Information Technology Terms

In following article we discussed some terms and issues related to Information technology

Information-processing technology

Information-processing technology, or just information technology (IT), is the most common single type of technology within operations and includes any device which collects, manipulates, stores or distributes information. Often organizational and operational issues are the main constraints in applying information technology because managers are unsure how best to use the potential in the technology. The following quotation gives some idea of how fast information technology has changed: The rate of progress in information technology has been so great that if comparable advances had been made in the automotive industry, you could buy a Jaguar that would travel at the speed of sound, go 600 miles on a thimble of gas and cost only $2!

Centralized and decentralized information processing

All computers used for management purposes were, at one time, large and centralized. It was simply the most economical way of buying processing power. Then the cost and power of smaller computers reached the point where it was economical feasible for different parts of the operation to have their own dedicated computer under the direct control of the staff who would use them. This is the distributed processing concept. The obvious problem with such an arrangement was that, in bringing computing power closer to its users, coordinating all the various processing activities became more complex. The answer to the problem was for the distributed computers to exchange information. This eventually led to the concept of the network.

Telecommunications and information technology

Computer-based technologies in business use have always been based on digital principles (converting information into a binary form using 0s and 1s). Telecommunications, mean while were originally based on analogue technology. The digitization of telecommunications transmissions (including digital compression techniques, which allow information to be squeezed into a smaller ‘space’ so that more can be sent using a given amount of transmission capacity), together with the use of high-capacity optical fibre networks, brought new possibilities. The technologies of computing and telecommunications in effect merged. Digital telecommunication lines could carry both voice and non-voice (text, data, etc.) traffic at the same time, so separate sites of the same organization, or separate operations, could lease lines for their exclusive use. Alternatively, separate operations could use one of the public integrated services digital networks (ISDNs).

The internet

Undoubtedly the most significant technology to impact on operations management in the last few years has been the internet. In effect, the internet is a ‘network of networks’. It is used to link computer networks with other computer networks. Its origin lies in the development of LANs in the 1970s and 1980s (and later, wide area networks, WANs). However, because they used different types of computer, LANs usually found it difficult to talk to each other. Nor did WANs use the same language as LANs. The breakthrough came with the development of a technique called ‘packet switching’. This enabled many messages to be sent to different locations at the same time and allowed individual networks to communicate. In practical terms, though, most of us think of the internet as the provider of services such as the ability to browse the World Wide Web.


The use of internet –based technology, either to support existing business processes or to create entirely new business opportunities, has come to be known as e-business. The most obvious impact has been on those operations and business processes that are concerned with the buying and selling activity (e-commerce). The internet provided a whole new channel for communicating with customers. The advantage of internet selling was that it increased both reach (the number of customers who could be reached and the number of items they could be presented with) and richness (the amount of detail which could be provided concerning both the items on sale and customers’ behaviour in buying them). Traditionally, selling involved a trade-off between reach and richness. The internet effectively overcame this trade-off. However, the internet had equally powerful implications for the ongoing provision of services.


The major impact of the internet on so many areas of business has been further boosted by developments in mobile technology. M-business is the phrase now frequently used to cover applications that combine broadband internet and mobile technology devices. For example, some financial services offer their customers access to their accounts through personal digital assistance (PDAs) and mobile (cell) phones. But in business, applications are not limited to enhanced customer service. Generally, communications between staff, especially those who spend much of their time away from the operations, such as sales people, can be significantly facilitated. Mobile communications of this type offer the potential for significant cost savings as well as new business opportunities. However, as with all wireless applications, security concerns can prove a problem in some applications.

Management information systems (MIS)

Within the configuration of any information-processing technology, what is important is the way in which information moves, is changed, is manipulated and presented so that it can be used in managing an organization. These systems are management information systems. Operations managers make considerable use of MISs, especially in their planning and control activities. Systems which are concerned with inventory management, the timing and scheduling of activities, demand forecasting, order processing, quality management and many other activities are an integral part of many operations managers’ working lives and are referred to in the planning and control.

Decision support systems (DSSs)

A decision support system is one which provides information with the direct objective of aiding or supporting managerial decision making. It does this by storing relevant information, processing it and presenting it in such a way as to be appropriate to the decision being made. In this way, it supports managers by helping them to understand the nature of decisions and their consequences, but it does not actually make the decision itself. Often DSSs are used for ‘what if’ analyses which explore the (often financial) consequences of changing operations practice.

Expert systems (ESs)

Expert systems take the idea of DSSs one stage further in that they attempt to ‘solve’ problems that would normally be solved by humans. An ES exhibits (within a specified area) a sufficient degree of expertise to mimic human problem solving. The key part of an ES is its ‘inference engine’ which performs the reasoning or formal logic on the rules that have been defined as governing the decision. These rules are called the ‘knowledge base’ of the ES (which is why ESs are also called knowledge-based systems). There have been many attempts to utilize the idea of an ES in operations management. Although authorities agree that ESs will become far more important in the future of operations management, not all applications so far have been totally successful. The problems which have been encountered include the following:

* Most expert systems can treat only narrow problems rather than the more realistic issues of integration and conflict between problem areas of the operation.
* Putting even some of an operations manager’s expertise into a knowledge base is very expensive in terms of time and processing power.
* Like all information-based systems, it is rendered impotent if the data it is working with are wrong or inaccurate.

The elements of job design

Job design involves a number of separate yet related elements which when taken together define the jobs of the people who work in the operation. Whether you are managing an Egyptian quarry, providing adventure holidays, running a software consultancy or a tax advice office, or building cars, there are six key elements of job design that you will need to consider.

What are the environmental conditions of the workplace?

The conditions under which jobs are performed will have a significant impact on people’s effectiveness, comfort and safety. This is called ergonomic environmental design. It is concerned with issues such as noise, heat and light in the workplace.

What technology is available and how will it be used?

The vast majority of operational tasks require the use of technology, even if the technology is not sophisticated. Not only does the technology need to be appropriate and designed well, so does the interface between the people and the hardware. This is called ergonomic workplace design.

What tasks are to be allocated to each person in the operation?

Producing goods and services involves a whole range of different tasks which need to be divided between the people who staff the operation. Different approaches to the division of labour will lead to different task allocations.

What is the best method of performing each job?

Every job should have any approved method of completion and this should be the ‘best’ method. Although there are different ideas of what is ‘best’, it is generally the most efficient method but that fits the task and does not unduly interfere with other tasks. This is usually referred to as work study – one element of scientific management.

How long will it take and how many people will be needed?

The second element of scientific management is work measurement. Work measurement helps us calculate the time required to do a job so that we can then work out how many people we will need.

How do we maintain commitment?

Keeping staff motivated is not easily. There is a danger that in considering the previous questions it may be tempting to see the person as a unit of resource rather than a human being with feeling and emotions. So understanding how we can encourage people and maintain their commitment is the most important of the issues in job design and work organization. This is concerned with the behavioural approaches to job design including empowerment, teamwork and flexible working.

End of Information Technology terms


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