9.4 use of digital technology

digital technology

use of digital platforms or resources to support the business

big data

vast quantities of information that business collect from multiple sources

digital technology

use of digital platforms or resources to support the business

big data

vast quantities of information that business collect from multiple sources

adv big data

allows businesses to access large amounts of data about many aspects of their business and environment

dis big data

provides challenges for the business in terms of legal requirements around data storage, processing and transfer

data mining

• process of analysing data to identify patterns and make relations which can be used to make informed decisions

  • buying habits

  • demographics

adv data mining

• better understand customer needs

• uses analysis to target customers with products and offers them what they want

• accurately forecast sales based on wide data

dis data mining

• only valuable if large data sets exist

• corelation of data doesn’t always mean there is a long term future pattern

e-commerce

electronically buying pr selling goods and services

advantages of e-commerce

• reaches a wider audience – customers can shop from anywhere

• lower overhead costs – no need for physical stores

• open 24/7 – can generate sales at any time

• easier to track data – helps with marketing and inventory management

disadvantages of e-commerce

• high competition online – can be hard to stand out

• technical issues – website downtime or payment failures can hurt sales

• security risks – data breaches or fraud threats

• lack of personal touch – harder to build customer relationships

• reliance on shipping – delays can affect customer satisfaction

automation

digital automation refers to the use of technology and software to automate various tasks, processes or workflows that where previously manual

advantages of automation

• reduces labour costs – fewer employees needed for repetitive tasks

• increases efficiency – machines work faster and more consistently

• improves accuracy – fewer human errors

• boosts productivity – can run 24/7 without breaks

• frees up staff – employees can focus on more complex tasks

disadvantages of automation

• high upfront costs – investment in machines and technology

• job losses – can lead to redundancies and lower staff morale

• technical failures – breakdowns can halt production

• less flexibility – automated systems may struggle with non-standard tasks

• training needed – staff must learn to manage and maintain systems

pressures to adopt new technology

• increased competition

  • reduces barriers to entry

• more informed customers

  • prices can be compered, more transparency

• change

  • hard to keep up with new technology

• disruptive technology

  • firms can choose to adopt the new technology or stick to how they operate

  • risk of failure

digital technology impact on business function

• marketing

  • big data used to understand what customers need and can develop campaigns to address that

• finance

  • greater efficiency through the use of technology and monitoring business revenue and cash flow

• HR

  • recruit staff that can use technology

  • may not need some staff to make decisions as data and automation is used

• operations

  • can intergrade into production and distribution

  • JIT stock control

dis digital technlogy

• high initial cost

  • purchasing

  • redundancy

  • militance and repair

• job security / cultural change

  • replace human labour with capital

  • employees fear change

  • lower productivity level

• security of data

  • need to protect sensitive customer/supplier data

  • expenisive

  • vulnerability to cyber crime

threat of digital technology

• reduced profit margins – digital platforms increase price transparency, making it harder to charge premium prices

• increased competition – low entry barriers online allow new and global competitors to enter the market quickly

• pressure to innovate constantly – businesses must keep up with fast-changing tech and customer expectations

• disruption of traditional business models – digital alternatives (e.g., streaming vs. physical media) can make existing products or services obsolete

• customer power – reviews, price comparisons, and social media mean businesses have less control over brand perception

• high investment costs – staying competitive requires ongoing spending on tech, software, and staff training

• automation risk – while efficient, automation can reduce workforce morale and create resistance to change

challenges of digital technology

• do management see opportunities presented by digital technology

• able to secure funding

• will it provide a CA

• culture

  • decision based on data rather than instinct

• is the business able to cope with rapid change