MSIT 116A Advanced Management Information System

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MSIT-116A:
Advanced Management
Information System
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______________________________________________________________
Course Design and Editorial Committee
Prof. M.G.Krishnan Prof. Vikram Raj Urs
Vice Chancellor Dean (Academic) & Convener
Karnataka State Open University Karnataka State Open University
Mukthagangotri, Mysore 570 006 Mukthagangotri, Mysore 570 006
Head of the Department and Course Co-Ordinator

Rashmi B.S
Assistant Professor & Chairperson
DoS in Information Technology
Karnataka State Open University
Mukthagangotri, Mysore 570 006
Course Editor
Ms. Nandini H.M
Assistant professor of Information Technology
DoS in Information Technology
Course Writers
Dr. Chethan Dr. Ranjit K N
Associate Professor Assistant Professor
Dept. of Computer Science, Dept. of Computer Science,
Maharaja Institute of Technology, Maharaja Institute of Technology,
Mysore. Mysore.
Publisher
Registrar
Developed by Academic Section, KSOU, Mysore

Karnataka State Open University, 2014
All rights reserved. No part of this work may be reproduced in any form, by mimeograph or
any other means, without permission in writing from the Karnataka State Open University.
Further information on the Karnataka State Open University Programmes may be obtained
from the Universitys Office at Mukthagangotri, Mysore 6.
Printed and Published on behalf of Karnataka State Open University, Mysore-6 by the
Registrar (Administration)
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Manasagangothri, Mysore 570 006
MSc in Information Technology III Semester
MSIT 116A Advanced Management Information System
Module 1
Unit-1 Information Systems Introduction 01-23

Unit-2 Information Technology 24-36
Unit-3 Business Networks and Telecommunication 37-54
Unit-4 Network Planning and Introduction to Database 55-61
Module 2
Unit-5 Introduction to DBMS 62-74

Unit-6 Data Warehouse and Introduction to Enterprise System 75-80
Unit-7 Introduction to Business Systems 81-102
Unit-8 Customer Relationship Management 103-111
Module 3
Unit-9 Business Intelligence Architecture and tools 112-120
Unit-10 OLAP and Application BI in Business 121-127
Unit-11 CIO Profile and Roles 128-132

Unit-12 Security of Information Systems 133-143
Module 4
Unit-13 Information Security Risks 144-155
Unit-14 Information System Implementation 156-162
Unit-15 Organization and Information System 163-167
Unit-16 Business Effectiveness 168-177
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Preface
The concept of the MIS has evolved over a period of time comprising many different facets
of the organizational function. MIS is a necessity of al the organizations. The initial concept
of MIS was to process data from the organization and present it in the form of reports at
regular intervals. The system was largely capable of handling the data from collection to
processing. It was more impersonal, requiring each individual to pick and chose the
processed data and use it for his requirements. This concept was further modified when a
distinction was made between data and information. The information is a product of an
analysis of data. This concept is similar to a raw material and the finished product. What
are needed are information and not a mass of data. However, the data can be analyzed in a
number of ways, producing different shades and specifications of the information as a
product. It was, therefore, demanded that the system concept be an individual- oriented, as
each individual may have a different orientation. Towards the information, this concept was
further modified, that the system should present information in such a form and format that
it creates an impact on its user, provoking a decision or an investigation. It was later
realized then even though such an impact was a welcome modification, some sort of
selective approach was necessary in the analysis and reporting. Hence, the concept of
exception reporting was imbibed in MIS.
Organization of the material: The book introduces its topics in ascending order of
complexity and is divided into four modules, containing four units each.
In the first module, we begin with an introduction to Information System and Information
Technology, Business Networks and Telecommunication.
In the second module, we discussed about DBMS, Data Warehouse, Business Systems and
Custom Relationship Management.
The third module contains Business Intelligence Architecture and tools, OLAP and
Application BI in Business and Security information systems.
In the fourth module, Information Security Risks and Organization of Information Systems
are discussed.
Happy reading to all the students.
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MODULE -1
UNIT 1: Information Systems Introduction
Structure:
1.0 Learning Objectives
1.1 Introduction
1.2 The changing face of the Business Environment
1.3 Types of information system
1.4 Information system vs. Information Technology
1.5 Emerging trends in information technology
1.6 Hardware, Software, Network resources
1.7 Summary
1.8 Keywords
1.9 Exercises
1.10 References

After studying this unit, you will be able to
Understand about Management Information concept
The different types of IS used in Business
How the Information System emerged
The different components of Information System
1.1 Introduction
A management information system (MIS) provides information that is needed to manage
organizations efficiently and effectively. Management information systems involve three
primary resources: people, technology, and information or decision making. Management
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information systems are distinct from other information systems in that they are used to
analyze operational activities in the organization. Academically, the term is commonly used
to refer to the group of information management methods tied to the automation or support
of human decision making, e.g. decision support systems, expert systems, and executive
information systems.
1.2 The changing face of the Business Environment:
Change is Constant. This saying is very much true for the present industries or business
firms. All the firms are rushing towards changing their basic business process by
implementing additional facilities to the customers, improving their internal organizational
process by incorporating innovative technologies to stand on top and way ahead of other
organizations in the present business environment.
Organizations today are focusing on providing new products/services to the customers as
customers are considered as King in the present business world. Business firms invest in
information systems and technologies because they are necessities of doing business. For
Ex, City Bank introduced first ATMs in New York in 1977 to attract customers by giving
them superior service. Their competitors rushed to provide ATM services to their
customers to stay on par with City Bank. Today, all banks in the world are having ATM
services as it is one of the basic requirements for surviving in the banking business. The
change in environment forces the business firms to change the way they conduct the
business because it has created a huge impact. Customers would not do business with the
firm which does not add or create extra services to them.
In order to survive in the rapidly changing environment, the business firms should adhere to
the changes in the environment and react with the demands and needs of the customers.
Environments generally change much faster than the organizations. The main reasons for
organizations failure are inability to adapt to rapidly changing environment and lack of
resources. New technologies, new products and change in public taste and values put
strains on any organizations culture, politics and people.
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The business firms which do not respond to the changes in the environment will not survive
as the environment change creates huge impact on business. Thus all business firms should
change according to changes taking place in the environment.
1.3 Types of Information System

The different types of IS used in Business Organization are:
Transaction Processing System (TPS)

Transaction is an elementary activity conducted during business operation such as sale,
airline reservation, inquiry about inventory, payroll etc.
A TPS is a computerized system that performs and records the daily routine transactions
necessary to conduct business. Ex: Sales and Inventory processing and Accounting System.
Characteristics of TPS
High volume of transaction i.e transaction is not meant just for one customer, many
customers can do it.
Each transaction is similar i.e whatever transaction is made by the customer, it is the
same for all. For ex, whenever a customer draws the money from ATM, whatever
procedure he follows, it will be the same for all customers.
Procedures for processing transaction are well described i.e if a customer wants to
draw money then the procedures that he has to follow is well explained.
Uses of TPS
To answer routine question (How many sales are done today?)
To track the flow of transaction (In order to know the inventory level, employees
should check how many goods have been sold)
Managers need TPS to monitor the status of internal operation of the organization
(Managers use TPS to monitor internal operation such as the sale made was good
or not)
Managers also need TPS to know firms relation with external environment
(Whether suppliers are delivering the product or how are the competitors
performing)
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Disadvantage
Failure of TPS for few hours can lead to firms demise (loss) i.e if the TPS of
railway reservation fails, then the reservation cant be made for the entire day.
Hence it is loss for the company.
Model of TPS
Transaction
TPS for accuracy,
Data File
completeness,
consistency,validity &
Reports
decision for acceptance &
rejection
Master
File
Display &
Output
Processed
Transaction
Transaction files Query Processing
Processing
Algorithm
The diagram represents the model of TPS which consist of usage of files represented in the
form of cylinders. The files used may consist of stored data, instructions to process the
transaction and processed data.
Transaction Data File consists of all transactions made and it is updated on daily basis.
Master File consists of employee details, organization details or product details and it is not
updated on daily basis.
Transaction Processing Algorithm is a set of rules which describes on how to make the
calculations.
If we consider Payroll system, in which monthly compensation of an employee is
calculated, it is an example of TPS as it is generating a salary slip for an employee. To
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calculate the payment, employee data, organization data and rules to calculate salary is
considered. The employees salary slip will be stored in Processed Transaction Files. If we
want to get particular employees salary, then it can be generated by query processing which
is sent to Processed Transaction File and the output is either given in the form of reports or
it is displayed in the monitor.
TPS MIS
MIS FILES
ORDER
Order PROCESSING
File SYSTEMS
Sales
Data
MATERIAL
Production
RESOURCE
Master
PLANNING SYSTEM
File Unit
Product
Report MANAGERS
Cost MIS
Data
GENERAL
Accounting
LEDGER
File Expense
SYSTEM
Data
Fig:-TPS Supply Summarized Transaction Data to the MIS Reporting System

All the above three processed data are stored in MIS file. The output of TPS is given as
input to MIS. The MIS generates final reports which are given to managers in order to
know the organizational activities.
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Office Automation System (OAS)
The term office automation refers to all tools and methods that are applied to office
activities which make it possible to process written, visual, and sound data in a computer-
aided manner. The use of computer systems to execute a variety of office operations, such
as word processing, accounting, typing, fax, record management and e-mail is called OAS.
Office automation is intended to provide elements which make it possible to simplify,
improve, and automate the organization activities of a company or a group of people. In
particular, it also includes the following activities,
exchange of information
management of administrative documents
handling of numerical data
meeting, planning and management of work schedules
Management Information System (MIS)

MIS is the study of information systems in business and management. The term MIS also
designates a specific category of information system serving the management.
MIS provides middle management (Managers) with reports on the organizations
current performance. This information is used to monitor and control the business
and predict the future performance.MIS addresses structured problems which are
repetitive and routine.
MIS uses data supplied from TPS and summarizes the report on companys basic
operations.
MIS serve managers with daily, weekly, monthly and yearly reports.
MIS generally provide answers to routine question in business (Ex: Reports on
targeted sales v/s Actual sales).
MIS are not flexible they just summarize the report, and do not use any high level
analytical methods.
The Primary users of MIS are Top Level Managers, Middle Level Managers,
Operational Managers & Staff.
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Ex: A report on deposits & withdrawal in total and by branch are routinely used by bank
officers to keep informed of performance of individual branches, to monitor.
TPS
Processed
TPS
Data
MIS
Summarized
Reports
Fig: Model of MIS
Decision Support System (DSS)

DSS Support semi-structured & unstructured problems.
o Unstructured are those in which the decision maker must provide judgment,
evaluation & insight to solve a problem.
o Semi-structured are combination of structured & unstructured where only a
part of problem has a clear cut answer by an accepted procedure.
DSS are specifically designed to help Middle Level Managers to make decisions in
situation where there is uncertainty about the possible outcomes of those decisions.
DSS comprise of tools and techniques to help gather relevant information and
analyze the options & alternatives.
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DSS is classified into two types,
1) Model Driven DSS
It consists of models such as Statistical Models that helps in establishing relationships, such
as relating product sales to differences in age or income.
Optimization Models that is used to determine how efficiently and effectively operations
can be performed.
Mathematical Models to make some mathematical calculations.
Forecasting Models that is used to forecast sales.
These models analyze the data available and help users to evaluate alternatives.
2) Data Driven DSS
Data driven DSS helps users to extract useful information from available data by
identifying related patterns and helps taking decision. Data driven DSS uses OLAP (Online
Analytical Processing) Tools, Data Mining Tools to analyze large pools of data and extract
related information.
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Components of DSS
TPS External
Data
DSS
Database
DSS Software System
Models
OLAP Tools
Data Mining Tools
User Interface
User
Fig: Model of DSS
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DSS Database: Collection of current & historic data which is input from external database
or TPS system. It may contain customer data, competitors data, past transactions taken
place etc.
User Interface: Interaction between DSS system & user.
Consider the decision process followed by banking officers who must decide whether to
begin installing ATM.
Many questions that will arise are,
How many ATM locations will be needed?
What will each service cost?
What limits should be placed on withdrawal?
Which is the best route for the van to carry cash to ATM locations?
In such cases it is impossible to pre-design system report formats & contents. A DSS
should have greater flexibility than other systems. The user must be able to request reports
by defining their content & even by specifying how the information is to be produced.DSS
is designed to support decision making rather than render a decision.
The bankers get information from DSS Database about number of customers
coming to each branch and making transactions. Since the database consists of large
volume of data, it will be difficult for the bankers to track the customers. Hence
Statistical Tool and OLAP Tools/Data Mining Tools provide easier representation
by showing some graphs or condensed table on number of customers arriving in
each branch. By this managers can identify where large number of customers are
coming and therefore take decision on opening ATM in that particular region.
The service cost can be fixed with help of Mathematical Model.
Withdrawal limits can also be fixed depending on withdrawing amount made by
customers in the bank. This Processed Transaction Data is also obtained from DSS
Database.
The best route is selected with the help of Optimization Model.
Hence DSS makes managers to take decision easily because of Models, OLAP Tools and
Data Mining Tools.
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Uses of DSS
Product pricing, sales forecasting, promotional campaign
Optimization of sourcing, production & maintenance.
Analysis of impact of employee compensation plans, labor force requirements.
Break even analysis, profitability analysis, financial forecasting.
Benefits of DSS
Ability to view data in different dimensions and sensing problems, trend, pattern
through different views.
Ability to understand and assess business performance and various results in terms
of cause and effect, and enabling to define the problem.
Ability to judge impact on business.
Ability to control risk exposure in decisions.
Ability to make better decisions.
Examples of Decision-Support Systems
Organization DSS Application
American Airlines Price and route selection
Equico Capital Corporation Investment evaluation
General Accident Insurance Customer buying patterns and fraud detection
Bank of America Customer profiles
Frito-Lay, Inc. Price, advertising, and promotion selection
Burlington Coat Factory Store location and inventory mix
Southern Railway Train dispatching and routing
United Airlines Flight scheduling
Group Decision Support System (GDSS)

GDSS is an interactive, computer based system used to facilitate the solution of
unstructured problems by a set of decision makers working together as a group.
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GDSS makes meeting more productive by providing tools to facilitate planning,
generating, organizing & evaluating ideas, establishing priorities and documenting
meeting proceedings which internally increases value in business.
GDSS have Hardware, Software &People components.
Hardware components consist of conference room, computer, electronic display
boards, audiovisual and network equipment.
GDSS Software tools are developed for meetings in which all participants are in
same room, but in some cases they can be used for meetings in which participants
are in different locations. Software tools include,
Electronic Brainstorming Tools: Enable individuals simultaneously and
anonymously to contribute ideas on topics of meeting.
Idea Organizers: Facilitate the organized integration & synthesis of ideas
generated during brainstorming.
Tools for Voting or Setting Priorities: Ideas are given priorities i.e ideas
are voted by participants and the best idea is given first priority.
Stakeholder Identification & Analysis Tools: It is used to evaluate impact
of ideas generated on organization and to evaluate impact of those
stakeholders on the ideas.
Policy Formulation Tools: It is used to formulate policies on ideas
generated.
People components include participants, a trained facilitator & staff to support
hardware & software.
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Idea Brainstorming
Generation
Session Idea Idea Organizer

Planning Organization
Prioritization Vote Selection

Questionnaire
Policy Policy Formation

Session Development Stakeholder ID
Manager
Organizational Enterprise Analyzer

Memory
Access to Information
Fig: Group System Tools

How GDSS is used in the meeting.
It is an electronic meeting.
Each person is having a workstation.
These workstations are connected to managers workstation and also to the file
server.
The ideas are generated through brainstorming sessions.
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The data or ideas that are sent by each person from their respective workstations are
saved in file server and the persons views and opinions are kept confidential.
Prioritization and voting of ideas is performed and the solution to the problem is
achieved. Ideas generated are used to determine what impact they are having on
stakeholders.
Finally policy is formulated on ideas generated and it is made in use.
Thus GDSS helps managers working together as a group to make decision by finding
solution to unstructured problems in a fast and easier way.
Executive Support System/Executive Information System (ESS or EIS)

Senior Managers need systems that address strategic issues & long term trends, both in the
firm and external environment.
They are concerned with questions such as,
What will be employment levels in 5 years?
What are long-term industry cost trends?
Where does company fit in?
How well competitors are performing?
ESS help Senior Management make the above decisions which are unstructured & semi-
structured.
ESS Workstation/Portal
Menus
Graphics
Communication
Local Processing
Internal Data External Data

TPS/MIS Data Tax Info
ESS Financial Data Competitors Info ESS
Workstation/Portal Office Systems Stock Market Info Workstation/Portal
Modeling/Analysis
Fig: Model of ESS
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The above diagram represents the general model of ESS in which we have more than one
workstation/portal. The executives work with the ESS. The ESS consists of both internal
and external data stored in the database. The system also consists of processing models for
processing the data.
The managers give random input of their future problems to ESS and it also takes data from
the database. After analyzing, ESS generates some estimated data in the form of graphs.
This estimated data helps managers to take decision on future.
Inter-Relationship Among Systems.
ESS
MIS DSS
TPS
Fig: Interrelationship among Kinds of Systems
The above diagram represents the interrelationships among different kinds of systems used
in business. TPS is used for processing transaction and its data is used by DSS and MIS.
MIS data in turn is used by the DSS, and ESS uses the data from all the systems. Systems
use data from one to another for support of business operations, decision making,
monitoring performance, predicting future etc.
Expert Systems (ES)

ES are intelligent systems for capturing tacit knowledge (knowledge that cannot be
transferred from one person to another easily) in a very specific and limited domain of
human expertise. These systems capture the knowledge of skilled employees in the form
of rules in a software system that can be used by others in the organization. They perform
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very limited tasks that can be accomplished by professionals in a few minutes or hours,
such as granting a loan, diagnose a malfunctioning machine etc.
ES are used in business in discrete, highly structured decision making situation.
ES is computer software designed to simulate the problem solving behaviors of a
human who is an expert in a narrow domain or disciplines.
Components of Expert System
Fig: Components of Expert System
1. Knowledge Base: It is the set of rules of the form if..then.. else documented by
humans and represented in computer system.
2. Inference Engine: It is the strategy used to search Knowledge Base. There are two
types of strategies,
Forward Chaining: The inference engine begins with the information
entered by the user and searches knowledge base until the goal is reached.
Example for Expert System to Diagnose Throat Infection
What is your name?
What is your age?
What are the symptoms?
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Knowledge Base:
Rule 1: If throat irritation then throat is infected.
Rule 2: If throat irritation and high temperature then fever
else
no fever.
Backward Chaining: Starts with a list of goals and then searches back
through inference rules to find the facts that support the goal.
Ex: Expert System to find root cause for profit/loss or Expert System to diagnose the
disease or Expert System to grant loan to a customer.
Example for Expert System to grant loan of 20 lakhs:
Whether salaried or not?
What is the salary drawn?
Knowledge Base:
Rule 1: If not salaried then Loan cannot be granted.
Rule 2: If salaried and salary less than 10000 then loan cannot be granted
else
loan can be granted.
3. End User Interface: It is used to accept input and generate output.
Applications of Expert System

It is used in Medical Diagnosis, Accounting, Process Control, Financial Services,
Production, etc.
Benefits of Expert System

Improved decisions.
Reduces errors.
Reduce training time for employees.
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High level of quality & service.
Reduced manpower
Disadvantages of Expert Systems

Cannot easily adapt to new situation.
Do not learn by experience.
Do not have common sense.
Only certain problems can be solved using ES.
Maintenance is difficult if modifications need to be done.
1.4 Information System vs. Information Technology

IT (Information Technology): Technology used to manage information by use of
hardware and software.
IS (Information System): System used to generate information i.e data is converted into
information. Ex: Accounting System, Database Management System, Order Processing
System.
Information Systems have become integral part of large organization. They have
fundamentally altered the economics of organizations and greatly increased the
possibilities for organizing work. Information Technology helps firms contract in
size because it can reduce transaction cost. It also helps organization to reduce
agency costs because it becomes easier for managers to manage huge number of
employees i.e agents are appointed by the business firms to do their task. As the
firms grow in size and scope, the agency cost also increase because owners must put
more effort on supervising and managing agents/employees. But with the help of
IT, managers can easily supervise their agents and hence reduce agency costs.
Business organizations are spending/investing huge amount of money on
information systems, hardware/software and telecommunication equipment. This is
because IT/IS is having great influence on business and day-to-day activities.
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Earlier video cassettes which were available in magnetic tapes are now replaced by
CDs.
The introduction of Cell Phones and Blackberry helps the user to access internet
without using computer, Video Conferencing helps people communicate from far
off distance, the use of internet and E-mail in international communications systems
has drastically reduced the cost of operating on global scale and thus have
influenced a lot on people and business.
Most of the businesses are going web based i.e. they create their own websites and
operations are carried over the medium of internet (E-business) i.e customers prefer
to buy books online instead of going to the store and they can also shop in a
worldwide market place and obtain price and quality information reliably 24 hours a
day.
The emergence of Core Banking helps customers to carry out transactions through
internet. Customers draw money from ATM instead of visiting banks.
Information System like Accounting System helps to perform accounting operations
faster than doing it manually.
Because of all these changes the firms are transforming into a fully digital firm. IT/IS are
some of the most important tools available to managers for achieving higher levels of
efficiency and production in business operations, especially when coupled with changes in
business practices and management behavior.
1.5 Emerging trends in information technology & information systems

Information technology has become an integral part of our daily life. Information
technology has served as a big change agent in different aspect of business and society. It
has proven game changer in resolving economic and social issues. Advancement and
application of information technology are ever changing.
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Some of the trends in the information technology are as follows:
1950s-1960s: Data Processing
Until 1960s, the role of most IS was simple: transaction processing, record-keeping,
accounting etc. IS was used just to process data.
1960s-1970s: Management Reporting
This was a little bit advanced. MIS (Management Information System) was added that
focused on developing management reports that would give managers the information they
needed for decision-making purpose.
1970s-1980s: Decision Support
By 1970s it was evident that management reports were not meeting many of decision-
making needs of management. Hence Decision Support Systems (DSS) was introduced. It
helped managers to take complex set of decisions.
1980s-1990s: Strategic and end-user Support
There was rapid development of microcomputer processing power that gave birth to end-
user computing. End-users could now use their own computing resources to support their
job requirements instead of waiting for indirect support of centralized corporate
information service departments.
Executive Support System (ESS) also was introduced that helped top level executives to
take decisions.
The concept of Artificial Intelligence (AI) i.e intelligent software like Expert System (ES)
were deployed inside the system that intelligently act on the behalf of their owner.
1990s-2000s: Electronic Business and Commerce
ERP (Enterprise Resource Planning) systems were introduced that integrates all facets of
the firm such as planning, manufacturing, sales, customer relations, inventory control,
financial management, human resources, marketing etc.
There was rapid growth of internet, intranet, extranet and other interconnected global
networks. Thus many businesses today are using internet technologies to web-enable
business processes and create innovative e-business applications.
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1.6 Hardware, Software, Network resources
Fig: Components of IS
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An IS depends on the resources of people, hardware, software, data, network to perform
input, processing, output, storage and control activities that convert data resources into
information products.
The 4 major components of IS are
1. People Resources
People are the essential ingredient for the successful operation of all IS. Without people
Information System cannot be used.
Ex: Specialists-system analysts, software developers, system operators.
End Users-anyone who uses information systems.
2. Hardware Resources
Hardware resources include all physical devices and materials used in IS
Ex: Computer Systems, Computer Peripherals etc.
3. Software Resources
Software resources include all sets of procedures to handle the business process.
Ex: System Software, Application Software, Procedures (Information processing
instruction)
4. Data Resources
Data are raw material for information system. Data that were previously captured as a result
of a common transaction are now stored, processed and analyzed using softwares. Data
can be of many forms like alphanumeric data numbers, letters, text data, images, voice etc.
Ex: Customer Data, Supplier Data, Sales Data, Competitors Data, Employee Files etc.
5. Network Resources, Communication Media and Support
Telecommunications technologies and networks like Internet, Intranets and Extranets are
important for successful communication in the organization. It also consists of
communication media like wireless or wired etc.
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1.7 Summary
This unit provides a brief introduction to Management Information System. This also
introduces the usages of MIS in different business levels. Various resources used in IS was
also discussed.
1.8 Key Words:
Information systems, Information Technology, Management Information System, Software
Resources, Hardware Resources.
1.9 Exercise:
1) Discuss the components of Information System.
2) Explain the trends in IS.
3) Explain Online and Batch Transaction Processing System, with an example each.
4) What is meant by GDSS?
5) Write short notes on i) Expert System ii) Execution Support System.
6) Explain the different kinds of Information Systems.
7) What is GDSS? Explain the functions and components of it.
8) With a neat sketch, explain four major types of systems found in a typical
organization.
9) What do you mean by Expert System?
10) What is TPS? Explain with an example.
1.10 References
1. Management Information system by Effy Oz
2. Gordon B.Davis & Margrethe H.Olson Management Information systems, 2nd edition
Tata MC-Graw HILL.
3. Waman S.Jawadekar ,Management Information Systems,IIIrd Edition,
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UNIT 2: Information Technology
Structure
2.1 Data Resources
2.2 Impact of Internet Revolution in Business
2.3 Managing E-Transformation
2.4 Introduction to Telecommunications and Computer Network for Business
2.5 Summary
2.6 Keywords
2.7 Exercise
2.8 References

Understand about the different types of data resources
The concept of e-transformation
Understand the concept of networks and the different types
2.1 Data Resources:
Data
Data is the collection of raw facts representing events occurring in organization or the
physical environment before they have been organized and arranged into a form that people
can effectively understand and use.
Information
Information is the data that have been shaped into a form that is meaningful and useful to
human beings. Processed data is Information.
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Ex:
Data Information
Information
331 Soap 10 Sales region: North
system
836 Salt 22 Store: Super Bazaar 122
331 Soap 12 Item no Description Quantity Units sold
331 Soap 10 7156
Fig: Data and Information
Raw data from super market checkout counter can be processed and organized to produce
meaningful information, such as total units of sale.
Data Manipulation
Data is manipulated to make useful information
Survey is common method of collecting data
Raw data is hard to read
Information is more useful to business than data
Generating Information
A process is manipulation of data
Process usually produces information
Process may produce more data
A piece of information in one context may be considered data in another context
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Information in Context
Not all information is useful
Useful information is
Relevant
Complete
Accurate
Useful information is
Current
Obtained economically (in business)
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2.2 Impact of Internet Revolution in Business
Worldwide influence of the internet is well-established and acknowledged. Penetration rate

of the internet has been phenomenal; almost 1/3rd of Human population are accessing the
internet. The way business is conducted in this digital age has changed due to so many
people logged on to the internet.
Advancement in communication and information technology has further strengthen the role
of the internet in business. The internet is widely used in organization for marketing and
promotion of products and services. The internet is used to deliver customer support, share
information and provide training to employees.
With the internet becoming a powerful tool for employees, the impact on business is
undeniable.
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Internet and Porters Five Force Model
Porters five force model is a framework for industry analysis, business strategy
development and study competition. The five forces of the model are the threat from
upcoming and future competition, threat from existing substitute, bargaining power of
consumers, negotiating power of suppliers and threat of competition. Internet has great
Impact on all five force of the model:
Threat of new entrants: The internet has considerably lowered entry barrier in setting up
new enterprise. The setting up of a new company does not require much capital investment,
for example, online retail sites, etc. Ever increasing competition has lowered the margins.
Threat of new substitute: The Internet has reduced the product life cycle; shelf life of
products and encouraged innovation is customer serving.
Bargaining power of customers: The internet has made the customer well informed about
products and available substitute. Companies have to be careful in presenting
differentiation and pricing.
Bargaining power of suppliers: Suppliers are well informed about happening in the
industry thanks to the internet.
Threat of competition: The internet has made transparency and honest important factor in
success of the company. Customers tend to know more about the company. The internet has
lowered the cost of searching new available products.
Internet and the way business is conducted
The internet has changed the face of business. It has opened up new avenues of conducting
business. Below are some impacts of the internet on business:
Communication: communication technology combined with the internet has given a new
dimension to connectivity and dispersion of information. Employees are in constant touch
through email, instant messaging, office intranet, etc.
Collaboration: The internet has facilitated collaboration among employees of organization.
Geographical boundaries no longer hamper project work and sharing of information.
Business Transaction: The internet has encouraged the culture of online business or e-
commerce. In recent years many players have opened shops through e-commerce. Internet
banking, payment gateways, etc. are part of normal supply chain transaction.
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Work Flexibility: The internet has enabled workers to log in from remote location and
home. It has helped on the move employees by remaining in touch with happenings of
work.
Web based application: The internet has facilitated the development of concept like cloud
computing, which has enabled process and storing of data in large proportion. The internet
has helped reduce infrastructure cost of the company.
The internet thus has made a big impact in the way the business gets conducted in both
positive as well as a negative way. The internet has made many business obsolete example
post offices. Online security issues like hacking, identity theft, etc. are a constant threat to
internet users.
2.3 Managing E-Transformation
Transformation of Business Enterprises.

Along with rapid changes in markets and competitive advantages are changes in the firm
themselves. The internet and new markets are changing the cost and revenue structure of
the traditional firms and are hastening the demise of traditional business models. In addition
to the above some more transformations are also caused due to the technological
convergence in the traditional business in terms of its structure, management, technology
adoption etc. These transformations are presented in the encapsulated manner below.
Organizations are becoming Flattening
Organizations are becoming Decentralization
Organizations are becoming Flexibility
Location independence
Low transaction and coordination costs
Empowerment
Collaborative work and teamwork
Globalization
Globalization results various organizations to distribute core business functions in product
design, manufacturing, finance and customer supports to locations in other countries where
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the work may be performed cost effectively. The Globalization leads the management and
control in a global marketplace, competition in world markets, global workgroups and
global delivery systems which essentially based on digital technology.
The Emerging Digital Firm
A digital firm is one in which nearly all of the organizations significant business
relationships with customers, suppliers and employees are digitally enabled and mediated.
Core business which involve set of logically related tasks and behaviors that organizations
develop over time to produce specific business results and the unique manner are organized
and coordinated. Core processes are accomplished through digital networks spanning the
entire organization or linking multiple organizations. In a digital firm, any piece of
information required to support key business decisions is available at anytime and
anywhere in the firm. Key Corporate Assets of digital firm are Intellectual property, core
competencies, and financial and human assets are managed through digital means. A
frame work of Digital Firm is presented in Figure
Fig: Framework of Digital Firm
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Key benefits of digital firms may be listed as below.
1. They sense and respond to the changing business environments more rapidly than
traditional firms, giving them flexibility to survive in turbulent times.
2. The firms offer extraordinary opportunities for more flexible global organization and
management.
3. Time shifting (business being conducted 24x7) and space shifting (business being
conducted globally or beyond traditional geographic boundaries) are the norms in the
organizations.
The characteristics of digital firm
A digital firm usually possesses the flowing characteristics.
1. Digitally enabled relationships with customers, suppliers, and employees
2. Core business processes accomplished using digital networks
3. Digital management of key corporate assets
4. Agile sensing and responding to environmental changes
5. Seamless flow of information within the firm, and with strategic partners
2.4 Introduction to Telecommunications and Computer Network for Business
Network
A computer network is a connection of two or more computers/devices. Ex: Mobile
connected to Computer, Mouse connected to Computer. It can also be defined as a group of
stations (computers, telephones or other devices) connected by communication facilities for
exchanging information. A network can be connected to other network thus making a
bigger network. For example, local telephone exchanges connect to the city main exchange,
which itself connects to the main national telephone exchange. Computer networks allow
the user to access remote programs and remote databases either of the same organization or
from other enterprises or public sources.
Why we use Network?
Communication: To send E-mails, Video Conferencing, Chatting etc.
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To share Hardware: If we have one printer in the lab, then we can connect all
computers to one printer instead of connecting one printer to each computer.
To share Software: Some expensive software can be installed in one machine and
then by using a network we can share the software with other machines.
Ex: In an organization, HRM software which consists of all information about employees is
connected to one machine. By using network we can connect to other machines and access
information.
To share Files: Files can be shared from one computer to another by using
network. There is no necessity of taking files in pendrive.
Types of Networks
Depending on the size and coverage area of the network, it can be classified into following
groups:
Local Area Network (LAN)
Metropolitan Area Network (MAN)
Wide Area Network (WAN)
Local Area Network (LAN)

A network that connects a group of computers in a small geographical area such as
in a building, college or office is called Local Area Network (LAN).
LAN is the most common type of network used in an organization. LANs are
typically high speed networks that connect computers, printers and other network
devices together in an organization.
Fig: Example of an Office LAN
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As shown in the Figure all computers in an office are connected to each other by cable. All
computers can communicate, share information and hardware resources.
Metropolitan Area Network (MAN)

Metropolitan Area Network (MAN) is a backbone network that connects Local
Area Networks (LANs) in a metropolitan area such as a city or town.
It handles many communication activities or traffic.
Typically a MAN includes one or more LANs, covering a larger geographical
area than LAN but smaller geographical area than a Wide Area Network
(WAN).
Bigger than LAN and smaller than WAN
Fig: Example of MAN

Ex: Large universities and colleges such as VTU Head Office have their own networks
spread over city or town connecting all the branch campuses (VTU Regional Office).
Wide Area Network (WAN)

A Wide Area Network (WAN) is a computer network covering broad
geographical areas such as state or country
The largest and most well-known example of a WAN is the Internet.
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Fig: Example of WAN
Components of Communication Network / How two Computers Communicate with

each other
Terminals
Terminals are any input/output devices that use telecommunications networks to transmit or
receive data. They include Computers, Telephones.
Communications Processors
Support data transmission and reception between terminals and computers.
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They include Modems, Switches, Routers.
Communications Channels/Transmission Media
Telecommunications channels are the part of a telecommunications network that
connects the message source with the message receiver.
They include the physical equipment used to connect one location to another for the
purpose of transmitting and receiving information.
Transmission media can be categorized into two: Guided Transmission Media
(Wires/Cables). Ex: Twisted Pair Cable, Coaxial Cable, Fibre Optic and Unguided
Transmission Media (Wireless) Ex: Electromagnetic waves in form of radio,
microwave, infrared or others.
Explaining with an example, in the fig, 1 represents End User or Terminal, 2 represents
Communication Processors (Modem), 3 represents Communication Channels which can be
wired or wireless and 4 represents Server.
The end user sends request. The modem receives digital signal and converts to analog
signal and passes through communication channel which can be cable or wire. The second
modem that is connected to server receives analog signal and converts to digital signal and
is received by the server.
The server again sends reply to modem which converts digital signal to analog and passes
through media which is received by modem of end user. This modem again converts analog
signal to digital and delivers the reply to end user.
2.5 Summary
This unit briefs about data resources and e-transformation, the different types of networks
used and also how two computers interact with each other.
2.6 Key Words
Data, Information, Network, Telecommunication System.
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2.7 Exercise
1. What is Network? Explain the different types of Networks.

2. Explain how two systems interact with each other.
3. What are the advantages of using network resources in business?
4. Explain telecommunication network model.
2.8 References

2. Management Information System by James A OBrien
4. Gordon B.Davis & Margrethe H.Olson Management Information systems, 2nd
edition Tata MC-Graw HILL.
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UNIT 3: Business Networks and Telecommunication
Structure
3.1 Competitive edge of computer Networks
3.2 Networking for people
3.3 Evolution of computer Network
3.4 Technological foundation of a computer network
3.5 Types of architecture
3.6 Network media
3.7 Network protocols
3.8 Summary
3.9 Key Words
3.10 Exercise
3.11 References

Understand the basics of computer networks.
Know different types of network and communication media used for
communication.
Highlight the different types of network protocols.
A clear understanding of usage of network in business is also key area discussed in
this unit.
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3.1 Competitive edge of computer Networks
Telecommunications Strategic Capabilities
Time Barriers. Strategic use of information systems helps overcome time barriers by
focusing on interval reduction and just-in-time operations. The goal is to shorten the
response time to customer demands and reduce inventory investment to a minimum.
Operating in real time means no time lag between the identification and fulfillment of a
need.
Geographic Barriers. Telecommunications and computing technologies make it possible
to distribute key business activities to where they are needed most, where they are best
performed, or where they best support the competitive advantage of a business.
Telecommunication networks allow instantaneous access to all members and resources of
the organization, however remote, so that the best combination of talent and ability can be
brought to bear on problems or opportunities.
Cost Barriers. Information systems help reduce costs in many areas: production,
inventory, distribution, or communications. For example, decentralized decision making
can be combined with centralized implementation of those decisions for greater economy
without sacrificing the efficiency of the process.
3.2 Networking for people
In a short period of time computer networks have become an indispensable part of business,
industry, entertainment as well as a common-man's life. These applications have changed
tremendously from time and the motivation for building these networks are all essentially
economic and technological. Initially, computer network was developed for defense
purpose, to have a secure communication network that can even withstand a nuclear attack.
After a decade or so, companies, in various fields, started using computer networks for
keeping track of inventories, monitor productivity, communication between their different
branch offices located at different locations. For example, Railways started using computer
networks by connecting their nationwide reservation counters to provide the facility of
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reservation and enquiry from anywhere across the country. And now after almost two
decades, computer networks have entered a new dimension; they are now an integral part of
the society and people. In 1990s, computer network started delivering services to private
individuals at home. These services and motivation for using them are quite different. Some
of the services are access to remote information, person-person communication, and
interactive entertainment. So, some of the applications of computer networks that we can
see around us today are as follows:
Marketing and sales: Computer networks are used extensively in both marketing and sales
organizations. Marketing professionals use them to collect, exchange, and analyze data
related to customer needs and product development cycles. Sales application includes
teleshopping, which uses order-entry computers or telephones connected to order
processing network, and on line-reservation services for hotels, airlines and so on.
Financial services: Today's financial services are totally depended on computer networks.
Application includes credit history searches, foreign exchange and investment services, and
electronic fund transfer, which allow user to transfer money without going into a bank (an
automated teller machine is an example of electronic fund transfer, automatic pay-check is
another).
Manufacturing: Computer networks are used in many aspects of manufacturing including
manufacturing process itself. Two of them that use network to provide essential services are
computer-aided design (CAD) and computer-assisted manufacturing (CAM), both of which
allow multiple users to work on a project simultaneously.
Electronic data interchange (EDI): EDI allows business information, including
documents such as purchase orders and invoices, to be transferred without using paper.
Electronic mail: probably it's the most widely used computer network application.
Teleconferencing: Teleconferencing allows conference to occur without the participants
being in the same place. Applications include simple text conferencing (where participants
communicate through their normal keyboards and monitor) and video conferencing where
participants can even see as well as talk to other fellow participants. Different types of
equipments are used for video conferencing depending on what quality of the motion you
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want to capture (whether you want just to see the face of other fellow participants or do you
want to see the exact facial expression).
3.3 Evolution of computer Network:
Today, computer networks are the core of modern communication. All modern aspects of
the public switched telephone network (PSTN) are computer-controlled. Telephony
increasingly runs over the Internet Protocol, although not necessarily the public Internet.
The scope of communication has increased significantly in the past decade. This boom in
communications would not have been possible without the progressively advancing
computer network. Computer networks, and the technologies that make communication
between networked computers possible, continue to drive computer hardware, software,
and peripherals industries. The expansion of related industries is mirrored by growth in the
numbers and types of people using networks, from the researcher to the home user.
History of Computer Networks

1950s - 1960s: Terminal Oriented Computer Networks
1960s 1970s: Computer-to-Computer Networks: the ARPANET first Wide Area
Network (WAN)
1980s: Local Area Networks (LANs)
1980s: The Internet
1) Terminal-Oriented Computer Networks of 1960s and 1970s: early computers
were extremely expensive, so time-sharing techniques were developed to allow
them to be shared by many users.
through use of video terminals multiple users were able to simultaneously input
instructions and obtain results from the host computer.
modem devices further enabled that terminals reach the host computer via telephone
network, over a greater distance.
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2) Computer-to-Computer Networks
As cost of computers dropped and new applications emerged, it became necessary to enable
mainframe computers to interconnect and communicate over long geographic distances.
Application examples:
file transfer between computers
multiprocess operation over multiple computers
ARPANET (1960s) - 1st major effort at developing a network to interconnect computers
over a wide geographic area first major WAN
Internet (1970s) - emerged from ARPANET network of interconnected networks
3) Local Area Networks

In 1980s affordable computers become available. Subsequently, need for low-cost, high
speed, and low error-rate networks arose
to interconnect local workstations over small radius < 1km
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to enable sharing of local resources (printers, servers, etc.) variety of LAN
topologies emerged.
4) The Internet
Internet = Internetwork two or more interconnected networks network
of networks.
3.4 Technological foundation of a computer network:
Networking Hardware
Networks use a variety of devices to connect computers and peripheral devices (such as
printers) to each other, and to connect networks to each other. Each computer or device
connected to a network must have a network interface card (NIC) or proper networking
circuitry, which connects through a cable or a wireless antenna to a hub, switch, bridge, or
router, which in turn connects to a LAN or WAN. A hub is a common device often used as
a central location to connect computers or devices to a local network. A switch is like a
hub, except that it is more intelligent. Communications that go through a hub are
broadcast to all devices attached to the hub; communications through a switch go only to
designated devices on the network. A bridge is a device that connects two networks, such
as a LAN, to the Internet. A router routes data packets to the next node on their way to the
47
final destination. It can connect dissimilar networks and can be programmed to also act as a
firewall to filter communications. Routers keep tables of network addresses, known as
Internet Protocol (IP) addresses, which identify each computer on the network, along with
the best routes to other network addresses. You are not likely to see a WAN router, but you
might have seen a router used to support a LAN in a small office or in a household. A
repeater amplifies or regenerates signals so that they do not become weak or distorted.
Another type of networking hardware that might be familiar to home computer users is the
modem. A modema word contracted from modulator-demodulatorin traditional usage
is a device whose purpose is to translate communications signals from analog to digital, and
vice versa. For many years the only way to link to the Internet was to dial up, meaning
connecting over regular telephone lines. These lines were originally designed for analog
continuoussignals rather than for digital signals, which consist of discrete bursts. A
modem turns the digital signal from your computer into an analog signal that can go out
over the phone lines. A modem on the receiving computer transforms the analog signal
back into a digital signal the computer can understand. The former transformation is called
modulation and the latter is called demodulation.
A dial-up connection with a modem is very slow (usually no faster than 56 Kbps), so most
users and small businesses have turned to faster connections that use digital signals
throughout the connection, such as DSL and cable connections. Even though the medium
transfers digital signals, the word modem is now used for the devices that connect
computers to the Internet with these technologies. Thus, for example, if you use a cable
company to link to the Internet, the device connecting your computers network card to the
cable is called a cable modem. If you use a DSL service, the device used is called a DSL
modem, and if you use a power line, the device is called a BPL modem.
Virtual Private Networks

A LAN is a private network, because it only provides access to members of an
organization. Though a firm does not own the lines it leases, the network of leased lines
might be considered a private network, because only members authorized by the
organization can use it. Many companies cannot afford or do not wish to pay for a private
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network. By implementing special software (and sometimes also hardware) they can create
a virtual private network (VPN). A virtual private network (VPN) can be thought of as a
tunnel through the Internet or other public network that allows only authorized users to
access company resources. The virtual in VPN refers to the illusion that the user is
accessing a private network directly, rather than through a public network. VPNs enable the
use of intranets and extranets.
Switching Techniques
Imagine that your telephone could connect to only one other telephone. Of course, this
limitation would render the telephone impractical. The same is true of communications
when using computers. You want to be able to link your computer to every other computer
on a network. Or, imagine that you can link to any other computer, but you have to wait for
a specific communications path to open to conduct a conversation; no other path is
available to you. So you might wait a long time until no one is using any segment of that
path to make your call. Obviously, this wait would be very inconvenient. To avoid such
inconveniences, data communications must have mechanisms to allow your messages to be
routed through any number of paths: if one is busy, then another can be used. These
mechanisms, called switching techniques, facilitate the flow of communications and specify
how the messages travel to their destination. The two major switching techniques are circuit
switching and packet switching.
Circuit Switching
In circuit switching, a dedicated channel (a circuit) is established for the duration of the
transmission. The sending node signals the receiving node that it is going to send a
message. The receiver must acknowledge the signal. The receiving node then receives the
entire message. Only then can the circuit be allocated for use of two other communicating
parties.
Packet Switching
In packet switching, a message is broken up into packets. A packet is a group of bits
transmitted together. Each of the messages packets is passed from the source computer to
49
the destination computer, often through intermediate nodes. At each node, the entire packet
is received, stored, and then passed on to the next node, until all packets, either kept
together or reassembled, reach the destination. On their way to their final destination, the
packets are transmitted independently to intermediate nodes. Different packets of the same
message might be routed through different paths to minimize delay and are then
reassembled at their destination. At the receiving device, the packet numbers are used to
place each packet in its place so that the file transmitted is reconstructed accurately.
3.5 Types of Architecture
Network architectures are classified into two broad categories:

Client-server Architectures
Peer-to-peer Architectures
Client-server Architectures
In the client-server architectural model, a system is decomposed into client and server
processors or processes. Servers provide computational resources (or services), which
clients consume. Typically a server provides services to many clients. It is also common for
clients to consume services from multiple services. Stated otherwise, there is generally a
1:M relationship between a server and its clients, and it is sometimes the case that there is a
1:M relationship between a client and the servers that it uses. The client-server architectural
model supports the separation of functionality based on the service concept.
Client-server architectures are commonly organized into layers referred to as tiers.
Tiered Architectures
Two-tier architectures. The system architecture consists of a data server layer and an
application client layer. Data access computation is associated with the data server layer,
and the user interface is associated with the client application layer. If most of the
application logic is associated with the client application logic, it is sometimes referred to
as a fat client. If it is associated with the data access server, the application client layer is
sometimes referred to as a thin client.
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Three-tier architecture. The system architecture consists of data server layer, an
application server layer and a client application layer. The application server layer
facilitates the separation of application logic from presentation, and promotes distributed
processing.
Multi-tier architecture. The system architecture is a superset of a three-tier architecture,
and includes additional layers for data and/or application servers.
Peer-to-Peer Architectures
In a peer-to-peer architecture model, a system is decomposed into computational nodes that
have equivalent capabilities and responsibilities. This division is in contrast to a client-
server architectural model, where client and server nodes are divided into server and client
roles.
An example of a peer-to-peer architecture is a system of intelligent agents that collaborate
to collect, filter, and correlate information.
Sometimes layered (tiered) and peer-to-peer architectures are combined, where the nodes
in particular layers are in peer-to-peer relationships. For example, a multi-tiered
architecture might include an enterprise management layer, consisting of peer nodes for
such things as network management, event management, database management, Web
server management, and workload balancing.
3.6 Network Media

Network media (sometimes referred to as networked media) refers to media mainly used
in computer networks such as the Internet.
Network media is essentially driven by technological development, emerging from the
internet as a non-centralized medium in the late nineties; the term has more recently begun
to be applied to both the arts and industry. The following features distinguish Network
Media from classical media, such as broadcast media and the printed press:
Network Media is typically democratic and decentralized. The audience can also be
the contributors. Media tells about the right information to the city.
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Network Media often requires the involvement of computers as an input/output
device.
Network media requires a community to participate and consume
With the rapidly increasing digital era, new aspects of digital networking are becoming
more important. Essentially, network media is about co-operative/collaborative practice in
which many can contribute to the production of "media".
The benefits of the development of inter-networking ultimately has allowed for greater
political, social comment and discussion but is also widely thought of in a much broader
context of globalization and the fragmentation of the world.
Network Media Types
Guided Transmission Media (Wired)
Twisted Pair
Coaxial Cable
Optical Fibre
Unguided Transmission Media (Wireless)
Blutooth
Wi-Fi
Wi-Max
Guided Transmission Media (Wired Technologies)

Twisted pair
Two insulated copper wires twisted together in a regular spiral pattern; one pair
establishes one communication link; it transmits electromagnetic signals.
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Twisted pairs are distinguished between shielded and unshielded twisted pairs
according to their protection against electromagnetic fields.
Used for Telephone Connection.
Coaxial Cable
A single insulated inner wire is surrounded by a cylindrical conductor which is

covered with a shield; it transmits electromagnetic signals.
Coaxial cable is basically a copper cable, mostly used by Cable TV Companies to
distribute TV signals from antenna to users at home.
Optical Fiber
Fiber optic cable consists of a centre glass core surrounded by several layers of
protective materials.
It transfers data in the form of light.
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Fiber optic cable has the ability to transmit signals over much longer distances than
coaxial and twisted pair.
It also has the capability to carry information at vastly greater speed compared to
other transmission media.
Cost is high as well as difficulty in installation.
Used by most Telephone Companies.
Unguided Transmission Media (Wireless Technologies)
Makes use of air for data signals to travel. There is nothing to guide them along a specific
path like wires.
Bluetooth
Bluetooth is an open wireless protocol for exchanging data over short distances
from fixed and mobile devices.
Bluetooth is a standard and a communications protocol primarily designed for low
power consumption, with a short range (1 meter, 10 meters, 100 meters) based on
low-cost transceiver microchips in each device. Bluetooth makes it possible for
these devices to communicate with each other when they are in range.
Wi-Fi (Wireless Fidelity)
The name of a popular wireless networking technology that uses radio waves to provide
wireless high-speed Internet and network connections.
The Wi-Fi Alliance, the organization that owns the Wi-Fi (registered trademark) term
specifically defines Wi-Fi as any "wireless local area network (WLAN) products that are
based on the Institute of Electrical and Electronics Engineers' (IEEE) 802.11 standards."
Uses of Wi-Fi
Wi-Fi enabled device such as a PC, video game console, mobile phone, MP3 player
can connect to the Internet when within range (up to 100 meters) of a wireless
network connected to the Internet.
Wi-Max (Worldwide Interoperability for Microwave Access)
It is a telecommunications technology that provides wireless transmission of data
using a variety of transmission modes, from point-to-multipoint links to portable
and fully mobile internet access.
54
Wi-Max is a wireless digital communications system.
Wi-Max can provide broadband wireless access (BWA) up to (50 km) for fixed
stations, and (5 - 15 km) for mobile stations.
For fixed stations, the Wi-Max device will be fixed to a particular room wherein the
signal from service provider is received through the wire and for mobile stations,
the Wi-Max device can be carried wherein the signal from service provider will be
received from nearby towers.
3.7 Network Protocols

Protocol is a formal rule of behavior which is necessary when two or more
computers communicate.
Protocol is like human language and basic understanding
Some protocols designed for WANs, LANs, and wireless communications
Most important set of protocols called TCP/IP
Types of Network Protocol
1) TCP/IP (Transmission Control Protocol/Internet Protocol)
It is the basic language or protocol used for internet. TCP/IP was first developed by U.S.
Department of Defense, as a research project for its Advanced Research Projects Agency
network (ARPAnet) in the late 1960s. TCP (Transmission Control Protocol) and IP
(Internet Protocol) are two different procedures that are often linked together. The linking
of several protocols is common since the functions of different protocols can be
complementary so that together they carry out some complete task. The combination of
several protocols to carry out a particular task is often called a "stack" because it has layers
of operations. In fact, the term "TCP/IP" is normally used to refer to a whole suite of
protocols, each with different functions. This suite of protocols is what carries out the basic
operations of the Web. TCP/IP is also used on many local area networks. The details of
how the Web works are beyond the scope of this article but I will briefly describe some of
the basics of this very important group of protocols. More details can be found in the
references in the last section.
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When information is sent over the Internet, it is generally broken up into smaller pieces or
"packets". The use of packets facilitates speedy transmission since different parts of a
message can be sent by different routes and then reassembled at the destination. It is also a
safety measure to minimize the chances of losing information in the transmission process.
TCP is the means for creating the packets, putting them back together in the correct order at
the end, and checking to make sure that no packets got lost in transmission. If necessary,
TCP will request that a packet be resent.
2) Internet Protocol (IP) is the method used to route information to the proper
address. Every computer on the Internet has to have its own unique address known as the IP
address. Every packet sent will contain an IP address showing where it is supposed to go. A
packet may go through a number of computer routers before arriving at its final destination
and IP controls the process of getting everything to the designated computer. Note that IP
does not make physical connections between computers but relies on TCP for this function.
IP is also used in conjunction with other protocols that create connections.
3) Another member of the TCP/IP suite is User Datagram Protocol (UDP). (A
datagram is almost the same as a packet except that sometimes a packet will contain more
than one datagram.) This protocol is used together with IP when small amounts of
information are involved. It is simpler than TCP and lacks the flow-control and error-
recovery functions of TCP. Thus, it uses fewer system resources.
4) A different type of protocol is Internet Control Message Protocol (ICMP). It defines
a small number of messages used for diagnostic and management purposes. It is also
used by Ping and Traceroute.
5) Mail Protocols POP3 and SMTP
Email requires its own set of protocols and there is a variety, both for sending and for
receiving mail. The most common protocol for sending mail is Simple Mail Transfer
Protocol (SMTP). When configuring email clients, an Internet address for an SMTP server
must be entered. The most common protocol used by PCs for receiving mail is Post Office
Protocol (POP). It is now in version 3 so it is called POP3. Email clients require an
address for a POP3 server before they can read mail. The SMTP and POP3 servers may or
56
may not be the same address. Both SMTP and POP3 use TCP for managing the
transmission and delivery of mail across the Internet.
A more powerful protocol for reading mail is Interactive Mail Access Protocol (IMAP).
This protocol allows for the reading of individual mailboxes at a single account and is
more common in business environments. IMAP also uses TCP to manage the actual
transmission of mail.
6) Hypertext Transfer Protocol
Web pages are constructed according to a standard method called Hypertext Markup
Language (HTML). An HTML page is transmitted over the Web in a standard way and
format known as Hypertext Transfer Protocol (HTTP). This protocol uses TCP/IP to
manage the Web transmission.
A related protocol is "Hypertext Transfer Protocol over Secure Socket Layer" (HTTPS),
first introduced by Netscape. It provides for the transmission in encrypted form to provide
security for sensitive data. A Web page using this protocol will have https: at the front of
its URL.
7) File Transfer Protocol
File Transfer Protocol (FTP) lives up to its name and provides a method for copying files
over a network from one computer to another. More generally, it provides for some simple
file management on the contents of a remote computer. It is an old protocol and is used
less than it was before the World Wide Web came along. Today, its primary use is
uploading files to a Web site. It can also be used for downloading from the Web but, more
often than not, downloading is done via HTTP. Sites that have a lot of downloading
(software sites, for example) will often have an FTP server to handle the traffic. If FTP is
involved, the URL will have ftp: at the front.
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8) Ethernet
Ethernet: LAN protocol using coaxial cable

Gigabit Ethernet: faster Ethernet connections
Devices on network contend with other devices for transmission time
CSMA/CD protocol ensures no collisions in transmission
Wireless Protocols
1) IEEE 802.11: known as Wi-Fi

Supports wireless communication within 100 metres of router
Max speed 11 Mbps
2) Access point (hotspot): allows Internet access within range of equipment
3) Encryption: ability to scramble and code messages
Use keys shared between sender and receiver
4) Bluetooth: allows devices to communicate within 10 metres
5) Worldwide Interoperability for Microwave Access (WIMAX): increases range
and speed of wireless communication
Works with metropolitan area networks
6) Mobile Broadband Wireless Access (MBWA): similar to cell phone
communications
Compatible with IP services & Compatible with Wi-Fi and Bluetooth
3.8 Summary
This unit briefs about competitive edge of computer network, evolution of computer
network, technology of computer network, architecture and protocols of computer network.
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3.9 Key Words
Network, communication media, types of network, protocols.
3.10 Exercise
1. Explain strategic advantage of usage of computer network in business.

2. What are the different types of network?
3. Explain the applications of computer network.
4. List out the various network protocols.
5. Explain the different types of communication media.
3.11 References
1. Computer Networks by Forouzhan

Tata MC-Graw HILL.
4. Management Information systems by Effy Oz.
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UNIT 4: Network Planning and Introduction to Database
Structure:
4.1 Quality of service internet telephony and voice over internet protocols
4.2 Network planning design and management
4.3 Introduction to Database Management.
4.4 Summary
4.5 Key Words
4.6 Exercise
4.7 References

Understand the concept of QoS in Telephony
Know VOIP
Understand how network is planned and designed to suit any organization
Know DBMS
4.1 Quality of service internet telephony and voice over internet protocols:
In the field of telephony, quality of service was defined by the ITU in 1994. Quality of
service comprises requirements on all the aspects of a connection, such as service response
time, loss, signal-to-noise ratio, crosstalk, echo, interrupts, frequency response, loudness
levels, and so on. A subset of telephony QoS is grade of service (GoS) requirements, which
comprises aspects of a connection relating to capacity and coverage of a network, for
example guaranteed maximum blocking probability and outage probability.
Quality of service (QoS) is the overall performance of a telephony or computer network,
particularly the performance seen by the users of the network.
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To quantitatively measure quality of service, several related aspects of the network service
are often considered, such as error rates, bandwidth, throughput, transmission delay,
availability, jitter, etc.
Quality of service is particularly important for the transport of traffic with special
requirements. In particular, much technology has been developed to allow computer
networks to become as useful as telephone networks for audio conversations, as well as
supporting new applications with even stricter service demands.
Internet Telephony/Voice Over Internet Protocol (VOIP)
Internet telephony refers to communications servicesvoice, facsimile, and/or voice-
messaging applicationsthat are transported via the Internet, rather than the public
switched telephone network (PSTN). The basic steps involved in originating an Internet
telephone call are conversion of the analog voice signal to digital format and
compression/translation of the signal into Internet protocol (IP) packets for transmission
over the Internet; the process is reversed at the receiving end.
Internet telephony issues include quality of service and financial implications. The quality
is usually not quite as good as a conventional phone, but the low price compensates for it.
The telephony software is relatively cheap. Often, the basic package is free, with additional
services costing extra. The whole package is only $30 - $50. The only additional cost is for
the Internet connection.
Features
Internet telephony products have all of the features of standard telephones and more.
Common telephone-type features available through Internet phone include call holding, call
waiting, muting and volume control, caller ID, call blocking and screening, directory
assistance, speed dial, and voice mail. Non-telephone features available include white
boarding, document sharing and file transfer. IRC-type conversations are also possible,
using voice instead of text, although text chat is available for when the network gets busy
or the system is down. A log book allows you to keep track of all incoming and outgoing
calls; the time, date, length of call, caller name, IP address, and source and destination
gateways are all recorded. Automatic routing/traffic balancing algorithms are used, which
determine the best available route based on the destination and current network traffic.
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The user often has a choice of network parameters, including sampling rate and
compression algorithm. A high sampling rate gives more information about the speech, but
can flood the channel; words, phrases, or even whole sentences may be lost. A better
quality connection requires a longer delay than a mediocre one; the choice between high
quality and minimal delay is up to the user. The user is often offered the choice of
compression algorithm; connections through VocalTec's Internet Phone use one of the
following compression algorithms: TrueSpeech 8.5 , VSC (VocalTec's own algorithm), and
GSM. Some compression algorithms may require more bandwidth or computing power
than a user has access to, so the most powerful one may not always be accessible by a
certain user.
In general, people that want to talk to each other over the Internet each log onto a computer
equipped with a microphone and speaker and establish a connection. However, a user
doesn't have to be online to reap the benefits of online telephone service. Any combination
of computer/telephone calls can be made, even telephone to telephone, over the Internet.
Whenever a telephone is used, the call must be transferred from the Internet to the local
telephone system. The companies that provide Internet phone software also provide
gateways through which these conversions occur. A fee for using the gateway is incurred
by the user; these charges are very small compared to standard long-distance charges. For
example, a transatlantic phone call using a telephone over the Internet could be as low as
$.04/minute, as opposed to $1.00/minute over telephone lines.
4.2 Network planning design and management:
Network planning and design is an iterative process, encompassing topological design,

network-synthesis, and network-realization, and is aimed at ensuring that a new
telecommunications network or service meets the needs of the subscriber and operator. The
process can be tailored according to each new network or service.
A traditional network planning methodology involves five layers of planning, namely:
business planning
long-term and medium-term network planning
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short-term network planning
IT asset sourcing
Operations and maintenance.
Each of these layers incorporates plans for different time horizons, i.e. the business
planning layer determines the planning that the operator must perform to ensure that the
network will perform as required for its intended life-span. The Operations and
Maintenance layer, however, examines how the network will run on a day-to-day basis.
The network planning process begins with the acquisition of external information. This
includes:
forecasts of how the new network/service will operate;
the economic information concerning costs; and
the technical details of the networks capabilities.
Planning a new network/service involves implementing the new system across the first four
layers of the OSI Reference Model. Choices must be made for the protocols and
transmission technologies.
Network planning process involves three main steps:
Topological design: This stage involves determining where to place the
components and how to connect them. The (topological) optimization methods that
can be used in this stage come from an area of mathematics called Graph Theory.
These methods involve determining the costs of transmission and the cost of
switching, and thereby determining the optimum connection matrix and location of
switches and concentrators.
Network-synthesis: This stage involves determining the size of the components
used, subject to performance criteria such as the Grade of Service (GOS). The
method used is known as "Nonlinear Optimization", and involves determining the
topology, required GOS, cost of transmission, etc., and using this information to
calculate a routing plan, and the size of the components.
Network realization: This stage involves determining how to meet capacity
requirements, and ensure reliability within the network. The method used is known
as "Multicommodity Flow Optimization", and involves determining all information
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relating to demand, costs and reliability, and then using this information to calculate
an actual physical circuit plan.
These steps are performed iteratively in parallel with one another.
Network management refers to the activities, methods, procedures, and tools that pertain
to the operation, administration, maintenance, and provisioning of networked systems.
Network management is essential to command and control practices and is generally
carried out of a network operations center.
Operation deals with keeping the network (and the services that the network
provides) up and running smoothly. It includes monitoring the network to spot
problems as soon as possible, ideally before users are affected.
Administration deals with keeping track of resources in the network and how they
are assigned. It includes all the "housekeeping" that is necessary to keep the
network under control.
Maintenance is concerned with performing repairs and upgradesfor example,
when equipment must be replaced, when a router needs a patch for an operating
system image, when a new switch is added to a network. Maintenance also involves
corrective and preventive measures to make the managed network run "better", such
as adjusting device configuration parameters.
Provisioning is concerned with configuring resources in the network to support a
given service. For example, this might include setting up the network so that a new
customer can receive voice service, real time communications etc.
A common way of characterizing network management functions is FCAPSFault,
Configuration, Accounting, Performance and Security.
Functions that are performed as part of network management accordingly include
controlling, planning, allocating, deploying, coordinating, and monitoring the resources of a
network, network planning, frequency allocation, predetermined traffic routing to support
load balancing, cryptographic key distribution authorization, configuration management,
fault management, security management, performance management, bandwidth
management, Route analytics and accounting management.
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Data for network management is collected through several mechanisms, including agents
installed on infrastructure, synthetic monitoring that simulates transactions, logs of activity,
sniffers and real user monitoring. In the past network management mainly consisted of
monitoring whether devices were up or down; today performance management has become
a crucial part of the IT team's role which brings about a host of challengesespecially for
global organizations.
4.3 Introduction to Database Management
Database Management System (DBMS)

Collection of interrelated data
Set of programs to access the data
DBMS contains information about a particular enterprise
DBMS provides an environment that it both convenient and efficient to use
Purpose of Database Systems
Database management systems were developed to handle the following difficulties of
typical file-processing systems supported by conventional operating systems.
Data redundancy and inconsistency
Difficulty in accessing data
Data isolation multiple files and formats
Integrity problems
Atomicity of updates
Concurrent access by multiple users
Security problems
Example of DBMS Software Packages:

Microsoft SQL Server, MySQL, Oracle, Microsoft Access etc.,
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4.4 Summary:
This unit introduced the quality of service in telephony, network planning design and
management. This unit also introduced the concept of DBMS.
4.5 Keywords:
Quality of Service, network planning, DBMS.
4.6. Exercise:
1. Explain QoS in internet telephony.

2. Explain DBMS.
3. What are the factors considered in network planning design and
management?
4. Explain VOIP.
4.7 References:
1. Computer Networks by Forouzhan

Tata MC- Graw HILL.
4. Management Inforamtion System by Effy Oz.
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MODULE- 2
UNIT 5: Introduction to DBMS

Structure
5.1 Application of DBMS in management
5.2 DBMS Concepts
5.3 Steps in Designing DB
5.4 DB Objects
5.5 Normalization
5.6 DBMS
5.7 Data Model
5.8 Object Oriented data Model
5.9 Types of DB
5.10 Composite Information Systems
5.11 Summary
5.12 Keywords
5.13 Exercises
5.14 References

Know database and DBMS
Key concepts of DBMS
Data model and types
Application of DBMS in Business
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5.1 Application of DBMS in management
Database Management System:

Collection of interrelated Information
Set of programs to access the data
DBMS contains information about a particular enterprise
DBMS provides an environment that is both convenient and efficient to use and
data is kept safely
Applications of DBMS in Business:

o Banking: all transactions
o Airlines: reservations, schedules
o Universities: registration, grades
o Sales: customers, products, purchases
o Manufacturing: production, inventory, orders, supply chain
o Human resources: employee records, salaries, tax deductions
Information management is the focus of all applications
5.2 DBMS Concepts

Data Base Management System
DBMS A data base management system is the software system that allows users to define,
create and maintain a data and provides controlled access to the data.
A database management system (DBMS) is basically a collection of programs that enables
users to store, modify, and extract information from a database as per the requirements.
DBMS is an intermediate layer between programs and the data. Programs access the
DBMS, which then accesses the data. There are different types of DBMS ranging from
small systems that run on personal computers to huge systems that run on mainframes.
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Components of the DBMS Environment
There are five major components in the DBMS environment
- Hardware
- Software
- Data
- Users
- Procedures
1) Hardware: The hardware is the actual computer system used for keeping and accessing
the database. Conventional DBMS hardware consists of secondary devices, usually hard
disks, on which the database physically resides, together with the associated input-output
devices controllers and so forth. Database run on range of machines, from Micro-computer
to large mainframes. Other hardware issues for a DBMS includes database machines, which
is hardware designed specially to support a database system.
2) Software: The software is the actual DBMS. Between the physical databases itself and
the users of the system of software, usually called the Database Management System or
DBMS. All requests from users for access to the database are handled by the DBMS. One
general function provided by the DBMS is thus the shielding of database from complex
hardware-level detail.
The DBMS allows the users to communicate with the database. In a sense, it is the mediator
between the database and the users. The DBMS controls the access and helps to maintain
the consistency of the data. Utilities are usually included as part of the DBMS. Some of the
most common utilities are writers, application development tools and other design aids.
3) Data: It is the most important component of DBMS environment from the end users
point of view. The database contains operational data and the meta-data, the data about
data.
The database should contain all the data needed by the organization. In of the major
features of databases is that the actual data are separated from the programs that use the
data. A database should always be designed, built and populated for a particular audience
and for a specific purpose.
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4) Users: there are a number of users who can access or retrieve data on demand using the
application capacities. The users of a database system can be classified in the following
groups, depending on their degrees of expertise or the mode of their interactions with
DBMS.
The users can be:
Naive Users
Online Users
Application Programmers
Sophisticated users
DBA
5) Procedures: Procedures refer to the instructions and rules that govern the design and use
of the database. The users of the system and the staff that manage the database require
documented procedures on how to use or run the system.
These may consist of instruction on how to:
- Log onto the DBMS
- Use a particular DBMS facility or application program
- Start and stop the DBMS
- Make backup copies of the database
- Handle hardware or software failures
- Change the structure of a table, reorganize the database across multiple disks, improve
performance, or archive data to secondary storage.
Three Level Architecture of DBMS

1) External Level: External Level is described by a schema i.e. it consists of definition of
logical records and relationship in the external view. It also contains the method of deriving
the objects in the external view from the objects in the conceptual view.
2) Conceptual Level: Conceptual Level represents the entire database. Conceptual schema
describes the records and relationship included in the Conceptual view. It also contains the
method of deriving the objects in the conceptual view from the objects in the internal view.
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3) Internal Level: Internal level indicates hoe the data will be stored and described the data
structures and access method to be used by the database. It contains the definition of stored
record and method of representing the data fields and access aid used.
A mapping between external and conceptual views gives the correspondence among the
records and relationship of the conceptual and external view. The external view is the
abstraction of conceptual view which in turns is the abstraction of internal view. It
describes the contents of the database as perceived by the user or application program of
that view.
A mapping between conceptual records from the physical database.
A major objective for three- level architecture is to provide data independence, which
means that upper levels are unaffected by changes in the lower levels.
1. Logical data independence: Logical data independence indicates that the conceptual
schema can be changed without affecting the existing schemas.
2. Physical data independence: Physical data independence indicates that physical storage
structures or devices could be changed without affecting conceptual schema.
Database Languages
The data definition language (DDL) comprises those instructions used for creating,
removing and altering data structures for containing information.
The data manipulation language (DML) comprises those instructions used for
retrieval, deletion, update & insertion of database contents
The data control language (DCL) comprises those instructions used for specifying
access permissions on the database structures & contents
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5.3 Steps in Designing DB
Database Design
1st Step: Requirements definition & analysis
2nd Step: Conceptual design
3rd Step: Logical design or data model mapping
4th Step: Physical design
1) Requirements analysis
Database designers interview prospective database users to understand and document their
data requirements.
Two types of requirements
Functional requirements
Database requirements
2) Conceptual design
Create conceptual schema using high level conceptual data model
Conceptual schema is a description of the data requirements of the users and
includes entity types, relationships, and constraints.
Conceptual schema does not include implementation details and can be used to
communicate with nontechnical users.
It can be used to ensure that all users data requirements are met and no conflict
exists
3) Logical design or data model mapping

Conceptual schema is transformed from the high level data model into the
implementation data model.
Actual implementation of the database using a commercial DBMS
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4) Physical design
Internal storage structures, access paths, and file organizations for the database
files are specified
In parallel with all steps, application programs are designed and implemented as
database transactions corresponding to the high level transaction specifications.
5.4 DB Objects
A database object is any defined object in a database that is used to store or reference data.
Some examples of database objects are:-
1. Table: A table stores data about an entity (a person, place, or thing) and is the
basic element in any database. A table is made up or records, which in turn are
made up of fields. It is columnar in appearance, with each record in a separate
row of the table and each field in a separate column.
2. Form: A form provides a more convenient and attractive way to enter, display
and/or print the data in a table.
3. Query: A query answers a question about the database. The most common
type of query specifies a set of criteria, then searches the database to retrieve the
records that satisfy that criteria.
4. Report: A report presents the data in a table or query in attractive fashion on
the printed page.
5.5 Normalization
Database normalization is the process of organizing fields and tables of a relational

database to minimize redundancy. The guidelines to normalize are called Normal Forms.
The different types of normal forms are as follows:
First Normal Form (1NF)
First normal form (1NF) sets the very basic rules for an organized database:
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Eliminate duplicative columns from the same table.
Create separate tables for each group of related data and identify each row with a
unique column or set of columns (the primary key).
Second Normal Form (2NF)
Second normal form (2NF) further addresses the concept of removing duplicative
data:
Meet all the requirements of the first normal form.
Remove subsets of data that apply to multiple rows of a table and place them in
separate tables.
Create relationships between these new tables and their predecessors through the
use of foreign keys.
Third Normal Form (3NF)
Third normal form (3NF) goes one large step further:
Meet all the requirements of the second normal form.
Remove columns that are not dependent upon the primary key.
Boyce-Codd Normal Form (BCNF or 3.5NF)
The Boyce-Codd Normal Form, also referred to as the "third and half (3.5) normal form",
adds one more requirement:
Meet all the requirements of the third normal form.
Every determinant must be a candidate key.
5.6 DBMS
Database Management System

Software interface between users and databases
Controls creation, maintenance, and use of the database
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Fig: DBMS Software
Functionalities of DBMS
A DBMS is a general purpose software system facilitating each of the following:
Defining a database
Specifying data types, structures, and constraints of the data to be stored in the database.
Constructing the database
The process of storing the data on some storage medium (e.g., magnetic disk) that is
controlled by the DBMS
Manipulating the database
Querying the database to retrieve specific data, updating the database to reflect changes in
the mini-world, and generating reports
Sharing a database
Allowing multiple users and programs to access the database "simultaneously"
Maintaining the database
Allowing the system to evolve as requirements change over time
System protection
Preventing database from becoming corrupted when hardware or software failures occur
Security protection
Preventing unauthorized or malicious access to database.
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5.7 Data Model
A data model is a collection of concepts for describing data.
A schema is a description of a particular collection of data, using the given data model.
The relational model of data is the most widely used model today.
Main concept: relation, basically a table with rows and columns.
Every relation has a schema, which describes the columns, or fields.
A database model is a type of data model that determines the logical structure of a
database and fundamentally determines in which manner data can be stored, organized, and
manipulated. The most popular example of a database model is the relational model, which
uses a table-based format.
Common logical data models for databases include:
Hierarchical database model
Network model
Relational model
Entityrelationship model
Object Oriented model
5.8 Object oriented data Model
Object-oriented database management systems (OODBMSs) combine database capabilities

with object-oriented programming language capabilities. OODBMSs allow object-oriented
programmers to develop the product, store them as objects, and replicate or modify existing
objects to make new objects within the OODBMS. Because the database is integrated with
the programming language, the programmer can maintain consistency within one
environment, in that both the OODBMS and the programming language will use the same
model of representation. Relational DBMS projects, by way of contrast, maintain a clearer
division between the database model and the application.
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As the usage of web-based technology increases with the implementation of Intranets and
extranets, companies have a vested interest in OODBMSs to display their complex data.
Using a DBMS that has been specifically designed to store data as objects gives an
advantage to those companies that are geared towards multimedia presentation or
organizations that utilize computer-aided design (CAD).
Some object-oriented databases are designed to work well with object-oriented
programming languages such as Delphi, Ruby, Python, Perl, Java, C#, Visual Basic, .NET,
C++, Objective-C and Smalltalk; others have their own programming languages.
OODBMSs use exactly the same model as object-oriented programming languages.
Fig: Object Oriented data model
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5.9 Types of DB
Types of Databases
Operational Database
Supports business processes and operations
Also called subject-area databases, transaction databases, and production
databases
Examples are customer databases, personnel databases, inventory databases, and other
databases containing data generated by business operations.
Distributed Database
Replicated and distributed copies or parts of databases on network servers at
a variety of sites.
Done to improve database performance and security
Distributed databases may be copies of operational or any other type of database.
External Database
Available for a fee from commercial sources or with or without charge on
the Internet or World Wide Web
Hypermedia Database
Hyperlinked pages of multimedia
5.10 Composite Information Systems
One important category of strategic applications involves inter-corporate linkage or intra-

corporate integration. Applications in this category require multiple systems to work
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together. This category of Information systems is called as Composite Information Systems
(CIS).
5.11 Summary
This unit introduced the concepts of database and DBMS. This unit also introduced the
steps in designing the database and highlighted the importance of normalization. This unit
also introduced the types of data bases and data model and also application of DBMS in
business.
5.12 Keywords:
Database, DBMS, Data Model, Normalization
5.13 Exercise
1. Explain DBMS.
2. What are different types of DBMS?
3. What is data model? Explain object oriented data model.
4. What is Normalization and list the different normal forms?
5. What is DDL, DCL, DML?
5.14 References
1. Database Management System by Korth
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UNIT 6: Data Warehouse and Introduction to Enterprise Systems
Structure
6.1 Data Integration and Strategies Data Planning Date Warehousing
6.2 Introduction to Enterprise Information System
6.3 Summary
6.4 Keywords
6.5 Exercises
6.6 References

Know data integration and strategies
Know the concept of data warehousing
Know Enterprise Information System
6.1 Data Integration and Strategies Data Planning Date Warehousing
Data integration involves combining data residing in different sources and providing users
with a unified view of these data. This process becomes significant in a variety of
situations, which include both commercial (when two similar companies need to merge
their databases) and scientific (combining research results from different bioinformatics
repositories, for example) domains. A complete data integration solution encompasses
discovery, cleansing, monitoring, transforming and delivery of data from a variety of
sources.
Integration solutions enable you to understand, cleanse, monitor, transform and deliver
data, as well as to collaborate to bridge the gap between business and IT.
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Data Warehousing
Data collections used for transactions
Accumulation of transaction data useful
Data warehouse: large database
Typically relational
Supports decision making
Data copied from transactional database
Data mart: collection of data focusing on particular subject
Transactional database not suitable for business analysis
Only current data
Not historic
Data warehouse requires large storage capacity
Mainframe computers used
Scalability issue
Phases in Building a Data Warehouse

Begin building data warehouse after equipment secured
Extraction phase
Create files from transactional database
Transformation phase
Cleanse and modify data
Loading phase
Transfer files to data warehouse
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6.2 Introduction to Enterprise Information System:
Enterprise Information System (EIS)

Functional systems include Accounting System, Financial System, HRIS, MkIS etc.
Enterprise Information System can perform many types of functions. It is an integrated
combination of all business information systems.
Therefore,
EIS is an integrated cross functional software system that automates all the
functions of an enterprise to improve its efficiency and profitability.
EIS system deals with the planning and use of resources used in the business.
Resources are Finance, Manufacturing, HR, Materials.
EIS is a package encompassing all major functions of the business.
EIS is a way to integrate the data and processes of an organization into one single
system.
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EIS systems use a unified database to store data for various functions found
throughout the organization.
Ex of EIS software are SAP, Microsoft Dynamics, JD Edwards, Oracle.
Enterprise Management System (EMS)
Fig: Components of Enterprise Management System (EMS)
A system that manages the whole business or enterprise is called EMS. It consists of
following components.
CAD/CAM/CAE: The systems which handle design, manufacturing and
engineering functions and provide the same to ERP in its manufacturing
application.
AMS: Keeps track of employees attendance for personnel planning, availability
and scheduling.
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DMS: Designed to keep important documents (employee document, tax document
etc) in database for viewing, sending messages & for document support in
transaction handling.
CMS: Used for tracking the communication made through e-mail, chat, video
conferencing, telephone in the organization. ERP uses CMS for all its
communication needs of recording an event.
SMS: Handles the security (warning signals, alarms, movement of employees

captured by CCTV) of the business operations.
EDI: Electronic Data Interchange System assists ERP in connecting two systems
electronically for email, data transfer. Used to handle e-commerce.
6.3 Summary
This unit introduced the concepts of Data Integration and Strategies, Data Planning, Date
Warehousing and to Enterprise Information System.
6.4 Keywords
Data integration, data ware housing, EIS.
6.5 Exercise
1. Explain the need for data integration.

2. Explain data warehousing.
3. With the help of diagram explain EMS.
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6.6 References

Tata MC-Graw HILL.
3. Management Information System by James OBrein
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UNIT 7: Introduction to Business Systems
Structure
7.1 Evolution of enterprise Information system
7.2 Emergence of ERP
7.3 ERP systems
7.4 ERP- the Enterprise Solutions
7.5 ERP-Market
7.6 E-CRM Systems
7.7 Customer Service and Support Automation
7.8 Summary
7.9 Keywords
7.10 Exercise
7.11 References

Know about role of enterprise system in organization
Know different modules in ERP
Know about E-CRM
Know how ERP is implemented in organization
7.1 Evolution of enterprise Information system
The evolution of EIS systems closely followed the spectacular developments in the field of
computer hardware and software systems. Organizations start with stand-alone applications
or Legacy systems.
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During the1960s most organizations designed, developed and implemented
centralized computing systems, mostly automating their inventory control systems
using inventory control packages (IC). These were legacy systems based on
programming languages such as COBOL, ALGOL and FORTRAN.
Material requirements planning (MRP) systems were developed in the 1970s which
involved mainly planning the product or parts requirements according to the master
production schedule. Following this route new software systems called
manufacturing resources planning (MRP II) were introduced in the 1980s with an
emphasis on optimizing manufacturing processes by synchronizing the materials
with production requirements. MRP II included areas such as shop floor and
distribution management, project management, finance, human resource and
engineering.
EIS systems first appeared in the late 1980s and the beginning of the 1990s with the
power of enterprise-wide inter-functional coordination and integration. Based on the
technological foundations of MRP and MRP II, EIS systems integrate business
processes including manufacturing, distribution, accounting, financial, human
resource management, project management, inventory management, service and
maintenance, and transportation, providing accessibility, visibility and consistency
across the enterprise.
During the 1990s EIS vendors added more modules and functions as add-ons to
the core modules giving birth to the extended EISs. These EIS extensions include
advanced planning and scheduling (APS), e-business solutions such as customer
relationship management (CRM) and supply chain management (SCM).
Nowadays Web based Enterprise systems having all the modules integrated to one
is on the go. The Web-Based Enterprise Management (WBEM) is a set of industry
standards that an enterprise can use to manage its information operations in the
distributed computing environment of the Internet.
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7.2 Emergence of ERP
Enterprise Resource Planning or ERP is one the most common term used among corporate
world, business school and in the technology structure. There are several definitions of the
ERP, but the term can be best understood if each word is looked at individually.
Enterprise refers to any organization with aspiration and business motive. In any
organization, there are several resources in form of human capital, plant, machinery,
capital, etc. Every organization is looking at ways to use all resources in optimal manner
and to get the most out of them. Therefore, for effective utilization of these resources,
organization needs to set about controls and check points around them. These control and
check points are known as strategic planning, for example, inventory planning, sales
planning, human-resource planning, financial planning, etc.
ERP software looks to combine all the resource planning and execution at the
corporate level. This facilitates tracking of resources and supplementing executive
decision. ERP is an integrated information system which utilizes a central database and has
a common computing platform, which assists in effective resource planning to ensure
business transactions.
Advent of Enterprise
The last couple of decades or so has seen the emergence of techniques to improve
productivity. However, with the advent of information technology, ERP has been in the
forefront in organizational success. Traditionally, all organizations were built of different
departments undertaking distinct task such as manufacturing, sales, operations, human
resource, finance, etc. A thought prevailed that if individual departments could meet their
respective goals, organization will also meet its objective. However, it has been observed
that different departments have their own objectives and productivity metrics. These
departmental objectives may not align to the overall organizational objective. For example,
sale team makes a commitment of next-day delivery when the distribution team may not be
ready for that task. So there were always inter-department conflicts plaguing the
organization.
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This led in the development of enterprise approach towards management. Under enterprise
approach, the whole organization works towards a single set of objective; all the
departments need to develop their objective in line with the organizational objective. The
whole organization works as a single unit with departments working as a sub-unit.
Enterprise Resource Planning System
As organization started moving towards enterprise approach, focus started shifting from
function to process. Delivering customer delight became not just a sales function, but is part
of the performance delivery process. This change of focus reorganized company structures.
Earlier individual department had their own system catering to their own needs and
demand. This led to duplication of data, lack of integration between department/systems
and continuity in flow of information.
ERP system looks at the process as a whole. For example, a goods receipt will lead to
update in stock inventory, update in purchase order history, update accounts payable, and
update need of inspective of new stock.
ERP system leads to removal of data duplication as one entry or activity can be captured
just once, and this record cannot be accessed without proper authorization.
ERP systems lead to standardization of data as entry fields are not left to user discretion.
ERP System helps in data tracking from origin to destination.
7.3 ERP Systems

ERP (Enterprise Resource Planning)
Enterprise is a business organization which has a goal or set of objectives. It consists
of resources such as human resource, machines and tools, money etc. With the help of
resources, organization is able to produce good/services.
Planning is deciding in advance what to do in future. Therefore planning of these resources
is very important to satisfy goals and objectives of business.
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Fig: Components of ERP
Modules of ERP
Sales: Sales, distribution, invoicing, order processing.

Production: Production planning and control, quality assurance, scheduling and
dispatching.
Materials: Materials Management, purchases, inventory.
Finance: Finance and accounting, cash management, asset management, balance
sheet processing.
Personnel: Personnel management, recruitment, payroll, attendance, training.
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ERP in Action
Production
Staffing Inventory
Sales
Purchasing
Planning
Order Tracking
Source: BusinessWeek Intl
Features of ERP
ERP facilitates company-wide Integrated Information System covering all

functional areas like Manufacturing, Selling and distribution, Payables, Receivables,
Inventory, Accounts, Human resources, Purchases etc.,
ERP performs core corporate activities and increases customer service and thereby
augmenting the Corporate Image.
ERP bridges the information gap across the organization.
ERP provides for complete integration of Systems not only across the departments
in a company but also across the companies under the same management i.e if one
company uses ERP and its other branch also uses ERP, then both can access
information of each other.
ERP is the only solution for better Project Management. A project is a task that
involves team work and that has to be completed within a given period of time. In
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order to complete a project, the organization will have to access information from
all functional areas. ERP provides management with all these information.
ERP allows automatic introduction of latest technologies like Electronic Fund
Transfer (EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video
conferencing, E-Commerce etc.
ERP eliminates most of the business problems like Material shortages, Productivity
enhancements, Customer service, Cash Management, Inventory problems, Quality
problems, Prompt delivery etc.
ERP provides business intelligence tools like Decision Support Systems (DSS),
Executive Information System (EIS), Reporting, Data Mining and Early Warning
Systems (Robots) for enabling people to make better decisions and thus improve
their business processes.
Benefits of ERP
Business integration.
Efficient
Flexibility.
Better Analysis & planning capabilities.
Use of latest technology.
Better management of resources and thus reducing the cost.
Customer satisfaction increases due to shorter delivery cycle.
Transparency between business partners & customers.
Due to faster processing technology, management can see the information in their
perspective and take different view of the business.
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ERP Implementation Steps / 9 Steps in ERP Implementation
Fig: Steps Implementation of ERP
1. A user meeting is arranged to explain the ERP & process of implementation. All the
requirements of the business are documented and Requirement Derivation
Document (RDD) is prepared.
2. ERP product specifications are mapped on to RDD to check if it satisfies all the
requirements of the business. A Deviation Requirement Derivation Document
(DRDD) is prepared which has the shortcomings of the ERP product specifications.
3. The RDD & the DRDD is explained for understanding & approval. This process is
called gap analysis.
4. ERP is configured according to the DRDD and RDD.
5. The product is functionally implemented.
6. The product is technically implemented.
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7. The solution is tested with data of actual business scenario. The solution is then
demonstrated to the users for their understanding & confirmation. The users are
trained to run the solution & resolve the difficulties in operations of the system
solution.
8. The ERP is implemented and the change over from the manual system to the ERP
solution is planned.
9. Log book of system usage is kept to make note of problems, solutions,
modifications. The document is updated with changes. The system performance is
checked. Review meeting with users is arranged to get the feedback from the users.
Major Hassles/Problems/Challenges/Limitations/Disadvantages in Implementation of

ERP
Changeover of a whole business process to a new process is difficult.

When a new ERP is implemented it may cause burden to the users as their
involvement is more (users have to do requirement analysis, undergo training, test,
provide feedback and transfer all manual work to the system). Thus the users will
resist or oppose the system.
The limited technological awareness of the users.
The inability of the users to change over from the old conventional systems to the
technological based new systems.
Some users dont appreciate the IT applications as they may not feel comfortable to
use the system.
A lack of clarity on the business requirement will impact the ERP solution to
business i.e if the users are not aware of business process carried out, then ERP will
not function according to the user need.
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ERP Selection
ERP selection involves two criteria,

Vendor Evaluation
Factors that are considered while evaluating a Vendor are,
1. Business strength of the vendor so that the product will be quickly
developed and hence results in faster delivery.
2. Quality, price of the product provided by the vendor.
3. R & D investment in the product.
4. Future plans of the vendor.
5. Market reach & resource strength of the vendor.
Technology Evaluation
1. Client server architecture & its implementation: Client server architecture is
necessary since users make use of internet to carry out their activities.
2. Front end tools (ASP.net, Java etc) & back end tools (Data Base
Management System, ORACLE, MySql) used for the data, process &
presentation management.
3. Speed of data transfer.
4. Support system technologies like bar coding, EDI, imaging, communication
& network.
5. Hardware and Software configuration management.
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7.4 ERP- the Enterprise Solutions:
Enterprise resource planning (ERP) is business management softwareusually a suite of

integrated applicationsthat a company can use to collect, store, manage and interpret data
from many business activities, including:-
Product planning, cost and development
Manufacturing or service delivery
Marketing and sales
Inventory management
Shipping and payment
ERP provides an integrated view of core business processes, often in real-time, using
common databases maintained by a database management system. ERP systems track
business resourcescash, raw materials, production capacityand the status of business
commitments: orders, purchase orders, and payroll. The applications that make up the
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system share data across the various departments (manufacturing, purchasing, sales,
accounting, etc.) that provide the data.
ERP (Enterprise Resource Planning) systems typically include the following

characteristics:
An integrated system that operates in (or near) real time without relying on periodic
updates
A common database that supports all applications
A consistent look and feel across modules
Installation of the system with elaborate application/data integration by the
Information Technology (IT) department, provided the implementation is not done
in small steps
An ERP system covers the following common functional areas. In many ERP systems
these are called and grouped together as ERP modules:
Financial accounting: General ledger, fixed asset, payables including vouchering,
matching and payment, receivables cash application and collections, cash
management, financial consolidation
Management accounting: Budgeting, costing, cost management, activity based
costing
Human resources: Recruiting, training, roistering, payroll, benefits, 401K,
diversity management, retirement, separation
Manufacturing: Engineering, bill of materials, work orders, scheduling, capacity,
workflow management, quality control, manufacturing process, manufacturing
projects, manufacturing flow, product life cycle management
Order Processing: Order to cash, order entry, credit checking, pricing, available to
promise, inventory, shipping, sales analysis and reporting, sales commissioning.
Supply chain management: Supply chain planning, supplier scheduling, product
configuration, order to cash, purchasing, inventory, claim processing, and
warehousing (receiving, put away, picking and packing).
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Project management: Project planning, resource planning, project costing, work
breakdown structure, billing, time and expense, performance units, activity
management
Customer relationship management: Sales and marketing, commissions, service,
customer contact, call center support - CRM systems are not always considered part
of ERP systems but rather Business Support systems (BSS).
Data services : Various "selfservice" interfaces for customers, suppliers and/or
employees
7.5 ERP-Market
Enterprise resource planning (ERP) markets help businesses, as well as nonprofits

and government agencies, increase productivity. ERP applications are information
systems that bind closely various corporate functions, including human resources,
finance and inventory management, while enabling a company to efficiently
manage its customers and suppliers.
The ERP market is a global exchange in which software providers and support
technicians sell enterprise resource management software to businesses. The market
is global in nature and includes businesses of all sizes, according to
ERPWwire.com, an online ERP resources provider.
Some of the top-tier ERP vendors are SAP-AG, BAAN, PeopleSoft, Oracle
Application and J.D.Edwards. These companies are covering the major ERP market
revenue.
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Significance
The ERP market plays a key role not only in corporate decision-making processes but in
global transactions. A company may be at a competitive disadvantage if it cannot find
adequate resource planning applications to boost competitiveness and improve operating
processes in the short and long terms, according to CIO Magazine, an information
technology publication.
Participants
ERP market participants vary by economic stature, industry and operating strategy, notes
CIO Magazine. Large organizations typically purchase ERP software with broad
applicability, including corporate fields such as accounting, finance, human resources
management, sales and purchasing management. Smaller clients, however, buy limited-
scope resource planning software for operating needs.
7.6 E-CRM Systems
It is an integrated cross-functional enterprise software system that automates the

process of marketing, sales and service to the customer. CRM has got modules and tools
that help the business enterprise and its employees to provide fast, better and consistent
service to the customers.
Phases of CRM
1. Acquire: CRM software tools & database help in acquiring new customers by
doing superior job of contact management, sales prospecting, selling, direct
marketing & fulfillment.
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2. Enhance: CRM account management and customer service and support tools help
to keep customers happy by giving superior service, thus increase profits to
business.
3. Retain: CRM analytical software & database help a company proactively identify
and reward its most loyal & profitable customers to retain & expand their business
via targeted & relationship marketing programs.
Modules/Functions of CRM
Fig: CRM
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1) CRM Life Cycle: Refer Phases of CRM
2) CRM Functional Solutions
Direct Marketing
Cross Sell and Up Sell
Proactive Service
Sales Force Automation
Customer Support
3) CRM Integrated Solution

All the data of customers will be stored in the db. These data can be accessed by business
partners, company and customers whenever required via internet. Hence there is
collaborative fulfillment.
Approaches to CRM
1) Data driven CRM
Customer Analysis and Customer Evolve CRM

Data Processing Intelligence Strategies
Implement
Strategies
Evaluate and
Modify
Fig: Data-driven CRM
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This approach is customer intelligence driven, where CRM strategies are based on
customer intelligence. Customer intelligence is the process of gathering and analyzing
information of customers from the db (Name, Gender, Purchase quantity, their preferences,
problems etc) in order to build effective customer relationship and improve strategic
decision making.
The customer intelligence is built using the information from sales force automation,
customer service etc.
This approach relies on past data and information.
For ex, a customer may not be happy with the quality of the product. CRM analysis and
processes this information from the customer data. This process is called Customer
Intelligence. The organization then builds up strategy and implements it. Finally evaluation
is made to check if customer is satisfied. If not, modification is made.
2) Process Driven CRM (Analytical CRM)
Initiation Transition Pre- Post-

of Service to Service Service
service service
Evaluate
Knowledge
Customer Management System
Data
Fig: Process Driven CRM
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Here, in every process customer detail is gathered and service is provided. Based on
that knowledge is built. It uses set of process to understand customer behavior.
In this approach customer is provided with tools to interact with the organization.
CRM system has capability to capture these interactions, analyze them, process and
formulate a strategy to give better service to the customer.
The customer service process cycle has following phases. Taking the ex. of Hotel
room booking,
Initiation of service: Customer calls up and enquires if there is room
availability or not. If it is available room is booked and this information
is stored in db.
Transition to service: Customer arrives and shows his ID card for
proof. He fills the form and the data is again stored in db.
Pre service: Luggage is carried to his room.
Service: The customer orders for tea, breakfast, dinner and laundry
service. This data on his taste and preferences is also stored in db.
Post service: The customer pays the bill and feedback form is given.
This will build up the knowledge of the customer and improvement in
service is made next when the customer visits.
Difference between Data Driven & Process Driven approaches
Data driven is reactive as it relies on customer data history and customer

intelligence.
Process driven is proactive that uses customer knowledge.
Process driven is more effective than Data driven.
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Trends (Types) in CRM
Four types of CRM
1) Operational CRM
Automates all the process involved in sales and service of products i.e whatever
items customer purchase and the service provided to them will be stored in the db.
Records every interaction with the customer and it is used by different department.
It does not have any intelligent tools to analyze the product demand, forecast and
make comparisons.
2) Analytical CRM
Extracts in depth customer history, preferences and profitability information from
the database.
It is implemented using several analytical tools such as data mining and statistical
models to extract vital data about customers, analyze, predict & derive customer
value and behavior & forecast demand.
3) Collaborative and Portal (Web) based CRM
It is internet/extranet based CRM.
Enables easy collaboration with customers, suppliers & partners.
Improves efficiency & integration throughout the supply chain.
Allows greater responsiveness to customer needs through sourcing of products &
services outside the enterprise.
Provides all users with the tools & information that fit their individual roles &
preferences.
Empowers all employees to respond to customer demands more quickly & become
truly customer focused
CRM Vendors: SAP, SEIBLE etc.
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Benefits of CRM
Allows a business to identify & target their best customers who are most profitable
to the business.
Real time customization & personalization of products & services based on
customer wants, needs, buying habits & life cycles.
Keeps track of customer history.
Helps the company to provide consistent customer experience & superior service to
the customer.
7.7 Customer Service and Support Automation
Applications of CRM
Fig: Applications of CRM
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1) Contact & Account Management
CRM software captures & tracks data of customers via telephone, fax, website and e-mail.
It stores the data in a common db and makes the data available throughout the company.
2) Sales
CRM system provides sales representatives with software tools & company data sources
they need to support, and manage sales activities in a better way. i.e if the sales
representative want to meet the customers then he will schedule the date and time of
meeting the customers in the db. The CRM software also consists of product details which
the sales rep will make use of whenever required.
CRM also consists of details of customer orders and helps the business organization to
deliver the product on time to customers.
3) Marketing & Fulfillment
CRM system helps marketing professionals to carry out marketing tasks such as
forecasting, planning, profit making, to get competitors information etc. They can also go
for Direct Marketing by giving special offers on particular occasions to customers.
4) Customer Service & Support

CRM helps service reps to give service & support to the customer using call centre
software, help desk software and web based self service. Customers can get to know their
tariff rates of their network by calling customer care executives. They can also visit
companys website and get details on their own (Web based self service).
5) Retention & Loyalty Programs

CRM systems try to help company identify, reward & market to their most loyal &
profitable customers.
Tools like data mining and analytical software are used to identify most profitable
& loyal customers and then reward them by giving them special discounts, offers,
coupons etc.
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7.8 Summary
This unit introduced enterprise systems used in business to achieve competitive advantage.
7.9 Keywords
ERP, CRM, E-CRM, Enterprise Systems, ERP Implementation.
7.10 Exercise
1. Explain ERP system in detail.

2. List the advantages and disadvantages of ERP systems.
3. Explain the steps involved in implementation of ERP in an organization.
4. Explain E-CRM in detail.
5. Explain the approaches to CRM.
6. Discuss the role of data warehouse and data mining in CRM.
7. Discuss the emergence of ERP.
8. Discuss the evolution of enterprise Information system
7.11 References

Tata MC-Graw HILL.
3. Management Information Systems by Effy Oz.
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UNIT 8: Customer Relationship Management
Structure
8.1 Enterprise marketing automation (EMA)
8.2 Comparative Analysis of E-CRM Software Vendor and Products
8.3 Evaluating an E-CRM Product
8.4 Summary
8.5 Key Words
8.6 Exercise
8.7 References

know about marketing systems
know about different vendors of CRM solutions
Evaluating a CRM product
8.1 Enterprise marketing automation (EMA)
Enterprise marketing automation is part of customer relationship management module.

Enterprise marketing automation can also be an independent software installed by the
company. The main function of the enterprise marketing automation module is to run
different marketing programs in the organization. The enterprise marketing automation
module also helps the given organization develop a business plan.
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Fig: Marketing Information System
An enterprise feeds from the customer data which is maintained by the company.
Therefore, the module helps the company to maintain, manage and filter customer-related
information.
When a company decides to start a marketing campaign for a particular product than the
enterprise marketing automation tool provides the company a short list of customer who
could be interested in the product. This filtration of customer is done based on customer
segmentation.
Customer Segmentation
Customer segmentation is an important parameter to consider when designing marketing
campaigns. Customer segmentation technique splits the customer on various parameters. If
the marketing campaign satisfies those customer parameters, then, enterprise marketing
automation tool will provide their list.
Parameters considered for customer segmentation are as follows:
Homogeneity within a particular customer segment.
Heterogeneity across different industry and customer segment.
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Customer should respond in an identical manner to a particular marketing
campaign.
Customer should be reachable through the marketing campaign.
Organization should be able to create a marketing strategy for the group.
Segmentation Strategy
An organization looks to target a particular segment for following reason:
Organizations are better able to understand and satisfy needs of the customer.
Organizations are able to generate higher profits through segmentation.
Segmentation provides a great opportunity of growth.
Segmentation can create a long and fruitful customer relationship.
Segmentation can lead to higher market share.
However, to devise a successful segmentation strategy is difficult. Organizations typically
run into challenges around selection of variables to define segment. There is also a
difficulty in identifying correct algorithms for segmentation.
Components of Enterprise Marketing Automation
There are about five components of enterprise marketing automation. They are as
follows:
1. Promotions: These are the activities undertaken by organization to increase their
sales. Promotions can be categorized as cross selling or up selling. In cross selling,
customers are offered similar products to one they have already bought. The aim of
cross selling is to satisfy all the customer requirements. In up selling customer are
offered expensive product as well as an upgrade to the existing products. Up selling
is more profitable, and it is in top up of existing sale.
2. Event Based Marketing: This involves registering customers for seminar and in
case web cast via the Internet. Companies look forward to sponsoring events and
include their products as part of the marketing event.
3. Loyalty and Loyalty Programs: Loyalty is defined as continued commitment of a
customer to a particular product, brand or organization. Customer tends to maintain
their loyalty if companies provide value to them and/or it is much expensive to
change product brand or organization.
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4. Partner Management: It is a marketing campaign organization joins hands to
promote their and partners products. This could also be referred to as joint
promotion.
5. Response Management: This gives flexibility in marketing campaigns based upon
the initial reaction from the customer. It is a response management in real time.
8.2 Comparative Analysis of E-CRM Software Vendor and Products
The Oracle CRM software portfolio includes Oracle Siebel CRM, Oracle CRM on
Demand, Oracle E-Business Suite (EBS), PeopleSoft Enterprise, Oracle Contact Center
Anywhere (CCA), RightNow and the newest flagship product, Fusion CRM. Oracle counts
over 6,000 global CRM customers, about 6 million users and approximately 130 million
self service users.
Siebel Systems was the undisputed CRM software leader from the 90's through the turn of
the century, peaking at 45% market share in 2002. Since being acquired in 2005 by Oracle,
the software solution has continued its assertive push however with stiff competition from
arch rival SAP, and multiple ways to measure market share, both SAP and Oracle claim the
top CRM software position. Most analysts give Oracle a slight edge, however, it really
comes down to what measures are used.
Oracle Siebel is a mature and impressive customer relationship management system. The
applications roots were deep in Sales Force Automation (SFA), however, over several years
the company acquired or built-out a broad CRM suite with dozens of industry specific
vertical market CRM solutions.
Oracle Siebel, like most legacy client-server CRM systems, has a reputation for high risk,
and expensive deploymentsleaving this type of enterprise software solution for
midmarket and enterprise-level customers and budgets. In fact, failed implementations and
frustrated customers were the primary impetus for the rise and sky-rocketing growth of
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cloud or software as a service (SaaS) CRM applications. Not to be left out of a major
market movement, Oracle also delivers its Oracle CRM on Demand for SaaS CRM
prospects as well as RightNow for customer service and customer experience prospects and
Oracle Fusion for higher-end, broad-based CRM. Over the longer run, Oracle Fusion will
become the flagship product, however, that is still several years into the future.
The SAP CRM system is a fully integrated customer relationship management (CRM)
application that targets business software requirements of midsize and enterprise
organizations across industries and locations.
SAP's CRM system offers several integrated modules that automate traditional customer
facing process areas such as SAP CRM Sales (sales force automation), SAP CRM
Marketing, SAP CRM Service, SAP CRM Interaction Center, SAP CRM Web Channel
(with E-Marketing, E-Service and E-Commerce) and SAP CRM Partner Channel
Management.
Similar to arch rival and top competitor Oracle, SAP has more recently released two SaaS
CRM systemsSAP Sales on Demand which is a cloud CRM extension for the company's
on-premise ERP (Enterprise Resource Planning) application and SAP Business ByDesign
which is a full ERP cloud suite that includes CRM.
For businesses seeking a wholesale transition to the cloud, the Business ByDesign cloud
product is the only option available from SAP. Business ByDesign is a purpose built cloud
and SaaS product covering the breadth of ERP and CRM.
Salesforce.com is still the (relative) new guy, but no longer a small guy. The cloud CRM
pioneer and advocate is now the third largest CRM software company in terms of market
share (although Microsoft also asserts this position and the two are very close in CRM
market share). While not nearly the size if its major software competitorssuch as Oracle,
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SAP and Microsoftit has nonetheless secured over two million global customers and for
the most part continues to show higher growth than the market average.
Salesforce.com became a leading vendor of customer relationship management software
applications using the software-as-a-service or cloud computing model. The company's
flagship product is a CRM system designed for businesses of all sizes and industries
worldwide and focusing on the disruptive opportunities driven by cloud, social and mobile.
Salesforce is also advancing its platform-as-a-service (PaaS) solution called Force.com and
managing an eco-system of somewhat integrated third party products in an online
marketplace called AppExchange. Salesforce.com prices its CRM software solutions to
businesses on a subscription basis, primarily through direct sales but also less frequently
through a business partner channel. The software solution is not available for on-premise or
private cloud use.
Microsoft is in the number four CRM software market position. As is often the history with
Microsoft, it takes them a few versions to get a new product right, but once they get it they
have the proven experience is scaling growth like no other competitor.
Microsoft Dynamics CRM 2011 is the 5th version release for the customer relationship
management software. Some analysts point out there was never a version number two and
Microsoft accelerated their version count as they skipped from version one to version three.
However, with the most recent name change from CRM 5 to Dynamics CRM 2011,
Microsoft has moved away from the sequential version numbering scheme.
Dynamics CRM is somewhat unique in an increasingly crowded CRM software market to
use the same code base for both on-premise and software-as-a-service (SaaS) delivery
models. It also gives customers more choices in hosting delivery by supporting multiple
public clouds for SaaS delivery. Customers have the option to subscribe to Dynamics CRM
directly from Microsoft or may choose from a number of hosting providers and specialized
Microsoft channel partners.
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Microsoft CRM also allows cloud customers and business partners to install sever-side
code in the Microsoft cloud. This permits greater extensibility for a number of business
processes not supported by some competitors such as Salesforce.com. Microsoft's CRM
solution will also continue to advance in combination with Azure, its high profile public
cloud platform. Additional unique Microsoft CRM product capabilities include the tightest
integration with Outlook, Office & SharePoint; highly configurable role-based workflows;
business intelligence (BI) and analytics; and a suite of strong technology tools for software
integration and customization.
SugarCRM doesn't match the company size or global brand recognition of the prior four
CRM vendors, but nonetheless is the number five market share leader and a very strong
competitor in its target markets.
Sugar is a maker of open source CRM software, and while there are dozens of open source
CRM software systems in the market, Sugar CRM stands alone and ahead of the pack
primarily due to offering an extremely easy to use product that is functionally rich and at a
very low price point. Sugar CRM is easily the most cost effective CRM solution in the
market.
Open Source CRM software like Sugar is proliferating in large part because these systems
provide customers with choices outside of the traditional commercial or proprietary CRM
applications like SAP, Oracle, Salesforce and Microsoft. For companies seeking increased
software control to accommodate challenging industry requirements, unique business
processes, complex feature sets or budgetary constraints, open source CRM software can
provide both a viable alternative and an entry point to an enterprise-wide open source
software technology strategy.
Very low acquisition costs, unfettered extensibility, choice in software delivery methods
such as SaaS/cloud or on-premise, freedom from vendor lock-in and growing support from
global ecosystems are driving increased attention and adoption of open source CRM
systems.
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8.3 Evaluating an E-CRM Product
Vendor Evaluation
Factors that are considered while evaluating a Vendor are,
1. Business strength of the vendor so that the product will be quickly
developed and hence results in faster delivery.
2. Quality, price of the product provided by the vendor.
3. R & D investment in the product.
4. Future plans of the vendor.
5. Market reach & resource strength of the vendor.
Technology Evaluation
1. Client server architecture & its implementation: Client server architecture is

necessary since users make use of internet to carry out their activities.
2. Front end tools (ASP.net, Java etc) & back end tools (Data Base
Management System, ORACLE, MySql) used for the data, process &
presentation management.
3. Speed of data transfer.
4. Support system technologies like bar coding, EDI, imaging, communication
& network.
5. Hardware and Software configuration management.
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8.4 Summary
This unit introduced marketing systems and evaluation of CRM solution. This unit also
discussed about different vendors of CRM solutions.
8.5 Keywords
CRM, MKIS, CRM Vendors
8.6 Exercise
1. List of the vendors of CRM solutions.

2. Explain Enterprise marketing automation.
3. How to evaluate a CRM before procuring to an organization for implementation.
8.7 References
1. Waman S.Jawadekar ,Management Information Systems,IIIrd Edition

3. Management Information System by Effy Oz
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MODULE 3
UNIT 9: Business Intelligence Architecture and Tools

Structure
9.1 Introduction
9.2 Business intelligence
9.3 Business intelligence architecture
9.4 Business intelligence Tools
9.5 Data mining
9.6 Data mining methods
9.7 Data mining frame work
9.8 Summary
9.9 Key Words
9.10 Exercise
9.11 References

know about Business intelligence, architecture and tools of business intelligence
know about concepts of Data mining
9.1 Introduction
The current business environment is constantly evolving. The global economic scenario is
providing opportunities as well as challenges. The factors affecting business environment
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are consumer needs, globalization, and government policies, etc.
In such a business environment, organization basically has four action steps. The
organization can be reactive, anticipative, adaptive, or/and proactive. For this, organization
can develop a new strategy, get into partnership, etc.
Today most of the businesses are having a computerized business support. This support is
in form of decision support system, business analysis, etc.
The main objective of business intelligence is to bridge the gap between organization
current status and its desired position. Business intelligence helps organization achieve
commercial success along with sound financial management.
Business intelligence is framework designed to support decision-making process. This
framework combines architecture, database, analytical tools and applications. Business
analytics forms an integral part of business intelligence.
9.2 Business Intelligence

Framework of Business Intelligence
More and more businesses are moving towards business intelligence. The reason for this
movement is the business environment. Organizations are forced to capture, store and
interpret data. This data is at the core of business success. Organizations require correct
information for any decision-making process.
Business intelligence combines data warehousing, business analytics, performance,
strategy and user interface. Business receives data from various sources. This data is
capture in the data warehouse where it is stored, organized and summarized as per further
utilization. Authorized users can access this data and work on it to get desired results. This
result than are shared to executives for decision-making process. These data results can be
published through dashboards or share points.
Benefit of Business Intelligence
The benefits of Business intelligence are as follows:
Business intelligence is faster more accurate process of reporting critical
information.
Business intelligence facilitates better and efficient decision-making process.
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Business intelligence provides timely information for better customer relationship
management.
Business intelligence improves profitability of the company.
Business intelligence provides a facility of assessing organizations readiness in
meeting new business challenges.
Business intelligence supports usage of best practices and identifies every hidden
cost.
Business intelligence usage can be optimized by identifying key projects on which
company would like to focus. This process of highlighting key projects is called business
intelligence governance.
The importance of business intelligence is growing, and its usage has proliferated across
various types of users. Earlier, it was in the domain of IT staff, but now business team is
also independently handling business intelligence.
9.3 Business Intelligence Architecture
Business Intelligence Architecture and Components

The main components of business intelligence are data warehouse, business analytics and
business performance management and user interface.
Data warehouse holds data obtained from internal sources as well as external sources. The
internal sources include various operational systems.
Business analytics creates a report as and when required through queries and rules. Data
mining is also another important aspect of business analytics.
Business performance management is a linkage of data with business objectives for
efficient tracking. This business performance is then broadcasted to an executive decision-
making body through dashboards and share-point.
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9.4 Business intelligence Tools
Business intelligence is an important to ensure the following:

Various decision-makers and analyst have a direct and un-interrupted access to
data. The data been used across the organization should be non-disputable.
Decision makers spend their time analyzing the data rather than collecting and
formatting them.
Decision makers are able to focus their energy in improving the business process
rather than searching for data across systems.
Decision makers can instantaneously carry out what if analysis without much
manual intervention.
Data management is done from enterprise perspective rather than at a departmental
level.
Data is considered as a strategic resource rather than as an input for business
intelligence process.
Business forecast is used supply and demand side of business users.
Majority of the decision-making process is done through an automated process.
Data is shared effortlessly within the company.
Reports generated utilize primary and secondary data without any additional
efforts.
For business intelligence to ensure the above it is necessary that it has a robust architecture.
Business intelligence architecture is divided into six critical elements data management,
transformation tools and processes, data repositories, application tools for analysis,
presentation tools and operational processes.
1. Data Management
For to achieve data integrity following points need to be addressed. The 1st major point
organization is the need of the data. The organization must come to agreement that a
particular analytics will provide competitive advantage and enhance business performance.
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The next question which needs to be addressed is the source of the information. This
sourcing of data can be from enterprise itself, or it may be from the external sources. If the
source is within the organization than it is essential there is a common platform for all flow
of information.
The next question is the quantity of the data. Since there is large volume of data available,
based on the required company should gather data to have a normalized business behavior.
The next question is to make data valuable, once that is determined data management
comes from the picture, i.e. acquisition of data to retirement of data.
2. Transformation Tools
The required data needs to undergo ETL process. ETL process consists of extracting data,
transforming the data and loading the data. The process extracting data from the repository
is a straight-forward process. However, validation and cleansing of data is a difficult task.
This validation and cleansing of data is done through various well established business
rules. Transformation of data involves converting the data to standardized form.
3. Data Repositories
Organization can store data through data warehouses. Data warehouse sometime has data
mart, which is a partition to handle single business function. A metadata repository is used
to store data definition and technical information.
4. Analytical Tools and Presentation
There are several business tools available on the market, but it is essential to identify what
it intends to do with the data and then choose the tool.
5. Presentation Tools and Applications
Business intelligence can only work if end users are able to make sense out of that data.
Presentation tools should allow the users to manipulate complex data into to ad hoc reports
for company-wide distribution.
6. Operational Process
Operational Process determines how data management and business intelligence is to be
implemented within the organization. It deals with the question how the organization
creates manages data and different applications.
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9.5 Data Mining
Data warehouses are large databases containing historical transactions and other data.
However, data warehouses in themselves are useless. To make data warehouses useful,
organizations must use software tools to process data from these huge databases into
meaningful information. Because executives can obtain significantly more information
about their customers, suppliers, and their own organizations, they like to call information
gleaned with such tools business intelligence (BI) or business analytics. The two main
uses of these databases are data mining and online analytical processing. These terms are
often used interchangeably by some people.
Data Mining
Data warehouses could be regarded as a type of mine, where the data is the ore, and new
useful information is the precious find. Data mining is the process of selecting, exploring,
and modeling large amounts of data to discover previously unknown relationships that can
support decision making. Data-mining software searches through large amounts of data for
meaningful patterns of information.
Data mining has four main objectives:
Sequence or path analysis: Finding patterns where one event leads to another, later event.
Classification: Finding whether certain facts fall into predefined groups.
Clustering: Finding groups of related facts not previously known.
Forecasting: Discovering patterns in data that can lead to reasonable predictions.
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9.6 Data Mining Methods
Some data-mining tools are complex statistical analysis applications, and others use
additional tools which go beyond statistical analysis and hypothesis testing. While some
tools help find predefined relationships and ratios, they do not answer the question that
more powerful data-mining tools can answer: What are the relationships we do not yet
know? This is because the investigator must determine which relationships the software
should look for in the first place.
Several types of analytical software are available: statistical, machine learning, and neural
networks.
Artificial neural networks: Non-linear predictive models that learn through
training and resemble biological neural networks in structure.
Genetic algorithms: Optimization techniques that use processes such as genetic
combination, mutation, and natural selection in a design based on the concepts of
natural evolution.
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Decision trees: Tree-shaped structures that represent sets of decisions. These
decisions generate rules for the classification of a dataset. Specific decision tree
methods include Classification and Regression Trees (CART) and Chi Square
Automatic Interaction Detection (CHAID) . CART and CHAID are decision tree
techniques used for classification of a dataset. They provide a set of rules that you
can apply to a new (unclassified) dataset to predict which records will have a given
outcome. CART segments a dataset by creating 2-way splits while CHAID
segments using chi square tests to create multi-way splits. CART typically requires
less data preparation than CHAID.
Nearest neighbor method: A technique that classifies each record in a dataset
based on a combination of the classes of the k record(s) most similar to it in a
historical dataset (where k 1). Sometimes called the k-nearest neighbor technique.
Rule induction: The extraction of useful if-then rules from data based on statistical
significance.
Data visualization: The visual interpretation of complex relationships in
multidimensional data. Graphics tools are used to illustrate data relationships.
9.7 Data Mining Framework
Data mining consists of five major elements:

Extract, transform, and load transaction data onto the data warehouse system.
Store and manage the data in a multidimensional database system.
Provide data access to business analysts and information technology professionals.
Analyze the data by application software.
Present the data in a useful format, such as a graph or table.
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9.8 Summary
This unit introduced concepts of data mining and explained the notion of business
intelligence and its benefits to organizations.
9.9 Keywords
Data mining, Business intelligence, Data warehouse, data mart.
9.10 Exercise
1. Explain the role of business intelligence in organization.

2. What is data mining? List out its four objectives .
3. Explain with examples how data mining is used in business.
4. What are the different types of tools for mining data.
9.11 References:

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UNIT 10: OLAP and Application BI in Business
Structure
10.1 OLAP and multidimensional database modelling
10.2 Some BI Applications in SCM and procurement
10.3 Business Intelligence in various business applications
10.4 Summary
10.5 Key Words
10.6 Exercise
10.7 References

know about Business intelligence, architecture and tools of business intelligence
know about concepts of Data mining
10.1 OLAP and multidimensional database modelling
One of the critical components in the information technology age is the data. Data is the
source of all the information and information is valuable for decision making process.
Decision support systems are developed to support executive management and relevant
decision makers. In the modern era, there is large volume of information is available. Data
warehouse is required to store huge volume of data.
Since the data warehouse is supporting decision support system, therefore, it should be
subject oriented, integrated, collected over a period of time and static
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Data Warehouse
Data warehouse has subject oriented data. This subject oriented data could be information
such as sales, customer name, etc. Data warehouse excludes information, which is not
useful for decision-making process.
Data warehouse is developed as an integration of multiple heterogeneous data sources. As
the data source have their own data protocol, data processing is required while data
warehousing.
Data warehouse provides information with time as function. This gives historical
perspective to the information.
Once data is captured into the data warehouse, it cannot be changed.
Data within the data warehouse is maintained in form of star schema, snowflake schema
and galaxy schema.
Data Mart
The data mart is that portion of the access layer of the data warehouse which is utilized by
the end user. Therefore, data mart is a subset of the data warehouse. Data mart is usually
assigned to a specific business unit within the enterprise. Data mart is used to slice data
warehouse into a different business unit. Typically, ownership of the data mart is given to
that particular business unit or department.
The primary utility of data mart is business intelligence. A data mart requires very less
investment compared to data warehouse and therefore it is apt for smaller business. Set up
time for data mart is very less again making it practical for smaller business.
The main advantages of data mart are as follows:
It provides easy access to daily used data.
It improves decision making process for end user.
It is easy to create and maintain.
Online Analytical Processing (OLAP)

OLAP or Online Analytical Processing is a concept in which data is analyzed through
multiple dimensions with help of structure called cube. OLAP helps in converting data into
information.
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The main objective of OLAP is to summarize information for decision making process
from large data base. The report generated through OLAP can be presented in a format as
per the requirement of end user.
The advantages of OLAP are as follows:
It ensures that response to query is quicker consistently.
It provides facility to work with data which are difficult to query through SQL.
It lets user create view with the help of spreadsheet.
There are three types of OLAP multi-dimensional OLAP, relational OLAP and Hybrid
OLAP. In multi-dimensional OLAP data is usually stored in proprietary structure suitable
for multi-dimensional analysis. In relational OLAP data base is structure through standard
database in star or snowflake schema. A combination of multi-dimensional OLAP and
relational OLAP is the hybrid OLAP.
OLAP applications operate on data organized especially for such use or process data from
relational databases. A dynamic OLAP application responds to commands by composing
tables on the fly. To speed up response, databases can be organized in the first place as
dimensional.
In dimensional databasesalso called multidimensional databasesthe raw data is
organized in tables that show information in summaries and ratios so that the inquirer does
not have to wait for processing raw data. Many firms organize data in relational databases
and data warehouses but also employ applications that automatically summarize that data
and organize the information in dimensional databases for OLAP. Cognos, Hyperion (a
subsidiary of Oracle), and many other companies sell multidimensional database packages
and OLAP tools to use them. OLAP applications can easily answer questions such as,
What products are selling well? or Where are my weakest-performing sales offices?
Note that although the word cube is used to illustrate the multidimensionality of OLAP
tables, the number of tables is not limited to six, which is the number of sides of a real
cube. It is possible to produce tables showing relationships of any two related variables
contained in the database, as long as the data exists in the database. OLAP enables
managers to see summaries and ratios of the intersection of any two dimensions.
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10.2 Business Intelligence in various business applications
Predicting Customer Behavior
In banking, data mining is employed to find profitable customers and patterns of fraud. It is
also used to predict bankruptcies and loan payment defaults. For example, when Bank of
America looked for new approaches to retain customers, it used data-mining techniques. It
merged various behavior patterns into finely tuned customer profiles. The data was
clustered into smaller groups of individuals who were using banking services that didnt
best support their activities. Bank employees contacted these customers and offered advice
on services that would serve them better. The result was greater customer loyalty (measured
in fewer accounts closed and fewer moves to other banks).
Companies selling mobile phone services face a growing challenge of customer churn
(switching to a competitor). Some surveys show that more than 50 percent of mobile phone
users consider switching to a competitor at any given time, and 15 percent plan to switch to
a competitor as soon as their contract expires. Mobilcom GmbH, a German company with
4.56 million customers and 1100 employees, uses data mining to identify such customers
and approach them with inducements to continue or renew their contract before they
switch. The company uses an application called DB Intelligent Miner from IBM. The
software periodically looks for patterns of customer churn and assigns each customer a
score representing the likelihood of canceling the contract. The software considers many
variables, among which are complaint history and the number of days to expiration.
Customer loyalty is extremely important because the cost of obtaining a new customer far
exceeds the cost of retaining an existing one, especially in a highly competitive market such
as mobile telephones.
To ensure a steady flow of customer data into their data warehouses, companies in almost
every industryfrom airlines to lodging, dining, and gamblingoperate customer loyalty
programs similar to the original frequent-flier programs. Membership is often free, and
customers leave a record every time they make a purchase even if they do not use a credit
card to pay. In many cases, mining such data provides business intelligence to target
individual customers.
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A large U.S. airline collects every possible piece of data on passengers in a central data
warehouse, from frequent-flyer numbers through reservations and flight details. The airline
uses data-mining tools to extract information that helps retain frequent flyers. For example,
the executives can query the data warehouse to see how many flight disruptions,
cancellations, or delayed arrivals its best customers experience in a given month. This helps
the airline to proactively contact these customers and offer them incentives to ensure their
continued business.
UPS has an organizational unit called Customer Intelligence Group. The group analyzes
patterns of customer behavior so it can make predictions that help the company enhance
services and retain customers. For example, the group is able to accurately predict customer
defections by examining usage patterns and complaints. When the data of a specific
customer indicates that the customer might defect, a salesperson contacts that customer to
review and resolve any problems. The software helped to significantly reduce the loss of
customers.
Identifying Profitable Customer Groups
Financial institutions, especially insurance companies, often dismiss high-risk customers.
Better analysis of such customers can yield good business, as Progressive Casualty
Insurance Company has proven. Progressive is the fourth largest U.S. insurance firm. The
company uses proprietary analytical software and widely available insurance industry data.
The company defines narrow groups or cells of customers, for example, college-educated
motorcycle riders ages 35 and older whose credit scores are above 650 and who have no
accidents recorded. For each cell, the company performs a statistical regression analysis to
identify factors that most closely correlate with the losses that this particular group causes.
For each cell, the company then sets premiums that should enable the company to earn a
profit on its portfolio of customer groups. The company uses simulation software to test the
financial implications of accepting the analyzed groups as customers. This way,
Progressive can profitably insure customers in traditionally high-risk categories. Other
insurance companies reject such applicants and refuse to renew the contracts of customers
who became high-risk because of claims such as for car accidents. These companies do so
without bothering to analyze the data more deeply.
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Utilizing Loyalty Programs
Loyalty programs such as frequent flier and consumer clubs help organizations get huge
amounts of data about their customers. Some grocery chains, for example, issue discount
coupons only to the most loyal customers. Harrahs Entertainment, Inc., the casino and
hotel chain, uses its data warehouse to target individual customers, rather than groups. The
techniquewhose specifics the company refuses to disclose for obvious reasonsenables
Harrahs to tailor lodging, dining, and gambling packages that are attractive to its
customers. It helps Harrahs discern the small spender from the big spender and decide how
to price those services according to individual spending patterns at the companys facilities.
This is an example of yield management or revenue management.
Inferring Demographics
Some companies use data-mining techniques to try to predict what customers are likely to
purchase in the future. Amazon.com is a leader in exploiting customer data. The company
registered U.S. Patent Number 6,865,546, titled Methods and systems of assisting users in
purchasing items. The software developed by Amazon determines the age of the recipient
of an item purchased by a customer. The age range is estimated based at least in part on a
customer order history of gifts purchased for the recipient. The first gift is associated with
the first age appropriateness designation. The second gift is associated with a second age
appropriateness designation. An age range associated with the recipient is estimated. The
software also captures and analyzes any data that may indicate the recipients gender. The
recipients age progression is calculated, and the company uses it to offer the customer gifts
for that person when the customer logs on to the site. So, if you purchase gifts from
Amazon.com for your baby niece, do not be surprised if Amazon entices you to purchase
items for a young girl, a young woman, and an older woman over the next few decades.
Here is another example of what this data-mining tool can do: if you purchased perfume a
week before Valentines Day, it will infer that you bought the item as a Valentines gift for
a woman and offer certain colors for the wrapping paper.
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10.3 Summary
This unit introduced the concepts of OLAP, Business Intelligence and its usage in Business
applications.
10.4 Keywords
OLAP, Business Intelligence, Customer Intelligence
10.5 Exercise
1. Explain OLAP.
2. Explain with examples usage of BI in various business applications.
10.6 References

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UNIT 11: CIO Profile and Roles
Structure
11.1 Introduction
11.2 The profile of a chief information officer
11.3 The role of a CIO
11.4 The CIOs role in Innovation Challenge
11.5 Summary
11.6 Key Words
11.7 Exercise
11.8 References

know about CIO
know about roles and responsibility of CIO
11.1 Introduction
Chief information officer (CIO)The highest-ranking IS officer in the organization,
usually a vice president, who oversees the planning, development, and implementation of
IS and serves as leader to all IS professionals in the organization. The fact that a
corporation has a position titled chief information officer (CIO) reflects the importance
that the company places on ISs as a strategic resource. The CIO, who is responsible for all
aspects of an organizations ISs, is often, but not always, a corporate vice president. Some
companies prefer to call this position chief technology officer (CTO). However, you might
find organizations where there are both a CIO and a CTO and one reports to the other.
There is no universal agreement on what the responsibility of each should be. Yet, in most
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cases when you encounter both positions in one organization, the CTO reports to the CIO.
A person who holds the position of CIO must have both technical understanding of current
and developing information technologies and business knowledge. The CIO plays an
important role in integrating the IS strategic plan into the organizations overall strategic
plan. He or she must not only keep abreast of technical developments but also have a keen
understanding of how different technologies can improve business processes or aid in the
creation of new products and services.
11.2Profile of CIO
Being at a high profile designation, the CIO only reports to the Chairman or the Managing
Director of the board. It is their primary responsibility to ensure the smooth running of all
the technological functions of the company.
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Educational Requirements
To be eligible for the post of a chief information officer of a company, an ideal candidate
requires a Bachelor's or a Master's Degree in Computer Science and people with a
Bachelor's Degree would require extensive work experience. It has been noted that
employers show preference to candidates who have a Master's Degree with an impressive
work profile. Most employers prefer candidates with more than 5 years of experience
handling management and IT responsibilities. Work experience on practice, financial and
clinical management is considered as an added advantage.
Job Responsibilities
The main task of a Chief Information Officer is to oversee the development of the IT
department of a company. He/she has to ensure the usage of new and improved techniques
in technology to increase the productivity of the company. The CIO provides leadership,
planning and effective management in all the areas of information technology. He/she has
to handle all the hardware and software deals done by the company and also review the
performances of other team members. In many organizations the CIO is responsible for
hiring, developing and supervising his staff. In some instances, CIOs are given the
responsibility of designing the budget of their own department. The CIO also plays an
important part in protecting the company from various cyber threats which are quite
common nowadays. Depending on the size of the company, the CIO may require a single
individual or an entire department to tackle these security threats.
11.3 Role of CIO
Typically, a CIO is involved with driving the analysis and re-engineering of existing
business processes, identifying and developing the capability to use new tools, reshaping
the enterprise's physical infrastructure and network access, and with identifying and
exploiting the enterprise's knowledge resources. Many CIOs head the enterprise's efforts to
integrate the Internet into both its long-term strategy and its immediate business plans.
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CIO's are often tasked with either driving or heading up crucial IT projects which are
essential to the strategic and operational objectives of an organisation. A good example of
this would be the implementation of an Enterprise Resource Planning (ERP) system which
typically has wide-ranging implications for most organizations.
Another way that the CIO role is changing is an increased focus on service management. In
essence, a CIO in the modern organization is required to possess business skills and the
ability to relate to the organization as a whole, as opposed to being a technological expert
with limited functional business expertise. The CIO position is as much about anticipating
trends in the market place with regard to technology as it is about ensuring that the business
navigates these trends through expert guidance and proper strategic IT planning that is
aligned to the corporate strategy of the organization.
11.3CIOs Role in Innovation Challenge
The role of CIOs, and the organizations they lead, is to become the strategic glue
between a companys business strategy and the enabling technology architecture. IT
organizations that understand and communicate in terms of business strategy will propose
and implement technical strategies that create unprecedented opportunities for innovation in
processes, products, and services. A host of new collaboration technologies, combined with
the expanding capabilities of the network, make the possibilities endless for innovation on a
global scale. Of course, every CIO still has the responsibility to improve productivity in
operations and to ensure business resilience. All that, while operating and improving legacy
systems.
Three strategic levers provide the framework for CIOs to enable innovation today:
Lead withdont resistnew collaboration tools and processes that promote innovation
within the company and with trusted partners.
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Create a flexible, secure, and scalable IT architecture that continuously improves time to
capability for the business.
Position IT to provide measurable value (beyond efficiency) at all levels: productivity,

experience, and growth
11.4 Summary
This unit introduced the about roles and responsibilities of CIO in Business organization
11.5 Keywords
Chief Information Officer, CIO Roles.
11.6 Exercise
1. Explain the roles and responsibility of CIO.

2. Explain the role of CIO in innovation challenge.
11.7 References

4. The CIOs Role in Enabling Innovation, By Rebecca Jacoby, Chief
Information Officer, Cisco.
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UNIT -12: Security of Information Systems
Structure
12.1 Introduction to information security
12.2 Information Security Threats
12.3 Information Security Policy and Enforcements
12.4 Information Security Management Standards and Global Practices
12.5 Summary
12.6 Keywords
12.7 Exercises
12.8 References
12.0 LEARNING OBJECTIVES
Understand about Information System Security
Discuss about risks and threats to Information System
Understand security policies and standards
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12.1. Introduction to Information Security
Information resources are scattered throughout the organization. Furthermore, employees

travel with and take home corporate computers and data. Information is transmitted to and
from the organization and among the organizations components. IS physical resources,
data, software, procedures, and any other information resources may therefore be
vulnerable, in many places at any time.
The major goals of information security are to:
Reduce the risk of systems and organizations ceasing operations.
Maintain information confidentiality.
Ensure the integrity and reliability of data resources.
Ensure the uninterrupted availability of data resources and online operations.
Ensure compliance with policies and laws regarding security and privacy.
To plan measures to support these goals, organizations first must be aware of the possible
risks to their information resources, which include hardware, applications, data, and
networks; then, they must execute security measures to defend against those risks.
Information Security and Control
Security covers a wide array of activities that includes products and processes to prevent
unauthorized access, modification, deletion of information, knowledge, data and facts.
12.2 Information Security Threats
Information Systems Concerns
1) Unintentional Threats: Threats caused by mistake and not intentionally.
Human errors in design and use of systems.
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Environmental Hazards.
Computer System failures.
2) Intentional Threats: Threats caused on purpose.
Criminal Attacks like hacking, stealing information, cyber theft.
1) Risk to application and data
Computer Crime: Use of computers and networks to involve in anti - social

activities is called Computer Crime. It includes,
Unauthorized use, access, modification, and destruction of hardware,

software, data and network resources.
The unauthorized release of information.
The unauthorized copying of software.
Denying an end user the access to his/her own hardware, software, data and
network resources.
Hacking: Hacking means finding out weaknesses in an established system and

exploiting them. A computer hacker is a person who finds out weaknesses in the
computer and exploits it. Hackers may be motivated by several reasons such as
profit, protest, or challenge.
Hacking is the obsessive use of computers, unauthorized access and use of

networked computer systems, stealing and damaging data and resources,
allowing information to be downloaded by others and executing programs
that leave the system vulnerable.
Ex: Hacking an email account by breaking the password, Hacking a company website and
taking control of the website.
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Cyber Theft: Many attacks occur through internet
Fraudulent data alteration.
Using computer for some other purpose.
Cyber Terrorism
It is the use of Internet based attacks in terrorist activities, including acts of

deliberate, large-scale disruption of computer networks, especially of
personal computers attached to the Internet, by the means of tools such as
computer viruses.
Cyber terrorism is a controversial term. It is relating to deployments, by

known terrorist organizations, of disruption attacks against information
systems for the primary purpose of creating alarm and panic. It is difficult
to identify any instances of cyber terrorism.
A cyber terrorist attack is designed to cause physical violence or extreme

financial harm. According to the U.S. Commission of Critical Infrastructure
Protection, possible cyber terrorist targets include the banking industry,
military installations, power plants, air traffic control centers, and water
systems.
Unauthorized use at work: Use of computers and networks in the organization to

satisfy personal needs is termed as unauthorized use at work. It includes,
Doing private consulting.
Doing personal finances.
Playing video games.
Watching movies.
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Chatting.
Social networking.
Unauthorized use of Internet or company networks.
One of the measures to avoid unauthorized use of computers and networks in the
organization is using Sniffers (a software tool) which monitor the network traffic or
capacity and find evidence of improper use.
Software Piracy: Software piracy refers to the unauthorized duplication and use of
computer software.
Types of Software Piracy
i) Licensed User Duplication for Unlicensed Users
When someone copies software without buying the appropriate number of

licenses, it is copyright infringement. Each of these activities is a form of
software piracy.
An individual copying software for a friend.
ii) Generating Keys using Key Generator Software
When someone uses key generator software to generate a registration key

that turns an evaluation version into a licensed version.
iii) Illegal Internet Distribution
When someone posts a licensed version of a software product on the Internet

and makes it available for downloading.
Piracy of Intellectual Property
Music, Videos, Images, articles, books and other digital forms.
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Computer Virus and Worms
2) Risk to hardware
Natural Disaster
Blackout: Loss of power
Brownout: Frequent low voltage fluctuations
Vandalism: Deliberate destruction
12.3 Information Security Policy and Enforcements
1) Encryption: Scrambling data before transmission and unscrambling after reception

using mathematical algorithms.
2) Authentication
Passwords and PINS
Smart cards and other Identification Devices
Biometric authentication
3) Firewalls: A system of hardware and software that can act as a "wall" that "burns out"
unauthorized programs and users trying to enter the system.
4) Email Monitoring: Whether the e-mails are used for right purpose or not can be
monitored by using a software.
5) Anti-Virus Software: This is used to remove virus from the system.
6) Backup files: Having a copy of files in case the original files get deleted.
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7) Biometric Controls
Voice verification, Finger prints, Hand Geometry, Retina scanning, Face

recognition etc.
12.4 Information Security Management Standards and Global Practices
Controls are constraints and other restrictions imposed on a user or a system, and they can
be used to secure systems against. Controls are implemented not only for access but also to
implement policies and ensure that nonsensical data is not entered into corporate databases.
Guaranteeing effective information security has the following key aspects:
Preventing the unauthorized individuals or systems from accessing the information.
Maintaining and assuring the accuracy and consistency of data over its entire life-cycle.
Ensuring that the computing systems, the security controls used to protect it and the
communication channels used to access it, functioning correctly all the time, thus making
information available in all situations.
Ensuring that the data, transactions, communications or documents are genuine.
Ensuring the integrity of a transaction by validating that both parties involved are
genuine, by incorporating authentication features such as "digital signatures".
Ensuring that once a transaction takes place, none of the parties can deny it, either having
received a transaction, or having sent a transaction. This is called 'non-repudiation'.
Safeguarding data and communications stored and shared in network systems.
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Application Reliability and Data Entry Controls
Apart from performing programmed functions, reliable applications can resist inappropriate
usage, such as incorrect data entry or processing. The most reliable programs consider
every possible misuse or abuse. A highly reliable program includes code that promptly
produces a clear message if a user either makes an error or tries to circumvent a process.
For example, a Web site invites users to select a username and password, and the operators
demand passwords that are not easy to guess. The application should be programmed to
reject any password that has fewer than a certain number of characters or does not include
numerals. A clear message then must be presented, inviting the user to follow the
guidelines. Controls also translate business policies into system features. For example,
Blockbuster Video uses its IS to implement a policy limiting debt for each customer to a
certain level. When a renter reaches the debt limit and tries to rent another DVD, a message
appears on the cash register screen: Do not rent! Thus, the policy is implemented by
using a control at the point of sale. Similar systems do not allow any expenditures to be
committed unless a certain budgetary item is first checked to ensure sufficient allocation. A
spending policy has been implemented through the proper software.
Backup
Probably the easiest way to protect against loss of data is to automatically duplicate all data
periodically, a process referred to as data backup.
Access Controls
Unauthorized access to information systems, usually via public networks such as the
Internet, does not always damage IT resources. However, it is regarded as one of the most
serious threats to security because it is often the prelude to the destruction of Web sites,
databases, and other resources, or theft of valuable information.
Access controls are measures taken to ensure that only those who are authorized have
access to a computer or network, or to certain applications or data. One way to block access
to a computer is by physically locking it in a facility to which only authorized users have a
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key or by locking the computer itself with a physical key. However, in the age of
networked computers, this solution is practical only for a limited number of servers and
other computers. Therefore, these organizations must use other access controls, most of
which rely on software.
Atomic Transactions
As you know, in an efficient IS, a user enters data only once, and the data is recorded in
different files for different purposes, according to the systems programmed instructions.
For instance, in a typical order system, a sale is recorded in several files: the shipping file
(so that the warehouse knows what to pack and ship), the invoice file (to produce an
invoice and keep a copy in the system), the accounts receivable file (for accounting
purposes), and the commission file (so that the salesperson can be compensated with the
appropriate commission fee at the end of the month). An atomictransaction (from the
Greek atomos, indivisible) is a set of indivisible transactions; either all transactions are
executed or none arenever only some. Using atomic transactions ensures that only full
entry occurs in all the appropriate files.
Audit Trail
In spite of the many steps taken to prevent system abuse, it nonetheless occurs.
Consequently, further steps are needed to track transactions so that (1) when abuses are
found, they can be traced, and (2) fear of detection indirectly discourages abuse. One
popular tracking tool is the audit trail: a series of documented facts that help detect who
recorded which transactions, at what time, and under whose approval. Whenever an
employee records a transaction, the system prompts the employee to provide certain
information: an invoice number, account number, salesperson ID number, and the like.
Sometimes an audit trail is automatically created using data, such as the date and time of a
transaction or the name or password of the user updating the file.
This data is recorded directly from the computeroften unbeknownst to the userand
attached to the record of the transaction. The laws and regulations of many countries
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require certain policy and audit trail controls, and since so many operations are performed
using ISs, the controls must be programmed into software. In the United States, the
Sarbanes-Oxley Act of 2002 requires corporations to implement audit trails and other
measures in their systems.
Audit trail information helps uncover undesirable acts, from innocent mistakes to
premeditated fraud. The information helps determine who authorized and who made the
entries, the date and time of the transactions, and other identifying data that is essential in
correcting mistakes or recovering losses. The audit trail is the most important tool of the
information systems auditor (formerly known as the electronic data processing auditor),
the professional whose job it is to find erroneous or fraudulent cases and investigate them.
12.5. SUMMARY
This unit provides a brief introduction to Information System security. This also introduces
the threats and measures to Information Systems.
12.6. KEY WORDS
IS Threats, Security measures, Goals of security measure.
12.7. EXERCISE
1) What do you understand by the term Hacking?

2) What is software piracy?
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3) Explain the common measure to ensure security of IS.
4) Discuss the threats to IS.
12.8. REFERENCES
1. Management Information System by Effy Oz.
Tata MC-Graw HILL.
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Module 4
Unit 13: Information Security Risks
Structure
13.1 Information Security Access Control Systems and Technologies
13.2 Information Security Risk
13.3 Management Framework
13.4 Implementation of Information System: Critical Success Factor
13.5 Summary
13.6 Keywords
13.7 Exercises
13.8 References
Understand about Information Security Access Technologies
Discuss about information security risks
Understand implementation of information system
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13.1 Information Security Access Control Systems and Technologies
The term access control refers to the practice of restricting entrance to a property, a
building, or a room to authorized persons. Physical access control can be achieved by a
human (a guard, bouncer, or receptionist), through mechanical means such as locks and
keys, or through technological means such as access control systems like the mantrap.
Within these environments, physical key management may also be employed as a means of
further managing and monitoring access to mechanically keyed areas or access to certain
small assets.
Physical access control is a matter of whom, where, and when. An access control system
determines who is allowed to enter or exit, where they are allowed to exit or enter, and
when they are allowed to enter or exit. Historically, this was partially accomplished through
keys and locks. When a door is locked, only someone with a key can enter through the
door, depending on how the lock is configured. Mechanical locks and keys do not allow
restriction of the key holder to specific times or dates. Mechanical locks and keys do not
provide records of the key used on any specific door, and the keys can be easily copied or
transferred to an unauthorized person. When a mechanical key is lost or the key holder is
no longer authorized to use the protected area, the locks must be re-keyed.
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Electronic access control uses computers to solve the limitations of mechanical locks and
keys. A wide range of credentials can be used to replace mechanical keys. The electronic
access control system grants access based on the credential presented. When access is
granted, the door is unlocked for a predetermined time and the transaction is recorded.
When access is refused, the door remains locked and the attempted access is recorded. The
system will also monitor the door and alarm if the door is forced open or held open too long
after being unlocked.
How does computer system security provide protection? There are four primary methods:
1. System Access Controls.

Ensuring that unauthorized users don't get into the system, and by encouraging (and
sometimes forcing) authorized users to be security-consciousfor example, by
changing their passwords on a regular basis. The system also protects password data
and keeps track of who's doing what in the system, especially if what they're doing
is security-related (e.g., logging in, trying to open a file, using special privileges).
The section "System Access: Logging Into Your System" introduces the basics of
system access controls. Chapter 6, Inside the Orange Book, describes the Orange
Book accountability requirements, which specify the system access controls defined
for different levels of secure systems. In particular, see the section entitled
"Accountability Requirements" in that chapter.
2. Data Access Controls.

Monitoring who can access what data, and for what purpose. Your system might
support discretionary access controls; with these, you determine whether other
people can read or change your data. Your system might also support mandatory
access controls; with these, the system determines access rules based on the security
levels of the people, the files, and the other objects in your system.
3. System and Security Administration.
Performing the offline procedures that make or break a secure systemby clearly
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delineating system administrator responsibilities, by training users appropriately,
and by monitoring users to make sure that security policies are observed. This
category also involves more global security management; for example, figuring out
what security threats face your system and what it will cost to protect against them.
4. System Design.
Taking advantage of basic hardware and software security characteristics; for
example, using a system architecture that's able to segment memory, thus isolating
privileged processes from non-privileged processes.
Although a detailed discussion of secure system design is outside the province of

this book, the section "System Architecture" in Chapter 6 describes briefly the
major Orange Book design requirements for different levels of secure systems.
13.2 Information Security Risk
Information security, sometimes shortened to InfoSec, is the practice of

defending information from unauthorized access, use, disclosure, disruption, modification,
perusal, inspection, recording or destruction. It is a general term that can be used regardless
of the form the data may take (electronic, physical, etc...)
Two major aspects of information security are:
IT security: Sometimes referred to as computer security, Information Technology

Security is information security applied to technology (most often some form of
computer system). It is worthwhile to note that a computer does not necessarily mean a
home desktop. A computer is any device with a processor and some memory. Such
devices can range from non-networked standalone devices as simple as calculators, to
networked mobile computing devices such as smartphones and tablet computers. IT
security specialists are almost always found in any major enterprise/establishment due
to the nature and value of the data within larger businesses. They are responsible for
keeping all of the technology within the company secure from malicious cyber attacks
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that often attempt to breach into critical private information or gain control of the
internal systems.
Information assurance: The act of ensuring that data is not lost when critical
issues arise. These issues include but are not limited to: natural disasters,
computer/server malfunction, physical theft, or any other instance where data has the
potential of being lost. Since most information is stored on computers in our modern
era, information assurance is typically dealt with by IT security specialists. One of the
most common methods of providing information assurance is to have an off-site backup
of the data in case one of the mentioned issues arise.
Risk Management and Risk Assessment are major components of Information Security
Management (ISM). Although they are widely known, a wide range of definitions of Risk
Management and Risk Assessment are found in the relevant literature [ISO13335-2],
[NIST], [ENISA Regulation]. Here a consolidated view of Risk Management and Risk
Assessment is presented. For the sake of this discussion, two approaches to presenting Risk
Management and Risk Assessment, mainly based on OCTAVE [OCTAVE] and ISO
13335-2 [ISO13335-2] will be considered. Nevertheless, when necessary, structural
elements that emanate from other perceptions of Risk Management and Risk Assessment
are also used (e.g. consideration of Risk Management and Risk Assessment as counterparts
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of Information Security Management System, as parts of wider operational processes, etc.
[WG-Deliverable 3], [Ricciuto]).
It seems to be generally accepted by Information Security experts, that Risk Assessment is

part of the Risk Management process. After initialization, Risk Management is a recurrent
activity that deals with the analysis, planning, implementation, control and monitoring of
implemented measurements and the enforced security policy. On the contrary, Risk
Assessment is executed at discrete time points (e.g. once a year, on demand, etc.) and
until the performance of the next assessment - provides a temporary view of assessed risks
and while parameterizing the entire Risk Management process. This view of the
relationship of Risk Management to Risk Assessment is depicted in the following figure as
adopted from OCTAVE .
It is worth mentioning, that in this figure both Risk Management and Risk Assessment are
presented as processes, that is, as sequences of activities (s. arrows in figure above).
Various standards and good practices exist for the establishment of these processes (e.g.
through structuring, adaptation, re-configuration etc.). In practice, organizations tend to
generate their own instantiations of these methods, in a form most suitable for a given
organizational structure, business area or sector. In doing so, national or international
standards (or combination of those) are taken as a basis, whereas existing security
mechanisms, policies and/or infrastructure are adapted one-by-one. In this way, new good
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practices for a particular sector are created. Some representative examples of tailored
methods/good practices are:
a method based on a native national standard (e.g. [IT-Grund]);
a method based on an native international standard (e.g. [ISO13335-2]);
a method based on a de facto standard (e.g. [OCTAVE]);
a method based on a sector standard (e.g. [SIZ-DE]);
a method based on an individual basic protection profile for the IT-systems of an
organization (e.g. [SIZ-PP]);
adoption of an already existing risk analysis of similar systems (e.g. based on an
existing Protection Profiles according to Common Criteria [CC]).
In practice, combinations of the above examples are very common.
For the sake of the presentation within this site, the assumption is made, that the Risk
Management life-cycle presented in the figure (i.e. plan, implement, monitor, control,
identify, assess), refers solely to risks. Similar activities that might be necessary within the
Information Security Management process are considered to apply to operational aspects
related to the implementation and control of security measurements (see also ISMS scope).
Even although organizations tend to use a single method for Risk Management, multiple
methods are typically be used in parallel for Risk Assessment. This is because different
Risk Assessment methods might be necessary, depending on the nature of the assessed
system (e.g. structure, criticality, complexity, importance, etc.).
Through a series of activities, ENISA has established inventories of existing Risk

Management and Risk Assessment methods and tools in Europe (also referred to
as products here). Any of these products can be used for the instantiation of both the Risk
Management and Risk Assessment processes mentioned in the figure above. The contents
of these inventories and the inventories themselves are presented in this site.
It should be noted that a more detailed representation of Risk Management and Risk
Assessment is given in ISO 13335-2 [ISO13335-2]. In general, the contents of Risk
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Management and Risk Assessment processes as described here are compatible with ISO
13335. In the future, detailed examples of how to adapt the processes presented to existing
business and IT-needs by means of demonstrators will be given. The generation of such
material will be part future work at ENISA in form of demonstrators.
13.3 Management Framework
The Information Management Framework provides a high level framework for the
effective management of information within a local government. The framework identifies
the aspects of information management that should be considered to ensure that information
is captured, stored, accessed, maintained and disposed of securely and effectively.
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The Framework represents the discipline of Information Management as comprising seven
key elements:
1. Knowledge Management the practice of extracting extra value from information,

including analysis and reporting
2. Governance - policy, architecture and direction for information and information
management
3. Security - confidentiality, integrity and availability of information in line with ISO
27001 and other relevant standards.
4. Information Asset Management - full lifecycle management of information as an
asset and classifying and cataloguing it so it can be found and used
5. Information Access and Use - sharing, licensing and use of information so
information is easy to find and able to be exploited as widely as possible
6. Record Keeping - ensuring legislative and regulatory requirements are met in the
handling of information
7. Data Management - management, and maintenance of the data that underlies
information
The framework has been designed with Knowledge Management as the highest level, and
Data Management as the lowest level activity, with record keeping in the middle
representing that it is central to all information management activities. Governance and
Security apply to all aspects of the framework.
13.4 Implementation of Information System: Critical Success Factor
Critical success factor (CSF) is the term for an element that is necessary for an
organization or project to achieve its mission. It is a critical factor or activity required for
ensuring the success of a company or an organization. The term was initially used in the
world of data analysis, and business analysis. For example, a CSF for a
successful Information Technology (IT) project is user involvement.
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"Critical success factors are those few things that must go well to ensure success for a
manager or an organization, and, therefore, they represent those managerial or
enterprise area, that must be given special and continual attention to bring about high
performance. CSFs include issues vital to an organization's current operating activities
and to its future success."
Critical success factors should not be confused with success criteria; those are outcomes of
a project or achievements of an organization that are needed to consider the project a
success or to esteem the organization successful. Success criteria are defined with the
objectives
Successfully implementing information systems (IS) projects is of critical importance to the

prosperity and even survival of modern. This is because an effective use of IS for
supporting the operations of modern organizations usually leads to significant
improvements in organizational productivity and often provides organizations with crucial
competitive. Numerous IS projects have been initiated, developed and implemented.
SF or Critical success factor for IT project or System is its user involvement. Some of the
other CSFs are:
Money factors: positive cash flow, revenue growth, and profit margins.
Acquiring new customers and/or distributors -- your future.

Customer satisfaction -- how happy are they?
Quality -- how good is your product and service?
Product or service development -- what's new that will increase
business with existing customers and attract new ones?
Intellectual capital -- increasing what you know that's profitable.
Strategic relationships -- new sources of business, products and
outside revenue.
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Employee attraction and retention -- your ability to do extend your
reach.
Sustainability -- your personal ability to keep it all going
13.5 Summary
This unit provides a brief detail of Information Security Access Control Systems
and Technologies, Information Security Risk, Management Framework, Implementation of
Information System: Critical Success Factor.
13.6 Keywords
Information security, Access control systems, Security risk, Management

framework.
13.7 Exercises
1) Explain security access control systems.

2) Explain the risks involved in the information security.
3) Mention the critical success factors for implementation of information system.
13.8 References
Text Books
1. GordorB.Davis&Margrethe H. Olson Management Information Systems 2nd
edition Tata McGraw Hill.
2. OLeary, DanielE. 2000. Enterprise Resource planning Systems: Systems, Life
Cycle, Electronic commerce and Risk. Cambridge, United Kingdom: Cambridge
University Press.
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Reference Books
1. Shtub, Avraham. 1999. Enterprise Resource Planning (ERP) : the Dynamics of
operations Management. Norwell, Massachusetts: Kluwer Academic Publishers.
2. Management Information Systems- IIIrd editionJavadekar.
Extra Reference:
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Unit 14: Information System Implementation
Structure
14.1 System Implementation
14.2 Successful Implementation through Change Management and its advantages
14.3 Summary
14.4 Keywords
14.5 Exercises
14.6 References
Understand about system implementation
Discuss about change management
14.1 System Implementation
Systems implementation is the process of:

1. Defining how the information system should be built (i.e., physical system design),
2. Ensuring that the information system is operational and used,
3. Ensuring that the information system meets quality standard (i.e., quality
assurance).
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Systems design
Conceptual design what the system should do
Logical design what the system should look to the user
Physical design how the system should be built
The purpose of System Implementation can be summarized as follows: making the new
system available to a prepared set of users (the deployment), and positioning on-going
support and maintenance of the system within the Performing Organization (the transition).
At a finer level of detail, deploying the system consists of executing all steps necessary to
educate the Consumers on the use of the new system, placing the newly developed system
into production, confirming that all data required at the start of operations is available and
accurate, and validating that business functions that interact with the system are functioning
properly. Transitioning the system support responsibilities involves changing from a system
development to a system support and maintenance mode of operation, with ownership of
the new system moving from the Project Team to the Performing Organization.
14.2 Successful Implementation through Change Management and its

advantages
The change challenge that faces IT and other departments when new technology initiatives
are introduced is to engage the staff most impacted, exactly those who often feel quite
threatened by these kinds of initiatives. They have these emotional reactions because they
often have insufficient information about the scope of the change, the training implications,
and the potential impact on role changes. The information vacuum is often filled with
rumors instead of integrating and engaging all employees with the technology and business
process improvement activities.
Some examples of how this could be addressed are presented below:

o The engagement of all staff in a visioning process that encourages their
participation in, understanding of, and contribution to future goals
162
o The creation of internal change agent groups who facilitate the communication
process between staff and management
o The encouragement of the development of more participative leadership
practices in traditionally hierarchically structured organizations
The importance of managing organizational change effectively has compelled a growing
number of organizations to incorporate the discipline into major initiatives of all sorts, from
the introduction of IT software packages to business process and organizational structure
changes. The contribution of effective change management/leadership to the achievement
of positive results cannot be ignored. For example, Statistics Canada has reported that
Canadian firms have achieved performance improvements of 46 percent for process
innovation, 32 percent for product innovation and 25 percent for productivity improvement,
when combining high usage of innovative Human Resource Management (HRM) practices
with high usage of information and communication technologies (ICT), in change
initiatives. When firms do not include, or use only low levels of HRM practices, and only
rely on high ICT for benefits, the resulting productivity improvements were noticeably
smaller: 24 percent for process innovation, 14 percent for product innovation and 9 percent
for productivity improvement1. These findings have served to reinforce the importance of
engaging employees in any IT initiative, establishing alignment through an industry best-
practice change process, establishing a common vision for the end-state, and to maximizing
the benefits derived.
A MANAGEMENT OF ORGANIZATIONAL CHANGE APPROACH
A more systemic, engagement-oriented and process-focused approach to the management

of organizational change enables collaboration between leaders, managers and staff in the
implementation of technology and business process changes. In order to achieve this
collaboration, four interdependent approaches should be undertaken:
1. Participative leadership: refers to a set of organizational values and leadership
behaviours that can contribute to employees becoming more committed to their
organization and its goals, and cultivating better labour-management relationships.
It also helps bridge the typical chasm that often exists between leaders/managers
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and their staff, and contributes to a more adaptive, resourceful and resilient
behaviour during periods of change. Participative leadership is an essential
component of empowered, high-involvement organizations.
2. Empowerment: is defined in terms of developing the organizational conditions
that support high staff involvement in change initiatives, sharing appropriate
decision-making responsibilities among management, supervisors and staff, and
sharing of power as appropriate for the circumstances. The applications of
empowerment in North American organizations have suffered from a lack of
definitional rigour and this has resulted in different consultants defining it
differently. Ultimately, this has resulted in much inconsistency in how it has shown
up in organizations. This lack of definitional clarity could have contributed to
outcomes that were less than satisfactory. Nonetheless, the core of empowerment is
employee involvement, shared decision-making, redistributed authority and control,
and increased organizational flexibility and adaptability, just the kinds of practices
that have been demonstrated in the management literature to be necessary for
successful change, be it in IT, manufacturing or other industry sectors.
In summary, the following appear to be the foundational elements of the

approach to managing organizational change in a technology or any project:
1. High staff involvement in the change initiatives
2. Sharing appropriate decision-making responsibilities among
management, supervisors and staff.
3. Sharing of power as appropriate for the circumstances
3. Systems thinking: takes the position that organizations are dynamic systems
whose parts impact and are impacted by both external and internal influences.
Taking a Systems Thinking perspective is a conceptual framework that has been
developed by a number of academics (e.g., Merrelyn Emery, Peter Senge) and
practitioners to help understand that organizations are made up of highly
interdependent processes that are also impacted by the environment. This means
that the smallest intervention will have unanticipated influences on other parts of
the organization. This in turn means that there will be situations that require tools,
164
methods and techniques that are more group-focused rather than individual-
focused, e.g., a group visioning process has the impact of increasing participants
awareness of other parts of the organization and how the parts influence one
another. This would not happen if an individual intervention occurs.
The commonality of language, mental model and approach is guaranteed by ensuring

that staff, management and leaders work in an integrated and collaborative fashion.
This also ensures an understanding of the intricacies of leading and participating in a
large system change effort, and contributes in a significant way to the return on
investment. However, in order for an organization to see long-term benefit, it is
necessary that it be prepared to devote on-going energy and resources to maintaining
innovations, and to transform itself by adopting practices that appear to have not been
previously utilized, e.g., continued development of the change agents, more consistent
information exchange with all staff.
This strategy involves alignment between impacted personnel and facilitates strong
partnerships among those taking responsibility for any IT initiative. This strategy is
designed to shift embedded organizational beliefs, values and attitudes at every level of
the organization to support the implementation of the business transformation
initiatives.
4. The eight-step change process: This process, developed by John P. Kotter, the
Konosuke Matsushita Professor of Leadership, Emeritus at the Harvard Business
School, integrates participative leadership, empowerment and systems thinking, and
suggests that effective change is largely dependent on ensuring that the appropriate
leadership and support processes, procedures, structures and systems are in place. It
follows the process outlined in Figure 1 below.
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14.3 Summary
This unit provides brief details about the importance of system implementation
through change management and its advantages.
14.4 Keywords
System implementation, change management
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14.5 Exercises
1) What is system implementation?

2) Explain system implementation through change management.
14.6 References

University Press.
Extra Reference:
167
Unit 15: Organization and Information Systems
Structure
15.1 The impact of information systems on organizational performance
15.2 Importance of evaluating the impact of information systems on business

effectiveness
15.3 Summary
15.4 Keywords
15.5 Exercises
15.6 References
Understand about impact of IS in organization
Discuss about evaluation of IS on business effectiveness
15.1 The Impact of Information Systems on Organizational Performance
The effectiveness of an information systems controls is evaluated through an information

systems audit. An audit aims to establish whether information systems are safeguarding
corporate assets, maintaining the integrity of stored and communicated data, supporting
corporate objectives effectively, and operating efficiently. It is a part of a more general
financial audit that verifies an organizations accounting records and financial statements.
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Information systems are designed so that every financial transaction can be traced. In other
words, an audit trail must exist that can establish where each transaction originated and
how it was processed. Aside from financial audits, operational audits are used to evaluate
the effectiveness and efficiency of information systems operations, and technological audits
verify that information technologies are appropriately chosen, configured, and
implemented.
15.2 Importance of evaluating the impact of information systems on Business

effectiveness
Impacts of information systems

Computerized information systems, particularly since the arrival of the Web and mobile
computing, have had a profound effect on organizations, economies, and societies, as well
as on individuals whose lives and activities are conducted in these social aggregates.
Organizational impacts of information systems

Several essential organizational capabilities are enhanced by information systems. These
systems provide support for business operations; for individual and group decision making;
for new product development; for relationships with customers, suppliers, and partners; for
pursuit of competitive advantage; and, in some cases, for the business model itself
(e.g., Google). Information systems bring new options to the way companies interact and
compete, the way organizations are structured, and the way workplaces are designed. In
general, use of Web-based information systems can significantly lower the costs of
communication among workers and firms and cost-effectively enhance the coordination of
supply chains or webs. This has led many organizations to concentrate on their core
competencies and to outsource other parts of their value chain to specialized companies.
The capability to communicate information efficiently within a firm has led to the
deployment of flatter organizational structures with fewer hierarchical layers.
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Nevertheless, information systems do not uniformly lead to higher profits. Success depends
both on the skill with which information systems are deployed and on their use being
combined with other resources of the firm, such as relationships with business partners or
superior knowledge of the industry.
The use of information systems has enabled new organizational structures. In particular, so-
called virtual organizations have emerged that do not rely on physical offices and standard
organizational charts. Two notable forms of virtual organizations are the network
organization and the cluster organization.
In a network organization, long-term corporate partners supply goods and services to and
through a central hub firm. Together, a network of small companies can present the
appearance of a large corporation. Indeed, at the core of such an organization may be
nothing more than a single entrepreneur supported by only a few employees. Thus, network
organization forms a flexible ecosystem of companies, whose formation and work is
organized around Web-based information systems.
In a cluster organization, the principal work units are permanent and temporary teams of
individuals with complementary skills. Team members, who are often widely dispersed
around the globe, are greatly assisted in their work by the use of Web resources, corporate
intranets, and collaboration systems. Global virtual teams are able to work around the
clock, moving knowledge work electronically to follow the Sun. Information systems
delivered over mobile platforms have enabled employees to work not just outside the
corporate offices but virtually anywhere. Work is the thing you do, not the place you go
to has become the slogan of the emerging new workplace. Virtual workplaces include
home offices, regional work centres, customers premises, and mobile offices of people
such as insurance adjusters. Employees who work in virtual workplaces outside their
companys premises are known as telecommuters.
The role of consumers has changed, empowered by the Web. Instead of being just passive
recipients of products, they can actively participate with the producers in the cocreation of
value. By coordinating their collective work using information systems, individuals have
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created such products as open-source software and online encyclopaedias. The value of
virtual worlds and massively multiplayer online games has been created largely by the
participants. The electronic word-of-mouth in the form of reviews and opinions expressed
on the Web can make or break products. In sponsored cocreation, companies attract their
customers to generate and evaluate ideas, codevelop new products, and promote the
existing goods and services.
15.4 Summary
This unit provides brief details about the impact of information systems on organizational
performance.
15.4 Keywords
Information system, Evaluation of Information system.
15.5 Exercises
1) What is information system?

2) Explain the importance of evaluating the impact of information systems on Business
effectiveness.
15.6 References

University Press.
171
Extra Reference:
172
Unit 16: Business Effectiveness
Structure
16.1 Business effectiveness as a Functions of Cost, Value, Performance and

Competitive Positioning
16.2 Valuation Process of Information System Application.
16.3 Summary
16.4 Keywords
16.5 Exercises
16.6 References
Understand business effectiveness and competitive advantage
Discuss about valuation process of IS
16.1 Business effectiveness as a Functions of Cost
Cost effectiveness analysis starts by accepting that there may be room to improve your
current practices. Enterprises have four core areas where a review of processes can yield
substantial changes to the organizations overall cost effectiveness strategies:
1. Strategic cost management
2. Materials management techniques
173
3. Labor infrastructure
4. Process automation
Whether it is implementation of strategic cost management in the supply chain, a change in

materials management techniques, restructuring of the labor force, or an investment in
automation that yields downstream savings, periodic review is the key to leveraging the
most bountiful cost effectiveness strategies.
Strategic Cost Management Methods
One of the keys to being able to judge the success of your cost effectiveness analysis is to
first have an overall strategic cost management program. Without an enterprise-wide vision
for cost controls, implementing the best strategies is virtually impossible.
Whether it is the implementation of low-cost country sourcing, or a reduction of lead times

by leveraging domestic sourcing options, supply chain methodology plays a key role in
overall cost effectiveness analysis.
Materials Management Savings
Inventory is one of the top three costs in business. Proper analysis and review of inventory
practices is one of the easiest places to reduce cost. From improvement of inventory control
practices, reducing loss of inventory and needless purchasing, to carrying correct inventory
levels and using Economic Order Quantities, materials management offers enterprise
savings.
Some of the tools available to implement cost effectiveness analysis include: leveraging
vendor relationships, application of lean manufacturing theory to inventory processes,
subscription to consignment-style inventory, using vendor finance solutions for inventory,
and implementation of ERP software.
174
Labor Infrastructure
While having more than one person capable of fulfilling a role through cross training can
be one of your cost effectiveness strategies, true redundancy in positions is counter
effective to true cost management.
A periodic review of positions across different business units is critical to ensuring that
there are fewer areas of redundancy and that as many functions are effectively centralized
or automated.
Process Automation
Whether it is by investment in production machinery, ERP software, full-enterprise e-

procurement, a warehouse management system, or improved labor tracking software, IT
infrastructure in both the hardware and software arenas are critical to cost effectiveness
strategies.
Process automation can be a labor-multiplier. While it requires training and capital

investments up front, over time process automation generally provides relatively quick
ROI.
Putting It All Together
First create the vision. Then start measuring the processes. Finally, identify areas of
opportunity. Once those areas are identified, use some of the reliable and proven decision
making tools like cost benefit analysis to ensure you choose the right areas to address first.
In a world of limited business resources, addressing the areas with the most potential return
over the shortest time defines cost effectiveness analysis.
175
Business effectiveness as a Functions of Value
Finally we look to determine whether organisations which focus more on the value-added
finance services are both higher performing overall and have finance functions oriented to
management support. This helps us to start determining the overall good practice
configuration for finance service delivery. We can go some way towards arriving at a
picture of what characterises high performer finance service delivery by focusing on
performance measures in commercial organisations as a whole, as rated by survey
respondents. Then assessing their association, if any, with how their finance services are
delivered.
Cause-and-effect is not necessarily implied but we can see how these higher performers
structure and deliver finance services finance function and organisation performance.
The performance measures tested in the research, from the perceptions and views as given
by respondents in the survey on their organisations performance, include:
Organisations with higher levels of partnering report high performance highly

transformed finance functions, showing collaborative or business partnering attributes,
report higher average business performance.
A critical finding in the research is that for the vast majority of the attributes 20 their
presence is associated with a significantly higher performance on all seven of the
performance measures tested, as above.
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Thus, for example, organisations in which the finance function provides timely, useful
information to management (the first ranked attribute) on average report better business
performance than in others where this is not the case. The 20 attributes are ranked in
descending order of strength of association between the attribute and the performance of
the organisation in Table 4.1.
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Performance and Competitive Positioning
Having a clearly defined and sustainable competitive advantage is a major factor in

the success of all businesses. Why? Because businesses must be market-led which means if
you are able to explain your competitive advantage in one or two succinct sentences, you
are better placed to market your products directly from the customer viewpoint.
This means you need to be able to state succinctly:
exactly what you do

who buys your products or services
how your product or services meets customer needs in a unique way
Why your competitors cant duplicate what you are doing.
An objective review of your competitive advantage
We know that how you define your value proposition to your market (beyond
good service) can be challenging for some business owners. Despite this it is essential.
Further, if your competitive advantage isnt sustainable and defensible, then you need to
evolve new products and services in an agile and cost effective manner to maintain and
grow your market share.
To achieve competitive clarity, we work alongside you to consider a range of factors and
explore how they may impact your continued competitive strength.
Some of the approach includes asking these questions.
What is your market share and how does that relate to the scale of your operations
and industry experience?
178
How is your business model helping or hindering your success? Are there any
opportunities to fine tune your value chain to secure greater competitive edge?
Do you have specialist or unique approaches, technologies or relationships that
underpin your market strength?
Is your brand a differentiator for your customers?
Are you able to access sufficient resources to sustain and grow your market
presence given your portfolio of business activities?
Do your internal processes and people enable you to access opportunities quickly
and effectively?
How is the external regulatory and prevailing macro-economic environment
expected to impact you in the short and medium term?
What is the biggest single opportunity for your organisation and does it fit with
your competitive direction?
What is the most substantial external threat to your growth prospects in the next 1-3
years?
16.2 Valuation Process of Information System Application
Information is increasingly being recognised as one of the firms most valuable assets.
However so far it has resisted quantitative measurement. While it consumes vast and ever
increasing quantities of organisational resources in its capture, storage and processing, it
typically receives no financial recognition on the balance sheet. The objective is to develop
an approach to valuing information which is both practical to apply and consistent with
accepted accounting principles. It begins by examining the nature of information as an
asset, and defines a number of laws that govern its behavior as an economic good. It then
looks at alternative asset valuation models from accounting theory and how they may be
applied to measure the value of information.
Information is increasingly being recognised as a key economic resource and as one of the
179
firms most important assets. According to Peter Drucker (1992), one of the most
influential authors in the management field
From being organised around the flow of things and the flow of money, the economy is
being organised around the flow of information.
Despite gaining recognition as an asset in its own right, information has so far resisted
quantitative measurement. While it consumes vast and ever increasing quantities of
organisational resources in terms of data capture, storage, processing and maintenance, it
typically receives no financial recognition on the balance sheet. While hardware and
(rarely) software assets are capitalised, the valuation of information has been largely
ignored, even though this is a much more valuable asset from a business viewpoint.
Hardware and software are merely mechanisms used to create and maintain information
information is the underlying business asset that is produced and maintained by this
technology. Information provides the capability to deliver services, make better decisions,
improve performance, achieve competitive advantage and can also be sold directly as a
product in its own right. Using a manufacturing analogy:
Data is the raw material

Software and hardware are the plant and equipment
Information is the end product that is delivered to the customer
180
To be most effective, IT strategies should be focused on enhancing and sustaining the value
of information (the product) rather than on systems and technology (the production
equipment). Business strategies are generally evaluated in terms of how they contribute to
the value or profitability of the firm the bottom line. Similarly, IT strategies should be
evaluated in terms of how they contribute to the information bottom line the value of
information delivered to users. To do this, we need some way of measuring the value of
information.
16.3 Summary
This unit provides brief details about Business effectiveness as a Functions of Cost,
Value, Performance and Competitive Positioning, Valuation Process of Information
System Application.
16.4 Keywords
Business effectiveness as function of cost, value, performance.
16.5 Exercises
1) Mention the business effectiveness as a function of cost, value, performance

& competitive positioning.
2) Explain the valuation process of information system application.
16.6 References

University Press.
181
Extra Reference:
182

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1

Head of the Department and Course Co-Ordinator

Developed by Academic Section, KSOU, Mysore

Unit-1 Information Systems Introduction 01-23

Unit-5 Introduction to DBMS 62-74

Unit-10 OLAP and Application BI in Business 121-127

Unit-11 CIO Profile and Roles 128-132

UNIT 1: Information Systems Introduction

1.0 Learning Objectives

1.2 The changing face of the Business Environment:

1.3 Types of Information System

Transaction Processing System (TPS)

Fig:-TPS Supply Summarized Transaction Data to the MIS Reporting System

Management Information System (MIS)

Fig: Model of MIS

Decision Support System (DSS)

DSS Software System

Data Mining Tools

Fig: Model of DSS

Organization DSS Application

American Airlines Price and route selection

Equico Capital Corporation Investment evaluation

General Accident Insurance Customer buying patterns and fraud detection

Bank of America Customer profiles

Frito-Lay, Inc. Price, advertising, and promotion selection

Burlington Coat Factory Store location and inventory mix

Southern Railway Train dispatching and routing

United Airlines Flight scheduling

Group Decision Support System (GDSS)

Session Idea Idea Organizer

Prioritization Vote Selection

Policy Policy Formation

Organizational Enterprise Analyzer

Fig: Group System Tools

Executive Support System/Executive Information System (ESS or EIS)

Internal Data External Data

Fig: Model of ESS

Inter-Relationship Among Systems.

Fig: Interrelationship among Kinds of Systems

Expert Systems (ES)

Components of Expert System

Fig: Components of Expert System

3. End User Interface: It is used to accept input and generate output.

Applications of Expert System

Benefits of Expert System

Disadvantages of Expert Systems

1.4 Information System vs. Information Technology

1.5 Emerging trends in information technology & information systems

2.0 Learning Objectives

2.1 Data Resources:

Fig: Data and Information

Worldwide influence of the internet is well-established and acknowledged. Penetration rate

2.3 Managing E-Transformation

Transformation of Business Enterprises.

Fig: Framework of Digital Firm

2.4 Introduction to Telecommunications and Computer Network for Business

Local Area Network (LAN)

Fig: Example of an Office LAN

Metropolitan Area Network (MAN)

Fig: Example of MAN

Wide Area Network (WAN)

Components of Communication Network / How two Computers Communicate with

2.6 Key Words

Data, Information, Network, Telecommunication System.