T4 Business Informatics

What is Software?

Definition: A general term for programs written in programming languages that tell the computer which tasks to perform.

Purpose: Without software, physical hardware like the CPU and RAM cannot perform useful work.

Business Role: Supports daily operations, communication, and complex decision-making

The Three Main Types of Software

System Software: Operates and controls the hardware (e.g., Windows, macOS, Linux).

Application Software: Helps users perform specific tasks (e.g., Excel, Firefox, Accounting software).

Development Software: Used by programmers to create and test new programs (e.g., Python, VS Code).

The Hotel Analogy:

• Hardware: The physical building/pipes .

• System Software: The operational rules and check-in procedures.

• Application Software: The actual services provided (restaurant, spa).

• Development Software: Planning/designing a new restaurant concept

Operating Systems (The Core System Software)

Function: Acts as the bridge between hardware, applications, and the user.

Key Tasks:

• Manages hardware resources (CPU, memory) .

• Schedules programs and controls I/O devices.

• Manages files and ensures the system runs reliably

Standard vs. Individual Software

• Standard Software: Ready-made programs (e.g., Microsoft Office).

  • Pros: Lower cost, quick setup, vendor support.

  • Cons: May not fit a company's unique process perfectly.

• Individual Software: Custom-built for one company.

  • Pros: Tailored exactly to business needs.

  • Cons: High development costs and longer setup time.

• E-commerce Example: A small shop might use a standard platform like Shopify, while a giant like Amazon uses individual software for total control.

From "Application" to "Application System

Application Software: A single program used for a task (e.g., a calculator).

• Examples: office software, reservation systems, accounting software

Application System: A broader concept that integrates Software, Data, Hardware, and Users to work together.

• Three Main Types:

  1. Administration & Logistics: Focused on routine transactions.

  2. Planning & Control: Focused on analyzing data and managing resources.

  3. Cross-sectional: Systems that cut across different departments.

The Organizational Hierarchy

Application systems must support three different levels of a company:

• Operational Level: Daily activities (e.g., a cashier scanning items).

• Tactical Level: Mid-term planning and coordination (e.g., a marketing manager planning a campaign).

• Strategic Level: Long-term direction (e.g., an executive deciding to open a branch in a new country).

Integration in Business Systems

• Vertical Integration: Connecting the different levels of hierarchy (e.g., ensuring a CEO's strategic goal is reflected in daily operations).

• Horizontal Integration: Connecting different departments at the same level (e.g., ensuring the Sales system talks to the Warehouse system).

Administration & Logistic Systems (Operational Level)

• Administration Systems: Process high volumes of routine, "boring" data.

  • Examples: Accounting, cost calculations, and payroll.

• Logistic Systems: Support simple operational decisions.

  • Examples: Order processing, delivery route planning, and inventory management.

• Key Focus: Efficiency in daily "ground-level" business tasks.

Planning & Control Systems (Tactical and Strategic levels)

• Role: Support the Tactical and Strategic levels of a company.

• Analyze internal company data and external information such as market statistics

• Planning: Helps structure long-term business decisions using internal data and external market stats.

• Control: Monitors if those plans are actually being followed.

• Specific Systems:

  • MIS/DSS: Management Information / Decision Support Systems.

  • EIS/ESS: Executive Information / Support Systems.

Cross-sectional & Office Systems

• Cross-sectional Systems: Support activities involving multiple departments or even multiple companies (e.g., HR or EDI for electronic invoices), enabling communication between organisations

• Some are sector-specific, designed for a particular industry

• Others are non-sector specific, such as HR or accounting systems used in many companies

• Office Systems: A sub-type of cross-sectional systems, which supports everyday office work, used by almost everyone.

  • Examples: Word processors, spreadsheets (Excel), and email.

• Purpose: Facilitate document creation, data analysis, and communication.

Workflow vs. Workgroup Systems (Coordination)

• Workflow Systems (The Process): Focus on the sequence of tasks. They automatically route a task to the next person.

• Coordinate tasks and define the order of steps in a business process

• Example: A marketing ad goes from Idea → Design → Approval → Publication.

• Workgroup Systems (The People): Focus on collaboration.

  • Example: Shared files, video meetings, and messaging tools like Slack or Teams.

The "Old Way": Isolated (Non-Integrated) Systems

• The Scenario: A company uses separate, independent software for reservations, billing, and customer data.

• The Problems:

  • Duplicate Data: Entering the same name three times.

  • Inconsistency: If a guest changes a booking in one system, the other systems still show old info.

  • Higher Error Rates: Manual transfers lead to mistakes.

ERP in Action (E-commerce Example)

When a customer buys an item online, the ERP coordinates everything at once:

1. Inventory: Automatically subtracts the item from stock.

2. Finance: Triggers the invoice and payment process.

3. Logistics: Notifies the warehouse to ship the item.

4. Marketing: Saves the customer data for future promotions.

The "New Way" (The ERP Solution)

ERP (Enterprise Resource Planning) is the solution to the "Silos" problem. It replaces those 10 separate programs with one single software that runs the whole company.

• One Central Database: This is the "Magic." There is only one version of the truth. If the Sales team updates a customer's address, it is instantly updated for the shipping and billing teams too.

• Real-time Visibility: Managers can see exactly what is happening in the warehouse, the bank account, and the sales floor all at once.

• The Big Names: You’ll likely see these on an exam. SAP is the most famous one, often used by huge global corporations.