Samenvatting collegeaantekeningen BIT

BIT_samenvatting_colleges.pdf

Vrije Universiteit Amsterdam (VU) | Business Information Technology

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Door Jordy Herberichs (jordyherberichs@gmail.com)

Hoorcollege 1 (H1)
Information systems = organization (structure, culture, processes, strategy) + people (work,
job satisfaction, motivation, user friendliness) + IT (hardware, software, systems, network).
These are interrelated, not separable.
Data = collection of non-random symbols, numbers, words, images and sounds.
They represent facts, are recorded by observation or research and are not organized to
convey specific meaning (Example: 03-09-12-0900). Data is useless without a label and/or
context.
Information = data related to other (contextual) data.
They are processed, contextually relevant and meaningful and useful to human recipients
(Example: a financial ledger).
Knowledge = skills + experience + accumulated learning + judgment.
This is the result of activities and related information processing. It is needed for decision-
making and understanding and relating date or information.
Information Systems (IS) = group of interrelated components (organization, people and IT)
that work collectively to carry out input, processing, output, storage and control actions in
order to convert data into information. IS are more than just IT (which is just the
technology), it requires understanding of business. IS are important because processing
information is crucial for organizations survival and advantage, and the volumes and
importance of information are growing. IS give meaning to data.
How to deal with all the information? (Galbraith, 1974)
- Reduce need for information processing (create buffers, reduce coordination, ask yourself
whether its feasible in todays complex, uncertain, globalizing environment).
- Increase capacity for information processing (IS).

Hoorcollege 2 (H4 + H5)

Five forces model (Porter) and the influence of IS:
- Supplier power: IS changes balance of power in markets.
- Substitute products: IS creates new products and differentiate existing products.
- Buyer power: IS changes balance of power in markets.
- Threat of new entrants: IS raise entry barriers / make market entry easier.
- Internal rivalry: IS changes balance of power, reduce costs and make management more
effective.
The best IS for a company depends on its focus:
- Process (operational excellence): ERP, SCM, Workflow, E-commerce.
- Product (product leadership): SCM, Collaboration tools, CAD, CAM.
- Customer (customer intimacy): CRM, E-commerce, business analytics.

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IS strategy: a portfolio of IS to be
implemented, which is both highly
aligned with business strategy and
may have the ability to create an
advantage over competitors.
Strategic alignment, two
approaches:
- Business aligning: how can IS
support business strategy?
- Business impact: how can IS shape
business strategy?
IS strategy process:
1. Determine approach: change
emphasis not order.
2. Determine scope: corporate IS strategy? IS strategy for parts of the organization?
3. Determine objectives: general objectives (improve business in general, etc.) and specific
objectives (develop new policies, change structure, etc.)
4. Analysis of internal and external environment: IS/IT environment and business
environment.
5. Strategic definition.
6. Strategic implementation.
Analysis of current IS/IT: strategy, information resources & flows, employees and
technological infrastructure. Tools:
- Information flow modeling: identify key flows, potential improvements (accuracy, speed,
timeliness, costs) and determine benefits of improvements.

Information flow
model

Business process
model

Data model

Focus

Organizational
information
exchange

Business process

Data organization

Level of analysis

Elements of the
organization

Activities

Data elements

Goal

Gap analysis for IS

strategy, or system
design

Process analysis and

optimization

System design

- McFarlans strategic grid: the purpose is assessing importance of IS, see whether IS do
match strategic objectives and IS match IS management.

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Analysis of IS/IT:
- Technological trends.
- Business opportunities.
- IS/IT used by other comparable organizations (use McFarlans grid).
- IS/IT used by competitors (use McFarlans grid).

Hoorcollege 3 (H2 + Chaffey & White: H2 + H3)

Why IT knowledge? To better communicate with nerds, IT is everywhere, increased
dependency on information, IT enables organizational change and basic IT knowledge is
necessary to understand IS.
Layered approach:
1. Application: useful task, business process (Word, Facebook)
2. Infrastructure/support software: database management, ERP infrastructure (DBMS,
webserver).
3. Operating system: file and process management, resources, users (Linux, Windows).
4. Driver software: machine code instructions, controllers for hardware (LDI X R1, ADD).
5. Hardware:









- CPU (control unit, arithmetic logic unit).

- Primary storage (read-only memory (incl. BIOS), random access memory (RAM)).

- Secondary storage (hard discs, USB-sticks, CD, DVD).

- Networking (modem, network card, wireless transceiver, optical interface).

- Input devices (mouse, touch screen, audio in, scanners, sensors).

- Output devices (monitor, printer, plotter, robots).
Computer functions: collect (filter clean up), store and retrieve (search, list aggregate),
process (combine, calculate, extract) and disseminate (presentation).
Moores Law: the amount of transistors on a CPU doubles every 1,5 to 2 years.

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Binary digit = bit 0 or 1. Byte = 8 combined bits. Transistor: when a bit is 1 it can pass, when
its 0 it doesnt.
Developments in hardware: increasing processing capacity, increasing storage capacity,
decreasing size, increasingly distributed/modularized.
Network = system to connect 2 or more devices. Scale/scope: LAN, WAN. Primary
connecting media: wired, wireless, optical. Network architecture:
- Centralized: 1 server, many clients.
- Distributed: many servers, many clients.
- Peer-to-peer: no dedicated server, many clients.
Many different protocols and standards (= standard language for communication, governed
by standard-setting organizations): TCP/IP (internet), Ethernet, Wi-Fi, Bluetooth, UMTS (3G).
Measurement of network performance: transmission speed, latency (delay), reliability,
availability, security. From providers perspective: utilization, load, efficiency.
Developments in networking: increasing capacity, increasing interconnectedness, increasing
mobility.
Software types:
- Application software: enterprise systems, departmental applications, personal productivity
and group working applications.
- Systems software: operating systems, development software, database software.
Considerations for software choice: type of software, functionality, performance ease of
use, interoperability, make/rent/buy (custom made, packaged/off-the-shelf, hosted,
tailored/customized), open source.
Developments in software: multimedia (text/numbers -> audio/video), integration of
functions, mobile apps, networked communication, increasingly distributed.
IS classification: by management layer (operational, tactical, executive), by function
(purpose of the IS) and by reach (geographic reach, individual, local/departmental,
enterprise, IOS).
Functions of IS:
- Operational: processing routine transactions, payroll, order entry, administrative systems.
- Monitoring: performance checking, student trail system, forecasting.
- Decision support: value different alternatives, make decisions.
- Communication: e-mail, IM, groupware, workflow, SCM.
Management Information Systems = help management and executive layers to make
decisions by using data gathered from different sources and combining these data. Often
make use of a data warehouse.
Knowledge Management Systems = help an organization in creating, acquiring, retrieving
and storing knowledge (BI, communication, groupware, wiki).
Technological developments: modularity & virtualization, web-enabled, mobile
technologies, augmented reality, web 2.0, community software, RFID (uses microchips
containing data about an item and its location, mostly used to track goods in a supply chain),
cloud computing.

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Hoorcollege 4 (H5)
Modeling:
- When? As a part of
building/changing an IS.
- What? Representation of facts
(data) and activities (processes).
- Why? To stimulate the creative
process, for building software itself,
to improve communication
between domain experts and
technicians, to evaluate
completeness and consistency, to
provide basis for planning and
control.
Modeling types:
- Information flow modeling.
- Process modeling: activity diagrams (flow, sequence). Optional: roles and swimlanes.
- Data modeling: data types (integer, string), entity-relationship diagrams.
Data hierarchy:
1. Bit: 0/1.
2. Byte: character.
3. Field: group of characters.
4. Record: group of related fields.
5. File: group of records of same type.
6. Database: group of related files.
Traditional file processing: each functional area has its own applications and files.
Problems with separate data files: data redundancy (presence of duplicate date) and
inconsistency (same attribute has different values), program-data dependence, lack of
flexibility, poor security and lack of data sharing and availability.
Relational database: two-dimensional tables called relations or files. Each table contains
data on one entity (e.g. student) and its attributes (e.g. student nr, address, courses).
Table = grid of columns and rows.
- Rows: records for different instances of an entity. Each student has a record.
- Fields (columns): represents attribute for entity.
- Primary key: field that uniquely identifies each record in a table.
- Foreign key: field that is a primary key in another tables, used for looking up records from
that table and links records together.
Entity-relationship diagram (ERD): used by analysts to document the data model, illustrates
relationships (one-to-one (1-1), one-to-many (1-N) or many-to-many (N-N)) between
entities.

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Implementation: entities become tables, relationships become represented by foreign keys

in tables, many-to-many relationships become intermediate tables.
Data model and IS:
- A correct data model is essential for an IS to function correctly and efficiently.
- In practice often thousands of entities (tables) are related to each other.
- Normalization: minimized redundancy and many-to-many relationships.
- Referential integrity: consistent relationships.
Database Management System (DBMS): specialized software for storage, manipulation and
retrieval of structured data, interfaces between applications and physical data files.
Capabilities: data definition capability (specifies structure of content), data dictionary
(automated/manual file storing definitions), data manipulation language (used to
add/change/delete/retrieve data from database).
Large databases: require special capabilities and tools to analyze large quantities of data and
to access data from multiple systems.
Data mining (discovery): discover patterns in large data sets (associations, sequences,
classification, clustering, etc.), web mining (patterns in visits, search behavior, etc.)
Business intelligence/analytics.
Data warehouse: stores current and historical data from many core operational systems.
Will provide query, analysis and reporting tools. ETL: Extract, Transform, Load
Data marts: subset of data warehouse. Summarized or highly focused portion of firms data
for use by specific population of users. Typically focuses on single subject or line of business.
ERP (Enterprise Resource Planning) (system): a packaged business software system that lest
an organization automate and integrate the majority of its business processes, share
common data and practices across the enterprise and produce and access information in a
real-time environment. Implementation involves business process redesign and data
modeling, so its not the same as a central database.
Benefits: consistent, accurate, integrated data; streamlined process (reduced cycle-time and
costs) and improved maintenance, scalability and adaptability.
Risks: high initial costs and risks; lack of feature-function fit; tension with existing
organizational structure and culture; vendor dependency.
Scope of ERP increased over the years: often include CRM, SCM and more.

Hoorcollege 5 (Chaffey & White: H2 + H3)

Internet = very large scale computer network connecting millions of computers. Started as
an advanced research project of the department of Defense.
OSI 7 layer model:
7. Application:
6. Presentation:
5. Session:

4. Transport:

the contact with the human (e.g. Word, webbrowser)

how are the 0s and 1s presented visually
about the specific session youre in (e.g. log-in procedures)
takes care when the destination you want to send something to isnt

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3. Network:
2. Data link:
1. Physical:

in your own network.

how you determine that your message only gets to one destination
single circuit, basal error checks
moving the 0s and 1s (bits)

TCP/IP model:
5+6+7
Application
4

Transport
3

Internet


1+2

Network interface
TCP/IP line is not a dedicated connection just to you, but for everyone, so it can work much
more efficient.
Internet characteristics:
- Packet switching: digital data is sent in
small packages called packets.
- Packets: contain data, address
information, error-control information
and sequencing information.
- Transmission Control Protocol (TCP):
ensures that messages are properly
routed from sender to receiver and that
those messages arrive intact.
- Internetworking Protocol (IP): enables
the intercommunication of inter- and
intra-organizational networks.
- Bandwidth: the information carrying
capacity of communication lines.
World Wide Web protocol:
- HTTP: Hypertext Transfer Protocol.
- URL: Uniform Resource Locator => DNS (Domain Name Server) translates IP-address in
domain name space (e.g. 130.05.23.23 => http://www.google.nl/).
- Client-side: HTML, JavaScript, Flash (displays content, adds interactivity).
- Server-side: .NET, ASP, Java (used to communicate with webserver to get/receive data).
- Database: SQL, db_app software (communication between database server and web-
server).
Markup languages:
- HTML (Hypertext Markup Language): easy to use, but no full separation of contents and
layout, hard to interpret for non-humans.
- XML (eXtensible Markup Language): consists of three documents, divide content and form.
Web 1.0: done by hand, only sending information, static content, managed by owner.
Web 2.0: user generated content, user interaction, collaborative, participative, everybody
can generate contents, add information easily, read and write, managed by owner and
others. Principles: decentralization of content creation, network effect, crowdsourcing.

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E-business: online shopping. Pros: convenience (24/7),

information & reviews, price. Cons: security/fraud,
privacy, limited product inspection.
But its not only online shopping: increasing customer
interaction (user innovation, crowdsourcing, customer
communities) and new business models
(disintermediation, reintermediation).
Intranet: content (information) + communication
(exchange) + collaboration (transactions, document
sharing, etc.)
Extranet: all of the above but with partner access.
Boundaries between intranet, extranet and internet are
disappearing; theyre all based on the same technology.
Customer Relationship Management (CRM):
- Customer acquisition: get new customers.
- Customer retention: make a customer buy more of the same product.
- Customer extension: make a customer buy other products.
- Customer selection: target specific customers.
Benefits: increased efficiency, reduced complexity, improved data integration, reduced cost
through outsourcing, innovation, customer
benefits.
Interorganizational Systems (IOS): coordinate
processes across organizations and between
organizations and customers (e.g. Supply Chain
Management (SCM) systems, ov-chip card).
IOS stages: ========>

Hoorcollege 6 (Gastcollege ING)

Essence of banking (evolving pillars):
- Secure storage of value.
- Bridging savings and investments.
- Manage risks.
- Facilitate trade.
- Enable (remote) payments.
Common theme is trust (DSB fiasco).

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McFarlans grid for banks:

Factory

Strategic

Account management, payments processing, Online banking systems, payment factories

payment channels, ATM operation
Support

Turnaround

Billing engines, CRM, customer intelligence,

management reporting

- (no R&D in banking)

X-axis = IS impact on future strategic objectives

Y-axis = IS impact on operational performance
Can we work without it for a day? Yes = bottom half of the grid
Is it just to retain customers? Yes = left half of the grid
Credit transfer: regular cash transfer.
Direct debit: incasso.
Non-bank payment types like PayPal make the banks less necessary.
Great advantage of iDeal is the privacy, the company never knows your details.
95% of payments (in volume, in euros) in the Netherlands is with card, just 5% is cash.
3 steps of payments:
1. Authorization: are you who you say you are, do you have enough cash)
2. Clearing: sort out the payments, where does the money go
3. Settlement: actually make the payments; transfer the money to another account.
The Red Ocean: payments are basically a transfer of funds and money is generated from
processing fees and liquidity intake.
The Blue Ocean: payments are a valuable source of data to understand what is going on in
the real world and money is generated from using this knowledge.
There are lots of discussions and lawsuits about the interchange fee (acquirer has to pay a
fee to the issuer for each payment).
Trend: disintermediation of banks (Tesco offering cards).

Hoorcollege 7 (H6 + Malone)

Organization structure = what an organization looks like, so its a definition of functions,
roles, tasks, departments and the relationships between those. Characteristics:
- Division of labor: task units, degree of specialization.
- Line vs. staff positions: staff directly involved in production process vs. service staff
(finance, IT).
- Span of control: supervision levels & numbers.
- Coordination & control: vertical control vs. horizontal coordination.
- Central vs. decentralized decision-making: central (top) vs. local (bottom) decision-making.

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ERP systems: coordinate processes, knowledge and activities among different business
functions, levels and business units to improve efficiency. They are integrated IS (usually
from a single vendor) that coordinate internal processes. They provide company-wide data
to support decision-making (customer, strategic, etc.). An ERP tends toward centralization,
control and integration.
Advantages:
- Integration & standardization: uniform organization, integrate regional differences and
cultures, leverage scale.
- Outside connections: customer driven (improve quality, built to order), supply chain
integration.
- Information availability and synchronicity across departments.
- Decision information: control by reliable indicators (MIS), provide data for DSS and
analytical tools.
Disadvantages:
- Low success rate: 70% of companies havent obtained the promised benefits on schedule,
or spend more than intended.
- High Total Cost of Ownership (TCO): license fees, consultancy costs, maintenance staff,
change over costs.
- Organizational change requirements: integration (loss of cultural values), best practices
(competitive advantage), standards (innovation).
Is changes decision-making and coordination:
- Decision making and coordination across time and distance (increased speed of
information exchange, increased availability of information).
- IS create more/less centralization and control.
Malone (1997): three types of decision-making.
1. Cowboys: independent, decentralized (e.g. local store owner, farmer)

- Relatively low need for communication.

- Decisions based on local information.
2. Commanders: centralized (e.g. top management of multinational, army).

- Higher communication needs.

- Decisions based on information from diverse sources.
3. Cyber-cowboys: connected, decentralized (e.g. sales reps, consultants).

- Even higher communication needs.

- Autonomous decisions, but based on vast amounts of remote information.

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Type of decision-making depends on: trust (local and management), if local decisions are
improved by local information and if autonomy is valued positively.
According to Malone IS lead to empowerment, because communication costs are reduced
and important information is easily available at lower levels in the organization.
But technology can also lead to centralization: control monitoring, automation of tasks.
IS enables new organization structures: virtual companies and teams.
Venkatraman & Henderson (1998) on virtual organizing:

Hoorcollege 8 (Ambrust)
Cloud computing refers to both the applications delivered as services over the internet and
the hardware and systems software in the data centers that provide those services (Ambrust
et al., 2010).
Its the convergence of three major trends:
- Lower costs of information flows and communication (broadband, networks).
- Separation of applications and infrastructures (multi-tenancy).
- Utility computing: where server capacity is accessed across a grid as a variably priced
shared service.
SaaS = Software as a Service (e.g. Facebook, Spotify, SkyDrive, BaseCamp).
PaaS = Platform as a Service (e.g. Google AppEngine, Windows Azure).
IaaS = Infrastructure as a Service (e.g. Rackspace hosting, IBM, GoGrid).

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Utility computing: the ability of companies to access computing services, business processes
and applications from a utility-like service over a network. Particularly useful when demand
is unknown in advance, for batch analytics and if demand for a service varies with time).
Cloud computing
Positive implications: no start-up costs, more scalability, decrease Total Cost of Ownership,
supports virtual company.
Negative implications: uncertainty concerning availability and performance, uncertainty
concerning business continuity, data confidentiality/privacy.
Privacy issues:
- Information is no longer in your direct custody or control, handed over to a third party to
manage and resident in a different jurisdiction.
- Mass-market cloud services are subject to take it or leave it service agreements.
- Information and data may not be portable (you cant take it with you).
Solutions:
- Cloud broker: an entity that manages the use, performance and delivery of cloud services,
and negotiates relationships between cloud providers and consumers.
- Private cloud: separated storage for only one user (e.g. an organization), isolated from
foreign users.
Big data = a collection of data sets so large and complex that it becomes difficult to process
using on-hand database management tools.
Why so much data? Because we can get it, we can keep it and we can use it.
Business analytics = the set of practices, skills, techniques and technologies, that are
employed by organizations to access, report and analyze data in order to understand
business performance and support decisions making processes.
Analytics need to be embedded into the machinery of organizational action: operational
decision-making, business processes, manager and employee behavior, customer
expectations
Implications:
- Enhanced insights, improved quality of information, increased managerial productivity,
improved efficiency and effectiveness, support for achieving competitive advantage.
- Organizations have to adapt: hire the right people, use the right technology, establish an
analytics culture.

Hoorcollege 9 (H6 + H8)

Culture: consists of values & beliefs (learned unconsciously), and practices (learned
consciously).
IS and culture, cultural types:

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- Open system: focused on environment, entrepreneurial, responsive to customers, organic,

flexible.
- Rational goal: focused on efficiency in terms of external requirements, directive, goal-
oriented, competitive, rule-driven.
- Internal process: focused on internal efficiency, stability, control, routine, procedures,
conservative.
- Human relations: informal, interpersonal relations, well-being, commitment, participation,
support.
Power = ability to exert influence over others. There are five bases of power: coercive,
reward, administrative expertise, technical expertise, referent.
Centralization decreases autonomy (and thus local power).
For a new IS, consider the fit with current organizational culture and the power players.
People effect the performance of an IS, the IS can add or diminish their contribution and
systems fail usually because managers ignored human aspects.
Human-Computer Interaction (HCI): focuses on users, their tasks and how IS can support
these. Important are the interface design and task analysis. Important for program
designers.
Technology Acceptance Model (TAM):





UTAUT:

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Relevance of these models:

- For system design: ease of use / effort expectancy important.
- For system implementation: stress utility (perceived usefulness is crucial), social influence,
use depends heavily on context (facilitating conditions, experience, voluntariness).
Human needs: work design model

Productivity paradox
- IS contributes to efficiency and productivity: speeds up processes, improves availability of
information, improves connectedness of people.
- IS leads to Information overload: feeling of receiving more information than one can
handle.
Causes of the paradox: formalization of communication, high IT costs, mismanagement, IT
needs more IT, unintended effects, humans.
Commitment vs. control:
- Control: monitoring, replacing human skills (automation of work).
- Commitment: self control, autonomy, empowerment, complementing human skills,
replacing only those tasks that are boring and repetitive.
Framework distributed work:

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New ways of working:

- Working from home: increases productivity, better work/life balance, less stress, regular
face-to-face contact needed for commitment and cohesion.
- Flexible workspace: no personal desks, cases with folders, laptops etc.
- Virtual teams: teams whose members use technology to varying degrees in working across
locational temporal and relational boundaries to accomplish an interdependent task.
Pros: better performance, knowledge resources, cost advantages, diverse skills and
resources, culturally diverse.
Cons: cultural differences, language differences, difficulty establishing common ground,
good teamwork more difficult to achieve.
Dependent upon: team, training, task, technology.
Needs a cultural change: both driver and effect; focus on output, not presence.
Task complexity & media richness: choice for
communication technology determined by
information characteristics.
Socio-technical design: systems design should
take account of interdependencies between
different elements of the system. Reconcile needs
of both technological and social system.

Hoorcollege 10 (H7 + H9 + H10 + Kim & Lee)

Implementation: internal strategy formation, project definition and activities aimed at
introducing an IS to the users of an organization, with the aim of removing resistance and
stimulating optimal use of the application. Issues: fitting technology into organization,
familiarizing users with technology, facilitating and stimulating use.
Challenges: often technologically advanced, introduced into an established firm, external
conditions likely to change during project, may involve links with other firms, magic bullet
expectations.
Implementation strategies (Kim & Lee, 1991):
- Empirical-rational: people act rationally and make their decisions on the basis of rational
considerations, taking their own interests into account (do: education & training,
communication between developers and users, selection of suitable personnel, create
realistic, optimistic expectations regarding the value of the application).
- Normative/re-educative: people are primarily geared towards satisfying needs and these
needs are dependent on the social and professional context (do: facilitate and promote
participation, influence attitudes (find opinion leaders), create positive climate towards

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implementation, active learning process).

- Power/coercive: peoples behavior is affected by political or economic sanctions (do:
leaders with sufficient authority and resources, identifying resistance, reorganization of
related reward systems, hire experts or consultants).
Information management:
- Collect information: internal and external.
- Organize information: IS
- Process information: knowledge management.
- Maintain information: security, information overload.
IT governance = the leadership and
organizational structures and
processes that ensure that the
organizations IT sustains and extends
the organizations strategies and
objectives.
Chief Information Officers (CIO):
responsible for information
management and IT governance in an
organization. Has a strategic function
(part of management team) and a
structural function (IT leader).







IS portfolio management:

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IS structure architecture:
Centralized IS architecture:

- Pros: system integration, accessibility, concentrated expertise.

- Cons: inflexible and remote, few are fully satisfied.

- Works best in: central, vertical organizations with little interaction between units.
Decentralized IS architecture:

- Pros: satisfied users, flexibility & local.

- Cons: high costs, scattered expertise, difficult to integrate systems.

- Works best in: independent units.
Federalized/distributed IS architecture:

- Pros: independent local systems & shared central systems, flexibility &

centralization.

- Cons: higher costs, expertise still scattered, difficult to integrate systems.

- Works best in: high interdependence between units, turbulent environment,

decentralized decisions.
Developing software: dont develop software when there is limited or unskilled IS staff.

- Pros: tailor made, flexible, fast to adapt, user involvement.

- Cons: expensive, may be difficult to integrate, knowledge has to be kept in-house.
Outsourcing: turning over responsibility for some or all of an organizations IS development
and operations to an outside firm.

- Pros: access to know-how and consulting, lower personnel and fixed costs, greater

attention to core business, technical advantages (uptime, upgrades, backup, etc.).

- Cons: loss of control and dependency, loss of experienced employees, paying too

much, IT out of touch with primary process, inflexibility to experiment with IS.
IS cost/benefit analysis: formal-rational method.
- Most used due to transparency: payback period, return on investment, discount cash flow.
- Cost of purchase: hardware & software.
- Implementation: training, BPR, existing systems, parallel running, quality dip.
- Ownership: support, staff, upgrades, maintenance, obsolescence.
- Change: interoperability & openness.
- Tangible benefits: cost savings, quality improvements, avoiding cost increases, revenue
increases, staying in business.
- Intangible benefits: improved information flows, motivation, customer satisfaction,
reputation, flexibility, product differentiation, innovation/knowledge/learning.
- Balanced scorecard: financial perspective + customer perspective + internal business
perspective + innovation & learning perspective.
Problems: very hard to identify all costs/benefits, reasons for failures of IS include over-
emphasis on costs, quantitative approach does not fit IS projects.
Security: threats to information.
Because of accidents (human errors account for 40-60% of the breaches), natural disasters,
hacking, malware (virus, worm, Trojan, spyware, adware, botnet), other internet related
threats (phishing etc.).

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Hoorcollege 11 (Gastcollege Shell)

Lot of innovation: partners in formula 1, biofuels, environmental sustainability.
Shell doesnt work alone at oil fields, mostly with national partners, but also with
competitors.
Trading: not all fuel sold by Shell is actually from Shell, the company trades a lot with other
companies.
Four kinds of customers:
- Consumers: want cheaper and more efficient fuel.
- Industrial customers: B2B
- Partners.
- Major resource holders.
Buzzwords: innovation: safety, corporate environmental, social responsibility, customer and
partner focus, profitability and performance, sustainability and growth, value added
technology, competitive shareholder return.
4,500,000 emails per day and 8,000 applications.
IT operating model (lot of it is outsourced/offshored):
Strategy








Business transformation











New or enhanced business

capabilities








End to end operations











Strategic sourcing for scale,

delivery and access to technology

Group CIO
Technology
Business alignment
Invest prioritization
Innovation
Architecture
Projects
Enhancements
Infrastructure
Applications
Application services
Foundation
Infrastructure

Shell uses only 8% of its server park.

IT use started at the Finance department at Shell, but they aim to use it strategically.
5 behavioral imperatives: a strategy is only as good as your leaders embrace it, our people
understand it and our stakeholders see the impact in business outcomes.
- External focus: outside-in mindset, build external networks, access cutting edge supplier
technology, differentiate for competitive edge.
- Commercial mindset: TQ unit costs, continue benchmarking, clear commercial frameworks.
- Delivery: reliable and sustainable operations, use business KPIs, solid project delivery, lean
demand management.
- Speed: single point of accountability, decisions at the highest level, appropriate controls,

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embrace escalations to unblock.

- Simplicity: discuss, decide and do, functional excellence driven from ITE, consistent
operating models, LEAN.
What matters in an organizational culture:
- Strong sense of community and social fabric.
- Harvest: operational excellence and continuous improvement of our assets.
- Curiosity and drive for innovation.
- Our leaders role model and personally develop the best in people.
- Productive ways of working in an interdependent world.
According to Shell:
Data = interpretable for computers
Information = interpretable for humans.
How do hackers get access?
- Insecure systems: servers, websites, desktops, databases.
- Theft of user identities: phishing, spear phishing (= phishing directed towards a specific
person).
- Vulnerabilities with third parties: suppliers who have not upgraded their security level,
joint ventures with lower security standards.
Information risk management process:
1. Risk assessments: define the risk assessment standard, support and validate risk
assessments, report on risk factors and levels.
2. Controls: maintain controls register, advise on the controls relevant to mitigate risks,
review design effectiveness of controls.
3. Compliance: collect evidence on compliance, review operational effectiveness of controls,
report on design and operational effectiveness.
4. Surveillance and incidents: conduct surveillance and report on threats and vulnerabilities,
investigate incidents and report on causes and remediation.
Information Resource Management (IRM) takes action at several levels:
- Improve.
- Remediate vulnerabilities.
- Implement effective controls.
- End-user awareness.
Risks & opportunities:
- Cyber insecurity.
- Open knowledge society.
- Continuing attacks via internet and social media.
- Cloud.
- Consumerisation (bring your own device)

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