Chapter 1

Abstract:
These cases are a part of Chapter 1 which is the introductory chapter of Information
Systems and provides a brief understanding of the Business Driven Management
Information Systems. The cases covered in this chapter deal with various topic heads, viz.
The emergence of IoT and listing of few of its implementations, the prevalence of a large
retail chain in the era of e-commerce, and the power of internet connectivity which has
reduced the physical distances between different geographical locations.
Brief case descriptions:
1) Opening Case: It gives a short description of what IoT or M2M is and charts out the
emergence and prospects of IoT. It provides a few examples of the application of IoT
in real life and explains the possibilities of IoT. In the end, the case also touches upon
the data that will be generated by IoT and brings Big Data into the picture.
2) Closing Case 1: It is a two-part case. The first part talks about the retail giant, which
,because of its best practices, is thriving and succeeding against the likes of Amazon.
The case, according to me, is primarily concerned with demonstrating that having an
excellent IT infrastructure is not sufficient in itself for the success of the organization.
There needs to be an amalgamation of strategy to emerge on top.
3) Closing Case 2: It talks about various phases Globalization, where Friedman lists
down multiple technologies that have created a flat world.

Opening Case
1) Knowledge: Explain the Internet of Things and list three IoT devices. –
Internet of Things is a concept of making devices smart by using advanced technology to
connect them directly through internet. These are used to ease human lives and make it
more effective, efficient and safe by automating various devices that are used by us day to
day. Some of these devices include:
a) Smart Thermostats: These devices help the homeowners in managing the energy uses
in their house more efficiently by controlling the home’s temperature according to
owner’s requirement using sensors.
b) Smart Yoga Mat: IoT enables them to provide options like providing feedback on yoga
postures, calories burned, and providing guided practices at home to make it more
comfortable and simpler at home itself.
c) Smart Fry Pan: These intelligent pans have sensors that give the user the idea of the
temperature of food and help in learning cooking also by giving instructions for setting
heat, ingredients, etc.
2) Comprehension: Explain why it is important for business managers to understand
that data collection rates from IoT devices is increasing exponentially. - As IoT devices
connect with each other to share the required data to perform, it is leading to an increase in data in
a huge amount. It can also be seen that the business environment is currently collecting more data
from IoT devices in one second than all the data collected from the beginning of the time till 2000.
These data can be used for enhancing user experience by making everything in his life easier,
efficient and effective. This exponential increase in data all around the globe can be used by
businesses to predict customer behaviors, optimize and improve business processes, and analyze
multiple variables for trends and patterns as well. Using big data for all these can be critical for any
industry in present times as it can lead to various competitive advantages and can help in developing
the business to new extents.

3) Application: Demonstrate how data from an IoT device can be transformed into
information and business intelligence. Various IoT devices collect data from users, and these
data can be used to find out the patterns of consumer behaviors and recent trends like tracking the
consumers' purchase data, social media data, economic data, etc. Data collected related to current
traffic situations, vehicle maintenance, map, etc. can help in improving the delivery time and
efficiency of various products. Health care facilities can be optimized by the application of IoT in
multiple places in tracking health situations, pharmaceuticals, capturing diagnosis and even
predicting diseases. Data can be used to enhance cybersecurity by analyzing credit card frauds,
security system data, police data, etc. The data collected through IoT devices are more efficient and
effective in collecting useful data related to us because it is embedded in our day to day lives, and it
can create various business opportunities by understanding the pain points of the users.

4) Analysis: Analyze the current security issues with IoT. –There is an exponential adoption
of IoT, and it is estimated that by 2020, there would be around 50 bn IoT devices that would be in
operation.

Below is the list of security issues:

1. Brute force attacks on IoT devices: Hackers can easily target the IoT devices with
brute force attacks which might disrupt the connected devices as well
2. Data privacy issues: A wide array of devices are capturing personal data, machine
data, and other types of data every second. Where, how, and in what form, the
captured data that might be used is not known to the data provider.
3. Home invasion: Home automation using IoT has emerged as a significant security
threat nowadays. The hackers can take control of the Home IoT devices, which
might be sold to criminals, and this might be a significant cause of concern.
5) Synthesis: Propose a plan for how a start-up company can use IoT device data to
make better business decisions - A start-up can make better business decisions by utilizing
real-time data from the devices connected backward or forwards.

Backward connectivity means connecting the supply chain, manufacturing processes, and
warehouses using IoT to make better planning decisions and remove bottlenecks in the
manufacturing processes. For, e.g., the entrepreneur can develop IoT solutions to track the
inventory levels better, thereby reducing the stock of inventory, which would, in turn, lead
to cost savings.
Forward connectivity: the startup can attach sensors to the product to understand the buying
decisions of the users. The location and time can be transmitted, and during checkout, the
details can be matched to who is making the purchase. It would help in making targeted
promotions to the customers. E.g., A clothing startup can have sensors that would detect
the purchase timings and preferences of the users during checkout, which can be used in
marketing promotions.

6) Evaluate: Argue for and against the following statement “Internet of Things is just
a passing fad and would be gone within a decade” If this were a few years ago, I would
have been for the statement. However, now, IoT is a part of all aspects of our life. Home automation
to fitness bands have been able to simplify our life and in turn, have increased our efficiency.

The adoption is only growing in various fields. IoT devices have found its way in healthcare
(real-time health tracking of old age patients), leading to better emergency response
timings.
Another sector that is increasingly adopting IoT is agriculture. Sensors determine the
moisture content, nutritional value of the soil, and help in better sowing decisions.
Core industries such as steel and iron manufacturing, oil refineries, etc. use IoT extensively
for remote monitoring of the manufacturing plants. IoT also helps in determining,
analyzing, and pre-emptively correcting faults that might arise in the manufacturing plants
by continually monitoring the vital stats in these plants.
 Closing case 1
1) Imagine you are working for Costco as a manager in its Chicago store. Your boss
does not understand the difference between data, information, business
intelligence, and knowledge. Using the examples of products and services
available at Costco, provide examples of each to help your boss understand these
important concepts -
Data Information Business Intelligence Knowledge
Data are raw facts Information is data BI is information
Knowledge includes
that describe the converted into a collected from different
the skills, expertise,
characteristics of an meaningful and sources such and as experience
event or object. useful context. suppliers, customers,
coupled with the
competitors, partners,
information and
etc for strategic
intelligence that
decision making. helps create a
person’s intellectual
E.g., 80% of the gross resources.
E.g., Sales of Costco E.g., Sales of Costco profits come from
have grown 40%, and membership fees.
stock prices have
doubled.

2) It is important for Costco’s corporate acct., marketing, and operational mgmt

business to access and analyze sales info as:
a) Design of goods and services: It would help Costco to analyse what kind of goods are
being old and what are the latest customer trends so as to design the goods and services
accordingly.
b) Quality Management: In this decision of operation management, Costco wholesale
strategy would involve service quality control through HR training and development.
c) Location Strategy: This is the decision that will help Costco to maximize the market
reach and understand the problems that are present in the supply chain. This will in turn
help Costco to eliminate the problems present in the supply chain.
d) Inventory Management: This strategic decision area of operation management will
ensure inventory efficiency by using warehouse-style stores as retail and storage spaces
as one.

3) Explain systems thinking and how MIS solves the issue with the information silos
throughout Costco’s entire worldwide organization - Systems thinking is a holistic
approach that focuses on the way that a system’s constituent parts interrelate and how systems work
overtime and within the context of larger systems. This is different from the traditional approach in
the fact that the latter thinks of all the components separately Systems thinking can be used in any
area of research and is widely accepted across different domains.
 What basically happens in information silos is that the information is not shared between
departments and divisions which can hamper the growth and efficiency of the organization.
It can result in problems such as duplication of efforts and redundant job roles. It can also
result in an increase in cost and lack of synergy among the various departments and
employees. What MIS enables is that it provides regular reports on operations for every
level of management in a company. This ensures that the flow of information through out
the organization is done effectively and efficiently.

4) Imagine you are working for Costco as a manager in its Chicago store. Using
Porter’s Five Forces Model, analyse buyer power and supplier power for Costco.
Costco is the second-largest retailer in the USA. While the product offerings by
competitors, low switching costs and e-commerce make the retail market most
competitive, the buyer power in retail is certainly high. Costco has managed to be
profitable as it has a membership-only benefit that is directed towards bulk buyers
rather than individuals and offering value products at low prices thus balancing the
buyer power.
Supplier power for Costco is not much high as they procure products in bulk from a number
of suppliers and are not impacted by one single supplier keeping the level of supply stable,
also another factor is the in-house brand, Kirkland Signature which can be utilized to keep
the supplier power low.

5) Which of the three generic strategies is Costco following? Porter’s three generic
strategies are broad cost leadership, broad differentiation, and focused strategy.

Costco is following the cost leadership strategy. The products are marked at 14 percent or
less over cost and the products of in-house brand Kirkland Signature get a maximum 15
percent bump. Costco buys in bulk from various suppliers and sets the industry’s lowest
selling price.

6) Only members of Costco can purchase products at Costco. Which of Porter’s

five forces did Costco address by the introduction of its members-only program?
Through the introduction of its members-only program, Costco is addressing the Buyer
Power in its business strategy. As shopping at Costco is possible only after buying the
yearly-membership, it provides more value to the customers by providing products to the
customers at lowest possible market price. Since the customers are getting more value, they
buy products in bulk and also membership renewal rate is close to 90 percent which helps
Costco not only reap profits but also keep Buyer Power in check as customers won't easily
switch to other retailers.
 Closing case 2
1) Define globalization 1.0, 2.0, and 3.0 and provide a sample of the type of
business data managers collected during each era. Globalization 1.0 happened with
the discovery of the world as round in the 1400s and the discovery of new trade routes shrinking
the world from large to medium and white- controlled business through colonization. Data
collected were maps showing trade sea routes, land routes, Climate data of colonies, various
languages, cultures, money exchange details, etc.
Globalization 2.0 is the era that began around 1800, with the advent of the industrial
revolution and the world shrank from medium to small with the advent of airways,
telegraphs, etc. Managers would be interested in data such as time zones, competitor
information, market shares, etc.
Globalization 3.0 refers to current times which began in the 2000s, eliminating distance
between people, leading to world being tiny and businesses headed by all people
regardless of race. Managers can collect all data related to their businesses, such as
consumer data, vendor data, market data, etc.

2) Explain Friedman’s flat world and the reasons it is important for all businesses,
small or large, to understand. -
Friedman feels that the world has become flat because of the technological advances
that can connect people from all the nooks and corners of the world seamlessly as if
they live next door. Doctors in India can diagnose patients in Uganda through online
medium. Expeditors in Antarctica can access news and knowledge through the web. It
is essential for even small businesses from developing countries because technology
has made world a level playing field eliminating the economic and cultural advantages
enjoyed by the developed countries.
All businesses regardless of size need to understand that world flat giving equal
opportunities any place linked with technology, as learning and outsourcing, collecting
data and analysis all can happen online and sometimes even free of cost. For example,
Wikipedia, google open source, etc.

3) Demonstrate how students competing for jobs in a flat world can create
competitive advantages to differentiate themselves in the market place Students
can differentiate themselves by keeping updated about the various new technologies
required in the business world such as big data, AI, VR, Cloud computing, data analysis,
etc.
- As most learning is available online from renowned experts through online courses,
students can make themselves acquainted with multiple skills and thorough knowledge
in particular skills.
- Learning multiple languages and cultures that help to seamlessly understand other
peoples point of views
- Connecting with experts in their area to create a wider social network circle.
- Creating awareness about market, economics and global political affairs as they are
walking into the global level playing business field.
- Students should create a brand of their own with creative and analytical skills to manage
the business world.

4) Analyze the current business environment and identify a new flattener not
mentioned on Friedman’s list.
Most businesses now have a presence in various geographical locations and the
effectiveness of the business depends on the seamless communication and collaboration
between these locations, in the most humanely and visually pleasing way. And I think
one flattener that makes this experience better is the new telepresence technologies that
let a manager in one location feel as if present in another location. Another flattener
would be the current boom in instant payment facilities that has fastened up various
businesses.

5) Propose a plan for how a star-up company can use any of Porter’s strategies to
combat competition in a global world. -
For competing in a global environment, a startup company should have to create
product differentiation in the global market. While creating a product differentiation
strategy, we have to define the type of market in which we will compete. In the early
stages of product development we develop our value proposition, design the product
and protect its intellectual property rights by registering it. In our strategic planning, we
will consider the expectations and needs of the customer from our product that is not
offered by competing products. We can disrupt the norm of the market by offering
products as per latest technology and so we can catch the eye of the investors and users
in the market. Technology is one of the major ways through which we can enter into
the market with low investments and compete with traditional players.

6) Argue for or against the following statement:”The world is not flat(in Friedman’s
sense of the term) because many underdeveloped countries are not connected
electronically.”

Over the years the online world has grown many times facilitating the information
sharing and tremendous growth of the e-commerce sector. But still there are countries
where the electronic connectivity is not grown as much compared to others. The
economies of underdeveloped countries do not grow because of the lack of electronic
information sharing which is required for trade purposes with other countries. This
increases the level of poverty and unemployment among its citizens. By bringing
electronic connectivity into these countries can help them in sharing political and
human exchange with other countries. It will also help them in technology transfer from
other countries. So, the world is still not flat.