM Lecture 5 Advanced Diploma (Thames College) 86

Developing a Telecommunications System p g yReduced travel time which can be more productively used for work. Flexible work schedule which can motivate staff. Conducive work environment which reduces stress. r d tr Reduced overheads. Greater workplace efficiency.ITM Lecture 5 Advanced Diploma (Thames College) 87

Effectively Work as Telecommuters v yWVideo conferencing Teleconferencing E-mail Net meetings/Online chat facilities Groupware p Blackberry for instant access anytime, anywhereITM Lecture 5 Advanced Diploma (Thames College) 88

Factor to Consider in Developing a Telecommunications S st m T l mm ni ti ns SystemThere are several factors that should be consider when developing a telecommunications plan and in choosing telecommunications equipment.Distance - If the communications are mainly local and internal to the organization, then there is li l i little need to consider long-distance d id l di telecommunications features. Type of Service - The type of service to be supported must also be considered.ITM Lecture 5 Advanced Diploma (Thames College) 89

G oba at o GlobalizationGlobalization refers to the worldwide phenomenon of technological, economic, political and cultural exchanges, brought about by modern g , g y communication, transportation and legal p infrastructure as well as the political choice to consciously open cross-border links in international trade and finance. The term Global Culture is used to describe how g g human beings are becoming more intertwined with each other around the world economically, p politically, and culturally. y yITM Lecture 5 Advanced Diploma (Thames College) 90

G oba Systems Global Syste s Infrastructure ast uctu eThe basic requirements for data communications and a q global information system is in place. There are several factors that must be considered to ensure a successful global data communications capability. These include factors like establishing standards and human resource policies. Imagine the scenario of each site having its own computers, software and procedures for developing systems and processing data. There would be tremendous problems trying to make these sites communicateITM Lecture 5 effectively.Advanced Diploma (Thames College)

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Unit 14: Information Systems I f i S Types and Presentations


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What is a Computer-based Information System? Inf rm ti n S t m?This is one that uses technology to perform some or all of its intended tasks which i l d th h dli of i hi h include the handling f inputs such t h as business problems, processing the problems and producing as output, reports and recommendations. The typical components of such a system are h d hardware, software, a database, ft d t b network, procedures and people.ITM Lecture 5 Advanced Diploma (Thames College) 93

Classification of Information Systems yThere are various ways of classifying information y y g systems. One common approach is to classify according to its pp y g main functions. Transaction Processing Systems (TPS) g y ( ) Information Reporting Systems (IRS) Decision Support Systems (DSS) Expert Systems (ES) Executive Information S t m (EIS) E ti Inf rm ti n Systems Office Automation (OA)ITM Lecture 5 Advanced Diploma (Thames College) 94

Types of Information Systems yp y


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Transaction Processing Systems (TPS) g y ( )Automated clerical and operational functions Track data at the most elementary level


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Information Reporting System (IRS) p g y ( )Provide routine summary and exception reports, reports often drawing on transaction level data.


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Decision Support System (DSS) ec s o Suppo t Syste ( SS)Supports management decisions that are semisemi structured or cannot be specified in advance Interactive and user friendly user-friendly


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Expert System (ES) pe t Syste ( S)Captures human expert knowledge to solve problems Gives the computer the ability to make suggestions and act like an expert Captures the use of the wisdom of experts and specialists Years of experience and specific skills are not completely lost when a human expert dies, retires or dies leaves the company To solve complex problems and support difficult decisionsITM Lecture 5 Advanced Diploma (Thames College) 99

Executive Information System (EIS) y ( )Utilizes heavy graphics displays, draws together yg p p y, g data from numerous internal and external sources Determine how certain data was produced p For senior managers Drill down capabilities


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O ce uto at o (O ) Office Automation (OA)Office Automation (OA) refers to a wide variety ( ) y of computer-based technologies that make office workers more productive at their jobs. This improvement in productivity can be achieved through increases in effectiveness or efficiency.


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Management Information Systems g yAnother common term used loosely is Management Information Systems (MIS). We will consider it to be any information system that supports the timely use, management and processing of d t or i f r ti p rt i i t pr i f data r information pertaining to an organization's operations by authorized people i th organization's environment. l in the i ti ' i t In this definition, the relevant parts of any TPS, IRS, DSS, ES, EIS and OA can be considered components of an organization's MIS.ITM Lecture 5 Advanced Diploma (Thames College) 102

Transaction Processing Systems (TPS) g y ( )It is a system that supports the processing of a firm's business transactions. These systems are designed to keep an g g g y organization running smoothing by automating the processing of the huge amounts of paperwork that must be handled daily.


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Example o TPS a p e ofThere are several examples of TPS.Order Entry Inventory Distribution Sales I i i S l Invoicing Accounts Receivable Purchasing Receiving Accounts Payable Payroll yITM Lecture 5 Advanced Diploma (Thames College) 104

Example o TPS - Order Entry a p e of O de tyThis is the TPS which processes customer orders. Orders may arrive by a variety of means : ,p , mail, phone, fax etc. In cases of repeat orders, a trigger within the t m ill b th th system will be the source. r


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Example o TPS - Inventory a p e of ve to yAn inventory system monitors the quantity of each product available for sale and helps ensure th t the proper amount of stock is that th t f t ki maintained. All movement of goods in and out of the store or warehouse will be recorded. recorded


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Example o TPS - Distribution a p e of st but oThis involves ensuring the best mode of transport is selected to deliver goods to the customer on time. t ti Customs clearance, insurance and freight , g forwarding are the areas of concern here.


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Example o TPS - Sales Invoicing a p e of Sa es vo c gThe main role of the sales invoicing system is to receive delivery information from the Distribution S t Di t ib ti System and to prepare dt invoices to be sent to the customer. Discounts are applied where appropriate. In some systems, monthly statement of systems accounts are also prepared.


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Example of TPS - Accounts Receivable pAs the name implies, this TPS records the implies amount owed by customers and the payments made. made The data comes from the sales invoicing system. In companies with cash sales, there is little or no receivables. A large amount of money may be tied in A/R y and the results of this system often receive close attention.ITM Lecture 5 Advanced Diploma (Thames College) 109

Example o TPS - Purchasing a p e of Pu c as gMany companies have central department to handle procurement of its goods and services. i The advantages are to gain maximum g g volume discounts, obtain the lowest price or best deal from various vendors and to achieve standardization where necessary.


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Example o TPS - Receiving a p e of ece v gThe role of the receiving system is to record the receipt, inspection, acceptance or rejection of goods. j ti f d The inspection serves to identify damaged p y g or incomplete goods which must be rejected. rejected


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Example of TPS - Accounts Payable p yThis system records the invoices received from vendors, determines the optimum time t ti to pay and prepares and prints d d i t cheques. Cash forecasting is another important task of the A/P system. system


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Example o TPS - Payroll a p e of Pay oThis system calculates the salary to be paid to employees, taking into account any relevant deductions (e.g. pension fund ) or l t d d ti ( i f d additions (e.g. allowances). The payroll system must produce income tax reports and should also keep track of pension fund or union fees which have to be dit d t b credited to another organization. th i tiITM Lecture 5 Advanced Diploma (Thames College) 113

Information Reporting Systems o at o epo t g Syste sAn Information Reporting Systems (IRS) is an p g y ( ) information system that provides predefined types of information to management for relatively structured types of decisions. fd i i Many of the traditional hard copy reports are now also available in screen form form. Printouts like invoices or remittance advice are not traditionally considered "reports" and are more closely reports associated with the Transaction Processing System (TPS) that produced them. Information Reporting Systems are used for both management planning and management control functions.ITM Lecture 5 Advanced Diploma (Thames College) 114

Methods of Information PresentationCo Common methods of presentation used in information sys e s o e ods o p ese o o o systems are via the PC screen or printed page. Information can also be presented vocally, either by face to p y y face communication, telephone or pre-recorded message, The aim of an information system, beyond presenting the required information at the required time, must be to present it in such as way that it may be readily absorbed. A number of f b f factors contribute to this: ib hi Visual Presentation Use of Graphics Format and layoutITM Lecture 5 Advanced Diploma (Thames College) 115

V sua Presentation Visual P ese tat oAbout 70% of all the information that we absorb is acquired visually rather than through the other senses. th h th th This already the primary method used in y p y information systems as both screen and paper printouts show information visually visually.


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Use o G ap cs of GraphicsAlthough text forms the bulk of the contents of information being provided, alternatives should be sought. Graphics is a lt ti h ld b ht G hi i useful supplement. Examples are pie charts, line charts, etc.


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Fo at a d ayout Format and LayoutUse of different fonts and different font sizes, sizes underlining and so on help to highlight important points and make the presented information easier to absorb. Even th way sentences and paragraphs are E the t d p r r ph r positioned is important in making the page or screen l k more appealing. look li Imagine how boring a textbook looks if all you see are lot of words arranged close together on each page.ITM Lecture 5 Advanced Diploma (Thames College) 118

Questions & Discussion


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ITM - Lecture 5

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