Assessing Greater Use of Technology 3.9.4 Flashcards
what is e-commerce
it is the term used for selling products or services online. The internet has become a step in the distribution process, referred to as place in the marketing mix.
what is big data and data mining and how does it benefit firms
big data describes the vast amount of data generated by the technological devices we use daily.
a firm with access to a few personal details relating to your purchasing habits and your movements during the day could use this combination of information to better sell you their products (improve marketing techniques). A business with access to sufficient computer power can sift through the data to find consumer patterns in the buying behaviour of buyers, this is called data mining.
what is ERP
Enterprise Resource Planning (ERP) software is an integrated digital technology system used by businesses to collect, store and manage and interpret data from the different business functions. It helps co-ordinate the operation of the business.
ERP will:
-calculate how soon inventories will be used up by and therefore need to be reordered from supplier
- calculate what skills are needed to complete new orders and whether staff overtime is need to complete orders
- it organises the business operations so they run as effectively as possible
what are the pressures to adopt digital technology
pressure if falling behind competitors
pressure for growth
pressure of better quality from consumers
what is the benefits and disadvantages of digital technology
boost revenue:
- reach more customers through ecommerce
- find out customer needs and tastes to better satisfy them through data mining
- satisfy needs better through more accurate better quality delivery (ERP)
Reduce costs:
- increase productivity, lower fixed costs, less wastage through ERP and computer aided manufacturing
- less fixed costs held up in stores due to eCommerce (selling moved online)
negatives of this is this would have high costs if implementing these things (buying and training). Could also effect the culture of the business causing problems and demotivation of staff ( this could also happen through any redundancies cause by the implementation of the computer aided manufacturing)
what is the impact of eCommerce on the functional areas of the business
Marketing:
Ecommerce has a major effect on the marketing function. Selling online creates a radical shift in the place part of the marketing mix as selling is done online, making your website the place of the marketing mix.
HR:
need to hire or train specialised employees who are able to create and operate a well functioning easy to use website for consumers. Could also cause redundancy due to selling becoming more online, not needing as many high street stores
operations:
no longer do products need to be shipped to each individual store, they need to be shipped directly to consumers. This creates more focus on making sure the products get to the consumer quickly and conveniently.
finance:
could reduce fixed costs due to not using multiple high street stores and operating from one larger warehouse
what is the impact of data mining on the functional areas of the business
marketing:
being able to process so much data about customers and correlate customer attributes allow you to market your products more effectively towards them. This makes R&D much more effective R&D (same benefits).
HR:
have to hire specialists staff
Operations:
Gathering digitally generated data throughout a production process can help strengthen a quality assurance process. With computer controlled machinery being able to report data on each item being produced and the current state of the machine itself, malfunctions and faulty products are more easily prevented.
what is the impact of ERP on the functional areas of the business
marketing:
gather information on customer buying habits through things like loyalty cards.
HR:
staff rotas can be produced based on predicted sales.
can be used to work out how much staff should be paid each month (based of hours worked or from piece rate pay)
operations:
can be used to work out how much needs to be made to meet demand (reduce wastage), and identify the most efficient sequence production ( minimize customer waiting time)
how can ERP help reduce dis economies of scale
A fully integrated ERP system improves communication within a business. Different areas of the business will co-ordinate their activities more effectively as a result of this enhanced communication
