ISM 50 - Business Information SystemsLecture 10Instructors: Mary Doyle, Geoff RyderUC Santa CruzApril 29, 2009Class announcementsHomework 3 due todayLate penalty for homeworks and folios:full credit if handed in on the due date10% penalty if handed in up to one lecture late20% penalty if handed in up to two lectures lateno credit if turned in more than two lectures laterturn in on paper during the lecture; otherwise, your grade for that assignment may be delayedMidterm next Wednesday!Study guide posted on class web site.Today’s Class Review of HW 2 problem #1 Midterm review part 2 Review of data and information, architecture, and infrastructure The Internet Client server technology Student presentation of Sun N-tier Sun N-tier case discussionHW 2, Problem 1Initial investment and return over time.Net Present Value $1 invested in the bank today is worth $(1 + i) next year. Equivalently: $ 1/(1 + i) today is worth $1 next year. ($1 next year) has NPV of $ 1/(1 + i) 1/(1 + i) == “discount factor” Is this the same as your “personal discount factor”?*Net* Present ValueNet *Present* ValueCalculate ROR NPV = -900 + 750*(1 + i)-1+ 350*(1 + i)-2 NPV depends on the available interest rate. Rate of Return, r, is the interest rate that would make a bank investment equal in value: 900 = 750*(1 + r)-1+ 350*(1 + r)-2 0 = 900 + 750*(1 + r)-1+ 350*(1 + r)-2 Let d = (1 + r)-1 0 = 350*d2+ 750*d + 900 Use Quadratic Formula: d = -3 or 6/7 Don’t want negative interest rate! So, d = 6/7 = (1 + r)-1 r = 7/6 - 1 = 1/6 ≈ .1667. So, ROR is approximately 16.7% 16.7% > 15% So, go ahead with the project!Midterm Review Part 2149 - 168ReaderSun Case139 - 154TextbookClient-Server Computing107 - 132TextbookIT Architecture137 - 147ReaderAlibris Case83 - 98TextbookElectronic Commerce117 - 135ReaderCisco Case59 - 82TextbookIT Applications38 - 50TextbookInformation Management95 - 115ReaderFrito Lay Case71 - 93Reader, O’Brien IICompeting with IT35 - 70Reader, O’Brien IBus. I.S. Foundationspp. 3 - 33Reader, R. NolanIT HistoryMidterm Review Part 2 Porter Models Cisco Case Alibris Case E-Commerce More terminologyPorter Models Five forcesBuyers SuppliersNew entrantsSubstitutesRivals Value chain Competitive strategiesPrimarySupportingCisco Case Drivers of change Corporate strategy Vendor selection process Conference room prototyping Success factors Mistakes Lessons learnedO’Brien Framework and CiscoManagementChallengesSpecificTypes ofITFound-ationalConceptsDevelop-mentalProcessBusinessApplica-tionsInformationSystemsRapid growthFailing systemsCost overrunsManagement philosophyCross-functional teamsExecutive sponsorshipLegacy systemsERPCRPRFPBPRProcess TracksManufacturingOrder entryFinanceSalesAlibris Case Changes to Interloc’s revenue model? Benefits of changing the revenue model? Why the decision to switch to Oracle? Benefits of the fulfillment facility?E-Commerce Categories: B2B B2C C2C StepsMatching buyers and sellersNegotiating termsConsummationCustomer serviceProcurementDirect, indirect, EDI, SCMReview: terms to knowERP BPR SCM NPV ROI IROROLTP workflowintermediary disintermediategeneration regenerationreplication representationURL LOB ISVend-to-end solutionReview: terms to knowOur model of information in a computer system has three essential components. Which of the following is not one of the three components?(1) data(2) structure(3) relevance(4) interpretationReview: terms to knowAn automatic teller machine (ATM) is an example of what type of application?(1) DSS(2) OLTP(3) workflow(4) SCMArchitecturebyDavid G. MesserschmittCopyright notice©Copyright David G. Messerschmitt, 2000. This material may be used, copied, and distributed freely for educational purposes as long as this copyright notice remains attached. It cannot be used for any commercial purpose without the written permission of the author.What is Architecture?How do you architect a solution?Understand the higher purpose of the systemIdentify the basic elements of the systemDecompose into subsystemsUnderstand the functions and interactions of the subsystemsOrchestrate the emergence of the higher purposeStructure and organizing principles of any systemWhat does that mean?A system is decomposed into interacting subsystemsEach subsystem may have a similar internal decompositionArchitectureSlide adapted from slides for Understanding Networked ApplicationsBy David G Messerschmitt. Copyright 2000. See copyright noticeThree Elements of Architecture Decomposition - identification of interacting subsystems that make up the higher purpose of the system Functionality - capabilities assigned to each subsystem supporting the overall system purpose Interaction - how the subsystems communicate to support the system purposeEmergenceSubsystems are more specialized and simpler functionalityHigher-level system functionality arises from the interaction of subsystemsEmergence includes capabilities that arise purely from that interaction (desired or not)e.g. airplane flies, but subsystems can’tWhy system decomposition? Divide and conquer approach to containing complexity Reuse Consonant with industry structure (unless system is to be supplied by one company) Others?Architecture example: functional decomposition of an organization, through its org. chartVice ChancellorDr. Mary DoyleExecutive Functions:BudgetingCommunicationsResearch1. Applications and Project Management2. ClientServices andSecurity3. CoreTechnologies4. Client RelationshipManagement5. InstructionalTechnologyGroupAIS, App Architecture, Dept. Systems, Finance/HR, Proj. Mgmt.Security, Service Management,SupportCenterData Center,Enterprise Architecture,Network Ops,Telecom.Divisional Liasons,Local IT SpecialistsFive groups, including WebCTOrg. chart (2)Networked computing infrastructurebyDavid G. MesserschmittLayering“A specific architecture in which ordered subsystems interact only with their nearest neighbors. Used in the networked computing infrastructure, in which each layer makes use of the services of the layer below, adds elaboration or specialization, and provides services to the layer above.”Existing layersElaboration or specializationServicesExample of Layering: networkingPhysicalLinkNetworkTransportApplicationMessagesPacketsFramesBitsSignalsSoftware LayeringApplicationMiddlewareOperating SystemOperating system functions