FORM 4
COMPUTER STUDIES
CHAPTER 2
APPLICATION AREAS OF
INFORMATION AND COMMUNICATION
TECHNOLOGY (ICT)
Financial systems
Financial systems enable organizations to
manage their finances.
They include:
1. Payroll systems.
2. Accounting systems.
3. Banking systems.
1.Payroll systems
A payroll system is software designed to
organize all the tasks of employee payment and
the filing of employee taxes. These tasks can
include keeping track of hours, calculating wages,
withholding taxes and deductions, printing and
delivering checks and paying employment taxes
to the government.
2.Accounting systems
Accounting systems are popular in business
management. There are six key business
accounting activities/subsystems:
a) Customer orders entry and billing
Customer orders entry and billing subsystem
records incoming customer orders, authorises
delivery of items or services ordered and
produces invoices for customers who do not
pay in advance or on cash basis.
b)Inventory management
Inventory management is used to
keep track of the items in stock and
help the management determine
which items to reorder. This helps
the management to have enough
stock at all times to meet the needs
of the customers.
Manual or electronic?
c)General ledger accounting
General ledger accounting is used to keep track of
how much a business makes and its worthiness by
summarising the financial transactions.
It produces reports on income, sources of income,
expenses, and the net profit or loss earned.
A summary report of these transactions is called a
balance sheet and is usually generated at the end
of an accounting period.
Accounts receivable
Accounts receivable system keeps track or records
of the amount owed by each customer. This helps
the management to make a follow-up by billing the
customers for overdue payments.
Accounts payable
Accounts payable system keeps track of the amount
the business owes others e.g. suppliers, tax
organisations, transport e.t.c. Hence, it helps the
management to produce cheques for payment of
these amounts.
3. Banking systems
The banking industry was one of
the earliest consumers of
information and communication
technology. The computerized
banking services include:
Processing customer transactions
Computers are used in banks to carry out financial
transactions such as recording deposits, withdrawals and
calculating interests on savings and loans. Such systems
also generate reports on the current status of accounts.
In most banks, these transactions are entered via
terminals, which are connected, to a central computer for
centralized processing. The tellers have revolutionized
banking activity by offering 24 hour service to customers
and more flexibility in cash deposits and withdrawals.
Cheque clearing and processing
Computerised cheque clearing and processing is made
possible due to the special characters on cheques printed
using ink containing magnetic particles. The characters
identify the bank in which the cheque is drawn, the
customer account number, the cheque number and the
amount of the cheque.
Usinga magnetic ink character reader, these details are
automatically entered into a computer for cheque
processing. Manual processing used to take lots of time
but with computer systems, millions of cheques are
processed every day hence improving efficiency in service
delivery to customers.
Electronic funds transfer (EFT)
Electronic Funds Transfer (EFT) is the movement
of money using information and communication
technology. When a cash dispenser is used, the
amount withdrawn by a customer is deducted
from his/her account. Another example is when
paying for goods and services using a credit
card. Payment is transferred electronically from
the customers account to the recipients
account.
Internet Banking
Also called e-banking, Enables users to access their
bank accounts through the internet. The user can
query account statements, pay bills and transfer
funds electronically.
Mobile banking
M-banking is whereby an account holder in a bank
can perform banking transactions using his /her
mobile phone. The transactions may include ; cash
transfer (M-pesa), settling bills electronically and
performing account queries.
Retail systems
Computers are becoming more and more
popular in retail stores such as supermarkets,
distributor outlets etc. Computers are used in
such stores for:
1. Stock control
2. Transactions handling at the electronic
point of sale terminals (EPOS)
1.Stock control
A computerised stock control system enables a
user to manage his/her stock more efficiently.
This system is used to track what is in stock and
what needs reordering so as to reduce the risk of
under stocking or overstocking. Overstocking ties
up valuable space and capital that could have
been used for other valuable items. On the other
hand under stocking causes customer
dissatisfaction.
2. Transactions handling at the electronic point
of sale terminals
An electronic point- of -sale (EPOS) is a computer
terminal used in retail stores to input and output data
at the point where sales are transacted e.g. at the
supermarket checkout counter. An EPOS terminal has
all facilities of a normal cash register, but with
additional direct data capture devices, e.g. bar code
reader, card reader, a monitor and a receipt printer. In
such retail stores, goods are identified by means of bar
codes. For each item, a record is stored in secondary
storage medium containing: the item number, item
name or description, quantity in stock and the price.
Transactions at the point of sale terminal may involve the
following steps:
1. The bar code reader (wand) is passed over the items bar code.
The bar code is automatically converted to the item number, e.g.
2160, which is read to the computer.
2. Using this number, the computer searches for the item with a
corresponding number in the products database.
3. Once the record is found, its description and price lookup file is
used for processing the sale.
The advantages of electronic point of sales terminal systems are:
1. Correct prices are used at the checkout counter.
2. Faster since the attendant does not have to enter details
manually.
Reservation systems
Reservation systems are distributed networked systems
that are used mainly to make bookings in areas such as
airlines, hotels, car-rental, theatres etc. Bookings are
made from a remote terminal connected to a
centralised computer database. To access the database,
a customer makes enquiries via the remote terminal
connected to the central computer.
Forexample to make airline booking enquiries such as
finding out the seats reservation a customer uses a
remote terminal in the nearest booking office. The
response is immediately available to the customer
within a few seconds.
Educational systems
Computer aided instruction (CAI)
Computer aided instruction refers to the use of a
computer to learn, drill and practice particular
educational principles. For example when learning a
new concept in foreign language such as Japanese, the
learner is presented with the explanation of the
concept. The computer then presents questions from
which the learner is to select the correct answer.
Some CAI programs present learning content in form of
educational games, which makes learning more fun
especially for young children. A good example is a
Computer aided learning (CAL)
Another educational technique that uses computers
is computer aided learning. Unlike computer aided
instruction, which is meant to drill the learner,
computer aided learning present’s educational
materials the way a teacher does in a classroom. For
example, the program may pose a question and
depending on the learner's performance, it may
present new content or revisit the topic.
In order to make learning effective, most computer
aided learning programs have clear graphical
presentations such as video clips and voice for
demonstrating or explaining difficult concepts.
Electronic learning (e-Learning)
In e-Learning, lessons and lectures are
presented from a central site and the
presentation is transmitted to remote
conference terminals or displayed on TV
screens. The learner can also access learning
material on the internet, sit for online
examinations and receive results the same
way. Learners therefore do not need to go
physically to a college.
Computer based simulation
Computer based simulation refers to the science of
representing the behavior of a real-life situation by
using computerised models. Simulation has become
very popular in learning and training institutions. For
example, in distant or e-Learning, where a learner is
not in physical contact with a trainer, simulation
software can be used to provide the learner with clear
illustrations about a certain concept or skill.
Simulation programs are mostly used in educational
areas where practical skills have to be learnt like
training drivers, pilots, engineers etc. have to be
instructed using a virtual environment.
Industrial system
The application of computer technology in industrial or
manufacturing processes has become one of the most
effective methods of automated production. This has
resulted in tremendous improvement in productivity.
Industrial plants such as motor vehicle manufacturers,
chemical plants, refineries and mining plants use
computer systems in a number of ways. Some include:
1. Computer aided design and manufacturing.
2. Simulation.
3. Process control.
Computer aided design/computer aided manufacturing
Computer aided design Computer aided manufacturing (CAD/CAM)
is an integrated system that allows products that have been
designed using design application Software, to be transmitted into
an automated manufacturing system for the product to be
manufactured as per the computer model. For example design of
motor vehicle brake pads involves designing the model using
computer aided design software then feeding it to an automated
machine which engineers the required shape and dimensions as per
the specifications. One application of computer aided
manufacturing is the use of robots to carry out assembly line
operations. A robot is a computer controlled device that emulates a
human being in carrying out operations that would otherwise be
hazardous, repetitive and boring to a human being. Such operations
may include welding, lifting heavy objects; spray painting of vehicle
bodies, removing red-hot materials from furnaces etc.
Industrial simulation
Simulation allows some activities that would otherwise
be expensive and dangerous in real life situation to be
put under test. For example, a car or plane crash test
simulation is the use of a virtual model on the computer
screen that attempts to represent the real situation or
object. This enables the manufacturers identify the
weaknesses of the real situation or object hence put the
correct reinforcement to their designs. E.g. motor vehicle
seat belts can be tested for their effectiveness in case of
a car crash using a computer model. The general name
of using computer models in such circumstances is
known as nondestructive testing (NDT).
Process control
Computerised process control refers to the use of
a computer system to control an ongoing physical
process especially in manufacturing. Such process
controls may include regulating temperature,
pressure, fluid flow etc. Computerised process
control is mostly used in petroleum refineries,
chemical plants and other manufacturing
companies to manage machine intensive
processes.
Scientific and research systems
Computers have a wide variety of applications in
science, research and technology. Some of which
are:
1. Weather forecasting.
2. Medical research.
3. Military and space exploration science.
Weather forecasting
Modern weather forecasting techniques have been automated using
computerised systems; hence weather predictions are more
accurate and reliable. Due to the large volume of data collected
from rainfall, air pressure, humidity, temperature, wind speed and
cloud cover, computers help in analysing, processing and predicting
weather patterns using such data.
Another application of computers in weather forecasting is the use
of geographical information system (GIS) and the geographical
positioning system (GPS). This system represents geographical data
in graphical form by positioning and superimposing it on the world
map. Geographical information system is used to represent data on
weather patterns in a clearer and coherent manner on a world map.
Similarly, the path of storms can be accurately tracked and
predicted. Such information is very important for the aviation
industry and many other sectors of the economy.
Medical research
In health sciences, health professionals use computer
technology for diagnosis, keeping patients' records,
inventory control etc. Computers are now being used to
control devices that help to care for the handicapped such
as the deaf, blind, bed ridden etc. In some health
institutions, a more specialised computer system referred to
as an expert system may be in use. An expert system is an
interactive system that generates conclusions from
captured data by comparing it with a set of rules held in a
database called a knowledge base. The system emulates
the reasoning of a human expert in a narrow field of
specialisation. Expert systems have been developed to help
medical professionals diagnose illnesses more accurately in
Military and space exploration science
The dynamic growth in military, space science and
exploration would not be a reality today were it not for
computer technology. Space exploration and military research
bodies such as America's national aeronautics and space
administration (NASA) make extensive use of computer
systems, for research, design, development and control of
unmanned spaceships, aeroplanes and missiles.
Marketing
Without proper marketing, a business cannot
survive in a competitive environment; hence
computers are being used in a number of ways to
enhance marketing. These include:
1. Electronic commerce or e-business
2. Electronic presentations
3. Advertising
Electronic commerce/e-business
E-commerce is a new way of doing business where the
transactions are carried out electronically without
physical interaction between the seller and buyer. For
example a customer may decide to buy an item through
the Internet by visiting the supplier's web site, selecting
the item and placing it in a virtual shopping tray. The
website tracks the whole session as the customer chooses
various items and calculates the total bill. Payment is
then made through a cheque, credit card or through
electronic funds transfer. Once the payment is made, the
item is shipped to the customer.
This method of trade has enabled people to do business
Electronic presentation
Usingcomputers, marketing agents can create exciting
presentations concerning the products of a business and
present them to the audience using presentation software.
Electronic presentation adds value to traditional marketing
techniques because they are attractive.
Advertising
Usingsimulation, presentation and animation software, it is
possible to design catchy advert materials and video clips.
Such materials can then be displayed on billboards,
broadcasted over a television or placed on the Internet.
