MMS SEM - I

MASTER IN MANAGEMENT
STUDIES

INFORMATION
TECHNOLOGY
FOR
MANAGEMENT
 © UNIVERSITY OF MUMBAI
Dr. Suhas Pednekar
Vice Chancellor,
University of Mumbai

Dr. Dr. Prakash Mahanwar Dr. Madhura Kulkarni

Director, Institute of Distance Incharge Study Material Section,
and Open Learning, Institute of Distance and
University of Mumbai. Open Learning,
University of Mumbai.

Course : Ms. Anitha Menon

Coordinator

: Dr. Rajendra Patil

Course Writer Associate Professor,
Vidyalankar School of Information
Technology
Vidyalankar College Marg,
Wadala (East), Mumbai.

: Dr. Kamatchi Iyer

Director,
ISME School of Management and
Entrepreneurship, Mumbai.

: Mrs. Vijaya Sachin Bhosale

ICS College of Arts, Commerce
and Science, Khed District,
Ratnagiri.

August 2021, MMS SEM - I, M a st e r i n M an a ge m e n t S t u d i e s ,

Information Technology for Management

Published by : Incharge Director

Institute of Distance and Open Learning ,
University of Mumbai,

DTP Composed : Ashwini Arts

Gurukripa Chawl, M.C. Chagla Marg, Bamanwada,
Vile Parle (E), Mumbai - 400 099.

Printed by :
Information Technology for Management
Master of Management Studies (MMS) Semester I: 15 Sessions of Three Hours Each

Course Objectives
The objective of the course is to enable the student to: (a) to understand the significance of
information technology, conceptual framework of networking, communication technology,
database etc. for individual & business management; (b) to understand role, impact and
emerging trends of information technology for management and its application at individual
,organizational level society and similarly for business alignment..

Course Outline
Unit I
1. Historical perspective of information technology and business.
2. Functioning of computer hardware and software components, characteristic from user
and buyers' perspectives.
Unit II
3. Introduction and conceptual framework of networking & Telecommunication,
components of networking, LAN/WAN/MAN, network topologies, and various
option of networking for business, various medium of communication, physical and
cable less (dial up, leased line, satellite, V- SAT, DSL Lines, fibre optics).
4. Internet Technology: How internet works, familiarity with various components of the
internet, browser, Web Browser, DNS server, Search Engine, Application of
internets- Websites, Blog, E- Mail, FTP, voice over internet, concept of cloud
computing, cloud computing and business.
Unit III
5. Role and emerging trends of information technology; Overview of concept such as
ERP, SCM, CRM, database management, DBMS; Data warehousing, Business
intelligent, knowledge Management, E- Commerce, E- Business, M- Commerce,
Digital Business, E-governance.
6. Impact of information on business, business alignment across the function and sectors
and society.
Unit IV
7. Case study and presentations

Textbooks
E- Business: Road Map for Success by Ravi Kolkata and Marcia Robinson.
Competitive Strategy by Michael Porter
Electronic Commerce – A Managerial Perspective by Efraim Turban, David King, Jae Lee
Principles of Information Systems by Ralph Stair and George Reynolds.
Reference Books
Information Technology for Management by Rainer, Porter and Turban.
Introduction to Information Technologyby Rajaraman.
Information Technology for Managementby Chandrahauns Chavan and Bacchu Lal.
 Chapter 1
Information Technology
1.1 INTRODUCTION:

Technology has been defined as "systematic knowledge and action, usually of industrial processes but
applicable to any recurrent activity". In providing tools and techniques for action, technology at once
adds to and draws from a knowledge base in which theory and practice interact and compact. At its
most general level technology may be regarded as definable specifiable way of doing anything. In other
words, we may say a technology is a codified, communicable procedure for solving problems.
Technology, Manfred Kochen observed, impacts in three stages. First, it enables us to do what we are
now doing, but better, faster and cheaper; second, it enables us to do what we cannot do now; and third,
it changes our life styles. Information technology is a recent and comprehensive term, which describes
the whole range of processes for generation, storage, transmission, retrieval and processing of
information. In this Unit, an attempt is made to discuss the components of information technology and
to identify elements that really matter m the investigation and implementation of new information
technologies in information systems and services.
1.2 DEVELOPMENT OF INFORMATION TECHNOLOGY:

Despite the impression often given that information technology has suddenly burst on the scene, its
roots could be traced well into the past.
1.2.1 Historical Perspective :

The history of man-made information technology is one of slow evolution dating back to 5
Information Technology: 5,000 years. It has followed the mechanical and later electronic
rather than biochemical path, with primitive signs, hieroglyphics, the alphabet writing, the
book printing, and computer type-setting - a more or less linear development. More recently,
the telephone, radio, television, satellite transmission, transistor, the computer, and the
microprocessor represent distinct qualitative changes in the information technology, with the
fact that we now have to accept the composite term information technology to include a
whole range of new developments. It has been said that information technology is the science
of information handling, particularly by computers used to support the communication of
knowledge in scientific technical, economic and social fields.
1.2.2 Definition of Information Technology (IT) :

The term `Information Technology' (IT) has varying interpretations. Macmillan Dictionary of
Information Technology defines IT as "the acquisition, processing, storage and
dissemination of vocal, pictorial, textual and numerical information by a micro-electronics-
 based combination of computing and telecommunications".
Two points are worth consideration about this definition:
The new information technology is seen as involving the formulating, recording and
processing and not just transmitting of, information. These are elements in the
communication process which can be separated (both analytically and in practice) but
in the context of human communication they tend to be intertwined.

Modem information technology deals with a wide variety of ways of representing

information. It covers not only the textual (i.e., cognitive, propositional and verbalised
forms, we often think under the head information), but also numerical, visual, and
auditory representations.

We have a convergence of three strands of technologies: computers, micro-electronics and

communications. In other words, a mosaic of technologies, products and techniques have
combined to provide new electronic dimensions to information management. This mosaic is
known by the name new information technology.
It is important to bear in mind that information technology is not just concerned with new pieces
of equipment but with much broader spectrum of information activities. Information
technology encompasses such different things as book, print; reprography, the telephone
network, broadcasting and computers. In the following sections let us briefly consider the
major components of information technology namely: computer technology,
communications technology and reprographic and micrographic technologies.
1.3 COMPUTER TECHNOLOGY:

Technology Computer technology may conveniently be grouped into: processor technology,

storage technology and software aspects.
1.3.1 Processor Technology :

Computers consist of electronic components assembled in a design or "architecture" that

will perform necessary functions of input, output, and computation and control (control of
both the computer itself and of attached peripheral devices that perform input and output
functions and store the files).
In the past, electronic components were expensive, so a minimum number
were used in a single processor that alternately performs input, control,
processing and output. Besides, the first generation of computers, operated
by means of vacuum tubes or valves, were relatively bulky and energy
consuming.
 The first major innovation, leading to microelectronics was the discovery of
transistor, a product of solid state physics, which used semiconductor
materials. The most important development of these today is based on the
non-metallic element `silicon'. Being much smaller than the vacuum tube,
the transistor quickly replaced it in all electronic equipment. However,
transistors and other equipment had to be wired together and a single piece
of equipment might have thousands of such components. The wiring and
assembly of such elements were a delicate and costly process.

This naturally paved the way for research towards the concept of integrated
circuit (IC). At first IC' s were simple but, as the technology developed, they
rapidly became smaller and more complex. This led to the miniaturization
and refinement.

The central feature of micro-electronics is the development of micro-

processor, a special form of IC with functions of arithmetic, logic and
control - similar to those of Central Processing Unit (CPU) of a computer
and contained in a single chip.

In addition, the microprocessor includes units to interpret instructions from

the stored programme to supply the control memory the information
necessary to retrieve instructions and send out data as required.

The microprocessor is the building block from which modem computer

systems are assembled. The microprocessor uses very, little energy and has
few environmental requirements of older machinery.

Air conditioning, for example, might not be necessary for a general purpose
computer using microprocessor technology. The practical significance of
this is that it is now possible to bring the computer to the problem instead of
bringing the problem to the computer.

The aspects referred to above form a major hardware component of a

computer.

1.3.2 Storage Technology:

In the previous section, the, recent innovations relating to the processing aspects of
computer technology were discussed briefly. In considering some of the advances in
devices for digital information storage, it may be stated that most of the primary
storage in computers is now supplied by semi-conductor circuits.
There have been significant developments in memory technology affecting
three areas of performance spectrum; the high speed, high performance; the
midrange and the low speed bulk memory systems. It is now possible that even
a small computer system might have cache memory, a small associative
memory retaining most recently referenced information and in a readily
available place.

In some cases, cache memory may be at the top of a hierarchy of memories

having a wide variety of characteristics. Memory management, dynamic
memory allocation, and virtual memory schemes, generally found in large
computer systems, are now appearing on computers which are small and less
costly.

The development of charge coupled devices (CCDs) and bubble memories has
filled the gap which previously existed in the continuum of memory devices
such as fixed-head magnetic disks and these are slower than other semi-
conductor memories.

These memories have advantage over magnetic disks in that they contain' no
mechanical parts and could be used to store significant amount of information
and can be treated as a structured file system.

There has been a continuous improvement in recording densities of magnetic

media. Floppy disks and microfloppies provide a convenient media to store
data. The development of video Information Technology: disk has added a new
dimension to the information storage technology.

Video disks could' be used to store large volumes of information in digital form.
This kind of mass storage devices are believed to be very useful in the
development of information storage and retrieval systems

It May be stated that all these innovations in storage technology provide us a

variety of alternatives depending on the requirements of speed of operation.
 These developments add more capabilities to the storage aspects and may be
considered advances in the storage technology.

1.3.3 Software Aspects:

Software is a generic term covering the concepts, procedures and instructions which
enable computer systems to do useful things. Usually, software is conceived in terms
of computer programs, discrete units of software which make the computer to carry
out specific tasks, and or systems or packages. The importance of software is
obvious, since it is the software which applies the power of the computer to solve the
users' problems. Many of the users need a clear understanding of the capabilities of
software more than hardware aspects.
It is known for some years now that the "rapid increase in the capabilities of
computer systems has not been matched by corresponding increases in the
development and quality of software.

This situation has caused much disenchantment with computer systems. The
methods by which computer software is produced have changed considerably
in recent years with the emergence of "software engineering", which enabled
improvements in programming practice, such as structured, or modular
programming.

As one of the solutions to the software problem increased production and

availability of packaged software is encouraged. Another solution to the
problem is the use of fourth generation languages and flexible integrated
software to produce prototypes of programmes to meet the user needs.

It is hoped that these solutions would be able to meet fairly standard

requirements. For the average user they mean that there will be an increasing
number of packages to meet most of his needs.

1.4 COMMUNICATIONS TECHNOLOGY :

The development of communications technology is, in a sense, a symbol of man's effort to

communicate rapidly over great distances. Communications technology is older than
computer technology. It has grown as rapidly as the computer technology in recent times.
These two technologies are now fusing into `compunications'.
 This newly emergent technology is changing our life styles as few technologies
have before. This new technology has probable and important uses in the home,
office, factory, community and in information exchange system and holds prospects
of immediate relevance to information profession.

Some of the significant aspects of information transmission technology are

discussed briefly in the following paragraphs. A communication system can
establish paths over which messages can be sent between any two instruments in
specified locations at desired times.

This type of system is generally known as switched .network.' Communications

technology has advanced to the extent that now it is possible to hire services from
a commercially operated network.

Hence, there is a steady growth of computer-to-computer data traffic. Also,

computer manufactures are offering network architectures which together offer
multiple operating systems running on families of similar computers.

A terminal of a computer network may have access to any of the computers within
the network, if it is authorized to do so. A computer serves as a terminal when
connected for providing computation, information retrieval, etc., in accordance with
the request of the terminal.

A multi-lateral access capability allows the users of the terminal to share these
resources. Such networks are characterized by a new technique known as packet
switching in which the message is divided into a number of message blocks called
packets and are transmitted between nodes in store and forward basis.

Among the information resources to be shared are the data bases. A number of
information systems have come into operation based on this concept.

As a result of rapid technological progress, a variety of services, which have traditionally been
considered separate, are now becoming increasingly similar. This tendency is generally
referred to as convergence of service modes.
Telecommunications can now handle not only speech and data but also visual information in a
unified manner. Broadcasting is now capable of providing two-way or selective dissemination
of audio and visual information by way of a broad-band cables in addition to conventional one
way dissemination.
With the result, two traditionally separate 'services, telecommunications and broadcasting tend
to merge together in their mode of operation and thereby provide users with diversified types
of information more efficiently.
This innovation could be utilized for the publication of journals through the extensive use of
techniques like facsimile text processing and word processing. Library and information
services may also be included into the integrated whole. To handle the economy of scale, the
concept of Integrated Services Digital Network (ISDN) is evolving very rapidly.
1.5 Fundamentals of Computer Architecture:
Speed: Computers can calculate at very high Speeds.
Storage: Computers have their main memory and auxiliary memory systems. A computer can
store a large amount of data.
Accuracy: The accuracy of a computer system is very high.
Versatility: Computers are very versatile machines. They can perform activities
, ranging from simple calculations to performing complex CAD modeling and simulation for
navigating missiles and satellites.
Automation: Computers can be programmed to perform a series of complex tasks, involving
multiple programmes. Computers can perform things flawlessly.
Diligence: Diligence means being constant and earnest in effort and application.
1.6 Computer Applications:
Military application: The first digital computers, with their large and cost, mainly performed
scientific calculations, often to support military objectives.
Creative Art: They have also been used for entertainment, with video games becoming a huge
industry.
Robotics: Computers have been used to control mechanical devices since they became small
and chief.
Networking and the Internet: Computers have been used to coordinate information in multiple
locations.
Different types of Computer Systems:
Super Computers: The mightiest computers, and of course the most expensive are known as
Super Computers. They process billions of instructions per second. One uses super computers
for tasks that require mammoth data manipulation, such as worldwide weather forecasting and
weapons research.
Main Frame: In the jargon of the computer trade, large computers are called main frame. Main
frame are capable of processing data at very high speeds – millions of instruction per second
and have access to billions of characters of data. The principal use of it is for processing vast
amounts of data quickly.
Personal Computer: Personal Computer are often called as PC. A PC is based on a
microprocessor originally made by the Intel Company with other companies such as – AMD.
PCs usually use an operating system.
MAC: The computers made Macintoshes which uses power PC processer made by Motorola
are referred as MAC. Macintoshes use operating system, called MAC OS created Apple.
1.7 The Generation of the Computer:
A generation refers to the state of improvement in the development of a product. It also is used
for major state of different advancements/achievements of computer technology. With each
new generation, the circuitry has become smaller and more advanced than the previous
generation before it. The time span of era of computer generation may vary in different
prospects.
a. The First Generation: 1946 – 1958 (The Vacuum Tube Years)
The first generation of computers were huge, slow, expensive and often undependable and used
Vacuum Tubes in CPU’s. In 1946 two Americans, Presper Eckert and John Mauchly, built the
ENIAC electronic computer which used vacuum tubes instead of the mechanical switches of
the Mark I. The ENIAC used thousands of vacuum tubes, which took up a lot of space and
gave off a great deal of heat.
First generation computers relied on machine language to preform operations and they could
only solve one problem at a time. Input was based on punched cards and paper taps and output
was displayed on printouts.
b. The Second Generation: 1959 – 1964 (The Era of the Transistor)
33 Transistors replaced vacuum tubes and ushered in the second generation of computers. In
1947 three scientists, John Barden, William Shockley, and Walter Brattain, working at AT&T’s
Bell Labs, invented the transistor the which functions like a vacuum tube. The transistor was
faster, more reliable, smaller and much cheaper to build than vacuum tube.
Second generation computers moved from cryptic binary machine language to symbolic or
assembly languages. High level programming languages such as versions of COBOL and
FORTRAN were also developed at this time.
c. The Third Generation: 1965-1970 (Integrated Circuits – Miniaturizing the Computer)
Integrated Circuits (IC) have started replacing transistors. The integrated circuits, or as it is
sometimes referred to as semiconductor chip, packs a huge number of transistors onto a single
wafer of silicon. Placing such large numbers of transistors on a single chip vastly increased the
power of a single computer.
Instead of punched cards and printouts, users interacted with third generation computers
through keyboards and monitors and interfaced with an operating system, which allow the
device to run may different applications at one time with a central programme that monitored
the memory.
Computers, for the first time, became accessible to a mass audience because they were smaller
and cheaper than their predecessors.
d. The Fourth Generation: 1971- Today (The Microprocessor)
This generation can be characterized by both the jump to monolithic integrated circuits
(millions of transistors put onto one integrated circuit chip) and the invention of the
microprocessor.
By putting millions of transistors onto on a single chip, more calculation and faster speeds
could be reached by computers. Microprocessors moved out of the realm of desktop computers
and into many areas of life as more and more everyday products began to use microprocessors.
As these small computers became more powerful, they could be linked together to form
networks, which eventually led to the development of the Internet. Fourth generation
computers also saw the development of GUIs, the mouse and handheld devices.
e. Fifth Generation – Present and Beyond: Artificial Intelligence:
Fifth generation computing devices, based on artificial intelligence, are still in development,
through there are some applications, such as voice recognition, that are being used today. The
use of parallel processing and superconductors is helping to make artificial intelligence a
reality.
 Chapter 2
Implications of Information Technology in business
2.1. Introduction:
Information Technology is a terminology which is known to all educated people of the World
at present times. Information technology (IT), as defined by the Information Technology
Association of America (ITAA), is “the study, design, development, implementation, support
or management of computer-based information systems, particularly software applications and
computer hardware.” IT deals with the use of electronic computers and computer software to
convert, store, protect, process, transmit, and securely retrieve information.
When computer and communications technologies are combined, the result is information
technology, or “InfoTech.” Information technology is a general term that describes any
technology that helps to produce, manipulate, store, communicate, and disseminate
information. Presumably, when speaking of Information Technology (IT) as a whole, it is noted
that the use of computers and information are associated.
Globalization has brought in many changes in the business scenario with the whole world
inching towards one big market place. Communication between the buyers and sellers has
become critical as each can opt to explore a greater number of alternatives than ever before. E-
commerce through Internet, e-mails, websites, and other facilities enables a businessman to be
linked with every corner of the world, and thus opens up greater opportunities in the world
market.
Another important factor is the time required for completing a business transaction. As markets
are becoming competitive and information is more readily available, a quick, reliable and
replicable transaction implies availing of prevailing opportunities. On the contrary, delays in
processing a transaction might become synonymous to wasting an opportunity. Therefore, a
fast and alternative mechanism of communication, contract, and payment is an integral part of
a globally competitive business organization.
Role of information technology in business Today, technology is becoming very important in
our daily lives. It affects individuals, communities, businesses and the nation highly
technological impact in the business world. It has helped in terms of management,
manufacturing, marketing of communication products and modular type more easily.
Information technology or IT refers to an entire industry. Information technology is the use of
computers and software to manage information. It refers to anything related to computing
technology, such as networking, hardware, software, the Internet, or the people that involve
these technologies.
Many companies have IT departments for managing the computers, networks, and other
technical parts of their businesses, such as storing information, protecting information,
processing the information, transmitting the information as necessary, and later retrieving
information as necessary.
This is referred to as Management Information Services (or MIS) or Information Services (or
IS). Information technology has become very important in the business world. No matter small
or big business, IT has helped the organization, manager, and workers in more efficient
management, to inquire about a particular problem, conceive its complexity, and generate new
products and services; thereby, improving their productivity and output.
Information technology can help through
• Communication
• Inventory management
• Management Information Systems
• Customer Relationship Management
1. Communication:

In the business world, communication plays an important role in maintaining the

relationship between employees, suppliers, and customers. Therefore, the use of IT
we can simplify the way to communicate through e-mail, video chat rooms or social
networking site.
2. Inventory Management:

Organizations need to maintain enough stock to meet demand without investing in more
than they require. Inventory management systems identify the quantity of each item
a company maintains, an order of additional stock by using a way of inventory
management. It is become more important because organization needs to maintain
enough stock to meet customer demand. By using in IT in inventory management, it
also will helps in track quantity of each item a company maintains, triggering when
it comes to managing inventory.
3. Management Information Systems:

Information data is very important for an organization and a valuable resource

requirement for safe and effective care. Then, the company should use the
management information system (MIS) to enable the company to track sales data,
 expenditure and productivity as well as information to track profits from time to time,
maximizing return on investment and recognize areas of improvement.
4. Customer Relationship Management:

Companies are using IT to improving the way of design and manage the customer
relationship. Customer Relationship Management (CRM) systems capture every
relation a company has with a customer so that a more experience gain is possible.
If a customer makes a call to center and report an issue, the customer relation officer
will be able to see what the customer has purchased, view shipping information, call
up the training manual for that item and effectively respond to the issue.
2.2 Advantages of Information Technology in Business:
2.2.1.Introduction:
Since the computerized system so widely used, it is advantageous to incorporate information
technology into the organization. Information technology provides tremendous benefits to the
business world such as allowing the organization to work more efficiently and to maximize
productivity. Among the advantages of information technologies in business are:
• Storing and Protecting Information
• Working away
• Automated Processes
• Communication Storing and Protecting Information
Information technology helps in storage systems of important data or document to protect
company’s valuable records. Storage systems, such as vaults, it can help via keep information
safe by only allowing certain users within your company to access, withdraw, add or change
the documents. Working Away Information Technology systems can access the remote
network electronics company.
It allows one to work from home or anywhere. From this, it will help in increasing productivity
even physical work has been done in the office. Automated Processes Each organization to find
ways do more work in a short amount of time.
Therefore, the efficiency of information technology by developing automated processes to take
the burden off your staff. Communication In the business world, communication plays an
important role in maintaining the relationship between employees, suppliers, and customers.
Thus, the use of IT we can simplify the way to communicate through e-mail, video chat rooms
or social networking site. It means we can communicate with our employees, supplier and
customers anywhere.
2.2.2. Social Media for Business Growth:
A significant amount of social media activity is carried out through mobile devices. Make sure
that your social media strategy is compatible with mobile devices to guarantee a worthwhile
user experience. Social media sites continue to gain popularity at a rapid rate and it is important
for small and growing businesses to use them to advertise and market what they offer. The term
“information technology systems in an organization” is composed of four distinct parts which
include: an organization, information in an organization, and information technology and
information technology systems in an organization. Flow of Information is a key resource for
all organizations.
What information describes might be internal, external, objective or subjective. External
information describes the environment surrounding the organization.
Objective information describes something that is known.

Subjective information describes something that is currently unknown.

With information technology, the flow of all these three types of information is made simple
buy use of centralized data centers where all this data can be retrieved. Information in an
organization can flow in four directions and these include upward flow of information,
downward flow of information, outward flow of information and horizontal flow of
information.
2.2.3. Transaction processing:
Information technology simplifies the transaction process of an organization. A transaction
process system (TPS) is a system that processes transactions that occur within an organization.
At the heart of every organization are IT systems whose main role is to capture transaction
information, create new information based on the transaction information. TPS will update any
transaction process and store that information in a database, so any concerned party in the
organization can access that information via a centralized information storage network of
internet. Decision support:
A decision support system (DSS) is a highly flexible and interactive IT system that is designed
to support decision making when the problem is not structured. A DSS works together with an
artificial intelligence system to help the worker create information through (OLAP) online
analytical process to facilitate decision-making tasks that require significant effort and analysis.
Workgroup support since information technology facilitates in creating an information sharing
environment, workers can easily consult each other across different department without any
interruption. They can use emails, text chatting services to inquire something related to a given
task at work. With work group support systems, group decision making becomes easier.
2.2.4. Executive support:
An executive information system (EIS) is an interactive management information system
(MIS) combined with decision support systems and artificial intelligence for helping managers
identify and address problems and opportunities. An EIS allows managers to view information
from different angles. It also provides managers with the flexibility to easily create more views
to better understand the problem or opportunity at hand.
2.2.5. Data Management:
With the help of database software, an organization stores all its relevant data on a database.
This infrastructure can be designed when it is internal or external. An internal centralized
system can only be accessed within the organization while an external centralized system
allows data to be accessed outside the organization using a remote (IP) internet protocol
Address or a domain name. In this case, employees or managers can use a company website to
access relevant company data by use of passwords. This data is not exposed to the public and
search engines.
 Chapter 3
ORGANISATION OF THE COMPUTER SYSTEM
3.1.Introduction:
A computer system is usually defined as a combination of hardware and software. Computer
hardware is the physical equipment. Software is the collection of programs that make the
hardware do its job. Each of the hardware and software components has undergone refinements
and modifications depending upon the limitations encountered by the users and the endeavors
to overcome these limitations to meet new requirements and challenges. Let us therefore
understand the computer from two perspectives, namely, the general functions of its
components and the evolution these components have undergone.

3.2. INPUT DEVICES:

General Functions It provides a means for the machine to communicate with its external
environment by accepting (or reading) data and the program.
1. It converts the data based on the program into computer acceptable form through an input
interface.
2. It supplies the converted instructions and data to the computer system for further processing.
The very scope of computers is enough to understand that there is no limit to the form and
type of data that serves as an input. Sometimes the input is in the form of text in normal
language, sometimes it is a picture, sometimes it is a voice input like a song. Selection of an
appropriate input device will improve efficiency and keep human interaction minimal.
3.2.1. Types of Input Devices:
On-line or Direct Data Entry Devices:
These devices are under the control of the CPU and communicate directly with the
CPU, that is, these are connected via cable to the CPU. This process of data entry may
be time consuming and may have errors but by using these devices, we can avoid having
to capture data from paper. These are also known as Interactive Input Devices and are
classified as:
(a) Keyboard
(b) Locator devices
(c) Interface or pick devices.
(a) Keyboard:
The most common input device is the keyboard (Figure 2.10). The modern keyboard generally
contains 104 keys and is called the QWERTY keyboard because of the sequence of keys in the
top row, which are similar to those of a standard typewriter. A keyboard is used for a wide
range of tasks but is well known for its capability to 23 Components of CCT enter data, which
is copied from the original paper documents (such as name and address details on a form).
Keyboards are also used for typing letters, memos, reports and other documents using word
processing software.
(b)Locator devices:
Locator devices are used to control the location or position of the cursor on the screen and they
allow us to provide the necessary input. Generally, locator devices are good for gross
movement but not for precision work.
1. Mouse:
It is a small hand-held device used to indicate a position or movement on a computer’s display
screen by rolling it over the mouse pad/flat surface. There are different types of this device like
physical, optical and laser mouse. Physical mouse works on the principle of the movement of
a ball, whereas optical and laser mouse works on the bases of light signals (i.e. have no
mechanical movement inside.)
2. Trackball:
It is a movable ball mounted on top of a stationary base, which can be rotated manually using
a finger and it also has two buttons like a mouse for performing operations similar to mouse.
Three dimensional track balls are available that allow the movement not only the traditional
left/right and forward/ backward movement but also up and down as well.

3. Touch pad:
It is a flat touch sensitive rectangular surface performing similar operations as a mouse or a
track ball.

4. Digitizing Tablet:
Digitizing tablet is an electronic plastic board, on which specifying a location corresponds to
a location on the computer screen. It is considered to be an absolute locator because it is very
precise and when a stylus (pen) is placed in a particular position the same signals are produced
each time. It is in this that it differs from other locator devices. Digitizers are used by architects
and engineers in Computer Aided Designing (CAD) for designing buildings, cars, mechanical
parts, robots, etc. Moreover, they are used in the Geographical Information System for
digitizing of maps.

5. Joystick:
Joystick is a wired/wireless control device which is usually used for playing video games.
These are relative locators in which the direction of the push determines the change of position
and the amount of deflection determines a change of speed (see Figure). A joystick not only
indicates two dimensional positions by moving the ball rotationally but also three dimensional
position, where the third dimension is indicated by the rotation of the rod. Games software,
flight simulators, etc. often use joystick as the input device.

(c) Interface/Pick Devices Pick devices are used to select an object on the screen. The object
may be text or graphic. Examples of pick devices are light pens and touch screens.
3.2.2.Light Pens:
The light pen is a pen-like light-sensitive device that feeds a narrow electrical pulse generated
by a pointing device directed towards the screen. It is connected by a wire to the computer
terminal that detects the signals from the screen. Light pens may be used in place of a mouse
or a keyboard, particularly for menu based applications where an option may be selected by
pointing on it. They are used for Computer Aided Designing (CAD) and drawing purposes.
Moreover, with the help of a light pen, engineers, architects or fashion designers can draw and
edit the designs directly on the screen, though for editing a drawing keyboard may be used to
select colours, lines with varying thickness, cropping or enlarging the drawings. It is also used
to read bar codes from products that are available in big departmental stores.
3.2.3.Touch Screens:
Touch screens are monitors on which the user makes selections by touching the screen, rather
than moving a cursor to the location with external locator devices. Touch screens are often used
in situations where users are likely to have a low level of competence in using computer
keyboards. Touch screens are sometimes used in restaurants, building societies and travel
information systems.
3.3. Source Data Entry Devices :
We have observed that in grocery stores, the clerks merely wave the product over a laser
scanner/barcode reader, which automatically enters the product code and retrieves the
corresponding price of the product automatically. The earlier practice was to enter the code/
product name by using a keyboard (a time consuming process). The laser scanner/barcode
reader comes under Source Data Entry Devices category, which increases the efficiency of a
user. These devices help us in entering the data directly from the source, without any human
intervention. The devices used in this category are:
(a) Video digitizer
(b) Digital camera
(c) Scanning devices
(d) Voice input
(e) Remote control
(f) Magnetic stripe reader
(g) Sound sensor – microphone
(h) MIDI instrument.
3.4. Storage devices:
Types of Storage There are four type of storage:
• Primary Storage
• Secondary Storage
• Tertiary Storage
• Off-line Storage

3.4.1. Primary Storage:

• Also known as main memory.
• Main memory is directly or indirectly connected to the central processing unit
 via a memory bus.
• The CPU continuously reads instructions stored there and executes them as
required.
• Example: – RAM – ROM – Cache
3.4.2. RAM:
• It is called Random Access Memory because any of the data in RAM can be accessed just as
fast as any of the other data.
• There are two types of RAM: –
DRAM (Dynamic Random Access Memory)
SRAM (Static Random Access Memory)

3.4.3. ROM:
• This memory is used as the computer begins to boot up.
• Small programs called firmware are often stored in ROM chips on hardware devices (like a
BIOS chip), and they contain instructions the computer can use in performing some of the most
basic operations required to operate hardware devices.
• ROM memory cannot be easily or quickly overwritten or modified.
3.4.4. Cache:
• Cache is a high-speed access area that can be either a reserved section of main memory or a
storage device.
• Most computers today come with L3 cache or L2 cache, while older computers included only
L1 cache.
3.5. Secondary Storage:
• It is not directly accessible by the CPU.
• Computer usually uses its input/output channels to access secondary storage and transfers the
desired data using intermediate area in primary storage.
• Example: – Hard disk
3.5.1. Hard Disk:
• The hard disk drive is the main, and usually largest, data storage device in a computer.
• It can store anywhere from 160 gigabytes to 2 terabytes.
• Hard disk speed is the speed at which content can be read and written on a hard disk.
• A hard disk unit comes with a set rotation speed varying from 4500 to 7200 rpm.
• Disk access time is measured in milliseconds.

3.6. Tertiary Storage:

• Typically it involves a robotic mechanism which will mount (insert) and dismount removable
mass storage media into a storage device.
• It is a comprehensive computer storage system that is usually very slow, so it is usually used
to archive data that is not accessed frequently.
• This is primarily useful for extraordinarily large data stores, accessed without human
operators.
Examples: – Magnetic Tape – Optical Disc

3.6.1. Magnetic Tape:

• A magnetically coated strip of plastic on which data can be encoded.
• Tapes for computers are similar to tapes used to store music.
• Tape is much less expensive than other storage mediums but commonly a much slower
solution that is commonly used for backup.
3.6.2. Optical Disc:
• Optical disc is any storage media that holds content in digital format and is read using a laser
assembly is considered optical media.
• The most common types of optical media are – Blu-ray (BD) – Compact Disc (CD) – Digital
Versatile Disc (DVD).
3.7. Off-line Storage:
• Also known as disconnected storage.
• Is a computer data storage on a medium or a device that is not under the control of a
processing unit.
• It must be inserted or connected by a human operator before a computer can access it again.
Examples:
– Floppy Disk
– Zip diskette
– USB Flash drive
– Memory card
3.7.1. Floppy Disk:
• A soft magnetic disk.
• Floppy disks are portable.
• Floppy disks are slower to access than hard disks and have less storage capacity, but they are
much less expensive.
• Can store data up to 1.44MB.
• Two common sizes: 5 ¼” and 3 ½”
3.7.2. USB Flash Drive:
• A small, portable flash memory card that plugs into a computer’s USB port and functions as
a portable hard drive.
• Flash drives are available in sizes such as 256MB, 512MB, 1GB, 5GB, and 16GB and are an
easy way to transfer and store information.
3.8. Memory Card:
• An electronic flash memory storage disk commonly used in consumer electronic devices such
as digital cameras, MP3 players, mobile phones, and other small portable devices.
• Memory cards are usually read by connecting the device containing the card to your computer,
or by using a USB card reader.
3.9. Output Devices:
(a) Monitor:

Monitor is an output device that resembles the television screen and uses a Cathode Ray
Tube (CRT) to display information. The monitor is associated with a keyboard for
manual input of characters and displays the information as it is keyed in. It also
displays the program or application output. Like the television, monitors are also
available in different sizes.
(b) Liquid Crystal Display (LCD):

LCD was introduced in the 1970s and is now applied to display terminals also. Its
advantages like low energy consumption, smaller and lighter have paved its way for
usage in portable computers (laptops) .
(c) Printer:

Printers are used to produce paper (commonly known as hardcopy) output. Based on
the technology used, they can be classified as Impact or Non-impact printers.

Impact printers use the typewriting printing mechanism wherein a hammer strikes the
paper through a ribbon in order to produce output. Dot-matrix and Character printers
fall under this category.

Non-impact printers do not touch the paper while printing. They use chemical, heat or
electrical signals to etch the symbols on paper. Inkjet, Deskjet, Laser, Thermal printers
fall under this category of printers.

When we talk about printers we refer to two basic qualities associated with printers:
resolution, and speed. Print resolution is measured in terms of number of dots per inch
(dpi). Print speed is measured in terms of number of characters printed in a unit of time
 and is represented as characters-per-second (cps), lines-per-minute (lpm), or pages-per-
minute (ppm).

(d) Plotter:

Plotters are used to print graphical output on paper. It interprets computer commands
and makes line drawings on paper using multicolored automated pens. It is capable
of producing graphs, drawings, charts, maps etc. Computer Aided Engineering
(CAE) applications like CAD (Computer Aided Design) and CAM (Computer Aided
Manufacturing) are typical usage areas for plotters.

Chapter 4
Business Environment in IT age
4.1. Introduction:
The business environment in the Information Age places many pressures on companies.
Organizations may respond reactively to a pressure already in existence, or
proactively to an anticipated pressure. Company responses are typically facilitated
by information technology (IT), which in a broad sense is a collection of the
individual technology components that are typically organized into computer-based
information systems (ISs).
4.2. Reasons:
4.2.1. Global competition for trade and for labor:
Companies in developed countries usually pay high fringe benefits and environmental
protection costs. Therefore, they have difficulty competing in labor-intensive
industries with developing countries. As a result, companies are moving their
manufacturing facilities to countries with low labor costs. Such a global strategy
requires extensive communications, frequently in several languages and under
several cultural, ethical, and legal conditions. The complexity of the communication
system may greatly hinder global competition unless it is properly supported by IT.

4.2.2. Need for real-time operations:

Companies in the Information Age no longer have the luxury of “information float,”
which is the time between when a business event occurs and when information
captured about that event reaches the necessary decision makers. High-performance
 telecommunications technologies can reduce this time lag to near zero. Similarly,
these same technologies permit financial transactions to be nearly instantaneous. For
many businesses, slow, paper-based, mail-based transactions and processes are a
thing of the past. Orders now can occur instantly, as can electronic payment transfers
and documentation of transactions.
4.2.3. Changing workforce:
The workforce, particularly in developed countries, is changing rapidly and becoming
more diversified. An increasing number of females, single parents, minorities, and
physically challenged persons work today in all types of positions. More employees
than ever before prefer to defer retirement. IT is easing the integration of these
employees into the traditional workforce. In addition, as more organizations become
transnational, managerial complexity accompanies growing cultural complexity.
4.2.4. Customer orientation:
Customer sophistication and expectations increase as customers become more
knowledgeable about the availability and quality of products and services. They are
also more knowledgeable about competing products. In fact, customers ultimately
want products “free, perfect, and now.” These expectations translate into the need
for organizations to demonstrate a customer orientation. Customers are demanding
ever-more detailed information about products and services. They want to know what
features are available, what warranties they will receive, what financing is available,
and so on, and they want to know immediately. Companies must be able to deliver
information quickly to satisfy their customers, or risk losing them. Advances in the
use of the Internet and electronic commerce (e-commerce) bring customers
information about thousands of products, including cost and quality comparisons.

4.2.5. Technological innovation and obsolescence:

Pressures to produce goods and services efficiently (quickly and at low cost) cause
organizations to look for technological breakthroughs that will give them an
advantage over their competitors. Technology is playing an increased role in both
manufacturing and service organizations. New and improved technologies such as
computer-integrated manufacturing enable organizations to produce superior
products, to customize products more easily, and to quickly alter manufacturing
processes as the market dictates.
4.2.6. Information overload:
The Internet and other telecommunications networks increase the amount of information
available to organizations and individuals. The amount of information available on
the Internet more than doubles every year, and most of it is free. The information and
knowledge generated and stored inside organizations are also increasing
exponentially. Managers are at risk of “analysis paralysis”—bombarded with so
much potentially useful information that they feel compelled to consider vast
amounts of it before taking action. But of course, only some of the information is
truly relevant. Therefore, the accessibility, navigation, and management of
information necessary for managerial decision making is becoming critical.
4.3. Conclusion:
To summarize, the modern global business environment is transnational and culturally
complex. Its diversity brings different competitive advantages and challenges to each
country, to each industry, and to each business. These advantages and challenges
appear and disappear as fast as world events occur and as fast as generations of new
technologies are created and become obsolete. The business world is increasingly
“transparent”: information moves so rapidly around the world that industrial secrets,
technical advantages, and managerial innovations can evaporate with the speed of e-
mail. This speed of change and global dispersion of information also accelerates the
rate of social change across the globe. These factors have accelerated the need for
Information Technology in the Business world.
 Chapter 5
Information Technology Systems
Points:
5.1 Role and emerging trends of information technology
5.2 Concept of ERP, SCM, CRM
5.3 Database management
5.4 Data warehousing
5.5 Business Intelligent System
5.6 Knowledge Management
5.7 E- Commerce
5.8 E- Business and M- Commerce
5.9 Digital Business
5.10 E-governance
5.11 Conclusion

Introduction
Information technology is related to networking. As globalization spreads throughout the world
the traditional business partners are changing. Everyone is your competitor now including
suppliers, customers, and partners as well as industry. New Global Models have been
established by alliances, partnerships, and strategic outsourcing of companies because of this
there is a full range of skills, resources and market offerings which are easily accessible for
everyone. In a complex global business environment, no specific, single model will fit the
broad range of situations that leaders will come across. Devices have been used for centuries
to aid computation. The world’s first programmable computer was available in 1941. Initially
the computer work stands alone with one terminal now it is working with several terminals. It
has become the need of whole organization.
Organizations and individuals around the world spend billions of dollars each year providing
and using information technology. New capabilities, standards, and products appear every day.
Many involve unsuited or even competing specifications and interfaces. The main feature of
the information revolution is the growing economic, social and technological role of
information. Information-related activities did not come up with the Information Revolution.
They existed, in one form or the other, in all human societies, and eventually developed into
institutions. Technology is the combination of several aspects including data, information,
knowledge and wisdom. Data and information are easily transferable in the modern world,
whether through oral, written or electronic methods. Knowledge, however, is built by one
person and transferred (more slowly) through education and human interaction. Research in
information technology is used to identify those factors that facilitate the IT- Based processes
and procedures.

5.1 Role and emerging trends of information technology

Information Technology is particularly concerned with Internet. It distributes at exponential
rates among the business-to-business organizations. IT has positive impact on the development
of the organizations. Internet has been the favorable topic for various researchers and scholars
during the last decade. Marketing and sales practices of today’s world are highly attributed for
adoption of new technology. Now it is the era of information technology in which the
knowledge of information technology has become a competitive necessity. Everybody must
have the knowledge of how to establish and manage effective relationships both within the
organizations. The firm’s competitive advantage is the management of the firm’s information-
processing system. The multiple tools of the Internet enable the communication and
transformation of information through multiple ways, namely one-to-one communication, one-
to-many and many-to-many. The internet facilities the information exchanges between
organizations, concerning issues such as discovery of new customer needs, trends of the local
and global markets, competitive moves, joint development of products, joint selling activities,
etc. There is a lack of any established criteria for measuring the use of the Internet, as well as
the success of its use. WWW researchers need to develop concepts and to shape standards, to
provide mechanisms for measuring investment opportunities and business success on the
Internet. People have become habitual of computers and even a single day without computer
will make them paralytic. Information technology is a dynamic and vast area has made us
dependent for simple day to day task. Let’s talk about sector vise implication of IT:
IT has entered almost in all industries. For instance, railways, airways and sea networks are
connected with the help of IT. As information plays a vital role in the smooth functioning of
all these sectors and without this even a second will become havoc.
Banking is another sector that is mostly depending on IT. All-important transactions are being
carried out with the help of information technology; similarly bulk of most confidential data is
stored in banking softwares and systems. Several time-consuming tasks have become simpler
and much easier with substantial amount of safety. In fact, e-commerce has made online
banking as well as online purchasing and selling of commodities and services much easier and
faster adding to the convenience of the common man. By simply searching on the internet one
can order anything with just a single click on the mouse button.
Similarly, another most important sector which is benefited a lot by information technology
is the travel and tourism sectors. By Means of online booking and reservation facilities one can
avoid the crowd and lengthy procedures of booking air or railway tickets. People can also enjoy
the best deals and book tickets online from the comfort of their living room
IT plays a major role in simplifying various organizational processes. Most business
enterprises rely on the power of information technology for carrying out their daily tasks
conveniently and faster. IT makes complex procedures easier, faster and also helps a lot in
avoiding redundancy. It lets individual’s access necessary data, ensuring the safety of
confidential ones.

The field of education has also been blessed with the benefits of IT. Online application to
universities, checking results, study materials and much more has made the reach of
education broader and easier.
 Fig. 5.1: Components of Information Technology

5.1.1 Technological Trends from 1950’s toTill Date

In 1950’s the electronic computer on the face of European continent was invented and lot of
research took place about potential development of Human, Computer Intelligence and
Communication. That initial system was basically a pilot computer with 800 vacuum tubes.
These computers were specially designed to handle numeric as well as textual information. In
European world some business applications as well as payroll activities were carried out
through electronic computers.
During the era of 1954 in United States I.B.M 650 was introduced which was slightly
inexpensive machine with drum storage. The computer systems produced in this period were
First Generation Computers. During the era of 1960’s the first structural, technical, procedural,
and programming languages were released, and those systems were launched which were
functional trial product of computer and priced for individual users. It was used in health
sciences as well as different fields and people of that time considered it as Personal Computer.
The series of compatible computers were also initiated during this period. In this age several
terminals were attached with one central computer from where they get access. H.P (Hewlett
Packard) and other top-notch players also entered in the industry during this period. So, we can
say that this period was considered as Second-Generation Computer Era. In the period of
1970’s the first Ram chip was introduced by Intel. The first microprocessor was also developed
by the team of Intel. Apple II Computers were also introduced. So, in short it was the big era
for invention of programming as well as new languages in the field of computer sciences.
During 1980’s and 1990’s many companies dealing in sale and purchase of computers were
entered in the market and this period was considered as bestselling era. So many different
features were added in the system to make them smart and for easy usage. These systems are
useful in every aspect of human life including education and business applications. By means
of this cost can be reduced and volume of production can be enhanced. During this age printers
as well as other storage devices were also developed and sold. Different models were there for
digital audio and graphics. Several up gradations took place in this period. From 2000’s onward
there is a shift from analog, mechanical and electronical technology to digital technology. The
cyber system was introduced and people from all over the world started using internet. It was
a major revolution and landmark in the history of information technology. From then to till
now computer knowledge has become necessary for every job. Due to all this revolution the
economy is now changed from internal, specialized, and proprietary based economy to
external, networked and shared based economy.
5.1.2 Current Advancement in Technology
There are some of the most important new technologies, trends, approaches, standards and
issues which should be identified while considering the trends in Information Technology
systems. As we now perceived from above discussion that information technology is
particularly concerned with the applications of computer system. Firstly we gather the data,
then store this in data warehouses after that relevant information can be extracted by means of
data mining and by applying technological tools finally after manipulation of data we get
relevant information. Different industries are interlinked with information technology which
may include computer hardware, softwares, semiconductors, electronics, internet,
telecommunication networks, e-commerce as well as computer services etc.
Internet as well as Intranet facilities are there which provides resources of Information
Technology used within certain premises or outside the boundaries. Virtualization of systems,
softwares and approaches are also there and many organizations have virtualized their
computing environments. It has been implemented since 1960’s but has become widely used
only in 21st century; virtualization helps to streamline resources and processes by increasing
the utilization rates and flexibility of computers. Virtualization essentially allows you to do a
lot more with less effort.
Mobile Computing is another concept which involves mobile communications, softwares and
hardware of mobiles. So mobile computing is portable and even though the location is being
changed but the device work properly. As Man is a social animal. Social networking is another
most important need of today’s humanity. It has become an important part of our lives. We
update our status on regular basis and communicate with our friends and family members for
people distances don’t matter in this regard. Now computer and its usage has become the
necessity of present age so the ultimate users want wireless and 24/7 connectivity from
everywhere around the world and IT providers are working hard to fulfill the need in this
respect.
5.1.3 World Wide Web Most
commonly it is abbreviated as www and is the system of interlinked documents which are in
access of users with the help of internet. While clicking on a single button one can have an easy
access on different web pages including texts, images as well videos and so many other
features. So there are several benefits of World Wide Web in this regard which shows that users
can access the data at any location while using the server from World Wide Web. E-mails are
one of the blessings which have replaced letters, in past people rely on writing letters to their
dear ones but now just only you can simply go on the web and type out the e-mail and send it
instantly in the persons e-mail's inbox. We can say that World Wide Web has so many benefits.
By means of this we can find lot of information. We can purchase online, movies and songs
can be downloaded. Similarly as far as studies are concerned we can get millions of information
about our concerned topics. We can also play games, make friends and check our accounts.

5.1.4 Information Security Issues

Apart from various benefits there are cyber attacks which have threatened the whole IT
industry. Different computer worms and viruses are there to attack the information available in
systems and harm the network as well as corrupt or modify the existing files. It is the need to
aware all the users about these security threats. Many companies are spending their budget and
conducting lot of awareness programs in assessment of security technology and also providing
training and development and certifications to their employees. Similarly risk management
teams are working in this regard to keep proper record of all the information available in their
systems and also to keep the backup of the important files. In order to protect themselves from
these attacks the internet users must change their passwords on regular basis and also they
should install anti-virus and firewall software applications for security purpose. Firewall can
be used both in terms of hardware or softwares so its main purpose is to secure the network
from all unwanted threats coming from network sources. There are different antivirus softwares
which detect the viruses and remove them. So everyone must be aware about these measures
and try to adopt that in order to prevent themselves from several cyber diseases.
5.1.5 Artificial Intelligence
The intelligent digital personal assistants like Siri, Google Now, Cortana, Alexa are all powered
by AI. Artificial Intelligence endeavours to simulate the natural intelligence of human beings
into machines, thus making them behave intelligently. An intelligent machine is supposed to
imitate some of the cognitive functions of humans like learning, decisionmaking and problem
solving. In order to make machines perform tasks with minimum human intervention, they are
programmed to create a knowledge base and make decisions based on it. AI system can also
learn from past experiences or outcomes to make new decisions.

5.1.6 Machine Learning

Machine Learning is a subsystem of Artificial Intelligence, wherein computers have the ability
to learn from data using statistical techniques, without being explicitly programmed by a
human being. It comprises algorithms that use data to learn on their own and make predictions.
These algorithms called models, are first trained and tested using a training data and testing
data, respectively. After successive trainings, once these models are able to give results to an
acceptable level of accuracy, they are used to make predictions about new and unknown data.
5.2 Concept of ERP, SCM, CRM
In any industry, some of the demands managers face is to be cost effective. In addition to that,
they are also faced with challenges such as to analyze costs and profits on a product or
consumer basis, to be flexible to face ever altering business requirements, and to be informed
of management decision making processes and changes in ways of doing business.
However, some of the challenges holding managers back include the difficulty in attaining
accurate information, lack of applications that mimic existing business practices and bad
interfaces. When some challengers are holding a manager back, that is where Enterprise
Resource Planning (ERP) comes into play. Supply chain management basically merges the
supply and demand management. It uses different strategies and approaches to view the entire
chain and work efficiently at each and every step involved in the chain. Every unit that
participates in the process must aim to minimize the costs and help the companies to improve
their long term performance, while also creating value for its stakeholders and customers. This
process can also minimize the rates by eradicating the unnecessary expenses, movements and
handling. CRM is an enterprise application module that manages a company's interactions
with current and future customers by organizing and coordinating, sales and marketing, and
providing better customer services along with technical support.

5.2.1 Enterprise Resource Planning (ERP)

In a nutshell, the Enterprise Resource Planning software tries to integrate all the different
departments and functions of an organization into a single computer system to serve the various
needs of these departments.
Over the years business applications have evolved from Management Information Systems
with no decision support to Corporate Information Systems, which offer some decision
support to Enterprise Resource Planning. Enterprise Resource Planning is a software solution
that tackles the needs of an organization, taking into account the process view to meet an
organization's goals while incorporating all the functions of an organization.
Its purpose is to make easy the information flow between all business functions within the
boundaries of the organization and manage the organization's connections with its outside
stakeholders. The task at hand, of implementing one software program that looks after the
needs of the Finance Department together with the needs of the Human Resource Department
and the Warehouse, seems impossible. These different departments usually have an individual
software program that is optimized in the way each department works.

ERP is a business management software that is implemented by many business houses to

increases their productivity and performance. It is basically used to collect, store, manage and
interpret data from many business activities like Product planning, cost, Manufacturing or
Service delivery, Marketing and Sales, Inventory management , Shipping and payment etc.

ERP software is very useful for large organization. It comes in many modules:

o Human Resources
o Financial Accounting
o Supply Chain Management
o Customer Relationship Management
o Inventory
o Purchasing
o Project management

Fig 5.1: ERP System

5.2.1.1 Advantages of ERP System

 With Enterprise Resource Planning (ERP) software, accurate forecasting can be done.
When accurate forecasting inventory levels are kept at maximum efficiency, this
allows for the organization to be profitable.
Integration of the various departments ensures communication, productivity and
efficiency.
Adopting ERP software eradicates the problem of coordinating changes between many
systems.
ERP software provides a top-down view of an organization, so information is available
to make decisions at anytime, anywhere.

5.2.1.2 Disadvantages of ERP System

Adopting ERP systems can be expensive.

The lack of boundaries created by ERP software in a company can cause problems of
who takes the blame, lines of responsibility and employee morale.

Time and Cost are the important factors that need to be considered before buying or
implementing an ERP system. The implementation can take several months to couple of years.
The cost is also not fixed and varies based on your requirements and the features provided by
the vendor. So, it is advisable to thoroughly analyse the vendor's ERP package modules,
features and supporting infrastructure before implementing the ERP.

Top ERP Vendors

o SAP
o Oracle
o Microsoft
o Epicor
o Infor
o QAD
o Lawson
o SAGE
o JD Edwards

5.2.2 Supply Chain Management (SCM)

SCM can be defined as the management of flow of products and services, which begins from
the origin of products and ends at the product’s consumption. It also comprises movement and
storage of raw materials that are involved in work in progress, inventory and fully furnished
goods. The main objective of supply chain management is to monitor and relate production,
distribution, and shipment of products and services. This can be done by companies with a very
good and tight hold over internal inventories, production, distribution, internal productions and
sales.
 0
Fig 5.2: Supply Chain Management
In the above figure, we can see the flow of goods, services and information from the producer
to the consumer. The picture depicts the movement of a product from the producer to the
manufacturer, who forwards it to the distributor for shipment. The distributor in turn ships it to
the wholesaler or retailer, who further distributes the products to various shops from where the
customers can easily get the product. Supply chain management basically merges the supply
and demand management. It uses different strategies and approaches to view the entire chain
and work efficiently at each and every step involved in the chain. Every unit that participates
in the process must aim to minimize the costs and help the companies to improve their long
term performance, while also creating value for its stakeholders and customers. This process
can also minimize the rates by eradicating the unnecessary expenses, movements and handling.
Here we need to note that supply chain management and supply chain event management are
two different topics to consider. The Supply Chain Event Management considers the factors
that may interrupt the flow of an effective supply chain; possible scenarios are considered and
accordingly, solutions are devised for them.
Every firm strives to match supply with demand in a timely fashion with the most efficient use
of resources. Here are some of the important goals of supply chain management:
Supply chain partners work collaboratively at different levels to maximize resource
productivity, construct standardized processes, remove duplicate efforts and minimize
inventory levels.
Minimization of supply chain expenses is very essential, especially when there are economic
uncertainties in companies regarding their wish to conserve capital.
Cost efficient and cheap products are necessary, but supply chain managers need to
concentrate on value creation for their customers.
Exceeding the customers’ expectations on a regular basis is the best way to satisfy them.
Increased expectations of clients for higher product variety, customized goods, off-season
availability of inventory and rapid fulfillment at a cost comparable to in-store offerings
should be matched.
To meet consumer expectations, merchants need to leverage inventory as a shared resource
and utilize the distributed order management technology to complete orders from the
optimal node in the supply chain.
The key benefits of supply chain management are as follows:
Develops better customer relationship and service.
Creates better delivery mechanisms for products and services in demand with minimum
delay.
Improvises productivity and business functions.
 Minimizes warehouse and transportation costs.
Minimizes direct and indirect costs.
Assists in achieving shipping of right products to the right place at the right time.
Enhances inventory management, supporting the successful execution of just-intime stock
models. Assists companies in adapting to the challenges of globalization, economic
upheaval, expanding
consumer expectations, and related differences.
Assists companies in minimizing waste, driving out costs, and achieving efficiencies
throughout the supply chain process.
5.2.2.1 SCM Process
Supply chain management is a process used by companies to ensure that their supply chain is
efficient and cost-effective.

Fig 5.3: SCM Process

A supply chain is the collection of steps that a company takes to transform raw materials into
a final product. The five basic components of supply chain management are discussed below:
1.Plan
The initial stage of the supply chain process is the planning stage. We need to develop a plan
or strategy in order to address how the products and services will satisfy the demands and
necessities of the customers. In this stage, the planning should mainly focus on designing a
strategy that yields maximum profit. For managing all the resources required for designing
products and providing services, a strategy has to be designed by the companies. Supply chain
management mainly focuses on planning and developing a set of metrics.
2. Develop (Source)
After planning, the next step involves developing or sourcing. In this stage, we mainly
concentrate on building a strong relationship with suppliers of the raw materials required for
production. This involves not only identifying dependable suppliers but also determining
different planning methods for shipping, delivery, and payment of the product. Companies need
to select suppliers to deliver the items and services they require to develop their product. So in
this stage, the supply chain managers need to construct a set of pricing, delivery and payment
processes with suppliers and also create the metrics for controlling and improving the
relationships. Finally, the supply chain managers can combine all these processes for handling
their goods and services inventory. This handling comprises receiving and examining
shipments, transferring them to the manufacturing facilities and authorizing supplier payments.
3. Make
The third step in the supply chain management process is the manufacturing or making of
products that were demanded by the customer. In this stage, the products are designed,
produced, tested, packaged, and synchronized for delivery. Here, the task of the supply chain
manager is to schedule all the activities required for manufacturing, testing, packaging and
preparation for delivery. This stage is considered as the most metric-intensive unit of the supply
chain, where firms can gauge the quality levels, production output and worker productivity.
4. Deliver
The fourth stage is the delivery stage. Here the products are delivered to the customer at the
destined location by the supplier. This stage is basically the logistics phase, where customer
orders are accepted and delivery of the goods is planned. The delivery stage is often referred
as logistics, where firms collaborate for the receipt of orders from customers, establish a
network of warehouses, pick carriers to deliver products to customers and set up an invoicing
system to receive payments.
5. Return
This stage often tends to be a problematic section of the supply chain for many companies. The
planners of supply chain need to discover a responsive and flexible network for accepting
damaged, defective and extra products back from their customers and facilitating the return
process for customers who have issues with delivered products.
5.2.2.2 SCM Process Flow
Supply chain management can be defined as a systematic flow of materials, goods, and
related information among suppliers, companies, retailers, and consumers.
Types
There are three different types of flow in supply chain management:
Material flow
Information/Data flow
Money flow

Fig 5.4: SCM Process Flow

Material Flow
Material flow includes a smooth flow of an item from the producer to the consumer. This is
possible through various warehouses among distributors, dealers and retailers. The main
challenge we face is in ensuring that the material flows as inventory quickly without any
stoppage through different points in the chain. The quicker it moves, the better it is for the
enterprise, as it minimizes the cash cycle. The item can also flow from the consumer to the
producer for any kind of repairs, or exchange for an end of life material. Finally, completed
goods flow from customers to their consumers through different agencies. A process known as
3PL is in place in this scenario. There is also an internal flow within the customer company.
Information Flow
Information/data flow comprises the request for quotation, purchase order, monthly schedules,
engineering change requests, quality complaints and reports on supplier performance from
customer side to the supplier. From the producer’s side to the consumer’s side, the information
flow consists of the presentation of the company, offer, confirmation of purchase order, reports
on action taken on deviation, dispatch details, report on inventory, invoices, etc.
Money Flow
Based on the invoice raised by the producer, the clients examine the order for correctness. If
the claims are correct, money flows from the clients to the respective producer. Flow of money
is also observed from the producer side to the clients in the form of debit notes.
5.2.3 Customer Relationship Management
Atul Parvatiyar and Jagdish N. Sheth provide an excellent definition for customer relationship
management in their work titled - 'Customer Relationship Management: Emerging Practice,
Process, and Discipline' –
Customer Relationship Management is a comprehensive strategy and process of acquiring,
retaining, and partnering with selective customers to create superior value for the company
and the customer. It involves the integration of marketing, sales, customer service, and the
supply-chain functions of the organization to achieve greater efficiencies and effectiveness
in delivering customer value.
5.2.3.1 Need of CRM
To keep track of all present and future customers.
To identify and target the best customers.
To let the customers know about the existing as well as the new products and services.
To provide real-time and personalized services based on the needs and habits of the
existing customers.
To provide superior service and consistent customer experience.
To implement a feedback system.
5.2.3.2 Scope of CRM

Fig 5.5: CRM Model

5.2.3.3 Objectives of CRM
The most prominent objectives of using the methods of Customer Relationship Management
are as follows −
 Improve Customer Satisfaction − CRM helps in customer satisfaction as the satisfied
customers remain loyal to the business and spread good word-of-mouth. This can be
accomplished by fostering customer engagement via social networking sites, surveys,
interactive blogs, and various mobile platforms.
Expand the Customer Base − CRM not only manages the existing customers but also
creates knowledge for prospective customers who are yet to convert. It helps creating
and managing a huge customer base that fosters profits continuity, even for a seasonal
business.
Enhance Business Sales − CRM methods can be used to close more deals, increase
sales, improve forecast accuracy, and suggestion selling. CRM helps to create new
sales opportunities and thus helps in increasing business revenue.
Improve Workforce Productivity − A CRM system can create organized manners of
working for sales and sales management staff of a business. The sales staff can view
customer’s contact information, follow up via email or social media, manage tasks,
and track the salesperson’s performance. The salespersons can address the customer
inquiries speedily and resolve their problems.

5.2.3.4 Types of CRM

There are four basic types of CRM systems −

Strategic CRM
Operational CRM
Analytical CRM
Collaborative CRM
Strategic CRM
Strategic CRM is a type of CRM in which the business puts the customers first. It collects,
segregates, and applies information about customers and market trends to come up with better
value proposition for the customer.
The business considers the customers’ voice important for its survival. In contrast to Product-
Centric CRM (where the business assumes customer requirements and focuses on developing
the product that may sometimes lead to over-engineering), here the business constantly keeps
learning about the customer requirements and adapting to them.
These businesses know the buying behavior of the customer that happy customers buy more
frequently than rest of the customers. If any business is not considering this type of CRM,
then it risks losing the market share to those businesses, which excel at strategic CRM.
Operational CRM
Operational CRM is oriented towards customer-centric business processes such as marketing,
selling, and services. It includes the following automations: Sales Force Automation,
Marketing Automation, and Service Automation.
Salesforce is the best suitable CRM for large established businesses and Zoho is the best
CRM for growing or small-scale businesses.
 Fig 5.6: Operational CRM
Sales Force Automation
SFA is the application of technology to manage selling activities. It standardizes a sales cycle
and common terminology for sales issues among all the sales employees of a business. It
includes the following modules −
Product Configuration − It enables salespersons or customers themselves to
automatically design the product and decide the price for a customized product. It is
based on if-then-else structure.
Quotation and Proposal Management − The salesperson can generate a quotation of
the product prices and proposal for the customer by entering details such as customer
name, delivery requirements, product code, number of pieces, etc.
Accounts Management − It manages inward entries, credit and debit amounts for
various transactions, and stores transaction details as records.
Lead Management − It lets the users qualify leads and assigns them to appropriate
salespersons.
Contact Management − It is enabled with the features such as customers’ contact
details, salespersons’ calendar, and automatic dialing numbers. These all are stored in
the form of computerized records. Using this application, a user can communicate
effectively with the customers.
Opportunity Management − It lets the users identify and follow leads from lead
status to closure and beyond closure.
Marketing Automation
Marketing automation involves market segmentation, campaigns management, event-based
marketing, and promotions. The campaign modules of Marketing Automation enable the
marketing force to access customer-related data for designing, executing and evaluating
targeted offers, and communications.
Event-based (trigger) marketing is all about messaging and presenting offers at a particular
time. For example, a customer calls the customer care number and asks about the rate of
interest for credit card payment. This event is read by CRM as the customer is comparing
interest rates and can be diverted to another business for a better deal. In such cases, a
customized offer is triggered to retain the customer.
Service Automation
Service automation involves service level management, resolving issues or cases, and
addressing inbound communication. It involves diagnosing and solving the issues about
product.
With the help of Interactive Voice Response (IVR) system, a customer can interact with
business computers by entering appropriate menu options. Automatic call routing to the most
capable employee can be done.
Consumer products are serviced at retail outlets at the first contact. In case of equipment
placed on field, the service expert may require product servicing manual, spare parts manual,
or any other related support on laptop. That can be availed in service automation.
Analytical CRM
Analytical CRM is based on capturing, interpreting, segregating, storing, modifying,
processing, and reporting customer-related data. It also contains internal business-wide data
such as Sales Data (products, volume, purchasing history), Finance Data (purchase history,
credit score) and Marketing Data (response to campaign figures, customer loyalty schemes
data). Base CRM is an example of analytical CRM. It provides detailed analytics and
customized reports.
Business intelligence organizations that provide customers’ demographics and lifestyle data
over a large area pay a lot of attention to internal data to get more detail information such as,
“Who are most valuable customers?”, “Which consumers responded positively to the last
campaign and converted?”, etc.
Analytical CRM can set different selling approaches to different customer segments. In
addition, different content and styling can be offered to different customer segments. For the
customers, analytical CRM gives customized and timely solutions to the problems. For the
business, it gives more prospects for sales, and customer acquisition and retention.
Collaborative CRM
Collaborative CRM is an alignment of resources and strategies between separate businesses
for identifying, acquiring, developing, retaining, and maintaining valuable customers. It is
employed in B2B scenario, where multiple businesses can conduct product development,
market research, and marketing jointly.
Collaborative CRM enables smooth communication and transactions among businesses.
Though traditional ways such as air mail, telephone, and fax are used in communication,
collaborative CRM employs new communication systems such as chat rooms, web forums,
Voice over Internet Protocol (VoIP), and Electronic Data Interchange (EDI).
 Fig 5.7: Collaborative CRM
There are collaborative CRMs with in-built Partner Relationship Management
(PRM) software application which helps in managing partner promotions.
5.2.3.5 Advantages of CRM
Provides better customer service and increases customer revenues.
Discovers new customers.
Cross-sells and up-sells products more effectively.
Helps sales staff to close deals faster.
Makes call centers more efficient.
Simplifies marketing and sales processes.
5.2.3.6 Disadvantages of CRM
Some times record loss is a major problem.
Overhead costs.
Giving training to employees is an issue in small organizations.

5.3 Database Management System

The database is a collection of inter-related data which is used to retrieve, insert and delete
the data efficiently. It is also used to organize the data in the form of a table, schema, views,
and reports, etc. for e.g. Bank database organizes the data about its account holders with
different attributes like account number, account name, account type etc.
o Database management system is a software which is used to manage the database. For
example: MySQL, Oracle, etc are a very popular commercial database which is used in
different applications.
o DBMS provides an interface to perform various operations like database creation,
storing data in it, updating data, creating a table in the database and a lot more.
 o It provides protection and security to the database. In the case of multiple users, it also
maintains data consistency.

DBMS allows users the following tasks:

o Data Definition: It is used for creation, modification, and removal of definition that
defines the organization of data in the database.
o Data Updation: It is used for the insertion, modification, and deletion of the actual data
in the database.
o Data Retrieval: It is used to retrieve the data from the database which can be used by
applications for various purposes.
o User Administration: It is used for registering and monitoring users, maintain data
integrity, enforcing data security, dealing with concurrency control, monitoring
performance and recovering information corrupted by unexpected failure.

5.3.1 Characteristics of DBMS

o It uses a digital repository established on a server to store and manage the information.
o It can provide a clear and logical view of the process that manipulates data.
o DBMS contains automatic backup and recovery procedures.
o It contains ACID properties which maintain data in a healthy state in case of failure.
o It can reduce the complex relationship between data.
o It is used to support manipulation and processing of data.
o It is used to provide security of data.
o It can view the database from different viewpoints according to the requirements of the
user.

5.3.2 Advantages of DBMS

o Controls database redundancy: It can control data redundancy because it stores all
the data in one single database file and that recorded data is placed in the database.
o Data sharing: In DBMS, the authorized users of an organization can share the data
among multiple users.
o Easily Maintenance: It can be easily maintainable due to the centralized nature of the
database system.
o Reduce time: It reduces development time and maintenance need.
 o Backup: It provides backup and recovery subsystems which create automatic backup
of data from hardware and software failures and restores the data if required.
o multiple user interface: It provides different types of user interfaces like graphical
user interfaces, application program interfaces

5.3.3 Disadvantages of DBMS

o Cost of Hardware and Software: It requires a high speed of data processor and large
memory size to run DBMS software.
o Size: It occupies a large space of disks and large memory to run them efficiently.
o Complexity: Database system creates additional complexity and requirements.
o Higher impact of failure: Failure is highly impacted the database because in most of
the organization, all the data stored in a single database and if the database is damaged
due to electric failure or database corruption then the data may be lost forever.

5.4 Data warehousing

A Data Warehouse (DW) is a relational database that is designed for query and analysis rather
than transaction processing. It includes historical data derived from transaction data from single
and multiple sources.

An operational database undergoes frequent changes on a daily basis on account of the

transactions that take place. Suppose a business executive wants to analyze previous feedback
on any data such as a product, a supplier, or any consumer data, then the executive will have
no data available to analyze because the previous data has been updated due to transactions.

A Data Warehouse provides integrated, enterprise-wide, historical data and focuses on

providing support for decision-makers for data modeling and analysis.

A Data Warehouse is a group of data specific to the entire organization, not only to a particular
group of users.

It is not used for daily operations and transaction processing but used for making decisions.

A Data Warehouse can be viewed as a data system with the following attributes:

o It is a database designed for investigative tasks, using data from various applications.
o It supports a relatively small number of clients with relatively long interactions.
o It includes current and historical data to provide a historical perspective of information.
o Its usage is read-intensive.
o It contains a few large tables.
"Data Warehouse is a subject-oriented, integrated, and time-variant store of information in
support of management's decisions."

5.4.1 Characteristics of Data Warehouse

The characteristics of a data warehouse are discussed below −
Subject Oriented − A data warehouse is subject oriented because it provides
information around a subject rather than the organization's ongoing operations. These
subjects can be product, customers, suppliers, sales, revenue, etc. A data warehouse
does not focus on the ongoing operations, rather it focuses on modelling and analysis
of data for decision making.
Integrated − A data warehouse is constructed by integrating data from heterogeneous
sources such as relational databases, flat files, etc. This integration enhances the
effective analysis of data.
Time Variant − The data collected in a data warehouse is identified with a particular
time period. The data in a data warehouse provides information from the historical
point of view.
Non-volatile − Non-volatile means the previous data is not erased when new data is
added to it. A data warehouse is kept separate from the operational database and
therefore frequent changes in operational database is not reflected in the data
warehouse.

5.4.2 Data Warehouse Applications

As discussed before, a data warehouse helps business executives to organize, analyze, and use
their data for decision making. A data warehouse serves as a sole part of a plan-execute-assess
"closed-loop" feedback system for the enterprise management. Data warehouses are widely
used in the following fields −

Financial services
Banking services
Consumer goods
Retail sectors
Controlled manufacturing

5.4.3 Types of Data Warehouse

Information processing, analytical processing, and data mining are the three types of data
warehouse applications that are discussed below −
Information Processing − A data warehouse allows to process the data stored in it.
The data can be processed by means of querying, basic statistical analysis, reporting
using crosstabs, tables, charts, or graphs.
Analytical Processing − A data warehouse supports analytical processing of the
information stored in it. The data can be analyzed by means of basic OLAP operations,
including slice-and-dice, drill down, drill up, and pivoting.
 Data Mining − Data mining supports knowledge discovery by finding hidden patterns
and associations, constructing analytical models, performing classification and
prediction. These mining results can be presented using the visualization tools.
5.4.4 Benefits of Data Warehouse
1. Understand business trends and make better forecasting decisions.
2. Data Warehouses are designed to perform well enormous amounts of data.
3. The structure of data warehouses is more accessible for end-users to navigate,
understand, and query.
4. Queries that would be complex in many normalized databases could be easier to build
and maintain in data warehouses.
5. Data warehousing is an efficient method to manage demand for lots of information from
lots of users.
6. Data warehousing provide the capabilities to analyze a large amount of historical data.

5.5 Business Intelligent System

With increased data load emerged the need of organizing, storing and drawing useful
insights from it in order to enhance business value. Which introduced concepts of Business
Intelligence in the picture.

The term Business Intelligence refers collectively to the tools and techniques used for the
collection, integration, analysis and visualization of raw data. The raw data collected and
processed through the Business Intelligence processes is then transformed into
comprehensible data or meaningful information.

This information is then interpreted strategically by looking for trends and patterns in order
to make business decision supported by facts. To simplify the concept, raw data is collected
from various sources and with the help of Business Intelligence tools and is transformed
into meaningful information, stored in data warehouses in predefined manners. From the
data warehouses, we can retrieve stored data in the form of a report, query or conduct an
analysis. This can also be explained using ETL (Extract, Transform, Load concept).

It helps in analyzing business trends from past and help in taking lucrative business steps
in future. BI is a dynamic approach, that means it’s output changes and evolves with time
and trends in business.

5.5.1 Business Intelligence Examples

For example, ‘Westside Store’ selling products of various brands both in-store and online.
 All the customers are offered a loyalty card which has a unique ID. These cards are used
while shopping from Westside stores or Westside’s online portal. All your purchase details
associated with your unique account ID are stored into the Westside’s database. Now, the
manager of Westside will use BI methods and software to run analytical reports on huge
amounts of customer information to identify consumer trends like their favorite brand, do
they prefer in-store shopping or online shopping? What price range is the most affordable?
and during which months or seasons of the year, they shop the most.

Thus, giving the organization valuable information like customer preferences, needs, and
habits. Using which the organization could anticipate new opportunities, deliver better
service and come up with new marketing campaigns like releasing offer coupons, launching
a sale etc., serving the ultimate goal of growth of the business.

5.5.2 Characteristics of BIS

It is created by procuring data and information for use in decision-making.

It is a combination of skills, processes, technologies, applications and practices.
It contains background data along with the reporting tools.
It is a combination of a set of concepts and methods strengthened by fact-based support
systems.
It is an extension of Executive Support System or Executive Information System.
It collects, integrates, stores, analyzes, and provides access to business information
It is an environment in which business users get reliable, secure, consistent,
comprehensible, easily manipulated and timely information.
It provides business insights that lead to better, faster, more relevant decisions.

5.5.3 Benefits of BIS

Improved Management Processes.

Planning, controlling, measuring and/or applying changes that results in increased
revenues and reduced costs.
Improved business operations.
Fraud detection, order processing, purchasing that results in increased revenues and
reduced costs.
Intelligent prediction of future.
5.6 Knowledge Management
Knowledge management is an activity practised by enterprises all over the world. In the
process of knowledge management, these enterprises comprehensively gather information
using many methods and tools.
Then, gathered information is organized, stored, shared, and analyzed using defined
techniques. The analysis of such information will be based on resources, documents, people
and their skills.
Properly analyzed information will then be stored as 'knowledge' of the enterprise. This
knowledge is later used for activities such as organizational decision making and training new
staff members. There have been many approaches to knowledge management from early days.
Most of early approaches have been manual storing and analysis of information. With the
introduction of computers, most organizational knowledge and management processes have
been automated.
Therefore, information storing, retrieval and sharing have become convenient. Nowadays,
most enterprises have their own knowledge management framework in place.
The framework defines the knowledge gathering points, gathering techniques, tools used, data
storing tools and techniques and analyzing mechanism.
5.6.1 The Knowledge Management Process
The process of knowledge management is universal for any enterprise. Sometimes, the
resources used, such as tools and techniques, can be unique to the organizational environment.
The Knowledge Management process has six basic steps assisted by different tools and
techniques. When these steps are followed sequentially, the data transforms into knowledge.

Fig 5.8: Knowledge Management Process

Step 1: Collecting
This is the most important step of the knowledge management process. If you collect the
incorrect or irrelevant data, the resulting knowledge may not be the most accurate. Therefore,
the decisions made based on such knowledge could be inaccurate as well.
There are many methods and tools used for data collection. First of all, data collection should
be a procedure in knowledge management process. These procedures should be properly
documented and followed by people involved in data collection process.
The data collection procedure defines certain data collection points. Some points may be the
summary of certain routine reports. As an example, monthly sales report and daily attendance
reports may be two good resources for data collection.
With data collection points, the data extraction techniques and tools are also defined. As an
example, the sales report may be a paper-based report where a data entry operator needs to
feed the data manually to a database whereas, the daily attendance report may be an online
report where it is directly stored in the database.
In addition to data collecting points and extraction mechanism, data storage is also defined in
this step. Most of the organizations now use a software database application for this purpose.
Step 2: Organizing
The data collected need to be organized. This organization usually happens based on certain
rules. These rules are defined by the organization.
As an example, all sales-related data can be filed together and all staff-related data could be
stored in the same database table. This type of organization helps to maintain data accurately
within a database.
If there is much data in the database, techniques such as 'normalization' can be used for
organizing and reducing the duplication.
This way, data is logically arranged and related to one another for easy retrieval. When data
passes step 2, it becomes information.
Step 3: Summarizing
In this step, the information is summarized in order to take the essence of it. The lengthy
information is presented in tabular or graphical format and stored appropriately.
For summarizing, there are many tools that can be used such as software packages, charts
(Pareto, cause-and-effect), and different techniques.
Step 4: Analyzing
At this stage, the information is analyzed in order to find the relationships, redundancies and
patterns.
An expert or an expert team should be assigned for this purpose as the experience of the
person/team plays a vital role. Usually, there are reports created after analysis of information.
Step 5: Synthesizing
At this point, information becomes knowledge. The results of analysis (usually the reports)
are combined together to derive various concepts and artefacts.
A pattern or behavior of one entity can be applied to explain another, and collectively, the
organization will have a set of knowledge elements that can be used across the organization.
This knowledge is then stored in the organizational knowledge base for further use.
Usually, the knowledge base is a software implementation that can be accessed from anywhere
through the Internet.
You can also buy such knowledge base software or download an open-source implementation
of the same for free.
Step 6: Decision Making
At this stage, the knowledge is used for decision making. As an example, when estimating a
specific type of a project or a task, the knowledge related to previous estimates can be used.
This accelerates the estimation process and adds high accuracy. This is how the organizational
knowledge management adds value and saves money in the long run.

5.7 E- Commerce
E-commerce also known as Electronic Commerce, refers to buying and selling of products
or services over the Internet. Normally e-commerce is used to refer to the sale of physical
products online, but it can also describe any kind of commercial transaction that is facilitated
through the internet.
The first ever online sale was in 1994 when a man sold a CD by the band Sting to his friend
through his website Net Market, an American retail platform. This is the first example of a
consumer buying a product from a business through the World Wide Web or e-commerce as
we commonly know it today. After that e-commerce has evolved to make products easier to
discover and purchase through online retailers and marketplaces. All freelancers as well as
small and large businesses have been benefited from e-commerce which enables them to sell
their goods and services at a scale that was not possible with traditional offline retail.

5.7.1 Types of E-commerce model

There are basically 4 main types of e-commerce models that can describe almost every
transaction that takes place between consumers and businesses.
1. Business to Consumer (B2C):
When a good or service is sold to an individual consumer by a business, e.g., we
buy a pair of shoes from an online retailer.
2. Business to Business (B2B):
When a good or service is sold by a business to another business, e.g., a
software-as-a-service is sold by a business for other businesses to use.
3. Consumer to Consumer (C2C):
When a good or service is sold by a consumer to another consumer, e.g., we sell
our old furniture on eBay to another consumer.
4. Consumer to Business (C2B):
When a consumer’s own products or services is sold to a business or
organization, e.g., an authority offers exposure to their online audience in
exchange for a fee or a photographer licenses their photo for a business to use.
5.7.2 Business Application of E-commerce

Conversational commerce: e-commerce via chat

Digital Wallet
Document automation in supply chain and logistics
Electronic tickets
Enterprise content management
Group buying
Instant messaging
Newsgroups
Online banking
Online office suites
Online shopping and order tracking
Pretail
Print on demand
Shopping cart software
Social networking
Teleconferencing
Virtual assistant (artificial intelligence)
Domestic and international payment systems

5.7.3 Advantages of E-commerce

E-commerce enables fast and secure shopping.
It is making digitalized world.
E-commerce also enables to choose different goods and services according to
your choice.
It is a simple way of selling and buying products and services.
E-commerce replaced the paper work as all transactions are through internet
today.
It provides better management system, as it has a centralized database.
E-commerce via internet covers a large number of customers worldwide.

5.7.4 Disadvantages of E-commerce

E-commerce has no universal standard for quality and reliability.
E-commerce works through internet, it is possible that navigation on internet
itself may be slow.
Strong security is required in e-commerce as all transactions are through
internet.
There is high risk of buying unsatisfactory products through e-commerce.
It uses public key infrastructure which is not safe.
Customers also trap in banking fraud which is quite frequent.
Hackers also try to get access of data or to destroy data in e-commerce.

5.8 E- Business and M- Commerce

E-Business is the trading in products or services using Internet. E-business draws on
technologies such as mobile commerce, electronic fund transfer, supply chain management,
Internet marketing, online transaction processing, electronic data interchange etc.
Mobile commerce or simply M-Commerce means engaging users in a buy or sell process via
a mobile device. For instance, when someone buys an Android app or an iPhone app, that
person is engaged in m-commerce. There are a number of content assets that can be bought
and sold via a mobile device such as games, applications, ringtones, subscriptions etc.

Fig 5.9: Mobile Commerce

5.8.1 Working of M-Commerce
Let’s look at some of the points that you need to remember as a business, while engaging in
m-commerce −
5.8.2 Decide Where to Sell
Before you sell your products or services via m-commerce, you need to decide what type of
outlets or stores suit your business best. Let us suppose you have created ringtones − you can
sell them either at specific third-party outlets or to independent aggregators who charge you a
commission for the service.
You can also sell your ringtones on mobile stores or app stores such as Android marketplace
or App store (Apple). These stores are frequently visited by many buyers and hence ideal for
making sales easily and efficiently. Finally, you can also sell via your own mobile store by
creating a mobile website specifically for sales or as by setting-up an m-commerce page on
your main website.
5.8.3 Set up Mobile Billing
Once you have decided where to sell, the next step is to set up your merchant account. For
instance, you can use third-party services such as PayPal. This is ideal for small businesses or
also large companies. A third-party application makes it really easy for you as well as your
customers to make the payments, but then they do charge commission on the transaction.
You can also set-up your own billing and payment gateway, but make sure that you make it
really easy for users. Mobile users do not use keyboards or a mouse so make sure that the
design of your m-commerce site is intuitive, with easy navigation tools and the right display
sizes. Basically, make your m-commerce site optimized for Smartphone users.
5.8.4 Benefits of M-Commerce
The major benefit of engaging in m-commerce is the sheer size of potential sales. The
probability of your potential customers owning a Smartphone is very high, so you can safely
assume that you will get much more positive response from mobile devices than your website.
M-commerce is recommended for every business irrespective of its type, scale, and size.
5.9 Digital Business
In today’s work-from-home world, it feels like everyone is running a digital business. But the
reality is that top business leaders have different definitions of what it means to go digital. As
a result, priorities vary when it comes to technology adoption and transformation.
Generally speaking, digital businesses rely on technology to operate and grow. Depending on
your industry, that might look like:
Using productivity apps and task management systems to automate workflows
Leveraging AI to improve customer experience
 Capturing data to improve business intelligence
Or, for online-only companies, doing 100 percent of your work via digital platforms
5.9.1 Concepts of Digital Business
Becoming a digital business is a foundational shift, so it’s important to consider the key
concepts guiding your transformation.
What are businesses looking to achieve by going digital? Most organizations cite the
following four concepts:
1. Flexibility
Our world is constantly changing, and companies are looking for a business model that allows
them to be more flexible. During the COVID-19 pandemic, for instance, businesses realized
that technology could help them pivot from on-site to work-from-home and back again without
creating a logistical nightmare. Going digital allows you to adapt to change quickly without
the dead weight of time-consuming manual processes.
2. Scalability
With scalability, processes match fluctuations in your workload. Digital businesses can quickly
scale up or down to meet the needs of the organization. As an example, a scalable business can
efficiently onboard new employees during periods of growth or expand their data storage when
taking on a large client.
3. Culture
Digital business requires changing how you operate, and this starts with changing how you
think. To truly become a digital business, you need your staff to be on board. Though tech
leaders in your organization may be at the forefront of this work, building a philosophy of
productivity, efficiency, and automation into every department's mission is vital to success.
4. Quality
Our final digital business concept seems straightforward, but it’s important to keep in mind
that quality is key as you make big changes. Often, we become swept up in innovation for
innovation’s sake. But this won’t add value to your business. If your new processes aren’t
enhancing quality, you need to rethink your strategy.

5.9.2 Examples of Popular Digital Businesses

Digital business isn’t just a transformative trend for major companies like Home Depot and
GE. Many digital businesses start online (and remain online) with 100 percent of their
operations existing in a digital space. Online-only digital businesses often have low startup
costs and can quickly scale to meet the demands of the market, making them a popular choice
for both experienced and fledgling entrepreneurs.
Sellers on Etsy, the popular ecommerce platform offering handmade goods, are a common
example of the digital business trend. Etsy reported in 2017 that 97 percent of the business
owners selling on their platform ran their business from home, and more than 75 percent were
one-person operations. Despite being considered a “microbusiness,” many successful digital
business owners on Etsy said it was their sole occupation – about 32 percent of sellers.

5.10 E-governance
Electronic Governance or E-Governance is the application of Information and
Communication Technology (ICT) for providing government services, interchange of statics,
communication proceedings, integration of various independent systems and services.
Through the means of e-governance, government services are made available to citizens in a
suitable, systematic and transparent mode. The three main selected groups that can be
discriminated in governance concepts are government, common people and business groups.
E-governance is the best utilization of information and communication technologies to
mutate and upgrade the coherence, productivity, efficacy, transparency and liability of
informational and transnational interchanges within government, between government
agencies at different levels, citizen & businesses. It also gives authorization to citizens
through access and use of information. Generally, E-governance uses information and
communication technologies at various levels of the government and the public sector to
enhance governance. Theoretical studies state that E-Governance is the procedure of change
of the correlation of government with its ingredients, the citizens, the businesses and between
its own organs, using tools of information and communication technology.
The UNESCO states, E-governance is the public sector’s use of information and
communication automation in order to upgrade information and service delivery, stimulating
resident involvement in the decision-making process and making government more liable,
unambiguous and productive.
5.10.1 Elements of E-Governance:
Basic elements of e-governance are:
1. Government
2. Citizens
3. Investors/Businesses
5.10.2 Types of E-Governance:
E-governance is of 4 types:
1. Government-to-Citizen (G2C)

The Government-to-citizen mentions the government services that are acquired by the
familiar people. Most of the government services come under G2C. Similarly, the primary
aim of Government-to-citizen is to supply facilities to the citizens. It also helps the ordinary
people to minimize the time and cost to carry out a transaction. A citizen can retrieve the
facilities anytime from anywhere.
Similarly, spending the administrative fee online is also possible due to G2C. The facility of
Government-to-Citizen allows the ordinary citizen to outclass time limitation. It also focuses
on geographic land barriers.

2. Government-to-business (G2B)

The Government-to-business is the interchange of services between Government and

Business firms. It is productive for both government and business firms. G2B provides access
to pertinent forms needed to observe. It also contains many services interchanged between
business sectors and government.
Similarly, the Government-to-business provides timely business information. A business
organization can have easy and easy online access to government agencies. G2B plays a
important role in business development. It upgrades the efficiency and quality of
communication and transparency of government projects.

3. Government-to-Government (G2G)

The Government-to-Government mentions the interaction between different government

departments, firms and agencies. This increases the efficiency of government processes. In
G2G, government agencies can share the same database using online communication. The
government departments can work together. This service can increase international
discretion and relations.
G2G services can be at the local level or at the international level. It can convey with both
global government and local government. It also provides safe and secure inter-relationship
between domestic or foreign government. G2G builds a universal database for all members
to upgrade service.

4. Government-to-Employee (G2E)

The Government-to-Employee is the internal part of G2G section. It aims to bring

employees together and improvise knowledge sharing. It provides online facilities to the
employees. Similarly, applying for leave, reviewing salary payment record and checking
the balance of holiday. The G2E sector yields human resource training and development.
So, G2E is also the correlation between employees and government institutions.

5.10.3 Advantages of E-Governance

The supreme goal of the e-governance is to be able to provide an increased portfolio of public
services to citizens in a systematic and cost-effective way. It allows for government
transparency because it allows the public to be informed about what the government is
working on as well as the policies they are trying to implement.
The main advantage while executing electronic government will be to enhance the efficiency
of the current system.

5.10.4 Disadvantages of E-Governance

The main disadvantage regarding e-governance is the absence of fairness in public access to
the internet, of trustworthy information on the web and disguised agendas of government
groups that could have impact and could bias public opinions.

5.11 CONCLUSIONS:
Most of all IT helps in searching new and interesting jobs. Information technology is a vast
area and used in broader term but most commonly it is used in context of computers and
telecommunication equipment’s which are useful in every organization. Organizations and
individuals around the world spend billions of dollars each year providing and using
information technology. New capability, standards, and products appear every day. Initially
the computer work stands alone with one terminal now it is working with several terminals.
World Wide Web has made the life easier. Similarly social networking sites have has become
an important part of our lives. By means of this people can connect with their dear ones and
share their ideas with others. On the other hand, cyber-crimes, system viruses and worms have
created harm to all the available information. In today’s work-from-home world, it feels like
everyone is running a digital business. Enterprise Resource Planning is a software solution
that tackles the needs of an organization, taking into account the process view to meet an
organization's goals while incorporating all the functions of an organization.
There are a number of content assets that can be bought and sold via a mobile device such as
games, applications, ringtones, subscriptions etc.
E-governance is the best utilization of information and communication technologies to
mutate and upgrade the coherence, productivity, efficacy, transparency and liability of
informational and transnational interchanges within government, between government
agencies at different levels, citizen & businesses.

Exercise:
1. What is Internet? State its evolution.
2. Explain the applications of ICT in corporates
3. Explain the role of Information Technology in the development of corporates.
4. Explain the following along with their applications. a) Artificial Intelligence b) Machine
Learning
5. Explain advantages and disadvantages of SCM.
6. Explain the concept of Customer relationship management.
7. Explain the model of ERP.
8. Explain difference between E-Commerce and Mobile Commerce.
9. Define Datawarehouse. State its features.
10. Write a note on Business Intelligence
11. Explain the role of digital transformation for the growth of E-Governance.
 Chapter 6
Impact of Information Technology in Business Sector
Points:
6.1 Introduction
6.2 E-Infrastructure in India
6.3 Impact of information on business
6.4 Business alignment across the function and sectors and society
6.5 Conclusion
Objectives:
Study and impact of digitization on Business sector
Developmental aspects of Information Technology
Revolution of digitization on society

6.1 Introduction
Information Technology (IT) is among the relevant factor assisting the business to penetrate
in a new market for being innovative and generating new product and services which help the
growth of the business and company. 21st century has come to be known as the era of
Information Technology; it is the key driver of economic growth of not only a nation, but
rather the whole world. The growth and progress of every sector of the country today depends
on the level of Information Technology. Likewise, Information Technology is one of the
essential features for the overall development of a country.
The revolution of IT and internet facilitates the outstanding performance of the economy in
business sector, through the exchanges of information by using internet and electronic devices
facilitate accessibility of doing business between companies globally.
6.1.1 Important Features of Information Technology
Following are the major features as well as advantages of Information Technology −
The development of Information Technology has made education system simpler,
easier, and widespread. Now, people of remote areas can also use technology for their
children’s education and also avail the benefits of adult education.
Diffusion of e-governance on a large scale.
Participation of public in governance and policy making.
Fast economic development.
Development of remote areas.
Technology helps the police in nabbing the criminals.
The judiciary and other administrative services can also take the help of technology to
make work easier and faster.
Highly beneficial for the common people, as they can access their rights and can take
legal action against the person who violates his/her rights.
It increases the happiness and prosperity of not only an individual, but rather the society
as a whole.
6.1.2 Demerits of Information Technology
Information Technology is like a boon on the society. However, it comes with its own
disadvantages −
As discussed above, with the help of technology, police can arrest criminals and
criminal activities; at the same time, technology has also opened the door for criminals
as well to practice smart criminal activity.
There are chances that children can misuse technology and take a wrong path.
Some distorted and perverted minds use technology to demean or defame someone
unethically and also illegally.
These are basically not demerits but rather the misuse of technology.
6.1.3 Information Technology Act, 2000
By understanding the growing demand and applications of Information Technology, the
Government of India passed the bill of Information Technology in 2000, which came to be
known as the Information Technology Act, 2000.
The major features of the Act are −
It facilitates e-governance and e-commerce by providing equal legal treatment to users.
It made provision to accept electronic records and digital signature.
It gave legal approval to electronic business transactions.
The Act instructs banks to maintain electronic record and facilitate electronic fund
transfer.
6.2 E-Infrastructure in India
E-infrastructure facilitates competent equipment and favourable resources and opportunities
that are essentially needed to for the safety, security, and development of a society. Further, e-
infrastructure helps to integrate various technologies including different computer systems,
internet broadband channels, computing power, data storage, data sharing, and many more.
To meet the growing challenges of globalization and cope-up with the sustainable growth of
information and communication technology, it is essentially required to integrate these
systems by developing better e-infrastructure.
6.2.1 Initiatives
By understanding the growing demand and challenges, the Department of Information
Technology formulated a ‘National Policy on Universal Electronic Accessibility’.
The policy was approved by the union cabinet in 2013.
The major strategies adopted in the implementation of the policy have been taken from the
Press Information Bureau Government of India Cabinet October 3, 2013 −
Creating awareness on universal electronics accessibility and universal design.
Capacity building and infrastructure development.
Setting up of model electronics and ICTs centres for providing training and
demonstration to special educators and physically as well as mentally challenged
persons.
 Conducting research and development, use of innovation, ideas, technology etc.
whether indigenous or outsourced from abroad.
Developing programme and schemes with greater emphasis for differently abled
women/children.
Developing procurement guidelines for electronics and ICTs for accessibility and
assistive needs.
6.2.2 ITIR
For the exclusive growth of E-infrastructure in India, the Government of India has formulated
the policy on ‘Information Technology Investment Regions (ITIRs) in 2008.
As per the policy, ITIRs will be self-contained integrated township with the purpose to
accelerated growth of Information Technology, Information Technology Enabled Service, and
Electronic Hardware Manufacturing units.
Further, the policy has recommended to assign minimum area of 40 sq. km for ITIR. However,
out of the total demarcated area, 40% should be reserved for the processing zone and the
remaining area for the non-processing zone.
The processing zone will include −

Information Technology/Information Technology Enabled Services

Electronic Hardware Manufacturing Units
Logistics and other services and required infrastructure.
On the other hand, the non-processing area will include −

Residential area
Commercial area
Other social and institutional infrastructure
6.2.3 National Knowledge Network
In 2009, in order to create an infrastructure that can fulfil the future requirements, the concept
of ‘National Knowledge Network’ (NKN) is conceptualized.
The concept of NKN is designed to Encourage, Enable, Enrich, and Empower the user
community to test and implement the innovative ideas without any restrictions.
Further, the NKN will provide better −
Network design
Security requirements
Service requirements
Operational requirements

6.2.4 Dot Bharat

The concept of developing the domain and website in ‘Devnagri’ (native script) was launched
in August 2014.
This script will cover the following Indian languages −
 Hindi
Marathi
Boro
Dogri
Maithili
Sindhi
Gujarati

6.3 Impact of Information on Business

The rise of information technology has paved the way for various innovations. With the
digitization of information, more and more businesses are increasingly leveraging the benefits
of digital tools to improve their prospects. Information technology has been crucial in turning
this process into a complete success. Advancement in communication and information technology has
further strengthen the role of the internet in business. The internet is widely used in organization for
marketing and promotion of products and services. The internet is used to deliver customer support, share
information and provide training to employees.
Information technology has dramatically transformed the lives of individuals. It provides
businesses the scope to analyze data and plan business strategies accordingly. Utilizing
information technology means that the data analysis is accurate, thus optimizing profits.
Information technology has had a major impact on various aspects of businesses. Let’s take a
look at some of these here.
1. Cloud Computing
The concept of cloud computing is immensely popular among businesses owing to the
efficiency in business operations that it provides. Cloud computing utilizes information
technology to capitalize on its ability to provide improved agility and time and resource
management for businesses.
Increasingly, businesses are shifting to the cloud to leverage its many benefits. It has been
predicted that more than $1 trillion will be impacted in IT spending by the transition of
businesses to cloud computing by 2020.
“Cloud-first strategies are the foundation for staying relevant in a fast-paced world,” Ed
Anderson, research VP at the analyst firm, Gartner pointed out, “The market for cloud services
has grown to such an extent that it is now a notable percentage of total IT spending, helping to
create a new generation of start-ups and “born in the cloud” providers.”
A good Internet connection and a commendable WiFi connectivity are important to accomplish
this.
2. Automation of Business Processes
The movement towards increased automation of business processes has gained traction over
the years. It improves efficiency and increases workflow considerably.
Information technology helps in developing automated processes for businesses. This not only
helps in reducing the cost of operation but also saves time. The time saved can be utilized to
focus on other tasks, thus speeding up business processes significantly.
Processes like billing, tracking metrics, collecting customer data, monitoring certain processes
etc. can be automated easily. There are numerous automation software that can be utilized for
this purpose.
3. Working Remotely
Implementation of information technology provides the ability to remotely access your
company’s network. As a result, it equips employees with the ability to get the work done even
if they are not physically present at the workplace.
Such agility has a number of benefits. Therefore, it has gained massive popularity. In fact,
according to a U.S. federal government resource, 47% of the employees are eligible to work
remotely.
Ian Adams, head of strategic marketing development at the outsourcing company, Mitie
pointed out, “We’re seeing greater collaboration between HR, IT, property and facilities
management and job titles like ‘workplace director’ making this agile workplace happen.”
4. Mobile Technology
Mobile technology has picked up momentum owing to its convenience, efficiency and speed.
With the rise in the popularity of information technology, implementation of mobile
technology has gained ground quickly.
The trend of BYOD (Bring Your Own Device) is on the rise owing to increased employee
satisfaction. As many as 74% of the organizations are already utilizing this trend or plan on
doing so in the future. In fact, the BYOD market is estimated to reach $181.39 billion by 2017.
Mobile technology takes business communication to a whole new level. A mobile team can
improve the workplace productivity considerably. There are numerous ways to integrate
mobile technology in the workplace. In fact, chances are, your employees are already using it.
5. Protecting Information
Every organization has a mammoth database comprising various information related to
business transactions, client details and so on. Such information is extremely valuable to a
business and can cause a host of legal issues if it is lost. This is where information technology
becomes relevant. It provides the right resources to store the information in a way that ensures
maximum protection.
Virtual storage systems can keep information safe by allowing a limited number of users to
access these. Increased protection also ensures that these systems are not hacked and the
information is not wiped out owing to some problems. Therefore, information technology
helps in upholding business integrity.
6. Providing Customer Satisfaction
Customer experience and satisfaction are crucial aspects of all businesses. The key to customer
satisfaction is a strong customer support team and its availability to cater to the requirements
of the customers.
Information technology provides the best tools for communicating with customers and solving
their problems in real time. It has unlocked the facilities like Email, social media and other
messaging platforms for this purpose.
A happy customer-base is important for the growth of a business. Various cloud-based
communication channels have made customer experience more improved.
Help desk software can also improve the support experience. A ticketing system can streamline
the entire process and not only improve employee workflow but also provide more accurate
and timely support. An automated system is the ideal solution for handling tickets as it
eliminates common errors, delays, and misdirected requests by turning service requests and
alerts into tickets. Even the most dedicated representatives can handle only so much. High
volumes, coupled with limited resources, can result in poor experiences for your internal
customers. It seems clear that help desk technology is a worthwhile investment for any
organization. Additionally, you can also pick and choose which features are most relevant to
monitoring performance, ticket status, as well as satisfaction. All of this allows you to modify
the software to integrate seamlessly into your existing strategy.
7. Management of Resources
A business has a variety of resources. These may include financial resources, human resources
and so on. For large organizations, managing resources becomes quite difficult. Information
technology plays a vital role in managing these resources effortlessly by introducing a wide
range of feasible solutions.
For example, the integration of Enterprise Resource Planning (ERP) has improved the
efficiency of various business processes. ERP is a business management software that enables
an organization to use a series of integrated applications that can manage and automate various
business operations.
Information technology is at the core of such software. The implementation of ERP is
progressing at a rapid rate with more and more businesses implementing this efficient
technology to make certain business processes hassle-free.
8. Open Source Software
Information technology has paved the way for various open source software that allow free
usage of certain tools for various organizations. The primary benefit of open source software is
its flexible license. This allows modifications to the source code. This means that you have the
facility to customize its functions according to your requirements.
Almost every software that businesses use has open source variants that are widely available
on the Internet. Utilizing these could mean multiple benefits at reduced expenses.
Such benefits of the increased implementation of information technology have provided
businesses with competitive advantages.
6.3.1 Internet and the way business is conducted
The internet has changed the face of business. It has opened up new avenues of conducting
business. Below are some impacts of the internet on business:
Communication: communication technology combined with the internet has given a new
dimension to connectivity and dispersion of information. Employees are in constant touch
through email, instant messaging, office intranet, etc.
Collaboration: The internet has facilitated collaboration among employees of organization.
Geographical boundaries no longer hamper project work and sharing of information.
Business Transaction: The internet has encouraged the culture of online business or e-
commerce. In recent years many players have opened shops through e-commerce. Internet
banking, payment gateways, etc. are part of normal supply chain transaction.
Work Flexibility: The internet has enabled workers to log in from remote location and home.
It has helped on the move employees by remaining in touch with happenings of work.
Web based application: The internet has facilitated the development of concept like cloud
computing, which has enabled process and storing of data in large proportion. The internet has
helped reduce infrastructure cost of the company.
The internet thus has made a big impact in the way the business gets conducted in both positive
as well as a negative way. The internet has made many business obsolete example post offices.
Online security issues like hacking, identity theft, etc. are a constant threat to internet users.

6.4 Business alignment across the function and sectors and society

In this digital age with fierce competition, it is essential that managers within organization are
completely aware and receptive to evolving changes. One the quickest evolving change is
within information systems. This change in information systems is contributed to advances in
computing and information technology. Enterprise officers that have aligned IT with business
strategies argue that the integration is crucial to a firm’s survival and success. However, the
critical market positioning with its potential outcomes has launched technical projects into the
organizational domain. The enlargement of information resources within businesses has led to
internal realization, development, structural modifications, and managerial actions. Applying
a concept that information system is strictly under the purview of IT department can lead to
adverse situation for the company. Therefore, it is essential for organization to recognize
information systems contribution in business effectiveness.

1.Systems and Innovation Opportunities

Development in information systems has brought opportunities but also threats. The onus
is on the organization to identify opportunity and implement it. Organization needs to
develop strategies, which can best utilize information systems to increase overall productivity.

The most common practice with regards to information systems is automation. Though
automation is helpful, innovation using information systems give the organization a
competitive edge.

2.Systems and Customer Delight

Organizations are fully aware that proliferation of information systems has reduced product
life cycle, reduced margin and brought in new products. In such scenario customer satisfaction
alone will not suffice, organization needs to strive for customer delight. Information systems
with data warehousing and analytics capability can help organization collect customer feedback
and develop products, which exceed customer expectation. This customer delight will lead to
a loyal customer base and brand ambassador.

3.Systems and Organizational Productivity

Organizations require different types of information systems to mitigate distinctive process and
requirements. Efficient business transaction systems make organization productive. Business
transaction systems ensure that routine process are captured and acted upon effectively, for
example, sales transaction, cash transaction, payroll, etc.

Further, information systems are required for executive decision. Top leadership requires
precise internal as well as external information to devise a strategy for organization. Decision
support systems are designed to execute this exact function.

Business transaction systems and executive decision support systems contribute to overall
organizational productivity.

4.System and Workers Productivity

Information systems have facilitated the increase in workers’ productivity. With introduction
of email, video conferencing and shared white board collaboration across organization and
departments have increased. This increased collaboration ensures smooth execution and
implementation of various projects across geographies and locations.

5.Information systems as a Value Add for Organization

Organization use information systems to achieve its various strategy as well as short-term and
long-term goals. Development of information systems was to improve productivity and
business effectiveness of organization. Success of information systems is highly dependent on
the prevalent organization structure, management style and overall organization environment.

With correct development, deployment and usage of information systems, organization can
achieve lower costs, improved productivity, growth in top-line as well as the bottom-line and
competitive advantage in the market.

The readiness of workers into accepting the information systems is the key in realizing the full
potential of them.

Development and deployment of information systems have revolutionized the way business is
conducted. It has contributed to business effectiveness and increased in productivity.

6.4 CONCLUSIONS:
In today’s information and communication age, there is a constant reference to information
systems and management of information systems. In the digital age data, storage and retrieval
are done through various systems and interfaces. Current global and competitive business
environment constantly asks for innovation, existing knowledge base is getting obsolete,
continuously thriving for advancement in process improvement. The learning curve is always
put to test, and every company is striving to remain ahead of the curve. Due to this shift in the
way business is getting conducted has thrown out new reality of ever shortening product and
service life cycle. More and more companies are coming out with customized products and
finding ways to differentiate from competition. Business Process Outsourcing involves
contracting one or many front end (customer related) or back end (finance, HR, accounting,
etc.) activities within a company to a third party service provider. The number of jobs within
BPO industry has increased exponentially in last decade. BPO is one of the new faces in
business environment. The recent explosion of information technology has seen few but
significant emerging trends, for example, mobile platform for doing business, cloud
computing, technology to handle a large volume of data

Exercise:
1. Explain Information System in brief.
2. Explain the feature of Information Technology.
3. State the highlights of IT act 2000.
4. Explain some technologies that makes the impact on Business Sectors.
5. Explain the role of Internet in conducting the business.
6. Comment, Investment on Information systems as a Value addition for Organization