Chapter 3.

7 Use of Systems and Data

3.7 (a) The Value of Data and the Use of Databases

Data can be very valuable to an organisation providing it can be clearly analysed. An

early example of the value of data is the use of stock control systems. As the data
about stock can be updated each time a stock item is sold, the stock situation is always
up-to-date. This means that, as soon as the amount in stock falls below a reorder
level, an order can be placed. Indeed, many systems trigger the reordering
automatically as soon as the number in stock falls below its reorder level. This is
often done by the system sending the order to the supplier using electronic data
interchange (EDI). This is discussed in Section 3.7 (c).

This automatic stock reordering has two cost effects. First it means that the
organisation should rarely run out of stock which would cause a loss of sales if it were
to happen and, hence, loss of income. It also means that the organisation should not
need to store large quantities of stock which would lead to high inventory costs.

If the organisation also keeps data showing the rates of sales of products, the system
can recognise changes in these rates and so change its ordering patterns.

Thus, data about products in stock and rates of sales is valuable as they improve the
profitability of the organisation.

In order for data to be of value they must be accurate and up-to-date. Often data are
inaccurate due to them not being frequently updated. If the sales figures are only used
once a week to update the stock database, the stock levels are soon out of date and the
data have little value.

These days, banks offer services other than banking. They offer mortgages, insurance
and business support. If a bank is considering a loan, it is important that the bank is
aware of the risks involved. Keeping data about previous borrowers, such as age,
income and social background, and comparing the data for a potential new borrower
with the historical data can help to determine whether or not to make the loan. This is
often done using artificial intelligence (AI) techniques and leads to fewer people
reneging on their loan. Thus, the data used is very valuable to the bank.

Another example is of an international company that has run two advertising

campaigns in two different countries. The one was much more successful than the
other. It is important that the company keeps data about the two campaigns in order
to determine why the one campaign was more successful than the other. This will
lead to better sales campaigns in the future, improving the profitability of the
company.

However, how does the senior executive in one country know what is happening in
other countries? Modern companies keep databases that can be accessed on a world-
wide basis. In order to do this, value added network services (VANS) are used.
These simplify the exchange of data between users of the service by using computer
networks.

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In these systems, users plug into the interface provided by the VANS operating
company and the software does everything else. A VANS may operate in a single
company or may be of use to several companies. For example, estate agents may
share a VANS in order to match potential buyers with sellers over a much wider area
than is possible if each estate agent only has access to their own data. This system is
also used by solicitors having access to local authority databases for conveyancing
purposes. Eventually VANS will operate on a world-wide basis. Thus data that was
only of value to a small number of users is now of value to many more. This means
that the data have increased in value.

One of the problems with so much data being available is trying to sift the data for
useful information. This is often achieved using data mining techniques. A lot of
work is going on to develop sophisticated data mining software which looks for
patterns in vast quantities of data.

The ability to sift through data to find patterns such as

• finding people who are most likely to respond to 'junk mail',

• which products (such as bread and milk) are most often sold together in a
supermarket,
• which people are likely to live longest,

can lead to much better targeting of customers with the result that there are better
returns on investments.

A great deal of work is being done on data mining as many companies can make use
of the results. Indeed, some companies sell lists of people who may be valuable
customers to other companies.

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3.7 (b) Standardisation

In order to be able to share data successfully some form of standardisation is needed

so that users can send, receive and interpret the data correctly. Some mention of this
was made in Chapter 1.6 in the AS text. Some typical standards used for files are
given below.

Text files. These are used to hold characters represented by the ASCII code. Text
files are used to transfer data between application packages. The data consists of
individual characters and there is no formatting applied to the characters.

Comma Separated Variable files. These are used to transfer tabular data between
applications. Each field is separated by a comma.

Tab Separated Variable files. These are used to transfer tabular data between
applications. Each field is separated by a tab character.

Standard Interchangeable Data files. These are used to transfer tabular data
between applications. They are not common outside the UK education market.

Rich Text Format files. These are a complex format used to store data from a word
processor. They include information about fonts, sizes, colour and styles.

Picture files. These are used to represent sound/pictures in digital format. There are
many different formats such as BMP (bit mapped), JPEG (Joint Picture Experts
Group), GIF (Graphical Interchange Format) and MPEG (Moving Picture Experts
Group). JPEG and MPEG involve compression techniques. It is these techniques that
allow pictures to be quickly transferred over the Internet. MPEG has also allowed the
introduction of many more television channels through a more efficient use of the
bandwidth available over the media used.

Sound files. As with picture files, there are many different formats that store sound in
digital form. WAV files are common on PCs. Storing sound requires a great deal of
memory. CDs sample at the rate of 44,100 samples/sec and DVD (Digital Versatile
Disk) at 96.000 samples/sec. Thus 3 minutes of music requires 3 x 60 x 96,000 =
16Mbytes. A typical DVD can hold 4.3 Gbytes or 13 hours of music.

Without standards there would be a proliferation of formats and it would not be

possible to move data electronically. Not only must file formats be standardised but
also communication methods. For example, if two computers need to communicate,
it is essential that both are sending and receiving data in the same format. It is useless
if one computer sends in one format and the other is expecting the data in a different
format. As communications are world-wide and there are a multitude of computer
manufacturers, it is essential that standards are set for consistency.

The method of transferring data over a wide area is usually by means of ISDN
(integrated services digital network) connections. ISDN is used by telephone
companies to connect digital exchanges. Most homes use analogue connections to the
local exchange but after that ISDN is used as shown in Fig. 3.7(b)1.

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 Digital links

Digital
Exchange

Digital
Exchange
Digital
Exchange

User

Analogue links User

Fig. 3.7(b)1

ISDN has a standard format that is used world-wide. There are two standard ISDN
services known as primary rate access (ISDN 30) and basic rate access (ISDN 2). The
difference is the number of channels and the methods used to deliver the services to
the user.

ISDN 2 will probably be used by most small business and individual users. It
provides two channels at 64kbps (B-channels) and a signalling channel of 16kbps (D-
channel). The three channels are multiplexed onto a single communications medium.
Data is packaged into frames, one type for transmission from the network to the
terminal and the other for transmission from the terminal to the network. Each type of
frame consists of 48 bits that have to be in a prescribed order. This ensures that the
data can be reassembled properly when received. This system can use the same wires
as in current telephone networks.

ISDN 30 provides 30 B-channels and one D-channel. It is used by large customers

and is usually delivered by fibre optics. Its operation is basically the same as ISDN 2
but 30 channels are multiplexed instead of two.

In order that data are understood when received, it is not sufficient to package data
into a format that can be sent along ISDN connections. The data may represent
sound, pictures, text or many other things. It is necessary to package this data into
some standard format first. The standard used is Open Systems Interconnection

6.1 - 4
Reference Model usually simply called the OSI model. The OSI model is simply a set
of rules (protocol) for the transmission of data from one piece of hardware to another.
These rules will have to cover the medium used for the transmission and then rules
about the software itself. This is an obvious subdivision for the rules that are needed,
but these can also be subdivided. In all the OSI model has 7 subdivisions (other
models have more or fewer, but all work on the same basic principle). The point being
that if the whole protocol was treated as a single entity then every time a small change
was necessary, perhaps a different peripheral being added to a system or a different
software being used, the whole protocol would need to be altered. However, in the
OSI system, only one of the subdivisions (actually called ‘layers’) needs to be altered.

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3.7 (c) Computers and Communication

Computers are now used to aid communication between many devices and to provide
extra facilities that were not available with the old telephone networks.

Voice mail digitises spoken messages and stores them on disk. When recipients
access the messages they are converted back into sound.

Digital telephone systems provide many facilities. Because computers can maintain
very large databases, it is possible for users to have itemised bills, recall stored
numbers and to have accurate timing of calls. Although itemised bills can be sent out
on a regular basis, users can, using the Internet, access their own accounts at any time
and see what calls they have made and the costs of these calls. These systems also
allow the use of voicemail. Mobile phones rely heavily on computers to route calls.

Electronic commerce (e-commerce) is becoming more popular. It is quite common to

order goods over the Internet. Many companies use computers to maintain large
databases that can be queried by customers online who may then place orders. An
extension of this is EDI (electronic data interchange). EDI allows users to send and
receive order details and invoices electronically. It differs from email in that the data
is highly structured into fields such as sender's name, recipient's name, order number,
quantity, product code, whereas email is completely unstructured in that it is simply
text. Fig. 3.7 (c)1 shows how this works. Many companies insist on using this
method of ordering and invoicing.

Retailer Customer
Order
Payment
Invoice
Computer Delivery Note
Computer
Price List

Fig. 3.7 (c)1

Teleconferencing allows a group of people to communicate, throughout the world,

simultaneously using telephones and group email. Video conferencing is similar to
teleconferencing but also allows users to see one another. These methods of
communication have reduced travel costs as meetings can be held without people
leaving their desks. Originally, special rooms were required for videoconferencing.
This is no longer necessary as videoconferencing can now be done using standard PCs
and a video camera. In this system whiteboards can be used to produce drawings that
can be transmitted electronically.

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3.7 (d) New Business

The Internet allows communication on a world-wide basis. This means that

advertising can be relatively cheap. Organisations can advertise all round the world
from a single site. There is no need to advertise in each individual country. It also
means that it is easier to sell goods throughout the world. Organisations can create
Web sites that advertise their goods and let users have access to their product
databases. It is also possible to allow users to order, and pay for, goods on the
Internet. This means that people will be needed to create Web sites, to keep them up-
to-date and to manage large databases of goods and customers. Users can transmit
their details and orders over the Internet at very little cost. The main problem is
security of information and people are needed to create secure systems for EDI.

Another area of expansion is in providing information. For example, medical

advances can be posted on the WWW that can then be accessed world-wide. Indeed,
doctors can request advice using the WWW.

The use of the Internet by media reporters can mean that news can be quickly updated
and that information is in electronic form. This means that it can be manipulated for
use on other media.

Estate agents can set up sites that enable them to sell property throughout the world.
The applications are endless and you should keep abreast of modern developments as
they are published in the media. It is also worth reading Business @ the Speed of
Thought by Bill Gates published by Penguin Books (ISBN 0140283110).

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3.7 (e) Training

Training in the use of IT is essential if users are to make the best use of it. Young
people are growing up in an IT environment and receive basic training in its use.
However, older generations find using IT daunting and need careful and appropriate
training. This may be as simple as switching on a PC and loading software or may
involve the use of particular packages. In the latter case, the packages taught need to
be pertinent to the jobs carried out by the learner. It is very easy to alienate learners
by teaching them how to use software facilities that they will never use.

It is also important that courses provide sufficient time for the learners to practise new
skills and to be provided with sufficient notes to enable them to redo tasks, set during
the course, at a later date. Online help is not enough; most people prefer to have their
notes in printed form. This is because they need to look at their work and their notes
at the same time. Adjusting the size of windows so that the work and the notes are
both on the screen at the same time is often unsatisfactory. Also, learners like to flick
back and forth through their notes and this is much easier when the notes are on
paper.

IT is an ever-changing subject, which means that users continually need retraining.

Application packages are continually being upgraded and new applications are being
created daily.

IT is changing the way things are done all the time. Robots weld cars, what is to be
done with the people who used to do the welding? They will have to be retrained to
do a different job. Bank clerks used to add up columns of figures, now they press
keys on a keyboard. However, they are now expected to provide new services to the
customer other than handling cash and cheques. They have had to be retrained as
sales persons as banks now sell mortgages, insurance and other services.

Organisations are setting up help desks for customers to contact when they have a
query. At present, most of these help desks involve large numbers of people. In
future a lot of this help will be provided electronically by means of databases that
hold data about frequently asked questions (FAQs). This means that the operators of
the help desks will have to be retrained to create these databases.

Training in the use of IT is not sufficient in itself. Employees can be trained to use
email but also need training in how email can be used to enhance their work. Instead
of groups of workers meeting, say, once a week, the workers can keep one another
informed of progress when it happens. This means that all workers on a project know
the current stage of development of that project. This speeds up the work. However,
training is needed in these new working methods, particularly to prevent an
overloading of email communications.

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3.7 (f) Changing Work Patterns

These were mentioned in the previous Section. At one time a sales person went to a
customer with a catalogue and a price list. If a customer wanted something unusual,
the sales person had to go back to the office to get details. Now a laptop and a
modem can allow the sales people to access the company's database from customers'
premises. This allows them to spend more time with customers.

A similar example is that of selling double-glazing. At one time someone went to the
customer's house and measured all the windows. The next step was to go back to the
office and prepare a quotation which was then sent to the customer. Now, the sales
person can use a laptop, with suitable software, to prepare a quotation on the spot.

It is quite common for people to work on a project in the office, email it home and
continue working on it later at home.

Like banks, factories have seen major changes in working patterns. Fewer people are
needed in the assembly process because of more machines being used, many of them
intelligent and robotic. However, more technicians are needed to maintain the
automated plant. This seems like a balance of job lost against jobs gained, but it is
more complicated because the jobs lost are normally low skill while the new jobs are
high skill. This movement of skill levels in the work force has major implications for
the education of people and also means that many who were employed may not be
able to learn new skills and hence get new jobs. There is a consequent social problem
in society of a whole new underclass of people who are unable to gain satisfactory
employment.

Office personnel use computers to produce invoices using databases of orders,

delivery notes and customers. The company payroll is fully computerised with
money being transferred electronically from employer's bank to employees’ banks.
No longer do wages clerks have to calculate wages and count money into pay packets.

Hotel receptionists have access to a database for all the hotels in a group. This means
that they can now book hotels for customers other than the one in which they work.

Staff who work in stores only take stock a few times a year instead of weekly. Stock
levels are kept on computer databases and need to be checked occasionally in case
stock is removed without passing through point-of-sale terminals. (This may be due
to products being damaged or stolen.)

Teachers and lecturers often set assignments using computer networks. Students then
post their work to their tutors electronically. Tutors view the work on screen and
return the marked work, with comments, electronically.

People expect much higher quality in documents, whether it is posters or letters.

Students expect teaching materials to be of a higher standard. This book has been
produced in electronic format so that you can read it on a screen and print it off for
later use. This means that your school or college only has to have one copy of the
book and it can be shared using a computer network.

6.1 - 9
Products can be manufactured to a much higher standard because of the use of
computerised machines and robots. This increase in accuracy has lead to an increase
in quality. Self- assembly furniture is easier to put together because the parts are
made more accurately. Children's building toys look much better because the
components are more accurately made and are of better, more consistent, quality.

This increase in quality has led to fewer faults in end products such as motor cars.
This means that, in the case of motor cars, mechanics spend more time servicing
vehicles and less time correcting errors in manufacture. However, the increase in
quality has also led to a reduction in the need to service motor vehicles.

6.1 - 10
3.7 Example Questions

Example questions are not offered here as all the work is either a repeat of previously
visited work or is based on definitions that can be taken straight from the text.
As all the examiner comments have already been made, any content here would
simply be a repeat of what has gone before.

6.1 - 11