ITM 100 Midterm Review
Information System: Set of interrelated components that collect, process, store, and
distribute information to support decisionmaking and control in an organization.
-Input: Captures raw data from organization or external environment
-Processing: Converts raw data into meaningful form
-Output: Transfers processed information to people or activities that use it.
Data (input): can be seen as raw numbers, figures, and facts
Information (output): can be seen as processed data or data with meaning
Knowledge: can be seen as personalized information residing in the mind of the
Behavioural approach: Psy, Soc, Eco
Technical approach: Management Science, Operational Research, Computer
Socio-technical approach: Mix of behavioural and technical
Data management technology: Consists of software governing organization of
data on physical storage media
Networking and telecommunications technology: transfers data from one
physical location to another using both physical devices and software
Network: Links 2 or more computers so it can share resources
Complementary assets: assets required to derive value from primary investment
Digital Dashboards: displays on a single screen graphs and charts of key
performance indicators for managing a company.
Business Processes: manner in which work is organized
Information systems Processes: increases efficiency of existing processes (eg.
Information System Types:
Supply Chain Management (SCM): manage firm’s relationships with suppliers
Enterprise Systems aka Enterprise Resource Planning (ERP): Collect data from
different functions and stores it in a central data depository
Knowledge Management System (KMS): Support processes for acquiring
Transaction Processing System (TPS): Records daily routine transactions
Decision Support System (DSS): Supports non-routine decision making for middle
managers and rely on powerful data analysis capabilities Management Information System (MIS): provides report on firm’s current
performance and answers to routine questions
Executive Support Systems (ESS): support non-routine decision making for senior
managers and rely on data from a range of internal and external sources.
>Technical definition: Stable, formal social structure that takes resources from
environment and processes them to produce outputs
>Behavioral definition: A collection of rights, privileges, obligations, and
responsibilities that is delicately balanced over a period of time through conflict and
5 Kinds of Organizational Structure
Entrepreneurial: Young small firm in fast changing environment
Machine bureaucracy: large bureaucracy in slow-changing environment
Divisionalized bureaucracy: combination of multiple machine bureaucracies
Professional bureaucracy: knowledge based organization; goods & services
depend on expertise and knowledge of professionals (eg. Hospitals)
Adhocracy: Task force organization must respond to rapidly changing environments
Disruptive Technology: Technology that provides a sweeping change to
businesses, industries, and markets
First Mover: Inventor of disruptive technology
Fast Follower: Firms with size and resources to capitalize on that technology
Transaction Cost Theory: firms seek to economize on the cost of participating in a
Agency theory: Assumes employees are self-interested and may not always act in
a manner consistent with organizational goals
Business Value Chain: highlights specific activities in a business where
competitive strategies can best be applied
• Primary Activities – Directly related to Production and distribution of firm’s
• Support Activities – Make delivery of primary activities possible
Michael Porter’s Competitive forces model: provides general view of firm
competitors, and its environment
• Traditional Competitors
• New Market Entrants • Substitute Products and Services
Information Systems dealing with Competitive Forces
• Low-Cost Leadership
• Product Differentiation
• Focus on Market Niche
• Strengthen Customer and Supplier Intimacy
Low-Cost Leadership: Produce products and services at lower cost than
competitors while enhancing quality and level of service
Product Differentiation: Enable new products or services to greatly change
Synergies: Output of some units used as inputs to other units, aka two
organizations pool markets and expertise.
Core competency: Activity for which a firm is a world-class leader. (eg. World’s best
package delivery service), Relies on knowledge gained from years of experience.
Behavioral Targeting: Increases efficiency of ads by using information users reveal
Ethics: Principles of right and wrong people use to make choices
5 Moral Dimensions of the Information Age; aka major ethical, social, and political
issues raised by information systems
Information rights and obligations: What can individuals protect?
Property rights and obligations: How will intellectual property rights be protected?
Accountability and control: Who is held accountable for harm done to individual
System quality: What standards of data and system quality should we demand?
Quality of Life: What values should be preserved in an information and knowledge-
based society? Which institutions should we protect from violation?
Responsibility: Accepting the potential costs, duties, obligations for your decisions
Accountability: Mechanisms for identifying responsible parties
Liability: Permits individuals to recover damages done to them
Due Process: Laws appeal to higher authority to ensure laws applied properly
Privacy: Claim of individuals to be left alone free from surveillance or interference
from other individuals, organizations, or the state. Opt-in model:
Opt-out model: model of informed consent that permits the collection of personal
information until consumer requests the data not to be collected.
Platform for Privacy Preferences (P3P): Enables automatic communication of
privacy policies between an e-commerce site and its visitors
Trade Secret: Intellectual work or product belonging to business, not in the public
Copyright: Statuary grant protecting intellectual property from being copied for at
least 50 years
Patent: Grant to creator of invention giving exclusive monopoly on ideas behind an
invention from between 17 – 20 years.
1. Identify and clearly describe the facts
2. Define the conflict or dilemma, and identify the higher-order
3. Identify the stakeholders
4. Identify the options that you can reasonably take
5. Identify the consequences of your options
Profiling: combines data from multiple sources to create dossiers of detailed
information for an individual
Moore’s Law: Observation that computing power doubles every 18 months
Observation that price of computing falls by half every 18 months
Law of Mass Digital Storage: Amount of digital information is roughly doubling
Cost of storage falling 100% per year
Metcalfe Law: value of network grows with members
Client Machines: Desktops, Laptops, and PDAs
Server Machines: Provides access to network-based applications
Mainframe systems: Used as giant servers for enterprise networks and corporate
Virtualization: Presents computing resources so they can’t be restricted by physical
configuration Multi-core processors: reduced power requirements, enhanced performance
Grid Computing: connects geographically remote computers to single network
Green Computing: Environmentally sustainable computing. Practice of making,
using, and disposing computing and networking hardware.
Open-Source: This software is free and can be modified by users
Total cost of ownership (TCO) model: used to analyze direct and indirect costs to
determine actual cost of specific technology implementations.
Database: Group of related files
Database Management System (DBMS): special software to create and maintain
a database and enable individual business applications to extract the data they need
without having to create separate files or data definitions in their computer program.
Data Dictionary: automated or manual file that stores information about data
elements and characteristics such as usage, physical representation, ownership,
authorization, and security.
Normalization: Process of creating small, stable, yet flexible and adaptive data