Digital Technology and Business Operating Systems
It is often noted that two major worldwide events are responsible for changes not only to the lives of ordinary people who make up the target markets of business organizations, but also to the operations of the said business themselves. These events are namely: The advent of globalized trade and recent technological advances. Globalization of human activities including trade has meant that business are constantly being exposed to new environments, new markets with unique and often discerning preferences and on the loop-side, the ever present threat of competition vying for a similar market slice as the said businesses (Kehal & Singh, 2008).
It is not surprising therefore, when the need to gain a competitive advantage over rivals has been the dominating theme in the board rooms of a majority of companies; with technology increasingly being seen as key to achieving success in this task (Kehal & Singh, 2008). Dependent on the industry, technology could imply many different things.
For companies in the manufacturing sector, technology could mean the acquisition of a new machine that eases the manufacturing task at hand; while for others like those in horticulture industry, technology could mean adoption of a new way to inter-crop plants in order to eradicate disease thus improve on yields. However, digital technologies have found a place in a multitude of businesses as they offer various advantages that cut across the board such as fastening communication and the retrieval of data (Kehal & Singh, 2008).
Digital technologies refers to what is conventionally refereed to as Information communication technology (Watkins, 2010). This encompasses computers and related internet based media such as email and social networking platforms (Watkins, 2010). Digital technologies also includes any form of networks in an organization including those restricted to operate within the organization, the intranet, and connections between a company and outside affiliated organizations such as suppliers and distributors termed
Digital Technology in Business 2 as the extrenet (Watkins, 2010). To define the operations of a company: These refer to the set systems, procedures and the information that guides them, that enable an organization to integrate, organize and normalize its primary processes in order to achieve its set goals (Daft & Marcic, 2008). For integration to be considered optimum, data in the company’s domain should be accessible to all involved in both a timely and eased manner (Weil, 2010).
On the other hand, normalization in this context involves the standardization of an organization’s business processes by getting rid of variations in business procedures among employees and departments (Weil, 2010). Different organizations have different operating systems, with each system suited to the organization in question (Weil, 2010). For instance, Cisco, a network solutions provider has made it possible for small businesses to acquire information communication technology based solutions by developing them and making them available through their partners worldwide.
Procter & Gamble on the other hand, has established local marketing arms which are allowed the leeway to strategize on how best they would exploit their immediate markets with other core services like human resource management and informational technology services centralized and standardized by the parent company (Weil, 2010). Though these models differ, that is of importance is not their apparent schism, but whether the chosen operating model has a chance at achieving success in the organization ( Watkins, 2010).
The success of an operating system, is dependent on the organization’s staff and management’s uptake of the operating system, their willingness to follow it through and whether they are well equipped to make it work for the organization (Watkins, 2010). However, as noted above, the motivation for any operating business is to achieve success in the midst of competing interests and changing business environment ( Kehal & Singh, 2008). This need by organizations has lead to wide scale adaptation of new organization forms Digital Technology in Business 3 heavily influenced by digital technologies (Kehal & Singh, 2008).
This is because mounting evidence suggests that digital technologies enable the core activities in any business operating model, integration and normalization, to take place more smoothly when compared to any other strategy (Weil, 2010). This paper by use of examples drawn from various industries, elaborates on these points, taking special note of how digital technologies have shaped the operating models of companies, influenced the workings of the human resource aspect of a business, including both the benefits and challenges of digital technologies in organizations (Malecki & Moriset, 2008).
Starting with the a look at the processes involved in the sensitive service industry such as the airline industry quite often the supports to an airline, namely those involved with maintainance, overhaul and repair of aircraft required to fill in detailed reports of the process such as the tools involved and the spare parts used during maintenance for the airline’s documentation purposes( SITA, 2008).
This process may turn out to be tideious and riddled with inefficiencies as it may involve filling in of similar details like the type of aircraft and the organization owning repeatedly (SITA, 2008). Such tasks can be eased by adoption of digital technologies such as the use of Radio Frequency Identification (RFID) hand held readers that would capture information from RFID enabled aircraft parts and simultaneously share them with interested parties along the supply chain (SITA, 2008).
The automation described above confers the airline company with several competitive advantages such as improvement of relations with suppliers by facilitating their work therefore improving on its business operations (SITA, 2008). Through this automated system, it becomes easier for the company to trace the parts used on their planes thus giving them the advantage of authenticating their reliability and quality; a factor that may go a long way in vouching for their Digital Technology in Business 4 safety record while at the same time, reducing on the operating costs of the airline (SITA, 2008).
The centralized data received from the readers may help in streamlining of the procurement process of the airline leading to a decrease in resource wastefulness and also gives the airline stability in terms of delivery of their core services, air transport, by ensuring that flight cancellations due to delays in maintenance or unnecessary unscheduled maintenance problems do not disrupt operations leading to flight delays and cancellations ( SITA, 2008).
However, such centralized systems of data collection may pose some challenges to those involved. For instance, the ownership of the data may turn out to be a point of friction among the parties as the shared nature of collection and storage of the data may lead to challenges in the access and security of the data (SITA, 2008). In addition, for such a system to operate effectively, the participation of a wide group of corporations is necessary (SITA, 2008).
This may be a challenge for the corporations as issues such as who will finance the initial part of the adoption of digital technology may arise while later on as alluded above, disputes over the ownership of this system may arise while during operation, the costs involved in maintaining the digital technology may be problematic in terms of who will bear the burden of the cost especially if the problem is arising from one end of the system leading to problems at the nether end (SITA, 2008). Digital technologies also offer ways in which employee productivity can be improved thus improving on the outcome of the corporation.
Several areas in which digital technology can be of use in the development of internet based employee induction platforms which will enable the company introduce new employees into the company operating culture in a more engaging and interactive manner (Murphy, 2003). The costs involved in such a venture also tend to be less costly in the ;long run as the initial resources, human resource and capital, needed to set up the program can be minimized and even eventually eliminated once the system had been set up Digital Technology in Business 5 without any losses in quality of the process (Murphy, 2003)
Training process that is critical in human resource development and management in a corporation can also be aided by use of digital materials such as compact disks (CD). This not only provides a format of presenting the information in a easier to understand media forms such as videos and graphic illustrations, it also provides a reference library to the employee who in need and at will can reference back to aspects of the training program (Murphy, 2003).
Use of such media such as CD and internet will allow training of employees who are based in areas other than where the actual training is occurring especially in corporations with branches in far flung markets as is the case I the globalized economy (Murphy, 2003). The employee also benefits from the opportunity of going through the training at their own pace and time , therefore improving on the likelihood of uptake of the information (Murphy, 2003). The other area where digital technologies offer advantages to corporations is in the area of employee incentives (Murphy, 2003).
Through the platform of the internet, a company can offer employees opportunities of enrolling into affiliate programs earning them income, or they could be privy to discounts and offers from third party suppliers who deal with their employers (Murphy, 2003). for instance special mortgage rates may be offered to employees of a certain company via the mortgaging subsidiary of the bank that their employer’s use to transact their business operations (Murphy, 2003).
These strategies may go along way mot only in motivating employees but also in enabling the company retain its talented and trained employees by ensuring their their loyally to the company thus reducing on a company’s recruitment and training bill (Murphy, 2003). The benefits of digital technology enables a company reorganize its marketing strategy in order for exploit their niche as effectively as possible (Rust & Espinoza, 2006).
This is made Digital Technology in Business 6 possible by the room afforded in matters of gauging customer preference, dislikes and other characteristics during the process of market segmentation (Rust & Espinoza, 2006). Through portals like social media and internet based survey’s a company may gain useful insights about their consumers as these digital technologies offer a cost effective, non – intrusive and consumer friendly means of interaction; therefore bridging the gap between a company’s management and its the customers (Rust & Espinoza, 2006).
These benefits spill over as they contribute to customer loyalty making the customer feel that their opinion is valued and by providing them with the rare opportunity of being involved in the development of their favorite product or service ( Rust & Espinoza, 2006). Quality control management is a critical part of a company’s operations as it provides the means by which a company can keep the promises exhaulted by its brand to the market (Malecki, & Moriset, 2008).
failure in the quality management system may lead to not only costly changes in the brand image, but also to enormous costs involved in product recalls and in brushes with regulatory authorities (Malecki, & Moriset, 2008). Many problems in the quality control management occur when there are variations in the execution of processes or in the material used in producing a good or service (Malecki, & Moriset, 2008).
The use of digital technologies may shield a company from such eventualities by periodically and automatically surveying the production process for deviations in the norm and alerting the management of possible shortfalls in the system (Malecki, & Moriset, 2008). Digital technology based quality assurance systems are more reliable as they are not dependent on human schedules and shielded from human borne errors during production (Malecki, & Moriset, 2008). Internet based systems also allow fro the survey of the intricate details of different aspects of the production process even for companies that have outsourced
Digital Technology in Business 7 production either as a whole or in bits across geographically dispersed areas (Malecki, & Moriset, 2008). An example of this is in the manufacture of airplanes by the Boeing and airbus whose different parts are assembled in different regions of the world. The reporting is also made easier especially in the event of a breach in the quality of the product, with the source of error pinpointed and dealt with saving on costs and time ( Malecki, & Moriset, 2008). Recently, a new form of trade has arisen where transactions in both goods and services are carried out via the internet (Burgess, 2002).
The producer of the good may be on one end of the world while the consumer may be at the other (Burgess, 2002). Digital technologies provide for ways in which the buyer and seller can meet irrespective of the distances and time zones involved (Burgess, 2002). The seller benefits by finding a market fir their goods while the buyer benefits by having the leeway to ‘window shop’ through out the internet searching for their ideal product at the ideal price without the hustle of dealing with salesmen (Burgess, 2002).
In addition the direct contact between the buyer and seller enables for customization of the process to suit either party (Burgess, 2002). This is especially advantageous for small businesses who lack the machinery, resource and human investment needed to carry out an effective marketing campaign as large corporations (Burgess, 2002). Quite effectively backed by a single personal computer connected onto the internet and a a ‘one-man-army’ sales team an entrepreneur can achieve their business goals (Burgess, 2002).
This trade termed as e-commerce, has enabled individuals like authors sell their services even without an established local network of suppliers and distributors (Burgess, 2002). Large corporations are also increasingly joining this bandwagon by providing portals like ‘e- shops’ on their websites where special offers of their products can be viewed, purchased and ordered right to the customer’s doorstep (Burgess, 2002).
By use of sophisticated but easily accessible forms of Digital Technology in Business 8forms of digital technologies the process of market segmentation described above are at the reach of entrepreneurs who otherwise would not have been able to exploit such advantages (Burgess, 2002). The small business owner is able to make up for his lower employee base and human resource pool by automating a majority of their business processes such as the installation of electronic tax register teller machines may ease the process of filling for tax returns (Burgess, 2002).
The operations of small businesses may also be expanded by collaboration with partners following research on the internet without the huge costs involved in expansion such as the hiring of additional staff, the payment for new business premises and the sometimes bureaucratic processes involved in meeting local regulatory standards and licensing issues (Burgess, 2002).
Through digital technologies, owners of small businesses are offered tools by which they can advertise their businesses effectively but with minimal costs such as the use of promotional CD for a musician or a recording company, easy to use software that enable the design of eye catching and effective banners, posters and fliers and through the setting up of a website where additional information about the company’s services is accessible to the market ( Burgess, 2002).
Despite these advantages of the use of digital technologies in business operations, the process in usually fraught by many difficulties as alluded in some of the examples above. Some of the challenges are secondary to inadequate knowledge on the scope by which digital technologies can affect the operations of a company thus leading to the wrong choice made in the technology that would be of use to the organization ( Andriole, 2008).
It should be remembered at this juncture that the key notion about operating systems is that they have to be well designed to suit the business they are intended for, thus borrowing examples from other companies is encouraged but it should not be done in a ‘cut- and- paste manner’ ( Andriole, 2008). For instance, Digital Technology in Business 9 a server, which is a computer with high processing capability, would be more suitable fore a small company with few employees while a single personal computer may suffice for a single proprietorship.
Conversely a larger organization with several departments and more employees, would benefit more from several interconnected severs ( Andriole, 2008). However other challenges to digital technology arise from the human aspect of the process (Andriole, 2008). Sometimes employees, through their unions, may resist the adoption of digital technology influenced operating systems due to fears arising about the likelihood of loss of employment and income via automation of processes (Daft & Marcic, 2008).
In a large manufacturing plant, the quality of goods produced may be checked by a string of employees stationed along the conveyor belts, automation of this process by use of specialized robots run by sophisticated computers, may render a large group of people jobless. This may hinder the newly instituted operating system to problems (Daft,& Marcic, 2008).
The challenges of operating in digital technology may arise from difficulties in operating in the new environment due to inadequacy in skills and expertise to utilize the the digital l technology (Murphy, 2003). This is a problem as the new technology instead of complimenting the employees and mangement, it serves to slow down the working of the organization as both groups may view digital technology as a stumbling block thus preferring to ignore or under utilize it by doing things the old way (Murphy, 2003).
This scenario is more pronounced in situations where the technology being introduced has been imported and is new to the business environment of the company (Murphy, 2003). This is because of the lack of adequate local support to smoothen the process of adoption by providing technical support (Murphy, 2003). The main challenge with digital technologies, lies in the costs involved in setting up and maintaining them (Andriole, 2008). The machinery involved may be costly especially for small
Digital Technology in Business 10 businesses and very large corporations, software to run computer’s is also costly and the maintenance of such systems often requires specialized manpower which may come at a premium (Andriole, 2008). When this is coupled with the rapid evolutionary tendency of digital technologies which render recently developed technologies as obsolete, it is easy to see why cost is frequently mentioned as a major stumbling block (Andriole, 2008).
In some situations, there might be the need of hiring additional staff just to maintain the system, training staff to know how to use the system every time the system is upgraded and this may turn into a demoralizing process (Andriole, 2008) .. In conclusion, this essay has highlighted the influence of digital technologies on the operations of organizations be they be simple small businesses or large multinationals dealing in several products and services (Malecki & Moriset, 2008).
The challenges though apparent can be overcome by understanding digital technologies and keeping the goals and objectives of the organization in mind as the solution appears to lie in crafting an operating system that is in tandem with the organization’s goals and vision (Daft & Marcic, 2008). The management of an organization should desists from taking a one-size-fits -all approach and should also consider the impact that their employees may have on the success of the digital technologies in thee organization’s operations (Kehal & Singh, 2005).