Chapter 13: Understanding Software: A Primer for Managers
Computer Hardware: The physical components of information technology, which can
include the computer itself plus peripherals such as storage devices, input devices like
the mouse and keyboard, output devices like monitors and printers, networking
equipment, and so on.
Software: A computer program or a collection of programs. It is a precise set of
instructions that tells hardware what to do
Operating System: The software that controls the computer hardware and establishes
standards for developing and executing applications.
Applications: Includes desktop applications, enterprise software, utilities, and other
programs that perform specific tasks for users and organizations.
Bitcoin uses a blockchain – the largest application of blockchain
13.2 Operating Systems
The operating system (OS) controls a computer’s hardware and provides a common set
of commands for writing programs.
Most computing devices (enterprise-class server computers, PCs, phones, set-top boxes,
video games, cars, the Mars Rover) have an operating system.
Some products use operating systems provided by commercial firms, while others
develop their own operating system. Others may leverage open source alternatives (see
Chapter 14 “Software in Flux: Partly Cloudy and Sometimes Free”).
Embedded systems are special-purpose computer systems designed to perform one or a
few dedicated functions, and are frequently built into conventional products like
thermostats, door locks, cars, air conditioners, industrial equipment, and elevators.
Apple develops their own OS for their own hardware (iOS)
Microsoft sells their OS to companies like Dell Operating systems are also designed to give programmers a common set of commands
to consistently interact with the hardware. These commands reduce program
complexity and make it faster to write software while minimizing the possibility of
errors in code.
A good OS and software development program can catalyze network effects.
Firmware and Embedded Systems
Firmware: Software stored on nonvolatile memory chips (as opposed to being stored on
devices such as hard drives or removable discs). Despite the seemingly permanent
nature of firmware, many products allow for firmware to be upgraded online or by
connecting to another device.
Embedded Systems: Special-purpose software designed and included inside physical
products (often on firmware). Embedded systems help make devices “smarter,” sharing
usage information, helping diagnose problems, indicating maintenance schedules,
providing alerts, or enabling devices to take orders from other systems.
13.3 Application Software
Desktop applications are typically designed for a single user. Enterprise software
supports multiple users in an organization or work group.
Popular categories of enterprise software include ERP (enterprise resource planning),
SCM (supply chain management), CRM (customer relationship management), and BI
(business intelligence) software, among many others.
These systems are used in conjunction with database management systems; programs
that help firms organize, store, retrieve, and maintain data.
ERP and other packaged enterprise systems can be challenging and costly to implement,
but can help firms create a standard set of procedures and data that can ultimately
lower costs and streamline operations.
The more application software that is available for a platform, the more valuable that
The DBMS stores and retrieves the data used by the other enterprise applications.
Different enterprise systems can be configured to share the same database system in
order to share common data.
Firms that don’t have common database systems with consistent formats across their
enterprise often struggle to efficiently manage their value chain, and often lack the
flexibility to introduce new ways of doing business. Firms with common database
systems and standards often benefit from increased organizational insight and decision-
Take the quiz to see importance of standardizing on data formats and business rules.
o Q1: there is ambiguity in something as simple and basic as dates.
o Q2: there is ambiguity in even what seems to be simple business rules.
o Q3: automation entails having to codify worker logic. That is not that
straightforward. When set up properly, enterprise systems can save millions of dollars and turbocharge
organizations by streamlining processes, making data more usable, and easing the
linking of systems with software across the firm and with key business partners.
Efficient enterprise systems may also make it easier for firms to partner with other
organizations, and can give it advantages when considering mergers and acquisitio