Chap04

Question 1

Impact on Technological Change on Product and Service:

Answer 1

To remain competitive, companies continuously change the manufacturing, design and features of
their products and services.
Examples:
 Sony and Toshiba try to develop televisions with ‘flat screen’ technology.
 Mobile manufacturing companies like Apple, Samsung continuously add and update
technologies in their phones.
 Nokia could not update its technology and could not compete with its competitors

Question 2

Downsizing

Answer 2

It means business activities are conducting by smaller number of people

Question 3

De-layering

Answer 3

it means removing one or more levels of management in organizational
structure. Due to high-quality communication and management tools, middle
managers are made redundant.

Question 4

Outsourcing

Answer 4

Outsourcing means making arrangements with other business organizations
to perform some operational tasks (instead of appointing in-house
employees).
Often following tasks are outsourced:
 Book-keeping
 Payroll processing
 IT Requirements
 Cleaning and Security of a building.
Benefits of Outsourcing:
 Business can focus on its “Core Competence”.
 Experts’ services are obtained.

Question 5

Restructuring R

Answer 5

Restructuring is a change in a company’s structure or processes. Different
functions or departments can be merged or demerged.

Question 6

Virtual Company:

Answer 6

A virtual business is any business that conducts all or most of its business via the internet.
 It has no physical location that customers can visit.
 It has virtual employees who work from home.
 People are linked through computer and internet

Question 7

Online Social Media:

Answer 7

Social Media has changed the traditional business models. Physical interaction has reduced. Many
business market and deliver through social media.

Question 8

Big Data

Answer 8

Big Data is a collection of data that is huge in volume, and still growing. It is so big that traditional
Database Management System cannot capture, store or analyze it. They can be used to reveal
trends, patterns, preferences of human.

Question 9

Artificial Intelligence

Answer 9

Artificial Intelligence can be used in following segments of business:
 Online assistance to customers
 Resolution of frequently occurring problems.
 Routine decision making.

Question 10

Uses/Benefits of Information Technology and Information System:

Answer 10

 Development of E-Commerce.
 Development of products (e.g. computers, mobile phones, electronic appliances)
 Improved methods of communication (e.g. whatsapp)
 Availability of information (through internet)
 Easy Database Management by organization.
 Quick processing of transaction.

Question 11

Transaction
Processing System
(TPS)

Answer 11

This system processes routine nature transactions e.g. sales order
processing

Question 12

Management
Information System
(MIS)

Answer 12

It provides information of routine nature to management for planning
and control purposes. It compares actual performance with budget.

Question 13

Decision Support

System (DSS)

Answer 13

A decision support system (DSS) is a computer program that supports
decision-making activities e.g. in Material Requirements Forecasting.
It uses different decision making models like Forecasting, Statistical
Analysis.

Question 14

Executive Information
System (EIS) OR
Executive Support
System (ESS)
It provides easy access to internal and external information relevant to
o

Answer 14

It provides easy access to internal and external information relevant to
organizational goals. It converts data into executive level reports.

Question 15

Expert System

Answer 15

An Expert System is a computer program that uses Artificial Intelligence
to provide recommendation on matters related to specific area of
expertise e.g. for medical analysis, or law or taxation

Question 16

Enterprise Resource

Planning (ERP)

Answer 16

Enterprise resource planning (ERP) is the integrated management of
main business processes. It integrates many business activities e.g.
• Finance
• Human Resources
• Manufacturing and logistics
• Supply Chain Management
• Customer Relationship Management

Question 17

Database Management System:

Answer 17

A database management system (DBMS) is software used to create and manage data in computer. It
allows users to create, read, update and delete data in a database.
For example, a customer database contains Name, Address, Order history, Billing details of each
custome

Question 18

Data Warehouse:

Answer 18

A data warehouse is a repository that stores all of an organization’s current and historical data from
multiple sources.

Question 19

Data Mart:

Answer 19

A data mart is similar to a data warehouse, but it holds data only for a specific department or line of
business, such as sales, finance, or human resources.

Question 20

Risks in IT System:

Answer 20

1. Human Error (input of incorrect data, or accidental deletion, or unprotected system)
2. Technical Error (glitches in hardware, software, communication)
3. Natural Disaster (e.g. flood)
4. Sabotage (e.g. theft, terrorist attacks)
5. Viruses
6. Hacking
7. Loss of key personnel
8. Built-in errors in software
9. Not enough built-in controls in system

Question 21

General Controls

Answer 21

These relate to all IT system, particularly to development, security and use of computer
programs e.g.
o Application of IT standards (IT standards e.g. ISOs should be applied for
development, testing and use of new IT systems)
o Controls over development and use of computer programs.
o Physical Access Controls
o Logical Access Controls

Question 22

Application Controls

Answer 22

These are written into the computer software, and are unique to particular IT application
e.g. Data Validation Controls.

Question 23

Physical Access

Controls

Answer 23

These are physical measures to protect computer system from theft,
fire, flood etc.:
 Locks on doors, bars on windows
 Shatter proof glass
 Locate hardware at higher floors
 Backup power generators
 Smoke detectors, fire alarms
 Regular “fire drills”
 Insurance Agreement
 Agreement with third parties to provide technical support in
disaster

Question 24

Logical Access Controls

Answer 24

These are logical measures to protect computer system, particularly
from hacking:
 Passwords
 Encryption
 Firewalls
 System Logs
 Audit Trail
 Anti-viruses

Question 25

Data Validation Controls:

Answer 25

Data validation controls are checks on specific fields of input data which ensures that correct data is
entered into system. If an incorrect entry is made into system, it rejects entry and issues a Data
Validation Report.

Question 26

Examples of Data Validation Controls:

Answer 26

refer notes