Project Scope&Project Resources, Schedule, and Cost(.docx

Project Scope
&
Project Resources, Schedule, and Cost
(Cooperative Milk Collecting Center)
Table of Contents
Up Dated Project Scope (Cooperative Milk Collecting Center)
Project
Outcome……………………….………………………………………
…….…….….……………..8
Requirements Traceability
Matrix…..…..…….………………………………………………….
….9
Project Scope Statement

……….……….………………………………………………………
………12
Work Breakdown
Structure……….……………………………………………………
……………….13
Work Breakdown
Dictionary………….……………………………..…………………
……...……...14
Project Resource
Management…………………………………………………………
…………..…18
Project
Schedule………………………………………………………………
…………………………..….22
Project
Cost……………………………………………………………………
…………………………………26
Project Outcome
This project is development of new business suggested and
established from American Farmers Association as a partnership
with one of the largest food organization in the middle East
named Carrefour, Mr. Gorge Stuard the Head of Investment and
development Sector in the organization , the one who will be

responsible for following up funding provided by his
organization required to execute the project. The Product will
be directly under supervision from USFDA, to be sure for the
safety of the Milk product before doing any sale to the
consumer in the local market. The main idea of the project is to
buy the milk from farmers and collected and stored it large
frediges tanks dedicated for this purpose to maintain the
validity of the milk for long as possible around four weeks. The
milk before storage will go through a process to purified from
any impurities after filtering and treatment of any harmful
bacteria. Next step is to be packaged and sold in the local
market under a trade name called Golden Milk. This profitable
project distributes profits as follows:
1- 70% to the investor Carrefour Organization which is fully
given the funds to execute the project.
2- 30% of the profits to the American Farmers Association in
return providing the land on an area of 5,000 M2, they will
responsible to do agreement with farmers to buy the milk from
them on behalf of CMCC, in addition the Administration and
full management of the Milk Collection & Processing Center
furthermore, providing technical expertise, manpower and
specialized team in marketing for the product . Also, they have
to follow up all the necessary procedures inquired to take
approvals from government authorities to approve the project
execution and the commercial name of the milk product.
The project aims to build milk processing machines that will
process the milk collected from different farmers to add value
and packages it before selling it to retail shops and supermarket.
Through processing, which adds value, the shelf life and prices
of milk increases, and this help in profit maximization. The
project will be particularly helpful and significant to the
smallholder dairy producers because it will be collecting milk
from them before processing. Payments that dairy farmers will
be getting will help them increase their income.
Furthermore, the project will facilitate several methods that
will assist in the improvement of milk safety, especially in the

small-scale dairying; this is because most of the farmers depend
on their dairy products they get from their dairy animals to sell
and at least earn a living from this activity. This project,
therefore, will enable farmers to eradicate milk spoilage. which
is estimated at the rate of 30% of the whole milk produced
(Ortuzar et al. 2018)and will further improve the quality of the
liquid. The project is specifically aimed at solving Milk
Spoilage Problem which we have observed happening for quite
some years now. The project targets to reduce milk spoilage to
about 10%, and it will be overcome through However, offering
storage facilities for the Milk brought by the farmers and add
value through processing, which increases the shelf life. The
project will facilitate transportation of the milk to the market
under product name: Golden Milk.Requirements Traceability
Matrix
There are several stakeholders' requirements for this project; the
stakeholders' demands for the project are:
The largest food organization in the middle East Carrefour need
to support the project financially to enhance its implementation.
The American Farmers Association need to provide the land
with 5000M2 to start doing the schematic diagram for the all the
required facilities of the project which will include the
following:
1- Administration Building 300 M2.
2- Milk Tanker Truck Dump load platform (Collection Area)
200 M2.
3- Laboratory 150 M2.
4- Storage Building 1500 M2.
5- Filling & packing Warehouse 1500 M2.
6- Workshop 350 M2
7- Trucks Pick up Area for the Packing Milk to be distributed to
the shops 600 M2.
8- Labor Accommodation 400 M2.
Some of the facilities that are required to keep milk safe and in
good quality are expensive. Therefore, stakeholders must come
in handy and help raise funds to acquire those machines and

equipment required like Fridges with complete cooling system
and boilers to heat the milk to killed any harmful bacteria and
Automatic Filling Systems, Central Filters machine , Automatic
Drain System for all wastage, Temperature Instrument Gages .
The American Farmers Association Farmers is responsible as
per their agreement with Carrefour to ensure that the farmers
have sufficient cows in their farms to be able to provide the
supplied the agreed quantities of milk to the collecting center to
achieved the production planning strategy by making visits to
those farms before concluding any agreement.
The Operations requirement- this stakeholder's need takes into
consideration the maintenance of the features of the project.
Furthermore. In this regard, the operational team further fosters
constraints, for instance, the ability activities in the project.
The third stakeholder requirement is the customer's
stakeholder's requirement; this requirement – users, usually give
information regarding the product and services offered or
provided by the project. Lead users generally help in
contributing to the user stories as well as ideas regarding the
product and services quality as well as usability. It enables the
project to understand which area has to be improved (Eskerod &
Jepsen, 2013). Besides, they required the skill to help in the
process of the milk product so that wastages are minimized at
all costs. Also, they need the marketing skill that allows the
firm to sell its products to the final consumers.
These project solution requirements include the equipment that
will be used to minimize milk spoilage while they are on transit
or storage to the final selling point. The other element is the
material used for packaging purposes to the quantities that will
be offered to the final consumer.
The project needs to uplift society and create employment.
About 15 employees will be hired to work in the milk
processing plant and thus creating jobs. Farmers will also get
the market for their milk and therefore make money, which will
raise their standards of living. On the other hand, the project is
required to lead to the development of the neighboring areas.

Other businesses are expected to come up in the area where the
cooperative will be built.
Quality requirements refer to specifications of the quality of the
products as well as services that are offered by the project, it
takes into consideration all the processes that take place in the
project as well as the entire environment surrounding the
project, including ensuring that the products meet the required
standards and keeping the high standards of hygiene and
cleanness. They are typically activities that may result in the
quality improvement of the product as well as services. The
quality requirements for this project include customer
experience- customer experience refers to activities that may be
able to contribute towards the pleasing of the product as well as
services.
Furthermore, maintainability requirements ensure that
everything works well, and things are easy to maintain (Pries &
Quigley, 2012).
The requirements of a project are the conditions or capabilities
that the deliverables of a project must meet in order to satisfy
the project objectives. The requirements traceability matrix
explicitly shows the connections between the requirements, the
project objectives, and the deliverables.
· List each requirement for the project, the project objective
that each requirement addresses, and the deliverable that
satisfies each requirement.
Requirement
Project Objective
Deliverable
Financial support
To keep milk safe and in good quality
Good Quality of Milk
Operations
maintenance of the project
Maintain the project throughout the end
Consumers Feedback

Helps the company by contributing consumer feedback
regarding their product and services quality as well as usability
Improving the service or product by analyzing the consumer
feedback
Farmer’s Earning
To pay the highest possible rate to farmers to encourage them to
sale their milk to the CMCC.
To get the supplied quantities from the milk as per expected.
Equipment’s
To process the milk storage and achieving the production Plans
Best packaging service to avoid and distributing the product as
per marketing business plan.
Employment Creation
Will raise the standard of living
More amount of milk can be Sold in market.
Quality
Keeping the high standard of hygiene’s
Quality improvement of the product
Project Scope Statement
Project scope defines all the work that must be done to deliver
the expected outcome or product of the project. The project
scope statement describes precisely what is and what is not
included in the project. The scope of the project is derived from
project requirements and is used as input to create the work
breakdown structure.
Compose a project scope statement:
· Describe, in detail, the characteristics of the product, service,
or outcome that the project will produce.
The project will be particularly helpful and significant to the

smallholder dairy producers because it will be collecting milk
from them without any fatigue in the distribution of milk to the
markets in a traditional way, where they must distribute in a
timely manner so as not to be damaged milk since a large
proportion of farmers do not have storage places and equipment
because of the high cost to them. In addition to the
transportation fees to distribute the milk to the shops. It is
easier for them to supply the full quantities of milk to the center
and collect the money immediately, without any effort incurred
as it was in the past. Payments that dairy farmers will be
getting will help them increase their income. The project aims
to build milk processing machines that will process the milk
collected from different farmers to add value and packages it
before selling it to retail shops and supermarket. Through
processing, which adds value, the shelf life and prices of milk
increase.
The project intends to provide is the milk storage services in
their storage areas constructed specially for this purpose and
equipped with all cooling devices according to the appropriate
cooling temperatures to save milk for long periods for more
than 4 weeks.
· Describe the incremental deliverables that must be produced to
create the final product, service, or outcome of the project.
A new delivery plan for farmers has to be developed. Moreover,
a delivery plan is an essential external stakeholder. In addition
to that, since there is readily available market, it is also
important to establish a finished marketing plan that will ensure
an expanded market for the milk. Marketing plan is an
incremental deliverable that will help the project meet its
objectives.
Here, in this project the incremental approach is how
to produce more milk, how to check the quality of the milk and

how to retain the same quality of the milk over the period.
The storage of the milk to protect from germs or bacteria. And
above all, the environment plays a vital role. Hygienic area,
hygienic people as well as hygienic machinery is required to
pull out the maximum benefit and along that also to provide
quality of product which the company has promised to give to
the society.
Furthermore, Screening is another incremental deliverable,
screening ensures that the milk is screened for pathogens and
other components. Screening is done to ensure quality of milk.
Finances is another essential incremental deliverable. It is
important that enough budget is allocated to the project, this
will ensure that the project meets all of the objectives set.
Furthermore, enough budget will foster quick completion of the
project.
· Describe the exclusions from the scope of the project.
MSPM 6900 Capstone: Social Impact in Project Management
The scope of project excludes the profit margins after 1 year of
the running business. It should tell the stakeholders that at what
time of frame they will get the profit from the business not the
investment. It should have a proper plan for coming 5 years,
that where the business stands and how much you can give to
the society in terms of product or service and how much profit
margin you will get from the business
©2019 - Walden University- Project Scope & Project Resources,
Schedule and Cost 3
Work Breakdown Structure
Work Breakdown Structure Dictionary
· Complete this table for each work package in the WBS.
Project Title: Cooperative Milk Collecting Center (CMCC)-
Product Name: Golden Milk
WBS Work Package ID: PP

WBS Work Package Task Name:Project preparation
Description of Work: It is consisting of preparing design
drawing and all inquired specification related to the work
execution and all Cooling & Packaging System. In addition, the
required legalization matters to find out who will be the
partnership needed for the project, to get all funds required to
execute the project.
Deliverable:
Activities (Verb Noun Format)
Labor Resources
(Name or Type)
Other Resources (Such as Equipment)
Expected Duration
1- Project Preparation
Mr. Gorge Stuard.
Head of Investors Committee
·
3 months
1.1- Funds & Partnership
2 months
1.1.1- American Farmer Association
Mr. David Lowis
Financial Controller in (AFA)
·
One month
1.1.2- Carrefour (Food Organization) – from Middle East
Mr. Gorge Stuard
Head of Investment and development Sector in Carrefour &
Head of Investors committee for CMCC
·
One month
1.2- Design Document & Legalization
Sam Smith- Head of Permits for Industrial Establishment

·
3 months
1.2.1- Design Admin Building
Michel Saad – CMCC Project Manager has been appointed for
15 months until completion of the Project.
He will be responsible for the entire project.
Plotter, computers and Stationery
15 days
1.2.2- Design Collection Area
Michel Saad – CMCC Project Manager
15 days
1.2.3- Design of Storage Building
30 days
1.2.4- Design of Filling and Packing ware
30 days
1.2.5- Design of Truck pick up Area& Labor Accommodation
30 days
End of Project Preparation Phase
·
0 days
Total Duration: 3 months
Acceptance Criteria: The Funds Availability for project
financing.
Person Responsible for verification of Completion: Head of
Investors Committee Mr. Gorge Stuard.

WBS Work Package ID: WE
WBS Work Package Task Name:Work Execution
Description of Work: Start project mobilization to make the site
ready for construction works and after that the construction
work will be started.
Deliverable:
Labor Resources
(Name or Type)
Expected Duration
2- Work Execution
Michel Saad – CMCC Project Manager has been appointed for
15 months until completion of the Project.
He will be responsible for the entire project
Rental Construction Equipment, Wheel Loaders, Excavators
Backhoe, Sewage Pipeline material and all material required for
project services.
7 months
2.1- Site Mobilization
Michel Saad
- CMCC Project Manager-
·
2 months
2.1.1- Infrastructure Works
Michel Saad
- CMCC- Project Manager-
Backhoe, Sewage Pipeline material and all material required for
project services.
40 days
2.1.2- Temporary Site Office
Michel Saad

Steel Structure Materials & Sandwich panels with other
Building Materials
20 days
2.2- Construction work
Michel Saad
Backhoe, Concrete Mixer, Pumps, Building Materials.
5 months
2.2.1-Admin building construction
Michel Saad
Rental Construction Equipment, Building Materials.
4 months
2.2.2- Collection Area Construction
Michel Saad
- CMCC -Project Manager-
3 months
2.2.3- Storage Building Construction
Michel Saad
2 months
2.2.4- Filling & Packing warehouse construction
Michel Saad
3 months
2.2.5-Truck pick up Area & labor Accommodation Construction
Michel Saad
2 months
End of Work Execution Phase

-
-
0 days
Total Duration: 360 days
Acceptance Criteria: handing over the mobilization &
construction work
Person Responsible for verification of Completion: Michel
Saad & Murad Nabil.
WBS Work Package ID: FW
WBS Work Package Task Name:Finishes Work
Description of Work: the beginning of the finishing works,

which includes the external works including landscaping and
paving, and the work of parking for trucks and irrigation works
for external plantations. In addition the interior finishes work,
such as plastering of walls and paints works, electrical works
with installing the light fitting, applying floor tiles and
installation of sanitary appliances.
Deliverable:
Labor Resources
(Name or Type)
Expected Duration
3.0- Finishes Works
Michel Saad
- CMCC -Project Managers-
Building Material, Rental construction Equipment, Irrigation
material and tools
4 months
3.1- Exterior Work
Michel Saad
- CMCC -Project Managers -
Building Material, Rental construction Equipment, Irrigation
material and tools.
15 days
3.1.1- Landscape Work
Michel Saad
- CMCC -Project Managers-
soil, paving equipment and building material.
45 days
3.1.2 - Paving Work
Michel Saad
Rental Paving Equipment, Water Tankers, sand &stone
aggregates, Asphalt & Concrete for Paving
2 months
3.1.3- Truck Parking

Michel Saad
Steel Material, Concrete Rental Crane
One month
3.1.4- Irrigation
Michel Saad
Irrigation Material and Plants, electronic system.
45 days
3.2- Interior work
Michel Saad
Cement, Bricks, Tiles, Paint material electrical Material and
light lamps
4 months
3.2.1- Plastering and Paint
Michel Saad
Cement, Bonding material , sand , and pant material
3 months
3.2.2- Light Fitting and Electrical Work.
Michel Saad
Tools , Electrical Wires and Plugs , lamps and switches,
Breakers
4 months
3.2.3- Tiles and Flooring
Michel Saad
Cement, Sand, Bonding Material, Fixing tools and Tiles
75 days
3.2.4- Installation Sanitary Appliances
Michel Saad
Valves, Sanitary Parts and Accessories. Fixing tools
One month

End of Finishes Works
·
0 days
Acceptance Criteria: Complete all Finishes works related to the
project Exterior and Interior.
Person Responsible for verification of Completion: Project
Manager Mr. Michel Saad
WBS Work Package ID: EI
WBS Work Package Task Name:Equipment Installation
Description of Work: Supply and install of milk storage tanks
and refrigerators with cooling system, in addition supply and
install of milk filling system in bottles and assembly in cartons
in preparation for loading in trucks for distribution in the local
market.
Deliverable:
Labor Resources
(Name or Type)
Other Resources
(Such as Equipment)
Expected Duration
4.0- Equipment Installation for new cold drink Product
Mr. Murad Nabiel,
Mr. Adam Abbas
Installation Tools, Forklift, cranes, Electrical connection &
Manual.
181 days
4.1- Final Installation
Mr. Murad Nabiel
Procurement Manager (CMCC)

Reported to Project manager Mr. Michel Saad
Mr. Adam Abbas
Technical Engineer (AFAS)
Manual.
87 days
4.1.1- Storage Containers Installation
Mr. Murad Nabiel
Procurement Manager (CMCC)
Reported to Project manager Mr. Michel Saad
Mr. Adam Abbas
Technical Engineer (AFAS)
Manual.
one month
4.1.2- Fridges and Cooler System
Mr. Murad Nabiel
Mr. Adam Abbas
Manual.
One month
4.1.3- Packing System
Mr. Murad Nabiel
Mr. Adam Abbas
Manual.
One month
4.2- Project Closeout
4.2.1- Testing & Commencing
Mr. Adam Abbas
Operation Manuals
12 days
4.2.2- Project Handing Over

Mr. Michel Saad
Mr. Gorge Stuard.
As Built Drawing
Complete Sets.
0 days
Acceptance Criteria: Start up the Machines and production
Started.
Person Responsible for verification of Completion: Mr.
MuradNabiel, Mr.Adam Abbas, Finally, Assigned by
Head of Investors Committee Mr. Gorge Stuard.
Project Resource Management
Project resource management includes the processes to identify,
acquire, and manage the human and non-human resources
needed to complete the work of the project and produce the
final product, service, or outcome. The resource plan for a
project is used as input to develop the project schedule and
estimating the cost of a project.
Project Team
· In the table below, identify and assign roles and
responsibilities for three to five (3–5) key project team
members for the project using the definitions of role and
responsibility provided on pages 318–319 of the PMBOK
(PMBOK Guide).
Team Member Name
Role
Responsibility
Gorge Stuard
Head of Investors Committee including (Carrefour and
American Farmer Association)

Responsible for collecting funding for the project & Giving
approval to start project works and handing Over and
commissioning the production of Milk Collecting Center.
Michel Saad
CMCC Project Manager has been appointed for two-year
contract until completion of the Project.
· Making the Project plan.
· Developing a project Schedule.
· Managing Project Team.
· Leading all work Execution of the project.
Murad Nabiel
Procurement Manager, employed in CMCC, and reported to the
project Manager.
Responsible for directing the purchasing of the milk from the
suppliers, conducting interviews with milk suppliers,
negotiating the supplier agreements. Responsible for supply all
equipment and prepare the system for a start-up commissioning.
Sarah Fouad
Human Resources
Manager (CMCC)
Hiring employees and selecting qualified staff and withholding
training courses.
Adam Abas
Technical support Engineer
Approved all process from collecting the milk and storage it in
the refrigerators up to fill it in bottles to be ready for
distribution & Operation of equipment and manuals.
· Describe the processes that will be used to develop and
manage the project team.
Development and management of the project team requires some
processes, the main intention is to improve the competencies of

team members. On the other hand, management of the team
members is meant to optimize project performance.Develop
Project Team. This focuses on improving the competencies of
team members, it is achieved through several processes such as
training, team building. Training team members how to
effectively carry out their duties to enhance their competencies.
Furthermore, facilitating team-building activities is very
essential in this process. Furthermore, Incenting the team using
recognition and rewards is very important since it will motivate
them to work even smarter than before (Chiocchio, Kelloway, &
Hobbs, 2015).Manage Project Team
This process is meant to monitor or tracks team member
performance, give feedback to the team members, fostering the
resolving of various issues et cetera. provision of the project
performance appraisals on the team members. Using appropriate
conflict management approach to solve issues that may arise
among the team members (Chiocchio, Kelloway, & Hobbs,
2015).
Project Resources
Complete the table below for the project. The table should
contain the key project team members identified, and all other
human and non-human resources needed for the project.
· Project Team member name and rate
Resource Name
Cost per hour
Gorge Stuard - Head of Investors Committee
$45 / Hour
Michel Saad -Project Manager (CMCC)
$40/ Hour
Murad Nabiel Procurement Manager (CMCC)
$40 / Hour
Adam Abbas – Technical Support engineer (CMCC)
$30 / Hour
Jone Gawland-Producer Manager (CMCC)
$35/ Hour

Sarah Fouad – Human Resources (CMCC)
$30 / Hour
· Human resources other than the project team members
Resource Name
Rate or Cost
Numbers of 15 Workers
$20/Hours
Auditor
$15000/year
Consultant
$100/Day
Transporters- 2 Drivers – Outsource
$35 / Hour
Advertising Advisor ( Out Source)
500 per Task
· Non-Human resources needed for the Project
· Resource Name
Rate or Cost
Land Purchasing (5,000 M2) - $30/ Meter Square
$150,000
Backhoe, Concrete Mixer, Pumps
Rent one Construction Equipment $30/Hour
Building Material- as Bill of Quantities (Total)
$80,000
No. 20 Mechanical Refrigeration $ 1500/ Unit
$ 30,000
Packing System (Total)
$15,000
Advertising Advisor (Outsource)
500 per Task
Water, Electricity, Telecommunication Services& Cleaning
(Lump Sum)

$35,000
· Tools & Technique used to Identify the project resources
When we have all required inputs for resource planning, here’s
how to get down to it. Expert judgment comes from our
professional experience, valuable insights that may come from
our senior consultants hired by CMCC. As it may sound
obvious, it’s important for the project’s success.
Next comes the alternatives identification. As a project may
change during their lifetime, we need to take different scenarios
into consideration. This way, we can come up with solutions to
use as changes occur. Two methods we may use are:
· Pattern thinking – this method involves pattern recognition,
which is useful while refining or improving, based on past
experiences.
· Lateral thinking – this approach requires creative thinking and
solving problems with ideas that may not be obvious at first.
Bottom-up estimating, which is the next method we can use
while planning resources, is a simple concept based on
involving people who are going to work on the project in
estimating it. In this approach our team estimates tasks based on
their knowledge and experience, resulting in a more detailed
schedule, but it’s also more time consuming.
· Explain how will acquire the non-human resources for the
project
The use of resource management software will come in handy
during this duration in order to not only manage both human
and non-human resources, but also tabulate all data that has
been accumulated by the business during its operations.
Software in this instance is more appropriate than the use of
spreadsheets as it provides quick access to information through
the use of filters, especially when dealing with bulky bits of

information regarding, say, the names and units of milk for each
farmer involved.
The project intends to acquire its non-human resources from an
investor committee. The project investors along with other core
members higher up the ranking chains will be consulted as the
project expands and decisions on the trajectory of the business
will be decided upon.
However, in order to get the funding necessary to kick start this
project, the investor committee must approve the ideas and
goals being pushed by the business and subsequently involve
Mr. Gorge Saad in its decision-making processes once funding
for the project has been secured. Project Schedule:
A project schedule is developed by estimating the duration of
the activities that must be performed in order to produce each of
the sub-deliverables. The project schedule is typically
represented in a Gantt Chart. The Gantt Chart depicts the
project activities, durations, start and end dates, and
predecessors. It also shows the project’s critical path. Activities
on the critical path are those that, if delayed, will impact the
project finish date.
Estimate Activity Durations
· Describe the tool/technique you used to estimate the activity
durations:
There are several tools or techniques that can used to estimate
the activates duration as per the following:
Analogous Estimation
The analogous, or top-down, estimation relies on information
from similar projects to determine the activity duration for a
current project. All we need the historical data and a degree of
expertise about the similar projects, because the reliability of
your estimation depends on how closely the activities match the
projects we are using as comparisons. Use this method at the
beginning of a project when we don’t have all the details.
Adjust the estimates as we learn more about the tasks and how
long they can be expected to take with the resources available.

Parametric Estimation
The parametric estimation is similar, but more accurate, than
the analogous estimation. To use it, multiply the number of
units we need by the time it takes to produce the units. We will
need historical information about similar activities to complete
our estimate. The method is scalable. This means if our
historical data tells us that it takes one person an hour to
produce one unit, we can reasonably estimate that we can
complete three units within one hour if we allocate three
workers to the task. When we use this method, it's important to
account for all tasks that impact the activity. For example, if the
workers spend part of the time preparing materials, account for
that time in our estimates.
Expert Judgment
When the project is complicated and several factors can
influence the duration of our activities, we might want to use
expert judgment to estimate activity duration. Experts
knowledgeable in an area can judge the time and resources that
need to complete activities in this area. We also can gather
estimates from external experts, if we can get external estimates
at reasonable cost.
The Delphi Technique
The Delphi technique makes use of group intelligence to
determine activity duration. The technique involves gathering
opinions from several experts and then sending the responses
back to the experts for their review. They can change their
opinions after reviewing the responses. The process might
involve several rounds, as we want to investigate differences of
opinion and get to a consensus. To reduce bias and prevent
individual experts from overly influencing results, experts
submit their opinion anonymously. We can use a third party to
gather the opinions.
Work Breakdown Structure
Certain activities might be too large or complex for a reliable

duration estimate. If an activity takes up more than 10 percent
of the project schedule, we might want to break it into several
different tasks. we can use a work breakdown structure to
reduce these activities into smaller, more manageable tasks.
Doing this enables us to set priorities and estimate the duration
of tasks more accurately. A work breakdown structure also is
useful for building accountability, because we can assign
specific tasks to designated project participants.
· Estimate the duration for each of the project activities and
enter the durations in the table.
Deliverable/Activity
Start
Finish
Duration
Project Start (Cooperative Milk Collecting Center)
3rd of October 2019
30 December 2020
15 months
1. Project Preparation
3rd of October 2019
3rd January 2020
3 months
1.1. Funds& Partnership
3rd of October 2019
3rd of December 2019.
2 months
1.1.1 American Farmer Association
3rd of October2019
3rd of November 21, 2019
One month
1.1.2 Carrefour Food Organization
3rd of October 2019
3rd of December 2019

2 months
1.2 Design& Document Legalization
3rd of October 2019
3rd January 2020
3 months
1.2.1 Design Admin Building
3rd of October
17th of October 2019
15 days
1.2.2 Design Collection Area
3rd of November 2019.
15 days
1.2.3 Design of Storage Building
3rdof November 2019
30 days
1.2.4 Design of Filling and Packing Warehouse
3rd of November 2019
30 days
1.2.5 Design of Truck pick up Area & Labor Accommodation.
3rd January 2020
30 days
2. Work Execution
3rd January 2020
3rd of August 2020
7 months
2.1 Site Mobilization
3rd January 2020
3rd of March 2020
2 months
2.1.1 Infrastructure Works
3rd January 2020
13th of February2020

40 days
2.1.2 Temporary Site Office
13th of February 2020
3rd of March 2020
20 days
2.2 Construction Work
3rd of March 2020
3rd of August 2020
5 months
2.2.1 Admin Building Construction
3rd of March2020
3rd of July 2020
4 months
2.2.2 Collection Area Construction
3rd of March 2020
3rd of June 2020
3 months
2.2.3 Storage Building Construction
3rd of March 2020
3rd of May 2020
2 months
2.2.4 Filling and Packing Warehouse Construction
3rd of May 2020
3rd August 2020
3 months
2.2.5 Truck Pick up Area and Labor Accommodation
Construction
3rd of June 2020
3rd of August 2020
2 months
3. Finishes Work
3rd of June 2020
3rd of October 2020
4 months
3.1 Exterior Work
3rd of August 2020

3rd of October 2020
2 months
3.1.1 Landscape Work
3rd of August 2020
18 of September 2020
45 days
3.1.2 Paving Work
15th of August 2020
2 months
3.1.3 Truck Parking
4rd of August 2020
4th of September 2020
One month
3.1.4 Irrigation
3rd of August 2020
45 days
3.2 Interior Work
3rd of June 2020
3rd of October 2020
4 months
3.2.1 Plastering and Paint
3rd of June 2020
3rd of September 2020
3 months
3.2.2 Light Fitting and Electrical Work
3rd of June 2020
3rd October 2020
4 months
3.2.3 Tiles and Flooring
3 of July 2020
75 days
3.2.4 Installation Sanitary Appliance
3rd of August 2020

3 of September 2020
One month
4. Equipment installation required for a new Gold drink product
3rd of October 2020
30 December 2020
87 days
4.1.1 Storage Containers Installation
3rd of October 2020
One month
4.1.2 Fridges and Cooler System
18th of November 2020
15 days
4.1.3 Packing System
18th of November 2020
18th of December 2020
One month
4.2 Project closeout
4.2.1 Testing & commencing
18th of December 2020
29 December 2020
12 days
4.2.2 Project Handing Over
-
29 December 2020
0 days

Gantt Chart
· Using the data in table above, construct a Gantt Chart for the
project.
· The Gantt Chart should depict the following: Activity Name,
Start Date, Finish Date, Duration, and Predecessors.
· The Gantt Chart should display the critical path.
· The Adjustment of dates may occur as per the Primavera
Software Format and Data Output.
Project Cost
Project cost management involves estimating how much it will
cost to complete all of the project activities and then
aggregating those costs to determine the total cost of the
project. In order to estimate the cost of the project, resources
must be applied to the project activities.
Project Cost Estimates
Deliverable/Activity
Duration
Resource Name(s)
Resource Quantity/Rate
Activity Cost
Project:
15 months

1.0- Project Preparation
3 months
1.1-Funds& Partnership
2 months
Carrefour Food Organization Middle East & AFA
Finance
Collecting Funds for project Budget
1.1.1 American Farmer Association
One month
Feasibility study & cost Analysis
Consultation
$ 4,000
1.1.2 Carrefour Food Organization
2 months
Feasibility study & cost Analysis and financial studies
Consultation
$8,000
1.2 Design& Document Legalization
3 months
Plotter, Computers and Stationery
-
-
1.2.1 Design Admin Building
15 days
Design Document
Complete Design documents set.
$10350.00
1.2.2 Design Collection Area
15 days
Design Document

$1,100
1.2.3 Design of Storage Building
30 days
Design Document
$1,300
1.2.4 Design of Filling and Packing Warehouse
30 days
Design Document
$ 1,400
1.2.5 Design of Truck pick up Area & Labor Accommodation.
30 days
Design Document
$850.00
2.0- Work Execution
7 months
-
·
·
2.1 Site Mobilization
2 months
·
·
-
2.1.1 Infrastructure Works
40 days
Rental Construction Equipment, Building Material, Sewage Pipe
line , manhole , steel bars and cement & concrete
Estimate as per B.O.Q and Site Condition.
$ 25,000
2.1.2 Temporary Site Office
20 days
Rental Construction Equipment& Building Material

$15,000
2.2 Construction Work
5 months
·
·
·
2.2.1 Admin Building Construction
4 months
$30,000
2.2.2 Collection Area Construction
3 months
$18,000
2.2.3 Storage Building Construction
2 months
Estimate as per B.O.Q and Site Condition
$22,000
2.2.4 Filling and Packing Warehouse Construction
3months
$20,000
2.2.5 Truck Pick up Area and Labor Accommodation
Construction
2 months
$26,000
3.0- Finishes Work
4 months
-

-
-
3.1 Exterior Work
2 months
-
-
-
3.1.1 Landscape Work
45 days
Rental,Bobcat Equipment, Loaders Soil Bricks
As per Landscape survey Layout.
$ 10,000
3.1.2 Paving Work
2 months
Rental equipment for leveling, compacting ground , Paving
Equipment & water tank, Paving material
2 leveling & 2 paving Equipment
5 Water Tanks,
$ 50 per Hour for each. Estimated hours 16 .
$7,200 for equipment +
$ 3500 Asphalt Material
Total = $10,700
3.1.3 Truck Parking
One month
$ 4850.00
3.1.4 Irrigation
45 days
Rental,Bobcat Equipment, Drip Irrigation systems. Water Flow
Meters, soil sensors, Drones
As per Plants Layout refer to the approved landscape Drawing.
$ 15,000
3.2 Interior Work
4 months

-
-
-
3.2.1 Plastering and Paint
3 months
Cement, Sand, Bonding Material Mixing tools, Paint material
Brushes, ladders, Plastic covers etc.
Estimated as quantities and previous work done.
$2,250.00
3.2.2 Light Fitting and Electrical Work
4 months
Ladders, electrical wiring, lamps, D.B Switches Breakers and
Data Cables etc
As per Elect B.O.Q
$12,000.00
3.2.3 Tiles and Flooring
75 days
Adhesives Sand, Cement, Bonding Materials, Tiles
As Per Finishes Schedule for the project.
$15,000
3.2.4 Installation Sanitary Appliance
One month
Sanitary Parts and accessories,
As Quantities mentioned in the B.O.Q
$4100
4.0-Equipment installation required for a new cold drink
product
87 days
-
-
-
4.1.1 Storage Containers Installation
One month
Storage Containers & Forklift, Power Connection, Control Panel
Fixing Tools, carne

As per the Detailed Drawing and B.O.Q
$ 15,500
4.1.2 Fridges and Cooler System
15 days
Fridges and cooler System.
As per the Design Drawing and B.O.Q
$ 20,000
4.1.3 Packing System
One month
Packing Machine, Motors, Cartons, Bottles, Forklift
As per detailed drawing & B.O.Q and manuals
$15,000
4.2.1 Testing & commencing
12 days
Measuring & testing Tools
Total No.3 of Measuring & testing tools
$550.00
4.2.2 Project Handing Over
0 days
·
·
·
Grand Total
$ 280,850
· Describe the tool/technique you used to estimate the activity
resources.
There are several tools and techniques that can be used to
estimate activity resources in our project as follows:
Expert Judgment
Expert judgment is the first tool and technique. Experts can

provide real perspective when it comes to estimating resources
for our activities. First off, experts can help the project staff
choose the right resource based on their wealth of experience
with similar projects or activities. Once we have decided on
which resource is correct for the task, experts can then help us
to determine how many of these resources we should employ for
a given activity. Experts usually know the optimum number so
there is just enough work to go around and avoid idle time.
Experts earn their big paychecks also by sharing their
knowledge and insights about requirements for a given activity
that is common in their area of expertise. Experts can give us
choices of different techniques for estimating and because they
have seen many different situations, experts can typically also
provide a range of choices of resources appropriate for a given
activity.
Estimating Tools
Next, we have the three common estimating techniques that we
have already seen in both Cost Management. Bottom-up
estimating it is time consuming, it is the most accurate of
estimating approaches. Some call it the Engineering or
Grassroots estimate because of the level of detail involved.
The key is in the detail. When we breakdown an enormous task
into smaller, more manageable tasks then the tasks become
small enough to make a considered estimate for the required
resources. After we assign people, equipment, material and
supplies, we get a total for that single task. Add up all these
estimates and that is Bottom-up estimating. When each and
every task on the WBS has its own detailed estimates, the
number can be aggregated at a different level or totaled for the
entire project.
Analogous estimating is certainly quicker and easier. This
method uses the common features of similar past projects based
on recent historical data.
And then Parametric estimates are simple math tools. They are
algorithm-based. If you have current, up-to-date data, we can

use a formula to make an estimate based on proven
relationships. For example, a paving staff knows its past cost
per lane mile paved and even the cost of a mile of painted
centerline. Very handy but using this tool requires current,
accurate and relevant data.
Data Analysis
We are moving on to our next tool and technique, which is Data
analysis where we take the time to look at the activity resource
related information so we can organize, assess and evaluate
them.
Alternative Analysis
As a project manager, our project team and often experts will
assist us in identifying several resource options for our
activities.
When choosing resources, we must first determine what is the
best choice and why. Is it faster? Is faster always the best?
What about reliability and what about quality? The analysis of
alternatives should consider all the ways to accomplish the
activity. Should the task be done manually or is automation a
better choice?
Questions such as whether it makes sense to do the work in-
house or use external resources need to be considered when
estimating resources. Very often, our project manager will also
have to consider whether it makes more sense to build it or buy
it or even rent it. For example, software, should we build it
ourselves or purchase it from a vendor? Both the requirements
of an activity or its product, as well as the current environment
will limit our choice of alternatives.
One example that immediately comes to mind is a resource
shortage and its effect on cost and considerations regarding
alternatives. So, as we see, there are many considerations when
choosing and estimating the resources required for the project
activities and it’s good to have alternatives.
· Describe the tool/technique you used, to estimate the activity
costs.
The cost of each project activity is estimated in the estimate

costs process. An interesting point about this process is that it
uses the same tools as in the estimate activity duration. In the
estimate activity duration process, we determine the time taken
by each activity. Now, in the estimate costs process, we will
calculate the total cost of the project.
In estimate cost process, the cost of each activity is determined,
including the cost of human hours, the cost of equipment, and
the cost of materials used as well as the contingency cost (i.e.,
the cost to cover the identified risks).
There are several tools and techniques that can be used to
estimate activity cost in our project as follows:
Analogous Estimating
This technique is employed to estimate the project cost when
limited detail about the project is available. Therefore, this
technique does not provide a very reliable estimation. The
primary benefits of this technique are its lower cost and quick
results.
In analogous estimation, the cost of the project is estimated by
comparing it with similar projects previously completed by your
organization. Here, you will look into your organization’s
historical records (i.e., an organizational process assets) for
prior completed projects similar to your own. You will select
the project which is closest to your project and use your expert
judgment to determine the cost estimate of your current project.
The analogous estimating is also known as the top-down
estimating.
Parametric Estimating
Like analogous estimating, parametric estimation uses historical
data to calculate cost estimates; however, it also utilizes
statistical data. It takes variables from similar projects and
applies them to the current project.
For instance, in a previous project, we take the cost of concrete
per cubic meter, then calculate the concrete requirement for the
current project and multiply it with the cost obtained from the
previous project. This will provide the total cost of concrete for
your current project.

In the same way, you can calculate the cost of other parameters
(men, materials, and equipment).
The accuracy of this process is better than the analogous
estimation because it employs more than one data set.
Bottom-up Estimating
The bottom-up estimating technique is also called the
“definitive technique.” This technique is the most accurate,
time-consuming, and costly technique for estimating the cost of
a project. Here the cost of every single activity is determined
with the highest level of detail at the bottom level and then rolls
up to calculate the total project cost.
Here, the total project work is broken down into the smallest
work components. Each component cost is estimated, and
finally, it is aggregated to determine the project’s cost estimate.
Reference
Barroso, (2003). Writing the proposal for a qualitative research
methodology project.
Eskerod, P., & Jepsen, A. L. (2013). Project Stakeholder
Management.
Haugan, G. T. (2016). The New Triple Constraints for
Sustainable Projects, Programs, and Portfolios. Boca Raton, FL:
CRC Press.
Pries, K. H., & Quigley, J. M. (2012). Total Quality
Management for Project Management. Boca Raton, FL: CRC
Press.
Vida, K. P. (2012). The Project Management Handbook: A
Guide to Capital Improvements. Rowman & Littlefield.
Zikwel O, (2000). Evaluation of models for forecasting final

cost of a project: Project Management Journal.
Cooperative Milk Collecting Center
Project
Project Preparation
Work Execution
Finishes Work
Funds and Partnership
Design and Document Legalization
American Farmers Association
Carrefour Food Oganization Middle East
Exterior Work
Landscape Work
Paving Work

Truck Parking
Irrigation
Plastering and Paint
Light and Fitting and Electrical Work
Tiles and Flooring
Admin Building
Collection Area
Storage Building
Filling and Packing Warehouse
Truck Pick Up Area and Labor Accommodation
Installation Sanitary Appliance
Site

Mobilization
Infrastructure Works
Temporary Site Office
Interior Work
Construction Work
Admin Building
Collection Area
Storage Building
Filling and Packing warehouse
Truck Pick up Area & Labor Accommodation
Equipment installation required for a new Gold milk product
Final Installation

Storage Containers Installation
Fridge and Cooler System
Project Closeout
Project Handing Over
Testing and Commissioning
Packing System
MSPM
6900 Capstone: Social Impact in Project Management
©2019
-
Walden University
-
Project
Scope
&

Project Resources
, Schedule and
Cost
1
Project Scope
&

MSPM 6900 Capstone: Social Impact in Project Management
©2019 - Walden University- Project Scope & Project Resources,
Schedule and Cost 1
Project Scope
&

bgloss.indd 312 11/26/2015 7:40:39 PM
Managing and Using
Information Systems
A STRATEGIC APPROACH
Sixth Edition
Keri E. Pearlson
KP Partners
Carol S. Saunders
W.A. Franke College of Business
Northern Arizona University
Dr. Theo and Friedl Schoeller Research Center for Business
and Society
Dennis F. Galletta
Katz Graduate School of Business
University of Pittsburgh, Pittsburgh, PA
ffirs.indd 1 12/1/2015 12:34:39 PM
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Library of Congress Cataloging-in-Publication Data
Names: Pearlson, Keri E. | Saunders, Carol S. | Galletta, Dennis
F.

Title: Managing and using information systems: a strategic
approach / Keri
E. Pearlson, Carol S. Saunders, Dennis F. Galletta.
Description: 6th edition. | Hoboken, NJ : John Wiley & Sons,
Inc., [2015] |
Includes index.
Identifiers: LCCN 2015041210 (print) | LCCN 2015041579
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Subjects: LCSH: Knowledge management. | Information
technology—Management. |
Management information systems. | Electronic commerce.
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ffirs.indd 3 12/1/2015 12:34:39 PM
iv
Information technology and business are becoming
inextricably interwoven. I don ’ t think anybody can talk
meaningfully about one without the talking about the other.
Bill Gates
Microsoft 1
I ’ m not hiring MBA students for the technology you learn
while in school, but for your ability to learn about, use
and subsequently manage new technologies when you get out .
IT Executive

Federal Express 2
Give me a fi sh and I eat for a day; teach me to fi sh and I eat
for a lifetime .
Proverb
Managers do not have the luxury of abdicating participation in
decisions regarding information systems (IS).
Managers who choose to do so risk limiting their future
business options. IS are at the heart of virtually every
business interaction, process, and decision, especially when the
vast penetration of the Web over the last 20 years
is considered. Mobile and social technologies have brought IS
to an entirely new level within fi rms and between
individuals in their personal lives. Managers who let someone
else make decisions about their IS are letting
someone else make decisions about the very foundation of their
business. This is a textbook about managing and
using information written for current and future managers as a
way to introduce the broader implications of the
impact of IS.
The goal of this book is to assist managers in becoming
knowledgeable participants in IS decisions. Becoming
a knowledgeable participant means learning the basics and
feeling comfortable enough to ask questions. It does

not mean having all the answers or having a deep understanding
of all the technologies out in the world today. No
text will provide managers everything they need to know to
make important IS decisions. Some texts instruct on
the basic technical background of IS. Others discuss
applications and their life cycles. Some take a comprehensive
view of the management information systems (MIS) fi eld and
offer readers snapshots of current systems along with
chapters describing how those technologies are designed, used,
and integrated into business life.
This book takes a different approach. It is intended to provide
the reader a foundation of basic concepts relevant
to using and managing information. This text is not intended to
provide a comprehensive treatment on any one
aspect of MIS, for certainly each aspect is itself a topic of many
books. This text is not intended to provide readers
enough technological knowledge to make them MIS experts. It
is not intended to be a source of discussion of any
particular technology. This text is written to help managers
begin to form a point of view of how IS will help or
hinder their organizations and create opportunities for them.
The idea for this text grew out of discussions with colleagues
in the MIS area. Many faculties use a series of

case studies, trade and popular press readings, and Web sites to
teach their MIS courses. Others simply rely on one
of the classic texts, which include dozens of pages of diagrams,
frameworks, and technologies. The initial idea for
this text emerged from a core MIS course taught at the business
school at the University of Texas at Austin. That
course was considered an “appetizer” course—a brief
introduction into the world of MIS for MBA students. The
course had two main topics: using information and managing
information. At the time, there was no text like this
Preface
1 Bill Gates, Business @ the Speed of Thought. New York:
Warner Books, Inc. 1999.
2 Source: Private conversation with one of the authors.
fpref.indd 4 11/27/2015 4:21:12 PM
vPreface
one; hence, students had to purchase thick reading packets made
up of articles and case studies to provide them the
basic concepts. The course was structured to provide general
MBA students enough knowledge of the MIS field so
that they could recognize opportunities to use the rapidly
changing technologies available to them. The course was

an appetizer to the menu of specialty courses, each of which
went much more deeply into the various topics. But
completion of the appetizer course meant that students were
able to feel comfortable listening to, contributing to,
and ultimately participating in IS decisions.
Today, many students are digital natives—people who have
grown up using information technologies (IT) all
of their lives. That means that students come to their courses
with significantly more knowledge about things such
as tablets, apps, personal computers, smartphones, texting, the
Web, social networking, file downloading, online
purchasing, and social media than their counterparts in school
just a few years ago. This is a significant trend
that is projected to continue; students will be increasingly
knowledgeable the personal use of technologies. That
knowledge has begun to change the corporate environment.
Today’s digital natives expect to find in corporations
IS that provide at least the functionality they have at home. At
the same time, these users expect to be able to work
in ways that take advantage of the technologies they have grown
to depend on for social interaction, collaboration,
and innovation. We believe that the basic foundation is still
needed for managing and using IS, but we understand
that the assumptions and knowledge base of today’s students is

significantly different.
Also different today is the vast amount of information amassed
by firms, sometimes called the “big data” prob-
lem. Organizations have figured out that there is an enormous
amount of data around their processes, their interac-
tions with customers, their products, and their suppliers. These
organizations also recognize that with the increase
in communities and social interactions on the Web, there is
additional pressure to collect and analyze vast amounts
of unstructured information contained in these conversations to
identify trends, needs, and projections. We believe
that today’s managers face an increasing amount of pressure to
understand what is being said by those inside and
outside their corporations and to join those conversations
reasonably and responsibly. That is significantly different
from just a few years ago.
This book includes an introduction, 13 chapters of text and mini
cases, and a set of case studies, supplemental
readings, and teaching support on a community hub at
http://pearlsonandsaunders.com. The Hub provides faculty
members who adopt the text additional resources organized by
chapter, including recent news items with teaching
suggestions, videos with usage suggestions, blog posts and
discussions from the community, class activities, addi-

tional cases, cartoons, and more. Supplemental materials,
including longer cases from all over the globe, can be
found on the Web. Please visit
http://www.wiley.com/college/pearlson or the Hub for more
information.
The introduction to this text defends the argument presented in
this preface that managers must be knowledge-
able participants in making IS decisions. The first few chapters
build a basic framework of relationships among
business strategy, IS strategy, and organizational strategy and
explore the links among them. The strategy chapters
are followed by ones on work design and business processes
that discuss the use of IS. General managers also need
some foundation on how IT is managed if they are to
successfully discuss their next business needs with IT pro-
fessionals who can help them. Therefore, the remaining chapters
describe the basics of information architecture
and infrastructure, IT security, the business of IT, the
governance of the IS organization, IS sourcing, project
management, business analytics, and relevant ethical issues.
Given the acceleration of security breaches, readers will find a
new chapter on IS security in this sixth edition of
the text. Also, the material on analytics and “big data” has been
extensively updated to reflect the growing impor-

tance of the topic. Further, the chapter on work design has been
reorganized and extensively revised. Each of the
other chapters has been revised with newer concepts added,
discussions of more current topics fleshed out, and old,
outdated topics removed or at least their discussion shortened.
Similar to the fifth edition, every chapter begins with a
navigation “box” to help the reader understand the flow
and key topics of the chapter. Further, most chapters continue to
have a Social Business Lens or a Geographic Lens
feature. The Social Business Lens feature reflects on an issue
related to the chapter’s main topic but is enabled by or
fundamental to using social technologies in the enterprise. The
Geographic Lens feature offers a single idea about
a global issue related to the chapter’s main topic.
No text in the field of MIS is completely current. The process of
writing the text coupled with the publication
process makes a book somewhat out‐of‐date prior to delivery to
its audience. With that in mind, this text is written
fpref.indd 5 11/27/2015 4:21:12 PM
http://pearlsonandsaunders.com
http://www.wiley.com/college/pearlson
vi Preface

to summarize the “timeless” elements of using and managing
information. Although this text is complete in and
of itself, learning is enhanced by combining the chapters with
the most current readings and cases. Faculty are
encouraged to read the news items on the faculty Hub before
each class in case one might be relevant to the topic of
the day. Students are encouraged to search the Web for
examples related to topics and current events and bring them
into the discussions of the issues at hand. The format of each
chapter begins with a navigational guide, a short case
study, and the basic language for a set of important management
issues. These are followed by a set of managerial
concerns related to the topic. The chapter concludes with a
summary, key terms, a set of discussion questions, and
case studies.
Who should read this book? General managers interested in
participating in IS decisions will find this a good
reference resource for the language and concepts of IS.
Managers in the IS field will find the book a good resource
for beginning to understand the general manager’s view of how
IS affect business decisions. And IS students will
be able to use the book’s readings and concepts as the beginning
in their journey to become informed and success-

ful businesspeople.
The information revolution is here. Where do you fit in?
Keri E. Pearlson, Carol S. Saunders, and Dennis F. Galletta
fpref.indd 6 11/27/2015 4:21:12 PM
vii
Books of this nature are written only with the support of many
individuals. We would like to personally thank
several individuals who helped with this text. Although we ’ ve
made every attempt to include everyone who helped
make this book a reality, there is always the possibility of
unintentionally leaving some out. We apologize in
advance if that is the case here.
Thank you goes to Dr. William Turner of LeftFour , in Austin,
Texas, for help with the infrastructure and
architecture concepts and to Alan Shimel, Editor‐in‐Chief at
DevOps.com for initial ideas for the new security
chapter.
We also want to acknowledge and thank pbwiki.com. Without
its incredible and free wiki, we would have been
relegated to e‐mailing drafts of chapters back and forth, or
saving countless fi les in an external drop box without

any opportunity to include explanations or status messages. For
this edition, as with earlier editions, we wanted to
use Web 2.0 tools as we wrote about them. We found that
having used the wiki for our previous editions, we were
able to get up and running much faster than if we had to start
over without the platform.
We have been blessed with the help of our colleagues in this
and in previous editions of the book. They
helped us by writing cases and reviewing the text. Our thanks
continue to go out to Jonathan Trower, Espen
Andersen, Janis Gogan, Ashok Rho, Yvonne Lederer Antonucci,
E. Jose Proenca, Bruce Rollier, Dave Oliver, Celia
Romm, Ed Watson, D. Guiter, S. Vaught, Kala Saravanamuthu,
Ron Murch, John Greenwod, Tom Rohleder, Sam
Lubbe, Thomas Kern, Mark Dekker, Anne Rutkowski, Kathy
Hurtt, Kay Nelson, Janice Sipior, Craig Tidwell, and
John Butler. Although we cannot thank them by name, we also
greatly appreciate the comments of the anonymous
reviewers who have made a mark on this edition.
The book would not have been started were it not for the initial
suggestion of a wonderful editor in 1999 at John
Wiley & Sons, Beth Lang Golub. Her persistence and patience
helped shepherd this book through many previous

editions. We also appreciate the help of our current editor, Lise
Johnson. Special thanks go to Jane Miller, Gladys
Soto, Loganathan Kandan, and the conscientious JaNoel Lowe
who very patiently helped us through the revision
process. We also appreciate the help of all the staff at Wiley
who have made this edition a reality.
We would be remiss if we did not also thank Lars Linden for
the work he has done on the Pearlson and Saunders
Faculty Hub for this book. Our vision included a Web‐based
community for discussing teaching ideas and post-
ing current articles that supplement this text. Lars made that
vision into a reality starting with the last edition and
continuing through the present. Thank you, Lars!
From Keri: Thank you to my husband, Yale, and my daughter,
Hana, a business and computer science student at
Tulane University. Writing a book like this happens in the white
space of our lives—the time in between everything
else going on. This edition came due at a particularly frenetic
time, but they listened to ideas, made suggestions, and
celebrated the book ’ s completion with us. I know how lucky I
am to have this family. I love you guys!
From Carol: I would like to thank the Dr. Theo and Friedl
Schoeller Research Center of Business and Society for
their generous support of my research. Rusty, thank you for

being my compass and my release valve. I couldn ’ t do
it without you. Paraphrasing the words of an Alan Jackson song
(“Work in Progress”): I may not be what you want
me to be, but I ’ m trying really hard. Just be patient because I ’
m a work in progress. I love you, Kristin, Russell,
and Janel very much!
From Dennis: Thanks to my terrifi c family: my wife Carole,
my daughters Christy and Lauren, and my grand-
daughter Gracie. Also thanks to Matt and Jacob, two lovable
guys who take wonderful care of my daughters. Finally,
thanks to our parents and sisters ’ families. We are also blessed
with a large number of great, caring neighbors whom
we see quite often. I love you all, and you make it all
worthwhile!
Acknowledgments
fack.indd 7 11/27/2015 4:24:53 PM
viii
Dr. Keri E. Pearlson is President of KP Partners , an advisory
services fi rm working with business leaders on issues
related to the strategic use of information systems (IS) and
organizational design. She is an entrepreneur, teacher,

researcher, consultant, and thought leader. Dr. Pearlson has held
various positions in academia and industry. She
has been a member of the faculty at the Graduate School of
Business at the University of Texas at Austin where she
taught management IS courses to MBAs and executives and at
Babson College where she helped design the popular
IS course for the Fast Track MBA program. Dr. Pearlson has
held positions at the Harvard Business School, CSC,
nGenera (formerly the Concours Group), AT&T , and Hughes
Aircraft Company . While writing this edition, she was
the Research Director for the Analytics Leadership Consortium
at the International Institute of Analytics and was
named the Leader of the Year by the national Society of
Information Management (SIM) 2014.
Dr. Pearlson is coauthor of Zero Time: Providing Instant
Customer Value—Every Time, All the Time (John
Wiley, 2000). Her work has been published in numerous places
including Sloan Management Review, Academy
of Management Executive, and Information Resources
Management Journal . Many of her case studies have been
published by Harvard Business Publishing and are used all over
the world. She currently writes a blog on issues at
the intersection of IT and business strategy. It ’ s available at
www.kppartners.com.
Dr. Pearlson holds a Doctorate in Business Administration
(DBA) in Management Information Systems from

the Harvard Business School and both a Master ’ s Degree in
Industrial Engineering Management and a Bachelor ’ s
Degree in Applied Mathematics from Stanford University.
Dr. Carol S. Saunders is Research Professor at the W. A.
Franke College of Business, Northern Arizona
University in Flagstaff, Arizona, and is a Schoeller Senior
Fellow at the Friedrich‐Alexander University of
Erlangen‐Nuremberg, Germany. She served as General
Conference Chair of the International Conference on
Information Systems (ICIS) in 1999 and as Program Co‐Chair of
the Americas Conference of Information
Systems (AMCIS) in 2015. Dr. Saunders was the Chair of the
ICIS Executive Committee in 2000. For three
years, she served as Editor‐in‐Chief of MIS Quarterly . She is
currently on the editorial boards of Journal
of Strategic Information Systems and Organization Science
and serves on the advisory board of Business &
Information Systems Engineering. Dr. Saunders has been
recognized for her lifetime achievements by the
Association of Information Systems (AIS) with a LEO award
and by the Organizational Communication and
Information Systems Division of the Academy of Management.
She is a Fellow of the AIS.
Dr. Saunders ’ current research interests include the impact of
IS on power and communication, overload,
virtual teams, time, sourcing, and interorganizational linkages.

Her research is published in a number of journals
including MIS Quarterly, Information Systems Research,
Journal of MIS, Communications of the ACM, Journal
of Strategic Information Systems, Journal of the AIS, Academy
of Management Journal, Academy of Management
Review, Communications Research , and Organization Science
.
Dr. Dennis F. Galletta is Professor of Business Administration
at the Katz Graduate School of Business,
University of Pittsburgh in Pennsylvania. He is also the
Director of the Katz School ’ s doctoral program and has
taught IS Management graduate courses in Harvard ’ s summer
program each year since 2009. He obtained his
doctorate from the University of Minnesota in 1985 and is a
Certifi ed Public Accountant. Dr. Galletta served as
President of the Association of Information Systems (AIS) in
2007. Like Dr. Saunders, he is both a Fellow of
the AIS and has won a LEO lifetime achievement award. He was
a member of the AIS Council for fi ve years.
He also served in leadership roles for the International
Conference on Information Systems (ICIS): Program
Co‐Chair in 2005 (Las Vegas) and Conference Co‐Chair in 2011
(Shanghai); as Program Co‐Chair for the
About the Authors
fabout.indd 8 11/27/2015 4:25:42 PM

http://www.kppartners.com
ixAbout the Authors
Americas Conference on Information Systems (AMCIS) in
2003 (Tampa, Florida) and Inaugural Conference
Chair in 1995 (Pittsburgh). The Pittsburgh conference had
several “firsts” for an IS conference, including the first
on‐line submissions, reviews, conference registration and
payment, placement service, and storage of all papers
in advance on a website. Dr. Galletta served as ICIS Treasurer
from 1994 to 1998 and Chair of the ICIS Execu-
tive Committee in 2012. He taught IS courses on the Fall 1999
Semester at Sea voyage (Institute for Shipboard
Education) and established the concept of Special Interest
Groups in AIS in 2000. In 2014, he won an Emerald
Citation of Excellence for a co‐authored article that reached the
top 50 in citations and ratings from the fields of
management, business, and economics.
Dr. Galletta’s current research addresses online and mobile
usability and behavioral security issues such as
phishing, protection motivation, and antecedents of
security‐related decision making. He has published his research
in journals such as Management Science; MIS Quarterly;

Information Systems Research; Journal of MIS; European
Journal of Information Systems; Journal of the AIS;
Communications of the ACM; Accounting, Management, and
Information Technologies; Data Base; and Decision Sciences
and in proceedings of conferences such as ICIS,
AMCIS, and the Hawaii International Conference on Systems
Sciences. Dr. Galletta’s editorship includes working
as current and founding Coeditor in Chief for AIS Transactions
on Human‐Computer Interaction and on editorial
boards at journals such as MIS Quarterly, Information Systems
Research, Journal of MIS, and Journal of the AIS.
He is currently on the Pre‐eminent Scholars Board of Data Base.
He won a Developmental Associate Editor Award
at the MIS Quarterly in 2006. And during the off‐hours, Dr.
Galletta’s fervent hobby and obsession is digital pho-
tography, often squinting through his eyepiece to make portrait,
macro, Milky Way, and lightning photos when he
should be writing.
fabout.indd 9 11/27/2015 4:25:42 PM
x
Contents
Preface iv
Acknowledgments vii
About the Authors viii
Introduction 1

The Case for Participating in Decisions about Information
Systems 2
What If a Manager Doesn’t Participate? 5
Skills Needed to Participate Effectively in Information
Technology Decisions 6
Basic Assumptions 8
Economics of Information versus Economics of Things 12
Social Business Lens 14
Summary 15
Key Terms 16
1 The Information Systems Strategy Triangle 17
Brief Overview of Business Strategy Frameworks 19
Business Models versus Business Strategy 21
Brief Overview of Organizational Strategies 25
Brief Overview of Information Systems Strategy 26
Social Business Lens: Building a Social Business Strategy 27
Summary 28
Key Terms 29
Discussion Questions 29
Case Study 1‐1 Lego 30
Case Study 1‐2 Google 31
2 Strategic Use of Information Resources 33

Evolution of Information Resources 34
Information Resources as Strategic Tools 36
How Can Information Resources Be Used Strategically? 37
Sustaining Competitive Advantage 43
Social Business Lens: Social Capital 47
Strategic Alliances 47
Risks 49
Geographic Box: Mobile‐Only Internet Users Dominate
Emerging Countries 50
Co‐Creating IT and Business Strategy 50
ftoc.indd 10 11/27/2015 8:36:37 PM
xiContents
Summary 51
Key Terms 51
Case Study 2‐1 Groupon 52
Case Study 2‐2 Zipcar 53

3 Organizational Strategy and Information Systems 55
Information Systems and Organizational Design 58
Social Business Lens: Social Networks 63
Information Systems and Management Control Systems 63
Information Systems and Culture 66
Geographic Lens: Does National Culture Affect Firm
Investment in IS Training? 70
Summary 71
Key Terms 71
Case Study 3‐1 The Merger of Airtran by Southwest Airlines:
Will the Organizational Cultures Merge? 72
Case Study 3‐2 The FBI 73
4 Digital Systems and the Design of Work 75
Work Design Framework 77
How Information Technology Changes the Nature of Work 78
Social Business Lens: Activity Streams 84
Where Work Is Done and Who Does It: Mobile and Virtual
Work Arrangements 86
Geographic Lens: How Do People Around the World Feel About

Working Remotely? 88
Geographic Lens: Who Telecommutes? A Look at Global
Telecommuting Habits 89
Gaining Acceptance for IT‐Induced Change 94
Summary 96
Key Terms 97
Case Study 4‐1 Trash and Waste Pickup Services, Inc. 97
Case Study 4‐2 Social Networking: How Does IBM Do It? 98
5 Information Systems and Business Transformation 99
Silo Perspective versus Business Process Perspective 100
Building Agile and Dynamic Business Processes 104
Changing Business Processes 105
Workflow and Mapping Processes 107
Integration versus Standardization 109
Enterprise Systems 110
Geographic Lens: Global vs. Local ERPs 113
Social Business Lens: Crowdsourcing Changes Innovation
Processes 118

Summary 119
Key Terms 120
ftoc.indd 11 11/27/2015 8:36:37 PM
xii Contents
Case Study 5‐1 Santa Cruz Bicycles 121
Case Study 5‐2 Boeing 787 Dreamliner 122
6 Architecture and Infrastructure 124
From Vision to Implementation 125
The Leap from Strategy to Architecture to Infrastructure 126
From Strategy to Architecture to Infrastructure: An Example
133
Architectural Principles 135
Enterprise Architecture 136
Virtualization and Cloud Computing 137
Other Managerial Considerations 139
Social Business Lens: Building Social Mobile Applications 143
Summary 144

Key Terms 144
Case Study 6‐1 Enterprise Architecture at American Express
145
Case Study 6‐2 The Case of Extreme Scientists 146
7 Security 147
IT Security Decision Framework 149
Breaches and How They Occurred 151
The Impossibility of 100% Security 154
What Should Management Do? 155
Summary 162
Key Terms 163
Case Study 7-1 The Aircraft Communications Addressing and
Reporting System (ACARS) 163
Case Study 7-2 Sony Pictures: The Criminals Won 164
8 The Business of Information Technology 165
Organizing to Respond to Business: A Maturity Model 167
Understanding the IT Organization 168

What a Manager Can Expect from the IT Organization 168
What the IT Organization Does Not Do 170
Chief Information Officer 171
Building a Business Case 173
IT Portfolio Management 175
Valuing IT Investments 176
Monitoring IT Investments 177
Funding IT Resources 182
How Much Does IT Cost? 184
Summary 187
ftoc.indd 12 11/30/2015 7:27:16 PM
xiiiContents
Key Terms 188
Case Study 8‐1 KLM Airlines 189
Case Study 8‐2 Balanced Scorecards at BIOCO 190
9 Governance of the Information Systems Organization 191

IT Governance 192
Decision‐Making Mechanisms 199
Governance Frameworks for Control Decisions 200
Social Business Lens: Governing the Content 204
Summary 205
Key Terms 205
Case Study 9‐1 IT Governance at University of the Southeast
205
Case Study 9‐2 The “MyJohnDeere” Platform 207
10 Information Systems Sourcing 208
Sourcing Decision Cycle Framework 209
Social Business Lens: Crowdsourcing 214
Geographic Lens: Corporate Social Responsibility 220
Outsourcing in the Broader Context 224
Summary 225
Key Terms 225

Case Study 10‐1 Crowdsourcing at AOL 225
Case Study 10‐2 Altia Business Park 226
11 Managing IT Projects 228
What Defines a Project? 230
What Is Project Management? 231
Organizing for Project Management 232
Project Elements 233
IT Projects 239
IT Project Development Methodologies and Approaches 240
Social Business Lens: Mashups 247
Managing IT Project Risk 247
Summary 253
Key Terms 254
Case Study 11‐1 Implementing Enterprise Change Management
at Southern Company 254
Case Study 11‐2 Dealing with Traffic Jams in London 255
ftoc.indd 13 11/27/2015 8:36:37 PM

xiv Contents
12 Business Intelligence, Knowledge Management, and
Analytics 258
Competing with Business Analytics 259
Knowledge Management, Business Intelligence, and Business
Analytics 260
Data, Information, and Knowledge 261
Knowledge Management Processes 264
Business Intelligence 264
Components of Business Analytics 265
Big Data 268
Social Media Analytics 269
Social Business Lens: Personalization and Real‐Time Data
Streams 271
Geographic Lens: When Two National Views of Intellectual
Property Collide 272
Caveats for Managing Knowledge and Business Intelligence 274
Summary 274
Key Terms 275

Case Study 12‐1 Stop & Shop’s Scan It! App 275
Case Study 12‐2 Business Intelligence at CKE Restaurants 276
13 Privacy and Ethical Considerations in Information
Management 278
Responsible Computing 280
Corporate Social Responsibility 283
PAPA: Privacy, Accuracy, Property, and Accessibility 284
Social Business Lens: Personal Data 289
Geographic Lens: Should Subcultures Be Taken into Account
When Trying to Understand National
Attitudes Toward Information Ethics? 292
Green Computing 292
Summary 293
Key Terms 294
Case Study 13‐1 Ethical Decision Making 295
Case Study 13‐2 Midwest Family Mutual Goes Green 297
Glossary 299
Index 313

ftoc.indd 14 11/27/2015 8:36:37 PM
1
Introduction
Why do managers need to understand and participate in the
information systems decisions of their
organizations? After all, most corporations maintain entire
departments dedicated to the management
of information systems (IS). These departments are staffed with
highly skilled professionals devoted
to the fi eld of technology. Shouldn’t managers rely on experts
to analyze all the aspects of IS and
to make the best decisions for the organization? The answer to
that question is an emphatic “no.”
Managing information is a critical skill for success in today ’ s
business environment. All decisions
made by companies involve, at some level, the management and
use of IS and the interpretation of
data from the business and its environment. Managers today
need to know about their organization ’ s
capabilities and uses of information as much as they need to
understand how to obtain and budget
fi nancial resources. The ubiquity of personal devices such as

smart phones, laptops, and tablets and
of access to apps within corporations and externally over the
Internet, highlights this fact. Today ’ s
technologies form the backbone for virtually all business
models. This backbone easily crosses
oceans, adding the need for a global competency to the manager
’ s skill set. Further, the proliferation
of supply chain partnerships and the vast amount of technology
available to individuals outside of
the corporation have extended the urgent need for business
managers to be involved in information
systems decisions. In addition, the availability of seemingly
free (or at least very inexpensive) appli-
cations, collaboration tools, and innovation engines in the
consumer arena has put powerful tools in
everyone ’ s hands, increasing the diffi culty of ensuring that
corporate systems are robust, secure, and
protected. A manager who doesn ’ t understand the basics of
managing and using information can ’ t
be successful in this business environment.
The majority of U.S. adults own a smart phone and access
online apps. According to the Pew
Research Center , in 2014, 90% of U.S. adults had a cell phone
of some kind, and 87% of American

adults used the Internet. 1 Essentially the use of these types of
devices implies that individuals now
manage a “personal IS” and make decisions about usage, data,
and applications. Doesn ’ t that give
them insight into managing information systems in
corporations? Students often think they are
experts in corporate IS because of their personal experience
with technology. Although there is some
truth in that perspective, it ’ s a very dangerous perspective for
managers to take. Certainly knowing
about interesting apps, being able to use a variety of
technologies for different personal purposes,
and being familiar with the ups and downs of networking for
their personal information systems pro-
vide some experience that is useful in the corporate setting. But
in a corporate setting, information
systems must be enterprise‐ready. They must be scalable for a
large number of employees; they
must be delivered in an appropriate manner for the enterprise;
they must be managed with corpo-
rate guidelines and appropriate governmental regulations in
mind. Issues like security, privacy, risk,
support, and architecture take on a new meaning within an
enterprise, and someone has to manage

them. Enterprise‐level management and use of information
systems require a unique perspective and
a different skill set.
1 Internet Use and Cell Phone Demographics,
http://www.pewinternet.org/data‐trend/internet‐use/internet‐use‐
over‐time (accessed
August 18, 2015).
cintro.indd 1 11/26/2015 7:38:29 PM
http://www.pewinternet.org/data%E2%80%90trend/internet%E2
%80%90use/internet%E2%80%90use%E2%80%90over%E2%80
%90time
2 Introduction
Consider the now‐historic rise of companies such as
Amazon.com, Google, and Zappos. Amazon.com began as
an online bookseller and rapidly outpaced traditional
brick‐and‐mortar businesses like Barnes and Noble, Borders,
and Waterstones. Management at the traditional companies
responded by having their IS support personnel build
Web sites to compete. But upstart Amazon.com moved ahead,
keeping its leadership position on the Web by lever-
aging its business model into other marketplaces, such as music,
electronics, health and beauty products, lawn and

garden products, auctions, tools and hardware, and more. It
cleared the profitability hurdle by achieving a good
mix of IS and business basics: capitalizing on operational
efficiencies derived from inventory software and smarter
storage, cost cutting, and effectively partnering with such
companies as Toys “R” Us Inc. and Target Corporation.2
More recently, Amazon.com changed the basis of competition in
another market, but this time it was the Web ser-
vices business. Amazon.com Web services offers clients the
extensive technology platform used for Amazon.com
but in an on‐demand fashion for developing and running the
client’s own applications. Shoe retailer Zappos.com
challenged Amazon’s business model, in part by coupling a
social business strategy with exemplary service and
sales. It was so successful that Amazon.com bought Zappos.
Likewise, Google built a business that is revolutionizing the
way information is found. Google began in 1999
as a basic search company but its managers quickly learned that
its unique business model could be leveraged
for future success in seemingly unrelated areas. The company
changed the way people think about Web content
by making it available in a searchable format with an incredibly
fast response time and in a host of languages.
Further, Google’s keyword‐targeted advertising program

revolutionized the way companies advertise. Then Google
expanded, offering a suite of Web‐based applications, such as
calendaring, office tools, e‐mail, collaboration,
shopping, and maps and then enhanced the applications further
by combining them with social tools to increase
collaboration. Google Drive is one of the most popular
file‐sharing tools and Gmail one of the most popular email
apps. In 2015, Google’s mission was to “organize the world’s
information and make it universally accessible and
useful.” It is offering its customers very inexpensive fiber
connections. In so doing, Google further expanded into
infrastructure and on‐demand services.3
These and other online businesses are able to succeed where
traditional companies have not, in part because their
management understood the power of information, IS, and the
Web. These exemplary online businesses aren’t suc-
ceeding because their managers could build Web pages or
assemble an IS network. Rather, the executives in these
new businesses understand the fundamentals of managing and
using information and can marry that knowledge
with a sound, unique business vision to dominate their intended
market spaces.
The goal of this book is to provide the foundation to help the
general business manager become a knowledge-

able participant in IS decisions because any IS decision in
which the manager doesn’t participate can greatly affect
the organization’s ability to succeed in the future. This
introduction outlines the fundamental reasons for taking the
initiative to participate in IS decisions. Moreover, because
effective participation requires a unique set of manage-
rial skills, this introduction identifies the most important ones.
These skills are helpful for making both IS decisions
and all business decisions. We describe how managers should
participate in the decision‐making process. Finally,
this introduction presents relevant models for understanding the
nature of business and information systems. These
models provide a framework for the discussions that follow in
subsequent chapters.
The Case for Participating in Decisions about Information
Systems
In today’s business environment, maintaining a back‐office
view of technology is certain to cost market share and
could ultimately lead to the failure of the organization.
Managers who claim ignorance of IS can damage their
reputation. Technology has become entwined with all the classic
functions of business—operations, marketing,
accounting, finance—to such an extent that understanding its
role is necessary for making intelligent and effec-

tive decisions about any of them. Furthermore, a general
understanding of key IS concepts is possible without the
extensive technological knowledge required just a few years
ago. Most managers today have personal technology
2 Robert Hof, “How Amazon Cleared the Profitability Hurdle”
(February 4, 2002),
http://www.bloomberg.com/bw/stories/2002-02-03/how-amazon-
cleared-the-profitability-hurdle (accessed on October 29, 2015).
3 For more information on the latest services by these two
companies, see http://aws.amazon.com/ec2 and
http://www.google.com/enterprise/cloud/.
cintro.indd 2 11/26/2015 7:38:29 PM
cleared-the-profitability-hurdle
http://aws.amazon.com/ec2
http://www.google.com/enterprise/cloud
3The Case for Participating in Decisions about Information
Systems
such as a smart phone or tablet that is more functional than
many corporate‐supported personal computers provided
by enterprises just a few years ago. In fact, the proliferation of
personal technologies makes everyone a “pseudo‐

expert.” Each individual must manage applications on smart
phones, make decisions about applications to purchase,
and procure technical support when the systems fail. Finally,
with the robust number of consumer applications
available on the Web, many decisions historically made by the
IS group are increasingly being made by individuals
outside that group, sometimes to the detriment of corporate
objectives.
Therefore, understanding basic fundamentals about using and
managing information is worth the investment of
time. The reasons for this investment are summarized in
Figure I-1 and are discussed next.
A Business View of Critical Resources
Information technology (IT) is a critical resource for today’s
businesses. It both supports and consumes a significant
amount of an organization’s resources. Just like the other three
major types of business resources—people, money,
and machines—it needs to be managed wisely.
IT spending represents a significant portion of corporate
budgets. Worldwide IT spending topped $3.7 trillion in
2014. It is projected to continue to increase.4 A Gartner study
of where this money goes groups spending into five
categories including devices (e.g., PCs, tablets, and mobile
phones), data center systems (e.g., network equipment,

servers, and storage equipment), enterprise software and apps
(e.g., companywide software applications), IT ser-
vices (e.g., support and consulting services), and
telecommunications (e.g., the expenses paid to vendors for
voice
and data services).
Resources must return value, or they will be invested elsewhere.
The business manager, not the IS specialist,
decides which activities receive funding, estimates the risk
associated with the investment, and develops metrics
for evaluating the investment’s performance. Therefore, the
business manager needs a basic grounding in managing
and using information. On the flip side, IS managers need a
business view to be able to explain how technology
impacts the business and what its trade‐offs are.
People and Technology Work Together
In addition to financial issues, managers must know how to
mesh technology and people to create effective work
processes. Collaboration is increasingly common, especially
with the rise of social networking. Companies are
reaching out to individual customers using social technologies
such as Facebook, Twitter, Reddit, Renren, YouTube,
and numerous other tools. In fact, Web 2.0 describes the use of

the World Wide Web applications that incorporate
information sharing, user‐centered design, interoperability, and
collaboration among users. Technology facilitates
FIGURE I-1 Reasons why business managers should participate
in information systems decisions.
Reasons
IS must be managed as a critical resource since it permeates
almost every aspect of business.
IS enable change in the way people work both inside and
outside of the enterprise.
IS are at the heart of integrated Internet‐based solutions that are
replacing standard business processes.
IS enable or inhibit business opportunities and new strategies.
IS can be used to combat business challenges from competitors.
IS enable customers to have greater pull on businesses and
communities by giving them new options for voicing their
concerns and opinions using social media.
IS can support data‐driven decision making.
IS can help ensure the security of key assets.
4 http://www.gartner.com/newsroom/id/2959717/ (accessed
March 5, 2015).
cintro.indd 3 11/26/2015 7:38:29 PM
http://www.gartner.com/newsroom/id/2959717

4 Introduction
the work that people do and the way they interact with each
other. Appropriately incorporating IS into the design
of a business model enables managers to focus their time and
resources on issues that bear directly on customer
satisfaction and other revenue‐ and profit‐generating activities.
Adding a new IS to an existing organization, however, requires
the ability to manage change. Skilled business
managers must balance the benefits of introducing new
technology with the costs associated with changing the
existing behaviors of people in the workplace. There are many
choices of technology solutions, each with a different
impact. Managers’ decisions must incorporate a clear
understanding of the consequences. Making this assessment
doesn’t require detailed technical knowledge. It does require an
understanding of short‐term and long‐term con-
sequences risk mitigation, and why adopting new technology
may be more appropriate in some instances than in
others. Understanding these issues also helps managers know
when it may prove effective to replace people with
technology at certain steps in a process.
Integrating Business with Information Systems

IS are integrated with almost every aspect of business and have
been for quite some time. For example, the CTO of
@WalmartLabs, Jeremy King, wrote in a blog,
There used to be a big distinction between tech companies:
those that develop enterprise technology for businesses,
and the global companies that depend on those products. But
that distinction is now diminishing for this simple reason:
every global company is becoming a tech company. . . . we’re
seeing technology as a critical component for business
success.5
Walmart built platforms to support all of its ecommerce and
digital shopping experiences around the world.
Walmart’s teams created a new search engine to enable
engaging and efficient ways for on‐line customers to find
items in inventory. IS placed information in the hands of
Walmart associates so that decisions could be made closer
to the customer. IS simplified organizational activities and
processes such as moving goods, stocking shelves, and
communicating with suppliers. For example, handheld scanners
provide floor associates with immediate and real‐
time access to inventory in their store and the ability to locate
items in surrounding stores, if necessary.
Opportunities and New Strategies Derived from Rapid Changes

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