3.9.4 Assesing the use of financial technology Flashcards
What is e commerce
Purchasing goods and services online - continues to grow as delivery networks and collection lockers become more effective an accessible
Benefits of e-commerce
- growth of mobile devices means online purchasing can happen anywhere and at any time
- prices are transparent
- there is greater access to suppliers
- start up costs are low
Drawbacks of ecommmerce
- its not suitable for all products where customers need to touch and experience the product
- delivery costs can be expensive
- lots of fraud is committed through e-commerce
What is data mining
Process of analysing data to identify patterns and relationships between a number of variables e.g demographics and buying behaviour in supermarkets
Benefits of data mining
- businesses are able to profile customers and better understand their needs
- it uses analytics to effectively target customers with offers and products that they will want
- accurately forecasts sales numbers based on a wide variety of data, including economic and social trends
Drawbacks of data mining
- May only be valuable to large firms where a large quantity of data is available
- correlation of data does not necessarily mean there is a relationship
What does big data refer to
Refers to the vast quantities of information that business are now able to collect though sources such as gps data, bar code readers and social media.
What is enterprise resource planing (ERP)
ERP is the data management software that links functional business together such as stock ordering, customer relationship management, human resource and financial management
Benefits of ERP
- improves flexibility and efficiency by coordinating the functions of a business
- it provides managers and employees with useful information on a number of business processes
- improves customer service
Drawbacks of ERP
- there is the cost of developing the system for business specific needs
- there has to be investment in training staff effectively to use the system
Benefits of digital technology?
- offers new ways of doing business (paperless transactions, crowd funding, virtual reality)
- faster access to information
- better communication between employees and functions
- knowledge management systems can replace the need for moderate level of expertise e.g computer diagnosis of illness
Pressures digital technology brings to a business
- can remove barriers to entry increasing the level of competition in markets
- technology creates transparency in markets - customers can easily compare prices and find online reviews
- constant change - the pace of technology is extremely fast and can be very difficult for businesses to keep up with these advancement
Impact on marketing business function of digital technology
-big data gives businesses acces to vast amount of information on their customers. Effective use of this knowledge will allow business to gain a greater understanding on the needs and allow them to improve products and customer service
Impact of digital technology on operations business function
ERP can integrate all aspect of production, leading to greater efficiency and reduced waste. E.g just in time stock control will reduce inventory levels and free up cash
Impact of digital technolgy on finance business function
Provides business with the ability to monitor financial transactions and close monitor to business costs, thus leading to greater efficiency and control over budgets
