1 | AB1401 IT 2012

The Digital World

- 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-Marts 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. Apples iPod, iTunes, iPhone; Netflixs 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.Penneys 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. Verizons 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. Citibanks introduction of ATMs
Governmental regulations requiring record keeping. E.g. Toxic Substances Control Act,
Sarbanes-Oxley Act

2 | AB1401 IT 2012

IT Infrastructure Hardware, Software
- 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 Corporations 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
Moores 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
3 | AB1401 IT 2012

Metcalfes 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
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
Speed/Cost
4 | AB1401 IT 2012

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

5 | AB1401 IT 2012

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 users 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?

6 | AB1401 IT 2012

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
- 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

7 | AB1401 IT 2012

- 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 re-
assemble 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
8 | AB1401 IT 2012

- 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 2
32
unique IP addresses scarce IPv6, next version of IP will allow for 2
128
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 users 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 theres a phone line
Cons slow, cant 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)
9 | AB1401 IT 2012

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

10 | AB1401 IT 2012

- 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 recipients
phone number to all its towers recipients cell phone receives broadcast and establishes a connection
with nearest tower voice line is established via the tower by MTSO
E-Commerce
- 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
11 | AB1401 IT 2012

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
12 | AB1401 IT 2012

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

13 | AB1401 IT 2012

- Managing an e-business website
Statistics
o More than 50% of web sales are lost because visitors cant 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 companys 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 persons
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
14 | AB1401 IT 2012

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 dont 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



15 | AB1401 IT 2012

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
o 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 70s is now very weak
A mediocre algorithm for military use may be sufficiently strong for home use
Shifts in time due to
Moores Law
Technological shifts, e.g. quantum computing, internet
Discovery of new mathematics
Others, e.g. cleverness of hackers
o 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
- 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

16 | 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,+) Uses num to select one of the list of arguments given by value1,
value2, and so on
GETPIVOTDATA(data,table,field1,item1,) Extract data from PivotTable
LOOKUP(lookup_value,) Looks up a value in a range or array. (Function has been replaced
by HLOOKUP() and VLOOKUP() functions)
RTD(progID,server,topic1*,topic2,+) Retrieves data in real time from an automation server
HLOOKUP(value,table,row[,range]) Searches for value in table and returns the value in the specified
row useful when data is arranged in rows
VLOOKUP(lookup_value,table_array,
col_index_num[,range_lookup])
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.
If >1 value matches the lookup_value then 1
st
value is
used. If exact match is not found, error value #N/A is
returned
MATCH(value,range[,match_type]) 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
INDEX(ref,row[,col][,area]) Looks in ref and returns the value of the cell at the intersection of
row and, optionally, col
INDEX(ref,MATCH(value,range[,match_type]),
MATCH(value,range[,match_type]))
Use this instead of VLOOKUP to find something in a column on the
left

17 | AB1401 IT 2012

- Error messages
##### column not wide enough
#NAME? cell reference invalid
#NUM! problem with number, e.g. -45
#DIV/0! When a formula divides by 0 or empty cell
#N/A e.g. when using VLOOKUP, data needed is not available/found
#REF formula contains invalid cell reference
Circular ref when a formula references itself directly or indirectly
- Other functions
ISERROR() returns true when there is error and false when there is no error
ISNUMBER()
ISTEXT()
ISBLANK()

Ethics and Privacy
- 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

18 | AB1401 IT 2012

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, whos 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 Kants 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

19 | AB1401 IT 2012

Enterprise Systems
- 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 organisations 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-/country-
specific versions
E.g. SAP has a local HR version for Singapore to reflect CPF contribution scheme

20 | AB1401 IT 2012

- 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 organisations 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

21 | AB1401 IT 2012

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
o 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. SAPs mobile apps, Sybases 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


22 | AB1401 IT 2012

Database Design
- 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)