Management Information Technology (IT)

1. Today business, government, and other organizations de­pend on computers to process data and to make information available for decision making. A computer is an electronic ma­chine that can accept, store, manipulate, and transmit data in ac­cordance with a set of specific instructions. Although computers are a relatively recent invention, we have already seen five gen­erations of computers. Currently, firms can choose mainframe computers, minicomputers, or microcomputers to match their in­formation needs.

Mainframe computers may be as big as a good-sized room, can handle huge quantities of data, perform a variety of opera­tions on these data in fractions of a second, and provide output information in several different forms. The largest and most powerful mainframe computers are sometimes called supercom­puters. These very large computers are used almost exclusively by universities and government agencies that are involved in re­search activities that require large memories and high-speed pro­cessing.

Minicomputers are smaller (more or less desk-sized) comput­ers that made computers available to most firms.

The microcomputer, sometimes called a personal computer (PC), is a desktop computer. It was made possible by the devel­opment of microprocessor chips, a fraction of an inch in size, that contain all the electronic circuitry required to perform large-scale data processing. Although microcomputers are often purchased for use at home many smaller firms find them completely satisfactory for their limited needs. Each of these machines con­sists of at least one input unit, a memory, a control unit, an arith­metic-logic unit, and an output unit. Firms can also establish a computer network — a system in which several computers can either function individually or communicate with each other.

2. Computers require software, or programs, which are oper­ating instructions. Today, software has been developed to satisfy almost every business need. Database management programs can store and transform data into information. Data contained in a database program can also be stored. Graphics programs make it possible to display in graph form data and conclusions. Spread­sheets are software packages that allow users to organize data into a grid of rows and columns. Spreadsheets allow managers to answer "what if questions by changing data to match new as­sumptions. Word processing programs allow users to store docu­ments in the computer's memory or on a disk. Once entered, the material can be revised, edited, deleted, printed, or simply used at a later date. Most experts predict that in the future computers will affect every aspect of human life. Specific trends that will affect business include the increase in available information, the use of automation, and the need for employees that know how to use a computer.

3. A management information technology (MIT) is a means of providing managers with the information they need to perform management functions as effectively as possible. The data that are entered into the system must be relevant, accurate, and time­ly. The information provided by the system must be all of these. Managers in different areas of a business generally require infor­mation pertaining to their own areas. The management informa­tion, technology should match the firm it serves in capacity and complexity.

4. The four functions performed by MIT are collecting data, storing and updating data, processing data, and presenting infor­mation. Data may be collected from such internal sources as ac-

counting documents and other financial records, conferences and meetings, and sales and production records. External sources in­clude customers, suppliers, bankers, publications, and informa­tion-gathering organizations.

5. With a computer, data can be stored on magnetic tapes and disks and used when they are needed. Data should be updated regularly to maintain their timeliness and accuracy. Updating can be accomplished manually or via computer.

6. Data processing is the MIT function that transforms stored data into a form that is useful for a specific purpose. Large groups of numerical data are usually processed into summary numbers called statistics. Although statistics can provide infor­mation in a manageable form, the user is responsible for correct­ly interpreting statistics.

Finally, the processed data (which can now be called informa­tion) must be presented for use. Verbal information is generally presented in a text form. Numerical information is often dis­played in graphs and charts or tables.

Exercises