9.4 Asssessing greater use of digital technology

Question 1

Digital technology

Answer 1

Describes the use of digital resources to find, analyse, create, communicate and use information information effectively in a digital context.

Question 2

Pressures to adopt digital technology

Answer 2

• Improved performance: can lead to lower costs and quicker and more efficient decision-making
• Keep up with consumer and market trends: more flexible business that can quickly respond to changes in consumer tastes, fashion and market trends

Question 3

E-commerce

Answer 3

Relates to the buying and selling goods and services through an electronic medium. Can be either B2B, B2C, or C2C.

Question 4

Benefits of E-commerce

Answer 4

• Consumers have access to more products and services at cheaper prices
• Information is available instantly
• Provides a business opportunities 24/7 and 365 days a year
• Offers a global reach
• Potential cost reductions
• Supply chain improvements

Question 5

Drawbacks of e-commerce

Answer 5

• Consumers are unable to examine the product personally/ physically
• Consumers are dependent on system reliability
• Personal information can be stolen through hacking
• Risk of data leaks of personal information

Question 6

Big data

Answer 6

Refers to the ever-increasing amounts of structured, semi-structured and unstructured data that have the potential to be mined for information.

Question 7

Data mining

Answer 7

Data mining is the process used by organisations to turn large amounts of data (big data) into useful information.

Question 8

How can data mining be used?

Answer 8

Can be used in market analysis and management e.g. customer profiling and promotion and financial planning (e.g. cash-flow analysis, resource planning and fraud and detection management).

Question 9

Enterprise resource planning (ERP)

Answer 9

ERP is the business management software system by which an organisation manages and integrates the important parts of its business.

Question 10

Benefits of ERP

Answer 10

• Improved speed
• Increased efficiency
• Increased integration
• Better management of resources
• Increased customer satisfaction

Question 11

Drawbacks of ERP

Answer 11

• Costly (requires finance)
• Needs to be adapted to each individual organisation
• Requires time to set up
• Requires dedicated staff/ training

Question 12

Benefits of digital technology

Answer 12

• Decreases costs in the long run
• Allows access to new markets
• Maintains competitiveness
• Improves overall living standards

Question 13

Drawbacks of digital technology

Answer 13

• High initial investment
• Change within an organisation leads to stress
• Stress can leader to a decrease in morale

Question 14

Impact of digital technology on the functional areas of the business

Answer 14

Financial:
- Financial monitoring/ analysis are quicker and easier to undertake

Marketing:
- Digital technologies have opened up new markets
- Enabled more targeted promotions
- Significantly reduced marketing costs

Operations management:
- Digital technology has enabled greater automation of production
- More efficient inventory control
- Lead to lower costs, better quality, greater flexibility and reduced waste

Human resources:
- Development of more flexible, multi-skilled workforces
- Can be more closely monitored
- Costs of training/ recruitment