FREE online courses on Information Technology - Chapter 1 INFORMATION
TECHNOLOGY - What is Information Technology
Information technology refers to all forms of technology
applied to processing, storing and
transmitting information in
electronic form. The physical equipment used for this purpose includes
computers, communications equipment and networks, fax machines, and even
electronic pocket organizers. Information systems execute organized procedures
that process and/or communicate information. We define information as a tangible
or intangible entity that serves to reduce uncertainty about some state or
event.
Data can originate
from the internal operations of the firm and form external entities such as
suppliers or customers. Data also come from external databases and services; for
example, organizations purchase a great deal of marketing and competitive
information.
An information system usually processes these data in some
way and presents the results to users. With the easy availability of personal
computers, users often process the
output of a formal system themselves in an ad hoc manner. Human interpretation of information is
extremely important in understanding how an organization reacts to the output of a system. Different results
may mean different things to two managers. A marketing manager may use
statistical programs and graphs to look for trends or problems with sales. A
financial manager may see a problem with cash flow given the same sales data.
The recipient of a system's output may be an individual, as in the example of
the marketing manager, or it may be a workgroup.
Many systems are used routinely for control purposes in the
organization and require limited decision making. The accounts receivable
application generally runs with little senior management oversight. It is a
highly structured application with rules that can be followed by a clerical
staff. A department manager handles exceptions. The output of some systems may
be used as a part of a program or
strategy. The system itself could be implementing a corporate strategy, such as
simplifying the customer order process. A system might help managers make
decisions.
Information technology, however, extends far beyond the
computational capabilities of computers. Today, computers are used extensively
for communication as well as for their traditional roles of data storage and
computation. Many computers are connected together using various kinds of
communications lines to form network. Through a network, individuals and
organizations are linked together and these linkages are changing the way we
think about doing business. Boundaries between firms are breaking down from the
electronics communications link provided by networks. Firms are now more willing
to provided direct access to their systems for suppliers and customers. If the
first era of computing was concerned with computation, the second era is about
communications.
