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R1 Business Context, x 100 = 90% CPR - Coggle Diagram
R1 Business Context
R1.1
Types of organizations and stakeholders within business
Types of Organizations
Voluntary/Charity
Organizations whose purpose is to benefit society
Profit as a motive with no government intervention
Money raised by organizations is invested back into community or organization
Charities are registered with the Charity Commission and operates for charitable purposes
Register for Charity Commission
Established for a charitable purpose
Subject to High Court's charity law jurisdiction
Private
Owned by individuals and driven by making profit
Profit benefits owners of organizations, shareholders and investors
Financed by money from shareholders or bank loans
Small or medium enterprises
Businesses with financial turnover, assets or a number of employees that are below a certain level are classified as SMEs
SMEs Have full-time employees to manage their data and IT infrastructure
Typical job titles for these people include, system administrator, network manager or IT manager
Large enterprises
Has more comprehensive business model
Often have full-time staff who manages applications and/or part of IT infrastructure
They exceed numbers of employees, financial turnover and assets that are benchmark for SMEs
Non-governmental organisations
Non-profit organizations that function independently on government
Organized at local community, national and international levels to serve a social or political goal
Relies on volunteers as their workforce
Groups
Operational
NGOs focus on design and implementation of development projects
Advocacy
NGOs promote or defend a specific cause and seek influence public policy
Reply on funding from sources like:
Sales of goods and services
Private donations
Membership fees
Grants
Public
Includes any organization owned or operated by government agencies
Examples
Local council
Passport Office
Libraries and schools
Types of Stakeholders
Internal
Board of Directors
Responsible for helping business setting and achieving goals
Ensure to restore interest of their suppliers, employees, customers
Represent shareholder's interests. They ensure company's long-term and sustainable success
If lacks judgment it will impact business financially
Employees
Employees have responsibilities to protect their health and safety and others with their actions
If they don't take care will suffer from bad reputation and reduce future employees
Employment rights
Statutory sick pay
Minimum periods of notice if employment coming to an end
Time off for emergencies
Right to request flexible hours
Departments
Owners
People who own the business, controls how business operates and processes
Able to employ a manager or board of directors to manage business
Supply capital or equity
May have impacts of business shut down due to lack of funding
External
Outsourced services and suppliers
Direct/indirect competitors
Shareholders
Investors
Clients
Funders
Customers/consumers
Government (Local/National/International)
Factors that affect business
Business to many
These are businesses that sells their products and/or services to other businesses and to customers (a combination of B2C and B2B).
Business to customer
This is where businesses sell products and/or services directly to customers
Business to business
These are businesses that sell products and/or services to other businesses in order for them to function
R1.2
Key factors that influence business environment
Key Factors that influence Business
Social
Market trends
Identify potential changes in the market and stay ahead of competitors.
Cultural expectations
It’s a mistake to make assumptions that customers will make similar choices just because they seem similar.
Social mobility
This can be horizontal or vertical mobility. Status of the person in overall society.
Socioeconomic aspects
To understand the characteristics that usually influence consumers (the amount of money people earn)
Technological
Potential impacts of emerging technologies
Makes faster business decisions based on outputs from cognitive technologies
Avoids mistakes and ‘human error’
Increases productivity and operational efficiency.
Processes vast amounts of data to generate quality information which can be used to expand the business.
Saves time and money by automating and optimizing routine processes and tasks.
Increases revenue by identifying and maximizing revenue opportunities.
Economic
Interest rates
Increases in interest rates mean that businesses have larger overheads and less disposable income.
Exchange rates
Changes to exchange rates, like value of the pound to euro, can affect how much money a business has to pay to suppliers.
Consumer trends
Levels of employment, level of wages inflation, interest rates and consumer confidence can all impact how much consumers spend.
Periods of recession
An economic recession can change the purchasing attitude of consumers.
Legal
Consumer laws
These are laws that are used to regulate the legal relationships between consumers and businesses.
Employment law
Employment laws operate differently in different countries. (The minimum wage in the UK is different to South Africa and the USA)
Organizational law
Businesses can be registered as a corporation, limited partnership, etc. The legal status of a business determine the types of activities it is allowed to carry out.
Health and Safety legislation
These are laws relating to health and safety can also vary greatly between countries.
Political
Foreign trade policy
Changes in government trade policy can make it difficult for businesses to trade across international borders.
Tax policy
This can include changes to income tax, national insurance contributions, corporation tax, business rates and value added tax (VAT).
Government policy
The passing of new legislation or government changing the way they spend taxes.
Environmental
Carbon footprint
Carbon footprints are measures of carbon dioxide and are determined by the greenhouse gases that are generated by the activities of the business.
Digital Waste
Sometimes referred to as e-waste is any type of digital/electronic equipment that is no longer used and is discarded.
R1.3
Measurable value of digitalization in business
Measurable value of digitalization
Online Opportunities for commerce
Customers expect fast dispatch of products that they purchase, expect instant access
People shop online at least once a week. So businesses are moving their sales operations online
They can reach a larger audience (global access) and increase brand awareness
Customer retention
Number of customers a business has retained over a period of time
Formula to calculate retention rate
Customers at end of period - customers acquired -----------------------------------------------------------------
Customers at the beginning of period
Increased communication
Business growth
The social interaction between businesses and their customers increases sales and improves brand loyalty
Brand building
Can boost a business’s visibility with potential customers, improving brand
Channel engagement
It can boost user engagement by engaging with more customers and delivering a better online experience.
Digital analytics
Collection, measurement, analysis, visualization and interpretation of digital data
Used to improve customer experiences, attract new audiences
Provides insights into how a business is performing in the digital marketplace
It allows business to track their products/services performance with information relating to audience and how to change their promotion methods
Social media
Businesses use social media to promote their products and services
Allows businesses to interact with customers more easily
Can answer queries, share news, promotions and updates quickly and easily
Remote working
Mobile and remote working more accessible to wider range of people
Organizations with larger remote workforce requires less office space, materials and utilities, reducing costs
Sales and marketing
Cannot sell a product/service without marketing it
Marketing takes place first and identifies the needs and wants of the customer
If a product/service is not wanted/needed then it cannot be sold
R1.4
Influence and impacts of digitalization within business context and market environment
Brand differentiation
How it can be created
Presentation of the brand
Altering price of goods/services
Emotional response
Story behind the brand
Physical characteristics
Overall customer experience
Brand values
Timeless
Can it adjust some of its values to remain tough and constant
Exclusive
Should not be a version of another company's brand values. Must be unique
Memorable
When they see logo name, is it memorable/know what it is/means
Actionable
Brand values must be things which company and employees expect to deliver in interactions with customers
Types of virtualization
Network virtualization
Reproduces physical network requirements as a virtual network
Allows applications to run in exactly same way as on physical network but logical, so no physical ports, devices etc
Desktop virtualization
Enables organizations to provide software configured for specific needs
Changes or upgrades can be rolled out quickly and easily from IT department to all locations
Server virtualization
Enables one physical server to run multiple operating servers as virtual machines
Benefits
More efficient use of IT equipment
Faster workload distribution
Better application operation
Improved server access
Reduced operating costs
What does cloud solutions provide
Faster implementation
Improved collaboration
Connectivity
Reduced risk of data loss
Cost saving
Security
Processes and business models
Digital manufacturing
Advantages
Development of virtual process which can be tested and corrected before time and money is spent
Speeds up new innovations and redesigns of service/product
Reduction in loss of data resulting in mistakes and errors
Financial
Paying salaries and suppliers
Receiving payments from customers
Ensuring that company meets its legal obligations like tax
Production of predictions on the future finance
Quarterly, half-yearly and annual reports on company's financial position
Digital innovations
Business intelligence and insight
Uses software and other tools to interpret data, identifies problems like losing sales
The reports, charts and graphs generated provide insight into issues and identify ways to deal with them
Unique selling points
Gives company a distinct position in marketplace as it demonstrates a special benefit that it can provide
May include value of product for its price or solution it provides to particular business problems
R1.5
The Role of Technical Change Management
Digital Change for an Organisation
Organisations need to know when to have change and not do it for the sake of it
Organisations need to carefully consider the overall business goals and objectives they want to achieve.
Rationale of Change
It's important that all staff can understand the reason for the investment so that there is less resistance to new processes.
Engaging the stakeholders is not always an easy task for organisations.
When an ogranisation identifies how digital change can support their goals, they have to convince the stakeholders
The Role of Technical Change
Organizational change means a change, reorganization or replacement with respect to processes, methods, systems etc
This change can be developmental, transitional and transformational.
Re-evaluating the Digital Change Strategy
A digital change within any organisation is never complete as new technologies are launched continuously
They need to reassess the digital journey being taken and consider the rate at which the digital change is taking place.
Managing Digital Change
When implementing new technology there will be different stages of planning and implementation.
Stages
Getting ‘buy in’ from all stakeholders
Communication of changes (to customers and staff)
Developing the skills of staff to use the new technology
Launch and monitoring
Planned-For Factors
Planned change is the preparation of the organisation for new goals or a new direction for the business to go in.
Adding additional features and/or services
Rebranding
Scaling
Diversification
Unforeseen or Unpreventable Factors
Zero-day vulnerabilities
Data corruption
Crisis (natural disasters such as floods, terrorism and cyber attacks)
System failures
Innovations within Digital Technology
It is important that organisations adopt new technologies
Reasons why:
Competitive advantage
Avoid possible extinction
Prevent financial loss
Changes in legislation
Response to competition
R1.6
The Components of Technical Change Management
SMART Objectives
SMART
Specific
Measurable
Achievable
Realistic
Evaluate
Re-Evaluate
Timely
Risks
Misuse of new tools and processes
Inadequate support, infrastructure or resources
Resistance to change from staff/teams
Knowledge management and angle sources of dependences
Request for Change
A request for change is a formal request to make changes to a product or system.
Types of requests for change
Major changes
These changes may mean a significant change to hardware, software, a product and/or operational processes
Minor changes
This is when the CAB have requested minor changes to the request.
Scheduled changes
Business usually have set periods of time when systems, processes and so on are reviewed.
Spontaneous changes
Occurs when meetings have been held and feedback has been provided about the progress of further identified issues.
Change Advisory Board
Change management has to be approved, have clear objectives and be planned for carefully.
It is a group of people who hold a CAB meetings to asses, prioritize, authorize changes
The CAB should include at least one person from each group of the people affected by the changes.
Functions they carry out:
Prioritize and review change request
The CAB review the requests for change and use knowledge, experience and background information to assess the changes for risk.
Monitor the change process
The CAB will monitor the proposed changes to ensure that intended outcomes do not negatively impact the business.
Provide feedback
The CAB team will provide managerial feedback during the change management process
R1.11
Risks and Implications within a Business Environment
Audience Exclusion
It's used mainly within marketing campaigns when a business only wants to target a particular customer group
Benefits
Reaching a more relevant audience
Avoiding ‘ad fatigue’ and overloading the audiences for whom the product/service may not be relevant
Insufficient Business Resilience
Business resilience is when a business anticipates, prepares for, responds and adapts to staged changes and sudden disruptions.
Inability to adapt to disruption
When disruptions occur, for example a pandemic, businesses need to react immediately to prepare and for changes they face.
Inability to adapt to change
Businesses need to strengthen and constantly review their risks mitigation strategies to ensure that they are resilient to future changes.
Non-Compliance
It's when a business or person fails to or refuses to act in accordance with set policies and procedures.
Technical
Systems not fit for purpose
The technological infrastructure of a business uses about 50% of the allocated budget for technological spending.
System does not meet user requirements
Businesses that do not have up-to-date and fit for purpose systems can lose money due to employees taking longer to complete tasks
Privacy and Security
Businesses store a lot of data and information about their customers, suppliers, workforce and operations.
Risks:
Theft or manipulation of sensitive or private information.
Computer fraud where cyber criminals use sophisticated phishing scams.
Viruses that can destroy data, damage hardware, render systems inoperable and disrupt business processes
Implications
Operational downtime
Once a business has been victim of a cyber attack, the incident must be investigated to determine how and why it occurred.
Loss of reputation
Customers need to be able to trust the businesses that they deal with. Cyber attacks can damage reputation of a business
Legal action
The data protection and privacy laws require businesses to to manage the security of all personal data.
Financial loss
Compensating customers and suppliers who have been affected, setting up incident responses
R1.13
Types of Hacker and the Implications of Hacking
Black Hat Hacker
Black Hat hackers are criminals who break into computer networks with malicious intent.
They may also release malware that destroys files, holds computers hostage, or steals passwords etc
Grey Hat Hacker
Gray hat hackers enact a blend of both black hat and white hat activities
Gray hat hackers often look for vulnerabilities in a system without the owner's permission or knowledge.
If issues are found, they report them to the owner, sometimes requesting a small fee to fix the problem.
White Hat Hacker
The good guy who uses his (or her) capabilities to damage your organization - hypothetically
To uncover security failings in your system in order to help you safeguard your business from the dangerous hackers
Consequences of Hacking
Lv2
is “unauthorised access with intent to commit or facilitate commission of further offences”, which comes with a maximum sentence of five years in prison.
Lv3
is “unauthorised acts with intent to impair, or with recklessness as to impairing, operation of computer, etc”, which may result in a ten year prison sentence.
Lv1
is “unauthorised access to computer material”, which is punishable by up to two years in prison.
3ZA
“unauthorised acts causing, or creating risk of, serious damage”), is punishable by up to life in prison
x 100 = 90% CPR