Lesson 3

Telecommunications
and
Networks
LEARNING OUTCOMES OF THIS UNIT:
• Explain the importance of telecommunications in your organization
• Explain the business benefits and disadvantages of networks;
• Identify the trends in telecommunication
• Explain the types of telecommunications network
• Specify the advantages and disadvantages of the client/server computing
• Explain how internet is enhancing value to business organizations
• Describe the models of e-commerce and
• Discuss the key features of e-commerce.

Froilan G. Cantillo, CCpE

Topic
Introduction
What Are Computer Networks?
What is meant by Telecommunications?
Types of Telecommunications Network
Client Server Computing
Network Computing
Trends in Telecommunications
The Internet
Difference Between Intranet and Extranet
E-Commerce

Froilan G. Cantillo, CCpE

Introduction
For the modern organizations to operate effectively, the links connecting its people and their
computers are vital. The network links provide the channels for information to flow continuously
between people working in different departments of an organization, or in different organizations.
This allows people to collaborate much more efficiently than before the advent of networks when
information flow was irregular and unreliable. These links allow hardware such as printers and
faxes to be shared more cost-effectively.
This unit focuses on the use of computer networks from the global network of the internet through
to small-scale networks. The benefits of networks are discussed. The basic trends and functions
of telecommunications networks are also explained.

Froilan G. Cantillo, CCpE

What Are Computer Networks?
A computer network can be defined as: “a communications system that links two or more
computers and peripheral devices and enables transfer of data between the components”.
Computer networks are themselves constructed on different scales. Small-scale networks within
a workgroup or single office are known as local-area networks (LANs). Larger-scale networks
which are national or international are known as wide-area networks (WANs). The internet is the
best-known example of wide-area network.

Froilan G. Cantillo, CCpE

What are the business benefits of networks?
Networks are vital to a business. They are important for the cost savings and improved
communications that arise from an internal network. Beyond this, they are truly vital, because
they help a business reach out and connect with its customers, suppliers and collaborators.
Through doing this a company can order new raw materials more rapidly and cheaply from its
suppliers and can keep in touch with the needs of its customers.

Froilan G. Cantillo, CCpE

Benefits of networks
The benefits that networks provide are as follows
• Reduce cost compared to traditional communications
• Reduce time for information transfer
• Enable sharing and dissemination of company information
• Enable sharing of hardware resources such as printers, back up, processing power.
• Promote new ways of working
• Operate geographically separate business as one.
• Restructure relationships with partners.

Froilan G. Cantillo, CCpE

What are the disadvantages of network technology?
To balance against the many benefits, there are, of course, disadvantages with introducing
networks.
The main disadvantages are:
• Overreliance on networks for mission-critical applications
• Cost of initial set-up and maintenance
• Disruptions during initial set up and maintenance
• Reduced security due to more external access points to the networks on wide-area networks
and the internet.

Froilan G. Cantillo, CCpE

What is meant by Telecommunications?
Communications over a long distance, as opposed to communication within a computer, or
between adjacent hardware pieces (Sousa & Oz, 2015)

The Importance of Telecommunication Networks and Networking in an Organization

Telecommunications networks and the use of these networks for communication (networking) is
important in today’s organization for the following reasons:
• Networking permits the sharing of scarce, critical resources such as software, printers, fax
machines and other peripherals.
• Networking allows users to share data. Users from different areas within the organization, as
well as those in different organizations, can all access common databases and this permits the
more efficient use of data.

Froilan G. Cantillo, CCpE

What is meant by Telecommunications?
• Networking is the key in making distributed data processing and client/server systems
feasible. It interconnects the computer systems of an organization so their computing power
can be shared by end users throughout the whole organization.
• Networks exchange the communication within the organization and between organizations.
Networking, therefore, can be used for applications such as information distribution and to
build strategic information systems.
• There is a trend towards electronic trade. Computer networks form the basis for electronic
trade.
• It enhances collaboration and communication among individuals both inside and outside an
organization.

Froilan G. Cantillo, CCpE

A telecommunications network model
The conceptual model below shows
a telecommunications network. It
illustrates that a communications
network is any arrangement where a
sender transmits a message to a
receiver over a channel consisting of
some type of medium. A
telecommunications network
consists of five basic categories of
components, those are terminals,
telecommunications processors,
telecommunications channels,
computers, and telecommunications
control software.

Froilan G. Cantillo, CCpE

Types of Telecommunications Network
There are many different types of telecommunications networks. From an end user point of view,
there are two basic types: wide area networks (WAN) and local area networks (LAN). It is
important to note that there is a growing trend toward the increased use of LAN’s and WAN’s as
an alternative to the use of terminals connected to minicomputers or smaller mainframes for end
user computing in many organizations.

Froilan G. Cantillo, CCpE

Wide Area Network (WAN)
Wide area networks (WAN’s) are
telecommunications networks that span a
large geographical distance.
These networks cover areas such as:
• a large city or metropolitan area;
• a whole country; or
• many countries and continents.
WAN’s may consist of a variety of cable,
satellite, and microwave technologies.

Froilan G. Cantillo, CCpE

Local Area Network (LAN)
LAN consists of a single network segment or several connected segments that are limited in
extent,
hence local.
• LAN’s use a powerful microcomputer with a large disk capacity as a file server or network
server that contains a network operating system program that controls telecommunications
and the use of network resources.
• LAN’s may be connected to WAN’s by communications processors forming a common
interface called a gateway.
• LAN’s allow end users in a work group to communicate electronically; share hardware,
software, and data resources; and pool their efforts when working on group projects.

Froilan G. Cantillo, CCpE

Local Area Network (LAN)

Froilan G. Cantillo, CCpE

Client Server Computing
Client Server computing is a grown trend in most organizations. Computing power has rapidly
become distributed and interconnected throughout many organizations through networks of all
types of computers.

Characteristics of a client/server network are:

• End user microcomputer workstations are the clients;
• Clients are interconnected by local area networks and share application processing with LAN
servers, which also manage the networks; and
• LANs may be interconnected to other LANs and wide area networks of client workstations and
servers.

Froilan G. Cantillo, CCpE

Client Server Computing
Benefits of client server computing include:
• clients (end users) can perform some or most of the processing of their business applications;
• LAN servers can share application processing, manage work group collaboration, and control
common hardware, software, and databases;
• data can be completely processed locally, where most inputs and outputs must be handled;
• provides access to the workstations and servers in other networks;
• computing processing is more tailored to the needs of the end users;
• increases information processing efficiency and effectiveness as users are more responsible
for their own application systems;
• allows large central-site computers to handle the jobs they do best, such as high-volume
transaction processing, communications network security and control, and maintenance and
control of large corporate databases; and
• clients at local sites can access the corporate super servers to receive corporate wide
management information or transmit summary transaction data reflecting local site activities.
Froilan G. Cantillo, CCpE
Network Computing
The growing reliance on the computer hardware, software, and data resources of the Internet,
Intranets, extranets, and other networks has emphasized that for many users “the network is the
computer”. This network computing, or network-centric, concept views networks as the central
computing resource of any computing environment. It appears to be the architecture that will take
computing into the next century.

Features of network computing include:

• Network computers provide a browser-based user interface for processing small application
programs called applets.
• Network computers are microcomputers without floppy or hard disk drives that are designed
as low-cost networked computing devices.
• Servers provide the operating system, applets, databases, and database management
software needed by the end users in the network.

Froilan G. Cantillo, CCpE

Network Computing
Peer-to-Peer networks
The emergence of peer-to-peer (P2P) networking technologies and applications is being hailed
as a development that will revolutionize E-business and E-commerce and the Internet itself. It is a
simple type of LAN which provides sharing of files and peripherals between PCs.

Froilan G. Cantillo, CCpE

Network Computing
Inter-Enterprise Networks
Many applications of telecommunications can be classified as inter-enterprise networks.
Businesses are using telecommunications to:
• Link a company’s wide area and local area networks to the networks of customers and
suppliers both domestically and internationally.
• Build new strategic business relationships and alliances with their stakeholders in an attempt
to increase and lock in their business, while locking out competitors.
• Reduce transaction-processing costs.
• Increase the quality of service.
• Connect to information service providers, and other external organizations to provide better
information for management decision-making.
Distributed Processing is where information-processing activities in an organization are accomplished by a
network of computers interconnected by telecommunications links instead of relying on one large
centralised computer facility or on the decentralised operation of several independent computers.

Froilan G. Cantillo, CCpE

Trends in Telecommunications
There is definitely a change in the business use of telecommunications. The trend toward more
vendors, services, advanced technologies, and open systems dramatically increase the number
of feasible applications. Telecommunications, therefore, is playing a more important role in
support of the operations, management, and strategic objectives of both large and small
companies. The difference between analogue and digital network technologies, the various
communication media, the trend towards open systems and the application trends should be
noted.
The trend is towards the pervasive use of telecommunications networks in support of business
operations, managerial decision-making, and strategic advantage in domestic and global
markets.

Froilan G. Cantillo, CCpE

Management Responsibility
Telecommunications is so important in organizations that any manager has to be aware of the
telecommunications trends in the industry, otherwise, the organization could fall in the trap of
poor decisions or investments in this minefield. This could lead to a situation where the
organization is unable to compete with rival organizations. A basic knowledge of the technology
trends is also important to enable the managers to make the right decisions in obtaining and
managing telecommunications
technology in your organization.

Froilan G. Cantillo, CCpE

The Internet
The simplest way in which the internet can be described is as a global network system made up
of smaller systems.
The history and origin of the internet as a business tool is surprising since it has taken a relatively
long time to become an essential part of business. The internet was conceived by the Défense
Advanced Research Projects Agency (DARPA), an American intelligence organization in 1969.
The internet began to achieve its current form in 1987, growing from systems developed by
DARPA and the National Science Foundation (NSF). The internet is only the latest of a series of
developments through which the human race has used technology to disseminate information.

Froilan G. Cantillo, CCpE

The distinguishing features of the Internet:
• The Internet does not have a central computer system or telecommunications centre. Instead
each message sent on the Internet has an address code so any computer in the network can
forward it to its destination.
• The Internet does not have a headquarters or governing body.
• The usage of the Internet is growing rapidly. This high level of traffic on the net makes it very
slow. That is a major problem.
• The most popular Internet application is e-mail. Other applications include assessing files and
databases from libraries and organizations and holding real-time conversations with other
Internet users.
• The Internet supports bulletin board systems.

Froilan G. Cantillo, CCpE

Difference Between Intranet and Extranet
Intranet is a private network within a single company using internet standards to enable
employees to share information using e-mail and web publishing.
Extranet is formed by extending the intranet beyond a company to customers, suppliers and
collaborators.

Froilan G. Cantillo, CCpE

Important Key Concepts
Firewall: a specialised software application mounted on a server at the point where the company
is connected to the internet. Its purpose is to prevent unauthorised access into the company from
outsiders.
World Wide Web: the most common technique for publishing information on the internet. It is
accessed through web browsers which display web pages of embedded graphics and
HTML/XML-encoded text.
Businesses’ use of the Internet is expanding rapidly for several reasons:
• ease of world-wide communications with colleagues, consultants, customers and suppliers;
• links workstations together to form virtual work groups to work on joint projects such as
product development, marketing campaigns, and scientific research;
• allows for collaboration through Internet’s global e-mail and bulletin board systems (BBS);
• access to a vast range of information provided by the networks on the Internet;
• the Internet represents the wave of the future in business telecommunications and
• special software programs are required to access the Internet.
Froilan G. Cantillo, CCpE
E-Commerce
Electronic commerce (e-commerce) is defined as sharing business information, maintaining
business relationships, and conducting business transactions through the use of
telecommunication networks. What is referred to as traditional e-commerce has been conducted
using EDI, enterprise-wide messaging systems, fax communication, bar coding, and other private
local area network and wide area network systems. E-commerce is also about reorganizing
internal business processes and external business alliances and creating new consumer-oriented
products and services globally. The term e-business is sometimes used interchangeably with the
term e-commerce to refer to this broader concept.

Froilan G. Cantillo, CCpE

E-Commerce Models
There are several forms of e-commerce, or e-commerce models, based on who is involved in
the transaction:
• Business-to-business (B2B). The business-to-business (B2B) model represents
interorganizational information systems in which a company handles transactions within its
own value chain or with other businesses and organizations.
• Business-to-consumer (B2C). The business-to-consumer (B2C) model represents retailing
transactions between a company and individual customers.
• Consumer-to-consumer (C2C). The consumer-to-consumer (C2C) model represents
individuals who are selling and buying directly with each other via a Web site.

Froilan G. Cantillo, CCpE