Discussion
Business operations in a company refer to all activities that take place inside it to keep it going and remain profitable. A business plan in a business organization is a policy which is focused on operations in such a manner that all functions such as systems, equipment, processes and personnel are aligned together.
Business operations differ on business types, size, industry, net worth, competitors etc. Operations for a cement manufacturing business would be different from that of an online retailer. The former would require a point-point terminal sales strategy whereas the latter would need efficient e-commerce software that can manage online orders for products. Most businesses actually take into consideration four most important elements of business which are: Process; Staffing; Location; Technology or equipment (Greasley, 2013). The last business element i.e. Technology is of utmost importance in today’s business environment and a topic of study in our report. In the highly competitive industry in modern times, it is almost inevitable to utilize technology/equipment that is up-to-date and in proper working order (Introduction to operations management, 2007).
A major area of concern when it comes to utilizing technology in business operations is the proper grasp and implementation of Information and communications technologies (ICT). Information and communications technologies (ICT), is a useful tool to upkeep a range of businesses activities; from inner business systems to business communications and e-commerce.
It is true that any business organization which has to make an assessment of all its resources, e-business can still improve the efficiency in the distant future by saving considerable time and streamline its processes. E-business can also open new options for collaboration and exchange of facts and figures, all of which may lead to an increase in revenues. There can be two ways in which this technology can be utilized to an organization’s advantage. These are:-
- Internal business systems; and
- Electronic commerce or e-commerce
Internal business systems is that component of business operations that helps utilize different tools to manage an organizations’ human resources, customer relationships, documents and other internal processes (Slack and Lewis, 2009). The three main components of an Internal Business Systems and the role of each of these is as below:
- Intranet and extranet –
Intranet is just like a local internet in a business environment. It is basically a computer network which makes it available to share privately information, operational systems and system resources within a business environment. The intranet connects employees of different departments at different locations enabling them to communicate and collaborate in an efficient manner. It also helps managers to streamline main operations and minimizing the need for physical meetings and propelling the rate of development and reliability of information (The evidence centre for skills and health, 2011). Extranet is an extension of intranet which an organization makes available to outside people like partners, vendors, suppliers and those in other organizations.
- Human resources management – ICT can and does improve the human resource management at both operational and strategic levels. Giving to the organization an added value is vital for any business, not just adding new technologies. However, even in human resource management technology helps to improve efficiency in different types of assessments such as personnel records, benefits, compensation, training and skills development and schedules. There are some other tasks where technology applications can be used to enhance the HR such as recruiting, long-term personnel planning, knowledge management, employee development, succession planning and retention strategies (Lusch and Vargo, 2015).
- Customer relationship management – By utilizing an efficient and up-to-date customer relationship management or CRM techniques, an organization can properly interact with future and current customers. CRM technologies have now become more cost-effective and accessible and some of these even do not require any software. These enables an organization to keep track of figures related to sales, trends, promotions and offering an enhanced overall experience to their customers (Operations Management).
Internal Business Systems
There are several business processes related to e-commerce, that are enabled by e-commerce which include creation of online storefront, supply chain management and marketing of products (Vacca, 2013). Such processes fall into three categories that are:
- Business to business (B2B)
- Internet marketing
- Business to customer (B2C)
In B2B transactions, the internet holds the key potential for many small businesses (Vacca, 2013). There can be two different aspects to the B2B model that make it distinct from the business-to-customer (B2C) model which are as mentioned below.
- Price flexibility – There should be variations between pricing of products between purchasers.
- Cooperation of business systems – The businesses that are involved in B2B e-commerce make their internal systems to work in unison and share interactions and information which results in lesser human work.
An organization that adopts and implements a B2B e-commerce process is benefitted in these ways:
- Buying supplies not directly linked to business – There are some purchases made by a business organization which are not directly linked to its operations such as office furniture, pens and paper and these are similar to catalogue-based websites.
- Buying direct materials – Some organizations like to establish associations with suppliers to e-procure direct materials with the aim to minimize costs (Greasley, 2013).
- Sell products to new vendors – This involves selling products and services across different platforms in an e-marketplace and expanding the market base.
- Leveraging the organizations’ web occurrence – An organization must improve business-to-customer (B2C) e-commerce website. The business could be more sophisticated to target more corporate clientele (Greasley, 2013).
- Investing in e-procurement methods – Businesses should assess their purchasing process and look out for various options to automate the procurement process. By carefully investing in the e-procurement procedures, organizations could get considerable increase in revenues.
Scalability is a very significant issue in all process technologies and has a deep association with capacity strategy. The overall capacity of any operations processes is greatly related on how each individual units of process technology actually go about making them (Greasley, 2013).
- Assessment of capital cost of technology – The capital cost of any unit of technology is directly dependent on the size of the unit of technology. It means that if the size of the unit is large then its capital cost may be more, but its capital cost per unit of capacity would be less. The costs of supporting and installing the technology would also be lower per unit of output. Moreover, the operating costs per unit are also highly likely to be lower on large machines due to the fixed costs of operating them being relatively distributed over a higher volume (Greasley, 2013).
- Process technology must match demand over time – Traditionally, there has been a trade-off between big increments of capacity using economies of scale and resultantly a mismatch between capacity and demand. This mismatch also does exist in smaller growths of capacity but with a closer match between capacity and demand, however with lesser economies of scale.
The traditional cost/flexibility trade-off that is evident in the scale, integration and automation dimensions of process technology has now come under the market’s much challenging and demanding forces. In fact, increased market division and the demand for increased customization do reduce outright volumes/quantities of any particular type of products or services. At the same time any limitation in product/service life cycle may mean sporadic step changes in the requirements put on an operation and associated process technology (Vacca, 2013). Such instances may mean a huge reduction in the potential for implementing large-scale and somewhat inflexible but conventionally low-cost technologies. On the other hand, there exist a severe pressure to be cost-effective which is making ongoing reductions take place in direct labor and putting a big emphasis on automation (Genpact, 2014).
For many traditionally labor-intensive departments such as the banking sector, a significant amount of technological investment puts a major impact on shareholder and analysts’ confidence and consequently on the share price. Thus, it is important to note that these two types of pressures are putting the traditional process technologies under strain. However, many of the modern operations have totally embraced the process technology even though in IT-rich methods. Thus, it has clearly now been observed that the over-emphasis of IT in organizations these days can’t be ruled out (Kidd, 2009).
The current markets almost every time these days demand increased flexibility and lesser costs at the same time from process technology. Nowadays, recent developments in Information Technologies and their impact on shifting traditional balances and trade-offs should also be included. Developing scalability, analytical content and connectivity features have enabled process technologies to improve their flexibility, although retaining realistic efficiency and vice versa (Leonard-Barton and Kraus, 1985).
E-Commerce
The three main dimensions of process technology that are automation, scalability, and coupling have significant relation with the volume/variety features of the market (Process Improvement). In conventional process technologies especially with less IT element, large auto-mated and closely linked technologies were able to process at low costs but with fairly less flexibility. This makes them very apt for high-volume and less variable processes. The process technology is very much likely to be consisting of smaller detached units with little automation if the process requirements were for high variety but low volume (Performance Management Practitioner Series, 1997).
Business Organizations nowadays, must be skillful enough in fetching in new technologies and managing the challenges which come along whilst applying the change. Changes of this characteristic may provide noteworthy benefits to business organizations but may also bring about many challenges which need to be controlled to produce a desirable result. However, problems do arise in business organizations attempting to acquire a new technology without appropriate training and management of their employees’ (Delaney and D’Augostino, 2015).
As organizations strive for the improvement of the market position, more creative and efficient methods are needed to contribute in improving their processes. Improving processes frequently means altering them or creating new ones altogether. Technology does have a role to play in bringing about these improvements. Business Organizations thus have to continue to do improvements in such a manner of analysis, improvements and monitoring the changes. Technological changes may also impact the characteristics and philosophy of any business organization (Massy and Zemsky, 1995).
Conclusion
Technological changes have the likelihood of impacting an employee’s work duties which may build feelings of uncertainty. The ambiguity of what new technology brings for employees’ may activate more conflict to their receiving it. When an organization has chosen and approved a new technology tool, it must be applied and introduced to all concerned employees. Business Organizations that fail to implement their planned changes successfully may pay a dear price that could lead to missing market position, decreased staff morale, credibility of stakeholders and loosing key employees.
References
Delaney, R and D’Augostino, R. (2015). The challenges of integrating new technologies into an organization. Mathematics and Computer Science Capstones. Le Salle University Digital Commons.
Genpact. (2014). The impact of technology on business process operations. Genpact Research Institute. Available at https://www.genpact.com/downloadable-content/insight/the-impact-of-technology-on-business-process-operations.pdf [Accessed 4 Sep, 2017]
Greasley, A. (2013). Operations Management. 3rd ed. Chichester, England: John Wiley and Sons.
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Leonard-Barton, D. and Kraus, W. A. (1985). Implementing New Technology. Harvard Business Review. [online]. Available at: https://hbr.org/1985/11/implementing-new-technology [Accessed 4 Sep 2017].
Lusch, R. F. and Vargo, S. L. (2015). The service-dominant logic of marketing: Dialog, debate and directions. New York: Routledge.
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Performance Management Practitioner Series. (1997). Improving customer service through effective performance management. Available at https://www.opm.gov/policy-data-oversight/performance-management/reference-materials/historical/customer_service.pdf [Accessed on 4 Sep 2017]
Process Improvement. Available at https://www.cs.umd.edu/~mvz/cmsc435-s09/pdf/slides17.pdf [Accessed on 4 Sep 2017]
Slack, N. and Lewis, M. (2009). Operations Strategy. 2nd ed. New Delhi: Dorling Kindersley.
The evidence centre for skills and health. (2011). How do new technologies impact on workforce organization? Available at https://www.skillsforhealth.org.uk/index.php?option=com_mtree&task=att_download&link_id=101&cf_id=24 [Accessed on 4 Sep 2017]
Vacca, J. R. (2013). Computer and information security handbook. 2nd ed. Waltham, USA: Morgan Kauffman Publishers.
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