Information Technology AB1401

The Digital World -

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Why is IT such a powerful force?  Pervasive, encourages innovation  Improve business processes – allows businesses to use new tools to analyse data  Cash study: Synergy Sports Technology o Problem: lack of hard data usable in decision-making processes; costly and competitive market o Solution: developed new system – collects and organises data using video clips of games Rise of digital firm  Significant business relationships are digitally enabled and mediated  Core business processes are accomplished through digital networks  Key corporate assets are managed digitally  Greater flexibility in organisation and management – time and space shifting IT comprises of  Large and powerful servers / PCs, desktops, laptops / Networks, databases  Others o Green computing o New tools: social media, peer-to-peer, blogging, web 2.0 IT-business strategic fit  Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals  Business firms invest heavily in info systems to achieve 6 strategic business objectives o Operational excellence  Improvement in efficiency to attain higher profitability  Info systems, technology an important tool in achieving greater efficiency and productivity  Eg. Wal-Mart’s RetailLink system  links suppliers to stores for superior replenishment system o New products, services, business models  Business model: describes how company produces, delivers and sells product or service to create wealth  E.g. Apple’s iPod, iTunes, iPhone; Netflix’s Internet-based DVD rentals o Customer and supplier intimacy  Customer service improves  more returning customers  increase revenue and profit  Intimacy with suppliers allows them to provide vital inputs that lower costs. E.g. J.C.Penney’s info system links sales records to contract manufacturer o Improved decision making  Lack of accurate information – managers needs to use forecasts/guesses/luck, leading to:  Overproduction, underproduction  Misallocation of resources  Poor response time  Poor outcomes increase costs  lose customers  E.g. Verizon’s web-based digital dashboard provides managers with real-time data on customer complaints, network performance, line outages, etc o Competitive advantage  Deliver better performance  Charge less for superior products  Respond to customers and suppliers in real time. E.g. Toyota Production System creates a considerable advantage over competitors o Survival  Industry-level changes. E.g. Citibank’s introduction of ATMs  Governmental regulations requiring record keeping. E.g. Toxic Substances Control Act, Sarbanes-Oxley Act

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IT Infrastructure – Hardware, Software -

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Definition of IT infrastructure  Set of physical devices and software required to operate the entire enterprise  But it is also a set of firm-wide services budgeted by management, comprising both human and technical capabilities, including: o Computing platforms providing computing services o Telecommunications services o data management services o application software services o physical facilities management services o IT management, standards, education, R&D services 7 components  Computer hardware platforms  Operating system platforms  Enterprise software applications  Data management and storage  Networking/telecommunications platforms  Internet platforms  Consulting system integration services Eras in IT infrastructure evolution  Mainframe and minicomputer: 1959-present o 1958: IBM introduced first mainframe – support thousands of online remote terminals o 1965: less expensive Digital Equipment Corporation’s minicomputers introduced  decentralised computing  Personal computer era: 1981-present o 1981: IBM introduced PC o 1980s-1990s: proliferation – growth of personal software  Client/server era: 1983-present o Desktop clients networked to servers, with processing work split between clients and servers o Network two- or multi-tiered [client  internet  web server  application server  sales / production / accounting / HR  data] o Various types of servers – network, application, Web  Enterprise internet computing era: 1992-present o Move toward integrating disparate networks and applications using internet standards and enterprise applications  Cloud computing: 2000-present o A model of computing where firms and individuals obtain computing power and software applications over the internet o Fastest growing form of computing Technology drivers  Moore’s Law o Variants  Number of transistors on a chip doubles every 18 months. Nanotechnology: may shrink size of transistors to width of several atoms, reaching the sizes of viruses, the smallest life form  Computer power (i.e. amount of work that can be done) doubles every 18 months  Price of computing falls by half every 18 months o Contrary factors: heat dissipation needs, power consumption concerns  Law of mass digital storage o The world is producing an increasing amount of digital information requiring storage. The amount of the digital information roughly doubles annually o Cost of storing information is decreasing at an even quicker rate: exponential rate of 100% annually

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Metcalfe’s Law o Value of power of a network grows exponentially as a function of the number of network members o As network members increase, more people want to use it (demand increases). E.g. social networks Declining communication costs and the internet  An estimated 1.5 billion people worldwide have internet access  As communication costs fall toward a very small number and approach 0, utilisation of communication and computing facilities explodes Standards and network effects  Specifications that establish the compatibility of products and the ability to communicate in a network  Unleash powerful economies of scale, prices decline, as manufacturers focus on developing innovative products everyone can use based on a single standard – increase efficiency Types of computers  PDA, handheld computers, tablet PC  Nettop, netbook  Laptop/notebook computer  Desktop computer  Workstations  Minicomputers/mainframes  Supercomputers Hardware platforms  Components of a computer o Input devices e.g. camera, keypad, mic, screen o Processing unit CPU and memory (sit in their sockets on the motherboard) o Storage devices fixed or removable; magnetic or optical o Output devices e.g. screen, speaker o Communications devices wired or wireless  Computer performance o CPU clock speed in GHz o RAM size, speed o Bus width width, speed  Data are stored in Speed/Cost o Primary memory  Level 1 cache memory (on chip) 1-10 nanoseconds  Level 2, level 3 cache memory (on chip/motherboard) 10-50 nanoseconds  Random access memory (RAM) 50-500 nanoseconds o Secondary memory  Hard disk 10 milliseconds  Other storage devices (CD, floppies, thumbdrive) 100 milliseconds - 1 second  Other computers (over the network) many seconds  Implications of the model o L1, L2, L3 caches help a lot o Get more RAM – disk access (“swapping” is a disaster for performance) o If data resides on slower media (e.g. CD, floppy, thumbdrive), copy it to faster media (e.g. hard drive) before opening/working on it.  Multicore processors o Dual-core, quad-core laptops already in market o Future: 8-core, 16-core o Benefits  Reduce power requirements and hardware sprawl  save cost  Few systems to maintain  save cost

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Performance and productivity beyond capabilities of single-core processors Able to handle the exponential growth of digital data and globalisation of the internet Able to meet demands of sophisticated software applications under development Run applications more efficiently than single-core processors – multitasking Able to increase performance in areas, eg data mining, mathematical analysis, web surfing

Software  5 major themes in software platform evolution o Linux and open source software o Java and Ajax o Web services and service-oriented architecture o Software mashups and Web 2.0 applications o Software outsourcing  Open source vs proprietary software o Proprietary software  Software with restrictions on copying and modifying places on it by the creator/distributor  Restrictions enforced by  Legal means – software licensing, copyright protection, patent protection  Technical means - releasing only machine-readable programs to users and withholding human-readable source code  Sometimes both  E.g. Windows, MS Office, Lotus SmartSuite, Corel WordPerfect Office o Open source software  Produced by a community of several hundred thousand programmers around the world  Free  Can be modified by users  Works derived from the original code must also be free – software can be redistributed by user without additional licensing  By definition not restricted to any specific OS or hardware technology – but most are based on Linux or Unix OS  OpenSource.org  Open source movement has been evolving for more than 30 years – demonstrates ability to produce commercially acceptable, high-quality software  Based on the following premise  Superior to commercially produced proprietary software  Thousands of programmers around the world working or no pay can read, perfect, distribute, and modify the source code much faster, and with more reliable results, than small teams of programmers working for a single software company (wisdom of the crowds)  Currently thousands of programs available from hundreds of websites  Popular tools  Linux OS  Most well-known open source OS  Unix-like  Downloadable FOC, or purchased for a small fee with additional tools  Reliable, powerful, compactly designed  Capable of running on many different hardware platforms, including servers, handheld computers, consumer electronics  Has become a robust low-cost alternative to Unix and Windows OS  Apache HTTP web server  Mozilla Firefox web browser  OpenOffice desktop productivity suite – inexpensive and legal alternative to MS Office

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Software for the web o Java  Created in 1992 at Sun Microsystems  Object-oriented programming language – can handle text, data, graphics, sounds, video  OS-, processor-independent  Leading interactive programming environment for the web – applets, e-commerce apps  Nearly all web browsers come with a Java platform built-in  Has migrated to cellular phones, smartphones, automobiles, music players, game machines, set-top cable TV systems Mashups o Building blocks of new software apps and services o In the past, software such as MS Word or Adobe Illustrator came in a box and was designed to operate on a single machine o Now  Software is downloadable from the internet  Composed of interchangeable components that integrate freely with other apps  Individual users and entire companies mix and match these components to create their own customised apps, called mashups - app produced is ‘greater than’ the sum of its parts  Based on cloud computing model  One area of great innovation  Mashup of mapping and satellite image software (Google Maps) with local content. E.g. ChicagoCrime.org, personalised Facebook profile Widgets o Small programs that can be added to webpages or placed on the desktop to add functionality o Web widget  Runs inside webpage or blog  E.g. Flixter widget on Facebook profiles – film ratings, reviews, etc o Desktop widget  Integrate content from an external source into the user’s desktop to provide services  Calculator, dictionary, weather conditions, etc  E.g. Apple Dashboard, MS Windows Vista Sidebar, Google desktop gadgets o Have become so powerful and useful that Facebook and Google launched programmes to attract developers of widgets for their websites  E.g. provide storefront windows for advertising and selling products and services  Random House Inc: has widgets that enable visitors to its website to click through to purchase new books from its online store  Amazon.com & Wal-Mart: have toolbar widgets that enable surfers to search their web stores while staying on their social network or personal page Killer app o Application software: computer program designed to help the user perform a particular task o Computer program that is so necessary or desirable that it proves the core value of some larger technology, such as computer hardware like a gaming console, OS, etc o Can substantially increase sales of the platform on which it runs Software bundling o A market strategy that involves offering several software for sale as a single suite of software  E.g. MS Office, Lotus SmartSuite, Corel WordPerfect Office, Sun StarOffice o Pros and cons  Choice?  Inter-operability?  Cost savings?  Others?

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Changing sources of software o Cloud computing  Hardware and software capabilities are provided as services over the internet and accessed using clients such as desktops, notebooks, netbooks, mobile devices  Current the fastest growing form of computing  Hardware firms  IBM, HP, Dell  Build huge, scalable cloud computing centres providing computing power, data storage, high speed internet connections  Software firms  Google, Microsoft, SAP, Oracle, Salesforce.com  Sellf software applications as services  More immediately appealing to SMEs which lack resources to purchase and own their own hardware and software o Software as a Service (SaaS)  Software will be increasingly delivered and used over networks as a service  Based on cloud computing concept  Free / low-cost tools for individuals and small businesses provided by Google or Yahoo!  Enterprise software and other complex business functions  Available as services from major commercial software vendors  Subscription or pay-per-transaction basis  E.g. Salesforce.com  Provides on-demands software for CRM including Salesforce automation, partner relationship management, marketing, customer service  Companies should carefully assess the costs and benefits – people, organisational and technology issues  Pros companies can focus on business (not technology) issues; may cut costs  Cons companies’ dependency on SaaS providers Total Cost of Ownership (TCO) o TCO model used to analyse direct and indirect costs of systems  Hardware + software = 20% of TCO  Other costs: installation, training, support, maintenance, infrastructure, downtime, space, energy o Can be reduced through greater centralisation and standardisation of hardware and software resources

Telecommunications -

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Data  Analogue o continuous signals – can take any value within a range o problem: gets distorted & weakened during transmission/reproduction  cannot be recovered  Digital o Travels well o Even if distorted during transmission/reproduction, original signal can be reconstructed  Digitising analogue signals o Computer text is already in digital format (ASCII) o Sounds, images and videos can be encoded directly as digital signals o Pre-existing analogue signals can be digitised by sampling analogue signals at regular intervals Modems  Modulator/demodulator o Modulation imprinting a digital signal on an analogue signal o Demodulation converting a modulated signal back to a digital signal

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Communication channels  A path from one point to another  Can data flow in both directions? o Simplex only A sends B radio station o Semi-duplex both can send, but take turns walkie-talkie o Full duplex both can send at same time hand phone  Channel capacity: how many bits per second (bps) can the channel carry? o To move data faster, channels of higher capacity are required  Telecommunication media o Wired communications media (bounded)  Closed, connected path  Copper wire  Unshielded twisted-pair cable (UTP) – come in several varieties  Coaxial cable (COAX) – a centre wire, surrounded by insulation, a metallic shield, and a final covering of insulating material  Optical fibre: uses a very thin glass or plastic fibre through which pulses of light travel  Have unlimited capacity (add wires), good security (physical access required), high cost of deployment, no mobility o Wireless communications media (unbounded)  Transmit info through the air  Radio waves – microwave  Repeater: a device that receives radio signal, strengthens it, and sends it on  Communications satellite: microwave repeater in space  Infrared – uses red light to send and receive info  Service area covered by access points  Have high mobility, low cost of deployment (add towers), poor security, limited capacity (interference among messages on the same frequency slot) Computer network: two or more computers connected so that they can communicate with each other and share information, software, peripheral devices (e.g. printers), and/or processing power  Types/classifications o Geographical scope PANs, LANs (within building), MANs, WANs (world) o Distribution of processing power client/server vs peer-to-peer o Communications media wired vs wireless o Access rights intranet vs internet  Put together, we can have o A local-area client/server copper-wire network used as an Intranet o A wide-area peer-to-peer optical-fibre network accessible to all (e.g. internet)  Topology – star (high performance), ring, bus, mesh  Switching o Circuit switching  Physically link up to stations  reserve link for exclusive use for duration of conversation  Entire message travels by one dedicated route which stays blocked  E.g. traditional telephone network, cellular networks, 3G o Packet switching  Break up message into small packets  packets propagate through network  reassemble packets, recover message  Packets travel along different routes and may arrive out of sequence  E.g. LANs, some WANs, GPRS, SMS, WiFi, 4G  Features  Better network utilisation –no routes are blocked, re-route around congestion  Robustness – multiple paths among nodes, re-route around damage  More complex – packets tagged and re-sequenced at destination, thus slower  Troublesome for real-time data where packets must arrive in correct order

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Internet  A network of networks o Different network developed independently using diverse technologies and standards o Joined together using the internet standards to form the internet o Uses packet-switching  Communication protocols o Set of rules that every computer in a network follows to transfer data o Most widely used  TCP/IP (Transmission Control Protocol/Internet Protocol) – primary protocol for transmitting data over the Internet  HTTP (Hypertext Transfer Protocol) – supports the movement of web pages over the Web  FTP (File Transfer Protocol)  Internet address o Every networked device has its own unique four-byte IP address, which IP uses to route data packets – data packets contain senders’ and recipients’ IP addresses o IP address  String of 32 bits represented by 4 octets  Must be unique  Only 232 unique IP addresses  scarce  IPv6, next version of IP will allow for 2128 unique IP addresses o Domain name system (DNS)  Gives easy-to-remember domain names to IP addresses  Based on type of activity, geographical location  Understanding addresses  Top-level domain (TLD)  3-character extension that identifies type of website or organisation  E.g. www.yahoo.com.sg  www = World Wide Web  yahoo = name  com = commercial organisation  sg = country of origin  Domain name servers  http tells browser where to find the IP address corresponding to a URL  A client/server network o Client  internet  server  app server/webpages/mail files  database server  back-end systems/sales/production/accounting/HR o Client users o Servers computers that provide services on the internet  Web server provides info and services to web surfers  Mail server provides email services and accounts  FTP server maintains downloadable files  Speed o Limited by the user’s connection to it o Broadband – high capacity telecomm pipeline capable of providing high-speed internet service o How to connect?  Phone line + dial-up modem  Connects computer to phone line so as to access another computer  Pros cheaper than broadband, available where there’s a phone line  Cons slow, can’t use phone line to talk when online  Phone link + DSL modem  Digital subscriber line  Pros high speed, allow simultaneous voice communication, always-on connection  Cons have to live close to a central office (CO)

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Cable TV line + cable modem  Device that uses TV cable to deliver an internet connection  Pros high speed, available wherever there is cable TV, always-on connection  Cons speed degrades as number of people using it increases Satellite dish + satellite modem Dedicated high-speed business lines

   Wireless o Wireless technologies: cellular, Bluetooth, WiFi, WiMax o Wireless computer networks carry computer data over radio waves  Over long distances  3G/4G network: within specified radius  4G  Much higher transmission rate  Packet switched  High security  Distance covered can be a town, a city, a country  WiMax  802.16  Access range of 31 miles  Requires WiMax antennas  Sprint Nextel building WiMax network  Over short distances  WiFi: via wireless access points/hotspots within office buildings, campus, etc  Set of standards: 802.11a, 802.11b, 802.11g, 802.11n  Used for wireless LAN and wireless internet access  Uses access points: devices with radio receiver/transmitter used to connect wireless devices to a wired LAN  Hotspots: one or more access points in public place to provide max wireless coverage  Bluetooth  Links up to 8 devices in 10m area using low-power, radio-based communication  Useful for personal networking (PANs)  Weak security  Wireless LAN  Info can be passively tapped  Encryption (WEP or WPA) used in 802.11 is vulnerable  What to do?  Locate access points away from perimeter  Secure access points with strong passwords Radio frequency identification (RFID)  Uses tiny tags with embedded microchips containing data (about an item and location) and antenna  Tags transmit radio signals over short distances to special RFID readers, which send data over network to computer for processing  Types o Active tags have batteries, range is hundreds of feet, more expensive o Passive smaller, range is shorter, less expensive, powered by radio frequency energy  Data on tags can be R, WORM (write-once-read-many), or R/W  Common uses o Automated toll-collection o Tracking goods in supply chain  Requires companies to have special hardware and software  Reduction in cost of tags make RFID viable for many firms

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Cellular systems Call originates from phone  call wirelessly finds nearest cellular tower  tower sends signal via traditional phone network to a mobile telephone switching office (MTSO)  MTSO routes call over network to land-based phone / initiates search for recipient on cellular network by sending recipient’s phone number to all its towers  recipient’s cell phone receives broadcast and establishes a connection with nearest tower  voice line is established via the tower by MTSO

E-Commerce -

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The use of internet and web for business transactions – digitally enabled transactions History  Began in 1995 and grew exponentially; now growing at annual rate of 16%  Rapid growth led to market bubble – many failed, but many survived with soaring revenues Unique features  Ubiquity o Internet/web technology available everywhere and anytime o Effect  Marketplace removed from temporal, geographic locations to become “marketspace”  Enhanced customer convenience and reduced shopping costs  Global reach o The technology reaches across national boundaries o Effect  Commerce enabled across cultural / national boundaries seamlessly, without modification  Marketspace potentially includes billions of consumers and millions of businesses  Universal standards o One set of technology standards: internet standards o Effect  Disparate computer systems easily communicate with each other  Lower market entry costs – costs merchants must pay to bring goods to market  Lower consumers’ search costs – effort required to find suitable products  Richness o Supports video, audio, text messages o Effects  Possible to deliver rich messages simultaneously to large numbers of people  Video, audio and text marketing can be integrated into single marketing message and consumer experience  Interactivity o The technology works through interaction with the user o Effect  Consumers engaged in dialog that dynamically adjusts experience to the individual  Consumer becomes co-participant in process of delivering goods to market  Information density o Large increases in info density – total amount and quality of info available to all market participants o Effect  Greater price transparency  Greater cost transparency  Enables merchants to engage in price discrimination – market segmentation  Personalisation / customisation o Technology permits modification of messages, goods o Effect  Personalised messages can be sent to individuals as well as groups  Products and services can be customised to individual preferences. E.g. Nike

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Social technology o Promotes user content generation and social networking o Effect  Empowers users to create and distribute content on a large scale  Permits users to program their own content consumption  Provides many-to-many model of mass communications Digital markets  Reduce o Information asymmetry o Search costs o Transaction costs o Menu costs – merchants’ costs of changing prices  Enable o Price discrimination o Dynamic pricing o Disintermediation Digital goods  Goods that can be delivered over a digital network. E.g. music, video, software, books, games  Marginal cost of producing second unit is almost zero  Costs of delivery over the internet are very low  Marketing costs remain the same; pricing highly variable (low menu costs)  Industries with equivalent digital goods are undergoing revolutionary changes – declining sales, or even destruction of businesses Types of e-commerce  B2C o Online businesses selling to individual customers o Business models: portals, online retailers, content providers, community providers o E.g. Amazon.com  B2B o Online businesses selling to other businesses o Larger than B2C markets – about 85-90% of commerce expenditures o E.g. Alibaba.com  C2C o Consumers selling to other consumers, with the help of an online market maker o Consumer prepares product  places product online for sale/auction  relies on market maker to provide catalogue, search engine, transaction clearing capabilities  products get displayed, discovered, and paid for o E.g. eBay.com Business models  Virtual storefront o Sells physical products directly to consumers or to individual businesses. o E.g. Amazon.com, RedEnvelope.com  Information broker o Provides product, pricing, and availability information to individuals and businesses. o E.g. Edmunds.com, Realtor.com  Transaction broker o Saves users money and time by processing online sales transactions and generating a fee for each transaction. o E.g. Etrade.com, Expedia.com  Online marketplace o Provides a digital environment where buyers and sellers can meet, search for, display, and establish prices for products. o E.g. eBay.com, Priceline.com

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Content provider o Creates revenue by providing digital content, such as digital news, music, photos, and videos, over the web o E.g. iTunes.com, Games.com, WSJ.com, GettyImages.com  Social network o Provides online meeting place where people with similar interests can communicate and find useful information o E.g. Linkedin.com, MySpace.com, iVillage.com  Portal o provides initial point of entry to the web along with specialised content and other services o e.g. Yahoo.com, MSN.com  Service provider o Provides Web 2.0 applications such as photo sharing, video sharing, and user-generated content as services o E.g. Google Maps, Photobucket.com, YouTube.com, Xdrive.com  Pure-play o Purely based on internet o Did not have an existing bricks-and-mortar business when designing the internet business  Clicks-and-mortar o Extension of bricks-and-mortar businesses  Communications and social networking o New business models: social networking (e.g. Facebook) & social shopping (E.g. ThisNext) o Can provide ways for corporate clients to target customers through banner ads and pop-up ads Revenue models  Advertising o Provides a forum for advertisements and receives fees from advertisers o E.g. Yahoo  Subscription o Offers users content/services and charges a subscription fee for access to some or all offerings o E.g. Consumer Reports, Wall Street Journal, ESPN  Transaction fee o Receives a fee for enabling or executing a transaction o E.g. eBay, E-Trade, Autobytel  Sales o Derives revenue by selling goods, information, or services o E.g. Amazon, Lands’ End, Dell, DoubleClick  Affiliate o Steers business to an affiliate and receives a referral fee or percentage of the revenue from any resulting sales o E.g. MyPoints How to be found on internet?  Online (banner) advertisements o Pop-up small webpage ad that appears on your screen outside the current website o Pop-under do not see it until you close your current browser window  Registering with search engines o Some search engines list your site for free, some charge a fee o For an additional fee, your site can appear at the top of a search list (every time)  Viral marketing o Encourages users of a product or service from a B2C business to introduce friends to join o E.g. Blue Mountain Arts  Send a card  card has link so the recipient can send a card back  Idea originated from Hotmail  recipient sees a link to free Hotmail account

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Managing an e-business website  Statistics o More than 50% of web sales are lost because visitors can’t find content o More than 40% of repeat visitors are lost due to a negative experience o It costs six times more to sell to a new customer than to sell to an existing one o A company can boost its profits 85% by increasing its annual customer retention by only 5%  Design tips o Keep the site simple o Focus on content (current ) o Enhance response time – 8 seconds o Site should be available 24/7 o Ensure company’s name is visible o Keep graphics & other bandwidth-intensive design to a minimum o Allow easy return to homepage Achieving customer intimacy  Blogs o Personal webpages that contain series of chronological entries by author and links to related webpages o Has increasing influence in politics, news o Corporate blogs: new channels for reaching customers, introducing new products/services  Customer self-service o Websites and email to answer customer questions or to provide product information o Reduces need for human customer-support expert  Personalisation o Targeting of marketing messages to specific individuals by adjusting the message to a person’s name, interests, past purchases o E.g. Amazon.com notifies users by email when new books on their favourite subjects or by their favourite authors are published  Website visitor tracking through clickstream tracking tools B2C payment methods  Credit cards o Security neither the merchant nor the consumer can be fully authenticated o Merchant risk consumers can repudiate charges o Cost ~3.5% fee  not suitable for micropayments o Social equity young adults do not have credit cards  Peer-peer payment systems o Enables transfer of funds between two individuals o E.g. Paypal, AOL Quickcash, Yahoo! Paydirect, Webcertificate  Direct debit from bank account  Cash on delivery M-commerce services and applications  Location-based services  Banking and financial services  Wireless advertising  Games and entertainment

Securing Information Systems -

Principles & Economics of Security  Principles o Security is a trade-off. E.g. money, time, convenience, capabilities o Security is a system – not just a specific defence  part of a more complex system

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Economics o Security failure are often due to misplaced economic incentives than technology o People who design and protect a system are not those who suffer the cost of failure o Aligning security interest with capability  want improved security vs can improve security o Aligning liability with security  enforce liability, allow parties to transfer liability, provide mechanism to reduce risk Why are systems worth hacking into? o Valuable data  Financial digital transfer  instant riches  Contact particulars  mass messaging or even blackmail o Dubious “fame and glory”  Gain “respect” amongst the dark side  Get free publicity by attacking major institutions o Politically driven  Motivated by dislike or disagreement  Targets could be actors, management, political or other public figures Why are systems vulnerable? o Complexity and configuration  Modern IT has complex networks of setups  Lack of comprehensive configuration and updates software patches o Internet vulnerabilities  Internet-specific vulnerabilities. E.g. DNS, server attacks, emails, instant messaging o Wireless vulnerabilities  By nature, wireless is anyone-to-anyone  Setting of access points must be secured  E.g. WEP (not good), WPA2, VPN o Lack of security consciousness  People don’t pay enough attention to secure their passwords  Not applying latest security patches o Software complexity  Modern software involves extremely large control cases which are not all tested  E.g. software bugs, crashes, weak algorithms  Theoretically impossible to test all cases o Faster computers benefit users and hackers  Hackers use latest, fastest computers to attack mainstream, mid-end computers/software Cryptography o Principles  Security in encryption lies in security of keys  Use combination of symmetric keys, asymmetric keys and hashes  Use key lengths that are computationally hard relative to available computer models  Use chain of trusts, starting at root authority o Methods  Symmetric cryptography  Use the same key to encrypt and decrypt Original data  encryption (symmetric key)  scrambled data  decryption (symmetric key)  original data  Advantages: easy to understand and implement, fast in computation  De/encryption is fast  Secure (128-, 256-, 1024-, 2048-bit)  Resulting cipher-text is compact

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Asymmetric cryptography  Use the paired public/private keys to encrypt and decrypt Original data  encryption (public key)  scrambled data  decryption (private key)  original data  Highly secured based on well-refined math models  Fast for paired de/encryption, near impossible for unpaired de/encryption Strength  Measured by time taken for a rich expert hacker (i.e. someone who is very conversant with the latest algorithms with the fastest CPUs and largest memory available, financed by a practically large budget) to break the cryptographic algorithm  A relative measurement  A very strong algorithm in the 70’s is now very weak  A mediocre algorithm for military use may be sufficiently strong for home use  Shifts in time due to  Moore’s Law  Technological shifts, e.g. quantum computing, internet  Discovery of new mathematics  Others, e.g. cleverness of hackers Public Key Infrastructure (PKI)  Trust-based, needs a root authority called Certificate Authority (CA)  Based on both symmetric and asymmetric key system  Asymmetric encrypt symmetric keys, digital signatures, digital certificates  Symmetric encrypt document  Provides  Secure creation of good keys  Validation of initial identities  Issuance, renewal and termination of certs  Cert validation  Cert distribution  Secure archival and recovery of keys  Generation of signatures and timestamps  Establishing and managing trust relationships

Excel -

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Operators  Arithmetic perform mathematical calculations  Comparison compare values for the purpose of true/false results  Text concatenation join strings of text in different cells  Reference enables you to use ranges in calculations Order of precedence: 1. Parentheses 2. Negation 3. Exponentiation 4. Multiplication/division 5. Addition/subtraction Functions  A shorthand way to write an equation that performs a calculation  3 parts: an equal sign, a function name, and ≥1 argument o Argument: the value the function uses to perform a calculation, including a number, text, or a cell reference that acts as an operand Cell reference: relative, absolute, mixed

15 | AB1401 IT 2012

Mathematical functions

Purpose

SUMIF(range,criteria,[sum_range])

Conditionally totals cells in a sum range that meet given criteria

AVERAGEIF(range,criteria,[average_range])

Averages cells in a range based on a specified condition

COUNTIF(range,criteria)

Counts cells in a range based on a specified condition

Logical functions FALSE()

If one or more of its logical tests is false

TRUE()

If every logical test in the formula is true

AND(logical1*,logical2+,…)

Returns true if all arguments are true

OR(logical1*,logical2+,…)

Returns true if any argument is true

NOT(logical)

Reverses the logical value of the argument

IF(logical_test,value_if_true[,value_if_false])

Performs a logical test and returns a value based on the result

IFERROR(value,value_if_error)

Returns value_if_error if value is an error

Lookup functions CHOOSE(num,value1*,value2,…+) GETPIVOTDATA(data,table,field1,item1,…) LOOKUP(lookup_value,…) RTD(progID,server,topic1*,topic2,…+) HLOOKUP(value,table,row[,range]) VLOOKUP(lookup_value,table_array, col_index_num[,range_lookup])

MATCH(value,range[,match_type])

INDEX(ref,row[,col][,area]) INDEX(ref,MATCH(value,range[,match_type]), MATCH(value,range[,match_type]))

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Uses num to select one of the list of arguments given by value1, value2, and so on Extract data from PivotTable Looks up a value in a range or array. (Function has been replaced by HLOOKUP() and VLOOKUP() functions) Retrieves data in real time from an automation server Searches for value in table and returns the value in the specified row – useful when data is arranged in rows Searches vertically down the leftmost column of a table then reads across the row to find the value in the column you specify – useful when data is arranged in columns Note: Range_lookup is optional  If it is TRUE/omitted, an exact of approximate match is returned. If exact match is not found, the next largest value < the lookup_value is returned  If it is TRUE/omitted, value in the first column of table_array must be placed in ascending order  If it is FALSE, the values in the first column of table_array do not need to be sorted  If it is FALSE, VLOOKUP will only find an exact match. st If >1 value matches the lookup_value then 1 value is used. If exact match is not found, error value #N/A is returned Searches range for value and, if found, returns the relative position of value in range If match_type is 1  less than 0  exact match -1  greater than Looks in ref and returns the value of the cell at the intersection of row and, optionally, col Use this instead of VLOOKUP to find something in a column on the left

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Error messages  #####  #NAME?  #NUM!  #DIV/0!  #N/A  #REF  Circular ref Other functions  ISERROR()  ISNUMBER()  ISTEXT()  ISBLANK()

column not wide enough cell reference invalid problem with number, e.g. √-45 When a formula divides by 0 or empty cell e.g. when using VLOOKUP, data needed is not available/found formula contains invalid cell reference when a formula references itself directly or indirectly returns true when there is error and false when there is no error

Ethics and Privacy -

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Privacy  Concerns our data and the use of it  Data connects our daily lives with society. E.g. bank account, boarding plane, shopping  In the US, the information collector owns it, even if the data is about you  Privacy vs security: trade-off o Security is a survival need – a loss in security could result in real loss in money, data, property, resource, even lives o Privacy is a social need – a loss in privacy causes embarrassment, loss of reputation or trust, severed relationships o Law: convicted defendants of defamation/negligence/breach of trust/etc are liable for damages  Transient data capture o Short-lived conversations are vulnerable to privacy loss: emails are saved, SMS/MMS are copied and logged by law, VoIP conversations can be logged, casual conversations are no longer casual o Self-contributed privacy exposure: blogs, videos on Youtube, live feeds, forums, etc Ethics  Principles of right and wrong that individuals, acting as free moral agents, use to make choices to guide their behaviours  Hovers around the grey area of legal and moral principles  Ethical issues frequently occur within relatively short time span during which a firm decision is made o Usually a choice between zero-sum consequences o Usually irreversible o Consequence is usually relatively non-trivial  Info systems and ethics o Info systems raise new ethical questions because they create opportunities for  Intense social change, threatening existing distributions of power, money, right, and obligations  New kinds of crime o A model for thinking about ethical, social and political issues  IT creates ripples of new situations that are not covered by old rules  Social and political institutions cannot respond overnight – may take years to develop etiquette, expectations, laws  Requires understanding of ethics to make choices in legally grey areas

17 | AB1401 IT 2012

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5 moral dimensions 1. Information rights and obligations 2. Property rights and obligations  Intellectual property: intangible property of any kind created by individuals/corporations  3 ways it is protected  Trade secret: intellectual work/product belonging to business, not the public domain  Copyright: statutory grant protecting it from being copied for the life of the author  Patents: grants creator of invention an exclusive monopoly on ideas behind invention for 20 years  Challenges: digital media instead of physical media  Ease of replication  Ease of transmission  Difficulty in classifying software  Compactness  Difficulty in establishing uniqueness  Digital Millennium Copyright Act (DMCA)  Makes it illegal to circumvent technology-based protections of copyrighted materials 3. Accountability, liability, control  Computer-related liability problems  If software fails, who’s responsible?  If seen as part of a machine that harms, software producer and operator may be liable  If seen as similar to a book, difficult to hold software author/publisher responsible  What if it is seen as a service? 4. System quality: data quality and system errors  Flawless software is economically unfeasible  3 principal sources of poor system performance  Software bugs, errors  Hardware or facility failures  Poor input data quality 5. Quality of life 4 technology trends that raise ethical issues 1. Computing power double every 18 months: increased reliance and vulnerability 2. Data storage costs rapidly declining: multiplying databases on individuals 3. Data analysis advances: greater ability to find personal information / profiling and non-obvious relationship awareness (NORA) 4. Networking advances and the internet: enables moving and accessing large quantities of data Basic concepts form the basis of ethical analysis of info systems and those who manage them o Responsibility: accepting the potential costs, duties, obligations o Accountability: mechanisms for identifying responsible parties o Liability: permits individuals/firms to recover damages done to them o Due to process: law are well-known and understood, with ability to appeal to higher authorities Ethical principles o Golden rule: do unto other as you would have them do unto you o Immanuel Kant’s categorical imperative: if an action is not right for everyone to take, it is not right for anyone o Descartes’ rule of change: if an action cannot be taken repeatedly, it is not right to take at all o Utilitarian principle: take the action that achieves the higher or greater value o Risk aversion principle: take action that produces the least harm/potential cost o Ethical “no free lunch” rule: assume that virtually all tangible and intangible objects are owned by someone unless there is a specific declaration otherwise Computer Misuse Act Spam Control Act

18 | AB1401 IT 2012

Enterprise Systems -

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Before enterprise systems  Different departments in an organisation developed their own computer systems  Each one working separately using its own apps and data  Each department relied on the others to transfer key information o Items like employee numbers are generated in one system, then passed on and entered manually into other apps o Problematic  Synchronisation of info was manual, slow and unreliable  Mistakes occurred, leading to more complications as erroneous data propagated throughout the organisation Enter enterprise systems  Combines/standardises data used by different apps  Eliminates the need for interfaces between software apps  Resolves the issue of synchronising information What are enterprise systems?  Also known as Enterprise Resource Planning (ERP) systems  Suite of integrated software modules with a common central database that covers the major functions within an organisation  Major functional areas: o Manufacturing and production o Procurement and logistics o Finance and accounting o Sales and marketing o Human resources  Vendors o Tier I serve large global corporations e.g. Oracle, SAP o Tier II serve mid-market businesses e.g. Ross, Sage, QAD o Tier III serve smaller-than-medium businesses e.g. Exact, Visibility  Built around the predefined business processes in each of the functional areas  Some degree of variation is allowed by the ES package software by having the organisation select from a set of parameters o What if organisation’s requirements cannot be accommodated?  Customisations, programming  Customisation is usually discourage because it is costly, may introduce errors into system, and makes it difficult to upgrade to future versions of the ES  Workarounds: additional steps to get around the problem o When customers have similar customisation needs, vendors may produce industry-/countryspecific versions  E.g. SAP has a local HR version for Singapore to reflect CPF contribution scheme

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Benefits  Integration enables o Capturing of data once at point of origination – reduce data capture effort and errors o Automatic triggering of downstream transactions. E.g. capture of order at point of sale, trigger scheduling of shipment, update of inventory, sales accounts o Access to updated information  MNCs use ES to promote the adoption of standard process and standard data definitions across their business units in multiple countries o Benefits/features  “One face” to the customer – consistent  Allows aggregation of functions, such as global procurement in order to get the best prices from suppliers  Allows optimisation of organisation’s global supply chain, as design, marketing, production, procurement, and logistics occur in different parts of the world  Reduces cycle time  Provides headquarters management with standard information across countries for better decision making Challenges  Highly expensive to purchase and implement enterprise apps o Requires data standardisation, management, cleansing o Total cost may be 4-5 times the price of software  Requires fundamental changes in o Technology o Business processes o Organisation  The way employees work  Amount of training to use an ES can be substantial – might have user resistance  Incurs switching costs – increases dependence on ES software vendors Extending ES beyond the organisation  Major ES vendors (e.g. SAP and Oracle) now offer modules that allow the organisation to further integrate its operations beyond its boundaries o With suppliers supply chain management (SCM) systems  Supply chain comprises organisations and processes for  Procuring raw materials  Turning them into intermediate and finished products  Distributing these to customers (often through distributors)  Types  Sequential  Push-based (build-to-stock) Supplier  manufacturer  distributor  retailer  customer  Pull-based (demand-driven) Supplier  manufacturer  distributor  retailer  customer  Concurrent  Information flows in many directions simultaneously among members  Challenge: manage the efficient flow of goods and information so that materials and finished goods are available at the right place and time  Inefficiencies cut into operating costs – waste up to 20% of operating costs  Ideally, all parties in the chain want a just-in-time situation, i.e. components arrive as needed  production is not halted  reduce inventory holding costs  Requires accurate forecasting of sales and production  shipment, quality and demand are uncertain  keep buffer stock

20 | AB1401 IT 2012

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Bullwhip effect: where relatively small variations in demand get amplified as they pass up the supply chain, there is excess stockpiling of inventory to address uncertainty in demand  SCM systems  Reduce bullwhip effect by providing all members of supply chain with dynamic information about inventory levels, sales and product forecasts, shipments  Make it easier for supply chain partners to connect to each other  Pervasiveness of global supply chain has made concurrent supply chains more attractive and feasible With customers customer relationship management (CRM) systems  Challenges  How to know customers in a personal way when corporation is large  Who are the most profitable customers? What do they want to buy?  Business value of CRM  Increased customer satisfaction  Reduced direct-marketing costs  More effective marketing  Lower costs for customer acquisition/retention  Increased sales revenue  Reduced churn rate (i.e. number of customers who stop using/purchasing products/service from a company)  CRM systems  Capture and integrate customer data from multiple sources within the organisation  Consolidate and analyse customer data  Distribute customer information to various systems and customer touch points across enterprise  Provide single enterprise view of customers  Capabilities  Sales force automation  Account management, lead management, order management, sales planning, field sales, sales analytics  Increasingly accessible through mobile devices  Marketing  Campaign management, channel promotions management, events management, market planning, marketing operations, marketing analytics  Customer service  Service delivery, customer satisfaction management, returns management, service planning, call centre and help desk, service analytics  May include a web-based self service capability before routing calls to customer service representative  Next generation enterprise apps  Enterprise solutions/suites  Replace stand-alone enterprise, CRM, SCM systems  Make these apps more flexible, web-enabled, integrated with other systems, including mobile devices  E.g. SAP’s mobile apps, Sybase’s mobile CRM, mobile workforce management  Open-source and on-demand apps: e.g. Saas, Salesforce.com  Service platform  Integrates multiple apps to deliver a seamless experience for all parties  Order-to-cash process  Portals: increasing new services delivered through portals

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Database Design -

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Data vs Information  Data o A fact/observation about a person/place/event/thing o Words, numbers, pictures, etc  Information o Processed data Why need data?  Transaction processing  Command and control  Decision making Why need Database Management System (DBMS)?  Allows creation of a database  Supports specialised languages for easy retrieval of data from a set of inter-related tables o E.g. structured query language (SQL) Parts of a DBMS  Data definition  Data manipulation  Application generation  Data administration Types of DBMS  Flat files  Hierarchical e.g. XML, IMS  Network e.g. Codasyl  Relational e.g. Oracle, MS Access o Most popular o Stores data in inter-related tables that have rows and columns  Object-oriented e.g. Orion, O2 Designing databases  Involves o Modelling a business requirement with a database model, e.g. relational model o Translating the database model into a database schema that can be implemented using DBMS Entity-relationship diagram (ERD)

22 | AB1401 IT 2012