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The technological environment - introduction

technology.pngTechnological change presents significant opportunities and threats for businesses.

Technology developments affect business operations in a number of positive ways:

  • Increasing access to, and storage and manipulation of, data.
  • Increasing speed and volume of communication.
  • Reduced language and cultural barriers.
  • Reduced costs of production.
  • Reduced administration costs, waste and increased efficiencies.
  • Increased outsourcing of key functions cutting operating costs.
  • Higher quality products at competitive prices through improved innovation and development.
  • Better working conditions, flexible working practices and greater opportunity for personal development.
  • Increasing access to global markets and greater mobility in business transactions.

However, there are some potential negatives associated with technology development

  • The real costs of remaining ahead of competitors.
  • Fewer barriers to entry to markets, allowing smaller companies to compete using relatively low cost web marketing tools.
  • Empowering customers to seek lower prices and better deals.
  • The increasing support costs such as licensing of software, maintenance of equipment and the training of staff.
  • Reduced job security.
  • The pace of constant change undermining existing organisational structures and threatening social relationships.
  • The increased risk of interconnected systems failing and resulting chaos. Not all systems are secure and it is increasingly difficult to protect systems from hacking.