In the past few decade there has been a revolution in computing and communications. and all indications are that Information Technology progress and use of information technology will continue at a rapid pace. Accompanying and supporting the dramatic increases. These advance present many significant opportunities but also pose major challenge. Today innovations in information technology are having wide-ranging effects across numerous domains of society, and policy makers are acting on issue involving economic productivity, intellectual property rights, privacy protection, and affordability of and access to information. Choice made now will have long lasting consequenc. And attention must their social and economic impacts.
One of the most significant outcomes of the progress of information technology is probably electronic commerce over the Internet, a new way of conducting business. Though only a few years old, it may radically alter economic activities and the social environment. Already, it affects such large sectors as communications, finance and retail trade and might expand to areas such as education and health services. It implies the seamless application of information and communication technology along the entire value chain of business that is conduct electronically.
One important way in which information technology is affecting work is by reducing the importance of distance. In many industries, the geographic distribution of work is changing significantly. For instance, some software firms have found that they can overcome the tight local market for software engineers by sending projects to India or other nations where the wages are much lower.Furthermore such arrangement can take advantage the time differences that critical projects can be work on nearly around the clock. Firms can outsource their manufacturing to other nations and rely on
Telecommunications to keep marketing, R&D, and distribution teams in close contact with the manufacturing groups. Thus the technology can enable a finer division of labour among countries, which in turn affects the relative demand for various skills in each nation. The technology enables various types of work and employment to be decoupled from one another. Firms have greater freedom to locate their economic activities, creating greater competition among regions in infrastructure, labour, capital, and other resource markets. It also opens the door for regulatory arbitrage: firms can increasingly choose which tax authority and other regulations apply.
Computers and communication technologies also promote more market-like forms of production and distribution. An infrastructure of computing and communication technology. Pproviding 24-hour access at low cost to almost any kind of price and product information desired by buyers. Will reduce the informational barriers to efficient market operation. This infrastructure might also provide the means for effecting real-time transactions and make intermediaries such as sales clerks. Stock brokers and travel agents, whose function is to provide an essential information link between buyers and sellers. Redundant Removal of intermediaries would reduce the costs in the production and distribution value chain .
The information technologies have facilitat the evolution of enhance mail order retailing. In which goods can be order quickly by using telephones. Computer networks and then dispatch by suppliers through port companies that rely extensively on computers and communication technologies to control their operations. Nonphysical goods, such as software, can be shipp electronically, eliminating the entire transport channel. Payments can be done in new ways. The result is disintermediation throughout the distribution channel, with cost reduction, lower end-consumer prices, and higher profit margins.
The impact of information technology on the firms’ cost structure can be best illustrat on the electronic commerce example. The key areas of cost reduction when carrying out a sale via electronic commerce rather than in a traditional store. Involve physical establishment, order placement and execution, customer support, strong, inventory carrying, and distribution. Although setting up and maintaining commerce web site might be expensive.
It is certainly less expensive to maintain such a storefront than a physical. One because it is always open can be access by millions around the globe, and has few variable costs, so that it can scale up to meet the demand. By maintaining one ‘store’ instead of several, duplicate inventory costs are eliminate. In addition, e-commerce is very effective at reducing the costs of attracting new customers. Because advertising is typically cheaper than for other media and more targeted. Moreover, the electronic interface allows e-commerce. Merchants to check that an order is internally consistent and that the order, receipt, and invoice match.
Through e-commerce firms are able to move much of their customer support on line so that customers can access databases or manuals directly. This significantly cuts costs while generally improving the quality of service. E-commerce shops require far fewer, but high-skilled, employees. E-commerce also permits savings in inventory carrying costs. The faster the input can be order and deliver.
The less the need for a large inventory. The impact on costs associated with decreased inventories is most pronounced in industries where the product has a limited shelf life (e.g. bananas), is subject to fast technological obsolescence or price decline. Where there is a rapid flow of new products (e.g. books, music). Although shipping costs can increase the cost of many products purchased via electronic commerce and add substantiall. To the final price. Distribution costs are significantly reduc for digital products such as financial services, software and travel which are important e commerce segments https://techsolutionstips.com/ .