413TeChnology as a vaRiable anD Responsive oRg ani.docx

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3
TeChnology as a
vaRiable anD Responsive
oRg aniz aTional Dynamism
Introduction
This chapter focuses on defining the components of technology
and
how they affect corporate organizations. In other words, if we
step
back momentarily from the specific challenges that information
tech-
nology (IT) poses, we might ask the following: What are the
generic
aspects of technology that have made it an integral part of
strategic and
competitive advantage for many organizations? How do
organizations
respond to these generic aspects as catalysts of change?
Furthermore,
how do we objectively view the role of technology in this
context, and
how should organizations adjust to its short- and long-term
impacts?
Technological Dynamism
To begin, technology can be regarded as a variable, independent

of others, that contributes to the life of a business operation. It
is
capable of producing an overall, totalizing, yet distinctive,
effect on
organizations— it has the unique capacity to create
accelerations of
corporate events in an unpredictable way. Technology, in its
aspect of
unpredictability, is necessarily a variable, and in its capacity as
accel-
erator— its tendency to produce change or advance— it is
dynamic.
My contention is that, as a dynamic kind of variable,
technology, via
responsive handling or management, can be tapped to play a
special
role in organizational development. It can be pressed into
service as
the dynamic catalyst that helps bring organizations to maturity
in
dealing not only with new technological quandaries, but also
with
other agents of change. Change generates new knowledge,
which in
turn requires a structure of learning that should, if managed
properly,
4 2 INFORMATION TECHNOLO GY
result in transformative behavior, supporting the continued
evolution
of organizational culture. Specifically, technology speeds up
events,
such as the expectation of getting a response to an e-mail, and

requires
organizations to respond to them in ever-quickening time
frames.
Such events are not as predictable as those experienced by
individuals
in organizations prior to the advent of new technologies—
particu-
larly with the meteoric advance of the Internet. In viewing
technology
then as a dynamic variable, and one that requires systemic and
cul-
tural organizational change, we may regard it as an inherent,
internal
driving force— a form of technological dynamism.
Dynamism is defined as a process or mechanism responsible for
the
development or motion of a system. Technological dynamism
charac-
terizes the unpredictable and accelerated ways in which
technology,
specifically, can change strategic planning and organizational
behav-
ior/culture. This change is based on the acceleration of events
and
interactions within organizations, which in turn create the need
to
better empower individuals and departments. Another way of
under-
standing technological dynamism is to think of it as an internal
drive
recognized by the symptoms it produces. The new events and
interac-
tions brought about by technology are symptoms of the
dynamism
that technology manifests. The next section discusses how

organiza-
tions can begin to make this inherent dynamism work in their
favor
on different levels.
Responsive Organizational Dynamism
The technological dynamism at work in organizations has the
power
to disrupt any antecedent sense of comfortable equilibrium or an
unwelcome sense of stasis. It also upsets the balance among the
vari-
ous factors and relationships that pertain to the question of how
we
might integrate new technologies into the business— a question
of
what we will call strategic integration— and how we assimilate
the cul-
tural changes they bring about organizationally— a question of
what
we call cultural assimilation. Managing the dynamism,
therefore, is a
way of managing the effects of technology. I propose that these
orga-
nizational ripples, these precipitous events and interactions, can
be
addressed in specific ways at the organizational management
level.
The set of integrative responses to the challenges raised by
technology
4 3teChnolo GY As A vArIAble And resp onsIve
is what I am calling responsive organizational dynamism,

which will
also receive further explication in the next few chapters. For
now, we
need to elaborate the two distinct categories that present
themselves
in response to technological dynamism: strategic integration and
cul-
tural assimilation. Figure 3.1 diagrams the relationships.
Strategic Integration
Strategic integration is a process that addresses the business-
strategic
impact of technology on organizational processes. That is, the
business-strategic impact of technology requires immediate
orga-
nizational responses and in some instances zero latency.
Strategic
integration recognizes the need to scale resources across
traditional
business– geographic boundaries, to redefine the value chain in
the
life cycle of a product or service line, and generally to foster
more
agile business processes (Murphy, 2002). Strategic integration,
then,
Technology as an
independent
variable
Creates
Organizational
dynamism

Acceleration of events that
require different
infrastructures and
organizational processes
Requires
Strategic
integration
Cultural
assimilation
Symptoms and
implications
Figure 3.1 Responsive organizational dynamism.
is a way to address the changing requirements of business
processes
caused by the sharp increases in uses of technology. Evolving
tech-
nologies have become catalysts for competitive initiatives that
create
new and different ways to determine successful business
investment.
Thus, there is a dynamic business variable that drives the need
for
technology infrastructures capable of greater flexibility and of
exhib-

iting greater integration with all business operations.
Historically, organizational experiences with IT investment
have
resulted in two phases of measured returns. The first phase
often
shows negative or declining productivity as a result of the
investment;
in the second phase, we often see a lagging of, although
eventual
return to, productivity. The lack of returns in the first phase has
been
attributed to the nature of the early stages of technology
exploration
and experimentation, which tend to slow the process of
organizational
adaptation to technology. The production phase then lags behind
the ability of the organization to integrate new technologies
with
its existing processes. Another complication posed by
technological
dynamism via the process of strategic integration is a
phenomenon we
can call factors of multiplicity — essentially, what happens
when several
new technology opportunities overlap and create myriad
projects that
are in various phases of their developmental life cycle.
Furthermore,
the problem is compounded by lagging returns in productivity,
which
are complicated to track and to represent to management. Thus,
it is
important that organizations find ways to shorten the period
between
investment and technology’ s effective deployment. Murphy

(2002)
identifies several factors that are critical to bridging this delta:
1. Identifying the processes that can provide acceptable
business
returns from new technological investments
2. Establishing methodologies that can determine these
processes
3. Finding ways to actually perform and realize expected
benefits
4. Integrating IT projects with other projects
5. Adjusting project objectives when changes in the business
require them
Technology complicates these actions, making them more
difficult
to resolve; hence the need to manage the complications. To
tackle
these compounded concerns, strategic integration can shorten
life
cycle maturation by focusing on the following integrating
factors:
• Addressing the weaknesses in management organizations in
terms of how to deal with new technologies, and how to bet-
ter realize business benefits
• Providing a mechanism that both enables organizations to
deal with accelerated change caused by technological innova-
tions and integrates them into a new cycle of processing and

handling change
• Providing a strategic learning framework by which every new
technology variable adds to organizational knowledge, par-
ticularly using reflective practices (see Chapter 4)
• Establishing an integrated approach that ties technology
accountability to other measurable outcomes using organiza-
tional learning techniques and theories
To realize these objectives, organizations must be able to
• Create dynamic internal processes that can function on a
daily basis to deal with understanding the potential fit of new
technologies and their overall value to the business
• Provide the discourse to bridge the gaps between IT- and
non-IT-related investments and uses into an integrated system
• Monitor investments and determine modifications to the life
cycle
• Implement various organizational learning practices, includ-
ing learning organization, knowledge management, change
management, and communities of practice, all of which help
foster strategic thinking and learning that can be linked to
performance (Gephardt & Marsick, 2003)
Another important aspect of strategic integration is what
Murphy
(2002) calls “ consequential interoperability,” in which “ the
conse-
quences of a business process” are understood to “ dynamically
trigger
integration” (p. 31). This integration occurs in what he calls
the five

pillars of benefits realization:
1. Strategic alignment: The alignment of IT strategically with
business goals and objectives.
2. Business process impact: The impact on the need for the
organi-
zation to redesign business processes and integrate them with
new technologies.
3. Architecture: The actual technological integration of appli-
cations, databases, and networks to facilitate and support
implementation.
4. Payback: The basis for computing return on investment
(ROI)
from both direct and indirect perspectives.
5. Risk: Identifying the exposure for underachievement or fail-
ure in the technology investment.
Murphy’ s (2002) pillars are useful in helping us understand
how
technology can engender the need for responsive organizational
dyna-
mism (ROD), especially as it bears on issues of strategic
integration.
They also help us understand what becomes the strategic
integration
component of ROD. His theory on strategic alignment and
business
process impact supports the notion that IT will increasingly

serve as an
undergirding force, one that will drive enterprise growth by
identify-
ing the initiators (such as e-business on the Internet) that best
fit busi-
ness goals. Many of these initiators will be accelerated by the
growing
use of e-business, which becomes the very driver of many new
market
realignments. This e-business realignment will require the
ongoing
involvement of executives, business managers, and IT
managers. In
fact, the Gartner Group forecasted that 70% of new software
applica-
tion investments and 5% of new infrastructure expenditures by
2005
would be driven by e-business. Indeed, this has occurred and
contin-
ues to expand.
The combination of evolving business drivers with accelerated
and
changing customer demands has created a business revolution
that
best defines the imperative of the strategic integration
component of
ROD. The changing and accelerated way businesses deal with
their
customers and vendors requires a new strategic integration to
become
a reality rather than remain a concept discussed but affecting
little
action. Without action directed toward new strategic
integration,
organizations would lose competitive advantage, which would

affect
profits. Most experts see e-business as the mechanism that will
ulti-
mately require the integrated business processes to be realigned,
thus
providing value to customers and modifying the customer–
vendor
relationship. The driving force behind this realignment
emanates from
the Internet, which serves as the principle accelerator of the
change
in transactions across all businesses. The general need to
optimize
47teChnolo GY As A vArIAble And resp onsIve
resources forces organizations to rethink and to realign business
pro-
cesses to gain access to new business markets.
Murphy’ s (2002) pillar of architecture brings out yet another
aspect
of ROD. By architecture we mean the focus on the effects that
technol-
ogy has on existing computer applications or legacy systems
(old exist-
ing systems). Technology requires existing IT systems to be
modified
or replacement systems to be created that will mirror the new
busi-
ness realignments. These changes respond to the forces of
strategic
integration and require business process reengineering (BPR)
activi-

ties, which represent the reevaluation of existing systems based
on
changing business requirements. It is important to keep in mind
the
acceleration factors of technology and to recognize the amount
of
organizational effort and time that such projects take to
complete. We
must ask the following question: How might organizations
respond to
these continual requirements to modify existing processes? I
discuss
in other chapters how ROD represents the answer to this
question.
Murphy’ s (2002) pillar of direct return is somewhat limited and
nar-
row because not all IT value can be associated with direct
returns, but
it is important to discuss. Technology acceleration is forcing
organiza-
tions to deal with broader issues surrounding what represents a
return
from an investment. The value of strategic integration relies
heavily on
the ability of technology to encapsulate itself within other
departments
where it ultimately provides the value. We show in Chapter 4
that
this issue also has significance in organizational formation.
What this
means is simply that value can be best determined within
individual
business units at the microlevel and that these appropriate-level
busi-
ness units also need to make the case for why certain

investments need
to be pursued. There are also paybacks that are indirect; for
example,
Lucas (1999) demonstrates that many technology investments
are non-
monetary. The IT department (among others) becomes
susceptible to
great scrutiny and subject to budgetary cutbacks during
economically
difficult times. This does not suggest that IT “ hide” itself but
rather
that its investment be integrated within the unit where it
provides the
most benefit. Notwithstanding the challenge to map IT
expenditures
to their related unit, there are always expenses that are central
to all
departments, such as e-mail and network infrastructure. These
types
of expenses can rarely provide direct returns and are typically
allocated
across departments as a cost of doing business.
Because of the increased number of technology opportuni-
ties, Murphy’ s (2002) risk pillar must be a key part of strategic
integration. The concept of risk assessment is not new to an
organiza-
tion; however, it is somewhat misunderstood as it relates to
technology
assessment. Technology assessment, because of the acceleration
factor,
must be embedded within the strategic decision-making process.

This
can only be accomplished by having an understanding of how to
align
technology opportunities for business change and by
understanding
the cost of forgoing the opportunity as well as the cost of delays
in
delivery. Many organizations use risk assessment in an
unstructured
way, which does not provide a consistent framework to
dynamically
deal with emerging technologies. Furthermore, such assessment
needs
to be managed at all levels in the organization as opposed to
being an
event-driven activity controlled only by executives.
Summary
Strategic integration represents the objective of dealing with
emerg-
ing technologies on a regular basis. It is an outcome of ROD,
and it
requires organizations to deal with a variable, that forces
acceleration
of decisions in an unpredictable fashion. Strategic integration
would
require businesses to realign the ways in which they include
technol-
ogy in strategic decision making.
Cultural Assimilation
Cultural assimilation is a process that focuses on the
organizational
aspects of how technology is internally organized, including the

role
of the IT department, and how it is assimilated within the
organiza-
tion as a whole. The inherent, contemporary reality of
technologi-
cal dynamism requires not only strategic but also cultural
change.
This reality demands that IT organizations connect to all aspects
of
the business. Such affiliation would foster a more interactive
culture
rather than one that is regimented and linear, as is too often the
case.
An interactive culture is one that can respond to emerging
technology
decisions in an optimally informed way, and one that
understands the
impact on business performance.
The kind of cultural assimilation elicited by technological dyna-
mism and formalized in ROD is divided into two subcategories:
the
study of how the IT organization relates and communicates with
“ others,” and the actual displacement or movement of
traditional
IT staff from an isolated “ core” structure to a firm-wide,
integrated
framework.
IT Organization Communications with “ Others”
The Ravell case study shows us the limitations and

consequences of
an isolated IT department operating within an organization. The
case
study shows that the isolation of a group can lead to
marginalization,
which results in the kind of organization in which not all
individuals
can participate in decision making and implementation, even
though
such individuals have important knowledge and value.
Technological
dynamism is forcing IT departments to rethink their strategic
posi-
tion within the organizational structure of their firm. No longer
can
IT be a stand-alone unit designed just to service outside
departments
while maintaining its separate identity. The acceleration factors
of
technology require more dynamic activity within and among
depart-
ments, which cannot be accomplished through discrete
communica-
tions between groups. Instead, the need for diverse groups to
engage
in more integrated discourse, and to share varying levels of
techno-
logical knowledge, as well as business-end perspectives,
requires new
organizational structures that will of necessity give birth to a
new
and evolving business— social culture. Indeed, the need to
assimilate
technology creates a transformative effect on organizational
cultures,
the way they are formed and re-formed, and what they will need

from
IT personnel.
Movement of Traditional IT Staff
To facilitate cultural assimilation from an IT perspective, IT
must
become better integrated with non-IT personnel. This form of
inte-
gration can require the actual movement of IT staff into other
depart-
ments, which begins the process of a true assimilation of
resources
among business units. While this may seem like the elimination
of
the integrity or identity of IT, such a loss is far from the case.
The
elimination of the IT department is not at all what is called for
here;
on the contrary, the IT department is critical to the function of
cul-
tural assimilation. However, the IT department may need to be
struc-
tured differently from the way it has been so that it can deal
primarily
with generic infrastructure and support issues, such as e-mail,
net-
work architecture, and security. IT personnel who focus on
business-
specific issues need to become closely aligned with the
appropriate

units so that ROD can be successfully implemented.
Furthermore, we must acknowledge that, given the wide range
of
available knowledge about technology, not all technological
knowl-
edge emanates from the IT department. The question becomes
one of finding the best structure to support a broad assimilation
of
knowledge about any given technology; then, we should ask
how that
knowledge can best be utilized by the organization. There is a
pitfall
in attempting to find a “ standard” IT organizational structure
that
will address the cultural assimilation of technology. Sampler’ s
(1996)
research, and my recent research with chief executives,
confirms that
no such standard structure exists. It is my position that
organizations
must find their own unique blend, using organizational learning
con-
structs. This simply means that the cultural assimilation of IT
may
be unique to the organization. What is then more important for
the
success of organizational development is the process of
assimilation as
opposed to the transplanting of the structure itself.
Today, many departments still operate within “ silos” where
they
are unable to meet the requirements of the dynamic and
unpredictable
nature of technology in the business environment. Traditional

orga-
nizations do not often support the necessary communications
needed
to implement cultural assimilation across business units.
However,
business managers can no longer make decisions without
considering
technology; they will find themselves needing to include IT
staff in
their decision-making processes. On the other hand, IT
departments
can no longer make technology-based decisions without
concerted
efforts toward assimilation (in contrast to occasional partnering
or
project-driven participation) with other business units. This
assimi-
lation becomes mature when new cultures evolve synergistically
as
opposed to just having multiple cultures that attempt to work in
con-
junction with each other. The important lesson from Ravell to
keep
in mind here is that the process of assimilating IT can create
new
cultures that in turn evolve to better support the requirements
estab-
lished by the dynamism of technology.
Eventually, these new cultural formations will not perceive
them-

selves as functioning within an IT or non-IT decision
framework
but rather as operating within a more central business operation
that
understands how to incorporate varying degrees of IT
involvement
as necessary. Thus, organizational cultures will need to fuse
together
to respond to new business opportunities and requirements
brought
about by the ongoing acceleration of technological innovation.
This
was also best evidenced by subsequent events at Ravell. Three
years
after the original case study, it became necessary at Ravell to
inte-
grate one of its business operations with a particular group of
IT staff
members. The IT personnel actually transferred to the business
unit
to maximize the benefits of merging both business and technical
cul-
tures. Interestingly, this business unit is currently undergoing
cultural
assimilation and is developing its own behavioral norms
influenced by
the new IT staff. However, technology decisions within such
groups
are not limited to the IT transferred personnel. IT and non-IT
staff
need to formulate decisions using various organizational
learning
techniques. These techniques are discussed in the next chapter.
Summary

Without appropriate cultural assimilation, organizations tend to
have
staff that “ take shortcuts, [then] the loudest voice will win the
day, ad
hoc decisions will be made, accountabilities lost, and lessons
from suc-
cesses and failures will not become part of ... wisdom”
(Murphy, 2002,
p. 152). As in the case of Ravell Corporation, it is essential,
then, to
provide for consistent governance that fits the profile of the
existing cul-
ture or can establish the need for a new culture. While many
scholars
and managers suggest the need to have a specific entity
responsible for
IT governance, one that is to be placed within the operating
structure
of the organization, such an approach creates a fundamental
problem.
It does not allow staff and managers the opportunity to
assimilate tech-
nologically driven change and understand how to design a
culture that
can operate under ROD. In other words, the issue of governance
is
misinterpreted as a problem of structural positioning or
hierarchy when
it is really one of cultural assimilation. As a result, many
business solu-
tions to technology issues often lean toward the prescriptive,

instead of
the analytical, in addressing the real problem.
Murphy’ s (2002) risk pillar theory offers us another important
component relevant to cultural assimilation. This approach
addresses
the concerns that relate to the creation of risk cultures formed
to deal
with the impact of new systems. New technologies can actually
cause
changes in cultural assimilation by establishing the need to
make cer-
tain changes in job descriptions, power structures, career
prospects,
degree of job security, departmental influence, or ownership of
data.
Each of these potential risks needs to be factored in as an
important
part of considering how best to organize and assimilate
technology
through ROD.
Technology Business Cycle
To better understand technology dynamism, or how technology
acts as
a dynamic variable, it is necessary to define the specific steps
that occur
during its evolution in an organization. The evolution or
business cycle
depicts the sequential steps during the maturation of a new
technology
from feasibility to implementation and through subsequent
evolution.
Table 3.1 shows the five components that comprise the cycle:
feasibil-

ity, measurement, planning, implementation, and evolution.
Table 3.1 Technology Business Cycle
CYCLE COMPONENT COMPONENT DESCRIPTION
Feasibility Understanding how to view and evaluate emerging
technologies, from a
technical and business perspective.
Measurement Dealing with both the direct monetary returns and
indirect nonmonetary
returns; establishing driver and support life cycles.
Planning Understanding how to set up projects, establishing
participation across
multiple layers of management, including operations and
departments.
Implementation Working with the realities of project
management; operating with political
factions, constraints; meeting milestones; dealing with
setbacks; having
the ability to go live with new systems.
Evolution Understanding how acceptance of new technologies
affects cultural
change, and how uses of technology will change as individuals
and
organizations become more knowledgeable about technology,
and
generate new ideas about how it can be used; objective is
established
through organizational dynamism, creating new knowledge and
an
evolving organization.

Feasibility
The stage of feasibility focuses on a number of issues
surrounding
the practicality of implementing a specific technology.
Feasibility
addresses the ability to deliver a product when it is needed in
com-
parison to the time it takes to develop it. Risk also plays a role
in
feasibility assessment; of specific concern is the question of
whether
it is possible or probable that the product will become obsolete
before
completion. Cost is certainly a huge factor, but viewed at a “
high
level” (i.e., at a general cost range), and it is usually geared
toward
meeting the expected ROI of a firm. The feasibility process
must be
one that incorporates individuals in a way that allows them to
respond
to the accelerated and dynamic process brought forth by
technological
innovations.
Measurement
Measurement is the process of understanding how an investment
in
technology is calculated, particularly in relation to the ROI of

an
organization. The complication with technology and
measurement
is that it is simply not that easy to determine how to calculate
such
a return. This problem comes up in many of the issues discussed
by
Lucas (1999) in his book Information Technology and the
Productivity
Paradox. His work addresses many comprehensive issues,
surround-
ing both monetary and nonmonetary ROI, as well as direct ver-
sus indirect allocation of IT costs. Aside from these issues,
there
is the fact that for many investments in technology the attempt
to
compute ROI may be an inappropriate approach. As stated,
Lucas
offered a “ garbage can” model that advocates trust in the
operational
management of the business and the formation of IT
representatives
into productive teams that can assess new technologies as a
regu-
lar part of business operations. The garbage can is an abstract
con-
cept for allowing individuals a place to suggest innovations
brought
about by technology. The inventory of technology opportunities
needs regular evaluation. Lucas does not really offer an
explana-
tion of exactly how this process should work internally. ROD,
how-
ever, provides the strategic processes and organizational–
cultural
needs that can provide the infrastructure to better understand

and
evaluate the potential benefits from technological innovations
using
the garbage can model. The graphic depiction of the model is
shown
in Figure 3.2.
Planning
Planning requires a defined team of user and IT representatives.
This
appears to be a simple task, but it is more challenging to
understand
how such teams should operate, from whom they need support,
and
what resources they require. Let me be specific. There are a
number
of varying types of “ users” of technology. They typically exist
in three
tiers: executives, business line managers, and operations users.
Each
of these individuals offers valuable yet different views of the
benefits
of technology (Langer, 2002). I define these user tiers as
follows:
1. Executives: These individuals are often referred to as execu-
tive sponsors. Their role is twofold. First, they provide input
into the system, specifically from the perspective of pro-
ductivity, ROI, and competitive edge. Second, and per-
haps more important, their responsibility is to ensure that

users are participating in the requisite manner (i.e., made
Garbage can
model of IT value
Failed systems
Direct
benefits
Indirect
benefits
User
needs, etc.
C
on
ve
rs
io
n
eff
ec
ti
ve
ne
ss
�e IT value pipeline

Figure 3.2 Garbage can model of IT value. (From Lucas,
H.C., Information Technology and the
Productivity Paradox. Oxford University Press, New York,
1999.)
to be available, in the right place, etc.). This area can be
problematic because internal users are typically busy doing
their jobs and sometimes neglect to provide input or to
attend project meetings. Furthermore, executive sponsors
can help control political agendas that can hurt the success
of the project.
2. Business line managers: This interface provides the most
information from a business unit perspective. These indi-
viduals are responsible for two aspects of management.
First, they are responsible for the day-to-day productivity
of their unit; therefore, they understand the importance
of productive teams, and how software can assist in this
endeavor. Second, they are responsible for their staff. Thus,
line managers need to know how software will affect their
operational staff.
3. Functional users: These are the individuals in the trenches
who
understand exactly how processing needs to get done. While
their purview of the benefits of the system is relatively nar-
rower than that of the executives and managers, they provide
the concrete information that is required to create the feature/
functions that make the system usable.
The planning process becomes challenging when attempting to
get the three user communities to integrate their needs and “

agree to
agree” on how a technology project needs to be designed and
managed.
Implementation
Implementation is the process of actually using a technology.
Implementation of technology systems requires wider
integration
within the various departments than other systems in an
organization
because usually multiple business units are affected.
Implementation
must combine traditional methods of IT processes of
development
yet integrate them within the constraints, assumptions, and
cultural
(perhaps political) environments of different departments.
Cultural
assimilation is therefore required at this stage because it delves
into
the structure of the internal organization and requires individual
participation in every phase of the development and
implementation
cycle. The following are some of the unique challenges facing
the
implementation of technological projects:
1. Project managers as complex managers: Technology projects
require multiple interfaces that often lie outside the traditional
user community. They can include interfacing with writers,

editors, marketing personnel, customers, and consumers, all
of whom are stakeholders in the success of the system.
2. Shorter and dynamic development schedules: Due to the
dynamic
nature of technology, its process of development is less lin-
ear than that of others. Because there is less experience in
the general user community, and there are more stakeholders,
there is a tendency by those in IT, and executives, to underes-
timate the time and cost to complete the project.
3. New untested technologies: There is so much new technol-
ogy offered to organizations that there is a tendency by IT
organizations to implement technologies that have not yet
matured— that are not yet the best products they will eventu-
ally be.
4. Degree of scope changes: Technology, because of its
dynamic
nature, tends to be prone to scope creed — the scope of the
orig-
inal project expanding during development.
5. Project management: Project managers need to work closely
with internal users, customers, and consumers to advise
them on the impact of changes to the project schedule.
Unfortunately, scope changes that are influenced by changes
in market trends may not be avoidable. Thus, part of a good
strategy is to manage scope changes rather than attempt to
stop them, which might not be realistic.
6. Estimating completion time: IT has always had difficulties in
knowing how long it will take to implement a technology.
Application systems are even more difficult because of the
number of variables and unknowns.

7. Lack of standards: The technology industry continues to be a
profession that does not have a governing body. Thus, it is
impossible to have real enforced standards that other pro-
fessions enjoy. While there are suggestions for best prac-
tices, many of them are unproven and not kept current with
changing developments. Because of the lack of successful
application projects, there are few success stories to create new
and better sets of best practices.
8. Less-specialized roles and responsibilities: The IT team
tends to
have staff members who have varying responsibilities. Unlike
traditional new technology-driven projects, separation of roles
and responsibilities is more difficult when operating in more
dynamic environments. The reality is that many roles have not
been formalized and integrated using something like ROD.
9. Broad project management responsibilities: Project
management
responsibilities need to go beyond those of the traditional IT
manager. Project managers are required to provide manage-
ment services outside the traditional software staff. They need
to interact more with internal and external individuals, as well
as with non-traditional members of the development team,
such as Web text and content staff. Therefore, there are many
more obstacles that can cause implementation problems.
Evolution
The many ways to form a technological organization with a
natural

capacity to evolve have been discussed from an IT perspective
in this
chapter. However, another important factor is the changing
nature
of application systems, particularly those that involve e-
businesses.
E-business systems are those that utilize the Internet and engage
in e-commerce activities among vendors, clients, and internal
users
in the organization. The ways in which e-business systems are
built
and deployed suggest that they are evolving systems. This
means
that they have a long life cycle involving ongoing maintenance
and
enhancement. They are, if you will, “ living systems” that
evolve
in a manner similar to organizational cultures. So, the
traditional
beginning-to-end life cycle does not apply to an e-business proj-
ect that must be implemented in inherently ongoing and
evolving
phases. The important focus is that technology and
organizational
development have parallel evolutionary processes that need to
be in
balance with each other. This philosophy is developed further in
the
next chapter.
Drivers and Supporters

There are essentially two types of generic functions performed
by
departments in organizations: driver functions and supporter
func-
tions. These functions relate to the essential behavior and nature
of
what a department contributes to the goals of the organization. I
first encountered the concept of drivers and supporters at
Coopers
& Lybrand, which was at that time a Big 8* accounting firm. I
stud-
ied the formulation of driver versus supporter as it related to the
role
of our electronic data processing (EDP) department. The firm
was
attempting to categorize the EDP department as either a driver
or a
supporter.
Drivers were defined in this instance as those units that
engaged
in frontline or direct revenue-generating activities. Supporters
were
units that did not generate obvious direct revenues but rather
were
designed to support frontline activities. For example, operations
such
as internal accounting, purchasing, or office management were
all
classified as supporter departments. Supporter departments, due
to
their nature, were evaluated on their effectiveness and
efficiency or
economies of scale. In contrast, driver organizations were
expected to
generate direct revenues and other ROI value for the firm. What

was
also interesting to me at the time was that drivers were expected
to
be more daring— since they must inevitably generate returns for
the
business. As such, drivers engaged in what Bradley and Nolan
(1998)
coined “ sense and respond” behaviors and activities. Let me
explain.
Marketing departments often generate new business by
investing
or “ sensing” an opportunity quickly because of competitive
forces
in the marketplace. Thus, they must sense an opportunity and be
allowed to respond to it in a timely fashion. The process of
sensing
opportunity, and responding with competitive products or
services,
is a stage in the cycle that organizations need to support.
Failures in
the cycles of sense and respond are expected. Take, for
example, the
* The original “ Big 8” consisted of the eight large accounting
and management con-
sulting firms— Coopers & Lybrand, Arthur Anderson, Touche
Ross, Deloitte
Haskins & Sells, Arthur Young, Price Waterhouse, Pete
Marwick Mitchell, and
Ernst and Whinney— until the late 1980s, when these firms
began to merge. Today,
there are four: Price Waterhouse Coopers, Deloitte & Touche,
Ernst & Young, and
KPMG (Pete Marwick and others).

launching of new fall television shows. Each of the major
stations
goes through a process of sensing which shows might be
interesting to
the viewing audience. They respond, after research and review,
with a
number of new shows. Inevitably, only a few of these selected
shows
are actually successful; some fail almost immediately. While
relatively
few shows succeed, the process is acceptable and is seen by
manage-
ment as the consequence of an appropriate set of steps for
competing
effectively— even though the percentage of successful new
shows is
low. Therefore, it is safe to say that driver organizations are
expected
to engage in high-risk operations, of which many will fail, for
the sake
of creating ultimately successful products or services.
The preceding example raises two questions: (1) How does
sense
and respond relate to the world of IT? and (2) Why is it
important?
IT is unique in that it is both a driver and a supporter. The latter
is the
generally accepted norm in most firms. Indeed, most IT
functions are
established to support myriad internal functions, such as

• Accounting and finance
• Data center infrastructure (e-mail, desktop, etc.)
• Enterprise-level application (enterprise resource planning,
ERP)
• Customer support (customer relationship management, CRM)
• Web and e-commerce activities
As one would expect, these IT functions are viewed as overhead
related, as somewhat of a commodity, and thus are constantly
man-
aged on an economy-of-scale basis— that is, how can we make
this
operation more efficient, with a particular focus on cost
containment?
So, what then are IT driver functions? By definition, they are
those
that engage in direct revenues and identifiable ROI. How do we
define
such functions in IT because most activities are sheltered under
the
umbrella of marketing organization domains? (Excluding, of
course,
software application development firms that engage in
marketing for
their actual application products.) I define IT driver functions
as those
projects that, if delivered, would change the relationship
between the
organization and its customers; that is, those activities that
directly
affect the classic definition of a market: forces of supply and
demand,
which are governed by the customer (demand) and the vendor
(sup-
plier) relationship. This concept can be shown in the case

example that
follows.
Santander versus Citibank
Santander Bank, the major bank of Spain, had enjoyed a
dominant
market share in its home country. Citibank had attempted for
years to
penetrate Santander’ s dominance using traditional approaches
(open-
ing more branch offices, marketing, etc.) without success, until,
that
is, they tried online banking. Using technology as a driver,
Citibank
made significant penetration into the market share of Santander
because it changed the customer– vendor relationship. Online
bank-
ing, in general, has had a significant impact on how the banking
industry has established new markets, by changing this
relationship.
What is also interesting about this case is the way in which
Citibank
accounted for its investment in online banking; it knows little
about
its total investment and essentially does not care about its direct
pay-
back. Rather, Citibank sees its ROI in a similar way that depicts
driver/marketing behavior; the payback is seen in broader terms
to
affect not only revenue generation, but also customer support
and

quality recognition.
Information Technology Roles and Responsibilities
The preceding section focuses on how IT can be divided into
two dis-
tinct kinds of business operations. As such, the roles and
responsibili-
ties within IT need to change accordingly and be designed under
the
auspices of driver and supporter theory. Most traditional IT
depart-
ments are designed to be supporters, so that they have a close-
knit
organization that is secure from outside intervention and geared
to
respond to user needs based on requests. While in many
instances
this type of formation is acceptable, it is limited in providing
the IT
department with the proper understanding of the kind of
business
objectives that require driver-type activities. This was certainly
the
experience in the Ravell case study. In that instance, I found
that
making the effort to get IT support personnel “ out from their
com-
fortable shells” made a huge difference in providing better
service
to the organization at large. Because more and more technology
is
becoming driver essential, this development will require of IT
per-
sonnel an increasing ability to communicate to managers and
execu-

tives and to assimilate within other departments.
The Ravell case, however, also brought to light the huge
vacuum of
IT presence in driver activities. The subsequent chief executive
inter-
view study also confirmed that most marketing IT-oriented
activities,
such as e-business, do not fall under the purview of IT in most
orga-
nizations. The reasons for this separation are correlated with the
lack
of IT executive presence within the management team.
Another aspect of driver and supporter functions is the concept
of
a life cycle. A life cycle, in this respect, refers to the stages that
occur
before a product or service becomes obsolete. Technology
products
have a life cycle of value just as any other product or service. It
is
important not to confuse this life cycle with processes during
devel-
opment as discussed elsewhere in this chapter.
Many technical products are adopted because they are able to
deliver
value that is typically determined based on ROI calculations.
However,
as products mature within an organization, they tend to become
more of

a commodity, and as they are normalized, they tend to become
support-
oriented. Once they reach the stage of support, the rules of
economies
of scale become more important and relevant to evaluation. As a
prod-
uct enters the support stage, replacement based on economies of
scale
can be maximized by outsourcing to an outside vendor who can
provide
the service cheaper. New technologies then can be expected to
follow
this kind of life cycle, by which their initial investment requires
some
level of risk to provide returns to the business. This initial
investment
is accomplished in ROD using strategic integration. Once the
evalua-
tions are completed, driver activities will prevail during the
maturation
process of the technology, which will also require cultural
assimilation.
Inevitably, technology will change organizational behavior and
struc-
ture. However, once the technology is assimilated and
organizational
behavior and structures are normalized, individuals will use it
as a per-
manent part of their day-to-day operations. Thus, driver
activities give
way to those of supporters. Senior managers become less
involved, and
line managers then become the more important group that
completes
the transition from driver to supporter.

Replacement or Outsource
After the technology is absorbed into operations, executives
will seek
to maximize the benefit by increased efficiency and
effectiveness.
Certain product enhancements may be pursued during this
phase; they
can create “ mini-loops” of driver-to-supporter activities.
Ultimately, a
technology, viewed in terms of its economies of scale and
longevity,
is considered for replacement or outsourcing. Figure 3.3
graphically
shows the cycle.
The final stage of maturity of an evolving driver therefore
includes
becoming a supporter, at which time it becomes a commodity
and,
finally, an entity with potential for replacement or outsourcing.
The
next chapter explores how organizational learning theories can
be
used to address many of the issues and challenges brought forth
in
this chapter.
Mini loop technology enhancementsTechnology
driver

Evaluation
cycle
Driver
maturation
Support
status
Replacement or
outsource
Economies
of scale
Figure 3.3 Driver-to-supporter life cycle.
CoverHalf TitleTitle PageCopyright
PageContentsForewordAcknowledgments Author Introduction1:
The “Ravell” CorporationIntroductionA New ApproachThe
Blueprint for IntegrationEnlisting Support Assessing
ProgressResistance in the RanksLine Management to the
RescueIT Begins to ReflectDefining an Identity for Information
TechnologyImplementing the Integration: A Move toward Trust
and ReflectionKey Lessons Defining Reflection and Learning
for an Organization Working toward a Clear Goal Commitment
to Quality Teaching Staff “Not to Know” Transformation of
Culture Alignment with Administrative
DepartmentsConclusion2: The IT DilemmaIntroductionRecent
BackgroundIT in the Organizational ContextIT and
Organizational StructureThe Role of IT in Business
StrategyWays of Evaluating ITExecutive Knowledge and
Management of ITIT: A View from the TopSection 1: Chief
Executive Perception of the Role of ITSection 2: Management
and Strategic IssuesSection 3: Measuring IT Performance and
ActivitiesGeneral ResultsDefining the IT DilemmaRecent
Developments in Operational Excellence3: Technology as a

Variable and Responsive Organizational
DynamismIntroductionTechnological DynamismResponsive
Organizational DynamismStrategic IntegrationSummaryCultural
AssimilationIT Organization Communications with
“ Others” Movement of Traditional IT StaffSummaryTechnology
Business
CycleFeasibilityMeasurementPlanningImplementationEvolution
Drivers and SupportersSantander versus Citibank Information
Technology Roles and ResponsibilitiesReplacement or
Outsource4: Organizational Learning Theories and
TechnologyIntroductionLearning OrganizationsCommunities of
PracticeLearning Preferences and Experiential LearningSocial
Discourse and the Use of LanguageIdentitySkillsEmotionLinear
Development in Learning Approaches5: Managing
Organizational Learning and TechnologyThe Role of Line
ManagementLine ManagersFirst-Line
ManagersSupervisorManagement VectorsKnowledge
ManagementChange Management Change Management for IT
OrganizationsSocial Networks and Information Technology6:
Organizational Transformation and the Balanced
ScorecardIntroductionMethods of Ongoing EvaluationBalanced
Scorecards and DiscourseKnowledge Creation, Culture, and
Strategy7: Virtual Teams and OutsourcingIntroductionStatus of
Virtual TeamsManagement ConsiderationsDealing with Multiple
LocationsExternalizationInternalizationCombinationSocializatio
nExternalization DynamismInternalization
DynamismCombination DynamismSocialization
DynamismDealing with Multiple Locations and
OutsourcingRevisiting Social DiscourseIdentitySkillsEmotion8:
Synergistic Union of IT and Organizational
LearningIntroductionSiemens AGAftermathICAPFive Years
LaterHTCIT History at HTCInteractions of the CEOThe
ProcessTransformation from the TransitionFive Years
LaterSummary9: Forming a Cyber Security
CultureIntroductionHistoryTalking to the BoardEstablishing a
Security CultureUnderstanding What It Means to Be

CompromisedCyber Security Dynamism and Responsive
Organizational DynamismCyber Strategic IntegrationCyber
Cultural AssimilationSummaryOrganizational Learning and
Application DevelopmentCyber Security RiskRisk
ResponsibilityDriver /Supporter Implications10: Digital
Transformation and Changes in Consumer
BehaviorIntroductionRequirements without Users and without
InputConcepts of the S-Curve and Digital Transformation
Analysis and Design Organizational Learning and the S-
CurveCommunities of PracticeThe IT Leader in the Digital
Transformation EraHow Technology Disrupts Firms and
IndustriesDynamism and Digital DisruptionCritical Components
of “ Digital” Organization Assimilating Digital Technology
Operationally and CulturallyConclusion11: Integrating
Generation Y Employees to Accelerate Competitive
AdvantageIntroductionThe Employment Challenge in the Digital
EraGen Y Population AttributesAdvantages of Employing
Millennials to Support Digital TransformationIntegration of Gen
Y with Baby Boomers and Gen XDesigning the Digital
EnterpriseAssimilating Gen Y Talent from Underserved and
Socially Excluded PopulationsLanger Workforce Maturity
ArcTheoretical Constructs of the LWMAThe LWMA and Action
ResearchImplications for New Pathways for Digital
TalentDemographic Shifts in Talent ResourcesEconomic
SustainabilityIntegration and TrustGlobal Implications for
Sources of TalentConclusion12: Toward Best
PracticesIntroductionChief IT ExecutiveDefinitions of Maturity
Stages and Dimension Variables in the Chief IT Executive Best
Practices ArcMaturity StagesPerformance DimensionsChief
Executive OfficerCIO Direct Reporting to the
CEOOutsourcingCentralization versus Decentralization of
ITCIO Needs Advanced DegreesNeed for StandardsRisk
ManagementThe CEO Best Practices Technology ArcDefinitions
of Maturity Stages and Dimension Variables in the CEO
Technology Best Practices ArcMaturity StagesPerformance
DimensionsMiddle ManagementThe Middle Management Best

Practices Technology ArcDefinitions of Maturity Stages and
Dimension Variables in the Middle Manager Best Practices
ArcMaturity StagesPerformance DimensionsSummaryEthics and
Maturity13: ConclusionIntroductionGlossaryOrganizational
Learning DefinitionsReferences Index
Chapter 3: Software
Learning Objectives
Upon successful completion of this chapter, you will be
able to:
• define the term software;
• identify and describe the two primary categories of
software;
• describe the role ERP software plays in an
organization;
• describe cloud computing and its advantages and
disadvantages for use in an organization; and
• define the term open-source and identify its
primary characteristics.
Introduction

The second component of an information system is software, the
set of instructions that tells the hardware what to do. Software
is created by developers through the process of programming
(covered in more detail in Chapter 10). Without software, the
hardware would not be functional.
54 | Chapter 3: Software
Types of Software
Software can be broadly divided into two categories: operating
systems and application software. Operating systems manage
the
hardware and create the interface between the hardware and the
user. Application software performs specific tasks such as word
processing, accounting, database management, video games, or
browsing the web.
Operating Systems
An operating system is first loaded into the computer by the
boot program, then it manages all of the programs in the

computer,
including both programs native to the operating system such as
file and memory management and application software.
Operating
systems provide you with these key functions:
1. managing the hardware resources of the computer;
2. providing the user-interface components;
Chapter 3: Software | 55
Linux Ubuntu desktop
3. providing a platform for software developers to write
applications.
All computing devices require an operating system. The most
popular operating systems for personal computers are:
Microsoft
Windows, Apple’s Mac OS, and various versions of Linux.
Smartphones and tablets run operating systems as well, such as
iOS (Apple), Android (Google), Windows Mobile (Microsoft),
and
Blackberry.

Microsoft provided the first operating system for the IBM-PC,
released in 1981. Their initial venture into a Graphical User
Interface
(GUI) operating system, known as Windows, occurred in 1985.
Today’s Windows 10 supports the 64-bit Intel CPU. Recall that
“64-bit” indicates the size of data that can be moved within the
computer.
Apple introduced the Macintosh computer 1984 with the first
commercially successful GUI. Apple’s operating system for the
Macintosh is known as “Mac OS ” and also uses an Intel CPU
supporting 64-bit processing. Mac OS versions have been
named
after mountains such as El Capitan, Sierra, and High Sierra.
Multitasking, virtual memory, and voice input have become
standard features of both operating systems.
The Linux operating system
is open source, meaning
individual developers are
allowed to make modifications

to the programming code.
Linux is a version of the Unix
operating. Unix runs on large
and expensive minicomputers.
Linux developer Linus Torvalds,
a professor in Finland and the creator of Linux, wanted to find a
way
to make Unix run on less expensive personal computers. Linux
has
many variations and now powers a large percentage of web
servers
in the world.
56 | Information Systems for Business and Beyond (2019)
Sidebar: Why Is Microsoft Software So
Dominant in the Business World?
If you’ve worked in business, you may have noticed that almost
all computers in business run a version of Microsoft Windows.
However, in classrooms from elementary to college, there is
almost

a balance between Macs and PCs. Why has this not extended
into
the business world?
As discussed in Chapter 1, many businesses used IBM
mainframe
computers back in the 1960s and 1970s. When businesses
migrated
to the microcomputer (personal computer) market, they elected
to
stay with IBM and chose the PC. Companies took the safe route,
invested in the Microsoft operating system and in Microsoft
software/applications.
Microsoft soon found itself with the dominant personal
computer
operating system for businesses. As the networked PC began to
replace the mainframe computer, Microsoft developed a network
operating system along with a complete suite of programs
focused
on business users. Today Microsoft Office in its various forms
controls 85% of the market.
1
Application Software

The second major category of software is application software.
1. [1]
Image of Microsoft Excel
Application software is utilized directly today to accomplish a
specific goal such as word processing, calculations on a
spreadsheet, or surfing the Internet using your favorite browser.
The “Killer” App
When a new type of digital
device is invented, there are
generally a small group of
technology enthusiasts who
will purchase it just for the joy
of figuring out how it works. A
“killer” application is one that
becomes so essential that large
numbers of people will buy a

device just to run that application. For the personal computer,
the
killer application was the spreadsheet.
The first spreadsheet was created by an MBA student at Harvard
University who tired of making repeated calculations to
determine
the optimal result on a problem and decided to create a tool that
allowed the user to easily change values and recalculate
formulas.
The result was the spreadsheet. Today’s dominant spreadsheet is
Microsoft Excel which still retains the basic functionality of the
first
spreadsheet.
Productivity Software
Along with the spreadsheet, several other software applications
have become standard tools for the workplace. Known as
productivity software, these programs allow office employees to
complete their daily work efficiently. Many times these
applications

come packaged together, such as in Microsoft’s Office suite.
Here is
a list of some of these applications and their basic functions:
• Word processing Users can create and edit documents using
this class of software. Functions include the ability to type and
edit text, format fonts and paragraphs, as well as add, move,
and delete text throughout the document. Tables and images
can be inserted. Documents can be saved in a variety of
electronic file formats with Microsoft Word’s DOCX being the
most popular. Documents can also be converted to other
formats such as Adobe’s PDF (Portable Document Format) or a
.TXT file.
• Spreadsheet This class of software provides a way to do
numeric calculations and analysis, displaying the result in
charts and graphs. The working area is divided into rows and
columns, where users can enter numbers, text, or formulas. It
is the formulas that make a spreadsheet powerful, allowing the
user to develop complex calculations that can change based on
the numbers entered. The most popular spreadsheet package

is Microsoft Excel, which saves its files in the XLSX format.
• Presentation Users can create slideshow presentations using
this class of software. The slides can be projected, printed, or
distributed to interested parties. Text, images, audio, and
visual can all be added to the slides. Microsoft’s PowerPoint is
the most popular software right now, saving its files in PPTX
format.
• Some office suites include other types of software. For
example, Microsoft Office includes Outlook, its e-mail
package, and OneNote, an information-gathering collaboration
tool. The professional version of Office also includes Microsoft
Access, a database package. (Databases are covered more in
Chapter 4.)
Microsoft popularized the idea of the office-software
productivity
bundle with their release of the Microsoft Office Suite. This
package

continues to dominate the market and most businesses expect
employees to know how to use this software. However, many
competitors to Microsoft Office do exist and are compatible
with
the file formats used by Microsoft (see table below). Microsoft
also
offers a cloud-based version of their office suite named
Microsoft
Office 365. Similar to Google Drive, this suite allows users to
edit
and share documents online utilizing cloud-computing
technology.
Utility Software and Programming Software
Utility software includes programs that allow you to fix or
modify
your computer in some way. Examples include anti-malware
software and programs that totally remove software you no
longer
want installed. These types of software packages were created
to
fill shortcomings in operating systems. Many times a
subsequent

release of an operating system will include these utility
functions as
part of the operating system itself.
Programming software’s purpose is to produce software. Most
of
https://commons.wikimedia.org/wiki/User:Wgsimon
Screen shot of Tableau (click to
enlarge)
these programs provide developers with an environment in
which
they can write the code, test it, and convert/compile it into the
format that can then be run on a computer. This software is
typically
identified as the Integrated Development Environment (IDE)
and is
provided free from the corporation that developed the
programming language that will be used to write the code.
Sidebar: “PowerPointed” to Death
As presentation software has
gained acceptance as the

primary method to formally
present information to a group
or class, the art of giving an
engaging presentation is
becoming rare. Many
presenters now just read the
bullet points in the
presentation and immediately bore those in attendance, who can
already read it for themselves. The real problem is not with
PowerPoint as much as it is with the person creating and
presenting.
Author and chief evangelist Guy Kawasaki has developed the
10/20/
30 rule for Powerpoint users. Just remember: 10 slides, 20
minutes,
30 point font.”
2
If you are determined to improve your PowerPoint
skills, read Presentation Zen by Garr Reynolds.
New digital presentation technologies are being developed that

go beyond Powerpoint. For example, Prezi uses a single canvas
for
the presentation, allowing presenters to place text, images, and
2. [2]
https://opentextbook.site/informationsystems2019/wp-
content/uploads/sites/3/2018/07/TABLUE.png
https://opentextbook.site/informationsystems2019/wp-
content/uploads/sites/3/2018/07/TABLUE.png
http://www.amazon.com/gp/product/0321811984
other media on the canvas, and then navigate between these
objects
as they present. Tools such as Tableau allow users to analyze
data in
depth and create engaging interactive visualizations.
Sidebar: I Own This Software, Right?
Well…
When you purchase software and install it on your computer,
are
you the owner of that software? Technically, you are not! When
you
install software, you are actually just being given a license to
use it.

When you first install a package, you are asked to agree to the
terms
of service or the license agreement. In that agreement, you will
find
that your rights to use the software are limited. For example, in
the terms of the Microsoft Office software license, you will find
the following statement: “This software is licensed, not sold.
This
agreement only gives you some rights to use the features
included
in the software edition you licensed.”
For the most part, these restrictions are what you would expect.
You cannot make illegal copies of the software and you may not
use
it to do anything illegal. However, there are other, more
unexpected
terms in these software agreements. For example, many
software
agreements ask you to agree to a limit on liability. Again, from
Microsoft: “Limitation on and exclusion of damages. You can
recover from Microsoft and its suppliers only direct damages up
to

the amount you paid for the software. You cannot recover any
other
damages, including consequential, lost profits, special, indirect
or
incidental damages.” This means if a problem with the software
causes harm to your business, you cannot hold Microsoft or the
supplier responsible for damages.
Applications for the Enterprise
As the personal computer proliferated inside organizations,
control
over the information generated by the organization began
splintering. For instance, the customer service department
creates
a customer database to keep track of calls and problem reports,
and the sales department also creates a database to keep track of
customer information. Which one should be used as the master
list of customers? Or perhaps someone in sales might create a
spreadsheet to calculate sales revenue, while someone in
finance

creates a different revenue document that meets the needs of
their
department, but calculates revenue differently. The two
spreadsheets will report different revenue totals. Which one is
correct? And who is managing all of this information?
Enterprise Resource Planning
In the 1990s
the need to bring an organization’s information back under
centralized control became more apparent. The Enterprise
Resource Planning (ERP) system (sometimes just called
enterprise
software) was developed to bring together an entire
organization
within one program. ERP software utilizes a central database
that
is implemented throughout the entire organization. Here are
some
key points about ERP.
• A software application. ERP is an application that is used by

many of an organization’s employees.
• Utilizes a central database. All users of the ERP edit and save
their information from the same data source. For example, this
means there is only one customer table in the database, there
is only one sales (revenue) table in the database, etc.
• Implemented organization-wide. ERP systems include
functionality that covers all of the essential components of a
business. An organization can purchase modules for its ERP
system that match specific needs such as order entry,
manufacturing, or planning.
ERP systems were originally marketed to large corporations.
However, as more and more large companies began installing
them,
ERP vendors began targeting mid-sized and even smaller
businesses. Some of the more well-known ERP systems include
those from SAP, Oracle, and Microsoft.
In order to effectively implement an ERP system in an
organization, the organization must be ready to make a full
commitment. All aspects of the organization are affected as old

systems are replaced by the ERP system. In general,
implementing
an ERP system can take two to three years and cost several
million
dollars.
So why implement an ERP system? If done properly, an ERP
system can bring an organization a good return on their
investment.
By consolidating information systems across the enterprise and
using the software to enforce best practices, most organizations
see an overall improvement after implementing an ERP.
Business
processes as a form of competitive advantage will be covered in
Chapter 9.
Customer Relationship Management
A Customer Relationship Management (CRM) system manages
an
organization’s customers. In today’s environment, it is

important to
develop relationships with your customers, and the use of a
well-
designed CRM can allow a business to personalize its
relationship
with each of its customers. Some ERP software systems include
CRM modules. An example of a well-known CRM package is
Salesforce.
Supply Chain Management
Supply Chain
Many organizations must deal with the complex task of
managing
their supply chains. At its simplest, a supply chain is the
linkage
between an organization’s suppliers, its manufacturing
facilities,
and the distributors of its products. Each link in the chain has a
multiplying effect on the complexity of the process. For
example,
if there are two suppliers, one manufacturing facility, and two

distributors, then the number of links to manage = 4 ( 2 x 1 x
2 ). However, if two more suppliers are added, plus another
manufacturing facility, and two more distributors, then the
number
of links to manage = 32 ( 4 x 2 x 4 ). Also, notice in the above
illustration that all arrows have two heads, indicating that
information flows in both directions. Suppliers are part of a
business’s supply chain. They provide information such as
price,
size, quantity, etc. to the business. In turn, the business
provides
information such as quantity on hand at every store to the
supplier.
The key to successful supply chain management is the
information
system.
https://commons.wikimedia.org/wiki/Category:Supply_chain#/m
edia/File:A_company%27s_supply_chain_(en).png
A Supply Chain Management (SCM) system handles the
interconnection between these links as well as the inventory of

the products in their various stages of development. As
discussed
previously much of Walmart’s success has come from its ability
to identify and control the supply chain for its products.
Walmart
invested heavily in their information system so they could
communicate with their suppliers and manage the thousands of
products they sell.
Walmart realized in the 1980s that the key to their success was
information systems. Specifically, they needed to manage their
complex supply chain with its thousands of suppliers, thousands
of retail outlets, and millions of customers. Their success came
from being able to integrate information systems to every entity
(suppliers, warehouses, retail stores) through the sharing of
sales
and inventory data. Take a moment to study the diagram
above…look for the double-headed arrow. Notice that data
flows
down the supply chain from suppliers to retail stores. But it also
flows up the supply chain, back to the suppliers so they can be

up to
date regarding production and shipping.
Mobile Applications
Just as with the personal computer, mobile devices such as
smartphones and electronic tablets also have operating systems
and
application software. These mobile devices are in many ways
just
smaller versions of personal computers. A mobile app is a
software
application designed to run specifically on a mobile device.
As shown in Chapter 2, smartphones are becoming a dominant
form of computing, with more smartphones being sold than
personal computers. A greater discussion of PC and smartphone
sales appears in Chapter 13, along with statistics regarding the
decline in tablet sales. Businesses have adjusted to this trend by
increasing their investment in the development of apps for
mobile

devices. The number of mobile apps in the Apple App Store has
increased from zero in 2008 to over 2 million in 2017.
3
Building a mobile app will will be covered in Chapter 10.
Cloud Computing
Historically, for software to run on a computer an individual
copy
of the software had to be installed on the computer. The concept
of
“cloud” computing changes this.
Cloud Computing
The “cloud” refers to applications, services, and data storage
located on the Internet. Cloud service providers rely on giant
server
farms and massive storage devices that are connected via the
Internet. Cloud computing allows users to access software and
data
storage services on the Internet.
You probably already use cloud computing in some form. For
example, if you access your e-mail via your web browser, you

are
3. [3]
using a form of cloud computing if you are using Google
Drive’s
applications. While these are free versions of cloud computing,
there is big business in providing applications and data storage
over
the web. Cloud computing is not limited to web applications. It
can
also be used for services such as audio or video streaming.
Advantages of Cloud Computing
• No software to install or upgrades to maintain.
• Available from any computer that has access to the Internet.
• Can scale to a large number of users easily.
• New applications can be up and running very quickly.
• Services can be leased for a limited time on an as-needed
basis.
• Your information is not lost if your hard disk crashes or your

laptop is lost or stolen.
• You are not limited by the available memory or disk space on
your computer.
Disadvantages of Cloud Computing
• Your information is stored on someone else’s computer.
• You must have Internet access to use it.
• You are relying on a third-party to provide these services.
Cloud computing has the ability to really impact how
organizations manage technology. For example, why is an IT
department needed to purchase, configure, and manage personal
computers and software when all that is really needed is an
Internet
connection?
Using a Private Cloud
Many organizations are understandably nervous about giving up
control of their data and some of their applications by using
cloud

computing. But they also see the value in reducing the need for
installing software and adding disk storage to local computers.
A
solution to this problem lies in the concept of a private cloud.
While
there are various models of a private cloud, the basic idea is for
the cloud service provider to section off web server space for a
specific organization. The organization has full control over
that
server space while still gaining some of the benefits of cloud
computing.
Virtualization
Virtualization is the process of using software to simulate a
computer or some other device. For example, using
virtualization
a single physical computer can perform the functions of several
virtual computers, usually referred to as Virtual Machines
(VMs).
Organizations implement virtual machines in an effort to reduce
the number of physical servers needed to provide the necessary

services to users. This reduction in the number of physical
servers
also reduces the demand for electricity to run and cool the
physical
servers. For more detail on how virtualization works, see this
informational page from VMWare.
http://www.vmware.com/virtualization/virtualization-
basics/how-virtualization-works.html
http://www.vmware.com/virtualization/virtualization-
basics/how-virtualization-works.html
Example program “Hello World”
written in Java
Software Creation
Modern software applications
are written using a
programming language such as
Java, Visual C, C++, Python, etc.
A programming language
consists of a set of commands

and syntax that can be
organized logically to execute
specific functions. Using this language a programmer writes a
program (known as source code) that can then be compiled into
machine-readable form, the ones and zeroes necessary to be
executed by the CPU. Languages such as HTML and Javascript
are
used to develop web pages.
Open-Source Software
When the personal computer was first released, computer
enthusiasts banded together to build applications and solve
problems. These computer enthusiasts were motivated to share
any
programs they built and solutions to problems they found. This
collaboration enabled them to more quickly innovate and fix
problems.
As software began to become a business, however, this idea of
sharing everything fell out of favor with many developers.
When a
program takes hundreds of hours to develop, it is

understandable
that the programmers do not want to just give it away. This led
to a
new business model of restrictive software licensing which
required
payment for software, a model that is still dominant today. This
model is sometimes referred to as closed source, as the source
code
is not made available to others.
There are many, however, who feel that software should not be
restricted. Just as with those early hobbyists in the 1970s, they
feel
that innovation and progress can be made much more rapidly if
they share what has been learned. In the 1990s, with Internet
access
connecting more people together, the open-source movement
gained steam.
Open Office Suite

Open-source software makes the source code available for
anyone to copy and use. For most people having access to the
source code of a program does little good since it is challenging
to
modify existing programming code. However, open-source
software
is also available in a compiled format that can be downloaded
and
installed. The open-source movement has led to the
development
of some of the most used software in the world such as the
Firefox
browser, the Linux operating system, and the Apache web
server.
Many businesses are wary of open-source software precisely
because the code is available for anyone to see. They feel that
this
increases the risk of an attack. Others counter that this openness
actually decreases the risk because the code is exposed to
thousands of programmers who can incorporate code changes to
quickly patch vulnerabilities.
There are thousands of open-source applications available for

download. For example, you can get the productivity suite from
Open Office. One good place to search for open-source software
is
sourceforge.net, where thousands of programs are available for
free
download.
Summary
Software gives the instructions that tell the hardware what to
do.
There are two basic categories of software: operating systems
and
applications. Operating systems interface with the computer
hardware and make system resources available. Application
software allows users to accomplish specific tasks such as word
processing, presentations, or databases. This group is also
referred
to as productivity software. An ERP system stores all data in a
centralized database that is made accessible to all programs and

departments across the organization. Cloud computing provides
access to software and databases from the Internet via a web
browser. Developers use various programming languages to
develop
software.
Study Questions
1. Develop your own definition of software being certain to
explain the key terms.
2. What are the primary functions of an operating system?
3. Which of the following are operating systems and which are
applications: Microsoft Excel, Google Chrome, iTunes,
Windows, Android, Angry Birds.
4. What is your favorite software application? What tasks does
it
help you accomplish?
http://sourceforge.net/
5. How would you categorize the software that runs on mobile
devices? Break down these apps into at least three basic

categories and give an example of each.
6. What does an ERP system do?
7. What is open-source software? How does it differ from
closed-
source software? Give an example of each.
8. What does a software license grant to the purchaser of the
software?
Exercises
1. Find a case study online about the implementation of an ERP
system. Was it successful? How long did it take? Does the case
study tell you how much money the organization spent?
2. If you were running a small business with limited funds for
information technology, would you consider using cloud
computing? Find some web-based resources that support your
decision.
3. Go to sourceforge.net and review their most downloaded
software applications. Report on the variety of applications you
find. Then pick one that interests you and report back on what

it does, the kind of technical support offered, and the user
reviews.
4. Review this article on the security risks of open-source
software. Write a short analysis giving your opinion on the
different risks discussed.
5. List three examples of programming languages? What
features
in each language makes it useful to developers?
http://sourceforge.net/
http://www.zdnet.com/six-open-source-security-myths-
debunked-and-eight-real-challenges-to-consider-7000014225
Lab
1. Download Apache Open Office and create a document. Note:
If
your computer does not have Java Runtime Environment (JRE)
32-bit (x86) installed, you will need to download it first from
this site.Open Office runs only in 32-bit (x86) mode. Here is a
link to the Getting Started documentation for Open Office.
How does it compare to Microsoft Office? Does the fact that

you got it for free make it feel less valuable?
1. Statista. (2017). Microsoft – Statistics & Facts. Retrieved
from
https://www.statista.com/topics/823/microsoft/
2. Kawasaki, G. (n.d.). The 10/20/30 Rules for PowerPoint.
Retrieved from https://guykawasaki.com/the_102030_rule/.↵
3. Statista. (2018). Number of apps in Apple App Store July
2008 to
January 2017. Retrieved from https:https://www.statista.com/
statistics/263795/number-of-available-apps-in-the-apple-
app-store/.↵
http://www.openoffice.org/download
http://www.oracle.com/technetwork/java/javase/downloads/jre8-
downloads-2133155.html
http://wiki.openoffice.org/w/images/3/3c/0108GS33-
GettingStartedWithBase.pdf
Chapter 4: Data and
Databases
Learning Objectives
Upon successful completion of this chapter, you

will be able to:
• Describe the differences between data,
information, and knowledge;
• Describe why database technology must be
used for data resource management;
• Define the term database and identify the
steps to creating one;
• Describe the role of a database
management system;
• Describe the characteristics of a data
warehouse; and
• Define data mining and describe its role in
an organization.
Chapter 4: Data and Databases | 75
Introduction
You have already been introduced to the first two components
of

information systems: hardware and software. However, those
two
components by themselves do not make a computer useful.
Imagine
if you turned on a computer, started the word processor, but
could
not save a document. Imagine if you opened a music player but
there was no music to play. Imagine opening a web browser but
there were no web pages. Without data, hardware and software
are not very useful! Data is the third component of an
information
system.
Data, Information, and Knowledge
There have been many definitions and theories about data,
information, and knowledge. The three terms are often used
interchangeably, although they are distinct in nature. We define
and illustrate the three terms from the perspective of
information
systems.

Data are the raw facts, and may
be devoid of context or intent. For example, a sales order of
computers is a piece of data. Data can be quantitative or
qualitative.
Quantitative data is numeric, the result of a measurement,
count,
or some other mathematical calculation. Qualitative data is
descriptive. “Ruby Red,” the color of a 2013 Ford Focus, is an
example
of qualitative data. A number can be qualitative too: if I tell you
my
favorite number is 5, that is qualitative data because it is
descriptive,
not the result of a measurement or mathematical calculation.
Information is processed data that possess context, relevance,
and
purpose. For example, monthly sales calculated from the
collected
daily sales data for the past year are information. Information
typically involves the manipulation of raw data to obtain an
indication of magnitude, trends, in patterns in the data for a

purpose.
Knowledge in a certain area is human beliefs or perceptions
about
relationships among facts or concepts relevant to that area. For
example, the conceived relationship between the quality of
goods
and the sales is knowledge. Knowledge can be viewed as
information that facilitates action.
Once we have put our data into context, aggregated and
analyzed
it, we can use it to make decisions for our organization. We can
say that this consumption of information produces knowledge.
This
knowledge can be used to make decisions, set policies, and even
spark innovation.
Explicit knowledge typically refers to knowledge that can be
expressed into words or numbers. In contrast, tacit knowledge
includes insights and intuitions, and is difficult to transfer to

another person by means of simple communications.
Evidently, when information or explicit knowledge is captured
and stored in computer, it would become data if the context or
intent is devoid.
The final step up the information ladder is the step from
knowledge (knowing a lot about a topic) to wisdom. We can say
that someone has wisdom when they can combine their
knowledge
and experience to produce a deeper understanding of a topic. It
often takes many years to develop wisdom on a particular topic,
and
requires patience.
Big Data
Almost all software programs require data to do anything
useful.
For example, if you are editing a document in a word processor
such as Microsoft Word, the document you are working on is
the
data. The word-processing software can manipulate the data:
create

a new document, duplicate a document, or modify a document.
Some other examples of data are: an MP3 music file, a video
file, a
spreadsheet, a web page, a social media post, and an e-book.
Recently, big data has been capturing the attention of all types
of
organizations. The term refers to such massively large data sets
that
conventional data processing technologies do not have
sufficient
power to analyze them. For example, Walmart must process
millions
customer transactions every hour across the world. Storing and
analyzing that much data is beyond the power of traditional data
management tools. Understanding and developing the best tools
and techniques to manage and analyze these large data sets are a
problem that governments and businesses alike are trying to
solve.
Databases

The goal of many information systems is to transform data into
information in order to generate knowledge that can be used for
decision making. In order to do this, the system must be able to
take
data, allow the user to put the data into context, and provide
tools
for aggregation and analysis. A database is designed for just
such a
purpose.
Why Databases?
Data is a valuable resource in the organization. However, many
people do not know much about database technology, but use
non-
database tools, such as Excel spreadsheet or Word document, to
store and manipulate business data, or use poorly designed
databases for business processes. As a result, the data are
redundant, inconsistent, inaccurate, and corrupted. For a small
data set, the use of non-database tools such as spreadsheet may
not cause serious problem. However, for a large organization,
corrupted data could lead to serious errors and destructive

consequences. The common defects in data resources
management
are explained as follows.
(1) No control of redundant data
People often keep redundant data for convenience. Redundant
data could make the data set inconsistent. We use an
illustrative
example to explain why redundant data are harmful. Suppose
the
registrar’s office has two separate files that store student data:
one
is the registered student roster which records all students who
have
registered and paid the tuition, and the other is student grade
roster
which records all students who have received grades.
As you can see from the two spreadsheets, this data
management
system has problems. The fact that “Student 4567 is Mary
Brown,

and her major is Finance” is stored more than once. Such
occurrences are called data redundancy. Redundant data often
make data access convenient, but can be harmful. For example,
if
Mary Brown changes her name or her major, then all her names
and
major stored in the system must be changed altogether. For
small
data systems, such a problem looks trivial. However, when the
data
system is huge, making changes to all redundant data is difficult
if
not impossible. As a result of data redundancy, the entire data
set
can be corrupted.
(2) Violation of data integrity
Data integrity means consistency among the stored data. We
use the above illustrative example to explain the concept of data
integrity and how data integrity can be violated if the data
system is
flawed. You can find that Alex Wilson received a grade in
MKT211;

however, you can’t find Alex Wilson in the student roster. That
is,
the two rosters are not consistent. Suppose we have a data
integrity
control to enforce the rules, say, “no student can receive a grade
unless she/he has registered and paid tuition”, then such a
violation
of data integrity can never happen.
(3) Relying on human memory to store and to search needed
data
The third common mistake in data resource management is the
over use of human memory for data search. A human can
remember
what data are stored and where the data are stored, but can also
make mistakes. If a piece of data is stored in an un-remembered
place, it has actually been lost. As a result of relying on human
memory to store and to search needed data, the entire data set
eventually becomes disorganized.
To avoid the above common flaws in data resource management,

database technology must be applied. A database is an
organized
collection of related data. It is an organized collection, because
in
a database, all data is described and associated with other data.
For the purposes of this text, we will only consider
computerized
databases.
Though not good for replacing databases, spreadsheets can be
ideal tools for analyzing the data stored in a database. A
spreadsheet
package can be connected to a specific table or query in a
database
and used to create charts or perform analysis on that data.
Data Models and Relational Databases
Databases can be organized in many different ways by using
different models. The data model of a database is the logical
structure of data items and their relationships. There have been
several data models. Since the 1980s, the relational data model
has been popularized. Currently, relational database systems
are

commonly used in business organizations with few exceptions.
A
relational data model is easy to understand and use.
In a relational database, data is organized into tables (or
relations).
Each table has a set of fields which define the structure of the
data
stored in the table. A record is one instance of a set of fields in
a
table. To visualize this, think of the records as the rows (or
tuple) of
the table and the fields as the columns of the table.
In the example below, we have a table of student data, with
each
row representing a student record , and each column
representing
one filed of the student record. A special filed or a
combination
of fields that determines the unique record is called primary key
(or key). A key is usually the unique identification number of

the
records.
Rows and columns in a table
Designing a Database
Suppose a university wants to create a School Database to track
data. After interviewing several people, the design team learns
that
the goal of implementing the system is to give better insight
into
students’ performance and academic resources. From this, the
team decides that the system must keep track of the students,
their
grades, courses, and classrooms. Using this information, the
design
team determines that the following tables need to be created:
• STUDENT: student name, major, and e-mail.
• COURSE: course title, enrollment capacity.
• GRADE: this table will correlate STUDENT with COURSE,
allowing us to have any given student to enroll multiple
courses and to receive a grade for each course.

• CLASSROOM: classroom location, classroom type, and
classroom capacity
Now that the design team has determined which tables to create,
they need to define the specific data items that each table will
hold.
This requires identifying the fields that will be in each table.
For
example, course title would be one of the fields in the COURSE
table. Finally, since this will be a relational database, every
table
should have a field in common with at least one other table (in
other
words, they should have relationships with each other).
A primary key must be selected for each table in a relational
database. This key is a unique identifier for each record in the
table.
For example, in the STUDENT table, it might be possible to use
the
student name as a way to identify a student. However, it is

more
than likely that some students share the same name. A student’s
e-mail address might be a good choice for a primary key, since
e-
mail addresses are unique. However, a primary key cannot
change,
so this would mean that if students changed their e-mail address
we
would have to remove them from the database and then re-insert
them – not an attractive proposition. Our solution is to use
student
ID as the primary key of the STUDENT table. We will also do
this
for the COURSE table and the CLASSROOM table. This
solution is
quite common and is the reason you have so many IDs! The
primary
key of table can be just one field, but can also be a combination
of
two or more fields. For example, the combination of StudentID
and
CourseID the GRADE table can be the primary key of the
GRADE

table, which means that a grade is received by a particular
student
for a specific course.
The next step of design of database is to identify and make the
relationships between the tables so that you can pull the data
together in meaningful ways. A relationship between two tables
is
implemented by using a foreign key. A foreign key is a field in
one
table that connects to the primary key data in the original table.
For
example, ClassroomID in the COURSE table is the foreign key
that
connects to the primary key ClassroomID in the CLASSROOM
table.
With this design, not only do we have a way to organize all of
the
data we need and have successfully related all the table together
to
Tables of the
student

database
meet the requirements, but have also prevented invalid data
from
being entered into the database. You can see the final database
design in the figure below:
Normalization
When designing a database, one important concept to
understand
is normalization. In simple terms, to normalize a database
means to
design it in a way that: 1) reduces data redundancy; and 2)
ensure
data integrity.
In the School Database design, the design team worked to
achieve
these objectives. For example, to track grades, a simple (and
wrong)
solution might have been to create a Student field in the
COURSE
table and then just list the names of all of the students there.
However, this design would mean that if a student takes two or

more courses, then his or her data would have to be entered
twice
or more times. This means the data are redundant. Instead, the
designers solved this problem by introducing the GRADE table.
In this design, when a student registers into the school system
before taking a course, we first must add the student to the
STUDENT table, where their ID, name, major, and e-mail
address
are entered. Now we will add a new entry to denote that the
student takes a specific course. This is accomplished by adding
a
record with the StudentD and the CourseID in the GRADE
table.
If this student takes a second course, we do not have to
duplicate
the entry of the student’s name, major, and e-mail; instead, we
only need to make another entry in the GRADE table of the
second
course’s ID and the student’s ID.

The design of the School database also makes it simple to
change
the design without major modifications to the existing structure.
For example, if the design team were asked to add functionality
to the system to track instructors who teach the courses, we
could
easily accomplish this by adding a PROFESSOR table (similar
to the
STUDENT table) and then adding a new field to the COURSE
table
to hold the professors’ ID.
Data Types
When defining the fields in a database table, we must give each
field
a data type. For example, the field StudentName is text string,
while
EnrollmentCapacity is number. Most modern databases allow
for
several different data types to be stored. Some of the more
common
data types are listed here:
• Text: for storing non-numeric data that is brief, generally

under 256 characters. The database designer can identify the
maximum length of the text.
• Number: for storing numbers. There are usually a few
different
number types that can be selected, depending on how large
the largest number will be.
• Boolean: a data type with only two possible values, such as 0
or
1, “true” or “false”, “yes” or “no”.
• Date/Time: a special form of the number data type that can be
interpreted as a number or a time.
• Currency: a special form of the number data type that formats
all values with a currency indicator and two decimal places.
• Paragraph Text: this data type allows for text longer than 256
characters.
• Object: this data type allows for the storage of data that
cannot
Open Office Database Management

System
be entered via keyboard, such as an image or a music file.
There are two important reasons that we must properly define
the data type of a field. First, a data type tells the database what
functions can be performed with the data. For example, if we
wish
to perform mathematical functions with one of the fields, we
must
be sure to tell the database that the field is a number data type.
For
example, we can subtract the course capacity from the
classroom
capacity to find out the number of extra seats available.
The second important reason to define data type is so that the
proper amount of storage space is allocated for our data. For
example, if the StudentName field is defined as a Text(50) data
type,
this means 50 characters are allocated for each name we want to
store. If a student’s name is longer than 50 characters, the
database
will truncate it.

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