Hardware And Software In The Enterprise - Savvas
CHAPTER 6Hardware and Software in the EnterpriseObjectivesAs a manager, you’ll face many decisions about using hardware and software to improve the performance of your firm. After completing this chapter, you will be able to answer the following questions:1. What computer processing and storage capability does our organization need to handle its information and business transactions?2. What arrangement of computers and computer processing would best benefit our organization?3. What kinds of software and software tools do we need to run our business? What criteria shouldwe use to select our software technology?4. Of what new software technologies should we be aware? How would they benefit our organization?5. How should we acquire and manage the firm’s hardware and software assets? FOCUS ON THE FEATURESCASE STUDIESOpening case: Nor-Cargo Revamps Its ITInfrastructureWindow on Management: The Case for LinuxWindow on Technology: ApplicationIntegration to the RescueChapter-ending Case: Zurich North AmericaHunts Down Its IT AssetsHANDS-ON PROBLEM SOLVINGApplication Software Exercise:Spreadsheet Exercise: Evaluating Hardware andSoftware OptionsDirt Bikes U.S.A: Analyzing the Total Cost ofOwnership (TCO) of Desktop Software AssetsElectronic Business Project:Planning and Budgeting for a Sales ConferenceWEB ACTIVITIESwww.prenhall.com/laudon Internet Connection:Evaluating Computer Hardware Vendors InteractiveStudy Guide Additional Case Studies InternationalResources
Nor-Cargo Revamps Its IT InfrastructureNor-Cargo started out in 1920 as asmall cargo services company that ranships up and down the coast ofNorway. About 15 years ago, it beganexpanding, acquiring dozens of otherfirms. Today Nor-Cargo is the largesttransportation company in Norway,with 4.3 billion in annual revenue. Nor-Cargo operatesfrom the Arctic Circle down to the European continentwith eight areas of business, including package transportation, air and sea freight, freight forwarding, andthird-party logistics.This growth did not come without a price. NorCargo’s information technology (IT) infrastructure waschallenged by all of its acquisitions, each with theirown technology platforms; business processes; andapplications for payroll, accounting, and customs.Lacking a centralized IT strategy, Nor-Cargo sufferedfrom operational inefficiency, redundant resources,high software development costs, and limited coordination between all of its companies. Nor-Cargo had toomany different operating systems and too many serversin a distributed environment, underutilizing its datastorage capacity by 50 percent. All of these disparatesystems forced Nor-Cargo to maintain separate information systems staff for many of the cities it serviced andprevented the company from responding rapidly to market changes. Develop enterprisewide standardsNor-Cargo management wanted to reduce the size ofits information systems workforce by 20 percent eachyear. It also wanted a coordinated IT infrastructure thatwould allow it to consolidate data in a single repository.It used ECOstructure blueprints created by CiscoSystems, EMC, and Oracle Corporations to provide secureand new storage, networking, and software architecturesthat could accommodate growing computing requirements in the future.Consultants from Rubik Consultants performed a totalcost of ownership (TCO) analysis showing that Nor-Cargoshould move from a distributed architecture to a centralized one where it could standardize on one applicationfor each area of the company and take advantage of leading-edge logistics systems. The consultants recommendedNor-Cargo adopt a standardized network and IT platformas a common framework for its mission-critical systems.Oracle provided an integrated e-business software platform accessible to Nor-Cargo employees, suppliers, andcustomers through a Web interface. Cisco provided network security and management software and hardware.After implementing the new infrastructure, Nor-Cargocould aggregate data from multiple sources, giving managers the ability to analyze the data. For example, management can now examine truck traffic patterns and usesuch data to make truck trips more cost efficient. NorCargo can quickly roll out new applications over theinfrastructure, including a Web-based bar code system Rapid expansion Decentralized ITInfrastructure ECOStructure blueprint Cisco hardware &software Oracle e-businesssoftware Business processes Acquisitions Analyze companywide data Provide onlinepackage tracking Roll out new applications Reduce costs Improve customerservice000191
192 Part II Information Technology Infrastructurethat lets customers track packages. Even though NorCargo has not finished rolling out all of its applications,it has realized savings from improved communications,smaller information systems staff, and reductions in thenumber of its servers from 150 to 50.Sources: Cisco Systems, “Case Study: Nor-Cargo Brings All Shipsinto One Port,” Maximizing the Data Center, 2003; Eric J. Adams,“Streamline Delivery at Nor-Cargo,” Cisco IQ Magazine,September/October 2002; and www.nor-cargo.no, accessed August16, 2003.Management ChallengesNor-Cargo found that its efficiency and competitiveness were hampered by poorly managed hardware andsoftware technology that lacked the functionality for runningits business. The company found it could lower operatingcosts and provide better services to customers by improvingthe selection and management of its hardware and software.In order to consolidate hardware and software assets andselect appropriate technology, Nor-Cargo’s management hadto understand the capabilities of computer hardware and software technology, how to select hardware and software tomeet current and future business requirements, and thefinancial and business rationale for its hardware and softwareinvestments. Computer hardware and software technologiescan improve organizational performance, but they raise thefollowing management challenges:1. The centralization versus decentralization debate.A long-standing issue among information system managers and CEOs has been the question of how much tocentralize or distribute computing resources. Shouldprocessing power and data be distributed to departmentsand divisions, or should they be concentrated at a singlelocation using a large central computer? Should organizations deliver application software to users over networks from a central location or allow users to maintainsoftware and data on their own desktop computers?Client/server and peer-to-peer computing facilitatedecentralization, but network computers and mainframes support a centralized model. Which is the bestfor the organization? Each organization will have a different answer based on its own needs. Managers need tomake sure that the computing model they select is compatible with organizational goals.2. The application backlog. Advances in computer software have not kept pace with the breathtaking productivity gains in computer hardware. Developing software hasbecome a major preoccupation for organizations. A greatdeal of software must be intricately crafted. Moreover, thesoftware itself is only one component of a complete information system that must be carefully designed and coordinated with organizational and hardware components. The“software crisis” is actually part of a larger systems analysis,design, and implementation issue, which is discussed indetail later. Despite the gains from fourth-generation languages, personal desktop software tools, object-orientedprogramming, and software tools for the Web, many businesses continue to face a backlog of two to three years indeveloping the information systems they need, or theymay not be able to develop them at all.Although managers and business professionals do not need to be computer technologyexperts, they should have a basic understanding of the role of hardware and software in theorganization’s information technology (IT) infrastructure so that they can make technologydecisions that promote organizational performance and productivity. This chapter surveysthe capabilities of computer hardware and computer software, and highlights the majorissues in the management of the firm’s hardware and software assets.6.1 COMPUTER HARDWAREINFRASTRUCTUREANDINFORMATION TECHNOLOGYComputer hardware, which we defined in Chapter 1, provides the underlying physical foundation for the firm’s IT infrastructure. Other infrastructure components—software, data, andnetworks—require computer hardware for their storage or operation.computerPhysical device that takes data as aninput, transforms the data by executing stored instructions, and outputsinformation to a number of devices.The Computer SystemA computer is a physical device that takes data as input, transforms these data according tostored instructions, and outputs processed information. A contemporary computer system
Chapter 6 Hardware and Software in the Enterprise 193FIGURE 6-1Hardware components of a computer systemSecondary Storage Magnetic disk Optical disk Magnetic tapeCommunicationsDevicesCentralProcessingUnit (CPU)Input Devices Keyboard Computer mouse Touch screen Source data automationBusesPrimaryStorageOutput Devices Printers Video display terminals Plotters Audio outputconsists of a central processing unit, primary storage, secondary storage, input devices, outputdevices, and communications devices (see Figure 6-1). The central processing unit manipulates raw data into a more useful form and controls the other parts of the computer system.Primary storage temporarily stores data and program instructions during processing, whereassecondary storage devices (magnetic and optical disks, magnetic tape) store data and programs when they are not being used in processing. Input devices, such as a keyboard ormouse, convert data and instructions into electronic form for input into the computer.Output devices, such as printers and video display terminals, convert electronic data produced by the computer system and display them in a form that people can understand.Communications devices provide connections between the computer and communicationsnetworks. Buses are circuitry paths for transmitting data and signals among the parts of thecomputer system.In order for information to flow through a computer system and be in a form suitable forprocessing, all symbols, pictures, or words must be reduced to a string of binary digits. Abinary digit is called a bit and represents either a 0 or a 1. In the computer, the presence ofan electronic or magnetic signal means one, and its absence signifies zero. Digital computers operate directly with binary digits, either singly or strung together to form bytes. A stringof eight bits that the computer stores as a unit is called a byte. Each byte can be used to storea decimal number, a symbol, a character, or part of a picture (see Figure 6-2).The CPU and Primary StorageThe central processing unit (CPU) is the part of the computer system where the manipulation of symbols, numbers, and letters occurs; it controls the other parts of the computer system(see Figure 6-3). Located near the CPU is primary storage (sometimes called primary memory or main memory), where data and program instructions are stored temporarily during processing. Buses provide pathways for transmitting data and signals between the CPU, primarystorage, and the other devices in the computer system. The characteristics of the CPU andprimary storage are very important in determining a computer’s speed and capabilities.Figure 6-3 also shows that the CPU consists of an arithmetic-logic unit and a control unit.The arithmetic-logic unit (ALU) performs the computer’s principal logical and arithmeticoperations. It adds, subtracts, multiplies, and divides, determining whether a number is positive, negative, or zero. In addition to performing arithmetic functions, an ALU must be ableto determine when one quantity is greater than or less than another and when two quantitiesare equal. The ALU can perform logic operations on letters as well as numbers.A contemporary computer systemcan be categorized into six majorcomponents. The central processing unit manipulates data andcontrols the other parts of thecomputer system; primary storage temporarily stores data andprogram instructions during processing; secondary storage storesdata and instructions when theyare not used in processing; inputdevices convert data and instructions for processing in the computer; output devices presentdata in a form that people canunderstand; and communicationsdevices control the passing ofinformation to and from communications networks.bitA binary digit representing the smallest unit of data in a computer system.It can only have one of two states,representing 0 or 1.byteA string of bits, usually eight, used tostore one number or character in acomputer system.central processing unit (CPU)Area of the computer system thatmanipulates symbols, numbers, andletters, and controls the other parts ofthe computer system.primary storagePart of the computer that temporarilystores program instructions and databeing used by the instructions.arithmetic-logic unit (ALU)Component of the CPU that performs the computer’s principal logicand arithmetic operations.
194 Part II Information Technology InfrastructureFIGURE 6-2Bits and bytesBits are represented by either a0 or 1. A string of eight bitsconstitutes a byte, which represents a character or number.Illustrated here is a byte representing the letter “A” using theASCII binary coding standard.control unitComponent of the CPU that controlsand coordinates the other parts of thecomputer system.machine cycleSeries of operations required toprocess a single machine instruction.RAM (random access memory)Primary storage of data or programinstructions that can directly accessany randomly chosen location in thesame amount of time.FIGURE 6-30or1One bitCharacters arerepresented by onebyte for each letter.0 1 0 0 0 0 0 1One byte for character AThe control unit coordinates and controls the other parts of the computer system. It readsa stored program, one instruction at a time, and directs other components of the computersystem to perform the program’s required tasks. The series of operations required to process asingle machine instruction is called the machine cycle.Primary storage has three functions. It stores all or part of the software program that is beingexecuted. Primary storage also stores the operating system programs that manage the operation of the computer (see Section 6.3). Finally, the primary storage area holds data that theprogram is using. Internal primary storage is often called RAM, or random access memory. Itis called RAM because it can directly access any randomly chosen location in the sameamount of time.Primary memory is divided into storage locations called bytes. Each location contains aset of eight binary switches or devices, each of which can store one bit of information. Theset of eight bits found in each storage location is sufficient to store one letter, one digit, or onespecial symbol (such as a ). Each byte has a unique address, similar to a mailbox, indicatingwhere it is located in RAM. The computer can remember where the data in all of the bytesare located simply by keeping track of these addresses. Computer storage capacity is measured in bytes. Table 6-1 lists the primary measures of computer storage capacity and processing speed.Primary storage is composed of semiconductors, which are integrated circuits made byprinting thousands and even millions of tiny transistors on small silicon chips. There are several different kinds of semiconductor memory used in primary storage. RAM is used forshort-term storage of data or program instructions. RAM is volatile: Its contents will be lostwhen the computer’s electric supply is disrupted by a power outage or when the computer isThe CPU and primary storageThe CPU contains an arithmeticlogic unit and a control unit.Data and instructions are storedin unique addresses in primarystorage that the CPU can accessduring processing. The data bus,address bus, and control bustransmit signals between thecentral processing unit, primarystorage, and other devices in thecomputer system.Central Processing Unit (CPU)Primary Storage1Arithmetic-Logic Unit822 11 339 10T#UControl UnitData BusAddress BusControl ry storageaddress
Chapter 6 Hardware and Software in the Enterprise 195TABLE 6-1Key Measures of Computer Storage Capacity and Processing SpeedSTORAGE CAPACITYByteKilobyteMegabyteGigabyteTerabyteString of eight bits1,000 bytes (actually 1,024 storage positions)1,000,000 bytes1,000,000,000 bytes1,000,000,000,000 bytesPROCESSING 0 second1/1,000,000,000 second1/1,000,000,000,000 secondMillions of instructions per secondturned off. ROM, or read-only memory, can only be read from; it cannot be written to.ROM chips come from the manufacturer with programs already burned in, or stored. ROMis used in general-purpose computers to store important or frequently used programs.ROM (read-only memory)Semiconductor memory chips thatcontain program instructions. Thesechips can only be read from; theycannot be written to.Computer ProcessingThe processing capability of the CPU plays a large role in determining the amount of workthat a computer system can accomplish.Microprocessors and Processing PowerContemporary CPUs use semiconductor chips called microprocessors, which integrate allof the memory, logic, and control circuits for an entire CPU onto a single chip. The speedand performance of a computer’s microprocessors help determine a computer’s processingpower and are based on the number of bits that can be processed at one time (word length);the amount of data that can be moved between the CPU, primary storage, and other devices(data bus width); and cycle speed, measured in megahertz. (Megahertz is abbreviated MHzand stands for millions of cycles per second.)Microprocessors can be made faster by using reduced instruction set computing (RISC)in their design. Conventional chips, based on complex instruction set computing, have several hundred or more instructions hardwired into their circuitry, and they may take severalclock cycles to execute a single instruction. If the little-used instructions are eliminated, theremaining instructions can execute much faster. RISC computers have only the most frequently used instructions embedded in them. A RISC CPU can execute most instructions ina single machine cycle and sometimes multiple instructions at the same time. RISC is oftenused in scientific and workstation computing.microprocessorVery large-scale integrated circuittechnology that integrates the computer’s memory, logic, and control ona single chip.megahertzA measure of cycle speed, or the pacing of events in a computer; onemegahertz equals one million cyclesper second.reduced instruction set computing(RISC)Technology used to enhance thespeed of microprocessors by embedding only the most frequently usedinstructions on a chip.Parallel ProcessingProcessing can also be sped up by linking several processors to work simultaneously on thesame task. Figure 6-4 compares parallel processing to serial processing used in conventionalcomputers. In parallel processing, multiple processing units (CPUs) break down a probleminto smaller parts and work on it simultaneously. Getting a group of processors to attack thesame problem at once requires both rethinking the problems and special software that candivide problems among different processors in the most efficient way possible, providing theneeded data, and reassembling the many subtasks to reach an appropriate solution.Massively parallel computers have huge networks of processor chips interwoven in complex and flexible ways to attack large computing problems. As opposed to parallel processing
Computer hardware, which we defined in Chapter 1, provides the underlying physical foun-dation for the firm’s IT infrastructure. Other infrastructure components—software, data, and networks—require computer hardware for their storage or operation. The Computer System
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