Digital Organization

Digital Firm

use of digital technology

• SMACIT (social media, mobile, analytics, cloud, IoT)

Privacy of digital resources

Internet of Things (IoT)

objects that were never really meant to be connected to the internet that now are and generate data

• EX. Apple Watch, Washing Machines

Enterprise Systems

A set of IS tools that many organizations use to enable information flow within and between processes (ways that enterprises transmit information internally)

Process View

each department is a silo of its own, that does its own work then sends completed work to the next step 

• Need for a “big picture”. Multiple persons, multiple pieces of data, multiple users of a specific data, multiple places

Enterprise Resource Planning (ERP)

software packages most frequently discussed type of ES

• ERP gathers multiple pieces of data used by multiple users, in multiple departments and compute it through modular applications

Business Processes

repeatable set of activities to run a business

IT enhances business processes by…

increasing efficiency of existing processes + enabling entirely new processes

7 Types of Information Systems

• Transaction Processing Systems (TPS)

• Business Intelligence Systems (BIS)

• Management Information Systems (MIS)

• Decision Support Systems (DSS)

• Executive Support Systems (ESS)

• Enterprise Systems (ERP/EAI)

• Coordination and Collaboration Systems

Transaction Processing Systems (TPS)

#1 - monitoring operations

• A computerized system that performs and records the daily routine transactions necessary to conduct business

  • EX. sales order entry, payroll, shipping

Business Intelligence Systems (BIS)

#2 - data and software tools for organizing, analyzing, and providing access to data improving decision making for all levels of management

• Management information systems, decision support systems, executive support systems

 Management Information Systems (MIS)

#3

• Support answering routine questions with predefined procedure for answering them

• Typically have little analytic capability, most suitable for routine reports

• Serve middle management with reports on firm’s current performance

• Information is usually internally generated from TPS

Decision Support Systems (DSS)

#4

• Tells you specifically what to do

• Serves middle management

• Support non-routine decision making

  • EX. The transit app, tells you when the bus is coming and WHEN TO LEAVE

  • EX. applying a discount to a purchase

• May use external information as well as TPS/MIS data

• Model driven DSS – a voyage-estimating system

• Data driven DSS – a system to analyze customers’ revenue potential

Executive Support Systems (ESS)

#5

• Serve senior management

• Support non-routine decisions (ex. Requiring judgement, evaluation, and insight)

• Incorporate data about external events (ex. New tax laws or competitors) as well as summarized information from internal MIS and MSS

  • EX. digital dashboard with real-time view of the firm’s KPI (ex. financial performance – working capital, accounts receivable, accounts payable, cash flow, and inventory)

Enterprise Systems (EAI/ERP)

#6

• Connect multiple stakeholders to the enterprise, provides centralized data repository to share to departments

• System Integration - collecting data from different processes and storing data in a central data repository (establishing one source of truth)

  • Information Sharing Enables: coordination of daily activities, efficient response to customer orders (production, inventory), help managers make decisions about daily operations and longer-term planning

Enterprise Systems: Enterprise Application Integration (EAI)

• integration of multiple applications for data compartmentalization

  • EX. neomascol, courses, neomaagora

• 4 Major Enterprise Applications:

  • Enterprise Resource Planning (ERP - focuses on “internal” operations)

  • Supply Chain Management systems (SCM)

  • Customer Relationship Management systems (CRM)

  • Knowledge Management Systems (KMS)

• Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization

Enterprise Systems: Enterprise Resources Planning (ERP)

• systems that companies use to keep track of everything that goes on in the company

• Four Dimensions

  • Integration, Transversality, Modular Approach, Configuration & Customization

• ERP systems promote organizations with a common language and a common pool of data, the sharing of business information stored on a common database

• SCMS & CRMS

Integration

• ERPs designed to seamlessly integrate information flows throughout the company

Transversality

• Same information potentially shared across the whole organization and no longer only by a department or a function

Modular Approach

• ERP applications exist by industry (automotive, retail, chemicals, etc.)

Supply Chain Management Systems (SCMS)

• Manage firm’s relationships with suppliers (interorganizational system)

• Sharing information about: orders, production, inventory levels, delivery of products and services

• Goal: right about of products to destination with least amount of time and lowest cost

Customer Relationship Management Systems (CRMS)

• Provide information to coordinate all of the business processes that deal with customers

• Goal: helping firms identify, attract, and retain most profitable customers

• Examples:

  • Sales: telephone sales, web sales, retail store sales, field sales

  • Marketing: campaign data, content, data analysis

  • Service: call center data, web self-service data, wireless data

Knowledge Management Systems (KMS)

• Support capturing and sharing knowledge and expertise (how to create, produce, deliver products and services)

• Collect internal knowledge and experience within firm and make it available to employees

• Knowledge management can be supported by collaboration tools

EX. a shared Wiki

Operational CRM

Customer-facing applications such as sales force automation, call center and customer service support, and marketing automation

Analytical CRM

Based on data warehouses populated by operational CRM systems and customer touch points

Systems for Collaboration and Teamwork

#7

• EX. e-mail and instant messaging, wikis, virtual worlds

• Collaboration and social business platforms

  • Virtual meeting systems (telepresence), Microsoft SharePoint, Enterprise social networking tools

• Successful collaboration requires an appropriate organizational structure and culture, along with appropriate collaboration technology

Digital Firm

uses Information and Communication Technologies (ICTs) as a primary source of competitive advantage in its internal and external operations

• core business processes are accomplished through digital networks spanning the entire organization

Example of a Digital Firm

Working in a restaurant taking paper orders. Then switching to using a tablet (not yet digitalized). Using the data taken from the orders on the tablet to predict demands (digital firm). 

3 Digital Transformation Capabilities

1. Ubiquitous Data

2. Unlimited Connectivity

3. Massive Computing Power

Investing in IT is not intrinsically a benefit

Generally a positive relationship, but volatile.

• EX. Buying a good racket doesn’t matter if you can’t play tennis

Complementary Assets (…to acquisition of technology)

• Social Assets - infrastructure at a societal level

  • EX. what good is 6G if no one has the ability to implement it

• Management Assets - incentives for management innovation

• Organizational Assets - efficient business processes and appropriate business models

Firms invest in IS to achieve 6 Strategic Business Objectives

1. Operational excellence - improvement of efficiency to attain higher profit

2. New products, services, and business models

3. Customer and supplier intimacy

4. Improved decision making

5. Competitive advantage

6. Survival - mimicking the way other companies have succeeded in order to stay relevant.

Network Effect

technology is only as useful as the network it uses

• EX. Uber, you wouldn't use it if there weren’t enough drivers

Information System

contains information about an organization and its environment

• 3 basic activities: Input, Processing, Output

• Supports decision making, coordination, and control

• Consists of: Technology, Management, Organization

Feedback

output returned to appropriate people or activities in the organization to evaluate and refine the input

Basic to Complex Information

Data → Information → Business Intelligence → Knowledge

Data

Raw facts that describe the characteristics of an event or object

Information

data converted into a meaningful and useful context

Business Intelligence

information collected from multiple sources that analyzes patterns and relationships for decision making

Knowledge

the skills, expertise, experience, coupled with information and intelligence that create a person’s intellectual prowess

Information Technology (IT) is NOT Information Systems (IS)

technology vs. a social system that interacts with technology

Dimensions of an Information System

• Organizational Dimension - organizational structure within a company

• Management Dimension - strategic decision making

• Technology Dimension - the technical aspect of data, network, software, and hardware

Interdependence between organizations and information systems

Changes in strategy, rules, and business processes increasingly require changes in hardware and software, databases, and telecommunications

Data Visualization

the representation of information in an efficient graphic form to support decision making

first example of modern data visualization is credited to…

William Playfair (1759-1823)

“Causes of Mortality in the Army of the East”

Florence Nightingale (1820-1910)

Effective Dataviz: Literacy

• using agreed upon rules within a specific interpretive community

• The efficacy of a design is a function of the audience’s training and shared cultural codes, rather than universal biologically optimized guidelines

  • EX. Reading an x-ray, doctors are able to cause they know what they’re looking for and they belong to the group that decodes

Effective Dataviz: Intuitive-By-Design

can a person take a glance and understand the premise of the information?

Pie charts are always…

bad

Chernoff’s Faces (1973)

Meant to facilitate memorization and clustering of multivariate data

• idea of “faces are easy to recognize”

In realy, too complex to understand

Bad Dataviz: The Lie Factor

visual distortion that misleads the reader, Edward Tufte

• graphic showing a very large difference in area

Bad Dataviz: The Zoom Trap

zooming in on the y-axis, not starting at zero

Bad Dataviz: Data-Ink Ratio

Too much extra information cluttering the graphic

10 Perceptual Tasks

when decoding information from a graph, a person will use at least one of these thought processes

From Best (1) to Worst (10)

1. Position

2. Non-Aligned Scales

3. Length

4. Direction

5. Angle

6. Area

7. Curve

8. Volume

9. Shading

10. Color Saturation

Position

#1 - using spatial location along a common baseline to represent data

Non-Aligned Scales

#2 - using position to compare but baselines differ

Length

#3 - can be hard to perceive an accurate measurement

Direction

#4 - can be difficult to determine

Angle

#5 - can be hard to estimate value

• EX. Pie charts

Area

#6 - who knows for sure bruh

Curve

#7 - like what

Volume

#8 - who is doing the math like really

Shading

#9 - who cares

Color Saturation

#10 - I didn’t even think it was that bad

Continuous Variable

undetermined set of intervals/categories

• EX. time, age, sales, interest rates

Discrete variable

determined set of intervals/categories

• whole units

Why are systems vulnerable?

Technical Factors: hardware, software, network, data

Social Factors: human errors

Internal Threat: Inside Knowledge

EX. former developer knows about a “backdoor”

Internal Threat: Sloppy Security Procedures

EX. an office uses a shared “universal” login for all desk computers

Internal Threat: Social Engineering

EX. a worker receives a “spoofed” email from their boss asking them to urgently wire funds to a new vendor

Internal Threat: Internal Origin of Threats

EX. an angry IT admin deletes company files after they leave the firm

Threats to… Software

programming errors, installation errors, unauthorized changes, malware (malicious software)

Malware: Virus

a rogue software program that attaches itself to other software programs or data files in order to be executed

• require a host file and human action to execute

Malware: Trojan Horses

software that appears benign but does something other than expected

• mimics software but does not self-replicate

Malware: SQL Injection Attacks

hackers submit data to Web forms that exploit the sites unprotected software and sens rogue SQL queries to database

• Prompt Injection → EX. teachers including invisible white text in an assignment to catch students using AI

Malware: Spyware

small programs that install themselves on computers to monitor user web surfing activity and serve up advertising

• focuses on surveillance and data collection

Malware: Key Loggers

record every keystroke on a computer to steal serial numbers, passwords, launch internet attacks

• used for credential theft by recording physical inputs from the keyboard

• EX. on public use computers

Malware: Worms

independent computer programs that copy themselves from one computer to another over a network, they operate on their own

• don’t need a host file or human action

Threats to… Hardware

Breakdowns, configuration errors, damage from improper use or crims, loss and theft of portable devices, disasters

Data Encryption

transforming data into cypher text

• methods: Secure Socket Layers (SSL), Secure Hypertext Transfer Protocol (S-HTTP)

Network Attacks: Denial Of Service (DOS) Attack

malicious attempt to disrupt the normal traffic of a targeted server, service, or network by overwhelming the target or its surrounding infrastructure with a flood of internet traffic

Network Attacks: Spoofing

redirecting web link to another address from the intended one, with the new site masquerading as the intended destination

• EX. using a fake email address

Network Attacks: Sniffer

eavesdropping program that monitors information traveling over the network

• goal: stealing information

Network Attacks: Identify Theft

impersonation of someone else to steal personal information

Network Attacks: Phishing

setting up fake websites or email messages to ask for confidential personal data

• EX. phishing emails

Network Attacks: Evil Twins

wireless networks that pretend to offer trustworthy Wi-Fi connections

Digital Certificates

• help establish the identity of people or electronic assets

• protect online transactions by providing secure, encrypted, online communication

  • EX. https

General Data Protection Regulation (GDPR)

mandates that companies notify relevant authorities about personal data breach within 72 hours

Information Systems Controls: General Controls

• Govern, design, and use of computer programs through the organization (typically the IT department is responsible)

• Includes: software, hardware, computer operations, data security, implementation, administration control

Information Systems Controls: Application Controls

• Specific controls unique to an application (typically the business unit is responsible)

• Includes: input, processing, output

Tools and Technologies to Secure IS

• Intrusion detection systems - examines events as they are happening to discover attacks in progress

• Antivirus and antispyware software - checks computers for presence of malware and can often eliminate it as well

• Encryption

• Digital certificate

• Security in the cloud - responsibility for security resides with the company owning the data

  • Service level agreements (SLAs)

1st Era: File System Approach to Data Management / Hierarchical Model (1960s)

• 0s and 1s

• Poor security

• Any change in software program may require changes in data accessed by those programs

• Presence of duplicate data in multiple data files

• Data inconsistency and redundancy

• Lack of flexibility and data sharing

2nd Era: The Database Approach to Data Management / Relational Model (1970s) 

• Introduction to shared data banks

• A single human resources database provides many different views of data, depending on the information requirements of the user

• A relational database organizes data in the form of two-dimensional tables (columns, rows)

Database Management: Entity-Relationship Diagram

Database Management Systems: Data definition capability

specifies the structure of database content, used to create tables and define characteristics of fields

Database Management Systems: Data Dictionary

• automated or manual file storing definitions of data elements and their characteristics

Database Management Systems: Data manipulation language

• used to add, change, delete, retrieve data from database EX. SQL

3rd Era: Data Warehousing (1980s)

• Data Warehouses 

  • Stores current and historical data from many core operational transaction systems, Consolidates and standardizes information for use across enterprise, but data cannot be altered

• Data Marts

  • Subset of data warehouses, Summarized or focused portion of data for use by specific population of users

You want variables that aren’t derived from other variables

• EX. You don’t want both Years_of_Service and Date_Hired because Years_of_Service can be calculated from Date_Hired

4th Era: Multidimensional Model (1990s) and Business Intelligence Tools

Data/Text/Web Mining - finding patterns in the data for Multi-Dimensional Online Analytical Processing

Multi-Dimensional Online Analytical Processing (OLAP) - where a unit of data can be characterised as multiple things to easily find it

5th Era: Data Lakes (2010s)

Big data, introduction of the cloud

6th Era: Semantic Models (2020+)

AI