1) The acronym ERP stands for Enterprise Resource Planning. This is a software
package that integrates the many functions (accounting, finance, inventory,
management, human resources, etc.) of a business. CRM stands for the Customer
Relationship Management. This is a system used to support customer related sales
and marketing activities. SCM is an acronym for the Supply Chain Management.
This is a vital system that can help a firm manage aspects of its value chain, from
the flow of raw materials into the firm, through delivery of finished products and
services at the pointofconsumption. BI stands for Business Intelligence Systems,
which is a system that uses data created by other systems to provide reporting and
analysis for organizational decisionmaking.
2) There are many types of ownership costs associated with creating and supporting
an organization’s information systems. These include programming costs for
customer software as well as purchase, configuration, and licensing costs for
packaged software, but it does not end here. There are costs associated with design
and documentation both for programmers and users. Other additional costs are
from testing which is necessary because new programs should be tested thoroughly
across the various types of hardware the firm uses. Additionally, they need to be
tested in conjunction with existing software and systems before being deployed
throughout the organization. These tests are important because any errors that are
not caught can severely slow down a business and lead to costly mistakes. Once
these systems are deployed, firms need to constantly engage in a host of activities
to support the system that may also include the following: training, collecting and
relaying comments to help the system, auditing to ensure compliance, backup data,
plans for recovery and disaster recovery, and managing security issues.
Understanding TCO is critical when making technology investment decisions
because it is such a huge price tag maintaining this information system.
3) Although most OSS can be downloaded for free and the source code for OSS
products is openly shared, some people will prefer a commercial alternative. For
example, in class, we discussed the option of downloading Open Office. Open
Office is strikingly similar to Microsoft Word except the software is free. Many
people will rather pay for Microsoft Word because they know it is compatible