Changing Technology & Productivity (Cambridge (CIE) IGCSE Business): Revision Note

Technology is improving the service sector

• Technology is helping service-based businesses work more efficiently, serve customers faster, and reduce operating costs

Technology to improve productivity

Contactless payments

• Contactless payment systems allow customers to pay quickly by tapping a card, phone or smartwatch on a payment terminal

• This speeds up the transaction process and reduces waiting times in shops, cafés and other service businesses

Online booking and self-service

• Many service businesses now allow customers to book appointments, check-in or place orders online without needing help from staff

• Self-service kiosks and websites reduce pressure on frontline workers

• Fewer staff are needed at reception or check-in desks, and customers can be processed quickly and accurately

  • For example, Formule 1 hotels offer online check-in and key collection kiosks, allowing guests to go straight to their rooms without waiting at reception

Chatbots and automated customer support

• Chatbots are software programs that can answer customer queries automatically through websites, apps or messaging services

• They are available 24/7 and can handle common requests like opening hours, order updates or booking changes

• Staff are freed up to deal with more complex issues, while routine queries are handled automatically, reducing workload

Mobile apps and digital platforms

• Mobile apps allow customers to access services quickly and give businesses real-time information about demand, location and performance

• Apps are widely used in transport, food delivery and entertainment services

• Businesses can manage orders, staff and customers more efficiently using real-time data, improving speed and reducing delays

  • For example, Deliveroo uses its app to connect customers with nearby restaurants and delivery riders, ensuring fast service and better route planning

The impact of changes in technology

• Technology brings many benefits to businesses and employees, but it also creates challenges, especially in the way people work and the skills they need

Impact on the business

Impact on employees

How changes in technology improves business performance

• Technology directly affects how well a business performs by improving processes, reducing costs and helping the business meet customer needs more effectively

Profitability

• Technology helps businesses increase profits by lowering production and operating costs

• Automation reduces the need for large numbers of employees, and digital systems can reduce waste and errors

• Lower costs and higher output can lead to higher profit margins and better overall financial performance over time

Efficiency and productivity

• Digital tools and machines allow businesses to produce more in less time and with fewer mistakes

• Technology can also help manage tasks such as inventory control, scheduling and communication

• Improved efficiency leads to quicker delivery times, lower labour costs and higher overall output, all of which help improve business performance

Customer satisfaction

• Technology can improve the customer experience by making it easier, faster, and more convenient to buy and use products or services

• It also allows businesses to respond to customers more effectively

• Higher customer satisfaction can lead to repeat purchases, positive reviews and stronger customer loyalty, helping the business grow

Quality

• Technology increases quality by reducing human error and allowing businesses to follow exact specifications

• Quality control systems can detect problems early in the production process.

• Better quality leads to fewer returns or complaints, which protects the business’s reputation and saves money

Innovation and competitiveness

• Technology enables businesses to develop new ideas more easily and respond quickly to market change

• Digital tools help businesses research trends, test products and improve designs.

• Innovation helps businesses stay competitive, attract new customers and enter new markets