SOLUTIONS MANUAL for Experiencing MIS Third Canadian Edition. David M. Kroenke Andrew Gemino Peter T by welldoneassistant

Contents Introduction: Organizing the Course

Chapter 1:

Information Systems and You

Chapter 2:

Business Processes, Management, and Decision Making

Chapter 3:

Productivity, Innovation and Strategy

Chapter 4:

Hardware and Software

Chapter 5:

Database and Content Management

Chapter 6:

Networks and Collaboration

Chapter 7:

Competitive Advantage and Business Processes

Chapter 8:

Decision Making and Business Intelligence

Chapter 9:

E-Commerce, Social Networking, and Web 2.0

108

Chapter 10:

Acquiring Information Systems through Projects

119

Chapter 11:

Structure, Governance, and Ethics

129

Chapter 12:

Managing Information Security and Privacy

141

CHAPTER 1 INFORMATION SYSTEMS AND YOU TEACHING OVERVIEW We like to begin the first lecture with an introduction to the course, the instructor, and the grading scheme. We follow this with questions and a short break before starting in on the material for the course. Handling the administration early in the session lets students get the questions that are bugging them out of their heads so we can get on with the learning. For this reason, we also take questions for the first 5 minutes or so at the start of every class. We find that we can learn quite a bit about how the course is going by asking for questions. The most important topic for the first lecture is to drive home the idea that systems are larger than just machines and software. Systems involve people and procedures too. The Social Media case provides some Canadian examples of how social media can change an organization’s relationship with its customers. This is particularly true with small and medium sized businesses The Google Knows Best case also provides some examples of how valuable information resources can be. The Running Room example at the end of the chapter also shows how information systems extend the services of traditional business. It is an example of how the system serves to connect people and offer services that were not available without the system. Students will also be interested in the data from the Information and Communication Technology (ICT) industry. The website (http://strategis.ic.gc.ca/epic/site/ict-tic.nsf/en/ h_it07229e.html.) provides a great summary of the industry. These numbers surprise most people. Perhaps most important is to bring student’s attention to the wages and the difference between the average wage across all industries and those in the ICT industry. Ask students why people in the ICT industry get paid more? Also note that the Services sector is the fastest growing part of the industry. ICT services mean interacting with clients to analyze and implement information systems. That is exactly what MIS skills are focused on. Part of increasing engagement is giving students a reason to consider more MIS training. Talking about innovation, and wages, is a good way to do that.

CHAPTER OBJECTIVES 1. 2. 3. 4.

Understand what is meant by an information system. Know what is meant by MIS. Understand how information systems (IS) differ from information technology (IT). Understand the role that information and communication technologies have in our economy. 5. Understand how successful business professionals use IS. 6. What is the shape of things to come? 7. Understand the goals of this class. Copyright © 2014 Pearson Canada Inc. 5

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

CHAPTER OUTLINE Q1 Q2 Q3 Q4 Q5 Q6 Q7

What is an information? What is MIS? How does IS differ from IT? How important are information systems to our economy? How do successful business professionals use information systems? What is the shape of things to come? What is this class about?

ANSWERS TO USING YOUR KNOWLEDGE QUESTIONS 1. “Outlook on Human Resources in the ICT Labour Market: 2008–2015” suggests that ICT workers need to have several core skills. a. What are these key skills?  Technical skills  Specific technology and industry experience  Satisfactory communications and other business skills b. Identify ways that a student could best obtain these skills.  Technical Skills: in this class  Specific technology and industry experience: co-op  Satisfactory communications and other business skills: business classes c. Do you believe a business student can work effectively in the ICT industry? Would a business student have a competitive advantage over a computing science student? Why or why not? Yes, because as the ICTC report displays, there are three different occupations that are all very business-centric. A business student can have an advantage based on their communication and business skills, which are unlikely to be taught in a specific engineering or computer science courses. 2. The interview with Hal Varian, chief economist at Google, focuses on six themes: 1) flexible corporations, 2) corporations and work, 3) free goods and value, 4) workers and managers, 5) computer monitoring and risks, and 6) changes in industries. Choose one of these themes and discuss in more detail the implications of the change for you personally. Provide specific examples where possible. You can find the article at www.mckinseyquarterly.com/Strategy/Innovation/Hal_Varian_on_how_the_Web_ challenges_managers_2286. Note: There will be a number of answers to this question. More successful answers will be able to show how these themes might affect their own personal lives. Encourage students to use examples in their own experiences. Copyright © 2014 Pearson Canada Inc. 6

Chapter 1: Information Systems and You

3. Consider costs of a system in light of the five components: costs to buy and maintain the hardware; costs to develop or acquire licenses to the software programs and costs to maintain them; costs to design databases and fill them with data; costs of developing procedures and keeping them current; and finally, human costs both to develop and use the system. a. Over the lifetime of a system, many experts believe that the single most expensive component is people. Does this belief seem logical to you? Explain why you agree or disagree. It is likely that this belief is true. An information system is only as good as the people who have developed it and who make use of it to perform their business functions more effectively and efficiently. It is very costly to hire and retain qualified, creative, and motivated people. Without those people, however, even the most technically sophisticated system will be of little value to the organization. b. Consider a poorly developed system that does not meet its defined requirements. The needs of the business do not go away, but they do not conform themselves to the characteristics of the poorly built system. Therefore, something must give. Which component picks up the slack when the hardware and software programs do not work correctly? What does this say about the cost of a poorly designed system? Consider both direct money costs as well as intangible personnel costs. If a system does not meet its requirements, the people and procedures will have to adjust and “pick up the slack.” People will have to change their behaviors to work with the system. This may result in reduced productivity at a minimum. In addition, annoyance and frustration may build to the point where people actually avoid the system in some fashion…they may find a way not to use the system at all (thus defeating its purpose); they may avoid using it by increasing absenteeism; or they may find another job. c. What implications do you, as a future business manager, take from questions (a) and (b)? What does this say about the need for your involvement in requirements and other aspects of systems development? Who eventually will pay the costs of a poorly developed system? Against which budget will those costs accrue? It is hoped that students will appreciate how important it is that the business professionals play an active role in systems development. Requirements not only must be delineated for the system, but business managers (who are paying the bills) must ensure that the requirements are being fulfilled in the new system. If they are not fulfilled, the business unit not only will have wasted the development costs; it will experience ongoing costs of decreased productivity and possibly higher staff turnover.

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

ANSWERS TO COLLABORATIVE EXERCISES 1. Watch the video “Did You Know 3.0” (www.youtube.com/watch?v=jpEnFwiqdx8) or “Did you Know 4.0?” (http://www.youtube.com/watch?v=6ILQrUrEWe8) Discuss this video with your group and identify three specific impacts that you think the information in this video will have on your business career. Be as specific as possible, and link the ideas to your intended major, interests, and career aspirations. There is no single answer to this question. This is a common theme in collaborative exercises. The answer is not as important as the process that the students go through in developing their answers to the questions. The question is intended to get students thinking about changes in technology and linking these changes to the business environment around them. It is important for students to be as specific as possible, since they learn more when they tie these ideas to things happening in their own lives. 2. Watch the video “A Vision of Students Today” (www.youtube.com/watch?v= dGCJ46vyR9o). Discuss this video with your group and identify three ways that courses could be designed to improve the way students engage in the course. Be as specific as possible and be prepared to share your ideas with the class. Again, no simple answers. Encourage the students to Google “A Vision of Students Today” and the read through blogs about it. Ask them to form their own opinions This can be done as an in class exercise. We suggest a three step process: 1) Show the movie 2) Have students form small groups of 3 or 4 to talk about it for a few minutes 3) Elicit some opinions from the class This is a good way to start the class, as it is likely to intrigue students and start them thinking about the class in a different way.

ANSWERS TO CASE STUDIES MIS In Use 1a– Social Media: Changing the Relationship between Customers and Business 1. Are the social media sites that Mabel’s Labels uses Information Systems? Yes, these are systems. Information is collected, processed, and distributed. They may not be thought of as traditional applications but information is the key resource in these systems and they support the company’s processes. 2. What do you think are the benefits to Mabel’s Labels of joining and participating in their various social media sites? What are the costs? The benefits are access to a wider audience and hence a wider customer base than using traditional marketing (newspapers, flyers in the mail, etc. What is remarkable is that many of these systems do not have an obvious application cost. They are largely Copyright © 2014 Pearson Canada Inc. 8

Chapter 1: Information Systems and You

free to participate it. However, the cost of maintaining the web presence on these applications can be quite onerous. The major cost is the time that has to be spent monitoring and replying. This time should be factored in when considering whether to invest in these technologies. 3. Can larger companies do the same social media marketing and promotion that Mabel’s Labels can? Do you think small businesses have an advantage in social media promotion over larger organizations? Justify your answers. Small businesses may have an advantage over larger businesses in that small businesses can more effectively use free sites such as Twitter, Facebook, and MySpace. Larger companies can use these spaces, but it is often awkward for them to do so for two reasons. One reason is the sheer size of the company and its customer base makes it difficult to effectively interact with customers using this media. Second, it is difficult for a large company to personalize their services and at the same time maintain a consistent brand. Small businesses have fewer customers and more readily adapt to changes in customer opinion. While small businesses may be more effective in the short run, in the long run, larger companies have access to resources that will help them monitor and reply to the media attention. Small businesses can be overwhelmed due to a lack of resources. 4. What risks does Mabel’s Labels face in their social networking strategy; that is, what are the downsides to using social media for small businesses? Some examples include:  Increased time and effort required to support social media efforts  Privacy and security risks due to profile on sites  Lack of control over features and advertising on social media sites  Customers can more easily organize themselves and develop material damaging to the company  Competitors can view and comment on your site 5. Some people have suggested, based on the fact that social networking sites do not make money, that social networking sites are a temporary fad that will eventually be absorbed by other more profitable companies. Do you think social networking is something that will last? Justify your answer. This question has no definitive answer and we should not suggest there is one to be found. It is important to encourage the students to form their own opinions about topics such as these and to continue to shape that opinion as they move through the semester. MIS in Use 1b – Google Knows Best 1. Do people who use free email systems understand the implications of the tradeoffs that they have made? (Hint: Do you?) Copyright © 2014 Pearson Canada Inc. 9

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

Some people will understand and some people will not. A majority of the people signing up for Gmail are not aware of the details of the site’s user agreement. Some people are quite surprised to learn that Google can scan through the email and use some of the information from the mail system for the purpose of advertising. 2. Is email different from postal or telephone services? Is it more like a postcard, where privacy should not be assumed? This is a matter of opinion. Some students will suggest the former and others the latter. Using the analogy of the telephone system is a good argument to make. If someone is talking on their cell phone in a public place and you overhear the conversation, is that any different than reading emails on the Internet? Again, the point of this question is to encourage discussion and to have students view their use of Gmail from a different standpoint. 3. How complete a profile can Google assemble of a typical user? (Hint: what Google services—Calendar, Google Maps, etc.—do you use?). This is an interesting class exercise. Once students begin to think of all the different applications they use (Google Doc, Gmail, Google search engine, Google Earth, it will be come clear just how much information a company like Google could have on each individual. 4. Is there a way you could use free email systems yet still prevent your messages from being contextually scanned? Some students might think about encryption and using encrypted attachments or other ideas to get around contextual scanning. Others might get more interested and look for other ways. The important point is that there are ways around contextual scanning and some research in this area will show students some of the latest examples. 5. Should these forms of communication service be regulated? If so, how and by whom? A discussion of completely free access versus controlled access is another good example of a class discussion question. Most students start out arguing for free access, but when you note that organized crime and other related groups use these communication channels as well, the idea of limits and controls begins to become more appealing. Keeping students sensitive to the pros and cons of limiting access is the important point to make here. 6. Is there a difference between what Google is doing and how spam filters work? Spam filters read through email looking for “inappropriate” content or indications that the message has been sent by spammers. Over 90% of all mail sent on the net is spam. So spam filters are reading email content but they are generally recognized as good things. So can Google’s reading of email be viewed for this perspective? The Copyright © 2014 Pearson Canada Inc. 10

Chapter 1: Information Systems and You

difference is that Google uses the information for marketing whereas spam filters use it to limit email coming to email users and does not use the information for marketing. 7. What are your privacy rights and expectations while using the Internet? This is a question students need to consider and research. Much of this is a matter of ethical behaviours, but it is important to note that there are no ethical standards applied on the Internet. Case Study 1: Running at the Speed of the Web: The Running Room The Running Room (www.runningroom.com) is North America’s largest specialty retailer of sporting goods, apparel, and footwear for runners and walkers. The company operates over 90 corporately owned stores in Canada and the United States. The Running Room website was created in early 2000.

QUESTIONS 1. Do you think The Running Room would be as successful as it is if it didn’t have a website? In other words, is the company’s website a critical component for success, or simply a nice ”extra” for its customers? The website has clearly become a critical component for the Running Room. It supports the expansion of the firm and helps to connect the stores with customers in a meaningful way. Customers are using the website to organize their own events so it is much more than just an extra “nice to have.” 2. Could the Running Room provide the same customer experience without using its website? For example, could the company use more mailings and telephone calls to stay in touch with its customers? Perhaps. Many of the services could be replicated with mailings and telephone calls. However, scheduling events and other more sophisticated services would be difficult to match using telephone and mail. What should be very obvious are that the costs of providing these services goes way up when you rely on telephone and mail. So while it might be possible to accomplish, it will certainly cost more to use mail and telephone. 3. Do you think the Running Room’s website creates a barrier to entry for its potential competitors? Explain your answer. Other competitors could develop a similar website. But the competitors would have to develop it and integrate it with their stores and people. This will take time and money. Also the competitors would not have a large user base to start so could not offer the full range of services. Therefore the site creates a competitive advantage for the Running Room. Copyright © 2014 Pearson Canada Inc. 11

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

4. Check out The Running Room’s mission statement. Does the website help the company meet these goals? Discuss why or why not. The Running Rooms’ mission is: “The Running Room will always be driven by its emphasis on continuous improvement, customer service, and community involvement. We are not just selling shoes and equipment, we are selling a commitment to active living.” See http://www.runningroom.com/hm/inside.php?id=3036 The website clearly supports this by limiting the active community, supporting events and charitable causes and developing strong ties to customers and support their lifestyles through events hosted on their site.

DULLER THAN DIRT Goals  Share our excitement about MIS with our students  Establish the fact that this class is work. Some topics take time and effort to learn. That’s OK.  Discuss strategies for making the subject interesting.  Introduce students to the idea of “waking up to your life” Background and Presentation Strategies See the annotation for the start of this chapter. You might choose to use some of that material with this Exercise at the end of your presentation. I use the “waking up to your life” theme as a wrap up for this lecture. See the Wrap Up. I take the students’ goal of being a business professional very seriously—occasionally more seriously than some of them do. Given that goal, I’m here to help those who want to learn how to use IS and related topics to help them strengthen their personal competitiveness. I love this field, and you probably do too. Tell the students why! They will be very interested to know why you picked this discipline, what you like about it, what the challenges are, what you find interesting. Few students will want to be professors, but they will want to know what aspects of your interests will apply to them. This class can be fun and incredibly interesting. Especially if students learn to personalize the topics; that is, to constantly to ask themselves, how can I use this knowledge to get a job? To get a better job? To gain a competitive advantage? To be a better professional? Examples:  How will I, as a future public relations agent, use this material? What do I need to know to get a public relations job in technology? How can I use data communications technology to make me more productive? Copyright © 2014 Pearson Canada Inc. 12

Chapter 1: Information Systems and You

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What do I, as a future general manager, need to know about this subject? What do I need to know about developing information systems? What do I need to know about using IT to advance corporate strategy? Should I think about an IS career? Although hardware and software jobs exist, not every IS professional writes computer programs or installs network gear. It’s all about the innovative application of IT and IS for the solution of business problems. That could be interesting!

Having said all of that, at times this topic is duller than dirt. No getting around it. So, sometimes a person just has to buckle down and do the work. Ignorance is curable, but it doesn’t cure itself. Not every topic will be exciting and interesting to every student all the time. That doesn’t mean the topics aren’t important. Depending on the students’ age and maturity, sometimes I leave it at that. But, if they are young and need coaching, I’ll continue with some of the following points:  Like any challenging course, you cannot succeed by channel surfing. You can’t switch channels when the going gets hard. You have to stay with it.  If you’re a CFO and the financial statements have to be filed, they have to be filed, and you make that happen. It’s all part of being a business professional.  If you’re a manager, and the computer budget needs to be submitted, you do what you have to do. If you don’t know what something is or does, you find out. It doesn’t matter how tired you are, how many other things you have to do, you just keep working; it must be done. At least, you do that if you’re a professional.  So, learn not to quit when the going gets rough. Learn that behavior now, before you start your career! Students are students, and undergraduates are undergraduates. Many are young. They get busy with other classes; they get distracted with their friends; they get involved in campus activities that consume their study time. As the class proceeds, I have to keep stoking the fires of their interest by showing them my excitement about the material. Ultimately, however, it’s not my excitement about the class that motivates them; it’s their excitement. Mine just get them going. Every lecture, I need to do something to build that excitement. If I can do that, this class is a joy to teach. When I don’t do that, it’s like dragging a 500-pound sack of potatoes across campus. Again, it’s the excitement of the students that moves the class along. Suggested Responses for Discussion Questions 1. You might ask the class the following questions:  Do you think about your goals? About how well you’re accomplishing your goals? Do you think about what you want to accomplish in “this awkward time between birth and death”?  Write a note to remind yourself that you cannot avoid responsibility for your life. Make goals; see how you’re doing. Once a week may be too often. How about once a month? Copyright © 2014 Pearson Canada Inc. 13

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

2. The purpose of this question is to ask the students to ask themselves whether they’re living their lives by someone else’s criteria. I think that’s such an important task for undergraduates—especially for the traditional 20-year-old. Why do they attend college or university? Why are they business majors? What do they want to do? Are these their goals or their parents’ goals? Are they an interpretation of what it means to be successful? If the answers to these questions indicate they chose these goals for themselves, then the students can rededicate themselves to the goals. But if not, now’s the time to find out. If you’d rather be a painter, an engineer, or a biochemist, now’s the time to figure that out. 3. Because it will help you learn to use IS to solve problems, make better decisions, and become a more complete business professional. 4. The text suggests personalizing it – making the material relevant to the students’ goals. Wrap Up Sometimes David Kroenke wraps up the first lecture with the following:  You and I, all of us, have just invested 3,600 heartbeats in the last 50 minutes. That’s 3,600 heartbeats we’ll never have again. Was it worth it? If not, what can we (that is all of us—you and me) do to make it worth it next time?  Over the years, I’ve come to view a class like a woven tapestry. Each of us contributes one string of yarn, one string of the warp or one of the weft. We weave this experience together. I bring my excitement for the topic, my knowledge, my experiences, and I frame the experience. What happens, next, however, is up to you. Did you do the homework? Did you read the assignment? Are you surfing the Web or sending emails or are you listening? Are you relating this material to your goals?  We make this experience together. I hope we will weave a beautiful tapestry, and to that end, I will do all I can. I hope you will, too. See you next time!

CHAPTER 2 BUSINESS PROCESSES, MANAGEMENT, AND DECISION MAKING CHAPTER OVERVIEW In the first lecture we worked to convince students that information systems are more than just machines and software. These systems have a large impact on the economy we live in and the career that students will eventually find themselves in. Our next step is to introduce them to business and how information systems support how businesses get things done. As a starter, ask your students about the kind of information they place on their their Facebook page. Having this discussion is a good way to get interaction and discussion about information systems started. The primary issue to be considered this week is “What is a Business process?” It may be useful to start with a simple example to explain business processes. Our first question “How did this stuff get here” provides an example of how you might bring the subject of business processes to life. You might think about walking through the course registration process as an example of how business processes operate, or filling up the gas tank, or taking money out of an ATM. Another good example is to use the MIS in Use case as an example of a business process. Using examples helps to make the discussion richer. We would suggest spending some time interacting with students and asking them about a process they are familiar with. It is a good use of time when introducing the notion of business process. We also believe that the Q6 as covered is an important opportunity to quickly reinforce the model of information systems that was introduced in the first week. Students should not be able to escape the class without understanding Figure 2-3. Another important issue is to recognize that a byproduct of every business process is information about how the process can be improved (Box, 1957)1. The subject of what information is and how information can influence decision making is the second large issue to address this week. We believe it is important to emphasize the importance of decision making and information early in the course as any business major can relate to using information to make improved decisions. As a note for instructors working to develop student’s opinions about the importance of information technology, the “What do YOU think?” exercise titled “Your Personal Competitive Advantage” provides a good exercise that can be used effectively in a class discussion about why taking this course might be useful for any business major.

Box, George E. P. (1957). Evolutionary operation: A method for increasing industrial productivity. Applied Statistics, 6(2), 81-101.

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

An Example to Use in Class: The MIS in Use case “EDoc: Software making waves” is an effective case for illustrating business process and how technology supports the process. The most effective thing about this mini-case is that it is simple. The answers to the case are provided at the end of this chapter. Most people think of tugboats as a sunset industry; however, the case shows that a little system can go a long way in making an industry that is over 100 years old more efficient.

CHAPTER OBJECTIVES 1. 2. 3. 4. 5. 6.

Get students to think about “how stuff gets here.” Understand elements of a business process. Understand what is meant by information. Understand the role information plays in business processes. Understand how information systems support decision making. Help student to consider their role as part of an information system.

CHAPTER OUTLINE Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8

“How did this stuff get here?” What is a business process? What are the components of a business process? What is information? What is the role of information in business processes? How do information systems support business processes? How do information systems support decision making? What is your role?

ANSWERS TO USING YOUR KNOWLEDGE QUESTIONS 1. Consider the four definitions of information presented in this chapter. The problem with the first definition, “knowledge derived from data,” is that it merely substitutes one word we don't know the meaning of (information) for a second word we don't know the meaning of (knowledge). The problem with the second definition, “data presented in a meaningful context,” is that it is too subjective. Whose context? What makes a context meaningful? The third definition, “data processed by summing, ordering, averaging, etc.,” is too mechanical. It tells us what to do, but it doesn't tell us what information is. The fourth definition, “a difference that makes a difference,” is vague and unhelpful. As well, none of these definitions helps us to quantify the amount of information we receive. What is the information content of the statement that every human being has a navel? Zero—you already know that. On the other hand, the statement that someone has just deposited $50,000 into your chequing account is chock-full of information. So, good information has an element of surprise. Copyright © 2014 Pearson Canada Inc. 16

Chapter 2: Business Processes, Management, and Decision Making

Considering all of these points, answer the following questions: a. What is information made of? Information is made of data that has been processed in some way to be meaningful to the recipient. b. If you have more information, do you physically weigh your decisions more? Why or why not? If you are carrying around a 1,000-page report that contains information, then you might say information causes you to physically weigh more. In most situations, however, having more information does not result in a weight gain. It results in a change in your brain. c. If you give a copy of your transcript to a prospective employer, is that information? If you show that same transcript to your dog, is it still information? Where is the information? A transcript from a prospective employee is meaningful to an employer trying to fill a position. The content of the transcript (courses taken, grades earned) has value in the hiring context. A dog has no use for the content of the transcript and so it has no value to him. If the piece of paper the transcript is printed on is crumpled up, then it might have value to the dog as an item to chase or tear up (depending on the dog). d. Give your own best definition of information. Student answers will vary. Despite its subjectivity, I still like “information is data that is meaningful within a context.” Also, look for the fact that data usually must be transformed in some way to be meaningful; and to provide value, the information must make a difference to the recipient. e. Explain how you think it is possible that we have an industry called the information technology industry, but we have great difficulty defining the word information. We have many everyday terms that are difficult to define. We speak of the health care industry, but we typically only define “health” in the negative (the absence of disease). This is just another example of a term that is broadly understood but difficult to define precisely. 2. Re-read the “MIS in Use” case to refresh your memory of the Edoc HELM system. a. Using Figure 2.1 as a guide, draw the paper-based process described in the case. The actual picture is not important. This is something that students will learn more formally in a systems analysis and design class. What is important is the notion that information is flowing between the various entities in the process. Copyright © 2014 Pearson Canada Inc. 17

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

Figure 1: The Process before Helm

b. Now draw the process after HELM was introduced. c. What are the major differences between the two processes? The major differences are the fact that information about a job is recorded once by the dispatcher in HELM. From that point forward, all of the information about the job and its completion is handled through the system. This reduces the amount of manual work to be completed by dispatcher, accountant, and tugboat captain. Figure 2: The Process after HELM

Chapter 2: Business Processes, Management, and Decision Making

d. What are the improvements that have been made through the introduction of HELM? (Hint: Consider tangible and intangible benefits.) Tangible: 1) reduced costs, 2) reduced errors, 3) reduced data entry time Intangible: 1) more accurate information, 2) more timely information, 3) reduced frustration, 4) improved ability to train new dispatchers 3. The text states that information should be worth its cost. Both cost and value can be broken into tangible and intangible factors. Tangible factors can be directly measured; intangible ones arise indirectly and are difficult to measure. For example, a tangible cost is the cost of a computer monitor; an intangible cost is the lost productivity of a poorly trained employee. Give five important tangible and five important intangible costs of an information system. Give five important tangible and five important intangible measures of the value of an information system. If it helps to focus your thinking, use the example of the class scheduling system at your university or some other university information system. When determining whether an information system is worth its cost, how do you think the tangible and intangible factors should be considered? Tangible Costs:  Cost of hardware components  Cost of software components  Cost of database components  Cost of training users  Cost of hiring users and/or developers Intangible Costs:  Cost of searching for information that is difficult to find  Cost of making a decision when information arrives after the fact  Cost of frustration when system does not work as expected  Cost of decision errors when information is inaccurate  Cost of employees trying to work around or avoid a problematic system Tangible Value:  Increased sales to new customers  Increased sales due to more repeat customers  Increased employee productivity  Decreased hiring costs due to lower employee turnover  Increased quality resulting in fewer defects in output Intangible Value:  Increased employee satisfaction  Increased customer satisfaction Copyright © 2014 Pearson Canada Inc. 19

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

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Improved management decision making Decreased employee absenteeism Decreased employee turnover

To determine if an information system is worth its cost, the values of all relevant tangible costs and benefits should be estimated as accurately as possible (easier said than done, of course). In addition, the values of intangible costs and benefits can sometimes be estimated with a little effort. If the intangibles cannot be quantified, they should at least be described so that their existence is recognized and appreciated. 4. Singing Valley Resort is a top-end (rooms cost from $400 to $2500 per night), 50-unit resort located high in the mountains of Colorado. Singing Valley prides itself on its beautiful location, its relaxing setting, and its superb service. The resort’s restaurant is highly rated and has an extensive list of exceptional wines. The well-heeled clients are accustomed to the highest levels of service. a. Give an example of three different operational decisions that Singing Valley personnel make each day. Describe an information system that could be used to facilitate those decisions. Note that a discussion of the systems will vary depending on the perspective of the person answering the question. Operational Decisions (system to support decision)  How much food to buy for restaurant (food service inventory system)  How much wine to stock this week (food service inventory system)  How many towels to purchase this month (inventory management system) b. Give an example of three different managerial decisions that Singing Valley managers make each week. Describe an information system that could be used to facilitate those decisions. How many servers should be available for dinner? (human resource scheduling system) What price should we set for our rooms this week? (guest scheduling system that considers time of year and current levels of unused capacity) How can we incent our guests to spend either more time or more money at the resort? (a system that gathers all of a guest’s activities during a stay for analysis) c. Give an example of three different strategic decisions that Singing Valley’s owners might make in a year. Describe an information system for each. Should we expand the number of rooms we have? (this would rely on accurate information from the guest registration system) Should we offer discounted rates for our guest and at what times for the year? Should we consider opening a different restaurant that caters more to a family experience? Copyright © 2014 Pearson Canada Inc. 20

Chapter 2: Business Processes, Management, and Decision Making

d. Which of the decisions in your answers to questions a, b, and c are structured? Which, if any, are unstructured? The decisions in part (a) are primarily structured. The decisions in part (b) are less structured and the decisions in part (c) are largely unstructured.

ANSWERS TO COLLABORATIVE EXERCISES 1. This chapter introduced the concept of Business Process Management (BPM). In the discussion, three methods for improving business processes were listed: Total Quality Management (TQM), Six Sigma, and Lean Production. Do the following with your team: a. Choose one of the methods listed above. Create a definition of the method, elaborate on how it works, and indicate where and when it was developed. Discuss how this method differs from other BPM methods. Again, there is no single answer to this question. The question is intended to get students thinking about how an organization might think about how it can change its processes. It is important for students to try to get specific about a particular process so that is why we ask them to choose one and research it. b. Using the Internet, find an example of at least one company that has used this method. Examples: TQM: Ford, Phillips Six Sigma: Motorola, GE Lean Production: Toyota c. Combine what you have discovered in parts a and b and create a two-page (maximum) description of the method, aimed at an audience that has never heard of BPM or your method. Focus on what a manager should know about this method and provide a list of useful web resources where people can go to find out more. Be prepared to present your findings to the class. Again, there is no single answer to this question. This exercise will work for a smaller class but can become repetitive for a larger class. 2.

Business Process Simulation is a method used to simulate a process so that you can explore different ways of managing the business process. IBM’s INNOV8 software provides a “serious game” environment where you can explore Business Process Simulation. Complete the following with your team: a. Run through the demonstration for INNOV8 2.0. (You can find it at www-01.ibm.com/software/solutions/soa/innov8/innov8game.jsp)

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

b. Try at least one of the simulations (supply chain, customer service, or traffic). Record your best score. c. Describe what your group learned from the simulation. Did you have enough information to make the necessary decisions? What data would you like to have had, to help you get better scores? Some students find the simulation engaging, while others do not. The idea behind the simulation—that there are different process choices that managers face in developing effective and efficient business processes—is excellent. If you can get students engaged in the exercise it can be rewarding. But many students are used to video games that offer far more interactive environments. Some students might therefore be frustrated The purpose of making it a group exercise is to allow students to talk about business processes and have them start thinking about the value of information in these processes.

ANSWERS TO CASE STUDIES MIS in Use: Edoc: Software Making Waves 1. What are the primary benefits realized by Edoc’s use of HELM software? The primary benefits are: Saves Time in Data Entry Reduces Errors Reduces time to process customer orders (improves timeliness of information) 2. Could HELM also result in increased revenue? Explain your answer. Yes. If the Helm software saves enough time for the people running the tugboat then it may be possible to make additional trips during the day. This would increase revenue. In addition, if more tug boats could be dispatched by the same number of dispatchers then this would allow for the potential for increasing the fleet (therefore increasing revenue). 3. Can you think of other benefits that might arise from the use of the software? For example, experienced dispatchers in the industry are difficult to find. Could the system help with this challenge? Yes. The HELM system provides relief for the dispatcher job. The paperwork surrounding the job is reduced so that more attention can be placed on optimizing the jobs being allocated. This should make it easier for a company to maintain and train dispatchers. Since experienced dispatchers are difficult to find, this may be a source of advantage for the firm adopting this software.

Chapter 2: Business Processes, Management, and Decision Making

Case Study 2: High Touch—High Tech 1. What challenges are created when providing anywhere, anytime services? (Hint: How and when did you conduct your last banking transaction?) A primary challenge with both new and existing customers is the lack of face-to-face contact. Transactional services (deposits and withdrawals) require less personal interaction but more complex or sophisticated services, such as loans or investments and mutual funds, can be difficult to explain and sold if customers do not visit a branch. The Internet and automated banking machines can be viable alternatives for marketing many new products and services but many consumers are also adopting other technologies such as cell phones. These have increased risks and can be both expensive and complex to develop. 2. What business and technology issues would be faced by an organization that wants to have a complete view of its customers? (Hint: What are the benefits and costs of cooperation, and are there any privacy issues?) Privacy and security are important technological issues to consider. If personal information is being collected, how can this information be secured. Do customers want to have this information available to everyone they deal with at the bank? (In many cases there are legal limitations on who can have access.) Another consideration is what legal rights the company has to use this information. The additional information will mean additional storage and additional training for CSR’s as they work to sell services. Are the unknown benefits worth the costs? 3. Can you think of any examples where a lack of information or failure to consider the information could affect the profitability of a business? There are many examples. Financial services are particularly dependent upon information because if credit customers default on loans, the bank loses both the interest (profit) on the transaction, as well as the full loan amount. Conversely, a customer may seem to have little income and not be eligible for a loan, but at the same time could have large amounts of money on deposit. To make the best decisions the bank needs access to the relevant and complete information usually contained in a customer’s full credit report. In retail businesses, a similar example occurs if they do not check the legitimacy of credit card or chequing transactions. 4. If a customer has more than one account at a particular organization, should he or she receive separate mailings or all documentation in the same envelope? This can be a complex question. From the company’s perspective, if the systems allow this or can be set up this way it may be less expensive (for example in postage) and more convenient. However, not all customers may want to receive their information in a single mailing or at the same location. As a result, understanding what particular customers want or giving them a choice rather than treating them all the same may be the best approach. Copyright © 2014 Pearson Canada Inc. 23

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

5. Does being a credit union rather than a share corporation affect Vancity’s structure? Yes. In a Credit Union, the customers own shares in the institution. That means clients are not only customers but also owners. Vancity therefore must be especially careful to balance customers’ needs together with the desire to maximize profits.

YOUR PERSONAL COMPETITIVE ADVANTAGE Goals   

Raise students’ awareness that they should be engaged in job planning/searching right now. Show the application of the principles of competitive advantage to career planning. Suggest innovative tasks for job searching.

Background and Presentation Strategies Students seldom understand how their status as students gives them access to business people that they will lose after they graduate. Ask the students if they understand the difference in the response they will receive to the following two statements: 



Hi, my name is XXX, and I’m a student at YYY University. We’re studying information systems and competitive advantage. I see that your company, ZZZ, is using a CRM applications. I’m wondering if you would have a few minutes to talk with me about how your CRM system gives ZZZ a competitive advantage. Hi, my name is XXX, and I’m looking for a job. I see that your company, ZZZ, is using a CRM application. I’m wondering if you would have a few minutes to talk with me about how your CRM system gives you a competitive advantage.

What will be the difference in response? Huge. In the first, the person will feel like they’re helping along some bright, ambitious person. Most will say, sure, and maybe offer to buy the student a cup of coffee. In the second, the person will feel like they’re being manipulated to find a job. Most will say, “Contact our HR department.” Why should students talk with business people, and do it right now? To build their networks. 

Have the conversation. Make a list of great questions to ask; be appreciative that the business person took the time. Then, toward the end of the interview, ask if the person has any advice for finding a job in that industry. Not, do they have a job, but rather, do they have any advice for finding a job. If they have a job, they’ll tell you. If not, they may give you some good advice. Even if you get no good advice, you have another point in your network. Take Figure 2-1 along and ask the person how you can use it to gain a competitive advantage. See question 3. Copyright © 2014 Pearson Canada Inc. 24

Chapter 2: Business Processes, Management, and Decision Making

Why do students not use their special student status in this way? I don’t know, but I try to ensure that they at least know about these strategies. Some students may be too shy. If this is the case, sometimes I make it an assignment, possibly an extra credit assignment. Similarly, students should be availing themselves of every resource the university provides for outreach to business people. 

If there is a mentor program, get a mentor. If there is a chance to visit a business, go visit the business. If someone from industry speaks on a topic of interest, by all means go. Talk to the speaker afterwards, make one or two positive comments, and ask a good question. Ask for the person’s business card. In a day or two, send them an email thanking them. See if you can get an interview to discuss some topic of mutual interest.

Sometimes I lead them carefully through the disaster scenario. I tell them I had this horrible dream last night. And my dream was that they graduated, couldn’t get a job, took a dead-end job for 2 years, and then couldn’t get out of that track. To avoid this nightmare, they have to start thinking about their jobs, now! (I’m assuming mostly thirdyear students.) Suggested Responses for Discussion Questions 1. Answer depends on the student. Sometimes I say, “If your list is short, tell me what you plan to do in the next quarter.” 2. Again, the answer depends on the student. I also encourage them to realize that they aren’t competing just with the students they see on our campus. They’re competing with students all over the world. (More on this topic in Chapter 3.) 3. There are many ways to build networks. Here are two types of answers: 

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Read trade magazines, relevant Web sites (e.g., www.cio.com), and other sources. Find an article on a topic of interest and think of ways the ideas in that article apply to you and one or more items in the list in Figure 2-1. Contact the author of the article. Make a few complimentary comments; ask questions that pertain to the article, you, and the list. Approach business people working in your major field of study and ask them how you can use knowledge of information systems to gain a competitive advantage in that field. Tell them of your interest in both your major and in IS. Use this situation to generate further introductions, perhaps to specialists in your field.

4. Get active. Join clubs. Meet with lots of students. Participate in campus life both in and beyond the business school. You add more connections to your network by meeting students that are outside of your major or even outside of the business school. As you meet people, tell them of your career interests. Ask if they know anyone working in that field. Ask if they know someone you could meet with, as Copyright © 2014 Pearson Canada Inc. 25

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition

described in question 3. Join a business-specific club, for example, the Accounting Club or the Marketing Club. Get involved, especially with activities that engage local business people. Arrange for speakers and host speakers on campus. As you meet business people on campus, query them about their careers. How did they get where they are? Use an IS to keep track of the people whom you’ve met. Put contacts in a spreadsheet or database. Keep track of contacts you’ve had, emails you’ve sent, meetings you’ve attended. At an interview, when appropriate, show off your database. Use the Web and email to contact people who are doing interesting things. Wrap Up 



You don’t want to find just any job. You want to find a great job! You want to find one with appropriate responsibilities, with a growing company, with job growth potential, and where you work with interesting people. You also want one that pays well. Finding that great job may not be easy. Start now! Start thinking about what kind of job you want, and start preparing yourself to find that job. The last semester of your senior year will be too late. If you’re not an IS major, combining IS knowledge with your major can make for a great combination. Think about taking some more IS classes.

CHAPTER 3 PRODUCTIVITY, INNOVATION AND STRATEGY CHAPTER OVERVIEW In the second lecture we emphasized the concept of business processes and how they generate information. We also talked about how we might use the information generated to improve decision making. In this lecture the primary objective is to challenge students to understand how information systems can be used to gain competitive advantage. We take a somewhat unconventional approach to discussing organizational strategy by beginning with the productivity paradox. Many people may believe that the paradox does not (and perhaps never did) exist. Others argue that the productivity paradox is an old issue with little relevance to current issues. Arguments can be made on both sides, but of more importance is allowing students to begin questioning the value that information technologies (and information systems) bring to organizations. Students likely take for granted that computers and associated systems are good for companies. But people who have worked in companies understand that systems can be as constraining as they are liberating. Although our economy has invested heavily in information technology and systems, it is not clear that organizations clearly understand how to realize the full value of these investments. We have much to learn about how to use systems and this chapter provides a starting point for the discussion. The chapter has several good issues for discussion. The first has to do with the general notion of productivity. A suggested exercise to start a discussion about this is provided below. The notion of effectiveness (doing the right things) and efficiency (doing things right) are important in many IS issues. Students should recognize that there are often tradeoffs between these two objectives in any process. We believe it is important to tie the notion of business processes to the concept of a value chain. The example process of tire manufacturing (Figure 3-1) is a good one to bring to class. Though value chains and business processes are separate ideas, it is important to get students thinking of processes that cut across functional areas that are supported by information systems. The notion of primary and support activities is also critical for understanding the discussion of competitive advantage. Another item for discussion is whether information systems can cause changes in industry structure. Here we introduce the notion of sustaining and disruptive technologies introduced by Clayton Christensen. We have argued that while many information systems sustain innovation, a small number of systems can cause significant change in industry structure. Nicholas Carr’s “IT Doesn’t Matter” provides a final discussion topic. We take the view that Carr is largely correct when he suggest that information technology (hardware and software) are increasingly commoditized. However, information systems that contain Copyright © 2014 Pearson Canada Inc. 27

Instructor’s Manual for Kroenke/Gemino/Tingling, Experiencing MIS, Third Canadian Edition



People who are not connected are at a serious disadvantage. It’s not an easy disadvantage to fix. Equal access through traditional means is impossible. A brochure cannot provide the latest information, 24/7. Possibly the best hope, the great equalizer, will be the blending of televisions and Internet devices. Then, everyone with a TV (almost every person) can have Internet access. Cheap data communications will make it easy to connect as well.

CHAPTER 4 HARDWARE AND SOFTWARE CHAPTER OVERVIEW In the first three chapters we emphasized the relationship between information systems, the student, and his or her career in business. We showed how information systems support business processes, which have effects on productivity and competitive advantage. In Chapters 4, 5, and 6 we focus on the technology underlying these systems, specifically, hardware and software, databases, and networks. You can put this in perspective for the students by referring back to Figure 1-1.

Chapter 4 will cover hardware and software, Chapter 5 will cover data and databases, and Chapter 6 will cover networks which are what connects all of the boxes in Figure 1 together. We think it is important for students to understand why they are learning something about the technological foundations for information systems. We therefore spend time at the start of the hardware and software lecture discussing why the technical material is an important component of the course. An example exercise to support this discussion is provided below Three issues normally emerge from this discussion. The first is that a percentage of students believe that it is not necessary to understand the technology to be a good user of the technology. If it is designed well then it should be easy and useful and that is all a student needs to know. Students might say, “I don’t know how my car works, but I don’t need to in order to drive it.” On the face of it, that statement has appeal. But there is more to consider. First, almost everyone gets some training to drive a car and it takes time to become a good driver. And for an average driver this might be enough… until the car breaks down, or until the driver wants to become a really good driver. Then you need more. To be an excellent driver (for example a top NASCAR driver), technical knowledge is essential. This knowledge helps with designing better cars and running faster on the track. Most business majors are not going to be satisfied with being an average user of technology. So understanding how information technology works will give them an edge over others who do not have the knowledge. This knowledge will improve his or her ability to use the technology more effectively.

CHAPTER 6 NETWORKS AND COLLABORATION CHAPTER OVERVIEW Chapter 5 and Chapter Extensions 5a and 5b introduced students to the formal world of content and database management and design. In Chapter 6 we introduce the final technical piece of the IS model: networks. One way to start the network discussion is to bring back Figure 1-1 and ask students “Where are the networks?”

The answer, of course, is that the networks are the glue that holds all of these five components together. There are social networks that hold people together that are featured in the “What do YOU think?” exercise entitled “Human Networks Matter More.” These social networks are not the ones featured in the main body of the chapter. Instead, our focus is placed on the communication networks that facilitate person-toperson, computer-to-person or computer-to-computer interaction. Students often find the discussion of networks, protocols, open standards, and related material quite dry. So instructors should recognize that they need to work hard to engage students with the material. The point of this chapter is not to make students experts in communications technology. Rather it is to improve their understanding of the foundations for networks. Our opening vignette hopefully shows that students and business professionals are surrounded by networks. The availability of networks changes products, services, and in some cases even industries. It is clear that business professionals should not ignore the networks that surround them. Instead, business professionals should understand the networks and their capabilities and limitations, and look for opportunities to make their company more efficient or effective. We provide two suggestions for improving student engagement with the material below. Before ending this summary, we wanted to draw attention to the items in Question 7 and 8: “Why is my phone getting smarter?” and “How does a search engine work?” We have found that the discussion of webcrawlers—the frontier—and search engines really help to engage students in wanting to understand more about networks. Knowing that the first search engine (Archie) was developed at McGill by a Canadian student usually gets some interest started. These are just two examples of the many examples of interesting applications of network technology. We think business students can be intrigued about the uses of networks more than they can be intrigued about the internal workings of networks. So it is important we cover applications of networks and not just focus on the technology that makes them happen.

Chapter 6: Networks and Collaboration

Examples to Use in Class. The opening vignette in Q1 (where we count the number of networks that a business professional bumps into when he or she goes out for dinner and a show in St. John’s) is a good example to bring to student’s attention. To support the vignette, ask the students the following question: “What would be different about your life if you didn’t have the Internet? What would you be missing? What couldn’t you do?” You may have to prompt them a bit. But ask them to think about a world with no Google, no webCT or Blackboard, no air travel websites. No ebay, Facebook, Twitter, MySpace, iTunes, YouTube, or dating connection services. What about a world with no email? How would we survive? What would students do? You will hear gasps as students think about how much of their lives depend on the Internet. Then ask students if they think that knowing something about how a network works might benefit them. It is one thing to be a user of networks, but business people need to understand how networks can be used to make money. This is a great exercise to get people going. Another illustrative exercise was created by Kamal Masri, an instructor and PhD student at Simon Fraser University. We use this exercise to explain how packet switching works and we call it the “You as a Router” exercise. This exercise works best after the break. The first step in the exercise is to prepare a set of “packets” for use in the class. You will need the 5 packets that are supplied below. We photocopy these before the class. Note that all five of the packets will share the same destination address (which will be one of your student’s first and last names in the class). We do not fill this name in before class as the student may not be in attendance. Instead we quietly choose a student once we get to the class. We find it is best to ask a student before class who is sitting near the back of the classroom to provide their last and first name for an example in class. We then write the name into the destination address. If the students know each other well, you might consider using a student number and not a name. Each “packet” has a header (indicating the number of packets and when sent), the packet ID (which indicates the order of the packet), and the message text (one word for each packet). The message spells out (when put in correct order) “Good Luck on the Midterm” After the break, or as you are explaining how packet switching works, is the best time to run this exercise. Take the five “packets” that you have created with the “destination address” and distribute them randomly to five different people at the front of the room. The wider the distribution the better. Now ask each person to act like a “Router”. To be a router, you have to look at the destination address. If the address does not have your name there, you must “bounce” the packet to a router (person) sitting near to you. The class is to keep quietly “bouncing” the packets until all 5 packets arrive at their destination address. Make sure to announce that this is a quiet exercise and that no one is allowed to announce the destination address as that destroys the effect of the exercise. Note, make sure that once the “bouncing” has started that you get back to the job of lecturing. It is fascinating to watch how the packets move through the class, but the exercise can take a good 10 minutes to complete (depending on the size of the class and Copyright © 2014 Pearson Canada Inc. 69

CHAPTER 7 COMPETITIVE ADVANTAGE AND BUSINESS PROCESSES CHAPTER OVERVIEW In Part 2 of this book, we walked through Chapters 4, 5, and 6 for a technical tour of information systems. We change focus in Part 3 to look at the business aspect of information systems, specifically achieving competitive advantage. Each chapter in Part 3 considers a different aspect of competitive advantage. Chapter 7 focuses on how organizations use information systems to develop competitive advantage through various systems. Chapter 8 considers how the information collected in these information systems can be used to improve business decision making. Chapter 9 then considered the use of social media and e-commerce in achieving competitive advantage. Each of these aspects of competitive advantage is important to understanding why competitive advantage through IS is difficult to develop and maintain. While it may be difficult, it is also very rewarding for those companies that are able to achieve sustained advantage. Before we begin, a short note on cross-functional and interorganizational systems is required. We have labeled ERP and CRM as cross-functional and have labeled e-commerce and SCM as interorganizational. We recognize that these categories are really a matter of degree and depend on the specific implementation of the software in an organization. We have labeled e-commerce and SCM as interorganizational because the direction of the software is clearly to link more directly with customers and suppliers processes that are outside of the firm. We found that this distinction allowed us to provide a more coherent description, but we understand that this can be somewhat of a misleading categorization. Chapter 7 covers a wide amount of information from functional systems through crossfunctional systems and finally to inter-organizational systems. Because there is a large amount of material, it is important to focus on a few key themes that are important to you as an instructor. We believe there are three key themes in this chapter: 1. The challenges of using functional systems 2. The marriage between cross-functional systems, industry standard business practices and competitive advantage 3. The rise of interorganizational systems What makes the material in this chapter difficult to teach is that many students do not have the breadth of experience working with information systems within an organization. Without this experience, the students have difficulty envisioning the constraints placed on systems by functional areas. We have a suggestion for a discussion that can occur near the end of the lecture to help students summarize the material being presented to them. It is focused on competitive advantage and is described later in this section. Copyright © 2014 Pearson Canada Inc. 82

Chapter 7: Competitive Advantage and Business Processes

In regards to the first issue, it is important to talk about why functional systems are important. We believe it is more important, however, to talk about why there are challenges with organizing data and applications in this way. It seems as though every Introduction to MIS textbook includes a chapter about the various functional systems in a business. We have found that this type of lecture—one that lists different applications— provides very little to the student. We have therefore tried to limit this discussion. Instead, we have placed more emphasis on question Q4, which we believe is central to the learning in the chapter. Students need to realize that locking data within business functions may limit the effectiveness of the firm. In regard to the second issue, the marriage between cross-functional systems and industry standard best practices is a relatively easy one to make. We’ve tried to emphasize that the cross-functional systems that we consider (CRM and ERP and also SCM if used exclusively within an organization) are really a collection of best practices. People have adopted this software because they are looking for the efficiencies that these standard processes embedded in software can bring. This is the happy side of the marriage. But there are two costs to consider. The first cost is that there is the likelihood that the company adopting the software may have to significantly change their business process. When an organization adopts the software, they are really saying that “We will have our people and procedures adapt to conform to the software.” This can be an uneasy transition, as change is often not greeted favourably within an organization. The second cost is a consideration of competitive advantage. If other firms adopt the same software (and same business practices) then where is the competitive advantage of adopting the system? Won’t installing these crossfunctional systems lead to a reduction in competitive advantage? We leave this discussion to the exercise described below. In regard to the third issue, the growth of interorganizational systems is an important phenomenon. Interorganizational systems take cross functional systems one step further, by integrating processes across firms. It is important for students to understand why firms want to do this. In the case of supply chain, firms integrate information to improve coordination and reduce costs. In e-commerce, firms integrate processes to reach a larger market and/or to be more efficient in performing transactions. The challenges across organizational boundaries are significant and students should recognize that while there may be an ability to operate across organizational boundaries, there will be a significant reluctance to this among many firms. Exercises to Use Near the End of the Class This exercise uses the “What do YOU think?” exercise provided at the end of Chapter 7: “Available Only in Vanilla?” Implementations of ERP that do little or no customization are often referred to as vanilla implementations. The exercise outlines why companies choose to do this but asks some interesting questions for discussion. We suggest that near the end of the lecture, you bring up the discussion questions from this exercise. Ask students what they think and try to get some discussion between students. Copyright © 2014 Pearson Canada Inc. 83