Technology in Your Business

Key Terms

application service providers (ASP)
A service company that buys and maintains software on its servers and distributes it through high-speed networks to subscribers for a set period and price.

batch processing
A method of updating a database in which data are collected over some time period and processed together.

chief information officer (CIO)
An executive with responsibility for managing all information resources in an organization.

cloud computing
A general term for the delivery of hosted services over the internet.

computer network
A group of two or more computer systems linked together by communications channels to share data and information.

computer virus
A computer program that copies itself into other software and can spread to other computer systems.

data mart
Special subset of a data warehouse that deals with a single area of data and is organized for quick analysis.

data mining
Sophisticated database applications that look for hidden patterns in a group of data to help track and predict future behavior.

data warehouse
An information technology that combines many databases across a whole company into one central database that supports management decision-making.

database
An electronic filing system that collects and organizes data and information.

decision support system (DSS)
A management support system that helps managers make decisions using interactive computer models that describe real-world processes.

enterprise portal
A customizable internal website that provides proprietary corporate information to a defined user group, such as employees, supply-chain partners, or customers.

executive information system (EIS)
A management support system that is customized for an individual executive; provides specific information for strategic decisions.

expert system
A management support system that gives managers advice similar to what they would get from a human consultant; it uses artificial intelligence to enable computers to reason and learn to solve problems in much the same way humans do.

information technology (IT)
The equipment and techniques used to manage and process information.

intranet
An internal corporate-wide area network that uses internet technology to connect computers and link employees in many locations and with different types of computers.

knowledge management (KM)
The process of researching, gathering, organizing, and sharing an organization’s collective knowledge to improve productivity, foster innovation, and gain competitive advantage.

knowledge worker
A worker who develops or uses knowledge, contributing to and benefiting from information used to perform planning, acquiring, searching, analyzing, organizing, storing, programming, producing, distributing, marketing, or selling functions.

local area network (LAN)
A network that connects computers at one site, enabling the computer users to exchange data and share the use of hardware and software from a variety of computer manufacturers.

managed service providers (MSP)
Next generation of ASPs, offering customization and expanded capabilities such as business processes and complete management of the network servers.

management information system (MIS)
The methods and equipment that provide information about all aspects of a firm’s operations.

management support system (MSS)
An information system that uses the internal master database to perform high-level analyses that help managers make better decisions.

online (real-time) processing
A method of updating a database in which data are processed as they become available.

transaction processing system (TPS)
An information system that handles the daily business operations of a firm. The system receives and organizes raw data from internal and external sources for storage in a database using either batch or online processing.

virtual private networks (VPN)
Private corporate networks connected over a public network, such as the internet. VPNs include strong security measures to allow only authorized users to access the network.

wide area network (WAN)
A network that connects computers at different sites via telecommunications media such as phone lines, satellites, and microwaves.

Transforming Businesses through Information

• How has information technology transformed business and managerial decision-making?

Businesses depend on information technology for everything from running daily operations to making strategic decisions. Companies must have management information systems that gather, analyze, and distribute information to the appropriate parties, including employees, suppliers, and customers. These systems are comprised of different types of computers that collect data and process it into usable information for decision-making. Managers tap into databases to access the information they need, whether for placing inventory orders, scheduling production, or preparing long-range forecasts. They can compare information about the company's current status to its goals and standards. Company-wide enterprise resource planning systems that bring together human resources, operations, and technology are becoming an integral part of business strategy.

Linking Up: Computer Networks

• Why are computer networks an important part of today's information technology systems?

Today companies use networks of linked computers that share data and expensive hardware to improve operating efficiency. Types of networks include local area networks, wide area networks, and wireless local area networks. Intranets are private WANs that allow a company's employees to communicate quickly with one other and work on joint projects, regardless of their location. Companies are finding new uses for wireless technologies such as tablets, cell phones, and other mobile devices. Virtual private networks give companies a cost-effective secure connection between remote locations by using public networks such as the internet.

Management Information Systems

• What types of systems make up a typical company's management information system?

A management information system consists of a transaction processing system, management support systems, and an office automation system. The transaction processing system collects and organizes operational data on the firm's activities. Management support systems help managers make better decisions. They include an information-reporting system that provides information based on the data collected by the TPS to the managers who need it; decision support systems that use models to assist in answering "what if" types of questions; and expert systems that give managers advice similar to what they would get from a human consultant. Executive information systems are customized to the needs of top management.

Technology Management and Planning

• How can technology management and planning help companies optimize their information technology systems?

To get the most value from IT, companies must go beyond simply collecting and summarizing information. Technology planning involves evaluating the company's goals and objectives and using the right technology to reach them. IT managers must also evaluate the existing infrastructure to get the best return on the company's investment in IT assets. Knowledge management focuses on sharing an organization's collective knowledge to improve productivity and foster innovation. Some companies establish the position of chief knowledge officer to head up KM activities.

Protecting Computers and Information

• What are the best ways to protect computers and the information they contain?

Because companies are more dependent on computers than ever before, they need to protect data and equipment from natural disasters and computer crime. Types of computer crime include unauthorized use and access, software piracy, malicious damage, and computer viruses. To protect IT assets, companies should prepare written security policies. They can use technology such as virus protection, firewalls, and employee training in proper security procedures. They must also take steps to protect customers' personal privacy rights.

Trends in Information Technology

• What are the leading trends in information technology?

IT is a dynamic industry, and companies must stay current on the latest trends to identify ones that help them maintain their competitive edge, such as digital forensics, the distributed workforce, and grid computing. With digital forensics techniques, corporations, government agencies, attorneys, and lawmakers can obtain evidence from computers and corporate networks - web pages, pictures, documents, and e-mails. Many knowledge workers now work remotely rather than from an office. Companies adopting the distributed workforce model gain many benefits, such as cost savings, more satisfied and productive employees, and increased employee retention. Cloud computing harnesses the power of computers, online software, and data storage to create a virtual computing environment that is invisible to the user. A company can access the cloud on an as-needed basis instead of investing in its own supercomputer equipment. Outsourcing a portion of the company's computing needs provides additional flexibility and cost advantages. Companies can also set up internal grids.