ICT in Business

 Information and communication technology (ICT) refers to the use of electronic

technology to gather, store, process and communicate information.
 It refers to all technologies that process information and are used in the running of a
business
 It is a computing and communication system that businesses might use to exchange
information with stakeholders.
 It can also be referred to as information technology (IT)
 Some examples of ICTs are intranet, extranet, website, mobile apps, e-commerce
websites, software robots, servers, cloud technologies, digital communication apps, and
technology to facilitate work from home.

ICT resources in a business

1. Word processing

 Is used in all departments for administrative tasks – typing, printing, storing, amending
all forms of written letters and messages for internal and external communication.
 It is beneficial to a company in terms of speed and accuracy
 It is beneficial in terms of ease amending of documents
 It I capable of linking with email for for quick internal and external communications

2. Page maker and publishing programs

 These are specialist publishing programs that can create magazine and newspaper pages
for high quality printing direct from computer
 Can be used by the marketing department to produce own promotional material
 internal business newspaper can be produced to aid internal communications
 Are important in terms of reducing the need for use of professional publishing firms.
That is, it results in reduction of costs.
  Allows documents can be amended quickly, e.g. promotional leaflets changed for
different countries

3. Database

 Is used in all departments of a company where the storing, filing and retrieving of large
quantities of data are necessary
 Is used by human resources department for keeping of personnel records
 Is used by the marketing department for storing details of all customers, addresses,
numbers of products purchased etc
 Is used by the operations department for stock handling, electronic ordering of new
supplies, application of JIT stock-control process
 are useful in finance department for recording all transactions, including trade
receivable payments and for producing up-to-date accounting data to management
 Is beneficial in terms of replacing vast quantities of paper records
 Allows rapid retrieval of information, which saves time

4. Spreadsheet program

 Is useful for updating and amending financial records of a business

 Allows updating of cash flow forecasts and budgets in light of new information
 changes in expected performance can be input to the spreadsheet and changes in total
figures are made automatically
 income statements and statements of financial position can be drawn up frequently
 Is beneficial in terms of flexibility and speed. This means that changes to accounting
records can be made quickly and the impact of these on total figures can be
demonstrated instantly

5. Computer-aided manufacturing (CAM)

 these programs are used to operate robotic equipment that replaces many
labourintensive production systems
 Are used in operations management in manufacturing businesses
Benefits of using CAM

 Labour costs are reduced as computers replace many workers

 productivity is increased and variable cost per unit is lower than in non-computerised
processes
 accuracy is improved – less scope for human error
 flexibility of production is increased – modern computer-controlled machinery can
usually be adapted to make a number of different variations of a standard product, and
this helps to meet consumers’ needs for some individual features.

6. Internet/Intranet

 The internet is the world wide web of communication links between computers
 Is used by the marketing department – for promoting a business to a large market and
taking orders online
 Is used by the operations management for searching the market for the cheapest
suppliers
 Is used by the human resources uses these programs for communicating within the
organisation
 Intranets allow all staff to be internally connected via computers

Benefits of internet/intranet

 cost savings from cheap internal and external communications

 access to a much larger potential market than could be gained through non-IT methods
 webpages project a worldwide image of the business
 online ordering is cheaper than paper-based systems
 The use of social media and mobile marketing allows access to consumer groups not
reached by traditional promotional methods

Advantages of ICT

1. Easier, faster and more effective communication

Improved and faster communication in the workplace is one of the advantages of using
technology in the workplace. Communication through hi-tech gadgets such as the cellular
phones and computer technology such as e-mails ensures that the communication process is
fast. The fast receipt and dispatch of information helps increase efficiency in the workplace.

2. An increase in the profits of a company

The use of modern technology reduces the cost of production especially when technology takes
the place of human resource; this increases the profits. When using labor- displacing
technology, you do not have to pay a monthly salary and benefits to employees. This means
that your cost of production goes down while your profit margins goes higher.

3. Cost effectiveness

For business ICT saves incredible amount of money on business flights and accommodations.
Only few years ago there was no way to send free message through to the phone, but now
people uses social network for free communication e.g. Viber, Skype, Facebook. It allows the
saving of time and money for petrol as businesses can make purchases through online
shopping..
4. Increased/improved manufacturing productivity

The automation of business processes and giving employees ICT tools can help in improving the
overall productivity of the employees and the business. On the production line, for example,
solutions such as computer-aided design/manufacturing can help to reduce set-up times and
improve manufacturing accuracy so that employees spend less time on reworking. Access to
manufacturing data enables managers to plan production more effectively, making better use
of resources and reducing lead times.

5. Greater availability

Websites are open for communication in every minute of the year. This means that a business
can be open anytime anywhere giving a customer the capability to make purchase from
different sites and different countries.
6. Creation of employment

 The best advantage of ICT has been a creation of new and interesting jobs in IT sectors.
Computer programmers, web designers etc. have great employment opportunities
created through the advancement of technology.

Limitations of applying ICT to businesses

1. Costs

 Capital costs can be substantial. Labour training costs will be necessary and will recur
regularly with further technological development. Redundancy costs will be incurred if
any existing staff are being replaced by the technology.

2. Loss of jobs
Employers worldwide continue to seek reduction of the cost of production and at the same
time increase their profits. Advanced technology offers a solution to this pursuit through labor-
displacing technology. Automated Teller Machines take the place of bank tellers and automated
airline kiosks take the place of ticket agents. As a result of these, many jobs are lost as
technology reduces or replaces the need for human resource

3. Crime rate

The increase of crime in the workplace is another disadvantage connected to the use of
technology, especially when it comes to the abuse of computer technology to commit crimes
such as Internet hackings and theft of money through illegal access of credit card numbers.
Invasion of the privacy of employees also happens in the workplace through computer-based
technology. The theft of personal information and data from computer hard drives for illegal
gain or manipulation is another crime that has risen due to the use of technology in the
workplace.

4. Production cessation and errors can occur

Technology in the workplace is common. However, some employees may overly rely on their
business technology to complete tasks and services. This may lead to employees not catching
errors that might have been caught had the task been done manually. Additionally, over-
reliance on technology impacts whether a business can complete tasks if the technology is
removed. For example, a business that functions completely online can't process orders at all if
the business' server fails, and factories may have to halt production of a product if a robot on
an assembly line breaks down.