Computer Applications in Business

Computer Applications in Business refer to the use of computing technology to improve productivity and efficiency within organizations. Since their emergence in the workplace during the latter half of the 20th century, computers have transformed various business functions, enabling tasks such as document creation, data management, accounting, and communication to be completed quickly and accurately. These applications not only enhance individual productivity but also facilitate collaboration among employees, allowing for data sharing and coordinated efforts across teams.

Modern businesses leverage computer applications for a wide range of functions, from managing databases to executing enterprise-wide systems that streamline operations. The Internet has further revolutionized business practices, providing new avenues for marketing, e-commerce, and customer engagement. However, the integration of computer technology in business is accompanied by significant security and ethical considerations, including the protection of sensitive data and the privacy of individuals. As organizations continue to evolve in the Information Age, the role of computer applications in shaping effective, secure, and collaborative work environments remains critical.

Published in: 2021

By: Wienclaw, Ruth A.

Subject Terms

Computer Applications in Business

Although computing devices are not as recent an invention as one might think, it was not until the latter part of the twentieth century that they reached a level of sophistication that enabled them to become common in the workplace. Computers enhance productivity at work, quickly and accurately performing many of the repetitive and tedious chores associated with document creation and editing, accounting, publishing, and record keeping. In addition, computers are invaluable for enhancing the way that people work together by providing the capabilities to share data, coordinate tasks, and quickly communicate. Computers also are invaluable for managing data and allow organizations to maintain and manipulate databases in ways that would be impossible without technology. The use of computers for business is not without risks and concerns, however, including both issues of security and concerns for the individual's right to privacy.

Keywords Application Software; Database; Enterprise; Information Technology; Local Area Network (LAN); Security; Wide Area Network (WAN)

Information Technology > Computer Applications in Business

Overview

As a species, human beings appear to be infinitely inventive and constantly searching for ways to improve their lives. Many important accomplishments and innovations resulting from this quest have changed the course of history along the way. Within the current lifetime, however, arguably none is more important than the progress that has been made in countless disciplines as well as everyday activities as a result of computer technology. The application of computers both at home and at work helps us to better organize our lives, more easily perform repetitive or logical tasks, and access our creativity. Like the Renaissance and the Industrial Revolution before it, the Information Age continues to transform our lives and the ways in which we perform many of our tasks. The trend does not appear to be coming to a quick end, however, and it is reasonable to assume that the proliferation of technological invention and innovation will not continue to change the way that we do things well into the future.

The use of computers to assist in performing tedious tasks, however, is not a recent concept. For centuries, human beings have looked for ways to improve the accuracy of their computations and to better control the world around them. For example, the Antikythera Mechanism — the world's oldest known computing device — dates to the first century B.C. This complex, multi-geared device is believed to be an early analog computer that was designed to calculate astronomical positions. Despite such intriguing examples, however, computers did not come into their own until the mid-twentieth century. The cumbersome mainframe devices of the time were revolutionized in the 1970s with the invention of the microprocessor. This innovative technology led to the development of the personal computer that soon became commonplace both at home and at work.

Computers have become so much a part of many people’s lives that it is difficult to imagine life without them. In the workplace, computers allow workers to write letters, record financial transactions, and send both quick messages and lengthy documents to colleagues across the room or across the world. Computers automatically spell check correspondence and make suggestions on how to improve grammar. Computers allow workers to circumvent the art department and use presentation software to design business presentations in full color, illustrated with high-quality photographs and graphics, with just a few clicks of a mouse. Computers automatically synchronize the calendars in personal digital assistants or smartphones and chime merrily to remind us of appointments, tasks, and deadlines.

In the mid-twentieth century, computers were cumbersome things that belonged to the realm of big business problems and scientific research. For most people, correspondence and technical writing was literally penned by hand and sent to a secretary or a typing pool to be formalized on that modern wonder, the electric typewriter. The phrase "cut and paste" was literal: workers received the crisp white sheets of paper back from the unseen typing pool and proceeded to edit by hand, frequently using scissors and tape to rearrange paragraphs. Then suddenly lives were revolutionized by the advent of the word processor. Although these devices still were not on every desktop, the secretaries and typists were thrilled because they no longer had to type each draft from scratch; they could rearrange paragraphs, edit, and correct on electronically stored documents and print out a fresh edited copy in a fraction of the time that the work would have taken on a typewriter.

The first word processors were crude, however, when compared to the capabilities that are housed today within personal computers or laptops. They were unitaskers, useful only for typing, editing, and printing documents. Since the introduction of the personal computer to the workplace, the way that we do work has been transformed. Depending on the software applications that are installed on the computers, one can not only type and edit documents but also create layouts and designs for print. Electronic spreadsheets that automatically total columns of figures and quickly paste cells to other pages make the task of double-entry bookkeeping almost fun. Whether they work on independent personal computers or are part of a network, the ability to do carry out work using computers has impacted workers in a wide range of industries. The application of computers to business is virtually as unlimited as the tasks performed in the workplace.

Applications

The examples above illustrate just a few of the ways that computers can enhance individual productivity in the workplace. However, computers in the workplace are useful for much more than enhancing individual productivity. There are numerous applications of computer technology that can enhance the way that workers interact with each other and collaborate to enhance the productivity and effectiveness of the organization as a whole. Computers also are invaluable for storing and manipulating large collections of data in support of numerous tasks across the organization. In addition, the Internet has given businesses an entirely new medium for advertising products and services, gathering data about prospective customers and competitors, and selling products online.

Enterprise-Wide Computer Applications

By definition, an organization is a group of people that is organized to perform work or some other task. The fact that organizations are made up of more than one person gives them the opportunity to achieve synergy and accomplish more together than they could as isolated individuals. Modern computer technology can help in this task. In many businesses, computers are linked together over a local area network that allows multiple computers located near each other (e.g., in the same room or building) to share files and peripheral devices such as printers. This capability is particularly useful if a number of people need to work on the same document (e.g., inputting data, commenting on a document, creating reports from a database). Similarly, computers that are widely dispersed can be linked into a wide area network. Wide area networks typically use high-speed, long-distance communications networks or satellites to connect the computers within the network. Through them, employees can communicate and cooperate with colleagues in the next office and across the globe.

The linking of computers through networks can enhance the productivity and effectiveness of the entire enterprise. For example, computerized cash registers in a retail store or other points of sale can be linked together so that sales clerks can search across the network to see whether other stores have a particular item in stock. Similarly, the computers at the point of sale can be linked directly to the corporate headquarters so that the store's closing data each evening can be directly and immediately shared with corporate management. Computerized inventories can help individual stores keep track of what they have in stock, what products are most in demand, and when it is time to reorder, and they can even assist in automatically ordering stock. Enterprise-wide computer systems can also automatically invoice customers and perform other billing tasks.

Computers are also used to organize and manage. On a personal productivity level, application software is readily available that can help people keep track of their calendars, including scheduling of appointments, meetings, and tasks to be done. However, on a higher level, application software is available for project management. This type of application allows a project manager to track and control schedules for complex projects and to communicate status, risks, and other information about the project status to customers and team members.

Another important computer application frequently used in the business world is the database management system. A database is a computer program that allows the user to create, change, and organize a collection of data items that are related to each other. What differentiates a database from other collections of data is that the data in a database are used for multiple purposes. The data in a database are placed into a series of tables that are keyed to each other and that can be manipulated into a variety of reports that display only that portion of the database in which the user is currently interested. The process of database management comprises inputting data into the database, updating the data, and representing all or part of the data in various reports that meet the user's specific needs. Computer technology enables the creation and manipulation of large databases that could not be managed through another medium.

Database management systems are used in a wide array of businesses. The inventory control system of a retail store or chain discussed above is one example of a database management system. Another example is a medical records management system in a hospital. These systems may help a hospital or physician's office control, organize, and manage a wide range of demographic information about their patients and their medical histories, information about their medical insurance coverage, and other data that are important to the healthcare system. Medical records management systems can allow users to pull together the information in a variety of ways for various forms and records.

Another application of a database management system is in marketing. Database systems in this area can help marketers better understand their target market, collect and analyze data on prospective customers, and keep track of current customers' buying history, needs, and other characteristics. A database management system can be used to develop targeted mailing lists for new products based on customer demographics or buying history or to track customer purchases so that better solutions can be offered or new products developed to better meet their needs.

Internet Applications for Business

No discussion of computer applications in business would be complete without mention of the Internet. The advent of this "network of networks" has revolutionized the way that many tasks are carried out. The Internet links together numerous smaller networks, including many from government, business, and academia, and allows users to communicate through various communication media, including e-mail, online chat, instant messaging, forums, social-networking sites, and blogs.

From a marketing perspective, the rise of the Internet and the ease of designing and maintaining a professional web site has brought with it the potential to reach far greater numbers of potential customers than was previously possible. The Internet can provide a wealth of information that an organization can use in marketing efforts. Whether the organization is offering goods or services, the Internet offers an array of opportunities for gathering information, testing marketing approaches, and advertising. For organizations offering products for sale, the Internet also offers effective ways to put one's catalog online and even to take orders and receive payment without the expense of a physical storefront or extensive staff. E-commerce also allows businesses to sell directly to customers and to reach a larger potential market.

Another marketing application of Internet technology is the ability to research the competition. Data about what competitors are selling, how and to whom they are advertising, and what the latest buzz words are for attracting potential customers is readily available to those who are willing to gather it. The Internet can also provide a wealth of information about prospective customers. Demographic data are frequently available from government sources online, and lists of businesses or organizations that might be part of the target market can be readily generated.

Security & Ethical Considerations for Computers in the Workplace

Business applications for computer technology are not an unmixed blessing. The same technology that offers new opportunities to honest businesspersons also offers new opportunities to criminals. Cyber crime can affect both those buying and selling products. Organizations using the Internet for financial transactions or the collection of other sensitive or personal information must be diligent in ensuring that their web sites are secure to protect both themselves and their customers. For those organizations storing or transmitting sensitive information over the Internet, security becomes an even greater concern as criminals increasingly find innovative ways to outwit the security measures instituted by Internet users.

It is essential that a business protect its information technology assets. The impact of security breaches can be far reaching. The physical destruction or sabotage of information technology hardware can be expensive for the organization, as can the destruction of data or software. Software can be not only erased but also altered or corrupted so that it produces invalid results and the system becomes unreliable and unusable. In addition to the threat to the organization, security breaches can also result in identity theft for the individuals whose data are contained in the databases. Threats to enterprise security can come not only from external hackers — individuals who gain access to the system illegally — but from the business's own employees as well.

A good security program for information technology needs to address several levels. First, the security of the computer centers and other rooms where information technology processing activities take place and data and other resources are stored must be ensured. Second, the security of equipment, facilities, and application software needs to be taken into account. Third, the communication networks (both local area and wide area), access to the Internet, and any intranets or extranets must be considered. Care must be taken to protect the enterprise's information technology resources from both intrusions by forced, unauthorized entry into the system and interception and capture of data by unauthorized personnel.

However, security issues are not the only ethical issues faced by enterprises using computer technology, particularly database management systems containing sensitive information about people. Although in Europe it is illegal to use information about a customer in ways that a customer did not intend for it to be used — including selling the customer's information to another company for marketing purposes — this is both a legal and accepted practice in the United States. However, ethical concerns about an individual's right to privacy should not be taken lightly.

Computers offer another opportunity to businesses: the opportunity to closely monitor their employees. For example, computers can gather data concerning the time it takes for an individual to fill out an insurance claim form or process a travel reservation or how many phone calls an individual takes during a shift. On production lines, computers can enable businesses not only to keep track of errors but also to trace them to the employee that made them. Some organizations monitor the e-mails of employees. Although there may be legitimate reasons for doing such things, employees often take exception to such close monitoring. Employee dissatisfaction, sabotage, or other negative consequences can result from such computer applications in business.

Terms & Concepts

Application Software: A program that performs functions not related to the running of the computer itself. Application software includes word processing, electronic spreadsheet, computer graphics, and presentation software.

Database: A collection of data items used for multiple purposes that is stored on a computer.

Desktop Publishing: The use of a personal computer to create high-quality printed documents such as brochures, newsletters, and books. Desktop publishing uses various types of computer software (e.g., word processing, page layout, graphics) to create professional-quality documents.

Double Entry Bookkeeping: An accounting technique in which each transaction is recorded as both a credit (the source of financing) and a debit (the use of the financing). Each credit typically has more than one debit posted against it. This system aids in balancing of the credit and debit ledgers.

E-Commerce: E-commerce (electronic commerce) is the process of buying and selling goods or services — including information products and information retrieval services — electronically rather than through conventional means. E-commerce is typically conducted over the Internet.

Enterprise: An organization that uses computers. Although this term is often applied to large organizations, the term can be applied to both small and large organizations.

Information Technology: The use of computers, communications networks, and knowledge in the creation, storage, and dispersal of data and information. Information technology comprises a wide range of items and abilities for use in the creation, storage, and distribution of information.

Local Area Network (LAN): Multiple computers that are located near each other and linked into a network that allows the users to share files and peripheral devices such as printers.

Network: A set of computers that are electronically linked together.

Presentation Software: A type of graphics software that allows the user to create a series of visual aids (slides) that can be used to support a speaker in giving a speech or public presentation. Typically, the slides are displayed via a projector connected to a computer on which the software resides. Presentation software often also allows the user to print out paper versions (hard copy) of the slides for various uses, including handouts for the audience or memory aids for the presentation.

Security: The process of safeguarding and protecting the data, hardware, software, and processes of a business's information technology assets.

Spreadsheet: A table of values arranged in rows and columns in which the values have predefined relationships. Spreadsheet application software allows users to create and manipulate spreadsheets electronically.

Synergy: The process by which the combined product resulting from the work of a team of individuals is greater than the results of their individual efforts.

Wide Area Network (WAN): Multiple computers that are widely dispersed and that are linked into a network. Wide area networks typically use high speed, long distance communications networks or satellites to connect the computers within the network.

Word Processing: The use of a computer to create, edit, and store documents electronically.

Bibliography

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Computer Applications in Business

On this Page

Subject Terms

Computer Applications in Business

Information Technology > Computer Applications in Business

Overview

Applications

Enterprise-Wide Computer Applications

Internet Applications for Business

Security & Ethical Considerations for Computers in the Workplace

Terms & Concepts

Bibliography

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