Computers and Computer Systems VI

COMPUTERS IN BUSINESS

OVERVIEW.

Computers are used in government agencies, nonprofit organizations, and households, but their impact has been greatest in business and industry. The competitive nature of business has created demands spurring continuous advancements in computer technology and systems design. Meanwhile, declining prices and increasing computing power has led a large percentage of all businesses to invest in computer systems.

Computers are used to process data in all areas of business operations:

• product design and development
• manufacturing
• inventory control and distribution
• sales and marketing
• transaction processing
• customer support
• accounting and financial management and planning
• personnel management
• internal and external communications
• data exchange with suppliers, customers, and government agencies (including tax filings)

SYSTEM DESIGN AND CONFIGURATION.

Computer systems may be designed for a specific industry's use, including all necessary software, and as such are called "turnkey" systems. Vendors that provide integrated computer systems include original equipment manufacturers (OEMs) and value-added resellers (VARs). VARs, as wholesalers, buy computers, software, and peripherals often from separate suppliers and configure them as ready-to-use systems. Alternatively, a business can have its computer system (or at least the software) custom-designed by a computer service firm. Increasingly, however, businesses have purchased their computers and other system components separately and installed them on their own, as computers have become more standard and compatible with other makes, and as corporations have built up knowledgeable in house technology support staffs. Likewise, the trend in software has been toward customizing software that is based on widely used standards, e.g., Oracle-based database management systems, rather than embarking on completely new proprietary software ventures.

KEY APPLICATIONS.

The most common uses of a computer system are for database management, financial management and accounting, and word processing. Database systems are used to keep track of large amounts of changing information on such subjects as clients, vendors, employees, inventory, supplies, product orders, and service requests. Financial and accounting systems are used for a variety of mathematical calculations on large volumes of numerical data, whether in the record keeping of financial service firms or in the general accounting tasks of any business. Using spreadsheets and database management software, computers may be used by accounts payable, accounts receivable, and payroll departments, among others. In addition to merely processing and tabulating financial data, companies use computers to quickly analyze their cash flow, cost-efficiency, and other critical performance information.

Databases are also used to help make strategic decisions through the use of software based on artificial intelligence or other specialized tools. Database technology is increasingly being applied to storing human knowledge, experience, insights, and solutions to past problems within specific business fields. This is known as a knowledge base. Knowledge bases are frequently associated with expert systems, which are a special form of management decision support systems. The goal of such systems is to provide a decision maker with information that will help him or her make the best possible choices. These systems attempt to harness the knowledge and experience of the most highly trained individuals in a field, and pass this information along to everyone in the business who works in that field. This is increasingly important in complex or rapidly changing professional environments. Expert systems are used in regulatory compliance, contract bidding, production control, customer support, and general training, among other areas.

Computer systems increasingly are also being used in telecommunications. Whether over standard telephone lines, higher speed network cable, or fiber-optic lines, businesses routinely use computers for a host of internal and external communications functions over computer networks. These functions include voice and electronic messaging as well as data exchange. The tremendous growth of the Internet and World Wide Web has played a major role in advancing the communications side of computing.