IT and Applications
Unit 2: Information Technology and Business
Business in the information age, information systems, organisation structure, evolution of IS, e-business, enterprise systems, and computers in past and present.
Business in the information age
The information age is the period (roughly 1970s onward) in which information became the most valuable resource for businesses. Today, businesses succeed not just by having better products, but by having better data and better systems to use that data.
Companies like Amazon, Google, and Meta dominate not because they build physical goods but because they collect, process, and act on information at massive scale.
Information systems
An Information System (IS) is an organised combination of people, hardware, software, data, and networks that work together to collect, process, store, and distribute information for decision making.
Components of an information system
- People — users, managers, IT staff.
- Hardware — computers, devices, network equipment.
- Software — operating systems, business applications.
- Data — the raw facts the system stores and processes.
- Procedures — rules and processes the people follow.
- Networks — connections between machines (LAN, internet, cloud).
Organisation structure and IT support
Most organisations are arranged in a pyramid of three management levels, and IT supports each differently:
| Level | Role | IT support example |
|---|---|---|
| Strategic (top) | Long-term planning, vision | Executive dashboards, BI tools |
| Tactical (middle) | Implementing strategy, budgeting | Reports, analytics, MIS |
| Operational (bottom) | Day-to-day operations | POS systems, transaction systems |
Evolution and types of information systems
Information systems have evolved as business needs grew:
- TPS (Transaction Processing System) — records day-to-day transactions (sales, payroll).
- MIS (Management Information System) — summarises TPS data into reports for managers.
- DSS (Decision Support System) — helps managers make decisions with what-if analysis.
- ESS / EIS (Executive Support System) — gives senior executives a high-level view.
- KMS (Knowledge Management System) — captures and shares organisational knowledge.
- OAS (Office Automation System) — supports daily office work (email, calendars).
Business information system
A Business Information System is an information system designed specifically to support business processes — sales, marketing, finance, HR, operations.
Categories of business information system
- Functional systems — built around a business function (Accounting IS, HR IS, Marketing IS).
- Enterprise systems — span the whole organisation (ERP, CRM, SCM).
- Inter-organisational systems — span multiple companies (supplier portals, EDI).
e-Business system
e-Business uses internet technologies to perform business activities, both inside and between organisations. It is broader than e-Commerce, which is only about online buying and selling.
Categories of e-Business:
- B2C (Business to Consumer) — Amazon, Flipkart, Daraz.
- B2B (Business to Business) — Alibaba, supplier portals.
- C2C (Consumer to Consumer) — eBay, OLX.
- C2B (Consumer to Business) — freelance platforms like Upwork, Fiverr.
- G2C / G2B (Government to Citizen / Business) — e-governance portals.
Enterprise system
An enterprise system integrates the data and processes of an entire organisation into a single unified platform. The three big ones are:
- ERP (Enterprise Resource Planning) — integrates finance, HR, manufacturing, sales (e.g. SAP, Oracle ERP, Microsoft Dynamics).
- CRM (Customer Relationship Management) — manages customer data and interactions (e.g. Salesforce, HubSpot, Zoho).
- SCM (Supply Chain Management) — manages flow of goods from supplier to customer (e.g. SAP Ariba, Oracle SCM).
IT for business
IT helps businesses by:
- Reducing costs through automation.
- Improving speed and accuracy of decisions.
- Reaching global customers via the internet.
- Enabling new business models (subscriptions, marketplaces, on-demand services).
- Providing insights from data analytics.
- Improving collaboration through tools like Slack, Microsoft Teams, Zoom.
IT for individuals
IT also serves individuals directly:
- Communication — email, WhatsApp, video calls.
- Education — Coursera, Khan Academy, YouTube.
- Entertainment — Netflix, Spotify, YouTube.
- Banking — mobile banking, UPI, e-wallets like eSewa, Khalti.
- Health — fitness trackers, telemedicine apps.
- Productivity — Google Workspace, Microsoft 365, Notion.
Computers in past and present
- Past: large, expensive, and used only by governments, universities, and big corporations for specialised tasks like accounting and scientific computation.
- Present: personal computers, smartphones, smart watches, and IoT devices put computing in every pocket. Cloud computing means even small startups can rent supercomputer-class power per hour.
- Future direction: AI assistants, quantum computing, ambient computing where technology fades into the background.