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BEC IV > 2. Role of Information Technology in Business > Flashcards

2. Role of Information Technology in Business Flashcards

1
Q

Business strategy: what is governance?

A
  • Answer questions to; what will we do? What is important? How to determine what is important?
  • Processes and structures, to oversee organizational activities in pursuit of objectives.
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2
Q

Business strategy: what are 2 key elements of governance?

A
  • Strategy: determining long-term goals and approaches for achieving those goals.
  • Oversight: managing and monitoring operations to achieve internal control and manage risks
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3
Q

Business strategy: what are problems of IT?

A

Lack of integration of IT investments and business strategy

  • lack of IT strategic focus (many IT units are “bottom up”)
  • Lack of strategic investment = over-investment in existing businesses and under-investment in “transformative” tech
  • Inadequate scope and agility = IT investments in business units result in inadequate scalability to meet changing business needs.
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4
Q

Business strategy: Why has the role of IT changed?

A

Increasing IT investments due to:

  • Digitization (i.e. moving data to electronic form)
  • Globalization (i.e. integration of cultures and economies due to digitization) ova made IT investment central
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5
Q

Business strategy: what are basic strategies?

A
  • Product differentiation: setting products apart from competitors by offering one that’s faster, has enhanced features, etc
  • Cost leadership - costs possible by operating efficiencies
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6
Q

Business strategy: how is IT involved in differentiation strategy?

A
  • By using Internet as a distribution channel (e.g. eBay).
  • By changing the info on Internet quickly = product life cycles are shorter and product evolution is faster = leads to differentiation.
  • Advanced tech (i.e. lasers, 3D printers) can improve product quality.
  • Digitized products (e.g. books, music) can increase quality and reduce costs.
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7
Q

Business strategy: how is IT involved in cost leadership strategy?

A

*Advanced tech can reduce costs and improve production and delivery systems (e.g. Walmart)

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8
Q

Business strategy: what has having Internet availability resulted in?

A

Intense price competition.

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9
Q

What are 5 categories of IT systems by activity?

A
  1. Operational systems
  2. Management Information Systems (MIS)
  3. Group Support Systems (GSS)
  4. Decision Support Systems (DSS)
  5. Knowledge Work (KM) Systems
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10
Q

Categories of IT systems: What are the orders (highest to lowest)?

A

Decision ad executive support system (DSS, ESS) - Management Information Systems (MIS) - Operational Systems.

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11
Q

What are 3 levels of management and how do they match with categories of IT systems?

A

Top: Strategic management (DSS, ESS).
Tactical management (MIS).
Bottom: Operational management (Operational Systems).

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12
Q

What is TPS?

A

Operational or Transaction Processing Systems.

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13
Q

TPS: what are 3 functions and examples of tasks under those functions?

A
  1. Support large volume, day-to-day activities of business (e.g. purchasing of goods and services, manufacturing activities, sales to customers, cash collections, payroll).
  2. Transaction types: Non-financial (e.g. placing orders for goods, accepting order from a customers). Financial (e.g. billing a customer, receiving pmts, paying employer for services rendered).
  3. Generate debit and credit entries into accounts.
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14
Q

Knowledge Management Systems: What are components?

A

Knowledge base: knowledge database = provides means to collect, organize, and develop relations among information.

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15
Q

Management Information Systems: what does it do?

A

Support routine, day-to-day, lower level management.

  • Primarily synthesize data from TPS (i.e. internal data)
  • Tasks: structured problems
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16
Q

MIS example?

A

Compare planning information (budgets, forecasts, etc) data with outcomes.

  • Presented in periodic management reports
  • Summary reports, variance reports, exception reports
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17
Q

What is an example of subset of MIS?

A

Accounting Information Systems (AIS).

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18
Q

Decision Support Systems (DSS): what does it support? Tasks? What does it often integrate? Capabilities?

A

Support: mid-and upper-level management.
Tasks: manage non-routine problems and long-range planning.
Integrate: external (market level) with TPS data.
Capabilities: significant analytical and statistical capabilities.

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19
Q

DSS: what are 2 types and examples?

A
  • Data driven: process large amounts of data to find relations and patterns (e.g. data warehousing and data mining)
  • Mode driven: use models to forecast outcomes. Model-driven analytics.
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20
Q

DSS: examples used by audit firms?

A
  • Client risk assessment
  • Client acceptance and retention
  • Internal control documentation and testing
  • Compute audit sample size
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21
Q

What is GSS?

A

Group Support Systems.

Facilitate group collaboration: may include functions such as calendars, meeting scheduling, and doc sharing.

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22
Q

What is ESS and SSS?

A

Executive Support Systems and Strategic Support Systems.
Similar to DSS:
*Support forecasting and long-range, strategic decisions.
*Greater use of external data.
*DSS for dummies.
*Can be ad hoc (i.e. for a specific purpose - monitor competitor pricing).

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23
Q

What are flat file systems?

A

Early (pre-ERP) IT systems: separate programs and data sets - each application has separate data and programs.

  • Data sharing across applications through separate programs.
  • Select data records from one application and reformat for other application.
  • Difficult to achieve cross-functional reporting.
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24
Q

Flat file systems: What are problems?

A
  • High data redundancy

* Poor cross-functional availability and reporting (e.g. across applications).

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25
Q

What are database systems? What is always implemented in a database environment?

A

Pool data into logically related files (the database).

MIS (components: knowledge base or knowledge database) = collect, organize, and develop relations among information.

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26
Q

What are elements of the Knowledge Management?

A
  • MIS.
  • Data warehouse: collect, organize, integrate, and store entity-wide data - easy access to large qty of varied data from across the organization.
  • Data mining: exploration, aggregation, and analysis of data in the data warehouse using analytical tools and exploratory techniques.
  • Data mart: A specialized version of a data warehouse that contains data that is pre-configured to meet the needs of specific departments
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27
Q

What is data warehousing based on? Where is it often incorporated in? Does it include only internal data?

A

Relational database of archived operational transactions and other data.
In a data-driven DDS.
No, it may include external data (e.g. economic indicators, stock prices, market share, political stability of a country, weather conditions).

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28
Q

Data warehousing: what are capabilities?

A
  • Drill down: move from summary to detailed info

* Slicing and dicing: view data in multiple ways

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29
Q

What are data processing model components?

A

Inputs - hardware / database system / software - outputs

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30
Q

Data: what numbers exist for computers?

A

Only groupings of 0, 1 .

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31
Q

What is bit?

A

Binary digit: on or off, 0 or 1. the smallest piece of info that can be represented.

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32
Q

What is byte?

A

Logical grouping of bits (can be 2n power: e.g. 8,16,32, or 64 bit bytes).
E.g. the character “R” = 1010010 + a check digit

Or a group of (usually) 8 bits represent alphabetic, numeric, and other characters (3,g,X,?, etc). Several coding systems assign bytes to characters (e.g. ASCII and EBCIDIC). These system define the sequence of zeros and 1s that represent each character.

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33
Q

What is field?

A

A logical group of bytes.

  • Identify a characteristic or attribute of an entity (invoice, customer, product, etc): e.g. name, address, customer number
  • In database, fields are also known as “attributes”
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34
Q

What is record?

A

A group of related fields (or attributes).

Describe an example fo an entity (a specific invoice, a particular customer, an individual product).

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35
Q

What is file (known as table in a relational database environment)?

A

Collection of related records for multiple entities (an invoice file, a customer file, a product file).

36
Q

What is database?

A

A set of logically related files.

37
Q

How much is bit, byte, kilobyte, megabyte, and gigabyte?

A

Bit = (2small0) 0 or 1.
Byte = (2small3) 8 bits.
Kilobyte (KB) = (2small10) 1,024 bytes.
Megabyte (MB) = (2small20) 1,024 kilobytes.
Gigabyte (GB) = (2small30) 1,073,741,824 bytes.

38
Q

What is software?

A

Instructions (i.e. programs) for hardware.

39
Q

What are 3 categories of software?

A
  1. System software: programs that run computer and support system management (operating system is most important).
  2. Programming language: used to create applications. Now, most are third or fourth generation languages, many are object-oriented programming languages (OOPL) (e.g. Java) - All must be converted from source codes to first generation language (0 and 1 = object codes).
  3. Application software: End-user programs that you know and love.
40
Q

What is operating system?

A

Interface between user and hardware.

  • Defines what commands can be issued and how (e.g. typing in a common, pointing and clicking) - e.g. Microsoft Windows, Unit/Linux, Mac OS X.
  • Controls all input and output to main memory, assigns workspace to applications, schedules jobs, execute user commands, manage system resources.
41
Q

What is application software? Categories?

A

Do what end-users want.
Categories:
*General (e.g. word processors, spreadsheets, database)
*Specific (e.g. a marketing information system for a clothing designer)
Runs on specific operating system and hardware environment (e.g. software for Mac OS will not run in Windows).

42
Q

Application software: How is it developed?

A
  • May be purchased off the shelf (general)

* Developed (internally or externally) (specific)

43
Q

What is Database management system (DBMS)?

A

“Mid-ware” program (i.e. between the application software and operating system).
Manages the database.

44
Q

What are 3 DBMS languages?

A
  1. Data definition language (DDL):
    * Used to define tables and fields and relations among tables
    * Uses meta-data to define the database elements
    * Example commands: CREATE, DROP, ALTER (of fields and tables)
  2. Data manipulation language (DML):
    * Used to add, delete, or update records
    * Example commands: UPDATE, INSERT, DELETE (of records)
  3. Data query language (DQL):
    * Used to extract information
    * Most relational database use structured query language (SQL) to extract data (text approach)
    * Query-By-Example (QBE): graphic interface with “drag and drop” fields to create query (graphic approach)
45
Q

What are 6 database controls in DBMS?

A
  1. Concurrent access management: no collisions!
  2. Access controls: no hackers or creepers!
  3. Data definition standards, data element standards
  4. Backup and recovery procedures
  5. Update privileges
  6. Data elements and relationship controls
46
Q

What are inputs and outputs devices (I/O devices) also called?

A

Peripherals

47
Q

What does input devices do?

A

Instruct central processing unit (CPU) and supply data to be processed.

48
Q

What are examples of input devices?

A
  • Keyboard, mouse, trackball
  • Touch-screen technology
  • Microphones and voice recognition technology
  • Point of sale (POS) scanners
49
Q

What does output devices do?

A

Transfer data fro the processing unit to other formats.

50
Q

Examples of output devices?

A
  • Printers, plotters - paper output
  • Monitors, flat panel displays, CRT (cathode ray tube) displays - visual output
  • Speakers, voice output communication aids (VOCAs) - auditory output
51
Q

What are the elements of central processing unit (CPU) and what do they do?

A
  • Control unit: interprets program instructions

* Arithmetic logic unit (ALU): performs arithmetic calculations

52
Q

CPU: what does primary storage do and what are 2 primary storage (main memory)?

A

Primary memory: stores programs and data when in use (information in process).

  • Random Access Memory (RAM): stores data temporarily
  • Read-Only Memory (ROM): permanently stores data needed by computer
53
Q

Secondary storage: What are examples of offline storage?

A
  • Magnetic disks
  • Magnetic tape
  • Optical disks
  • Solid state drives (SSDs) = flash drives = USB, jump, thumb drives
54
Q

Describe magnetic disk.

A

most common (e.g. large storage iPods) - Random access device = data can be stored and retrieved in any order (very efficient)

55
Q

Describe Magnetic tape.

A

now mostly for archive storage (e.g. backup); never in online, real-time systems. Slow and cheap.

56
Q

Describe Optical disks.

A

disk access device that is written and read by light instead of electrical impulses. Laser (i.e. light) burns data on diet - random access storage - newer = blu-ray (>capacity, more precise)

57
Q

Describe solid state drives (SSDs).

A

Portable, capacity 128 megabytes to 20 gig.
Not really a drive; memory similar to RAM; random access storage.
Contains no moving parts.

58
Q

What are types of computer systems (Big)?

A

Supercomputers, Mainframe computers,

59
Q

What is supercomputers?

A
  • Oriented toward scientific purposes = calculation-intensive scientific applications.
  • Fastest available.
  • Parallel processing and computer clusters (connected computers)
60
Q

What is mainframe computers?

A
  • Smaller than super computers
  • Oriented toward more business, accounting (to support mission-critical tasks)
  • Used in many legacy (old) and ERP applications
  • Often used with microcomputers in networked systems with thousands of simultaneous users
  • Input/output (I/O) intensive
61
Q

What are types of computer systems (medium)?

A

Server

62
Q

What is server?

A

A computer than provides resource on a computer network

63
Q

What are types of computer systems (small)?

A

Personal computers (PCs) or workstations, thin clients, others.

64
Q

What is PC or workstations?

A
  • Used by individuals

* Sometimes called, in network systems, fat clients (or thick clients)

65
Q

What are thin clients?

A

In a network system, a computer with minimal capabilities that mostly uses resources on a server.

66
Q

What are other types of small computer systems?

A
  • Laptops or tablet computer

* Mobile devices including small phones, tablets, handheld devices, and wearable computing technologies

67
Q

What is computer hardware?

A

Physical equipment of the computer system.

68
Q

What are the steps of manual processing?

A
  1. Enter transaction on source document (source document)
  2. Record source document chronologically in a journal (journal)
  3. Copy to ledger(s) (master files) (ledger - T accounts):
  4. Trial balance
  5. Prepare reports (FS)
69
Q

Manual processing: what must general and subsidiary ledger do?

A

Subsidiary ledger balances equal general ledger accounting balance

70
Q

Manual processing: reports: what does it do?

A

Produce summarized account reports.

  • From general ledger produce trial balance and FS
  • From subsidiary ledgers produce additional reports (customer A/R balances, vendor A/R balances, etc)
71
Q

What are differences between manual and computerized processing?

A

Eliminate redundancy and post transactions to many systems simultaneously.

72
Q

Automated processing: how is data captured?

A

Automated data capture equipment: e.g. bar code reader

Increasingly rare to manually record on doc and enter into system = expensive and error-prone.

73
Q

What are the counter part of automated systems: manual system?

A

Automated system.

74
Q

What are the counter part of automated systems: source documents?

A

Image or/and transaction files

75
Q

What are the counter part of automated systems: journal?

A

Transaction file

76
Q

What are the counter part of automated systems: subsidiary ledger?

A

Master file.

77
Q

What are the counter part of automated systems: reports?

A

Display and reports.

78
Q

What are the 2 primary methods of capturing data and updating master files?

A
  1. Batch: group transactions for processing

2. On-line, real-time (OLRT): continuous, immediate processing

79
Q

What are steps of batch processing? How often is it processed? What is the important activity? What is the file also called?

A
  1. Batch transaction data is sorted into items number sequence
  2. Sorted transaction data is updated into new inventory file
    * Process periodically (e.g. daily, weekly, monthly)
    * Compute batch control total(s)
80
Q

Batch processing: What is transaction and master file called? Alternative?

A
  • Called sequential-access files because the records are in sequence
  • Alternative is “random-access files”
81
Q

When is batch processing appropriate? When is it not appropriate?

A

*Appropriate when transactions are;
low volume and periodic.
independent and unimportant.

*Not: no real time = delay between transaction and posting. System is always out of date = delays error detection.

82
Q

How does batch control totals work?

A

One or more batch control totals calculated for each batch.

  1. Compare batch control totals for batches
  2. Differences between the two control totals indicate an error
83
Q

What is on-line, real-time (OLRT) processing?

A
  • Continuous, immediate transaction processing.
  • Near simultaneous transaction entry and master files updating.
  • Each transaction completed (data capture, validation, master file update) before following transaction.
84
Q

On-line, real-time (OLRT) processing: requirements?

A
  • Random access storage device

* Networked computer system or internet

85
Q

on-line, real-time (OLRT) processing: when is it appropriate? Not appropriate?

A
  • Most current accounting system
  • Need real-time data
  • Want better customer service
  • Interdependent data, high transaction volume (making batches impractical)
  • could link to supplier and customer system

Not: high cost, low priority (unimportant) system

86
Q

What is point-of-sale (POS) system technology?

A
  • Combine online, real-time processing with automated data capture
  • Scanners capture data from product bar codes (fast, accurate, cheap).
  • Computer system connected to, or integrated with, electronic cash register.
  • POS systems or terminals networked to central computer
  • Central computer maintains databases of products, prices, sales, etc.

BEC IV (12 decks)

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