Technology is the knowledge, tools, techniques and actions used to transform ideas, information and materials into finished goods and services. Technology can be as simple as making coffee at a restaurant or as complicated as sending a rocket to Mars.
Technological change builds on the present and helps create the future. Knowledge and ideas are expanding continually. New materials are being discovered or created. New ways of doing things are pioneered.
Technological changes affect all aspects of business functions within the business presenting both technological opportunities and threats. The departments are likely to benefit most from them and the potential advantages to be gained.
Factors to consider about technology implementation
When adopting certain technologies, managers need to consider the following factors:
- Benefits. Managers can obtain data quickly and frequently from all departments and regional divisions of the business to better control the business overall in order to achieve expected gains in efficiency (as measured by productivity, flexibility and communications) and profits. Customers can gain access to up-to-date information from any part of the world through dedicated websites. Outside news media such as Bloomberg, CNBC or Yahoo Finance provide invaluable information to users in a cost-effective way.
- Expenses. Initial capital costs can be substantial and will include the cost of purchasing, installation, maintenance, replacement and insurance of new technologies. The company will need to include necessary labor training costs and then regularly train its staff with further technological development. If any workers need to be made redundant as a result of being replaced by the new technology application, redundancy costs will have to be incurred by the Human Resources department.
- Recruitment and training. There will be a need for training workers to adopt the new technologies. The number of people who need training, where to find the time to train people and how to train them will need to be considered as one of the steps to successfully introduce technology into the business.
- Reliability. There will be breakdowns in an automated production system from time to time, therefore the expected gains in efficiency related to new systems may take longer to be realized than what was originally forecasted. Any technical issues with stock-handling systems such as Just-in-Time, will lead to the whole process of inventory management being halted, hence the whole production process may be stopped.
- Change management. Because many managers and employees are afraid of changes, therefore the need for managing the technological change process will require a great deal of management knowledge and skillset. Many workers and managers may not be willing to educate themselves making new technology implementation quite an issue for the whole business.
- Sensitivity of human relations. If the technological changes are not properly and sensibly explained and presented to workers by the management, new technology implementation may have very negative impact causing resistance to change, low morale due to reduced job security and difficulties with future workforce planning as trade unions may lobby for keeping as many members’ jobs as possible.
- Data protection. In recent years, the governments have created national legislations regarding holding data of staff and customers. Businesses must adhere to these laws and keep up-to-date with these legal constraints on its use of IT.
It is worth noting that the potential opportunities for technological applications in a business are increasing almost daily.
Changes in technology will affect what customers want, what competitors provide and how businesses operate. The development of the Internet and advances in technical knowledge have directly affected the recruitment process, business communication and human resource management; E-commerce, development of new products as a part of the research and development, opening up new markets and pricing strategies; annual reports which are now published online available to anyone in the world; inventory management and benchmarking in operations management.
