CHAPTER I & II Key Term: 1. Ad hoc report: specific reports to help solve specific problems. 2.

Closed system: is the system that can stand alone, with no connection to another system, nothing flows in from another system, nothing flows out to another system. 3. Data processing: is the changing and manipulating the data in the IS. 4. Data warehouse: is the large archival database or collection of related databases that serves in the organization. 5. Data: is the plural of Latin datum, literally a given or fact, which may take the form of a number, a statement, or a picture, or data is the raw materials in the production of information. 6. Database: is the large pool of the data. 7. Decision Support System (DSS): is the information al build system of organization which especially designed to help managers make the decision. 8. Decision: is the way that an organization or individual finding one particular way when there are more than one way to solve a problem. In other word, when an organization or individual finds more than one way to solve the problem must take a decision. 9. E-commerce: is a way of buying and selling goods and services via a telecommunications network. 10. Enterprise applications system: is the enterprise software or system thinking that led many manufacturing and other organization to adopt system that fulfill the functions of inventory planning, purchasing, payment, billingtogether. 11. Exception Report: is the periodic or ad hoc reports that flag facts or numbers that deviate from preset standards. 12. Executive information system (EIS) or executive support system (ESS): is a system use to help highranking officers direct an organization which often programmed to integrate thousands of pieces of data and produce summary reports. 13. Executive support system (ESS)

14. Expert System: Information systems (ISs) can be developed that incorporate human expertise. 15. Geographic Information Systems (GISs): can be used to tie data to physical location such as a neighborhood, city, county, state, country, or even the entire world. 16. Group Decision Support System (GDSS): a program that help a group, rather than an individual, make decisions. 17. Information: data that have been manipulated or processed to be meaningful and useful. 18. Information Map: is the description of data and information flow within an organization and show a network of information subsystems that exchange information with each other and with the world outside the system. 19. Information System (IS): consist of all components that work together to process data and produce information. 20. Information Technology (IT): a term that refers to all technologies that collectively facilitate construction and maintenance of information system. 21. Input: entering data into the Information System. 22. Input device: tool used to enter data into an IS. 23. Knowledge worker: the workers whose main function is to generate information based on knowledge in their respective fields. Those people are scientists, budget planners, project leaders and marketing managers. 24. Management information system (MIS): the computer-based information systems that can be used for planning, control, decision making, and problem solving rather than reporting transactions. 25. Open system: the system that interfaces and interacts with other systems in order to operate. 26. Output: getting the information out of Information System. 27. Problem: is any undesirable situation. 28. Process: is any manipulation of data, usually with the goal of producing information. 29. Storage: storing data and information. 30. Subsystems: component of a larger system-with sub goals, all contributing to meeting the main goal.

31. Synergy: combine resources produce output that exceeds the sum of outputs of the same resources employed separately. 32. System: is an array of components that work together to achieve a common goal, or multiple goals, by accepting input, processing it, and produce output in organized manner. 33. Telecommunication: communication that takes place between computer components, communication occurs between computers over great distances. 34. Transaction: is a business event: a sale, a purchase, the hiring of a new employee, and the like. 35. Transaction processing system (TPS): is a system that records transactions such as a cash register or order entry terminal. 36. Affiliate programs: Web site that places link to commercial sites, allowing any purchases by clicking. 37. Alliances: Companies who gain competitive advantage by combining services to make them more attractive because of cheaper service and one-stop shopping. 38. Bleeding edge: failures that occur when organization tries to be on the technological leading edge. 39. Competitive advantage: refers to offering a product or service that competitors cannot provide or providing the same product or service more attractively to customers. 40. Creating a standard: is the way to make a product or service become well and high quality. 41. Creating new and unique products and services: start offering an identical or similar product or service for a comparable or lower price. 42. Critical mass: is a body of clients that is large enough to attract many other clients. 43. Differentiation: is the way to persuading consumers that its product or service is better than its competitors, even if it is not. 44. Enhancing existing products and services: is the way that organization may actually add to their product or service to enhance its value to the consumer. 45. Establishing high switching costs: is the way which starts to increase the expenses incurred when a customer stops buying a product or service from one business and starts buying it from another. 46. First mover: an organization that is the first to offer a new product or service. 47. Locking in clients or suppliers: people always think about marketing, so they willing to go there.

48. Raising barriers to entrants: is anything that prevents entry when entry is socially beneficial. 49. Reducing costs: lowering prices. 50. Reengineering: involve adoption of new machinery and elimination of management layers. 51. Strategic advantage: A position in which one dominate a market; so called competitive advantage. 52. Strategic information system (SIS): Any information system that gives its owner a competitive advantage. Question: 1. What does the word processing in data processing mean? The word processing in data processing mean: is the manipulation of data into information using mathematical, statistical, and other tools. 2. SivY 3. Give three business examples (not mentioned in the text) of data that must be processed to provide useful information. Three business examples of data that must be processed to provide useful information: Hospital: the data that are useful in this business can be the name of patients, name of their illness, what can they eat, number and address of the patients family, name of the medicines that they have to use Restaurant: the data that are useful for restaurant can be price of meat, price of vegetable, number of customers, names of meal, expenses, and revenues Computer shop: the data that are useful for computer shop can be the new model of laptop or desktop, the price of each model, the color that customers like, size of Ram, CPU, hard disk size, number of each computer brand in stock 4. Give three examples of subsystems not operating on the context of IT. Why are these subsystems and not systems? Three examples of subsystems not operating in the context of IT:

 The HR department of a given company is a subsystem of the whole company management because it has distinctive goals from the main system, but those goals contribute to the company goal, maximizing profit. The management collage in a particular university is the subsystem of university management which consists of many collages and functions. Its goal is to manage and facilitate the education quality in the field of management, but its end goal is operating the university. A chapter in a book is also a subsystem of the entire book since the book will be incomplete and thus leads to incomplete understanding without a chapter. 5. How do TPSs and DSSs differ? TPSs (Transaction processing systems): systems that record transactions such as a cash register or order entry terminal. DSSs (Decision support systems): information systems which is designed to help managers make decisions. 6. What is a problem? Give an example of a business problem and discuss how a computer-based information system could solve it. A problem is any undesirable situation. For example, if you know that some customers do not pay their debts on time, but you dont know who or how much they owe, so you have problem. In this case, you can solve problem with the aid of information and simple accounting software can help. 7. What is synergy? How is synergy accomplished when a person uses a computer? Synergy (work together) occurs when combined resources produce output that exceeds the sum of the outputs of the some resources employed separately. A computer works quickly and accurately, humans work relatively slowly and make mistakes. A computer cannot make independent decisions. Thus, human-computer combination allows the results of human thought to be translated into efficient processing of large amounts of data. 8. An information system consists of hardware and software. Why is this statement inadequate? Because it consists of other major components as well: Data\information- input that the system takes to produce information.

 Hardware- a computer and its peripheral equipment: input, output, storage devices, and data communication equipment. People- technicians, network manager, system analysts etc. Procedures\policies- rules for achieving optimal and secure operations in data processing. Telecommunication- hardware and software that facilitates fast transmission and reception of text, pictures, sound, and animation in the form of electronic data. 9. When does a manager need to make a decision? Manager need to make decision when they want to make planning, organizing, leading, and controlling. 10. How can a DSS help make decisions? A DSS can help make the decision by finding the optimal course of action and answer the question what if? DSS are programmed to process raw data, make comparisons, and generate information to help manages glean the best alternatives for financial investment, marketing strategy, credit approval. (Glean: to collect info in small amounts and often difficulty) 11. Note the word support in decision support systems? Why are these applications not called dicisionmaking systems? Note the word support in decision support systems term. The reasons why these applications are not called Decision-making systems because a DSS is only a decision aid, not an absolute alternative to human decision making. 12. Who is considered as knowledge worker? Will you have a career as a knowledge worker? Explain? The knowledge workers are those whose main function is to generate information based on knowledge in their respective fields, and those people are scientists, budget planners, project leaders and marketing managers. I will exactly have a career as knowledge worker providing that I am now being trained for a specific field, International Business Management. After graduation, I would become a manager or project leader who will be able to use the learned skill to get the job done effectively. 13. What is the most prevalent type of information system? Why is this type of IS ubiquitous?

 TPSs (Transaction processing systems), because they are systems such as cash register, ATMs, and other systems that record data and perform basic processing, and these systems can link different functions and sites of a business because of telecommunication. 14. TPSs are usually used at the boundaries of the organization. What are boundaries? Give three examples of boundaries. Boundaries is at the point where the organization transaction business with other parties. For example: making a purchase at a store, withdrawing money from a checking account, making a payment to creditor or paying an employee. 15. What is an exception report? How does it help save managers time? Exception report is the periodic or ad hoc reports that flag facts or numbers that deviate from preset standard. They allow managers to save time by focusing on exceptions and take care of a situation that caused an unplanned event. 16. How did the role of information systems change in the late 1970s and early 1980s? During the 1970s and 1980s, corporations perception of information changed. Executives learned that information can significantly change an organizations long-term strategic position in national and global markets. Often, applying information systems to long-term planning completely changes the way firm conducts its business. Some systems even change the product or service that a firm provides. 17. What should an information system achieve for an organization in order to be considered a strategic information system? In order to be considered a strategic information system, an information system achieve IS must serve an organization goal rather than simply provide information. IS must work with managers of other functional units including marketing, finance, purchasing, human resource, and so on in order to pursue the organization goal. 18. What strategic goal can an IS attain that does not involve wresting market share from competitors?

 The strategic goal that IS can attain and does not involve wresting market share from competitors is Strategic Information System (SIS). This strategic can be developed from scratch, or involve from an organizations existing ISs. 19. What conditions must exist in an organization planning as SIS? In an organization planning an SIS, there are 2 conditions must exist: 1st: the information system must serve an organizational goal rather than simply provide information. 2nd: the organizations IS unit must work with managers of other functional units (including marketing, finance, purchasing, human resources, and so on) to pursue the organizational goal. 20. Sometimes it is difficult to convince top management to commit funds to develop and implement an SIS. Why? It is sometimes hard to convince the top managers to commit funds to develop and implement an SIS because it involves risk. Developing and implementing SIS is not always beneficial and runs as expected, and the company may encounter loses. Implementing the SIS, for example in the banking industry, the entire management system has to be changed, and it takes time as well as budget. In case the implementation does not go as planned, the outcome might be disastrous or the company has to shut down. 21. An SIS often offers a corporative short-lived advantage. Why? Because SIS is the information system that help seize opportunities which is less tangible; it can be developed from scratch, or it can evolve from an organizations existing IS. The corporative shortlived advantage is identifying and seizing the opportunities. 22. What is reengineering? Reengineering is the process of designing a business process from scratch to achieve hundreds of percentage points in improvement rates. Almost always, reengineering involves implementing new ISs. 23. Software developers have made great efforts to create a standard. What does creating a standard mean in the software industry, and why are companies doing it?

 creating a standard in the software industry means the way to make a product or service become good quality and enhances capability. Companies are doing it because they want to lock in either suppliers to their mode of operation or buyers to their product and they have pursued this strategy vigorously, especially in the Internet arena. 24. What should an organization do to sustain the strategic benefits of an IS? An organization can sustain the strategic benefits of IS, the organization should continuously modifies and enhances it, creating a moving target for competitors. 25. Adobe encourages PC users to download its acrobat PDF reader free of charge. Macromedia encourage people to download its Flash player free for charge. How does this eventually help them strategically? If they give the application away, how does their generosity help them make money? Adobe encourage PC user to download its acrobat PDF reader free of charge, and Macromedia encourage people to download also can help their strategic:Widespread of using their web browsers. Their generosity help them to make money: Great numbers of people use their software, and they can hefty sales of related software. Moreover, they can get paid from other companies because their browser can links automatically to other companies sites. it starts bund the browser with windows and forcing the PC maker who wanted to sell the machines need their product. 26. Referring to the list of strategic moves (see figure 2.2), classify the initiative of JetBlue. Classify the initiatives of the JetBlue Reducing the cost: Massive Automation (reduce the cost of booking and reservation) Enhancing products and services: Enhanced service (leather seat, real-time TV, on-schedule departure and arrival and open skies system) Differentiating the products and services Locking the buyers: convenient booking, reservation, check-in and language

27. What were the reasons for the failures of FordDirect.com?

 The reasons for failure of FordDirect.com were: The buyers were not enthusiastic about having Web access in their vehicles as Nasser predicted, so the B2C initiative failed. The company did not carefully consider state laws and its relationship with dealers. Many state laws do not permit cutting an agent out of the sale. State franchising laws did not allow Ford to bypass its dealers. 28. What are the reasons of failure of so many Web-based businesses in the early 2000s? During the year 2000, dot.com businesses were booming but were forced to shut the door because of a few reasons. First of all, the consumers were not familiar with the new online purchasing patterns, and the number of customers were quite small. Furthermore, these businesses failed to analyze what customers needed and wanted. The second reason is that there were many businesses entered into the small market, especially the online retailer, inspiring by successful stories of other online businesses. When there were competitors, the suppliers lowered the prices greatly and thus and made no profits for long term. Another reason is that these companies failed to implement the requirements for strategic advantages, so others soon emulated the new services they offered. Last but not least, it made no sense for investors to infuse their money into such uncertain businesses. 29. What does the term first mover mean? First mover: an organization that is the first to offer a new product or service. 30. What does the term of bleeding edge mean? The bleeding edge refers to the failure that occurs because an organization tries to be on the technological leading edge. Businesses have experienced disasters with new business ideas, which are only magnified when implementing new technology. Being at the front line, businesses have to take great risk too, and being on the bleeding edge often means that implementation costs are significantly more than anticipated, and thus create loses.