Computers play a vital role in meeting the challenges of global competitiveness, where businesses must be efficient and responsive, and must produce high quality goods and services at an even lower cost. Without computers, to provide the accurate, precise information needed to make strategic decisions and to manage production processes, many companies would find it impossible to survive.
Computers are widely used primarily to collect, manage and reproduce a wide variety of business data. That can mean everything from medical and financial records to a list of parts to make a thing. It can include the plans and designs for a new product.
But computers do far more than just keep track of things; they help people to make better decisions. Computers use stored information to construct simulations ranging from simple analyses to realistic depictions and animations of new products. Accountants and book keepers can substitute new retail prices for the products, and immediately see the effect on the firm’s profits. Marketing people can use presentation software to test advertising slogans on small groups of potential customers before carrying out the major campaign.
Computers also help people to communicate both directly and indirectly. Publishing software brings the power of the printing press within the reach of everybody. Public relations department can create glossy reports, complete with photographs, articles and charts, at a cost much lesser than that of outside services with the help of computers. Office employees today use electronic mail (E-mail) to stay in touch with their co-workers.
From the perspective of a typical corporation, information is any non-tangible item that affects business. Plans for the new products, employee reviews, moves made by the competitor, price lists, stock market moves just about anything can be considered information. Corporations need information to make decisions about product features, marketing efforts, and investments among other things.
Today, information alone is not enough; it should be accurate and up- -to-date. To be profitable a company must know where the market is headed, and must be able to jump in and out at the right times.
Having the access to good and accurate information and turning it around into products which consumers want, is the key to staying in business. The company that does not stay well informed may quickly be left behind by its efficient competitors.
Computer applications to business commenced from the middle of the 1950s. The first non-scientific use of computers concerned routine clerical work. Today, most large and medium sized companies are almost totally dependent on their computers for numerous administrative functions.
Pay roll and Personal Records:
Payroll accounting was the first commercial area to become widely computerized. The calculation of wages and salaries involves a number of variables but common factors which relate to the personal details of each employee, such as gross pay, tax code, insurance premium, other perks, etc, are handled by the computer.
Stock control and the processing of sales and sales accounting, sales analysis, market research, forecasting and subsequent production planning are additional areas in which the computer assists in business and commercial organizations. In all these cases the company can benefit from immediate availability of the information which the computer provides.
Computers have become a necessity in the banking sector to tackle the massive volume of book keeping this sector involves. In most cases the computers are located centrally, the various batches being equipped with terminals. This enables the branches to interrogate the central system for information on such things such as current balances, deposits, overdrafts, interest charges, shares and other records. One of the mammoth operations carried out is the clearance of cheques.
Leading international banks and financial institutions are able to obtain up-to-date news on foreign currency rates from the world’s money markets using the on-line worldwide information service.
Insurance companies, finance houses and stock broking firms also make use of computers. Here the conditions and requirements are similar to those in banking. Large fields of information have to be retained and updated interest rates and bonuses have to be calculated, policy statements and renewal notices have to be prepared and payments made. In buying and selling of stocks ad shares various calculations have to be made, contract notes drawn up and files consulted and amended.
To conclude from the above one can observe that Businesses must take advantage of computers to be faster and accurate. They can also have a faster turnover in the business.