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

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Introduction to Business ­MGT 211
VU
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
i.
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
i.
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
i.
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
i.
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.
v.
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
i.
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
i.
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.
v.
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
i.
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.
i.
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.
i.
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
i.
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.
i.
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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i.
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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Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGER’S RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures