9.4 Assessing greater use of digital technology

Question 1

What does digital technology involve?

Answer 1

The use of digital resources to find, analyse, create, communicate & use information digitally.

Question 2

What are the different digital technologies?

Answer 2

E-commerce

Enterprise Resource planning (ERP)

Data mining.

Big data

Question 3

What is E-commerce?

Answer 3

Refers to the commercial transactions conducted electronically on the internet. It involves the buying & selling of goods & services, or the transmitting of funds or data over the internet.

Question 4

What can E-commerce involve?

Answer 4

B2B

B2C

C2C

Question 5

How has E-commerce grown?

Answer 5

• More people & businesses are connected online & as connection becomes easier & faster.

Growth in mobile & tablet devices, broadband speeds, services such as click & collect delivery lockers & integration of stores & online ordering for collections & returns.

Question 6

What are the advantages of E-commerce?

Answer 6

• Access to markets, 24h per day.
• A new way that consumers can shop.
• Relatively cheap start up costs compared to establishing a high-street presence.
• Greater access to suppliers & greater ease of comparing prices.

Question 7

What are the disadvantages of E-commerce?

Answer 7

• The customers inability to use & touch the products.
• Having to wait for delivery.

Delivery costs.

• Worries about how to return products.
• Worries about the use of data & the security of buying online.

Question 8

What is enterprise resource planning?

Answer 8

• A business management software system that allows a business to manage data relating to many of its activities such as inventory management, manufacturing, marketing, shipping & sales.
• It manages the data that links all the different parts of the business together & enables managers to make well-informed better decisions.

Question 9

What are the positives of enterprise resource planning?

Answer 9

• Productivity & efficiency of the business by ensuring resources are used fully & not idle.
• Flexibility of the business & response time by being able to coordinate parts of the organisation more effectively.

Question 10

What are the negatives of Enterprise resource planning?

Answer 10

• Investment in systems & technological infrastructure.
• Training of staff.
• Planning to ensure the requirements of the ERP system are fully thought through before the technology is developed & implemented to ensure it has the functions required.

Question 11

What is within enterprise resource management?

Answer 11

Supply chain management

Customer relationship management

Financial management

Human resource management

Inventory management

Question 12

What is data mining?

Answer 12

• An analytic process designed to explore data to try & find patterns within in and/ or identify systematic relationships between variables.

Data mining looks for possible relationships e.g. between different items a customer buys/ how different market segments might respond to promotional offers.

Question 13

What is big data?

Answer 13

Big data is the process of collecting & analysing large data sets from traditional and digital sources to identify trends & patterns that can be used in decision-making.

Question 14

What does greater access to data, greater speed of analysis & falling costs of storage & interrogating mean data analysts can do?

Answer 14

Can gain incredible insights into business issues such as consumer behaviour.

Question 15

What does big data take the form of?

Answer 15

Messages, updates, & images posted to social networks, readings from sensors, GPS signals from mobile phones & many more.

Question 16

What are the impacts of digital technology for a business?

Answer 16

• Significant improvements in the ease with which different stakeholders can communicate & monitor the performance of a business.
• Better management.
• Enabling new ways to do business.
• Changes in HR issues.

Question 17

What are the challenges of digital technology?

Answer 17

Leadership

Culture change

The rate of change.

Question 18

What are the pressures to adopt digital technology?

Answer 18

The need to keep up with the market.

The need to keep pace with competitors decision making & strategy.

The need to keep costs down.

Question 19

What are the threats of digital technology for a business?

Answer 19

Downward pressure on prices & on profit margins.

New unexpected competitors.

Keeping up with change.

Question 20

The impact of digital technology on functional areas??

Answer 20

HR- may be changes to skills required as greater information technology skills = needed.

Marketing- digital tech enables far more data on customers to be gathered & can lead to more personalised & efficient marketing.

Finances- Depends on what type of digital tech is being considered e.g going online can lead to cheaper transaction costs..

Operations- Impact will depend on which aspect of digital tech is considered.