In the recent years information technology has been progressing rapidly. As a result, the cost of communications has become very low. The increasing competition in the field creates a pressure to come up with innovative ways of using information technology. There are also various challenges such as maintaining intellectual property rights and privacy. Although e-commerce is young, it has the potential to have a great economic and social impact. The applications used in e-commerce have the potential to expand to other areas such as education and health service.
Information technology is affecting businesses by making geographical distance an irrelevant factor. Outsourcing is a significant example of this. This also means that there will be people working round the clock. Thanks to telecommunication systems, the various departments of a company working in different countries can keep smooth communication. The geographical flexibility gives companies choices to decide which tax authority and regulations to apply.
There is often access to information and services at all times of the day. People can directly get information on various markets. This makes brokers and agents unnecessary. This will decrease the cost of each service. Information technology has made mail order retailing smooth and easy. Every business involved in this makes effective use of technology. There are also products such as software and e-books which can be shipped electronically. This removes the need for transport. The payment is also done electronically.
E-commerce stores are easier to maintain and can be accessed by more customers than a physical store. This also eliminates the need to open multiple stores at different geographical locations, as all customers can access the services at the same place. Advertising is also cheaper via online media. It can also be more effective. Customer services can also be provided using technology. The electronic medium reduces the need for a number of employees to run a retail business. However, the few employees will need to be highly skilled.
E-commerce also involves some intermediary costs such as those for secure online payment. The importance of advertising is higher in e-commerce as there are a large number of companies providing similar services online and there is a need to attract the attention of the customers. E-commerce is vulnerable to fraudulent activities and the extra precautions that need to be taken increase the cost.
Information technology lets people who cannot meet physically work collaboratively. Sharing of information builds relations between employees of a department and company. There can also be uninhibited communication between employees of various levels such as managers and subordinates. More people work from their homes rather than at an office. This makes them more particular about choosing the right houses. Working using information technology makes it possible for employees to work flexible hours, work part time, share jobs or do multiple jobs at the same time. There could be easier career advancement as changing jobs need not necessarily mean changing one’s living place.
Information technology can complement traditional classrooms. Computer assistance plays an important role in learning. However, for the majority of students, a teacher is required for motivating, encouraging and evaluating. Availability of reading materials in the Internet increases convenience. Information technology makes communications during group projects easier. Distance learning courses are delivered much more effectively with the aid of new technologies. Rather than using purely printed materials, education providers can now use audio and video materials as well. Rather than working alone, the students can interact with one another and their teachers through online platforms such as discussion groups.
Protecting intellectual property right is a critical issue in the field of information technology. The original creators and distributors of services can feel dejected as their incentives with be reduced by copying and distribution of their contents by others. There are also issues related to free speech on the Internet. There still are not ways to control objectionable content on the Internet. The possibilities for data-mining raise concerns over privacy. There is an increased dependence on technology. This can be risky in case of a failure in technological infrastructure. A number of decisions need to be taken after proper investigation to ensure effective use of technology in the future.