Wednesday, December 1, 2021 1:03 PM

Impact of technology on working methods

• Over the period machines replaced men and now machines are replaced by more sophisticated
machines
• Recently the computers were used for mental and intellectual jobs (data processing and
analysis) and;
• Now Even high level of intellectual jobs are done through AI

Huge impact of technology on the nature of products and services a business is using

In order to remain competitive companies have to continuously upgrade the technology in the
1. Design of products and services (pre-production) and IT ki involvement design (Low wastage), manufacturing (Kam se kam time me product
2. Manufacturing mechanism (in-production) bnaee), Marketing (Customer tk kese pohnche)

3. Distribution and marketing mechanism (post production)

Impact of technology on Business / Organization Structure

1. Downsizing
• reduction in size of a business organization.
• It does not (necessarily) mean selling fewer goods or services.
• It means that business activities are conducted by a smaller number of people.
• Possible with technology, as tasks that were performed previously by humans can now be
performed by machine or computer.

1. De-layering
• Removing one or more levels of management in the organization structure to ensure
□ fast and seem-less communication,
FAIDAY □ Quick reporting of problems identified
□ and implementation of plans
• Could also mean removing all layers of middle management entirely, leaving just senior
managers and front-line managers and supervisors.
Sub se ziyada kia zaroori hai? delayering k liay
Key requirements for de-layering
• High-quality and effective communications is required, where senior management can delegate
sufficient authority to junior managers, and expect junior managers to meet their
responsibilities.
kia nuksan ho ga
Moral issue with de-layering
• middle managers are made redundant, and there is consequently some downsizing leading to
unemployment.

PESTEL - IT Page 1
1. Outsourcing Non core task ko outsource kr den
• arranging other business organizations to perform some
□ administrative or
□ management tasks,
instead of employing individuals internally

• Examples
○ External accountancy firm to take over the administration of the payroll,
○ External building services company to take over responsibility for cleaning and security
○ A motor car producer might outsource the manufacture of most (or even all) of the
component parts, so that its only ‘in-house tasks’ are product design, assembly, testing and
marketing.
○ outsource IT requirements to specialist IT firms.
○ Outsource most of their office administration tasks, such as record keeping and word
processing.

Main philosophy behind outsourcing

• A business succeeds in its competitive markets for performing core competences better than
rivals.
• Support activities, such as
□ office administration,
□ IT support,
□ building and facilities administration
□ payroll
do not require any specialized skills, and there are other companies that can do these tasks
just as well or much better.
• Performing non core tasks itself may divert management's attention away from the core
competences.

Remedies
• Management should focus on its strengths, not the routine and ordinary.
• Outsource ‘noncore’ activities and concentrate on its core activities, This would help in
maintaining and improving competitive advantage of company over rivals.

Key Requisite
Outsourcing is easier by high-quality telecommunications and computer systems, Data and
information flows smoothly and clearly between a business and the organizations to which

PESTEL - IT Page 2
information flows smoothly and clearly between a business and the organizations to which
activities are outsourced.
Skill availability
Advantages : Competitive advantage
1) Skill availability cost saving
2) Competitive Advantage value addition
3) Cost Saving
4) Value Addition
Information leak
Dis-Advantages: Demotivation of employees
1) Risk of Information Leak Work lost
2) Demotivation of employees critical relation
3) Control over work lost
4) Critical Relationship with Outsourcing Company

Restructuring
Different organizations merge
□ functions,
□ sections and
□ departments
according to the technological advancement

Example of central decision making (possible due to technology)

Real time, online data availability has shifted the regional decision making into centralized
decisions.

Virtual company
Taken to an extreme form,
• a business organization can outsource almost all its activities, leaving just one or two individuals
at the center managing the business.
• has no physical hub or center of operations.
• It is a network of individuals linked by computer and telecommunications network (such as the
internet).
• The individuals need not be employees of the business: they might be part-time workers or
self-employed individuals.
• Each individual in the virtual company might work from home.
• Data and information is transferred between them, and each performs particular tasks with a
definite objective

PESTEL - IT Page 3
The virtual company has been made possible by developments in Information technology.

Online Social Media

Social media has changed the business models.

• Personal and business entities now have become the digital identities.
• Social media has affected alot
□ Physical interactions,
□ traditional marketing,
□ traditional businesses
Market of the company is expanding continuously.

Big Data
Extremely large data sets are being
□ gathered,
□ analyzed computationally
to reveal
□ patterns,
□ fashions,
□ trends,
□ associations and
□ preferences, (especially relating to human behavior and interactions)
These big data sets are being used to take business decisions.

Artificial Intelligence

• Artificial intelligence has shifted the paradigm.

• Different business segments are using artificial intelligence;
• various services are being provided with the help of artificial intelligence.

For example:
1. Online assistance to the customers is being provided through the artificial intelligence.
2. Frequently occurring problems are being solved using artificial intelligence.
3. Routine decision making is also being done with the help of artificial intelligence.

PESTEL - IT Page 4
PESTEL - IT Page 5
PESTEL - IT Page 6
PESTEL - IT Page 7
PESTEL - IT Page 8
PESTEL - IT Page 9
PESTEL - IT Page 10
PESTEL - IT Page 11
PESTEL - IT Page 12
PESTEL - IT Page 13