Business Driven Information Systems, Ninth Edition
Paige Baltzan
CONTENTS
module 1
Business Driven MIS 1
CHAPTER 1
Management Information Systems: Business
Driven MIS 3
opening case study: Business Competition
in the Age of AI/ML 4
Section 1.1 Business Driven MIS 6
COMPETING IN THE INFORMATION AGE 6
Connected Devices Driving the Fourth Industrial
Revolution 6
Core Driver of the Information Age 1: Data 8
Core Driver of the Information Age 2: Information 12
Core Driver of the Information Age 3: Business
Intelligence 12
Core Driver of the Information Age 4: Knowledge 15
SYSTEMS THINKING AND MANAGEMENT INFORMATION
SYSTEMS 17
The MIS Solution 18
Systems Thinking 20
MIS Department Roles and Responsibilities 22
Section 1.2 Business Strategy 25
IDENTIFYING COMPETITIVE ADVANTAGES 25
BUSINESS STRATEGY 1: SWOT ANALYSIS 27
BUSINESS STRATEGY 2: THE FIVE
FORCES MODEL 28
Force 1: Buyer Power 28
Force 2: Supplier Power 30
Force 3: Threat of Substitute Products or Services 31
Force 4: Threat of New Entrants 31
Force 5: Rivalry among Existing Competitors 31
Porter’s Five Forces Example: Analyzing the Airline
Industry 32
BUSINESS STRATEGY 3: THE THREE GENERIC
STRATEGIES 33
Learning Outcome Review 34
Key Terms 36
Review Questions 36
Business Driven Case One 37
Business Driven Case Two 39
Business Driven Decisions 40
Business Driven Projects 45
CONTENTS
CHAPTER 2
Digital Transformation: Decisions,
Processes, and Artificial Intelligence 46
opening case study: Artificial Intelligence:
Butler 1.0 to Butler 2.0 47
Section 2.1 Decision Support Systems 49
MAKING ORGANIZATIONAL BUSINESS
DECISIONS 49
The Decision-Making Process 50
Level 1: Operational Decision-Making 50
Level 2: Managerial Decision-Making 52
Level 3: Strategic Decision-Making 53
MEASURING ORGANIZATIONAL BUSINESS
DECISIONS 53
Efficiency and Effectiveness Metrics 57
The Interrelationship between Efficiency and
Effectiveness 58
USING MIS TO MAKE BUSINESS DECISIONS 59
Level 1: Operational Support Systems 60
Level 2: Managerial Support Systems 61
Level 3: Strategic Support Systems 63
Section 2.2 Digital Transformation: Business Processes
and Artificial Intelligence 66
MANAGING BUSINESS PROCESSES 66
Business Process Modeling 69
As-Is and To-Be Process Models 69
Business Process Best Practices 72
Use Cases 73
USING MIS TO IMPROVE BUSINESS PROCESSES 74
Level 1: Operational Business Processes—Automation 74
Level 2: Managerial Business Processes—Streamlining 76
Level 3: Strategic Business Processes—Reengineering 78
USING AI TO MAKE BUSINESS DECISIONS AND DRIVE
DIGITAL TRANSFORMATION 81
Algorithm Basics 82
Types of Artificial Intelligence 83
SIX BRANCHES OF ARTIFICIAL INTELLIGENCE 84
AI Branch 1: Machine Learning 84
AI Branch 2: Neural Networks 86
AI Branch 3: Natural Language Processing 87
AI Branch 4: Computer Vision 88
AI Branch 5: Expert Systems 88
AI Branch 6: Robotics 89
The Biggest Problem with AI and ML: Bias in the Training
Data 89
Learning Outcome Review 90
Key Terms 92
Review Questions 93
Business Driven Case One 94
Business Driven Case Two 94
Business Driven Decisions 96
Business Driven Projects 101
CHAPTER 3
Ebusiness: Electronic Business Value 102
opening case study: Generative AI Chatbots:
Digital Transformation for Web 3.0 103
Section 3.1 Web 1.0: Ebusiness 105
DISRUPTIVE TECHNOLOGY 105
Disruptive versus Sustaining Technology 105
The Internet and World Wide Web—The Ultimate
Business Disruptors 106
WEB 1.0 – EBUSINESS: THE DEMOCRATIZATION
OF BUSINESS 108
Web 1.0 Advantage 1: Expanding Global
Reach 109
Web 1.0 Advantage 2: Opening New
Markets 109
Web 1.0 Advantage 3: Reducing Costs 110
Web 1.0 Advantage 4: Improving Efficiency and
Effectiveness with Analytics 111
THE FOUR EBUSINESS MODELS OF WEB 1.0 113
Web 1.0 eBiz Model 1: Business-to-Business (B2B) 114
Web 1.0 eBiz Model 2: Business-to-Consumer (B2C) 115
Web 1.0 eBiz Model 3: Consumer-to-Business (C2B) 115
Web 1.0 eBiz Model 4: Consumer-to-Consumer (C2C) 115
Web 1.0 eBiz Revenue-Generating Strategies 115
Web 1.0 eBiz Fraud 118
WEB 1.0 EBIZ TOOLS FOR CONNECTING AND
COMMUNICATING 118
Web 1.0 eBiz Communication Tool 1: Email 119
Web 1.0 eBiz Communication Tool 2: Instant
Messaging 119
Web 1.0 eBiz Communication Tool 3: Podcasting 119
Web 1.0 eBiz Communication Tool 4: Video Chat 120
Web 1.0 eBiz Communication Tool 5: Content
Management Systems 120
Section 3.2 Web 2.0: Business 2.0 121
WEB 2.0: ADVANTAGES OF BUSINESS 2.0 121
Web 2.0 Advantage 1: Content Sharing through Open
Sourcing 121
Web 2.0 Advantage 2: User-Contributed
Content 122
Web 2.0 Advantage 3: Collaboration Inside the
Organization 123
Web 2.0 Advantage 4: Collaboration Outside the
Organization 123
WEB 2.0: ALL ABOUT SOCIAL MEDIA 125
Web 2.0: Social Tagging 126
Web 2.0: Social Collaboration by Blogs and Wikis 128
Web 2.0: Social Fraud 129
WEB 3.0: DEFINING THE NEXT GENERATION OF ONLINE
BUSINESS OPPORTUNITIES 130
Web 3.0: Deep Web 130
Web 3.0: Dark Web 131
Web 3.0: Integration with AI/ML 131
Learning Outcome Review 133
Key Terms 134
Review Questions 135
Business Driven Case One 135
Business Driven Case Two 136
Business Driven Decisions 137
Business Driven Projects 140
CHAPTER 4
Ethics and Information Security: MIS Business
Concerns 141
Section 4.1 Ethics 143
INFORMATION ETHICS 143
Legal vs. Ethical 144
Information Does Not Have Ethics; People Do 145
Ethical Considerations Surrounding AI/ML 146
DEVELOPING INFORMATION MANAGEMENT POLICIES 148
ePolicy 1: Ethical Computer Use Policy 148
ePolicy 2: Information Privacy Policy 149
ePolicy 3: Acceptable Use Policy 150
ePolicy 4: Email Privacy Policy 152
ePolicy 5: Social Media Policy 153
ePolicy 6: Workplace MIS Monitoring Policy 154
Section 4.2 Information Security 156
PROTECTING INTELLECTUAL ASSETS 156
Hackers: A Dangerous Threat to Business 158
Viruses: A Dangerous Threat to Business 160
THE FIRST LINE OF DEFENSE—PEOPLE 161
Safeguarding Data 162
THE SECOND LINE OF DEFENSE—TECHNOLOGY 164
Defense 1: People: Authentication and Authorization 164
Defense 2: Data: Prevention and Resistance 167
Defense 3: Attack: Detection and Response 169
Learning Outcome Review 170
Key Terms 171
Review Questions 172
Business Driven Case One 172
Business Driven Case Two 174
Business Driven Decisions 175
Business Driven Projects 180
module 2
Technical Foundations of MIS 181
CHAPTER 5
Infrastructures and Platforms: Sustainable
Technologies 182
opening case study: Envision 2030: 17 Goals
to Transform the World for Persons with
Disabilities 183
Section 5.1 MIS Infrastructures 185
THE BUSINESS BENEFITS OF A SOLID MIS
INFRASTRUCTURE 185
INFRASTRUCTURE 1: SUPPORTING OPERATIONS:
INFORMATION MIS INFRASTRUCTURE 186
Information MIS Infrastructure Element 1: Backup and
Recovery Plan 187
Information MIS Infrastructure Element 2: Disaster
Recovery Plan 188
Information MIS Infrastructure Element 3: Business
Continuity Plan 190
INFRASTRUCTURE 2: SUPPORTING CHANGE: AGILE MIS
INFRASTRUCTURE 192
Agile MIS Infrastructure Characteristic 1: Accessibility 194
Agile MIS Infrastructure Characteristic 2: Availability 194
Agile MIS Infrastructure Characteristic 3:
Maintainability 194
Agile MIS Infrastructure Characteristic 4: Portability 195
Agile MIS Infrastructure Characteristic 5: Reliability 195
Agile MIS Infrastructure Characteristic 6: Scalability 196
Agile MIS Infrastructure Characteristic 7: Usability 196
Section 5.2 Building Sustainable MIS Infrastructures 197
MIS AND THE ENVIRONMENT 197
Sustainability Pressure 1: Increased Electronic
Waste 198
Sustainability Pressure 2: Increased Energy
Consumption 199
Sustainability Pressure 3: Increased Carbon
Emissions 199
INFRASTRUCTURE 3: SUPPORTING THE ENVIRONMENT:
SUSTAINABLE MIS INFRASTRUCTURE 200
Sustainable MIS Infrastructure Component 1: Grid
Computing 201
Sustainable MIS Infrastructure Component 2: Virtualized
Computing 203
Sustainable MIS Infrastructure Component 3: Cloud
Computing 207
Utility Computing: The Cloud Advantage 211
Infrastructure as a Service (IaaS) 212
Software as a Service (SaaS) 212
Platform as a Service (PaaS) 213
Learning Outcome Review 214
Key Terms 216
Review Questions 216
Business Driven Case One 217
Business Driven Case Two 218
Business Driven Decisions 218
Business Driven Projects 223
CHAPTER 6
Data: Business Intelligence 224
opening case study: Stranger Things
Happening at Netflix 225
Section 6.1 Data, Information, and Databases 227
DATA QUALITY 227
Value of Data Trait 1: Data Type: Transactional and
Analytical 228
Value of Data Trait 2: Data Timeliness 228
Value of Data Trait 3: Data Quality 229
Value of Data Trait 4: Data Governance 232
STORING DATA USING A RELATIONAL DATABASE
MANAGEMENT SYSTEM 233
Storing Data Elements in Entities and Attributes 235
Creating Relationships through Keys 236
Coca-Cola Relational Database Example 236
USING A RELATIONAL DATABASE FOR BUSINESS
ADVANTAGES 238
Database Business Advantage 1: Increased
Flexibility 239
Database Business Advantage 2: Increased Scalability
and Performance 239
Database Business Advantage 3: Reduced Data
Redundancy 239
Database Business Advantage 4: Increased Data Integrity
(Quality) 240
Database Business Advantage 5: Increased Data
Security 240
Section 6.2 Data Warehouse and Blockchain 242
BUSINESS INTELLIGENCE 242
The Problem: Data Rich, Information Poor 243
The Solution: Data Aggregation 243
Data Mining Analysis Techniques 244
Data Mining Technique 1: Estimation
Analysis 246
Data Mining Technique 2: Affinity Grouping
Analysis 246
Data Mining Technique 3: Cluster Analysis 247
Data Mining Technique 4: Classification Analysis 247
DATA WAREHOUSE 249
Data Analysis 251
Data Lake 252
Data Cleansing or Scrubbing 253
Data Visualization 255
BLOCKCHAIN: DISTRIBUTED COMPUTING 258
How Blockchains Work 260
Blockchain Advantages 263
Non-Fungible Tokens (NFTs) 264
Learning Outcome Review 265
Key Terms 266
Review Questions 266
Business Driven Case One 267
Business Driven Case Two 268
Business Driven Decisions 271
Business Driven Projects 277
CHAPTER 7
Digital Ecosystems: Connecting Digital Lives,
Business, and Society 278
opening case study: Apple Vision Pro Use
Cases 279
Section 7.1 Connectivity: The Key to Communication
in the Digital Age 281
DIGITAL ECOSYSTEMS 281
ADVANCED CONNECTIVITY FOR THE DIGITAL AGE 283
Three Types of Computer Networks: LAN, WAN, MAN 284
Measuring Network Performance 285
WIRELESS NETWORKS: THE KEY TO MOBILITY 286
5G and Wi-Fi 6: The Power of Streaming 290
Satellites 292
SECURITY: PROTECTING DIGITAL ECOSYSTEMS 294
Wireless Security Best Practices 294
Section 7.2 Digital Lives, Business, and Society 296
DIGITAL BUSINESS ECOSYSTEMS 296
Digital Ecosystem Technology 1: Augmented
Reality (AR) 297
Digital Ecosystem Technology 2: Virtual Reality (VR) 298
Digital Ecosystem Technology 3: Immersive Reality 300
BUSINESS WI-FI APPS 301
Wi-Fi Business App 1: Radio-Frequency Identification
(RFID) 301
Wi-Fi Business App 2: Global Positioning System (GPS) 302
Wi-Fi Business App 3: Geographic Information
System (GIS) 303
INFORMATION MOBILITY MANAGEMENT 305
Mobility Strategy 1: Mobile Device Management 306
Mobility Strategy 2: Mobile Application Management 307
Mobility Strategy 3: Mobile Information Management 308
CLOSING THE DIGITAL DIVIDE 310
Learning Outcome Review 312
Key Terms 314
Review Questions 315
Business Driven Case One 315
Business Driven Case Two 316
Business Driven Decisions 317
Business Driven Projects 322
module 3
Enterprise MIS 323
CHAPTER 8
Enterprise Applications: Business
Communications 324
opening case study: Where’s the Barbie Hot
Pink Paint? 325
Section 8.1 Supply Chain Management 327
BUILDING A CONNECTED CORPORATION THROUGH
INTEGRATIONS 327
Integration Tools 328
SUPPLY CHAIN MANAGEMENT 330
SCM and Porter’s Five Forces 331
SCM Metrics 332
SCM Datasets Driving Analytics 333
TECHNOLOGIES REINVENTING THE SUPPLY CHAIN 335
Disruptive Tech 1: 3D Printing Supports Procurement 338
Disruptive Tech 2: RFID Supports Logistics 339
Disruptive Tech 3: Drones Support Logistics 341
Disruptive Tech 4: Robotics Supports Materials Management 342
Disruptive Tech 5: Blockchain Revamping the Supply Chain 343
Section 8.2 Customer Relationship Management and
Enterprise Resource Planning 346
CUSTOMER RELATIONSHIP MANAGEMENT 346
Evolution of CRM 348
The Power of the Customer 350
Measuring CRM Success 350
OPERATIONAL AND ANALYTICAL CRM 350
Marketing and Operational CRM 350
Sales and Operational CRM 352
Customer Service and Operational CRM 354
Analytical CRM 355
CRM Datasets Driving Analytics 355
ENTERPRISE RESOURCE PLANNING 356
The Evolution of ERP 362
Core ERP Components 364
Extended ERP Components 365
Measuring ERP Success 365
ORGANIZATIONAL INTEGRATION WITH ERP 366
ERP Datasets Driving Analytics 367
On-Premise ERP 367
Cloud ERP 368
Hybrid ERP 369
Learning outcome review 373
Key Terms 374
Review Questions 375
Business Driven Case One 375
Business Driven Case Two 377
Business Driven Decisions 378
Business Driven Projects 382
CHAPTER 9
Systems Development and Project Management:
Corporate Responsibility 383
opening case study: Let My People
Go Surfing: The Education
of a Reluctant Businessman 384
Section 9.1 Developing Enterprise Applications 386
THE SYSTEMS DEVELOPMENT LIFE CYCLE (SDLC) 386
Phase 1: Planning 386
Phase 2: Analysis 388
Phase 3: Design 391
Phase 4: Development 392
Phase 5: Testing 394
Phase 6: Implementation 396
Phase 7: Maintenance 396
SOFTWARE DEVELOPMENT METHODOLOGY: THE
WATERFALL 398
AGILE SOFTWARE DEVELOPMENT METHODOLOGIES 399
Rapid Application Development (RAD) Methodology 400
Extreme Programming Methodology 400
Rational Unified Process (RUP) Methodology 401
Scrum Methodology 401
Section 9.2 Project Management 402
USING PROJECT MANAGEMENT TO DELIVER
SUCCESSFUL PROJECTS 402
Project Failure Reason 1: Unclear or Missing Business
Requirements 404
Project Failure Reason 2: Skipped Phases 404
Project Failure Reason 3: Changing Technology 405
Project Failure Reason 4: The Cost of Finding
Errors 405
Project Failure Reason 5: Balance of the Triple
Constraint 406
PRIMARY PROJECT PLANNING DIAGRAMS 408
OUTSOURCING PROJECTS 415
Learning Outcome Review 417
Key Terms 418
Review Questions 419
Business Driven Case One 419
Business Driven Case Two 420
Business Driven Decisions 422
Business Driven Projects 426
APPENDIX A
Hardware and Software Basics A.1
INTRODUCTION A.1
HARDWARE BASICS A.1
Central Processing Unit A.2
Primary Storage A.3
Secondary Storage A.5
Input Devices A.7
Output Devices A.8
Communication Devices A.9
COMPUTER CATEGORIES A.10
SOFTWARE BASICS A.10
System Software A.12
Application Software A.13
Distributing Application Software A.13
Key Terms A.14
Business Driven Decisions A.14
APPENDIX B
Networks and Telecommunications B.1
INTRODUCTION B.1
NETWORK BASICS B.1
ARCHITECTURE B.3
Peer-to-Peer Networks B.3
Client/Server Networks B.4
TOPOLOGY B.4
PROTOCOLS B.4
Ethernet B.6
Transmission Control Protocol/Internet Protocol B.7
MEDIA B.9
Wire Media B.9
Wireless Media B.10
Key Terms B.10
Business Driven Decisions B.11
APPENDIX C
Designing Databases C.1
INTRODUCTION C.1
THE RELATIONAL DATABASE MODEL C.1
Entities and Attributes C.2
Type of Attributes C.2
Business Rules C.3
DOCUMENTING ENTITY-RELATIONSHIP DIAGRAMS C.3
Basic Entity Relationships C.4
Relationship Cardinality C.6
RELATIONAL DATA MODEL AND THE DATABASE C.6
From Entities to Tables C.6
Logically Relating Tables C.7
Key Terms C.9
Business Driven Decisions C.9
APPENDIX D
Emerging Trends and Technologies D.1
INTRODUCTION D.1
TRENDS SHAPING OUR FUTURE D.2
The World’s Population Will Double in the Next 40 Years D.2
People in Developed Countries Are Living Longer D.3
The Growth in Information Industries Is Creating
a Knowledge-Dependent Global Society D.3
The Global Economy Is Becoming More Integrated D.4
The Economy and Society Are Dominated by
Technology D.4
Pace of Technological Innovation Is Increasing D.4
Time Is Becoming One of the World’s Most Precious
Commodities D.5
TECHNOLOGIES SHAPING OUR FUTURE D.5
The Digital Mesh D.5
Smart Machines D.6
The New IT Reality D.6
Key Terms D.7
Business Driven Decisions D.7
APPENDIX E
Connectivity: The Business Value of a
Networked World E.1
OVERVIEW OF A CONNECTED WORLD E.1
Network Categories E.1
Network Providers E.2
Network Access Technologies E.4
Network Protocols E.6
Network Convergence E.8
BENEFITS OF A CONNECTED WORLD E.10
Key Terms E.12
Business Driven Decisions E.12
APPENDIX F
Business Intelligence F.1
OPERATIONAL, TACTICAL, AND STRATEGIC BI F.1
BI’s Operational Value F.2
BUSINESS BENEFITS OF BI F.3
Categories of BI Benefits F.4
Quantifiable Benefits F.5
Indirectly Quantifiable Benefits F.5
Unpredictable Benefits F.5
Intangible Benefits F.5
Key Terms F.6
Business Driven Decisions F.6
Business Driven Projects BDP.1
Glossary G.1
Notes N.1
Index I.1