Unit 1

Fundamentals of IT
Contents

 What is Information Technology?

 Types of IT

 The role of managers‘ vis-à-vis IT

 Need and importance for IT participation

What is Information Technology?

 Information technology (IT) includes all tools that capture, store,

process, exchange, and use information.
 The field of IT includes
− computer hardware, such as mainframe computers, servers,
laptops, and PDAs
− software, such as operating systems and applications for
performing various functions
− networks and related equipment, such as modems, routers and
switches
− databases for storing important data.
Fig: IT infrastructure supports function, network, and enterprise information systems
 An organization’s defined set of IT hardware, software, and networks is
called its IT infrastructure.
 An organization also requires a staff of people called the IT support
organization to plan, implement, operate, and support IT.
 An organization’s IT infrastructure must be integrated with employees
and procedures to build, operate, and support information systems.
 These systems enable a firm to meet fundamental objectives, such as
increasing revenue, reducing costs, improving decision making,
enhancing customer relationships, and speeding up their products’ time
to market.
Types of IT

 When considering the role of business managers for working with IT, it
is useful to divide information systems into three types:
1. Function IT
2. Network IT
3. Enterprise IT
Function IT
 Function IT includes information systems that improve the productivity
of individual users in performing stand-alone tasks.
 Examples include using computer-aided design (CAD) software, word
processors, spreadsheet software, decision support systems, and e-
learning systems.
 A Decision Support System (DSS) employs models and analytic tools to
help users gain insights into data, draw conclusions from the data, and
make recommendations.
 For example, a buyer might use a DSS to analyze supplier bids and select
the least expensive provider for raw materials.
 Without the DSS, such a task could otherwise take a buyer days or
weeks.
 E-learning systems encompass a number of computer-enhanced
learning techniques, including computer-based simulations, multimedia
CD-ROMs, Web-based learning materials, hypermedia, podcasts, and
Webcasts. Such use of information systems qualifies as an example of
function IT.
Network IT
 Network IT includes information systems that improve communications
and support collaboration among members of a workgroup.
 Examples include the use of Web conferencing, wikis, and electronic
corporate directories.
 Web conferencing uses IT to conduct meetings or presentations in
which participants are connected via the Internet
 Wiki is a Web site that allows users to edit and change its content easily
and rapidly. The wiki may be either a hosted Internet site or a site on the
company intranet.
 Electronic corporate directories are used in large organizations to find
the right person with whom to collaborate on an issue or opportunity
Enterprise IT
 Enterprise IT includes information systems that organizations use to
define interactions among their own employees and/or with external
customers, suppliers, and other business partners.
 Three examples of enterprise systems are transaction processing,
enterprise resource planning, and interorganizational systems.
 A Transaction Processing System (TPS) captures data for company
transactions and other key events and updates the firm’s records, which
are maintained in electronic files or databases.
 Enterprise Resource Planning system (ERP)—a group of computer
programs with a common database that a firm uses to plan, manage, and
control its routine business operations
 Interorganizational information systems support the flow of data among
organizations to achieve shared goals.
 For example, some organizations need to share data for purchase
orders, invoices, and payments, along with information about common
suppliers and financial institutions. Such a system speeds up the flow of
material, payments, and information, while allowing companies to
reduce the effort and costs of processing such transactions.
 one type of interorganizational system is electronic data interchange
(EDI). EDI supports the direct, computer-to-computer transfer of
information in the form of predefined electronic documents.
The Role Of Managers vis-a-vis IT
 Companies that successfully adopt new technology recognize that
managers have a crucial role in leading the successful introduction and
adoption of IT.
 Managers have three critical responsibilities when it comes to capturing
real benefits from IT:
1. Identifying Appropriate IT opportunities
2. Smooth Introduction and Adoption of IT
3. Ensuring that IT Risks Are Mitigated
Identifying Appropriate IT Opportunities
 Organizations typically spend one to six percent of their total revenues
on IT
 The most important consideration is what organizations are getting out
of their investments in IT, not how much they are investing in IT.
 Management’s role is to frame these opportunities so others can
understand them, to evaluate them against existing business needs, and
finally to pursue any that fit with an articulated business strategy
Smooth Introduction and Adoption of IT

 To implement an IT system successfully, a company might need to

change its business processes, worker roles and responsibilities, reward
systems, and decision making.
 Many organizations have tried to implement a promising new IT system,
only to have employees never use it or not use the system to its full
potential.
 Managers must be able to overcome this resistance so that the new IT
system is accepted and used throughout the organization.
Table: Four reasons people resist change

 Three theories on organizational change management can help smooth

the introduction and adoption of IT
1.The Change Management Continuum Model
2.The Unified Theory of Acceptance and Use of Technology
3.The Three Worlds of IT model
The Change Management Continuum Model
 Developed by D. R. Conner
 The Change Management Continuum Model describes key activities that
are needed to build commitment for change
Table: The phases and stages of the Change Management Continuum Model
 An organization must execute each of the seven stages to get
employees to commit to a new IT system.
 People will resist adoption of the new system if a stage is skipped or not
successfully completed.
The Unified Theory of Acceptance and Use of Technology
 The Unified Theory of Acceptance and Use of Technology identifies four
key factors that directly determine a user’s acceptance and usage of IT
The Three Worlds of IT model
 Successfully implementing the three types of IT (function, network,
and enterprise) requires different types of organizational change
 Ensuring that IT Risks are Mitigated
 IT resources are used to capture, store, process, update, and exchange information
that controls valuable organizational assets
 As a result, special measures are needed to ensure that the information and its
control mechanisms stand up to intense scrutiny
 Managers are responsible for ensuring that physical IT assets, such as
applications, databases, networks, and hardware, are protected against loss
or damage.
 If assets are lost or destroyed as the result of a disaster, business continuity
plans must be in place to ensure the ongoing operation of critical business
functions.
 Management’s responsibility also includes ensuring that data assets are
secure from unwanted intrusion, loss, and alteration, and ensuring that
personal data is secured to protect individual privacy rights.
 Need and importance for IT participation
 IT is a branch of technology which makes the study, usage and process of
data possible in the areas of storage, manipulation, transfer, management,
control and automated data preparation using hardware, software and
netware.
 IT has many capabilities in solving organizations’ problems. Some of IT’s
advantages are mentioned below:
− Improving the organization’s performance, ability to do computations
which were not possible before, decreasing activities and paperwork,
improving the quality and accuracy of tasks
− Improving the decision making, costumers’ services, making a linkage
between costumers and goods suppliers, decreasing the time of work
processes, supporting the organizations’ strategies
 New IT business opportunities, as well as threats, are coming at a
faster and faster rate. Managers play a key role—they must frame
these opportunities and threats so others can understand them, and
then evaluate and prioritize problems and solutions.
 Managers must lead the effort to pursue IT policies that best meet
organizational needs
 Managers are the key to ensuring that IT innovations pay off; they must
lead a holistic approach that includes encouraging the acceptance of
change, addressing changes in business processes and organizational
structure, addressing new employee roles and expectations, and
establishing new measurement and reward systems
 To gain a sustainable competitive advantage, companies consistently
must deliver increasing value to customers. Doing so requires essential
information gained through the effective use of IT that better defines
customers and their needs. This information can help companies
improve products and develop better customer service, leading to
sustained increases in revenue and profits.
 Managers must recognize the value of this information, know how to
communicate their needs for it, and be able to work with IT staff to build
effective IT systems that make useful information available.
 In a rapidly changing global business environment, managers require
life-long learning and flexibility in determining their business roles and
career opportunities.
 Given the strong shift toward the use of IT, managers must be able to
understand how technology affects their industry and the world at large