Topic 2 - ICT in Business and Manufacturing
The shape of businesses is changing:
More people are going into business by themselves
Larger organisations are becoming less hierarchical, with employees working more in groups needing less supervision.
The use of problem-solving skills, ability to use initiative and familiarity with ICT is increasingly important in recruitment.
Many people now use the Internet for contacting companies and doing business with them.
Question 1 List two advantages and two disadvantages of using the internet in business. ANSWER
This picture shows a CD-ROM business card.
Go to http://www.applegate.co.uk/it/company/co_1088250.htm to see how a small ICT company, ICT Solutions in Rochdale can support other businesses.
Banks have made extensive use of ICT for many years:
Electronic Funds Transfer (EFT)
Smart
Cards
We will look at each of these in turn:
MICR:
These are the strange looking numbers at the bottom of a cheque. They are written in a special magnetic ink, and have the advantage that they can be read by a reader connected to a computer, or by a person. One the cheque is written the bank sort code, the account number, the cheque number. When the cheque is being cleared, the cheque amount is also written.
BACS
The Bankers Automated Clearing Services have used computers to carry out most financial transactions between banks. These include:
clearing cheques
paying in salaries
payment of standing orders or direct debits
The BACS does its processing by batch processing, in which all transactions from the previous day are processed at one time. The processed data is passed between banks on magnetic tapes. Logs are kept of all the transactions. Banks were among the first organisations to use mainframe computers. Many of these are still at work today, as they are very good at this routine number-crunching. It still takes up to a week for a cheque to clear.
ATM
Automatic teller machines are familiar to most bank customers. They insert a card in the wall, type in a PIN number and, hey presto!, out comes the money.
They are connected to the bank via telephone lines and pass the details of each transaction to a transaction file. This is updated at the end of the day to debit the customers' bank accounts with the appropriate sums of money. The ATM allows the customer to:
Get cash out
Find out the
balance in their account
Change their Personal Identification Number (PIN)
Request a
statement.
Putting money into the account still requires handing it over to a cashier. Lloyds Bank have a system called Creditpoint where the customer deposits money in a special envelope. It is, in effect, a posting box; all the subsequent cash handling operations are manual.
For the customer, the ATM:
is more anonymous.
provides a 24-hour
a day service, seven days a week; ideal for customers who work irregular
hours.
causes fewer
queues since the transactions are quicker.
For the bank the ATM:
frees up staff
from performing routine transactions so that more profitable
sales-orientated work can be done.
reduces the number
of staff, since the computer does the work.
provides a continuous service outside normal hours.
prevents customers
withdrawing money that is not in the account.
Question 2 Give two advantages and two disadvantages for a customer using a bank ATM. ANSWER
Electronic Funds Transfer at Point of Sale. You will have seen these devices at the checkouts of many shops:
The cashier swipes the card through and the transaction is logged so that funds will be transferred from the customer's account to the retailer's account. Although in theory it would be possible for the transfer to be made on the spot, in fact the transaction is carried out when all the other transactions are updated later on in the day. Transactions made after about 16.00 are carried out the next day. The picture here shows the general scheme to ensure security:
To prevent fraud, SMART cards are being more widely used, and soon customers will have to put in a PIN number into the machine.
These are cards which have a chip built in. These will soon contain not just the account details of the customer, but also:
thumb print
iris pattern
These are unique to the card owner, and will make it much harder for the fraudulent user.
Many customers now use the internet for their banking They can access their account to :
get a balance
pay bills
transfer funds
manage the account
Paying in money is not so easy; cash cannot be stuffed down a phone line. The internet is a playground for hackers and fraudsters. Security on such accounts has to be rigorous. Here is a screen dump of a typical interface for internet banking; this one is in Russia:
Question 3 Describe three ways that ICT is used by a Bank. Explain your answers ANSWER
To shop on the web you need:
a computer (really?);
a web browser (do not use the trade names Internet Explorer or Netscape);
an internet service provider (ISP);
a modem. If you are using dial-up, you will need a 56 k modem. If you have broadband, you will have an ADSL modem.
The advantages to the customer are:
no need to leave house and face the heaving masses in the shopping mall;
easy to shop around for the best price or value (not necessarily the same, as some so-called good deals may include hidden extras);
can see a lot of goods and read details about them;
Payment is easy.
The advantages to the retailer are:
no need for a large premises to display the goods;
no wastage due to shoplifting;
not many staff needed;
customers can access the store twenty four hours a day, seven days a week;
retailers can use the net to check competitors' prices.
The disadvantages are:
goods cannot be inspected or tried on;
delivery time can be unacceptably long;
faulty goods are hard to return;
possibility of fraudulent trading;
credit card details could be revealed.
Internet shopping has burgeoned over the last few years. Most major retailers have an on-line shop as well as their normal stores.
Question 4 Describe how a customer can access an on-line store run by a supermarket. Give two advantages and two drawbacks. ANSWER
Now go on to Computers in Industry