ICT in Society

Business and Commerce

Produced by Thomas Simpson

ICT in Business Introduction

A business is an organisation that sells products/services in order to make a profit

Businesses of all types can use ICT to good effect whether it is a MNC or small firm in different areas of their work

Computer systems have the capacity to make a business more efficient, more cost-effective and responsive to the needs of its customers

Key Elements of a Business

Research & Development

DesignDistribution

Marketing Manufacturing

Sales & Feedback

A business can be split up into 6 major sections

Each of these sections can use ICT in different ways to improve there efficiency or function.

What is the function of each section?

Research and DevelopmentWork undertaken to find new concepts and improvements that could be applied to new or current product(s)/ service(s)

DesignWorking out the form of the product(s)/service(s) to enable the next stage to be successful

ManufacturingIs the transformation of raw materials into finished goods ready for sale. This can be both a product or service

MarketingA means to create awareness of a product / service that encourages the recipient to use the product or service

DistributionThe process of transporting goods that are sold or due to be sold from the producer to the consumer

Sales and FeedbackSales is the act of selling goods, and analysis of customer feedback to improve likelihood of sale

Elements of a

Business

ICT in Research and Development

Computer analysis of existing sales data can provide insights on likely markets for new products or services

New product designs can be modelled using software to simulate and test products services in a virtual environment

Advantages of ICT in Research and Development

Using previous sales data generated from EPOS means that new graphs and charts do not need to continually made

ICT allows research and development to happen in a ‘renewable environment’ for example within an IBM eServer. This means that possible developments to new products / services can be simulated using software

This is often used instead of pilot schemes or prototypes as is more cost effective in the long run.

Disadvantages of ICT in Research and Development

EPOS systems need to be incorporated into every sale outlet for the system to give a true reflection of product performance. This in some cases means that MNC refuse to allow smaller outlets stock their newer products

Virtual environments can be very expensive to buy initially. The people who use them also need to be highly trained in using them

ICT in Design

Computer Aided Design (CAD) software allows designers to create detailed designs of a product.

This can be emailed to mangers and amended following feedback.

Final designs can then be integrated with Computer Aided Manufacture (CAM) software

Advantages of ICT in Design

CAD allows mistakes and misfits to be detected before the product goes to manufacture. This means that the time taken from designing to manufacture is far less. also as a result of the process being quicker it saves money.

It also permits easy modification and adaptation. Design drawings can easily be changed to match any amendments made.

Some Software now incorporates features that automatically creates a working drawing of a product made using CAD.

Disadvantages of ICT in Design

CAD software requires its users to be trained how to use the software. This is because it has features within it that make it hard to pick up just through trial and error

CAD software is often expensive due to its use in industry and possibility to create high profits.

ICT in Manufacturing

CAM can produce precise accurate components with little tolerance

Control systems can also be used to maintain environmental conditions in a manufacturing plant

Advantages of ICT in Manufacturing

Using CAM means that products can be made non stop as they do not tire.

As a result of not tiring, CAM also means that product quality is assured with each item made being identical to the next.

Using machines results in no labour costs. This means that in the long run, the company has bigger profit margins

Disadvantages of ICT in Manufacturing

Setup costs are very high for such manufacture with most scaleable machines costing anything above ten thousand pound.

When new products are to be made it means that the hardware need to be recalibrated, this takes skilled employees

Some see CAM unethical as its it replaces workforces with a cheaper alternative, meaning thousands lose their jobs

ICT in Marketing

Direct mailing has proved to be a successful way of informing customers of new products/services using processes like mail merge

Websites have also formed a means of advertising space that informs customers about current products /services and promotions

Advantages of ICT in Marketing

Direct mail has proved to be a cost effective way of generating awareness and boosting sales of a particular company.

Its easy of use and options for overseas investment mean it is popular with new and up and coming businesses.

Websites have now become set in stone as a place to find out about a company. It rapidly becoming the first stop for potential new customers

Disadvantages of ICT in Marketing

Some people see direct mail a waste of resources and time. According to research conducted in Which? Magazine 89% of direct mail sent through the post is unread.

Direct mail has also meant unemployment as call centres are relocated overseas where labour is cheaper.

Websites always need to be updated to be useful, this requires skilled staff

ICT in Distribution

A stock control system can be used to ensure that the supply of products to sales point is guaranteed. This is known as ‘just-in-time’ stocking (as soon as a item is sold, a replacement is ordered).

Hand held PDA’s can also be used by delivery staff when delivering recording a digital signature from customer as confirmation of acceptance. This can then be uploaded into a data base

Advantages of ICT in Distribution

Just-in-time stocking is a major benefit to big companies as it allows for a large variety of products to be put on sale but takes up little room.

This means that companies can offer wide choice meaning customers are more likely to purchase something.

PDA’s mean that delivery records can be combined in a database. Mail merged stickers can be printed on boxes to ensure that they are delivered to the right place

Disadvantages of ICT in Distribution

Just-in-time can be tricky to set up as finding the optimum number of items to store at one time varies depending on a variety factors like marketing.

High demand of a particular product can cause big waiting lists which leads to customer dissatisfaction

Also if the system goes down then manual measures have to take over which are less efficient.

PDA’s can cause problem to customers who are ICT illiterate.

ICT in Sales and Feedback

Electronic Point of Sale (EPOS) systems can be installed at sales outlets. These provide swift feedback on sales performance of different products

This data ca then be analysed using spreadsheet software to help the research and development section

Advantages of ICT in Sales and Feedback

Data collected from the EPOS means that future products / services can be attempted to be made successful and ultimately more profitable.

The findings can then be passed on to research and development section for the cycle to start again in the effort to make more money

Graphs and statistical analysis software allows presentations made to managers are professional. Further more, these presentations are statistically accurate taking less time to construct

Disadvantages of ICT in Sales and Feedback

For sales figures that give a representation of all product / service sales, EPOS must be installed at every outlet. This can prove expensive to small businesses.

Statistical analysis can sometimes detract from true performance and be manipulated to represent a more pleasant outcome.

Some think that is better to have an idea of your market in your head as opposed to what statistics say.

Conclusion

ICT can used in a variety of ways within a business. Its presence in some areas of business is more important than other areas, depending on the business.

Its use can mean that businesses improve there efficiency and ultimately their profits.

However, it often requires investment and usually takes time to pay off its cost.