Principles of Business

Section 10 – Technology and the global business environment

Objectives
1. Explain the concept of business technology
2. Explain the role of Information Communication Technology (ICT) in business
3. Describe the types of ICT used in business
4. Distinguish between E-Commerce and E-business
5. Identify ways in which ICT can be used to improve efficiency of business operations
6. Discuss the ethical implications of the use of ICT in business

Business technology

Business technology refers to applications of science, data, engineering and information for
business purposes, such as the achievement of economic and organisation goals. The main
element of technology is the idea of change and how it can affect business and society.

Changes in technology will affect how a business operates in both the internal and external
environments. For example
• Using accounting software instead of manual accounting
• Using social media to monitor customer satisfaction and gain new customers
• Telecommuting where with broadband access employees can work from home.
• Videoconferencing can save time and money in travel and overseas accommodations.

Role of technology in business

Information and communication technology (ICT) is considered to be all uses of digital

technology that exist to help individuals, businesses and organisations use information. So ICT
is concerned with the storage, retrieval, manipulation, transmission or receipt of digital data.
Importantly it is also concerned with the way these different uses can work with each other.

Storage: Electronic storage take up less space then manual storage

Retrieval of data: employees can retrieved information stored electronically quicken than that
stored manually.
Manipulation of data – Changes can be made easily and quickly
Transmission or receipt of data – ICT makes it easy to send and receive data e.g via email, orders
through websites

Ways in which technology has influenced banking and commerce

• Through the introduction of Automatic Teller Machines (ATMs) and Automated
Banking Machines (ABMs) which facilitate the deposit and withdrawal of funds, as well
as other services without having to go into a bank to access teller services. The location
 of ATM machines in hotels, petrol stations, malls and supermarkets adds to the
convenience of customers who can transact business without having to wait in line at a
bank.

• The practice of on-line banking which enables customers to access their accounts from
home and other locations using personal computers. This facility enables customers to
check their balances from the comfort of their homes and permits easy and convenient
payment of utility and other bills. Customers with more than one account can also use
this facility to transfer funds from one account to another.

• Through electronic commerce (ecommerce). Using the internet, individuals and

businesses are now able to make business transactions via the World-wide web, without
having to visit a physical brick and mortar store. E-commerce has given rise to many on-
line stores which permit customers to browse for products and pay for them
electronically.

Types of ICT used in business

(a) Traditional
(i) Productivity tools Details
Word A word processor is a program that allows the
user to type, edit and format text-based
documents.

Excel A spreadsheet is a program in which data is

displayed in table format. It is designed for
the manipulation of numerical data such as
calculations and comparison of cost and to
represent data using charts and graphs.

Database software e.g Access A database is a collection of structured data

that is arranged to allow its contents to be
easily retrieved, managed and updated.

Presentation Software e.g PowerPoint, Prezi A presentation program is used to create

slides containing a variety of elements such as
text, pictures, sounds, graphs and video clips.
You would use a slideshow when making a
presentation to an audience, such as giving a
report in a meeting, speaking at a conference
or when teaching a lesson.

Graphic software e.g Adobe Photoshop Software for the manipulation of photographs
and images. E.g to alter images by changing
their shape, colour and size.
 (ii) Specialist applications Details
Accounting: QuickBooks Specialist account packages are used by small
and medium-sized businesses to record
transactions and to product sets of accounts.
They enable the fast and accurate creation of
financial data.

QuickBooks is the most popular small

business accounting software used by
businesses to manage income and expenses
and keep track of the financial aspects of their
business.
Computer Aided Design (CAD) Specialist design packages enable designers
and engineers to design new products using a
computer or another electronic tools. These
designs can then be fed into a computer-aided
manufacturing system/production line.

Management Information Systems These provide detailed and relevant

information to managers covering all aspects
of the areas they are managing, e.g sales
levels and stock levels. A MIS enables data
to be presented in a clear and visual way for
management meetings.

b. Digital communication technologies

(i) Internet
This is a system of computer networks enabling fast communication around the globe. The key
uses of the internet for business include:
• Buying and selling goods
• Collecting marketing data
• Promoting the business and its products
• Communication

(ii) Mobile technology

Today mobile phones have all the facilities that a computer has. It is handy in making videos,
emailing, sending pictures, accessing the internet etc
The mobile phone plays a vital role in business making it almost impossible to operate a business
without one.
M-commerce refers to the buying and selling of goods using mobile (cell phone) technology.
E-commerce vs e-business
In both cases, the e stands for "electronic networks" and describes the application of electronic
network technology - including Internet and electronic data.

E-commerce covers outward-facing processes that touch customers, suppliers and external
partners. This including sales, marketing, order taking, delivery, customer service, purchasing of
raw materials and supplies for production and procurement of indirect operating-expense items,
such as office supplies. It involves new business models and the potential to gain new revenue or
lose some existing revenue to new competitors.

The term ‘electronic data interchange’ (EDI) refers to the exchange of information between
businesses as well as the exchange of information withing a business, whereby information is
converted into a form that enables it to be transmitted electronically.

E-business includes e-commerce but also covers internal processes such as production, inventory
management, product development, risk management, finance, knowledge management and
human resources. E-business strategy is more complex, more focused on internal processes, and
aimed at cost savings and improvements in efficiency, productivity and cost savings.

Ways in which technology can improve business operations

A business is able to become more efficient and therefore gain advantages over its competitors
when it uses ICT for the following reasons:
• Speed and time
Operations can be carried out quicker using ICT. E.g An order can be processed and sent
to the supplier very quickly. Or a customer’s record may be accessed quick simply by
typing the customer’s name into a database.

While it may take a lot of time to set up the system, once that time has been invested it
will enable very fast processing and very swift operations.

• Easier storage
Very large quantities of information can be stored on a computer or in a server.

• Improved sharing of information

Information can be shared easily and quickly through LAN and the Internet, either
privately within a firm or with all internet users through a commercial website that has
open access.

• Automations – need for minimal human interaction.

Using automatic systems to operate or control processes, methods and systems with little
or no human intervention. In the Caribbean automation takes place in the bottling
operations, mining and oil refining.
Benefits of technology to business

There are a number of benefits to businesses from the use of technology

o It helps a business reach more potential customers and develop business
relationships.
o Using technology, businesses can streamline operations, reduce cost, improve
efficiency, maximise profits, minimise waste and devote talent to core business
activities instead of overheads.
o It helps businesses prove better service to their customers.
o It supports better relationships with key partners.
o It allows customers to better guide the business.

Consequences of unethical use of ICT

• Security
Information stored in databases, in social media communication channels and in the
company intranet systems is never 100% safe.
o Information can be leaked from within
o Hackers can easily hack computers connected to the internet and access a user’s
information
Large companies try to make their network safe by using complex computer
programming language and encrypting text etc.

• Privacy
Customers’ records are usually kept in an electronic format by a business. Sharing these
details without consent is unethical and sometimes illegal.
Data protection laws have been passed by a number of Caribbean countries making it
illegal for a company to disclose a person’s personal details without the person’s
permission.

• Intellectual property infringement

Creators of work lose lots of money when persons purchase a book or upload it to the
internet for users to download free.
A business that believes its intellectual property have been infringed will take legal action
through the courts.

• Impact on humans
Some fraudsters use the internet to con money out of people posing as genuine traders.
Unethical businesses invade people’s privacy with unwanted advertising.

• Distractions
When employees access social media during the course of working hours, unless for
business use this can prove to be a distraction from doing one’s job.