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Business and Technology | Effects of Technology in Business

Business and Technology | Effects of Technology in Business

Business and Technology

Technology plays an important role in business. Almost all businesses and industries use technology in their operations. Technology plays a key role in the growth of businesses around the world. Businesses use technology to carry out their functions as production, marketing and distribution, accounting, human resource, and research and development efficiently and effectively. Without the growth of technology, the idea of globalization wouldn't turn to be a reality. Businesses can go international through the use of the internet. Technology has allowed businesses to grow and expand in different ways.

Technology expands the reach and efficiency of internal and external business communication. It allows opportunities to optimize production. Using proper technology, small companies can often compete with larger firms in operational efficiency. Manufacturers constantly look to upgrade technology to compete with industry leaders on production efficiency. Technology also makes the process of selling to and servicing customers much more efficient as well. It is used to organize items systematically in a warehouse or storage room and manage accounting and finance tasks.

Effect of Technology in Business

Technology plays a crucial role in the economic development of a country. It also affects the ways and strategy of doing business. It greatly affects business operations. The use of technology in the work process enhances both efficiency and effectiveness. It affects inputs, processing, and output both quantitatively and qualitatively. Technology is changing in Nepal. However, Nepalese organizations are not found to adjust to the rapidly changing technology in their business operation. It has definitely eroded their competitiveness.

A business should make technology an important part of its operation since it exerts a number of positive effects. However, it is not free from limitations or negative effects.

Positive Effects

The following are the positive effects of technology in the development of business.

1. productivity: 

Productivity may be defined as the ratio between input and output. With suitable technology, productivity is enhanced. Productivity is the most important indicator of the long-term economic prospects of a business. It increases the quality of output by decreasing the per-unit cost of production.

2. Competitive advantage: 

Adoption of suitable technology enhances quality as well as the speed of delivery. It also helps to reduce the cost of production as a result of which the business becomes able to sell its products at lower costs compared to the competitors. Hence, a business can get a competitive advantage by adopting suitable technology.

3. Innovation: 

Innovation is the process of translating an idea or invention into goods or service that creates value for which customers pay. Innovation is essential for the growth and survival of a business. Adoption of suitable technology helps a business to be innovative. It enhances business efficiency.

4. Increase in profit: 

Technology enhances product quality. It also decreases the cost of production. Due to high quality and low cost, the demand for the products increases as a result of which a business can earn higher profit.

5. Customer value: 

Technology assists ineffective distribution of the products. Similarly, better services may be provided to the customers in the stipulated time. Hence, the use of proper technology enhances customer value.

Negative Effects

The following are the negative effects of technology on business.

1. Capital burden: 

Technology needs a huge investment of capital. It may not be afforded by small organizations. The investment in technology is normally high. Hence, all organizations may not be able to adopt the latest technologies.

2. The threat of quick replacement: 

The change in technology is rapid. New technology may replace the existing technology in a short period. So, there is always a risk of replacing the existing technology. Hence, huge investments in technology may be threatening or riskier.

3. Increase in cost: 

Technology demands proper repair and maintenance in a regular manner to keep it functioning. It increases investment or the cost of production. It eventually decreases the competitiveness of the business.

4. Need of skilled manpower: 

The human factor is very important for the effectiveness of the technology. Human resources with proper knowledge and skill are needed to reap the benefits from the technology. Hence, it is necessary to have competent manpower for the effectiveness of technology which all the organizations may not be able to manage. On the other hand, acquiring, managing, and developing competent manpower may be a costly affair.

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