1. Part VII: Special Topics Introduction to Business 3e 18 Copyright © 2004 South-Western. All rights reserved. Using Information Technology

2. Copyright © 2004 South-Western. All rights reserved.18–2 Learning Goals Describe the key components of a computer and explain their purpose Discuss the different ways computers and related technologies contribute to today’s businesses Describe some of the key challenges of managing today’s information technologies Identify emerging technologies and their implications

3. Copyright © 2004 South-Western. All rights reserved.18–3 Using Information Technology

4. Copyright © 2004 South-Western. All rights reserved.18–4 What Is a Computer? Device capable of processing and storing vast quantities of information –Hardware –System architecture  Central processing unit (CPU)  Primary storage - RAM  Secondary storage - hard drive, removable storage devices  Peripherals

5. Copyright © 2004 South-Western. All rights reserved.18–5 A Typical Microcomputer Exhibit 18.1

6. Copyright © 2004 South-Western. All rights reserved.18–6 How Much Have Computers Improved? The physical changes in computer hardware over the past 50 years have been accompanied by even more dramatic changes in actual performance. For key computer components, price-performance ratios have been improving by a factor of 10 every five years. To put such improvements in perspective, had automobiles experienced the same rate of price- performance improvement, the $10,000 luxury car in the mid-1960s would now sell for under a nickel (including a liberal allowance for inflation). Exhibit 18.2

7. Copyright © 2004 South-Western. All rights reserved.18–7 Software Programs Collection of step-by-step instructions to the CPU that is loaded into primary storage (RAM), then run by the CPU –System (operating system) software  Handles input and output to peripherals, manages the internal memory, and informs the user of the status of application tasks

8. Copyright © 2004 South-Western. All rights reserved.18–8 Software Programs Application programs –Word processing, spreadsheets, databases Middleware –Allow other application programs to cooperate with each other Utility software –Antivirus and hard drive recovery programs

9. Copyright © 2004 South-Western. All rights reserved.18–9 Uses of Computers Computational models –Statistical analysis –Optimization models –“What-if” analysis –Decision support systems Data processing systems –Accuracy –Speed –Space –Flexibility

10. Copyright © 2004 South-Western. All rights reserved.18–10 Uses of Computers Interorganizational systems (IOS) –Use computers and telecommuncations to move information across boundaries of a firm Remote job entry systems –ATMs, airline reservation systems

11. Copyright © 2004 South-Western. All rights reserved.18–11 Uses of Computers Electronic data interchange (EDI) –Reduce ordering costs –Improve processing time and accuracy Commercial information services –Provide packaged information services to subscribers

12. Copyright © 2004 South-Western. All rights reserved.18–12 Managing Today’s Information Technologies Managing firm’s information system architecture –Stand-alone system –Mainframe (multi-user) system with terminals –Network system includes file servers and workstations  Local area network (LAN)  Wide area network (WAN)

13. Copyright © 2004 South-Western. All rights reserved.18–13 Stand-Alone System Architecture Exhibit 18.3

14. Copyright © 2004 South-Western. All rights reserved.18–14 Mainframe (Multiuser) System Architecture Exhibit 18.4

15. Copyright © 2004 South-Western. All rights reserved.18–15 Network System Architecture Exhibit 18.5

16. Copyright © 2004 South-Western. All rights reserved.18–16 Managing Today’s Information Technologies Acquiring software –Compatibility –Upgradeability –Support –Customized software

17. Copyright © 2004 South-Western. All rights reserved.18–17 Managing Today’s Information Technologies Managing the development of information systems –Enterprise resource planning (ERP) systems –Systems development life cycle (SDLC) –Incremental development techniques  Prototype, alpha and beta testing

18. Copyright © 2004 South-Western. All rights reserved.18–18 Managing Today’s Information Technologies Managing the implementation of information systems –Transferring a system to its intended users often is more difficult than technical development of the system.

19. Copyright © 2004 South-Western. All rights reserved.18–19 Managing Today’s Information Technologies Managing information systems security –Protect against espionage  Use passwords to limit access  Systematically change passwords  Terminate user rights when person leaves  Train personnel in security procedures –Protect against sabotage  Back up system regularly  Use proper virus hygiene

20. Copyright © 2004 South-Western. All rights reserved.18–20 Protecting Passwords Avoid writing a password down. Never type a password when someone is looking. Never use the same password on two systems. Never use meaningful personal information for a password. Never use an actual word for a password. Exhibit 18.6

21. Copyright © 2004 South-Western. All rights reserved.18–21 Emerging Technologies Evolution of the worldwide network –E-Commerce –Infrastructure –Implications  Virtual reality display techniques  Video-conferencing Truly intelligent systems –Artificial intelligence –Massively parallel machines

22. Copyright © 2004 South-Western. All rights reserved.18–22 Future of the Internet Internet offers unparalleled opportunities for research, public relations, and communications –Concerns remain  Lack of central authority  Lack of underlying organization  No way to ensure accuracy of information  Network performance unpredictable  Individual performance depends on download speed

23. Copyright © 2004 South-Western. All rights reserved.18–23 Future of the Internet Internet offers unparalleled opportunities for research, public relations, and communications –Progress  High-speed internet connections via cable TV wiring  Private providers handling more traffic

24. Copyright © 2004 South-Western. All rights reserved.18–24 Chapter Summary Computers are capable of processing and storing vast amounts of information Most common uses of computers include computational models, data processing systems, and interorganizational systems There are a number of challenges associated with managing today’s information technologies Two key developments are the evolution of the worldwide network and emergence of truly intelligent systems