What you’ll learn to do: Discuss the role of technology in business
Not since the industrial revolution has business experienced such rapid and profound changes as it has seen since 1990 and the launch of the World Wide Web. Since the days of dial-up, access to the Internet is available almost everywhere. It is rare these days for consumers to go into a coffee shop, library or any place of business and not be able to access a Wi-Fi signal. If there isn’t a Wi-Fi signal in close range, most people still have access to the Internet via their cellular data connection on their smartphones and personal hotspots, no problem. With this anywhere/anytime access to the Internet, businesses created web applications to answer common needs of consumers. These applications can do everything from tracking food portions to sending massive amounts of information in a click of a button.
More people and companies are using cloud-based services for their business and store everything online instead of on a single device. This change will continue to have an enormous impact on the way business is done, transforming our once-traditional office environments and how people interact with companies on a regular basis. Flash drives are almost extinct with the prevalence of cloud storage, like iCloud, Google Drive, Dropbox and FTP sites. With so many new technologies permeating the way people access information and access each other, the forward momentum looks promising for future technological developments.
In this module we will examine how these technological advances have impacted business.
- Describe the types of technology used in business
- Explain how technology changes businesses
- Explain business intelligence and its impact on business success
Think about how you conduct business today as a consumer. The way that consumers identify and ultimately purchase products, goods and services has changed at an exceedingly rapid pace. This is a direct result of advances of the technology available to today’s businesses. What most consumer do not see are the wide range of new and evolving technologies that businesses employ in the development, production and distribution of those products, goods and services. Although the type of technology a business employs is determined by their operations, we can classify the technologies used in business into several broad categories.
- Computers. Desktop computers loaded with office and productivity software packages allow workers to write letters, analyze financial information, send and receive emails, and design sales presentations. The computer itself could be a desktop model with a separate monitor and keyboard, or a mobile laptop. There are two main types of computers. Personal computers (PCs) operate using Microsoft Windows are the most common, and Macintosh Computers using Apple Computer’s operating system are popular among creative professionals.
- Software. Software is loaded onto a computer to provide specific types of functionality. Software ranges from word processing programs such as MSWord to highly complex programs that allow developers to create virtual 3D images of a new product. Literally millions of software applications are available to business and selecting the most appropriate software to accomplish the business’s objectives occupies much of the time of Information Technology personnel. For example, artificial intelligence/machine learning (AI) continues to gain in importance. Some estimates show that nearly 40 percent of businesses may be using AI to automate their processes by as early as 2019. Businesses are hoping that these AI programs will execute specific tasks, allowing businesses to gain a competitive edge and provide a higher-quality service experience for consumers.
- Networking. Computers are often linked to form a network. This allows people within an organization to share documents or information, provide a central repository to store documents, or for people to communicate using email within an office. They also allow several computers to share a printer or storage device. A network can be limited to computers within a shared office, or span across multiple offices and locations.
- Telephone Systems. You may not think of something as traditional as a telephone system as a technology, but today’s business phone systems are quite complex. The most common type of phone system consists of a hardware unit that uses software to split the phone company line among individual handsets. The increasing use of automated attendants that help callers find the employee they are seeking, check their account balance, place a service call, check on the status of an order allow businesses to provide a level of customer service without the caller ever interacting with an employee of the business.
- Accounting Systems. Although primarily a software package, accounting systems are a crucial to business success. Accounting systems keep track of every dollar a company spends along with every dollar of revenue. In addition, accounting systems are capable of tracking labor costs, inventory levels, asset value and other pieces of financial information that managers need in order to make decisions about business operations. These systems can range from a relatively simple system such as QuickBooks to highly complex systems such as SAP.
- Computer Aided Manufacturing Systems. No longer does the manufacturing process require hundreds of employees working on a production line. Computer Aided Manufacturing (CAM) is the use of software and computer controlled machinery to automate the manufacturing process. This can be something as simple as filling cupcake tins with batter at a large bakery facility to building aircraft component parts to later be assembled into a jumbo jet. As technology continues to evolve, computers will take on an even more prominent role in the design and manufacture of everyday household goods.
These broad categories of technology can be found, to some extent, in virtually every business today. However, business cannot sit idle as technology changes around them. Today’s businesses must keep informed of new technologies in the same way that they must remain vigilant of changes in consumer demands. While leveraging existing technologies to their benefit, businesses must keep a watchful eye on emerging technologies such as Block Chain, virtual reality and machine learning in order to adopt the technologies that maximize efficiency and ultimately maximize revenue.
Technology’s Influence on Business
Not since the Industrial Revolution and the introduction of the assembly line has business undergone such rapid change as it has since the birth of the Internet. The technological revolution of the last 20 years has fundamentally changed the ways the businesses do business with each other, their customers, their suppliers and business partners. How customers discover a business’s products, goods and services is no longer bounded by geography. People on Main Street U.S.A. can shop the globe for goods and services that meet their needs at a price they are willing to pay. Think about the last thing you purchased. Count the ways that technology impacted your purchase.
In order to get an idea of how business is impacted by technology, let’s follow Jim as he goes to a local retailer and purchases a dishwasher.
Buying A DishWasher
Jim decides to purchase a new dishwasher, but before he heads out to the store he sits in his recliner and searches the Internet for dishwashers. He reads customer reviews and narrows his selection to 2 different models. He then goes to the websites of the companies that manufacture the two dishwashers and looks at the specifications, reads the warranty information and watches videos of people installing the dishwasher. While he is watching one of the videos a small box pops up and offers “live chat” with a customer service representative of Brand X.
He then goes to the website of the 3 local retailers that carry the dishwasher he wants and compares prices. He also checks to see if the dishwasher is in stock. He is on the website of Store A and while he is checking for the dishwasher an ad pops up and offers a 10 percent discount if he downloads and uses Store A’s app. He grabs his phone, downloads the app and logs back into the store website. Through the magic of “cookies” the information from his laptop appears on his phone and he continues shopping. With his decision made he completes the purchase online, using a verified secured server and pays for the dishwasher with his debit card.
Almost at the same time that he his the “confirm order” button on his phone the inventory level at Store A is adjusted to reflect Jim’s purchase. Since the dishwasher Jim has just purchased only leaves 1 in stock, Jim’s order triggers the store to request another dishwasher from its regional warehouse using real-time electronic data interchange. Before Jim can arrive at the store to pick up his new dishwasher, a replacement has been identified and robotic stock picking equipment is delivering it to the loading dock where it will be loaded onto a truck and delivered to Store A by 10am the next day.
Jim gets home with his new dishwasher and gets it installed thanks to the video provided by the manufacturer. He goes online and “registers” his purchase, providing his email address. Over the course of the next 6 months Jim will receive emails from the manufacturer of the dishwasher that range from a survey of customer satisfaction to an offer to purchase an extended warranty. He will also begin to see advertisements for other kitchen appliances, related products and “offers” from Store A and their competitors.
So, from the start everything about Jim’s purchase is touched by technology. We haven’t even talked about how the dishwasher was designed using CAD/CAM software, how computer integrated manufacturing produced the dishwasher or how the component parts of the dishwasher were made using robots and computerized machinery. As we said at the start of the Module—technology has revolutionized the way that business does business.
For an example of the future of technology and business, look at Amazon’s latest venture – “Amazon Go.” Amazon Go is a chain of grocery stores operated by the online retailer Amazon, currently with three locations in Seattle, Washington, two in Chicago, Illinois and one in San Francisco, California. The stores are partially-automated, with customers able to purchase products without being checked out by a cashier or using a self-checkout station. The first store, located in the company’s Day 1 building, opened to employees on December 5, 2016, and to the public on January 22, 2018. The flagship store has prepared foods, meal kits, limited groceries, and liquor available for purchase. The video that follows will give you some insight into how Amazon is using technology to totally transform the shopping experience.
In summary, consider the following ways that technology has changed business.
- Mobile Solutions. With the rise of Generation Y (Millennials) more people are using mobile devices to buy, sell, shop, find local businesses, and share their retail experiences with friends, acquaintances, prospects, and Facebook strangers every day.
- Cloud Computing. Cloud computing allows businesses large and small to move some of their operation to third-party servers accessible via Internet connectivity. Not only does this allow for rapid (on-demand) data and mobility it does so without the fear of downtime, crashes, or permanently lost data.
- Extreme Customer Segmentation. With the flow of more and more data, it’s easier now than ever before to understand the customers you’re looking for. Even a simple Google account will let you know where your visitors are from, what type of browser they’re using, how they found your website, what they do while on it, how long they stay, and at which point they decided to leave.
- Connectivity. Technology has also increased the ease with which we can all stay in touch. Whether it’s having your coworkers and employees available via text/video chat at a moment’s notice, or being able to send targeted promotional email blasts to pre-qualified customers when they’re shopping at nearby businesses, the rise of mobile technology has blended almost seamlessly with communication software to create a hyper-real web of real time information.
- Social Impact. The rise of social networking has figuratively shrunk the world and now users can connect without regard to geographical obstacle, financial background, or even social status. Indeed, years ago you may have been able to skate by on “okay” customer service and product offerings but now you’ll likely incur a hateful rant on Facebook or a bad review on rating sites like Yelp.
Businesses are forced to ride the wave of technology or risk going the way of Blockbuster, Toy ‘R Us, Radio Shack or Sears. The reality of business today is that technology will continue to force them to adapt and adopt or risk extinction.
Business intelligence (BI) is a technology-driven process for analyzing data and presenting useful information to help executives, managers and other end users make informed business decisions. The potential benefits of using BI tools include accelerating and improving decision-making, optimizing internal business processes, increasing operational efficiency, driving new revenues and gaining competitive advantage over business rivals. BI systems can also help companies identify market trends and spot business problems that need to be addressed. In short, BI technologies allow a business to view their operations, past, present and future.
BI technologies handle large amounts of data to help identify, develop and otherwise create new strategic business opportunities. Identifying new opportunities and implementing an effective strategy based on insights can provide businesses with competitive market advantage and long-term profitability.
The video below will provide you with an overview of how a company can use BI to improve its outcomes and attain its goals.
BI is most effective when it combines data derived from the market in which a company operates (external data) with data from company sources internal to the business such as financial and operations data (internal data). When combined, external and internal data can provide a complete picture which, in effect, creates an “intelligence” that cannot be derived from any singular set of data. Business intelligence tools empower organizations to gain insight into new markets, to assess demand and suitability of products and services for different market segments and to gauge the impact of marketing efforts.
Other ways a business can use BI to improve performance include
- Business Process Management. Performance metrics and benchmarking inform business leaders of progress towards business goals. BI tools can help a business boost internal productivity by focusing their efforts on what is important.
- Decision Making. BI analytics such as data mining and statistical analysis quantify processes for a business to make the best decisions. BI can help a business identify areas to cut costs or how to distribute budget allocations.
- Business Planning. Businesses can use BI data to develop both short term goals and long term strategy. Businesses can gain insight into their customers and market trends, allowing them to make decisions about current and future operations, products, goods or services.
- Collaboration. BI can facilitate collaboration both inside and outside the business by enabling data sharing and electronic data interchange. Many businesses use BI tools to communicate with suppliers, reducing lead times and inventory levels. By sharing data among partners, each business has up-to-the-minute information on everything from delivery times to price changes.
If BI is so powerful then why hasn’t it always been used by businesses? It has been used widely by businesses for decades, but in the past, only the information technology experts within a business had access to a few, highly complex BI tools and applications. As technology has evolved; however, there now exists a broad range of BI tools that a company can employ. Additionally, this new generation of BI tools are typically fairly simple to use so now a broader range of users within the business are able to get involved in analyzing and using data to make decisions. The result is that rather than the historical approach of just a few highly specialized data people being the only ones with visibility into the data, now people such as managers, supervisors, sales associates, and marketing specialists can leverage the power of internal and external data to their benefit and to the benefit of the organization.
Maidenform and BI
One example of how business intelligence systems have been maximized is at women’s underwear manufacturer Maidenform. Their CIO Bob Russo said recently after implementing BI, “Providing targeted information at the right place and time is central to improving the decision-making process. This would allow us to gain a competitive advantage in the marketplace as well as increase retail customer, shopper and shareholder value. We want to make sure that we are able to deliver ‘one version of the truth’ and deliver information that is actionable. We do not want to just deliver data.”
- Broberg, Orrin. "Eight Ways Technology Is Changing Business." Modus. December 5, 2013. Accessed June 25, 2019. https://gomodus.com/eight-ways-technology-changing-business/. ↵
- Thompson, Ed, CTO. "6 Real Life Examples of Successful Business Intelligence Systems." Matillion. March 13, 2018. Accessed June 25, 2019. https://www.matillion.com/insights/6-real-life-examples-of-successful-business-intelligence-systems/. ↵