Impact of Technology on Business - Essay Example

Impact of Technology on Business Section Number of Impact of Technology on Business The unprecedented development of Information and Communication Technology (ICT) in the last couple of decades opened up hitherto unexplored avenues for business development and promotion. Adoption of ICT has given businesses the perfect platform to integrate, monitor and control the entire range of vital activities and processes that make or mar businesses. These include product conceptualization, planning and development, product launch and introduction, product promotion, customer support and services. The Internet, the World Wide Web, e-Commerce and e-Business solutions are new means and ways of reaching out and interacting with the customer, organizing, streamlining and structuring internal and external business processes, and entering unexplored markets. This paper seeks to explore and define the impact of ICT on various aspects of a business. The paper will also endeavor to study the mechanism of adoption of ICT by businesses, and the role of support organizations that enables and facilitates the adoption of ICT. Basis of ICT Adoption The primary question is however why do business organizations adopt technologies? And how exactly is the decision to adopt technology made? Afuah and Tucci (2001) suggest that businesses adopt new technologies to reinforce an existing competitive advantage, surpass existing competitors, deter new competition, or to improve profit. However, the adoption of technology is preceded by a decision making process. Appropriate knowledge of the specific technology must be developed as the first step of this decision making process. The key decision makers must be convinced that the technology is suitable and appropriate for their organization. “Perceptions of the value that this technology may bring to the organization are weaved into the existing strategic vision of the organization. These visions not only influence the adoption decision but also the implementation of the technology within the organization.” (King & Gribbins, 2002) Variables such as characteristics of the technology, the organization’s existing business models and paradigms, locus of control within the organization, availability of skilled and knowledgeable manpower, organizational size, financial resources and pushes from within the industry influence the adoption of a particular technology in a business organization. In the case of ICT, the ICT revolution that has swept over the entire world in the last two decades has made it imperative for almost all organizations to adopt this all pervasive technology. Almost all worthwhile organizations, irrespective of their nature and work area, now have their own private networks that connect to the Internet. Business transactions, information exchange, buying and selling are now all done over the Internet. Employees even access and work on a network from remote locations. Customers, information seekers, business associates, employees, or targeted markets all become accessible through ICT. Adoption of ICT can be comparatively simple because worldwide standards have developed in almost all aspects of ICT such as Internet and Web technologies, e-commerce and e-business, software and even hardware infrastructure to a great extent. This makes the technology adoption process not only easy, but also very transparent and acceptable. Introducing a Product The impact of ICT adoption on customers has been profound. The role of ICT starts right from product planning development and launch. ICT has ushered in many new ways of launching and introducing a product to customers. Hart (2005) defines commercialization as the process of taking a new product from development to market. It generally includes production launch and ramp-up, marketing materials and program development, supply chain development, sales channel development, training development, training, and service and support development. ICT plays a crucial role in each and every aspect of commercialization. Multimedia presentation and dissemination has revolutionized production launch and ramp-up; marketing materials and program development is dependent on digital print and display technologies, networking has added new dimensions to supply chain development and sales channel development; various ICT tools such as interactive multimedia presentations has taken training and training development to a new level of simplicity and comprehensibility; online services and support infrastructures provide customers with incomparable experiences economizing on time and redundancy and maximizing on reliability and customer satisfaction. In any business, product introduction requires the largest investment of time, money and management resources. This high cost of product introduction can be attributed to a very high degree of uncertainty at this stage, and the responsive changes that are necessitated in the product and business processes. The need to adapt manufacturing processes to demand fluctuations is strong in the product introduction stage due to uncertainty of the market. Sethi and Sethi (1990) define manufacturing flexibility as the sum of process, routing and product flexibility. Sethi and Sethi also relate the flexibility of manufacturing volume directly to the market. ICT has enabled new and better methods of manufacturing that accord much higher flexibility. ICT solutions enhance flexibility by improving business integration, providing better and highly responsive manufacturing planning and scheduling models and creating more reliable forecast models. ICT flexibility is defined as the fact that “the fact that information is available the moment it is needed where it is needed, in any form it is needed any way, anywhere, anytime.” (Quinn, 1992 in: Knoll and Jarvenpaa, 1994) ICT flexibility has converged with manufacturing flexibility to optimize and provide a high degree of confidence to product introduction. Data integrity, data sharing and data communication are vital for effective management in the product introduction stage. Value Addition and ICT The ability of a business firm to add value to its products on the basis of external knowledge and customer inputs could very well be the factor that determines its competitive advantage. The absorptive capability of a firm is defined as its ability to recognize the value of new, external information, assimilate this information, and apply it to its own commercial advantage. A firm’s absorptive capacity depends on its acquisition, assimilation, transformation and exploitation capabilities. ICT, along with Knowledge Management Systems (KMS), play a significant role in fostering and honing this absorptive capability. ICT-based absorption plays crucial role in the critical core business process of New Product Development (NPD). NPD comprise three distinct phases: Creation or exploration phase of opportunity identification, ideas and concept generation; Development or exploitation phase of design and engineering; and Diffusion or ending phase of testing and support. ICT provides many avenues for incorporation of customer and consumer inputs and customer involvement resulting in value addition in each of these stages. Examples of such ICT tools and services are web-enabled customer surveys, creation of a web-based Information Pump (Prelec 2001) where a focused group of customers interact with each other in a pre-designed game, use of User Design that allows customers to select design features from drop-down menus, involvement of customers in online testing and simulation programs, etc. ICT and Customer Experience The Internet and the World Wide Web together provide the perfect and the most effective means of customer support in today’s business scenario. The proliferation of call centers and BPOs is sufficient evidence. Customer difficulties and grievances and addressed over the net in a matter of seconds and minutes. The two end nodes of this type of an ICT-enabled customer support infrastructure are fixed. The customer is comfortably in his home or at the place of product installation. Online support in the form of chat sites, email interactions and even multimedia interactions are provided on a 24x7 basis so that the customer is never left stranded. ICT enables the inclusion of practical hands-on installation and troubleshooting multimedia guides on the net and on portable media such as CDs and DVDs. These can be easily used by the customer or consumer not only to install and configure products but also to fix routine problems with the minimum of expertise and knowledge. Customer support is not restricted to product parameters only. E-Commerce websites, credit cards and Internet banking have paved the way for transactions over the Net. The customer buys over the Net and the transaction is made over the Net itself. Product web catalogues help the customer in selecting and choosing the purchase. A customer’s questions can thus be answered at many levels. At the audio level, the customer interacts with a call centre, on the web the customer can resort to online chatting or submitting written queries that get answered through the web itself; finally, many business houses are now providing interactive video conferencing sessions for customers from remote retail outlets or locations to customer care and technical centers. ICT has therefore enhanced the customer experience to a very great extent. Customers can be involved with the product right from conceptualization and planning. The move is towards an on-demand customized environment where the customer can dictate exact tastes and preferences for the production house to adhere to. ICT Partnerships and Alliances ICT adoption in businesses however entails the creation of high-cost ICT infrastructure. Setting up such ICT infrastructure on its own may not be cost-effective for many business houses. The answer lies in strategic service-business partnerships with ICT-based organizations that can rent the required ICT infrastructure. This is especially true for high-bandwidth network and web resources. Whereas, an ICT unit of its own in terms of human resources is a must for every organization for maintenance and operational activities, specialized jobs in customized software application development, or high resources and environment requirements as in the case of secure web servers can always be outsourced to specialized agencies. This not only results in considerable financial savings, but also conserves time by taking off unwarranted workload. Adoption of Information and Communication Technology in businesses therefore results in all-round benefits and advantages for both the business and its customers. References 1. Afuah, A., and Tucci, C. L., 2001, Internet Business Models and Strategies: Text and Cases, McGraw-Hill Irwin, Boston, MA, 2001. 2. Hart, M.A., July, 2005, Strategies for Optimal Product Launch, Product Development and Management Association, Southern California Chapter, pp. 1 – 11. 3. King, R.C. & Gribbins, M.L., 2002, Internet Technology Adoption as an Organizational Event: An Exploratory Study across Industries, Proceedings of the 35th Hawaii Internation Conference on System Sciences, 2002, 0-7695-1435-9/02 $17.00 (c) 2002 IEEE 4. Knoll, K., Jarvenpaa, S.L., Information Technology Alignment or “fit” in highly turbulent environments: the concept of flexibility, 1994, ACM 5. Prelec, D. (2001). Readings packet on the Information Pump. Including “Instructions for playing the Information Pump” and “A two-person scoring rule for subjective reports. Massachusetts Institute of Technology, Cambridge, MA. http://mitsloan.mit.edu/vc/papers/IPPacket.pdf [September 25, 2007] 6. Sethi, A.K., Sethi, S.P., Flexibility in manufacturing: A survey, International Journal of Flexible Manufacturing Systems(Historical Archive), Volume 2, Issue 4, Jul 1990, pp. 289 – 328 Read More