INFORMATION TECHNOLOGY FOR BUSINESS

Semester: BBA- Vth Prof. Miss. Poonam M. Patil

Module No-1
Information Technology and Information System

Introduction to Information Technology (IT)

• Information Technology (IT) refers to the use of computers, software, networks, and
other technologies to store, process, transmit, and manipulate data.
• Information Technology is the technology that uses computer with high speed
communication links to spread information from one place to another.
• The interconnection of computer enables people to send and receive information.
• The communication links are also used to communicate with different people in the
world.

Introduction to Information System (IS)

• Information system plays an important role in the success of business.
• It supports business operations, supports management in making decision and strategic
policies.
• The term information system is frequently used to refer to the interaction between
people, processes, data and technology.
• This interaction can occur within or across organizational boundaries.
• The information system is not only the technology an organization uses, but also the way
in which the organizations interact with the technology and the way in which the
technology works with the organization’s business processes.

System:
 System is a group of elements or components which work together to accomplish a
common task.

 Example:
 Computer System
 Software Company

 An information system is a combination of hardware, software and

telecommunication systems, which can support business operations to increase
productivity, and help managers make decisions.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

Characteristics of system:
1) Organization:
Organization implies structure and order of the system.
For example, the hierarchal relationship in a business organization / system represents
the organization structure.

2) Interrelationships:
An interrelationship is the manner in which each component functions with other
components of the system.
For Example: In a computer system.

3) Boundary:
A system has a boundary, within which all of its components are contained and which
establishes the limits of a system, separating it from other systems.

4) Purpose or central objective:

Central objective or purpose means all components of a system assemble together
towards a common goal, purpose or objective. The system’s goal is the reason for its
existence.

5) Environment:
A system operates within an environment- everything outside the system’s boundary.
The environment surrounds the system, both affecting it and affected by it.

For Example, the environment of a university includes prospective students,

foundations, funding agencies and the new media. Usually the system interacts with its
environment. A university interacts with prospective students by having open houses and
recruiting from local high schools.

6) Interface:
The point at which the system meets its environment are called interface.

7) Interdependence:
Interdependence means how various components of the system depend on each other.
Output of one system may be the input to another system.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

8) Integration:
Integration means how a system is tied together. Components of a system may work
independently and each component performs a unique function but they have to work
together within the system to achieve the system goals

Types of system
1) Open and close system
Open System:
• An open system is one that interacts freely with its environment.
• It’s taking input and returning outputs to the outside of the system.
• It has many interfaces with its environment.
• An open system is influenced by its environment and has exchanges with the
environment.
• An open system must adapt to the exchanges information, material, or energy with the
environment (users)
For example:
• An educational institution affiliated to Bangalore university is an open system because it
has interaction with university and gets influenced by any changes in the university
norms.
• The education system or any business process system will quickly change when the
environment changes.
Close System:
• And a close system does not interact with its environment.
• A close system is isolated from environment influences.
• It doesn’t accept or provide any inputs or outputs to the external environment.
• A completely closed system is rare.
For Example:
• Consider a ‘throw-away’ type sealed digital watch, which is a system, composed of a
number of components that work in a cooperative fashion designed to perform some
specific task. This watch is a closed system as it is completely isolated from its
environment for its operation.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

2) Adaptive and Non-adaptive system

Adaptive System:
• A system that reacts to its environment in such a way as to improve its functioning,
achievement or probability of survival is called an adaptive system.
• Adaptive System responds to the change in the environment in a way to improve their
performance and to survive.
• For example, human beings, animals.
• For the success of the business, the organizations need to change and adapt to the
changing environment, like they need to change as per the changing customer demands.
Non-Adaptive system:
• Non-Adaptive System is the system which does not respond to the environment.
• For example, machines.
• Today computers are a non-adaptive system because if computers learn how to modify
and upgrade themselves, then they would become an adoptive system.

3) Physical (Empirical) and Abstract (conceptual) system:

Physical (Empirical) System:
• Physical systems are tangible entities. We can touch and feel them.
• Physical System may be static or dynamic in nature.
• For example, desks and chairs are the physical parts of computer center which are
static. A programmed computer is a dynamic system in which programs, data, and
applications can change according to the user's needs.
• A physical or empirical system is a set of tangible entities that may be static or dynamic
and operates together to accomplish an objective.
• Physical systems may be derived from or based upon conceptual systems and thus
represents the conversion of concepts into practice.
Abstract (conceptual) System:
• Abstract systems are non-physical entities or conceptual that may be formulas,
representation or model of a real system.
• Abstract systems are concerned with theoretical structures. They are systems of
explanation.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

• A conceptual system is an orderly arrangement of ideas.

4) Deterministic and probabilistic system

Deterministic system:
• A deterministic system operates in a predictable manner.
• It is a system where inputs, process and outputs are known with certainty.
• If the given state of the system and all possible operations are known, then the next state
may be determined or predicted.
• For Example: An accounting system, a computer program; both these systems performs
exactly according to a set of instructions.
Probabilistic system:
• A probabilistic system is one whose exact state at any given time cannot be predicted.
• An inventory system is an example of probabilistic system. The average demand,
average time for replenishment etc., may be defined but the exact value at any given
time is not known.

5) Temporary and permanent systems

Temporary System:
• Temporary System is made for specified time and after that they are demolished.
• A small group-research project in the laboratory is temporary. Very less man made
systems are permanent.
• For example, a DJ system is set up for a program and it is dissembled after the program.
Permanent System:
• Permanent System persists for long time.
• For example, business policies.
• The policies of a business operation are permanent as far as year-by-year operations are
concerned.

6) Natural and Man-made systems

Natural System:

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

• Natural systems are created by the nature.

• Natural systems may not have an apparent objective but their outputs can be interpreted
as purpose.
• For Example: Solar system, seasonal system
Man-made System:
• Man-made system or we can call it as a manufactured system.
• Man-made systems are made with purposes that are achieved by the delivery of outputs.
Their parts must be related; they must be “designed to work as a coherent entity” else
they would be two or more distinct systems.
• For Example: Rockets, dams, trains.

Components of system:
The most common components of system are:
1) Input:
It involves capturing and assembling elements that enter the system to be processed.
For example: raw materials, money, labour, data etc.

2) Process:
Processing involves transformation process that converts input into output.
For example: manufacturing process, human break thing process etc.

3) Output:
It involves transferring elements that have been produced by the transformation process
to their ultimate destination.
For example: finished products, human services, information etc.

4) Feedback:
The feedback component gives feedback on the performance of the system. A negative
feedback indicates that the system is deviating from its goal while a positive feedback
indicates that the system performance is towards the achievement of the goal. It is self
regulatory.

5) Control:

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

The control component helps to take the corrective action, if required, to bring the
system back towards the achievement of the system goal. It is a self monitoring system.

6) Environment:
A system does not exist in a vacuum, rather, it exists and functioning in an environment
containing other systems. Several systems may share the same environment. If a system
is one of the components of a large system, it is a subsystem and the large system is its
environment.

7) Boundary or Interface:
A system by defining its boundary, this means choosing the environment. Some of these
systems may be connected to one another by means of a shared boundary or interface.

What is an information System?

An information system (IS) is a collection of interrelated components that collect,
process, store and provide an output the information needed to complete a business task.

Example: A payroll system

Collects information on employees and their work, processes and store that information,
and then produces pay checks and payroll reports for the organization.

Features / needs of Information system

1) Promptness:
 Decision making is to be taken within a time frame and therefore. Information
must be available within the desired time frame.
 It is well said ‘Information delayed is information denied’.

2) Accuracy:
 It means that information is free from mistake sand errors this implies that the
information is totally correct.
 It is an essential and important feature of good information. Increasing the
accuracy may have a cos.

3) Precision:
 Precision is an important virtue of good quality information.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

 Too much of information sometimes results in dumping of important information

in the heap of details that may not be required at a particular point of time only
precise information is respected and used by the management.

4) Adequacy or completeness:
 Adequacy generally refers to the complete and full detailed information.
 It means the information must contain sufficient quality information may be said
to be complete if the decision maker can satisfactorily solve the problem by using
the information.
 If the information is incorrect or inadequate than it can be quite harmful to the
organization.

5) Unambiguity:
 Clarity of information is an important attribute of good information.
 Information must be unambiguous and should be communicated in such a way
that it conveys the same meaning to different levels of management.

6) Timeliness:
 Timeliness is important information essential.
 This explains that information should reach the managers or users within the
prescribed time for effective decision making.
 Information must be delivered at the right time the right place to right person or
user.

7) Exception bored:
 In moderns business the organization are exception based organizations.
 This means the management and managers are provided with only those items of
information that are of particularly interacted to the management.
 This type of information is quite useful in saving time and resources of the top
management.

8) Availability:
 Information always should available in right time and right place to take the
decisions.
 If information is not readily available at the time of decision making the
information that information is considered to destroy.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

9) Format:
For making and information useful it should be made available in a form which suits the
recipient most. Information may be communicated in visual written or verbal form.

10) Frequency:
 Frequency of useful information should be based on the actual requirements of a
management or managers.
 The requirements depend on the recipient’s organizations positions and his
interaction with other departments.

Process of Information system:

1) Inputting raw data:
 Data about business transaction and other events must be captured and prepared
for processing by data entry activities such as recording, editing, typing.
 Example: Optical scanning of bar-coded tags in the retail outlets.

2) Processing of data into information:

 Data once entered is subjected to processing activities like calculating, sorting,
classifying, summarizing etc.
 Example: In payroll system, calculating net salary involves processing like
deduction of taxes, addition of commission earned etc.

3) Output of Information Product:

 Information thus produced by processing activity needs to be transmitted to
appropriate end user.
 This is done by the output activity.
 Information produced by the Information systems may be in the form of text,
images, videos, forms, reports etc.
 Example: Manager might see reports about the sales performance.

4) Storage of Data Resources:

 Data and information are required to be stored for future reference.
 Example: Maintaining the records of the customer, employees, products etc.

5) Control of system performance:

 Controlling is to keep a check on the performance of the information system.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

 An information system should produce feedback about its input, processing,

output and storage activities, which must be monitored and if the system is not in-
line with the achievement of its goals, then the corrective control action needs to
be taken.
 Example: Generating audio signals to indicate proper entry of sales data.

Resources of Information system (Components of an Information System):

People have relied on information systems to communicate with each other using a variety of
physical devices (hardware), information processing instructions (software), communications
channels (networks) and stored data (data resources).

An information system consists of following resources:

1. People Resources
2. Hardware Resources
3. Software Resources
4. Network Recourses
5. Data Recourses

1. People Resources:
 People are required for the operation of all information systems.
 These people resources include end users and Information System specialists.
 End users: End users use an information system or the information it produces.
Example: Accountant, manager, customer etc.

 Information system specialists: Information system specialists develop and operate

information systems.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

Example: System analyst, programmers, computer operators etc.

2. Hardware Resources:
Hardware resources include all physical devices and materials.
 Machines: Computer Systems and other peripheral devices.

 Data Media: Data is all tangible objects on which data is recorded.

Example: Magnetic disk, floppy disk, paper forms.

3. Data Resource:
Data should be viewed as more than the raw material for an information system.
 Database: Database that hold processed and organized data.

 Knowledgebase: Hold knowledge in variety of forms such as facts, rules, and case
Example: About successful business practices.

4. Software Resources:
Software Resources includes all sets of information processing instructions.
 Program: A set of operating instructions which direct and control computer hardware is
known as program. It is classified as Application software and System software.

 Application Software: That is meant for a particular end user’s application

Example: Word processing application, payroll application etc.

 System Software: That control and support operations of a computer program.

Example: Operating system.

 Procedures: A set of information processing instructions that are needed by the people
is known as procedure.
Example: A set of instructions given to people before filling up a paper form.

5. Network Resources:
The concept of Network resources emphasizes that communications networks are a
fundamental resource component of all information systems.
 Communication Media: Examples include twisted pair wire, coaxial cable, fiber-optic
cable, microwave systems, and communication satellite systems.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

 Network Support: Network support includes all of the people, hardware, software, and
data resources that directly support the operation and use of a communications network.

Examples include communications control software such as network operating systems

and Internet packages.

Difference between Information System and Information Technology

Sl. No. Information System Information Technology

It is software used to organize and It is a sub system of Information
1 analyze data. system.
Its main purpose is to turn raw data Its main purpose is to help people
into useful information that in turn perform their work properly and
2 will provide useful information for effectively and achieve their objective
making decision within within organization or business.
organization or business.
It mainly focuses on providing It mainly focuses on improving
3 support to operations, management, productivity and efficiency using
and decision-making. technology.
It is generally composed of four It is generally composed of three
components components
4
i.e. task, people, structure, and i.e. hardware, software. Networks and
technology. data.
It works as a bridge between It helps people to utilize and make
5
technology and people. sense of that system.
It simply incorporates technology, It designs, implement, maintain and
6 people and processes involved with support information or data within
information. information system.
It helps in storing operational data, It helps in implementing
7 communication records, documents, communication, build and grow
and revision histories. commerce and business sector

Functions of Information System:

1) Information system help managers, works analysis problems, visualize complex subjects
and create new products.
2) Information system will contain information about people, place and things with the
organization.
3) It will contain data that have been shaped into a form, which are meaningful and useful
to human beings.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

4) Information system will produce information so that organizations will take decisions,
control operators and analyze problems.
5) Information system will encompass the understanding of the management and
organizational dimensions of system.
6) Information system is used for building and managing system.
7) Information system designates a specific category of serving management level
functions.
8) Information system is saving as foundation for new services and products.

Types of Information System

As far as organizations perform many different types of activity, they require several
different types of information systems to support all of information needs. The
information systems found in most business include:

1) Transaction Processing System (TPS)

2) Management Information System (MIS)
3) Executive Information system (EIS) / Executive Support System (ESS)
4) Decision Support System (DSS)
5) Expert System (ES)
6) Communication Support System (CSS)
7) Office Support System (OSS) / Office Automation System (OAS)

Users of Information Systems

1. Support Business Processes:
Information systems that support the business processes and operations at the many
retail stores.
Example: Most retail stores now use computer-based information systems to help them
record customer purchases, keep track of inventory, pay employees, buy new
merchandise, and evaluate sales trends.

2. Support Decision Making:

Information systems also help store managers and other business professionals make
better decisions.
Example: This is not only supports the decision making of store managers, buyers, but
also helps them look for ways to gain an advantage over other retailers in the
competition for customers.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

3. Support Competitive Advantage:

Gaining a strategic advantage over competitors requires innovative application of
information technologies.
Examples: store management might a decision to install touch-screen kiosks in all of
their stores, with links of their e-commerce website for online shopping. This might
attract new customers and build customer loyalty because of the ease of shopping and
buying merchandise provided by such information systems.

Applications of Information System

1) Manufacturing and Production System
Manufacturing and production systems supply data to operate, monitor and control the
production process

Example: purchasing, receiving, shipping, process control, robotics, inventory systems,

scheduling, engineering, operations, quality control, resource management etc.

2) Sales and Marketing System

Sales and Marketing systems help the firm identify customers for the firm’s products or
services, develop products and services to meet customer’s needs, promote products and
services, sell the products and services, and provide ongoing customer support.

3) Finance and Accounting System

Finance and Accounting systems maintain records concerning the flow of funds in the
firm and produce financial statements, such as balance sheets and income statements.

Example: for Budgeting: General Ledger,

Billing: Cost Accounting, Accounts Receivable / Payable, Funds Management Systems,
Payroll. They were among the earliest systems to be computerized.

Example: Visa’s credit card payment system.

Examples of financial systems: cash management, loan management, check
processing, securities trading.

4) Human Resource System

Human Resources Systems deal with recruitment, placement, performance evaluation,
compensation, and career development of the firm’s employees.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

Example: Personnel record keeping, applicant tracking, positions, training and skills,
benefits.

Levels of Management And Information Systems

• In the diagram below, the organization is divided into strategic, management and
operational levels and then is further divided into functional areas like sales and
marketing, manufacturing and production, finance and accounting, human resources.
Systems are built to serve these different organizational interests.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

1. Operational Level (Lower Level Management)

• The last level of management is the lower level management and is also known as
the Supervisory or Operational Level Management.
• The managers at the lower level of management play a crucial role in the proper
management of an organization, as they directly interact with the actual work force and
interpret the instructions of the middle level managers to them.
• The responsibility and authority of the lower level managers depend upon the plans and
policies formed by the top level management.
• The lower level management consists of foremen, supervisors, section officers,
superintendents, and other managers who have direct control over the operative
employees of the organization.
• Operational level systems support operational managers by keeping track of the
elementary activities and transactions of the organizations such as sales, receipts, cash
deposits, payroll and flow of materials in a factory.

• The main purpose of systems at this level is to answer routine questions and to track the
flow of transactions through the organizations.
• Example: A system to record a bank deposits from ATM, a system that tracks the
number of hours worked each day by a daily wager in a factory shop floor.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

2. Management Level (Middle Level Management)

 The next level of management is the Middle Level, which serves as a link between
the Top Level Management and the Lower Level Management.
 The middle level management is superior to the lower or operational level
management and subordinate to the top level management.
 The middle level of an organization’s management consists of different functional
department heads, such as Departmental Managers including Production, Purchase,
Finance, Personnel, Marketing Managers, and other executive officers for different
departments such as plant superintendent, etc.
 The employees or members of the middle level management are responsible to the
top level management for their performance.
 Management level systems serve the monitoring, controlling, decision making and
administrative activities of middle management people.
 Management level systems typically provide periodic reports rather than instant
information on operations.
 Some management level systems support non-routine decision making. They tend to
focus on less-structured decision for which information requirements are not always
clear.

3. Strategic Level (Top Level Management)

 The senior most executives of the organization are found at the top level of
management.

 The top level of an organization’s management consists of the Board of Directors,

Managing Director, Chairman, Chief Executive Officer, Chief Operating Officer,
Vice-President, President, General Manager, and other Senior Executives.

 The managers at the top level of management of an organization are responsible for
its survival and welfare.

 These managers perform stressful and complex work that demands long hours and
commitment towards the company.

 Example: What will employment level be in 5 years? What products should be

making in 5 years?

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

What is an information Technology?

Information Technology refers to the branch of engineering that deals with the use of
computers and telecommunications to retrieve, store and transmit information.

Roles of IT in Various Sectors Like Business, Medicine, Education, Science

etc.
Education:

• IT provides students and educators with easy access to a vast amount of information and
resources on the internet.
• One revolution in education is the advent of distance learning. This offers a variety of
internet and video-based online courses.
• Especially important during the COVID-19 pandemic, IT enables remote learning,
allowing students to continue their education from home.
• Digital libraries and open education resources make educational materials more
accessible and cost-effective.
• Teachers use smart boards to deliver lessons in the classroom and prepare those lessons
on their laptops.
• Students use their smart phones and laptops to complete assignments and perform
research online.

Health and Medicine:

• All medical information can now be digitized.
• Software is now able to computer the risk of a disease.
• IT enables remote consultations and monitoring of patients, improving access to
healthcare services, especially in remote areas or during emergencies.
• IT facilitates the secure exchange of patient information between different healthcare
organizations, ensuring continuity of care and reducing duplication of tests and
procedures.
• Digital imaging technologies like x-rays, MRIs and CT scans.

Science:

• Scientist, researchers all over the world can work easily together even at a distance.
• With the help of IT they study about the space, moon and other planets.
• IT supports remote sensing technologies like satellites and drones, which collect data
for Earth and space sciences, climate studies and environmental monitoring.

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Business:

• IT supports digital marketing strategies, targeting specific audiences and tracking results.
• IT supports online sales and transactions, expanding market reach.
• IT assists in accounting, budgeting and financial analysis.
• IT system enables businesses to manage customer interactions and provide better
service.
• Accounting departments now use software to prepare financial statements and other
bookkeeping functions.
• IT faster’s innovations, enabling business to develop new products and services.

Personal, Social and Ethical issues in IT

 Personal Issues

• An increasing in work load and / or responsibilities can trigger job stress.

• Many employees feel information anxiety because other people are better than they in
using computers, because they are slow in learning new technology and because of the
need to continuously learn new things.

• Exposure to terminals can cause radiation exposure which is associated with cancer
and other health related problems.

• It can also affect eyesight. Other hazards are backaches and muscle tension in the
wrist and fingers.

 Social Issues

• They are mainly positive issues. There is now flexibility in jobs that can greatly
improve the quality of leisure time.

• There are also great opportunities for people with disabilities.

• Those who cannot type are able to use voice-operated typewriters or work from home.

• It has bought about major improvement in health care delivery, ranging from better
diagnosis to research of new drugs, to more accurate monitoring of critically ill
patients.

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 INFORMATION TECHNOLOGY FOR BUSINESS
Semester: BBA- Vth Prof. Miss. Poonam M. Patil

 Ethical Issues

• Many companies and professional organizations develop their own code of ethics.
• A code of ethics is a collection of principles intended as a guide for the members of a
company or an organization.
• There are four kinds of ethical issues – privacy, accuracy, property and
accessibility.
• Information privacy is the right to determine when and to what extent information
about oneself can be communicated to others.
• The issues to be considered here are electronic surveillance and personal information
in databases.
• Millions of computer users are being monitored without their knowledge.
• Information about individuals is being kept in many databases.
• Intellectual property is the intangible property created by individuals who are
protected by trade secrets, patent and copyright laws.

Advantages of Information Technology

1) Globalization

 The spread of technologies around the globe.

 Globalization gives businesses the opportunity to expand into new markets, reach
international buyers and increase revenue.
 The technology has not only made communication cheaper, but also possible much
quicker and round the clock.

2) Cost-effective

 IT can reduce operational costs through automation, remote work options, and the
elimination of paper-based processes.
 Computerized, internet business processes have made many businesses turn to the
Internet for increased productivity, greater profitability, cluster free working
conditions and global client.
 Due to the IT the business has been able to make their processes more streamlined,
thereby becoming more cost-effective and consequently more profitable.
 People are able to operate their businesses 24x7, even from remote locations only due
to the advent of information technology.

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Semester: BBA- Vth Prof. Miss. Poonam M. Patil

3) Communication

 Quick and effective communication is vital to any business anywhere in the world.
 Information technology gives a Communication has become so simple with only a
phone call, email, video conferencing, SMS etc., essential to communicate
efficiently and effectively.
 To the business world, and information technology gives your company the
resources it needs to communicate quickly and effectively.
 Not only do people connect faster with the help of information technology but they
are able to identify like-minded individuals and extend help.

4) Storing and Protecting Information

 IT provides a low-cost business options to store and maintain information that may
be important from a business or service point of view.
 Virtual vaults and other such security systems not only store vital data but also allow
control over the access to such information.
 IT security systems will also protect virtual data from being hacked or wiped out in
case of any technical failure.

5) Creation of New Jobs

 One of the biggest advantages of IT has been the creation of a whole new field of
opportunity for skilled personnel leading to new and interesting jobs.
 Hardware and software developers, computer programmers, web designers, system
analyst, the list of new jobs created could go on.

6) Production growth

 The technology supports growth in production.

 Human effort and working energy are limited.
 However, since machinery can perform at a higher level, production may be
increased often.
 The task carried out by the machine is more precise and flawless.

7) Saves time

 In today's world, time is money. As a result, the technique enables saving a lot of
time and boosting productivity. We can do large assignments faster.
 Everything in the world today is automated, and this innovation helps save a lot of
time by automating tasks that are impossible for people to do.
 For instance, if you don't have time to go shopping for clothes, you can order them
online and deliver them to your home.

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 Therefore, one may utilize time on other crucial matters by using technology.

8) Technology helps improve services

If you get a television, it breaks down after a few days. Given that the TV is still under
warranty, you shouldn't worry. To fix your TV, you must give the business or its
customer service a call. Thus, communication has become so simple with only a phone
call or email.

9) Reduces cybercrime or online crime

Today's technology is so efficient that apps are designed to identify fraud in only a few
seconds. Because there are powerful algorithms designed to detect any cybercrime,
cyber attacks have decreased.

10) Improved safety

 Technology has improved people's safety. CCTV cameras have been created with
the advancement of technology to protect your assets at your house and place of
business.
 Finding the thief is made simple because everything was caught on video.
 Lock mechanisms on mobile phones, computers, and Godrej lockers protect our data
and other possessions.
 You may use your fingerprint, eye, or facial recognition to unlock your phone,
laptop, and other devices.

Information Technology Disadvantages

The world around us has altered due to information technology. Global trading is getting
more straightforward, and communication is completed much more quickly.

Even though information technology appears to have only positives, there are a few
drawbacks, some of which are described below.

1) Over reliance on technology

 A lot of people believe that because computers and the Internet has become such a
regular part of modern life, some people particularly children who grow up with it,
will not be able to function without it.
 Some people think that the Internet is making people lazy, particularly when it
comes to essay or project research as instead of reading books in a library, one can
just perform a Google search.

2) Loss of communication skills

 With the ever increasing variety of social networking sites such as Face book and
Twitter, a lot of people are worried that traditional communication skills will be lost.

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This worry is particularly about children who often engage in these websites because
communication and interactive skills are not important with computers.

3) Job losses (Unemployment)

 Technology in an organization, company or business, the number of hours that a

human works at that company are reduced.
 This may even result in some people losing their jobs because technology is doing it
for them.
 As technology has advanced, it has significantly increased unemployment. People
rely on computers for all of their tasks as well as for their survival.
 Because a single computer can complete a great deal of work quickly, this has also
increased unemployment.
 However this is beneficial for the organization as their profit is increased because
they don’t need to pay their workers as much because they aren’t required as much.

4) Loss of personal touch

 E-mails and instant messaging have replaced the old tradition of handwriting letters.
And although this is advantageous because of time constraints, a personal touch and
sense of feeling is lost compared to taking the time to sit down and hand write a
letter.

5) Health problems

 People today are so engaged with technology that they neglect to take good care of
themselves. Their health is impacted in many ways by this.
 Research has shown that technology can cause a number of problems with a person’s
health.
 Many scientists, doctors and researchers are concerned about possible links between
technology and heart problems, eye strain, obesity, muscle problems and deafness.
 Waste emitted from technology can pollute the environment which not only makes
people ill, it also damages the environment.

6) Data security
 In the modern world, some people are knowledgeable about technology and have
become hackers, so your data isn't safe with you. They can hack your system, bank
accounts, business data, and much more from the comfort of their home using the
most recent technologies.
 Online sharing of OTP and other information is now dangerous due to the significant
possibility of fraud.
 Sharing even a bit of information online certainly increases the likelihood that it may
fall into the hands of terrorists, hackers, criminals, and other foreign opponents.

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7) People are easily distracted

 Instead of reading anything productive, they are more likely to use various
unnecessary stuff.
 Young people, adults, and children are all involved in social media, which prevents
them from completing their daily tasks.
 Since most children today own a laptop or a phone, they might need help to focus on
their schoolwork.

Impact of Information technology on business (Business Data Processing)

1) Promptness:
Decision making is to be taken within a time frame and therefore. Information must be
available within the desired time frame. It is well said ‘Information delayed is
information denied’.

2) Accuracy:
It means that information is free from mistake sand errors this implies that the
information is totally correct. It is an essential and important feature of good
information. Increasing the accuracy may have a cos.

3) Precision:
Precision is an important virtue of good quality information. Too much of information
sometimes results in dumping of important information in the heap of details that may
not be required at a particular point of time only precise information is respected and
used by the management.

4) Adequacy or completeness:
Adequacy generally refers to the complete and full detailed information. It means the
information must contain sufficient quality information may be said to be complete if the
decision maker can satisfactorily solve the problem by using the information. If the
information is incorrect or inadequate than it can be quite harmful to the organization.

5) Unambiguity:
Clarity of information is an important attribute of good information. Information must be
unambiguous and should be communicated in such a way that it conveys the same
meaning to different levels of management.

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6) Timeliness:
Timeliness is important information essential. This explains that information should
reach the managers or users within the prescribed time for effective decision making.
Information must be delivered at the right time the right place to right person or user.

7) Exception bored:
In moderns business the organization are exception based organizations. This means the
management and managers are provided with only those items of information that are of
particularly interacted to the management. This type of information is quite useful in
saving time and resources of the top management.
8) Availability:
Information always should available in right time and right place to take the decisions. If
information is not readily available at the time of decision making the information that
information is considered to destroy.

9) Format:
For making and information useful it should be made available in a form which suits the
recipient most. Information may be communicated in visual written or verbal form.

10) Frequency:
Frequency of useful information should be based on the actual requirements of a
management or managers. The requirements depend on the recipient’s organizations
positions and his interaction with other departments.

Intra and Inter organisational communication using Network Technology

Inter-communication takes place “outside”. In other words, it is in the open domain and
may be considered in the three ways below:
1) Inter-personal communication involves the exchange of message/information/data across
communication channel from one person to another or one group to another.
2) Inter-organizational communication describes communication between separate
organizations
For Example: a negotiation for a long-term business agreement such as a supplier and
development chain or network.
3) Internet communication uses a computer-based system that is open to the users
For Example: World-Wide-Web. Individuals and companies are able to buy, sell,
advertise, investigate-in fact, conduct all manner of communication processes-in a way
that might be person-to-person, person-to-company, or company-to-company

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Intra-communication takes place “inside” the individual /body /group /network/

organization and may be considered in the three ways below:
1) Intra-personal communication takes place “inside” the person; the process of intra-
personal communication involves the transmission of data / information / feelings
between the various senses or pathways.
2) Intra-organizational communication classifies communication that is internal within the
organization. It describes the use of company magazines or newsletters which are used
as the communication channel.
3) Internet communication is a form of communication channel using computer based
technology harnesses by the organization to allow internal communication to take place.
For Example: An internal email network.

Concept of Business Process Outsourcing (BPO)

 Business Process Outsourcing, or BPO, is a business practice in which one organization
hires another company to perform a process task that the hiring organization requires for
its own business to operate successfully.

 Business process outsourcing (BPO) is a subset of outsourcing that involves the

contracting of the operations and responsibilities of specific business functions (or
processes) such as payroll, customer service, accounting, data recording and much more
to a third-party service provide.

Definition of BPO
Business Process Outsourcing (BPO) is a subset of outsourcing that involves contracting
the operations and responsibilities for a particular business process to a third-party
service provider.

BPO is often divided into two main types of services: Back office and front office.

 Back office services include internal business processes, such as billing or purchasing.
 Front-office services pertain to the contracting company’s customers, such as
marketing and tech support.
 BPOs can combine these services so that they work together, not independently.

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Objectives of BPO
1. To decrease costs:
Outsourcing cuts down on costs for in-house labor, particularly for staffing and
training and for work space to accommodate local employees. An outsourcing
company physically located in developing country leverages lower-cost labor
markets.

2. To concentrate on key functions:

Outsourcing allows business to hone on their main offerings instead of company
functions that aren’t directly tied to their core processes.

3. To achieve better results in noncore functions:

Outsourcing companies specialize in what are considered noncore functions of other
businesses, delivering world-class capabilities for its clients. In fact, an outsourcing
company that invests in specialized processes and technologies can deliver cutting-
edge breakthroughs to its clients.

4. To expand their global presence:

Some outsourcing companies can serve customers in multiple languages, around the
clock, thus relieving the local company of the responsibility.

5. To enable flexibility:
Companies that outsource their noncritical functions can act more quickly and more
efficiently when managing the risks associated with introducing new products or
services.

6. To improve speed and efficiency:

Companies that outsource processes are opting to let specialists handle those tasks,
thus saving time, improving accuracy, and increasing their capacity.

Advantages of BPO
1. Achieve savings:
When a company outsources certain business processes to an external supplier,
especially a foreign one, it can increase its profits thanks to the reduced costs of the
tasks. In the case of purchasing outsourcing, for example, the company can obtain
better prices on products and in the long run increase its margins.

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2. Gaining flexibility:
By entrusting certain missions to an external service provider, the company has a
better reactivity and can react more quickly to changes in the market. It can also in
the event of unforeseen events quickly turn to other partners.

3. Paying less:
Outsourcing allows you to gain flexibility in your workforce and avoid the need to
hire. In addition to the legal obligation relating to the employment contract, the
company does not have to bear any expenses related to the recruitment of an
employee (salary, wage costs etc.)

4. Increasing its competitiveness:

By deleting certain business processes, the company saves precious time that it can
devote to high value added tasks and strategic missions.

Disadvantages of BPO
1. Security:
It is possible that this information could be stolen by a third party, or exploited by an
ill-intentioned supplier. It is essential to verify the guarantees related to security and
data protection.

2. Unforeseen costs:
Outsourcing can sometimes involve costs that can be difficult to predict. The
company may underestimate the amount of work required, or it may simply not think
about calculating costs properly in advance.

3. Work-Life Balance:
Most of the BPOs function in a client environment which would require agents in
India to work as per the timings of the US, UK or Australia. This means frequent
night shifts or early morning shifts as the normal working hours.

4. Communication difficulties:
In case of offshore outsourcing, there is a risk that it may be difficult to communicate
with the supplier, or that cultural differences may be encountered. For this reason, it
is recommended to choose a supplier near shore, and that has already a global
presence, and especially for purchasing outsourcing.

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5. Health Issues:
Most of the work here involves sitting in front of the computer and speaking over
headphones. Working in such an environment for years on end leads to long-term
health complications in an individual. This includes gastric problems, hormonal
imbalances and sleep disorders amongst other things.

Concept of KPO (Knowledge Process Outsourcing)

Knowledge Process Outsourcing (KPO) means information related business task or
knowledge-based processes such as research, analysis, consultancy or any other high-level task
are outsourced i.e. done by the workers of another company or allocated to the subsidiary of
the same organization.

Advantages of KPO
1. Cost-effectiveness:
One of the biggest advantages of a KPO is obviously the cost advantage. The company
does not have to set any infrastructure or bear any operational or running costs. And it
gets effective, expertises services at a fraction of the cost.

2. Access to the best talent:

KPO’s provide the company with the best, most knowledgeable and skilled
professionals available in the global talent pool. And if the KPO is in a developing
country like India or Philippines then the cost of such talent is also relatively low.

3. Focus:
Outsourcing some of the processes, allows the company to focus on its core functions.
The KPO handles the peripheral functions, and the company can better focus on its core
functions and improve their efficiency and results.

4. Better utilization of resources:

If the company outsources the process that is not at the core of their business strategy, it
can use the resources it save in better places. Say a company outsourcings its supply
chain management. Then the resources it saves on this can be utilized to streamline the
manufacturing process, R&D activities, better marketing etc.

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Activities of Information System

Regardless of the type and use of information system, the basic activities that occur in any
information system would involve:

1) Inputting Raw Data:

Data about business transaction and other events must be captured and prepared for
processing by data entry activities such as recording, editing, typing.

For Example, optical scanning of bar-coded tags in the retail outlets.

2) Processing of data into Information:

Data once entered is subjected to processing activities like calculating, sorting,
classifying, summarizing etc.

For example, in a payroll system, calculating net salary involves processing like
deduction of taxes, addition of commission earned etc.

3) Output of Information Product:

Information thus produced by processing activity needs to be transmitted to appropriate
end user. This is done by the output activity. Information produced by the Information
Systems may be in the form of text, images, videos, forms, reports etc.

For example, manager might see reports about the sales performance.

4) Storage of Data Resources:

Data and information are required to be stored for future reference.

For Example, maintaining the records of the customer, employees, products etc.

5) Control of System Performance:

Controlling is to keep a check on the performance of the information system. An
information system should produce feedback about its input, processing, output and

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storage activities, which must be monitored and if the system is not in-line with the
achievement of its goals, then the corrective control action needs to be taken.

For example, generating audio signals to indicate proper entry of sales data.

Importance of Information Systems in Decision Making and Strategy Building

A business organization is a system. Its components marketing, manufacturing sales, research,
accounting, HR etc.

All work together to provide some goods and services for the benefit of society in general.
Each of these components is itself a subsystem.

Fundamentally all organizations use and implement Information system in

following three phases.
Automating:

Organisations use IS to automate its various business operations.

Information:

Organizations use IS to share information and remain connected to one another in a firm.

Strategizing:

Organization at this stage try to use IS to gain strategic advantage over its competitions.

There are three fundamental reasons all business applications of information technology. They
are found in the three vital roles that information systems can perform for a business enterprise.

 Support of its business processes and operations.

 Support of decision making by its employees and managers.
 Support of its strategies for competitive advantage.

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Support for Business Operations and Processes

The use of information systems at various retail stores where computer-based information
systems help employees record the customer purchases, evaluate sale trends, keep track of
inventory etc

Support for Decision-making

Information system helps store managers and other business professionals make better
decisions

For example, decision on what line of products need to be added to the inventory etc.

Support competitive Advantage:

Information systems help in gaining strategic advantage over competitors.

For example, some companies sell their products through e-commerce which gives them the
advantage over their competitors.

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