Introduction to network concepts and fundamentals

Network

Information is the backbone of the present economy. For almost all of the business and practical purposes, information in its various forms has been digitized into bits of ones and zeros.

This simple transformation has resulted major changes in the businesses. Not only the lines between different industries and organizational boundaries are blurred, but also most of our everyday products and services have become smart and knowledge intensive (Tapscott, 1996).

The sharing of information and applications within different business functions is critical for the well functioning of the business. Information systems networks provide such a linkage to share information and applications. Because speed is an important factor of competitive advantages, it is crucial that the firm can take the advantages of networks for quick delivery of its services and products. A well-defined network should be able to provide seamless text and multimedia information to the users -- consumers, businesses, and other participants. For this sharing to occur, networks must provide both links among various IT components and provide the ability for them to operate in unison. The ability to electronically connect with internal as well as external networks is increasingly regarded as a necessary capacity for organizations.

The declining cost in computing power has contributed to the growing use of knowledge contents in most of our products and services, ranging from smart automobiles, smart houses, smart telephones, smart cards, and smart apparel. The other major shift has been due to the digitization of information and the availability of networks.

Because in light of the available IT networks, the firms are required to coordinate their internal and external activities in such as a way to exploit the potential of IT and reshape their future strategies. That means, doing business effectively demands a fundamental shift in a firm's coordination capability. That means to gain sustainable advantages in business, a firm does not only require a flexible IT networks, but also needs to be able manage and coordinate its activities flexibly (Scott-Morton, 1991).

IT networks comprise a set of interacting IT resources that provide shared access to the firm. In actuality, an IT networks consist of several parts to bear separate responsibilities. The issue, therefore, becomes how to fit these parts together as to provide strategic advantages to the firm. This shared networks is an outcome of the firm's breaking away with functional perspectives and focusing on the firm-level phenomenon. Only by visualizing present and future needs of the firm, a comprehensive and well directed IT networks could be developed.