NINTH EDITION Principles of Information Systems A Managerial Approach Ninth Edition Ralph M Stair Professor Emeritus, Florida State University George W Reynolds Australia · Canada · Mexico · Singapore · Spain · United Kingdom · United States Principles of Information Systems, A Managerial Approach, Ninth Edition by Ralph M Stair and George W Reynolds VP/Editorial Director: Jack Calhoun Senior Acquisitions Editor: Charles McCormick, Jr © 2010 Course Technology, Cengage Learning ALL RIGHTS RESERVED No part of this work covered by the copyright herein may be reproduced, transmitted, stored or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher Product Manager: Kate 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purposes only and may be trademarks or registered trademarks of their manufacturers and sellers SAP, R/3, and other SAP product/services referenced herein are trademarks of SAP Aktiengesellschaft, Systems, Applications and Products in Data Processing, Neurottstasse 16, 69190 Walldorf, Germany The publisher gratefully acknowledges SAP’s kind permission to use these trademarks in this publication SAP AG is not the publisher of this book and is not responsible for it under any aspect of press law ISBN-13:978–0-324–66528–4 ISBN-10:0–324–66528–8 Instructor Edition: ISBN-13:978–0-324–78141–0 ISBN-10:0–324–78141–5 Course Technology 25 Thomson Place Boston, MA 02210 USA Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan Locate your local office at: international.cengage.com/region Cengage Learning products are represented in Canada by Nelson Education, Ltd To learn more about Course Technology, visit www.cengage.com/coursetechnology To learn more about Cengage Learning, visit www.cengage.com Printed in the United States of America 13 12 11 10 09 For Lila and Leslie —RMS To my grandchildren: Michael, Jacob, Jared, Fievel, Aubrey, Elijah, Abrielle, Sophia, Elliot —GWR This page intentionally left blank BRIEF CONTENTS PART PART PART An Overview Chapter An Introduction to Information Systems Chapter Information Systems in Organizations Information Technology Concepts Chapter Hardware: Input, Processing, and Output Devices Chapter Software: Systems and Application Software Chapter Database Systems and Business Intelligence Chapter Telecommunications and Networks Chapter The Internet, Intranets, and Extranets Business Information Systems Chapter Electronic and Mobile Commerce Chapter Enterprise Systems Chapter 10 Information and Decision Support Systems Chapter 11 Knowledge Management and Specialized Information Systems PART Systems Development Chapter 12 Systems Development: Investigation and Analysis Chapter 13 Systems Development: Design, Implementation, Maintenance, and Review PART Information Systems in Business and Society Chapter 14 The Personal and Social Impact of Information Systems Glossary Index v This page intentionally left blank CONTENTS Preface xxi PART An Overview Chapter An Introduction to Information Systems Fossil, United States Information Concepts Data, Information, and Knowledge The Characteristics of Valuable Information The Value of Information System Concepts System Performance and Standards What is an Information System? 10 Input, Processing, Output, Feedback 10 Manual and Computerized Information Systems 11 Computer-Based Information Systems 11 Business Information Systems 15 Electronic and Mobile Commerce 16 Information Systems @ Work: Welcome to Mobile Banking 17 Enterprise Systems: Transaction Processing Systems and Enterprise Resource Planning 19 Information and Decision Support Systems 20 Ethical and Societal Issues: Green Data Centers 21 Specialized Business Information Systems: Knowledge Management, Artificial Intelligence, Expert Systems, and Virtual Reality 24 Systems Development 26 Systems Investigation and Analysis 27 Systems Design, Implementation, and Maintenance and Review 28 Information Systems in Society, Business, and Industry 28 Security, Privacy, and Ethical Issues in Information Systems and the Internet 28 Computer and Information Systems Literacy 30 Information Systems in the Functional Areas of Business 31 Information Systems in Industry 31 Global Challenges in Information Systems 32 Case One: New York City Cabbies Strike Over New Information System 38 Case Two: Yansha Leans on IS to Stay Competitive 39 Chapter Information Systems in Organizations FedEx, United States 43 Organizations and Information Systems Organizational Structures 42 44 48 vii Ethical and Societal Issues: Fighting Global Poverty with Information Systems 49 Organizational Culture and Change 53 Reengineering and Continuous Improvement 55 User Satisfaction and Technology Acceptance 57 Quality 57 Outsourcing, On-Demand Computing, and Downsizing Competitive Advantage 58 59 Factors That Lead Firms to Seek Competitive Advantage Strategic Planning for Competitive Advantage 60 61 Information Systems @ Work: Grand & Toy Seeks Competitive Advantage by Tracking Key Performance Indicators 62 Performance-Based Information Systems Productivity 64 65 Return on Investment and the Value of Information Systems Risk 65 66 Careers in Information Systems 66 Roles, Functions, and Careers in IS Typical IS Titles and Functions Other IS Careers 68 71 72 Finding a Job in IS 72 Case One: Customer Service Drives Information Systems at Volvo Cars Belgium 78 Case Two: CIO Plays Important Role at J&J Philippines 78 PART Information Technology Concepts 83 Chapter Hardware: Input, Processing, and Output Devices UB Spirits, India 85 Computer Systems: Integrating the Power of Technology Hardware Components 86 87 Hardware Components in Action 88 Processing and Memory Devices: Power, Speed, and Capacity Processing Characteristics and Functions Memory Characteristics and Functions Multiprocessing 89 92 95 97 Access Methods Devices 89 95 Parallel Computing Secondary Storage 84 98 99 Enterprise Storage Options 102 Input and Output Devices: The Gateway to Computer Systems Characteristics and Functionality Input Devices 103 104 105 Ethical and Societal Issues: Collecting Accurate and Verifiable Data Where It Counts 110 Output Devices viii 111 Special-Purpose Input and Output Devices 114 Computer System Types 115 Computer System Types 116 Information Systems @ Work: Penguins, Animal Logic, and Blades 121 Case One: Advance America Implements Grid Computing 127 Case Two: Mayo Clinic Turns to Game Processor to Save Lives Chapter Software: Systems and Application Software General Motors, United States 133 An Overview of Software 132 134 Systems Software 134 Application Software 135 Supporting Individual, Group, and Organizational Goals Systems Software 128 135 136 Operating Systems 136 Current Operating Systems 140 Workgroup Operating Systems 143 Enterprise Operating Systems 144 Operating Systems for Small Computers, Embedded Computers, and Special-Purpose Devices Utility Programs Middleware 145 147 149 Application Software 150 Information Systems @ Work: Software Helps Target Radiation Treatment for Cancer 151 Overview of Application Software 152 Ethical and Societal Issues: Imperial Chemical Turns to SaaS Security Tools 154 Personal Application Software 155 Workgroup Application Software 161 Enterprise Application Software 162 Application Software for Information, Decision Support, and Specialized Purposes 163 Programming Languages 163 The Evolution of Programming Languages Software Issues and Trends Software Bugs 164 167 167 Copyrights and Licenses Open-Source Software 167 168 Shareware, Freeware, and Public Domain Software Software Upgrades 169 170 Global Software Support 170 Case One: Systems Management Software Helps Fight Crime Chapter Case Two: Energy Giant Valero Turns to SOA Software 176 Database Systems and Business Intelligence Wal-Mart, United States 181 180 Data Management 175 183 The Hierarchy of Data 183 ix The Internet, Intranets, and Extranets | Chapter 289 or share too much People have been fired for blogging about work, and the daughter of a politician embarrassed her father when she made personal confessions on a blog Blog sites, such as www.blogger.com and www.blogcatalog.com, can include information and tools to help people create and use Web logs To set up a blog, you can go to the Web site of a blog service provider, such as www.livejournal.com, create a username and password, select a theme, choose a URL, follow any other instructions, and start making your first entry Blog search engines include Technorati and Blogdigger You can also use Google to locate a blog A corporate blog can be useful for communicating with customers, partners, and employees However, companies and their employees need to be cautious about the legal risks of blogging.21 Blogging can expose a corporation and its employees to charges of defamation, copyright and trademark infringement, invasion of privacy, and revealing corporate secrets A podcast is an audio broadcast over the Internet The name podcast comes from the word iPod, Apple’s portable music player, and the word broadcasting A podcast is an audio blog, like a personal radio station on the Internet, and extends blogging by adding audio messages Using PCs, recording software, and microphones, you can record audio messages and place them on the Internet You can then listen to the podcasts on your PC or download the audio material to a digital audio player, such as Apple’s iPod You can also use podcasting to listen to TV programs, your favorite radio personalities, music, and messages from your friends and family at any time and place Finding good podcasts, however, can be challenging Apple’s iTunes provides free access to tens of thousands of podcasts sorted by topic and searchable by keyword After you find a podcast, you can download it to a PC (Windows or Mac) and to an MP3 music player such as the iPod for future listening Figure 7.12 iTunes Podcasts iTunes provides free access to tens of thousands of podcasts People and corporations can use podcasts to listen to audio material, increase revenues, or advertise products and services You can listen to podcasts of radio programs, including some programs from National Public Radio (NPR), while you are driving, walking, making a meal, or most other activities Clear Channel Communications, a radio broadcasting corporation, sells memberships to podcasts of popular radio shows and personalities, including Rush Limbaugh, NPR programs, and others ABC News uses podcasts to allow people to 290 Part | Information Technology Concepts listen to some TV programs, such as Nightline Colleges and universities often use blogs and podcasts to deliver course material to students Many blogs, vlogs, and podcasts offer automatic updates to a PC using a technology called Really Simple Syndication (RSS) RSS is a collection of Web technologies that allow users to subscribe to Web content that is frequently updated With RSS, you can receive a blog update without actually visiting the blog Web site You can also use RSS to receive other updates on the Internet from news Web sites and podcasts Software used to subscribe to RSS feeds is called aggregator software Google Reader is a popular aggregator for subscribing to blogs Usenet and Newsgroups Usenet is an older technology that uses e-mail to provide a centralized news service Topic areas in Usenet are called newsgroups A newsgroup is essentially an online discussion group that focuses on a particular topic Newsgroups are organized into various hierarchies by general topic, and each topic can contain many subtopics Table 7.7 provides some examples Usenet is actually a protocol that describes how groups of messages can be stored on and sent between computers Following the Usenet protocol, e-mail messages are sent to a host computer that acts as a Usenet server This server gathers information about a single topic into a central place for messages A user sends e-mail to the server, which stores the messages The user can then log on to the server to read these messages or have software on the computer log on and automatically download the latest messages to be read at leisure Thus, Usenet forms a virtual forum for the electronic community, and this forum is divided into newsgroups Blogging, RSS, and social networking sites have drawn many users away from Usenet forums Table 7.7 Selected Usenet Newsgroups Newsgroup Address Description alt.airline Current schedules of various airlines alt.books Index of book reviews alt.current-events.net-abuse.spam Reports of e-mail and newsgroup spam abuse alt.fan Fans of various performers, artists, and others alt.politics Index of political discussions alt.sports.baseball Major league baseball biz.ecommerce Internet retailers misc.legal Miscellaneous discussions of legal matters news.software Usenet software rec.backcountry Activities in the great outdoors rec.food.restaurants Discussion of dining out Chat Rooms chat room A facility that enables two or more people to engage in interactive “conversations” over the Internet A chat room is a facility that enables two or more people to engage in interactive “conversations” over the Internet When you participate in a chat room, dozens of people might be participating from around the world Multiperson chats are usually organized around specific topics, and participants often adopt nicknames to maintain anonymity One form of chat room, Internet Relay Chat (IRC), requires participants to type their conversation rather than speak Voice chat is also an option, but you must have a microphone, sound card, speakers, The Internet, Intranets, and Extranets | Chapter 291 a fast modem or broadband, and voice-chat software compatible with the other participants’ Most of the functionality of chat is available in instant messaging software Internet Phone and Videoconferencing Services Internet phone service enables you to communicate with others around the world This service is relatively inexpensive and can make sense for international calls With some services, you can use the Internet to call someone who is using a standard phone You can also keep your phone number when you move to another location According to one Internet phone user who moved from Madison, Wisconsin, to California, “I was so happy about that Nothing changed for my customers For all they knew I was still in Madison.” Cost is often a big factor for those using Internet phones—a call can be as low as cent per minute for calls within the United States Low rates are also available for calling outside the United States In addition, voice mail and fax capabilities are available Some cable TV companies, for example, are offering cable TV, phone service, and caller ID for under $40 a month Skype offers free and low-priced Internet phone and video phone service from any Internet connected computer Using voice-over-IP (VoIP) technology, as described in Chapter 6, network managers can route phone calls and fax transmissions over the same network they use for data—which means no more separate phone bills See Figure 7.13 Gateways installed at both ends of the communications link convert voice to IP packets and back With the advent of widespread, low-cost Internet telephony services, traditional long-distance providers are being pushed to either respond in kind or trim their own long-distance rates VoIP (pronounced voyp) is growing rapidly Although the technology for VoIP has existed for decades, the widespread use of VoIP is just beginning Today, many companies offer Web phone service using VoIP, including Vonage, AT&T, Comcast, Verizon, AOL, Packet8, Callserve, Net2Phone, and WebPhone Even so, there are obstacles to using VoIP Some service providers, for example, might have trouble connecting their customers to emergency 911 service In 2005, the Federal Communications Commission (FCC) issued an order that Web phone services must notify their customers of the potential problems with making emergency 911 calls Internet videoconferencing, which supports both voice and visual communications, is another important Internet application Microsoft’s NetMeeting, a utility within Windows XP, is an inexpensive and easy way for people to meet and communicate on the Web Windows Vista offers Windows Meeting Space to provide the same service The Internet can also be used to broadcast group meetings, such as sales seminars, using presentation software and videoconferencing equipment These Internet presentations are often called Webcasts or Webinars WebEx and GoToMeeting are two popular Web conferencing tools The ideal video product will support multipoint conferencing, in which users appear simultaneously on multiple screens Hewlett-Packard (HP) has produced such a system called Halo (see Figure 7.14) When using Halo, it appears as though you are speaking with a number of people across a table, though those people may actually be located around the world Social Networks Social networking Web sites provide Web-based tools for users to share information about themselves with people on the Web and to find, meet, and converse with other members The most popular social networking sites are MySpace and Facebook Both sites provide members with a personal Web page and allow them to post photos and information about themselves (see Figure 7.15) Social networking sites allow members to send messages to each Figure 7.13 Wi-Fi Phone The BlackBerry Curve 8320 smartphone, combined with T-Mobile’s HotSpot @ Home service, uses the Internet for calls while at home and the cell network while away (Source: Courtesy of Research In Motion.) 292 Part | Information Technology Concepts Figure 7.14 Halo Collaboration Meeting Room HP’s Halo telepresence system allows people at various locations to meet as though they were gathered around a table (Source: Hewlett-Packard Web site, www.hp.com.) other and post comments on each other’s pages Members accumulate friends through invitation Special interest groups can be created and joined as well Social networking Web sites also provide tools to search for people with similar interests The power of social networks is now being harnessed for business purposes.22 Many businesses are using the information posted in member profiles to find potential clients Linked In is a social network that allows professionals to find others who work in the same field, applying social networking techniques for business networking Figure 7.15 Social Networking Web Sites Facebook is a social networking site that provides members with Web pages to post photos and information about themselves Facebook provides an application development platform so that technically proficient members can create applications to run within Facebook This has led to hundreds of tools that Facebook users can add to their pages For example, Facebook has tools to connect to people with similar music tastes, to see your daily horoscope, to share videos, to find “Mr or Ms Right,” to express your mood, and many more The U.S intelligence community is adopting social networking to share information among operatives and analysts.23 A-Space will be a private online social network designed for intelligence professionals to communicate online It includes blogs, a searchable database, The Internet, Intranets, and Extranets | Chapter 293 libraries of reports, collaborative word processing, and other useful tools to allow those in the field to quickly exchange and access information Another social networking site called Twitter (www.twitter.com) allows members to report on what they are doing throughout the day Referred to as a microblogging service, Twitter allows users to send short text updates (up to 140 characters long) from cell phones or the Internet to their Twitter page to let others know what they are doing.24 Twitter updates can be forwarded to MySpace or Facebook Web sites Media Sharing Media-sharing Web sites such as YouTube for video sharing and Flickr for photo sharing provide methods for members to store and share digital media files on the Web YouTube allows members to post homemade video content in categories such as comedy, entertainment, film and animation, how-to, news, people, pets, sports, and travel As mentioned earlier, Flickr allows members to upload photos to their own personal online photo album and choose photos to share with the community What makes these media-sharing sites part of Web 2.0 is their focus on community Both Flickr and YouTube provide ways for members to comment on the media YouTube allows visitors to e-mail favorite video clips to friends Both sites provide methods for visitors to view the most popular media or search on a particular topic Flickr uses a methodology of ranking content that has become popular with many Web 2.0 sites Formally called a folksonomy or collaborative tagging, Flickr allows users to associate descriptive tags with photos For example, you might tag a photo of your pet Weimaraner at the beach with “Dog,” “Pet,” “Weimaraner,” and “Beach.” Using associated tags, Flickr can easily group common photos together and gather statistics on photos Flickr uses this information to create a tag cloud—a diagram of keyword links with the size of each word representing the number of photos that use that tag (see Figure 7.16) Smugmug is a photo sharing site that supports higher-quality images than most such sites and allows members to sell their photos to others for profit25 Figure 7.16 Flickr’s Tag Cloud Flickr’s tag cloud uses font size to indicate which tags have the most photos associated with them; users click a tag to see the associated photos (Source: Flickr Web site, www.flickr.com.) Social Bookmarking Social bookmarking sites are another example of Web 2.0 These sites provide a way for Web users to store, classify, share, and search Web bookmarks—also referred to as favorites The typical purpose of social bookmarking sites is to provide a view of the most popular Web sites, videos, blog articles, or other Web content at any given moment Often social bookmarking sites include Web browser add-ons (extensions) that provide a button on the toolbar for recommending Web content For example, del.icio.us is a social bookmarking Web site that provides a “what’s hot right now” button When you sign up for del.icio.us, you can 294 Part | Information Technology Concepts download software to install on your computer that provides two buttons on your browser toolbar When you find a page you want to bookmark, you click the Tag button on the toolbar to store the link in your bookmark list on http://del.icio.us Pages you bookmark are tallied with other users’ bookmarks to determine the most popular pages on the Web at any given moment Digg is another popular social bookmarking site dedicated to news Many online news services provide “Digg this” buttons on articles so that readers can bookmark the article At www.digg.com you can see the most popular news articles of the moment listed sequentially, with the articles that accumulated the most “digs” listed first Digg also provides links to the most popular videos and podcasts Content Streaming content streaming A method for transferring multimedia files over the Internet so that the data stream of voice and pictures plays more or less continuously without a break, or very few of them; enables users to browse large files in real time Content streaming is a method for transferring multimedia files, radio broadcasts, and other content over the Internet so that the data stream of voice and pictures plays more or less continuously, without a break, or with very few of them It also enables users to browse large files in real time For example, rather than wait for an entire MB video clip to download before they can play it, users can begin viewing a streamed video as it is being received Content streaming works best when the transmission of a file can keep up with the playback of the file Shopping on the Web bot A software tool that searches the Web for information such as products and prices Shopping on the Web for books, clothes, cars, medications, and even medical advice can be convenient, easy, and cost effective Amazon.com, for example, sells short stories by popular authors for 49 cents per story The service, called Amazon Shorts, has stories that vary in length from 2,000 to 10,000 words by authors such as Danielle Steel, Terry Brooks, and others The company also sells traditional books and other consumer products To add to their other conveniences, many Web sites offer free shipping and pickup for returned items that don’t fit or otherwise meet a customer’s needs Increasingly, people are using bots to help them search for information or shop on the Internet A bot, also called an intelligent agent, is a software tool that searches the Web for information, products, or prices A bot, short for robot, can find the best prices or features from multiple Web sites Shopping.com uses bots to identify the best prices on merchandise Web Auctions Web auction An Internet site that matches buyers and sellers A Web auction is a way to connect buyers and sellers Web auction sites are a place where businesses are growing their markets or reaching customers for a low cost per transaction Web auctions are transforming the customer-supplier relationship One of the most popular auction sites is eBay, which often has millions of auctions occurring at the same time The eBay site is easy to use and includes thousands of products and services in many categories eBay remains a good way to get rid of things you don’t need or find bargains on things you need eBay drop-off stores allow people who are inexperienced with Internet auctions or too busy to develop their own listings to sell items on the popular Web site In addition to eBay, you can find a number of other auction sites on the Web Traditional companies are even starting their own auction sites Although auction Web sites are excellent for matching buyers and sellers, they can present problems Auction sites cannot always determine whether the people and companies listing products and services are legitimate In addition, some Web sites have had illegal or questionable items offered Many Web sites have an aggressive fraud investigation system to prevent and help prosecute fraudulent use of their sites Even with these potential problems, the use of Web auction sites is expected to continue to grow rapidly Music, Radio, Video, and TV on the Internet Music, radio, and video are hot growth areas on the Internet Audio and video programs can be played on the Internet, or files can be downloaded for later use Using music players and music formats such as MP3, discussed in Chapter 3, you can download music from the The Internet, Intranets, and Extranets | Chapter 295 eBay is a popular auction Web site Internet and listen to it anywhere using small, portable digital audio players Subscribers to a music service such as Napster or Rhapsody can download an unlimited number of songs from the site, as long as they pay the annual subscription service fee Pay-per-song services such as those offered by Apple iTunes and Amazon allow users to purchase songs for around $0.99 per song.26 A music service called SpiralFrog supports free music downloads for users willing to provide marketing information and watch ads.27 Radio broadcasts are now available on the Internet Entire audio books can also be downloaded for later listening using services such as Audible.com Audible provides a subscription service that allows users to download one or more books per month that can then be played using PC media software and portable digital music players Video and TV are also becoming available on the Internet One way to put TV programming on the Internet is to use the Internet Protocol Television (IPTV) protocol With the potential of offering an almost unlimited number of programs, IPTV can serve a vast array of programming on specialty areas, such as yoga, vegetarian food, unusual sporting events, and news from a city or region of a state Google offers a service that allows people to download selected television shows, movies, and other video Some episodes of television shows cost users $1.99 to download According to Jennifer Feikin, director of Google Video, “It’s the biggest marketplace of content that was previously offline and is now brought online.” Devices such as Apple’s video-enabled iPod can be used to view the video content Cell phones are being designed to receive and display Internet television and video.28 Other Web sites providing television content include Joost (joost.com), which offers over 20,000 free TV shows on over 400 channels.29 Hulu streams popular television programming from broadcast and cable networks at www.hulu.com.30 A number of innovative devices let you record TV programs and view them at any time and place.31 A California company called Sling Media (www.slingmedia.com), for example, offers a device that can broadcast any TV program coming into your home to a broadband Internet-connected PC.32 Once on the Internet, you can watch the TV program at any time and place that has broadband Internet service The device, called a Slingbox, costs about $250 and doesn’t require monthly service fees 296 Part | Information Technology Concepts Internet TV service Joost offers 20,000 free TV shows on over 400 channels E-Books and Audio Books Digital books, both in text and audio form, are growing in popularity thanks to appealing devices and services Amazon’s e-book reader called the Kindle jump-started the e-book market with its small form factor and high capacity.33 The Kindle wirelessly connects to Amazon’s e-book service using free wireless service from Sprint to download books, blogs, newspapers, and periodicals It can store about 200 books Audio books have become more popular due to the popularity of the iPod and services like audible.com Audio books are either read by a narrator or performed by actors They may be abridged (consolidated and edited for audio format), or unabridged (read word for word from the book) Audio book services may allow you to purchase books individually, or sign up for a membership and receive a new book each month Audio books can be transferred from PC to a portable device such as an iPod or Kindle Office on the Web Having an Internet office with access to files and information can be critical for people who travel frequently or work at home An Internet office is a Web site that contains files, phone numbers, e-mail addresses, an appointment calendar, and more Using a standard Web browser, you can access important business information An Internet office allows your desktop computer, phone books, appointment schedulers, and other important information to be with you wherever you are Many services and software products offer remote access to your files and programs over the Internet on the Web As mentioned earlier, Microsoft and Google both support online document storage and sharing Both companies and others also provide ways to access contact lists and calendar software and data online For example, 37signals.com provides online project management, contact management, calendar, and group chat applications Microsoft SharePoint provides businesses with collaborative workspaces and social computing tools to allow people at different locations to work on projects together (See Figure 7.17.) Over time, increasing amounts of software, services, and storage will be available online through your Web browser The Internet, Intranets, and Extranets | Chapter 297 Figure 7.17 Microsoft SharePoint Microsoft SharePoint provides a Web portal for sharing documents and information between organization members (Source: Courtesy of Microsoft Corporation.) Internet Sites in Three Dimensions Some Web sites offer three-dimensional views of places and products For example, a 3-D Internet auto showroom allows people to select different views of a car, simulating the experience of walking around in a real auto showroom (See Figure 7.18.) When looking at a 3-D real estate site on the Web, people can tour the property, go into different rooms, look at the kitchen appliances, and even take a virtual walk in the garden Map Web sites and Internet-powered software like Windows Live Search and Google Earth provide views of cities and locations in a 3-D environment.34 Second Life provides an entire 3-D virtual world for users to explore using avatars—characters within the world.3536 Figure 7.18 3-D Honda Hybrid 3-D graphics technologies allow consumers to examine merchandise from all angles (Source: American Honda Web site, www.honda.com.) Other Internet Services and Applications Other Internet services are constantly emerging A vast amount of information is available over the Internet from libraries Many articles that served as the basis of the sidebars, cases, and examples used throughout this book were obtained from university libraries online Movies can be ordered and even delivered over the Internet The Internet can provide critical information during times of disaster or terrorism During a medical emergency, critical 298 Part | Information Technology Concepts medical information can be transmitted over the Internet People wanting to consolidate their credit card debt or to obtain lower payments on their existing home mortgages have turned to sites such as Quicken Loan, E-Loan, and LendingTree for help The Internet can also be used to translate words, sentences, or complete documents from one language into another For example, Babel Fish Translation (www.world.altavista.com) and Free Translation (www.freetranslation.com) can translate a block of text from one language into another Some search engines can translate Web pages and allow you to search for Web sites published in certain languages or countries Clicking Language Tools on the home page of Google, for example, provides these capabilities The Internet also facilitates distance learning, which has dramatically increased in the last several years Many colleges and universities now allow students to take courses without visiting campus In fact, you might be taking this course online MIT is offering all of its 1,800 courses free online.37 Businesses are also taking advantage of distance learning through the Internet Video cameras can be attached to computers and connected to the Internet These Internet cameras can be used to conduct job interviews, hold group meetings with people around the world, monitor young children at daycare centers, check rental properties and second homes from a distance, and more INFORMATION SYSTEMS @ WORK Chevron Takes to the Clouds The importance of the Internet and Web is illustrated in the many applications discussed in this chapter However, their importance may far exceed the sum of these applications The Internet and the Web are quickly becoming equivalent with computing, especially with the rise of Web 2.0 technologies, which provides a platform for computing This is evidenced by online applications such as Google Docs and Adobe Photoshop Express, and extends to the way businesses are managing their information systems Take Chevron as an example Chevron Corporation is based in San Ramon, California and is one of the world’s leading energy companies It employs more than 55,000 people in 180 countries to produce and transport crude oil and natural gas and to refine, market, and distribute fuels and energy products Chevron works with many suppliers, each of which provides the company with continuously updated editions of their products and services catalogs Chevron negotiates the price of the items and services that they purchase from the suppliers Managing supplier catalogs and negotiating prices while staying within a budget has been such a chore that Chevron, like most other large enterprises, decided to pay an outside information systems company millions of dollars annually to manage the responsibility The complicated process of negotiating prices with suppliers became unwieldy for Chevron and its catalog management services provider Most negotiating was done through e-mail with spreadsheet attachments The company hired by Chevron to manage the process acted as the middleman Eventually, it became apparent that the system was ineffective and costly Chevron searched for an alternative and found it in a new service from Ketera Technologies Ketera Technologies provides on-demand services that the company calls “spend management solutions.” According to its Web site (www.ketera.com), Ketera provides “applications and services needed to control and reduce corporate spending at a low cost of ownership.” The application and services that Ketera provides run on Ketera servers maintained by Ketera staff and delivered to clients over the Internet through a Web browser Using Ketera’s services over the Web, Chevron suppliers can change prices, which Chevron executives then approve or adjust to stay in budget Ketera’s service provides numerous tools that Chevron can use to analyze and control its spending Most importantly, since the service is provided on the Web, all involved parties have convenient access to a centralized system, allowing Chevron to negotiate with all suppliers from one location and using one tool Ketera is one of many software companies providing software services over the Internet Recall from previous chapters that this method of delivering software is referred to as software as a service, or SaaS Increasing numbers of businesses of all sizes are turning to SaaS One compelling reason involves accounting To stay profitable in a challenging economy, many companies are reducing capital expenditures Software purchases are classified as capital expenditures, while Web- delivered software services are not Web-delivered software is sold on a subscription basis, and classified by accountants as a maintenance expense, an area of the budget that is not being cut as much as capital expenses Internet security has also developed to the point where companies are more confident that the data being managed will remain private and secure as it travels the Internet SaaS vendors are providing clients with adequate assurances that the data will remain safe in their hands Industry analysts expect that by 2011 the worldwide market for SaaS will grow from $6.3 billion to $19.3 billion This estimate and the rapid increase of offerings of Web-based software for both personal and business use indicate a strong migration from private ownership of software and information systems to a model in which software and information systems are supplied as subscription services delivered over the Internet This is what defines cloud computing Cloud computing will make the Internet and Web more important to businesses and society than ever Discussion Questions What benefits and dangers are presented by SaaS and cloud computing? Name two reasons companies are turning to SaaS Critical Thinking Questions Do you think SaaS suffers from any limitations because it is delivered over the Internet? What are they? How might the increasing number of software services and data being delivered over the Internet affect its infrastructure? Sources: Vara, Vauhini, “Web-Based Software Services Take Hold,” The Wall Street Journal, May 15, 2007, Page B3; Baker, Stephen, “Google and the Wisdom of Clouds,” BusinessWeek, December 24, 2007, Pages 49–55; Ketera Web site, www.ketera.com, accessed May 6, 2008 299 300 Part | Information Technology Concepts INTRANETS AND EXTRANETS intranet An internal corporate network built using Internet and World Wide Web standards and technologies; used by employees to gain access to corporate information extranet A network based on Web technologies that links selected resources of a company’s intranet with its customers, suppliers, or other business partners Table 7.8 Summary of Internet, Intranet, and Extranet Users virtual private network (VPN) A secure connection between two points on the Internet tunneling The process by which VPNs transfer information by encapsulating traffic in IP packets over the Internet An intranet is an internal corporate network built using Internet and World Wide Web standards and technologies Employees of an organization use it to gain access to corporate information After getting their feet wet with public Web sites that promote company products and services, corporations are seizing the Web as a swift way to streamline—even transform—their organizations These private networks use the infrastructure and standards of the Internet and the World Wide Web Using an intranet offers one considerable advantage: Many people are already familiar with Internet technology, so they need little training to make effective use of their corporate intranet An intranet is an inexpensive yet powerful alternative to other forms of internal communication, including conventional computer networks One of an intranet’s most obvious virtues is its ability to reduce the need for paper Because Web browsers run on any type of computer, the same electronic information can be viewed by any employee That means that all sorts of documents (such as internal phone books, procedure manuals, training manuals, and requisition forms) can be inexpensively converted to electronic form on the Web and be constantly updated An intranet provides employees with an easy and intuitive approach to accessing information that was previously difficult to obtain For example, it is an ideal solution to providing information to a mobile salesforce that needs access to rapidly changing information A growing number of companies offer limited access to their private corporate network for selected customers and suppliers Such networks are referred to as extranets; they connect people who are external to the company An extranet is a network that links selected resources of the intranet of a company with its customers, suppliers, or other business partners Again, an extranet is built around Web technologies Security and performance concerns are different for an extranet than for a Web site or network-based intranet User authentication and privacy are critical on an extranet so that information is protected Obviously, the network must perform well to provide quick response to customers and suppliers Table 7.8 summarizes the differences between users of the Internet, intranets, and extranets Type Users Need User ID and Password? Internet Anyone No Intranet Employees Yes Extranet Business partners Yes Secure intranet and extranet access applications usually require the use of a virtual private network (VPN) A virtual private network (VPN) is a secure connection between two points on the Internet VPNs transfer information by encapsulating traffic in IP packets and sending the packets over the Internet, a practice called tunneling Most VPNs are built and run by ISPs Companies that use a VPN from an ISP have essentially outsourced their networks to save money on wide area network equipment and personnel NET ISSUES The topics raised in this chapter apply not only to the Internet and intranets but also to LANs, private WANS, and every type of network Control, access, hardware, and security problems affect all networks, so you should be familiar with the following issues: The Internet, Intranets, and Extranets • Management issues Although the Internet is a huge, global network, it is managed at the local level; no centralized governing body controls the Internet Preventing attacks is always an important management issue Increasingly, states are proposing legislation to help collect sales tax from Internet sales • Service and speed issues The growth in Internet traffic continues to be significant Traffic volume on company intranets is growing even faster than the Internet Companies setting up an Internet or intranet Web site often underestimate the amount of computing power and communications capacity they need to serve all the “hits” (requests for pages) they get from Web cruisers • Privacy, fraud, security, and unauthorized Internet sites As use of the Internet grows, privacy, fraud, and security issues become even more important People and companies are reluctant to embrace the Internet unless these issues are successfully addressed Unauthorized and unwanted Internet sites are also problems some companies face A competitor or an unhappy employee can create an Internet site with an address similar to a company’s When someone searches for information about the company, he or she might find an unauthorized site instead While the business use of the Web has soared, online scams have put the brakes on some Internet commerce Many Internet users have cut back on their Internet shopping and banking because of potential Internet scams and concerns about privacy and identity theft In a business setting, the Web can also be a distraction to doing productive work Although many businesses block certain Web sites at work, others monitor Internet usage Workers have been fired for inappropriate or personal use of the Internet while on the job | Chapter 301 302 Part | Information Technology Concepts SUMMARY Principle The Internet is like many other technologies—it provides a wide range of services, some of which are effective and practical for use today, others that are still evolving, and still others that will fade away from lack of use The Internet started with ARPANET, a project sponsored by the U.S Department of Defense (DoD) Today, the Internet is the world’s largest computer network Actually, it is a collection of interconnected networks, all freely exchanging information The Internet transmits data from one computer (called a host) to another The set of conventions used to pass packets from one host to another is known as the Internet Protocol (IP) Many other protocols are used with IP The best known is the Transmission Control Protocol (TCP) TCP is so widely used that many people refer to the Internet protocol as TCP/IP, the combination of TCP and IP used by most Internet applications Each computer on the Internet has an assigned address to identify it from other hosts, called its Uniform Resource Locator (URL) People can connect to the Internet in several ways: via a LAN whose server is an Internet host, or via a dial-up connection, high-speed service, or wireless service An Internet service provider is any company that provides access to the Internet To use this type of connection, you must have an account with the service provider and software that allows a direct link via TCP/IP browsers A collection of pages on one particular topic, accessed under one Web domain, is called a Web site Hypertext Markup Language (HTML) is the standard page description language for Web pages The HTML tags let the browser know how to format the text: as a heading, as a list, or as body text, for example HTML also indicates where images, sound, and other elements should be inserted Some newer Web standards are gaining in popularity, including Extensible Markup Language (XML), Extensible Hypertext Markup Language (XHTML), Cascading Style Sheets (CSS), Dynamic HTML (DHMTL), and Wireless Markup Language (WML) Web 2.0 refers to the Web as a computing platform that supports software applications and the sharing of information between users Over the past few years, the Web has been changing from a one-directional resource where users find information to a two-directional resource where users find and share information The Web has also grown in power to support complete software applications and is becoming a computing platform on its own A rich Internet application (RIA) is software that has the functionality and complexity of traditional application software, but runs in a Web browser and does not require local installation Java is an objectoriented programming language from Sun Microsystems based on the C++ programming language, which allows small programs, called applets, to be embedded within an HTML document Principle Principle Originally developed as a document-management system, the World Wide Web is a hyperlink-based system that is easy to use for personal and business applications The Web is a collection of tens of millions of servers that work together as one in an Internet service providing information via hyperlink technology to billions of users worldwide Thanks to the high-speed Internet circuits connecting them and hyperlink technology, users can jump between Web pages and servers effortlessly—creating the illusion of using one big computer Because of its ability to handle multimedia objects and hypertext links between distributed objects, the Web is emerging as the most popular means of information access on the Internet today As a hyperlink-based system that uses the client/server model, the Web organizes Internet resources throughout the world into a series of linked files, called pages, accessed and viewed using Web client software, called a Web browser Internet Explorer, Firefox, and Safari are three popular Web Because use of the Internet and the World Wide Web is becoming universal in the business environment, management, service and speed, privacy, and security issues must continually be addressed and resolved Internet and Web applications include Web browsers; e-mail; career information and job searching; Telnet; FTP; Web logs (blogs); podcasts; Usenet and newsgroups; chat rooms; Internet phone; Internet video; content streaming; instant messaging; shopping on the Web; Web auctions; music, radio, and video; office on the Web; 3-D Internet sites; free software; and other applications You use a search engine to find information on the Web by specifying words that are key to a topic of interest, known as keywords Search engines scour the Web with bots (automated programs) called spiders that follow all Web links in an attempt to catalog every Web page by topic You use e-mail to send messages Various technologies are available for accessing and managing e-mail including online e-mail services, POP, and IMAP The Internet also offers a vast amount of career and job search information The Internet, Intranets, and Extranets Telnet and SSH enable you to log on to remote computers You use FTP to transfer a file from another computer to your computer or vice versa Web logs (blogs) are Internet sites that people and organizations can create and use to write about their observations, experiences, and opinions on a wide range of topics A podcast is an audio broadcast over the Internet Usenet supports newsgroups, which are online discussion groups focused on a particular topic Chat rooms let you talk to dozens of people at one time, who can be located all over the world You can also use Internet phone service to communicate with others around the world Internet video enables people to conduct virtual meetings Online social networks provide Web-based tools for users to share information about themselves with others on the Web and to find, meet, and converse with other members Mediasharing Web sites such as YouTube for video sharing and Flickr for photo sharing provide methods for members to store and share digital media files on the Web Social bookmarking sites let Web users store, classify, share, and search Web bookmarks—also referred to as favorites Content streaming is a method of transferring multimedia files over the Internet so that the data stream of voice and pictures plays continuously Instant messaging allows people to communicate in real time using the Internet Shopping on the Web is popular for a host of items and services Web auctions match people looking for products and services with people selling these products and services You can also use the Web to download and play music, listen to radio, and view video programs With office on the Web, you can store important files | Chapter 303 and information on the Internet When telecommuting or traveling, you can download these files and information or send them to other people Some Internet sites are threedimensional, allowing you to manipulate the site to see different views of products and images on the Internet A wealth of free software and services is available through the Internet Some of the free information, however, might be misleading or even false Other Internet services include information about space exploration, fast information transfer, obtaining a home loan, and distance learning An intranet is an internal corporate network built using Internet and World Wide Web standards and products Because Web browsers run on any type of computer, the same electronic information can be viewed by any employee That means that all sorts of documents can be converted to electronic form on the Web and constantly be updated An extranet is a network that links selected resources of the intranet of a company with its customers, suppliers, or other business partners It is also built around Web technologies Security and performance concerns are different for an extranet than for a Web site or network-based intranet User authentication and privacy are critical on an extranet Obviously, the network must perform well to provide quick response to customers and suppliers Management issues, service, and speed affect all networks No centralized governing body controls the Internet Also, because the amount of Internet traffic is so large, service bottlenecks often occur Privacy, fraud, and security issues must continually be addressed and resolved CHAPTER 7: SELF-ASSESSMENT TEST The Internet is like many other new technologies—it provides a wide range of services, some of which are effective and practical for use today, others that are still evolving, and still others that will fade away from lack of use The was the ancestor of the Internet and was developed by the U.S Department of Defense On the Internet, what enables traffic to flow from one network to another? a Internet Protocol b ARPANET c Uniform Resource Locator d LAN server Each computer on the Internet has an address called the Transmission Control Protocol True or False? What organization is responsible for managing Internet addresses? a Internet Corporation for Assigned Names and Numbers (ICANN) b Internet Society (ISOC) c Defense Advanced Research Projects Agency (DARPA) d America Online (AOL) A(n) _ is a company that provides people and organizations with access to the Internet Originally developed as a document-management system, the World Wide Web is a hyperlink-based system that is easy to use for personal and business applications A podcast is an online Web site that people can create and use to write about their observations, experiences, and opinions on a wide range of topics True or False? Which technology helps you easily specify the visual appearance of Web pages in a Web site? a HTML b XHTML c XML d CSS ... 11 0 Output Devices viii 11 1 Special-Purpose Input and Output Devices 11 4 Computer System Types 11 5 Computer System Types 11 6 Information Systems @ Work: Penguins, Animal Logic, and Blades 12 1... Software 17 6 Database Systems and Business Intelligence Wal-Mart, United States 18 1 18 0 Data Management 17 5 18 3 The Hierarchy of Data 18 3 ix Data Entities, Attributes, and Keys 18 3 Ethical and Societal... Software Bugs 16 4 16 7 16 7 Copyrights and Licenses Open-Source Software 16 7 16 8 Shareware, Freeware, and Public Domain Software Software Upgrades 16 9 17 0 Global Software Support 17 0 Case One: