FREE online courses on Information Technology - Chapter 8 NETWORK &
COMMUNICATIONS IN I T - Building Networks
Developing Computer
networks is not as easy as adding a telephone. There is no signal
infrastructure comparable to the voice network for data. Of course, one can
simply use modems and dial-up voice lines, but for many applications this
alternative is either too costly or infeasible because the voice lines are too
slow for data transmission.
In the U.S.,
we typically find that companies have developed two different kinds of networks,
electronic data interchange (EDI) and/or proprietary data networks. Generally
EDI refers to networks in which multiple parties have agreed to follow a
standard for exchanging data electronically. EDI networks exist in retailing,
transportation, and insurance. There is a national standard in the
U.S.
called ANSI x.21 and a European standard called EDIFACT.
In private industry and government, EDI is extremely popular for lowering costs
while increasing accuracy and quality in purchasing goods. One objective of EDI
is to reduce manual keying, therefore reduce errors, and speed up the order
cycle. By exchanging data electronically, organizations can change their
production cycles and the kind of services they offer.
Partially because firms cannot rely on a national data infrastructure, they have
developed elaborate private or proprietary networks, sometimes using common
carrier facilities, and at other times bypassing them completely. Examples of
familiar companies using proprietary networks include: Federal Express and
United Parcel for package delivery, United and American Airlines for their
reservation systems, Frito-Lay for distribution and decision support, Baxter
Laboratories for supplying its customers, and many other firms we encounter on a
regular basis. These networks are proprietary because they do not follow any
kind of industry standard.
Each of these firms has to bear the expense of designing, implementing, and
operating a proprietary data network. Some of these efforts even required
inventing new technology. Frito-Lay undertook the development of a hand-held
computer for its drivers to use for placing orders and keeping records. If a
firm operates in an industry without support for or traditional of EDI, today it
has to decide to develop a proprietary data network for an application, use a
service company's existing network, or develop its application on the Internet.
