Information communication technology (ICT)
Business technology refers to applications of science, data, engineering, and information for business purposes, such as the achievement of economic and organisational goals. ICT is generally accepted to mean all devices, networking components, applications and systems that combined allow people and organizations including businesses to interact in the digital world.
The Role of Information Communication Technology in Business
The main way in which technology has influenced banking and commerce is through the introduction of Automatic Teller Machines (ATMs) and Automated Banking Machines (ABMs) which facilitate the deposit and withdrawal of funds, as well as other services without having to go into a bank to access teller services. The location of ATM machines in hotels, petrol stations, malls and supermarkets adds to the convenience of customers.
Another way in which ICT has influenced business is through the practice of on-line banking which enables customers to access their accounts from home and other locations using personal computers. This facility enables customers to check their balances from the comfort of their homes and permits easy and convenient payment of utility and other bills. Customers with more than one account can also use this facility to transfer funds from one account to another.
Types of ICT used in Business
- Productivity tools such as:
- database software: Access;
- presentation software: PowerPoint, Prezi; and,
- graphics software: Adobe Photoshop.
- Accounting: QuickBooks
- Computer Aided Design (CAD)
- Management Information Systems
Digital communication technologies:
- Internet and,
Distinction between E-commerce and E-business
E-commerce is any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods and services. E-business is broader than e-commerce and include the transaction based e-commerce businesses and those who run traditionally but cater to online activities as well.
Ways in which ICT can be used to Improve Efficiency of Business Operations
The emergence of the electronic media and information communication technology has really impacted on business positively in many ways some of which are as follows:
Speed and time – Capital intensive production is much more productive than labour intensive production. ICT allows products and services to me delivered in a much shorter period of time.
Easier storage – information communication technology can improve the efficiency of businesses where it can foster organized storage of information through sophisticated databases.
Improved sharing of information - improved sharing of information will automatically follow from the application of ICT.
Automation – the advancement in information communication technology has led to spiral advancement in other automated systems. These mechanisms have resulted in the automation of most businesses where efficiency and cost-savings have been realized.
Benefits of Information Communication Technology
Some of these benefits are as follows:
Reaching customers – the application and use of ICT will facilitate for reaching more customers than with any manual system.
Streamline operations – the application of ICT can result in the streamlining of the operations of the business. There will be better planning, controlling and coordinating of the business operations.
Improvement in customer service – the application of ICT will require feedback from customers through toll free telephone systems. This will result in the improvement in the products that are made based on the needs and preferences of customers. This involvement of customers means a better customer service.
Ethical Implications of the Use of ICT in Business
Though the use of ICT has many advantages and results in efficiency in the operations of the business, there are also challenges with the use of the use of ICT and some of these are follows:
Security and privacy - security and privacy are serious concerns using information communication technology.
Intellectual property and copy rights infringement - Due to the ubiquitous nature of the Internet, issues such as copyright infringement are difficult to control.
Impact on humans – the use of ICT can negatively impact on humans if adequate means are not instituted to address the issue. Humans may be expose to inappropriate and negative information that may be of harm especially to your children
Determinants of Standard of Living and Quality of Life
The standard of living of people in any country is not just to enjoy just the necessities of life but also high consumption of good and services outside of the bare necessities. A standard of living is the level of wealth, comfort, material goods and necessities available to a certain socioeconomic class or a certain geographic area.
Determinants of Standard of Living
An evaluation of standard of living commonly includes the following factors: income; quality and availability of employment; quality and affordability of housing; hours of work required to purchase necessities; gross domestic product (GDP); inflation rate; affordable access to quality health care; quality and availability of education; life expectancy; infrastructure; national economic growth; economic and political stability and safety.
Difference between Standard of Living and Quality of Life
Quality of life is more subjective and intangible than standard of living. Factors that may be used to measure quality of life include the following: freedom from slavery and torture; equal protection of the law; freedom from discrimination; freedom of movement; freedom of residence within one's home country; presumption of innocence unless proved guilty; right to be treated equally without regard to gender, race, language, religion, political beliefs, nationality, socioeconomic status and more; right to privacy; freedom of religion; right to fair pay; equal pay for equal work; right to vote; right to rest and leisure; right to education and right to human dignity
National income is the total value of a country’s final output of all new goods and services produced in one year. There are three main methods of calculating national output which are:
- The expenditure approach which aggregates demand or gross national expenditures by summing consumption (C), investment (I), government expenditures (G), and net exports (X).
- The income approach which sums the incomes of the various sectors or economic agents and;
- The output approach which sums all outputs.
The Impact of the Economy on Businesses
The economy can have an impact on the operations of businesses. In a recession, workers are laid off and the unemployment rate increases. A recession is negative growth in the economy or declines in national income for consecutive quarters. Businesses and machinery are idled and capacity utilization falls significantly. Slack and excess capacities are created as capacity utilization falls. This causes a fall in wages as workers will be willing to obtain employment at a lower wage rate. This is so due to the oversupply of workers relative to the demand for labour by firms. Recessions also result in a fall in exports and even a fall imports at times.
Reasons for International Trade
International trade is the exchange of goods and services across international boundaries or territories. In international trade, countries import or purchase from foreign countries the products which they cannot produce and export or sell products which they can produce.
The following are reasons for international trade:
Reduced dependence on your local market - The local country may be struggling due to economic pressures, however, if it engages in international trade, it will have immediate access to an unlimited range of customers in areas where there is more money available to spend, and because different cultures have different wants and needs.
Increased chances of success - The higher is the volume of products the country sells, the more profit it makes.
Increased efficiency - There can be benefits from the economies of scale that the export of the country can bring.
Economic advantage - There can be advantages of currency fluctuations through international trade. Countries can export when the value of then currency is low against other currencies, and reap the very real benefits. When the currency is low, imports will become more expensive but exports will become more attractive.
Balance of Payments
The balance of payments is the set of accounts where trade transactions are recorded. Debit transactions involve payments by the local or domestic residents to foreign residents for imports of goods and services, purchases of local residents traveling abroad and foreign investment by local residents. Credit transactions are those where foreigners pay our country for goods and services sold to them and inflows of investments by foreign companies.
The balance of payments is comprised of four main accounts which are the current account, the capital account and the official reserve account plus the errors and omissions. Within these three accounts are sub-divisions, each of which accounts for a different type of international monetary transaction.
Current Account - the current account on the balance of payments measures the inflow and outflow of goods, services, transfers and investment incomes. It comprises of the following:
- Capital Account - The capital account is the net result of public and private international investments flowing in and out of a country. It records the net changes in the country's international financial assets and liabilities.
- The Official Reserve - The official reserve account records transactions of the central bank such as the current stock of foreign exchange reserves available for financing of international payment imbalances.
- Errors and Omissions - This section of the balance of payments records errors and possible omissions. Just as in the case where companies’ financial status is recorded on a balance sheet which must balance, the same must be so with the balance of payments. The errors and omissions account attempts to provide for this balance.