BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks

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Introduction to Business MGT 211

Lesson 40

BUSINESS IN DIGITAL AGE

Because businesses are faced with an overwhelming amount of data and information about

customers, competitors, and their own operations, the ability to manage this input can mean

the difference between success and failure. The management of its information system is a

core activity because all a firm's business activities are linked to it. New digital technologies

have taken an integral place among an organization's resources for conducting everyday

business.

Data communication networks --- Both public and private, carry streams of digital data

(electronic messages) back and forth quickly and economically via telecommunication

systems. The largest public communications network, the Internet, is a gigantic system of

networks linking millions of computers offering information about business around the world,

The Net is the most important e-mail system in the world. Individuals can subscribe to the Net

via an Internet service provider (ISP). The World Wide Web is a system with universally

accepted standards for storing, formatting, retrieving, and displaying information. It provides

the common language that enables users around the world to "surf" the Net using a common

format. Intranets are private networks that any company can develop to extend Net technology

internally -- that is, for transmitting information throughout the firm. Intranets are accessible

only to employees, with access to outsiders prevented by hardware and software security

systems called firewalls. Information networks are leading to leaner organizations -- business

with fewer employees and simpler organizational structures -- because networked firms can

maintain electronic, rather than human, information linkages among employees and

customers. Operations are more flexible because electronic networks allow business to offer

greater product variety and faster delivery cycles. Aided by intranets and the Internet, grater

collaboration is possible, both among internal units and with outside firms. Geographic

separation of the workplace and company headquarters is more common because electronic

linkages are replacing the need for physical proximity between the company and its

workstations. Improved management processes are feasible because managers have rapid

access to more information about the current status of company activities and easier access to

electronic tools for planning and decision making.

Transaction processing systems (TPS) --- are applications for basic day-to-day business

transactions. They are useful for routine transactions, such as taking reservations and meeting

payrolls, that follow predetermined steps. Systems for knowledge workers and office

applications include personal productivity tools such as word processing, document imaging,

desktop publishing, computer-aided design, and simulation modeling. Managing information

systems (MISs) support an organization's managers by providing daily reports, schedules,

plans, and budgets. Middle managers, the largest MIS user group, need networked

information to plan upcoming activities and to track current activities. Decision support

systems (DSSs) are interactive applications that assist the decision-making processes of

middle- and top-level managers. Artificial intelligence (AI) and expert systems are designed to

imitate human behavior and provide computer-based assistance in performing certain

business activities.

Hardware is the physical devices and components, including the computers, in the information

system (IS). It consists of an input device (such as a keyboard), a central processing unit

(CPU), a main memory, disks for data storage, and output devices (such as video monitors

and printers). Software includes the computer's operating system, application programs (such

as word processing, spreadsheets, and Web browsers), and a graphical user interface (GUI)

that helps users select among the computer's many possible applications.

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Control is important to ensure not only that the system operates correctly but also that data

and information are transmitted through secure channels to people who really need them.

Control is aided by the use of electronic security measures, such as firewalls, that bar entry to

the system by unauthorized outsiders. The database is the organized collection of all the data

files in the system. People are also part of the information system. IS knowledge workers

include systems analysts who design the systems and programmers who write software

instructions that tell computers what to do. System users, too, are integral to the system.

Telecommunication components include multimedia technology that incorporates sound,

animation, video, and photography along with ordinary graphics and text. Electronic discussion

groups, videoconferencing, and other forms of interactive dialog are possible with

communication devices (such as global positioning systems and personal digital assistants)

and communication channels (such as satellite communications).

Information Management: An Overview

Most business regard their information as a private resource, an asset they plan, develop, and

protect.

Information Manager -- Manager responsible for designing and implementing systems to

gather, organize, and distribute information.

Information Management -- internal operations for arranging a firm's information resources

to support business performance and outcomes. Information managers oversee the task of

information management.

Data versus Information

Data--raw facts and figures.

ii.

Information--meaningful, useful interpretation of data.

Information Systems (s) -- a system for transforming data into information and transmitting

it for use in decision-making.

New Business Technologies in the Information Age

The Expanding Scope of Information Systems

The relationship between information systems and organizations is

among the fastest-changing aspects of business today.

ii.

Information systems are crucial in planning.

iii.

An increased interdependence between a company's business strategy

and its IS is a basic change.

Electronic Business and Communications Technologies

Electronic Information Technologies Information-systems applications,

based on telecommunications technologies, that use networks of

appliances or devices to communicate information by electronic means;

1. Fax machine--Machine that can transmit copies of documents

(text and graphics) over telephone lines

2. Voice mail--Computer-based system for receiving and

delivering incoming telephone calls

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3. Electronic mail (e-mail)--Computer system that electronically

transmits letters, reports, and other information between

computers

4. Electronic conferencing--Computer-based system that allows

people to communicate simultaneously from different locations

via software or telephone

5. Groupware--Software that connects members of a group for

shared e-mail distribution, electronic meetings, appointments,

and group writing

ii.

Data Communication Networks --- Global network (such as the

Internet) that permits users to send electronic messages and information

quickly and economically

1. Internet--global data communication network serving millions of

computers with information on a wide array of topics and

providing communication flows among certain private networks.

In 2002, more than 700 million Net users were active on links

connecting more than 180 countries. In the United States alone,

more than 95 million users were on the Net every day.

2. Internet Service Provider (ISP)--commercial firm that

maintains a permanent connection to the Net and sells

temporary connections to subscribers.

3. World Wide Web (WWW, or "the Web")--subsystem of

computers providing access to the Internet and offering

multimedia and linking capabilities.

a. Web server--dedicated work station customized for

managing, maintaining, and supporting Web sites

b. Browser--software supporting the graphics and linking

capabilities necessary to navigate the World Wide Web

c. Directories--Service which organize web-pages into

directories, such as, Yahoo

d. Search Engines--Tool that searches Web pages

containing the user's search terms and then displays

pages that match

e. Intranet--private network of internal Web sites and other

sources of information available to a company's

employees. The Ford Motor Company intranet connects

120,000 work stations in Asia, Europe, and the United

States to thousands of Ford Web sites containing private

information on production, engineering, distribution, and

marketing.

f. Firewall--hardware and software security systems that

are not accessible to outsiders

g. Extranet--application allowing outsiders limited access

to a firm's internal information system.

New Options for Organizational Design: The Networked Enterprise

Leaner Organizations--Networked firms can accomplish more work with

fewer resources.

ii.

More Flexible Operations--Electronic networks allow businesses to

offer customers greater variety and faster delivery cycles.

1. Mass-customization--Flexible

production

process

that

generates customized products in high volumes at low cost

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iii.

Increased Collaboration--Networked systems make it cheaper and

easier to work together.

1. Networking and the Virtual Company--Networked systems

can also improve collaboration between organizations through

the so-called virtual company

iv.

Greater Independence of Company and Workplace--Employees no

longer need to work only at the office or the factory, nor are all the

company's operations performed at one location. Geographically

separate processes can be tightly coordinated via networking.

Improved

Management

Processes--Because

instantaneous

information is accessible in a convenient usable format, more upper

managers use it routinely for planning, leading, directing, and controlling

operations.

1. Enterprise Resource Planning (ERP)--Large information

system for integrating all the activities of a company's business

units

Types of Information Systems

Organizations depend on quality information to make good decisions and help them

accomplish their goals. To design and develop good information systems, companies hire a

top-level manager known as a CIO. A Chief Information Officer (CIO) is a strategic-level

manager who oversees the company's information systems. An information system is a

complex of several information systems that share information while serving different levels of

the organization, different departments, or different operations.

User Groups and System Requirements

Knowledge Workers--An increasingly important group of employees

who use information and knowledge as the raw materials of their work,

and who rely on technology to design new products or business

systems (e.g. engineers, scientists, computer programmers, etc.).

ii.

Managers at Different Levels--First-line managers need information

on the day-to-day details of their departments or projects. Middle

managers need summaries and analyses for setting intermediate and

long-range goals for their departments or projects. And top managers

need information on broader economic and business trends, and overall

company performance.

iii.

Functional Areas and Business Processes--Each business area

(e.g. marketing, finance) has its own information requirements, and each

business process (e.g. strategic planning, product development) also

has specific information needs.

Major Systems by Levels

Transaction Processing Systems--information-processing

applications for routine, day-to-day business activities involving well-

defined processing steps.

ii.

Systems for Knowledge Workers and Office Applications-- These

systems provide assistant for data processing and other office activities.

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Like other departments, the IS department includes both knowledge

workers and data workers. Knowledge workers include: systems

analysts, programmers, system operations personnel

iii.

Knowledge-Level and Office Systems

1. Computer-Aided Design (CAD)--computer-based electronic

technology that assists in designing products by simulating a real

product and displaying it in three-dimensional graphics.

2. Computer-Aided Manufacturing (CAM) --computer-based

electronic technology used in designing manufacturing

equipment, facilities, and plant layouts for better product flows

and productivity.

iv.

Management Information Systems--computer-based system that

supports an organization's managers by providing daily reports,

schedules, plans, and budgets. Middle managers are the largest MIS

user group.

Decision Support Systems--interactive computer-based system that

locates and presents information needed to support decision making.

Middle and top-level managers use DSS.

vi.

Executive Support Systems--quick-reference information-system

application designed specially for instant access by upper-level

managers.

vii.

Artificial Intelligence and Expert Systems

1. Robotics--combination of computers and industrial robots.

2. Expert System--AI program designed to imitate the thought

processes of human experts in a particular field.

Elements of the Information System

Computer Network -- all the computer and information technology devices, which by working

together, drive the flow of digital information throughout a system.

Hardware -- physical components of a computer system

Inputting

1. Input Device--part of the computer system that enters data into

it.

2. Central Processing Unit (CPU)--part of the computer system

where data processing takes place.

ii.

Main Memory--part of the computer CPU housing memory of programs

it needs to operate.

iii.

Programs

1. Program--set of instructions used by a computer to perform

specified activities.

2. Output Device--part of the computer system that presents

results, either visually or in printed form.

Software -- programs that instruct a computer in what to do.

System program--Software that tells the computer what resources to

use and how to use them.

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ii.

Application program--Software (such as Word for Windows) that

processes data according to a user's special needs

iii.

Graphical User Interface--Software that provides a visual display to

help users select applications.

Control --- ensures that the system is operating according to specific procedures and within

specific guidelines.

Problems of Privacy and Security

1. Privacy invasion occurs when intruders (hackers) gain

unauthorized access, either to steal information, money, or

property or to tamper with data.

2. Security measures for protection against intrusion are a

constant challenge.

Databases and Application Programs

Data and Databases--centralized, organized collection of related data.

ii.

Application Programs

1. Word-Processing Program--applications program that allows

computers to store, edit, and print letters and numbers for

documents created by users.

2. Electronic Spreadsheet--applications program with a row-and-

column format that allows users to store, manipulate, and

compare numeric data.

3. Database Management System--applications program for

creating, storing, searching, and manipulating an organized

collection of data.

4. Computer Graphics Program--applications program that

converts numeric character data into pictorial information such

as graphs and charts.

5. Presentation Graphics Software--applications that enable

users to create visual presentations that can include animation

and sound.

a. Desktop publishing--process of combining word-

processing and graphics capability to produce virtually

typeset-quality text from personal computer

Telecommunications and Networks

A network organizes telecommunications components into an effective system.

Multimedia Communication Systems -- system connected to networks of communication

appliances such as faxes televisions, sound equipment, cell phones, printers, and

photocopiers that may also be linked by satellites with other remote networks.

Communication Devices include global-positioning-systems (GPS),

paging systems and cellular telephones.

ii.

Communication Channels include wired and wireless transmission.

System Architecture Wide Area Network (WAN)--network of computers and workstations

located far from one another and linked by telephone wires or by satellite.

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Introduction to Business MGT 211

Local Area Network (LAN)--network of computers and workstations,

usually within a company, that are linked together by cable.

ii.

Wireless Networks--Wireless technologies use airborne electronic

signals for linking network appliances. In addition to mobile phones,

wireless technology extends to laptops, hand-held computers, and

applications in cars (including Internet access and music players, map

terminals, and game machines).

iii.

Client-server Network--Information-technology system consisting of

clients (users) that are electronically linked to share network resources

provided by a server, such as a host.

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