1. MP3 / MM740 Strategy & Information Systems Module 1: Fall 2002 Introduction to Information Technologies, Systems, and Competition John Gallaugher john.gallaugher@bc.edu www2.bc.edu/~gallaugh

2. Topics Covered Components of an Information System –Changing IS landscape & managerial implications Hardware –Moore’s Law & the Evolution of Computing Competition –Grid computing Software –Operating Systems, Java, and Software Competition –Architecture Basics: Client / Server, Web Services Data / Information – the killer asset Types of Information Systems –TPS, Reporting Systems, DSS –Artificial Intelligence

3. FoxMeyer

4. Massive System Projects Deregulation Globalization The Internet Skills Crunch Mergers & Acquisitions Technical Advances

5. 5 Components of an IS Data Procedures Software Hardware People Information Systems Information Systems

6. Hardware Computers Peripherals Networking Equipment

7. Source: Intel Corp.

8. 1981 IBM PC Processor: Intel 8088, 4.77 MHz Dual 160 KB floppy drives $3,300 1991 Compaq 486 Processor: Intel 80486, 33 MHz 120 MB hard drive $2,300 2001 Dell Dimension Processor: Intel Pentium 4,1.4 GHz 20 GB hard drive $950 The PC @ 20

9. Storage Crib Sheet –bit = zero or one, smallest computing unit –byte = 8 bits, one Latin character –kilobyte (K) = 1,024 bytes ~ 1 thousand bytes –megabyte (MB) = 1,024 K ~ 1 million bytes –gigabyte (GB) = 1,024 MB ~ 1 billion bytes –terabyte (TB) = 1,024 GB ~ 1 trillion bytes Typical PC Capacity (9/02) –RAM = 128 - 256 MB –High Density (HD) diskette - 1.44 MB –Hard Drives = 10 - 80 GB –CDs = >620 MB* –DVD = 4.7 GB*

10. Types of Computers (the distinction is blurring) Personal / Microcomputers –single-user, usually single processor, compact –desktop, laptop, palmtop, PDA, specialized Mid-range Systems (Servers) –may have more than one microprocessor, typically multi-user & focused on a functional area or task (marketing, plant management, web server). –Vintage midranges (proprietary OS): IBM AS/400 (updated), DEC VAX (discontinued) –Servers (UNIX/Win): Intel-based, Sun, HP/Compaq, IBM

11. Types of Computers (cont.) Mainframes (IBM) –large, expensive computer, supports multiple user groups, terminals, run several applications at once. –costly: support staff, air conditioning, software –secure: centralized programs & data are relatively easy to backup, maintain, upgrade, and monitor Super Computers (NEC, IBM, Hitachi, HP/Compaq) –massively parallel and/or clustered –used to solve problems requiring long, difficult calculations (e.g.airline scheduling, advanced modeling - biotech, weather, risk management) –evolution to grid computing…

13. Network Externalities (a.k.a. Network Effects, Metcalfe’s Law) A product or service becomes more valuable as its installed base expands Why do consumers care about installed base? –Exchange opportunities –Stability –Extrinsic, complementary benefits More Exchange Opportunities More Members

14. Why are Markets for Network Goods Different? Market competition occurs very early and is particularly fierce Markets are ‘tippy’ and subject to bandwagons Markets exhibit monopolistic tendencies The ‘best’ technology or highest quality product doesn’t always win

15. Software Operating Systems Applications Applets Java Challenges the Paradigm

16. Software Operating Systems control hardware and provide an environment in which applications execute Application Programs end-user program that performs a specific function Individual examples: word processor, spreadsheet. Collections of apps: Office (suite), SAP R/3 (ERP) Applets small application programs which execute within a larger environment (e.g. Java applets within browser) operating system applications

17. Competition in the OS Space Personal Computers Windows XP Apple Mutli-User Systems Windows 2000 Windows.NET Unix (Sun, IBM, HP / Compaq) Linux Consumer Devices Pocket PC OS Ultimate TV Xbox Tablet PC Windows XP Media Center Edition Palm (handheld) Liberate (set top) Sony MS Arsenal Competition

18. Java - a Cross-Platform Standard Java Consist of Two Components –object oriented programming language –virtual machine (software that executes Java byte code) Advantages –write-once run-anywhere. Runs on any machine with a JVM (Java Virtual Machine) regardless of OS or microprocessor –object-oriented language (reuse, faster dev.) –secure Disadvantages –slow due to download times –slow due to interpreting line by line –inconsistent Java Virtual Machines

19. Traditional Programs... Netscape Navigator for Windows Netscape Navigator for Macintosh Windows Compiler Macintosh Compiler Intel code 10010 01001... 01011 00101... PowerPC code … are written for an Operating System (Windows, Macintosh, etc.) & compiled for a microprocessor (Intel x86, PowerPC, Sun UltraSPARC, Compaq Alpha, etc.). Compiled code is ready to be executed by the appropriate microprocessor (fast). DrawWindow()… … GetWindow()… … (code can execute on OS & processor)

20. Java Programs... Java ProgramJava Compiler Windows, Intel JVM 00010 11110... … are written for the Java Virtual Machine (JVM). In theory, the same Java byte code can execute on any computer with a standard JVM, regardless of OS or processor (write once, run anywhere). Byte code is interpreted line-by-line for each processor (slow). OpenWindow()… … Macintosh, PowerPC JVM Sun Solaris, Sparc JVM Compaq UNIX, Alpha JVM Java byte code 10110 00110... 01011 01100... 11000 01010... 01111 01100... …and more (code is generic & must be interpreted) (JVM software is the interpreter)

21. Java is Often Confused With... JavaScript –interpreted programming language that co-exists in same files as HTML (doesn’t need to be compiled into byte code) –slower than Java –easier to program –supported by Netscape & Microsoft (w/some consistency problems) –unlike Java, can only be used to create web pages (Java can be used to create stand-alone applications that execute outside the browser).

22. Java is Often Confused With... ActiveX –Microsoft's component technology architecture (e.g. a way to string together pieces of reusable code). –Compiled, so it’s faster than Java, but not cross platform. –Unlike Java, it allows full access to the operating system (including file access commands). This means that ActiveX components are potentially less-secure than Java (easier to spread viruses, deploy malicious programs).

23. Multi-user Systems Architecture Architectures –enable the range of technical options (and hence business options) available to a firm –implications regarding cost, flexibility, security Host / Terminal Model Client / Server Model –fat clients –thin clients –three / n-tier model ASPs, EDI, and Web Services Peer-to-Peer

24. Host / Terminal Model Dumb terminals typically display only text sent from host. They do not perform any computing & don’t have a microprocessor. PCs can run terminal programs to act like dumb terminals & access hosts. All programs & data are on the host (usually mainframe)

26. Host / Terminal Model Advantages –proven, reliable technology –less complexity (fewer vendors) –centralized security, version control, & backup Disadvantages –costly hardware & software –aging technology –text-based interface difficult to use –applications are tightly integrated with database

27. Client / Server Computing Client –a program which makes request of another program, usually on another computer (e.g. web browser) –requests data or other action from servers Server –a program (usually on another computer) that runs services that are shared among multiple client/users on a network (ex. E-mail server, web server, database server). –responds to client requests (delivers data, performs tasks)

28. Client / Server Model PC executes client code client code makes a request Server executes server code & responds to request, holds data sales accounting wheels chemicals Divide & Conquer Share & Share Alike

29. Client/Server Advantages –easier to use (PC GUI) –faster to develop –database separate from applications (enables data integration across systems & reuse) –cheaper hardware (if PCs are in place) Disadvantages –complex (multi-vendor), new technology (lowers reliability & raises maintenance costs) –security vulnerabilities –version control

30. Variants of Client/Server Fat Clients client code stored (larger files, some business logic) client code executes Server (some b-logic) Data Thin Clients (NCs, browser apps.) client code executes (smaller files, mostly GUI) client code stored Server (most b-logic) Data Three-Tier (n-tier) Architecture client code executes (mostly GUI) Server Data b-logic

33. back-end logic (shared or reused) palm pocket pc web southwestairlines.comdollar.com

36. Data & Information Potentially a Key Source of Competitive Advantage

37. Data, Information, & Knowledge Data - raw facts, figures, and details. Information - organized, meaningful, and useful interpretation of data. Has a context, answers a question. Knowledge - an awareness and understanding of a set of information and how that information can be put to best use. Many firms are data rich and info poor: victims of an old or poorly planned architecture

38. Examples of Data, Information, & Knowledge Data: raw, no context Information: meaningful, has context Post lowered its prices after the first quarter. Price change has caused Post sales to rise at the expense of Kellogg’s Knowledge: information above & other information creates an awareness of impact

39. Types/Classifications of Information Systems

40. Transaction Processing Systems (TPS) A shared IS that uses a combination of IT and manual procedures to process data and information and to manage transactions. Examples: Cash Registers (POS), ATM Characteristics: –transactions are similar & repeatable –support multiple users in routine, everyday transactions (usually tactical systems) –data capture with possible report generation –accuracy is critical, TPS “feed” other IS

41. Reporting Systems - MIS Sometimes called Management Reporting Systems or Management Information Systems Characteristics –use data captured and stored from TPS –reports consolidated information rather than details of transactions –supports reoccurring decisions –provides reports in pre-specified formats (on screen, printed, or data)

42. Decision Support Systems (DSS) Allow users interrogate computers on an ad hoc basis, analyze information, and predict the impact of decisions before they are made. [key: unstructured, user-led exploration] Characteristics –Assists in ad-hoc decision making –Used when requirements, processes, or procedures are unstructured & aren’t known in advance –Provides info needed to define & solve a problem –Provides information in format determined at time of need

43. Management Levels & IS Strategic Planning Management Control Operational Control DSS MIS TPS

44. Expert Systems (ES) An artificial intelligence system that uses captured human expertise to evaluate and solve problems Characteristics: –diagnosis, configuration, and/or recommend a course of action –problems are structured and repeatable –application scope is limited to a particular problem area (domain)

45. Other Types of Artificial Intelligence (AI) Neural Networks –hunt for patterns in historical data –build their own expertise based on prior history –require clean data & consistency between performance history and future events Genetic Algorithms –search for optimal solutions based on natural selection: (1) propose solution (2) evaluate results against earlier solution (3) mutate & return to step 1

46. Keane’s Space Truss Design