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242 Part Two Information Technology Infrastructure

FIGURE 6.1 THE DATA HIERARCHY

A computer system organizes data in a hierarchy that starts with the bit, which represents either a 0
or a 1. Bits can be grouped to form a byte to represent one character, number, or symbol. Bytes can be
grouped to form a field, and related fields can be grouped to form a record. Related records can be
collected to form a file, and related files can be organized into a database.

PROBLEMS WITH THE TRADITIONAL FILE

ENVIRONMENT

In most organizations, systems tended to grow independently without a
company-wide plan. Accounting, finance, manufacturing, human resources,
and sales and marketing all developed their own systems and data files.
Figure 6.2 illustrates the traditional approach to information processing.
Each application, of course, required its own files and its own computer
program to operate. For example, the human resources functional area might
have a personnel master file, a payroll file, a medical insurance file, a pension
file, a mailing list file, and so forth until tens, perhaps hundreds, of files and
programs existed. In the company as a whole, this process led to multiple
master files created, maintained, and operated by separate divisions or depart-
ments. As this process goes on for 5 or 10 years, the organization is saddled
with hundreds of programs and applications that are very difficult to maintain
and manage. The resulting problems are data redundancy and inconsistency,

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