Information Technology – Building Business for Small Website

While looking for any assistance or merchandise, the most common practice nowadays is to first browse the Internet. The popularity of the Internet has thus made it the largest promotional place to showcase assistance or merchandise needed by all. So, an online version has been included in many businesses which are offline in nature, and numerous innovative people have started businesses based on information technology, building business for small website.

IT is an area that has countless prospects for everyone. Besides becoming the address for many small businesses, IT is also a place from where you can choose from different types of jobs offered.

Given below is how information technology helps in building business for small websites:

1. Globalization – You can secure orders for your products from consumers living in different parts of the world. Thus, you product market is not limited to the city where you are based but outside it as well. This way your revenue will also increase with the increase in your clients.

2. Payment – Information Technology has been one of the biggest achievements of mankind so far. With IT you can sell your product and get paid for them online. The clients can use their credit cards or Paypal accounts to send money to you for your goods. This will help you increase your business as it is not necessary for you to meet your clients to get the payment and at the same time your clients also need not have to go to you to collect the goods.

3. Convenience – Shopping online is very convenient as we just have to sit back at home and shop. With IT, you can create your own websites and sell your products online conveniently.

4. Cost effective – You don’t have to spend so much money on maintaining your business website as compared to renting an office. Websites are cost-effective and this leads to increased profit.

5. Audio and Video message – Information Technology can bring you all those benefits which you never thought was possible. This includes leaving an audio or video message for your clients or website visitors. You can make them understand your products better by leaving these messages. Thus, it can boost your sales.

6. Advertisement – Internet is one great place to advertise your products or services. You can promote your business successfully through internet and, that too, at a low cost.

7. Informative – Your website should contain all the information that a customer would like to know about a particular product. When you provide sufficient information about your product, the chances of securing an order would be high.

8. Entertainment – You can add some entertaining features in your website to entertain your present as well as potential clients. With the help of IT you can add numerous kind of entertainment. When your visitors are happy with your website and its contents then you may stand to gain some new clients for your product or services.

9. Gaining new clients – Through IT you can gain as well as retain clients. Your business webpage must be informative as well as attractive so that you can gain new clients and retain the exiting ones.

Skype Hype – 5 Differences Between Disruptive Technology & Parasitic Business Model

The news of Skype IPO was not a surprise as sooner or later any company owner with Skype’s business model has to bail out! Whilst Skype presents itself as disruptive technology, I would argue that their business model is more of a parasitic approach to price arbitrage in the market. Once price arbitrage disappears, they are dead in the water as they have no USP other than price. Invest at your peril!

What is Disruptive Technology?

Disruptive technology is a ground breaking technology or novel use of existing technology that breaks away from the traditional methods and delivers a breakpoint in the life-cycle of a product or market. Take the Digital Camera, which revolutionised photography for the man in the street enabling everyone to feel like David Bailey! Using technology which was already available, this turned the market upside-down and left traditionally strong companies such as Kodak, Fuji, Agfa, Canon and Minolta floundering and play catch up to the newcomers such as Sony & Samsung. All of a sudden these traditional market leaders were facing a new challenge from companies with a different background, highly skilled in mass marketing and used to short product life cycle. Some companies such as Kodak, Fuji & Agfa watched their core business of chemical film and processing whipped out within a few years, and were forced to rethink their business, product line-up and future direction. Now you cannot get more disruptive than this!

What is Parasitic Business model?

A business that is reliant on price arbitrage alone and its sole purpose is to exploit the price differential. In general these business models are reliant on the continued existence of the price arbitrage (or price gap) within a market.

This is not a derogatory term but it is the best attempt to explain the simple fact that without the price differential they have no unique selling point. This is about the business model and not technology, and it is strongly the case with Skype.

Skype came to existence and continues to exist because it can offer calls for free or at an unrealistically low price using existing technology. For Skype pricing policy to work and generate profits for its shareholders, it must continue to have access to a Zero-Cost network and rely on carriers to continue to charge high prices for calls therefore maintaining price arbitrage. Should a carrier decide to meet Skype pricing or prevent Skype from accessing its network, there will be no business model left.

In essence Skype is taking advantage of high prices charged by traditional carriers for making calls. Carriers need to make investment in their infrastructure to deliver new services and compete with one-another. Skype gets a free ride on this investment without making any investment of its own. So whilst carriers continue to invest in their network, they need to charge higher price levels to retain their cash flow and get a return on investment.

Skype also uses their customers’ PC as a hub and breakout point to route, redirect and deliver its traffic. Read your agreement with Skype, which you clicked as “I read and agree”. You have given them permission to do so and no, just shutting your Skype application does not stop it from chattering in the background with the network!

What is the difference between Skype and EasyJet or any other no-frills price-lead Airline?

Of course EasyJet and other budget airlines do compete on price, but there are a few fundamental differences.

1. The basic premise of the budget price airlines is breaking down the function and services of airlines into smaller pieces, Taylorism at work within the service industry if you will. They have separated the basic function of getting passengers from A to B, from all the supplementary services and have assigned a value to each part. They have stripped the unnecessary, sheer indulgence and the luxury from air travel, and brought air travel within the reach of a larger consumer segment.

2. They have given consumers a choice. You can have priority check-in, checked-in baggage, priority boarding, drinks, food, entrainment, etc. but you have to pay extra for each element. Of course we all know about Ryan Air and their attempts at pushing this to its limit with toilets charges and next they will be charging for oxygen!

3. They have taken advantage of the labour cost differentials as they have no legacy contracts with unions. The average BA cabin crew earns in excess of £30k per annum whilst an EasyJet cabin crew earns less than €15k. This is a 50% reduction in your operating costs alone.

4. Most budget airlines have also taken onboard standardisation by using a single aircraft model therefore reducing maintenance, training and purchasing costs. Of course EasyJet did step out of this model by ordering Airbus aircrafts a few years ago after using Boeing for many years, but never-the-less their fleet is made up of just two types of aircrafts rather than 12 different aircrafts at BA.

5. Finally, budget airlines have created a new market and have invested heavily in their own infrastructure. They have made a great contribution to the wealth of the nation, their shareholders and tourism industry as well as the national GDP of countries they operate within. Parasite businesses do not achieve any of these contributions or make such investments.

How long will the Arbitrage Last?

This is the “How long is a piece of string” question. Despite the popularity and growth of Skype, it only has a tiny market share of the global traffic. Skype at best is an irritation to the giant carriers and at worst not even on the radar. However, the day they start to make an impact on revenues of the carriers, the response will be swift, deadly and terminal. Carriers could deliver their own competitive products if the need arises, and can price Skype out of existence should Skype becomes a revenue drain.

Would the IPO be successful?

Not withstanding the ridiculous trademark issue with the B-Sky-B, I am sure it will be a success given all the hype and marketing around Skype. The question is whether the business is sustainable. If Skype continues to market itself as “cheap or free” alternative to carriers, then it is heading to the same end as many dotcom companies of the 1990s. Cheap or Free does not last for long and is not sustainable business model if you are relying on everyone else to make the investment in the infrastructure you intend to use! To be successful in the long run, Skype needs to bring something else to the party.

Delivering USP and truly sustainable value proposition requires investment which means changing the business into an orthodox model. The question is can Skype operate and prosper within an orthodox business model? The past history such as boo.com, e-toys, pets.com, etc., put a big question mark over this. Welcome to the Stock Market and business reality!

Advantages Of Information Technology In Business

Advantages of Information Technology In Business – Increased Efficiency

The main advantage of implementing and improving information technology in a business is the increased efficiency that it brings. Businesses are built around all kinds of processes, and a lot of these processes are repetitive, slow, and boring for people to perform. Computers and systems can be designed and implemented to perform these processes based on strict business rules – processes such as service desk call logging, file archiving, or customer records management. These tasks could actually be done by people, but computers and systems can perform them more accurately (if designed well) and a lot faster than people could. This brings us nicely to the next advantage of information technology in business…

More Useful And Relevant Work For Employees

We humans are fantastic creatures. We have highly developed brains, capable of making complicated decisions and improving our standard of living. We shouldn’t need to spend our time performing repetitive work that computers could do for us. Many automated tasks can and should be performed by information technology systems. All we would need to do is provide the input, the system would then do the processing, and provide an output. This would free up our time and allow us to perform more relevant work, such as building relationships in the business, making decisions, developing ideas, and providing service to customers – things that are hard for computer systems to do!

Better Decision Making For Management

One of the most useful functions of and advantages of information technology is to store large amounts of data. Years and years of individual customer records, transactions, data movements and updates are stored all over company systems. This data can be used, aggregated, analysed and displayed in almost any format imaginable, to allow employees to make better decisions about their company. Data can show customer trends, financial analysis, system response times, profitable customers, anything that you have stored can be displayed in a suitable format. This allows employees – both analysts and management – to look at this data and make decisions on it to improve the company and provide a better service.

Improved Service To Customers

Over the years, information technology in businesses has improved to a point where it has helped provide a better service to customers. This can be measured in many ways – decreased hold times for customers dialling in, more accurate information being provided to customers for their accounts, faster turnaround times for products and services, better management of information and how to apply it to a customer. All of these points can be attributed to the advantages of information technology in business.

I know I often make calls to my phone company/bank/insurance company or any other company that has incoming calls. Over the years, they have improved their systems to allow for better redirection of calls, call monitoring, account information and integration so they’re able to solve my problem and answer my question quicker and easier than they could have in the past.

Of course, it’s the employee who answers the questions and does the work, but it’s the computer system that provides them with the information they need to do so.

Do you have any other points on the advantages of information technology in business? Post them in the area below! Stay tuned for the next post on some of the disadvantages of information technology in business.

Thanks for reading!