Dr Nicos Rodosthenous 1

E-TourismNicos Rodosthenous PhD

14/02/20132

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Introduction: The purpose of this lecture is to examine how ICTs revolutionized modern society and how they affect business strategy.

• The internet in the 1990s networked the global economy and changed the way organizations operate and compete locally and internationally.

1. Implications for business and strategy:• All enterprises become global as they can be

present in the international marketplace at an affordable cost.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Frontier controls and limitations are gradually eased through international trade agreements leading to a better global trade.

• The location of buyers and sellers becomes less important for transactions.

• The EC illustrates that as a result of the ICTs development around the world, production systems, methods of organizing work and consumption patterns have been changed with long term effects like the first industrial revolution.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• A new info society is emerging, in which management, quality and speed of info are key factors for competitiveness.

• ICTs influence the economy at all stages, illustrating the need to enhance the global competition of both enterprises and regions.

• Technology can totally transform the way an entire business operates, as ICTs help to improve the efficiency, productivity and competitiveness.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• The real benefit of IT lies in the linking and reconfiguring of business and organizational functions, reducing both the communication and operational costs of most organizations, enabling them to interconnect with all their stakeholders (i.e. suppliers, customers).

• The global info revolution obliges enterprises to “act local and think global”, responding to rabidly changing customer needs.

• Successful ICT strategies based on innovative and dynamic management can provide organizations with competitive advantage. (www.cornwall-calling.co.uk)

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Implications of the ICT Revolution for Business and Strategy (Part A)

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Implications of the ICT Revolution for Business and Strategy (Part A)

2. The impact of the ICT revolution and the information society.

• The internet established an innovative and user-friendly platform by restructuring the lives of people and social interactions worldwide.

• ICTs satisfied people’s needs and wants by enabling them to socialize and interact with less cost not only with their local community but also around the earth.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• ICTs enable people in urban centers to meet their neighbors and to develop virtual communities.

• Discussion groups and chat pages assist people to communicate all over the world.

• The internet introduced new practices, like home shopping, e-entertainment, e-working, e-learning, e-medical support and e-banking.

• Examples: distance learning in universities. In India computer programmers can also provide

competitive services for international companies.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• People in developing countries will share knowledge and educate their workforce through the internet.

• The electronic/interactive/intelligent/virtual home and enterprise will facilitate the entire range of communications with the external world and to support all functions of everyday personal and professional life through interactive computer networks.

• Internet has the power to change everything-the way we live and work, the way we learn and play.

• Stretching the internet to a global market and society can be similar to traditional markets, which provide the

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Implications of the ICT Revolution for Business and Strategy (Part A)

• opportunity for forming a community that can debate all issues and market all commodities. (like the ancient agora in Athens.

• Internet can help people to feel free to broadcast their views and introduce a wide range of social, economic and political issues.

• As a result, democracy spreads gradually, empowering individuals to decide for themselves.

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Implications of the ICT Revolution for Business and Strategy (Part A)

3. The development of the information marketplace, eCommerce and cyber-markets.

• Information marketplace can be defined as the collection of people, computers, communications, software and services that will be engaged in the intra-organizational and inter-personal informational transaction of the future.

• Internet is suitable not only for trading services but for other products too, like new and used cars, i.e. e-bay, or www.usedcars.uk

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Implications of the ICT Revolution for Business and Strategy (Part A)

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Implications of the ICT Revolution for Business and Strategy (Part A)

• As a result of the developing information marketplace and eCommerce, new business opportunities and challenges emerge.

• The internet bridges the gap between consumers and suppliers and provides opportunities for disintermediation and re-intermediation. i.e. travel agents with airlines saving comm. and distribution costs

• Electronically empowered newcomers (i.e.Amazon.com) fight to increase their global market share.

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Development of their presence on the eMarketplace by adding value to the customer’s needs.

• Examples : Expedia.com, marriot.com, easyjet.com using internet strategically to increase market share, and to interact profitably with their clients.

• eCommerce can be defined as the secure trading of info, products and services via computer networks and the exchange of value on-line, as well as the support for any kind of business transactions over a digital infrastructure (Kalakota & Whinston, 1996)

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Main categories of eCommerce applied to eTrading:

• 1) from business-to-consumers (B2C) and• 2) business-to-business (B2B). • 3) Interactions with government organizations

(business-to- government-B2G) can also be included.

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Implications of the ICT Revolution for Business and Strategy (Part A)

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Benefits to the organizations using internet and eCommerce:

• 1) Growth: global presence 24 hours a day, 365 days a year.

• 2) Protection: brand name and property• 3) Differentiation: Improve customer

service/info/knowledge• 4) Management of change: enhance

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Implications of the ICT Revolution for Business and Strategy (Part A)

• 5) Developing trust: develop trust in all eCommerce applications.

• Business process re-engineering (BPR) may be needed to redesign the entire range of processes transforming the nature of a business.

• Example: Hotel entirely depended on a few tour operators to sell its products. Developing and promoting a web page may achieve better rates and yields and clientele.

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Implications of the ICT Revolution for Business and Strategy (Part A)

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Implications of the ICT Revolution for Business and Strategy (Part A)

• Internet enables business to:• 1) deliver real-time info to the point of customer

contact without any boundaries• 2) reduce the buying cycle and improve the time

to market of new products and services.• 3) provide info, speed and interactivity between

producers and consumers.• 4) employ the right technology at the right time• 5) achieve their objectives

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Implications of the ICT Revolution for Business and Strategy (Part A)

• 6) gain competitive advantage in the future.• Finally the introduction of complaint websites

(i.e. United Airlines) will provide costumers with a powerful voice and force both business and governments to pay more attention to customer complaints and issues.

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Implications of the ICT Revolution for Business and Strategy (Part A)

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