Chapter 14 Using technology to manage information
Data, information, and information systems
Data consist of raw facts and figures that may or may not be relevant, or meaningful, to a business
decision. Information is knowledge gained from processing those facts and figures.
An information system is an organized method for collecting, storing, and communicating past,
present, and projected information on internal operations and external intelligence. Most information
systems today use computer and telecommunications technology. A large organization typically
assigns responsibility for managing its information systems and related operations to an executive
called the chief information officer (CIO). The CIO often reports directly to the CEO. An effective
CIO can understand and control technology so that the company can use one seamless operation to
communicate both internally and externally.
The role of CIO is both expanding and changing as the technology to manage information continues to
develop. Over the past 10 years, thee role of a CIO has changed from being a technical role to being a
business partner who often applies strong influence over a company’s strategy.
Information system can be designed to assist many business functions and departments- from
marketing and manufacturing to finance and accounting. They can manage a huge flood of
information by organizing data in logical and accessible manner.
Many companies and nations combine high-tech and low-tech solutions to manage the flow of
information. Email, wireless communications, and videoconferencing are increasingly common.
Components and Types of Information systems
When today’s businesspeople think about information systems, they most likely think about computer-
based information systems. These systems rely on computer and related technologies to store
information electronically in an organized, accessible manner.
Computer-based information systems consist of four components and technologies:
-Computer Hardware -Computer Software
-Telecommunications and computer networks -Data resource management
Computer hardware refers to machines that range from supercomputers to smartphones. It also
includes the input, output, and storage devices needed to support computing machines. Software
includes operating systems, such as Windows or Linux, and application programs, such as Adobe or
Oracles. Telecommunications and computer networks refer to the hardware and software needed to
provide wired or wireless voice and data communications. Data resource management involves
developing and maintaining an organization’s databases so that decision-makers can access the
information they need when they need it. Databases
The heart of any information system is its database, a centralized integrated collection of data
resources. A company designs its databases to meet specific information processing and retrieval
needs of its workforce. Businesses obtain databases in many ways. They can hire a staff person to
build them on site, hire an outside source to build them, or buy packaged database programs from
specialized vendors, such as Oracle. A database acts as an electronic filing cabinet. It is capable of
storing large amounts of data and retrieving a specific piece of data within seconds. [Keep updated]
One problem with databases is that they often contribute to information overload-too much data for
people to absorb or data that are irrelevant, or not meaningful, to decision-making. Computer
processing speed and storage capacity are increasing rapidly, and data have become more abundant-
that is, there is more data and it is more easily available.
Decision-makers can also look up data online. Online systems give access to large amounts of
government data, such as economic data form Statistic Canada. One of the largest online databases is
that of the Canadian Census. The Canadian Census of Population is conducted every five years. It
collects data on households across Canada and tries to count everyone in the country.
Another source of free information is company websites. Anyone who is interested can visit firm’s
home pages to look for information about customers, suppliers and competitors. Trade associations
and academic institutions also maintain websites with related information.
Types of information system
In general, information systems fall into one of two broad categories: operational support systems or
management support systems.
Operational Support Systems
Operational support systems are designed to produce a variety of information on an organization’s
activities for both internal and external users. Examples of operational support systems include
transaction processing systems and process control systems. Transaction processing systems record
and process data from business transactions. Process control systems monitor and control physical
processes. For example, a steel mill may have electronic sensors linked to a computer system to
monitor the entire production process.
Management Support Systems
Management support systems are information systems that are designed to provide support for
effective decision-making. Several different types of management support systems are available. A
management information system (MIS) is designed to produce reports to managers and other
professionals. A decision support system (DSS) gives direct support to businesspeople during the
decision making process. For example, a marketing manager might use a decision support system to
analyze how a product’s price change will affect sales and profits.
An executive support system (ESS) lets senior executives access the firm’s primary databases, often
by touching the computer screen, pointing and clicking a mouse, or using voice recognition. In the typical ESS, users can choose from many kinds of data, such as the firm’s financial statements and
sales figures or stock market trends for the company and for the industry as a whole.
Finally, an expert system is a computer program that imitates human thinking through complicated
sets of “if-then” rules. The system applies human knowledge in a specific subject area to solve a
problem. Expert systems are used for a variety of business purposes: to set credit limits for credit card
applicants, to monitor machinery in a plant to detect potential problems or breakdowns.
Computer Hardware and Software
The first commercial computer, UNIVAC I, was sold to the U.S Census Bureau in the early 1950s. It
cost $1 million, took up most of a room, and could perform about 2,000 calculations per second.
The first personal computers were introduced in the late 1970s and early 1980s. Then, the idea of a
computer on every desk, or in every home, seemed unbelievable and not very likely. Today,
computers have become a must-have for both businesses and households. [less expensive]
Types of Computer Hardware
Hardware consists of all tangible, or physical, elements of a computer system- the input devices, the
components that store and process data and perform calculations, and the output devices that present
the results to users. Input devices allow users to enter data and commands for processing, storage, and
output. The most common input devices are the keyboard and mouse. Storage and processing
components include the hard drive and various other storage components, such as DVD drives and
flash memory devices. Output devices, such as monitors and printers, are the hardware elements that
transmit or display documents and other results of a computer system’s work.
Different types of computers have varying memory capacities and processing speeds. These
differences define four broad classifications: mainframe computers, midrange systems, personal
computers, and hand-held devices. A mainframe computer is the largest computer system. It has the
greatest storage capacity and the fastest processing speeds. Especially powerful mainframes called
supercomputers can handle extremely rapid, complex calculations that involve thousands of variables,
such as weather modelling and forecasting.
Midrange systems consist of high-end network servers and other types of computers that can handle
large-scale processing needs. They are less powerful than mainframe computers but more powerful
than most personal computers. A server is the heart of a midrange computer network. It supports
applications and allows networked users to share output devices, software, and databases.
PCs are everywhere today. Recent estimates of PC ownership report that more than 2/3 of North
American households have at least one personal computer.
Desktop computers were once the standard PC seen in offices and homes. Now notebook or laptop
computers account for more than half of all new PCs sold. Notebook computers cost more than
desktop computers. [Weight, portability, size]
One of the newer types of computer devices is the tablet. [IPAD, PLAYBOOK]
Handheld devices-made by companies such as Apple, Rim, Nokia, Samsung are even smaller. Two
kinds of hand-held devices are available to most business and consumer users. The original type is the personal digital assistant (PDA). PDAs keep schedules and contact information and have limited
software applications such as word processing and spreadsheets.
The other type of hand-held device is the Smartphone, which combines a device with a PDA.
Smartphone sales are growing much faster than sales of traditional PDAs.
In addition to PDAs and smartphones, some specialized hand-held devices are used in a variety of
businesses for specific applications. For example, in some restaurants, servers use small wireless
devices to swipe a credit card and print out a receipt right at the customer’s table. [UPS/Fedex]
Software includes all of the programs, routines, and computer languages that control a computer and
tell it how to operate. The operating system is the software that controls the basic workings of a
computer system. Application software is a software program that performs the specific tasks that
user wants to carry out- such as writing a letter or looking up data.
As mentioned earlier, nearly all computers today are linked to networks. In fact, if your PC has
Internet access, you’re linked to a network. Local area networks and wide area networks allow
businesses to communicate, transmit, and print documents, and share data. These networks require
businesses to install special equipment and connections between office sites.
But internet technology has also been applied to internal company communications and business tasks,
by using a ready-made network. Among these new Internet-based applications are intranets, virtual
private networks (VPNs), and voice over Internet protocol (VoIP). Each has contributed to the
effectiveness and speed of business processes.
Local Area Networks