Technological Factors (SQA National 5 Business Management): Revision Note

Recent technological developments

• Advances in technology have a major impact on how businesses produce, market, and deliver their goods and services

  • New and emerging technologies can lower costs, improve efficiency and create business opportunities

  • However, they can also require businesses to make large investments and can present training challenges

1. E-commerce and online platforms

• Businesses increasingly sell products and services through websites and apps

• Social media platforms also allow firms to interact directly with customers

Impact on business

2. Automation and artificial intelligence (AI)

• Machines, robots, and AI software are replacing or supporting human tasks, from manufacturing to customer service

Impacts of automation and AI on business

3. Data analytics and big data

• Data analytics is the process of collecting, examining and interpreting data to find patterns and trends that help a business make better decisions

• Big data refers to very large, complex sets of data that are too big for traditional methods to store, process or analyse easily

• Businesses now use advanced tools to collect and analyse customer and market data

• Benefits include

  • Improved decision-making

    • Analysing large amounts of data helps businesses spot patterns and trends, allowing them to make informed choices about pricing, inventory and strategy

  • Personalised marketing

    • Firms can target customers with tailored advertisements or product suggestions, increasing the chance of sales

  • Better understanding of customers

    • Businesses gain insights into customer behaviour, such as what products are most popular or when demand is highest

• However, there are risks around privacy

  • Collecting and storing personal data can raise security issues, and misuse of information can damage customer trust

4. Green and renewable technologies

• Pressure to be environmentally responsible has led businesses to invest in sustainable technologies

  • Examples include renewable energy, environmentally-friendly packaging and electric vehicles

• These technologies can improve business reputations and reduce long-term energy costs

  • However, they often require significant financial and training investment

5. Cloud computing and remote collaboration

• A cloud-based system is a way of storing data and running software over the internet instead of on a local computer or server

• Cloud-based systems allow employees to share documents, hold meetings and work together from anywhere in the world

  • This increases business flexibility and reduces office costs

  • However, firms are more reliant on secure internet connections and need to pay careful attention to data protection