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APPENDIX 3.5
Improvements Due to State-of-the-Art
Information Technologies
Currently available developments in hardware, software,
and telecommunications have led to such technologies
as client/server, relational data-base management systems, data warehouses, groupware, decision support
systems, electronic data interchange networks, and electronic funds transfer systems.
Firms that update their technologies can reap significant benefits. Infoage, for instance, converted its mainframe system a few years ago to a computer network
with on-line data files. As a result, the managers and
employees in the main office have easier and faster access to certain needed information and more effective
communication among departments in the main office
and the warehouse.
By converting to state-of-the-art technologies such
as those listed above, firms can achieve even greater
improvements in performance. We can illustrate this assertion by briefly considering data marts/warehouses
and LAN-based client/server systems. Managers and key
employees need rapid access to both financial and nonfinancial information. A data mart/warehouse can significantly improve the decision-making process by
enhancing the types of information that end users receive. Instantly accessible comprehensive information
stored in the data mart/warehouse can be shared with
colleagues anywhere in the firm, thus facilitating collaborative decision making and empowering employees.
Also, end users can work with flexible analysis and reporting tools, such as groupware,* to quickly locate information, generate scheduled or on-demand reports,
and make decisions that are more informed. The quality
of customer service is improved by providing real-time
access to critical information.
A data mart/warehouse also alters the traditional reporting process of decision makers by reducing the time
necessary to generate and distribute financial and nonfinancial reports and analyses. Many reports can be
distributed directly to users over the LAN-based
client/server setup via e-mail attachments. This direct
distribution eliminates mounds of paper documents
and increases efficiency since accessing and manipulating information is made easier.
A LAN-based client/server system can be an advantageous platform for a firm’s accounting applications, as
described earlier. Specific benefits that can be expected
by a typical firm include the following:
*Groupware consists of software that facilitates e-mail, computer conferencing, and videoconferencing. Groupware allows
co-workers to collaborate on projects anywhere and anytime
and to make decisions jointly. It is further examined in
Module 2.
1. Improved productivity of the accounting staff,
since many paper accounting documents are
eliminated and the staff is freed to complete important value-added tasks.
2. Less required training and support, since a graphical interface and available customizing tools enable the accounting staff to employ the packages’
functions quickly and easily.
3. Immediate updating of accounting files as transactions are entered.
4. Reduced time to generate and distribute financial
reports and analyses, since useful information can
be distributed over the network via e-mail. For example, a member of the accounting staff could
prepare a cost center expense summary report
and electronically distribute the report over the
network to the appropriate manager.
5. Improved customer service. For example, a firm
can provide its customers with on-the-spot, up-todate information on product prices and scheduled
delivery times. To ensure that ordered merchandise is delivered to customers when promised, the
shipping function can be easily monitored.
6. Simplified accounting cycle, resulting in faster
end-of-period closings.
7. Simplified data-entry process, with both real-time
processing and batch direct processing accommodated.
8. Flexibility in maintaining and modifying applications software to meet a wide range of changing
requirements without major reprogramming.
As these examples show, information technology can
be very important to the well-being of all firms. Firms
must be prepared to change their information systems
to incorporate new developments as they occur. Those
firms that are subject to rapid, frequent, and unpredictable changes must, in addition, focus on achieving
as great a stability as possible by managing information
through the intelligent use of technology.**
Difficulties Encountered with Respect to
Information Technologies
Although information technologies can significantly improve the functioning of automated AISs, various obstacles may impede the achievements. Developing such
technologies as data warehouses and client/server platforms can be very complex undertakings; thus they are
**Andrew C. Boynton, “Achieving Dynamic Stability Through
Information Technology,” California Management Review (Winter
1993), pp. 58–77.
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APPENDIX 5.1
likely to be extremely costly and time consuming. Certain costs tend to be unanticipated, such as those related to testing, network and systems maintenance,
end-user retraining, and security.
Even when the technology has been fully implemented, other hidden costs and problems may arise. Because LAN-based hardware and software tends to be
less reliable than mainframe hardware and software,
both data warehouses and client/server systems tend to
crash frequently, sometimes for extended periods. Also,
managers may block the flows of information throughout the organization, preferring to hoard the information
for their exclusive use. Even if information is allowed to
flow freely, employees may not understand how to employ it or share it on a peer-to-peer basis to aid in making decisions related to their job functions.
Certain obstacles to incorporating technologies
within the AIS may be beyond the control of a firm.
Some countries may be slow in updating regulations
concerning telecommunications, for instance. Outdated
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regulatory constraints can restrict the ability of the firm
in offering advanced services to its customers.* Countries may also be delinquent in installing enabling
technologies, such as fiber optic cables for better
telecommunications.
Finally, the most advanced technologies may not be
suitable for many firms, especially those that are small
and/or that have cash-flow problems. The added values
of such technologies as LAN-based client/server systems and data warehouses may not be sufficient for such
firms. In any case, their benefits as well as hidden costs
are difficult to measure and hence to justify on an economic basis. Consequently, each firm should carefully
weigh the available technologies in light of its needs and
resources.
*Catherine Arnst, “The Networked Corporation,” Business Week
(June 26, 1995), p. 87.
APPENDIX 5.1
SELECTED ACCESS METHODS
Three access methods—those involving binary searches,
linked lists, and inverted lists—were briefly mentioned
in Chapter 5. Because they can be useful to a complete
data retrieval strategy, we will examine them in this appendix. Certain problems at the end of Chapter 5 draw
on the methods described here.
Binary Searches
Binary search is a direct-access method that can be employed in locating records arranged via a primary key
within a sequential file. It is a much more efficient
search procedure than the sequential-access method,
however. Binary search consists of first checking the
value of the primary key of the record at the midpoint of
the file being searched. After determining in which half
of the file the desired record resides, the method then
checks the midpoint of that half. This procedure continues until the record is located.
Listing
number
Realtor
name
Street
address
Linked Lists
A linked list is a connected chain of logically related
data. It is formed by means of pointers that are embedded within the records of the file or files to which the list
pertains. Since the records of the file are normally
arranged according to their primary keys, the linked list
pertains to one of the secondary keys.
Pointers are data elements whose values specify
(“point to”) the physical storage addresses where associated data are stored. In contrast to the other data elements of a record, a pointer provides direction rather
than content.
We can observe the use of linked lists through a real
estate example. Figure A5.1-1 shows the fields that
compose a record relating to sales of houses. The primary key is the listing number of the houses available
for sale; secondary keys include such attributes as the
city where each house is located, its asking price, its
City where
located
Asking
price
Number of
bedrooms
Number of
square feet
FIGURE A5.1-1 A record layout of the key data elements relating to a home for sale.
Date of
construction