Please enable JavaScript.
Coggle requires JavaScript to display documents.
Information Technology and Business - Coggle Diagram
Information Technology and Business
Introduction
Tabs can be used the pay the water bill online.
Earlier, banks operated without computers. Ledgers and folio numbers were manually maintained in a physical post card. Interest was also manually calculated. Things took too long.
New age brought a great revolution to various spheres of business and industry. Increased efficiency, etc.
Current age is referred to as
Information age
Digital age
New media age
It is used everywhere:
Business
Industry
Home
Education
Entertainment
Science
Meaning and Definition
Meaning:
IT is a set of tools, processes, methods and related equipment to collect, process and present information.
“Information technology is defined as capabilities offered to organizations by computers, software applications, and telecommunications to deliver data, information, and knowledge to individuals and processes”.
- Attaran
IT is made of two words - Information and Technology
Information is all about communicating and receiving of knowledge and data.
Technology means the body of knowledge that is used to develop tools and machines for solving various organizational problems.
Information systems are tools that help companies analyze their position in the market and forecast any possible crises in the future.
It includes
computers
networks
mobile and wireless devices
satellite telecommunications
robotics
electronic mail
automated office equipment
These information systems transform raw data to useful information that can be used for decision making.
Characteristics of Information (CART)
Accuracy:
The information is free from errors, mistakes and also personal bias. Incorrect information can lead to incorrect decisions.
Timely:
The receiver should receive the information within the defined time. No delays. Latest information only.
Relevant:
Not all information is useful for everyone. Information reaching managers should be useful enough so that they can use it in the decision making process.
Complete:
Nothing should be incomplete as that may lead to incorrect decisions.
Advantages of IT in business
Office Automation:
Computers are used in organizations to manage information and automate basic processes.
Communication:
IT has made it easier to communicate with customers, suppliers and employees.
Business Analysis:
Business Analysis is aimed at providing solutions to various complex business problems. IT can suggest various tools and techniques as a solution based on the problem.
Better organized data:
IT has made it easier to organize and compile data at one place and make it available to its various users as per their needs. Ex. Excel sheets can be used for compiling vast financial data.
Reduction in Cost and Productivity improvement:
(Separate points)
Data is available at one place
Automation of repetitive tasks
Faster and more accurate problem solving
Reliability of information
Speedy results
IT in functional areas of a business
Finance & Accounting
Financial software handle information pertaining to
Daily entries of sales
Purchases
Salary disbursements
Etc.
Ex. Tally is used for journal entries and the preparation of financial statements.
Enterprises use various other software for payroll, billing, budgeting, etc.
Human Resource Management
IT tools (HRM software) are used for Human Resource Management (HRM)
Recruitment
Requesting resumes
Conduct aptitude tests
Interview candidates
Daily attendance
Maintaining employee information
Compensation management
Performance appraisal
Employee exit
Saves unnecessary human effort as well as costs on paper work.
Marketing
Development of IT and communication facilities has sparked a revolution in the marketing field.
IT has provided wings to marketing
Companies can now use digital marketing and CRM (customer relationship management) software to reach potential customers.
Digital Marketing
The promotion of products through digital channels such as
Social Media:
Facebook, Twitter, Instagram
Mobile Phones:
SMS and MMS
Television and Radio:
Video or audio ads
Electronic Billboards
CRM
It is a tactic to manage a company's relations with current and potential customers.
Objectives:
Customer retention
Increasing sales
Improving customer service
And thereby increasing profit
They store data about current and prospective customers.
This information includes data about:
What products the customers buy?
When do they buy?
How much quantity do they buy?, etc.
CRM also helps in sales forecasting
Sales
Technology drives sales growth by increasing market penetration
It enables automatic order placement.
Ex. Swiggy, Amazon, Myntra, etc. are online platforms that enable convenient order placement via a laptop or smartphone.
Companies use ERP software to manage
customer inquiry handling
pricing control
order control
sales invoice processing
It is integrated with other resource planning software solutions used by firms.
E business vs E commerce
E-Business refers to performing all type of business activities through internet.
They have the term
e
in common.
e
= electronic
E-Business is a broad concept and it is considered as a superset of E-Commerce.
It involves the use of internet, intranet or extranet.
It requires the use of multiple websites, CRMs, ERPs that connect different business processes.
It includes activities like
Procurement of raw materials/goods
Customer education
Supply activities
Making monetary transactions
Buying and selling products
E-Commerce refers to the performing online commercial activities, transactions over internet.
E-Commerce is a narrow concept and it is considered as a subset of E-Business.
It involves mandatory use of internet.
It usually requires the use of only a website.
It includes activities like
Buying and selling products
Making monetary transactions
Over the internet
Scope of E- Business
Reasons for increasing scope of E-Business
Increasing number of 3G / 4G mobile internet and smartphone users
Need for automation
Reduction in cost of internet facilities
Provision of online banking facilities
E-Business refers to performing all type of business activities through internet. It involves interaction between several parties. Here are the parties involved.
Business to Business (B2B)
Electronic exchange of products, services or information between businesses.
Ex. Exchange between manufacturer and wholesaler, retailer to wholesaler or vice versa.
Activities included
Inquiry about products
Placing orders
Making payments
Making complaints about the product or service
Business to Consumer (B2C)
A financial transaction or online sale between a business and consumer.
It involves the sale of a product or service from the business to the consumer.
Activities included
Product or service inquiry
Placing the order
Making payment
Giving Feedback
Types of B2C sellers
Direct Seller:
People buy goods and services directly from the seller.
Manufacturers may set up online versions of department stores.
Ex. Nike sells its shoes on the Nike website
Online Intermediaries:
These intermediaries don't create their own products or services but act as a common platform for buyers and sellers.
Ex. Makemytrip connects tourists with members of the hospitability business.
Community based:
Web communities such as social media platforms help marketers and advertisers reach customers.
Users see content (advertisements) based on their interests and preferences.
Ex. Facebook, Instagram and Twitter
IntraBusiness
Parties performing the economic transaction are within the business firm
Electronic exchange of information helps integrate departments
Ex. Marketing demand assesses demand --- Production Department --- Procurement (to get raw materials) --- Finance (get funds)
IT enabled communication via the
intranet
saves time and cost
Intranet:
An intranet is a private network accessible only to an organization's staff.
To facilitate business processes, firms use ERP software that allows for better integration.
Consumer to Business (C2B)
This is a transition from the traditional B2C model.
Examples include:
Reverse auctions, in which customers quote the price for a product or service they wish to buy. Ex. eBay
Influencer Marketing:
Business pays a fee to be promoted on the customer's social media / blog.
E-business can also be found in the following industries:
Banking
Insurance
Travel Services
Recruitment Services
Online learning
Online Entertainment
Online Shopping
Online Publishing
Merits of E-Business
Lower costs:
Lower transaction costs
Saves paper and stationery costs
Cheaper than traditional business models
No need of purchasing and maintaining a physical space
Saves cost on recruitment, less people needed (No need of hiring and training store staff)
Only cost = hiring a person who is proficient in technology and has computer skills.
Time saving:
Saves time of customers and business
Customer doesn't need to visit store
Faster communication between customer and business
This helps in quicker decision making
No physical restrictions:
No geographical boundaries
Anyone can order anything from anywhere at any time.
Eliminates place and accessibility issues:
Stores are only open for limited hours
With e-business, customers can place their order anytime
This makes it easier to conduct business across time zones.
Lower barriers to entry:
The internet doesn’t distinguish between small and large firms.
They have similar opportunities over the internet
This promotes competition and results for a better product for the customer.
Acts as a low-cost advertising medium:
Online advertising is one of the cheapest options out there.
Ads can be placed on sites like Instagram and Facebook.
This has the added benefit of sending targeted ads to people. This results in a higher chance of purchase.
Demerits of E-business
Lacks personal touch:
It takes away the human touch
Some people prefer talking to salespeople and understanding the product.
Virtual businesses cannot provide that human element
Security issues:
To perform an online transaction, a customer has to share various details such as name, phone number, address and bank details.
The safety of such information is threatened due to rampant hacking.
Digital payments are prone to online banking frauds.
Internet Connectivity:
E-business requires constant internet connectivity
This may not be available in remote and rural areas
Not having access to the internet also prevents online transactions
Moreover, businesses need to have access to a strong internet connection to run effectively and avoid delays in processing orders and payments.
High Initial Costs:
Preliminary costs include
Installing an internet connection
Purchasing hardware
Purchasing software
Setting up the entire system
Maintainance
Highly competitive:
The E-business marketplace is flourishing quickly.
Established firms need to work hard to maintain their position as more and more players enter the field.
A firm's position will depend on the way products are displayed on their web portal and all the accompanying services provided.
Dearth of skilled manpower:
Firms are facing a shortage of manpower who can continuously update the internet facilities and webpage.
Webpages require frequent changes
With so many E-businesses popping up, there is a shortage of staff that can take care of these technical needs.