Learning Objectives 13.1 Explain how businesses benefit from the use of information technology (IT). 13.2 Describe the components that enable IT– networks,

Learning Objectives 13.1 Explain how businesses benefit from the

use of information technology (IT).

13.2 Describe the components that enable IT– networks, hardware, and software.

13.3 Understand how MIS systems are used by managers.

13.4 Identify appropriate uses of business software applications.

13.5 Describe how e-commerce can create a competitive advantage.

13.6 Discuss the challenges IT systems pose to managers.

What is

Information Technology?

Information Technology is the set of methods or techniques for acquiring, organizing, storing, manipulating, and transmitting information.

•Information technology creates efficiencies, reduces costs, and enhances customer responsiveness.

•Information technology breaks down barriers of time and place by facilitating business over the Internet.

•Organizations that fail to take advantage of IT find it difficult to compete against increasing levels of productivity in the workplace.

•Effective IT systems must support organization- or enterprise-wide initiatives and strategies that integrate operations of all functional departments.

What is a

Management Information

System?

Management Information System (MIS) is a specific form of IT that managers utilize to generate the specific, detailed information they need to perform their roles effectively.

Examples of MIS systems include:

•Supply Chain Management System – a MIS that provides information to all different entities in the supply chain to help them work together more effectively.

•Operations Management System – a MIS that provides information to help transform resources into goods and services.

•Customer Relationship Management System (CRM) – a MIS that provides information on customer interactions which is used to develop ongoing relationships with customers to maximize their value.

Data, Information, and Data Mining

• Data – Unprocessed facts and figures that are input for a MIS.

• Information – Processed data that are output for MIS.

• Information must possess four characteristics to be useful to managers:

• Quality (accurate and reliable) • Completeness (sufficient to make a decision) • Timeliness (accessible when needed) • Relevance (addresses the right questions)

• Data Mining – The ability to discover beneficial relationships among data.

MIS Classifications

There are four classifications of a MIS which include:

•Transaction-processing Systems – A system designed to handle large volume of routine, recurring transactions. Banks use these systems to record deposits and withdraws from accounts.

•Operations Information Systems – A system that gathers, organizes, and summarizes data in a form that is of value to managers. Managers use these systems to obtain sales, inventory, accounting and other performance related information.

•Decision Support Systems – An interactive system that provides models that aid managers in making nonprogrammed or atypical decisions.

•Expert Systems – An advanced system that employs artificial intelligence to solve problems that ordinarily require human expertise.

What is a

Network?

Network – a system for data exchange and resource sharing by linking computers to a central database.

•Networks provide two key benefits: The ability to communicate and the ability to share data.

•A small network can be made up of two computers linked together, while the largest network is the Internet.

•The biggest limitations of networks is speed.

Types of Networks

•Intranet – A company-wide network, closed to public access, that uses Internet-type technology. They are one of the most secure forms of networks.

•Extranet – A semiprivate network that uses Internet technology and allows more than one company to access the same information or allows people on different servers to collaborate.

•Virtual Private Network (VPN) – A private data network that creates secure connections, or “tunnels,” over regular Internet lines.

•Internet – A global public network of thousands of smaller computer networks. It is the largest public network and can be accessed by anyone with a computer and a data connection.

Types of Networks - continued

•Cloud Computing Network – A form of virtualization in which a company’s data and applications are stored at offsite data centers that are accessed over the Internet (the cloud).

•Wireless Fidelity or WiFi – The technology used to obtain an internet connection without having to connect to a phone or cable line.

•Voice Over Internet Protocol (VoIP) – The Internet infrastructure that is used to route voice calls over the Internet.

•Radio Frequency Identification (RFID) – Electronic chips placed on goods to relay information, such as location, to electronic readers.

What is

Hardware?

Hardware – the physical devices associated with computing that include computers, printers, laptops, smart phones, tablets, iPods, and more.

Computer hardware components include:

• Central Processing Unit (CPU)

• Primary Storage

• Secondary Storage

• Input Devices

• Output Devices

• Communication Devices

Computer Hardware

•Central Processing Unit (CPU) – The hardware that interprets and executes software instructions and coordinates how all the other hardware devices work together.

•Primary Storage – The computer’s main memory in which program instructions and data are stored for direct access by the CPU.

•Secondary Storage – Removable hardware used to store data for long-term storage or portability. Secondary storage devices include compact disk, CD-ROMs, DVDs and thumb drives.

•Input Devices – Hardware used to capture information and commands. A keyboard, mouse, scanner, digital camera, and webcam are input devices.

•Output Devices – Hardware used to see, hear, or accept the results of information processing requests. Printers, monitors and speakers are output devices.

•Communication Devices – Hardware used to send information from one location and receive it at another. These devices include modems, cable, broadband, DSL lines, etc.

What is

Software?

Software – a set of programs and procedures used to operate a computer and perform specific tasks.

Software can be classified into two types:

• System software • Application software

System Software

The software that controls how technology tools work together, along with application software.

System software includes:

• Operating System Software (OSS) – controls application software and manages how hardware devices work together. Common operating systems include Unix, Linux, Microsoft Windows and Mac OS X.

• Utility Software – provides additional functionality to the operating system for a specific purpose. Some examples of utility software include antivirus, spyware, data recovery, and disk optimization.

Application Software

The software that is a set of instruction that tell a computer how to process information for a specific purpose.

•Common types of software applications used in business include word processing, spreadsheets, databases, presentation, email, and more.

•Most business software is distributed commercially through suppliers, retail stores or directly by the manufacturer.

•Free software is available in two formats:

• Freeware – free to use without any restrictions

• Shareware – copyrighted but distributed free of charge to potential customers. Users that find the software meets their needs are asked to pay a fee to the developer.

What is

E-Business?

E-Business – refers to a company that conducts business over the Internet.

•E-business may consist of providing information, such as online bank balance, servicing customers, or collaborating with business partners or suppliers.

•A type of e-business is ecommerce.

• E-commerce – the buying and selling of goods over the Internet.

• There are four type of e-commerce transactions:

• Buinsess-to-business (B2B) – A business that produces products to sell to other businesses electronically.

• Business-to-consumer (B2C) – A business that produces products to sell directly to consumers electronically.

• Consumer-to-business (C2B) – Applies to any consumer that sells a product or service to a business over the Internet.

• Consumer-to-consumer (C2C) – Applies to consumers buying and selling for other consumers.

Web 2.0 and Social Networking

• Web 2.0 – The second generation of the world wide web with interactive and collaborative functionality that includes blogs, wikis, video sharing, social networking and more.

• Social Network – An Internet site that facilitates relationships among people and businesses.

• Many businesses ban employees from using social networks as they believe they decrease productivity or employees may post negative remarks.

Challenges in

Information Technology

Information Technology, has many benefits, but also many challenges. Some of those challenges include:

• Information security• Viruses• Cybercrime• Privacy • Phishing • Network instability • Data reliability • Computer Ethics

Information Technology Challenges

Information Security

•Secure information is susceptible to risk from hackers, viruses, and lax internal computing policies.

•Hackers are individuals who unlawfully break into systems and breach security by stealing private data.

•Several tools to combat hackers include strong authentication, encryption, and firewalls.

• Authentication – The process of determining whether someone is who they declare to be, normally through the use of passwords to gain access to a network.

• Encryption – Scrambles information into a form that requires a key or password to decrypt it.

• Firewall – Analyzes information entering and leaving a network and prevents transmission of information without proper markings.

Information Technology Challenges – continued

Viruses

•A piece of programming code inserted into other programming to cause an unexpected and usually undesirable event.

•Viruses are spread by software, files, and hyperlinks from an unknown source and may be able to get past firewalls.

•The best way to minimize against virus threats is to:

1) Use a high quality antivirus program and keep it up-to-date to detect new viruses.

2) Scan software using an antivirus program before using it.

3) Scan shared file storage devices, such as CDs, USB flash drives, external drives and memory cards.

4) Download files only from known sources and scan Internet downloads and email attachments with an antivirus program.

Information Technology Challenges – continued

Backup and Recovery

•Every day businesses lose time and money because of system crashes and failures.

•One way to minimize the damage is to have a backup and recovery strategy in place:

• Backup – an exact copy of a system’s information and can be accomplished by a manager making a CD backup on a daily basis or the IT department performing a whole system backup.

• Recovery – the ability to get a system up and running in the event of a crash or failure.

•Responsibility for recovery should be assigned before a system failure occurs.

Cyberterrorism

•And extreme form of hacking where terrorist hackers can shut down entire systems bringing communications, transportation, and utility services to a complete halt.

Information Technology Challenges – continued

Privacy

•The increasing use of technology create major concerns about privacy for many organizations customers, as nearly all website collect some form of personal information.

•Ethical organizations maintain a privacy policy that discloses what private information they can collect, how it can be used, and whether it can be distributed to others.

•Any use of private information other than originally intended or agreed to by the user, is a considered a breach of privacy and grounds for legal action.

Phishing

•An online security threat that requests personal information be returned to the sender, with the outcome often being identity theft.

•Phishing attempts use a branded email message that looks authentic to fool the recipient into giving private information.

Information Technology Challenges – continued

Network Instability

•Is the threat of a network being inaccessible and affecting business operations.

•IT staff typically handle the detection and resolution of instability, but it is the managers concern to ensure that current data is available from regularly scheduled backups that save data to storage.

Data Reliability

•Input data must be accurate in order to obtain reliable output.

•Information must pass the “reasonableness” test, and not be assumed accurate because it was computer generated.

Computer Ethics

•Companies should establish an ethical computer policy to establish guidelines for acceptable use for company computers.

•A written policy ensures users are informed of the rules and consent to abide by them.