HISTORY: DOING BUSINESS BETTER Business communications media date back to the clay tablets of ancient Sumer (located in modern-day Iraq) that were used to keep track of commercial transactions in the fourth millennium BCE. Before telecommunications, horses, stagecoaches and sailing ships were the means of business communication. Electronic media like the telegraph and the telephone finally pushed business practices out of the Bronze Age. Later innovations continued to make business communication faster, cheaper and better.

Putting Business on the Line

Samuel F. B. Morse’s 1844 telegraph transformed commerce. Businesses could communicate instantly with far-flung business associates and branch offices. The size of firms grew. Once diverse regional markets became more standardized because product and price information were more easily available and widely distributed. In 1866 transoceanic telegraph service linked operations around the world. Also in that year Western Union launched the first business information service, the stock ticker.

Early phones were located in businesses, the first was installed by a burglar alarm firm in Boston in 1877 (Fagen, 1975). Many early residential phones were used for business purposes,

E-BUSINESS

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such as in the home offices of physicians. In 1879 large organizations began developing their own internal their own private telephone systems they enjoyed free internal calling, since the phone company did not charge fees for the internal lines. Company switchboards made connections to the public network for outside calls. They had to hire their own installers and telephone operators but they could do this for less than the cost of putting a telephone company line in every office. This private branch exchange (PBX) approach remained the dominant form of corporate telecommunications for 100 years.

The telephone improved business coordination by placing the instrument of communication on the desks of managers. The telephone could be credited (or blamed, depending on one’s view) with the rise of transnational corporations and global markets (de Sola Pool, 1983). High rise business districts might not have been possible without it. The large number of elevators that would have been needed to carry thousands of human messengers would have made skyscrapers impractical!

Punch Card Days The last Presidential election made punch cards seem like a current technology, but they actually date back to the 1800s and the early beginnings of automatic information processing. Punch cards first won fame in the wake of another notorious “long count.” Hand counts of the 1880 U.S. Census took several years and were still not finished in 1887, when planning for the next census began. In desperation, the Census Bureau turned to a new tabulating machine, invented by Herman Hollerith, that reduced personal data to holes punched in paper cards. Tiny mechanical fingers “felt” the holes and closed an electrical circuit that in turn advanced a mechanical counter. In 1890, the final census tally was compiled in six weeks. Hollerith’s invention was the foundation on which the International Business Machines Corporation (IBM) was built as the company developed information processing products for businesses.

By the early 20th century mechanical calculators and tabulating machines were found wherever large organizations made tedious mathematical calculations, in bookkeeping departments, for example. Other functions now associated with computers were performed by specialized machines. Beginning in 1874, typewriters and carbon paper revolutionized front office operations, finally making the quill pen obsolete. In the mail room addressograph machines, an 1896 invention, automated repetitive mass mailing tasks, such as sending magazines to subscribers, by imprinting addresses on a metal plates that were automatically inked and Advances in information processing were driven by another early 20th Century business innovation, scientific management, originated by American efficiency expert Frederick Winslow Taylor. Scientific management’s goal was to improve output per worker, or productivity. It reduced time-consuming tasks, such as writing out addresses, to simple repetitive tasks, such as feeding address plates into stamping machines, that a single worker could repeat all day long with great efficiency. That made it possible to reduce the total number of employees.

IBM Rules

IBM dominated business computing in much the same way that Intel and Microsoft dominate personal computing today. The company took its current name in 1924. It financed one of the first digital computers, a clacking electromechanical monster known as the Mark I, in 1943, but did not enter the computer business in earnest until 10 years later. The first commercial computer,

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1844 Morse’s telegraph 1866 Transoceanic telegraph, first stock ticker 1877 First business telephone line 1890 Hollerith cards save the U.S. Census 1956 IBM consent decree 1964 IBM Model 360 computer introduced

1966 SABRE airline reservation system 1973 Ethernet LAN standard established 1982 IBM personal computer introduced 1999 E-commerce craze 2001 Dot-com meltdown

MEDIA THEN/MEDIA NOW

UNIVAC (see Media Impact), went into service at the U.S. Census Bureau in 1951, but IBM did not deliver its first model until 1953.

In 1954 IBM was only the fourth-ranked computer producer, well behind computer industry pioneers Radio Corporation of America (RCA), Sperry Rand, and Bendix. That year, IBM introduced the Model 650, the first computer to utilize punch-card technology, something the company knew quite a bit about, and its computer sales took off. IBM made heavy investments in research and development to stay ahead of the competition. It also capitalized on its manufacturing expertise to produce a full line of peripheral equipment—printers, terminals, keypunch machines, and card sorters—that spelled enormous profits for IBM and unbeatable competition for other computer manufacturers. This was the same basic strategy followed by Microsoft years later: build outward from a core product (computers for IBM, operating system software for Microsoft) to dominate sales for subsidiary products (peripherals, Web browsers).

Like Microsoft today, IBM ran afoul of the Sherman Antitrust Act. To resolve an antitrust suit in 1956, the company signed a consent decree that required it to keep computer manufacturing and computer services (the processing of data for its customers) in separate subsidiaries. IBM also had to sell its programs separately from the machines and offer its computers for sale instead of renting them, as it previously had insisted on doing. This allowed leasing companies to buy computer equipment from IBM at volume discounts and then rent it to computer users at prices lower than IBM itself could charge. These changes kept competition alive.

In 1964 IBM introduced the Model 360, the first computer that was customizable to many different applications. Software and peripheral devices that worked on one 360 version worked on them all and were “backward compatible” with earlier IBM models. Before, users had to start over with entirely new software and hardware whenever they upgraded. (That’s one lesson that many of Microsoft’s customers wish it would learn from IBM!) Like latter-day computer monopolists, IBM took advantage of economies of scale to spread the costs of product development over many users, allowing IBM to undercut competitors while still garnering enormous profits. The 360 and its successor, the Model 370, led the company to dominance of both U.S. and international markets. In the late 1970s the Justice Department launched another (unsuccessful) antitrust case, with the goal of breaking up IBM into several companies.

Paradigm Shifts

Computing went through two major shifts in the fundamental ways computers were used before arriving at the PC-oriented paradigm of today. Early mainframe computers were the size of several large refrigerators placed in a row. They lived in rooms of their own, perched on elevated platforms with dedicated air conditioning units to keep them cool and platoons of computer operators to tend them. Information was processed in batch mode that tied up the computer for each separate task it performed, such as printing all of the company’s payroll checks, before moving on to another task. Programs and data were fed in as huge stacks of punch cards and results spewed out on high speed printers. Data were transferred from paper documents, such as census forms or employee time cards, onto punch cards by pecking at the keyboards of clanking keypunch machines. Computers became so important that new Management Information Systems (MIS) departments were created in large organizations everywhere to manage them.

The electronic media made little use of computers at first, their business operations were too small to justify the investment. The first application of computers in broadcasting was to make projections for the 1952 presidential elections. The projections were faulty, one application that perhaps hasn’t improved much over the years. Computers were at least efficient, if not always accurate, at counting people, though, and the A.C. Nielsen Company began using them to calculate television ratings in 1954 (Beville, 1988). Other batch processing applications helped large media companies run routine “back office” functions, like filling out payroll checks and equipment purchase orders.

Information processing broke out of the computer room beginning with the SABRE airline reservation system in 1966. Now, terminals were placed on the desktops of ordinary workers, such as travel agents, who might be thousands of miles removed from the computer itself. This shifted data entry from the keypunch room to the point where information was gathered from customers and computer output to where it was needed to serve customers better. Travel agents could type in reservation requests themselves and receive immediate confirmation back without waiting for manually processed reservation orders to be approved through a central clearinghouse. However, the terminals could only transmit what was being typed into them and display what the mainframe sent back. They were aptly called dumb terminals. Computing was still mainframe oriented; however, all the terminals were connected back to the computer room by cables or phone lines. Computers now handled many tasks simultaneously by sharing the

mainframe’s central processing unit among many users, taking turns between them for milliseconds at a time, a technique called time sharing. Electronic media applications of time sharing systems included videotex services, forerunners of the Internet, that delivered information to home computer terminals. Research analysts working for broadcasters and advertising agencies used them to view the latest ratings reports and to perform custom analyses of audience data on their desktops.

The current computing paradigm began to emerge in 1973 when Xerox Corporation researcher Robert Metcalfe proposed a high-speed data network standard called ethernet that could connect all the computers in a building, Local Area Networks. These were later connected to IBM personal computers that debuted in 1982. That yielded the client-server approach in which employees have personal computers (the clients) on their desktops that process data locally and then exchange information with other workers and also with the computers that run the network and store corporate data (the servers). Along with the client-server approach came many of the applications that are mainstays of the modern office including word processing, spreadsheets, data base management and electronic mail. Now large organizations could achieve almost instantaneous, or real time, updating of their customer files and financial information.

In the electronic media world, the client-server model underlies the World Wide Web, where instructions for Web pages written in the html language are downloaded from Web servers and processed locally by browser software running on personal

computers (the clients). Television news operations digitize video clips and satellite feeds, store them on computer servers, and then edit and insert them into news scripts through client work stations in the newsroom. Local Area Networks tie together all the sales and backroom administrative operations at local TV, and radio and cable system operations, too.

Convergence in the Office The technology used in the Internet’s backbone network developed as high speed data networks expanded beyond the reach of LANs, which were limited to a single building or campus. By the late 1980s wide area networks (WANs) connected computers across state and national boundaries. The WAN connections were the same high speed digital phone lines (e.g, T1 lines) that were already found in corporate telecommunications departments. Over the years, these departments had evolved into miniature telephone companies built around computerized PBX machines that connected all the corporation’s phones. There would be significant advantages in merging the organization’s telecommunications and MIS departments so that they could both use the same networks. The New Economy In the 1990s the MIS-telecommunications duo, or information technology (IT, for short) transformed business operations in every major corporation. A startling discovery was made, though. Investments in IT were not improving efficiency-- the so-called productivity paradox. Part of the problem was that these are long-term investments that only pay off over many years. The technology changed and was replaced before it paid for itself, in effect. But also, information technology was being applied to old ways of doing business. Adding expensive information technology to old business practices just added cost without improving the productive output of employees. For example, e-mail in the TV newsroom doesn’t improve productivity if the reporters can leave “sticky notes” for each other just as easily, it just adds the cost of the computers, networks and technicians.

The answer was process reengineering; that is, re-designing work tasks and organizations to take advantage of what IT could do best. Scientific management now entered the Information Age. This resulted in downsizing large organizations through massive layoffs as more efficient computerized processes replaced or combined labor-intensive tasks. Computerized news editing systems are a good example. Television news editors edit both the text of the news story and the news footage at the same time, through the same work station on their desks. Previously,

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Monster in the Closet. The client server paradigm meant installing LAN servers and wiring hubs in supply room closets everywhere.

PROFILE Amazing Dot Com

Name: Jeffrey Bezos (bay-zos) Born: January 12, 1964, Albuquerque, NM Education: A graduate of Princeton University, majoring in computer science and electrical engineering. Current Position: Chairman, Amazon.com Style: Smiling and enthusiastic, button-down blue shirts and khakis Most Notable Achievements: Virtually invented e-commerce, going from zero to a multibillion dollar company in four years. Selected as Time magazine’s Man of the Year in 1999. Most Dubious Achievement: Although he is worth billions, his company was slow to turn a profit, losing hundreds of millions of dollars a year.

How He Got Started: He was a tinkerer and a science whiz as a child. His first job after college was with a trading network start-up company, followed by investment analyst jobs on Wall Street. His Inspiration: His personal heroes are Thomas Edison and Walt Disney. He started thinking about the Internet in 1994 when he learned it was growing over 2000% a year. How He Got to the Top: After identifying on-line book selling as his golden opportunity, Jeff approached booksellers on the floor of a trade show. He started Amazon.com with money borrowed from his parents and opened for business from his garage in Bellevue, Washington in 1995. Amazon was an immediate success with investors, boosting Jeff’s personal worth to over $10 billion within four years. Where Does He Go from Here? Amazon needs to show consistent profits soon before investors lose faith

the footage had to make a pass through a separate editing suite before combining it with news copy. And, the footage can be shot on digital cameras and beamed in from microwave or satellite links. As a result of redesigning the process of newsgathering and editing, the news production process became faster, cheaper and more profitable.

Inessential functions that were not part of an organization’s core business were outsourced, or subcontracted, to more efficient outside firms, such as the production of payroll checks. IT made it possible to manage subcontractors as if they were internal departments, at a lower cost. The adaptation of Internet technology to internal corporate networks and then widening those networks to include suppliers and customers, as American Airlines did with its Sabre system, yielded further productivity gains. These applications used cheap and widely available Internet technology instead of proprietary systems so they could improve efficiency with lower investment.

The employees who survived downsizing and outsourcing became more productive while operating costs shrank, fattening corporate profits and expanding the general economy. Top-heavy corporate pyramids trimmed down as IT applications made it possible to manage operations effectively with fewer layers of middle management. Television networks were among those who slenderized with successive waves of layoffs that fell heavily on middle management. For example, computerized systems that tracked the inventory and insertion of commercials and provided instant reports to top management made it possible to lay off the employees who previously compiled the reports by hand.

Meanwhile, companies like Microsoft, Intel and Cisco Corporation (makers of gear for all those corporate LANs) became a vital economic sector in their own right, launching an unprecedented economic boom to close out the 20th Century. The boom seemed to defy the laws of economics. Growth continued without inflation even with low levels of unemployment, leading some to conclude that a new economy (see chapter 2) had been born.

Electronic commerce was the logical extension of process reengineering. It became possible to reengineer business-to-business sales, consumer retailing, mail order and customer service. The twin imperatives of scientific management and economies of scale – with help from a tax moratorium on e-commerce and a craving for Internet stocks on Wall Street – helped on-line retailers undercut the local shopping mall. This launched a new wave of convergence between electronic media, computers and retailing exemplified by Amazon.com (see Media Profile).

Now that the dot.com boom has fizzled, organizations are taking a more measured view of IT investments. Although many Internet-based companies failed when their business plans proved questionable and Wall Street lost interest, their methods were adopted by conventional retailers like Wal-Mart who opened their own on-line stores and began integrating their online operations with their conventional sales strategies. New ways of doing business, online airline

Electronic Commerce completes purchases and financial transactions on the Web.

bookings and music downloads to name two examples, are transforming relationships with consumers and the structure of the industries that provide them. However, in the process IT has perhaps lost some of its luster now that it is no longer a “strategic asset” for beating the competition – because the competition has it, too.

TECHNOLOGY: FASTER, CHEAPER, BETTER

Many e-business technologies have parallels in consumer telephone and Internet technologies, but some distinctive forms have evolved in the workplace. Unlike consumer electronic media that

exist to entertain and inform, the sole function of e-business technologies is to improve profits by performing business tasks faster, cheaper and better through links to employees and business partners.

Electronic Switchboards Large corporations have computerized private branch exchanges (PBXs) that are scaled-down versions of the automatic switches that telephone companies have in their central offices. PBXs connect internal calls and make automatic connections to outside lines. Not all employees make outside calls at the same time, so ten employees can be connected through a PBX to a single outside line, saving the cost of nine telephone company lines for each individual employee. Business customers pay a few cents for each local call so avoiding those charges across thousands of internal calls adds up to further savings. Additional financial benefits come from corporate tax deductions on PBX equipment. The overall savings are enough to offset the cost of the equipment and the staff that operates the system.

PBXs offer features not found in the public network. “Camp on” notifies callers when a busy line they have been trying to reach becomes free. Another option flashes “Do not disturb” or other off-putting messages to unwanted callers. That can be overridden by “Barge in,” which also allows supervisors to interrupt their subordinates’ phone conversations. PBX phones have dedicated buttons for the special features like call

forwarding. Other buttons pick up calls that come in to nearby phones. Many have miniature displays for Caller ID and short messages.

PBXs assist managers to monitor conversations, apply charge codes to calls, prevent calls to unauthorized numbers (such as 900-number calls), and route toll calls to leased lines (see below). They distribute incoming calls to attendants and report each worker’s call completion rates in telemarketing operations. Sometimes call management and distribution functions are carried out by stand-alone systems known as automatic call directors (ACDs). Another adjunct of the PBX is the automated attendant system—the proper name for the mechanized voices that instruct callers to “Press 1 for customer service, press 2 for sales, press 3 . . .” Large organizations also find it economical to have their own centralized voice messaging systems connected through the PBX, saving the expense of individual answering machines for each employee.

Centrex (short for CENTRal EXchange service) is for organizations that do not own PBX systems, including public institutions, like universities, who do not benefit from the tax breaks that make PBXs profitable (because they pay no taxes). The telephone company reserves a block of lines in its central office and offers a bulk discount on the monthly line charges. Calls made within this group are free of charge. Intelligent network technology helps Centrex customers make their own service changes, connect multiple locations, and access many of the same special features that PBX users have.

Small companies, like local TV and radio outlets, use key systems. Old-fashioned key systems had a row of lighting plastic buttons across the bottom of each phone set and thick cables interconnecting them. Modern key systems are more like PBXs, have all of the same features, and run on standard telephone wiring. They are just packaged and priced differently for smaller offices.

In the 1980s office telephone manufacturers made a bid to absorb data communications by installing computer plugs in PBX phones. Now it appears that data networks might absorb telephone systems through Internet telephony, also known as Voice Over IP (or VoIP, for short). Digital compression slims down the data stream from a telephone conversation from 64,000 bits

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Button, Button. Centrex phones like these have extension buttons for intra-office calls (at top) and multiple line appearances (bottom)

per second to around 2000. Add the Internet streaming technology we learned about in chapter 8 and you have the recipe for transmitting phone calls over the Internet That eliminates both the phone company and the corporate PBX. VOIP is available to home users, too, and on university campuses it is very well known to international students who use it to make calls to home at a fraction of the cost of conventional phone lines. As we saw in the infrastructure chapter, VOIP is cheaper because it evades special regulations and fees that have been imposed on conventional phone calls over the years. The technology has one other significant cost advantage for businesses: complete portability. When moving between offices, between office and home, or between home and the road, VOIP users can carry their phones with them, plug them in at the new location, and continue to receive calls on their office numbers. That saves companies installation fees when staff between offices and the cost of dedicated phone lines in their workers’ homes.

Fax Facts Facsimile machines are fast becoming a relic thanks to the Internet, too. Facsimile predates the telephone, but before 1968 it was limited to applications such as transmitting newspaper photographs and fingerprints that tolerated painstakingly slow transmissions. That’s when Group II machines were introduced that transmitted a page in four to six minutes using expensive chemically treated paper. Their main advantage was speed, but they also produced significant savings on messenger and express mail services.

Today’s Group III machines send a page in a fraction of a minute and use low-cost thermal paper or ordinary copier printing to record the image. Group IV machines send a page in under five seconds, match the print quality of computer laser printers and can handle color documents. Advanced features allow users to “broadcast” fax to multiple locations or delay transmissions until telephone rates are low. Fax on demand lets callers select pre-package information that is sent to them automatically on their own fax machines..

Fax machines use basic techniques of data transmission and compression also found in computer systems and indeed many of them are now computer cards inside personal computers. Fax machines are being integrated with office copy machines and computer printers, too. Documents can be scanned by a computer and sent over the Internet faster (although still not easier) than they can be faxed, and without the cost of a long distance call, so faxing should gradually become obsolete as more and more businesses and their customers get on the Internet.

The LAN: Inside the Cubicle Dilbert the downtrodden comic strip cubicle dweller is a model modern office worker. He doesn’t need a secretary or layers of middle managers between him and The Boss. E-mail handles all of his correspondence, memos and meeting scheduling for him. They key to Dilbert's efficiency is a cable poking through the back of his cubicle that connects his computer to a Local area network (LAN). LANs were first developed in the 1960s as high-speed data networks covering a large office building or a campus of buildings. A single cable is shared by many users, that connects them to a server that stores software and data and to shared network resources such as e-mail, Internet gateways and laser printers (see Demystifying Technology). Business tasks from report printing to manufacturing can be monitored and controlled from remote locations, so The Boss could count Dilbert’s keystrokes if he wished. Computer-mediated conferences are held entirely on-line, eliminating many meetings. LANs also cut down on meetings with groupware, computer programs that help employees collaborate on documents and projects. Automated meeting scheduling improves the efficiency of the in-person meetings that are still required. Thus, LANs

Just the Fax. Facsimile machines are a common office appliance.

No LAN Is an Island LANs represent text, numbers, and images as pulses of electricity corresponding to the 1’s and 0’s of computer data. They specialize in high-speed transmission, up to billions of bits per second, or several textbooks per second. Most share a single transmission medium among many users, usually a coaxial cable, the same basic kind of wire that comes out of your cable TV converter, only thinner. When multiple users share a wire, some obvious problems crop up. What if two users want to send data at the same time? What if someone sends a very long file that ties up the network? How do we sort out which data go where? First, we break up the data streams from each computer into manageable chunks, say a thousand bytes each, to keep the network from getting tied up by long data streams. We call these chunks “frames.” We have to add some extra data bits to each frame of data to provide address information about the sender and the. We also have to add bits that tell us where each frame belongs in the sequence and others that notify us if there has been an error in the transmission. Note that this process is a lot like the packet switching techniques used in the Internet (chapter 8), except that the addresses need only cover other users sharing the same LAN, not the entire Internet.

LANs have servers, specialized computers that coordinate the use of shared resources over the LAN and store software and data for users. Routers move data traffic between LANs, assuring that they reach their proper destination by checking the addresses of the data frames as they pass through. Repeaters are devices that regenerate data on long network runs. Hubs allow multiple users to share a single LAN connection. Inside each computer is a Network Interface Card (NIC) that chops the outgoing data into frames, addresses it and sends it out to the network. The NIC also looks for passing frames of data that carry its address, snatching them from the stream of data that rushes by. However, inside any given segment of a LAN there is no traffic cop to sort things out, all users contend equally for access to the network, resulting in collisions between data packets and frequent retransmissions that slow things down to a crawl when the network gets busy.

TECHNOLOGY DEMYSTIFIED

fatten profits by sharing expensive software and hardware among many employees and eliminating unnecessary communication.

LAN technology continues to progress. Coaxial cable wiring, the kind that is used in

cable TV systems, yields speeds of 10 million bits per second. Newer installations often use telephone wiring with two additional pairs of wires added (and thus wider modular phone jacks connect those extra wires) to achieve the same speed at a lower cost. Fiber optic networks raise the speed limit to 100 megabits and even one billion bits per second LANs now handle voice, image and video as well as e-mail .

Wireless LANs send data through radio transmitters built into the computers and are fast becoming a staple in modern offices. The popular Wi-Fi technology (see chapter 8) is also being adopted by organizations. The wireless connections offer greater flexibility, so that Internet-connected computers can be carried down the hall to the conference room instead of staying tethered to a hard-wired connection back in the office. As more and more locations, from coffee shops to airport terminals, add their own Wi-Fi networks, the technology is becoming indispensable for executives on the move.

WANs LANs are connected to private networks that are national or international in scope, called wide area networks, or WANs. Private networks include microwave, satellite, or fiber optic links and network control centers that are privately owned and operated by the company itself. They interconnect LANs and PBXs. Private networks economize by substituting the company’s own facilities for telephone company services and benefiting from economies of scale. For example, e-mail traffic between regional headquarters might be concentrated onto a high-capacity private

IMPACT MEDIA

CNN’s Other Network When we think of CNN, we immediately think of their cable television network (chapter 7). But CNN is also a major player in cyberspace with its CNN.com Web site and that has its own elaborate network behind it. To keep the news flowing, CNN maintains two separate data centers (and is considering adding a third) and connects each one to the Internet with five 155Mbps links and a T3. The high speed digital carrier lines are leased through several different telecommunications carriers

so that if any of their suppliers’ networks go down CNN can still stay on line. Big news events like the 9/11 terrorist attacks lead to huge spikes in demand, over 100 times the average traffic volume. One way CNN copes with the load is to distribute its content through caches on 600 different servers maintained by leading Internet Service Providers. CNN offloads video to servers run by video streaming specialist Intervu, Inc, while the audio goes to broadcast.com.

network connection to save the cost of long distance lines to send each piece of e-mail. Private networks also offer a high degree of security and a backup not found in public networks.

Some private networks are made up of dedicated leased lines obtained from telecommunications carriers like AT&T for a flat monthly fee (see Media Watch). These benefit high-volume users by avoiding per-minute usage charges. Digital data services (DDS) have data rates up to 56,000 bps. T1 carriers operate at 1.5 million bits per second, but are also available as fractional T1 lines in increments of 64,000 bits per second. T3s that send data at 45 million bits (about three copies of this textbook) per second and optical carriers with speeds of billions of bits per second are also found in corporate networks.

Virtual private networks are when telecommunications carriers use intelligent networks to reserve capacity on their networks, offering the same capabilities as leased line networks at a lower cost. Virtual private network connections to home workers let them access telephone extensions and LAN connections as if they were in the same building as their co-workers. Digital dial up lines including 56k bps lines and Integrated Services Digital Network (ISDN) lines are used for this purpose. New options are emerging, including corporate versions of Digital Subscriber Lines (DSL) that provide the same capacity as T1 lines but operate on conventional phone lines.

Wireless at Work There are also wide area wireless network options. These include modems that work

with conventional analog cell phone services, digital cell phone services that don’t require modems, and packet switched cellular networks (Cellular Data Packet Data, or CDPD). A third generation of wireless phones (called 3G phones, chapter 4) is eagerly awaited by business people who need e-mail and Internet access as they run between meetings.

Soon not only the employees but also the products they make and the furniture they sit on will have wireless connections as well. Radio Frequency Identification (RFID) technology puts tiny radio transmitters inside product packaging and every day office objects. When activated by a portable receiver, the tags transmit an identification code, making it possible to locate products inside shipping containers, warehouses, and store shelves. The technology can also automate equipment inventories, supply room restocking, and other labor-intensive “where are they and how many are left” business operations. Intranets and Extranets Many organizations also have internal Internets, called intranets (intra, meaning within) and extranets (extra, meaning external) that link customers and suppliers (see Media Watch). Both use cheap and widely understood Internet software and hardware. These offer everything from company Web pages that inform employees about benefits and deliver pep talks, Web- based training, and privately run e-commerce sites that solicit bids and complete transactions for supplies and parts.

The client-server paradigm is being challenged by the replacement of powerful personal computers with stripped- down machines that only display Web pages and download software from the network as they need it. This thin client approach cuts costs by replacing personal computers with cheaper network appliances and by making it possible to upgrade software and troubleshoot problems without visiting each individual computer. Those tasks cost several times

as much as the computers themselves. However, some organizations find that desktop computing power is worth more than the cost savings of this approach.

The computers at the center of corporate networks are also changing. Giant mainframe computers are largely a thing of the past or else are now acting as Web servers. High-powered corporate computing jobs (including servers for e-commerce applications) are performed by dozens of work stations working together. A new concept is Web computing, in

which the unused capacity of desktop computers is harnessed to complete major computation tasks.

Network Security Corporate networks are so vital and widespread that they make their owners vulnerable. A click of a mouse or a stolen password can leak important trade secrets, while disgruntled ex-employees or teenage hackers can bring an organization to its knees by disabling or overloading IT systems. To shield trade secrets and to protect against hackers and computer viruses, intranets and extranets are protected by firewalls that block data requests from unauthorized locations and disguise Internet addresses. Firewalls can be thought of as sophisticated filters that read the addresses of incoming and outgoing data packets and block unauthorized transmissions. Encryption, or encoding of information as it is transmitted and stored is another important security tool.

The 9/11 terror attacks called national attention to the problem of preserving the physical integrity of business networks. However, backhoes digging up communication cables at construction sites are still more realistic day-to-day problems. Having good backup connections is the key here. Many organizations have dedicated lines linking their key locations in case of the

failure of the public telephone networks. Many also maintain critical data in remote locations, and some even have completely operative backup network facilities that can be activated with a few minutes’ notice.

Teleconferencing Teleconferencing allows three or more people to communicate simultaneously over an electronic link. There are three varieties: audio, audiographic, and video (Svenning & Ruchinskas, 1990), although these are all rapidly converging into Internet-based computer conferencing. Their basic business justification is to cut travel costs by having employees meet electronically instead of in person.

Audio Conferencing. A telephone with a speakerphone that allows three people to communicate at the same time is the most basic

REVIEW

STOP &

1. Historically, what was the impact of the telegraph and the telephone on business operations?

2. How did IBM become dominant in the computer industry?

3. Name three basic office computing paradigms that have been used over the years.

4. What is new about the New Economy? 5. What are three basic types of teleconferencing? 6. What are some specialized telecommunications

services just for large organizations? 7. If an organization wanted to avoid paying for its internal

telephone calls but could not afford a PBX, what telephone service could it use?

8. What is the purpose of a LAN? 9. What does a secure server do?

Hi There. What do you get when you cross a speakerphone with a TV set and a video camera? Something like this, a portable video teleconferencing system.

form. When more than a few people are involved, specialized digital speakerphones cancel out echoes and background noise. Audio conferences involving many locations require bridges that equalize sound levels so that participants with good connections won’t drown out those with weak ones.

Audiographic Conferencing. If we add a fax to our basic speakerphone teleconference, that is a crude form of audiographic teleconferencing. Computers can be linked to share screens of information, documents, diagrams, software applications and computer simulations. Electronic blackboards let viewers at remote locations see what the conference leader writes on the board. Paricipants respond with light pens and pen input tablets (a mouse is a little clumsy for this) by drawing on their computer screens or tablets with a pen-like pointing device.

Videoconferencing. Videoconferences prepared for annual sales or stockholder meetings may have production values, professional actors, and costs that rival broadcast television. They are transmitted around the world over rented satellite hook-ups. Other videoconferences mediate important executive meetings. High end systems are found in luxuriously appointed conference rooms with cameras that automatically swivel and microphones that activate for the person speaking. Others use business video networks routinely to relay management briefings, training videos or video versions of the company newsletter. Codecs (short for coder-decoder) digitize and compress video for broadband private networks. However, advances in video compression make it possible to transmit usable pictures over dial-up lines as well.

Computer Conferencing. The Internet is moving teleconferencing out of expensive room installations and off special purpose equipment onto the desktop computer. Internet newsgroup, chat room and listserv applications are adapted to corporate meetings. Free software bundled with Web browsers (e.g. Microsoft Netmeeting) running on personal computers with built-in sound and graphics cards can originate audiographic conferences from any computer, minus the cost of a long distance call. Cheap digital cameras add a video dimension, although real time video is still somewhat grainy and choppy.

INDUSTRY: INSIDE THE CIO’S SHOP

Large organizations have to manage information technology carefully. The annual cost of computers and telecommunications services is the single largest item in the annual budget of many firms.

Corporate Utility or Strategic Asset? In the past, telecommunications was managed as a corporate telephone utility to provide reliable service at the lowest cost. The telecommunications manager reported to the head of office

IMPACT

MEDIA

Sneakernet: Nike’s Intranet From its home base in Beaverton, Oregon Nike manages a world-wide network of branches that distribute its swoosh-emblazoned athletic shoes in local markets. Nike has a conventional Intranet, SwooshNet, to share human resource information and company news with its employees, but also has what it calls its Global Product Information Network, but we will call Sneakernet. Sneakernet’s goal is to reduce the amount of time it takes to produce a new sneaker and also to improve its footwear products with input from Nike’s 40 international branches. It allows executives to track the entire development process, beginning with early market forecasts and scanned-in sketches of preliminary designs. Marketers can sort through upcoming products by color, price and target market and view reports on the current top sellers.

Sneakernet isn’t for everybody at Nike, though, new product information is a tightly kept secret, so only a select group of authorized users can access it. Sneakernet has paid off in some important ways. International managers no longer wait weeks for shipments of prototype sneakers, they can view digital pictures of them on the Intranet. The network improved access to existing information systems by providing a common, easy to use interface. Foreign managers provide feedback about new models in the early stages of design while they can still be revised and months have been shaved off the product development time as a result.

administration or facilities management, a lowly position in the corporate hierarchy (Keen & Cummins, 1994).

Computers entered many corporations through their accounting departments where they naturally fell under the purview of senior financial officers, who are important executives in any firm. As management information system (MIS) departments were organized they generally staid under the chief financial officer. Many organizations now combine the two under organizational titles such as information systems (IS) and information technology (IT). These departments are a strategic resource central to the overall success of the firm. That means that IT managers must fulfill a business plan; that is, their projects must show a profit that adds to the corporate “bottom line.” New top-level managers, chief information officers (CIOs), are charged with using computers and telecommunications to create new business opportunities. Ironically, though, the e-commerce explosion has undermined the role of CIOs because selling the company’s products is simply too important to leave in their hands. Some e-commerce staffs are found in marketing divisions while in other instances the chief executive officer of the company takes over.

The CIO’s Helpers Some CIOs have an army of helpers. LAN administrators run the internal networks while other network managers oversee connections to the organization’s wide area networks and maintain network control centers that rival those of the telephone companies. Computer programmers and systems analysts tend software applications on mainframes and servers. Installers and technicians make moves and changes and perform maintenance operations. Other technicians cover the help desk to assist users with software and hardware problems and conduct training classes. Web page designers and Webmasters who run Internet servers are recent additions to the staff.

Other CIOs have very small staffs and outsource their operations to systems integrators such as Electronic Data Systems (EDS). EDS and its competitors run corporate networks on a contractual basis so that companies do not incur the expense of staffing their own IT departments. Or, CIOs may limit outside help to the design and development of new systems, keeping day-to-day operations in house. In that case, the CIO may hire a consultant to design the new system. Telecommunications carriers and computer vendors also lend a hand, developing new systems on a contractual basis or as part of long-term commitments to their services.

CIOs pick and choose which operations they outsource. Application service providers (ASPs) are companies that write software applications for corporations, maintain them on their own computers, and rent the applications back to the customer. Other contractors will handle installations, training or help desk functions. E-commerce has spawned a new crop of subcontractors, including Web hosting services that house corporate Web sites, Web design shops that create the sites, and warehouse and delivery services to fulfill the orders.

APPLICATIONS: WHAT’S ON THE NETWORK?

While corporate network applications depend on the nature of the organization’s business and the sophistication of its technology, there are some common themes. Improvements in productivity remain important but information technology also gives an edge over the competition and creates new products (Keen & Cummins, 1994). Speeding Up the Line In the old days of the industrial economy a standard way to increase productivity was to “speed up the line.” That is, make the assembly line move faster so that factory hands would have to work faster and turn out more cars each day. The phrase takes on new meaning now that productivity improvements come from speeding up the network lines through which information flows.

Productivity can be improved either by producing more or by cutting production costs. The code-breaking computers of World War II replaced buildings full of mechanical calculators and data clerks, decoding more messages per day with fewer workers, improving productivity. Alternatively, PBX systems can cut monthly telephone line charges by 90 percent. Although workers still produce the same amount as before, this still increases productivity, since the overall cost of making products decreases.

Office automation is the use of information technology to improve the productivity of paper work (Rice & Bair, 1984). Productivity improves by increasing document production rates, combining tasks (such as editing TV news scripts and video at the same time), eliminating media

tion is to e office

transformations (such as re-typing handwritten movie scripts), lowering document production costs, and eliminating shadow functions (such as telephone tag with your producer) that contribute nothing to the finished product. Television production creates more paper than it does videotape. Thousands of paper copies of scripts and production reports circulate through major studios each day. By posting these reports on the Web, Paramount saves a third of a million dollars a year.

In the factory, computer-assisted design/computer-assisted manufacturing (CAD/CAM) systems help designers visualize and test new products by creating three-dimensional models on computer workstations. The designer’s output goes to robotic assembly lines where production is controlled by computer-integrated manufacturing (CIM) systems that run the production machinery while humans monitor through computer terminals. Movie studios are factories, too. Each movie and television episode is a custom designed product. Digitally animated movies like Finding Nemo are designed and produced inside computer workstations, combining CAD/CAM and CIM functions. The latest television news editing systems are further examples. Reporters and news editors design and produce their newscasts with newsroom work stations that replace the manual editing of analog tapes with non-linear editing of video clips stored on computer disc drives.

Much of the downsizing in organizations is thanks to computer-mediated communication, including electronic mail and teleconferencing systems. Middle managers are no longer needed to relay directives, now senior managers contact the workers through the corporate Intranet. Teleconferencing means less travel time and, in the long run, fewer executives to attend meetings. At the other end of the corporate hierarchy, LANs in television news operations eliminated junior “copy persons” and research assistants. Correspondents obtain information and access tape libraries themselves instead of consulting in-house researchers. In Hollywood, scripts and film clips move through high-speed networks and production reports come in through wireless Internet connections instead of through production assistants and messengers riding the congested freeways.

Instead of getting rid of employees, why not get rid of the offices they work in? That’s true for some 30 million workers worldwide. Telecommuting saves on real estate, office furniture, and janitors. Many workers become more productive, freed from the stress of commuting and child care arrangements. Virtual corporations that connect their employees through the Internet may not need any corporate headquarters building at all.

Management information has also been automated, another task formerly assigned to middle management, collating information into paper reports. For example, CBS Television’s Integrated Broadcast System keeps track of broadcast schedules, program logs and advertiser billing at its owned and operated (O&O) stations. Knowledge management puts not just information but expertise on line. Ever notice how they type in everything you say when you call for computer technical assistance? Expert technicians come up with answers to common problems and those are added to the database so that a solution is on hand when the next perplexed user calls. Some corporations are data warehousing all of their electronic communication, including internal memos, e-mail and phone conversations and data mining them for tips to improve efficiency. For example, if our employees are spending too much time visiting sports sites on the Web, we could search through our archive of corporate memos to see if any of our branch managers have come up with a way of filtering them.

Japanese automakers and electronics manufacturers introduced the just-in-time (JIT) method that reduces costly warehouse space by delivering parts just in time for assembly. Record and video retailers use those methods, too. The new video on demand cable systems are a just-in-time delivery system that bypasses the warehousing problem at the local video store. E-commerce takes this process, also known as supply chain management, to a new level by giving instant feedback about what’s selling and what’s not. Some electronic retailers never actually stock products, serving only as a middlepersons who take the order and arrange delivery from wholesale suppliers of books, records or zircon rings.

The Competitive Edge Information technology gives a competitive edge by improving access to products, extending networks to the customer, bringing new products out faster, differentiating existing products and creating new ones. Banks lure customers to their automatic teller machines (ATM) by extending access to all hours of the day and thousands of new locations. On line stores offer consumer

Computer Mediated Communication. Desktop video phones are another teleconferencing option. Digital transmission makes them “computer mediated.”

goods around the clock every day of the year, on every desktop in the world. Headline News and CNN.com follow the same strategy for news delivery.

The idea of extending corporate networks to the customer originated when American Airlines’ Sabre reservation system put terminals on the desks of travel agents. Now Internet users can cut their travel agent out of the deal at Travelocity, the Web version of Sabre. Two-way cable pay-per-view systems follow this strategy, too. In the business world electronic data interchange (EDI) systems exchange product orders, invoices, and payments between vendors and customers.

Product development cycles are shortened with CAD/CAM techniques that speed up research and development, that gets new products to market years before the competition does. Similarly, movie studios get the jump on the competition by using nonlinear editing to get latest “blockbuster” movies to the theaters ahead of their rivals. Television news operations that use electronic newsgathering and newsroom LANs to get the news to their viewers ahead of their competition are also shortening their product development cycle. The latest buzzword in office automation is Computer Supported Collaborative Work (CSCW). That means using computer networks and teleconferencing systems to link together teams of workers, sometimes across time zones and continents. That allows the development of new products to continue on a 24/7 basis: While the engineering team members in Tokyo are sleeping, their team members in Detroit are hard at work.

Companies that use 800 numbers for customer service and product support are differentiating standard products with information technology. The roadside assistance services that come with luxury cars are a good example. In the media realm, the broadcast networks have attempted—unsuccessfully, so far—to differentiate their standard product, a video entertainment service, with interactive Web services.

Put It on the Web More efficient business methods and competitive tactics are soon copied by one’s competitors, erasing their advantage. Now organizations use information technology to redefine markets and create new information-based products. In the Internet age, this often means figuring out how to put old products on the Web. The new systems may cost more than the old ones but develop new and profitable lines of business. For example, American Airlines’ Sabre system became an important business in its own right, with profits exceeding those of its parent corporation. Web versions of newspapers and magazines supplement conventional print readership and contribute new advertising and subscription revenues. Radio stations are invading the Web, too. Record companies are chiming in with pay services for record downloads. Broadcasters and Internet companies alike hope that Interactive TV will turn into a profitable new product that will provide new revenue streams that will supplement conventional advertising revenues.

E-Commerce Explosion “Put it on the Web” is the battle cry of companies who market their wares on the Internet. Books, travel, music, and computer software and hardware are the most popular categories for on-line businesses who sell to consumers (b to c). Many sites are what the retail trade calls category killers, in that they specialize in one line of products. Some are like outlet stores that carry only items from one particular manufacturer. Others imitate shopping malls by carrying many different types of products, like Amazon.com. Many are pure e-tailers in that they exist only on line, with no real world stores or warehouses. Others are on-line offshoots of bricks-and-mortar retailers like Wal-Mart that are called clicks and mortar operations.

By far the biggest category of e-commerce doesn’t want your business, not unless you are a business. Business to business (b-to-b) shopping is where the big profits are. Network equipment manufacturer Cisco Corporation became one the biggest corporations in the world with that business model. There are also on-line shopping malls for business supplies and services and large corporations are organizing on-line bazaars for their suppliers and customers in their industries. The watchword is disintermediation, eliminating distributors that serve as intermediaries between manufacturers and their customers.

Another buzzword to watch is m-commerce, short for mobile commerce. That refers to e-commerce transactions that can be completed by hand-held computers or advanced cell phones. Already found in Europe, these services let users point their cell phones at gas pumps and restaurant terminals to complete their transactions without getting out their credit cards.

E-commerce increases productivity by streamlining sales staffs, eliminating distributors and their commissions and providing more efficient management of the supply chain. It gives a

competitive edge by improving access to products and services and, for information-oriented firms, creating new products. Another important reason carries the mind-numbing label of customer relationship management (CRM). That means capturing information consumers leave behind as they sign up at e-commerce sites and surf around inside them and matching it with off line consumer behavior data. The data are used to personalize shopping, improve the closure rate on sales, and come up with new product ideas that keep customers coming back for more.

MEDIA LITERACY: REMAKING WORK

Information technology also had a major impact on the employees. Here we focus on the problems brought about by workplace automation.

The Myth of Information Systems Since the early 1990s, investments in information technology have finally begun to pay off with productivity gains (Byrnjolfsson & Hitt, 1996), although the gains may have been limited to the information sector itself, that part of the economy that produces computer hardware and software. Some critics claim that even in high tech fields the gains were the result of using IT to work longer hours (e.g., answering corporate email from home or working on a report while on vacation) rather improving output per hour. And, in any event, many IS projects still end in failure.

Why were productivity gains so long in coming and still unreliable today? The informal assistance that unofficial “computer gurus” give their co-workers may triple the budgeted operating costs of information systems. Some systems create new unproductive activities, such as wasting time on personal e-mail or on-line shopping at work. Efficient systems are sometimes abandoned in favor of newer technology before the older ones have paid for themselves. Also, the infrastructure has to evolve to the point that organizations don’t have to build their own networks from the ground up, by taking advantage of the Internet, for example. Many never work properly or are abandoned before completion (Kirwin & Cappuccio, 1998; Attewell, 1994).

Factors other than rational business analysis enter into the decision-making process: hidden personal agendas, corporate politics, and the need to project an innovative corporate image. According to computer scientist Rob Kling (1980), modernization waves in computer technology are computerization movements, complete with the prophets, zealots, and true believers. According to the social influence model, personal attitudes and interpersonal relationships intrude on the rational evaluation of information technology, too (Fulk, Schmitz, & Steinfield, 1990).

Still, there are signs that the productivity benefits of information technology are beginning to spread out of the high tech sector. Organizations that use information technology to decentralize functions and effectively organize teams of workers to devise original solutions to business problems tend to be the most successful.

The Boss Is Everywhere If you are not your own boss, the boss may be legally watching your every move. According to the American Management Association, three-fourths of all employers monitor phone conversations, computer files or email. Quite simply, there is no privacy at work. Only a few firms have policies that prohibit monitoring. As long as employees are put on notice that monitoring may take place they have no expectation of privacy and therefore no legal rights. Employees are dismissed for sending personal email, visiting cyberporn or e-commerce sites and even for receiving unsolicited personal messages. (By the way, the same holds for college students and college professors who use computers or computer accounts owned by their schools.)

Information technologies expand the scope of surveillance. Computerized systems track the time required to complete each task, and the data are collated and reported upward so that senior managers can manage productivity. Workers connected to LANs may have their keystrokes monitored and network administrators can make “screen grabs” of what they are viewing from remote locations. Cheap digital cameras the size of a pinhead make it easy to monitor employee behavior away from the desk, even in corporate bathrooms. Some companies distribute electronic badges so that every move can be traced.

This may sound intolerable in a free society, but while at work you are not living in the free world. Employers have legitimate reasons for snooping, such as preserving trade secrets and preventing sexual and racial harassment. Rampant downloading of large graphics files and MP3

files has been known to slow corporate (and university) networks to a crawl. Goofing off on the job while playing on line games seriously cuts into productivity, too.

There are some limits. Employers may listen in on private phone calls only if they notify workers that they have a legitimate business purpose for doing so, although that

reasoning does not extend to email. Employees who work from home may also have some rights, but that is a gray area at present The Temporary Workforce Temporary employment can be a great thing, it offers flexibility to workers with pressing responsibilities at home and the opportunity to “get in the door” with a new employer or even a new career. Sometimes the pay is better, too, with none of the tensions of corporate politics. Once limited to temporary laborers and clerks, the temporary workforce is expanding well into technical and management ranks and temps are becoming a significant portion of the entire workforce. Advanced IT systems are facilitating the change by enabling new corporate structures in which employees are added and subtracted as needed, even as continual “re-engineering” of jobs makes for continual layoffs and a ready supply of workers with useful skills. But, when the general economy slumps, all of the temp work dries up. Aside from permanent job insecurity, the temporary work trend has significant downsides for workers and society at large. Temporary workers do not have fringe benefits and are not represented by unions, factors that lower their cost to the employer but that raise long-term social costs ranging from health care, to welfare benefits, to social security. In the long term, temporary workers might place downward pressure on the wages and fringes for all workers. And who will pay for the continuing education of temporary worker? In the long run, we may be creating a less efficient workforce that will cost us all dearly.

Offshoring Jobs Another employment trend is offshoring, the export of jobs to other countries where labor costs are lower, unions are weaker, and workplace laws are lax. This is a long-term trend, perhaps most visible in the movement of automobile manufacturing jobs to countries in the Far East. Customer service jobs are among the latest to leave. The next time you call a computer or software company for customer support, ask the help desk person how the weather is where they are. You are likely to find that you are talking to someone in Bombay, India or Dublin, Ireland. Approximately 100,000 jobs like these left the U.S. in the early 2000s. Labor unions in developed countries have long opposed the trend, arguing for trade restrictions and urging us to “Buy American” when that failed. However, in a global economy these arguments lose their force, especially as the pool of unionized workers/voters in developed countries continues to shrink. Meanwhile, white collar workers have been able to remain secure in the knowledge that their jobs required high-level skills, learned at the best universities, that would always be needed in the home office. So, if the Detroit auto worker lost his assembly line job, at least he could hope that his children would work in the front office of a global automotive enterprise. That may be about to change. Global data networks and on-line collaboration tools make it possible for work teams to be assembled across continents and time zones. And that is not only possible but desirable: By having development of, say, new automobile designs continue around the clock, globalized corporations can shave months off new product development cycles. The developed countries no longer have a monopoly on highly trained technical workers, either. Many citizens of developing countries are now educated at top international universities abroad and some countries, India notable among them, have technical institutes that rival those found in the United States and Europe. Computer scientists and engineers living in developing countries are paid generous salaries by local standards, but still a small fraction of what they could

REVIEW

STOP &

1. What does a CIO do? 2. What are three basic purposes that businesses use

information technology for? Give an example of each type.

3. How does electronic commerce improve productivity? 4. What is knowledge management all about? 5. What are some of the reasons for the productivity

paradox? 6. Name three ways employers monitor their employees.

command in the United States or other advanced economies. Low turnover and minimal employee benefits are further sources of cost savings for the employer. Such disparities in labor costs have existed for generations, why the sudden upsurge in offshoring? Information systems make it possible to manage and coordinate the overseas workers almost as well as if they worked down the hall. In recent years high capacity fiber optic networks have been extended around the world, providing access to computer networks in locations that were previously beyond the reach of the information society. And, the cost of the high speed connections has been falling dramatically so that now communication costs are only a small fraction of the labor costs, making offshoring more economically attractive. In 2003, IBM caused a stir when it was revealed that it planned to “export” a significant number of programming jobs to India. However, in a global economy just about any job is exportable, even in creative fields. For example, The Simpsons is animated in South Korea, even though the local animators employed there reportedly do not “get” the jokes. India is also turning into a global production center for film and video. Technical writers, architects, accountants, legal researchers, and insurance claim processors are likely to be the next to go. The short-term impacts of offshoring are tragic for those who lose their livelihoods, but the longer term effects are unclear. Offshoring should lead to lower cost products, leading to more buying power for consumers and better productivity for businesses. In the long run, these generate more prosperity and more jobs worldwide. However, the benefits will likely be most enjoyed by those nations with the best educated work forces. For nations such as the United States that are sinking in the ranks of the best educated countries of the world, the outlook is growing dimmer. How can you be sure that your career won’t be one going offshore? The best bets are occupations that require close human contact. Those might include managers and therapists (and, we hope, college professors), but also janitors and nursing home aides. High level jobs that require original thinking, recognition of complex patterns, or an intimate knowledge of a culture, such as advertising executives, journalists, and television producers, are also good bets. However, any job that can be reduced to repetitive tasks or a set of rules is sure to be either sent off shore or taken over by a computer. So, while the marketing director for an online store may be sitting in San Francisco, the people writing the html code, tending the web servers, and delivering customer service may all be in Bombay.

he ation untries.

SUMMARY & REVIEW_____________________ What is the relationship between electronic media and organizations? Innovations from the telegraph to the telephone to Internet have made it possible for organizations to continually increase the size and scope of their operations. Electronic media solved the problems of coordination across national and boundaries and across time zones.

How have computing paradigms changed? Early corporate computers were large mainframes that processed huge batches of punch cards for applications like payroll. Later, terminals were placed on the desks of employees so that data could be entered and manipulated through time sharing systems. Personal computers and Local Area Networks gave rise to the current client-server approach that extended computers to desktops.

How has the Internet changed business? Large organizations link their internal operations through private Intranets and are extending their networks to customers and suppliers through extranets based on Internet technology. Voice, image and video are being integrated with computer data networks in the process. Sales of goods and services are being shifted to e-commerce sites on the Web.

What’s in corporate networks? Organizations use PBXs, key systems, or Centrex service to save on their local telephone bills. Local Area Networks move information within buildings or campuses. Wide area networks connect distant business locations over leased lines, virtual private networks, T1 carriers, DDS lines, and satellite networks. Large organizations maintain private networks for teleconferencing and to save telecommunications costs.

What are types of teleconferencing? Audio teleconferences can be implemented with a speakerphone. Large audio conferences require special bridging equipment so that all participants can be heard clearly. Audiographic teleconferences add text or still graphics to the discussion. Videoconferencing adds moving pictures to the conference. Many conferences are shifting to the Internet so that employees can initiate them without going to special rooms.

How does e-commerce function? Electronic commerce sites use the same basic technology Credit card numbers are sent to secure servers that encrypsecret code and verify the transaction with a bank over a sDigital cash is a new alternative to using credit cards.

How is IT managed? Computers and data communications are run by MItelecommunications have separate departments. Manintegrating the two under a new breed of senior executiveofficer (CIO). Many CIOs subcontract all or part of their opcontractors who provide hardware, software, personnel or tec

What are important IT applications? Organizations use communications media: to run their businedge on their competition, and to innovate with new produand computer-integrated manufacturing use computerized syand the factory floor more efficiently. Automated teller macommerce give a competitive edge. On-line airline resexamples of new product innovations.

What are the types of e- commerce? Business-to-business e-commerce sites are the most commprofitable. Consumer-oriented sites come in a variety of fcatalog shopping, electronic shopping malls, auctions and rev

Does IT improve productivity? Not always. Technological change is so rapid that promisedrealized before the next computerization movement hits. hidden costs associated with communications media that cut

Is there privacy in the workplace? Workers no legal privacy rights at work. Information workplace privacy by making it easy to inspect employee cmail systems and to monitor work activity. What are implications of offshoring? Offshoring is the growing trend towards exporting jobs to other countries. Increasingly professional white collar jobs as well as manufacturing jobs are leaving. In the long run, this could mean greater prosperity for workers all over the world. However, nations whose educational systems fall behind are likely to suffer. Only jobs that require direct human contact or high level skills are likely to be immune.