Management Information System Unit 12

Unit 12 Organization and Computer Networks

Structure:
12.1 Introduction
Objectives
Basics of computer systems
Technology scope supporting MIS
12.2 Basic Network Terminologies, Definitions and Applications
Local Area Network (LAN)
Wide Area Network (WAN)
Metropolitan Area Network (MAN)
Point to Point Links
Circuit Switching
Packet Switching
Modem
Internet
Transmission Control Protocol (TCP) &User Data gram Protocol
(UDP)
World Wide Web (WWW)
Voice Telephony (VoIP)
Internet
12.3 The Intranet and the Extranet
Intranet and Its Application to Business
Extranet and Its Application to Business
12.4 Summary
12.5 Terminal Questions
12.6 Answers to SAQs and TQs

12.1 Introduction
Information Systems have grown powerful year after year. The role of the
traditional MIS has been obscured by newer software applications. Various
applications known collectively as enterprise resource planning (ERP)
software has taken a dominant position among large business applications.
These packages, which typically come in functional modules such as an
accounting module, a human resources module, and a manufacturing
supply chain module, serve many of the functions that a traditional MIS

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would, and they tend to be more flexible, integrated, and user-friendly than
legacy MIS. While early implementations of ERP suites were largely cross-
functional databases with minimal high-level management tools, later
upgrades have added decision support and data manipulation tools to
facilitate a wide range of analyses.
In future, MIS is likely to be verbal and qualitative in nature. It will depend
upon the strength of the organizations Information Systems. Most of the
enterprises are growing and their systems also have to grow. The ever
growing demands of the systems will force out the old conventional systems
by newer systems. The next decade is going to witness several fundamental
and qualitative changes in the practice of management of commercial
enterprises and other types of organizations.
These changes would be necessitated by better rates of economic growth,
intensification of competition, diversified and rapid technological
developments, continuing fluidity in economic-political environments, and
socio-political changes involving the values and attitudes of people working
in organizations at all levels.
To support these demands and meet newer challenges in the business,
organizations will have to resort to various technologies. This unit is based
on such possible technologies which will enable the enterprises to support
their MIS.
Learning Objective
In this unit, student will understand the following –
 The basic terminologies used in networks and definitions
 How a network could be used for business applications
 Types of networks – LAN, WAN, MAN, etc
 How intranet and extranet will help growing organizations

12.2 Basic Network Terminologies, Definition and applications

Though there are plenty of network terminologies, it may not be required to
learn everything at this stage. Here only the basic terminologies are
introduced along with their definition and applications.
12.2.1 LAN – A local area network (LAN) is a computer network covering a
small geographic area. It could be used in small places like a home, office,

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education institutions etc. LAN may be used to transfer data with reasonably
high data transfer rates. Ethernet over unshielded twisted pair cabling, and
Wi-Fi are the two most common technologies currently being used with
LAN.
12.2.2 WAN – Wide Area Network (WAN) is a computer network that
covers a broader area than LAN. The coverage is for metropolitan cities
and state. It uses routers and public communications links with a very high
data transfer rates. The largest and most well-known example of a WAN is
the Internet. WANs are used to connect LANs and other types of networks
together, so that users and computers in one location can communicate with
users and computers in other locations. Many WANs are built for one
particular organization and are private. Others, built by Internet service
providers, provide connections from an organization's LAN to the Internet.
WANs are often built using leased lines. At each end of the leased line, a
router connects to the LAN on one side and a hub within the WAN on the
other. Leased lines can be very expensive. Instead of using leased lines,
WANs can also be built using less costly circuit switching or packet
switching methods explained later in this unit.
12.2.3 MAN – Metropolitan area networks, or MANs, are large computer
networks usually spanning a city. They typically use wireless infrastructure
or Optical fiber connections to link their sites. The IEEE 802-2001 standard
describes a MAN as being:
“A MAN is optimized for a larger geographical area than is a LAN, ranging
from several blocks of buildings to entire cities. MANs can also depend on
communications channels of moderate-to-high data rates. A MAN might be
owned and operated by a single organization, but it usually will be used by
many individuals and organizations. MANs might also be owned and
operated as public utilities. They will often provide means for internetworking
of local networks. Metropolitan area networks can span up to 50km, devices
used are modem and wire/cable “.
12.2.4 Point to Point LINKs – A point-to-point link provides a single, pre-
established WAN communications path from the customer premises through
a carrier network, such as a telephone company, to a remote network.
Point-to-point lines are usually leased from a carrier and thus are often
called leased lines. For a point-to-point line, the carrier allocates pairs of

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wire and facility hardware to your line only. These circuits are generally
priced based on bandwidth required and distance between the two
connected points.
12.2.5 Circuit Switching – Switched circuits allow data connections that
can be initiated when needed and terminated when communication is
complete. This works much like a normal telephone line works for voice
communication. Integrated Services Digital Network (ISDN) is a good
example of circuit switching. When a router has data for a remote site, the
switched circuit is initiated with the circuit number of the remote network. In
the case of ISDN circuits, the device actually places a call to the telephone
number of the remote ISDN circuit. When the two networks are connected
and authenticated, they can transfer data. When the data transmission is
complete, the call can be terminated.
12.2.6 Packet Switching – Packet switching is a WAN technology in which
users share common carrier resources. Because this allows the carrier to
make more efficient use of its infrastructure, the cost to the customer is
generally much better than with point-to-point lines. In a packet switching
setup, networks have connections into the carrier's network, and many
customers share the carrier's network. The carrier can then create virtual
circuits between customers' sites by which packets of data are delivered
from one to the other through the network. The section of the carrier's
network that is shared is often referred to as a cloud.
12.2.7 Modem – A modem is a device that interprets digital and analog
signals, enabling data to be transmitted over voice-grade telephone lines. At
the source, digital signals are converted to a form suitable for transmission
over analog communication facilities. At the destination, these analog
signals are returned to their digital form. Figure 3-7 illustrates a simple
modem-to-modem connection through a WAN.
12.2.8 Internet – The Internet, sometimes called the "Information
Superhighway", is a worldwide, publicly accessible series of interconnected
computer networks that transmit data by packet switching using the
standard Internet Protocol (IP). It is a "network of networks" that consists of
millions of smaller domestic, academic, business, and government
networks, which together carry various information and services, such as
electronic mail, online chat, file transfer, and the interlinked web pages and

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other resources of the World Wide Web (WWW). The concept of sending
electronic text messages between parties in a way analogous to mailing
letters or memos predates the creation of the Internet. Even today it can be
important to distinguish between Internet and internal e-mail systems.
Internet e-mail may travel and be stored unencrypted on many other
networks and machines out of both the sender's and the recipient's control.
During this time it is quite possible for the content to be read and even
tampered with by third parties, if anyone considers it important enough.
Purely internal or intranet mail systems, where the information never leaves
the corporate or organization's network, are much more secure.
12.2.9 TCP (Transmission Control Protocol) and UDP (User Datagram
Protocol) – These are the protocols by which data is transmitted over
networks. TCP makes a virtual "connection", which gives some level of
guarantee of reliability. UDP is a best-effort, connectionless transport, in
which data packets that are lost in transit will not be re-sent. The application
protocol sits on top of TCP and UDP. These define the specific messages
and data formats sent and understood by the applications running at each
end of the communication. Examples of these protocols are HTTP, FTP,
and SMTP.
12.2.10 WWW – The World Wide Web is a huge set of interlinked
documents, images and other resources, linked by hyperlinks and URLs.
These hyperlinks and URLs allow the web servers and other machines that
store originals, and cached copies, of these resources to deliver them as
required using HTTP (Hypertext Transfer Protocol). HTTP is only one of the
communication protocols used on the Internet. Web services also use HTTP
to allow software systems to communicate in order to share and exchange
business logic and data.
12.2.11 Voice telephony (VoIP) – VoIP stands for Voice over IP, where IP
refers to the Internet Protocol that underlies all Internet communication. This
phenomenon began as an optional two-way voice extension to some of the
instant messaging systems in businesses across the world. In recent years
many VoIP systems have become as easy to use and as convenient as a
normal telephone. The benefit is that, as the Internet carries the actual voice
traffic, VoIP can be free or cost much less than a normal telephone call,
especially over long distances and especially for those with always-on

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Internet connections. Thus, VoIP is maturing into a viable alternative to

traditional telephones. Interoperability between different providers has
improved.
12.2.12 Internet: In the late 1960s, the U.S. Department of Defense came
up with the idea of creating of a network of computers as a means of
communication. This was useful for them initially in case of some national
emergency such as a nuclear war. Thus, if one of these centers was
destroyed, the others would still function. This first computer network was
called DARPANET, which later became every famous as ARPANET. This
idea was a real success, and researchers and educators saw the
possibilities of using such networks in their own fields, and in the mid 1980s
created NSFNET (the National Science Foundation NETwork) which linked
five supercomputer centers. Today, the ever-growing network of computers
around the world is called the Internet.
Internet is defined as network of networks in which computers communicate
among themselves through some communication medium. The
communication medium can be cable wire, micro waves, or satellite.
Thousands of computers are interconnected across the world with the help
of network. This helps in exchange of information in all types of
communication. Internet is a very sentential part of any kind of business as
it connects people-to-people, organization-to-organization in no time and
less cost. Internet acts as an accelerator to the business and stand as a
back bone.
In order to connect yourself to internet you need to have very less
components. You need to have a computer, a browser program and a
modem. For instance, a Macintosh or a PC is connected to a phone line or
wireless and internet is accessed through internet explorer or Netscape
navigator. Internet is made out of several parts. The important are WWW,
email, mailing lists, discussion forums and news groups, Group chatting,
Telnet, FTP, etc.
According to Hughes in 1993, World Wide Web is: "a wide-area hypermedia
information retrieval initiative aiming to give universal access to a large
universe of documents". To be simpler WWW which is popularly called as
the WEB is system of interlinked hypertext documents which allow

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collaborating with remote sites and sharing the information. That means
WWW is a part of Internet.
Benefits: Speed, vast resources and ability to directly communicate the
users makes the Internet most useful to the world.
 It is considered as superior to best and biggest libraries in the world.
 Communication is a very important benefit of internet.
 With the invention of internet phone, one can talk with the people who
are sitting abroad without paying abroad call charges and free of cost.

Self Assessment Questions

1. LAN may be used to transfer data with reasonably high data transfer
rates.
2. Packet circuits allow data connections that can be initiated when needed
and terminated when communication is complete.
3. TCP and UDP are the protocols by which data is transmitted over
networks.
4. What is the difference between WWW and internet?
5. What are the benefits of Internet?

12.3 The Intranet, Extranet and Internet

12.3.1 Intranet and Its Application to Business
An intranet is a private computer network. Intranet uses Internet protocols
and network connectivity to securely share part of an organization's
information or operations with its employees. The same concepts and
technologies of the Internet such as clients and servers running on the
Internet protocol suite are used to build an intranet. HTTP, FTP and other
Internet protocols are used in intranet. There is often an attempt to use
Internet technologies to provide new interfaces with corporate "legacy" data
and information systems.
Intranets are generally restricted to employees of the organization while
extranets can generally be accessed by customers, suppliers, or other
approved parties.
Increasingly, intranets are being used to deliver tools and applications, e.g.,
collaboration (to facilitate working in groups and teleconferencing) or

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sophisticated corporate directories, sales and CRM tools, project

management etc., to advance productivity. Intranets are also being used as
culture change platforms. For example, large numbers of employees
discussing key issues in an online forum could lead to new ideas. Intranet
traffic, like public-facing web site traffic, is better understood by using web
metrics software to track overall activity, as well as through surveys of
users. Most commonly, intranets are owned by the communications, HR or
CIO areas of large organizations.
Advantages of intranets
a) Increased Productivity: Intranets can help users to locate and view
information faster and use applications relevant to their roles and
responsibilities. With the help of a web browser interface, users can
access data held in any database the organization wants to make
available, anytime and – subject to security provisions – from anywhere
within the company workstations, increasing employees' ability to
perform their jobs faster, more accurately, and with confidence that they
have the right information. It also helps to improve the services provided
to the users.
b) Reduced Time: With intranets, organizations can make more information
available to employees in less time.
c) Improved Communication: Intranets can serve as powerful tools for
communication within an organization, vertically and horizontally. From a
communications standpoint, intranets are useful to communicate
strategic initiatives that have a global reach throughout the organization.
The type of information that can easily be conveyed is the purpose of
the initiative and what the initiative is aiming to achieve, who is driving
the initiative, results achieved to date, and who to speak to for more
information. By providing this information on the intranet, staff have the
opportunity to keep up-to-date with the strategic focus of the
organization.
d) Web Publishing: Web publishing allows 'cumbersome' corporate
knowledge to be maintained and easily accessed throughout the
company using hypermedia and Web technologies.
e) Business operations and management: Intranets are also being used as
a platform for developing and deploying applications to support business
operations and decisions across the inter-networked enterprise.

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f) Cost-effective: Users can view information and data via web-browser

rather than maintaining physical documents such as procedure manuals,
internal phone list and requisition forms.
g) Enhance Collaboration: With information easily accessible by all
authorized users, teamwork is enabled.
12.3.2 Extranet and Its Application To Business
An extranet is a private network that uses Internet protocols, network
connectivity, and possibly the public telecommunication system to securely
share part of an organization's information or operations with suppliers,
vendors, partners, customers or other businesses. An extranet can be
viewed as part of a company's Intranet that is extended to users outside the
company. It has also been described as a "state of mind" in which the
Internet is perceived as a way to do business with a pre-approved set of
other companies business-to-business (B2B), in isolation from all other
Internet users. In contrast, business-to-consumer (B2C) involves known
server/s of one or more companies, communicating with previously
unknown consumer users.
An extranet may be considered as a private intranet mapped onto the
Internet or some other transmission system not accessible to the general
public, but is managed by more than one company's administrators.
An extranet requires security and privacy. These can include firewalls,
server management, the issue and use of digital certificates or similar
means of user authentication, encryption of messages.
There are a variety of commercial extranet applications, some of which are
for pure file management, and others which include broader collaboration
and project management tools. Also exists a variety of Open Source
extranet applications and modules, which can be integrated into other online
collaborative applications such as Content Management Systems.
Companies can use an extranet to:
 Exchange large volumes of data using Electronic Data Interchange
(EDI)
 Share product catalogs exclusively with wholesalers or those "in the
trade"
 Collaborate with other companies on joint development efforts

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 Jointly develop and use training programs with other companies

 Provide or access services provided by one company to a group of other
companies, such as an online banking application managed by one
company on behalf of affiliated banks
 Share news of common interest exclusively with partner companies
Disadvantages
Extranets can be expensive to implement and maintain within an
organization (e.g.: hardware, software, employee training costs) – if hosted
internally instead of via an ASP.
Security of extranets can be a big concern when dealing with valuable
information. System access needs to be carefully controlled to avoid
sensitive information falling into the wrong hands.
Extranets can reduce personal contact (face-to-face meetings) with
customers and business partners. This could cause a lack of connections
made between people and a company, which hurts the business when it
comes to loyalty of its business partners and customers.

Self Assessment Questions

6. _______ is a private computer network.
7. With intranets, organizations can make more information available to
employees in ______ time.
8. Web publishing allows 'cumbersome' corporate knowledge to be
maintained and easily accessed throughout the company using
__________ and _________ technologies.
9. A ______ requires security and privacy.

12.4 Summary
After going this unit, students would have understood the basics of
networks. Students would have learnt the various types of inter
organizational network, their appropriateness to the organization setup and
their benefits to the organization. The various types of networks ranging
from lan / wan to intranet and extranet and their utility is explained in this
unit.

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12.5 Terminal Questions

1. Explain the need of networking organizational functions?
2. What is the difference between LAN and WAN?
3. Explain what is meant by switching and the types of switching?
4. What is Intranet? How is it useful to an organization?
5. Explain the advantage and disadvantage of Extranet?

12.6 Answers

Answers to Self Assessment Questions

1. True
2. False
3. True
4. WWW is a part of Internet
5. Speed, vast resources and ability to directly communicate the users
6. Intranet
7. Less
8. hypermedia and Web
9. Extranet

Answers to Terminal Questions

1. Refer 12.1
2. Refer 12.2.1 and 12.2.2
3. Refer 12.2.5 and 12.2.6
4. Refer 12.3.1
5. Refer 12.3.2

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