- Understand what information technology is and why it’s important in business
- Explain how technology changes businesses
- Understand what business intelligence is and why it’s important
What Is Information Technology?
Information technology (IT) includes the equipment and techniques used to manage and process information. Information is at the heart of all organizations. Without information about the processes of and participants in an organization—including orders, products, inventory, scheduling, shipping, customers, suppliers, and employees—a business cannot operate.
In less than 70 years, we have shifted from an industrial society to a knowledge-based economy driven by information. Businesses depend on information technology for everything from running daily operations to making strategic decisions. Computers are the tools of this information age, performing extremely complex operations as well as everyday jobs such as word processing and creating spreadsheets. The pace of change has been rapid since the personal computer became a fixture on most office desks. Individual units became part of small networks, followed by more sophisticated enterprise-wide networks. The table below summarizes the software most commonly used in business management information systems today.
| Application Type | Description |
|---|---|
| Word processing software | Used to write, edit, and format documents such as letters and reports. Spelling and grammar checkers, mail merge, tables, and other tools simplify document preparation. |
| Spreadsheet software | Used for preparation and analysis of financial statements, sales forecasts, budgets, and similar numerical and statistical data. Once the mathematical formulas are keyed into the spreadsheet, the data can be changed and the solution will be recalculated instantaneously. |
| Database management programs | Serve as electronic filing cabinets for records such as customer lists, employee data, and inventory information. Can sort data based on various criteria to create different reports. |
| Graphics and presentation programs | Create tables, graphs, and slides for customer presentations and reports. Can add images, video, animation, and sound effects. |
| Desktop publishing software | Combines word processing, graphics, and page layout software to create documents. Allows companies to design and produce sales brochures, catalogs, advertisements, and newsletters in-house. |
| Communications programs | Translate data into a form for transmission and transfer it across a network to other computers. Used to send and retrieve data and files. |
| Integrated software suites | Combine several popular types of programs, such as word processing, spreadsheet, database, graphics presentation, and communications programs. Component programs are designed to work together. |
| Groupware | Facilitates collaborative efforts of workgroups so that several people in different locations can work on one project. Supports online meetings and project management (scheduling, resource allocation, document and e-mail distribution, etc.). |
| Financial software | Used to compile accounting and financial data and create financial statements and reports. |