Chapter 7: Telecommunications, The Internet, And Wireless Technology PDF

ODGOVORI Chapter 7: Telecommunications, the Internet, and Wireless Technology ***7-1. What are the principal components of telecommunications networks and key networking technologies?*** If you had to connect the computers for two or more employees in the same office, you would need a **computer...

ODGOVORI Chapter 7: Telecommunications, the Internet, and Wireless Technology ***7-1. What are the principal components of telecommunications networks and key networking technologies?*** If you had to connect the computers for two or more employees in the same office, you would need a **computer network**. In its simplest form, a network consists of two or more connected computers. Each computer on the network **contains a network interface device** to link the computer to the network. The connection medium for linking network components can be ***a telephone wire, coaxial cable, or radio*** ***signal in the case of cell phone and wireless local area networks (Wi-Fi networks***). **The network operating system (NOS)** **routes and manages communications on the network and coordinates network resources**. It can reside on every computer in the network or primarily on a dedicated server computer for all the applications on the network. **A server is a computer on a network that performs important network functions for client computers, such as displaying web pages, storing data, and storing the network operating system (hence con- trolling the network).** Microsoft Windows Server and Linux are the most widely used network operating systems. Most networks also **contain a switch or a hub acting** as a connection point between the computers**. Hubs are simple devices that connect network components, sending a packet of data to all other connected devices. A switch has more intelligence than a hub and can filter and forward data to a specified des- tination on the network.** What if you want to communicate with another network, such as the Internet? You would need a router. **A router is a com**munications processor that routes packets of data through different networks, ensuring that the data sent get to the correct address. Client/Server Computing **Client/server computing, is a distributed computing model in which some of the processing power is located within small, inexpensive client computers and resides (operates) literally on desktops or laptops or in handheld devices. These powerful clients are linked to one another through a network that is controlled by a network server computer.** **The server sets the rules of communication for the network and provides every client with an address so others can find it on the network.** **Client/server computing has largely replaced centralized mainframe computing in which nearly all the processing takes place on a central large mainframe computer**. It also makes it possible for personal computing devices such as PCs, laptops, and mobile phones to be connected to networks such as the Internet. **The Internet is the largest implementation of client/server computing**. ### Explanation of the Client/Server Model Client/server computing is a system organization model where data processing is shared between client devices (computers, laptops, mobile devices) and a central server. Client devices are smaller, cheaper, and use their own processing power to execute tasks, while the server manages the network, sets communication rules, and enables connections between clients. **Email System:** - **Client:** When a user opens an app like Gmail on their phone or computer, it acts as a client. - **Server:** The Gmail server stores emails, enables search functions, and manages sending and receiving messages. - **Network:** The client and server communicate via the internet, allowing the user to read and send emails from anywhere. Pocket switching Packet switching is a way of sending data by breaking it into small pieces called packets. Each packet travels separately across the network, using the fastest path available. At the destination, the packets are put back together in the correct order. Packet switching is a method of transmitting digital data efficiently by breaking messages into small units called packets. Each packet travels independently across the network using the fastest available path and is reassembled at its destination. Before packet switching, networks relied on circuit switching, **where a dedicated communication line was established for the entire transmission**, similar to traditional telephone calls. This approach was inefficient because the line remained reserved even when no data was being sent. Packet switching optimizes network usage, reduces costs, and is the foundation of modern internet communication. ### Example of Packet Switching **Streaming a Video:** - When you watch a YouTube video, the video file is broken into small packets. - Each packet travels separately through different network routes to reach your device. - Your device reassembles the packets to play the video smoothly. - If some packets arrive late or get lost, only those packets are resent instead of the whole video TCP/IP and Connectivity In a telecommunications network, different hardware and software components must communicate efficiently. To achieve this, they follow a common set of rules called protocols, which govern how data is transmitted between devices. In the past, businesses had to rely on proprietary and often incompatible protocols, limiting their choices to a single vendor. Today, most networks use a standardized protocol known as **Transmission Control Protocol/Internet Protocol (TCP/IP)**. Developed in the 1970s by DARPA for long-distance data transmission, TCP/IP has become the foundation of the modern internet. TCP/IP consists of multiple protocols, but the two most important are: TCP (Transmission Control Protocol): Manages data transfer between computers by **establishing a connection, ensuring packets are sent in order, and acknowledging their receipt.** IP (Internet Protocol): Handles the **addressing and routing of packets, ensuring they reach the correct destination and are reassembled properly.** Together, TCP and IP **enable reliable communication across networks**, making the internet and corporate networking seamless and efficient. ***Describe the features of a simple network and the network infrastructure for a large company.*** Traditional network devices like switches and routers have built-in proprietary software, making network management complex and slow. Software-Defined Networking (SDN) simplifies this by centralizing control functions in software, running on separate, inexpensive servers. This improves flexibility and efficiency, especially in cloud computing, by allowing better traffic management. This is usually used by smaller enterprises.  **As a firm grows, its small networks can be tied together into a corporate-wide networking infrastructure. The network infrastructure for a large corporation consists of a large number of these small local area networks linked to other local area networks and to firmwide corporate networks**. A number of powerful **servers support a corporate website, a corporate intranet, and perhaps an extranet.** Some of these servers link to other large computers supporting back- end systems. In addition to these computer networks, the firm's infrastructure may include a separate telephone network that handles most voice data. Many firms are dispensing with their traditional telephone networks and using Internet telephones that run on their existing data networks (described later).As you can see from this figure, a **large corporate network infrastructure uses a wide variety of technologies---everything from ordinary telephone service and corporate data networks to Internet service, wireless Internet, and mobile phones.** One of the major problems facing corporations today is how to integrate all the different communication networks and channels into a coherent system that enables information to flow from one part of the corporation to another and from one system to another. ***Name and describe the principal technologies and trends that have shaped contemporary telecommunications systems.*** Modern telecommunications are driven **by 5G, cloud computing, and artificial intelligence (AI).** 5G networks provide faster speeds, lower latency, and higher capacity, enabling innovations like smart cities and IoT. Cloud computing enhances scalability, reducing reliance on physical infrastructure and improving data storage and processing. AI-driven analytics optimize network management, detect threats, and automate customer service. These three technologies work together to create faster, more efficient, and more secure communication systems. 5G supports massive connectivity, allowing billions of devices to communicate seamlessly. Cloud computing powers remote work, streaming, and big data applications. AI enhances cybersecurity by identifying and responding to threats in real time. As these technologies evolve, they will continue to transform global telecommunications. Their integration ensures more reliable, intelligent, and accessible networks worldwide. ***7-2. What are the different types of networks?*** ***Define an analog and a digital signal.*** There are two ways to communicate a message in a network: an analog signal or a digital signal. An analog signal is represented by a **continuous waveform** that passes through **a communications medium and has been used for audio communication.** The most common analog devices are the telephone handse the speaker on your computer, or your iPhone earphone, all of which create analog waveforms that your ear can hear. A digital signal is **a discrete, binary** waveform rather than a continuous wave- form. Digital signals **communicate information as strings of two discrete states: 1 bits and 0 bits**, **which are represented as on-off electrical pulses.** Computers use digital signals and require a modem to convert these digital signals into ana- og signals that can be sent over (or received from) telephone lines, cable lines, or wireless media that use analog signals (see Figure 7.5). Modem stands for modulator-demodulator. Cable modems connect your computer to the Internet by using a cable network. DSL modems connect your computer to the Internet using a telephone company\'s landline network. Wireless modems perform the same function as traditional modems, connecting your computer to a wireless network that could be a cell phone network or a Wi-Fi network. An **analog signal** is **a continuous wave used for audio communication**, like the sound from a telephone or computer speaker. It can be heard by the human ear. **A digital signal is a series of 1s and 0s, represented as on-off electrical pulses**. Computers use digital signals and need a **modem** to convert them into analog signals for transmission over phone lines, cables, or wireless networks. ### Difference Between Analog and Digital Signals: - **Analog:** Continuous, used in audio and older communication systems. - **Digital:** Discrete, used in modern communication systems like computers and the internet. ***Distinguish between a LAN, MAN, and WAN.*** **LAN (Local Area Network):**\ A LAN connects devices like computers within a small area, typically within a building or a few nearby buildings. It is managed by a server, and common standards include Ethernet. It allows sharing of resources and data, often using either client/server or peer-to-peer architecture. **MAN (Metropolitan Area Network):**\ A MAN covers a larger area than a LAN, usually spanning a city or large campus, connecting multiple LANs within a specific geographical region. **WAN (Wide Area Network):**\ A WAN covers large geographic areas, connecting multiple LANs or MANs, often across countries or continents. The internet is the largest example of a WAN. It uses routers to connect different networks. A server manages access and resources in a LAN (Local Area Network), while a router connects the LAN to external networks like the Internet or other corporate networks. The most common LAN operating systems are Windows and Linux. Larger LANs often have multiple dedicated servers for specific tasks, such as file servers for data storage, print servers for managing printers, mail servers for email, and web servers for hosting websites. This structure improves efficiency and organization in complex networks. ***7-3. How do the Internet and Internet technology work, and how do they support communication and e-business?*** ***Define the Internet, describe how it works, and explain how it provides business value.*** The Internet is the world\'s most extensive public communication system. It\'s also the world\'s largest implementation of client/server computing and internetworking, linking millions of individual networks all over the world. Most homes and small businesses connect to the Internet by subscribing to an Internet service provider. An Internet service provider (ISP) is a commercial organization with a permanent connection to the Internet that sells temporary connections to retail subscribers. Individuals also connect to the Internet through their business firms, universities, or research centers that have designated Internet domains. ***Explain how the Domain Name System (DNS) and IP addressing system work.*** *Digital subscriber line (DSL) technologies operate over existing telephone lines to carry voice, data, and video at transmission rates ranging from 385 Kbps to over 100 Mbps, depending on usage patterns and distance. Fios (Verizon\'s fiber optic cable service) can deliver over 900 Mbps, although most home ser- vice delivers 100 Mbps. Cable Internet connections provided by cable televi-sion vendors use digital cable coaxial lines to deliver high-speed Internet access to homes and businesses. They can provide high-speed access to the Internet between 20 and 100 Mbps, with high-speed cable Internet download speed ap- proaching 1 Gbps. Where DSL and cable services are unavailable, it is possible to access the Internet via satellite, although some satellite Internet connections have slower upload speeds than other broadband services.* The Internet is based on the TCP/IP networking protocol suite described earlier in this chapter. Every device connected to the Internet (or another TCP/IP network) is assigned a unique Internet Protocol (IP) address consisting of a string of numbers.\ When a user sends a message to another user on the Internet or another TCP/IP network, the message is first decomposed into packets. Each packet contains its destination address. The packets are then sent from the client to the network server and from there on to as many other servers as necessary to arrive at a specific computer with a known address. At the destination address, the packets are reassembled into the original message. ***List and describe the principal Internet services.***  A white and blue text on a white background Description automatically generated ***Define and describe VoIP and virtual private networks and explain how they provide value to businesses.*** The Internet has also become a popular platform for voice transmission and corporate networking**. Voice over IP (VoIP) technology delivers voice information in digital form using packet switching, avoiding the tolls charged by local and long-distance telephone networks** (see Figure 7.9). Calls that would ordinarily be transmitted over public telephone networks travel over the corporate network based on the Internet protocol, or over the public Internet. Voice calls can be made and received with a computer equipped with a microphone and speakers or with a VoIP-enabled telephone.\ \ A virtual private network (VPN) is a secure, encrypted, private network that has been configured within a public network to take advantage of **A VPN provides your firm with secure, encrypted communications at a much lower cost than the same capabilities offered by traditional non-Internet providers that use their private networks to secure communications. VPNs also provide a network infrastructure for combining voice and data networks.** Several competing protocols are used to protect data transmitted over the public Internet, including Point-to-Point Tunneling Protocol (PPTP). In a process called tunneling, packets of data are encrypted and wrapped inside IP packets. By adding this wrapper around a network message to hide its content, business firms create a private connection that travels through the public Internet. ***Describe how online search technologies are used for marketing.*** Search Engine Marketing Search engines have become major advertising platforms and shopping tools by offering what is now called search engine marketing. Searching for information is one of the web's most popular activities. Over 90 percent of web traffic comes through search engines, and search engine marketing accounts for over 40 percent of digital ad spending worldwide (eMarketer 2020d). With this huge audience, search engines are 304 Part Two Information Technology Infrastructure the foundation for the most lucrative form of online marketing and advertising: search engine marketing. When users enter a search term on Google, Bing, Yahoo, or any of the other sites serviced by these search engines, they receive two types of listings: sponsored links, for which advertisers have paid to be listed (usually at the top of the search results page), and unsponsored, organic search results. In addition, advertisers can purchase small text boxes on the side of search results pages. The paid, sponsored advertisements are the fastest growing form of Internet advertising and are powerful new marketing tools that precisely match consumer interests with advertising messages at the right moment. Search engine marketing monetizes the value of the search process. ***7-4. What are the principal technologies and standards for wireless networking, communication, and Internet access?***  ***Define RFID, explain how it works, and describe how it provides value to businesses.*** Radio frequency identification (RFID) systems provide a powerful technology for tracking the movement of goods throughout the supply chain. RFID systems use tiny tags with embedded microchips containing data about an item and its location to transmit radio signals over a short distance to RFID readers. The RFID readers then pass the data over a network to a computer for processing. Unlike bar codes, RFID tags do not need line-of-sight contact to be read.\ The RFID tag is electronically programmed with information that can uniquely identify an item plus other information about the item such as its location, where and when it was made, or its status during production. The reader emits radio waves in ranges anywhere from 1 inch to 100 feet. When an RFID tag comes within the range of the reader, the tag is activated and starts sending data. The reader captures these data, decodes them, and sends them back over a wired or wireless network to a host computer for further process- ing (see Figure 7.15). Both RFID tags and antennas come in a variety of shapes and sizes. RFID technology enhances business efficiency by automating inventory management, reducing manual errors, and improving stock accuracy. It streamlines supply chain operations by enabling real-time tracking, speeding up shipping, and optimizing warehouse management. Additionally, it enhances security by preventing theft, reduces labor costs by minimizing manual scanning, and improves the customer experience with faster checkouts and personalized services. By integrating RFID, businesses can boost productivity, reduce operational expenses, and gain a competitive edge in the market. ***Define near field communication (NFC) and explain how it works.*** NFC is a short-range wireless connectivity standard that uses electromagnetic radio fields to enable two compatible devices to exchange data when brought within a few centimeters of each other. A smartphone or other NFC-compatible device sends out radio frequency signals that interact with an NFC tag found in compatible card readers or smart posters. The signals create a current that flows through the NFC tag, allowing the device and the tag to communicate with one another. In most cases the tag is passive and only sends out information while the other device (such as a smartphone) is active and can both send and receive information. (There are NFC systems where both components are active.) NFC is used in wireless payment services, to retrieve information, and even to exchange videos or information with friends on the go. You could share a website link by passing your phone over a friend's phone, while waving the phone in front of a poster or display containing an NFC tag could show information about what you're viewing at a museum or exhibit. ***Define WSNs, explain how they work, and describe the kinds of applications that use them.*** Wireless sensor networks (WSNs) are networks of interconnected wireless devices that are embedded in the physical environment to provide measurements of many points over large spaces. These devices have built-in processing, storage, and radio frequency sensors and antennas. They are linked into an interconnected network that routes the data they capture to a computer for analysis. These networks range from hundreds to thousands of nodes. Figure 7.16 illustrates one type of wireless sensor network, with data from individual nodes flowing across the network to a server with greater processing power. The server acts as a gateway to a network based on Internet technology. Wireless sensor networks are valuable for uses such as monitoring environmental changes; monitoring traffic or military activity; protecting property; efficiently operating and managing machinery and vehicles; establishing security perimeters; monitoring supply chain management; or detecting chemical, biological, or radiological material. ***Chapter 8: Securing Information Systems*** ***8-1. Why are information systems vulnerable to destruction, error, and abuse?*** Digital data are vulnerable to destruction, misuse, error, fraud, and hardware or software failures. The Internet is designed to be an open system and makes internal corporate systems more vulnerable to actions from outsiders. Hackers can unleash **denial-of-service (DoS) attacks or penetrate corporate networks, causing serious system disruptions.** **Wi-Fi networks** can easily be penetrated by intruders using **sniffer programs** to obtain an **address to access the resources of the network. Malware can dis- able systems and websites, with mobile devices a major target**. The dispersed **nature of cloud comput- ing makes it difficult to track unauthorized activity or to apply controls from afar**. Software presents problems because **software bugs may be impossible to eliminate and because software vulnerabilities can be exploited by hackers and malicious software**. End users often introduce errors. ***List and describe the most common threats against contemporary information systems.*** ***Define malware and distinguish among a virus, a worm, and a Trojan horse. (ovo pitaje je povezano)*** **Malicious software programs are referred to as malware and include a variety of threats such as computer viruses, worms, and Trojan horses.** A **computer virus** is a rogue software program that attaches itself to other software programs or data files to be executed, usually without user knowledge or permission. Most computer viruses deliver a payload. The payload may be relatively benign, such as instructions to display a message or image, or it may be highly destructive-destroying programs or data, clogging computer memory, reformatting a computer\'s hard drive, or causing programs to run improperly. Viruses typically spread from computer to computer when humans take an action, such as sending an email attachment or copying an infected file. **Worms** are independent computer programs that copy themselves from one computer to other computers over a network. Unlike viruses, worms can operate on their own without attaching to other computer program files and rely less on human behavior to spread rapidly from computer to computer. Worms destroy data and programs as well as disrupt or even halt the operation of computer networks.\ Worms and viruses are often spread over the Internet from files of down- loaded software; from files attached to email transmissions; or from compromised email messages, online ads, or instant messaging. Viruses have also invaded computerized information systems from infected external storage de- vices or infected machines. Especially prevalent today are drive-by downloads, Many malware infections are **Trojan horses**. A Trojan horse is a software program that appears to be benign (harmless) but then does something other than expected. The Trojan horse is not itself a virus because it does not replicate, but it is often a way for viruses or other malicious code to be introduced into a computer system. The term Trojan horse is based on the huge wooden horse the Greeks used to trick the Trojans into opening the gates to their fortified city during the Trojan War. An example of a modern-day Trojan horse is the ZeuS (Zbot) Trojan, which infected more than 3.6 million computers in 2009 and still poses a threat. It has been used to steal login credentials for banking by surreptitiously capturing people's keystrokes as they use their computers. Zeus is spread mainly through drive-by downloads and phishing, and recent variants have been difficult to eradicate ***Define a hacker and explain how hackers create security problems and damage*** A hacker is an individual who intends to gain unauthorized access to a computer system. Within the hacking community, the term cracker is typically used to denote a hacker with criminal intent, although in the public press, the terms hacker and cracker are used interchangeably. Hackers gain unauthorized access by finding weaknesses in the security protections websites and computer systems employ. Hacker activities have broadened beyond mere system intrusion to include theft of goods and information as well as system damage and cybervandalism, the intentional disruption, defacement, or even destruction of a website or corporate information system ***Define identity theft and phishing and explain why identity theft is such a big problem today.*** Identity theft is a crime in which an imposter obtains **key pieces of personal information**, such as social **security numbers, driver's license numbers, or credit card numbers, to impersonate someone else. The** information may be **used to obtain credit, merchandise, or services in the name of the victim or to provide the thief with false credentials.** Identity theft has flourished on the Internet, with credit card files a major target of website hackers. According to the 2020 Identity Fraud Study by Javelin Strategy & Research, identity fraud losses in the United States reached \$16.9 billion in 2019 (Javelin, 2020). ***Describe the security and system reliability problems employees create.*** We tend to think the security threats to a business originate outside the organization. In fact, company insiders pose serious security problems. Studies have found that user lack of knowledge is the single greatest cause of network security breaches. Many employees forget their passwords to access computer systems or allow coworkers to use them, which compromises the system. Malicious intruders seeking system access sometimes trick employees into revealing their passwords **by pretending to be legitimate members of the company in need of information.** This practice is called **social engineering**. Insiders bent on harm have also exploited their knowledge of the company to break into corporate systems, including those running in the cloud. The Interactive Session on Technology shows how a former employee at Amazon Web Services used her knowledge of Amazon cloud security to steal many millions of Capital One Financial customer records stored by Amazon's cloud computing service. ***Explain how software defects affect system reliability and security.*** Software errors pose a constant threat to information systems, causing **untold losses in productivity** and sometimes **endangering people who use or depend on systems**. Growing complexity and size of software programs, coupled with demands for rapid delivery to markets, have contributed to an increase in software flaws or vulnerabilities.\ A major problem with software is **the presence of hidden bugs or program code defects**. Studies have shown that it is virtually impossible to eliminate all bugs from large programs. The **main source of bugs is the complexity of decision-making code.** A relatively small program of several hundred lines will contain tens of decisions leading to hundreds or even thousands of paths. Important programs within most corporations are usually much larger, containing tens of thousands or even millions of lines of code, each with many times the choices and paths of the smaller programs.\ Zero defects cannot be achieved in larger programs. Complete testing simply is not possible. Fully testing programs that contain thousands of choices and millions of paths would require thousands of years. Even with rigorous testing, ***8-2. What is the business value of security and control?*** Lack of sound security and control can cause fi**rms relying on computer systems for their core business functions to lose sales and productivity**. Information assets, such as confidential employee records, trade secrets, or business plans, lose much of their value if they are revealed to outsiders or if they expose the firm to legal liability. Laws, such as HIPAA, the Sarbanes-Oxley Act, and the Gramm-Leach-Bliley Act, require companies to practice stringent electronic records management and adhere to strict standards for security, privacy, and control. Legal actions requiring electronic evidnnce and computer forensics also require firms to pay more attention to security and electronic records management. ***Explain how inadequate security and control may result in serious legal liability. Preskoci*** Inadequate security and control can lead to serious legal liability **by violating data protection laws like GDPR and HIPAA, resulting in heavy fines and lawsuits.** Poor financial controls can breach SOX and GLBA, exposing companies to regulatory penalties and investor lawsuits. Security failures may also lead to class-action lawsuits, government investigations, and even criminal charges for executives. Beyond legal consequences, businesses risk reputational damage, financial losses, and loss of customer trust, making strong cybersecurity and compliance essential. For instance, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 outlines security and privacy rules and procedures for simplifying the administration of healthcare billing and automating the transfer of healthcare data between healthcare providers, payers, and plans. The U.S. Financial Services Modernization Act of 1999, better known as the Gramm-Leach-Bliley Act requires financial institutions to ensure the security and confidentiality of customer data. The U.S. Public Company Accounting Reform and Investor Protection Act of 2002, better known as the Sarbanes-Oxley Act, is designed to protect investors in public companies. It imposes responsibility on companies and their management to safeguard the accuracy and integrity of financial information that is used internally and released externally. ***8-3. What are the components of an organizational framework for security and control?*** Firms need to establish a good set of **both general and application controls** for their information sys- tems. A risk assessment evaluates information assets, identifies control points and control weaknesses, and determines the most cost-effective set of controls. Firms must also develop a coherent corporate security policy and plans for continuing business operations in the event of disaster or disruption. The security policy includes policies for **acceptable use and identity management**. Comprehensive and systematic information systems auditing helps organizations determine the effectiveness of security and controls for their information systems. ***Define general controls and describe each type of general control.*** General control govern desing, security and use of computer programs and the security data files in general troughout the organizations information technology infrastructure. It includes:  ***Define application controls and describe each type of application control.*** **Application controls** are **specific controls unique to each computerized application**, such **as payroll or order processing**. They include **both automated and manual procedures that ensure that only authorized data are completely and accurately processed by that application**. Application controls can be classified as (1**) input controls, (2) processing controls, and (3) output controls**.\ **Input controls** check data for accuracy and completeness when they enter the system. There are specific input controls for input authorization, data conversion, data editing, and error handling. **Processing controls** establish that data are complete and accurate during updating. **Output controls** ensure that the **results of computer processing** are accurate, complete, and properly distributed. You can find more detail about application and general controls in our Learning Tracks.\ Information systems controls should not be an afterthought. They need to be incorporated into the design of a system and should consider not only how the system will perform under all possible conditions but also the behavior of organizations and people using the system. ***Describe the function of risk assessment and explain how it is conducted for information systems.*** Risk assessment **helps businesses evaluate potential threats by identifying vulnerabilities, estimating damage, and determining appropriate security measures**. Not all risks can be anticipated, but managers and IT specialists assess the frequency and severity of risks to allocate security budgets wisely. For example, if an event causes a \$1,000 loss annually, spending \$20,000 on protection is excessive. However, if it occurs daily, leading to \$300,000 in losses, investing \$100,000 in security measures is justified. A risk assessment of an online order processing system handling 30,000 orders daily evaluates risks based on probability, possible losses, and expected annual loss. Power failures have a 30% chance of occurring yearly, causing losses between \$5,000 and \$200,000, averaging \$102,500 per event. Embezzlement occurs 5% of the time, with losses between \$1,000 and \$50,000, averaging \$25,500. User errors happen 98% of the time, with losses ranging from \$200 to \$40,000, averaging \$20,100. **System builders** focus on risks with the highest financial impact, prioritizing power failures and user errors. **Effective risk management r**educes financial losses and operational disruptions by continuously assessing, mitigating, and adapting security measures. A well-structured risk assessment ensures system reliability, data protection, and financial stability while maintaining efficient business operations. ***8-4. What are the most important tools and technologies for safeguarding information resources?*** **Firewalls** prevent unauthorized users from accessing a private network when it is linked to the Internet **Intrusion detection systems** monitor private networks for suspicious network traffic and attempts to access corporate systems. Passwords, tokens, smart cards, and biometric authentication are used to authenticate system users. **Anti-malware software checks computer** systems for infections by viruses and worms and often eliminates the malicious software. **Encryption, the coding and scram- bling of messages**, is a widely used technology for securing electronic transmissions over unprotected networks. **Blockchain technology** enables companies to create and verify tamperproof transactions on a network without a central authority. **Digital certificates combined with public key encryption** provide further protection of electronic transactions by authenticating a user\'s identity. Companies can use **fault-tolerant computer systems** to make sure that their information systems are always available. Use of software metrics and rigorous software testing help improve software quality and reliability. ***Describe the nature of a token in the context of authentication.*** A token is a physical device, similar to an identification card, that is designed to prove the identity of a single user. Tokens are small gadgets that typically fit on key rings and display passcodes that change frequently. **Biometric authentication** uses systems that read and interpret individual human traits, such as fingerprints, irises, and voices to grant or deny access. Biometric authentication is based on the measurement of a physical or behavioral trait that makes each individual unique. It compares a person's unique characteristics, such as the fingerprints, face, voice, or retinal image, against a stored profile of these characteristics to determine any differences between these characteristics and the stored profile. If the two profiles match, access is granted. Fingerprint and facial recognition technologies are just beginning to be used for security applications, with many PC laptops (and some smartphones). in the context of authentication, a token is a digital or physical object used to verify a user\'s identity and grant access to a system. Tokens serve as an additional layer of security, often complementing passwords in multi-factor authentication (MFA). ***Describe how two-factor authentication can help to reduce fraud, hacking, and security breaches.*** Two-factor authentication increases security by validating users through A close up of a text Description automatically generated ***Chapter 9: Achieving Operational Excellence and Customer Intimacy*** ***Explain how enterprise systems provide valuable information for improving management decision-making.*** Enterprise systems integrate data from various business functions, providing a unified view of operations that enhances management decision-making. By centralizing information, these systems improve data accuracy, eliminate redundancies, and enable real-time reporting, helping managers make informed, data-driven decisions. They support strategic planning by identifying trends, forecasting demand, and optimizing resource allocation. Additionally, enterprise systems enhance operational efficiency by streamlining processes across departments, improving collaboration, and ensuring compliance with industry regulations. With better insights and automated analytics, managers can respond quickly to market changes, reduce risks, and drive business growth. Wakanda? **9-2. How do supply chain management systems coordinate planning, production, and logistics with suppliers?**  **List four likely parts of a retailer's supply chain.** **Distinguish between upstream and downstream portions of the supply chain.** The upstream portion of the supply chain includes the company's **suppliers**, the suppliers' suppliers, and the processes for managing relationships with them. The downstream portion consists of the organizations and processes for **distributing** and delivering products to the final customers. Companies that **manufacture**, such as Nike's contract suppliers of sneakers, also manage their own internal supply chain processes for transforming materials, components, and services their suppliers furnish into finished products or intermediate products (components or parts) for their customers and for managing materials and inventory. The supply chain illustrated in Figure 9.2 has been simplified. It only shows two contract manufacturers for sneakers and only the upstream supply chain for sneaker soles. Nike has hundreds of contract manufacturers turning out finished sneakers, socks, and athletic clothing, each with its own set of suppliers. The upstream portion of Nike's supply chain actually comprises thousands of entities. Nike also has numerous distributors and many thousands of **retail** stores where its shoes are sold, so the downstream portion of its supply chain also is large and complex. **Identify one of the most important and complex aspects of supply chain planning.** One of the most important---and complex---supply chain planning functions is demand planning, which determines how much product a business needs to make to satisfy all its customers' demands. ***9-3. How do customer relationship management systems help firms achieve customer intimacy?***  ***Describe the nature and purpose of sales force automation.*** **Sales force automation (SFA**) modules in CRM systems help sales staff increase productivity by focusing **sales efforts on the most profitable customers, those who are good candidates for sales and services**. SFA modules **provide sales prospect and contact information, product information, product configuration capabilities, and sales quote generation capabilities**. Such software can assemble information about a particular customer's past purchases to help the salesperson make **personalized recommendations.** SFA modules enable sales, marketing, and shipping departments to share customer and prospect information easily. SFA increases each salesperson's efficiency by reducing the cost per sale as well as the cost of acquiring new customers and retaining old ones. SFA modules also provide capabilities for sales forecasting, territory management, and team selling. **Distinguish between operational and analytical CRM.**  ***9-4. What are the challenges that enterprise applications pose, and how are enterprise applications taking advantage of new technologies?*** A close-up of a text Description automatically generated ***Describe how enterprise applications are taking advantage of cloud computing and business intelligence.*** Enterprise applications are **transforming with cloud computing and business intelligence to enhance efficiency, scalability, and decision-making**. **Cloud computing enables businesses to access applications and data from anywhere, fostering remote collaboration and flexibility. It reduces infrastructure costs through a pay-as-you-go model while ensuring high availability and disaster recovery. Security and compliance are strengthened with cloud providers offering encryption, authentication, and regulatory adherence.** **Business intelligence integrates data analytics into enterprise applications, allowing organizations to make informed decisions in real time.** A**dvanced BI tools process large datasets, uncover trends, and provide predictive insights for better strategy planning. Cloud-based BI solutions enable seamless integration with enterprise systems like ERP and CRM, enhancing operational efficiency.** AI and machine learning further refine BI by automating analytics and improving data accuracy. Together, cloud computing and BI empower enterprises to stay competitive in a data-driven world. This combination drives innovation, efficiency, and growth across industries. ***Define social CRM and explain how customer relationship management systems are using social networking***. CRM software vendors **are enhancing their products to take advantage of social networking technologies**. These **social enhancements help firms identify new ideas more rapidly, improve team productivity, and deepen interactions with customers**. **Using social CRM tools, businesses can better engage with their customers by, for example, analyzing their sentiments about their products and services.** **Social CRM tools enable a business to connect customer conversations and relationships from social networking sites to CRM processes**. The leading CRM vendors now offer such tools to link data from social networks to their CRM software. SAP, Salesforce.com, and Oracle CRM products feature technology to monitor, track, and analyze social media activity on Facebook, LinkedIn, Twitter, YouTube, and other sites. Business intelligence and analytics software vendors such as SAS also have capabilities for social media analytics (with several measures of customer engagement across a variety of social networks) along with campaign management tools for testing and optimizing both social and traditional web-based campaigns. Salesforce.com connected its system for tracking leads in the sales process with social-listening and social-media marketing tools, enabling users to tailor their social-marketing dollars to core customers and observe the resulting comments. If an ad agency wants to run a targeted Facebook or Twitter ad, these capabilities make it possible to aim the ad specifically at people in the client's lead pipeline who are already being tracked in the CRM system. Users will be able to view tweets as they take place in real time and perhaps uncover new leads. They can also manage multiple campaigns and compare them all to figure out which ones generate the highest click-through rates and cost per click ***Chapter 10: E-commerce: Digital markets, Digital Media*** ***10-1. What are the unique features of e-commerce, digital markets, and digital goods?***  ***Explain the term \"eyeballs\" and why it is no longer an effective way of engaging potential customers.*** The term \"eyeballs\" in marketing refers to **the number of people who view an advertisement or content**, **often used as a metric for online traffic and audience reach**. It was a **popular concept during the early days of the internet, where businesses focused on attracting as many visitors as possible to their websites, assuming that high traffic would lead to more sales.** The \"eyeballs\" approach to marketing **is outdated because high traffic alone does not translate to engagement, conversions, or brand loyalty.** Users have become **desensitized to ads, and content saturation makes it harder to stand out.** Modern strategies prioritize quality over quantity, leveraging personalization, AI-driven recommendations, and targeted interactions to connect with the right audience. **Additionally, social media and search algorithms now favor meaningful engagement over sheer visibility, while businesses focus on advanced metrics like conversion rates and customer retention to measure success.** ***Identify two areas of traditional media that are losing ground to online competitors.*** **Print Media (Newspapers & Magazines**) -- Traditional print publications are struggling as online news sources, blogs, and digital magazines offer real-time updates, personalized content, and multimedia formats that attract modern audiences. Many readers prefer free or subscription-based digital content over physical newspapers and magazines. **Television Advertising -- Traditional TV** commercials are losing effectiveness as audiences shift to streaming platforms, social media, and on-demand content. Viewers increasingly use ad-blocking technology or opt for ad-free subscription services, forcing advertisers to focus on digital marketing strategies like influencer partnerships, targeted social media ads, and interactive content. ***Explain the purpose and value of social shopping sites.*** At social shopping sites such as Pinterest you can swap shopping ideas with friends. Facebook offers the "like" button to let your friends know you admire a product, service, or content and, in some cases, purchase something online. Facebook processes around 3.2 billion likes and comments a day worldwide. Online communities are also ideal venues to employ viral marketing techniques. Online viral marketing is like traditional word-of-mouth marketing except that word can spread across an online community at the speed of light and go much further geographically than a small network of friends ***10-2. What are the principal e-commerce business and revenue models?*** ***Explain why portals are more than just gateways.*** Portals are gateways to the web and are often defined as those sites that users set as their home page. Some definitions of a portal include search engines such as Google and Bing even if few make these sites their home page. Portals such as Yahoo, Facebook, MSN, and AOL offer web search tools as well as an integrated package of content and services such as news, email, instant messaging, maps, calendars, shopping, music downloads, video streaming, and more all in one place. The portal business model now provides a destination site where users start their web searching and linger to read news, find entertainment, meet other people, and, of course, be exposed to advertising. Facebook is a different kind of portal based on social networking. Portals generate revenue primarily by attracting very large audiences, charging advertisers for display ad placement (similar to traditional newspapers), collecting referral fees for steering customers to other sites, and charging for premium services. Although there are hundreds of portal/search engine sites, the top portals (Yahoo, MSN, and AOL) gather more than 90 percent of the Internet's U.S. portal traffic because of their superior brand recognition ***Explain the value proposition of e-tailers.*** Online retail stores, often called e-tailers, come in all sizes, from giant Amazon with estimated 2020 retail sales revenues of more than \$280 billion to tiny local stores that have websites. An e-tailer is similar to the typical brick-and-mortar storefront, except that customers only need to connect to the Internet to check their inventory and place an order. Altogether, online retail (the sale of physical goods online) will generate about \$3.9 trillion in revenues worldwide in 2020. The value proposition of e-tailers is to provide convenient, low-cost shopping 24/7; large selections; and consumer choice. Some e-tailers, such as Tesco.com or Zara.com, referred to as bricks-and-clicks, are subsidiaries or divisions of existing physical stores and carry the same products. Others, however, operate only in the virtual world, without any ties to physical locations. Ashford.com and eVitamins.com are examples of this type of e-tailer. Several other variations of e-tailers---such as online versions of direct-mail catalogs, online malls, and manufacturer-direct online sales---also exist ***Explain the importance of micropayment systems.***  ***10-3. How has e-commerce transformed marketing?*** A close-up of a text Description automatically generated ***Identify the two places where behavioral targeting takes place.***  spent on each page of the site, the types of pages visited, and what the visitors purchased (see Figure 10.3). Firms analyze this information about customer interests and behavior to develop precise profiles of existing and potential customers. In addition, most major websites have hundreds of tracking programs on their home pages, which track your clickstream behavior across the web by following you from site to site and retarget ads to you by showing you the same ads on different sites. The leading online advertising network is Google's Marketing Platform. ***How can online businesses take advantage of interconnectedness?*** **Online businesses can leverage interconnectedness by utilizing data analytics and AI for personalized marketing, ensuring tailored experiences and targeted ads. Social media platforms enable direct engagement, community building, and brand loyalty.** A seamless omnichannel experience across websites, apps, and emails enhances customer journeys, while influencer and affiliate marketing expands reach through trusted recommendations. Businesses can also tap into global markets using localization strategies. Real-time customer support through chatbots and AI-driven assistants improves service, while user-generated content and community engagement foster trust and credibility, strengthening customer relationships. ***10-4. How has e-commerce affected business-to-business transactions?*** A close-up of a text Description automatically generated ***Define electronic data interchange and explain its continuing importance.*** **Electronic Data Interchange (EDI) is the standardized electronic transmission of business documents between organizations, replacing traditional paper-based processes.** It enhances efficiency by automating transactions, reducing processing time, and minimizing human errors. EDI also lowers costs by eliminating paperwork and administrative overhead while ensuring secure and accurate data exchange. It plays a crucial role in supply chain management by enabling real-time tracking of orders and inventory. Additionally, EDI supports regulatory compliance and scalability, making it essential for industries like retail, healthcare, manufacturing, and logistics, where fast, accurate, and secure data exchange is critical for success. ***Define and describe private industrial networks and how they are used.***  ***10-5. What is the role of m-commerce in business, and what are the most important m-commerce applications?*** ***List and describe important types of m-commerce services and applications.*** Location-based services include **geosocial, geoadvertising, and geoinformation services**. Seventy-four percent of smartphone owners use location-based services. What ties these activities together and is the foundation for mobile commerce is the global positioning system (GPS)--enabled map services available on smartphones. A geosocial service can tell you where your friends are meeting. Geoadvertising services can tell you where to find the nearest Italian restaurant, and geoinformation services can tell you the price of a house you are looking at or about special exhibits at a museum you are passing. In 2020, the fastest-growing and most popular location-based services are on-demand economy firms such as Uber, Lyft, Airbnb, and hundreds more that provide services to users in local areas and are based on the user's location (or, in the case of Airbnb, the user's intended travel location). Other Mobile Commerce Services Banks and credit card companies have developed services that let customers manage their accounts from their mobile devices. In the UK, HSBC and NatWest customers can use their cell phones to check account balances, transfer funds, and pay bills. Apple Pay for the iPhone and Apple Watch, along with other Android and Windows smartphone apps, allow users to charge items to their credit card accounts with a swipe of their phone. (See our Learning Track on e-commerce payment systems.) ***List and describe three types of mobile app payment systems.***  ***10-6. What issues must be addressed when building an e-commerce presence?*** ***List and describe the four types of e-commerce presence and the platforms and activities associated with each.*** four kinds of e-commerce presence: **websites, email, social media, and offline media**. You must address different platforms for each of these types. For instance, in the case of website presence, there are three platforms: traditional desktop, tablets, and smartphones, each with different capabilities. Moreover, for each type of e-commerce presence, there are related activities you will need to consider. For instance, in the case of websites, you will want to engage in search engine marketing, display ads, affiliate programs, and sponsorships. Offline media, the fourth type of e-commerce presence, is included here because many firms use multiplatform or integrated marketing by which print ads refer customers to websites