Technological factors affecting business

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Technological factors affecting business
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Technological factors affecting business are all externally generated changes in technologies and processes which are used (or may be used) by the company or its competitors. Proper identification of this factor during strategic analysis (PEST analysis, STEEP analysis, SWOT analysis, TOWS analysis) could lead to better strategic decision about investments and development of the organization. Rapid technological development in modern economy requires quick and flexible reactions of managers to better adapt and to survive in turbulent competitive environment.

Technological factors connected to information revolution

  • rapid development of fact communication networks,
  • growing efficiency of computer systems (processor speed, database and memory capacity),
  • global reach of information about company and competitors,
  • new web 2.0 (and newer) technology supports dynamic communication with customers,
  • new IT security challenges (encryption, certificates, SSL, HTTPS, etc.),
  • Internet infrastructure (fibre optics, Internet speed, availability, mobile capabilities),
  • Internet banking and shopping,
  • distribution of non material goods over Internet, social media influence on marketing, SEO (search engine optimization activities),
  • capabilities of CRM systems,
  • information system security (ie. based on ISO 27001),
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Legislation of technological processes

  • privacy laws concerning customer privacy and data security,
  • patents law and intellectual property legislation,
  • cyber crime protection, data protection, cyber security laws
  • government spending on technological research,
  • government actions in areas of education and training of highly competent engineers and technology users,
  • regulations concerning licensing of technologies,
  • regulations concerning online money transfer, offshore accounts and protection against competitive technologies from abroad,

Technological advances in production systems and logistics

  • new machinery and services,
  • equipment,
  • research and development software (CAD/CAM, CIM, simulation software),
  • environmentally friendly technologies (less energy consumption, less waste),
  • reduced need for manual labour (automation, robotization),
  • better productivity, speed of work and accuracy
  • shorter life cycles of technology increase cost of updating of machinery,
  • new generations of equipment could be incompatible with old (higher costs of service, lack of spare parts),
  • smart technologies (Internet of Things, etc.)
  • cooperation with scientific institutions allows faster implementation of innovative product and technological ideas,
  • lowering of health hazards for workers,

Technological advances in business process management

  • BPNM software,
  • work-flow software (simulation and optimization of complex business processes) allow reduction of operational bottlenecks,
  • MRP, ERP and other types of integrated IT systems,
  • outsourcing of production to other countries (technological capabilities, logistics networks),
  • supply chain capabilities of producers and suppliers allowing easy integration of complex processes, faster delivery speeds
  • new transport routes and means (better quality and cost efficiency of transport),
  • possibility to retain organizational knowledge in IT supported knowledge bases,

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Author: Krzysztof Wozniak