COMPUTER APPLICATION IN BUSINESS

III BBA

UNIT -1

Information Technology Basics - Information Definition – Prerequisites of

information – Need for Information – Components of Information Technology – Role of
Information Technology in Business.

INFORMATION TECHNOLOGY BASICS:

 IT or Information Technology refers to the development, maintenance, and use

of computer software, systems and networks.
 It includes the use for the processing and distribution of data.
 Data means Information, Fact, statistics etc gather together for reference, storage
or analysis.
 Information Technology is the design and implementation of computer network
for Data processing and Communication.
 This include Designing the Hardware for processing information and connecting
separate components and developing software that can efficiently and analyze
and distribute this data.

Communication
Hardware Server

Information
Database Software Design
Technology
Internet

Security Network

Application

 Information Technology we can have access to latest news, speaking with

people real time video chatting ,E- learning ,E – commerce and social
networking.
 It is a technologies which uses computer to gather, process, store, protect and
transfer information.

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COMPUTER CONSIST OF :

HARDWARE : Physical computer part.

SOFTWARE : Set of command that are understandable to the computer.

PRINCIPLE OF COMPUTER:

Data enters the computer through one or more input devices. The computer than
process the data and transmits the resulting data to the output device

INPUT PROCES OUT

S PUT

INPUT DEVICES OUTPUT DEVICES

Joystick - Monitor
Mouse - Projector
Keyboard - Printer
Scanner - Speaker
Microphone
Web camera

INFORMATION:

 Information is organised or classified data which has some meaning values

for the receiver.
 Information is the processed data on which decision and actions on based.

NEED FOR INFORMATION:

1. IDENTIFICATION: To plan properly, one needs to identify the information required

resources like, cash ,people, raw materials ,finished goods ,plant machinery, customer
etc. Right information leads to right decisions, so identification of right information is
key usage.
2. COLLECTION : Information ldentified needs to be collected and stored for further
process. Information needs to be collected to manage the business properly .
3. CONTROLLING : control mechanism is important to ascertain the find out quality
and relevance of information, it help in managing the resources better.

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4. MEASURING : For the success of any business it is important to keep measuring its
performance. Information is a vital resource to manage the business, it is important to
use information to measure performance of any business activity.
5. DECISION MAKING: One of the major usages of information is decision making. It
can be used for taking decisions at all levels of the organisation.

IMPORTANCE:

 access to variety of learning resources

 immediacy to information
 anytime learning
 anywhere learning
 collaborative learning
 multimedia approach to education
 authentic and up to date information
 access to online libraries
 teaching of different subjects made interesting
 educational data storage
 distance education
 access to the source of information
 multiple communication channels-e-mail, chat, forum, blogs ,etc.
 access to open courseware
 better accesses to children with disabilities
 reduces time on many routine tasks

PREREQUISITES OF INFORMATION:

1. TIMELINESS:
Information must reach the user in a timely manner, when it is a needed; not too
early, because by the time it is used it would be out- of-date; because the user will not be
able to incorporate it his/her decision making.

2. APPROPRIATENESS:
Information must be relevant to the person is using it. It must be within the sphere of
his/her activities can be used to reduce uncertainty decision making.

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3. ACCURACY :
Accuracy includes various costs. There is no need of 100% accurate information the
degree of accuracy it represents (e.g+or-5%)

4. FREQUENCY:
Frequency is related to time line ness. the information presented is linked to the
calendar end of the week beginning of the month.

5. UNDERSTANDABILITY:
The format and presentation of information are very important. some people prefer
tabular information, others may need it in a graphical form.

6. CONCISENESS:
Information should always contain the minimum amount of detail that is appropriate
for the user. Too much detail causes information overload.

7. RELEVANT:
It pertains to the particular problem. The data is relevant depend on the decision
making model used. For example, university admissions officials may choose to
consider the results of some high-school test irrelevant.

8. COMPLETE :
All the relevant part are included. For example, marketing data about household
incomes may lead to bad decisions, if not accompanied by consumption habits of the
target population.

9. CURRENT :
Decisions are often based on the latest information available.

10. ECONOMICAL:
The cost of gathering information should be justified by the over all benefits.

CLASSIFICATION OF INFORMATION:
Classification of information

Classification of Classification of Classification on

charactristics application management hierarchy

1. Action versus no 1. Planning information 1. Strategic information

Action information.

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 2. Internal versus 2. Control information. 2. Tactical information.
External versus.

3. Recurring versus non 3. Knowledge information. 3. Operational.

Versus.
Classification on characteristics:
The following is the classification of information on the basis of
characteristics.
1. A) Action versus no action information:
The information which induces action is called action information. The
information communicates only the status of a situation is no-action information.
EX: No stock report calling a purchase action is action information. Stock
ledger the store transactions and stock balances is no-action information.
B) Internal versus external versus:

The information generated through internal source of the organization is

termed as internal information. The information generated through government
reports, the industry surveys, etc. Termed as external information.

C) Recurring versus non recurring information:

The information generated at regular intervals is recurring information. The

financial analysis or the report on the market research study is non- recurring
information.

EX: Sales report. Trail balance stock statements.

Classification on application:

Following is the classification of information on the basis of information.

2. A) Planning information:

Certain standards norms and specification are used in the planning of any
activity. The time standards, the operational standards, the design standards are
examples of the planning information.

B) Control information:

Reporting the status of an activity through a feed back is called control

information.

C) Knowledge information:

A collection of information through library reports and the research studies

knowledge base as an information for decision making is known as knowledge
information.

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Classification on management hierarchy:

Following is the classification on the basis of its use in organization:

3. A) Strategic information:

This is the information needed long range planning and directing.

For example: one has to obtain information on trend, affect of advertising etc. This is
mainly meant for the top level management.

B) Tactical Information:

This type of information is needed to take short range decisions to run the
business effectively.

For example: Most of it is obtainable from day to day collection of routine

data. This is mainly meant for the middle level management.

C) Operational information:

This type of information is needed for day –to- day operation activity of a
business organization.

For example: operational information is easy to obtain by straight forward

clerical processing data. This is mainly meant for the operational level management.

Difference between data and information:

DATA INFORMATION

Facts, statistics used for reference or Knowledge derived from study, experience
analysis. and statistics.

Numbers, characters, symbols, images, etc., Communications of intelligence derived

which can be processed by a computer. from processed output of computer.

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 ‘Information is any kind of knowledge that
Data must be interpreted, by a human or
is exchangeable among people, about
machine, to derive meaning.
things, facts, concepts ,etc.,

Latin ‘datum ’meaning “that which is Information is a scientific term and is

given.”Data plural, datum singular. generally used in plural senses.

Data is an unprocessed facts and figures. Processed data is called information.

INFORMATION TECHNOLOGY:

Information technology is the use of any computers, storage, networking and other
physical devices, infrastructure and processes to create, process, store, secure and exchange
all forms of electronic data.

DEFINITION:

According to information technology association of American (ITAA)

‘’Information technology is the study design, development, implementation, support or
management of computer based information systems, particularly software applications and
computer hardware.’’

COMPONENTS OF IT:

1. Hardware:

Hardware represents the physical and tangible components of a computer. i.e the
components that can be seen and touched.

This includes the monitor, keyboard, and mouse

- Input devices: keyboard, mouse, etc.

- Output devices: printing, monitor etc.

2. Software:

Software is a set of programs, which is designed to perform or well defined function.

A Program is a sequence of instructions written to solve a particular problem.

Two types of software:

a) System Software:

The system software is a collection of programs designed to operate, control

and extend the processing capabilities of the computes itself.

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 b) Application Software:

Application software products are designed to satisfy a particular need of a

particular environment.

EX:Ms word ,excel, power point ,payroll software, student record software.

3. Tele Communications:

This component connects the hard ware together to form a network.

Connections can be through wires such as cables or fibre optics or wireless as through
wi fi.

4. Data Bases and Data ware houses:

A Database is a place where data is collected and from which it can be

retrieved using one or more specific criteria.

5. Human Resource and Procedures:

Most important component of information system& the human element. The

people that are needed to run the system procedures they follow guide future action.

ADVANTAGES OF IT:

 Globalization: This means that one can not only share information quickly and
efficiently, but one can also bring down barriers of linguistic and geographic boundaries.

 Communication: With the help of information technology communication has also

become cheaper, quicker, and more efficient.

 Cost effectiveness: IT has helped to computerize the business process to make them
extremely cost effective money making machines.

 All time : IT has made it possible for businesses to be open 24x7 all over the globe.

 Creation of new jobs: Probably the best advantage of information technology is the
creation of new and interesting jobs.

DIS ADVANTAGES OF IT:

 Un employment:

IT may have streamlined the business process it has also downsizing and outsourcing.
This means that a lot of lower and middle level jobs have been done away with causing
more people to become unemployed.

 Privacy and safety issues:

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 IT may have made communication quicker, easier, and more convenient, it has bought
along privacy issues. E-mail hacking, people are worried about their private information
becoming public knowledge.

 Lack of job security:

Industry experts believe that the internet has made job security a big issue as
technology keeps on changing with each day. This means that one has to be in a constant
learning mode, for their job to be secure.

ROLE OF INFORMATION TECHNOLOGY IN BUSINESS:

It has become very important in the business, world .It has helped the organisation,
manager, and workers in a more efficient management, to enquire about a particular problem,
conceive and generate new products and services thereby, improving their productivity and
output.

1. Operational Excellence

2. New product services and business model.

3. Customer and supplier intimacy

4. Improved decision making.

5. Competitive Advantages

6. Survival.

1. operational excellence:

 The effective operation leads to achieve higher profitability.

 Information technology is important to available to manager for achieving higher

level productivity.

 It makes a changes in business practices and management behaviour.

2. New product services and business model:

 Information technology is a major enabling tool for firms to create new product and
service.

 It create a new business models. A business model describes a company produces,

delivers, and sells a product or service to create wealth.

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3. customer and suppliers intimacy:

 Information technology can help a business to know its customers and serves them
well.

 It arises revenue and profit. A business engages its suppliers can provide vital inputs
with lowers cost.

4. Improved Decision making:

 Information technology provides right information at the right time to make a

decision.

 It made it possible for managers to use real-time data from the market place for
decision making.

5. Competitive Advantage:

 Information technology can help a business to achieve a competitive advantage.

 Making better product and services than competitor charging less price, for product
and services.

6. Survival:

 Business firm invest information systems and technology for doing the business.

 Information technology provides the capability to responding retention and reporting

requirements.

Book for Reference:

1. Introduction to information technology ITL ESL. Pearson education

2. Mohan kumar – Computer Application in Business

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