Chapter 9: Business Intelligence

Business Intelligence is information containing patterns, relationships, and trends
Business Intelligence System is an information system that employs business intelligence tools to produce and deliver information
Business intelligence tool is one or more computer programs that implement a particular BI technique.
Reporting tools are programs that read data from a variety of sources, process that data, and formats it into structured reports and deliver those reports to the user who need them
Data mining is a tool that processes data using statistical techniques. Many of which are sophisticated and mathematically complex
Knowledge management tools are used to store employee knowledge and make that knowledge available to employees, its customers, the vendors, and auditors
A business intelligence application is the usage of a tool on a particular type of data for a particular purpose
Reporting applications are BI applications that inputs data from one or more sources and applies a reporting tool to that data to produce information
-RFM analysis is a technique readily implemented using reporting tools is used to analyze and rank customers according to their purchasing patterns
-Online analytical processing is a second type of reporting tool is more generic than RFM
-Unsupervised data mining is when analysts don’t create a model or hypothesis before running the analysis
-A decision tree is a hierarchical arrangement of criteria that predict a classification or a value
-Curse of dimensionality is the more attributes there are the easier it is to build a model that fits the sample data but that is worthless as a predictor
-Real simple syndication is a standard for subscribing to content sources
-Expert Systems attempt to capture human expertise and put it into a format that can be used non experts
-A business intelligence application server delivers those results in a variety of formats to devices for consumption by BI users
-Portal servers  are like web servers except that they have a customizable user interface

Chapter 8: E-Commerce & Web 2.0

-e-commerce is the buying and selling of goods and services over public and private computer networks

-clearinghouse provides goods and services but not title

-B2C involves sales between supplier and a retail customer

-B2b involves sales between companies

-B2G refers to sales between the company and government

-E-commerce auctions match buyers and sellers by using an e-commerce version of a standard auction

-Electronic Exchanges match the buyer and sellers; similar to that of a stock exchange

-Price Elasticity measures the amount that demand rises or falls with changes in price

-HTTP occurs between the users and the server computer

- Webpage is a document coded in one of the standard page markup languages that is transmitted using HTTP

-Web servers are programs that run on a server tier computer and that manage HTTP traffic by sending and receiving web pages to and from clients

-HTML is the most common language for defining the structure and layout of web pages

- A supply chain is a network of organizations and facilities that transforms raw materials into products delivered to customers

-Supply chain profitability is the difference between the sum of the revenue generated by the supply chain and the sum of the costs that all organizations in the supply chain incur to obtain that revenue

-Bullwhip effect is a phenomenon in which the variability in the size and timing of order increases at each stage up the supply chain from customers to suppliers

-Web 2.0 is a loose grouping of capabilities, technologies, business models, and philosophies

-A beta program is a preleased version of software that is used for testing, it becomes obsolete when the final version is released

-A Social network application is a computer program that interacts with and processes information within a social network

Chapter 7: Business Process Management

-Business processes are critical, complex, and dynamic in structure, well managed organizations practice business process management

-BPM is the systematic process of creating, accessing, and altering business processes

                -process begins by creating a model of the business process

- as-in model documents the current situation and then change that model to make adjustments necessary to solve process problems-well managed organizations create policy, procedures, and committees to continually assess business process effectiveness

-the nature and difficulty of business process management varies with the scope of the business process

-functional processes involve activities within a single department or function

-BPM is easier to accomplish with functional processes

-functional processes lead to islands of automation that work in isolation from one another

-purchasing influences inventory, which influences production, which influences customer satisfaction, which influences future sales

-Cross-functional processing involve activities among several or even many business departments

-process management is more difficult for cross-functional systems because no manager has authority over all of the activities and the resources assigned to them

Interorganizational process includes activities at the company that processes your credit card transactions

BPM for interorganizational processes is much more difficult than for functional or cross functional systems

-a problem is a perceived difference between what is and what ought to be

-teams must be able to discuss the current and proposed processes

-business process is a network of activities, resources, facilities, and data that interact to achieve a function or purpose

-data records facts and figures

-Object management group (OMG) created a standard a standard set of terms and graphical notations for documenting business processes

-Swim lane layout roles are shown in its own horizontal rectangle. They are used to simplify process diagrams and to draw attention to interactions among components of the diagram

-Three ways of changing business processes

                -add or remove resources to an even process without changing its structure

                -designers can change the structure of a process without changing resource allocations

                -change the structure of a process without changing resource allocations

-if change is particularly effective, it can result in greater performance at no additional cost

-information systems and database information systems can play an important role in implementing activities that link other ativities

-business processes are resigned to take advantage of information systems and cheaper, more powerful computer networks and communications

-functional application is a computer program that supports or possibly automates the major activities in a functional process

-to reduce costs and risks, most license functional application software from a vendor and then adapt

-adaption is necessary because organizations differ in the way they structure their functional process

-the primary purpose of the sales process is to find prospects and transform them into customers by selling them something

-sales process manages a customer which is a euphemism for selling existing customers more products

-processes exist to manage products and brands companies use such process to assess the effectiveness of marketing messages, advertisement, and promotions and to determine product demand

-operations applications are prominent for nonmanufacturers. For manufacturing companies, many of the operations functions are merged into manufacturing systems

-Order-entry applications record customer purchases

-Order-management-applications track the order through the fulfillment process

-finished goods inventory applications are operated by nonmanufacturing organizations

-inventory applications support inventory control and inventory management

-Just-in-time inventory policy seeks to have production inputs delivered to the manufacturing site just as they are needed

-manufacturing planning applications help businesses allocate inventory and equipment to manufacturing processes

-a bill of materials (BOM) is a list of the materials that comprise a product

-companies may augment BOM to show labor and equipment requirements

-Materials requirements planning (MRP) is an application that plans the need for materials and inventories of materials used in the manufacturing process

-manufacturing resource planning is a follow up to MRP that includes the planning of materials, personnel, and machinery

-Master production schedule (MPS) is a plan for producing products

-Push manufacturing process pushes the product into sales according to the MPS

-Pull manufacturing process are pulled through manufacturing by demand

Customer service applications include order tracking, accounting tracking and customer support and training

-human resources applications support recruitment, compensation, assessment, development and training, and planning

-cost accounting applications determine the marginal cost and relative profitability of products and product families

-budgeting applications allocate and schedule revenues and expenses and are compared to actual financial results to the plan

-cash management is the process of a scheduling payments and receivables and planning the use of cash so as to balance the organizations cash needs against cash availability

-customer relationships management (CRM) is a cross functional application that tracks all interactions with the customer from prospect through follow-up service and support

-CRM applications integrate all of the primary business activities

-customer life cycle:

                -marketing

                -customer acquisition

                -relationship management

                -loss/churn

-CRM applications store data in a single database

-customer support has an important linkage to product marketing and development

-enterprise resource planning applications provide even more integration than CRM

-ERP integrates the primary value chain activities with human resources and accounting

-SAP is the first and most successful vendor of ERP software

-with ERP systems, organizational data are processed in a centralized database. Such centralization makes it easy for authorized users to obtain needed information from a single source

-Inherent processes are effective and often very efficient (business blueprint have been tried and tested over hundreds of organizations

Chapter 6: Data Communication

-a computer network is a collection of computers that communicate with one another over transmission lines or wireless. LAN connects computers through a single location while WAN connect computers at different locations

-LAN is a group of computers connected together on a single company site. Each device on a LAN has a hardware component called network interface card (NIC)

-most connections are made using unshielded twisted pair (UTP) cable. Twisting the wires substantially reduces the cross-wire signal interference that occurs when wires run parallel for long distances

-optical fiber cables are light rows that are reflected inside the glass core of the OFC. The core is surrounded by a cladding to contain the light signals. These cables use special connectors called ST and SC connectors

-most PCs today are equipped with an onboard NIC that supports what is called 10/100/1000 Ethernet

-Internet service providers (ISP) has three important functions

                -provide users with a legitimate internet address

                -serves as a gateway to the internet. ISP receives communication from your computer and passes them on to the internet

                -ISPs pay for the internet. They collect money from their customers and pay access        fees and other charges on your behalf

-modems convert digital data in the computer to a wavy analog signal

-there are different types of modems

                -Digital subscriber line (DSL modem)

                -Cable modems

-narrowband lines typically transmit speeds less than 56l, while broadband transmit in excess of 256k

-router is a special purpose computer that moves network traffic from one node on a network to another

-Public switched data network (PSDN) lease networks of computer and lines on time to other organizations

-encryption is the process of transforming clear text into coded, unintelligible text for security purposes. A key is a number used to encrypt data

-in symmetric encryption, the same key is used to encode and decode while in asymmetric encryption, different keys are used to encrypt and decode (public/private key)

-HTTPS data (internet) is encrypted using Secure Socket Layer (SSL), also known as transport layer security (TLS)

-firewall is a computing device that prevents unauthorized network access (it could be a computer or a program)

-a firewall has an access control list (ACL) which encodes the rules stating which addresses are to be allowed and which are to be prohibited.

-no computer should connect to the internet without firewall protection. Usually ISPs provide a firewall for its users

-each NIC is given an address at the factory, these addresses are considered your physical address, or MAC address

-logical addresses (IP address) are written as a series of dotted decimals which are used by the internet and other private networks

-there are two types of IP addresses. Public IP addresses are used on the internet while private IP addresses are used within private networks and internets

-when your computer is plugged in a LAN, the OS searches for a host program called Dynamic Host Configuration Protocol (DHCP). This program loans out a temporary IP address that the computer uses until it is disconnected from the LAN. DHCP can reuse the temporary IP if necessary

-Switch tables tell the switch where to send traffic to get it to its destination (LAN). Routing tables are the equivalent for routers

-the process of changing public IP addresses into private IP addresses, and the reverse, is called Network Address Translation (NAT)

-Changing a name into its IP address is called resolving a domain name. Top-level domains are the last letters in any domain name (com/org/net). Uniform resource locator (URL) is a combination of domain name plus its directory

-Voice over IP uses the TCP/IP to carry telephone voice conversations. Voice conversations are stored as bits, broken up into IP packets, and routed over the internet. Skype offer subscribers unrestricted telephone access using VoIP

Chapter 5: Database Processing

-the purpose of a database is to keep track of things

-a database is a self describing collection of integrated records

-databases are made up of columns, rows, tables, files

-databases are self-describing collection of integrated records (recrods are integrated because relationships among rows are represented in the database)

-databases are self-describing because they not only contain data, bu also data about the data in the database (called metadata)

-database management system is a program used to create, process, and administer a database

-developers use the DBMS to create tables, relationships, and other structures in a database

-DMBS functions to process a database. Applications use the DBMS for four operations (read, insert, modify, or delete)

-DMBS are also used to provide tools to assist in the administration of the database (set up security)

database application is a collection of forms, reports, queries, and application programs that process a database

-data entry forms are used to read, insert, modify, and delete data

-DBMS programs provide comprehensive and robust features for querying database data

-application programs process logic that is specific to a given business need. It enables database processing over the internet

-enterprise DBMS products process large organizational and workgroup databases while personal DBMS products are designed for smaller, simpler database applications. Today the only remaining personal DBMS is probably Microsoft Office

-because the design of the database depends entirely on how users view their business environment, user involvement is critical for database development

-database must require the data necessary for the users to perform their jobs, it contains that amount of data and no more. During database development the developers must rely on the users to ell them what to include in the database

-Before building the database the developers construct a logical representation of database data called a data model. Data models describe the data and relationships that will be stored in the database

-Entity-relationship data models define entities that will be stored in the database that has a relationship among other entities.

-database design is the process of converting a data model into tables, relationships, and data constraignts. Database design team transforms entities into tables and expresses relationships by defining foreign keys

-tables that are not normalized are subject to data integrity problems

-database is a model of how the users view their business world. Users are the final judges as to what data the database should contain and how the records in that datbase should be related to one another

Chapter 4: What do Business Professionals Need to Know about Computer Hardware?

-Hardware consists of electronic components and related gadgetry that input, process, output, and store data according to instructions encoded in computer programs or software

-typical input hardware are the keyboard, nouse, document scanners, and bar code scanners

-central processing unit (CPU)is a processing device also known as the brain of a computer

- Computers with two CPUs are called dual processor computers while quad would mean it has 4 CPUs

-computers reapresent data using binary digits, called bits. A bit is either zero or one. They are used for computer data because they are easy to represent electronically.

-bits are grouped into 8-bit chunks called bytes. Bytes are used to measure sizes of noncharacter data as well

-instructions are moved from the main memory to the CPU via data chanel or bus. CPU has a small amount of very fast memory called a cache

-when a user opens another program or needs to load more data, the OS will direct the CPU to attempt to place the new program or data into unused memory. If there is not enough memory, it will remove something, perhaps the block of memory labeled More Excel, and then it will place the just-requested program or data into the vacated space. This process is called memory swapping

-cloud referes to the computing network on the internet

-every computer has an operating system, which is a program that controls that computer's resources. If you want to write a document or query a customer database, you need application programs such as Microsoft Word or Oracle Customer Relationship Management (CRM) Both client and server computers need an operating system.

-application programs are written to use a particular operating system. Some applications come in multiple versions

-Four major operating systems

                -Windows

                -MAC OS

                -Unix

                -Linux

-application software perfrms a service or function. Horizontal market application software provides capabilities common accross all organizations and industries. Vertical-market applicatin software servces the needs of specific industries

-one-of-a-kind application software is developed for specific, unique need

-firmware is a computer software that is installed into devices such as printers, print servers, and various types of communication devies

-client server applications require code on both the client and server

-client-server applications that require nothing more than a browser is called thin client while applications such as Microsoft Outlook that require programs other than a browser is called a thick client

-the term open source means that the source code of the program is available to the public. Source code is a computer codewritten by humans and understandable to humans. Source code is complied of machine code that is processed by computers. Open source succeeds because of collaboration

-closed source's source code is highly protected and only available to trusted employees

Chapter 3: Information Systems for Competitive Advantage

-information systems exist to help organzizations achieve their goals and objectives
-competitive strategy determines the structure, features, and functions of every information system
-Porter’s Five Force Model
    -Bargaining power of customers
    -threat of substitutions
    -bargaining power of suppliers
    -treat of new entrants
    -rivalry
- to be effective, the organization’s goals, objectives, culture, and activities must be consistent with the organization’s strategy
-companies determine what type of competitive strategy depending on if the system’s benefits outweighs the risks
-value chain is a network of value-creating activities
-generic chain consists of five primary activities and four support activities
-Primary Activities: Inbound logistics, operations/manufacturing, outbound logistics, sales and marketing, customer service
-Support Activities: procurement
-linkages are interactions across value activities
-value chain analysis has a direct application to manufacturing businesses like the bicycle manufacturer
-business process is a network of activities that generate value by transforming inputs into outputs
-cost of business is cost of the inputs plus cost of activities
-margin of business is the value of the outputs minus the cost
-activities transform input resources into outputs
-manufacturing process transforms raw materials into finished goods while sales process transforms finished goods into cash
-business process varies in cost and effectiveness. Increasing margin is the key to comparative advantage
-organizations analyze their industry and choose a competitive strategy. Given that strategy they design business processes that will span value-generating activities. Those processes determine the scopes and requirements of each company’s information system. Using that, we will determine each company’s comparative advantage
-competitive advantage by creating new products, enhancing existing products/services, or differentiating their products/services from competititors
-competitive advantage by locking in customers making it hard or expensive for customers to switch to another product (switching costs)
-establish alliances with other organizations (set standards, promote product awareness and needs)
-reducing costs to increase profitability