Chapter 4: Data and information around the world

Chapter 4

Data and information around the world

Essential reading
Laudon, Kenneth C. and Jane P. Laudon Management Information Systems: Organization and Technology in the Networked Enterprise. (New Jersey: Prentice Hall, 2000) sixth edition [ISBN 013-015682-5] Chapters 8 and 10.

Further reading
Alter, Steven Information Systems: A Management Perspective. (Reading Mass: Addison-Wesley, 1999) third edition [ISBN 0-201-52108-3] Chapters 4 and 10. Curtis, Graham Business Information Systems: Analysis, Design and Practice. (London: Addison Wesley, 1998) third edition [ISBN 0-201-33136-5] Chapters 5 and 7.

Introduction
In this chapter we consider how data is structured and managed within an information system, and how we can distribute and exploit data in a networked world. As we have seen in the earlier chapters, timely, accurate and appropriate information is the basis for most information systems. This implies a need to capture data at appropriate points in any business process and to store this data. Once a resource of data is developed (in what we might loosely call a database), then we can exploit this in a variety of ways. When we come to consider data in a computer it is useful to make a distinction between viewing the physical details of how data is stored and accessed, and taking a logical view.1 From the perspective of a user or the designer of a business application the logical view is perhaps enough these are the events or objects in the world that I want to store data about; this is how I want to access it. However, it is useful to start our discussion with some consideration of physical storage issues.

See Curtis Section 7.3.

Data and databases

Scene-setting exercise
First read Laudon and Laudon Chapter 8 with the following question in mind. What is it necessary to do if we are to manage data as a resource?

Magnetic disks, and to a far lesser degree magnetic tapes, provide the secondary storage capability for most current computer systems. To think about the way in which data is organised and accessed using such devices, we might think of les. A le is a named unit of data stored within a computer. For example, as I write this subject guide, it is stored in a le on my desktop computer, held as a sequence of characters and control codes. Maintaining this organisation is vital; the characters must be retrieved in the same sequence they were stored; otherwise the document would be lebdanuaer (a random sequence of the letters of the word unreadable)! For data processing applications we tend to think of les slightly differently, as

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structured in terms of records made up of elds. A record relates to an individual entity (a customer, an order, a product), and eld to an individual aspect or attribute of the entity (the age of a customer, the date of an order, the weight of a product). Within an organisational business process, various types of le need to be recognised. Transaction processing applications will often revolve around a master le, which maintains the essential records of the relevant entities. This is then updated by various types of transaction (e.g. orders or payments). Transactions themselves may be stored in transaction les: for example, all the orders received today. For purposes of security and integrity copies should be made of all data stored on a computer. Hence another type of le is a back-up le. Example
The accounts systems of an insurance fund has a master le of customers, a sequence of records, each containing various types of data on individual customers and the policies they hold. Among the elds that occur within each record are: account number date of opening name address telephone number policies held claims.

These records may need to be accessed in any order, simply depending on which customer walks into the ofce and requests a service. The customer account number eld has a special status as the key eld. That is, given a customer account number, the right record can be uniquely identied and retrieved. If the le is stored on tape the only way to nd account 00014356H is to read through the tape until that record is found not a good idea. If the le is stored on disk, however, we can go (more or less) directly to read the record if we know where on the disk it is stored.

Exercise
A 2,400 foot magnetic tape in the old half-inch format common 20 years ago could store 6,250 bytes in each inch. Assuming that only 80% of the tape can be effectively used to store data, how much data can the tape hold? (Note: the effective use is less than 100 per cent because the computer has to leave spaces between blocks of data on the tape. This allows the tape to slow down and pause between reading individual blocks.) How does this compare with modern storage devices such as DVD?

There are different ways to organise a le on a direct access device such that, given a value of the key eld, the right record can be retrieved. The three fundamental methods are:
2

Laudon and Laudon refer to this as using a transform algorithm.

exhaustive search equivalent to using a disk as a tape using some form of index to record the location of records computing the location of a record from the value of the key referred to as algorithmic.2

Perhaps we should say was, not is, since most ordinary data handling applications are today handled by database software, with le organisation details hidden from the application developer or user.

The most common way to organise les is3 to use the second type, the index sequential access method (ISAM). In this case the records are stored on a disk in key number sequence, and an index (or indexes) maintained so that the location of a given

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record can always be established. Since index sequential les are in key sequence it is possible to efciently process the whole le in key sequence if need be. It is equally possible to process individual records in random sequence but less efciently. Maintaining the indexes is an overhead, and les that grow and change rapidly that is, if records are added and deleted a lot may make the method inefcient over time.
4

See Curtis Section 7.5.

Curtis gives a good discussion of the database approach, its advantages and disadvantages.

Databases In a traditional le-based approach4 each application has its own separate les to store relevant data. This may make it easier to develop each individual application, but it may cause longer-term problems. It is probable that the same data is needed for many applications, and storing it many times will be wasteful and lead to inconsistencies. It has therefore become common to approach data storage using a database approach. The principle behind this approach is the storage of data in an integrated and coordinated manner so that many users or application programs can share it. Items of data should be stored once only. This will allow improved control of information, avoid inconsistencies and allow security to be carefully managed. On the negative side, a database approach requires careful design, and may allow any data errors to propagate among every application using the database. Database software can also be slower and less efcient than optimised le-based processing.5 A database approach is achieved by using special software, a database management system (DBMS). This takes care of the details of physical storage of data and provides the user and application programs with a simple interface through which they can request and update existing items of data and create new ones. Such interfaces are provided for programs to use as they run, as well as for individual users who wish to extract some information from a database on an ad hoc basis.6 One result of using a database approach is that the storage of data (the logical view) has to be carefully designed so as to take into account the needs of all the various users and the various requirements they may have.7 This also leads to the need for a new organisational role, that of the database administrator to exercise control over data resources. There are various logical models used to express structures for data in a database, including the object model, network model, and the hierarchical model. For this unit only the relational model is considered in any detail, and a more detailed description of its use in designing a database is given under the heading Data analysis and Data modelling in Chapter 5 of this guide on developing information systems. A logical view of a database tends to see it as a single pool of data that can be accessed by many users as they wish. However in modern information systems, it is common for a database to be physically distributed: that is, split across different computers spread around the world. In this way data can be stored locally for its usual users, but be accessible to others across a network. A distributed database may be based on partitioning of data between sites, or it may be based on duplication of data at different sites. Distributed databases are a current technology, and are being exploited by many organisations in their new information systems. Other innovations in databases include object-oriented and multimedia databases. Perhaps the most signicant new idea is the concept of a data warehouse, a comprehensive site to store all organisational data from the past as well as the present, internally generated as well as externally. (Remember that most transaction processing systems essentially store data on todays situation, and do not hold data on the past for example, stock levels a

Ad hoc enquiries to a database are an essential part of an MIS, and managers need some form of query language to express their enquiries. For example, show me all the customers who have ordered in the last year more than twice and have spent over $1 million? The most common query language in use today is SQL Structured Query Language.
7

Now review the advantages of the database approach given in Laudon and Laudon, section 8.2 and Curtis, section 7.5.

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year ago, orders in May 1996, etc.). With such a comprehensive data pool many new analyses and trends can be explored, and serve to support managers in making sense of the world. Finally, in todays world, databases are being linked to the web. This is not just a technical issue of how to provide easy query access through a web page. It goes far further if organisations make databases openly available to all in the organisation, and assume that people will search for relevant information (browse for, we might say). This is the basis of many intranet projects as discussed below. Exercises
1. A database is to store information on a factorys products. There are 2,000 products and an average of 250 characters of data are to be stored on each one. How much disk space will be required to store the database? Express the answer as megabytes and as kilobytes. State any assumptions or limitations in your answer. 2. What do you understand by the phrase the database approach? What benets should an organisation get from adopting such an approach? What problems do you foresee if a database approach is combined with a distributed approach (for example, a distributed database)? 3. What tasks does a database administrator undertake? Write out a job description for such a person outlining the skills they are expected to have. 4. Which distributed database approach (partitioning or duplication) would you suggest for these distributed database applications: ight despatch information for an airline across many airports a parts catalogue for an engineering company used in many factories accounts information in a bank.

To answer you need to think about how local the use of data is, and how problems of inconsistencies would be handled.

The Internet and electronic commerce

Scene-setting exercise
First read Laudon and Laudon Chapter 10 with the following question in mind. What are the principal positive and negative aspects of the development of e-commerce?

The External Programme, for example, publishes information at www.londonexternal.ac.uk and the London School of Economics at www.lse.ac.uk.

The Internet The Internet was developed through military and academic projects in the 1960s and 1970s. In the 1990s it mushroomed as the great network of networks, spanning the globe and providing services to the largest multinational corporations, medium-sized business, government and public administration, as well as small businesses and the individual. The Internet is used to communicate, as in email or chat programs, to move data and les around as well as to advertise and to publish information to a potential worldwide community.8 Access to the Internet is usually made via an Internet Service Provider (ISP), often a part of a telecommunications or media company. The Internet manages to operate around the world through the adoption of standard rules or protocols for addressing and passing messages. The principal such standard is known as TCP/IP (Transmission Control Protocol/Internet Protocol). The Internet is essentially a huge clientserver network, with the client systems on the desktop, and servers providing web pages, email, etc. From a users point of view the main technologies that they see are the use of an email client, to prepare, send and

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receive messages, and the use of a browser program to navigate through the Worldwide Web. Other technologies may include streaming video to view real-time video clips, or streaming audio for example to listen to Internet radio, and each will have its own client software. Chat rooms are common too, for groups to exchange messages and discussion, as are listservers to distribute information via email to interested people. Finding information usually requires using some kind of search engine to provide a list of relevant sites, based on some key words. If and when a user wishes to trust the Internet with sensitive information, for example to send a credit card number to a company, then a user may need to become aware of the various means of securing information, for example through encryption. Finally, when we come to publish our own information (our home page), we may need to master the simple language used to prepare web pages, HTML (HyperText Markup Language). The existence of the Internet has given rise to new areas of business. These include ISPs and web design companies, but also many other companies, both new and old, now do business over the Internet, so called e-commerce. A well-known example is the American book selling company Amazon.com, which has pioneered selling books over the Internet. Equally, many airlines sell tickets over the net, and many banks offer online banking services. As other examples, recruitment and advertising of jobs, and the music industry, are elds in which the Internet is changing profoundly the way business is done. Section 10.2 of Laudon and Laudon gives a review of the business models applied in these new areas (Table 10.3) and introduces the word disintermediation to express the idea of the Internet offering a more direct link from customer to seller, with fewer intermediaries.9 This, it is proposed, will reduce costs of such business transactions.10 Exercise
Find out how many different types of business offer their products or services in your country over the Internet. Which are most successful? Why do you think that is?

See also Alter, Chapter 6 for a discussion on business models and examples. 10 You should be able to link the ideas to transaction cost economics.

11

The UK governments main presence on the web is www.open.gov.uk.

B2B sector A new area that is exciting much interest is the business to business sector (B2B, in the jargon). This represents the use of the Internet to support business between companies rather than to retail customers (B2C). Large corporations, including airlines, vehicle manufacturers and governments in Asia, America and Europe, have committed to transferring a major percentage of their purchasing to such electronic marketplaces. Electronic commerce is of course not only for the big companies. It also allows small companies to reach out to a worldwide (or extended) market. For example, a specialist bookshop, dealing in (lets say) old books on horse riding, can deal with customers around the world at very low cost. It is also worth noting that businesses are not alone in taking up the Internet. Many governments, charities, professional organisations, political parties and non-governmental organisations (NGOs) also publish their material on the web. In this way it is more accessible and available to a population and to people around the world (provided they have access to Internet connections).11 Intranets For some companies the example of publishing information, using browsers to nd what is needed and generally sharing information through the web, has led them to use the same model (and the same technologies) for their internal networks. These are known as intranets (intra meaning inside). Intranets are then seen as having a major role in supporting knowledge workers and providing the new generation of ofce information systems combined with MIS.

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Extranets A company may also wish to share data and information with partner organisations through an extranet (extra meaning outside). Such a system can link partners together to support a supply chain (for example, to enable just-in-time delivery), or to allow sharing of knowledge and insights about a common project, for example the multiple actors who participate in a construction project, from architect to landscape gardener by way of electricians. In this way, intranets and extranets provide a form of groupware systems that allow a team or group to work together, communicate and share information. Both intranets and extranets may require careful security procedures to be in place to limit read or write access to those who are authorised, with specialised software to protect such a system such as a rewall program. A rewall is the name given to software and hardware that controls access into and out of a particular organisations network. Consequences of the Internet We should recognise that the Internet has also had consequences in breaking down national boundaries and jurisdictions. Put bluntly, information of all kinds can ow into and out of countries with almost no effective control. A business may be registered in Country A, operate from Country B and sell goods to consumers in Country C, and avoid any tax or legal liability in any of the countries. What exactly governments and international organisations can do about this is a current topic of debate. The Internet has also had profound consequences beyond business, and the issues that are discussed are not just limited to issues of how to control (and tax) electronic commerce. For example, many non-governmental organisations (NGOs) concerned with international issues use the Internet to promote their causes and to disseminate information. This can be a powerful resource for such groups and help them to mobilise large numbers of people. As one recent example, the launch of the World Trade Organization has been marked by much protest and concern around the world, largely co-ordinated by use of the Internet. This may be seen in positive terms, if it allows a substantial global debate on key development issues and indeed the President of the World Bank welcomed a recent protest at a meeting in Prague as signifying the centrality of their mission and the importance of their work but not everybody will be so pleased. For some, such a use of the Internet may be seen as illegitimate or destabilising. More generally, the Internet presents governments with a challenge as to the extent to which they seek to control what it contains and what is available to citizens within their own country. Almost all countries seek to impose some regulation, be it of pornography, racial hatred, political campaigners or international news sites. We might also suggest that few countries are very successful in such controls, certainly if they at the same time try to promote Internet access for positive economic purposes.

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Exercises
1. What characteristics would you identify as making a particular business sector successful when starting to use the Worldwide Web for selling a product? 2. Describe the main management challenges for established businesses as ecommerce develops. How do you rank the advantages and disadvantages to newcomers as against established companies in new electronic marketplaces? 3. Identify as many means as you can by which an intranet/extranet can support a geographically distributed team of people to undertake a project. Think about this in the context of developing a new information system. For example a development team in San Francisco is working with the Asia sales department in Hong Kong to build a new system to run on a computer centre in Ireland. The main software supplier, a separate company, is in Germany, and various consultants are involved from the USA, Singapore and Australia. Most of the people involved never meet, and some are asleep when others are at work. 4. Are there any controls on information accessed through the web in your country. What is their justication. Are they effective?

Learning outcomes
By the end of this chapter and having undertaken the relevant readings and exercises, you should be able to: compare traditional le-based processing with the database approach, identifying strengths and weaknesses of each evaluate how the database approach contributes to organisational performance describe the Internet, and intranet and extranet in terms of applications, business models and basic technologies assess the impact of e-commerce on businesses and the wider impact of the internet on civil society.

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Notes

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