Developments in Technology Systems

Lesson Introduction

Technology systems do not stay the same for long, they are constantly being changed and improved upon. Companies won’t pay for a new system though without it offering the business a genuine measurable benefit.

These key drivers for changing technology systems are usually about making the business more money but this could be achieved by attracting more customers, reducing costs or speeding up the processes.

In this lesson we will learn how developing technology systems can allow a business to:

  1. Gain competitive advantage over other business’ to attract more customers.
  2. Reduce costs to help raise profits.
  3. Improve performance to make the business more efficient.

Media Attachments: Presentation

1. Competitive Advantage

Competitive Advantage

Business’ always want to gain an edge over their competitors. This might be to improve production speed and reduce costs or it might to add new advanced features or improve the performance of the actual product or service being offered to customers.

One of the best ways to do this in the modern business world is by developing a new technology system.

Retail business’ and coffee shops often innovate with new payment methods in order to gain an advantage over their rivals. They might do this by adding self-service tills or even the ability to scan while you’re shopping, or they might implement contactless payment methods and mobile payment methods like Apple Pay and Google Wallet.

The goal behind these is to make it quicker for customers to shop in their stores and so they are more likely to return rather than go to a rival.

Further Thought

What other ways can you think of that business’ might gain competitive advantage?

Have you seen something new in a shop that you thought was a good idea and made you consider returning rather than going to a competitor in future?

2. Reduced Costs

Reduced Costs

A business can reduce how much it costs to run their business by using new technology systems. This reduction in costs could be achieved by needing less staff to run or by making it quicker to develop or deliver the products and services.

If a business can reduce their costs then this would obviously be of great benefit to a business as it can be used to increase the business’ profits or to reduce the prices of their products and services to help gain an advantage over their competitors.

Examples of how business’ use technology to reduce costs can be seen everywhere. If we go back to the example of retail stores like supermarkets, many of these have implemented self service tills and scan as you shop systems which means they need less staff performing the checkout process. Because they need less staff working tills to checkout customers the business has reduced its costs by paying less in wages.

Other examples could include business’ installing satellite navigation systems in all of their delivery lorries to help reduce the time it takes to deliver their products. This can make savings in fuel as well as needing less delivery staff.

Further Thought

If a business can reduce their staff by implementing a new technology system, but the technology system would cost more than their staff’s wages to implement, would they do it?

Think of the pros and cons of the business doing so.

3. Improved Performance

Improved Peformance

A new technology system can make a business more efficient. By this we mean that the business can perform its daily activities quicker and more easily. When a business becomes more efficient we say they are improving their performance.

Improving the business’ performance can support the other two key drivers by giving them an advantage over competitors (by making it easier and quicker for customers to buy their products or use their services) and it can reduce costs (by needing less staff due to faster processes).

There are other benefits though, such as improved staff moral, as if it is easier for them to do their job they will be happier.

Many business’ have implemented technology systems to make it quicker and easier for staff to communicate. This could be having an email system for staff to contact each other, or through using video conferencing software so staff don’t need to travel long distances to take part in meetings.

A retail example is the implementation of touch screen tills. These are used heavily at fast food restaurants where it makes it far quicker and easier for staff to select the meal item the customer orders.

Further Thought

What other ways might a business improve their performance?

Try searching online for examples of where business’ have used technology to make themselves more efficient.

Lesson Summary

So to summarise what we’ve learnt in this lesson:

  • Technology systems are regularly changed and improved.
  • Gaining a competitive advantage is one of the reasons for doing so. This is where a business tries to gain an edge over their rival business’ by implementing new technology. An example of this would be shops implementing mobile payment methods earlier than their rivals to make it easier for customers to pay.
  • Reducing costs is another reason for implementing new technology systems. This can be achieved by reducing staff and by making it quicker to build and deliver products. Retail stores implemented self-service tills so they needed less checkout staff and so they saved money on staff wages.
  • Improved performance is the final reason for implementing a new technology system. Business’ may try to make themselves more efficient by making it quicker and easier for staff to perform their jobs. An example of this is the use of touch screen tills in fast food restaurants which makes it easier for staff to input customer orders.

Further Recommended Reading

Up your revision and ace your tests with these recommended books for preparing for your BTEC First online tests.

BTEC First in I&CT: Student Book – Page 49

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BTEC First in I&CT: Revision Guide – Page 38

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BTEC First in I&CT: Revision Workbook – Page 38

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