Midterm #2 examination March 11, 2012

Solutions
Question 1 (18 marks 54 minutes) Required: A) Define enterprise resource planning system and provide a rationale why using an ERP system might have been more appropriate for Roma than a combination of functional area information systems. (2 marks) Definition of ERP system (text, pg250) Systems that integrate the planning, management and use of all of an organizations resources, employing a common software platform and database Rationale why using an ERP system might have been more appropriate for Roma than a combination of functional area information systems - provide information about the separate business lines and integrate it into a common platform - provide access to a common information/data resource to all departments - promote a coherent organizational structure - provide more precise and timely information throughout the organization - potential for better decision making - Unified technology platform - promote an efficient, customer driven operation - Reduce data isolation / data silos / data dependence when info in integrated into enterprise wide systems

B) Describe two Market pressures relevant to Roma and indicate the role that information technology could play in responding to this pressure. (4 marks) Name and description of Market pressure (text pg16/17) Global economy and strong competition -facilitated by www and regional trade agreements (nafta,eu,etc) -higher labour cost in developed countries due to increase employee benefits results in labour-intensive industries moving to low labour-cost areas. Role that information technology could play in responding to the market pressure IT makes it easier for business to track changes in and utilize advantageous portions of trade agreements IT makes it easier to move operations through assistance with sourcing a new location to acquiring moving and setup services for the new locations.

The need for real-time operations -Organizations are required to have adequate information systems and technology to provide real-time processing -Organizations lose competitive edge if not using these systems The changing nature of the workforce -Workforce is more diverse (increasing number of women, minorities, handicapped, etc) -These different people bring diverse backgrounds and skills to the organization which require new management techniques. -Telecommuting impacts are becoming pervasive, requiring more management awareness. Powerful customers - As customers become more knowledgeable about product/service quality their expectations increase - Organizations have recognized the importance of customers and are working harder to retain them

IT is at the heart of real-time 24/7 operations. IT provides the platform that enables real-time systems.

IT provides a common communications platform for groups. Telecommuting requires IT support. Workplace diversity and ethics are managed more effectively with the aid of IT support.

IT supports CRM efforts in the organization IT enables a more consistent customer experience throughout the organization.

C) Name two core modules of an ERP system and describe how each would help Roma resolve their current business system problem. (2 marks). Name and description of ERP core module (text pg. 252) Financial Management - Support accounting, financial reporting, performance management, and corporate governance. They manage accounting data and financial processes such as general ledger, ap/ar, etc. Roma would reduce the reliance on manual processes as well as provide more up-to-date financial info at lower cost to the firm. Operations Management Manage the various aspects of production, planning, and execution such as demand forecasting, procurement, and materials planning. Roma would use operations managements software to aid in the planning logistics of raw materials or productions planning. Human Resource Management Support personnel administration (i.e. workforce planning, recruitment, performance, etc) time accounting, payroll, benefits, and regulatory requirements. As a small group, Roma could take advantage of more automated planning and benefits managements for its employees

D) Provide two reasons why ERP implementations fail (2 marks). Reasons why ERP implementations fail 1. Management and IT underestimated the complexity of planning, development, and training that required for a new ERP system. 2. Failure to involve affected employees in the planning and development phases and in change management processes. 3. Trying to do too much too fast. 4. Insufficient training in the new work tasks required by the ERP system 5. Failure to perform proper data conversion and testing for the new system Ref: text pg. 254 E) The introduction of the new ERP system would require the implementation of a new database management system as well as the upgrade of secondary storage capacity on Romas systems. Recommend and describe two types of computer storage appropriate for Romas ERP system. For each one provide a justification. (4 marks) Name and description of an appropriate secondary computer storage 1. Magnetic tape Justify why this type of secondary storage is appropriate for Romas ERP system Lowest cost solution Can handle very high volumes of data Very good for corporate data archiving Magnetic disk/ hard drive Very high capacity and speed Allow rapid access to data Useful for personal computers to allow users to store data Storage Area Network Very high capacity Designed for corporate storage needs Network Attached Storage High capacity Designed for corporate storage needs Raid High capacity Provides fault tolerance and reduces risk of data loss Lower cost than SAN or NAS Designed for corporate storage needs The following may be answered by students Not appropriate as they only provide moderate but will not be as relevant: to low storage capacity. CD ROM Not suitable for storing high volume, corporate Flash Drives data DVD Memory cards

2.

3. 4. 5.

6.

Ref: text pg. 382-386

F) The implementation of the new ERP system would also require the acquisition of new server computers with a new operating system. Roma is considering the use of open source operating system software. Provide two advantages and two disadvantages of using an open source operating system. (4 marks) Advantages of open source operating system 1. Source code for opensource software is available at no cost to developers or users 2. Opensource software products have worldwide communities of developers who write and maintain the code. 3. Opensource development produces highquality, reliable, flexible (code can be changed to meet the needs of the user), lowcost software. 4. Opensource software considered more reliable than commercial software. 5. Because the code is available to many developers, more bugs are discovered early and quickly and are fixed immediately 6. Support for opensource software readily available from firms that provide products derived from the software. Disadvantages of open source operating system 1. Roma would have to have buy maintenancesupport contracts from a third party, if it does not have inhouse technical experts (also true for commercial software). 2. Ease of use, amount of time and expense needed to train users, and the compatibility with existing systems or with the systems of business partners is questioned. Ref: text, pg 399-400. End of Question 1

Question 2 (16 marks 48 minutes) Required: A) Name and describe the type of e-commerce business model represented by HMVs new online music streaming service. Provide and discuss two benefits specific to the new online streaming for HMV. (4 marks) Name and description of HMVs new music streaming e-commerce business model (2 marks)
1.

On-line direct marketing, Manufacturers or retailers sell directly to customers. Very efficient for digital products and services.

Or
Membership Only members can use the services provided, including access to certain information, conducting trades, etc.

Chp 6 - Table 6.1

Identify and discuss two benefits specific to the new online streaming (2 marks) 1. Customers benefit by being able to access a vast number of products and services,
around the clock, 24/7 365 days

2. The major benefit is the ability to easily and conveniently deliver services, and products to people
in cities, rural areas. music on a disc. They can purchase it and use it in different devices as they like. Customers dont need to travel to the store location in order to purchase the

Chp 6.1 Also : Exposure to customers worldwide Reduce fixed cost such as rent or any cost associate with physical locations

B) Describe two types of electronic cash payment methods HMV could provide for their online customers. For each one state the main benefit over the use of electronic credit and debit cards. (4 marks). Describe two electronic cash payment methods
1. Person-to-Person Payments

Main benefits of this type of electronic payment system for HMV over the use of electronic credit and debit cards.
*Attractive security feature
You have to put only enough money in the account to cover any upcoming transactions. Therefore, if anyone should gain access to your account, they will not have access to all of your money.

PayPal
Today, 2Checkout and Authorize.Net compete with PayPal so will be acceptable as well as an answer. Person-to-Person Payments a is form of e-cash that enables two individuals or an individual and a business to transfer funds without using a credit card

*One account, one username, one password easy to use.

Chp. 6.4. 2. Digital Wallets

Digital Wallets is a software mechanism that provides security measures, combined with The wallet stores the financial information of the convenience, to EC purchasing. The wallet stores the financial information of the buyer, such as credit buyer, such as credit card number, shipping information, and so on. Thus, the buyer does not card number, shipping information, and so on. need to re-enter sensitive information for each purchase Chp. 6.4

If the wallet is stored at the vendor's website, then it does not have to travel on the Internet for each purchase, making the information more secure.

Also:
Stored-Value Money Cards - Although they resemble credit cards, stored-value money cards actually are a
form of e-cash. They allow you to store a fixed amount of prepaid money and then spend it as necessary. Each time you use the card, the amount is reduced by the amount you spent.

Smart Cards-They contain a chip that can store a considerable amount of information (more than 100 times that of a
stored-value money card). Smart cards are frequently multi-purpose; that is, you can use them as a credit card, a debit card, or a stored-value money card. In addition, when you use a smart card in department store chains as a loyalty card, it may contain your purchasing information. Advanced smart cards can help customers transfer funds, pay bills, and purchase items from vending machines.

C) Identify two examples of security threats that could occur to HMVs online store. For each one provide an example of an action that the HMV could take in order to prevent this threat or minimize its consequences. (4 marks) Two examples of security threats that could occur to HMVs online store 1. Denial-of-Service Attack
An attack in which the attacker sends so many information requests to a target such as the company website, the target cannot handle them successfully and typically crashes.

Example of an action that the HMV could take in order to prevent this threat or minimize its consequences
Communications (network) controls

secure the movement of data across networks. Communications controls consist of firewalls, anti-malware systems, whitelisting and blacklisting, intrusion detection systems, encryption, virtual private networking (VPN), secure socket layer (SSL), vulnerability management systems, and employee monitoring systems.

2.

Theft of Information: Cyber-attacks

Access controls restrict unauthorized individuals from using

Hackers will try to steal customers information & credit cards information that stored on the company online database.
Also: Software attacks have evolved from the outbreak era, when malicious software tried to infect as many computers worldwide as possible, to the profit-driven, web-based attacks of today. Cyber-criminals are heavily involved with malware attacks to make money, and they use sophisticated, blended attacks typically via the Web. Viruses, Worms, Trojan horse

information resources. Access controls can be physical controls or logical controls. Such as Authentication,
authorization including strong password and special

questions for the users when they logged-in. Anti-malware systems, also called AV or antivirus software, are software packages that attempt to identify and eliminate viruses, worms, and other malicious software

Chp. 3.2 & 3.3

D) Provide two examples of entities in HMVs new online music store and justify why it would be necessary for HMV to collect that data. (4 marks). Description of the entity 1.Customer: include: name, address, city 2. Product/Music Album: include: Product number, type, Desc Justification why it would be necessary for HMV to collect data about this entity HMV will be able to collect data on customers and music that was purchased, using the data that collected they will be able to offer some deals and send campaign to their customers, offer more options and product by knowing the customers trend of purchase and preferences.

End of Question 2

Question 3 (16 marks 48 minutes) A) The new inventory management software would be able to provide new reporting capabilities. Describe each of the following types of reports and provide an example of each type of report for ALDO shoes applicable to inventory management (4 marks). Description of exception report Reports that include only information that exceeds certain threshold standards or criteria Page 249 Example of exception report in inventory management for ALDO Identify low inventory or high inventory So anything that can identify a possible problem or something different that is out of the norm of the business Example of key performance indicator report in inventory management for ALDO Listing of the Top 10 sales of product, or top 10 stores, or bottom 10 stores inventory levels of top selling products

Description of key performance indicator report Reports that summarizes the performance of critical activities Page 249

B) Aldo would like to use RFID technology to complement its new warehousing software. Describe each type of RFID technology and discuss one advantage of each type of tag that is applicable to warehousing at ALDO. (4 marks) Description of RFID active tag Advantage of RFID active tags applicable to warehousing at ALDO RFID Tags that use internal batteries for power, These can be used for very expensive and they broadcast radio waves to the reader inventory items since ALDO stores will know the whereabouts of these items at all times in Page 227 can transmit a great distance the store system these tags are very expense to purchase Description of RFID passive tag RFID tags that require the reader for the power to work range is up to 6 meters Advantage of RFID passive tags applicable to warehousing at ALDO Tracking of inventory in and off of trucks, at the store for sales and if not deactivated can be used as a stop thief alert

C) Describe the following network applications and, for each, provide an example of how ALDO shoes could use it. (4 marks). Describe Mashups : (p 151) Specific example of how it could be applied to ALDO Website that takes different content from a A website with all of the manufactures of the number of other websites and mixes them shoes ALDO sells so the customer can get together to create a new kind of content greater details: -could display similar shoes from different manufacturers so that customers could compare using map and search engine Describe Corporate portal : (p 146-7) A personalized, single point of access through a web browser to critical business information, located inside and outside the organization. -will make it easier to find needed information and can offer self-service opportunities to employees, customers (B2B) and suppliers Need to apply user name and password only for authorized members. Specific example of how it could be applied to ALDO Provide employees ability to access and benefits, payroll, other personal information. Employees could enter health claims. Suppliers could access information about ALDOs product lines, inventory levels of products to allow suppliers to collaborate on product selections, renew inventory

D) ALDO is considering the use of the following types of computing. Provide a definition and explain how ALDO could use the following computing technologies. (4 marks) Define Cloud computing: (p 368) -Tasks are performed by computers physically removed from the user and accessed over a network, in particular the Internet. The cloud is composed of the computers, the software on those computers, and the network connections among those computers. The computers in the cloud are typically located in data centres, or server farms, which can be located anywhere in the world and accessed from anywhere in the world. The cloud incorporates the characteristics of grid computing and utility computing on a global basis. That is, the cloud supplies as many computers as are needed for a particular task (grid computing) and users pay for the amount of actual processing and storage used (utility computing). Specific example of how it could be applied to ALDO ALDO could use cloud computing to provide the infrastructure and applications software management and operations for its worldwide supply chain and inventory management. It would be readily accessible to all it operating units worldwide, efficiently and with unlimited capacity to handle spikes in activity as well as scalability to effectively accommodate the companys continuing growth. -would facilitate the availability of real-time exception reporting and business intelligence information transfer to ALDOs key decision makers in Montreal and other major centres -far less expensive and time consuming for implementation of the new SCM systems than Specific example of how it could be applied to ALDO Similar to Cloud Computing examples, - to provide infrastructure and applications software management and operations for ALDOs supply chain and inventory management -Would accommodate spikes in activity as well as scalability to effectively accommodate the companys continuing growth.

Define Utility computing: (p 368) A service provider makes computing resources and infrastructure management available to a customer as needed, charging the customer for specific usage rather than a flat rate. Utility computing enables companies to efficiently meet fluctuating demands for computing power by lowering the cost of owning hardware infrastructure. Utility computing also provides fault tolerance, redundancy, and scalability. That is, if one server fails, another takes it place. Scalability means that if an application requires additional servers, they can easily be added as they are needed.

End of Question 3