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Accounting Information Systems, 6th edition
                                  James A. Hall



COPYRIGHT © 2009 South-Western, a division of Cengage Learning. Cengage Learning and South-Western
                              are trademarks used herein under license
Objectives for Chapter 12
  Topologies that are employed to achieve connectivity across
  the Internet
  Protocols and understand the specific purposes served by
  several Internet protocols
  Business benefits associated with Internet commerce and be
  aware of several Internet business models
  Risks associated with intranet and Internet electronic
  commerce
  Issues of security, assurance, and trust pertaining to
  electronic commerce
  Electronic commerce implications for the accounting
  profession
What is E‐Commerce?
The electronic processing and transmission of business
data
  electronic buying and selling of goods and services
  on-line delivery of digital products
  electronic funds transfer (EFT)
  electronic trading of stocks
  direct consumer marketing
  electronic data interchange (EDI)
  the Internet revolution
Internet Technologies
 Packet switching
   messages are divided into small packets
   each packet of the message takes a different routes
 Virtual private network (VPN)
   a private network within a public network
 Extranets
   a password controlled network for private users
 World Wide Web
   an Internet facility that links users locally and globally
 Internet addresses
   e-mail address
   URL address
   IP address
Protocol Functions…
facilitate the physical connection between the
network devices
synchronize the transfer of data between
physical devices
provide a basis for error checking and measuring
network performance
promote compatibility among network devices
promote network designs that are flexible,
expandable, and cost-effective
Internet Protocols
Transfer Control Protocol/Internet Protocol (TCP/IP) -
controls how individual packets of data are formatted,
transmitted, and received
Hypertext Transfer Protocol (HTTP) - controls web
browsers
File Transfer Protocol (FTP) - used to transfer files
across the internet
Simple Network Mail Protocol (SNMP) - e-mail
Secure Sockets Layer (SSL) and Secure Electronic
Transmission (SET) - encryption schemes
Open System Interface (OSI)
  The International Standards
  Organization developed a layered set
  of protocols called OSI.
  The purpose of OSI is to provide
  standards by which the products of
  different manufacturers can interface
  with one another in a seamless
  interconnection at the user level.
The OSI Protocol

                         NODE 1                              NODE 2

                 Layer 7 Application                   Layer 7 Application
Data
Manipulation                                           Layer 6 Presentation
                 Layer 6 Presentation
Tasks                                                  Layer 5 Session        SOFT
                 Layer 5 Session        SOFT
                                        WARE                                  WARE
                 Layer 4 Transport                     Layer 4 Transport
Data                                                   Layer 3 Network
Communications   Layer 3 Network
Tasks                                                  Layer 2 Data Link       HARD
                 Layer 2 Data Link       HARD
                                        HARD                                  HARD
                                        WARE                                  WARE
                                                                               WARE
                                         WARE          Layer 1 Physical
                 Layer 1 Physical



                                         Communications Channel
Benefits of Internet‐Commerce
 Access to a worldwide customer and/or supplier
 base
 Reductions in inventory investment and carrying
 costs
 Rapid creation of business partnerships to fill
 emerging market niches
 Reductions in retail prices through lower
 marketing costs
 Reductions in procurement costs
 Better customer service
The Internet Business Model
 Information level
   using the Internet to display and make accessible
   information about the company, its products, services,
   and business policies
 Transaction level
   using the Internet to accept orders from customers
   and/or to place them with their suppliers
 Distribution level
   using the Internet to sell and deliver digital products to
   customers
Dynamic Virtual Organization
                                                                                       Business
                                                                                         Business
                        Consumers
                         Consumers
                                                                                       Customers
                                                                                        Customers




                                                                                                                               Perhaps the greatest




                                                                                                         Information
          Information




                                      Customer




                                                                            Customer
                                                                                                                               potential benefit to




                                                                                                         Product
          Product




                                      Orders




                                                                            Orders
                                                                                                                               be derived from
                          Marketing Organization                                                                               e-commerce is the
                                                                                                                               firm’s ability to forge
                                                                                                                               dynamic business
                                                                                                                               alliances with other
 Information




                                                 Information




                                                                                           Information
                          Inventory




                                                                    Inventory




                                                                                                                   Inventory
 Product




                                                 Product




                                                                                           Product
                          Orders




                                                                    Orders




                                                                                                                   Orders
                                                                                                                               organizations to fill
     Toy                                                 Music                                        Book
                                                                                                                               unique market
  Manufacturer                                         Distributor                                   Publisher
                                                                                                                               niches as the
                                                                                                                               opportunities arise.
       Physical                                          Physical                                     Physical
      Inventory                                         Inventory                                    Inventory
Areas of General Concern
 Data Security: are stored and transmitted data
 adequately protected?
 Business Policies: are policies publicly stated
 and consistently followed?
 Privacy: how confidential are customer and
 trading partner data?
 Business Process Integrity: how accurately,
 completely, and consistently does the company
 processes its transactions?
Intranet Risks
Intercepting network messages
   sniffing: interception of user IDs, passwords, confidential
   e-mails, and financial data files
Accessing corporate databases
   connections to central databases increase the risk that
   data will be accessible by employees
Privileged employees
   override privileges may allow unauthorized access to
   mission-critical data
Reluctance to prosecute
   fear of negative publicity leads to such reluctance but
   encourages criminal behavior
Internet Risks to Consumers
 How serious is the risk?
   National Consumer League: Internet fraud rose by
   600% between 1997 and 1998
   SEC: e-mail complaints alleging fraud rose from 12
   per day in 1997 to 200-300 per day in 1999
 Major areas of concern:
   Theft of credit card numbers
   Theft of passwords
   Consumer privacy--cookies
Internet Risks to Businesses
 IP spoofing: masquerading to gain access to a
 Web server and/or to perpetrate an unlawful act
 without revealing one’s identity
 Denial of service (DOS) attacks: assaulting a Web
 server to prevent it from servicing users
   particularly devastating to business entities that
   cannot receive and process business transactions
 Other malicious programs: viruses, worms, logic
 bombs, and Trojan horses pose a threat to both
 Internet and Intranet users
SYN Flood DOS Attack
   Sender                                                     Receiver


               Step 1: SYN messages

                                      Step 2: SYN/ACK


               Step 3: ACK packet code



In a DOS Attack, the sender sends hundreds of messages, receives the
SYN/ACK packet, but does not response with an ACK packet. This leaves the
receiver with clogged transmission ports, and legitimate messages cannot be
received.
Three Common Types of DOS Attacks
 SYN Flood – when the three-way handshake needed
 to establish an Internet connection occurs, the final
 acknowledgement is not sent by the DOS attacker,
 thereby tying-up the receiving server while it waits
 Smurf – the DOS attacker uses numerous
 intermediary computer to flood the target computer
 with test messages, “pings”
 Distributed DOS (DDOS) – can take the form of
 Smurf or SYN attacks, but distinguished by the vast
 number of “zombie” computers hi-jacked to launch
 the attacks
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E‐Commerce Security: 
               Data Encryption
Encryption - A computer program transforms a clear
message into a coded (ciphertext) form using an
algorithm.
                      Key



Cleartext    Encryption                    Communication
Message      Program          Ciphertext   System


Cleartext    Encryption
                                           Communication
Message      Program
                              Ciphertext   System


                     Key
Message A        Message B Message C       Message D

Multiple people
may have the public key                                    Public Key is used for
(e.g., subordinates).                                      encoding messages.



               Ciphertext     Ciphertext   Ciphertext   Ciphertext


Typically one person or                                    Private Key is used for
a small number of people                                   decoding messages.
have the private key (e.g.,
a supervisor).

               Message A      Message B Message C       Message D
E‐Commerce Security: 
Digital Authentication
Digital signature: electronic authentication
technique that ensures that the transmitted
message originated with the authorized sender
and that it was not tampered with after the
signature was applied
Digital certificate: like an electronic identification
card that is used in conjunction with a public key
encryption system to verify the authenticity of the
message sender
E‐Commerce Security: Firewalls
 Firewalls: software and hardware that provide
 security by channeling all network connections
 through a control gateway
 Network level firewalls
   low cost/low security access control
   uses a screening router to its destination
   does not explicitly authenticate outside users
   penetrate the system using an IP spoofing technique
 Application level firewalls
   high level/high cost customizable network security
   allows routine services and e-mail to pass through
   performs sophisticated functions such as logging or user
   authentication for specific tasks
Seals of Assurance
“Trusted” third-party organizations offer seals of
assurance that businesses can display on their Web
site home pages:
  BBB
  TRUSTe
  Veri-Sign, Inc
  ICSA
  AICPA/CICA WebTrust
  AICPA/CICA SysTrust
Implications for Accounting Profession
  Privacy violation
    major issues:
     a stated privacy policy
     consistent application of stated privacy policies
     what information is the company capturing
     sharing or selling of information
     ability of individuals and businesses to verify and
     update information on them
    1995 Safe Harbor Agreement
     establishes standards for information transmittal
     between US and European companies
Implications for Accounting Profession
  Audit implication for XBRL
    taxonomy creation: incorrect taxonomy results in
    invalid mapping that may cause material
    misrepresentation of financial data
    validation of instance documents: ensure that
    appropriate taxonomy and tags have been
    applied
    audit scope and timeframe: impact on auditor
    responsibility as a consequence of real-time
    distribution of financial statements
Implications for Accounting Profession
   Continuous auditing
     auditors review transactions at frequent intervals
     or as they occur
     intelligent control agents: heuristics that search
     electronic transactions for anomalies
   Electronic audit trails
     electronic transactions generated without human
     intervention
     no paper audit trail
Implications for Accounting Profession
  Confidentiality of data
    open system designs allow mission-critical
    information to be at the risk to intruders
  Authentication
    in e-commerce systems, determining the identity
    of the customer is not a simple task
  Nonrepudiation
    repudiation can lead to uncollected revenues or
    legal action
    use digital signatures and digital certificates
Implications for Accounting Profession
  Data integrity
    determine whether data has been intercepted and
    altered
  Access controls
    prevent unauthorized access to data
  Changing legal environment
    provide client with estimate of legal exposure
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Local Area Networks (LAN)
A federation of computers located close together
(on the same floor or in the same building) linked
together to share data and hardware
The physical connection of workstations to the LAN
is achieved through a network interface card (NIC)
which fits into a PC’s expansion slot and contains
the circuitry necessary for inter-node
communications.
A server is used to store the network operating
system, application programs, and data to be
shared.
LAN                       Files



            File Server




                            Node
  Node
          LAN




 Node                     Printer Server



         Node

                                           Printer
Wide Are Network (WAN)
 A WAN is a network that is dispersed
 over a wider geographic area than a
 LAN. It typically requires the use of:
   gateways to connect different types of LANs
   bridges to connect same-type LANs
 WANs may use common carrier
 facilities, such as telephone lines, or
 they may use a Value Added Network
 (VAN).
WAN
                      Bridge


                               LAN
      LAN




            Gateway
                                Gateway




LAN




                                          WAN
Star Topology
 A network of IPUs with a large central
 computer (the host)
 The host computer has direct connections
 to smaller computers, typically desktop or
 laptop PCs.
 This topology is popular for mainframe
 computing.
 All communications must go through the
 host computer, except for local computing.
Star Network
                     Topeka                                 St. Louis


      Local Data                                                                 Local Data




                                           Kansas
                                           City     Central Data

              POS

POS



                                                                        Dallas
             Tulsa
                              Local Data

POS

                                                                                    Local Data
                          POS
             POS
Hierarchical Topology
       A host computer is connected to several
       levels of subordinate smaller computers in a
       master-slave relationship.
                             Corporate    Production
                             Level        Planning System

                Production
     Regional   Scheduling
                                                                      Regional
     Level      System                                                Sales System




                                                               Sales        Sales        Sales
Warehouse   Warehouse        Production   Production   Local                             Processing
                                                               Processing   Processing
System      System           System       System       Level                             System
                                                               System       System
Ring Topology
 This configuration eliminates the central
 site. All nodes in this configuration are of
 equal status (peers).
 Responsibility for managing
 communications is distributed among the
 nodes.
 Common resources that are shared by all
 nodes can be centralized and managed by
 a file server that is also a node.
Ring                       Central
Topology                      Files




           Server                      Local
Local
 Files                                  Files




Local                                  Local
 Files                                  Files




                    Local
                     Files
Bus Topology
The nodes are all connected to a
common cable - the bus.
Communications and file transfers
between workstations are controlled by
a server.
It is generally less costly to install than a
ring topology.
Bus Topology



                                                            Print Server
              Node              Node
              Local Files       Local Files




Node
Local Files
                                                   Server
                                                            Central
                                                             Files



                  Node               Node
                  Local Files        Local Files
Client‐Server Topology
 This configuration distributes the
 processing between the user’s (client’s)
 computer and the central file server.
 Both types of computers are part of the
 network, but each is assigned functions
 that it best performs.
 This approach reduces data
 communications traffic, thus reducing
 queues and increasing response time.
Client-Server Topology



                    Client                 Client
                    Data Manipulation      Data Manipulation
                    Capabilities           Capabilities            Server
                                                                    Record
                                                                    Searching
                                                                    Capabilities
Client
Data Manipulation
Capabilities
                                                                   Common
                                                                     Files


                       Client                   Client
                       Data Manipulation       Data Manipulation
                       Capabilities            Capabilities
Network Control Objectives
establish a communications session
between the sender and the receiver
manage the flow of data across the
network
detect errors in data caused by line failure
or signal degeneration
detect and resolve data collisions between
competing nodes
POLLING METHOD OF CONTROLLING DATA COLLISIONS




 SLAVE                      Locked                     Locked                    SLAVE
                                       MASTER



                                                         WAN
                    Polling Signal



                                 Data Transmission                                SLAVE
  SLAVE                                                Locked




One Site, the “master,” polls the other “slave” sites to determine if they have data to transmit.
If a slave responds in the affirmative, the master site locks the network while the data are
transmitted.

Allows priorities to be set for data communications across the network
Token                           Central Files


 Ring
                   Server


                                                 Node
                                                Local Files
      Node
    Local Files




                                                     Contains data

                                                     Empty token



                    Node
                  Local Files
Carrier Sensing
A random access technique that detects collisions when
they occur
This technique is widely used--found on Ethernets.
The node wishing to transmit listens to the line to
determine if in use. If it is, it waits a pre-specified time to
transmit.
Collisions occur when nodes listen, hear no transmissions,
and then simultaneously transmit. Data collides and the
nodes are instructed to hang up and try again.
Disadvantage: The line may not be used optimally when
multiple nodes are trying to transmit simultaneously.
What is Electronic Data 
Interchange (EDI)?
The exchange of business transaction
information:
  between companies
  in a standard format (ANSI X.12 or EDIFACT)
  via a computerized information system
In “pure” EDI systems, human
involvements is not necessary to approve
transactions.
Communications Links
Companies may have internal EDI
translation/communication software and
hardware.
                    OR
They may subscribe to VANs to perform
this function without having to invest in
personnel, software, and hardware.
EDI System
           Company A                              Company B
Application Purchases                             Sales Order      Application
Software    System                                System           Software



           EDI                                    EDI
           Translation                            Translation
           Software                               Software
                              Direct Connection
           Communications                         Communications
           Software                               Software

                               Other
                               Mailbox

                Company         VAN          Company
                A’s mailbox                  B’s mailbox

                               Other
                               Mailbox
Advantages of EDI
Reduction or elimination of data entry
Reduction of errors
Reduction of paper
Reduction of paper processing and
postage
Reduction of inventories (via JIT systems)

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Plugin ch12edited-ok

  • 1. Accounting Information Systems, 6th edition James A. Hall COPYRIGHT © 2009 South-Western, a division of Cengage Learning. Cengage Learning and South-Western are trademarks used herein under license
  • 2. Objectives for Chapter 12 Topologies that are employed to achieve connectivity across the Internet Protocols and understand the specific purposes served by several Internet protocols Business benefits associated with Internet commerce and be aware of several Internet business models Risks associated with intranet and Internet electronic commerce Issues of security, assurance, and trust pertaining to electronic commerce Electronic commerce implications for the accounting profession
  • 3. What is E‐Commerce? The electronic processing and transmission of business data electronic buying and selling of goods and services on-line delivery of digital products electronic funds transfer (EFT) electronic trading of stocks direct consumer marketing electronic data interchange (EDI) the Internet revolution
  • 4. Internet Technologies Packet switching messages are divided into small packets each packet of the message takes a different routes Virtual private network (VPN) a private network within a public network Extranets a password controlled network for private users World Wide Web an Internet facility that links users locally and globally Internet addresses e-mail address URL address IP address
  • 5. Protocol Functions… facilitate the physical connection between the network devices synchronize the transfer of data between physical devices provide a basis for error checking and measuring network performance promote compatibility among network devices promote network designs that are flexible, expandable, and cost-effective
  • 6. Internet Protocols Transfer Control Protocol/Internet Protocol (TCP/IP) - controls how individual packets of data are formatted, transmitted, and received Hypertext Transfer Protocol (HTTP) - controls web browsers File Transfer Protocol (FTP) - used to transfer files across the internet Simple Network Mail Protocol (SNMP) - e-mail Secure Sockets Layer (SSL) and Secure Electronic Transmission (SET) - encryption schemes
  • 7. Open System Interface (OSI) The International Standards Organization developed a layered set of protocols called OSI. The purpose of OSI is to provide standards by which the products of different manufacturers can interface with one another in a seamless interconnection at the user level.
  • 8. The OSI Protocol NODE 1 NODE 2 Layer 7 Application Layer 7 Application Data Manipulation Layer 6 Presentation Layer 6 Presentation Tasks Layer 5 Session SOFT Layer 5 Session SOFT WARE WARE Layer 4 Transport Layer 4 Transport Data Layer 3 Network Communications Layer 3 Network Tasks Layer 2 Data Link HARD Layer 2 Data Link HARD HARD HARD WARE WARE WARE WARE Layer 1 Physical Layer 1 Physical Communications Channel
  • 9. Benefits of Internet‐Commerce Access to a worldwide customer and/or supplier base Reductions in inventory investment and carrying costs Rapid creation of business partnerships to fill emerging market niches Reductions in retail prices through lower marketing costs Reductions in procurement costs Better customer service
  • 10. The Internet Business Model Information level using the Internet to display and make accessible information about the company, its products, services, and business policies Transaction level using the Internet to accept orders from customers and/or to place them with their suppliers Distribution level using the Internet to sell and deliver digital products to customers
  • 11. Dynamic Virtual Organization Business Business Consumers Consumers Customers Customers Perhaps the greatest Information Information Customer Customer potential benefit to Product Product Orders Orders be derived from Marketing Organization e-commerce is the firm’s ability to forge dynamic business alliances with other Information Information Information Inventory Inventory Inventory Product Product Product Orders Orders Orders organizations to fill Toy Music Book unique market Manufacturer Distributor Publisher niches as the opportunities arise. Physical Physical Physical Inventory Inventory Inventory
  • 12. Areas of General Concern Data Security: are stored and transmitted data adequately protected? Business Policies: are policies publicly stated and consistently followed? Privacy: how confidential are customer and trading partner data? Business Process Integrity: how accurately, completely, and consistently does the company processes its transactions?
  • 13. Intranet Risks Intercepting network messages sniffing: interception of user IDs, passwords, confidential e-mails, and financial data files Accessing corporate databases connections to central databases increase the risk that data will be accessible by employees Privileged employees override privileges may allow unauthorized access to mission-critical data Reluctance to prosecute fear of negative publicity leads to such reluctance but encourages criminal behavior
  • 14. Internet Risks to Consumers How serious is the risk? National Consumer League: Internet fraud rose by 600% between 1997 and 1998 SEC: e-mail complaints alleging fraud rose from 12 per day in 1997 to 200-300 per day in 1999 Major areas of concern: Theft of credit card numbers Theft of passwords Consumer privacy--cookies
  • 15. Internet Risks to Businesses IP spoofing: masquerading to gain access to a Web server and/or to perpetrate an unlawful act without revealing one’s identity Denial of service (DOS) attacks: assaulting a Web server to prevent it from servicing users particularly devastating to business entities that cannot receive and process business transactions Other malicious programs: viruses, worms, logic bombs, and Trojan horses pose a threat to both Internet and Intranet users
  • 16. SYN Flood DOS Attack Sender Receiver Step 1: SYN messages Step 2: SYN/ACK Step 3: ACK packet code In a DOS Attack, the sender sends hundreds of messages, receives the SYN/ACK packet, but does not response with an ACK packet. This leaves the receiver with clogged transmission ports, and legitimate messages cannot be received.
  • 17. Three Common Types of DOS Attacks SYN Flood – when the three-way handshake needed to establish an Internet connection occurs, the final acknowledgement is not sent by the DOS attacker, thereby tying-up the receiving server while it waits Smurf – the DOS attacker uses numerous intermediary computer to flood the target computer with test messages, “pings” Distributed DOS (DDOS) – can take the form of Smurf or SYN attacks, but distinguished by the vast number of “zombie” computers hi-jacked to launch the attacks
  • 20. E‐Commerce Security:  Data Encryption Encryption - A computer program transforms a clear message into a coded (ciphertext) form using an algorithm. Key Cleartext Encryption Communication Message Program Ciphertext System Cleartext Encryption Communication Message Program Ciphertext System Key
  • 21. Message A Message B Message C Message D Multiple people may have the public key Public Key is used for (e.g., subordinates). encoding messages. Ciphertext Ciphertext Ciphertext Ciphertext Typically one person or Private Key is used for a small number of people decoding messages. have the private key (e.g., a supervisor). Message A Message B Message C Message D
  • 22. E‐Commerce Security:  Digital Authentication Digital signature: electronic authentication technique that ensures that the transmitted message originated with the authorized sender and that it was not tampered with after the signature was applied Digital certificate: like an electronic identification card that is used in conjunction with a public key encryption system to verify the authenticity of the message sender
  • 23. E‐Commerce Security: Firewalls Firewalls: software and hardware that provide security by channeling all network connections through a control gateway Network level firewalls low cost/low security access control uses a screening router to its destination does not explicitly authenticate outside users penetrate the system using an IP spoofing technique Application level firewalls high level/high cost customizable network security allows routine services and e-mail to pass through performs sophisticated functions such as logging or user authentication for specific tasks
  • 24. Seals of Assurance “Trusted” third-party organizations offer seals of assurance that businesses can display on their Web site home pages: BBB TRUSTe Veri-Sign, Inc ICSA AICPA/CICA WebTrust AICPA/CICA SysTrust
  • 25. Implications for Accounting Profession Privacy violation major issues: a stated privacy policy consistent application of stated privacy policies what information is the company capturing sharing or selling of information ability of individuals and businesses to verify and update information on them 1995 Safe Harbor Agreement establishes standards for information transmittal between US and European companies
  • 26. Implications for Accounting Profession Audit implication for XBRL taxonomy creation: incorrect taxonomy results in invalid mapping that may cause material misrepresentation of financial data validation of instance documents: ensure that appropriate taxonomy and tags have been applied audit scope and timeframe: impact on auditor responsibility as a consequence of real-time distribution of financial statements
  • 27. Implications for Accounting Profession Continuous auditing auditors review transactions at frequent intervals or as they occur intelligent control agents: heuristics that search electronic transactions for anomalies Electronic audit trails electronic transactions generated without human intervention no paper audit trail
  • 28. Implications for Accounting Profession Confidentiality of data open system designs allow mission-critical information to be at the risk to intruders Authentication in e-commerce systems, determining the identity of the customer is not a simple task Nonrepudiation repudiation can lead to uncollected revenues or legal action use digital signatures and digital certificates
  • 29. Implications for Accounting Profession Data integrity determine whether data has been intercepted and altered Access controls prevent unauthorized access to data Changing legal environment provide client with estimate of legal exposure
  • 31. Local Area Networks (LAN) A federation of computers located close together (on the same floor or in the same building) linked together to share data and hardware The physical connection of workstations to the LAN is achieved through a network interface card (NIC) which fits into a PC’s expansion slot and contains the circuitry necessary for inter-node communications. A server is used to store the network operating system, application programs, and data to be shared.
  • 32. LAN Files File Server Node Node LAN Node Printer Server Node Printer
  • 33. Wide Are Network (WAN) A WAN is a network that is dispersed over a wider geographic area than a LAN. It typically requires the use of: gateways to connect different types of LANs bridges to connect same-type LANs WANs may use common carrier facilities, such as telephone lines, or they may use a Value Added Network (VAN).
  • 34. WAN Bridge LAN LAN Gateway Gateway LAN WAN
  • 35. Star Topology A network of IPUs with a large central computer (the host) The host computer has direct connections to smaller computers, typically desktop or laptop PCs. This topology is popular for mainframe computing. All communications must go through the host computer, except for local computing.
  • 36. Star Network Topeka St. Louis Local Data Local Data Kansas City Central Data POS POS Dallas Tulsa Local Data POS Local Data POS POS
  • 37. Hierarchical Topology A host computer is connected to several levels of subordinate smaller computers in a master-slave relationship. Corporate Production Level Planning System Production Regional Scheduling Regional Level System Sales System Sales Sales Sales Warehouse Warehouse Production Production Local Processing Processing Processing System System System System Level System System System
  • 38. Ring Topology This configuration eliminates the central site. All nodes in this configuration are of equal status (peers). Responsibility for managing communications is distributed among the nodes. Common resources that are shared by all nodes can be centralized and managed by a file server that is also a node.
  • 39. Ring Central Topology Files Server Local Local Files Files Local Local Files Files Local Files
  • 40. Bus Topology The nodes are all connected to a common cable - the bus. Communications and file transfers between workstations are controlled by a server. It is generally less costly to install than a ring topology.
  • 41. Bus Topology Print Server Node Node Local Files Local Files Node Local Files Server Central Files Node Node Local Files Local Files
  • 42. Client‐Server Topology This configuration distributes the processing between the user’s (client’s) computer and the central file server. Both types of computers are part of the network, but each is assigned functions that it best performs. This approach reduces data communications traffic, thus reducing queues and increasing response time.
  • 43. Client-Server Topology Client Client Data Manipulation Data Manipulation Capabilities Capabilities Server Record Searching Capabilities Client Data Manipulation Capabilities Common Files Client Client Data Manipulation Data Manipulation Capabilities Capabilities
  • 44. Network Control Objectives establish a communications session between the sender and the receiver manage the flow of data across the network detect errors in data caused by line failure or signal degeneration detect and resolve data collisions between competing nodes
  • 45. POLLING METHOD OF CONTROLLING DATA COLLISIONS SLAVE Locked Locked SLAVE MASTER WAN Polling Signal Data Transmission SLAVE SLAVE Locked One Site, the “master,” polls the other “slave” sites to determine if they have data to transmit. If a slave responds in the affirmative, the master site locks the network while the data are transmitted. Allows priorities to be set for data communications across the network
  • 46. Token Central Files Ring Server Node Local Files Node Local Files Contains data Empty token Node Local Files
  • 47. Carrier Sensing A random access technique that detects collisions when they occur This technique is widely used--found on Ethernets. The node wishing to transmit listens to the line to determine if in use. If it is, it waits a pre-specified time to transmit. Collisions occur when nodes listen, hear no transmissions, and then simultaneously transmit. Data collides and the nodes are instructed to hang up and try again. Disadvantage: The line may not be used optimally when multiple nodes are trying to transmit simultaneously.
  • 48. What is Electronic Data  Interchange (EDI)? The exchange of business transaction information: between companies in a standard format (ANSI X.12 or EDIFACT) via a computerized information system In “pure” EDI systems, human involvements is not necessary to approve transactions.
  • 49. Communications Links Companies may have internal EDI translation/communication software and hardware. OR They may subscribe to VANs to perform this function without having to invest in personnel, software, and hardware.
  • 50. EDI System Company A Company B Application Purchases Sales Order Application Software System System Software EDI EDI Translation Translation Software Software Direct Connection Communications Communications Software Software Other Mailbox Company VAN Company A’s mailbox B’s mailbox Other Mailbox
  • 51. Advantages of EDI Reduction or elimination of data entry Reduction of errors Reduction of paper Reduction of paper processing and postage Reduction of inventories (via JIT systems)