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1. Information Systems for Business and Beyond Questions:
a. Chapter 9 – study questions 1-10, Exercise 3
b. Chapter 10 – study questions 1-10, Exercise 1

2. Information Technology and Organizational Learning Assignment:
a. Chapter 7 – Review the section on dealing with multiple locations and outsourcing. Review figure 7.2 and note how virtual team communications further reiterates the importance of this model. 
b. Chapter 8 – Review the Siemens AG case study. Note the importance of understanding the interrelationships amongst all the senior leaders at every location. Pay special attention to Figure 8.1 and Figure 8.2. Note how the corporate CIO should engage with each of the regional leaders. Why is this important?
The above submission should be two -pages in length (one page for each question) and adhere to APA formatting standards.

**Remember the APA cover page and the references (if required) do not count towards the page length**
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Information Technology
and Organizational

Managing Behavioral Change

in the Digital Age
Third Edition

Information Technology
and Organizational

Managing Behavioral Change

in the Digital Age
Third Edition

Arthur M. Langer

CRC Press
Taylor & Francis Group
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Boca Raton, FL 33487-2742

© 2018 by Taylor & Francis Group, LLC

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Fo r e w o r d xi
Ac k n o w l e d g m e n t s xiii
Au t h o r xv
I n t r o d u c t I o n xvii

c h A p t e r 1 th e “ r Av e l l” c o r p o r At I o n 1
Introduction 1
A New Approach 3

The Blueprint for Integration 5
Enlisting Support 6
Assessing Progress 7

Resistance in the Ranks 8
Line Management to the Rescue 8
IT Begins to Reflect 9
Defining an Identity for Information Technology 10
Implementing the Integration: A Move toward Trust and
Reflection 12
Key Lessons 14

Defining Reflection and Learning for an Organization 14
Working toward a Clear Goal 15
Commitment to Quality 15
Teaching Staff “Not to Know” 16
Transformation of Culture 16

Alignment with Administrative Departments 17
Conclusion 19

v i Contents

c h A p t e r 2 th e It d I l e m m A 21
Introduction 21
Recent Background 23
IT in the Organizational Context 24
IT and Organizational Structure 24
The Role of IT in Business Strategy 25
Ways of Evaluating IT 27
Executive Knowledge and Management of IT 28
IT: A View from the Top 29

Section 1: Chief Executive Perception of the Role of IT 32
Section 2: Management and Strategic Issues 34
Section 3: Measuring IT Performance and Activities 35
General Results 36

Defining the IT Dilemma 36
Recent Developments in Operational Excellence 38

c h A p t e r 3 te c h n o l o gy A s A vA r I A b l e A n d re s p o n s I v e
o r g A n I z At I o n A l d y n A m I s m 41
Introduction 41
Technological Dynamism 41
Responsive Organizational Dynamism 42

Strategic Integration 43
Summary 48

Cultural Assimilation 48
IT Organization Communications with “ Others” 49
Movement of Traditional IT Staff 49
Summary 51

Technology Business Cycle 52
Feasibility 53
Measurement 53
Planning 54
Implementation 55
Evolution 57
Drivers and Supporters 58

Santander versus Citibank 60
Information Technology Roles and Responsibilities 60
Replacement or Outsource 61

c h A p t e r 4 o r g A n I z At I o n A l l e A r n I n g th e o r I e s A n d
te c h n o l o gy 63
Introduction 63
Learning Organizations 72
Communities of Practice 75
Learning Preferences and Experiential Learning 83
Social Discourse and the Use of Language 89

Identity 91
Skills 92

v iiContents

Emotion 92
Linear Development in Learning Approaches 96

c h A p t e r 5 m A n A g I n g o r g A n I z At I o n A l l e A r n I n g A n d
te c h n o l o gy 109
The Role of Line Management 109

Line Managers 111
First-Line Managers 111
Supervisor 111

Management Vectors 112
Knowledge Management 116
Ch ange Management 120
Change Management for IT Organizations 123
Social Networks and Information Technology 134

c h A p t e r 6 o r g A n I z At I o n A l tr A n s F o r m At I o n A n d t h e
bA l A n c e d s c o r e c A r d 139
Introduction 139
Methods of Ongoing Evaluation 146
Balanced Scorecards and Discourse 156
Knowledge Creation, Culture, and Strategy 158

c h A p t e r 7 vI r t uA l te A m s A n d o u t s o u r c I n g 163
Introduction 163
Status of Virtual Teams 165
Management Considerations 166
Dealing with Multiple Locations 166

Externalization 169
Internalization 171
Combination 171
Socialization 172
Externalization Dynamism 172
Internalization Dynamism 173
Combination Dynamism 173
Socialization Dynamism 173

Dealing with Multiple Locations and Outsourcing 177
Revisiting Social Discourse 178
Identity 179
Skills 180
Emotion 181

c h A p t e r 8 sy n e r g I s t I c u n I o n o F It A n d
o r g A n I z At I o n A l l e A r n I n g 187
Introduction 187
Siemens AG 187

Aftermath 202
ICAP 203

v iii Contents

Five Years Later 224
HTC 225

IT History at HTC 226
Interactions of the CEO 227
The Process 228
Transformation from the Transition 229
Five Years Later 231

Summary 233

c h A p t e r 9 Fo r m I n g A c y b e r s e c u r I t y c u lt u r e 239
Introduction 239
History 239
Talking to the Board 241
Establishing a Security Culture 241
Understanding What It Means to be Compromised 242
Cyber Security Dynamism and Responsive Organizational
Dynamism 242
Cyber Strategic Integration 243
Cyber Cultural Assimilation 245
Summary 246
Organizational Learning and Application Development 246
Cyber Security Risk 247
Risk Responsibility 248
Driver /Supporter Implications 250

c h A p t e r 10 d I g I tA l tr A n s F o r m At I o n A n d c h A n g e s I n
c o n s u m e r b e h Av I o r 251
Introduction 251
Requirements without Users and without Input 254
Concepts of the S-Curve and Digital Transformation
Analysis and Design 258
Organizational Learning and the S-Curve 260
Communities of Practice 261
The IT Leader in the Digital Transformation Era 262
How Technology Disrupts Firms and Industries 264

Dynamism and Digital Disruption 264
Critical Components of “ Digital” Organization 265
Assimilating Digital Technology Operationally and Culturally 267
Conclusion 268

c h A p t e r 11 I n t e g r At I n g g e n e r At I o n y e m p l oy e e s t o
Ac c e l e r At e c o m p e t I t I v e A dvA n tA g e 269
Introduction 269
The Employment Challenge in the Digital Era 270
Gen Y Population Attributes 272
Advantages of Employing Millennials to Support Digital
Transformation 272
Integration of Gen Y with Baby Boomers and Gen X 273

i xContents

Designing the Digital Enterprise 274
Assimilating Gen Y Talent from Underserved and Socially
Excluded Populations 276
Langer Workforce Maturity Arc 277

Theoretical Constructs of the LWMA 278
The LWMA and Action Research 281

Implications for New Pathways for Digital Talent 282
Demographic Shifts in Talent Resources 282
Economic Sustainability 283
Integration and Trust 283

Global Implications for Sources of Talent 284
Conclusion 284

c h A p t e r 12 to wA r d b e s t p r A c t I c e s 287
Introduction 287
Chief IT Executive 288
Definitions of Maturity Stages and Dimension Variables in
the Chief IT Executive Best Practices Arc 297

Maturity Stages 297
Performance Dimensions 298

Chief Executive Officer 299
CIO Direct Reporting to the CEO 305
Outsourcing 306
Centralization versus Decentralization of IT 306
CIO Needs Advanced Degrees 307
Need for Standards 307
Risk Management 307

The CEO Best Practices Technology Arc 313
Definitions of Maturity Stages and Dimension Variables in
the CEO Technology Best Practices Arc 314

Maturity Stages 314
Performance Dimensions 315

Middle Management 316
The Middle Management Best Practices Technology Arc 323

Definitions of Maturity Stages and Dimension Variables in
the Middle Manager Best Practices Arc 325

Maturity Stages 325
Performance Dimensions 326

Summary 327
Ethics and Maturity 333

c h A p t e r 13 c o n c l u s I o n s 339
Introduction 339

g l o s s A ry 357
re F e r e n c e s 363
I n d e x 373

x i


Digital technologies are transforming the global economy. Increasingly,
firms and other organizations are assessing their opportunities, develop-
ing and delivering products and services, and interacting with custom-
ers and other stakeholders digitally. Established companies recognize
that digital technologies can help them operate their businesses with
greater speed and lower costs and, in many cases, offer their custom-
ers opportunities to co-design and co-produce products and services.
Many start-up companies use digital technologies to develop new prod-
ucts and business models that disrupt the present way of doing busi-
ness, taking customers away from firms that cannot change and adapt.
In recent years, digital technology and new business models have dis-
rupted one industry after another, and these developments are rapidly
transforming how people communicate, learn, and work.

Against this backdrop, the third edition of Arthur Langer’ s
Information Technology and Organizational Learning is most welcome.
For decades, Langer has been studying how firms adapt to new or
changing conditions by increasing their ability to incorporate and use
advanced information technologies. Most organizations do not adopt
new technology easily or readily. Organizational inertia and embed-
ded legacy systems are powerful forces working against the adoption
of new technology, even when the advantages of improved technology
are recognized. Investing in new technology is costly, and it requires

x ii Foreword

aligning technology with business strategies and transforming cor-
porate cultures so that organization members use the technology to
become more productive.

Information Technology and Organizational Learning addresses these
important issues— and much more. There are four features of the new
edition that I would like to draw attention to that, I believe, make
this a valuable book. First, Langer adopts a behavioral perspective
rather than a technical perspective. Instead of simply offering norma-
tive advice about technology adoption, he shows how sound learn-
ing theory and principles can be used to incorporate technology into
the organization. His discussion ranges across the dynamic learning
organization, knowledge management, change management, com-
munities of practice, and virtual teams. Second, he shows how an
organization can move beyond technology alignment to true technol-
ogy integration. Part of this process involves redefining the traditional
support role of the IT department to a leadership role in which IT
helps to drive business strategy through a technology-based learn-
ing organization. Third, the book contains case studies that make the
material come alive. The book begins with a comprehensive real-life
case that sets the stage for the issues to be resolved, and smaller case
illustrations are sprinkled throughout the chapters, to make concepts
and techniques easily understandable. Lastly, Langer has a wealth of
experience that he brings to his book. He spent more than 25 years
as an IT consultant and is the founder of the Center for Technology
Management at Columbia University, where he directs certificate and
executive programs on various aspects of technology innovation and
management. He has organized a vast professional network of tech-
nology executives whose companies serve as learning laboratories for
his students and research. When you read the book, the knowledge
and insight gained from these experiences is readily apparent.

If you are an IT professional, Information Technology and Organi­
zational Learning should be required reading. However, anyone who
is part of a firm or agency that wants to capitalize on the opportunities
provided by digital technology will benefit from reading the book.

Charles C. Snow
Professor Emeritus, Penn State University

Co­Editor, Journal of Organization Design

x iii


Many colleagues and clients have provided significant support during
the development of the third edition of Information Technology and
Organizational Learning.

I owe much to my colleagues at Teachers College, namely, Professor
Victoria Marsick and Lyle Yorks, who guided me on many of the the-
ories on organizational learning, and Professor Lee Knefelkamp, for
her ongoing mentorship on adult learning and developmental theo-
ries. Professor David Thomas from the Harvard Business School also
provided valuable direction on the complex issues surrounding diver-
sity, and its importance in workforce development.

I appreciate the corporate executives who agreed to participate
in the studies that allowed me to apply learning theories to actual
organizational practices. Stephen McDermott from ICAP provided
invaluable input on how chief executive officers (CEOs) can success-
fully learn to manage emerging technologies. Dana Deasy, now global
chief information officer (CIO) of JP Morgan Chase, contributed
enormous information on how corporate CIOs can integrate tech-
nology into business strategy. Lynn O’ Connor Vos, CEO of Grey
Healthcare, also showed me how technology can produce direct mon-
etary returns, especially when the CEO is actively involved.

And, of course, thank you to my wonderful students at Columbia
University. They continue to be at the core of my inspiration and love
for writing, teaching, and scholarly research.

x v


Arthur M. Langer, EdD, is professor of professional practice
of management and the director of the Center for Technology
Management at Columbia University. He is the academic direc-
tor of the Executive Masters of Science program in Technology
Management, vice chair of faculty and executive advisor to the dean
at the School of Professional Studies and is on the faculty of the
Department of Organization and Leadership at the Graduate School
of Education (Teachers College). He has also served as a member of
the Columbia University Faculty Senate. Dr. Langer is the author
of Guide to Software Development: Designing & Managing the Life
Cycle. 2nd Edition (2016), Strategic IT: Best Practices for Managers
and Executives (2013 with Lyle Yorks), Information Technology and
Organizational Learning (2011), Analysis and Design of Information
Systems (2007), Applied Ecommerce (2002), and The Art of Analysis
(1997), and has numerous published articles and papers, relating
to digital transformation, service learning for underserved popula-
tions, IT organizational integration, mentoring, and staff develop-
ment. Dr. Langer consults with corporations and universities on
information technology, cyber security, staff development, man-
agement transformation, and curriculum development around the
Globe. Dr. Langer is also the chairman and founder of Workforce
Opportunity Services (, a non-profit social venture

x v i Author

that provides scholarships and careers to underserved populations
around the world.

Dr. Langer earned a BA in computer science, an MBA in
accounting/finance, and a Doctorate of Education from Columbia

x v ii



Information technology (IT) has become a more significant part of
workplace operations, and as a result, information systems person-
nel are key to the success of corporate enterprises, especially with
the recent effects of the digital revolution on every aspect of business
and social life (Bradley & Nolan, 1998; Langer, 1997, 2011; Lipman-
Blumen, 1996). This digital revolution is defined as a form of “ dis-
ruption.” Indeed, the big question facing many enterprises today is,
How can executives anticipate the unexpected threats brought on by
technological advances that could devastate their business? This book
focuses on the vital role that information and digital technology orga-
nizations need to play in the course of organizational development
and learning, and on the growing need to integrate technology fully
into the processes of workplace organizational learning. Technology
personnel have long been criticized for their inability to function as
part of the business, and they are often seen as a group outside the
corporate norm (Schein, 1992). This is a problem of cultural assimila-
tion, and it represents one of the two major fronts that organizations
now face in their efforts to gain a grip on the new, growing power of
technology, and to be competitive in a global world. The other major

x v iii IntroduCtIon

front concerns the strategic integration of new digital technologies
into business line management.

Because technology continues to change at such a rapid pace, the
ability of organizations to operate within a new paradigm of dynamic
change emphasizes the need to employ action learning as a way to
build competitive learning organizations in the twenty-first century.
Information Technology and Organizational Learning integrates some
of the fundamental issues bearing on IT today with concepts from
organizational learning theory, providing comprehensive guidance,
based on real-life business experiences and concrete research.

This book also focuses on another aspect of what IT can mean to
an organization. IT represents a broadening dimension of business life
that affects everything we do inside an organization. This new reality is
shaped by the increasing and irreversible dissemination of technology.
To maximize the usefulness of its encroaching presence in everyday
business affairs, organizations will require an optimal understanding
of how to integrate technology into everything they do. To this end,
this book seeks to break new ground on how to approach and concep-
tualize this salient issue— that is, that the optimization of information
and digital technologies is best pursued with a synchronous imple-
mentation of organizational learning concepts. Furthermore, these
concepts cannot be implemented without utilizing theories of strategic
learning. Therefore, this book takes the position that technology liter-
acy requires individual and group strategic learning if it is to transform
a business into a technology-based learning organization. Technology­
based organizations are defined as those that have implemented a means
of successfully integrating technology into their process of organiza-
tional learning. Such organizations recognize and experience the real-
ity of technology as part of their everyday business function. It is what
many organizations are calling “ being digital.”

This book will also examine some of the many existing organi-
zational learning theories, and the historical problems that have
occurred with companies that have used them, or that have failed
to use them. Thus, the introduction of technology into organizations
actually provides an opportunity to reassess and reapply many of the
past concepts, theories, and practices that have been used to support
the importance of organizational learning. It is important, however,
not to confuse this message with a reason for promoting organizational

x i xIntroduCtIon

learning, but rather, to understand the seamless nature of the relation-
ship between IT and organizational learning. Each needs the other to
succeed. Indeed, technology has only served to expose problems that
have existed in organizations for decades, e.g., the inability to drive
down responsibilities to the operational levels of the organization, and
to be more agile with their consumers.

This book is designed to help businesses and individual manag-
ers understand and cope with the many issues involved in developing
organizational learning programs, and in integrating an important
component: their IT and digital organizations. It aims to provide a
combination of research case studies, together with existing theories
on organizational learning in the workplace. The goal is also to pro-
vide researchers and corporate practitioners with a book that allows
them to incorporate a growing IT infrastructure with their exist-
ing workforce culture. Professional organizations need to integrate
IT into their organizational processes to compete effectively in the
technology-driven business climate of today. This book responds to
the complex and various dilemmas faced by many human resource
managers and corporate executives regarding how to actually deal
with many marginalized technology personnel who somehow always
operate outside the normal flow of the core business.

While the history of IT, as a marginalized organization, is rela-
tively short, in comparison to that of other professions, the problems
of IT have been consistent since its insertion into business organiza-
tions in the early 1960s. Indeed, while technology has changed, the
position and valuation of IT have continued to challenge how execu-
tives manage it, account for it, and, most important, ultimately value
its contributions to the organization. Technology personnel continue
to be criticized for their inability to function as part of the business,
and they are often seen as outside the business norm. IT employees
are frequently stereotyped as “ techies,” and are segregated in such a
way that they become isolated from the organization. This book pro-
vides a method for integrating IT, and redefining its role in organiza-
tions, especially as a partner in formulating and implementing key
business strategies that are crucial for the survival of many companies
in the new digital age. Rather than provide a long and extensive list of
common issues, I have decided it best to uncover the challenges of IT
integration and performance through the case study approach.

x x IntroduCtIon

IT continues to be one of the most important yet least understood
departments in an organization. It has also become one of the most
significant components for competing in the global markets of today.
IT is now an integral part of the way companies become successful,
and is now being referred to as the digital arm of the business. This
is true across all industries. The role of IT has grown enormously in
companies throughout the world, and it has a mission to provide stra-
tegic solutions that can make companies more competitive. Indeed,
the success of IT, and its ability to operate as part of the learning
organization, can mean the difference between the success and failure
of entire companies. However, IT must be careful that it is not seen as
just a factory of support personnel, and does not lose its justification
as driving competitive advantage. We see in many organizations that
other digital-based departments are being created, due to frustration
with the traditional IT culture, or because they simply do not see IT
as meeting the current needs for operating in a digital economy.

This book provides answers to other important questions that have
challenged many organizations for decades. First, how can manag-
ers master emerging digital technologies, sustain a relationship with
organizational learning, and link it to strategy and performance?
Second, what is the process by which to determine the value of using
technology, and how does it relate to traditional ways of calculating
return on investment, and establishing risk models? Third, what are
the cyber security implications of technology-based products and
services? Fourth, what are the roles and responsibilities of the IT
executive, and the department in general? To answer these questions,
managers need to focus on the following objectives:

• Address the operational weaknesses in organizations, in
terms of how to deal with new technologies, and how to bet-
ter realize business benefits.

• Provide a mechanism that both enables organizations to deal
with accelerated change caused by technological innovations,
and integrates them into a new cycle of processing, and han-
dling of change.

• Provide a strategic learning framework, by which every new
technology variable adds to organizational knowledge and
can develop a risk and security culture.

x x iIntroduCtIon

• Establish an integrated approach that ties technology account-
ability to other measurable outcomes, using organizational
learning techniques and theories.

To realize these objectives, organizations must be able to

• create dynamic internal processes that can deal, on a daily
basis, with understanding the potential fit of new technologies
and their overall value within the structure of the business;

• provide the discourse to bridge the gaps between IT- and non-
IT-related investments, and uses, into one integrated system;

• monitor investments and determine modifications to the life

• implement various organizational learning practices, includ-
ing learning organization, knowledge management, change
management, and communities of practice, all of which help
foster strategic thinking, and learning, and can be linked to
performance (Gephardt & Marsick, 2003).

The strengths of this book are that it integrates theory and practice
and provides answers to the four common questions mentioned. Many
of the answers provided in these pages are founded on theory and
research and are supported by practical experience. Thus, evidence of
the performance of the theories is presented via case studies, which
are designed to assist the readers in determining how such theories
and proven practices can be applied to their specific organization.

A common theme in this book involves three important terms:
dynamic , unpredictable , and acceleration . Dynamic is a term that rep-
resents spontaneous and vibrant things— a motive force. Technology
behaves with such a force and requires organizations to deal with its
capabilities. Glasmeier (1997) postulates that technology evolution,
innovation, and change are dynamic processes. The force then is tech-
nology, and it carries many motives, as we shall see throughout this
book. Unpredictable suggests that we cannot plan what will happen
or will be needed. Many organizational individuals, including execu-
tives, have attempted to predict when, how, or why technology will
affect their organization. Throughout our recent history, especially
during the “ digital disruption” era, we have found that it is difficult,
if not impossible, to predict how technology will ultimately benefit or

x x ii IntroduCtIon

hurt organizational growth and competitive advantage. I believe that
technology is volatile and erratic at times. Indeed, harnessing tech-
nology is not at all an exact science; certainly not in the ways in which
it can and should be used in today’ s modern organization. Finally, I
use the term acceleration to convey the way technology is speeding up
our lives. Not only have emerging technologies created this unpre-
dictable environment of change, but they also continue to change it
rapidly— even from the demise of the dot-com era decades ago. Thus,
what becomes important is the need to respond quickly to technology.
The inability to be responsive to change brought about by technologi-
cal innovations can result in significant competitive disadvantages for

This new edition shows why this is a fact especially when examining
the shrinking S-Curve. So, we look at these three words— dynamic,
unpredictable, and acceleration— as a way to define how technology
affects organizations; that is, technology is an accelerating motive
force that occurs irregularly. These words name the challenges that
organizations need to address if they are to manage technological
innovations and integrate them with business strategy and competi-
tive advantage. It only makes sense that the challenge of integrating
technology into business requires us first to understand its potential
impact, determine how it occurs, and see what is likely to follow.
There are no quick remedies to dealing with emerging technologies,
just common practices and sustained processes that must be adopted
for organizations to survive in the future.

I had four goals in mind in writing this book. First, I am inter-
ested in writing about the challenges of using digital technologies
strategically. What particularly concerns me is the lack of literature
that truly addresses this issue. What is also troublesome is the lack
of reliable techniques for the evaluation of IT, especially since IT
is used in almost every aspect of business …

Information Systems for Business and Beyond (2019)

Information Systems for
Business and Beyond (2019)

Information systems, their use in business, and the
larger impact they are having on our world.



Information Systems for Business and Beyond (2019) by David Bourgeois is licensed
under a Creative Commons Attribution-NonCommercial 4.0 International License,
except where otherwise noted.

This book was initially developed in 2014 by Dr. David Bourgeois as part of

the Open Textbook Challenge funded by the Saylor Foundation. This 2019

edition is an update to that textbook.

This book was produced with Pressbooks ( and

rendered with Prince.

Open Textbook Challenge: Making Textbooks Available (For Free!)


Information Systems for
Business and Beyond

Updated edition: August 1, 2019





Title Page | v


Information Systems for Business and Beyond (2019) by David Bourgeois is licensed
under a Creative Commons Attribution-NonCommercial 4.0 International License,
except where otherwise noted.

vi | Copyright


Book Contributors

Information Systems for Business and Beyond was originally

developed in 2014 by David T. Bourgeois Ph.D.

Updates for the 2019 edition were graciously contributed by:

• James L. Smith Ph.D. (all chapters)

• Shouhong Wong, Ph.D. (chapters 4 and 8)

• Joseph Mortati, MBA (chapter 10)

Book Contributors | vii

Changes from Previous

Information Systems for Business and Beyond was written by Dr.

David Bourgeois and originally published in 2014 as part of the

Open Textbook Challenge at the Saylor Foundation. Since then, it

has been accessed thousands of time and used in many courses

worldwide. This 2019 update to the textbook brings it up to date

and adds many new topics. True to its open textbook roots, many

of the updates have come from the community of instructors and

practitioners who are passionate about information systems. See

the page Book Contributors to see the primary contributors to this

edition. A majority of the changes listed below were made by Dr.

James Smith, who did a revision to this text in 2018.

Here is a summary of the changes made:


• New and updated images, especially those related to statistics,

in order to bring them up to date.

• References brought up to date.

• Added labs for every chapter.

• Added an index.

• Editing for consistency.

Chapter 1: What is an information system?

• Added video: Blum’s fibre optic TED Talk

viii | Changes from Previous Edition

Chapter 2: Hardware

• Removed text which discussed increasing dependency on

tablets and decreasing use of desktops

• Clarification of bit vs. byte, binary vs. digital. Added tables to

Understanding Binary sidebar

• Added Huang’s Law on graphics processor units

• Modified text regarding Moore’s Law to state that his law is no

longer able to be maintained

Chapter 3: Software

• Added information about Ubuntu Linux

• Added Eclipse IDE

• Added information about Tableau

• Supply Chain Management: added an emphasis on use of

Information Systems up and down supply chain by Walmart to

gain competitive advantage

Chapter 4: Data and Databases

• Database schemas redesigned

• Data types added

• SQL examples include output

• NoSQL described

• Data Dictionary re-ordered to column name

• New section on “Why database technology?”

• Differentiation of data, information, and knowledge

• Section on Data models

• Changed illustrative example of database tables and


Changes from Previous Edition | ix

• Updated section on Business Intelligence to focus on the rise

of analytics and data science. Includes a new “What is Data

Science?” sidebar.

Chapter 5: Networking and Communication

• History of ARPANET initial four nodes, etc.

• Metcalfe’s Law

Chapter 6: Information Systems Security

• Added information on blockchain and Bitcoin.

Chapter 8: Business Processes

• Introduce tools (DFD, BPMN, UML) of business process


• Introduce examples of DFD.

Chapter 10: Information Systems Development

• Java sample code

• Mismanaging Change side bar

• Added section on mobile development.

• Added sidebar on risks of end-user computing

x | Information Systems for Business and Beyond (2019)

Chapter 11: Globalization and the Digital Divide

• World 3.0 written by economist Pankaj Ghemawat; also his

TED talk video

Chapter 12: The Ethical and Legal Implications of
Information Systems

• Facebook and Cambridge Analytics data privacy

• General Data Protection Regulation section

Chapter 13: Trends in Information Systems

• Waze mapping app

• Drone video

• Drone blood delivery in Kenya video

• Added sidebar on Mary Meeker and her Internet Trends report

Changes from Previous Edition | xi

How you can help

This is an open textbook and relies on the support of its users to

stay relevant and available. Here’s how you can help:

1. Let us know you are using this textbook.

◦ If you are an instructor, please let us know you’ve adopted

this textbook by filling out the instructor survey.

◦ If you are not an instructor, please fill out the student


2. Let us know how to improve the textbook. If you have

suggestions, please let us know by filling out our feedback


3. Finally, the domain, web hosting, security, backup and export

tools used by this textbook are not free. Please consider

supporting us financially through PayPal. Please note: this

donation goes directly to Imperial Digital LLC, the company

hosting and supporting this open textbook project. All

contribution are marked as donations towards this open

textbook project.

xii | How you can help


Welcome to Information Systems for Business and
Beyond. In this book, you will be introduced to the
concept of information systems, their use in
business, and how information systems can be
used to gain competitive advantage.


This book is written as an introductory text, meant for those with

little or no experience with computers or information systems.

While sometimes the descriptions can get a bit technical, every

effort has been made to convey the information essential to

understanding a topic while not getting overly focused in detailed


Chapter Outline

The text is organized around thirteen chapters divided into three

major parts, as follows:

• Part 1: What Is an Information System?

◦ Chapter 1: What Is an Information System? – This chapter

provides an overview of information systems, including

the history of how information systems got to where it is


◦ Chapter 2: Hardware – This is a discussion of information

Introduction | 1

systems hardware and how it works. You will look at

different computer parts and learn how they interact.

◦ Chapter 3: Software – Without software, hardware is

useless. This chapter covers software and the role it plays

in an organization.

◦ Chapter 4: Data and Databases – This chapter explores

how organizations use information systems to turn data

into information that can then be used for competitive

advantage. Special attention is paid to the role of


◦ Chapter 5: Networking and Communication – Today’s

computers are expected to also be communication

devices. This chapter reviews the history of networking,

how the Internet works, and the use of networks in

organizations today.

◦ Chapter 6: Information Systems Security – This chapter

discusses the information security triad of confidentiality,

integrity, and availability. Different security technologies

are reviewed, and the chapter concludes with a primer on

personal information security.

• Part 2: Information Systems for Strategic Advantage

◦ Chapter 7: Does IT Matter? – This chapter examines the

impact that information systems have on an organization.

Can IT give a company a competitive advantage? This

chapter discusses the seminal works by Brynjolfsson, Carr,

and Porter as they relate to IT and competitive advantage.

◦ Chapter 8: Business Processes – Business processes are the

essence of what a business does, and information systems

play an important role in making them work. This chapter

will discuss business process management, business

process reengineering, and ERP systems.

◦ Chapter 9: The People in Information Systems – This

chapter will provide an overview of the different types of

people involved in information systems. This includes

2 | Information Systems for Business and Beyond (2019)

people who create information systems, those who

operate and administer information systems, those who

manage information systems, and those who use

information systems.

◦ Chapter 10: Information Systems Development – How are

information systems created? This chapter will review the

concept of programming, look at different methods of

software development, review website and mobile

application development, discuss end-user computing,

and look at the “build vs. buy” decision that many

companies face.

• Part 3: Information Systems beyond the Organization

◦ Chapter 11: Globalization and the Digital Divide – The rapid

rise of the Internet has made it easier than ever to do

business worldwide. This chapter will look at the impact

that the Internet is having on the globalization of business

and the issues that firms must face because of it. It will

also cover the concept of the digital divide and some of

the steps being taken to alleviate it.

◦ Chapter 12: The Ethical and Legal Implications of

Information Systems – The rapid changes in information

and communication technology in the past few decades

have brought a broad array of new capabilities and powers

to governments, organizations, and individuals alike. This

chapter will discuss the effects that these new capabilities

have had and the legal and regulatory changes that have

been put in place in response.

◦ Chapter 13: Future Trends in Information Systems – This

final chapter will present an overview of some of the new

technologies that are on the horizon. From wearable

technology to 3-D printing, this chapter will provide a look

forward to what the next few years will bring.

Introduction | 3

For the Student

Each chapter in this text begins with a list of the relevant learning

objectives and ends with a chapter summary. Following the

summary is a list of study questions that highlight key topics in the

chapter. In order to get the best learning experience, you would

be wise to begin by reading both the learning objectives and the

summary and then reviewing the questions at the end of the


For the Instructor

Instructors: if you have adopted this book for your course, would

you be so kind as to let us know in the instructor survey?

Learning objectives can be found at the beginning of each

chapter. Of course, all chapters are recommended for use in an

introductory information systems course. However, for courses on

a shorter calendar or courses using additional textbooks, a review

of the learning objectives will help determine which chapters can be


At the end of each chapter, there is a set of study questions and

exercises (except for chapter 1, which only offers study questions).

The study questions can be assigned to help focus students’ reading

on the learning objectives. The exercises are meant to be a more

in-depth, experiential way for students to learn chapter topics. It

is recommended that you review any exercise before assigning it,

adding any detail needed (such as length, due date) to complete the

assignment. Some chapters also includes lab assignments.

As an open textbook, support for supplemental materials relies

on the generosity of those who have created them and wish to

share them. Supplemental materials, including slides and quizzes,

are located on the home page for this book. If you wish to contribute

4 | Information Systems for Business and Beyond (2019)


materials that you have created, please fill out the instructor survey

and communicate that fact.

Introduction | 5


Part I: What is an information
system? | 7

Chapter 1: What Is an
Information System?

Learning Objectives

Upon successful completion of this chapter, you will be

able to:

• define what an information system is by identifying

its major components;

• describe the basic history of information systems;


• describe the basic argument behind the article

“Does IT Matter?” by Nicholas Carr.


Welcome to the world of information systems, a world that seems to

change almost daily. Over the past few decades information systems

have progressed to being virtually everywhere, even to the point

where you may not realize its existence in many of your daily

activities. Stop and consider how you interface with various

components in information systems every day through different

Chapter 1: What Is an Information
System? | 9

electronic devices. Smartphones, laptop, and personal computers

connect us constantly to a variety of systems including messaging,

banking, online retailing, and academic resources, just to name a

few examples. Information systems are at the center of virtually

every organization, providing users with almost unlimited


Have you ever considered why businesses invest in technology?

Some purchase computer hardware and software because everyone

else has computers. Some even invest in the same hardware and

software as their business friends even though different technology

might be more appropriate for them. Finally, some businesses do

sufficient research before deciding what best fits their needs. As

you read through this book be sure to evaluate the contents of each

chapter based on how you might someday apply what you have

learned to strengthen the position of the business you work for, or

maybe even your own business. Wise decisions can result in stability

and growth for your future enterprise.

Information systems surround you almost every day. Wi-fi

networks on your university campus, database search services in

the learning resource center, and printers in computer labs are

good examples. Every time you go shopping you are interacting

with an information system that manages inventory and sales. Even

driving to school or work results in an interaction with the

transportation information system, impacting traffic lights,

cameras, etc. Vending machines connect and communicate using

the Internet of Things (IoT). Your car’s computer system does more

than just control the engine – acceleration, shifting, and braking

data is always recorded. And, of course, everyone’s smartphone is

constantly connecting to available networks via Wi-fi, recording

your location and other data.

Can you think of some words to describe an information system?

Words such as “computers,” “networks,” or “databases” might pop

into your mind. The study of information systems encompasses a

broad array of devices, software, and data systems. Defining an

10 | Information Systems for Business and Beyond (2019)

information system provides you with a solid start to this course

and the content you are about to encounter.

Defining Information Systems

Many programs in business require students to take a course in

information systems. Various authors have attempted to define the

term in different ways. Read the following definitions, then see if

you can detect some variances.

• “An information system (IS) can be defined technically as a set

of interrelated components that collect, process, store, and

distribute information to support decision making and control

in an organization.”

• “Information systems are combinations of hardware, software,

and telecommunications networks that people build and use to

collect, create, and distribute useful data, typically in

organizational settings.”

• “Information systems are interrelated components working

together to collect, process, store, and disseminate

information to support decision making, coordination, control,

analysis, and visualization in an organization.”

As you can see these definitions focus on two different ways of

describing information systems: the components that make up an

information system and the role those components play in an

organization. Each of these need to be examined.

1. [1]

2. [2]

3. [3]

Chapter 1: What Is an Information System? | 11

The Components of Information Systems

Information systems can be viewed as having five major

components: hardware, software, data, people, and processes. The

first three are technology. These are probably what you thought

of when defining information systems. The last two components,

people and processes, separate the idea of information systems

from more technical fields, such as computer science. In order to

fully understand information systems, you will need to understand

how all of these components work together to bring value to an



Technology can be thought of as the application of scientific

knowledge for practical purposes. From the invention of the wheel

to the harnessing of electricity for artificial lighting, technology has

become ubiquitous in daily life, to the degree that it is assumed

to always be available for use regardless of location. As discussed

before, the first three components of information systems –

hardware, software, and data – all fall under the category of

technology. Each of these will be addressed in an individual chapter.

At this point a simple introduction should help you in your



Hardware is the tangible, physical portion of an information system

– the part you can touch. Computers, keyboards, disk drives, and

flash drives are all examples of information systems hardware. How

12 | Information Systems for Business and Beyond (2019)

these hardware components function and work together will be

covered in Chapter 2.


Software comprises the set of instructions that tell the hardware

what to do. Software is not tangible – it cannot be touched.

Programmers create software by typing a series of instructions

telling the hardware what to do. Two main categories of software

are: Operating Systems and Application software. Operating

Systems software provides the interface between the hardware and

the Application software. Examples of operating systems for a

personal computer include Microsoft Windows and Ubuntu Linux.

The mobile phone operating system market is dominated by Google

Android and Apple iOS. Application software allows the user to

perform tasks such as creating documents, recording data in a

spreadsheet, or messaging a friend. Software will be explored more

thoroughly in Chapter 3.


The third technology component is data. You can think of data as

a collection of facts. For example, your address (street, city state,

postal code), your phone number, and your social networking

Chapter 1: What Is an Information System? | 13

account are all pieces of data. Like software, data is also intangible,

unable to be seen in its native state. Pieces of unrelated data are

not very useful. But aggregated, indexed, and organized together

into a database, data can become a powerful tool for businesses.

Organizations collect all kinds of data and use it to make decisions

which can then be analyzed as to their effectiveness. The analysis

of data is then used to improve the organization’s performance.

Chapter 4 will focus on data and databases, and how it is used in


Networking Communication

Besides the technology components (hardware, software, and data)

which have long been considered the core technology of

information systems, it has been suggested that one other

component should be added: communication. An information

system can exist without the ability to communicate – the first

personal computers were stand-alone machines that did not access

the Internet. However, in today’s hyper-connected world, it is an

extremely rare computer that does not connect to another device

or to a enetwork. Technically, the networking communication

component is made up of hardware and software, but it is such a

core feature of today’s information systems that it has become its

own category. Networking will be covered in Chapter 5.


14 | Information Systems for Business and Beyond (2019)

Jeff Bezos, Amazon CEO

When thinking about information

systems, it is easy to focus on the

technology components and forget to

look beyond these tools to fully

understand their integration into an

organization. A focus on the people

involved in information systems is the

next step. From the front-line user

support staff, to systems analysts, to

developers, all the way up to the chief

information officer (CIO), the people

involved with information systems are

an essential element. The people

component will be covered in Chapter 9.


The last component of information systems is process. A process

is a series of steps undertaken to achieve a desired outcome or

goal. Information systems are becoming more integrated with

organizational processes, bringing greater productivity and better

control to those processes. But simply automating activities using

technology is not enough – businesses looking to utilize

information systems must do more. The ultimate goal is to improve

processes both internally and externally, enhancing interfaces with

suppliers and customers. Technology buzzwords such as “business

process re-engineering,” “business process management,” and

“enterprise resource planning” all have to do with the continued

improvement of these business procedures and the integration of

technology with them. Businesses hoping to gain a competitive

advantage over their competitors are highly focused on this

Chapter 1: What Is an Information System? | 15

IBM 704 Mainframe (Copyright:
Lawrence Livermore National

component of information systems. The process element in

information systems will be discussed in Chapter 8.

The Role of Information Systems

You should now understand that information systems have a

number of vital components, some tangible, others intangible, and

still others of a personnel nature. These components collect, store,

organize, and distribute data throughout the organization. You may

have even realized that one of the roles of information systems

is to take data and turn it into information, and then transform

that information into organizational knowledge. As technology has

developed, this role has evolved into the backbone of the

organization, making information systems integral to virtually every

business. The integration of information systems into organizations

has progressed over the decades.

The Mainframe Era

From the late 1950s through the

1960s, computers were seen as

a way to more efficiently do

calculations. These first

business computers were

room-sized monsters, with

several machines linked

16 | Information Systems for Business and Beyond (2019)

Registered trademark of International
Business Machines

together. The primary work was to organize and store large volumes

of information that were tedious to manage by hand. Only large

businesses, universities, and government agencies could afford

them, and they took a crew of specialized personnel and dedicated

facilities to provide information to organizations.

Time-sharing allowed dozens or even hundreds of users to

simultaneously access mainframe computers from locations in the

same building or miles away. Typical functions included scientific

calculations and accounting, all under the broader umbrella of “data


In the late 1960s,

Manufacturing Resources

Planning (MRP) systems were

introduced. This software,

running on a mainframe

computer, gave companies the

ability to manage the

manufacturing process, making it more efficient. From tracking

inventory to creating bills of materials to scheduling production, the

MRP systems gave more businesses a reason to integrate computing

into their processes. IBM became the dominant mainframe

company. Continued improvement in software and the availability

of cheaper hardware eventually brought mainframe computers (and

their little sibling, the minicomputer) into most large businesses.

Today you probably think of Silicon Valley in northern California

as the center of computing and technology. But in the days of the

mainframe’s dominance corporations in the cities of Minneapolis

and St. Paul produced most computers. The advent of the personal

computer resulted in the “center of technology” eventually moving

to Silicon Valley.

Chapter 1: What Is an Information System? | 17


The PC Revolution

In 1975, the first microcomputer was announced on the cover of

Popular Mechanics: the Altair 8800. Its immediate popularity

sparked the imagination of entrepreneurs everywhere, and there

were soon dozens of companies manufacturing these “personal

computers.” Though at first just a niche product for computer

hobbyists, improvements in usability and the availability of practical

software led to growing sales. The most prominent of these early

personal computer makers was a little company known as Apple

Computer, headed by Steve Jobs and Steve Wozniak, with the hugely

successful “Apple II.” Not wanting to be left out of the revolution,

in 1981 IBM teamed with Microsoft, then just a startup company,

for their operating system software and hurriedly released their

own version of the personal computer simply called the “PC.” Small

businesses finally had affordable computing that could provide

them with needed information systems. Popularity of the IBM PC

gave legitimacy to the microcomputer and it was named

Time magazine’s “Man of the Year” for 1982.

Because of the IBM PC’s open

architecture, it was easy for

other companies to copy, or

“clone” it. During the 1980s,

many new computer

companies sprang up, offering

less expensive versions of the

PC. This drove prices down and

spurred innovation. Microsoft

developed the Windows

operating system, with version

3.1 in 1992 becoming the first

commercially successful release. Typical uses for the PC during this

period included word processing, spreadsheets, and databases.

18 | Information Systems for Business and Beyond (2019)

Registered Trademark of SAP

These early PCs were standalone machines, not connected to a



In the mid-1980s, businesses began to see the need to connect their

computers as a way to collaborate and share resources. Known as

“client-server,” this networking architecture allowed users to log

in to the Local Area Network (LAN) from their PC (the …

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