1. Introduction to Information Systems
Chapter 1 6
Telecommunications and Networks
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2. Trends in Telecommunications
More electronic commerce, enterprise collaboration,
online business operations and strategic advantage in markets
More vendors, carriers, alliances, and network
services, accelerated by deregulation & Internet growth
Extensive Internet, interconnected local & global
digital networks, improved transmission channels
Industry Trends
Technology Trends
Application Trends
Major trends occurring in the field of telecommunications have a significant impact on management decisions in this area. Key trends include:
Industry Trends. The key trend in this area is a move away from a few, large, regulated monopolies as suppliers toward an industry structure with many suppliers in fierce competition for new customers with new products and innovative services. Bottom line: The service and vendor options available to meet a company's telecommunications needs have increased dramatically.
Technology Trends. Digital transmission of information is the wave of the future. Besides being "computer ready" digital communication offer four distinct advantages to businesses and end users:
1. Significantly higher transmission speeds.
2. Movement of larger amounts of information.
3. Greater economy.
4. Much lower error rates (compared to analog transmission).
Another major technology trend is the advent of open systems -- information systems that use common standards for hardware, software, applications, and networking. Open systems create a computing environment characterized by easy access by developers, suppliers, and end users.
Application Trends. Technology and industry trends combine to open up application development to more providers, more products, and more choices for businesses and end users.
Discussion Note: Some choices are misleading. For example, application software for the personal computer in the utilities area (Symantec), statistics (SPSS), and personal finance (Quicken) are dominated by single companies who have bought their smaller rivals. The products and brands are maintained, but the control in these areas is very much monopolistic.
Teaching Tips
This slide corresponds to Figure 6.2 on pp. 176 and relates to the material on pp
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3. Telecommunications Strategic Capabilities
Overcome Geographic Barriers: Capture information about
business transactions from remote locations.
Overcome Time Barriers: Provide information to remote locations
immediately after it is requested.
Overcome Cost Barriers: Reduce the cost of more traditional
means of communications.
Overcome Structural Barriers: Support linkages for competitive
advantage.
The figure of the slide outlines the four major strategic capabilities of information technology:
Time Barriers. Strategic use of information systems helps overcome time barriers by focusing on interval reduction and just-in-time operations. The goal is to shorten the response time to customer demands and reduce inventory investment to a minimum. Operating in real time means no time lag between the identification and fulfillment of a need.
Geographic Barriers. Telecommunications and computing technologies make it possible to distribute key business activities to where they are needed most, where they are best performed, or where they best support the competitive advantage of a business. Telecommunication networks allow instantaneous access to all members and resources of the organization, however remote, so that the best combination of talent and ability can be brought to bear on problems or opportunities.
Cost Barriers. Information systems help reduce costs in many areas: production, inventory, distribution, or communications. For example, decentralized decision making can be combined with centralized implementation of those decisions for greater economy without sacrificing the efficiency of the process.
Teaching Tip: The IS also reduces travel costs as distance conferencing makes it less necessary to bring staff to headquarters for meetings.
Structural Barriers. Structural barriers in business include traditional constraints in how business is conducted (such as hours of operation and labor costs) and the processing time various firms in a channel of distribution take to act on customer demand. An IS can extend hours of operation (example: automatic teller machines at banks), service support (example: 24 hour customer support for software products), and improve distribution (example: EDI between manufacturers and suppliers, or wholesalers and retailers).
Teaching Tips
This slide corresponds to Figure 6.4 on pp. 178 relates to the material on pp
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4. Internet Applications
Internet Chat
and
Discussion Forums
Download and
Computer
Search Engines
Surf and
Popular Uses
of the
Internet
E-Commerce
Transfer
Protocol (FTP)
and Telnet
The Internet is the largest "network of networks" and the closest model of the information superhighway to come. The Internet is accessible to anyone with a modem and the proper communications software on their computer.
Nature of the Internet. The Internet developed from a US Defense Department network called ARPANET, established in One of the extraordinary features of the Net is its decentralized nature. No one "runs" the Net, it is not controlled either from a central headquarters nor governed by a single business or government agency. Like a real highway, it is "there" maintained to some degree by those who use it. But travel on it is pretty much up to the end users themselves.
Business of the Internet. By 1995, over 1.5 million host networks on the Internet belonged to businesses. Businesses on the Internet are there in part to take advantage of the easy, world-wide communications available through and file transfer protocols (FTPs). But business is also on the Net to help shape the network as a channel for conducting business transactions -- buying and selling goods and services in Cyberspace to distant customers linked by computers and modems.
Teaching Tips
This slide corresponds to Figure 6.5 on pp. 179 relates to the material on pp
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5. Business Value from e-Commerce Applications
Increase Customer Loyalty & Retention
Reduce the Cost of Doing Business
Generate New Revenue Sources
Attract New Customers
Deriving Business
Value from e-Commerce
Applications
Develop New Markets & Channels
Develop New Web-based Products
Many companies perceive the business value of the Internet for electronic commerce. Substantial cost savings can arise because applications that use the Internet and Internet-based technologies (like intranets and extranets) are typically less expensive to develop, operate, and maintain than traditional systems.
Example: American Airlines saves money every time customers use their website instead of their customer support telephone system.
Other primary reasons for business value include:
Attracting new customers with innovative marketing and products, and retaining present customers with improved customer service and support.
Generating revenue through e-commerce applications is a major source of business value (discussed in Chapter 8).
Summary: Most companies are building e-commerce websites to achieve six major business values:
1. Generate new revenue from online sales.
2. Reduce costs through online sales and customer support.
3. Attract new customers via Web marketing and advertising and online sales.
4. Increase the loyalty of existing customers via improved Web customer service and support.
5. Develop new Web-based markets and distribution channels for existing products.
6. Develop new information-based accessible on the Web.
Teaching Tips
This slide corresponds to Figure 6.7 on pp. 182 relates to the material on pp
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6. Basic Components in a Telecommunications Network
Software 1 2 3 4 5
PCs, NCs,
and Other
Terminals
Computers
Channels and Media
Processors
Like any communications model, a telecommunications network connects a sender to a receiver over a channel for sharing messages. The basic components of a telecommunications network are:
Terminals. These are networked microcomputer workstations or video input/output stations that provide the sending and receiving endpoints for the network.
Telecommunications Processors. These are specialized hardware components that support data transmission and reception between terminals and computers.
Telecommunications Channels and Media. A channel connects two or more parties in a network. Media are the particular way a channel is connected. Telecommunications channels use combinations of media such as copper wires, coaxial cables, fiber optic cables, and microwave carriers to transmit information.
Computers. All sizes and types of computers can and are connected to telecommunications networks. Typical arrangements include using a mainframe as a host for the network, a minicomputer as a front-end processor, with a dedicated microcomputer as a network server to a smaller local group of networked microcomputer workstations.
Telecommunications Control Software. Software controls the interaction of the computers on the telecommunications information system. Mainframes use telecommunications monitors in their role as host computers. Network operating systems are specially designed for microcomputer servers while individual microcomputers on the network access its functions by communications packages.
Teaching Tips
This slide corresponds to Figure 6.12 on pp. 188 relates to the material on pp
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7. Wide Area Networks
Local Area Networks (LAN) connect computers and other information processing devices within a limited physical area, such as an office, classroom, building, manufacturing plant, or other work site. LANs have become commonplace in many organizations for providing telecommunications network capabilities that link end users in offices, departments, and other workgroups.
Wide Area Networks (MAN) cover a large geographic areas. Networks that cover a large city or metropolitan area (MAN) are also included in this category. Such large networks have become a necessity for carrying out the day-to-day activities of many business and government organizations and their end users.
Example: WANs are used by many multinational companies to transmit and receive information among their employees, customers, suppliers, and other organizations across cities, regions, countries, and the world.
Teaching Tips
This slide corresponds to Figure 6.13 on pp. 190 relates to the material on pp
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8. WAN Wide Area Network Ontario California Norway Manitoba Belgium
Telecommunications networks covering a large geographic area are called wide
area networks (WANs). Networks that cover a large city or metropolitan area
(metropolitan area networks) can also be included in this category. Such large networks
have become a necessity for carrying out the day-to-day activities of many business
and government organizations and their end users.
For example: WANs are used by many multinational companies to transmit and receive
information among their employees, customers, suppliers, and other organizations across
cities, regions, countries, and the world.
Teaching Tips
This slide corresponds to Figure 6.13 on pp. 190 relates to the material on pp
British
Columbia
Pennsyl-
vania
Japan
Dominican
Republic
Chile
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9. Local Area Networks Printer PC Network Server
Shared
Database and
Software Packages
Printer PC
Internetwork Processor to Other Networks
Local Area Networks (LANs) connect computers and other information processing devices within a limited physical area, such as an office, a building, or work site. LANs use a variety of telecommunications media. Key concepts and components of LANs include:
Network Interface Card. PCs on a network must have a circuit board installed to handle the network interface. This is the typical way of expanding PC capability.
Teaching Tip: The advent of Windows 95 and Plug and Play architecture should make the installation of network cards by end users much easier.
Network Server. As mentioned earlier, this is a dedicated PC with a large hard disk capacity for secondary storage. Many servers also have more RAM than the individual workstations on the network.
Network Operating System. Just as individual PCs have their own operating systems, the network operating system controls the interface between users and machine hardware as well as the telecommunications peripherals linking them.
Internetworks. Most LANs are connected via telecommunications to other networks, which might be other LANs, wide area networks (WANs), mainframes, or very large networks like the Internet.
Teaching Tips
This slide corresponds to Figure 6.14 on pp. 190 relates to the material on pp
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10. Other E-business Networks
Router
Intranet
Server
Host System
The
Internet
Fire wall
Extranet
Most organizations use Virtual Private Networks (VPNs) to establish secure intranets and extranets.
A virtual private network is a secure network that uses the Internet as its main backbone network, but relies on the fire walls and other security features of its Internet and intranet connections and those of participating organizations.
Example: VPN’s would enable a company to use the Internet to establish secure intranets between its distant branch offices and manufacturing plants, and secure extranets between itself and its customers and suppliers.
Teaching Tips
This slide corresponds to Figure 6.16 on pp. 191 relates to the material on pp
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11. Client Server Networking
Systems
Servers
Host Systems/
Superservers
Midrange computers have become popular as powerful network servers included in corporate Intranets and Extranets and in client server networks.
A network is a system of microcomputers and servers linked together with telecommunications hardware and software.
Telecommunications. Telecommunications is the use of networks of interconnected computers and peripheral devices to process and exchange data and information. Hardware such as modems allow computers at distant locations to share information over telephone lines. Network operating systems are software programs that control resource sharing and communications flow among computers and peripherals on a local area network (LAN).
Networked computers draw additional computing power from the other computers on the network, which can include other microcomputers, minicomputers, and mainframes. This capability is known as distributed processing.
Distributed Processing. This is the ability to spread the processing requirements for a particular task around the network to take advantage of unused processing capacity.
Client server architectures, which are used frequently in businesses have the following components:
Client. A client on a network is typically a microcomputer that serves an end user for most of her or his processing needs. Programs for the client and extra processing capacity are provided as needed by the network.
Server. A server is a host or central computer that is dedicated to managing the logistics of routing data, information, and processing capacity among the clients on the system. In small networks, the server might be a single PC. On larger networks, the server can be a minicomputer or a mainframe. In very large organizations, several networks might be served, each by their own minicomputer, which in turn, is linked to the host mainframe.
Teaching Tips
This slide corresponds to Figure 6.16 on pp. 192 relates to the material on pp. 192.
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12. Client/Server Networks and Network Computing
Host System
Superserver
Client
User Interface
Application Processing
Application Control
Distributed Database
Central database control
Heavy duty processing
NetPC
Browser-based
Web OS
Application Software
Application
DBMS DB
A network is a system of microcomputers linked together with telecommunications hardware and software. Networked computers draw additional computing power from the other computers on the network, which can include other microcomputers, minicomputers, and mainframes. Key concepts of networked computing include:
Client. A client on a network is typically a microcomputer that serves an end user for most of her or his processing needs. Programs for the client and extra processing capacity are provided as needed by the network.
Server. A server is a host or central computer that is dedicated to managing the logistics of routing data, information, and processing capacity among the clients on the system. In small networks, the server might be a single PC. On larger networks, the server can be a minicomputer or a mainframe. In very large organizations, several networks might be served, each by their own minicomputer, which in turn, is linked to the host mainframe.
Network Computers. Provide a browser-based user interface for processing small applications programs called applets. Thin clients include network computers, Net PCs and other low-cost network devices or information appliances. Application and database servers provide the operating system, application software, applets, databases, and database management software needed by the end users in the network.
Network computing is sometimes called a three-tier client/server model, since it consists of thin clients, application servers, and database servers.
Teaching Tip: The information in this slide comes from figure 6.16 and 6.17 on pages
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13. Satellite network

14. Telecommunications Communication Media
Twisted Pair
Coaxial Cable
Fiber Optics
Terrestrial Microwave
Communication Satellites
Cellular Technologies
Wireless LAN
Telecommunications channels make use of a wide variety of media. In some cases, the media are complementary and the use of more than one media increases the functions and features of the telecommunications network. In other cases, the media are in direct competition with each other, hoping to capture customers from other media choices.
Discussion Note: The dual nature of telecommunications has implications yet to be resolved for open systems architecture.
Some major types of telecommunications media include:
Twisted-Pair Wire. This is the traditional phone line used throughout the world. It is the most widely distributed telecommunications media but is limited in the amount of data and speed of transmission.
Coaxial Cable. This is a sturdy copper or aluminum wire wrapped in spacers to insulate and protect it. Coaxial cable can carry more information and at higher speeds than twisted pair wires. It also is a higher-quality carrier, with little interference.
Fiber Optics. These are hair-thin glass filaments spun into wires and wrapped in a protective jacket. Fiber optics transmit light pulses as carriers of information and so are extremely fast and produce no electromagnetic radiation. This makes them extremely reliable channels, although splicing cables for connections is difficult.
Terrestrial Microwave. Earthbound microwave radiation transmit high-speed radio signals in line-of-sight paths between relay stations..
Communications Satellites. Satellites in geosynchronous orbit are used to transmit microwave signals to any place on earth using dish antennas for sending and receiving.
Cellular Radio. Low power transmitters on each cell of the system allow users to take advantage of several frequencies for communications.
Wireless LANs. Using radio or infrared transmission, some LANs are completely wireless, thus eliminating the cost of installing wire in existing structures.
Teaching Tip: The information in this slide comes from pp
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15. Telecommunications Processors and Software
Modems
Multiplexers
Internetwork Processors
Switches
Routers
Hubs
Gateways
Fire walls
Network Operating System
Telecommunications Monitor
Middleware
Network Management Software
Modem (Modulator-DEModulator). A device that converts the digital signals from input/output devices into appropriate frequencies at a transmission terminal and converts them back into digital signals at a receiving terminal.
Multiplexer: An electronic device that allows a single communications channel to carry simultaneous data transmission from many terminals.
Internetwork Processors: Communications processors used by local area networks to interconnect them with other local area and wide area networks. Examples include switches, routers, hubs, and gateways.
Fire wall: Computers, communications processors, and software that protect computer networks from intrusion by screening all network traffic and serving as a safe transfer point for access to and from other networks.
Network Operating System: Is a program that controls telecommunications and the use and sharing of network resources.
Telecommunications Monitor: Computer programs that control and support the communications between the computers and terminals in a telecommunications network.
Middleware: Software that helps diverse networked computer systems work together, thus promoting their interoperability.
Network Management Software: Software packages such as network operating systems and telecommunications monitors used to determine transmission priorities, route (switch) messages, poll terminals in the network, and form waiting waiting lines (queues) of transmission requests.
Teaching Tip: The information in this slide comes from pages
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16. Telecommunications Processors and Software
A modem is a device or program that enables a computer to transmit data over, for example, telephone or cable lines. Computer information is stored digitally, whereas information transmitted over telephone lines is transmitted in the form of analog waves. A modem converts between these two forms.
In electronics, a multiplexer (or mux) is a device that selects one of several analog or digital input signals and forwards the selected input into a single line. A multiplexerof 2n inputs has n select lines, which are used to select which input line to send to the output.

17. Internetwork Processors
Switches are the linkage points of an Ethernet network. Just as in hub, devices in switches are connected to them through twisted pair cabling. But the difference shows up in the manner both the devices; hub and a switch treat the data they receive. Hub works by sending the data to all the ports on the device whereas a switch transfers it only to that port which is connected to the destination device. 
Routers are network layer devices and are particularly identified as Layer- 3 devices of the OSI Model. They process logical addressing information in the Network header of a packet such as IP Addresses.

18. Internetwork Processors
Hub is one of the basic icons of networking devices which works at physical layer and hence connect networking devices physically together. Hubs are fundamentally used in networks that use twisted pair cabling to connect devices. They are designed to transmit the packets to the other appended devices without altering any of the transmitted packets received.
Gateway refers to a piece of networking hardware that has a ability to communicate with network. A network node (router) equipped for interfacing with another network that uses different protocols.A gateway is a node in a computer network, a key stopping point for data on its way to or from other networks. Gateways are able to communicate and send data back and forth. The Internet wouldn't be any use to us without gateways (as well as a lot of other hardware and software).

19. Network Topologies
There are several basic types of network topologies, or structures, in telecommunications networks. Three basic topologies used in wide area and local area telecommunications networks are:
1. Star: A star network ties end user computers to a central computer.
2. Ring: A ring network ties local computer processors together in a ring on a more equal basis.
3. Bus: A bus network is a network in which local processors share the same bus, or communications channel.
Teaching Tip: Instructors may wish to discuss the advantages and disadvantages associated with each of these types of topologies. This discussion is laid out in the Instructors Manual.
Teaching Tips
This slide corresponds to Figure 6.24 on pp. 201 and relates to the material on pp
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20. Internet Protocol (IP) Host-to-Host Transport Layer
The Internet’s TCP/IP
Application or
Process Layer
Internet Protocol (IP)
Host-to-Host Transport Layer
Network Interface
Physical Layer
Application
Layer
Presentation
Session
Transport
Network
Data Link
Physical
OSI Model
The International Standards Organization (ISO) has developed a seven-layer Open Systems Interconnection (OSI) model to serve as a standard model for network architecture.
Application Layer. This layer provides communications services for end user applications.
Presentation Layer. This layer provides appropriate data transmission formats and codes.
Session Layer. This layer supports the accomplishment of telecommunications sessions.
Transport Layer. This layer supports the organization and transfer of data between nodes in the network.
Network Layer. This layer provides appropriate routing by establishing connections among network links.
Data Link Layer. This layer supports error free organization and transmission of data in the network.
Physical Layer. This layer provides physical access to the telecommunications media in the network.
Teaching Tips
This slide corresponds to Figure 6.25 on pp. 203 relates to the material on pp
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21. Chapter Objectives
Identify several major developments and trends in the industries, technologies, and business applications of telecommunications and Internet technologies.
Provide examples of the business value of Internet, intranet, and extranet applications.
Identify the basic components, functions, and types of telecommunications networks used in business.
Explain the functions of major types of telecommunications network hardware, software, media, and services.
© 2002 McGraw-Hill Companies

22. Chapter Summary
Organizations are becoming internetworked enterprises that use the Internet, intranets, and other telecommunications networks to support e-business.
Telecommunications has entered a deregulated and fiercely competitive environment with many vendors, carriers, and services
A major trend is towards pervasive use of the Internet and its technologies to build interconnected enterprise and global networks.
© 2002 McGraw-Hill Companies

23. Chapter Summary (cont)
The major components of any telecommunications network are:
Terminals,
Telecommunications processors,
Communication channels,
Computers, and
Telecommunications software.
There are several basic types of telecomm networks, including wide area networks (WANs) and local area networks (LANs).
© 2002 McGraw-Hill Companies

24. Chapter Summary (cont)
Key telecommunications network alternatives include telecommunications media, processors, software, channels, and architectures.
© 2002 McGraw-Hill Companies