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About the Authors, xv
Preface, xix
Unit 1. Achieving Business Success, 2
Apple—Merging Technology, Business, and Entertainment, 3
Introduction, 7
Chapter 1. BUSINESS DRIVEN TECHNOLOGY, 8
Information Technology's Role in Business, 8
Information Technology's Impact on Business Operations, 8
Information Technology Basics, 9
Data, Information, and Business Intelligence, 10
IT Resources, 11
IT Cultures, 13
Chapter 1 Case: The World Is Flat—Thomas Friedman, 14
Plug-In Pointers: B1, B2, B3, B4, B5, T1, 15
Chapter 2. IDENTIFYING COMPETITIVE ADVANTAGES, 17
Identifying Competitive Advantages, 17
The Five Forces Model—Evaluating Business Segments, 17
Buyer Power, 18
Supplier Power, 18
Threat of Substitute Products or Services, 19
Threat of New Entrants, 19
Rivalry among Existing Competitors, 20
The Three Generic Strategies—Creating a Business Focus, 20
Value Chain Analysis—Targeting Business Processes, 21
Value Creation, 21
Chapter 2 Case: Say “Charge It” with Your Cell Phone, 24
Chapter 3. STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES, 26
Strategic Initiatives, 26
Supply Chain Management, 26
Customer Relationship Management, 28
CRM Strategy, 29
Business Process Reengineering, 30
Finding Opportunity Using BPR, 30
Pitfalls of BPR, 31
Enterprise Resource Planning, 31
Chapter 3 Case: Consolidating Touchpoints for Saab, 34
Plug-In Pointer: T2, 35
Chapter 4. MEASURING THE SUCCESS OF STRATEGIC INITIATIVES, 36
Measuring Information Technology's Success, 36
Efficiency and Effectiveness, 37
Benchmarking—Baseline Metrics, 37
The Interrelationships of Efficiency and Effectiveness IT Metrics, 38
Metrics for Strategic Initiatives, 40
Web Site Metrics, 40
Supply Chain Management (SCM) Metrics, 41
Customer Relationship Management (CRM) Metrics, 41
Business Process Reengineering (BPR) and Enterprise Resource Planning (ERP) Metrics, 42
Chapter 4 Case: How Do You Value Friendster?, 44
Chapter 5. ORGANIZATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES, 46
Organizational Structures, 46
IT Roles and Responsibilities, 46
The Gap between Business Personnel and IT Personnel, 48
Improving Communications, 48
Organizational Fundamentals—Ethics and Security, 48
Ethics, 49
Security, 50
Chapter 5 Case: Executive Dilemmas in the Information Age, 52
Plug-In Pointers: B6, B7, 53
Unit Summary, 54
Key Terms, 54
Unit Closing Case One: How Levi's Jeans Got into Wal-Mart, 55
Unit Closing Case Two: Business 2.0: Bad Business Decisions, 57
Making Business Decisions, 59
Apply Your Knowledge, 61
Unit 2. Exploring Business Intelligence, 68
It Takes a Village to Write an Encyclopedia, 69
Introduction, 72
Chapter 6. VALUING ORGANIZATIONAL INFORMATION, 73
Organizational Information, 73
The Value of Transactional and Analytical Information, 74
The Value of Timely Information, 75
The Value of Quality Information, 76
Understanding the Costs of Poor Information, 77
Understanding the Benefits of Good Information, 78
Chapter 6 Case: Fishing for Quality, 78
Chapter 7. STORING ORGANIZATIONAL INFORMATION—DATABASES, 80
Storing Organizational Information, 80
Relational Database Fundamentals, 80
Entities and Attributes, 81
Keys and Relationships, 81
Relational Database Advantages, 83
Increased Flexibility, 83
Increased Scalability and Performance, 83
Reduced Information Redundancy, 84
Increased Information Integrity (Quality), 84
Increased Information Security, 84
Database Management Systems, 85
Data Driven Web Sites, 85
Integrating Information among Multiple Databases, 87
Chapter 7 Case: Keeper of the Keys, 90
Plug-In Pointers: T5, T6, 91
Chapter 8. ACCESSING ORGANIZATIONAL INFORMATION—DATA WAREHOUSE, 92
Accessing Organizational Information, 92
History of Data Warehousing, 92
Data Warehouse Fundamentals, 93
Multidimensional Analysis and Data Mining, 94
Information Cleansing or Scrubbing, 95
Business Intelligence, 98
Enabling Business Intelligence, 98
Chapter 8 Case: Mining the Data Warehouse, 99
Plug-In Pointers: T3, T7, 100
Unit Summary, 101
Key Terms, 101
Unit Closing Case One: Harrah's—Gambling Big on Technology, 102
Unit Closing Case Two: Searching for Revenue—Google, 104
Making Business Decisions, 107
Apply Your Knowledge, 108
Unit 3. Streamlining Business Operations, 112
Second Life: Succeeding in Virtual Times, 113
Introduction, 117
Chapter 9. ENABLING THE ORGANIZATION—DECISION MAKING, 118
Decision Making, 118
Transaction Processing Systems, 119
Decision Support Systems, 120
Executive Information Systems, 122
Digital Dashboards, 122
Artificial Intelligence (AI), 124
Expert Systems, 125
Neural Networks, 126
Genetic Algorithms, 127
Intelligent Agents, 127
Data Mining, 128
Cluster Analysis, 129
Association Detection, 129
Statistical Analysis, 130
Chapter 9 Case: Defense Advanced Research Projects Agency (DARPA) Grand Challenge, 132
Plug-In Pointers: T4, T8, 132
Chapter 10. EXTENDING THE ORGANIZATION—SUPPLY CHAIN MANAGEMENT, 133
Supply Chain Management, 133
Basics of Supply Chain, 133
Information Technology's Role in the Supply Chain, 134
Visibility, 136
Consumer Behavior, 137
Competition, 137
Speed, 138
Supply Chain Management Success Factors, 138
Make the Sale to Suppliers, 139
Wean Employees off Traditional Business Practices, 139
Ensure the SCM System Supports the Organizational Goals, 139
Deploy in Incremental Phases and Measure and Communicate Success, 140
Be Future Oriented, 140
SCM Success Stories1, 140
Chapter 10 Case: BudNet, 141
Plug-In Pointer: B8, 142
Chapter 11. BUILDING A CUSTOMER-CENTRIC ORGANIZATION—CUSTOMER RELATIONSHIP MANAGEMENT, 143
Customer Relationship Management (CRM), 143
Recency, Frequency, and Monetary Value, 144
The Evolution of CRM, 144
The Ugly Side of CRM: Why CRM Matters More Now than Ever Before, 145
Customer Relationship Management's Explosive Growth, 147
Using Analytical CRM to Enhance Decisions, 148
Customer Relationship Management Success Factors, 149
Chapter 11 Case: The Ritz-Carlton—Specializing in Customers, 151
Plug-In Pointer: B9, 152
Chapter 12. INTEGRATING THE ORGANIZATION FROM END TO END—ENTERPRISE RESOURCE PLANNING, 153
Enterprise Resource Planning (ERP), 153
Bringing the Organization Together, 154
The Evolution of ERP, 155
Integrating SCM, CRM, and ERP, 156
Integration Tools, 158
Enterprise Resource Planning's Explosive Growth, 159
Chapter 12 Case: Gearing Up at REI, 160
Plug-In Pointer: B10, 161
Unit Summary, 162
Key Terms, 162
Unit Closing Case One: Dell's Famous Supply Chain, 163
Unit Closing Case Two: Revving Up Sales at Harley-Davidson, 165
Making Business Decisions, 167
Apply Your Knowledge, 169
Unit 4. Building Innovation, 174
EBay—The Ultimate E-Business, 175
Introduction, 178
Chapter 13. CREATING INNOVATIVE ORGANIZATIONS, 179
Disruptive Technology, 179
Disruptive versus Sustaining Technology, 179
The Internet—Business Disruption, 180
Evolution of the Internet, 181
Evolution of the World Wide Web, 182
Web 2.0, 184
The Future—Web 3.0, 185
Chapter 13 Case: Failing to Innovate, 186
Plug-In Pointers: T9, T10, 188
Chapter 14. E-BUSINESS, 189
E-Business, 189
E-Business Models, 189
Business-to-Business (B2B), 191
Business-to-Consumer (B2C), 191
Consumer-to-Business (C2B), 192
Consumer-to-Consumer (C2C), 192
E-Business Benefits and Challenges, 193
Mashups, 193
Chapter 14 Case: eBiz, 196
Plug-In Pointers: B11, B12, 198
Chapter 15. CREATING COLLABORATIVE PARTNERSHIPS, 199
Teams, Partnerships, and Alliances, 199
Collaboration Systems, 200
Knowledge Management Systems, 202
KM in Business, 202
Explicit and Tacit Knowledge, 203
KM Technologies, 205
KM and Social Networking, 205
Content Management Systems, 205
Working Wikis, 206
Workflow Management Systems, 207
Groupware Systems, 209
Video Conferencing, 210
Web Conferencing, 211
Instant Messaging, 211
Chapter 15 Case: Dreamworks Animation Collaboration, 212
Chapter 16. INTEGRATING WIRELESS TECHNOLOGY IN BUSINESS, 214
Wireless Fidelity (Wi-Fi), 214
Business Drivers for Wireless Technologies, 214
Advantages of Enterprise Mobility, 215
Bluetooth, 216
Radio Frequency Identification (RFID), 217
Satellite, 219
The Future of Wireless, 220
Chapter 16 Case: UPS versus FedEx: Head-to-Head on Wireless, 221
Plug-In Pointer: B12, 222
Unit Summary, 223
Key Terms, 223
Unit Closing Case One: Improving Highway Safety through Collaboration, 224
Unit Closing Case Two: Amazon.com—Not Your Average Bookstore, 225
Making Business Decisions, 227
Apply Your Knowledge, 228
Unit 5. Transforming Organizations, 236
The Digital Hospital, 237
Introduction, 239
Chapter 17. BUILDING SOFTWARE TO SUPPORT AN AGILE ORGANIZATION, 240
Systems Development, 240
Developing Software—The Systems Development Life Cycle (SDLC), 241
Software Development Methodologies, 243
Waterfall Methodology, 244
Rapid Application Development Methodology (RAD), 244
Extreme Programming Methodology, 245
Agile Methodology, 246
Developing Successful Software, 246
Slash the Budget, 246
If It Doesn't Work, Kill It, 247
Keep Requirements to a Minimum, 247
Test and Deliver Frequently, 247
Assign Non-IT Executives to Software Projects, 247
Project Managing the Systems Development Effort, 247
Chapter 17 Case: Transforming the Entertainment Industry—Netflix, 250
Plug-In Pointers: B14, B15, T11, T12, 251
Chapter 18. OUTSOURCING IN THE 21ST CENTURY, 252
Outsourcing Development, 252
Insourcing, 252
Outsourcing, 253
Financial Savings, 253
Increased Technical Abilities, 253
Market Agility, 254
Developing Strategic Outsourcing Partnerships, 255
Sourcing's New Surge—Offshoring, 255
Chapter 18 Case: UPS in the Computer Repair Business, 256
Plug-In Pointer: B13, 257
Chapter 19. DEVELOPING A 21ST CENTURY ORGANIZATION, 258
Developing Organizations, 258
21st Century Organization Trends, 258
Increased Focus on IT Infrastructure, 258
Increased Focus on Security, 259
Increased Focus on E-Business, 261
Increased Focus on Integration, 261
Chapter 19 Case: Creating a Clearer Picture for Public Broadcasting Service (PBS), 263
Unit Summary, 265
Key Terms, 265
Unit Closing Case One: RFID—Future Tracking, 266
Unit Closing Case Two: Masters of Innovation, Technology, and Strategic Vision, 267
Making Business Decisions, 270
Apply Your Knowledge, 272
Plug-In B1. Business Basics, 276
Introduction, 276
Types of Business, 276
Sole Proprietorship, 277
Partnership, 277
Corporation, 277
Internal Operations of a Corporation, 279
Accounting, 279
Financial Statements, 280
Finance, 282
Financial Analysis, 282
Human Resources, 282
Management Techniques, 283
Sales, 284
The Sales Process, 284
Market Share, 285
Marketing, 286
Marketing Mix, 287
Customer Segmentation, 288
The Product Life Cycle, 288
Operations/Production, 288
Business Process Reengineering, 288
Transforming Corporations, 289
Management Information Systems, 290
Plug-In Summary, 292
Key Terms, 293
Closing Case One: Battle of the Toys—FAO Schwarz Is Back!, 293
Closing Case Two: Innovative Business Managers, 295
Making Business Decisions, 297
Plug-In B2. Business Process, 298
Introduction, 298
Examining Business Processes, 298
Understanding the Importance of Business Processes, 299
Business Process Improvement, 302
Business Process Reengineering (BPR), 303
Business Process Design, 304
Selecting a Process to Reengineer, 306
Business Process Management (BPM), 307
Is BPM for Business or IT?, 307
BPM Tools, 308
BPM Risks and Rewards, 308
Critical Success Factors, 309
Business Process Modeling Examples, 310
Plug-In Summary, 313
Key Terms, 313
Closing Case One: Streamlining Processes at Adidas, 313
Closing Case Two: 3Com Optimizes Product Promotion Processes, 314
Making Business Decisions, 316
Plug-In B3. Hardware and Software, 318
Introduction, 318
Hardware Basics, 318
Central Processing Unit, 319
Primary Storage, 321
Secondary Storage, 322
Input Devices, 324
Output Devices, 324
Communication Devices, 326
Computer Categories, 326
Software Basics, 329
System Software, 329
Application Software, 330
Plug-In Summary, 332
Key Terms, 332
Closing Case One: Changing Circuits at Circuit City, 332
Closing Case Two: Electronic Breaking Points, 334
Making Business Decisions, 336
Plug-In B4. Enterprise Architectures, 338
Enterprise Architectures, 338
Information Architecture, 339
Backup and Recover, 340
Disaster Recovery, 340
Information Security, 342
Infrastructure Architecture, 343
Flexibility, 343
Scalability, 344
Reliability, 344
Availability, 344
Performance, 345
Application Architecture, 345
Web Services, 345
Open Systems, 347
Plug-In Summary, 348
Key Terms, 348
Closing Case One: Chicago Tribune's Server Consolidation a Success, 348
Closing Case Two: Fear the Penguin, 350
Making Business Decisions, 351
Plug-In B5. Networks and Telecommunications, 354
Networks and Telecommunications, 354
Network Basics, 354
Architecture, 356
Peer-to-Peer Networks, 356
Client/Server Networks, 356
Topology, 357
Protocols, 357
Ethernet, 357
Transmission Control Protocol/Internet Protocol, 359
Media, 362
Wire Media, 362
Wireless Media, 363
E-Business Networks, 363
Plug-In Summary, 365
Key Terms, 365
Closing Case One: Watching Where You Step—Prada, 365
Closing Case Two: Banks Banking on Network Security, 366
Making Business Decisions, 368
Plug-In B6. Information Security, 370
Introduction, 370
The First Line of Defense—People, 370
The Second Line of Defense—Technology, 372
Authentication and Authorization, 374
Prevention and Resistance, 375
Detection and Response, 376
Plug-In Summary, 379
Key Terms, 379
Closing Case One: Thinking Like the Enemy, 379
Closing Case Two: Hacker Hunters, 380
Making Business Decisions, 382
Plug-In B7. Ethics, 384
Introduction, 384
Ethics, 385
Information Has No Ethics, 386
Developing Information Management Policies, 388
Ethical Computer Use Policy, 388
Information Privacy Policy, 389
Acceptable Use Policy, 390
E-mail Privacy Policy, 390
Internet Use Policy, 391
Anti-spam Policy, 391
Ethics in the Workplace, 392
Monitoring Technologies, 392
Plug-In Summary, 395
Key Terms, 395
Closing Case One: Sarbanes-Oxley: Where Information Technology, Finance, and Ethics Meet, 396
Closing Case Two: Invading Your Privacy, 397
Making Business Decisions, 398
Plug-In B8. Supply Chain Management, 400
Introduction, 400
Supply Chain Drivers, 400
Facilities Driver, 401
Inventory Driver, 402
Transportation Driver, 403
Information Driver, 404
Applying a Supply Chain Design, 405
Future Trends, 407
Plug-In Summary, 409
Key Terms, 409
Closing Case One: Listerine's Journey, 409
Closing Case Two: Katrina Shakes Supply Chains, 411
Making Business Decisions, 413
Plug-In B9. Customer Relationship Management, 416
Introduction, 416
Using IT to Drive Operational CRM, 416
Marketing and Operational CRM, 416
Sales and Operational CRM, 418
Customer Service and Operational CRM, 420
Analytical CRM, 423
Current Trends: SRM, PRM, and ERM, 425
Supplier Relationship Management, 425
Partner Relationship Management, 425
Employee Relationship Management, 425
Future Trends, 426
Plug-In Summary, 427
Key Terms, 427
Closing Case One: Fighting Cancer with Information, 428
Closing Case Two: Calling All Canadians, 429
Making Business Decisions, 430
Plug-In B10. Enterprise Resource Planning, 432
Introduction, 432
Core and Extended ERP Components, 432
Core ERP Components, 434
Extended ERP Components, 435
ERP Benefits and Risks (Costs), 436
The Future of ERP, 437
Internet, 439
Interface, 439
Wireless Technology, 439
Plug-In Summary, 440
Key Terms, 440
Closing Case One: PepsiAmericas' Enterprises, 440
Closing Case Two: Campus ERP, 441
Making Business Decisions, 443
Plug-In B11. E-Business, 446
Introduction, 446
Accessing Internet Information, 446
Intranet, 447
Extranet, 447
Portal, 447
Kiosk, 448
Providing Internet Information, 448
Internet Service Provider, 448
Online Service Provider, 449
Application Service Provider, 450
Organizational Strategies for E-Business, 450
Marketing/Sales, 450
Financial Services, 453
Procurement, 454
Customer Service, 455
Intermediaries, 455
Measuring E-Business Success, 457
Web Site Metrics, 457
New Trends in E-Business: E-Government and M-Commerce, 460
M-Commerce, 460
Plug-In Summary, 462
Key Terms, 462
Closing Case One: Mail with PostalOne, 462
Closing Case Two: Made-to-Order Businesses, 464
Making Business Decisions, 465
Plug-In B12. Emerging Trends and Technologies, 468
Introduction, 468
Reasons to Watch Trends, 468
Trends Shaping Our Future, 469
The World's Population Will Double in the Next 40 Years, 469
People in Developed Countries Are Living Longer, 470
The Growth in Information Industries Is Creating a Knowledge-Dependent Global Society, 470
The Global Economy Is Becoming More Integrated, 471
The Economy and Society Are Dominated by Technology, 472
Pace of Technological Innovation Is Increasing, 472
Time Is Becoming One of the World's Most Precious Commodities, 472
Technologies Shaping Our Future, 473
Digital Ink, 473
Digital Paper, 473
Teleliving, 475
Alternative Energy Sources, 476
Autonomic Computing, 476
Plug-In Summary, 478
Key Terms, 478
Closing Case One: Autonomic Railways, 478
Closing Case Two: Wireless Progression, 479
Making Business Decisions, 480
Plug-In B13. Strategic Outsourcing, 482
Introduction, 482
The Outsourcing Phenomenon, 482
Outsourcing Benefits, 484
Outsourcing Options, 484
Offshore Outsourcing, 485
The Challenges of Outsourcing, 491
Future Trends, 492
Multisourcing, 493
Plug-In Summary, 494
Key Terms, 494
Closing Case One: Mobil Travel Guide, 494
Closing Case Two: Outsourcing Brew, 495
Making Business Decisions, 496
Plug-In B14. Systems Development, 498
Introduction, 498
Systems Development Life Cycle, 499
Phase 1: Planning, 499
Phase 2: Analysis, 501
Phase 3: Design, 504
Phase 4: Development, 506
Phase 5: Testing, 506
Phase 6: Implementation, 507
Phase 7: Maintenance, 508
Software Problems Are Business Problems, 509
Unclear or Missing Business Requirements, 510
Skipping SDLC Phases, 510
Failure to Manage Project Scope, 510
Failure to Manage Project Plan, 511
Changing Technology, 511
Plug-In Summary, 512
Key Terms, 512
Closing Case One: Disaster at Denver International Airport, 513
Closing Case Two: Reducing Ambiguity in Business Requirements, 514
Making Business Decisions, 515
Plug-In B15. Project Management, 518
Introduction, 518
Project Management Fundamentals, 518
Choosing Strategic Projects, 519
Setting the Project Scope, 520
Managing Resources and Maintaining the Project Plan, 521
Change Management and Risk Management, 521
Change Management, 522
Preparing for Change, 523
Risk Management, 524
Mitigating Risk, 525
Successful Project Management Strategies, 526
Plug-In Summary, 527
Key Terms, 527
Closing Case One: Staying on Track—Toronto Transit, 527
Closing Case Two: Change at Toyota, 528
Making Business Decisions, 530
THE TECHNOLOGY PLUG-INS, 532
Apply Your Knowledge Projects, 534
Glossary, 560
Notes, 573
Illustration Credits, 584
Index, 587

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