Information technology in business plays a strategic role, as it can enable businesses to achieve their goals and objectives more effectively and efficiently. In the strategic context, information technology in business can be used to support and enhance a variety of business functions, such as communication, collaboration, data management, and customer service.
How can information technology or information systems affect industries?
According to Porter, there are three ways in which information systems (IS) and information technology (IT) can affect industries:
- IT can create new products and services, such as software or online platforms, that did not previously exist.
- IT can change the way products and services are produced, such as through the use of automation or data analysis.
- IT can change the way products and services are delivered to customers, such as through the use of e-commerce or mobile apps.
Types of e-businesses
E-businesses are businesses that operate online, using the internet as a primary platform for buying and selling products or services.
There are various types of e-business, including:
- B2B (business-to-business): involves the exchange of products or services between businesses, like wholesalers selling to retailers.
- B2C (business-to-consumer): This type of e-business involves the sale of products or services directly to consumers, such as online retailers selling to individuals.
- C2B (consumer-to-business): This type of e-business involves consumers selling products or services to businesses, such as individuals selling handmade crafts on Etsy.
- C2C (consumer-to-consumer): This type of e-business involves the exchange of products or services between consumers, such as through online marketplaces like eBay.
4 stages of e-business
The four stages of e-business are:
- Pre-internet: This stage refers to the period before the widespread adoption of the internet, when businesses primarily relied on traditional methods of marketing and sales.
- E-commerce: During this stage, businesses began to use the internet as a means of selling products and services online.
- Mobile commerce: This stage saw the emergence of mobile devices as a primary means of accessing the internet, leading to the rise of mobile commerce, or m-commerce, which refers to the use of mobile devices for e-commerce transactions. 4. Social commerce: This stage involves the use of social media and other online platforms for e-commerce transactions and marketing.
Benefits to e-business
There are several benefits to e-business, including:
- Increased reach: E-business allows companies to reach a global market, rather than being limited to a local or regional market.
- Reduced costs: E-business can reduce costs by eliminating the need for physical storefronts and other brick-and-mortar expenses.
- Increased convenience: E-business allows customers to shop anytime, anywhere, and can provide a more convenient shopping experience overall.
- Improved personalisation: E-business can allow companies to gather and analyse customer data in order to offer personalised recommendations and experiences.
Barriers to e-business
There are also several barriers to e-business, including:
- Security concerns: Customers may be hesitant to make online transactions if they are worried about the security of their personal and financial information.
- Lack of trust: Some customers may not trust online businesses, particularly if they are unfamiliar with the company or if there have been past security breaches.
- Technological barriers: Some customers may not have access to the technology or internet connectivity needed to participate in e-business.
- Legal and regulatory barriers: Different countries and regions may have different laws and regulations governing e-business, which can create barriers for companies looking to expand internationally.
Overall, IT and e-business have the potential to significantly impact industries and offer many benefits to businesses and consumers. However, it is important for companies to carefully consider the potential barriers and to address any concerns or challenges in order to fully realise the benefits of these technologies.
Risks using information technology in business
There are several risks associated with the use of information technology in business, including:
- Data security risks: Businesses may be at risk of data breaches, which can result in the theft or loss of sensitive information such as customer data or intellectual property.
- System failure risks: IT systems can also fail or malfunction, which can disrupt business operations and lead to lost productivity and revenue.
- Compliance risks: Businesses may also face risks related to compliance with laws and regulations governing the use of IT, such as data protection laws.
- Reputation risks: IT-related incidents, such as data breaches, can also damage a company’s reputation and harm its relationships with customers and other stakeholders.
IT controls in business
IT controls are measures that businesses can implement in order to manage and mitigate these risks. Examples of IT controls include:
- Access controls: These controls restrict access to IT systems and data to authorised users only.
- Data backup and recovery: These controls ensure that data is regularly backed up and that there is a plan in place to recover data in the event of a system failure.
- Security protocols: These controls, such as firewalls and encryption, help to protect against cyber attacks and other security threats.
- Compliance controls: These controls ensure that the business is in compliance with relevant laws and regulations governing the use of IT.
How to promote cyber security
To promote good cyber security in a business, there are several steps that can be taken:
- Implement strong passwords and regularly update them: This helps to prevent unauthorised access to IT systems and data.
- Regularly update software and applications: This helps to ensure that systems are protected against the latest threats.
- Train employees on cyber security best practices: This helps to ensure that all employees are aware of the importance of cyber security and are able to take appropriate precautions.
- Implement security protocols such as firewalls and encryption: These measures help to protect against cyber attacks and other security threats.
- Regularly review and update cyber security policies: It is important to regularly review and update cyber security policies to ensure that they are effective and up-to-date.
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