You Name Here 1. Name a company that uses data as a source of competitive advantage. Justify your response. 2. Define dynamic pricing (in your own words) and provide an example not found in the text. 3. Define the following terms: table, record, field. Provide another name for each term, as well as an example. 4. Why would a firm use a loyalty card? What is the incentive for the firm? What is the incentive for consumers to opt in and use loyalty cards? What kinds of strategic assets can these system create? 5. Make a list of the kind of data you might give up when using a cash register, a Web site, or a loyalty card, or when calling a firm’s customer support line. How might firms leverage this data to better serve you and improve their performance? 6. What is HIPPA? What industry does it impact? 7. How might information systems impact mergers and acquisitions? What are the key issues to consider? 8. Find the Web page for your school’s information systems department. What is the URL that gets you to this page? Label the host name, domain name, path, and file for this URL. Are their additional subdomains? If so, indicate them, as well. 9. What is the difference between TCP and UDP? Why would you use one over the other? 10. Research online for the latest country rankings for broadband service. Where does the United States currently rank? Why? Published by Flat World Knowledge, Inc. © 2014 by Flat World Knowledge, Inc. All rights reserved. Your use of this work is subject to the License Agreement available here http://www.flatworldknowledge.com/legal. No part of this work may be used, modified, or reproduced in any form or by any means except as expressly permitted under the License Agreement. Information Systems: A Manager’s Guide to Harnessing Technology V 3.0 By John Gallaugher Chapter 14 A Manager’s Guide to the Internet and Telecommunications Learning Objectives Describe how the technologies of the Internet combine to answer these questions: What are you looking for? Where is it? And how do we get there? Interpret a URL, understand what hosts and domains are, describe how domain registration works, describe cybersquatting, and give examples of conditions that constitute a valid and invalid domain-related trademark dispute. Describe certain aspects of the Internet infrastructure that are fault-tolerant and support load balancing. Discuss the role of hosts, domains, IP addresses, and the DNS in making the Internet work. HOW THE INTERNET WORKS Internet service provider (ISP): Organization or firm that provides access to the internet. Connect to one another, exchanging traffic. Ensure that messages can get to any other computer that’s online and willing to communicate. Uniform Resource Locator (URL) Protocol: Enables communication by defining the format of data and rules for exchange. Hypertext transfer protocol: Application transfer protocol that allows Web browsers and Web servers to communicate with each other. S.

1. You Name Here
1. Name a company that uses data as a source of competitive
advantage. Justify your response.
2. Define dynamic pricing (in your own words) and provide an
example not found in the text.
3. Define the following terms: table, record, field. Provide
another name for each term, as well as an example.
4. Why would a firm use a loyalty card? What is the incentive
for the firm? What is the incentive for consumers to opt in and
use loyalty cards? What kinds of strategic assets can these
system create?
5. Make a list of the kind of data you might give up when using
a cash register, a Web site, or a loyalty card, or when calling a
firm’s customer support line. How might firms leverage this
data to better serve you and improve their performance?
6. What is HIPPA? What industry does it impact?
7. How might information systems impact mergers and
acquisitions? What are the key issues to consider?
8. Find the Web page for your school’s information systems
department. What is the URL that gets you to this page? Label
the host name, domain name, path, and file for this URL. Are
their additional subdomains? If so, indicate them, as well.
9. What is the difference between TCP and UDP? Why would
you use one over the other?

2. 10. Research online for the latest country rankings for
broadband service. Where does the United States currently
rank? Why?
Published by Flat World Knowledge, Inc.
© 2014 by Flat World Knowledge, Inc. All rights reserved.
Your use of this work is subject to the License Agreement
available
here http://www.flatworldknowledge.com/legal. No part of this
work may be used, modified, or reproduced in any form or by
any means except as expressly permitted under the License
Agreement.
Information Systems: A Manager’s Guide to Harnessing
Technology V 3.0
By John Gallaugher
Chapter 14
A Manager’s Guide to the Internet and Telecommunications
Learning Objectives
Describe how the technologies of the Internet combine to
answer these questions: What are you looking for? Where is it?
And how do we get there?
Interpret a URL, understand what hosts and domains are,
describe how domain registration works, describe
cybersquatting, and give examples of conditions that constitute
a valid and invalid domain-related trademark dispute.

3. Describe certain aspects of the Internet infrastructure that are
fault-tolerant and support load balancing.
Discuss the role of hosts, domains, IP addresses, and the DNS
in making the Internet work.
HOW THE INTERNET WORKS
Internet service provider (ISP): Organization or firm that
provides access to the internet.
Connect to one another, exchanging traffic.
Ensure that messages can get to any other computer that’s
online and willing to communicate.
Uniform Resource Locator (URL)
Protocol: Enables communication by defining the format of data
and rules for exchange.
Hypertext transfer protocol: Application transfer protocol that
allows Web browsers and Web servers to communicate with
each other.
SMTP: Simple mail transfer protocol: server to hold e-mail.
FTP: Application transfer protocol that is used to copy files
from one computer to another.
Identifies resources on the internet along with the application
protocol
Anatomy of a web address
Application Transfer Protocol
Host name
Domain name (top-level domain)

4. Path
File
Case-sensitive
Hosts and Domain Names
Domain name: Represents an organization.
Hosts: Public services offered by that organization.
Load balancing: Distributing a computing or networking
workload across multiple systems in order to avoid congestion
and slow performance.
Fault tolerance: Systems that are capable of continuing
operation even if a component fails.
None of these are case-sensitive.
Owning a Domain
One can register a domain name, paying for a renewable right to
use that domain name.
Web hosting services: Firm that provides hardware and services
to run the Web sites of others.
ICANN (Internet Corporation for Assigning Names and
Numbers): Nonprofit organization responsible for managing the
Internet’s domain and numbering.
Cybersquatting: Acquiring a domain name that refers to a firm,
individual, product, or trademark, with the goal of exploiting it
for financial gain.
Path Name and File Name
Paths map to a folder location where the file is stored on the
server.
Hypertext markup language (HTML): Language used to
compose Web pages.
Both are case sensitive

5. IP Address
Can be used to identify a user’s physical location.
NAT (network address translation): Conserves IP addresses by
mapping devices on a private network to single Internet-
connected devices that acts on their behalf.
Helps delay the impact of the IP address drought.
Value used to identify a device that is connected to the Internet
Domain Name Service (DNS)
Distributed database that looks up host and domain names and
returns the actual IP address for them.
Nameservers: Find Web servers, e-mail servers, and more.
Cache: Temporary storage space used to speed computing tasks.
Internet directory service that allows devices and services to be
named and discoverable
Domain Name Service (DNS)
Learning objectives
Understand the layers that make up the Internet and describe
why each is important.
Discuss the benefits of Internet architecture in general and
TCP/IP in particular.
Name applications that should use TCP and others that might
use UDP.
Understand what a router does and the role these devices play in
networking.
Conduct a traceroute and discuss the output, demonstrating how

6. Internet interconnections work in getting messages from point
to point.
Understand why mastery of Internet infrastructure is critical to
modern finance and be able to discuss the risks in automated
trading systems.
Describe VoIP, and contrast circuit versus packet switching,
along with organizational benefits and limitations of each.
TCP/IP
TCP (Transmission control protocol): Works at both ends of
internet communication to ensure a perfect copy of a message is
sent.
Packets or datagrams: Unit of data forwarded by a network.
All internet transmissions are divided into packets.
IP (Internet protocol): Routing protocol that is in charge of
forwarding packets on the internet.
Routers: Computing device that connects networks and
exchanges data between them.
TCP/ip
Router
Router
Router
Router
Router
TCP
TCP
IP
Web page on a web server

7. Web page on a computer
TCP/IP
UDP (User datagram protocol): Operates instead of a TCP in
applications where delivery speed is important and quality can
be sacrificed.
VoIP (Voice over Internet protocol): Transmission technologies
that enable voice communications to take place over the Internet
and private packet-switched networks.
Router and Computer CONNECTIONS
Routers are connected wirelessly or by cables.
Copper cables with transmissions sent through via electricity.
Fiber-optic lines-glass lined cables that transmit light.
Peering: When separate ISPs link their networks to swap traffic
on the Internet.
Takes place at neutral sites called Internet exchange points
(IXPs).
Colocation Facility (Colo)

8. Provides a place where:
Gear from multiple firms can come together.
Peering of Internet traffic can take place.
Equipment connecting in colos:
High-speed lines from ISPs.
Telecom lines from large private data centers.
Servers hosted in a colo to be closer to high-speed Internet
connections.
Traceroute
Repeatedly sends a cluster of three packets starting at the first
router connected to a computer.
Builds out the path that packets take to their destination.
Built into all major desktop operating systems.
Several Web sites will run it between locations.
Neat way to explore how the Internet works.
Learning Objectives
Understand the last-mile problem and be able to discuss the
pros and cons of various broadband technologies, including
DSL, cable, fiber, and various wireless offerings.
Describe 3G and 4G systems, listing major technologies and
their backers.
Understand the issue of Net neutrality and put forth arguments
supporting or criticizing the concept.
Last Mile
Internet backbone: High-speed data lines that interconnect and
collectively form the core of the Internet.
Amdahl’s Law: System’s speed is determined by its slowest
component.
Last mile problem: Internet connections are the slowest part of

9. the network.
Broadband: High-speed Internet connections.
Bandwidth: Network transmission speeds that are expressed in
some form of bits per second (bps).
Refers to Technologies that connect end users to the Internet
Cable broadband
Uses thick copper wire to offer broadband access.
Coaxial cable: Insulated copper cable used by television
providers.
Has shielding that reduces electrical interference.
Allows cable signals to travel longer distances without
degrading and with less chance of interference.
Limitation: Requires customers to share bandwidth with
neighbors.
Digital Subscriber Line (DSL)
Broadband technology that uses the wires of a local telephone
network.
Speeds vary depending on the technology deployed.
Limitation: uses standard copper telephone wiring that lacks the
shielding used by cable.
Broadband over power line technology has been available for
years.
Deployments are few because it is considered to be pricier and
less practical than alternatives.
Fiber to the Home (FTTH)

10. Broadband service provided via light-transmitting fiber-optic
cables.
Fastest last-mile technology and works easily over long
distances.
Limitations:
Need to build fiber infrastructure from scratch.
Cost of building is enormous.
Wireless
Mobile wireless service from cell phone access providers is
delivered via cell towers.
Providers require a wireless spectrum.
Wireless spectrum: electromagnetic frequencies used for
communication.
Most mobile cell phone services have to license spectrum.
3G
Offer access speeds usually less than 2 Mbps.
3G standards can be narrowed down to:
GSM: Global system for mobile communications
CDMA: Code division multiple access
3G is being replaced by high-bandwidth 4G.
4g
The winner in 4G technologies is:
LTE - Long Term Evolution.
Download speed is 5 to 18 Mbps and upload speed is reaching 2
to 9 Mbps.
Some tests showed download speeds as high as 50 Mbps and
upload speeds as high as 25 Mbps.

11. Satellite Wireless
Terrestrial wireless: provided by earth-bound base stations like
cell phone towers.
Possible via satellite.
First residential satellite services were only used for downloads.
Later some services were based on satellites in geosynchronous
earth orbit (GEO).
O3b hopes to provide fiber-quality wireless service to more than
150 countries, specifically targeting underserved nations.
Wi-Fi and Other Hotspots
Wi-Fi: Wireless local-area networking devices
Stands for wireless fidelity.
Wi-Fi antennas are built into their chipsets.
To connect to the Internet, a device needs to be within range of
a base station or hotspot.
Wi-Fi base stations used in the home are usually bought by end
users.
They are then connected to a cable, DSL, or fiber provider.
Net Neutrality
Access providers have wanted to offer varying coverage,
depending on the service used and bandwidth consumed.
Internet content providers worry that without strong neutrality
rules, ISPs may block content or favor their own offerings
above rivals.
If network providers move away from flat-rate pricing toward
usage-based pricing, this may limit innovation.
Principle that all Internet traffic should be treated equally

12. Published by Flat World Knowledge, Inc.
© 2014 by Flat World Knowledge, Inc. All rights reserved.
Your use of this work is subject to the License Agreement
available
here http://www.flatworldknowledge.com/legal. No part of this
work may be used, modified, or reproduced in any form or by
any means except as expressly permitted under the License
Agreement.
Information Systems: A Manager’s Guide to Harnessing
Technology V 3.0
By John Gallaugher
Chapter 13
The Data Asset: Databases, Business Intelligence, analytics, Big
Data, and Competitive Advantage
Learning objectives
Understand how increasingly standardized data, access to third-
party data sets, cheap, fast computing, and easier-to-use
software are collectively enabling a new age of decision
making.
Be familiar with some of the enterprises that have benefited
from data-driven, fact-based decision making.

13. Data and Decision Making
Big data: The collections, storage, and analysis of extremely
large, complex, and often unstructured data sets that can be
used by organizations to generate insights that would otherwise
be impossible to make.
The massive amount of data available to today’s managers.
Unstructured, big, and costly to work through conventional
databases.
Made available by new tools for analysis and insight.
Decision making is data-driven, fact-based and enabled by:
Standardized corporate data.
Access to third-party datasets through cheap, fast computing
and easier-to-use software.
Data and decision making
Business intelligence (BI): Combines aspects of reporting, data
exploration and ad hoc queries, and sophisticated data modeling
and analysis.
Analytics: Driving decisions and actions through extensive use
of:
Data
Statistical and quantitative analysis
Explanatory and predictive models
Fact-based management
Enterprises that Have Benefited from Data Mastery
Walmart: Moved to the top of the Fortune 500 list.
Caesars Entertainment: Grew to be twice as profitable as rivals
and rich enough to acquire them.
Capital One: Found valuable customers that competitors were

14. ignoring.
Its ten-year financial performance was ten times greater than the
S&P 500 average.
Learning Objectives
Understand the difference between data and information.
Know the key terms and technologies associated with data
organization and management.
Organizing Data - Key Terms and Technology
Database: Single table or a collection of related tables
Database management systems (DBMS): Software for creating,
maintaining, and manipulating data
Known as database software
Structured query language (SQL): Used to create and
manipulate databases
Database administrator (DBA): Job focused on directing,
performing, or overseeing activities associated with a database
or set of databases
Database design and creation
Implementation
Maintenance
Backup and recovery
Policy setting and enforcement
Security
Key terms associated with database systems
TABLE OR FILE

15. List of data, arranged in columns or fields and rows or records.
COLUMN OR FIELD
Column in a database table.
Represents each category of data contained in a record.
ROW OR RECORD
Row in a database table.
Represents a single instance of the data in the table.
Key terms associated with database systems
KEY

16. Field or fields used to uniquely identify a record, and to relate
separate tables in a database, like a social security number.
RELATIONAL DATABASE
Most common standard for expressing databases.
Tables or files are related based on common keys.
Learning objectives
Understand various internal and external sources for enterprise
data.
Recognize the function and role of data aggregators, the
potential for leveraging third-party data, the strategic
implications of relying on externally purchased data, and key
issues associated with aggregators and firms that leverage
externally sourced data.
Transaction Processing Systems
Transaction: Any kind of business exchange.
Loyalty card: System that provides rewards in exchange for
consumers , allowing tracking and recording of their activities.
Enhances data collection and represents a significant switching

17. cost.
Record a transaction or some form of business-related
exchange, such as a cash register sale, ATM withdrawal,
or product return
Enterprise Software
Firms set up systems to gather additional data beyond
conventional purchase transactions or Website monitoring.
Customer relationship management systems (CRM) - Empower
employees to track and record data at nearly every point of
customer contact.
Includes other aspects that touch every aspect of the value
chain, including SCM and ERP.
Surveys
Firms supplement operational data with additional input from
surveys and focus groups.
Direct surveys can give better information than a cash register.
Many CRM products have survey capabilities that allow for
additional data gathering at all points of customer contact.
External Sources
Organizations can have their products sold by partners and can
rely heavily on data collected by others.
Data from external sources might not yield competitive
advantage on its own:
Can provide operational insight for increased efficiency and
cost savings.
May give firms a high-impact edge.

18. Data Aggregators
One has to be aware of the digital tracking of individuals.
Made possible by the availability of personal information
online.
Firms that collect and resell data
Learning objectives
Know and be able to list the reasons why many organizations
have data that can’t be converted to actionable information.
Understand why transactional databases can’t always be queried
and what needs to be done to facilitate effective data use for
analytics and business intelligence.
Recognize key issues surrounding data and privacy legislation.
Reasons for Poor Information
Incompatible systems:
Legacy systems: Older information systems that are
incompatible with other systems, technologies, and ways of
conducting business.
Operational data cannot always be queried:
Most transactional databases are not set up to be simultaneously
accessed for reporting and analysis.
Database analysis requires significant processing .
Learning Objectives
Understand what data warehouses and data marts are and the
purpose they serve.
Know the issues that need to be addressed in order to design,
develop, deploy, and maintain data warehouses and data marts.
Recognize and understand technologies behind “Big Data,” how
they differ from conventional data management approaches, and

19. how they are currently being used for organizational benefit.
Data Warehouses and Data Marts
Structured for fast online queries and exploration.
Collects data from many different operational systems.
Data mart: Database or databases focused on addressing the
concerns of a specific problem or business unit.
Set of databases designed to support decision making in an
organization
Data Warehouses and Data Marts
Marts and warehouses may contain huge volumes of data.
Building large data warehouses can be expensive and time
consuming.
Large-scale data analytics projects should build on visions with
business-focused objectives.
Information Systems Supporting Operations
Maintaining Data Warehouses and Data Marts
Firms can address the broader issues needed to design, develop,
deploy, and maintain its system through data:
Relevance
Sourcing
Quantity and quality
Hosting
Governance

20. Insights from Unstructured Big Data
Hadoop: Made up of half-dozen separate software pieces and
requires the integration of these pieces to work
Advantages:
Flexibility
Scalability
Cost effectiveness
Fault tolerance
E-discovery
Firm should account for it in its archiving and data storage
plans.
Data can be used later and therefore should be stored in order.
Identifying and retrieving relevant electronic information to
support litigation efforts
Learning Objectives
Know the tools that are available to turn data into information.
Identify the key areas where businesses leverage data mining.
Understand some of the conditions under which analytical
models can fail.
Recognize major categories of artificial intelligence and
understand how organizations are leveraging this technology.
Business Intelligence Toolkit
CANNED REPORTS

21. Provide regular summaries of information in a predetermined
format.
AD HOC REPORTING TOOLS
Puts users in control so that they can create custom reports on
an as-needed basis by selecting fields, ranges, summary
conditions, and other parameters.
DASHBOARDS
Heads-up display of critical indicators that allows managers to
get a graphical glance at key performance metrics.
ONLINE ANALYTICAL PROCESSING (OLAP)
Takes data from standard relational databases, calculates and
summarizes the data, and then stores the data in a special
database called a data cube.
Data cube: Stores data in OLAP report

22. Data mining
Models based on:
Customer segmentation and market basket analysis.
Marketing and promotion targeting.
Collaborative filtering and customer churn.
Fraud detection, financial modeling, hiring and promotion.
Prerequisites
Organization must have clean, consistent data.
Events in that data should reflect trends.
Using computers to identify hidden patterns in large data sets
and to build models from this data
Problems in Data Mining
Using bad data can give wrong estimates, thus exposing the firm
to risk.
When the market does not behave as it has in the past,
computer-driven investment models are not effective.
Overengineering: Building a model with so many variables that
the solution arrived at might only work on the subset of data
used to create it.
Skills for data mining
INFORMATION TECHNOLOGY

23. STATISTICS
BUSINESS KNOWLEDGE
ARTIFICIAL INTELLIGENCE
Data mining has its roots in AI.
Neural network: Examines data and hunts down and exposes
patterns, in order to build models to exploit findings.
Expert systems: Leverages rules or examples to perform a task
in a way that mimics applied human expertise.
Genetic algorithms: Model building techniques where computers
examine many potential solutions to a problem.
Modifies various mathematical models that have to be searched
for a best alternative.
Computer software that seeks to reproduce or mimic human
thought, decision making, or brain functions
Learning objectives
Understand how Walmart has leveraged information technology
to become the world’s largest retailer.
Be aware of the challenges that face Walmart in the years
ahead.
Walmart: Data-Driven Value Chain

24. Largest retailer in the world.
Source of competitive advantage is scale.
Efficiency starts with a proprietary system called Retail Link.
Retail Link: Records a sale and automatically triggers inventory
reordering, scheduling, and delivery.
Inventory turnover ratio: Ratio of a company’s annual sales to
its inventory.
Back-office scanners keep track of inventory as supplier
shipments come in.
Data mining prowess
Gets data from varying environmental conditions.
Protects the firm from a retailer’s twin nightmares:
Too much inventory
Too little inventory
Helps the firm tighten operational forecasts.
Enables prediction.
Data drives the organization.
Reports form the basis of sales meetings and executive strategy
sessions.
Sharing data and keeping secrets
Walmart shares sales data only with relevant suppliers:
Stopped sharing data with information brokers.
Custom-builds large portions of its information systems to keep
competitors off its trail.
Other aspects of the firm’s technology remain confidential.
Challenges
Finding huge markets or dramatic cost savings to boost profits

25. and continue to move its stock price higher.
Criticisms:
Accusations of sub-par wages draw union activists.
Poor labor conditions at some of the firm’s contract
manufacturers.
Demand prices so aggressively low that suppliers end up
cannibalizing their own sales at other retailers.
Learning Objectives
Understand how Caesars has used IT to move from an also-ran
chain of casinos to become the largest gaming company based
on revenue.
Name some of the technology innovations that Caesars is using
to help it gather more data, and help push service quality and
marketing program success.
Caesars’ Solid Gold CRM for the Service Sector
Caesars Entertainment provides an example of exceptional data
asset leverage in the service sector.
Focus on how this technology enables world-class service
through customer relationship management.
Leveraged its data-powered prowess to move from a chain of
casinos to the largest gaming company by revenue.
Collecting Data
Caesars’ collects customer data on all activities on their
properties.
Used to track preferences and see if a customer is worth
pursuing.
Total Rewards loyalty card system.

26. Opt-in: Marketing effort that requires customer consent.
Opt-out programs: Enroll all customers by default.
Most Valuable Customers
Customer lifetime value (CLV): Present value of the likely
future income stream generated by an individual purchaser.
Tracks over ninety demographic segments:
Each responds differently to different approaches.
Iterative model of mining the data to identify patterns.
Creates and tests a hypothesis against a control group.
Analyzes to statistically verify the outcome.
Profits come from locals and people aged 45 years and older.
Data-driven service
Identifies high-value customers and gives them special
attention.
Customers can obtain reserved tables and special offers.
Tracks gamblers suffering unusual losses and provides feel-
good offers to them.
CRM effort monitors any customer behavior changes.
Customers come back because they feel that the company treats
them well.
Focuses on service quality and customer satisfaction.
Embedded in its information systems and operational
procedures.
Employees are measured on metrics that include speed and
friendliness.
Compensated based on guest satisfaction ratings.
Changed the corporate culture at Caesars from an every
property-for-itself mentality to a collaborative, customer-
focused enterprise.

27. Innovation and strategyINNOVATIONSTRATEGYHas new
innovations that help it gather more data
Push service quality and marketing program success
Interactive billboards
RFID-enabled poker chips and under-table RFID readers
Incorporation of drink ordering to gaming machines
Data advantage creates intelligence for a high-quality and
highly personal customer experience
Data gives the firm a service differentiation edge
Loyalty program represents a switching cost
Firm’s technology is unique and holds many patents
CHALLENGES
Gaming is a discretionary spending item, and when the economy
tanks, gambling is one of the first things consumers will cut.
Taken private: Publicly held company has its outstanding shares
purchased by an individual or by a small group of individuals
who wish to obtain complete ownership and control.
Has been through a risky overly optimistic buyout.