All Flashcards
Three dimensions of Information systems
- People (to feed IS)
- Organization (to implement IS)
- Technology
Technical Perspective Information Systems
- A system that converts data into information
- A series of interrelated components that gather, store and distribute process information with support of decision-making and control within the organization.
Organizational perspective information system
- Broader than technical perspective
- A socio-technical system intersecting technology, organization and management
- A system that not only consist of hard-& software, but also the data used or made by the system, just as the procedures and people that communicate with the system.
Digitalization from Social, Business and Industrial Perspective
Three important developments in technology
- Open-source technology
- Cloud computing
- Business Intelligence
Open source technology
larger companies pay programmers to write codes they then publish online so that every interested person can use the code for free (all about sharing and collaboration in software and hardware)
Cloud computing
Making data, hard-&software available via a network -> allows data analysis to be applied where people investigate if large data collections lead to new insights (allows you to use and store data and applications over the internet)
Business Intelligence
The collection and conversion of data in information reports (helps businesses make smart decisions using analyzed data)
What causes income inequality
- Caused by digitalization as automation is expected to replace many jobs
Business sectors & impact of digitalization
Hype cycle
hype cycle for emerging technologies shows how revolutions frequently follow the same pattern. In other words: the typical path that emerging technologies follow, from initial excitement to eventual maturity and widespread use.
Internet of Things (IOT)
inexpensive sensors, processors and communication systems that are used in all kinds of products in the environment e.g. lamps, watches
Web 2.0
- Internet services that allow users to collaborate, create resources and share information
- Web 2.0: uses online collaboration for the production of the content of the website
Other terms for Web 2.0 : collaborative consumption, digital co-creation, peer production & social media
How is Web 2.0 different from Web 1.0?
- Differs from Web 1.0 because value is jointly created using platforms instead of one/several companies
(Web 1.0: transaction orientated: involves a website and a user
Web 2.0: uses online collaboration for the production of the content of the website)
Social Media
technologies that ensure that user-generated content is supported and that commenting editing and sharing of content is enabled
Social networks
online communities enabling users to create a personal profile, link to others and communicate with others via chat or share content
Blogs
online diary. A mean to distribute ideas and information fast to readers
Wikis
A site where everyone can make an edit. Can be public or private.
Open wikis
Whoever is interested can edit. The more wiki users the more information. Number of users adds value.
Griefers
people who maliciously try to sabotage a wiki
Closed Wikis
used within secure environment to e.g. share knowledge or skills
Wiki master
someone who coordinates wiki and deletes unnecessary points
Roll back
used to restore a wiki page to an earlier version
Microblogging
sending short messages to several followers. For example twitter. Messages can be sorted using hashtags.
Most important social media tools
Blogs
Wikis
Microblogging
Messaging Services
Question-and-Answer Sites
API
Application Programming Interface (APIs): programming guidelines that tell other programs how to execute a certain task like retrieving information
3 different kinds of media
- Owned media: communication channels a company manages itself. E.g. a company website.
- Paid media: attempts by a company where the site or a message is distributed. E.g. online advertisement. Inbound marketing via online channels is used with convincing content that attracts customers.
- Earned media: online advertisement a company has not paid for. Due to positive publicity or satisfied customers. E.g. blogs.
Disadvantage of algorithms
hard to change the rules of the network. When a user wants to change a rule in an algorithm, all users can decide which rule they want to follow network splits in 2. These splits cause unstable algorithms.
Algorithms
A procedure for solving a mathematical problem with a finite number of steps, which often includes the repetition of an operation.
Blockchain
a cryptically protected distribution ledger
Initial Coin Offerings (ICOs)
When a cryptocurrency is launched
Miners
Attach new blocks to a blockchain
Blockchain can be based on 2 systems:
- Radical decentralization: There is algorithmic governance but a risk of hard forks (=When developers implement a major change to the blockchain protocol that creates a split).
- Permissioned blockchains: Systems with rules about who can take part in the system where participants sign a network constitution. Data remains decentralized, power does not.
Important dimensions regarding ethical, social and political issues involved with Information Technology
- Information rights and obligations: What can society oblige?
- Property rights and obligations: who is the owner of an image?
- System quality: which norms should be sticked to in order to protect the safety of society?
- Responsibility and control: who can be held responsible for any damage?
Sharing economy/ collaborative economy
Participants have access to products and Services instead of owning the products and services. “Shared”: can be owned by company or an individual. Customers can be brought together by platforms.
Relating to wisdom of crowds, for a crowd to be smart, it must:
- Be diverse: everyone adds their own info
- Be decentralized: there is no one to dictate the right answer
- Lead to a collective verdict
- Be independent: everyone focuses on info instead of opinions
Prediction markets
Uses wisdom of crowds where the opinion of a large group of people is used to make predictions of possible results.
Crowdsourcing
A company/person outsources a certain task to a large group of people. Often this task was originally performed by one person.
Online reputation management
has become more important due to social media as consumers are able to follow online listings of a company
Social Media Awareness and Response team (SMART team)
a group appointed with drafting a policy and providing support in the form of training on social media efforts of the company
Embassy
An “embassy” in BIM serves as a representative for a specific department, function, or group within the larger organization. This unit communicates and advocates for the needs, priorities, and perspectives of its constituency.
Astrosurfing
companies post positive reviews about their own products and services and post negative reviews about the products of their competitors.
Business process
a collection of events, activities and decisions that collectively lead to an outcome that brings value to an organization’s customers
Sock puppets
fake accounts that are used to promote a certain idea, product, company or person.
Business process management
Art and science overseeing how work is performed in an organization to achieve consistent outcomes and take advantage of improvement opportunities (e.g. reducing costs)
Defined as: a body of methods, techniques and tools to discover, analyze, redesign, execute and monitor business processes.
Common categories of business processes
Business Process management lifecycle
Events in BPM
(things that happen instantaneously, i.e. without duration)
o For example, arrival of equipment or an incoming hospital patient
Activities in BPM
(units of work that have a duration)
o For example, inspecting equipment or registering the patient
Decision points in BPM
(points in time decisions are made that affect process execution)
o For example, returning or keeping equipment, queueing or accelerating patient (emergency)
Events in BPM notation
circles
Activities in BPM notation
rounded rectangles
Tokens in BPM notation
coloured dots on top of a process model
Gateways in BPM notation
diamonds
Two types of gateways in BPM
- Split gateways have multiple outgoing sequences, the flow diverges
- Join gateways have multiple incoming sequences, the flow converges
XOR Gateway
To model exclusive decisions. Only follows one arc.
AND Gateway
To model parallel execution. Performs all arcs simultaneously.
Resources
anything/anyone involved in the performance of a process activity, e.g. participants/software/equipment.
Pools
Generally used for resource classes
Lanes
Used to partition a pool into sub-classes or individual resources
Social business
relates to the use of social network platforms to involve employees, clients and suppliers to deepen interactions and accelerate the sharing of information.
Command and control organizations
organizations that work less with teamwork and have less decentralized decision-making. Often also a hierarchical top-down process
Collaborative business culture
Senior manager trusts team that consists of employees and the related goal of managers is to build these teams.
Which technology to choose for cooperation depending on time and space
Transaction cost theory
Firms try to cut on transaction costs by e.g. vertical integration, hiring more employees, buying from suppliers and distributors. IT lowers transaction costs on the market worth it for firms to do business with other firms instead of increasing the amount of employees.
Principal-agency theory
A firm is ‘nexus of contracts’ from self-interested parties that need supervision. When a firm is growing, agency costs rise. IT can lower these costs causing firms to grow without extra costs.
IT strategies to deal with the five competitive forces
- Low-cost leadership (producing at a lower price than your competitors)
- Product differentiation strategy (introducing new products and services that sufficiently change customer convenience and experience)
- Focusing on a niche market (Information systems used to enable targeted strategy and specialize)
- Intimacy (strengthening of the connection with customers and suppliers)
Moore’s law
the performance of a chip doubles every 2.5 years. Moore’s law uses chip-based technology, which is an integrated circulation of transistors.
Chip-based technology
integrated circulation of transistors
Transistor
semiconductor which amplifies or switches electronic signals
Six waves of computing
- Mainframe era (IBM introduced centralised data processing systems, replacing vacuum tubes with transistors. Currently, these are mainly used for intranet or hosting).
- Introduction of minicomputers (Allowed for decentralized computing, a lot cheaper and smaller than mainframes)
- Personal computing era (First personal computer introduced)
- Client-server era (client-server model was created. The first paradigm developed. A distinction between server and client is made)
Mechanical/Moving components are:
- Hard disk drive: Does not contain volatile memory and uses a rotating magnetic disc. Many discs write and many fans absorb the heat released during movement.
- Fans
- Disc disks
Chip-based components are:
- Microprocessor: ensures the execution of programs. The “brain” of the computer
- Random access memory (RAM): Memory for which the data disappears when it is turned off. Also called “volatile memory”.
- Flash or SSD-Disk: Non-volatile memory. The data remains when the flash or SSD-disk is off.
Optical data storage devices
No chip-based or moving components. They have an optical reader that reads data from the disks. Written and read using laser.
E-waste
electronic waste
End of Moore’s law
- End of Moore’s law might be near as chips cant keep getting smaller
- To extend his law:
o Use of multicore processors two computers work simultaneously
o No longer make chips in 2D, but 3D: the chips get thicker
o The use of new materials and new methods for calculating, e.g. quantum calculations
Supercomputers
the fastest computers in the world
Massively parallel processing
a computer exists of many microprocessors that jointly and simultaneously work to solve problems.
Different ways to connect computers
- Grid computing
- Cluster computing
Grid computing
combining the computing software of many normal computers to jointly carry out a task using specialized software. When many normal processors are combined by specialized software to preform a join task: effect of massively parallel processing achieved.
Cluster computing
Computers are linked together to solve tasks together. Computers are much closer linked than in grid computing to a point where not only computers but servers work together. -> Server farms: allow many servers to collaborate with each other using software
Ways to connect
- Wireless: goes through telephone masts
- Satellite wireless: goes via satellites
- Wireless fidelity / WiFi: small box where signal comes in through router. Hotspot: the area in which Wi-Fi reaches
- Digital Subscriber Line (DSL): a cable through which telephone network enters houses
- Cale broadband: Made possible by a coaxial cable:provides the entrance for the television signal in bouses
- Fibre to the home (FTTH): Fibre optic cables. Light is emitted instead of electricity moves faster.
Open source software (OSS)
Software is free and everyone can see the code and change it for improvements. Threat is supported by big tech companies as codes get improved by opening up to everyone
Internet
connects networks around the world and connects any connected device around the world.
Network
A connection between computers that send data to each other
Protocols
protocols are sets of rules or guidelines that define how data and information are transmitted, processed, and managed within an organization.
they contain a data format and a data transmission
Data format
describes the rules for the data that will be sent
Data transmission
ensures the exchange of data
Optical fibre lines
High speed network cables made of glass
Internet backbone
The common core of the internet formed by high speed data lines
Last mile
the technology that connect users to the Internet
Amdahl’s law
“the speed of any network connection is determined by the speed of the slowest component of that network”
Broadband
Super-fast internet connections
Bandwidth
Network transmission speed, often also “bits per second”
Three common transfer protocols
- HTTP
- SMTP
- FTP
HTTP
HTTP (hypertext transfer protocol): ensures communication between web browsers and web servers
SMTP
(simple mail transfer protocol): protocol for the exchange of email
FTP
FTP (file transfer protocol): ensures that file exchanges take place between clients and servers
Types of Networks
- peer-to-peer model
- client-server model
Peer-to-peer model network
: Each participant is both a supplier and consumer of resources. A relationship between all participants is not required. Everything that is downloaded is shared online with another network member at the same time.
Client-server model network
Servers and consumers differ from each other. Servers are always active and wait for consumer requests. Consumers are not always active. When they are active, they ask for communication but they never supply on the network.
URL
Uniform resource locator. it tells your web browser where to find the desired information
Six parts of URL
- Application Transfer Protocol (ATP)
- Host
- Domain name
- Top-level domain name
- Path
- File
IP addresses
unique and assigned to each device connected to the internet with which device can be identified
Is IPv4 still sufficient?
IPv4 is no longer sufficient, solutions for this are IPV6 and NAT.
Domain Name Service (DNS)
a distributed database over several servers and functions as a telephone book
Peering
internet service providers exchange data for free at the internet exchange points
Paid peering
companies provide one-sided traffic -> internet service provider must expand their ICP so that they can deliver a faster service, which requires payment
Colocation facility
: a place where peering takes place by linking devices to accelerate communication
Internet Protocol (IP) and Transmission control protocol (TCP) allow…
allow data to be sent over the internet. The protocols work together to make data transmission as smooth as possible.
User datagram protocol (UDP)
an alternative protocol for transmission. Works faster but is less accurate as the loss of several packages is taken for granted. Allows streaming or voice or internet protocol (VoIP) to take place.
Cloud computing
- Making data, hardware and software available via a network
- No need to buy & install hardware/software but you can access these easily as a service through a web browser
Advantages and Disadvantages of Cloud Computing
3 types of cloud computing
- Infrastructure as a service (IaaS)
- Platform as a service (PaaS)
- Software as a service (SaaS)
Infrastructure as a Service (IaaS)
- User gets access to hardware (e.g. computers, storage and network facilities)
- Least extensive form of cloud computing
- User still has to develop software & applications
- IaaS allows the most customization
- Aimed at tech companies
Platform as a Service (PaaS)
- User gets access to a complete development and implementation environment on the internet
- Aimed at app developers
- Offers development and intelligence tools ->fast and easy development of new applications and with the analysis of data
- Consists of hardware software and operating systems
Software as a service (SaaS)
- The most complete cloud computing service
- Aimed at end users
- User applies for online software and receives a complete online service (e.g. email, online calendars, etc.)
IaaS and PaaS are relevant for ____ contect
B2B
Saas is relevant to _____ context.
B2C
3 characteristics of sustainable competitive advantage
- Operational effectiveness: performing the same tasks as competitors, but better
- Strategic positioning: performing other tasks than the competitor or same tasks in a different way
- A combination of both
Ways to achieve operational effectiveness
- Ensure product quality (e.g. offer higher quality products)
- Optimizing production processes (e.g. using IoT devices to improve supply chain)
- Reducing overhead costs (e.g. being “leaner”)
- Improving the customer experience (e.g. having better music & lighting in a store)
Danger: Product changes into a commodity that every company can offer, increasing competition.
fast follower problem
Using the successes and failures of other companies to market a comparable or superior product at a lower price
The Problem:
Lack of Innovation: Fast followers might struggle with developing their own groundbreaking ideas and innovations.
Dependency: They rely on the original innovators to lead the way, which can limit their strategic control and ability to lead the market.
Reputation: They might be seen as copycats, which can hurt their brand image and customer trust.
2 ways to carry out strategic positioning
- Strategic Position A: performing other tasks than competitors (Importance: distinguishment from competitors, not earning money)
- Strategic Position B: performance of the same task in a different way (Completely different approach for a similar purpose)
Straddling
When a company focuses on multiple strategic positions and cannot obtain the optimal benefit from both positions
Resource based view
Defines resources as possessions that are tied to a specific company in a semi-permanent way, e.g. brand name, in-house knowledge, knowledge of technology, specialized employees or contracts
VRIN Model
- Valuable
- Rare
- Imperfectly imitable
- Non-substitutable
Resources should comply with the VRIN model to ensure sustainable competitive advantage
Powerful resources
can help companies recognize strengths and weaknesses so that straregies can be formed. Often supported by Information Systems
–>these information systems: contain integrated solutions that combine hardware, software, data, procedures and people. A combination of tangible and intangible assets
Primary components of a value chain
- Inbound logistics (for receiving input from suppliers)
- Operations (converting input into products and services)
- Outbound logistics (delivering output to customers and retailers)
- Marketing and sales (e.g. customer engagement, pricing and promotion)
- Support (e.g. service, maintenance and customer service)
Secondary components of a value chain
- Firm infrastructure (matters that help with the entire chain)
- Human Resources (e.g. recruitment)
- R&D
- Procurement (buying raw material)
Examples of powerful resources
- Imitation resistant value chain
- Brand
- Scalability
- Switching costs and data
- Differentiation
- Network effects
- Distribution channels
- Intellectual property protection
Affiliates
Parties that encourage consumers to make a purchase from a third party and then receive a part of the margin for this
Patent trolls/ non-practicing entities
companies that apply for a patent for the sole purpose of suing a large company using that innovation
Radion frequency identification technology (RFID)
- Zara uses it: places small tags on/with products
- Tags can be active (having their own energy source & send signals) or pasive (no energy source and only return signal once in contact with reader)
Near field communication (NFD)
Variant of RFID: Near field communication (NFD):
* Tags only send signal once they are very near the reader e.g. contactless payments
Advantages and Disadvantages of Radio frequency identification technology (RFID):
Long-tail
formed by products for which the demand is not big enough to offer to local retailers
Long-enough-tail
examines which products are worth keeping in stock and whether a certain limit needs to be set
Collaborative filtering
For netflix: the use of assessments to recommend films that other customers also rated well
Data
all raw facts and figures without a single deeper meaning
Information
data that has been formed into a meaningful form, using context
Knowledge
comes from education and experience. Consists of information collected by a person or other unit with the possibility to localize additional information
–> knowledge is the ultimate tool
Columns in data tables
called attributes or fields
Rows in data tables
called records or tuples
Unique key
allows different tables to link to each other
The most serious problem with superfluous data
inconsistency
Join-operation
action where several related tables are linked by complex SQL queries to provide as much information as possible
Database normalization
process where tables are split into different tables to limit the workload for each new entry as much as possible and prevent errors
First normal form (1NF)
Requirements:
* Domain of the attributes contains only atomic values
* The value of each attribute consists of only one value within
Second Normal Form (2NF)
Requirements:
* Table meets all requirements for 1NF
* There is a composite key and no partial dependencies
Third Normal Form (3NF)
Requirements:
* Meet requirements of 2NF
* No transitive dependencies
Entity relationship model
describes the relationships between physical or conceptual matters that are important for the setup of the database
Entity relationship diagrams (ERD)
used to visualize entity-relationship models
ERDs are focused on four elements:
- Entities
- Attributes
- Relationships
- Cardinalities
Entities
- Represent things that are important to an organization and can be immaterial or physical
- Entity set: contains all entities of the same type
Attributes
- Describe an entity and represent the properties of a particular entity
- Appear as columns in a database
Relationships
- Shows the links between different entities
- Relationship set: contains all relationships of the same type
Types of relationships in ERD
- Unary Relationships: of an entity with itself
- Ternary relationship: of three entities
- N-ary relationships: of N entities
Cardinalities
- Indicate how many numbers of a given entity are related to numbers from another entity
Types of cardinalities
- One-to-one (1:1): exactly one element in entity A is associated with one element in entity B (e.g. each employee has their own company car)
- One-to-many (1:M)
- : one element in entity A is associated with multiple elements in entity B (e.g. a tennis player can win multiple tournaments)
- Many-to-many (M:N): Multiple A entities are assocuated with multiple elements of entitty B e.g. an actor plays in multipole firms and a movie has multiple actors
Structured Query language (SQL)
the default language used to communicate with database systems
3 categories of SQL commands
- Data Definition Language (DDL): used to create, delete and modify databases and tables. Conerns the structure of databases and tables
- Data Manipulation Language (DML): used to receive, insert or change and remove tuples. Concerns the content of databases and tables
- Data Control Language (DCL): used for user and consent management. Concerns access to databases and tables
Data types in SQL and what they’re used for
E-commerce
the transaction that goes through internet/the web
Characteristics of the internet why e-commerce has grown so much
- Ubiquity (it’s present everywhere)
- Gobal reach (transactions exceed cultural and national boundaries)
- Universal standards
- Richness (various kinds of content)
- Interactivity (e.g. chat function)
- Information density (easier to search for comparison material)
- Personalisation/customization
- Social technology (social technology prmotoes user content generation and social networking)
Internet and digitalization have changed the way firms do business as…
- Information assymetry is decreased
- Lower costs: menu- search- and transaction costs
- Dynamical prices possible
- Switching costs higher/lower
- Delayed completion
- Disintermediation: certain steps in the supply chain can be erased due to e-commerce
Types of e-commerce
- Business-to-consumer (B2C)
- Business-to-business (B2B)
- Consumer-to-consumer (C2C)
- Government to Citizen (G2C)
- Government to Business (G2B)
M-commerce
the platform for mobile phones
Types of business models
- Portal
- E-tailer
- Content provider
- Transactrion broker
Types of revenue models
- Advertising
- Sales
- Subscription
- Free/Freenium
Software
a computer program or a combination of programs which tell the computer hardware what to do
The way devices work is called the..
hardware/software layer cake
Layers in the hardware/software layer cake (from lowest to highest)
Computer hardware: lowest layer. the physical components of informationtechnology. Consits of the computer itself plus extra devices like storage, mouse and keuboard
Operating system (OS): Software that controls the computer hardware and establishes standards for the development and execution of applications
Applications: Programs that enable the immediate execution of specific tasks. A precise set of instructions that tell the hardware what to do within the standards. You can develop application youself or buy a software package (but it’s hard to install and is not always efficient)
Users
Two types of application
- Desktop software: contains applications that assist one user in performing certain tasks
- Enterprise software: contains applications that meet the needs of multiple users within an organization
Embedded software
software designed for a specific purpose and often embedded in physical products e.g. thermostats, doorlocks, cars and elevators
Firmware
software stored on non-volatile memory cards
Transaction processing systems
An operational system that records data about fundamental activities within the organization.
These systems make sure the right information gets to the right place so that transactions can happen smoothly and securely.
Two types of transaction processing systems
- Batch processing
- Online transaction processing (OLTP)
Batch processing
- Data is stored in a temprary storage
- Then: processed as a single uniy at a specific time
- Advantage of batch processing: companies can allocate ‘processing jobs’ better to moments when the hardware does not do anything else
- Disadvantage of batch processing: Database does not reflect the state of the company in real time –> a delay occurs as processing only takes place at a certain moment
Online transaction processing (OLTP)
- Data is immediately processed so that the current state of the system is always reflected
- Advantage: online and in real-time
Enterprise systems
made to combine collected and processed data from various departments of the company into a whole
* Goal of enterprise systems: collect data gathered by separate processes merged and used to better understand the existence of a company
3 enterprise syste,s
- Enterprise resource planning (ERP): Integrates the core funcions of an organization, e.g. accounting HR and Sales into a homogenous system
- Customer Relationship management (CRM): Integrates data from customers that can be used by different departments. A homogenous database is essential, but not necessary.
- Supply Chain Management (SCM): Provides a comprehensive overview of the value chain, including flow of raw materials, deliveries and supplies through the organization
Database management systems
collects and disseminates information that is created and used by multiple apps, e.g. data on current stock
Data warehouses
collect and store data from various core transaction systems throughout the organization and provide analyses and reporting tools. Data is standardized and consolidated but cannot usually be modified.
e-discovery
information needs to be identified and recalled from archives for supporting lawsuits
Data marts
subset of data stored in a data warehouse which contain a very concentrated part of the data of the organization
Data aggregators
companies that are purely focused on collecting and selling data to other companies
Business intelligence tools
all tools helped to merge, analyse and access data with the aim to sypport organizational decision-making
Ad hoc reporting tools
enables users to create their own report and easily modify them
Online analytical processing (OLAP)
data is extracted from traditional databases, calculated, summarised and stored in data cube. Real time is possible.
Data cubes
special databases that structure data across multiple dimensions, e.g. place, products and time. Runs data much faster than in original database.
Problems with the collection and processing of data
- Legacy systems: obsolete information systems that are not designed to share data, are not compatible with new technologies and are not aligned with the current needs of an organization
- Companies often deal with legacy systems
- Companies often struggle to make sure their data has the right fomrat for processing
- It might be costly to build large data warehouses
Data mining
Data mining: using specific algorithms to detect hidden patterns and make models suitable for large data sets
* Cab help when you want to use data at individual levels
* Identifying patterns at the transaction level
Types of patterns at the transaction level in data mining
- Associations: a phenomenon that often occurs in combinatio with another phenomenon
- Clusters: different stacks of observations with similar values that can be merged in a cluster
- Sequential relationships: dependencies that occur temporarily
Over-engineering
when so many variables are included in a model that the solution found probably only works in the subset of data with which the solution was found
Association rule mining
- Tries to identify the most common affinities between items
- Market basket analysis: looks at all individual transactions of a customer and then examines which products are bought together
- An item set can consist of only one product, e.g. {bread}, but also a combination of products e.g. {bread, milk}
Pruning
Used to identify bundles with high support
Clustering
tried to minimize the sum of the distance between the core of the cluster and all observations belonging to this cluster
K-clustering
each data point is allocated to the nearest cluster centre and the cluster centre is moved to minimize the total distance between points
4 important characteristics when using Big Data
- Volume (the size of the dataset that needs to be processed)
- Velocity (the speed in which new data must be generated and processed)
- Variety (the different formats and characteristiucs of data that have to be processed)
- Veracity (the reliability of data)
Analytics
combine classical statistics with artificial intelligence to derive achievable insights from Big Data
Artificial intelligence (AI)
aims to create a computer program that is capable of imitating or improving functions of the human brain.
Some AI analytic methods
- Machine learning
- Neural networks
- Expert systems
- Genetic algorithms
Machine learning (AI)
a form of AI where large amounts of data are used so that computers can improve the accuracy of actions and predictions without extra programming
Neural networks (AI)
networks trained to use large historic data sets and to find patterns in them so that a modle can be built to exploit the findings
Black box method in neural networks
You see what goes in (input) and what comes out (output) but you don’t know or need to understand how it works inside.
Expert systems (AI)
AI systems that use rules or examples to finish tasks that imitate human expertise
Genetic algorithms (AI)
Modelling technique in which computers investigate possible solutions to a problem, design different models and compare them to find the best solution
HADOOP
An open source source software framework that is used for the storagte and analysis of large datasets. Four important advantages: flexibility, scalability, cost efficiency and fault tolerance.
Network effects
show how the value that a user derives from a network is related by the number of users of the network. Does not only occur in social environments but also in organizations
Positive network effects
positive network effects amplify the benefits of a product or service as its user base expands, making it more attractive and useful to both existing and potential users.
Metcalfe’s Law: V~n^2
Congestion effect
opposite of network effect: additional user lowers the value of a network
Switching costs
- Switching costs: costs for switching to another product or service (consists of the intial investment and all investments in time, data loss and so on)
Total cost of ownership (TCO)
the total cost of a product during its lifetime (includes both the initial investments and later purchases related to the product)
Complementary benefits
Extra (third-party) products meet the need for additional services in the network and thus provide extra value to users (e.g. apps that add value to smartphone)
Platforms
products or services that encourage others to offer complementary products. Platform ecosystems integrate products and services in their software.
Platform ecosystems
integrate products and services into their software
API’s
(Application programming Interfaces): programming guidelines that tell other programs how to execute a certain task, e.g. retrieving information from the platform.
One-sided market
value is created from a signle group of users (e.g. whatsapp)
* Advantages within a one-sided market are called same-side exchange benefits ( the value for a group of users rises with the increase in the number of users of the same group)
Two-sided markets
: value is created from two groups of network users (e.g. uber)
* Advantages within two-sided market are also same-side exchange benefits but also cross-side exchange benefits ( an increase in one group of users causes an increase in value for the other group)
Positive feedback loops
Positive feedback loops: occur when an increase in A leads to an increase in B which again leads to an increase in A and so on
Characteristics of network effects
- Network industries are markets where there are strong network effects
- Because of presence of positive feedback loops: early and fierce competition since large first mover advantages can be achieved
- Often winner-takes-all or winner-takes-most markets and therefore there are often monopolies or oligopolies
- Technological leapfrogging: offering a new technology that is so superior to the old that its value exceeds the value of the network effects and technological functionality of the old technology
- Technological leapfrogging is requried to beat dominant players in the market
Strategies for entering network markets
Osborne effect
when a company announces a new product too early, causing customers to stop buying the current product
Collaborative consumption/sharing economy
where people share access to products and services
Servitization
a businessmodel innovation which moves companies from selling products to selling integrated products and services with the purpose:
o To provide in the need of the client
o To improve company results
o To improve concurrent position
Servitization is when a company that usually sells products starts offering extra services along with those products to add more value. (–> a company that makes washing machines. Instead of just selling the washing machines, they also offer a maintenance service, so if your machine breaks down, they’ll fix it for you.)
Social graph
the global mapping of users and companies and the way they are connected
Dark web
online content that can’t ve indexed by search engines like google
* Companies that want to advertise via social media face two challenges:
Content adjacency
advertisements are shown with embarrassing or offensive material, causing companies to have reputational damage
Three R’s of social media policy
- Representation
- Responsibility
- Respect
Bullwhip effect
phenomenon in supply chain management where small fluctuations in demand at the consumer level cause progressively larger fluctuations in demand at the wholesale, distributor, manufacturer and raw materials supply level
Push-based model
(build-to-stock). Based on forecasts or best guesses of demand for products and then pushed to customers
“make products first, hope they sell.”
Pull-based model
(demand driven or build-to-order): customer purchases trigger events in the supply chain
“make products when customer orders them”
Upstream supply chain
Refers to stages in supply chain that are closer to raw material extraction and production
Downstream supply chain
Refers to stages in production that are closer to the end customers
Stuxnet virus
Infects and takes control of systems –> sabotages them.
Acts as a stark reminder that businesses must protect their Information Systems from cyberthreats.
Black hat hacker
person who uses computer skills to break into systems and networks illegaly
Social engineering
Tactic used by hackers to manipulate people into revealing confidential information. Instead of hacking in, they trick individuals into saying passwords, etc.
Phishing scam
Fraudsters send fake messages, usually emails, to trick people into providing sensitive information
Data cubes
multi-dimensional arrays of values used to describe data in structured format, suitable for analysis and reporting, especially in business intelligence
Public key
Can be shared with anyone. Used to encrypt data
Private key
Kept secret. Used to decrypt data that was encrypted by public key
Genetic Algorithm
Problem-solving approach inspired by natural selection and evolution
ERP / Enterprise resource planning
A software system that helps businesses manage and integrate core processes.
Brute-force-attack
trial-and-error method used by hackers to crack passwords
Honey pot
A cybersecurity tool that simulates a vulnerable system or network to attract and divert attackers away from real assets
Process of discovering knowledge form data
Data collection –> Data preprocessing –> Data analysis –> Knowledge discovery –> Interpretation and Evaluation
Transaction Processing Systems (TPS)
Keep track of basic activities and transaction of an organization
Management Information Systems (MIS)
Collects, processes and presents information to support managerial decision-making
Decision support systems (DSS)
Helps managers make decisions by providing tools for analysing data and simulating scenarios
Executive support systems (ESS)
provides high-level executives with summarised information and analysis to support strategic decision making
Operational excellence
Improve the efficiency of operations -> achieve higher profitability
Business model
describes how a company produces, delivers, and sells a product/service to create wealth
Business drivers of Information Systems
- operational excellence
- New products, Services and business models
- customer and supplied intimacy
- improved decision making
- competitive advantage
- survival
Information Technology
consists of all the hardware and software that a firm needs to use to achieve its business objectives
3 activities produce the information that organizations need
Input: collects raw data from within the organization or from its external environment
Processing: converts this raw input into a meaningful form
Output: transfers the processed information to people who will use it or to the activities for which it will be used
Feedback
output that is returned to appropriate membersof the organization to help them evaluate or correct the input stage
Information systems literacy
behavioral as well as a technical approach to studying information systems
Computer literacy
knowledge of information technology
Management Information systems (MIS)
tries to achieve this broader information systems literacy, deals with behavioral issues as well as technical issues surrounding the development, use and impact of information systems used by managers and employees in the firm
Data management technology
consists of software governing the organization of data on physical storage media
computer hardware
physical equipment used for input, processing, and output activities in an information system
computer software
consists of the detailed, preprogrammed instructions that control and coordinate the computer hardware components in information system
Networking and telecommunications technology
consisting of physical devices and software, links the various pieces of hardware and transfers data from one physical location to anothe
World Wide Web
service the Internet provides that uses universally accepted standards for storing, retrieving, formatting and displaying information in a page format on the Internet
Information Technology Infrastructure
provides the foundation, or platform, on which the firm can build its specific information systems
Strategic choice
decision of what to produce -> it determines your likely customers, kinds of employees you will need, the production methods/facilities needed, and many other choices.
Four major functions of a business
Order fulfillment process
Organizations of a business
Senior management:
Makes long-range strategic decisions about products/services and ensures financial performance of firm
(Needs summarized information)
Middle management:
Carries out the program and plans of senior management
(Needs more specific information)
Operational Management
Responsible for monitoring daily activities of the business
(Needs transaction-level information)
Knowledge workers
design products/services and create new knowledge for the firm (e.g. engineers)
Data workers
Assist with administrative work at all levels of the firm (e.g. secretaries or clerks) Production/service workers: produce the product and deliver the service
Transaction Processing systems (TPS)
Keep track of basic activities and transactions of organization (like sales, receipts, payroll)
Computerized system that performs and records the daily routine transactions necessary to conduct business TPS are often so central to a business that TPS failure for a few hours can lead to a firm’s demise and perhaps that of other firms linked to it
Purpose: answer routine questions and to track the flow of transactions through organization
Management Information Systems (MIS)
-The study of information systems in business and management
-Designates a specific category of information systems serving middle management
-Provide middle managers with reports about the organization’s current performance
Decision Support systems (DSS)
-Focus on problems that are unique and rapidly changing, for which the procedure for arriving at a solution may not be fully predefined in advance
-Often bring in information from external sources
Executive support systems
-Help senior management make decisions, like what will employment levels be in five years & what products should we be making in five years?
-Present graphs and data from many sources through an interface that is easy for senior managers to use
-Often the information is delivered to senior executives through a portal, which uses a web interface to present integrated personalized business content
Supply chain management system (SCM)
Help manage relationships with their suppliers
Increase firm profitability by lowering the costs of moving/making products and by enabling managers to make better decisions about how to organize production
Customer Relation Management System (CRM)
Help manage relationships with their customers
Knowledge management system (KMS)
Enable organizations to manage processes better for capturing and applying knowledge and expertise
Collect all relevant knowledge and experience in the firm and make it available wherever and whenever it is needed to improve business processes and decisions
Intranets
internal company websites that are accessible only by employees.
Extranets
company websites that are accessible to authorized vendors and suppliers and often used to coordinate the movement of supplies to the firm’s production apparatus.
E-government
the use of the Internet and networking technologies to enable government and public sector agencies’ relationships with citizens, business, and other arms of government digitally
Social business
he use of social networking platforms, including Facebook, Twitter and internal corporate social tools, to engage their employees, customers and suppliers.
Time/Space collaboration and social tool matrix
Chief information officer (CIO)
senior manager who oversees the use of information technology in the firm
Chief security officer (CSO)
in charge of information systems security for the firm and is responsible for enforcing the firm’s information security policy -> responsible for educating and training users and information systems specialists about security
Chief privacy officer (CPO)
responsible for ensuring that the company complies with existing data privacy laws
Chief knowledge officer (CKO)
responsible for the firm’s knowledge management program
Chief data officer (CDO)
responsible for enterprise-wide governance and usage of information to maximize the value of the organization’s data -> ensures that the firm is collecting appropriate data to serve its needs
End users
representatives of departments outside of the information systems group for whom applications are developed.
Types of transaction processing systems
- batch processing
- online transaction processing (OLTP)
Transaction processing systems
An information processing system for business transactions involving the collection, modification and retrieval of all transaction data
Batch processing
Data is stored in temporary storage and processed as a single unit (batch) at a specific time. It enables companies to shift processing to times when computing resources are less busy. E.g. money transfers between banks.
Online transaction processing (OLTP)
Data is processed immediately in real-time. The current state of the system is always reflected. E.g. webshops, hotel bookings and airline tickets. In general, Online transaction processing systems (OLTP) enables data processing in real-time.
EU General Data Protection Regulation (GDPR)
applies to all companies and organizations that collect, store, or process personal information of EU citizens, and these protections apply worldwide regardless of where the processing takes place. So a company can be registered in the US, but if it’s operating in the EU and collects data from EU citizens, it is subject to GDPR.
TCP/IP
TCP (transmission control protocol) and IP (internet protocol) enable data transfer across the internet.
TCP slices data that is to be sent into packets at the source computer. IP routes these packets to the target computer. TCP at the target computer checks for completeness and reassembles packets.
What is the purpose of normalization
to eliminate redundant (repetitive) data and ensure data is stored logically.
1NF requirements
Each table cell should contain a single value (atomic values) & Each record needs to be unique.
2NF requirements
Be in 1NF & Single Column Primary Key that does not functionally dependant on any subset of candidate key relation
3NF requirements
Be in 2NF & Has no transitive functional dependencies
Data warehouse
collect and store data from several core transactional systems across the entire organization.
Data is consolidated and standardized but can usually not be altered.
Data warehouse systems provide tools for querying, analysis and reporting. It serves as an organizational memory.
Data marts
are subsets of the data stored in a data warehouse. They contain highly focused portion of the organization’s data. They are designed to support work on a specific business problem by a specific population of users.
Transaction processing systems (TPS)
-Systems that record data on fundamental operations occurring within the company
-Tracks flow of transactions
Systems business intelligence
Support management decision making
TPS represent input side; business intelligence tools, as well as more sophisticated analytics systems, represent the output side
Responsible for producing information and insights from the data
Support different levels of management
Enterprise applications
Systems that span functional areas
Execute business processes across the firm
Include all levels of management
4 major enterprise applications: enterprise systems, supply chain management systems, customer relationship management systems, knowledge management systems
Data lakes
store all the data in a non-standardized fashion that may be used later on.
Market basket analysis
products are analyzed that customers buy together.
Connection between firm, IT infrastructure and business capabilities
Stages in IT Infrastructure Evolution
-General-purpose mainframe and minicomputer era:
1959 to present
* Client/server era: 1983 to present
* Enterprise computing era: 1992 to present
* Cloud and mobile computing: 2000 to present
Nanotechnology
Nanotechnology – uses individual atoms
and molecules to create computer chips
that are thousands of times smaller than
currently technologically possible
The seven components of the IT ecosystem that
must be coordinated
Quantum computing
Uses quantum physics to represent and operate on data
– Can process units of data as 0,1 or both
– Dramatic increases in computing speed
DNA (molecular) computing
Emerging branch of computing that uses DNA,
biochemistry, and molecular biology hardware,
rather than traditional electronic computers
Optical computers
Computers that use light particles called photons
How TCP and IP work together
Net Neutrality
Business Value of Enterprise Systems
Increase operational efficiency
* Provide firmwide information to help managers make better decisions
* Help firms respond rapidly to customer requests for information or products
* Analytical tools are available, informing corporate headquarters in real-time
* Example: Coca-Cola
Just-in-time strategy
Components arrive as they are needed
o Finished goods shipped after leaving assembly line
Customer relationship management (CRM) systems
Operational CRM
Customer-facing applications
o Sales force automation call center and
customer service support
o Marketing automatio
Analytical CRM
- Based on data warehouses populated by operational CRM systems and customer touch points
- Analyzes customer data (OLAP, data mining, etc.)
Churn rate
- Number of customers who stop using or purchasing products or services from a
company - Indicator of growth or decline of firm’s customer base
