Concepts of Information Technology and its Fundamental aspects | Information Technology Practices in Business Notes | B.Com (CBCS and Non CBCS)

Concepts of Information Techonology and its Fundamental aspects

Information Technology Practices in Business

B.Com (CBCS and Non CBCS)

Unit – 1: Concepts of Information Technology and its Fundamental aspects

Information Revolution and Its impact on Business

Meaning: The Information Revolution refers to the dramatic changes taking place during the last half of the 20th century in which information technology has been the prime area of innovations. The information revolution began with the invention of the integrated circuit or computer chip. Those chips have revolutionized our lives, running our appliances, providing calculators, computers and other electronic devices to control our world.

It is still early enough that no one knows precisely what all of the implications of the information revolution will be for social life. But clearly changes such as the information superhighway permitting people to communicate using computers all around the globe, fax machines, satellite dishes and cellular phones are changing how families spend their time, the kind of work we do and may other aspects of our lives.

The computer has become helpful in managing knowledge at a time when the amount of information is expanding exponentially. The information stored in the world’s libraries and computers double every eight years. In a sense the computer age and the information age seem to do hand in hand.

The rapid development and deployment of computing power however has also raised some significant social and moral questions. People in this society need to think clearly about these issues, but often ignore them or become confused.

Impact of Information revolution on Business

Worldwide influence of the internet is well-established and acknowledged. Penetration rate of the internet has been phenomenal; almost 1/3rd of Human population are accessing the internet. The way business is conducted in this digital age has changed due to so many people logged on to the internet. Advancement in communication and information technology has further strengthened the role of the internet in business. The internet is widely used in organization for marketing and promotion of products and services. The internet is used to deliver customer support, share information and provide training to employees. With the internet becoming a powerful tool for employees, the impact on business is undeniable.

 Internet and Porter’s Five Force Model

Porter’s five force model is a framework for industry analysis, business strategy development and study competition. The five forces of the model are the threat from upcoming and future competition, threat from existing substitute, bargaining power of consumers, negotiating power of suppliers and threat of competition. Internet has great Impact on all five force of the model:

1)      Threat of new entrants: The internet has considerably lowered entry barrier in setting up new enterprise. The setting up of a new company does not require much capital investment, for example, online retail sites, etc. Ever increasing competition has lowered the margins.

2)      Threat of new substitute: The Internet has reduced the product life cycle; shelf life of products and encouraged innovation is customer serving.

3)      Bargaining power of customers: The internet has made the customer well informed about products and available substitute. Companies have to be careful in presenting differentiation and pricing.

4)      Bargaining power of suppliers: Suppliers are well informed about happening in the industry thanks to the internet.

5)      Threat of competition: The internet has made transparency and honest important factor in success of the company. Customers tend to know more about the company. The internet has lowered the cost of searching new available products.

Internet and the way business is conducted

The internet has changed the face of business. It has opened up new avenues of conducting business. Below are some impacts of the internet on business:

1)      Communication: communication technology combined with the internet has given a new dimension to connectivity and dispersion of information. Employees are in constant touch through email, instant messaging, office intranet, etc.

2)      Collaboration: The internet has facilitated collaboration among employees of organization. Geographical boundaries no longer hamper project work and sharing of information.

3)      Business Transaction: The internet has encouraged the culture of online business or e-commerce. In recent years many players have opened shops through e-commerce. Internet banking, payment gateways, etc. are part of normal supply chain transaction.

4)      Work Flexibility: The internet has enabled workers to log in from remote location and home. It has helped on the move employees by remaining in touch with happenings of work.

5)      Web based application: The internet has facilitated the development of concept like cloud computing, which has enabled process and storing of data in large proportion. The internet has helped reduce infrastructure cost of the company.

The internet thus has made a big impact in the way the business gets conducted in both positive as well as a negative way. The internet has made many business obsolete example post offices. Online security issues like hacking, identity theft, etc. are a constant threat to internet users.

Information Technology

Information Technology (IT) is a generic term that covers the acquisition, processing, storage and dissemination of information. It involves the application of computers and communication technology in the task of information handling, information and information flow from the generation to the utilization levels. It is restricted to systems dependent on microelectronics based combination of computers and telecommunication technologies. The IT is the boon for mankind. It gives accessibility to information at fingertips. There has been discussion on Information highways and high tech libraries. The promising and diversified possibilities of IT have reduced the space and time between the people, countries, continents and ultimately have led to the emerging concepts - Global Society and Global Village.

Information Technology (IT) is a new technology applied to the creation, storage, selection, transformation and distribution of information of many kinds. It has been defined differently by different people.

IT, as defined by the Information Technology Association of America (ITAA), is "the study, design, development, implementation, support or management of computer-based information systems, particularly software applications and computer hardware." It deals with the use of electronic computers and computer software to convert, store, protect, process, transmit and retrieve information, securely.

According to Mall, IT means various means of obtaining, storage, and transforming information using computer, communication and micro-electronics.

UNESCO defines IT as, scientific technology and engineering disciplines and the management techniques used in information handling and processing their application, computers and their interaction with men and machines and associated social, economic and cultural matters.

Objectives of Information Technology

The objectives of IT are to provide better means of information of data messages in the form of written or printed records, electric, audio or video signals by using wires, cables and telecommunication techniques, IT plays a vital role in information handling due to developments such as reduction in computing time, capabilities of files on video discs, use of T.V as readymade information screen, telecommunication and satellite communication facilities etc. The objectives of IT can be categorized into the following four groups.

(i) Supporting technical functions associated with acquisitions, technical processing, serial control, SDI/CAS, OPAC and circulation work.

(ii) Supporting information storage, retrieval and dissemination systems.

(iii) Supporting management information services for libraries, especially analyzing library statistics.

(iv) It can best be used in service and orientation courses for practicing librarians, continuing education programs for faculty teachers of library and information science, correspondence studies and library extension services.

Features of Information Technology

Information Technology possesses various features. Let us have an idea of its features.

1.       Broadness: IT involves more than just computer literacy. It takes into account how computers work and how these computers can further be used not just for information processing but also for communications and problem solving tasks as well.

2.       Streamlining: IT has the feature of streamlining the processes. It helps in streamlining the business processes. It also helps in getting constant and up to date information in real time.

3.       Globalization: IT is global. It not only brings the world closer together, but it allows the world’s economy to become a single interdependent system. This means that we can not only share information quickly and efficiently, but we can also bring down barriers of linguistic and geographic boundaries. It makes the word into a global village.

4.       Communication: IT helps in cheaper, quicker and more efficient communication. We can now communicate with anyone around the globe by simply text messaging them or sending them an email for an almost instantaneous response. The Internet has also opened up face to face direct communication from different parts of the world thanks to the helps of video conferencing.

5.       Cost effectiveness: Information technology helps to computerize the business process thus streamlining business to make them extremely cost effective. This in turn increases productivity which ultimately gives rise to profits that means better pay and less strenuous working conditions.

6.       Bridging the cultural gap: Information technology helps in bridging the cultural gap by helping people from different cultures to communicate with one another and allow for the exchange of views and ideas, thus increasing awareness and reducing prejudice.

7.       More time: IT has makes it possible for businesses to remain open 24x7 all over the globe. This means that a business can be open anytime anywhere, making purchases from different countries easier and more convenient. It also means that you can have your goods delivered right to your doorstep with having to move a single muscle.

8.       Creation of new jobs: IT creates new and interesting jobs. Computer programmers, System analyzers, Hardware and software developers and Web designers are just some of the many new employment opportunities created with the help of IT.

9.       Dynamic: IT is dynamic and ever changing. It has continuously changing features due to development in the field of communication and content technology.

Components of Information Technologies

Technological change is becoming a driving force in our society. Information technology is a generic term used for a group of technologies. The following are the major new technologies as most relevant information system.

Ø  Processor, memory and input/output channels,

Ø  Micro, Mini and Large scale computers,

Ø  Mass storage technologies,

Ø  Data communication, networking and distributed processing,

Ø  Data entry, display respond and

Ø  Software

These technologies can also be grouped into three major areas:

1.       Computer Technology.

2.       Communication Technology (Refer below – ICT)

3.       Content Technology.

Computer Technology: The present era is IT era where computers are performing their dominant role. We find presence of computers in every field. A computer is an electronic device which converts raw data into meaningful information by following a set of instructions called program. Computers can be classified into different categories. Of these categories personal computers, workstation, servers and super computers are very important. Personal computers are IBM compatible computers and are used by one person at a time. The common components of computer system include input unit, central processing unit and output unit. Input unit is used to enter the data in computer. It includes mouse, light pen, tract ball etc. Central Processing Unit is the main and central unit of the computer that controls the working of the Arithmetic Logic Unit and Memory Unit. Output unit produces the results which are displayed either on the screen or are printed through printer. A computer system is composed of hardware and software. Various hardware parts include memory, input devices, floppy and hard disk, pen drives, CD or DVD drives etc. Memory is an essential element of computer. RAM is internal memory and volatile in nature. Cache memory is a part of memory which uses static RAM and helps the processor to search the data at a very high speed.

Computers play an important role in data processing. They take raw data as input and after processing, provide meaningful information to the user. Electronic data processing comprises the role of computer which is composure of hardware and software. Data can be processed electronically at a wonderful speed and accuracy. This helps in providing timely reports to the management and these reports are very helpful in taking decisions for future. The processing of data can be done in two ways; one is on-line processing and the other is off-line processing.

Content Technology: The media and entertainment industries are undergoing significant structural change. Content + Technology interprets in depth the management and technology issue confronting today’s media companies for managers, operators and engineers from Software to Hardware, Regulation to Practice, Established and Emerging Standards.

Content technology or multimedia technology includes computer-based, interactive applications having multiple media elements, including text, graphics, animations, video and sound. Content technology refers to both the hardware and software used to create and run such systems. The mode of delivery for each application depends on the amount of information that must be stored, the privacy desired and the potential expertise of the users. Applications that require large amounts of data are usually distributed on CD-ROM or DVD-ROM, while personal presentations might be made directly from a computer using an attached projector. Multimedia products may be created and run on the commonly used computer environments. Multimedia system users may employ a variety of input devices in addition to the keyboard and mouse, such as joysticks and trackballs. Touch screens provide both input and display capabilities and are often the choice when potentially large numbers of novices may use the system. Other display devices include high-resolution monitors and computer projectors.

Information Communication Technology (ICT)

Information and communication technology (ICT) is associated with the most sophisticated and expensive computer based technologies. It consists of IT as well as telecommunication broadcast media, all types of audio and video processing and transmission and network based control and monitoring functions. The term ICT was evolved in 1997 in a report by Dennis Stevenson to UK government. It was promoted by new national curriculum documents for UK in 2000.

According to United Nations Development Programme (UNDP), “ICTs are basically information handling tools – a varied set of goods, application and services that are used to produce, store, process, distribute and exchange information. They include the ‘old’ ICTs of radio, television and telephone, and the new ICTS of computers, satellite and wireless technology and the internet. These different tools are now able to work together and combine to form our networked world.”

In the modern world, the term ICT is used to refer to merging (convergence) of audio-visual and telephone network with computer networks through a single cabling or link system. Recently, many companies have come up with campaigns to promote ICT and how it can be utilized to protect nature. In this aspect, WIPRO has played a leading role by introducing ‘Earthein’ (wherein students came up with ideas to use technology to benefit society).

What is the difference between IT and ICT?

IT refers to an entire industry that uses computers, networking, software and other equipment to manage information, whereas ICT can be seen as an integration of IT with media broadcasting technologies, audio/ video processing and transmission and telephony. Therefore, ICT can be seen as an extended acronym for IT. The term ICT is widely used in the context of education, whereas IT is a term widely used in the industry. In addition, recently, ICT is also used to refer to the integration of telephone and audio/ visual networks with computer networks. In simplest terms, ICT can be seen as the integration of information technology with communication technology.

Importance of ICT

The impact of communication technology in information science has been increasing in importance, as interactive information retrieval systems have been developed, that allow users dispersed over wide region to obtain access to these systems on a real time basis. Computer based information retrieval system form one broad class of system that can be linked to users in their office, homes as well as to users in libraries and other centers.

a)      Time Saving: Modern communication technologies avoid errors, duplication resulting in saving of time. They have more speed with accuracy and can transmit quickly. The message lead which the machine can do is definitely more and resulting in saving of time of superiors and subordinates in the organization.

b)      Saving Labour Cost: New communication technologies are labour saving devices. They save labour as well as payroll cost. Less number of workers or staff is sufficient with the installation of modern communication devices. The staff thereby released can be utilized for alternative works.

c)       Speed: A large quantity of information can be fed into the machine, which in term transmits with considerable speed. In respect of certain matters, speed and quickness are necessary to take quick decision. The handling of transmission is assigned to electrically or electronically or radio-wave operated machine which are known for greater speed of dispatch.

d)      Reduce Monotony: Routine respective work may lead to fatigue or monotony mechanization of communication system reduces the fatigue of the staff and resulting in improving the efficiency and quality of the work. For instance use of visual and audio-visual aids will reduce fatigue, which improves the quality of work.

e)      Equality: New technology can achieve equality in the provisions of communication reaching particularly with reference to geographical location.

f)       Standardization: Standardization of work can be achieved through machines. The ensure consistency uniformity in the quality as well as quantity of work the principle of standardization is so important that no one can afford to ignore its advantages.

g)      Accuracy and Efficiency: Correctness of message transmission is necessary to enable a receiver to understand in same spirit and to act accordingly. The systematic and automatic technology promotes accuracy. The new technology in general increases efficiency.

 Disadvantages of ICT

One of the major barriers for the cause of ICT not reaching its full potential in the foundation stage is teacher’s attitude. Within the early years educator’s attitudes towards ICT can vary considerably. Some see it as a potential tool to aid learning whereas others seem to disagree with the use of technology in early year settings. Some of the disadvantages of ICT are given below:

1)      High cost involvement: ICT is an expensive affair as it involves heavy cost in building and thereafter maintaining it.

2)      Centralized uniform content: ICT lays emphasis on common content, ignoring individual differences to increase number of users.

3)      Problem insensitive: ICT is not ideal for solving local and cultural sensitive problems.

4)      Unequal assess: To general mass as a whole, ICT is neither equally accessible nor equally beneficiary.

5)      Classification of society: ICT classifies world into two groups’ knowledge rich and knowledge poor.

Impact and Use of information technology in business

Small scale business houses need to buy software packages that could cater to their specific management, operational and functional needs. For this purpose, they need to approach firms and IT manufacturers who deal in such software applications. Other IT services include Internet marketing and email marketing, web hosting and promotions and maintaining client networks. Larger business houses have their own operational and functional employees who develop in house software applications and work on several IT needs of the businesses. They usually purchase ERI software programs to coordinate different processes and functions into a single application, which is actually more convenient. Manufacturing businesses may make use of servers and databases to store their vast data regarding inventory.

The information technology role in business sector certainly is of a great importance, which enables businesses to effectively and successfully plan, manage, execute strategies to lead to profit. Information Technology has proved to be a very crucial for business activities. It has introduced various new technological applications and tools that ha increased productivity and efficiency in business organizations. Information technology has facilitated easy and quick modes of communication. Let us see as to how I.T. has revolutionized this area. Some of the significance of It in business are given below:

1. Advertising: Information technology has introduced several new methods of advertising through the Internet. Business firms increase their income through these methods of advertising. Business can be increased by advertising on popular websites.

2. E-Commerce: One of the revolutions brought by Information Technology is E-Commerce. E-Commerce or E-business refers to buying and selling of goods or services through the Internet. These days, countless businesses offer online services. Some types of online businesses include consumer-based retail sites and the exchange of services and trading goods between corporations.

3. Communication: Employees and workers in organizations use emails, instant messages and video conferencing for quick and effective communication which improves the quality of work and improves business potential.

4. Applications: Most business organizations use software programs such as MS-Word, MS-Access, MS-Excel and PowerPoint. Mostly, photo manipulation tools like Photoshop are also used by organizations.

5. Prediction: According to the website, it is predicted that in the coming years, the boundaries between electronic commerce and conventional commerce will fade away as more and more businesses are moving selective sectors of operations online.

Significance of IT in education

New and emerging technologies challenge the traditional process of teaching and learning and the way education is managed, Information technology, while an important area of study in its own right, is having a major impact across all curriculum areas. Easy worldwide communication provides instant access to a vast array of data, challenging assimilation and assessment skills. Rapid communication, plus increased access to IT in the home, at work and in educational establishments, could mean that learning becomes a truly lifelong activity – an activity in which the pace of technological change forces constant evaluation of the learning process itself.

1. Access to variety of learning resources: IT aids plenty of resources to enhance the teaching skills and learning ability. With the help of IT now it is easy to provide audio visual education. The learning resources are being widens and widen. Now with this vivid and vast technique as part of the IT curriculum, learners are encouraged to regard computers as tools to be used in all aspects of their studies.

2. Any time learning: In the era of Information Technology and web networks the pace of imparting knowledge has become very fast and one can be educated any time. One can study whenever he wills irrespective of whether it is day or night and irrespective of being in India or any part of the world.

3. Collaborative learning: Now IT has made it easy to study as well as teach in groups or in clusters. With online we can be unite together to do the desired task. Efficient postal systems, the telephone (fixed and mobile) and various recording and playback systems based on computer technology all have a part to play in educational broadcasting in the new millennium. The Internet and its Web sites are now familiar to everyone.

4. Multimedia approach to education: Audio-Visual Education, planning, preparation and use of devices and materials that involve sight, sound or both, for educational purposes, is being extensively done. Among the devices used are still and motion pictures, filmstrips, television, transparencies, audiotapes, records, teaching machines, computers and videodisc. The growth of audio-visual education has reflected remarkable developments in both technology and learning theory.

5. Authentic and up to date information: The information and data which are available on the Internet is purely correct and up to date. Several hundred sites are available on the Internet which offers similar information. Internet, a collection of computer networks that operate on common standards and enable the computers and the programs they run to communicate directly, provides true and correct information.

6. Online library: Internets support thousands of different kinds of operational and experimental services one of which is online library. We can get plenty of data on this online library.

7. Distance learning: Distance Learning is a method of learning at a distance rather than in a classroom. Distance learning is easier these days as laptops and internet connectivity have given the Universities faster means of reaching more students in real time.

Uses of Information Technology in Medicine

Information technology plays important amazing roles in medicine. Using information technology in the medical field can improve efficiency and quality of care.

1. Benefits: Medical technology provides three primary benefits to the patients.

a)      It helps increase care-guidelines for specific conditions.

b)      It reduces the number of medication errors.

c)       It also improves how well medical professionals are able to track the progression of diseases within a community.

2. Storing Information: Information technology helps to organize patient records and can provide valuable cross-referencing information when it comes to things like drug interactions. Because of the rise in the number of medical images captured and used in treatment for a variety of conditions, information technology is especially important for storing images and locating them when needed. Even reading medical images may require IT assistance because of the increasing complexity of imaging technologies.

3. Trained Professionals: Information technology in and of itself is not enough to improve patient care. Hospitals, doctor’s offices and other medical institutions need trained IT professionals to implement and maintain new information technologies.

4. Privacy Concerns: While information technology can improve patient care, it can also compromise patient information potentially making personal details available to people outside of the doctor-patient relationship. Institutions implementing information technology to store and communicate information should be aware of these concerns and take steps to address them.

Social Impact of Information Technology

Computing technologies, like most other forms of technology, are not socially neutral. They effect and are themselves affected by society. Computers have changed the way people relate to one another and their living environment, as well as how humans organize their work, their communities and their time. Society, in turn, has influenced the development of computers through the needs people have for processing information. The study of these relationships has come to be known as “social informatics.”

The complete impact of the current information technology and networking revolution remains unknown, but her experiences of organizations and individuals who are using the tools and resources offered by information technology suggest that it may change out social fabric.

The twentieth century saw the development of scientific research and engineering applications that required increasingly complex computations. The needs and desires of society have subsequently influenced the development of a vast array of computing technologies, including supercomputers, graphics processors, games, digital video and audio, mobile computing devices etc.

In the twenty-first century, computers are used in almost every facet of society including agriculture, architecture, art, commerce and global trade, communication, education, governance, law, music, politics, science, transportation and writing. In general, computing technologies have been applied to almost every situation.

Impacts on Various other Organizations

1.       Banking Industry: Banking sector is one of the largest organizations which invest heavily in computers. Today, the banking functions in urban and semi-urban areas are fully computerized. Computerization in banking industry is necessary due to massive volume of transactions and to offer better and better customer service to the customers. Banking industry is facing stiff competition from the foreign and private banks. The technology being used by the foreign and private banks is much advanced as compared to public sector banks. This has compelled public sector banks to go in for adopting the latest technology. Computers are being installed in branches at different counters viz. Savings Bank, Current Account, Cash Credit Accounts etc. Cheques are handled by the computers at clearing houses. By computerization, many problems have been solved. Balances are automatically tallied in the accounts. Customers can obtain printed statements of their accounts. Automated Teller Machines have been installed in the branch premises of various banks and at the places of customer activities. Different networks viz. BANKNET, RBI NET, SWIFT, INFINET etc. are being used to expedite the customer transactions and to provide better customer service. National Electronic Funds Transfer (NEFT) and Electronic Clearing Service (ECS) have been started to minimize the time of funds-transfer and funds-credit in the accounts of customers with the introduction of RTGS system (Real Time Gross Settlement), funds can be settled in the accounts almost instantaneously. In all banking industry is handicapped without computers.

2.       Insurance Sector: The requirements of computers in insurance sector are similar to those in banking sector. A large number of files relating to customers’ policies are to be updated. Calculation of bonus, premium and interest is to be done on a large scale. Insurance companies have to intimate to the customers who do not pay the installments in time. Matured policies are to be paid. Manually it is a tedious job to handle all these transactions. With the introduction of computers in this sector; the burden on the employees has been reduced and timely statements of accounts are made ready in no time. Computerized acknowledgements are sent to the policy holders who pay premium on their policies and date of next installment due is also mentioned.

3.       Railways: Railway is largest organization which is effectively using the computers. The record of all trains running daily or weekly is kept in computers. A passenger can desire information about a particular train at any station linked with the computer network. For example, a passenger at Trichy station can get his ticket (with return ticket) reserved for Mumbai Central. There is no separate or special queue for a particular train or destination. The passenger can obtain his ticket in any queue for any station. Similarly he can get his ticket cancelled if his programme of journey has been changed. All information regarding time table of trains can be obtained at the computer terminals.

There are numerous organizations which are going for computerization. The advantages of computerization in these organizations are mentioned below:

                     i.            Payroll preparation: In large departments, organizations, business houses, factories, etc. computer is an aid in preparing pay rolls of employees. It is very difficult to prepare payroll of all the employees in a large organization manually. Moreover there are chances of mistakes in manual calculations. Computer do not make mistake while calculating D.A., H.R.A and other allowances. Income tax calculations are performed by the computers.

                   ii.            Budget Preparation: Computers can be used for preparation of budget of an organization. Budgeting is a sensitive item for an organization. Proper financing can be done through correct budgeting. Computers can store a lot of data of all departments and sections of an organization. Based on their requirements and trend during the past budget, budget for current year can be prepared correctly and the organizations can know the variance over previous year in the budgeted items.

                  iii.            Designing and Manufacturing: Computers can design a product very efficiently. This technique of designing is called Computer Aided Designing (CAD). Various software packages are available for designing a product. Programs like Auto Cad, CorelDraw etc. are very popular among computer users (designers). If one design is not approved, computer can immediately gives you another design according to your specifications. Once the design is approved, the product is manufactured. Computers are very helpful in controlling the manufacturing phase. With the help of Computer Aided Manufacturing (CAM), the manufacturing of the product is very easy. Whole of the manufacturing process is taken over by the computers and robots. Not only the use of CAM avoids wastage but also brings high quality improvement in the product.

                 iv.            Material Handling: In the manufacturing process, computers can handle the materials properly. The handling of materials by computers is very accurate and evens the chances of damage and accidents are negligible. Robots are used to handle the extremely dangerous and hazardous materials, acids etc. and avoid accidents.