The first computers were used only to process accounting data. Originally, this use was called electronic data processing, or EDP, but it was shortened to data processing. For the first ten years or so of the computer era, from about 1954 to 1964, the larger organizations (both government and business) used their computers mainly for data processing.
After a while the big organizations had put most of their accounting work on the computer and looked around for the next application. Their attention fell upon the managers, who had not benefited a great deal from data processing. It was recognized that the computer could also produce information for the managers to use in solving problems, and the idea of the “information system” was born.
Today, more information can be provided more quickly and cheaper than before. This is due to the development of faster, cheaper technology for information processing and developments in telecommunications for information transmission. Businesses require accurate, up-to-date information on both external elements such as competitor’s prices, market preferences, and the financial market; and internal elements within the organization in order to gain a competitive advantage and survive.
WHAT IS A PROBLEM?
The word problem sounds like something bad. Many problems that occur in business fit this image – they are bad. For example, too many employees lack the necessary skills, customer orders cannot be processed fast enough during peak sales periods, and the plant equipment breaks down. When managers are faced with these bad situations, their challenge is to make them good, or, at least, make them not so bad.
When a manager is faced with a good situation, such as sales of a product that exceed the plan, the task is to capitalize on this turn of events. Perhaps the sales can be increased even more, or an increase can be achieved for other products as well.
While we use... [continues]
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