IT for Management: On-Demand Strategies for
Performance, Growth, and Sustainability
Eleventh Edition
Turban, Pollard, Wood
Chapter 2
Information Systems, IT Architecture, Data
Governance, and Cloud Computing

Learning Objectives (1 of 5)
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Figure 2.2 IPOS Cycle
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Figure 2.3: Components of an Information System
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Data, Information, Knowledge, & Wisdom
• Raw data describes products, customers, events,
activities, and transactions that are recorded, classified,
and stored.
• Information is processed, organized, or put into context
data with meaning and value to the recipient.
• Knowledge applies understanding, experience,
accumulated learning, and expertise to current
problem.
• Wisdom applies a moral code and prior experiences to
form a judgement.
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Figure 2.4: Examples of Data, Information, Knowledge, and Wisdom
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Figure 2.5 Input-Processing-Output Model
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Figure 2.6 Hierarchy of Information Systems, Input/Output and
User Levels
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Transaction Processing Systems (TPS)
• Internal transactions: originate or occur within the
organization (payroll, purchases, etc.)
• External transactions: originate outside the
organization (customers, suppliers, etc.)
• Improve sales, customer satisfaction, and reduce many
other types of data errors with financial impacts
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Batch v. Online Real-Time Processing
• Batch Processing: collects all transactions for a time
period, then processes the data and updates the data
store
• OLTP: processes each transaction as it occurs (real-
time)
• Batch processing costs less than OLTP, but may be
inaccurate from update delays
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Management Information Systems (MIS)
• General-purpose reporting systems that provide
reports to managers for tracking operations,
monitoring, and control.
o Periodic: reports created or run according to a pre-set
schedule.
o Exception: generated only when something is outside
designated parameters.
o Ad Hoc, or On Demand: unplanned, generated as needed.
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Decision Support Systems (DSS) (1 of 2)
• Interactive, knowledge-based applications that support
decision making
• Support unstructured and unstructured decisions with
the following characteristics:
o Easy-to-use interactive interface
o Models or formulas that enable sensitivity analysis
o Data from multiple sources
• Can be used for open-ended What-if analysis and more
structured Goal-seeking
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Executive Information Systems (EIS)
• Strategic-level information systems that help executives
and senior managers analyze the environment in which
the organization exists
• Used to identify log-term trends and plan appropriate
actions
• Weakly structured data from both internal and external
sources
• Designed to be easily operated by executives
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Information Systems Components and
Classification
1. Name the six components of an IS.
2. Describe the differences between data, information, knowledge,
and wisdom.
3. Define TPS and give an example.
4. Explain why TPSs need to process incoming data before they are
stored.
5. Define MIS and DSS and give an example of each.
6. What characteristics distinguish a DSS from an MIS?
7. What level of personnel typically use an EIS?
8. What factors determine IS value?
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Learning Objectives (2 of 5)
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Figure 2.10
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IT Infrastructure
• Inventory of the physical IT devices that an organization
owns and operates
• Describes organization’s entire collection of hardware,
software, networks, data centers, facilities and related
equipment
• Does not include people or process components of an
IS
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IT Architecture
• Guides the process of planning, acquiring, building,
modifying, interfacing and deploying IT resources in a
single department within an organization
• Should offer a way to systematically identify
technologies that work together to satisfy the needs of
the departments’ users
• Blueprint for how future technology acquisitions and
deployment will take place
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Enterprise architecture (EA)
• Reviews all the information systems across all
departments in an organization to develop a strategy to
organize and integrate the organization’s IT
Infrastructures
• Helps meet the current and future goals of the
enterprise and maximize the value of technology to the
organization.
• The way IT systems and processes are structured
• Solves two critical challenges: where are we going;
how do we get there?
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Decision Support Systems (DSS) (2 of 2)
• Strategic Focus
o IT systems’ complexity
o Poor business alignment
• Business and IT Benefits of EA
o Cuts IT costs; increases productivity with information, insight,
and ideas
o Determines competitiveness, flexibility, and IT economics
o Aligns IT capabilities with business strategy to grow, innovate,
and respond to market demands
o Reduces risk of buying or building systems and enterprise
apps
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Measuring EA Success: KPIs
• Key Performance Indicators (KPIs) are measures that
demonstrate the effectiveness of a business process at
achieving organizational goals. They present data in
easy-to-comprehend and comparison-ready formats.
• KPIs measure financial, social media, sales and
marketing, operations and supply chain, or
environmental data.
• KPI examples are current ration; accounts payable
turnover; net profit margin; new followers per week;
cost per lead; order status.
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EA Components
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IT Infrastructure, IT Architecture, and
Enterprise Architecture
1. What is the purpose of the IT infrastructure?
2. How is the IT infrastructure different from the IT
architecture?
3. What is the purpose of an enterprise architecture?
4. What are the business benefits of EA?
5. Explain why it is necessary for the EA to maintain
alignment between IT and business strategy?
6. Explain KPIs and give an example.
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Learning Objectives (3 of 5)
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Information Management
• The use of IT tools and methods to collect, process,
consolidate, store, and secure data from sources that
are often fragmented and inconsistent
• Why a continuous plan is needed to guide, control, and
govern IT growth
• Information management is critical to data security and
compliance with continually evolving regulatory
requirements, such as the Sarbanes-Oxley Act, Basel III,
the Computer Fraud and Abuse Act (CFAA), the USA
PATRIOT Act, and the Health Insurance Portability and
Accountability Act (HIPAA)
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Reasons for Information Deficiencies
• Information deficiencies are still a problem, caused by:
o Data Silos, trapping information in stand alone data stores not
accessible by other information systems
o Lost or bypassed data, due to flaws in the data collection
process
o Poorly designed interfaces
o Nonstandardized data formats, impeding efficient analysis
o Cannot hit moving targets, because data tracking
requirements keep changing
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Reasons for Information Deficiencies:
Data Silos
Figure 2.14 Data (or information) silos are ISs that do not have the capability to
exchange data with other ISs, making timely coordination and communication
across functions or departments difficult.
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Information Management Benefits
• Business benefits of information management
o Improves decision quality
o Improves the accuracy and reliability of management
predictions
o Reduces the risk of noncompliance
o Reduces time and cost
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Enterprise Data Governance
• Data governance is the control of enterprise data
through formal policies and procedures to help ensure
data can be trusted and are accessible.
• Enterprise-wide Data Governance
o Crosses boundaries and used by people through the
enterprise.
o Reduces legal risks associated with unmanaged or
inconsistently managed information.
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Data Governance: Master Data &
Management
• Master Data & Management (MDM)
o Synchronizes critical data from disparate systems into one
master file
o Creates high-quality trustworthy data:
• Running the business with transactional or operational use
• Improving the business with analytic use
o Requires strong data governance to manage availability,
usability, integrity, and security
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Information Management and Data
Governance
1. What is information management?
2. What is a the “silo effect” and how does it affect business
performance?
3. What three factors are driving collaboration and information
sharing?
4. What are the business benefits of information management?
5. Explain why it is important to develop an effective data
governance program?
6. Explain the purposes of master data management.
7. Why has interest in data governance and MDM increased?
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Learning Objectives (4 of 5)
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Data Centers and Cloud Computing
• Data Centers and Cloud Computing are types of IT
infrastructures or computing systems.
• Data Center also refers to a physical facility.
o Houses large numbers of network servers used for the
storage, processing, management, distribution, and archiving
of data, systems, Web traffic, services, and enterprise
applications.
National Climatic Data Center U.S. Nation Security Agency Apple
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When a Data Center Goes Down, So Does
Business
• Business is Reliant Upon data
o Uber (car-hailing service)
• Users flooded social media with complaints when they
experienced an hour-long outage
o WhatsApp (smartphone text-messaging service)
• Competition added 2 million new registered users within
24 hours of WhatsApp outage (a record)
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Data Virtualization
• Data Virtualization
o Cisco’s single solution integrating computing, storage,
networking, virtualization, and management into a single
(unified) platform
o Virtualization gives greater IT flexibility and cutting costs:
• Instant access to data any time in any format
• Respond faster to changing data analytic needs
• Cut complexity and cost
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Data Virtualization Benefits
Data Virtualization compared to traditional data integration and replication
methods:
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The Software–Defined Data Center (SDDC)
• An SDDC facilitates the integration of the various
infrastructure silos within organizations.
o Optimizes the use of resources, balances workloads
o Maximizes operational efficiency by dynamically distributing
workloads and provisioning networks
o SDDC Goals: decrease costs and increase agility, policy
compliance and security by deploying, operating, managing
and maintaining applications.
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Figure 2.18 SDDC Infrastructure
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Cloud Computing
• What is “The Cloud”?
o A general term for infrastructure that uses the Internet and
private networks to access, share, and deliver computing
resources
o Scalable delivery as a service to end-users over a network
o Should be approached with greater diligence than other IT
decisions as a new technology including Vendor Management
and Cloud Service Agreements (CSAs)
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Cloud Computing Types
• Private Cloud: Single-tenant environments with
stronger security and control (retained) for regulated
industries and critical data.
• Public Cloud: Multiple-tenant virtualized services
utilizing the same pool of servers across a public
network (distributed).
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Cloud Computing CSAs
• Cloud Service Agreements
o A negotiated agreement between a company and service
provider that can be a legally binding contract or an informal
contract.
o The goal is not building the best CSA terms, but getting the
terms that are most meaningful to the business needs.
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Cloud Infrastructure
• The Value of the Cloud Infrastructure:
o Dynamic, not static
o Provides a way to make apps and computing power available
on demand because they are provided as a service
o Referred to as Software As A Service, or SaaS. (examples:
Google Apps and Salesforce.com)
o Helps companies become more agile and responsive while
significantly reducing IT costs and complexity
Large organizations are moving to Enterprise Clouds.
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Data Centers, Cloud Computing, and
Virtualization (1 of 2)
1. What is a data center?
2. What is the difference between on premise data centers and cloud
computing?
3. What is an SDDC?
4. What are the advantages of using an SDDC?
5. How can cloud computing solve the problems of managing software licenses?
6. What factors should be considered when selecting a cloud vendor or
provider?
7. When are private clouds used instead of public clouds?
8. Explain three issues that need to be addressed when moving to cloud
computing or services.
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Learning Objectives (5 of 5)
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Cloud Services and Virtualization
• Sustaining performance requires new business apps
and analytics capabilities, which comprise the front
end,― and the data stores and digital infrastructure, or
back end, to support them.
• The back end is where the data reside.
• Data may have to navigate through a congested IT
infrastructure that was first designed decades ago.
• Cloud Services are services made available to users on
demand via the Internet from a cloud computing
provider's servers instead of being accessed through an
organization’s on-premises servers.
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Anything-As-A-Service Models
There are different types of Cloud Service Model
• Software as a Service (SaaS)
o End-user apps, like SalesForce
• Platform as a Service (PaaS)
o Tools and services making coding and deployment faster and more
efficient, like Google App Engine
• Infrastructure as a Service (IaaS)
o Hardware and software that power computing resources, like EC2 & S3
(Amazon Web Services)
• Data as a Service (DaaS)
o Data shared among clouds, systems, apps, regardless the data source or
storage location
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Data Centers, Cloud Computing, and
Virtualization
Figure 2.17 Virtual machines running on a simple computer hardware layer.
Virtualization: created by a software layer (virtualization layer) containing its
own operating system and applications as a physical computer.
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Virtualization Concepts
• A virtual machine is a software-created computer.
Technically, a virtual machine (VM) is created by a
software layer, called the virtualization layer.
• That layer has its own Windows or other OS and apps,
such as Microsoft Office, as if it were an actual physical
computer.
• A VM behaves exactly like a physical computer and
contains its own virtual―that is, software-based―CPU,
RAM (random access memory), hard drive, and
network interface card (NIC).
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Virtualization Benefits
• Characteristics & Benefits
o Memory-intensive
• Huge amounts of RAM due to massive processing
requirements
o Energy-efficient
• Up to 95% reduction in energy use per server through less
physical hardware
o Scalability and load balancing
• Handles dynamic demand requests like during the Super
Bowl or World Series
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Data Centers, Cloud Computing, and
Virtualization Questions (2 of 2)
1. What is SaaS?
2. What is PaaS?
3. What is IaaS?
4. How might companies risk violating regulation or compliance
requirements with cloud services?
5. In what ways is a virtualized information system different from a
traditional information system?
6. Describe the different types of Virtualization.
7. What is load balancing and why is it important?
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