FREE online courses on Information Technology - Chapter 8 NETWORK &
COMMUNICATIONS IN I T - THE CONTRIBUTION OF COMMUNICATIONS
Firms take advantage of the opportunities provided by
telecommunications and networks in a number of ways. Two important contributions
of this technology are electronic mail (e-mail) and electronic data interchange
(EDI). In several industries, information technology is also used to create
electronic markets.
One of the most beneficial results of the marriage of
computers and communications technology is electronic mail. Computer users with
appropriate software and communications links can send messages and documents to
each other computer users. Electronic mail is analogous to physical mail handled
by the post office, except it is not stored or handled physically. When someone
sends you an e-mail message, it goes into your “mailbox” on the computer. When
you check your mail, the message is there for you to read and respond to if you
like. It has been estimated that 40 million people in this
US
use e-mail.
How does e-mail work in industry? Recently some fifty-three
engineers at Digital Equipment Corporation In Massachusetts,
Arizona,
Colorado,
Singapore, and
Germany
collaborated on the design of a new disk drive using e-mail. Most had never met,
and the engineers rarely phoned each other. DEC estimates that this diverse
group completed their task a year sooner and with 40 percent fewer people than a
comparable team assembled in one building.
Most companies with large e-mail systems also have large
networks. Hewlett-Packard has a network of 94,000 mailboxes and has a volume of
350 million mail messages a year for its 90,000 employees.
When we discussed corporate strategy in early, we made the
point that many strategic systems require the firm to be connected
electronically with customers and suppliers. One rapidly growing technique for
this type of interconnection is electronic data interchange (EDI).
Detroit
auto manufacturers were among the first companies to encourage suppliers to
accept orders electronically. The idea is simple. A buyer sends an order
electronically to the supplier and the supplier acknowledges the order
electronically. When the supplier sends the items ordered, the customer
electronically acknowledges receipt. Similarly, the firms set up an electronic
billing and payment system. The concept is very simple, but the reality of
implementing EDI is much more difficult.
One of the most important developments in the history of
information echnology is the evolution of the computer from a calculating engine
to a communications tool. As a calculator, computers are extremely valuable. It
is hard to imagine businesses operating on the scale they do today without the
capabilities of computer. However, the computer's role as a communications
device may dwarf its impact as a calculator. Computers and communications are
allowing us to change the structure of organizations and the nature of commerce.
In this chapter we look at the world of networks. The first
networks were used by business for electronic linking and communications and for
electronic customer/supplier relationships. Most proprietary or private networks
were developed for use within a single enterprise. For example, the first bank
networks connected tellers in branches with a central computer that had
information on customer checking accounts.
Electronic data interchange involves customers and suppliers.
Here companies agree to standards for exchanging information. Railroads and
their shippers agree on a standard to use the data that must be exchanged for
shipping products by rail. A new customer can begin exchanging data with the
railroads by following this message standard.
