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Business Information Systems

& Technologies
Information Technology > Business Information Systems & Technologies

tionship management to better serve the customer as well as data

Table of Contents mining to determine previously unknown relationships that help
the organization better market its products and services. Infor-
Abstract mation technology is the use of computers, communications
networks, and knowledge in the creation, storage, and dispersal
of data and information. Information technology comprises a
Overview wide range of items and abilities for use in the creation, storage,
and distribution of information. Various technology components
Applications are put together in an information system that facilitates the
Terms & Concepts flow of data (i.e., raw facts, figures, or details) and information
(i.e., organized, meaningful, interpreted data) and data between
Bibliography people or departments.

Suggested Reading There are several characteristics of the Information Age that set
it apart from other periods in history. First, the proliferation of
information technology has led to a situation where society in
Abstract many countries today is information-based, with more people
dealing with information than with agriculture or manufacturing.
The influx of data enabled by the technologies of the Information As the number and range of available information technologies
Age has literally transformed many businesses. Most businesses increase, a concomitant number of businesses depend on infor-
today use information technology in some form to create, store, mation technology to accomplish their work. This dependence
and distribute information. There are three interdependent com- is on both the computer technologies that enable organizations
ponents of information systems: Computers, communications to gather, store, manipulate, and analyze data, and also on the
and expertise. These components must work together in order communication technologies that allow them to interconnect
for an information system to effectively support the organization more quickly and efficiently than ever before. In fact, the under-
in its activities and mission. Information systems have several standing of information technology and information systems is
basic functions, including the capture, processing, generation, so important in the Information Age, that in many situations it is
storage, retrieval, and transmission of data. difficult if not impossible to be successful in the business world
without it. Information technology has become so much a part
Overview of our lives today that it is often embedded in other products
and services that we take for granted. For example, the phone
The influx of data enabled by the technologies of the Information call one makes for technical support may be enabled by network
Age and with which we are bombarded every day has literally technology and wireless communications systems so that the call
transformed many businesses. At a basic level, much correspon- can be answered by a technician working halfway around the
dence today is not sent by mail or even faxed, but is transmitted world. The prevalence of information technology does not mean
nearly instantaneously around the world via e-mail. Accounting that an organization needs to implement information technology
and project management tasks that used to be labor intensive to be successful, however. Like the manufacturing technology
jobs done by hand have benefited from spreadsheet application
that came before it and the agricultural technology before that,
software that allows quick and easy manipulation of data, check-
information technology is only a tool and must be understood in
ing of calculations, and monitoring of tasks. Huge databases
order to optimize its usefulness in the organization.
improve the ability of organizations to perform customer rela-

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Business Information Systems & Technologies Essay by Ruth A. Wienclaw, Ph.D.

comprise a display unit and keyboard which sit easily on a desk

Keywords or table with the processing unit fitting on or under the desk.
Notebook or laptop computers are smaller versions of the desk-
Application Software top computer and are designed for portability. The keyboard,
display, and processing unit are all part of one unit, and weigh an
Capture average of three to nine pounds, making them easy to transport
from site to site. Tablet personal computers weigh about three
Communications Network pounds and are the size of a tablet of paper. Tablet personal com-
puters are available in a variety of shapes and sizes depending on
Database their purpose. For example, many police departments use tablet
computers for writing tickets while insurance agents often use
Information System other models to sketch details of situations or prepare damage
claims in the field. Handheld computers (including both per-
Information Technology
sonal digital assistants and palm personal computers) are small
Processing computers that weigh less than a pound, yet are both fast and
powerful. These micro computers can be used to keep track of
Transmission extensive contacts lists, jot down notes during a meeting, send
and receive e-mail, or even carry streamlined versions of major
word processing, spreadsheet, and software application software
Information technology does more than support our work. In available on desktop computers.
many cases it also transforms the way that we accomplish our
Figure 1: The Three Components of Information
tasks and even allows us to do things that we would never have
been able to accomplish before. Work processes are constantly
being transformed through the application of information tech-
nology in order to improve productivity and free humans from
many repetitive tasks. For example, typewriters have given way
to word processors which, in turn, have given way to multitask-
ing computers that allow us to do more and do it more quickly
and efficiently than was ever possible before. However, infor-
mation technology not only allows humans to perform existing
processes more quickly or efficiently than ever before, in many
cases it also allows us to rethink and reengineer the way that we
do things in the workplace. Business process reengineering helps
organizations and managers rethink their practices and processes
and introduce radical improvements that benefit both the orga-
nization and its customers. For example, the division of labor
necessary to the Industrial Age is frequently being replaced by
teamwork, information sharing, and other ways of increasing the
interconnectedness of workers.

Three Components of Information Technology (Adapted from Senn, p. 15)

As shown in Figure 1, information technology comprises three Personal computers are prevalent in most businesses. In addition,
interdependent components: Computers, communications and many medium to large sized business also may have midrange or
expertise. The computer component of an information technol- mainframe computers. Midrange computers (sometimes called
ogy system can be any electronic system that can be instructed minicomputers) are used to interconnect people and large sets of
to accept, process, store, and present data. Although most people information. Midrange computers can be used across the entire
are familiar with desktop computers for work and home, many organization (i.e., enterprise-wide) or within a specific depart-
other devices meet this definition, including the microwave oven ment. Midrange computers typically are dedicated to performing
in the kitchen, the timer for the front door lights, the auto-focus specific functions. In addition, mainframe computers – which are
digital camera, the ATM machine outside the bank, and the auto- typically larger, faster, and more expensive than midrange com-
matic ticket kiosk at the cinema. puters – allow the interconnection of larger numbers of people
Computers or processing of larger amounts of data. As opposed to midrange
computers, mainframe computers typically perform several
In general, computers can be classified into four size categories. functions at once. In addition to these classifications of comput-
Microcomputers or personal computers are relatively compact. ers, supercomputers are available to solve problems comprising
This category of computers includes desktop computers that long and difficult calculations. Supercomputers are important

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Business Information Systems & Technologies Essay by Ruth A. Wienclaw, Ph.D.

various complex applications including scientific research and data between people or departments. Information technology
real-world simulations for the design of complex equipment and systems can support the organization in its processes and
such as new aircraft. help it to maximize the use of its other resources and be more
In order for a computer to do the work it is intended to do, it
needs software as well as hardware. Computer software is a set Basic Functions of Information Technology
of instructions that controls the computer or communications
network and which manages the hardware in the system. Oper- As shown in Figure 2, information technology has several basic
ating systems are sets of software programs that coordinate the functions. These functions may occur sequentially or simulta-
actions of the computer and its peripheral devices (e.g., printer). neously. First, information technology captures data, that is, it
Application software performs functions not related to the run- compiles detailed records of activities for later analysis or pro-
ning of the computer itself. Application software includes word cessing. Examples of data capture include the collection of patron
processing, electronic spreadsheets, computer graphics, and information and book information when a book is checked out of
presentation software. Application software packages focus on the library; the assignment of seats on an airplane or in a theatre;
particular types of tasks such as word processing, graphic design, and the collection of customer information for orders taken over
or database management. the Internet. Captured data are processed (i.e., converted, ana-
lyzed, or synthesized) into information that can be used by the
Communications Networks organization and its employees. Data processing comprises the
handling and transformation of data into information. Informa-
In addition to computer systems, information technology also
tion processing involves the transformation of collected data from
includes various communications networks. These are sets
one form into another. Word processing allows users to create
of locations (or nodes) with concomitant hardware, software,
documents and other text-based documents. Image processing
and information that are linked together to form a system that
converts visual information such as graphics and photographs
transmits and receives information and data. Communications
into a format that can be stored or manipulated in the information
networks include local area networks (LANs) that comprise mul-
system and/or transmitted across the network. Voice processing
tiple computers that are located near each other and linked into a
systems transform and transmit spoken information to enable
network that allows the users to share files and peripheral devices
virtual meetings and other applications. Information technology
such as printers, fax machines, and storage devices; metropoli-
can also be used to generate data through processing. The gener-
tan area networks (MANs) that transmit data and information
ation function organizes data and information into a useful form
citywide and at greater speeds than a local area network; and
such as in the generation of a document or multimedia presenta-
wide area networks (WANs) that comprise multiple computers
tion. Data and information are also stored on a computer so that
that are widely dispersed and are linked into a network. Wide
they can be retrieved and processed at a later time. Finally, data
area networks typically use high speed, long distance commu-
and information can also be transmitted by information systems
nications networks or satellites to connect the computers within
and distributed to other parties via a communications network.
the network.
Figure 2: The Functions of Information Technology
Organizations, by definition, involve groups of people working
together to accomplish work. Information technology can aid
organizations in their tasks by linking together multiple comput-
ers to share files and peripheral devices such as printers. This
capability allows multiple people to work on the same docu- 
ment (e.g., inputting data, commenting on a document, creating
reports from a database). Wide area networks – which typically
use high speed, long distance communications networks or sat-
ellites to connect the computers within the network – can also
allow employees to communicate and cooperate not only with Applications
colleagues in the next office, but across the globe. Linking computers into networks can enhance the productivity
Expertise and effectiveness of the entire enterprise. A common example
of this being done can be seen in the information systems used
Just as computer hardware and software are useless without each in many modern retail stores. Computerized cash registers in a
other, both require the additional input of the user’s expertise retail store or other point of sale can be linked together so that
in order to be able to optimize the work that they can do. This sales clerks can search across the network to see what other store
expertise includes familiarity with the tools of information tech- may have a particular item in stock. In addition, the computers at
nology, the skills needed to use these tools, and an understanding the point of sale can be linked directly to the corporate headquar-
of how and where information technology can best be imple- ters so that the store’s closing data each evening can be directly
mented. When all three of these components of information and immediately shared with corporate management. Informa-
technology are working together, they can create an information tion technology can also help individual stores keep track of
system that facilitates and optimizes the flow of information and their inventories including what items they have in stock, what

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Business Information Systems & Technologies Essay by Ruth A. Wienclaw, Ph.D.

products are most in demand, when it is time to reorder, and even for a number of purposes. One of the most common uses of this
assist in automatically ordering stock. Information technology application of information technology is the electronic trans-
can also be used to automatically invoice customers and do other mission of messages and documents. These capabilities include
billing tasks. e-mail, voice mail, electronic document exchange, electronic
funds transfer, and access to the Internet or other networks.
It is not just the enterprise that uses computers to improve the
Communications networks can also be used for purposes of
effectiveness and efficiency of its processes. Individual employ-
e-commerce to buy and sell goods or services – including prod-
ees, too, increasingly turn to information technology to help
ucts and information retrieval services – electronically rather
them in their tasks. For example, application software can help
than through conventional means. Networks can also be used to
people keep track of their calendars, including scheduling of
support group activities such as the ability to hold meetings with
appointments, meetings, and tasks to be done. Other application
participants at geographically dispersed sites. Audio and video-
software is available for project management to help employees
conferencing capabilities combined with electronic document
keep track not only of their own tasks but the tasks and processes
exchange capabilities can often obviate the need for extensive
of large projects. These software applications allow project man-
travel to meetings.
agers to track and control schedules for complex projects and
to communicate status, risks, and other information about the Terms & Concepts
project to customers and team members.
Application Software: A software program that performs func-
Another important use of information technology for businesses tions not related to the running of the computer itself. Application
is database management systems. These systems are computer software includes word processing, electronic spreadsheets,
software application programs that allow the user to create,
computer graphics, and presentation software.
change, and administer a collection of data items that are related
to each other. Databases are distinguished from other collections Business Process Reengineering (BPR): A management
of data by the fact that the data in a database are used for multi- approach that strives to improve the effectiveness and efficiency
ple purposes. In a database management system, data are placed of the various processes within an organization.
into a series of tables that are keyed to each other and that can
be manipulated into a variety of reports that display only that Capture: The process of collecting various types of data and
portion of the database in which the user is currently interested. information for later processing and transmission.
The data in the system are managed through inputting data into Communications Network: Sets of locations (or nodes) with
the database, updating the data, and representing all or part of concomitant hardware, software, and information that are linked
the data in various reports that meet the user’s specific needs. together to form a system that transmits and receives information
Information technology enables the creation and manipulation
and data.
of large databases that could not be managed through another
medium. Customer Relationship Management: The process of iden-
tifying prospective customers, acquiring data concerning these
Database management systems have a wide range of applications
prospective and current customers, building relationships with
for business. Inventory control systems in retail stores or chains
are one example of a database management system. Similarly, customers, and influencing their perceptions of the organization
medical records management systems in hospitals can help a hos- and its products or services.
pital or physician’s office control, organize, and manage a wide Data Mining: The process of analyzing large collections of data
range of demographic information about their patients and their to establish patterns and determine previously unknown relation-
medical histories, information about their medical insurance cov- ships. The results of data mining efforts are used to predict future
erage, and other data that are important to the healthcare system. behavior.
These systems can allow users to pull together the information in
a variety of ways for various forms and records. Database man- Database: A collection of data items used for multiple purposes
agement systems are also used in marketing. Database systems which is stored on a computer.
can help marketers better understand their target market, collect
Enterprise: An organization that uses computers. Although
and analyze data on prospective customers, keep track of cur-
rent customers’ buying history, needs, and other characteristics. this term is often applied to large organizations, the term can be
Database management systems can be used to develop targeted applied to both small and large organizations.
mailing lists for new products based on customer demographics Information System: A system that facilitates the flow of infor-
or buying history or track customer purchases so that better solu- mation and data between people or departments.
tions can be offered or new products developed to better meet
their needs. Information Technology: The use of computers, communi-
cations networks, and knowledge in the creation, storage, and
Another way that organizations are meeting the increasing dispersal of data and information. Information technology com-
demands for communication and information exchange is
prises a wide range of items and abilities for use in the creation,
through communications networks. These networks can be used
storage, and distribution of information.

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Business Information Systems & Technologies Essay by Ruth A. Wienclaw, Ph.D.

Network: A set of computers that are electronically linked Suggested Reading


Processing: The activity of converting, analyzing, computing,

DeJarnett, L. R. (2000). Knock, knock!...Who’s there?...The
and synthesizing data or information stored in a computer so that
twenty-first century century! Information Strategy:
it is in a useful form.
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in which the values have predefined relationships. Spreadsheet
Complete. http://search.ebscohost.com/login.aspx?direct=
application software allows users to create and manipulate
spreadsheets electronically.

Technology: The application of scientific methods and knowl-

edge to the attainment of industrial or commercial objectives. Peterson, K. (2007). Organizing business staff for greater
Technology includes products, processes, and knowledge. productivity. Kitchen & Bath Design News, 25(4), 40.
Retrieved May 11, 2007, from EBSCO Online Database
Transmission: The process of distributing data or information
Business Source Complete. http://search.ebscohost.com/
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Lucas, H. C. Jr. (2005). Information technology: Strategic
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Senn, J. A. (2004). Information technology: Principles, prac-
tices, opportunities (3rd ed.). Upper Saddle River, NJ:
Pearson/Prentice Hall. &site=ehost-live

Essay by Ruth A. Wienclaw, Ph.D.

Ruth A. Wienclaw holds a Doctorate in industrial / organizational psychology with a specialization in organization development from the
University of Memphis. She is the owner of a small business that works with organizations in the public and private sectors, consulting
on matters of strategic planning, training, and human / systems integration.

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