GEE 101 Living in the IT Era

Information Technology in Business

OVERVIEW
The business sector produces and services for profit. Information technology describes any
technology used to create, process and disseminate information that is critical to business
performance. Information technology is important to the business sector as a management tool to
optimize the processing of information to produce goods and services for profit.

Computers and information systems are essential parts of every business today. Like
accounting and legal, every business needs to invest in technology in technology to compete.
Technology is both a cost of doing business, and an opportunity to do more business. Most people
talk with recognize the necessity of having a computer, an email address, and a website but still look
at the upfront of the issues.

As technology continues to develop, the uses of information technology in business increase.

IT has made it possible for many businesses worldwide to run successfully. In this unit it will be
discuss its benefits and its potential limitations.

Lesson 1
INFORMATION AND COMMUNICATIONS TECHNOLOGY IN BUSINESS

At the end of this lesson, you should be able to:

a. Write a 250-word essay on one’s definition of information technology and
communications technology in business;
b. Identify and explain the advantage/s of information and communications technology in
business; and
c. Create a multimedia presentation and present a personal guideline to consider in
choosing a computer hardware and software in business.

Pre-test: TRUE OR FALSE

Directions: Write CORRECT if you agree with statement and INCORRECT if you disagree.

1. IT budget are typically limited, availability is a challenge as well.

2. Technology brings businesses closer to customers.
3. Cell phones have become business necessities for owners and employees.
4. Telecommunications comes from Greek word meaning “far off” and “information
exchange”.
5. Podcasting involves the distribution of digital audio or video files over the Internet.
6. A DBMS can reduce the time taken to enter data and retrieve information.
7. Databases are not a new invention.
8. Networking lets you share computing power and divvy up your workload among different
systems.
9. One of the best business investments today is broadband Internet access.
10. IT has made it possible for many businesses worldwide to run successfully.
Introduction
All businesses need to process data to provide the information essential to support business
decision making. Information such as sales figures, financial business accounts, customer details,
purchase orders and payroll details are required to tell the business owner whether sales are rising or
falling, the level of cash flow, whether invoices are being sent out on time, whether accounts are
being paid on time, and whether employees are paid the correct amounts. Data such as copies of
receipts and credit card vouchers, cheque butts, invoices, copies of pay slips and other documents
are used to provide this information.

In the past, the processing of business data was done manually with handwritten records – a
slow and often inaccurate process. In addition, communication with customers and other businesses
is also essential. However, both the processing of data to provide information and the ability of
businesses to communicate have been transformed by the use of computers and the spread of
information and communications, technology (ICT).

Process Improvement
Information technology (IT) includes the management information systems (computers,
hardware, software, networks) used to automate and support business tasks and decision-making. IT
is used to automate simple, routine tasks such as word processing and advanced processes such as
production, scheduling and logistics. In this manner, Information technology enables businesses to
operate efficiently and profitably.

Cost Reduction
Automation improvements achieved by developing information technology usually decrease
the number of personnel required. Economies of scale gained through the deployment of information
technology reduce the overall cost for business to produce products and services. This has an
overwhelming positive effect on the financial goals of a business.

Quality Assurance
Quality assurance entails systematic testing to ensure that a business is producing quality
goods and services for its customers. It can be used within processes such as marketing, customer
support and accounting, as well as product testing. The effective and efficient processing of
information related to achieving quality assurance goals is key to the delivery of quality goods and
services to business customers.

Communications
The business sector must communicate internally with its workers and externally with its
suppliers and customers on an efficient basis. Information technologies including word processing,
publishing software, email, internal computer networks, and Internet facilitate these communications.
Mobile devices including PDAs and Internet-based social media networks are evolving as
contemporary information technology platforms for business communications and becoming strategic
to the business sector.

Competitive Intelligence
Information technology has become fundamental to acquiring competitive advantage. The
combination of process improvements, cost reductions, communications and quality assurance will
contribute to the competitive advantage of a business unit. Evolving Internet aggregation
technologies, including social networks, blogs and subscription databases, are becoming important
tools needed to achieve and maintain advantages within the business sector.
Computers and Other Business Hardware
Successful business owners have realized that they need to keep abreast of developments in
computer technology, and their application to business. Most businesses also make use of a number
of other machines to assist in the smooth running of the business, and majority of these now
incorporate computer technology.

Common Used Examples of Business Hardware

1. Cash Register. These were invented to keep track of cash coming into the business and were
originally operated mechanically. Cash registers can also be connected to barcode readers
and EFTPOS terminals. By connecting the cash register to an integrated computer system, it is
also possible to track the quantities of goods sold, and assist with stock control and reordering.
2. Telephone system / switchboard. Most businesses requires telephone system which allows
employees in different parts of the business premises to communicate easily with each other,
while also allowing outgoing calls to be made from any extension, and the easy are still widely
used, most new systems use voice over Internet protocol (VoIP).
3. Printers, copiers, faxes and scanner. The tasks of printing a document from a computer,
making photocopies, sending faxes, and scanning documents were carried out using separate
and different devices. Business has the advantage of having all these tasks performed by one
machine. The printer / scanner / copier will usually also use Wi-Fi so that it does not have to be
physically connected to a computer or network. Documents can be scanned and sent directly
to a PC, tablet or phone. Printing can be done from within Wi-Fi range of the printer, or from
anywhere using an app installed on a smartphone.
4. Portable devices. The use of smartphones and other mobile devices now dominates social
communication technology. Many business owners will make use of technology that can be
taken away from the business. Laptop or notebook computers, mobile phones and handled
computers known as personal digital assistants (PDAs) have been in popular use since the
1990s.

Choosing a PC
In selecting the right computer for your business, you need to makes sure that you are looking
a business class PCs. It is one that includes various connectivity components like built-in Ethernet
and the software utilities to manage networking, as well as the slots, bays and ports needed to
expand memory, storage and business peripherals. Memory, more storage, and higher resolution or
larger display does not only make computing more pleasant, but also enhance productivity.

Guidelines in Choosing a PC

 CPU. Starting with the brains of the computer of the central processing unit, the system must
be powered by Intel Pentium 4 or equivalent Athlon XP class processor from Advanced Micro
Devices as opposed to Celrons, Durons, Pentium IIIs or earlier generations. System clock
speeds have been soaring high, so do not invest less than 2.4 GHz Pentium 4 or Athlon XP
2100+ machine with 512KB od on-chip cache memory and 400MHz front side bus for
processor to-memory transfers. On-chip cache is critically important to your processor’s
performance.

 RAM. Random Access Memory is also critically important. Considerably slower and cheaper
that cache, RAM is the bucket your computer’s processor uses to hold vast amounts of data
and program instructions while it works. Consider the minimum standard amount of RAM is
always 512MB as the minimum for business-class PC.
  Hard drive. One or more physical hard drives, each of which can be divided into multiple
logical drives, are the warehouses where you store multimegabyte programs and gigabytes
worth of data. The real price differential comes with the speed at which the platters in your
hard drive spin. Make sure you don’t buy anything slower than 7200RPM drive.

 Optical drive. It is preferable to have rewritable DVD in your PC. For starters, DVD platters
hold 4.3GB instead of the 650MB of CD-ROMs. All backup alternatives, none is so reliable, so
durable and so cheap as simply copying the contents of your hard drives to an optical drive.
Any of the popular DVD rewriting methods will be able to read your CD-ROM discs as well.

 Display. These thin-line low-power alternatives to the hot, bulky monitor are still a good deal
more expensive to buy. A 15-inch LCD is the viewing equivalent of a 17-inch monitor but has a
higher resolution and is easier on the eyes. A 17-inch LCD will provide higher resolution and
contrast, and a wider viewing angle for group presentations.

 Modem. One of the best business investments is a broadband Internet access. Depending
on the location, that could be via a phone company’s T1, ATM fiber relay or DSL, or the same
cable that brings content to the TV.

 Memory. Always insist that all the initial memory on a new PC be included on a single DIMM
(dual inline memory module. Insist at least one memory slot. Storage is measured in
gigabytes. Insist that a new PC have one free internal 3.5 inch storage bay that can accept
another hard drive. Insist also that it has at least one externally available 2.5 inch drive bay to
add another kind of optical drive.

 Peripherals. Choose to add a different graphics adapter, a wireless networking card, a

board for an external storage device or scanner. Insist on two open PCI slots on the smallest
desktops.

 Ports. The things that hang off the PC –mice, trackballs, keyboards, still and video cameras,
external drives, printers, and scanner – are relying on the new high-bandwidth FireWire and
USB 2.0 ports. Make sure that the PC has a half –dozen of ESB 2.0 ports both front and back.

SOFTWARE
Software refers to the programs which interact with hardware to perform designated tasks.
 System software converts the computer, mobile phone or other device from a collection of
circuits into a useful tool. It is usually installed by the manufacturer or supplier of the
equipment.
 Programming software allows the programmer to develop a completely new program to
perform a new task, or to modify or upgrade existing software.
 Application software allows a device to perform the specific tasks that the user requires,
including word processing, preparing spreadsheets, web browsing and sending and receiving
email.
 Operating System Software. This is the most basic kind of software, which is a program such
as one of Microsoft’s Windows interactions – Vista, 7 etc. – that controls the computer’s
monitor, drives, printer, and other components and also control how the components wok with
your applications software. Most computers come with the most up-to-date version of the
software preloaded.
 Application Software. Apart from operating system software, the general types of
applications software that may find to useful include:
 Word Processing Programs. These effectively convert your computer into a
sophisticated typewriter and enable you to write and quickly edit letters, reports and
other documents. The greatest utility of these programs is that you don’t have retype an
entire document to make corrections or changes to a few words or lines.
  Spreadsheets Programs. These programs are especially helpful in creating budgets,
business plans, financial statements, and other reports that require mathematical
calculations. The beauty of these programs is that if you change one or more numbers
in the spreadsheet report, all related numbers are automatically adjusted. Spreadsheet
programs are a great time saver in performing “what if” scenarios with financial
projections.

 Database Management Programs. These can be store, organize, manipulate and

update large amounts of business information with the assistance of database
management programs. For example, you can use these programs to keep track of your
customers, suppliers, or inventory levels.

 Accounting and Bookkeeping Programs. These programs run the gamut from those
that merely assist you in maintaining your financial records to those that assist you with
managing your payroll or accounts receivable or payable to those that assist you in
completing your tax returns.

 Desktop Publishing Programs. These types of programs can be used to help produce
professional-quality layouts for your own catalogs, newsletters, brochures, forms and
other documents.

Complete Software Packages

 Shop around for an integrated software package, sometimes known as “office suite”.
Integrated packages effectively combine several tools into a single program. For example,
there are several products on the market that combine word processing, spreadsheet and
database management functions.

 Have a program custom-made. An option obtaining applications that will work well together if
to hire a software consultant to create a custom made program for your business. This is more
expensive than purchasing ready-made software off the shelf, but well be worth the investment
if you can’t find existing programs that meet your specific needs.

 Purchase industry- specific software. You may be able to purchase a package that has
been developed specifically for your industry. For example, one industry may be particularly
important for is retailers, who tend to have very large and specific information needs.

Lesson 2
STRATEGIES TO SELECT APPROPRIATE HARDWARE
AND SOFTWARE TO MEET BUSINESS NEEDS

Introduction
To get the best value out of any new technology, the business owner needs to consider the
business’ objectives, and invest in technology that will contribute directly to the achievement of those
objectives.

For most business these would be typical objectives:

 Improved profitability, through increased efficiency and keeping costs under control.
 Growth of the business and increased market share, by improving customer service.
 Improved staff communication, and the exchange of information between employees.
Improving Profitability
There are many technological solutions available to improve profitability through increased
efficiency and productivity. For example, word processing software allows for the use of
standardized letters and other business documents, particularly through the use of document
templates. Accounting software provides for the quick and simple entry of transaction data to
produce accurate financial reports. Stock control software linked to sales records can alert the
relevant employees when it is necessary to reorder stock, and can generate the necessary order
forms. All of these software solutions can enhance business efficiency and so improve profitability
another important factor in improving profitability. ”Profitability is the ability to make profit”. For
example, purchasing the necessary hardware and software to enable videoconferencing with other
businesses can save time and money that would otherwise be spent attending meetings away from
the business. The use of VoIP allows cheaper phone calls via Internet, particularly if the business
needs to make a significant number of international calls. VoIP also allows for more than one call to
be transmitted simultaneously over the same broadband line, cutting down the need for costly
additional phone lines into the business. A variety of smartphone applications are available to allow
business owners to access their computer network when away from the business.

Business Growth and Increased Market Share

Improving customer service is a means of retaining customers and attracting new business,
essential for growth of the business, and increasing market share. Strategies can include the
purchase of enhanced phone technology to make it easier for customers to communicate with the
business. A business can also set up its own web page, as well as make use of social media such as
Facebook and Twitter. If the business provides goods or services direct to costumers’ homes or
businesses, mobile, EFTPOS and credit card readers allow salespeople to offer convenient payment
options for those customers.
It is possible to purchase integrated computer applications known as customer relationship
management software (CRMS) which can track all contact with individual customers including
inquiries, purchase orders, deliveries, invoices issued, payments and even complaints. This allows
any employee to completely up to date with all aspects of the relationship between the customer and
the business, and respond to queries quickly and efficiently.
Communication and Information
Organizing, sharing and accessing information is essential to a successful business.
Employees must be able to contribute data to the system, and access and exchange information –
both between themselves, and with suppliers and clients when appropriate. Internal phone systems,
computer terminals in appropriate locations, and an intranet can all assist in the management of
information within the business.
Document management software (DMS), which stores and tracks every documents produced
within the business is another example of an integrated computer application that can be considered
as part of a business strategy to improve communication and information sharing. Portable devices
such as smartphones, laptops and tablets can all be used to allow salespeople who work away from
the business premises to access the business’ intranet, check stock availability and complete orders.

Possible Uses of Available Computer Software

Software such as databases, spreadsheets and presentation programs such as PowerPoint
can improve efficiency and enhance customer relations in a business.

 Databases. Development of Database Management Systems (DBMS) are capable of

streamlining the creation and maintenance of databases, as well as enhancing the quality
and quantity of information available to the business owner. A DBMS is made up of a set of
records. A record is all the relevant information pertaining to one person or thing. A record is
made up of a number of fields, each containing a distinct piece of data.

Business Uses of Databases

Databases have many uses in business including:

a. Managing customer and supplier records.
b. Storing and maintaining records of staff payroll, leave entitlements, and pay as you go
(PAYG) taxation.
c. Maintaining records of vehicles, furniture, fittings and other equipment used by the
business.
d. Preparing a mailing list from a database of names and addresses.
e. Managing stock records.

A DBMS can reduce the time taken to enter data and retrieve information. It centralizes
data storage, allowing for cross-referencing of records, and enables the production of a variety of
different types of reports and other business documents. Efficiency and productivity can be
improved dramatically, and quick and easy access to relevant records can enhance customer
relations.

 Spreadsheets. A spreadsheet consists of a grid of rows and columns that contains either
text or numerical values. It allows the operator to perform mathematical calculations. The
place where data are entered on a spreadsheet is called a cell. It is the intersection of a row
and a column. Each cell is individually identified by its column letter and a row number. An
active cell is the selected cell into which data are to be entered or edited.

Three different types of data are placed in cells:

1. Label – words that represent headings or names
2. Values – numbers that will be used for calculations
3. Preparing a mailing list from a database of names and addresses.
 Business Uses of Spreadsheets

Once the business owner and/or employees understand how to use a spreadsheet program,
specific spreadsheets can be set up to perform a number of different purposes, including the
calculation of a number of different budgetary options, and planning for possible changes in
circumstances in the future.
The greatest advantage of a spreadsheet is that once it has been set up with all the necessary
labels, values and formulas, it automatically recalculates totals if any number has to be changed.
Suppose a business owner has a spreadsheet of the business’ budget, and wages are expected
to increase. A number of different levels of wage increase can be entered and the spreadsheet
will apply existing formulas to calculate possible effects on the overall costs of the business. The
business owner can use this information to assist in business planning.

 Presentation Programs. Presentation programs such as Microsoft PowerPoint, Apple

Keynote and Google Slides allow information in the form of text and images to be presented
to an audience as a slide show. Various forms of animation allow the operator to add special
effects to increase the visual appeal of the presentation, and to hold the audience’s interest
level.

The Primary uses of presentation programs in business are:

 Promotional and marketing material. New products or services can be presented to
customers and prospective customers through a slide show. This can be done either by
having customers attend a meeting or presentation, or by sending it as an attachment to
an email to prospective customers, allowing them to view it on their own computers.
 Staff training. Presenting information to new employees, or updating procedures or
work practices for existing staff can be made easier through the use of a slide show
presentation.
 Information for shareholders. If the business is a proprietary company, shareholders
are entitled to be presented with regular updates by the management. A slide show
presentation at a shareholders’ meeting is an effective way of carrying out this task.

Uses of Internet and Communications Technology

Web Pages. A web page makes use of the World Wide Web to convey information in the form
of a combination of texts, graphics, animation and video. A number of related web pages linked
together form a website. Every web page has an address, or URL (uniform resource locator), which
allows the user’s web browser to locate that web page. This contains basic information about the
organization and a number of link to other web pages within the website which can provide details
information about the location of the business premises (including maps and photographs), products
and services available, and online ordering facilities.
The easiest way for a business owner to get onto the Internet is to rely on an Internet service
provider (ISP). An ISP is an organization that connects a customer (in this case a business) to the
Internet via satellite, wireless or superfast ADSL+2 broadband. The ISP usually charges a monthly
fee for the service.

Podcasts. Podcasting involves the distribution of digital audio or video files over the Internet.
As a general rule, a podcast is directed to a number of users who subscribe to that particular
podcasting service, and who receive regular updates.
The main use of podcasts for business is for marketing and advertising purposes. Many
independent podcasters sell advertising time in the same way as commercial radio stations. If a
particular podcast is aimed at the same audience as the target customers of a business, podcast
advertising can be a very effective way of reaching those customers. For example, a sporting food
store owner could look at advertising on a podcast aimed at vegetarians and vegans.
SMS (short message service). It is a text message/s that can be sent between mobile
phones. If a business has employees, such as sales representatives who are regularly away from the
business premises, text messages are a convenient and cheap way for communication to occur
between these employees and the business owner or manager.
SMS has distinct advantages over email in that messages are delivered automatically to one
or more recipients without the need for them to dial in or log on. Text messages can also be used to
alert regular customers of any special deals on offer and notify suppliers of the arrival of a goods
shipment. Employees can notify clients if they are going to be late for an appointment. The fact that
SMS is cheaper than a normal phone call can assist a business in containing costs.
Blogs. The word “blog” is an abbreviation of weblog, and refers to an online diary or journal. It
is usually possible to add comments, ask questions, provide feedback, or share opinions on a blog. A
business can use blogs in a number of ways.
An internal blog can be established on the business’ intranet so that there is easy
communication within the business, encouraging employee participation in decision making and
allowing good ideas to be shared.
An external blogs allow communication between the business and its existing and potential
customers and suppliers. A blog of this type can be used to announce new products or changes in
trading hours, and to gather feedback and comments from a variety of stakeholders.

The advantages for external blog are the following:

 It allows the business owner and employees to establish a reputation for expertise, by
providing detailed information on products and services.
 New ideas for products and services can be put to the public to gain comment and
feedback.
 A blog is by its nature informal, so it can present a human face to the public and built
trust with customers.

Web 2.0. This refers to the transformation of the World Wide Web into a more creative and
interactive platform for information sharing, rather than just a means of retrieving information. The
development of social networking sites, such as MySpace and Facebook; video sharing sites, such
as Youtube; and information sharing, such as Wikipedia have made it easier for individuals and
organizations to create and share many different types of content on the web.

ACTIVITY 1 Personal Definitive Essay

Directions: Based on the insights presented by the information and communications technology in
business, formulate your own definition of information and communications technology
in a personal definitive essay of 250 words.

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ACTIVITY 2
Directions: Identify and explain at least five (5) advantages of information and communications
technology in business. Complete the table below.

Advantages of Information
Reasons
Technology