Highland college Bahir Dar

DEPARTMENT OF MANAGEMENT

COURSE MATERIAL FOR THE COURSE

COMPUTER APPLICATION IN
MANAGEMENT

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DEPARTMENT OF MANAGEMENT
COURSE MATERIAL FOR COMPUTER APPLICATION
IN MANAGEMENT

CHAPTER ONE:AN OVERVIEW OF COMPUTER, IT AND DATA

PROCESSING
1.1. What is a Computer?

• A computer is an advanced electronic device that takes raw data as input from the user
and processes these data under the control of set of instructions (called program) and
gives the result (output) and saves output for the future use. It can process both numerical
and non-numerical (arithmetic and logical) calculations.

• A computer is an electronic device which accepts and processes data by following a set
of instructions (PROGRAM) to produce a result (INFORMATION). Since the ultimate
aim of a computer is to produce information, the art of computing is often referred to as
information processing.

• Computer can also be defined in terms of functions it can perform. A computer can

• i) accept data,

• ii) store data,

• iii) process data as desired,

• iv) retrieve the stored data as and when required and v) print the result in desired format.

Today’s world is an information-rich world and it has become a necessity for everyone to know
about computers. Any digital computer carries out five functions in gross terms:

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• Takes data as input.

• Stores the data/instructions in its memory and use them when required.

• Processes the data and converts it into useful information.

• Generates the output

• Controls all the above four steps.

Figure 1.1 Data Processing

• Input: is the raw data entered into a computer from the input devices. It is the
collection of letters, numbers, images etc.

• Output: is the processed data given by computer after data processing. Output is also
called as Result. We can save these results in the storage devices for the future use.

• Process: is the operation of data as per given instruction. It is totally internal process of
the computer system.

The following list demonstrates various applications of computers in today's arena.

Business: A computer has high speed of calculation, diligence, accuracy, reliability, or

versatility which made it an integrated part in all business organizations. Computer is used in
business organizations for: Payroll calculations, Budgeting, Sales analysis, Financial forecasting,
Managing employees database, Maintenance of stocks etc.

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Banking: Today banking is almost totally dependent on computer. Banks provide following
facilities: Banks provide online accounting facility, which includes current balances, deposits,
overdrafts, interest charges, shares, and trustee records and ATM machines are making it even
easier for customers to deal with banks.

Insurance: Insurance companies are keeping all records up-to-date with the help of computers.
The insurance companies, finance houses and stock broking firms are widely using computers
for their concerns. Insurance companies are maintaining a database of all clients with
information showing: procedure to continue with policies, starting date of the policies, next due
installment of a policy, maturity date, interests due, survival benefits, bonus, etc.

Education: The computer has provided a lot of facilities in the education system: The computer
provides a tool in the education system known as CBE (Computer Based Education), CBE
involves control, delivery, and evaluation of learning, The computer education is rapidly
increasing the graph of number of computer students, There are number of methods in which
educational institutions can use computer to educate the students, It is used to prepare a database
about performance of a student and analysis is carried out on this basis.

Marketing: In marketing, uses of computer are following: Advertising - With computers,

advertising professionals create art and graphics, write and revise copy, and print and
disseminate ads with the goal of selling more products, At Home Shopping - Home shopping has
been made possible through use of computerized catalogues that provide access to product
information and permit direct entry of orders to be filled by the customers.

Health Care: Computers have become important part in hospitals, labs, and dispensaries. The
computers are being used in hospitals to keep the record of patients and medicines. It is also used
in scanning and diagnosing different diseases. ECG, EEG, Ultrasounds and CT Scans etc. are
also done by computerized machines. Some major fields of health care in which computers are
used are:

• Diagnostic System - Computers are used to collect data and identify cause of illness.

• Lab-diagnostic System - All tests can be done and reports are prepared by computer.

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• Patient Monitoring System - These are used to check patient's signs for abnormality such
as in Cardiac Arrest, ECG etc.

• Pharma Information System - Computer checks Drug-Labels, Expiry dates, harmful

drug’s side effects etc.

• Surgery: Nowadays, computers are also used in performing surgery.

Military: Computers are largely used in defense. Modern tanks, missiles, weapons etc. Military
also employs computerized control systems. Some military areas where a computer has been
used are: Missile Control, Military Communication, Military Operation and Planning, Smart
Weapons.

Communication: Communication means to convey a message, an idea, a picture or speech that

is received and understood clearly and correctly by the person for whom it is meant for. Some
main areas in this category are: E-mail, Chatting, Usenet, FTP, Telnet, and Video-conferencing.

Government: Computers play an important role in government. Some major fields in this
category are: Budgets, Sales tax department, Income tax department, Male/Female ratio,
Computerization of voters lists, Computerization of driving licensing system, and Weather
forecasting.

1.2 Characteristics of Computer

The major characteristics of computer can be classified in to speed, accuracy, diligence,

versatility and memory which are as follows:

• Speed: - The computer is able to process the data and give the output in fractions of
seconds such that required information is given to the user on time enabling the user to
take right decisions on right time. A powerful computer is capable of executing about 3
million calculations per second.

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• Accuracy: -In spite of its high speed of processing, the computers accuracy is
consistently high enough which avoids any errors. If it all there are errors, they are due to
errors in instructions given by the programmer.

• Reliable: - The output generated by the computer is very reliable, but it is reliable only
when the data, which is passing as input to the computer and the program, which gives
instructions are correct and reliable.

• Storage Capacity: - The computer has a provision to store large volumes of data in the
small storage devices, which have capacity to store huge amounts of data and help the
retrieval of data an easy task.

• Versatile:-The computer perform three basic operations: (1) It is capable to access and
accept information through various input-output devices from the user. (2) It performs
basic Arithmetic and Logic operations on data as desired and (3) it is capable to generate
the desired output in the desired form.

1.3 Limitation of Computer

• Computer does not work on itself, it requires set of instructions to be provided, and else
computer (Hardware) is waste.

• Computer are not intelligent, they have to be instructed about each and every step which
they have to perform

• A computer cannot take decisions on its own, one has to program the computer to take an
action if some conditional prevail.

• Computers, unlike humans cannot learn by experience.

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Computer vs. Human Beings

In Table 1.1, we try to elaborate the differences between human and computer.

Human Computer

Strengths • Have common sense and bigger • Speed: Fast.

knowledge base, thus can percept this
• Reliable.
environment better than computer given
appropriate means (especially in visual • Endurance: Not tired.
form).
• Unbiased.
• Can think (synthesize) new rules ‘out of
the box’. • Consistent.

• Psychologically, human decisions more • Can try much more

trusted than computer expert system combinations than what

decision. human is capable of.

• Can detect trends, patterns, or anomalies,

in visualization data.

• Good in learning.

Weaknesses • Easily tired and bored, thus can only be • Difficult to synthesize
utilized for a short period of time, perhaps new rules (cannot think
as ‘oracle’ only. ‘out of the box’).

• Cannot do micro manage. • Limited knowledge base.

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• Biased and inconsistent. • No common sense.

• Can make error.

• Not a perfect decision maker.

• Actually cannot see anything if the data is

presented in awkward manner.

Table 1.1 the Comparison of Human versus Computer

What is information technology (IT)?

IT: - refers to anything related to computing technology such as networking, software,

hardware, internet or the people who work with these technologies’.

OR

Information technology: - are the study, design, development, implementation support and
management of any computer based information systems.

What is information system (IS)?

A system: - a set of related parts that operate together to perform a specific function.

Information system (IS): - is an integrated set of components for collecting, processing, and
storing data and providing information, knowledge and digital products.

Components of IS

Hardware
Software
Telecommunication
Database
People and procedure

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Generations of computers

A computer is an electronic device that accepts processes, stores and outputs data under the control of
sets of instructions. Computers have come across a long way to acquire the current form and capability. It
took around 50 years of continuous developments to bring the computer in its present form. The evolution
of computers is mainly divided into five main generations. The computers of each of these generations
have different properties. Each new generation resulted in the following changes:

Increase in speed, storage capacity and reliability and decrease in size and cost

1. First Generation Computers (1940–1956)

The U.S. census Bureau developed the first business computer in the year 1951. This computer was
called Universal Automatic Computer (UNIVAC). It used vacuum tube circuits for processing.
Computers that used vacuum tube circuits were called the First Generation Computers. The vacuum
tube circuits contained a filament that was heated to emit electrons.
The main features of the first generation computers were as follows:
1. They used vacuum tubes.
2. They had a very big size.

3. They consumed huge electricity.

4. They were prone to failures.

5. They generated a lot of heat.

6. They only supported machine language.

2. Second Generation Computers (1956–1964)

Bell Labs of U.S.A. invented transistors that were used instead of vacuum tubes. Transistors are
electronic circuits that are small in size. They do not emit electrons and do not require any heating.
The computers that used transistors were called the Second Generation Computers.
The main features of the second generation computers were as follows:
1. They used transistors instead of vacuum tubes.
2. They were smaller in size as compared to the first generation computers.
3. They generated lesser heat.
4. They were more reliable and faster than the first generation computers.
5. They used core memories, magnetic tapes and disks.

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6. They used lesser electricity.

7. They could be programmed by using machine as well as assembly language.
3. Third Generation Computers (1964–1971)
The Third Generation Computers used Large Scale Integrated (LSI) circuits for processing. The
LSI circuits were invented in mid 1960s. LSI circuits integrate several circuit components into a
single chip.
The main features of the third generation computers were as follows:
1. They used integrated circuits.
2. They had a small size as compared to the second generation computers.
3. They consumed less electricity.
4. They were faster and reliable than the second generation computers.
5. They supported high level language.
4. Fourth Generation Computers (1971–Present)
Very Large Scale Integrated (VLSI) chips were invented in the year 1969. The computers that used
VLSI chips were called the Fourth Generation Computers.
The main features of the fourth generation computers are:
1. They contain high-speed microprocessors.
2. They contain huge storage volumes in the form of magnetic and optical storage.
3. They contain main memories up to GBs (Gigabytes).
4. They are companied by great developments in the fields of networks.
5. Fifth Generation Computers (Future)

Recent research has focused on developing “thinking computers”. These computers are called
the Fifth Generation Computers. Fifth generation computers will have the power to learn and
apply knowledge to solve a problem. They would be able to work like humans do.

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