Chapter 8

Social Media Information Systems

Most of use social media in one form our another and the number that do not shrinks everyday.  Let's take a look at IS in SM and see what effects it can have on an organization when they utilize it.  First off lets define SM, social media is simply the use of information technology to support the sharing of content among users of a network.  We know what all of those words really mean for a change so there isn't much need to break it down further.  What we do need to know in addition to that is that networks of people of a social media platform form what are called Communities of Practice or simply communities.  Communities are groups of people related by common interests on social media.  We will be using the simple term communities when we are talking about them.  Information Systems serves three distinct roles regarding SM.  The first role is as a  social media provider which is the entity that create the social networks that allow communities to form.  The next role information systems exist in is the user role.  Users can be individuals using social media, 73% of all persons with internet access can be classified as a user, 40% of them access their social media using a mobile device.  Users can also be classified as an organization or firm.  77% of Fortune 500 companies maintain an active Twitter account, 70% have a Facebook page for their organization and 69% maintain a YouTube channel.  Organizations are not only users but content providers as they create content and in some cases even create and maintain their own SMIS focused toward their customers.   Finally IS supports the existence of the communities of which users can be part of many.  To maintain the coherence of these communities organizations create a viral hook which is some form of inducement for users to pass their communications through the tiers of a community such as a prize or reward for doing so.  Social media information systems have the same five components of a system that any other IS does, let's talk about the specifics.  First is the hardware component which exists within the user role and provider role.  Users' hardware will generally consist of the device they use to access social media such as a desktop computer, laptop or their mobile device.  The providers' hardware is simply the servers used to host and render the social media applications users contribute to.  Next is the software component that again is distinct among users and providers.  Software for users consists of their OS, browser used to access social media as well as the applications the access with the browser or standalone social media applications.  Then there the data component.  This can be broken down into two parts when talking about social media IS, content data and connection data.  Content data is data that is contributed by users in response to data that already exists.  Think of one user replying to a post of another.  Next there is connection data which is data about the relationships that exist within and between communities.  We yet again draw a distinction among users and providers when talking about the processes component of the system.  User processes are informal and socially oriented as users do what they want and generally follow the lead of other users.  The small exception here is that an organization will likely create a guideline for how their official social media accounts are to be used adding some structure.  The purpose here is to ensure the organizations use of social media is aligned with their overall business strategy. The people component should be obvious here, users make up this so organizations and individuals.  

Organizations and Social Media

As we have said a lot of organizations are using social media in order to advance their overall business strategy.  There vast number of users of social media means that any modern firm not doing so is losing a huge competitive advantage but engaging in social media as an organization is not without its challenges.  The dynamic nature of social media has changed the balance of power among customers and organizations.  The free flow of information and feedback puts a lot of power in the hands of the customer in a way that has changed the game.  This is especially true regarding sales and marketing.  Obviously corporations can take advantage of the vast number of users by advertising to them through social media, this is made even more effective when organizations target specific communities to whom their product or services are relevant.  This allows organizations to ensure that their advertising dollars go that much further.  When an organization engages in a pay per click advertising campagin or one where they pay every time a user clicks on their add they want to make sure that those clicks have a high chance of creating value for them.  The shift in power is significant in advertising because users can easily provide feedback on products that has a high visibility to other users.  This is a new challenge for firms and one which they can't easily control.  When negative content is created by users respective to a firms product or service they have to decide how to address it.  There are only three real options all of which have their own set of outcomes.  Firms can delete the content if possible to reduce visibility though if they do this after the visibility is high there could be backlash from users.  Firms can also simply ignore the negative content though again if there is high visibility already this may not be the best choice.  Finally, firms can respond to the negative concept, this option has created a new avenue for the customer service chain as well.  The option to respond to negative content can create the opposite effect and work in favor of the firm, it also allows the firm to build up individual relationships with it's customers where there is need to do so.  Peer to peer support in social media also benefits the customer service chain.  User created reviews and user to user support has the potential to create a lot of value for the firm and is generally self sustaining due to users motivation to help each other and stand out among their communities.  Logistics is also affected here though to a lesser degree.  Logistic professionals can utilize social media to build relationships with their supply chain providers and users.  The manufacturing chain can also benefit greatly by the utilization of social media.  Users' feedback on products can help greatly with the design phase.  This is true when considering a new iteration for a product or when creating a whole new product.  Organizations can seek out specific information from users on social media or examine existing review data to glean valuable feedback and input from users.  The human resources chain again has the potential to benefit greatly from social media.  SM has created a whole new avenue for HR professionals to prospect, evaluate and recruit new talent for their firms.  The value here is great as firms don't have the need to wait for qualified applicants to find them, they can seek them out and target them with such services as LinkedIn.  

Social Capital and Organizations

Capital has been defined as the investment of resources for future profit.  Social capital is simply the investment in social relationships with the expectations of a return in the market place.  Social media has allowed firms to invest in social capital in new ways that have great potential in adding value.  The value from social capital can come in many forms.  Information is one, there is a troth of information available to organizations through social media.  For one they can get an idea of the general opinion their customers have of them and their products.  They also stand to learn much about their customers and their buying habits based on their social media behaviors and the communities they are a part of.  Firms can also generate influence through social media capital.  This relates strongly to the customer service chain as firms can fix problems they once weren't even aware existed.  This strengthens relationships and creates customer loyalty.  Firms can also influence customers to use their products and services by creating incentives to do so through social media such as creating a social media post for the new owner of a BMW, now all their friends will know how successful they are!  

The Challenges

We have talked about customer feedback and the need to have some control over it.  This is a new challenge for firms and once which they have to address in one form or another.  SM also creates security challenges for firms.  Employees who use social media are a large contributor here.  Posts from employees can be used to glean information about them and even potential cues as to what their organizational passwords are enabling outside entities to access their network.  Information leaks are another threat here.  Employees can intentionally or unintentionally leak valuable firm information to the general public in a huge way through social media.  This is can take the form of propriety information or even finance figures that an employee thoughtless commented on to his friends.  This is generally difficult to control as when it is done by accident it can't be foreseen and when it is done intentionally it can very easily be done so anonymously social media.   Finally there is the loss in productivity that exists around social media.  Vast numbers of users access social media while they are at work on company time.  These employees are in most cases not contributing to the value of the firm while doing so creating a large leak from productivity.  Whatever the challenges though it is certain that firms will continue to engage in social media ever seeking to glean whatever competivie edge is available to them.

Chapter 7

Processes, Organizations and IS

Okay so lets shift gears and take a look at how IS can change the way a firm conducts business from top to bottom.  First, let's get some terms out of the way starting with what types of processes there are.  As we said in Chapter 3 a process is a network of activities that generate value by transforming inputs into outputs.  Those inputs and outputs can be almost anything in the context.  You shouldn't let your mind limit this to just manufacturing, think about data and information as well.  Also, processes are made up of activities, you can think of them as "steps" in the network.  Okay so there are two types of processes, and this is going to sound kind of familiar, structured and dynamic processes.  Structured processes, like decisions, have formally defined and standardized activities in their network.  Dynamic processes do not, they are often related to more complex situations where things are not always going to be static, think of the process that takes place when one firm acquires another.  Process not only vary by type but also scope in relation to the business itself.  Workgroup processes take place within a singular entity within a firm, an example would be how the accounts payable gets the day-to-day job done.  These processes are often supported by workgroup information systems or functional information systems which exist to support only one workgroup.  Payroll software would be a good example of this, its sole purpose is to provide a tool to pay employees.  Next you have enterprise processes, these occur across an entire organization and will support activities in many different departments.  An example of this would be the system used in a hospital to manage patient information.  These systems can include everything from health information, billing information all the way to dietary information.  Finally, we have inter-enterprise processes which span two or more independent organizations. A good example of this is the state healthcare exchanges set up under the Affordable Healthcare Act.  These exchanges support several different healthcare providers as well as the federal and state regulatory agencies that oversee the implementation of the law.  Inter-enterprise systems are often very complicated and maintenance on them is difficult as different firms will be affected in different ways by any changes that take place.  

IS Can Change Things

Okay so why does this matter to a modern firm?  Well these systems can and have completely change the way firms conducted business by changing their processes and improving their quality.  There are two dimensions to the way this can happen.  One way is to change the efficiency of processes.  This happens when an IS allows a firm to better use their resources.  If less resources are required to achieve the same or greater output then process efficiency has been improved.  You can also change the effectiveness of a process.  Effectiveness can be thought of as how well a process achieves the organizations strategy or goals.  One example would be improving the time it takes to process or fulfill a customer's order. These changes to a process can take place two ways.  First, you can change the structure of a process which can be as simple as reordering the activities that take place.  Adding or removing activities is another example.  Another way to change processes is to change the resources that are used.  Adding more personal to a bottleneck station in your manufacturing change would be one way to do that.  This has the potential to not only increase the effectiveness of that single station but to also improve the overall efficiency of your entire chain.  Often times both types of change will take place.  This is especially true when you change the structure of a process.  Oftentimes it isn't possible to do that without changing the resources as well.  There are several ways that IS can improve qualities through these types of changes.  An IS can be the sole entity to perform a processes.  An online business that replaces a phone bank with and automated ordering system can greatly improve the overall quality of their ordering process.  You can also use IS to augment humans in their work.  Providing new software and hardware to replace a paper filing system could greatly effect the overall quality of such a system.  Finally, IS can simply do a great job at controlling the flow of data in almost any process.  Using an IS system to manage data as opposed to say a paper system can do a great many things.  The IS can ensure that the data is complete, formatted correctly and entered in the most relevant order.

The Big Picture

Lets put it all together now and look at how this takes place in the modern world of business.  A huge problem that occurs when talking about systems is known as information silos.  Information silos exist when data is isolated in separated information systems.  This problem can cause redundant data to exist or prevent relevant parties that need the data from accessing it.  This can all be solved by implementing a modern enterprise information system as described above.  A firm wide single system  or one that includes many departments can allow one department to communicate and exchange information or even amended it with another department.  The scope of these systems are quite large but we let's tackle the simpler two and move on the the more complex one with detail.  CRM or customer relationship management system is focused only on the interactions of the customer with the firm.  Generally these will include marketing, customer acquisition or sales, relationship management or customer service and the process of loss and churn of customers.  Next there are EAI or enterprise application integration systems.  These are generally used when ERPs which we will talk about in detail aren't ideal or desired by firms.  EAIs are simply suites of software applications that integrate existing systems by providing layers of software that allow existing applications to communicate with each other.  Finally we come to ERPs which are the real big picture information systems.  Enterprise resource planning suites are applications called modules in conjunction with a new database and a set of known or inherent processes designed for consolidating business operations into a single, consistent computing platform.  In order to truly be an ERP a system has to incorporate processes from the supply chain, manufacturing if it exists, customer relationship management, human resources and accounting.  These systems exist solely to integrate all major aspects of a business and improve process quality across the board.  Implementing them is often expensive and difficult due to resistance to change but they payoff for a large modern firm can be huge.  These systems have often been hosted on in-house platforms in the past and this is still the case for many firms. However, with the advent of modern cloud computing as we have already discussed you now see firms selling them as platform as a service allowing firms to build their systems from the ground up or as software as a service.  SaaS is the most common now and for obvious reasons the easiest system to implement.  Modern ERPs are all encompassing and are constantly being improved by the firms that provide them so the SaaS model has many benefits over other forms of hosting.

Chapter 6

The Cloud

You hear the term all the time, "Its in the cloud", but what does that really mean?  We are going to take a look at the cloud and its parts to ensure we have a general understanding of what it is and how it does what it does.  First lets use the generally accepted definition and then break that down a little.  The cloud is the elastic leasing of pooled computer resources over the internet.  There are a couple of key words that really make the cloud what it is.  First off it is elastic, this means that its capacity can vary literally one second to the next.  We will talk a little bit about the resources that are used to do this but gist is that the the computing power that is being used can be varied based on the need or demand for it.  The next part is that the resources are pooled.  What this means is that different applications or even different organizations can use the same physical resources at different times based on their need then.  This is performed through virtualization which we discussed depth earlier.  What you need to remember is that virtualization is "creating" a system through software that doesn't actually physically exist from the rest of the system.  The final key part is that this is done over the internet.  This is painfully straight forward in its meaning.  When these things occur in conjunction you have all the ingredients you need for cloud computing.  Okay but why is the cloud a thing?  Where did it come from all of the sudden?  Well there are three factors that have enabled cloud computing to be developed and implemented as a viable business model and tool.  First of as we discussed integrated circuits reduce in cost exponentially, this has led to systems where processors, data communication and storage are so cheap it is viable to great much larger systems than we have seen in the pass.  This is especially true when economies of scale are at play such as we see in large data centers.  Another factor is the advancement of virtualization software.  Modern virtualization software has allowed data centers to turn from massive simple storage caches to computing powerhouses that can easily reallocate resources to different processes or applications on a whim.  This a created a whole new industry often referred to as software driven data centers or SDDCs.   Finally the advent of universal standards in computer technology, specifically in the realm of data communication has allowed hosting companies to provide the flexible resources in a meaningful way that can be utilized across almost all sectors of industry.  This has made cloud computing the alternative to in house hosting which is how most of these applications were implemented in the past.  Cloud computing is more flexible as we have said but it also allows for easier budgeting as there are no surprises in cost when scaling occurs and the initial capital requirement is very small when compared to establishing an in house system.  Firms also do not have to worry about equipment becoming obsolete and needing to replace it as the hosting firm takes on that responsibility as well as the cost of maintaining the system.  We can see the economies of scale coming into play here again.  

Tech Makes The Cloud

Lets look at the components that make up the cloud starting with the most basic terms.  First is the network which is simply a collection of computers that communicate with each other.  This can be done over transmission lines or wirelessly.  All networks fit into four types.  First there is the personal area network or PAN, this is a network of personal connected devices that center around one person.  Your cell phone, Bluetooth headset and laptop can all be a part of your own PAN.  Next you have LANs or local area networks.  These are networks of computers that are connected at a single physical site.  Think of the computers at the library, they are all part of the same LAN.  Next there are wide area networks or WANs.  The are computers that are connected between two or more physical sites.  Consider a firm that has several locations across the country.  If these sites systems are all connected via in house networking the create a WAN.  Finally you have THE Internet or individual Internets which are simply networks of networks.  Anytime one separate network talks to another you have created an internet. The way in which these networks can so easily communicate with each other is enabled through standardized protocols or sets of rules and data structures for organizing communication.  The Institute for Electrical and Electronic Engineers creates committees that create and publish these protocols and standards that allow for universal communication.  Another factor is enabling networks to "call" each other using "phone numbers" or IP addresses.  IPv4 is the most common format, it looks something like xxx.xxx.xxx.xxx where x is a digit between 0 and 9.  Every system has a IP address including your phone and laptop.  This allows for devices to be identified individually.  This gets more complicated when talking about how a host router communicates with a server using IP address as things can be changed to make traffic more efficient then.  When you look at host websites how ever you never have to punch in a phone number, so how does that work.  Well most IP address are assigned to a domain name and when used in conjunction with the appropriate protocol, i.e. https, your traffic is routed to the correct location through a domain name server or DNS.  DNS communicate with internet service provider servers or ISPs.  All of this in combination leads to the three tier architecture that make up clouds.  The first tier is the user tier which consists of computers, phones and other devices that use browsers to request and process web page data.  Next is the server tier.  This consists of computers that run web servers and process web applications.  Web servers are servers that run programs that manage internet traffic by sending, receiving and processing request for web page data.