Informations system

You’ve probably heard that we live in the Information Age, or a period in history where the production, distribution, and control of information is the primary driver of the economy. The Information Age started in the 1970s with the Digital Revolution, or the conversion from mechanical and analog devices to digital devices. This shift to digital devices meant monumental changes for companies, individuals, and our society as a whole. The problem was, people couldn’t really understand how, or even why, this shift was going to affect them. Much like people today, they based their future projections on past events. They knew factories, bureaucracies, mass production, and operational efficiency. But this knowledge didn’t prepare them for the changes that were coming. The Digital Revolution didn’t just mean that new “digital” equipment was replacing old mechanical, or analog, equipment. These new digital devices could now be connected to other digital devices and share data among themselves. They could also work faster as processor speed increased. This was groundbreaking. In 1972, computer scientist Gordon Bell recognized that these digital devices would change the world as they evolved and became widely used. He formulated Bell’s Law, which states that “a new computer class forms roughly each decade establishing a new industry.”1 In other words, digital devices will evolve so quickly that they will enable new platforms, programming environments, industries, networks, and information systems every 10 years. And it has happened just as Bell predicted. About every 10 years since 1970, entirely new classes of digital devices have emerged. They have created entirely new industries, companies, and platforms. In the 1980s, we saw the rise of the personal computer (PC) and small local networks. In the 1990s, we saw the rise of the Internet and widespread adoption of cellular phones. In the 2000s, we saw a push toward making all “things” network-enabled. Social networking and cloud-based services really took off, creating a flurry of new companies. In the 2010s, we’ve seen huge advances in artificial intelligence, 3D printing, digital reality devices (e.g., Microsoft HoloLens), self-driving vehicles, and cryptocurrencies. The evolution of digital technology has fundamentally altered businesses and become a primary driver of corporate profitability. And it will probably continue to do so for at least the next few decades. The key to understanding how businesses will be affected by this digital evolution is understanding the forces pushing the evolution of these new digital devices.

To understand the fundamental forces pushing the evolution of digital devices, let’s imagine your body is evolving at the same rate as digital devices. Suppose you can run 8 miles per hour today. That’s about average. Now suppose, hypothetically, that your body is changing so quickly that you can run twice as fast every 18 months. In 18 months, you’d be able to run 16 mph. In another 18 months, you’d be at 32 mph. Then 64, 128, 256, and 512. Then, after 10 1/2 years of growth, you’d be running 1,024 mph—on foot! How would this change your life? Well, you’d certainly give up your car. It would be much too slow. Air travel would also probably be a thing of the past. You could start a very profitable package delivery business and quickly corner the market. You could live outside of the city because your commute would be shorter. You’d also need new clothes and some really tough shoes! And this is the key point—not only would you change, but what you do and how you do it would also change. This is Bell’s Law. This same thing is happening to digital devices. This example may seem silly at first, but it helps you understand how exponential change is affecting digital devices. Processing power, interconnectivity of devices, storage capacity, and bandwidth are all increasing extremely rapidly—so rapidly that it’s changing how these devices are used. Let’s explore some of these forces by looking at the laws that describe them.

In 1965, Gordon Moore, co-founder of Intel Corporation, stated that because of technology improvements in electronic chip design and manufacturing, “The number of transistors per square inch on an integrated chip doubles every 18 months.” This became known as Moore’s Law. His statement has been commonly misunderstood to be “The speed of a computer doubles every 18 months,” which is incorrect but captures the sense of his principle. Because of Moore’s Law, the ratio of price to performance of computer processors has fallen dramatically. In 1996, when the Internet was really starting to take off, a standard CPU cost about $110 per million transistors. By 2020 that price had fallen to $0.02 per million transistors.2 See Figure 1-1. Increasing processing power has had a greater impact on the global economy in the past 30 years than any other single factor. It has enabled new devices, applications, companies, and platforms. In fact, most tech companies would not exist today if processing power hadn’t increased exponentially.

Figure 1-1: Computer Price/Performance Ratio Decreases

Source: © Based on data from ark.intel.com#@Processors and techpowerup.com

As a future business professional, however, you needn’t care how fast a computer your company can buy for $1,000. That’s not the point. The point is, because of Moore’s Law, the cost of data processing is approaching zero. Current applications like new drug development, artificial intelligence, and molecular modeling require massive amounts of processing power. Innovations in these areas are being held back because the cost of buying sufficient processing power is so high. But the good news is that the cost of processing is dropping—rapidly.

Another fundamental force that is changing digital devices is Metcalfe’s Law, named after Robert Metcalfe, the inventor of Ethernet. Metcalfe’s Law states that the value of a network is equal to the square of the number of users connected to it. In other words, as more digital devices are connected together, the value of that network will increase.3 See Figure 1-2. Metcalfe’s Law can be clearly seen in the dramatic rise of the Internet in the 1990s. As more users gained access to the Internet, it became more valuable. The dot-com boom ushered in tech giants like Google, Amazon, and eBay. None of these companies would have existed without large numbers of users connected to the Internet.

Figure 1-2: Increasing Value of Networks

Metcalfe’s Law isn’t lost on tech companies, either. Google’s Project Loon is a major effort to bring Internet access to everyone on the planet using a network of inflated balloons floating around the world. One of the primary metrics for social media companies is the number of monthly active users (MAU) using their social network. The more people they can get in their network, the more their company will be worth. And look at the network effects of using products like Microsoft Word. Why do you pay for Microsoft Word when you could use a free word processor like LibreOffice Writer? You pay for Microsoft Word because everyone else uses it.

Other Forces Pushing Digital Change

And it’s not just the number of users on the network that’s changing the way we use digital devices—it’s the speed of the network. Nielsen’s Law, named after Jakob Nielsen, says that network connection speeds for high-end users will increase by 50 percent per year. As networks become faster, new companies, new products, and new platforms will emerge. YouTube, for example, started in February 2005 when there wasn’t a lot of videos shared over the Internet. But average Internet speeds were increasing to the point where a typical Internet connection could handle a stream of YouTube videos. By November 2006, the company was bought by Google for $1.65B. If you’re counting, that’s less than 2 years to create a billion-dollar company. Network speed matters. The question is why didn’t Google, Microsoft, IBM, or Apple think of video sharing before the YouTube founders? There are other forces changing digital devices beyond Nielsen’s Law, Metcalfe’s Law, and Moore’s Law. See Figure 1-3. Kryder’s Law, named after Mark Kryder, the former chief technology officer of Seagate Corp., says that the storage density on magnetic disks is increasing at an exponential rate. See Figure 1-4. Digital storage is so important that it’s typically the first question you ask when you buy a new computer, smartphone, or tablet. There’s also power consumption, image resolution, and interconnectivity between devices, all of which are changing, too. And this isn’t a complete list.

Figure 1-4: Price of Storage Capacity per GB

This takes us back to our original statement that Introduction to MIS is the most important class you will take in the school of business. Why? Because this class will show you how technology is fundamentally changing businesses. You’ll learn why executives are constantly trying to find ways to use new technology to create a sustainable competitive advantage. This leads us to the first reason Introduction to MIS is the most important course in the business school today: Future business professionals need to be able to assess, evaluate, and apply emerging information technology to business. You need the knowledge of this course to attain that skill.

1-2 How Will MIS Affect You?

Technological change is accelerating. So what? How is this going to affect you? You may think that the evolution of technology is just great. You can hardly wait for the next iGadget to come out. But pause for a second and imagine you graduated from college in 2004 and went to work for one of the largest and most successful home entertainment companies in the United States—Blockbuster LLC. In 2004, Blockbuster had 60,000 employees and 9,000-plus stores with $5.9B in annual revenues. Everything looked peachy. Fast-forward 6 years to 2010 and Blockbuster was bankrupt! Why? Because streaming a video over the Internet is easier than driving to a store. High-speed Internet connections made it all possible. The point is that after graduation you too may choose to go to work for a large, successful, well-branded company. And 6 years down the road, it could be bankrupt because technology changed and it didn’t.

Many years ago, I had a wise and experienced mentor. One day I asked him about job security, and he told me that the only job security that exists is “a marketable skill and the courage to use it.” He continued, “There is no security in our company, there is no security in any government program, there is no security in your investments, and there is no security in Social Security.” Alas, how right he turned out to be. So, what is a marketable skill? It used to be that one could name particular skills, such as computer programming, tax accounting, or marketing. But today, because of Moore’s Law, Metcalfe’s Law, and Kryder’s Law, the cost of data processing, storage, and communications is essentially zero. Any routine skill can and will be outsourced to the lowest bidder. And if you live in the United States, Canada, Australia, Europe, or another advanced economy, the lowest bidder is unlikely to be you. Numerous organizations and experts have studied the question of what skills will be marketable during your career. Consider two of them. First, the RAND Corporation, a think tank located in Santa Monica, California, has published innovative and groundbreaking ideas for more than 70 years, including the initial design for the Internet. In 2004, RAND published a description of the skills that workers in the 21st century will need:

Rapid technological change and increased international competition place the spotlight on the skills and preparation of the workforce, particularly the ability to adapt to changing technology and shifting demand. Shifts in the nature of organizations ... favor strong nonroutine cognitive skills.4

Whether you’re majoring in accounting, marketing, finance, or information systems, you need to develop strong nonroutine cognitive skills. What are such skills? Robert Reich, former Secretary of Labor, enumerates four:5

· Abstract reasoning

· Systems thinking

· Collaboration

· Ability to experiment

Figure 1-5 shows an example of each. Reread the eHermes case that started this lesson, and you’ll see that Amanda lost her job because of her inability to practice these key skills. Even though Reich’s book was written in the early 1990s, the cognitive skills he mentions are still relevant today because humans, unlike technology, aren’t changing that rapidly.6

Introduction to MIS is the best course in the business school for learning Reich’s four key skills because every topic requires you to apply and practice them. Here’s how. Abstract Reasoning Abstract reasoning is the ability to make and manipulate models. You will work with one or more models in every course topic and book lesson. For example, later in this lesson you will learn about a model of the five components of an information system. This lesson will describe how to use this model to assess the scope of any new information system project; other lessons will build upon this model. In this course, you will not just manipulate models that we have developed, you will also be asked to construct models of your own. In Lesson 5, for example, you’ll learn how to create data models, and in Lesson 12 you’ll learn to make process models. Systems Thinking Can you go to a grocery store, look at a can of green beans, and connect that can to U.S. immigration policy? Can you watch tractors dig up a forest of pulpwood trees and connect that woody trash to Moore’s Law? Do you know why Cisco Systems is one of the major beneficiaries of YouTube? Answers to all of these questions require systems thinking. Systems thinking is the ability to model the components of the system to connect the inputs and outputs among those components into a sensible whole that reflects the structure and dynamics of the phenomenon observed. As you are about to learn, this class is about information systems. We will discuss and illustrate systems; you will be asked to critique systems; you will be asked to compare alternative systems; you will be asked to apply different systems to different situations. All of those tasks will prepare you for systems thinking as a professional. Collaboration Collaboration is the activity of two or more people working together to achieve a common goal, result, or work product. Lesson 7 will teach you collaboration skills and illustrate several sample collaboration information systems. Every lesson of this book includes collaboration exercises that you may be assigned in class or as homework. Here’s a fact that surprises many students: Effective collaboration isn’t about being nice. In fact, surveys indicate the single most important skill for effective collaboration is to give and receive critical feedback. Advance a proposal in business that challenges the cherished program of the VP of marketing, and you’ll quickly learn that effective collaboration skills differ from party manners at the neighborhood barbeque. So, how do you advance your idea in the face of the VP’s resistance? And without losing your job? In this course, you can learn both skills and information systems for such collaboration. Even better, you will have many opportunities to practice them. Ability to Experiment

· “I’ve never done this before.”

· “I don’t know how to do it.”

· “But will it work?”

· “Is it too weird for the market?”

Fear of failure: the fear that paralyzes so many good people and so many good ideas. In the days when business was stable, when new ideas were just different verses of the same song, professionals could allow themselves to be limited by fear of failure. Let’s look at an example of the application of social networking to the oil change business. Is there a legitimate application of social networking there? If so, has anyone ever done it? Is there anyone in the world who can tell you what to do? How to proceed? No. As Reich says, professionals in the 21st century need to be able to experiment. Successful experimentation is not throwing buckets of money at every crazy idea that enters your head. Instead, experimentation is making a reasoned analysis of an opportunity, envisioning potential solutions, evaluating those possibilities, and developing the most promising ones, consistent with the resources you have. In this course, you will be asked to use products with which you have no familiarity. Those products might be Microsoft Excel or Access, or they might be features and functions of Blackboard that you have not used. Or you may be asked to collaborate using OneDrive or SharePoint or Google Drive. Will your instructor explain and show every feature of those products that you’ll need? You should hope not. You should hope your instructor will leave it up to you to experiment, to envision new possibilities on your own, and to experiment with those possibilities, consistent with the time you have available. Jobs Employment is another factor that makes the Introduction to MIS course vitally important to you. Accenture, a technology consulting and outsourcing company, conducted a survey of CEOs in 2018. It found that 74 percent of CEOs plan to use Artificial Intelligence (AI) to automate tasks to a large or very large extent over the next three years. But those same CEOs also believe that only 26 percent of their workers are prepared to collaborate with their AI coworkers. Even worse, only 3 percent of CEOs plan on increasing investments toward training and reskilling employees to prepare them for these new tech-centric jobs.7 Understanding technology and having a willingness to learn new tech skills will be an increasingly important part of staying gainfully employed in the future. You will learn more about intelligent systems, including AI, in Lesson 3. The demand for information systems and business jobs is high and driving future wage growth. According to data from the U.S. Bureau of Labor Statistics, shown in Figure 1-6, the top five occupational categories with the highest median wages in 2019 were management, computer and mathematical, legal, architecture and engineering, and business and financial operations. Projected job growth in computer and mathematical jobs (12.7 percent) was more than double the average for all occupations (5.2 percent). The mismatch between the high level of tech skills demanded by employers and the low level of tech skills held by employees is known as the technology skills gap.

Figure 1-6: Median Wage and Percent Job Growth by Sector

Source: Employment Projections program, U.S. Bureau of Labor Statistics.

Figure 1-7 shows a more detailed breakdown of salary growth from 2017 to 2019 for specific subcategories under business managers, computer and information technology, and other business occupations. It also shows job growth projections for the years 2018 to 2028.8 Growth rates of all information systems-related jobs are at or above the 5.2 percent average for all occupations. Some are growing many times faster.

Figure 1-7: Bureau of Labor Statistics Occupational Outlook 2018–2028

The bottom line? This course is the most important course in the business school because:

1. It will give you the background you need to assess, evaluate, and apply emerging information systems technology to business.

2. It can give you the ultimate in job security—marketable skills—by helping you learn abstraction, systems thinking, collaboration, and experimentation.

3. Many well-paid MIS-related jobs are in high demand.

 What Is MIS?

We’ve used the term MIS several times, and you may be wondering exactly what it is. MIS stands for management information systems, which we define as the management and use of information systems that help organizations achieve their strategies. MIS is often confused with the closely related terms information technology and information systems. An information system (IS) is an assembly of hardware, software, data, procedures, and people that produces information. In contrast, information technology (IT) refers to the products, methods, inventions, and standards used for the purpose of producing information.

How are MIS, IS, and IT different? You cannot buy an IS. But you can buy IT; you can buy or lease hardware, you can license programs and databases, and you can even obtain predesigned procedures. Ultimately, however, it is your people who will assemble the IT you purchase and execute those procedures to employ that new IT. Information technology drives the development of new information systems. For any new system, you will always have training tasks (and costs), you will always have the need to overcome employees’ resistance to change, and you will always need to manage the employees as they use the new system. Hence, you can buy IT, but you cannot buy IS. Once your new information system is up and running, it must be managed and used effectively in order to achieve the organization’s overall strategy. This is MIS. Consider a simple example. Suppose your organization decides to develop a Facebook page. Facebook provides the IT. It provides the hardware and programs, the database structures, and standard procedures. You, however, must create the IS. You have to provide the data to fill your portion of its database, and you must extend its standard procedures with your own procedures for keeping that data current. Those procedures need to provide, for example, a means to review your page’s content regularly and a means to remove content that is judged inappropriate. Furthermore, you need to train employees on how to follow those procedures and manage those employees to ensure that they do. MIS is the management of your Facebook page to achieve your organization’s overall strategy. Managing your own Facebook page is as simple an IS as exists. Larger, more comprehensive IS that involve many, even dozens, of departments and thousands of employees require considerable work. The definition of MIS has three key elements: management and use, information systems, and strategies. Let’s consider each, starting first with information systems and their components.

A system is a group of components that interact to achieve some purpose. As you might guess, an information system (IS) is a group of components that interacts to produce information. That sentence, although true, raises another question: What are these components that interact to produce information? Figure 1-8 shows the five-component framework—a model of the components of an information system: computer hardware, software, data, procedures, and people. These five components are present in every information system, from the simplest to the most complex. For example, when you use a computer to write a class report, you are using hardware (the computer, storage disk, keyboard, and monitor), software (Word, WordPerfect, or some other word-processing program), data (the words, sentences, and paragraphs in your report), procedures (the methods you use to start the program, enter your report, print it, and save and back up your file), and people (you).

Figure 1-8: Five Components of an Information System

Consider a more complex example, say, an airline reservation system. It, too, consists of these five components, even though each one is far more complicated. The hardware consists of thousands of computers linked together by data communications hardware. Hundreds of different programs coordinate communications among the computers, and still other programs perform the reservations and related services. Additionally, the system must store millions upon millions of characters of data about flights, customers, reservations, and other facts. Hundreds of different procedures are followed by airline personnel, travel agents, and customers. Finally, the information system includes people, not only the users of the system but also those who operate and service the computers, those who maintain the data, and those who support the networks of computers. The important point here is that the five components in Figure 1-8 are common to all information systems, from the smallest to the largest. As you think about any information system, including a new one like social networking, learn to look for these five components. Realize, too, that an information system is not just a computer and a program, but rather an assembly of computers, programs, data, procedures, and people. As we will discuss later in this lesson, these five components also mean that many different skills are required besides those of hardware technicians or computer programmers when building or using an information system. See the Career Guide for more. Before we move forward, note that we have defined an information system to include a computer. Some people would say that such a system is a computer-based information system. They would note that there are information systems that do not include computers, such as a calendar hanging on the wall outside of a conference room that is used to schedule the room’s use. Such systems have been used by businesses for centuries. Although this point is true, in this book we focus on computer-based information systems. To simplify and shorten the book, we will use the term information system as a synonym for computer-based information system.

The next element in our definition of MIS is the management and use of information systems. Here we define management to mean develop, maintain, and adapt. Information systems do not pop up like mushrooms after a hard rain; they must be developed. They must also be maintained, and because business is dynamic, they must be adapted to new requirements. You may be saying, “Wait a minute, I’m a finance (or accounting or management) major, not an information systems major. I don’t need to know how to manage information systems.” If you are saying that, you are like a lamb headed for shearing. Throughout your career, in whatever field you choose, information systems will be built for your use and sometimes under your direction. To create an information system that meets your needs, you need to take an active role in that system’s development. Even if you are not a programmer or a database designer or some other IS professional, you must take an active role in specifying the system’s requirements and in managing the system’s development project. You will also have an important role in testing the new system. Without active involvement on your part, it will only be good luck that causes the new system to meet your needs. As a business professional, you are the person who understands business needs and requirements. If you want to apply social networking to your products, you are the one who knows how best to obtain customer responses. The technical people who build networks, the database designers who create the database, the IT people who configure the computers—none of these people know what is needed and whether the system you have is sufficient or whether it needs to be adapted to new requirements. You do! In addition to management tasks, you will also have important roles to play in the use of information systems. Of course, you will need to learn how to employ the system to accomplish your job tasks. But you will also have important ancillary functions as well. For example, when using an information system, you will have responsibilities for protecting the security of the system and its data. You may also have tasks for backing up data. When the system fails (all do, at some point), you will have tasks to perform while the system is down as well as tasks to accomplish to help recover the system correctly and quickly.

Security is critically important when using information systems today. You’ll learn much more about it in Lesson 10. But you need to know about strong passwords and their use now, before you get to that lesson. Read and follow the Security Guide.

The last part of the definition of MIS is that information systems exist to help organizations achieve their strategies. First, realize that this statement hides an important fact: Organizations themselves do not “do” anything. An organization is not alive, and it cannot act. It is the people within a business who sell, buy, design, produce, finance, market, account, and manage. So, information systems exist to help people who work in an organization to achieve the strategies of that business. Information systems are not created for the sheer joy of exploring technology. They are not created so the company can be “modern” or so the company can show it has a social networking presence on the Web. They are not created because the information systems department thinks it needs to be created or because the company is “falling behind the technology curve.” This point may seem so obvious that you might wonder why we mention it. Every day, however, some business somewhere is developing an information system for the wrong reasons. Right now, somewhere in the world, a company is deciding to create a Facebook presence for the sole reason that “every other business has one.” This company is not asking questions such as:

· “What is the purpose of our Facebook page?”

· “What is it going to do for us?”

· “What is our policy for employees’ contributions?”

· “What should we do about critical customer reviews?”

· “Are the costs of maintaining the page sufficiently offset by the benefits?”

But that company should ask those questions! Lesson 2 addresses the relationship between information systems and strategy in more depth. Lesson 9 addresses social media and strategy specifically.

For more information on how an understanding of MIS can broaden your career options, see the Career Guide.

Again, MIS is the development and use of information systems that help businesses achieve their strategies. You should already be realizing that there is much more to this class than buying a computer, working with a spreadsheet, or creating a Web page.

Q1-4 How Can You Use the Five-Component Model?

The five-component model in Figure 1-8 can help guide your learning and thinking about IS, both now and in the future. To understand this framework better, first note in Figure 1-9 that these five components are symmetric. The outermost components, hardware and people, are both actors; they can take actions. The software and procedure components are both sets of instructions: Software is instructions for hardware, and procedures are instructions for people. Finally, data is the bridge between the computer side on the left and the human side on the right.

Figure 1-9: Characteristics of the Five Components

Now, when we automate a business task, we take work that people are doing by following procedures and move it so that computers will do that work, following instructions in software. Thus, the process of automation is a process of moving work from the right side of Figure 1-9 to the left.

You are part of every information system that you use. When you consider the five components of an information system, the last component, people, includes you. Your mind and your thinking are not merely a component of the information systems you use; they are the most important component. As you will learn later in this lesson, computer hardware and programs manipulate data, but no matter how much data they manipulate, it is still just data. It is only humans that produce information. When you take a set of data, say, a list of customer responses to a marketing campaign, that list, no matter if it was produced using 10,000 servers and Hadoop, is still just data. It does not become information until you or some other human take it into your mind and are informed by it. Even if you have the largest computer farm in the world and even if you are processing that data with the most sophisticated programs, if you do not know what to do with the data those programs produce, you are wasting your time and money. The quality of your thinking is what determines the quality of the information that is produced. Substantial cognitive research has shown that although you cannot increase your basic IQ, you can dramatically increase the quality of your thinking. That is one reason we have emphasized the need for you to use and develop your abstract reasoning. The effectiveness of an IS depends on the abstract reasoning of the people who use it.

Information systems often encounter problems—despite our best efforts, they don’t work right. And in these situations, blame is frequently placed on the wrong component. You will often hear people complain that the computer doesn’t work, and certainly hardware or software is sometimes at fault. But with the five-component model, you can be more specific, and you have more suspects to consider. Sometimes the data is not in the right format or, worse, is incorrect. Sometimes, the procedures are not clear and the people using the system are not properly trained. By using the five-component model, you can better locate the cause of a problem and create effective solutions.

Information systems differ in the amount of work moved from the human side (people and procedures) to the computer side (hardware and programs). For example, consider two different versions of a customer support information system: A system that consists only of a file of email addresses and an email program is a very low-tech system. Only a small amount of work has been moved from the human side to the computer side. Considerable human work is required to determine when to send which emails to which customers. In contrast, a customer support system that keeps track of the equipment that customers have and the maintenance schedules for that equipment and then automatically generates email reminders to customers is a higher-tech system. This simply means that more work has been moved from the human side to the computer side. The computer is providing more services on behalf of the humans. Often, when considering different information systems alternatives, it will be helpful to consider the low-tech versus high-tech alternatives in light of the amount of work being moved from people to computers.

The five-component framework can also be used when assessing the scope of new systems. When in the future some vendor pitches the need for a new technology to you, use the five components to assess how big of an investment that new technology represents. What new hardware will you need? What programs will you need to license? What databases and other data must you create? What procedures will need to be developed for both use and administration of the information system? And, finally, what will be the impact of the new technology on people? Which jobs will change? Who will need training? How will the new technology affect morale? Will you need to hire new people? Will you need to reorganize?

The Ethics Guide in each lesson of this book considers the ethics of information systems use. These guides challenge you to think deeply about ethical standards, and they provide for some interesting discussions with classmates. The Ethics Guide considers the ethics of presenting data that deceives the viewer.

Finally, as you consider the five components, keep in mind that Figure 1-9 shows them in order of ease of change and the amount of organizational disruption. It is a simple matter to order additional hardware. Obtaining or developing new programs is more difficult. Creating new databases or changing the structure of existing databases is still more difficult. Changing procedures, requiring people to work in new ways, is even more difficult. Finally, changing personnel responsibilities and reporting relationships and hiring and terminating employees are all very difficult and very disruptive to the organization.

1-5 What Is Information?

Based on our earlier discussions, we can now define an information system as an assembly of hardware, software, data, procedures, and people that interact to produce information. The only term left undefined in that definition is information, and we turn to it next.

Information is one of those fundamental terms that we use every day but that turns out to be surprisingly difficult to define. Defining information is like defining words such as alive and truth. We know what those words mean, we use them with each other without confusion, but nonetheless, they are difficult to define. In this text, we will avoid the technical issues of defining information and will use common, intuitive definitions instead. Probably the most common definition is that information is knowledge derived from data, whereas data is defined as recorded facts or figures. Thus, the facts that employee James Smith earns $70.00 per hour and that Mary Jones earns $50.00 per hour are data. The statement that the average hourly wage of all the graphic designers is $60.00 per hour is information. Average wage is knowledge derived from the data of individual wages. Another common definition is that information is data presented in a meaningful context. The fact that Jeff Parks earns $30.00 per hour is data.10 The statement that Jeff Parks earns less than half the average hourly wage of the company’s graphic designers, however, is information. It is data presented in a meaningful context. Another definition of information that you will hear is that information is processed data or, sometimes, information is data processed by summing, ordering, averaging, grouping, comparing, or other similar operations. The fundamental idea of this definition is that we do something to data to produce information. There is yet a fourth definition of information, which was set out by the great research psychologist Gregory Bateson. He defined information as a difference that makes a difference. For the purposes of this text, any of these definitions of information will do. Choose the definition of information that makes sense to you. The important point is that you discriminate between data and information. You also may find that different definitions work better in different situations.

Suppose you create a graph of Amazon’s stock price and net income over its history, like that shown in Figure 1-10. Does that graph contain information? Well, if it shows a difference that makes a difference or if it presents data in a meaningful context, then it fits two of the definitions of information, and it’s tempting to say that the graph contains information.

Figure 1-10: Amazon Stock Price and Net Income

Q1-6 What Are Necessary Data Characteristics?

You have just learned that humans conceive information from data. As stated, the quality of the information that you can create depends, in part, on your thinking skills. It also depends, however, on the quality of the data you are given. Figure 1-11 summarizes critical data characteristics.

First, good information is conceived from accurate, correct, and complete data that has been processed correctly as expected. Accuracy is crucial; business professionals must be able to rely on the results of their information systems. The IS function can develop a bad reputation in the organization if a system is known to produce inaccurate data. In such a case, the information system becomes a waste of time and money as users develop work-arounds to avoid the inaccurate data. A corollary to this discussion is that you, a future user of information systems, ought not to rely on data just because it appears in the context of a Web page, a well-formatted report, or a fancy query. It is sometimes hard to be skeptical of data delivered with beautiful, active graphics. Do not be misled. When you begin to use a new information system, be skeptical. Cross-check the data you are receiving. After weeks or months of using a system, you may relax. Begin, however, with skepticism. Again, you cannot conceive accurate information from inaccurate data.

Good information requires that data be timely—available in time for its intended use. A monthly report that arrives 6 weeks late is most likely useless. The data arrives long after the decisions have been made that required the information. An information system that sends you a poor customer credit report after you have shipped the goods is unhelpful and frustrating. Notice that timeliness can be measured against a calendar (6 weeks late) or against events (before we ship). When you participate in the development of an IS, timeliness will be part of the requirements you specify. You need to give appropriate and realistic timeliness needs. In some cases, developing systems that provide data in near real time is much more difficult and expensive than producing data a few hours later. If you can get by with data that is a few hours old, say so during the requirements specification phase. Consider an example. Suppose you work in marketing and you need to be able to assess the effectiveness of new online ad programs. You want an information system that not only will deliver ads over the Web but that also will enable you to determine how frequently customers click on those ads. Determining click ratios in near real time will be very expensive; saving the data in a batch and processing it some hours later will be much easier and cheaper. If you can live with data that is a day or two old, the system will be easier and cheaper to implement.

Data should be relevant both to the context and to the subject. Considering context, you, the CEO, need data that is summarized to an appropriate level for your job. A list of the hourly wage of every employee in the company is unlikely to be useful. More likely, you need average wage information by department or division. A list of all employee wages is irrelevant in your context. Data should also be relevant to the subject at hand. If you want data about short-term interest rates for a possible line of credit, then a report that shows 15-year mortgage interest rates is irrelevant. Similarly, a report that buries the data you need in pages and pages of results is also irrelevant to your purposes.

Just Barely Sufficient

Data needs to be sufficient for the purpose for which it is generated, but just barely so. We are inundated with data; one of the critical decisions that each of us has to make each day is what data to ignore. The higher you rise into management, the more data you will be given, and because there is only so much time, the more data you will need to ignore. So, data should be sufficient, but just barely.

Data is not free. There are costs for developing an information system, costs of operating and maintaining that system, and costs of your time and salary for reading and processing the data the system produces. For data to be worth its cost, an appropriate relationship must exist between the cost of data and its value. Consider an example. What is the value of a daily report of the names of the occupants of a full graveyard? Zero, unless grave robbery is a problem for the cemetery. The report is not worth the time required to read it. It is easy to see the importance of economics for this silly example. It will be more difficult, however, when someone proposes new technology to you. You need to be ready to ask, “What’s the value of the information I can conceive from this data?” “What is the cost?” “Is there an appropriate relationship between value and cost?” Information systems should be subject to the same financial analyses to which other assets are subjected.

Q1-7 2031?

At the start of this lesson you read about how technology is changing exponentially. Processing power, connectivity of devices, network speed, and data storage are increasing so rapidly that they fundamentally change the way we use technology every 10 years (Bell’s Law). Businesspeople need to be able to assess, evaluate, and apply emerging technology. They need to know how these changes affect businesses. Let’s take a guess at technology in the year 2031. Of course, we won’t have perfect insight, and in fact, these guesses will probably seem ludicrous to the person who finds this book for sale for a dollar at a Goodwill store in 2031. But let’s exercise our minds in that direction. Would you use your smartphone differently if it had a gigabyte network connection, an exabyte of data storage, and a battery that lasted a month on a single charge? What if it could connect to every device in your home, car, and office—and control them remotely? With this new device you could store every book, song, and movie ever created. You could capture, store, and stream 8K of UHD video with no delay at all. On the other hand, maybe smartphones will fade away. Large tech companies are investing tremendous resources into mixed-reality devices like HoloLens, Meta, and Magic Leap that can create virtual objects within the real world (see Lesson 4). It’s possible that changes in technology will make these devices commonplace. People didn’t always carry a phone around with them. But now they’re in nearly every pocket. How would these new devices change your everyday life? Well, you wouldn’t have to fight over the TV remote control any more. Everyone wearing a Microsoft HoloLens could sit on the couch and watch a different show at the same time. In fact, you might not have a two-dimensional TV hanging on the wall at all. 3D Holographic entertainment would take place in the center of the room, not on the walls.11 Your mixed-reality devices would also have gesture and voice control. That means you could turn your smart lightbulbs on or off by simply pointing to them. You could even see inside your smart refrigerator without leaving the couch! Nice. Also, thanks to increases in connectivity, all of your new smart devices could talk to each other. Imagine waking up in the morning and your smart home turning the lights on automatically. Your smart home then reads off your daily schedule (from your Internet-based calendar), starts your coffeepot, and tells your self-driving car to check for traffic delays. Advances in technology will undoubtedly have a profound impact on your personal life. But what about the impact of these advances on business? How will they change the way you work? What new types of jobs will be created? What new companies will form to support these advances? For example, the worldwide coronavirus lockdown during 2020 forced companies to adopt technologies that they may not have considered before. Workers were forced to work remotely if they could, and all meetings became virtual meetings. But face-to-face interactions are an important part of how businesses operate. What if you could virtually remote into work using a holographic interface and stay at home physically? You could still interact with your boss face-to-face and chat with coworkers at the coffeepot.12 You could live anywhere, avoid infectious viruses, skip the commute, and work for multiple companies at the same time. These changes may improve the way you work, but they’ll also change the type of work you do. People with the ability to effectively experiment will be able to adapt to changes in technology required by their employer. Companies that adapt more quickly will gain a competitive advantage, at least temporarily. For example, many manufacturing and service sector companies were forced to close during the 2020 coronavirus lockdown because their workers were prohibited from coming to work. But they might have remained open if they had been fully, or at least partially, automated. Companies recognize this fact. Widespread adoption of robotics and automated systems could prevent future shutdowns, reduce costs, and boost productivity. By 2031 you may be working side by side with a robotic coworker. Advances in technology have a downside too. By 2031, privacy may be increasingly difficult to maintain. Your data will be collected by new kinds of apps, flowing through the cloud, and be packaged for sale by companies providing “free” services. Social relationships may suffer as well. We may become less connected to people as we become more connected to systems. We’ll take a 2031 look at the end of each lesson. For now, just realize one certainty: Knowledge of information systems and their use in business will be more important, not less.

So What? Iotrends

Do you remember the first time that you accessed the Internet by logging on to the World Wide Web (WWW)? If so, you may recall the anticipation of exploring this new digital world. You were likely sitting in front of a bulky cathode ray tube (CRT) monitor and listening to the chirping and buzzing of the dial-up modem while considering the first site that you wanted to visit. Back in the 1990s and early 2000s, the Web was a relatively simple place—a small percentage of users had the technical ability to create and host websites (thus, most users were content consumers, not content creators), and home Internet connectivity was not ubiquitous like it is today. Furthermore, websites were very basic in nature, often just a collection of static text mixed with underlined/blue hyperlinks. There were no fancy or high-resolution graphics, no streaming video, no user-based customization, and no platforms allowing users to easily create their own content. This era is often referred to as Web 1.0. Compare your early experiences with the Web to the Web that you interact with today—it is obviously a very different place. Websites today are feature-rich with intricate graphics, high-resolution video streams, account customization, and so on. Furthermore, think of all of the ways in which you are now a content creator . . . you might post on social media, run a blog about a hobby, have a personal website, collaborate with colleagues online, or have your own YouTube channel. Finally, your access to the Web, and the Internet at large, is no longer limited to a bulky desktop computer at your house or in a library; connectivity is available nearly everywhere you go. The widespread access, rich content, collaboration tools, and ability for nontechnical users to create content are some of the hallmarks of Web 2.0, the current era of the Web. While the evolution of the Web has certainly changed how users like you interact with the Internet, a more robust Internet has also had profound implications for all types of organizations. Specifically, organizations are connected now more than ever thanks to the Internet of Things (IoT).

Source: Buffaloboy/Shutterstock

Moore Devices, Please The Internet of Things is the growing surge of devices that are now connected to the Internet. It is important to note that these devices are often equipped with the ability to easily integrate with other IoT devices.13 Moore’s Law has been a major catalyst in the spread of the IoT as processing chips can be extremely powerful despite being shockingly small. As an example of how tiny processing chips coupled with Internet connectivity can drastically change a business, let’s consider the operation of a farm. Farming is hard work, and one of the many duties of running a farm (that may span hundreds, or even thousands of acres) is monitoring. Farmers have to monitor crops, livestock, irrigation equipment, soil conditions, water resources, and workers. However, the IoT movement stands to revolutionize farming in several ways. Farmers can now place network-connected sensors in the soil that report soil conditions (e.g., oxygenation and moisture) in real time. They can also deploy network-connected drones to fly out to remote areas to check crops and irrigation lines and use autonomous farm equipment (e.g., tractors) to plant or harvest independently but report their location and operations in real time to farmers. All of these IoT devices work to help increase crop yields and revenue for the farmer. Now, besides farming, you may be wondering about other industries that may change as a result of the IoT. Consider the following examples:14

· Manufacturing: Automated production equipment is now being connected and optimized; poorly performing machinery can report problems and be replaced before failure.

· Smart cities: Sensors can connect traffic lights and emergency responders and even use mobile phone apps to detect potholes in roads and dispatch road crews.

· Smart commuting: Internet-connected cars and navigation apps installed on mobile phones can link thousands of drivers in metro areas to each other to help report construction, traffic jams, accidents, road hazards, and so on.

· Smart health care: Healthcare providers can be tracked in hospitals in real time and routed to emergencies appropriately; countless sensors can be connected to patients that report physiological readings to staff and may even automatically control the environment around the patient (e.g., lighting, temperature).

IoT Predictions Many industries stand to be affected, if not revolutionized, by the proliferation of IoT devices. But IoT devices are not static; they will continue to evolve, and their true impact over the coming years and decades is difficult to predict. One projection indicates that by 2025 there will be 21 billion IoT devices.15 (That works out to about 2.7 devices per person on the planet!) This estimate includes drastic growth in the connectivity of numerous transportation methods including bikes and cars. Another prediction is that 5G will accelerate both the speed and the opportunities for connecting numerous devices in more confined areas. This would allow for much more data to be captured and stored than ever before. While these opportunities sound favorable, these changes could also open the door for misuse. For example, as Internet speeds and the number of IoT devices increase, they may be used in more frequent distributed denial-of-service (DDoS) attacks. In short, the IoT will continue to evolve, expand, and impact nearly every aspect of our lives. Questions

1. People often use the terms Web and Internet interchangeably, but they are not the same. Do your best to define each and identify exactly how they are different.  Show Answer

2. The article talks about Web 1.0 and Web 2.0. You may be wondering if Web 2.0 is the end of the line. What do you think—will there be a Web 3.0, and if so, what would it entail?  Show Answer

3. While IoT is clearly having an impact on businesses (e.g., tracking manufacturing using sensors in production lines) and cities (e.g., tracking traffic flows, lighting, public transportation), how has IoT impacted your life? Do you have any IoT devices in your apartment or home? If not, which IoT devices would you be interested in owning?  Show Answer

4. Do you think IoT devices feature the newest and most advanced security measures, or could there be potential security risks from using IoT devices?  Show Answer

Security Guide

Passwords and Password Etiquette Many forms of computer security use passwords to control access to systems and data. Most likely, you have a university account that you access with a username and password. When you set up that account, you were probably advised to use a “strong password.” That’s good advice, but what is a strong password? Probably not “sesame,” but what then? Microsoft, a company that has many reasons to promote effective security, provides the following guidelines for creating a strong password. A strong password should:

· Have at least 12 characters; 14 is even better

· Not contain your username, real name, or company name

· Not contain a complete dictionary word in any language

· Be different from previous passwords you have used

· Contain both upper- and lowercase letters, numbers, and special characters (such as ~ ! @; # $ % ^ &; * () _+; =; {} | []\: “; ’ <; >;?,./)

Examples of good passwords are:

· Qw37^T1bb?at

· 3B47qq<3>5!7b

The problem with such passwords is that they are nearly impossible to remember. And the last thing you want to do is write your password on a piece of paper and keep it near the device where you use it. Never do that! One technique for creating memorable, strong passwords is to base them on the first letter of the words in a phrase. The phrase could be the title of a song or the first line of a poem or one based on some fact about your life. For example, you might take the phrase “I was born in Rome, New York, before 2000.” Using the first letters from that phrase and substituting the character < for the word before, you create the password IwbiR,NY<2000. That’s an acceptable password, but it would be better if all of the numbers were not placed on the end. So, you might try the phrase, “I was born at 3:00 AM in Rome, New York.” That phrase yields the password Iwba3:00AMiR,NY which is a strong password that is easily remembered. Once you have a strong password, you want to avoid reusing the same password at every site you visit. Not all sites provide the same level of protection for your data. In fact, sometimes they lose your password to hackers. Then hackers can use those passwords to access other sites that you regularly use. Password variety is your friend. Never use the same password for less important sites (e.g., social networking) that you’d use to access more important sites (e.g., online banking). You also need to protect your password with proper behavior. Never write down your password, do not share it with others, and never ask others for their passwords. Occasionally, an attacker will pretend to be an administrator and ask users for their passwords. You’ll never have to give your password to a real administrator. He or she doesn’t need it and won’t ask for it. He or she already has full access to all corporate computers and systems.

Source: Vitalii Vodolazskyi/Shutterstock

But what if you need someone else’s password? Suppose, for example, you ask someone to help you with a problem on your computer. You sign on to an information system, and for some reason, you need to enter that other person’s password. In this case, say to the other person, “We need your password,” and then get out of your chair, offer your keyboard to the other person, and look away while she enters the password. Among professionals working in organizations that take security seriously, this little “do-si-do” move—one person getting out of the way so another person can enter her password—is common and accepted. If someone asks for your password, do not give it out. Instead, get up, go over to that person’s machine, and enter your own password yourself. Stay present while your password is in use, and ensure that your account is logged out at the end of the activity. No one should mind or be offended in any way when you do this. It is the mark of a professional. Discussion Questions

1. Here is a line from Shakespeare’s Macbeth: “Tomorrow, and tomorrow, and tomorrow, creeps in this petty pace.” Explain how to use these lines to create a password. How could you add numbers and special characters to the password in a way that you will be able to remember?  Show Answer

2. List two different phrases that you can use to create a strong password. Show the password created by each.  Show Answer

3. One of the problems of life in the cyberworld is that we all are required to have multiple passwords—one for work or school, one for bank accounts, another for eBay or other auction sites, and so forth. Of course, it is better to use different passwords for each. But in that case you have to remember three or four different passwords. Think of different phrases you can use to create a memorable, strong password for each of these different accounts. Relate the phrase to the purpose of the account. Show the passwords for each.  Show Answer

4. Explain proper behavior when you are using your computer and you need to enter, for some valid reason, another person’s password.  Show Answer

5. Explain proper behavior when someone else is using her computer and that person needs to enter, for some valid reason, your password.  Show Answer

Career Guide

Five-Component Careers Some years, even some decades, students can wait until their last semester to think seriously about jobs. They can pick a major, take the required classes, and prepare to graduate, all the while assuming that job recruiters will be on campus, loaded with good jobs, sometime during their senior year. Alas, today is not one of those periods. In the current employment situation, you need to be proactive and aggressive in your job search. Think about it: You will be spending one-third of your waking life in your job. One of the best things you can do for yourself is to begin to think seriously about your career prospects now. You don’t want to find yourself working as a barista after 4 years of business school, unless, of course, you’re planning on starting the next Starbucks. So, start here. Are you interested in a career in MIS? At this point, you don’t know enough to know, but Figure 1-6 and Figure 1-7 should catch your attention. With job growth like that, you should at least ponder whether there is a career for you in IS and related services. But what does that mean? If you go to the U.S. Bureau of Labor Statistics, you can find that there are more than a million computer programmers in the United States today and more than 600,000 systems analysts. You probably have some notion of what a programmer does, but you don’t yet know what a systems analyst is. Examine the five components in Figure 1-8, however, and you can glean some idea. Programmers work primarily with the software component, while systems analysts work with the entire system, with all five components. So, as a systems analyst, you work with system users to determine what the organizational requirements are and then with technical people (and others) to help develop that system. You work as a cultural broker: translating the culture of technology into the culture of business, and the reverse. Fortunately for you, many interesting jobs are not captured by the bureau’s data. Why fortunate? Because you can use what you’re learning in this course to identify and obtain jobs that other students may not think about or even know about. If so, you’ve gained a competitive advantage. The chart on the next page provides a framework for thinking about careers in an unconventional way. As you can see, there are technical jobs in MIS but fascinating, challenging, high-paying, nontechnical ones as well. Consider, for example, professional sales. Suppose you have the job of selling enterprise-class software to the Mayo Clinic. You will sell to intelligent, highly motivated professionals with tens of millions of dollars to spend. Or suppose you work for the Mayo Clinic on the receiving end of that sales pitch. How will you spend your tens of millions? You will need knowledge of your business, and you will need to understand enough technology to ask intelligent questions and interpret the responses.

Source: Fizkes/Shutterstock

Give this some thought by answering the questions that follow, even if they aren’t assigned for a grade!

Discussion Questions

1. Look at the percent growth rates and the absolute growth rates shown in Figure 1-6. Why are both important when considering a potential career? Why might it be important to consider jobs with above average job growth?

2. Examine the five-component careers chart and choose the row that seems most relevant to your interests and abilities. Describe a job in each component column of that row. If you are uncertain, Google the terms in the cells of that row.

3. For each job in your answer to question 2, describe what you think are the three most important skills and abilities for that job.

4. For each job in your answer to question 2, describe one innovative action that you can take this year to increase your employment prospects.

Ethics Guide

Ethics and Professional Responsibility Suppose you’re a young marketing professional who has just taken a new promotional campaign to market. The executive committee asks you to present a summary of the sales effect of the campaign, and you produce the graph shown in Figure 1. As shown, your campaign was just in the nick of time; sales were starting to fall the moment your campaign kicked in. After that, sales boomed.

Figure A-1: Sales effect of the campaign

But note the vertical axis has no quantitative labels. If you add quantities, as shown in Figure A-2, the performance is less impressive. It appears that the substantial growth amounts to less than 20 units. Still the curve of the graph is impressive, and if no one does the arithmetic, your campaign will appear successful.

Figure A-2: Sales effect of the campaign

This impressive shape is only possible, however, because Figure A-2 is not drawn to scale. If you draw it to scale, as shown in Figure A-3, your campaign’s success is, well, problematic, at least for you.

Figure A-3: Scale drawing in the graph

Which of these graphs do you present to the committee? Each lesson of this text includes an Ethics Guide that explores ethical and responsible behavior in a variety of MIS-related contexts. In this lesson, we’ll examine the ethics of data and information. Centuries of philosophical thought have addressed the question “What is right behavior?” and we can’t begin to discuss all of it here. You will learn much of it, however, in your business ethics class. For our purposes, we’ll use two of the major pillars in the philosophy of ethics. We introduce the first one here and the second in Lesson 2. The German philosopher Immanuel Kant defined the categorical imperative as the principle that one should behave only in a way that one would want the behavior to be a universal law. Stealing is not such behavior because if everyone steals, nothing can be owned. Stealing cannot be a universal law. Similarly, lying cannot be consistent with the categorical imperative because if everyone lies, words are useless. When you ask whether a behavior is consistent with this principle, a good litmus test is “Are you willing to publish your behavior to the world? Are you willing to put it on your Facebook page? Are you willing to say what you’ve done to all the players involved?” If not, your behavior is not ethical, at least not in the sense of Kant’s categorical imperative. Kant defined duty as the necessity to act in accordance with the categorical imperative. Perfect duty is behavior that must always be met. Not lying is a perfect duty. Imperfect duty is action that is praiseworthy but not required according to the categorical imperative. Giving to charity is an example of an imperfect duty. Kant used the example of cultivating one’s own talent as an imperfect duty, and we can use that example as a way of defining professional responsibility. Business professionals have an imperfect duty to obtain the skills necessary to accomplish their jobs. We also have an imperfect duty to continue to develop our business skills and abilities throughout our careers. We will apply these principles in the lessons that follow. For now, use them to assess your beliefs about Figures 1 through 3 by answering the following questions.

Source: Fizkes/Shutterstock

Discussion Questions

1. Restate Kant’s categorical imperative using your own words. Explain why cheating on exams is not consistent with the categorical imperative.

2. While there is some difference of opinion, most scholars believe that the Golden Rule (“Do unto others as you would have them do unto you.”) is not equivalent to Kant’s categorical imperative. Justify this belief.

3. Using the Bateson definition (discussed in Q1-5) that information is a difference that makes a difference:

a. Explain how the features of the graph in Figure A-1 influence the viewer to create information.

b. Explain how the features of the graph in Figure A-3 influence the viewer to create information.

c. Which of these graphs is consistent with Kant’s categorical imperative?

4. Suppose you created Figure A-1 using Microsoft Excel. To do so, you keyed the data into Excel and clicked the Make Graph button (there is one, though it’s not called that). Voilà, Excel created Figure 1 without any labels and drawn out of scale as shown. Without further consideration, you put the result into your presentation.

a. Is your behavior consistent with Kant’s categorical imperative? Why or why not?

b. If Excel automatically produces graphs like Figure A-1, is Microsoft’s behavior consistent with Kant’s categorical imperative? Why or why not?

5. Change roles. Assume now you are a member of the executive committee. A junior marketing professional presents Figure A-1 to the committee, and you object to the lack of labels and the scale. In response, the junior marketing professional says, “Sorry, I didn’t know. I just put the data into Excel and copied the resulting graph.” What conclusions do you, as an executive, make about the junior marketing professional in response to this statement?

6. Is the junior marketing person’s response in question 5 a violation of a perfect duty? Of an imperfect duty? Of any duty? Explain your response.

7. If you were the junior marketing professional, which graph would you present to the committee?

8. According to Kant, lying is not consistent with the categorical imperative. Suppose you are invited to a seasonal barbeque at the department chair’s house. You are served a steak that is tough, overcooked, and so barely edible that you secretly feed it to the department chair’s dog (who appears to enjoy it). The chairperson asks you, “How is your steak?” and you respond, “Excellent, thank you.”

a. Is your behavior consistent with Kant’s categorical imperative?

b. The steak seemed to be excellent to the dog. Does that fact change your answer to part a?

c. What conclusions do you draw from this example?

Active Review

Use this Active Review to verify that you understand the ideas and concepts that answer the lesson’s study questions.

· Q1-1 Why is Introduction to MIS the most important class in the business school? Define Bell’s Law and explain why its consequences are important to business professionals today. Describe how Moore’s Law, Metcalfe’s Law, Nielsen’s Law, and Kryder’s Law are changing how digital devices are used. State how business professionals should relate to emerging information technology.

· Q1-2 How will MIS affect you? Give the text’s definition of job security and use Reich’s list to explain how this course will help you attain that security. Summarize IS-related job opportunities. According to the Bureau of Labor Statistics, how does the growth rate of IS-related jobs compare with the average growth rate of all jobs nationally?

· Q1-3 What is MIS? Explain why you can buy IT but you can never buy IS. What does that mean to you as a potential future business manager? Identify the three important phrases in the definition of MIS. Name the five components of an information system. Using the five-component model, explain the difference between IT and IS. Explain why end users need to be involved in the management of information systems. Explain why it is a misconception to say that organizations do something.

· Q1-4 How can you use the five-component model? Name and define each of the five components. Explain the symmetry in the five-component model. Show how automation moves work from one side of the five-component structure to the other. Name the most important component and state why it is the most important. Use the five-component model to describe the differences between high-tech and low-tech information systems. Explain how the components are ordered according to difficulty of change and disruption.

· Q1-5 What is information? State four different definitions of information. Identify the one that is your favorite and explain why. State the difference between data and information. Explain why information can never be written on a piece of paper or shown on a display device.

· Q1-6 What are necessary data characteristics? Create a mnemonic device for remembering the characteristics of good data. Explain how these data characteristics relate to information quality.

· Q1-7 2031? What trends do you expect to see in 2031? How might you use your smartphone differently in 2031? What everyday devices might be able to connect to the Internet in 2031? How might mixed-reality devices change your daily life? How could these devices change the way you work? Why would the ability to experiment and systems thinking be important in adapting to technological change? Summarize how answering these questions contributes to your skill as a nonroutine thinker.

Using Your Knowledge with eHermes Reread the eHermes vignette at the start of this lesson. Using the knowledge you’ve gained from this lesson, especially that in Q1-2, identify five mistakes that Amanda made. For each, explain what you would do differently. Be specific.

Using Your Knowledge

· 1-1. One of life’s greatest gifts is to be employed doing work that you love. Reflect for a moment on a job that you would find so exciting that you could hardly wait to get to sleep on Sunday night so that you could wake up and go to work on Monday.

a. Describe that job. Name the industry, the type of company or organization for which you’d like to work, the products and services it produces, and your specific job duties.

b. Explain what it is about that job that you find so compelling.

c. In what ways will the skills of abstraction, systems thinking, collaboration, and experimentation facilitate your success in that job?

d. Given your answers to parts a through c, define three to five personal goals for this class. None of these goals should include anything about your GPA. Be as specific as possible. Assume that you are going to evaluate yourself on these goals at the end of the quarter or semester. The more specific you make these goals, the easier it will be to perform the evaluation.

· 1-2. 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. Many experts believe that, over the lifetime of a system, the single most expensive component is people. Does this belief seem logical to you? Explain why you agree or disagree.

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.

c. What implications do you, as a future business manager, take from parts 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?

· 1-3. Consider the four definitions of information presented in this lesson. 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. Also, 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. In contrast, the statement that someone has just deposited $50,000 into your checking account is chock-full of information. So, good information has an element of surprise. Considering all of these points, answer the following questions:

a. What is information made of?

b. If you have more information, do you weigh more? Why or why not?

c. When you give a copy of your transcript to a prospective employer, how is information produced? What part of that information production process do you control? What, if anything, can you do to improve the quality of information that the employer conceives?

d. Give your own best definition of information.

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.

· 1-4. Suppose you work at a large regional healthcare provider. The CIO of the company has asked you to gather data about the organization’s operations. More specifically, the CIO wants to more carefully track supplies and equipment at hospitals and clinics within the organization. The problem is, few of the healthcare workers are interested in giving you that information. They don’t want management interfering with their patient care. They worry that management will start reducing their supplies if they think they have too many of certain items. Then, when they need these items the most, they’ll run short of essential supplies!

a. Describe why it’s important in this case to gather accurate information.

b. Describe why it’s important in this case to gather timely information.

c. Describe why it’s important in this case to gather relevant information.

d. Describe why it’s important in this case to gather information worth its cost.

Collaboration Exercise

This lesson discussed why collaboration is a key skill in maintaining job security. In this exercise, you will build a collaboration IS and then use that IS to answer the questions that follow in a collaborative fashion. You might want to read the four questions before you build your IS. Until you answer question 1-5, you’ll have to make do with email or face-to-face meetings. Once you’ve answered that question, use your communication method to answer question 1-6. Once you’ve answered question 1-6, use your communication method and your content-sharing method to answer question 1-7. Then use the full IS to answer questions 1-8 and 1-9.

· 1-5. Build a communication method:

a. Meet with your team and decide how you want to meet in the future.  Show Answer

b. From the discussion in step a, list the requirements for your communication system.  Show Answer

c. Select and implement a communication tool. It could be Skype, Google Meet, Zoom, or Skype for Business.  Show Answer

d. Write procedures for the team to use when utilizing your new communication tool.  Show Answer

· 1-6. Build a content-sharing method:

a. Meet with your team and decide the types of content that you will be creating.  Show Answer

b. Decide as a team whether you want to process your content using desktop applications or cloud-based applications. Choose the applications you want to use.  Show Answer

c. Decide as a team the server you will use to share your content. You can use Google Drive, Microsoft OneDrive, Microsoft SharePoint, or some other server.  Show Answer

d. Implement your content-sharing server.  Show Answer

e. Write procedures for the team to use when sharing content.  Show Answer

· 1-7. Build a task management method:

a. Meet with your team and decide how you want to manage tasks. Determine the task data that you want to store on your task list.  Show Answer

b. Decide as a team the tool and server you will use for sharing your tasks. You can use Google Drive, Microsoft OneDrive, Microsoft SharePoint, or some other facility.  Show Answer

c. Implement the tool and server in step a.  Show Answer

d. Write procedures for the team to use when managing tasks.  Show Answer

· 1-8. Nonroutine skills:

a. Define abstract reasoning and explain why it is an important skill for business professionals. Give three other examples of abstractions commonly used in business.  Show Answer

b. Define systems thinking and explain why it is an important skill for business professionals. Give three other examples of the use of systems thinking with regard to consequences of Bell’s Law, Moore’s Law, or Metcalfe’s Law.  Show Answer

c. Define collaboration and explain why it is an important skill for business professionals. Is the work product of your team better than any one of you could have done separately? If not, your collaboration is ineffective. If that is the case, explain why.  Show Answer

d. Define experimentation and explain why it is an important skill for business professionals. How does the fear of failure influence your willingness to engage in experimentation?  Show Answer

· 1-9. Job security:

a. State the text’s definition of job security.  Show Answer

b. Evaluate the text’s definition of job security. Is it effective? If you think not, offer a better definition of job security.  Show Answer

c. As a team, do you agree that improving your skills on the four dimensions in the Collaboration Exercise Questions will increase your job security?  Show Answer

d. Do you think technical skills (accounting proficiency, financial analysis proficiency, etc.) provide job security? Why or why not? Do you think you would have answered this question differently in 2000? Why or why not?

Case Study

Pluralsight

The pace of technology innovation is increasing. For companies hiring tech professionals, there is no standardized way of knowing whether potential new employees have the tech skill sets that will be required of them. Even college degrees or professional certifications offer no guarantee of skill or aptitude. Techniques change, knowledge fades, and skills quickly become obsolete. Organizations struggle with knowing whom to hire and how to keep current employees up to date with the latest tech skills. The technology skills gap is widening at a rapid rate. In 2004, Aaron Skonnard, Keith Brown, Fritz Onion, and Bill Williams founded a technology training company called Pluralsight that provided on-site technical and business management training in a classroom environment. Pluralsight’s focus was on training people and organizations in the latest technology-related skills to help them keep pace with technology innovation.

Pluralsight focuses on filling the skills gap between the high level of technology skills companies need and the relatively low level of technology skills that workers bring to the table. Pluralsight sees technology as an integral part of all modern companies and a force that is constantly pushing them forward. As such, companies become increasingly dependent on new technologies and need to retrain their employees in order to take advantage of these advances. Most employers and employees clearly see the need for constant technical skills training.

High-Speed Online Growth

Since Pluralsight’s founding in 2004, the company has grown to more than 800 employees and 1,300 expert authors. 16 The company’s mission is to provide a learning platform to everyone everywhere that enables them to gain the technology skills they need to create progress. In 2008, the company shifted focus from on-site classroom learning to online learning. The Pluralsight online learning library began with 10 courses based on Microsoft technologies. 17 Today more than 6,000 courses are available in more than 150 countries, covering a wide variety of software development and technology skills; these courses are delivered by carefully vetted instructors. 18

 Source: Sharaf Maksumov/Shutterstock

In 2011, Pluralsight made some strategic changes in its pricing strategy and began offering monthly subscriptions for its learning platform. Since then, the company has enjoyed rapid growth, nearly doubling subscriptions in each subsequent year. Headquartered in Utah, Pluralsight was named a 2020 Fortune 100 Best Company to Work For. It was also named to the Deloitte Technology Fast 500 for the fifth consecutive year.

In April 2018, Pluralsight went public. Shares of Pluralsight closed at $20 on the first day of trading, up 33 percent from the company’s list price of $15. At that share price, Pluralsight enjoyed a market capitalization of more than $2.5 billion, which far exceeded its last private valuation of about $1 billion.19 Pluralsight reported annual 2019 revenues of $317 million, which was up 37 percent from the previous year. In interviews shortly after the IPO, founder Aaron Skonnard said one of Pluralsight’s major areas of growth was training at large corporations. Ultimately, Pluralsight succeeded because its founders developed an innovative application of information systems technology. Training isn’t anything new. Neither is the Internet. Yet Pluralsight created a $2.5 billion company using common technology to provide online training. One of the keys to its success was finding a way to apply that technology to a business opportunity and then having the managerial skill to develop that idea into a thriving business. Questions

Q2-1 How Does Organizational Strategy Determine Information Systems Structure?

According to the definition of MIS, information systems exist to help organizations achieve their strategies. As you will learn in your business strategy class, an organization’s goals and objectives are determined by its competitive strategy. Thus, ultimately, competitive strategy determines the structure, features, and functions of every information system. Figure 2-1 summarizes this situation. In short, organizations examine the structure of their industry and determine a competitive strategy. That strategy determines value chains, which, in turn, determine business processes. The structure of business processes determines the design of supporting information systems.

DescribeListen

Figure 2-1: Organizational Strategy Determines Information Systems

Michael Porter, one of the key researchers and thinkers in competitive analysis, developed three different models that can help you understand the elements of Figure 2-1. We begin with his five forces model.