ITM - Lecture 5

INFORMATICS
Information Technology Management
Lecture 5
9th January 2008
ITM Lecture 5
Advanced Diploma (Thames College) 1
Information
o at o Tec
Technology
o ogy Management
a age e t
Unit
U it 10
10:
Electronic Commerce
ITM Lecture 5
What
W at iss Electronic
ect o c Commerce?
Co e ce?
z Electronic Commerce ((E-commerce)) or Electronic
Business (E-business) means shopping on the part of the
Internet called the World Wide Web (the Web).
z For decades, banks have been using Electronic Funds
Transfers (EFT, also called Wire Transfer), which are
electronic
l t i transmissions
t i i off accountt exchange
h information
i f ti over
private communications networks.
z Businesses also have been engaging in a form of electronic
commerce, known as Electronic Data Interchange (EDI), for
manyy years.
y
z Electronic commerce is defined as the use of electronic data
transmission to implement or enhance anyy business process.
ITM Lecture 5
E-commerce
co e ce Business
us ess Model
ode
z Business to Customer (B2C)
z Sale of goods to the public.
z E.g. Amazon.com
z Customer to Customer (C2C)

( )
z Sale of goods from one consumer to another
z E.g.
Eg E E-bay
bay
z Business to Business (B2B)
z Sale of goods from one business to another
z E.g. BigBoxX
ITM Lecture 5
Advantages
g of Electronic Commerce
z Access to a gglobal market at 24x7
z Instantaneous feedback
z Paperless
p transactions
z Real time updates to information
z Removal of the middleman function
z No geographic boundaries
z Large
g potential
p market
z Fast turnaround time
z Access to a wide range of suppliers
z Online customer support
z Reduced costs of distribution and processing
ITM Lecture 5
Disadvantages
g of Electronic Commerce
z Stem from the newness and rapidly developing pace of the
underlying
d l i technologies.
t h l i
z The costs and benefits have been hard to quantify.
z Had trouble recruiting and retaining employees with the
technological, design, and business process skills needed to
create an effective electronic commerce presence.
z Difficulty of integrating existing databases and transaction-
processing software designed for traditional commerce into
the software that enables electronic commerce.
commerce
z Face cultural and legal impediments to electronic
commerce.
z The legal environment in which electronic commerce is
conducted is full of unclear and conflicting laws.
ITM Lecture 5
Risks for the Growingg Use of Internet
z Misuse
Mi off P
Personall Information
I f i
z Virus attack on computer systems
z Online criminal activities
z Hacking
ITM Lecture 5
Revenue
eve ue Streams
St ea s in E-commerce
co e ce
z Direct
Di sales
l
z Software downloads
z Software rentals
z Advertising
z Backup/Storage
/
ITM Lecture 5
E-Commerce
Co e ce Market
a et Sectors
Secto s
z Online
O li b
banking
ki
z Online trading
z Entertainment
z Media
z Online training
Distribution
s bu o oof B2B Marketplaces
e p ces
in Operation or Announced by
Sector (As of August 2000)
ITM Lecture 5
International Electronic Commerce

z The predominant language on the Web is English,
English once the
language barrier is overcome, the technology exists for any
business to conduct electronic commerce with any other
b i
business or consumers, anywhere
h in i the
h world.
ld
z The political structures of the world have not kept up with
Internet technology: currency conversions
conversions, tariffs
tariffs, import and
export restrictions, local business customs, tax and laws of
each country in which a trading partner resides can each make
i
international
i l electronic
l i commerce difficult.
diffi l
z The main technological development that has allowed
electronic commerce to grow beyond its beginnings in bank
EFT and B2B-EDI is the emergence of the Internet and the
Web.
ITM Lecture 5
Economic Forces in E-Commerce
z Reduce Transaction Costs
z Businesses and individuals can use electronic commerce
to reduce transaction costs by improving information
flows and increasing coordination of actions to reduce
uncertainty.
y
z Reduce Cost of Searching for Information
z By reducing the cost of searching for information about
potential buyers and sellers and increasing the number
of potential market participants,
participants electronic commerce
can change the attractiveness of vertical integration for
manyy firms.
ITM Lecture 5
Network Organizations
Netwo O ga at o s
z Many companies and strategic business units operate in an
economic structure that exists between markets and hierarchies.
z Firms coordinate their strategies, resources, and skill sets by
f
forming
i a long-term,
l t stable
t bl relationship
l ti hi based
b d on a shared
h d purpose.
z Network organizations are particularly well-suited to technology
industries that are information intensive.
z Electronic commerce can make such networks, which rely
extensively on information sharing, much easier to construct and
maintain.
maintain
z These network forms of organizing commerce will become
predominant in the near future.
z One interesting role for electronic commerce is in the improvement
of existing markets and the creation of completely new markets.
ITM Lecture 5
Example of E-Commerce -
El tr ni D
Electronic Data
t Interchange
Int r h n (EDI)
z Electronic data interchange occurs when one business
transmits computer-readable data in a standard format to
another business.
z Business realized that they were spending a good deal of
time and money entering these data into their computers,
computers
printing paper forms, and then reentering the data on the
other side of the transaction.
z By creating a set of standard formats for transmitting that
information electronically,
y, businesses were able to reduce
errors, avoid printing and mailing costs, and eliminate the
need to reenter the data.
ITM Lecture 5
Steps
p in Makingg Moneyy in EC – ((1))
SStep 1:
1
z Write a business proposal
z Answer the following 11 questions
ITM Lecture 5
Steps
z 你的業務是什麼?
z 你的商業模型是什麼? (主要收入來源)
z 你的業務是滿足什麼需要或解決什麼
問題?
z 你的競爭對手有哪些? 詳細情況如何?
z 你的客戶是哪些?
ITM Lecture 5
Steps
z 你的業務目前發展狀況
z 主要構想的階段
z 業務開發階段
z 已有產品或服務
z 已有收入
z 已經有了可觀的收入，并且尋求業務的擴張
ITM Lecture 5
Steps
z 你希望融資的金額
z 你的目標評估價值是多少?
z 誰是你目前的投資者?
z 你的總部設在何處?
z 主要管理人員簡介
ITM Lecture 5
Steps
SStep 2:
2 Submit
S b i the
h proposall
contact @sbcvc.com
ITM Lecture 5
Steps
S 3:
Step 3 Auditing
A di i andd processing
i
Step 4: 3-4 weeks time to complete
If accepted,
d a legal document
d will be
b issued
d
and the money injected
ITM Lecture 5
Information
o at o Tec
Technology
o ogy Management
a age e t
Unit
U it 11
11:
Issues in E-Commerce
E Commerce
ITM Lecture 5
Electronic
ect o c Payment
Pay e t System
Syste
z Implementation of electronic payment systems is in
its infancy and still evolving.
z Electronic payments are far cheaper than using the
dead-tree method of mailing out paper invoices and
then later processing received payments.
z Electronic billing and payment systems is a win
win-win
win
situation:
z It is convenient for customers and it saves companies a
lot of money.
ITM Lecture 5
Electronic Payment
y Systems
y -Payment
y Method
z There are currently three basic ways to pay for your purchases:
z Cash
z Cheque
z Credit card
z Electronic cash distribution and payment can be handled by
wallets smart cards
wallets, cards, or through proprietary
proprietary, limited-use scrip
(Scrip is a digital cash minted by a small number of third-
party organizations).
z Electronic checks are encrypted representations that resemble
electronic cash.
z Over
O er 80% of Internet purchases
p rchases are paid for with
ith credit (or
debit) cards.
ITM Lecture 5
Electronic
ect o c Cash
Cas
z Credit card
card-issuing
issuing banks make money
money, by charging
merchants a processing fee ranging from 1-3% of the value
of the transaction.
z Small purchases are not profitable for merchants who
accept only credit cards for payment.
payment
z Compaq and IBM are among several companies that think
electronic cash schemes are in their infancy,
infancy and these
companies envision a rosy future for such methods.
z Electronic cash is attractive in the sale of goods and
services of Micropayments (Internet payments for items
costingg US$1
cos US$ oro less
ess are
a e called
ca ed Micropayments)
c opay e s)
ITM Lecture 5
Concerns
Co ce s on
o Electronic
ect o c Cash
Cas
z All electronic payment schemes have some issues that must
be satisfactorily resolved to allay consumers'fears and give
them confidence in the methodology.
z Concerns about electronic payment methods include
Privacy and Security, Independence, Portability,
Di i ibili and
Divisibility d Convenience.
C i
z These issues are particularly important when considering
electronic cash payment
pa ment systems.
s stems
z Privacy and security questions are probably the most
important issues that have to bee addressed with any
consumer.
ITM Lecture 5
Characteristics
C a acte st cs of
o Electronic
ect o c Cash
Cas
z Electronic cash should have two important
characteristics in common with real currency.
z It must be possible to spend electronic cash only
one, just as real currency is.
z Security procedures should be in place to guarantee
that the entire electronic cash transaction occurs
between two parties such that the recipient knows
that the electronic currencyy beingg received is not
counterfeit or being used in two different
transactions.
ITM Lecture 5
An Effective
ect ve Web Presence
P ese ce
z The
Th only
nl contact
nt t that
th t customers
t m r andnd other
th r
stakeholders have with a firm on the Web
might be through its presence there.
z Creating an effective Web presence can be
critical even for the smallest and newest firm
operating on the Web, and the tasks are:
z Identifying Web Presence Goals
z Achieving Web Presence Goals
ITM Lecture 5
Identifying
de t y g Web Presence
P ese ce Goals
Goa s
z When a business creates a physical space in which to
conduct its activities, its managers focus on very specific
objectives.
z They must find a location that will be convenient for
customers to find,
find with sufficient floor space and features
to allow the selling activity to occur, and they must balance
the need for room to store inventoryy and provide
p employee
p y
working space with the costs of obtaining that space.
z The p presence of a p
physical
y business location results from
satisfying these other objectives and is rarely a main goal of
designing
g g the space.
p
ITM Lecture 5
Achieving
c ev g Web Presence
P ese ce Goals
Goa s
z An effective site is one that creates an attractive presence
that meets the objectives of the business or other
organization.
z These objectives include:
z Attracting visitors to the Web site
z Making the site interesting enough that visitors stay and explore
z Convincing visitors to follow the site's links to obtain
information
z Creating an impression consistent with the organization's
desired image
z Reinforcing positive images that the visitor might already have
about the organization
ITM Lecture 5
Important
po ta t of
o Web Presence
P ese ce
z On the Web,
Web businesses and other organizations have the
luxury of intentionally creating a space that creates a
distinctive presence.
z A Web site can perform many image-creation and image-
enhancing tasks very effectively - it can serve as a sales
brochure a product showroom,
brochure, showroom a financial report,
report an
employment ad, or a customer contact point.
z Each entity that establishes a Web presence should decide
which tasks the Web site must accomplish and which tasks are
the most important to include.
z Different firms,
firms even those in the same industry,
industry might
establish different Web presence goals.
ITM Lecture 5
Web Presence for Not-for-profit

Or niz ti n
Organizations
z Use their Web sites as a central resource for integrated
communications with their varied and often geographically
disperse constituencies.
z Integrate information dissemination with fund-raising while
providing a two
two-way
way contact channel with persons engaged
in the organization's work.
z This combination of information dissemination with a two two-
way contact channel is a key element in any successful
electronic commerce Web site.
z Use the Web to stay in touch with existing stakeholders and
identify
de y new ew opportunities
oppo es for
o serving
se v g them.
e .
ITM Lecture 5
Issues
ssues in Setting
Sett g up a Website
Webs te
z Use
U off E
E-commercer software
ft r
z Development
evelop ent o of the website
webs te
z Digital cash: Payment
z Delivery
z CRM facility
f ili
ITM Lecture 5
Strategies for Purchasing, Logistic

and
nd SSupport
pp rt AActivities
ti iti
z Businesses use electronic commerce to improve their primary
activity of purchasing and all of the support activities creating
a Web p presence and sellingg to new customers on the Web.
z An emerging characteristic of purchasing, logistics and
support activities is that they need to be flexible.
z Economic organizations are evolving from the hierarchical
structures they have used since the Industrial Revolution to
new, more flexible
fl ibl networkk structures.
z These network structures are made possible by the reductions
i transaction
in t ti costs t causedd by
b the
th emergence off the
th Internet
I t t
and the Web.
ITM Lecture 5
Purchasing
Pu c as g Activities
ct v t es
z Purchasing activities include identifying vendors,
vendors evaluating
vendors, selecting specific products, placing order, and
resolving any issues that arise after receiving the ordered
goods or services.
z These issues might include late deliveries,
deliveries incorrect
quantities shipped, incorrect items shipped, and defective
items.
z The term Procurement generally includes all purchasing
activities,, plus
p the monitoringg of all elements of purchase
p
transactions. It also includes the job of managing and
developing
p g relationships
p with key suppliers.
pp
ITM Lecture 5
Purchasing
ct v t es Strategies
St ateg es
z A number of manufacturers that deal in general
industrial merchandise and standard machine tools
that
h are used d iin a variety
i off iindustries
d i h have createdd
Web sites through which businesses can purchase
items to fulfill
f lf ll recurring needs.
d
z Manyy of the products
p that companies
p buyy on a
recurring basis are commodities; that is, standard
items that b
buyers
y usuallyy select usingg price
p as their
main criterion.
ITM Lecture 5
Purchasing
St ateg es
z These products are often called Maintenance,
Maintenance
Repair and Operating (MRO) supplies.
z By using a Web site to process orders, the vendors
in this market can save the cost of printing and
shipping catalogs, and the cost of handling
telephone orders.
z Office equipment and supplies are also items that
are usedd by
b a wide
id variety
i off bbusinesses.
i
z Well-designed Web sites devoted to helping
b i
business purchasing
h i ddepartments b buy these
h routinei
items are easily as possible.
ITM Lecture 5
What
W at iss Logistics
og st cs Activities?
ct v t es?
z Logistics activities include managing the inbound
movements of materials and supplies and the outbound
movements of finished goods and services.
services
z The activities of Receiving, Warehousing, Inventory
C
Control,l V
Vehicle
hi l SScheduling
h d li and dC Control,l and
d Fi
Finished
ih d
Goods Distribution are all logistics activities.
z The classic objective of logistics is providing the right
goods in the right quantities in the right place at the
right time.
ITM Lecture 5
Logistics
og st cs Activities
St ateg es
z Businesses have been increasing their use of information
technology to achieve this objective.
z Information system
y delivers real-time shipment
p information
to Web browsers on its customers' computers.
z Firms that run their own tracking operations have also
b
begun iimplementing
l i tracking
ki systems thath use satellite
lli
global positioning technology to monitor vehicle
movements.
z The Web and the Internet are providing an increasing
number of opportunities
pp to better manage
g these activities as
they lower transaction costs and provide constant
connectivity between firms engaged in logistics
management
management.
ITM Lecture 5
Supportt Activities
Suppo ct v t es
z Support
S t activities
ti iti include
i l d the
th generall
g
categories like
z Financeand Administration
z Human
H R
Resources
z Technology
gy Development
p
ITM Lecture 5
Finance
F a ce and
a d Administration
d st at o
z Finance and Administration includes activities
such as making payments, processing payments
received
i d from
f customers, planning
l i capital i l
expenditures, and the budgeting and planning that
ensure sufficient funds will be available to meet
the organization's
g obligations
g as theyy come due.
z The operation of the computing infrastructure of
the organization is also an administration activity
activity.
ITM Lecture 5
Human
Hu a Resource
esou ce Activities
ct v t es
z Human
H R
Resource activities
ti iti include
i l d hiring,
hi i
g and evaluatingg employees;
training, p y
benefits administration, and complying
with government record-keeping
record keeping
regulations.
ITM Lecture 5
Developing
eve op g Technology
Tec o ogy
z Developing Technology can include a wide
variety of activities, depending on the nature of
the business or organization.
z Itt can
ca include
c ude the
t e networking
etwo g of
o research
esea c
scientists into virtual collaboration work-groups,
posting of research results,
results publishing research
papers online, and providing connections to
outside
id sources off research h andd development
d l
services.
ITM Lecture 5
Support
pp Activities - Trainingg Strategies
g
z The training function can be handled by the human resources
department, or decentralized and administered by individual
departments.
z In addition to saving the costs of running classroom sessions in
multiple locations, many companies found that the training was
producing sales increases in specific product lines.
lines
z The company also began tracking the courses that a salesperson or
reseller's salesperson
p had taken and began
g assigning
g g sales leads for
specific products to the salespersons that had taken the course for
that product.
z T keep
To k salespersons
l updated
d d after
f they
h have
h taken
k a course, they
h
send course graduates an e-mail notification whenever new
information about a pproduct becomes available.
ITM Lecture 5
Business Plan for Implementing
E C mm r
E-Commerce
z Setting
S tti Objectives
Obj ti
z Benefit Objectives
z Cost Objectives
z Comparing Benefits to Costs
ITM Lecture 5
Settingg Objectives
Sett Object ves
z Objectives for e-commerce initiatives should include expected
benefits and expected costs. It can inspire businesses to undertake
activities:
z Building brands
z Enhancing existing marketing programs
z Selling products and services
z S lli advertising
Selling d ii
z Improving after-sales service and support
z Purchasingg pproducts and services
z Managing supply chains
z Operating auctions
z C ti virtual
Creating i t l communities
iti andd Web
W b portals
t l
z Although the success of each of these activities is measurable to
some degree, many companies have undertaken these activities on
the Web without setting specific, measurable goals.
ITM Lecture 5
Cost and
a d Benefit
e e t Evaluation
va uat o
z In the earlyy days
y of e-commerce ((the mid-1990s), ), companies
p that
had good ideas could launch a business activity on the Web and not
face competition.
z A e-commerce is
As i now beginning
b i i to mature, more companies i are
taking a closer look at the benefits and costs of their electronic
commerce projects.
p j
z A good business plan will set specific objectives for benefits to be
achieved and costs to be incurred.
z A company will create a pilot Web site to test an electronic
commerce idea, and then release a production version of the site
when it works well
well.
z These companies must specify clear goals for the pilot test so that
theyy know when the site is readyy to scale up.
p
ITM Lecture 5
Benefit
e e t Objectives
Object ves
z Some companies
p build Web sites to build their brands or enhance
existing marketing programs in order to increased brand awareness,
as measured by market research surveys and opinion polls.
z C
Companiesi that
h want to sellll goods
d or services
i on their
h i sites
i can
measure sales volume in units or dollars.
z A good marketing staff or outside consulting firm can help a
company sort out the causes and effects of marketing and sales
programs and may be needed to help set and evaluate these kinds of
goals for electronic commerce initiatives.
z Companies that want to use their Web sites to improve customer
service or after
after-sales
sales support might set goals of increasing customer
satisfaction or reducing the cost of providing the customer service
or support.
ITM Lecture 5
Measurement
easu e e t of
o Benefit
e e t
z The benefits of other electronic commerce initiatives can be
assessed by using a variety of measurements.
z Supply chain managers can measure supply cost reductions,
quality improvements, or faster deliveries of ordered goods.
z Auction sites can set goals for the number of auctions, the
number of bidders and sellers
sellers, the dollar volume of items sold,
sold
the number of items sold, or the number of registered
participants.
z Virtual communities and Web portals measure the number of
visitors and try to measure the quality of their visitors'
experiences.
experiences
z Some sites use online surveys to gather these data; most settle
pp
for approximations provided
p byy measuringg the length
g of time
each visitor remains on theITM
site and how often visitors return.
Lecture 5
Cost Object
Objectives
ves
z Managers
g found that the cost of information technology gy
projects can be equally difficult to estimate and control.
z Since Web development uses relatively new hardware and
software
ft technologies,
t h l i managers have h little
littl experience
i on
which they can draw to make estimates.
z E
E-Commerce
Commerce initiatives tend to have a shorter timeframe than
many other information technology projects, the rapid changes
in Web technology can destroy a manager's best-laid plans
very quickly.
i kl
z In addition to hardware and software costs, the project budget
must include the costs of hiring, training, and paying the
personnel who will design the Web site, write or customize
the software, create the content, and operate and maintain the
site.
it
ITM Lecture 5
Comparing
Co pa g Benefits
e e ts to Costs
z Most companies
p have pprocedures that call for an evaluation
of any major expenditure of funds.
z These major investments in equipment, personnel, and
other
h assets are called
ll d capital
i l projects
j or capital
i l
investments.
z The techniques that companies use to evaluate proposed
capital projects range from very simple calculations to
complex
p computerp simulation models.
z No matter how complex the technique, it always reduces to
a comparison of benefits and costs.
z If the benefits exceed the cost of a project by a comfortable
margin, the company invests in the project.
ITM Lecture 5
Cost-Benefit Evaluation of E-
C mm r Str
Commerce Strategy
t El
Elements
m nt
z A keyy part
p of creatingg a business plan
p for e-commerce
initiatives is the process of identifying potential benefits,
identifying
y g the costs required
q to generate
g those benefits,
and evaluating whether the benefits exceed the costs.
z Companies
p should evaluate each element of their e-
commerce strategies using this cost-benefit approach.
ITM Lecture 5
E-Commerce: Go or Stop?
p
z Capital project evaluation (such as the payback method
or the net present value method) provide a quantitative
expression
p of what a comfortable benefit-to-cost
margin is for a specific company.
z Managers
g often use the term Return on Investment
(ROI) calculation to describe any capital investment
evaluation technique.
z The value of early position in a new market is so great
that many companies are willing to invest very large
amounts
of money with no near-term prospects of profit.
ITM Lecture 5
Information
o at o Tec
Technology
o ogy Management
a age e t
Unit
U it 12
12:
Data Files and Databases
ITM Lecture 5
Data
ata F
Files
es & Databases
atabases
z Before databases were introduced,
introduced all data
was stored in files.
z Files are still used today, but are much less
common.
z A file stores only 1 type of record.
z Databases can store different types of
records.
ITM Lecture 5
Data
ata F
Files
es
z Manual office systems used files to structure the
information and computer systems to group
common data together in files.
files
z The way in which data files for computerized
systems are structured follows a set pattern.
pattern
z The file is divided into records.
z E h rrecord
Each rd iis di
divided
id d iinto
t fi
fields.
ld
z The field is a particular data item which relates to a
record.
record
z Each record in a file would have the same set of fields.
ITM Lecture 5
Storingg Data
Sto ata in Files
F es
z Traditional Method
z Keep paper documents in 2-ring binder or file.
z Each file contains information about a particular
subject
z E.g. students data, there could be many
g
registration forms. Each form may include name,
student number, address, etc...
z Earlier application system each had their own
file
ITM Lecture 5
Filee Organization
F O ga at o
z Data files must be organized logically into
files
andd bbe accessible
ibl and
d updated
d d as needed.
d d
z There are three major methods of file
organization
z Sequential
S i lO
Organization
i i
z Direct Organization
z Indexed-sequential Organization
ITM Lecture 5
Sequential
Seque t a File
F e Organization
O ga at o
z This is the simplest form of file organization.
organization
z Records are stored in sequential order by a particular
record key.
key
z For example, if the file contains employee data, then the
p y Number.
data field chosen to be the record is the Employee
z Sequential Files can be stored on both magnetic tape
and
magnetic disks.
z Data which is stored sequentially
q y can onlyy be accessed
sequentially is called Sequential Access Method (SAM)
file.
ITM Lecture 5
Direct
ect File
F e Organization
O ga at o
z In a direct file,, the data management
g systems
y is able to
determine the exact location on the disk (address)
where the data record is stored.
z This method of access is called direct access and the
file is called Direct Access Method (DAM) file which is
only found in disks.
z The data management system determine the address on
the disk to store and retrieve a particular data record by
using a
program specially
i ll createdd for
f thishi purpose.
z The input will be the record key field, and the output
f
from this
hi program is i the
h address.
dd
ITM Lecture 5
Indexed-Sequential
q File Organization
g
z Data records are stored
sequentially by record key.
z A few data records are stored
on any one track.
t k
z An index is created by the data
management
g system.
y
z When a particular record is to
be accessed, the index is looked
up to find the track where the
record can be found.
z Then the records in this track
are readd sequentially
i ll until
il the
h
particular record desired is
found.
z It is found only on disks.
ITM Lecture 5
Redundancy
edu da cy in Data
ata Files
F es
z In the traditional data files,
files the same data may be
stored in several functional files.
z This situation duplicates data unnecessarily,
unnecessarily
creating what is referred to as Redundancy.
ITM Lecture 5
Databases
atabases
zA Database is a data store for accepting,
accepting
storing and providing on demand data for
multiple
lti l independent
i d d t users.
z It is essentially
y a means of organizing
g g data in
related file structure to allow quick, user
p
specifiedd access andd manipulation
p of the ddata.
z They are controlled by systems software
called Database Management Systems
S stems
(DBMS).
ITM Lecture 5
DBMSS
z The Database Management System (DBMS) is the
software that manage (builds and maintains) the
database.
database
z This includes Adding, Deleting and Changing
records in the database.
z The DBMS will also control access to the data.
z A financier user, for example, may not be able to view
personnel data,, even though
p g both finance and personnel
p
data are kept in the same database.
ITM Lecture 5
DBMSS
z The DBMS makes it easier for programmers to
develop application systems.
ITM Lecture 5
Functions
Fu ct o s of
o a DBMSS
z What are the functions performed by a
DBMS?
z Record
d C
Creation andd Updates
d
z Record Selection byy Search Criteria
z Minimize Data Redundancy
z Security
ITM Lecture 5
Record
eco d Creation
C eat o and
a d Updates
z The database is maintained by the user
creating, deleting or amending records.
z The
Th D Database
b M Management SSystem will ill also
l
allow the user to process selected groups of
records, the whole file or individual records.
z This is accomplished by selecting the
required option from a menu displayed on
the video screen or by keying in the relevant
command from the keyboard.
ITM Lecture 5
Record Selection by Search Criteria

z Involve the extraction of information from the selected
records according to specified search criteria.
z A database has searching facilities ranging from limited
searches on keywords to full text searching.
z This facility provides the means of extracting from a large
volume
l off data
d usefulf l facts
f which
hi h could
ld not possibly
ibl bbe
found by physical search methods in sufficient time to
make a decision
decision.
z A query language is used to specify the search criteria.
z This language facilitates enquiries using English-style word
to define commands, so greatly assisting users to find the
information theyy are seeking.g
ITM Lecture 5
Minimizee Data
ata Redundancy
edu da cy
z If a data element or record (e
(e.g.
g an
employee address) appears twice in an
organization's
i ti ' records,
d this
thi is
i called
ll d Data
D t
Redundancy, since logically, it should not
be necessary to hold the data twice, hence
one copypy is redundant.
z In a database, data redundancy should be
eliminated,
li i t d or att least,
l t minimized
i i i d andd this
thi
is the task of the DBMS.
ITM Lecture 5
Securityy
z The Database Management System is also
responsible for providing security for the
d t b
database, ensuring
i against
i t unauthorized
th i d
access and data corruption.
z For example, if many end-users are given
access to common data,, there must be a wayy
of controlling that access to ensure that no
w users are able
two b to changeg the data
simultaneously.
ITM Lecture 5
Data
ata Dictionary
ct o a y
z A data dictionaryy contains details of the data in a
database.
z JJust like an English-language
g g g dictionary,
y, each data item
is recorded together with its definition and explanation.
z The dictionaryy assists in the design
g of a database since
the meaning of various types of data are easily located.
z It can be used to reduce the level of redundancyy to a
necessary minimum.
z It is easier to identifyy synonyms
y y (data
( groups
g p havingg
more than one name).
ITM Lecture 5
Example
a pe
ITM Lecture 5
Advantages
dva tages of
o Databases
atabases
z Reduces data duplication which occurs
using conventional file structure.
z Avoids duplicating input data to update
p functionalityy independent
multiple p files
holding the same date.
z Offers
Off r useful
f l query
r andd rreport
p rt generation
r ti
languages.
z Provides fast and flexible access to
information
information.
ITM Lecture 5
Disadvantages
sadva tages of
o Database
atabase
z Data structures in a database are complex
and therefore takes a longer time to design
andd iimplement.
l t
z Costs more than conventional file systems.
y
z Requires high caliber, experienced and
specialized
p i liz d p personnel.
r l
ITM Lecture 5
Creating
C eat g a Database
atabase Environment
v o e t
z Departments
p have all alongg maintained their own data
and have been jealous of it.
z Inter-departmental
p rivalryy leads to reluctance to divulge g
data, let alone make it available in a central database.
z There must be a change g of attitude in terms of who
actually owns data.
z Appointing
pp g a Chief Information Officer is one wayy to
give direction and focus, as the CIO will be responsible
for the overall use of data and information in the
company.
z A data administration function must be established and
the CIO must plan the current
ITM Lecture 5
and future data needs.
Physical
P ys ca and
a d Logical
og ca Records
eco ds
z The form in which data which is actually
stored is not the same as the form
presented
t d to
t the
th application
li ti program.
z The data structure that is actually
y on the
computer media (e.g. disk, tape ) is called a
Physical Structure.
Structure
z The structure that the application program
uses is a Logical Structure.
ITM Lecture 5
Data
ata F
Files
es and
a d Databases
atabases
z Database Management Systems (DBMS) do not
replace the traditional method of storing data in data
files.
z The data is still stored in sequential, direct or indexed
sequential file structure even though a database
management system is used to provide greater
flexibility in accessing data.
z There are a variety of methods that could be used by
a DBMS to logically structure the data.
z Two methods that will be discussed are
z Multi-lists
z Inverted Files
ITM Lecture 5
Multilist
u t st
zA list links common items in a database.
database
z A list is like a chain and each link in that
chain is a record with the desired attribute.
z By starting at the first record,
record the DBMS
can retrieve, one by one, the records in the
chain
h i which
hi h share
h r th
the ddesired
ir d attribute.
ttrib t
ITM Lecture 5
Multilist
u t st
zA list links common items in a database.
database
z A list is like a chain and each link in that
chain is a record with the desired attribute.
z By starting at the first record,
record the DBMS
can retrieve, one by one, the records in the
chain
h i which
hi h share
h r th
the ddesired
ir d attribute.
ttrib t
ITM Lecture 5
Inverted
ve ted Files
F es
z In an inverted file,, the
addresses of each
record with a desired
attribute are stored in
an index.
z In a fully inverted file,
there will be one index
f each
for h type off data
d
item.
z I a partially
In i ll inverted
i d
file, only some of the
attributes are indexed.
indexed
ITM Lecture 5
Information
o at o Tec
Technology
o ogy Management
a age e t
Unit
U it 13
13:
Computer Configurations
ITM Lecture 5
Computer
Co pute Configurations
Co gu at o s
z A computer processing center will be set up in a
company to control and manage the computer
servers.
servers
z In a company with multiple sites, there are
diff r t possible
different p ibl hardware
h rd r setups,
t p ddepending
p di
on the number of computer servers and their
l ti
location.
z The computer systems could be Centralized or
Decentralized.
ITM Lecture 5
Centralized
Ce t a ed Environment
v o e t
z Facilities, systems &
Facilities
resources installed in a
central location
z Other business units gain
access through
thr h
telecommunications
networks
t k
z User interface through
dumb terminals or PCs with
terminal simulation software
ITM Lecture 5
Benefits for Centralized Environment

z Provides Access to Large Systems
z Sharing of Resources
z E i r tto M
Easier Manage
z Monitor
z Lower Cost
z Faster Deliveryy of Output
p
z Elimination of Redundancy
z Increased Security
z Greater Responsiveness
ITM Lecture 5
Decentralized
ece t a ed Processing
P ocess g
z W the availabilityy of cheaper
With p computers
p ((e.g.
g
minicomputers), it becomes possible for each
department or branch of a company to have its
own computer system.
z Each site can then carry out their processing
independently.
ITM Lecture 5
Distributed
st buted Processing
P ocess g
z Distributed pprocessingg involves havingg computers
p systems
y
at each site, but these systems work together to achieve the
same business objectives.
z There
h could ld be
b sharing
h i off corporate databases
d b as well
ll as
local processing.
z Distributed processing has increased in popularity.
popularity
z It is seen as a viable alternative to centralized processing
and decentralized processing.
z Both local and shared data processing are possible.
z Each site may need to process data unique to its own
location.
z At the same time, transactions can span across sites.
ITM Lecture 5
Reasons for Implementing
Di trib t d Systems
Distributed S t m
z Improved Response Time
z Reduced Costs
z Improve Accuracy
z Reduced Mainframe Costs
z Smoother Growth
z Increased
I d Reliability
R li bili
z Resource Sharingg
z Increased User Satisfaction
ITM Lecture 5
Developing
p g a Telecommunications System
y
z In anyy large
g organization,
g , communications and
information sharing depends on a good
telecommunications system and facilities.
z The computer network depends on the
telecommunications infrastructure for the transmission
of data.
z In developing a telecommunications plan for your
company, it is important to start with the requirements
of your company rather than just looking at the
d i bl ffeatures.
desirable
z A telecommunications system must advance the
b i
business objectives
bj i off theh organization.
i i
ITM Lecture 5
Developing
p g a Telecommunications System
y
z Reduced travel time which can be more
productively used for work.
z Flexible work schedule which can motivate
staff.
z Conducive work environment which
r d
reduces stress.
tr
z Reduced overheads.
z Greater workplace efficiency.
ITM Lecture 5
Effectively
v y Work
W as Telecommuters
z Video conferencing
z Teleconferencing
z E-mail
z Net meetings/Online chat facilities
z Groupware
p
z Blackberry for instant access anytime,
anywhere
ITM Lecture 5
Factor to Consider in Developing a
T l mm ni ti ns System
Telecommunications S st m
z There are several factors that should be
consider when developing a
telecommunications plan and in choosing
telecommunications equipment.
z Distance - If the communications are mainly
local and internal to the organization, then there
i little
is li l needd to consider
id long-distance
l di
telecommunications features.
z Type of Service - The type of service to be
supported must also be considered.
ITM Lecture 5
G oba at o
Globalization
z Globalization refers to the worldwide phenomenon
of technological, economic, political and cultural
exchanges,
g , brought
g about byy modern
communication, transportation and legal
infrastructure as well as the p
political choice to
consciously open cross-border links in international
trade and finance.
z The term Global Culture is used to describe how
human beings g are becomingg more intertwined with
each other around the world economically,
politically,
p y and culturally.
y
ITM Lecture 5
Global
G oba Syste
Systemss Infrastructure
ast uctu e
z The basic requirements
q for data communications and a
global information system is in place.
z There are several factors that must be considered to
ensure a successful global data communications
capability.
z These include factors like establishing standards and
human resource policies.
z Imagine the scenario of each site having its own
computers, software and procedures for developing
systems and processing data.
z There would be tremendous problems trying to make
these sites communicateITMeffectively.
Lecture 5
Information
o at o Tec
Technology
o ogy Management
a age e t
Unit 14:
I f
Information
i Systems
S –
Types and Presentations
ITM Lecture 5
What is a Computer-based
Inf rm ti n SSystem?
Information t m?
z This is one that uses technology to
perform some or all of its intended tasks
which
hi h iinclude
l d th
the hhandling
dli off iinputs
t such
h
as business problems, processing the
problems and producing as output, reports
and recommendations.
z The typical components of such a system
are hardware,
h d software,
ft a database,
d t b
network, procedures and people.
ITM Lecture 5
Classification of Information Systems

y
z There are various ways
y of classifying
y g information
systems.
z One common approach
pp is to classifyy accordingg to its
main functions.
z Transaction Processingg Systems
y (TPS)
( )
z Information Reporting Systems (IRS)
z Decision Support Systems (DSS)
z Expert Systems (ES)
z E
Executive
ti Information
Inf rm ti n SSystems
t m (EIS)
z Office Automation (OA)
ITM Lecture 5
Types
yp of Information Systems
y
ITM Lecture 5
Transaction Processingg Systems

y (TPS)
( )
z Automated clerical and operational functions
z Track data at the most elementary level
ITM Lecture 5
Information Reporting
p g System
y (IRS)
( )
z Provide routine summary and exception reports,
reports
often drawing on transaction level data.
ITM Lecture 5
Decision
ec s o Support
Suppo t System
Syste (DSS)
( SS)
z Supports management decisions that are semi-
semi
structured or cannot be specified in advance
z Interactive and user
user-friendly
friendly
ITM Lecture 5
Expert
pe t System
Syste (ES)
( S)
z Captures human expert knowledge to solve problems
z Gives the computer the ability to make suggestions
and act like an expert
z Captures the use of the wisdom of experts and
specialists
z Years of experience and specific skills are not
completely lost when a human expert dies,
dies retires or
leaves the company
z To solve complex problems and support difficult
decisions
ITM Lecture 5
Executive Information System

y (EIS)
( )
z Utilizes heavyy graphics
g p displays,
p y , draws together
g
data from numerous internal and external sources
z Determine how certain data was produced
p
z For senior managers
z Drill down capabilities
ITM Lecture 5
Office
O ce Automation
uto at o (OA)
(O )
z Office Automation ((OA)) refers to a wide varietyy
of computer-based technologies that make office
workers more productive at their jobs.
z This improvement in productivity can be achieved
through increases in effectiveness or efficiency.
ITM Lecture 5
Management
g Information Systems
y
z Another common term used loosely is
Management Information Systems (MIS).
z We will consider it to be any information system
that supports the timely use, management and
pr
processing
i off ddata
t orr iinformation
f r ti p pertaining
rt i i tto
an organization's operations by authorized
peoplel iin th
the organization's
i ti ' environment.
i t
z In this definition, the relevant parts of any TPS,
IRS, DSS, ES, EIS and OA can be considered
components of an organization's MIS.
ITM Lecture 5
Transaction Processingg Systems
y (TPS)
( )
z Itis a system that supports the processing
of a firm's business transactions.
z These systems are designed to keep an
g
organization runningg smoothingg byy
automating the processing of the huge
amounts of paperwork that must be
handled daily.
ITM Lecture 5
Example
a peo of TPS
z There are several examples of TPS.
z Order Entry
z Inventory
z Distribution
z Sales
S l Invoicing
I i i
z Accounts Receivable
z Purchasing
z Receiving
z Accounts Payable
z Payroll
y
ITM Lecture 5
Example
a peo of TPS - O
Order
de Entry
ty
z This is the TPS which processes customer
orders.
z Orders may arrive by a variety of means :
mail,, phone,
p , fax etc.
z In cases of repeat orders, a trigger within
th system
the t m will
ill be
b the
th source.
r
ITM Lecture 5
Example
a peo of TPS - Inventory
ve to y
z An inventory system monitors the quantity
of each product available for sale and helps
ensure that
th t the
th proper amountt off stock
t k is
i
maintained.
z All movement of goods in and out of the
store or warehouse will be recorded.
recorded
ITM Lecture 5
Example
a peo of TPS - Distribution
st but o
z This involves ensuring the best mode of
transport is selected to deliver goods to the
customer
t on time.
ti
z Customs clearance,, insurance and freight
g
forwarding are the areas of concern here.
ITM Lecture 5
Example
a peo of TPS - Sa
Sales
es Invoicing
vo c g
z The main role of the sales invoicing system
is to receive delivery information from the
Di t ib ti System
Distribution S t andd to t prepare
invoices to be sent to the customer.
z Discounts are applied where appropriate.
In some systems,
systems monthly statement of
accounts are also prepared.
ITM Lecture 5
Example
p of TPS - Accounts Receivable
z As the name implies,
implies this TPS records the
amount owed by customers and the payments
made.
made
z The data comes from the sales invoicing system.
z In companies with cash sales, there is little or no
receivables.
z A large amount of money may be tied in A/R
y
and the results of this system often receive close
attention.
ITM Lecture 5
Example
a peo of TPS - Pu
Purchasing
c as g
z Many companies have central department
to handle procurement of its goods and
services.
i
z The advantages
g are to gain
g maximum
volume discounts, obtain the lowest price
or best deal from various vendors and to
achieve standardization where necessary.
ITM Lecture 5
Example
a peo of TPS - Receiving
ece v g
z The role of the receiving system is to
record the receipt, inspection, acceptance
or rejection
j ti off goods.d
z The inspection
p serves to identifyy damaged
g
or incomplete goods which must be
rejected.
rejected
ITM Lecture 5
Example
p of TPS - Accounts Payable
y
z This system records the invoices received
from vendors, determines the optimum
ti to
time t pay andd prepares andd prints
i t
cheques.
z Cash forecasting is another important task
of the A/P system.
system
ITM Lecture 5
Example
a peo of TPS - Pay
Payroll
o
z This system calculates the salary to be paid
to employees, taking into account any
relevant
l t deductions
d d ti (e.g.
( pension
i fund
f d ) or
additions (e.g. allowances).
z The payroll system must produce income
tax reports and should also keep track of
pension fund or union fees which have to
b credited
be dit d to
t another
th organization.
i ti
ITM Lecture 5
Information
o at o Reporting
epo t g Systems
Syste s
z An Information Reporting
p g Systems
y (IRS)
( ) is an
information system that provides predefined types of
information to management for relatively structured types
off decisions.
d ii
z Many of the traditional hard copy reports are now also
available in screen form
form.
z Printouts like invoices or remittance advice are not
traditionally considered "reports"
reports and are more closely
associated with the Transaction Processing System (TPS)
that produced them.
z Information Reporting Systems are used for both
management planning and management control functions.
ITM Lecture 5
Methods of Information Presentation
z Co
Common o methods
e ods of
o presentation
p ese o used in information
o o sys
systems
e s
are via the PC screen or printed page.
z Information can also be ppresented vocally,
y either byy face to
face communication, telephone or pre-recorded message,
z The aim of an information system, beyond presenting the
required information at the required time, must be to present it
in such as way that it may be readily absorbed.
z A number
b off ffactors contribute
ib to this:
hi
z Visual Presentation
z Use of Graphics
z Format and layout
ITM Lecture 5
Visual
V sua PPresentation
ese tat o
z About 70% of all the information that we
absorb is acquired visually rather than
th
throughh the
th other
th senses.
z This already
y the primary
p y method used in
information systems as both screen and
paper printouts show information visually
visually.
ITM Lecture 5
Use o
of G
Graphics
ap cs
z Although text forms the bulk of the
contents of information being provided,
alternatives
lt ti should
h ld be
b sought.
ht Graphics
G hi is i a
useful supplement.
z Examples are pie charts, line charts, etc.
ITM Lecture 5
Format
Fo at and
a d Layout
ayout
z Use of different fonts and different font sizes,
sizes
underlining and so on help to highlight
important points and make the presented
information easier to absorb.
z Even
E th
the way sentences
t andd paragraphs
p r r ph arer
positioned is important in making the page or
screen look
l k more appealing.
li
z Imagine how boring a textbook looks if all you
see are lot of words arranged close together on
each page.
ITM Lecture 5
Questions & Discussion
ITM Lecture 5

ITM - Lecture 5

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ITM - Lecture 5

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INFORMATICS

Information Technology Management

9th January 2008

z Customer to Customer (C2C)

International Electronic Commerce

Step 4: 3-4 weeks time to complete

Web Presence for Not-for-profit

Strategies for Purchasing, Logistic

Record Selection by Search Criteria

Benefits for Centralized Environment

Classification of Information Systems

Transaction Processingg Systems

Executive Information System

z Format and layout

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