Computer Networks for Productivity Gains

By Joel G. Siegel, Frank Grippo, and Annie Amit

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Computer networks have many practical business applications. Local Area Networks (LAN), Wide Area Networks (WAN), and mobile wireless networks are of immense value in the business world. All three are tools to accumulate and analyze business-related information to make informed decisions.

There are many advantages to networks, including the sharing of data, software, and hardware within an organization. A network is fast, cost-effective, and promotes increased worker productivity. Networks allow computer administrators to have standardized configurations. All computers can access, revise, add, delete, and update data on a centralized file server.

One LAN can be connected to other LANs over any distance via telephone lines and radio waves. If a company has multiple office buildings, a WAN can be used to share business files and accounting information across the country. A WAN is a geographically scattered telecommunications network that joins together LANs scattered in different places.

Networks are used daily by:

  • Information systems and network managers, along with support staff, that operate and maintain the system.
  • Application system developers that set up and modify the network.
  • Business managers that deal with network staff and make informed business decisions.
  • Customers and vendors of a company, who may need to be connected to the company’s network to obtain relevant data. (Outsider-approved use of a network is referred to as extranet.)
  • Security personnel that use networks in order to implement security procedures to safeguard software and hardware.
  • Financial managers and analysts that are involved with appraising the funding for network equipment acquisitions.
  • Accountants that have to audit the financial records on a company’s network. Auditors can use software packages such as Microforge’s Network Auditor 3.0 (, which will check a computer network for faults or changes and determine exactly what hardware and software is installed. It also tracks software legitimacy.

The program keeps all the information it gathers in a central database. It allows the auditor to audit machines individually, and define exactly what information is stored.

Networked Accounting

There are many benefits to networked accounting, which is when accounting software resides on a server and is accessible by all PCs on the network connected to that server. Networked accounting enables companies to improve customer service by giving immediate access to customer accounts. When customers call with inquiries, their information can be immediately accessed, translating into greater customer satisfaction and more efficient business practices.

Networked accounting also helps improve managerial decision making by giving management immediate access to financial information. Managers have the ability to monitor cash flow, spot problem areas in receivables or inventory, and review the company’s daily fiscal condition.

Finally, networked accounting saves time and money. Networked accounting systems allow employees to perform multiple tasks simultaneously. For example, one employee can enter orders received while another calculates payments to vendors. Accounts payable employees do not have to wait for the accounts receivable employees to finish their tasks. Payroll operators can enter information while managers are preparing payroll report data.

System Security

Systems should include sophisticated security and password features that allow users varying degrees of access. For example, a customer service representative might have access to individual account balances but not to employee payroll data.

Networks and Business

After applications have been centralized, the next step is to centralize files and directories so databases are accessible from every computer. Files can also be shared between members of a group, who often work together on a single file.

In this approach, each member works on a common document that can be modified many times in its lifetime. A version management tool is a useful means for distinguishing between versions. Instead of storing each copy made by the members, only the changes are stored, in addition to the original version. This allows better workflow because everybody is in a state of interaction with the other members asynchronously.

Another approach is a groupware interface, which allows employees to work on the same document at the same time. This means, simply, “what you see is what I see.” Groupware allows for simultaneous work by people who are not physically in the same location. Applications and files are shared through a centralized server, which provides all the necessary communication resources.

Wireless Networks

The problem with wired networks is their lack of mobility. Workers like being able to move around the office while remaining in contact with the network. With wired networks, users have to stay in one physical location. Wireless networks, on the other hand, allow users to access information wherever they want, even at remote locations.

Wireless networks involve data carried over radio waves much like cordless phones. Most wireless LANs are not completely wireless; a wireless access point must usually be connected to a standard Ethernet network. Portable computers or devices must be equipped with a networking card to access the wireless network.

Moving too far from an access point will cause a disconnection from the network. The effective range of most units now is about 100–150 feet. As a user gets farther away, the connection becomes less reliable and the transmission becomes slower. As a result, many companies will set up their networks so that a user’s computer will automatically switch to the closest access point.

Setting up access points requires a good deal of configuration planning and implementation. Installers have to take into consideration walls, ceilings, and building materials. Someone should look at a blueprint and map the desired access range.

Security Issues

One disadvantage of a wireless network is that someone can easily hop onto a system, similar to the way people steal phone numbers from cellphone users. If a wireless range extends past an office, someone on the outside could actually access network resources and steal bandwidth. Some people roam the city with a laptop, looking for wireless leads.

Because wireless networks are not as secure as wired networks, security safeguards are a necessity. One option is a wired equivalent privacy (WEP), which establishes password protection for a wireless access point. Making a wireless network secure is not as simple as making a wired network secure, and firewall and other network security should still be enabled on the wired portion of the network, in case wireless access is compromised.

Joel G. Siegel, PhD, CPA, is a professor of accounting and information systems at Queens College, City University of New York.
Frank Grippo, CPA, is an associate professor of accounting at William Paterson University, Wayne, N.J.
Annie Amit works in the accounting department at Apple Bank.




















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