The vest-pocket guide to information technology

384 Pages·2005·9.873 MB·English

by  Jae K. Shim, Joel G. Siegel

TEAM LinG
ffirst.fm Page i Thursday, August 4, 2005 5:46 PM
T
HE
V
EST
P
OCKET
GUIDE TO
I
NFORMATION
T
ECHNOLOGY
Second Edition
ffirst.fm Page ii Thursday, August 4, 2005 5:46 PM
ffirst.fm Page iii Thursday, August 4, 2005 5:46 PM
T
HE
V
EST

P
OCKET
GUIDE TO
I
NFORMATION
T
ECHNOLOGY
Second Edition
Jae K. Shim, Ph.D.
Chief Financial Officer
NBRF Incorporated
Professor of Accounting and Finance
California State University, Long Beach
Joel G. Siegel, Ph.D., CPA
Financial Consultant
Professor of Accounting and Finance
Queens College of the City University of
New York
John Wiley & Sons, Inc.
ffirst.fm Page iv Thursday, August 4, 2005 5:46 PM
This book is printed on acid-free paper.
Copyright © 2005 by John Wiley & Sons, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval
system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, scanning, or otherwise,
except as permitted under Section 107 or 108 of the 1976 United
States Copyright Act, without either the prior written permission of
the Publisher, or authorization through payment of the appropriate
per-copy fee to the Copyright Clearance Center, Inc., 222 Rose-
wood Drive, Danvers, MA 01923, 978-750-8400, fax [phone], or
on the web at www.copyright.com. Requests to the Publisher for
permission should be addressed to the Permissions Department,
John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-
6011, fax [phone], or online at http://www.wiley.com/go/per-
missions.
Limit of Liability/Disclaimer of Warranty: While the publisher and
author have used their best efforts in preparing this book, they
make no representations or warranties with respect to the accu-
racy or completeness of the contents of this book and specifically
disclaim any implied warranties of merchantability or fitness for a
particular purpose. No warranty may be created or extended by
sales representatives or written sales materials. The advice and
strategies contained herein may not be suitable for your situation.
You should consult with a professional where appropriate. Neither
the publisher nor author shall be liable for any loss of profit or any
other commercial damages, including but not limited to special,
incidental, consequential, or other damages.
For general information on our other products and services, or
technical support, please contact our Customer Care Department
within the United States at 800-762-2974, outside the United States
at 317-572-3993 or fax [phone].
Wiley also publishes its books in a variety of electronic formats.
Some content that appears in print may not be available in elec-
tronic books.
For more information about Wiley products, visit our Web site at
http://www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Shim, Jae K.
The vest pocket guide to information technology / Jae K. Shim,
Joel G. Siegel.--2nd ed.
p. cm.
Includes index.
ISBN-13 978-0-471-72500-8
ISBN-10 0-471-72500-5 (pbk.)
1. Information technology—Handbooks, manuals, etc.
2. Management information systems—Handbooks, manuals, etc.
I. Siegel, Joel G. II. Title.
T58.5.S54 2005
658.4’038--dc22
2005043953
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
ffirst.fm Page v Thursday, August 4, 2005 5:46 PM
ABOUT THE AUTHORS
Jae K. Shim, Ph.D., is a Professor of Business Administra-
tion at California State University, Long Beach. Dr. Shim
received his MBA and Ph.D. degrees from the University of
California at Berkeley (Haas School of Business). He is the
President of the National Business Review Foundation, a
management and computer consulting firm. Dr. Shim has
published about 50 articles in professional journals, includ-
ing Journal of Systems Management, Financial Management,
Journal of Operational Research, Omega, Data Management,
Management Accounting, Simulation and Games, Long Range
Planning, Journal of Business Forecasting, Decision Sciences,
Management Science, and Econometrica. Dr. Shim has over 50
books to his credit and is a recipient of the 1982 Credit
Research Foundation Outstanding Paper Award for his arti-
cle on financial modeling. He is also a recipient of a Ford
Foundation Award, Mellon Research Fellowship, and
Arthur Andersen Research Grant. Dr. Shim has been for
over 20 years an industrial consultant in the areas of infor-
mation systems development and applications, corporate
planning modeling, business forecasting, and financial
modeling.
Joel G. Siegel, Ph.D., CPA, is a computer consultant to
businesses and Professor of Accounting, Finance, and Infor-
mation Systems at Queens College of the City University of
New York. He was previously associated with Coopers and
Lybrand, CPAs, and Arthur Andersen, CPAs. He served as a
consultant to numerous organizations including Citicorp,
International Telephone and Telegraph, Person-Wolinsky
Associates, and the American Institute of CPAs. Dr. Siegel
is the author of 50 books. His books have been published
by Prentice Hall, Richard Irwin, McGraw-Hill, Harper-
Collins, John Wiley, Macmillan, Probus, International Pub-
lishing, Barron’s, and the American Institute of CPAs. He
has authored approximately 200 articles on business topics
including many articles in the area of computer applications
to business. His articles have appeared in various journals
including Computers in Accounting, Decision Sciences,
Financial Executive, Financial Analysts Journal, The CPA
Journal, National Public Accountant, and Practical Accountant.
v
ffirst.fm Page vi Thursday, August 4, 2005 5:46 PM
vi About the Authors
In 1972, he received the Outstanding Educator of America
Award. Dr. Siegel is listed in Who’s Who Among Writers
and Who’s Who in the World. Dr. Siegel is the former chair-
person of the National Oversight Board.
ffirst.fm Page vii Thursday, August 4, 2005 5:46 PM
HOW THIS BOOK CAN HELP YOU
The book covers information systems in all phases of busi-
ness and in all functional areas to analyze and solve busi-
ness problems in the real world. The practical and efficient
use of computer technology, both software and hardware, is
highlighted. All types of business applications are covered.
The importance of databases, networking, and telecom-
munications is clearly presented. Popular accounting, tax,
finance, management, manufacturing, and marketing soft-
ware is explained for easy use. Software for decision sup-
port systems (DSSs), executive information systems (EISs),
and artificial intelligence (AI) (e.g., financial modeling, bud-
geting, strategic planning and control, forecasting, data
analysis, inventory planning, and optimization software) is
covered with real-life examples. What-if analysis and the
effects of changing assumptions are discussed.
The purpose of the book is to provide a wealth of current
and essential information to managers in all types of orga-
nizations so that they may make optimum decisions. It
gives the businessperson all he or she needs to know in the
computerized financial application and modeling environ-
ment. Emerging trends in information technology are antici-
pated and discussed. In other words, expected developments
in computers are presented so that managers can properly
plan ahead. The professional success of a business manager
depends on keeping abreast of the latest thinking and appli-
cations in information technology. This surely gives a com-
petitive edge.
The book is written for business professionals in a prac-
tical, reader-friendly manner including clear illustrations.
We have simplified difficult computer terminology and
usage. Important topics include management information
systems (MISs), selection of the best software and hardware
for particular applications, business application software
(e.g., accounting, finance, management, tax, marketing, and
manufacturing), databases, telecommunications and online
services (e.g., Internet, AOL, MSN, Dow Jones, Westlaw,
AICPA), and computer security and auditing. The latest
multimedia trends are covered. New developments in artifi-
cial intelligence and expert systems, decision support sys-
tems, and executive information systems are covered.
vii
ffirst.fm Page viii Thursday, August 4, 2005 5:46 PM
viii How This Book Can Help You
The audience for this book includes accountants, tax pre-
parers, financial managers, general managers, marketing
executives, production/operations managers, purchasing
managers, personnel managers, business analysts, forecast-
ers, budget analysts, chief financial officers (CFOs), chief
executive officers (CEOs), chief operating officers (COOs),
chief information officers (CIOs), chief technology officers
(CTOs), project managers, consultants, systems analysts, and
computer support staff. Businesspeople in large, medium,
and small companies will benefit. Private and nonprofit enti-
ties will find the material of equal value.
The following are some representative topics, among
others discussed in the book, of vital interest to business-
people:
❍❍❍❍ Strategic uses of the information system and techno-
logy.
❍❍❍❍ The use of software in planning and control.
❍❍❍❍ The applications of telecommunication technologies
and how digitized computer signals can take advan-
tage of these technologies.
❍❍❍❍ Accounting and information systems and packages
showing how applications can be made to record keep-
ing, reporting, and financial statement presentation.
❍❍❍❍ The Sarbanes-Oxley compliance software
❍❍❍❍ An explanation of what a decision support system
(DSS) is about and how it is useful to business deci-
sion makers to improve the quality of their analysis
and evaluation. It improves problem solving.
❍❍❍❍ The use of artificial intelligence and expert systems in
making decisions.
❍❍❍❍ Computerized security (e.g., protecting files, service
contracts, backups, insurance coverage, and security
devices). It includes preventing fraud.
❍❍❍❍ Database management involving organizing and
managing information so that it can be retrieved and
utilized in an effective and efficient way.
❍❍❍❍ What a management information system (MIS) is,
and what its applications and benefits are.
❍❍❍❍ The use of online databases (e.g., World Wide Web,
Dow Jones, Westlaw, Lexis) in making business deci-
sions.
❍❍❍❍ The use of the Intranet within a company as an impor-
tant information source.
❍❍❍❍ Available accounting and financial software and how
they improve financial reporting and analysis.
❍❍❍❍ The use of networking to operate smarter and be more
efficient in a computer environment.
❍❍❍❍ The use of computer conferencing.
❍❍❍❍ Financial modeling and what-if analysis in budget-
ing, forecasting, and general decision making.
ffirst.fm Page ix Thursday, August 4, 2005 5:46 PM
How This Book Can Help You ix
❍❍❍❍ Manufacturing information systems packages to aid
in inventory record keeping, inventory management
and control, and production planning.
❍❍❍❍ Executive information systems (EISs).
❍❍❍❍ Marketing information systems to aid in sales plan-
ning, sales forecasting, market research, and advertis-
ing effectiveness.
❍❍❍❍ Selecting the best hardware for the particular applica-
tion needs and to enhance productivity.
❍❍❍❍ Value chain management software.
Chapter 1 discusses what management information sys-
tems are about and presents MIS techniques. The different
types of MISs are explained, including when each type
would be most appropriate. Chapter 2 covers MISs in busi-
ness decision making and explains decision models. Chapter
3 introduces basic hardware components and how to buy
the “right” hardware combination for each user’s require-
ments. Chapter 4 presents systems software and explains the
functions and terminology of different types of systems soft-
ware. Chapter 5 covers application software and how such
software can be used to improve profitability and enhance
productivity. Chapter 6 discusses the use of database soft-
ware, including query languages. Chapter 7 presents data
communications. Chapter 8 discusses the different types of
online databases and the information available on them.
State-of-the-art communication technologies and popular
network applications are also presented. Chapter 9 discusses
how to use an Intranet within the business. Chapter 10 pre-
sents accounting, audit, and tax software and their business
applications. Chapter 11 shows how MISs can be applied to
financial management to improve the management of assets
and liabilities, and to help plan the financing of debt and
equity. The role of the MIS in forecasting is also explained.
Chapter 12 discusses manufacturing information systems
and packages. It includes applications to production plan-
ning so as to improve manufacturing activity and inventory
management. Marketing information systems and packages
are presented in Chapter 13. The chapter shows how soft-
ware is used in marketing management, sales planning,
and advertising effectiveness. The use of decision support
systems (DSSs) to aid in management decision making by
making it more accurate and reliable is the subject of Chap-
ter 14. Chapter 15 deals with the use of artificial intelli-
gence software to imitate the human mind process. It aids
in managerial analysis and decision making. Chapter 16 is
directed toward computer security and auditing. It pre-
sents protective data systems and information technology
to safeguard the integrity of information. Ways to prevent
misappropriation of resources and fraudulent transactions
are enumerated.