Business can now reach a wider market than they could ever do before, more people are starting to use the internet “255 million active European Internet users are expected to be online by the year end of 2004” (Source: eMarketer), this is a 364% increase from the 70 million online in 2000. Technology reduces physical obstacles such as distance and travel, products can be bought anyway in the world from a digital satellite receiver for example. This method of business has grown considerably; see below the expected growth of E-Commerce from 2000 to 2005, this is a 2600% increase.
Place in business is used to describe the availability of products “at the right time and place”. The impact of technology-enabled business operations has meant that customer can buy products and services from a website 24 hours a day, 365 days a year.
Technology-enabled business operations has meant that businesses could operate a “Just in time” policy, this is that a manufacturing firm for example could order parts as and when needed, this could be done automatically as the product goes through the production line, therefore they do not incur the costs associated with holding stock such as insurance, storage rent and security.
Also through E-Commerce businesses save money because less sales staff are needed, no shops are required, so money is saved on rent, lighting, heating etc, a machine can take orders all day without rest. These saving can be passed on to the customer making the businesses more competitive.
The impact of technology-enabled business operations has however had the following adverse affect on society and the business world.
The impact technology-enabled business operations have resulted in more automation, people have lost their jobs because they have been de-skilled by computers which ‘do their old job’, e.g. an E-Commerce website or automated telephone payment system may mean that less staff are needed to process and accept orders. Computers can do repetitive tasks quicker and more efficient than humans.
Technology-enabled business operations have resulting in opening for new kinds of fraud on the internet, predominantly credit card fraud. This problem costs business millions of pounds each year. The CyberSource Fraud 2000 Survey revealed that the average percentage of revenue lost to online fraud was around 4%. Microsoft's online travel affiliate for example, announced that it was to record a fiscal third-quarter charge of $4 million to $6 million to cover the cost of fraudulent transactions on its Web site arising from the use of stolen credit cards to make travel reservations.
Not everyone has access to the internet or is computer literate; therefore it can be argued that concentrating on online trading neglects this section of customer. In 2001 46% of the UK population had access to the internet at home and 26% at work. (Source: Nielsen//NetRatings, 1st Quarter 2001).
Conclusion
The impact of technology-based business operations has had benefits to both businesses and society as a whole. Firstly the Internet has meant that business could have a greater presence, they are able to reach a far wider audience of customers, and they are also able to operate 24 hours a day. Businesses have also become more productive due to automation; computers are far faster and efficient than people and need no rest. Organisations have benefited from reduced overheads so are able to save money which in turn makes products and services cheaper to the public, however this comes at a cost, people in certain types of jobs have become de-skilled, and also the increased use of the internet in business has opened new opportunities for fraudsters.
Bibliography:
http://www.altevie.net/mediagraphix/europeaninternetstats
Electronic Commerce 2nd Edition By Schneider/Perry
Information Systems: Foundations of E-business, 4th Ed
By Steven Alter
CB152-fundamentals of business Information technology – hand book
STUDENT NAME:
MOHAMMED BAKOUSE
STUDENT NUMBER:
0218679
CHOSEN TOPIC:
“Evaluate impact of technology-enabled business operations.”
