Managers need to determine what types of hardware and software will satisfy their current and future business needs, the right time to buy the equipment, and how to protect their IT investments. This does not imply that managers need to be experts in all areas of technology; however, building a basic understanding of hardware and software can help them make the right IT investment choices.

Information technology (IT) is any computer-based tool that people use to work with information and support the information and information-processing needs of an organization. Information technology can be composed of the Internet, a personal computer, a cell phone that can access the Web, a personal digital assistant, or presentation software. All of these technologies help to perform specifi c information processing tasks. There are two basic categories of information technology: hardware and software. Hardware consists of the physical devices associated with a computer system. Software is the set of instructions that the hardware executes to carry out specifi c tasks. Software, such as Microsoft Excel, and various hardware devices, such as a keyboard and a monitor, interact to create a spreadsheet or a graph. This chapter covers the basics of computer hardware and software including terminology, characteristics, and the associated managerial responsibilities for building a solid enterprise architecture.