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The use of computers and the Internet in business

Updated on August 9, 2016

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Introduction

Since their first appearance, computers have increasingly gained popularity over time. In the past few years, computers have become an indispensable part of all kinds of fields and industries. Business is not an exception. Millions of computers are being used by almost all of the companies in the world in offices as well as in assembly lines, which helps to save a huge amount of time and labor. Computers help companies to run their business more effectively and efficiently. Computers simplify the administrative procedures, perform clerical work, plan and keep things on schedule, and manipulate general office duties. Internet and local area network quicken the communication process within a company and among companies, and provide sufficient information for a company about the market and other competitors. The computer business itself also remains as a highly potential business.

One of the very first computers in the world
One of the very first computers in the world

Brief on the history of computers

According to John Hopplin in his research “An illustrated history of computer”, computers appeared very long ago in human’s history. The abacus was an early aid for mathematical computations. Its only value is that it aids the memory of the human performing the calculation. A skilled abacus operator can work on addition and subtraction problems at the speed of a person equipped with a hand calculator (multiplication and division are slower). The abacus is often wrongly attributed to China. In fact, the oldest surviving abacus was used in 300 B.C. by the Babylonians.

In 1642 Pascal, at age 19, invented the Pascaline as an aid for his father who was a tax collector. Just a few years after Pascal, the German Gottfried Wilhelm Leibniz (co-inventor with Newton of calculus) managed to build a four-function calculator the stepped reckoner. It could manipulate the addition, subtraction, multiplication, and division processes. In 1890, combining all of the successes in the past with his own research, Hollerith built a company, the Tabulating Machine Company which, after a few buyouts, eventually became International Business Machines , known today as IBM. The company made great contributions to the development of computer history.

The title of forefather of today's all-electronic digital computers is usually awarded to ENIAC, which stood for Electronic Numerical Integrator and Calculator. ENIAC was built at the University of Pennsylvania between 1943 and 1945 by two professors, John Mauchly and the 24 year old J. Presper Eckert. ENIAC filled a 20 by 40 foot room, weighed 30 tons, and used more than 18,000 vacuum tubes. After that, they developed mainframe computers, which could be interacted by time sharing or batch mode processing method.

A Harvard freshman by the name of Bill Gates decided to drop out of college so he could concentrate all his time writing programs for this computer. This early experienced put Bill Gates in the right place at the right time once IBM decided to standardize on the Intel microprocessors for their line of PCs in 1981. From that time on, computers undergo great changes to transform into the perfectly intelligent machine we have now (John Hopplin).

Evolution of men and computers
Evolution of men and computers | Source

Applications of computers in business

The applications of computers used in business grow quickly and continue to grow at a remarkable rate. According to Ramon Mangi, the first business computer was called UNIVAC1. UNIVAC1 was introduced for the first time in 1951 to take a United States census. This computer was invented by John Mauchly and J. Eckert. Together they founded and built the Eckert-Mauchly Computer Corporation. Theirs was the first computer to use a compiler and store programs (Ramon Mangi). At first, most of the companies used computers basically for clerical work. They used computer to administrate financial problems, and to store personnel and production’s data. Since then, computers have been improved a lot more than that to perform more complicated duty. Computers are now vital to the operation of a company. They performs almost all of the office duties including accepting input, processing data, producing output, storing output, and serving as modern typing machines. In production activities, computers can control the assembly lines and the whole production procedure. Computers not only help companies to operate more effectively but they also save them a lot of time, money and labor. For some companies, they can even encounter huge problems running their business without computer.

WalMart used RFID to improve their business strategies
WalMart used RFID to improve their business strategies

Case study: How Wal-mart pioneered to apply new technologies and earned millions

Different kinds of business apply computers in different way. Some retail stores use computers as POS terminal interfacing the electrical signals sent from the Optional Character Recognition codes they use. Some restaurants use computer to complete customers’ orders and make bills. Banks use computers for all of their transactions, providing credit cards, fund transferring and so on. The usage of computer is so popular that almost everyone is a potential user of a computer’s system (Alan Evans, “Technology in Action”).

One of the most famous examples of a business applying new technologies and earning millions in the process is Wal-Mart. Wal-Mart pushed the retail industry to establish the universal bar code, which forced manufacturers to adopt common labeling. The bar allowed retailers to generate all kinds of information -- creating a subtle shift of power from manufacturers to retailers. Wal-Mart became especially good at exploiting the information behind the bar code and is considered a pioneer in developing sophisticated technology to track its inventory and cut the fat out of its supply chain. Recently, Wal-Mart became the first major retailer to demand manufacturers use radio frequency identification technology (RFID). The technology uses radio frequencies to transmit data stored on small tags attached to pallets or individual products. RFID tags hold significantly more data than bar codes. Wal-Mart also established a sophisticated computer networks to control and manipulate these new technologies. Thanks to these computer-applications, Wal-Mart saves millions of dollars a year, increases the quality of its service, lowers the price and attracts more customers to buy their goods.

Brief on the history of the Internet

The appearance of the Internet and local area networks also increase the importance of computers. The Internet was the result of some visionary thinking by people in the early 1960s that saw great potential value in allowing computers to share information on research and development in scientific and military fields. J.C.R. Licklider of MIT, first proposed a global network of computers in 1962, and moved over to the Defense Advanced Research Projects Agency (DARPA) in late 1962 to head the work to develop it. Leonard Kleinrock of MIT and later UCLA developed the theory of packet switching, which was to form the basis of Internet connections. Lawrence Roberts of MIT connected a Massachusetts computer with a California computer in 1965 over dial-up telephone lines. It showed the feasibility of wide area networking, but also showed that the telephone line's circuit switching was inadequate. Kleinrock's packet switching theory was confirmed. Roberts moved over to DARPA in 1966 and developed his plan for ARPANET. These visionaries and many more left unnamed here are the real founders of the Internet.

How computers with Internet radically changed the business world

They are the central nervous system of a company

The Internet and local area network become a central nervous system of a company. For a lot of companies, email and instant messaging via computers raise to the most popular way of communication between employees and employees, between employers and employers, and between employers and employees. People can easily share their opinions, exchange information, and consult with one another through the computer network. According to a survey, the majority of companies in different countries use Internet to get connected within the companies and among different companies. The graph below shows the rate of companies using Internet in different countries (Jacob Smiths, “Business Internet Connectivity”).

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They allow companies to design a more flexible and thus productive work schedule

The development of computers and the Internet also allow employees to work at home. Working at home provides people with the flexibility of time management, benefits those who have difficulties with transportation, and saves the cost of hiring the office and facilities. People can share their work information through the Internet, and hold their meetings, conferences and seminars online. People can also communicate with their customers, advertise their products and conduct the selling process on their websites or some famous commercial websites such as Amazon and EBay.

As revealed by the graph, the rates of companies using the Internet are amazingly high!
As revealed by the graph, the rates of companies using the Internet are amazingly high!

They provide chances for companies to expand globally

The Internet also provides chances for companies to expand their reputation globally and to involve in international business. The Internet leads to the quick development of E-commerce, which creates both new challenges and opportunities for companies. A lot of companies have their own websites on the Internet and benefit remarkably from their online services. Online shopping and services become increasingly familiar to nearly everybody. Free services supported by advertising shifted some of the direct costs away from the consumer--temporarily. Services such as Delphi offered free web pages, chat rooms, and message boards for community building. Online sales have grown rapidly for such products as books and music CDs and computers.

Case study: EBay

EBay gains its popularity as one of the giant in online business. EBay.com is an online auction and shopping website in which people and businesses buy and sell goods and services worldwide. Millions of collectibles, appliances, computers, furniture, equipment, vehicles, and other miscellaneous items are listed, bought, and sold daily. In 2005, eBay launched its Business and Industrial category, breaking into the industrial surplus business. Some items are rare and valuable, while many others are dusty gizmos that would have been discarded if not for the thousands of eager bidders worldwide. Anything can be sold as long as it is not illegal or does not violate the eBay Prohibited and Restricted Items policy. Services and intangibles can be sold, too. Large international companies, such as IBM, sell their newest products and offer services on eBay using competitive auctions and fixed-priced storefronts. Regional searches of the database make shipping slightly faster and cheaper. Separate eBay sites such as eBay US and eBay UK allow the users to trade using the local currency as an additional option to PayPal. Software developers can create applications that integrate with eBay through the eBay API by joining the eBay Developers Program and creating software applications to support eBay buyers and sellers as well as eBay Affiliates (Eric Thompson, “Facts about EBay”). As of June 2016, there were more than 164 million active users on eBay.

Computer and electronic device industry is a lucrative business itself

The computer business itself is also considered as one of the most profitable business. The growing rise in the demand for computers and computer-related need engenders the births of hundreds of companies serving in this field. They produce computer hardware, invent and upgrade new application software, provide maintenance service and so on. Some companies can earn billions of dollars of profit a year, and they become giants in the business world with great influence on other companies and people’s lives. For example for the fiscal year 2015, Microsoft’s profit soars to 22.2 billion dollars. In the year 2015, Apple Company reported a profit of 18 billion dollars, the biggest in its history. A lot of billionaires are working in computer or computer related fields such as Bill Gates, Mark Zuckerberg, Lawrence Ellison and so on. Among them, Bill Gates was the wealthiest man in the world for several consecutive years. The computer business, described as a young, and dynamic area promises a great opportunity for people to experience.

Conclusion

In conclusion, computers play a vital role in business world today. There are hardly any companies running without computers. Computers help the world of business to meet its full potential. Computers are making real changes for the whole world and for everyone’s life!

References

Evans, Alan. Technology in action. 4th ed. New Jersey: UpperSaddleRiver, 2006.

Hopplin, John. “ An Illustrated History of Computer”. 2002. <http://www.computersciencelab.com/ComputerHistory/History.htm>

Howe, Walt. “A Brief History of the Internet”. Walt Howe’s Internet Learning Centre. 16 Jan, 2007. <http://www.walthowe.com/navnet/history.html>

Smiths, Jacob. “Business Internet Connectivity”. 16 Jan, 2004. <http://hwguide.computerworld.com/search/keyword/cwhw/Uses%20Of%20Computer%20In%20Business%20Management/Uses%20Of%20Computer%20In%20Business%20Management>

Thompson, Eric. “Facts about EBay”. 20 June 2006. <http://dvinfo.net/conf/archive/index.php/t-7637.html>

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