Investment in Technology
Table of Contents
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- The Areas of Technologies’ Application in Business Operations
- The Role of Technologies in Enhancing the Performance Objectives (Such as Improving Delivery Speed and Quality)
- How Technology Investments Correspond to the Volume/Variety Requirements to Provide the Appropriate Trade-Off between Flexibility and Cost
- The Challenges in Adopting New Technologies in Business Organisations
- Related Free Technology Essays
In the framework of the modern world, the ultimate factor in the market development is the volume and the nature of the investment in technology. The governments of numerous developed countries are interested in actively developing the bio-nanotechnologies along with the information technologies as these two types of technology are able to guarantee the security and development of the market. Thus, this kind of investment, regardless of the high risks and significant payback periods, is able to ensure significant progress in the development of not only markets but also various types of industries in general. In addition, it is a widely known fact that currently, in the twenty-first century, the role of markets and investments plays a decisive role. There is a change in the production markets, so that only companies with a high level of investment in technology would be able to compete successfully at the global level in the future. As a result, it is crucial to ensure that the form of the technology investment corresponds to the volume/variety requirements of the market and has the appropriate trade-off between flexibility and cost.
The Areas of Technologies’ Application in Business Operations
To understand the areas of technologies’ application in business operations, it is significant to have an understanding of what the technology is from the business perspective. Any kind of technology is represented by the various types of innovations in the field of technologies, which are characterized by the scientific and technical novelty, production or social applicability as well as the possibility of commercial realization (Steenhuis & Pretorius 2017; Szwejczewski, Sweeney & Cousens 2015). As a rule, these factors comprise of corporate mobility, virtualization, mobility, and cloud computing, processing of large data sets, and, finally, the mobile information systems.
The process of identification of the areas of the technologies’ application in business operations is frequently framed by the so-called ‘innovative project’ (Steenhuis & Pretorius 2017). An innovative project is a direct consequence of modernization activity, which generally consists in a new or value-added product, technological process, and/or management process (Deradjat & Minshall 2017; Szwejczewski, Sweeney & Cousens 2015). Herein, regardless of the area of business operations and technology application, the process of creating, improving and disseminating inventive projects is referred to as innovative.
As a rule, there are no limits in areas, where the technologies could be theoretically applied if the business operation environment is taken into consideration. To increase the efficiency of any area of business operation, the so-called ‘trading network systems’ are generally created. Their creation is accompanied with the use of the latest information technologies (Szwejczewski, Sweeney & Cousens 2015; Szwejczewski, Sweeney & Cousens 2015). At the same time, data is shared both within the networks (comprising retail outlets, warehouses, and different areas/branches) and also with external counterparts (Deradjat & Minshall 2017). The field of application of information technologies is gradually expanding from the automation of individual business processes in the enterprise (which include, for instance, the automation of a cash settlement unit, accounting, inventory management, logistics operations, and personnel management) to the integrated automation of basic or even all business processes (Brogan, Böhme, Gorkin, Fan & Birtchnell 2016; Szwejczewski, Sweeney & Cousens 2015). Hence, it is possible to suggest that all the areas of business operations mentioned above can be applied to technologies. As a result of the new technologies introduction in the markets, its quality and efficiency tend to improve. Herein, the question regarding the role of technologies in performance objectives’ enhancement becomes significant.
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The Role of Technologies in Enhancing the Performance Objectives (Such as Improving Delivery Speed and Quality)
The role of the technologies in enhancing the performance objectives is conceivable to be depicted when considering the informational technologies whether this or that type of technology is dominant in the market (Kasie, Bright & Walker 2017). An integrated system of technologies’ cooperation is needed for effective functioning of any enterprise in the market.
As a rule, the system of technologies’ cooperation is distributed between all business entities in the market. Such an approach helps increase the speed of the services and products delivery in a particular sector of the market. In addition, it stimulates the process of improvement of the products and services’ quality (Deradjat & Minshall 2017). In other words, a system of intersected technologies is mandatory (Brogan, et al. 2016). Hence, the essential role of the technology in enhancing the business performance objectives lies in the optimization of processes in the business environment aimed at achieving the expected goals of the business activity.
How Technology Investments Correspond to the Volume/Variety Requirements to Provide the Appropriate Trade-Off between Flexibility and Cost
As a rule, the company, or the organization, as a unit of the market creates its own information interchange system autonomously, and, as a result, it partially uses the system, which has already been applied in the market. It is obvious that the technologies used in the market cannot be developed apart from each other and must meet the convinced rations that enable the market to fit into industry-wide and worldwide flows (Kasie, Bright & Walker 2017). Such an approach forms the tendency to unify and standardize the technologies used. Herein, it is worth noting that the use of technologies for the automation of processes generally forces to change the structure, sequence and content of labour (Deradjat & Minshall 2017). In addition, it significantly limits the possibility of rationalizing the processes of activity by redesigning business processes.
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To avoid such a situation, it is necessary to take into account the specifics of the business activities and the characteristics of business processes when developing technology products. Such an individual approach is the foundation of the opposite trend – the one aimed at specialization, as it ensures the integration of the technology product into the existing system of organization processes. However, in most cases, specialized software products require significant financial costs.
Finally, in order to answer the question of how the technology investments correspond to the volume/variety necessities to provide the appropriate trade-off between suppleness and cost, it is possible to mention such a technological invention in the market as e-commerce. The tools of the e-commerce systems are mass-oriented and tend to be operated online (Szwejczewski, Sweeney & Cousens 2015). Such systems make it possible to accept orders from clients regardless of the time and location (Brogan, et al. 2016; Kasie, Bright & Walker 2017; Steenhuis & Pretorius 2017). The use of e-commerce systems allows improving the quality of customer service, stimulates the process of discovering new channels and sales markets, and increases the flexibility of customer service (Deradjat & Minshall 2017). All this undoubtedly increases the company’s competitiveness (Deradjat & Minshall 2017; Steenhuis, HJ & Pretorius). A peculiar example of an e-commerce system of technology, where all stages of a commercial transaction of the market are implemented electronically, is an online store oriented on the sale of various types of goods. Most systems are hybrid, combining elements of traditional and electronic commerce.
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The Challenges in Adopting New Technologies in Business Organisations
The indispensable challenge in adopting the innovative technologies in business operations entails the capacities of investments. The investments in high technologies make it possible to provide products and services of the so-called new generation with the new qualitative features (Brogan, et al. 2016; Deradjat & Minshall 2017). The latter invariably entail progress, and, as a result, influence the technological development of the world. It all means that any sector of the market in its development strategy must perceive technology as one of the priority areas.
Regardless of the growth of the domestic economies of the developed countries, it is impossible not to pay attention to the fact that such a positive result is based exclusively on the development of the commodity sector of the market, regardless of the market area concerned. If the long term functioning is to be considered, this certainly would not allow a particular company to occupy a leading position in the world market (Brogan, et al. 2016; Szwejczewski, Sweeney & Cousens 2015). At present, various kinds of technologies, Internet technologies and energy-saving technologies are made a priority for the different market sectors as they help develop the market structure in such a way that it brings more financial benefits at both domestic and global levels.
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The main challenges of investing in the technologies to be used in the market are the following. First and foremost, they include the high risks in terms of income (Szwejczewski, Sweeney & Cousens 2015). Secondly, the high initial financial investments also pose a challenge (Szwejczewski, Sweeney & Cousens 2015). Finally, the complexity of the estimation of payback is another challenge that needs to be surmounted (Szwejczewski, Sweeney & Cousens 2015). To successfully implement investment projects in market technology, serious financial investments are needed. However, there are not many market participants, including large companies, that would be ready to be engaged in such volumes of finance to be invested (Fujitsu Forum 2016). What is more, when investing in technology, there is a high degree of uncertainty about the final outcome and the payback period (Deradjat & Minshall 2017). Therefore, state and government support is of principal importance in this respect. One of the main levers of state influence on the development of investments in high technologies is the creation of an enabling environment to ensure the emergence and development of such investments (Brogan, et al. 2016). To overcome the technological backwardness in the developing sectors of the market of the world’s leading countries, one of the mechanisms for investment development would be the creation of the technologically sustainable environment, wherein the share of people is minimal to save up the assets for the development of the market and improvement of the quality.
To sum it all up, the technology plays an important role in the market functioning and, as a result, should represent an essential source of investment. Consequently, it is essential to make the system of technology investment interconnected with the volume/variety requirements of the market. Moreover, it is necessary to ensure that it results in appropriate trade-off between flexibility and cost. Such a positive outcome can be achieved only in the conditions when the technological development of the market is invested in properly as it is an essential step in the market development. It all means that on the one hand, the market determines the way of how the technologies should be invested in; on the other hand, the amount of investment in technologies shapes the level of the market development. Evidently, there are numerous challenges in the field of technology investment; however, these challenges are easy to overcome in the course of time by making smaller paces towards the bigger ones.