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Think Business
Programme 3: Information Technology
'Think Business' consists of five TV programmes. Each programme comprises a number of short case studies describing the activities of a wide range of real-life successful Scottish organisations including a range of different forms of business from the small-scale sole trader to larger limited companies. A Scottish charity and a workers' co-operative are also represented.
The five programmes use the real case studies to focus on particular areas of interest. These areas are described in each programme's title.
Programme 3 Information Technology: shows the application of IT in three Scottish organisations and also indicates how the organisations have benefited from its introduction.
The programme aims to introduce learners to:
- how IT can be used effectively in an organisation;
- how IT can help provide an organisation with a competitive advantage.
Learning Outcomes
Learners will:
- understand how IT can enhance the quality / relevance of information used for decision-making;
- identify how IT can improve the production process and enhance communication with customers;
- select relevant information from the programmes to support coursework.
The programmes will be useful to support learning in Standard Grade Business Management, Intermediate 1, 2 and Higher Grade Business Management. Similar GCSE and AS /A level courses in England and Wales and Ireland could also use the programmes to enhance learning.
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Three case studies of Scottish firms are presented in which the owners of the firms show and explain how they have used IT to increase their efficiency and effectiveness.
0.00–5.25: in Case Study 1, Don't get tangled in the Web, Anna Stewart of I Design shows how organisations can benefit from having specifically designed software and web pages through which they can communicate with customers.
5.25–12.30: in Case Study 2, Wherever you are, the advantages to the customer and the organisation of having an IT system of stock control and a web page are explained by Peter Allen, Managing Director of FOPP Records.
12.30–19.00: in Case Study 3, Reach your Customers, details of how Radical Travel can communicate directly with their customers, take bookings on line and reach new and distant markets are described by Alistair Campbell, Managing Director.
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In Scotland
Standard Grade Business Management
Area of Study 3 What resources do businesses use?
3.3 How do businesses use information? 3.4 How do businesses operate?
Area of Study 4 How are businesses managed?
4.5 How do businesses communicate?
Intermediate 1 Business Management
Information in Business
Learning Outcome 1 Describe the role of information in business Learning Outcome 2 Explain the importance of IT to the operation of an organisation
Intermediate 2 Business Management
Business Decision Areas
Learning Outcome 5 Explain the uses and importance of IT to the operation of organisations
Higher Grade Business Management
Business Enterprise
Learning Outcome 2 Assess the value of information and the application of IT to business enterprises
In England
GCSE Double Award in Applied Business: Investigating Business
GCSE Double Award in Applied ICT: ICT in Organisations
A/AS Business Studies: Operations Management
In Northern Ireland
GCSE Double Award in Applied Business: Investigating Business
GCSE Double Award in Applied ICT: ICT in Organisations
A/AS Business Studies: Marketing and Operations Management
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Why IT?
Organisations can improve their efficiency and effectiveness by applying IT to those areas of the organisation where it will improve service delivery, production, information gathering, processing and analysis and where it can effectively improve the communication between the organisation and its customers. In this way IT can help an organisation to maintain and increase their competitive advantage over other organisations.
Advantages of using IT
Organisations operating in a very competitive environment can obtain cost advantages by using IT to, for example, sell electronically, keep potential / actual customers informed about product information through a web page, keep electronic records of financial / customer information and use a system that records sales information electronically (electronic point of sale - EPOS) and through linking this to an IT stock control and reporting system, know when to purchase new supplies of inputs.
If the IT system has been designed properly and the manager / user trained in using the system, the information provided is likely to be up-to-date, accurate and relevant. Thus managers / users can utilise this information to make more informed decisions than if the information came from a manual system where it is not likely to be up-to-the-minute. Having the latest information is important for making decisions regarding the pricing and purchasing of products for resale and for deciding on future action.
Customers can also be kept informed if the organisation has a web page. Information giving product details, and on-line booking / buying from organisations brings significant advantages to both the consumer and the organisation. The fact that the web operates 24 hours a day, is not affected by time zone shutdowns and is available throughout the world, allows organisations to communicate with customers overseas and enter foreign markets without the cost of establishing a physical presence.
These are just some of the applications that contribute to increasing the efficiency and effectiveness of organisation.
Installing an IT system
Before installing an IT system the organisation should carefully consider how intensively the system will be used. There is little point installing a sophisticated IT system if it is not going to be used to the full. The potential costs of installing a system (capital costs, maintenance costs, disruption costs and training costs of staff and any other users of the system and the potential for information overload - too much information from the system) must be measured against the potential benefits the system will bring (savings in information gathering, processing and analysis costs, potential savings in direct labour costs and the provision of up-to-date, relevant and accurate information, etc.) before any final decision is made.
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NOTE:
Two types of activities / tasks suggested for learners have been laid out below.
- Activities / tasks based on information given in the case studies and requiring the learners to view the case studies.
- Other activities / tasks that can be done without viewing the case studies.
Also
- The activities / tasks available at Standard Grade and Intermediate 1 are often similar.
- Learners can use the activities / tasks at lower levels for reinforcement.
Activities and Tasks based on the Case Studies
Standard Grade Business Management
Case Study 1 (I Design)
- 1 Explain advantages of using IT to sell houses for:
- the luxury house builder;
- a potential luxury house buyer.
- It is proposed that IT should be used to advertise on Automatic Teller Machines at banks and targeted at those using the machines. List what you think might be the advantages and disadvantages of this to:
- the customer using the ATM;
- the organisation placing the advert on the ATM;
- the bank who owns the ATM.
Case Studies 2 and 3 (FOPP, Radical Travel)
- Explain how the electronic point of sale system (EPOS) used by the independent record retailer FOPP is able to inform the management of the current level of stock of particular records / CDs. List two advantages of the system for the organisation.
- FOPP has identified a threat to its future existence. Purchasers of music may use IT to download music directly to their homes rather than buying the music from a retailer. What would be the impact on FOPP if this happened and how might the web page devised by FOPP help to reduce the impact of the downloading on the record retailer?
- Explain how the web page developed by Radical Travel saves the organisation money when customers decide to book holidays. How does the existence of a web page make it easier for Radical Travel to communicate with its customers?
Intermediate 1 Business Management
Case Study 1 (I Design)
- 1 Explain the advantages of using IT to sell houses for:
- the luxury house builder;
- a potential luxury house buyer.
- It is proposed that IT should be used to advertise on Automatic Teller Machines at banks and targeted at those using the machines. List what you think might be the advantages and disadvantages of this to:
- the customer using the ATM;
- the organisation placing the advert on the ATM;
- the bank who owns the ATM.
Case Studies 2 and 3 (FOPP, Radical Travel)
- Explain how the electronic point of sale system (EPOS) used by the independent record retailer FOPP is able to inform the management of the current level of stock of particular records / CDs. List two advantages of the system for the organisation.
- FOPP has identified a threat to its future existence. Purchasers of music may use IT to download music directly to their homes rather than buying the music from a retailer. What would be the impact on FOPP if this happened and how might the web page devised by FOPP help to reduce the impact of the downloading on the record retailer?
- Explain how the web page developed by Radical Travel saves the organisation money when customers decide to book holidays. How does the existence of a web page make it easier for Radical Travel to communicate with its customers?
- Referring to FOPP and Radical Travel, identify all the costs that would have had to be paid to install the IT systems (EPOS / stock control in FOPP and the web page in Radical Travel)
- Explain how the managers at FOPP and Radical Travel are now able to take more informed decisions about their business as a result of the IT systems installed.
Intermediate 2 Business Management
Case Study 2 (FOPP)
- You are a cash till assistant working in one of the music shops run by FOPP and taking in the money from customers for their purchases. In what way(s) do you think your job would be different if the new EPOS system was installed?
Higher Grade Business Management
Case Studies 2 & 3 (FOPP, Radical Travel)
- Indicate and justify any other applications of IT that FOPP and Radical Travel might install in their organisations to support marketing, human resource and financial management and suggest particular advantages they might expect to receive as a result.
Other activities
At Standard Grade Business Management
- Your school is about to become an 'electronic'school and needs advice. Identify the kind of software that would be best for it to use in setting up the following:
- an internal communication system allowing all members of staff to send messages to each other;
- a storage system that will allow personal information about pupils to be kept;
- an electronic information system for pupils to help them with their school subjects;
- a weekly financial statement of the petty cash position in the school office;
- a system where the head teacher can exchange views with other head teachers without leaving the school.
- In groups, select one type of information that your school currently gathers, processes and possibly analyses manually, eg exam marks, pupil attendance, etc. Identify the most appropriate software to substitute for the manual system and list the likely benefits of using IT to process and analyse the information. Identify at least two problems that would have to be overcome when setting up an IT system for the school.
Intermediate 2 Business Management
- Explain the marketing advantages to a local travel agent of having access to a database of potential customers. What additional skills will be required by the staff to use the database effectively?
- While the introduction of IT into any organisation might be seen by staff as threatening their jobs, explain how it could also increase employment in the organisation.
Higher Grade Business Management
- Explain why decision-making by managers is likely to be more effective if the information used to make the decision has been gathered and processed by the organisation's IT system.
- Explain how the provisions of the Data Protection Act affect the storage of information about employees on a database.
Suggested Solutions
- Often in the area of Business Management there is no one correct answer but a number of plausible solutions may exist. The solutions offered here are simply suggestions; teachers and learners may well be able to identify other plausible alternatives.
- A number of activities involve learners in investigating local businesses, etc. In such cases, no suggested solutions can be offered.
Activities and Tasks based on the Case Studies
Standard Grade Business Management
Case Study 1 (I design)
| 1. |
Advantages of IT to house builder: |
Information accessible to all through the internet Virtual tours around house possible Excellent for marketing purposes. |
|
Advantages of IT to house buyer: |
Information available at the buyer's convenience Can experience the house without actually visiting. |
| 2. |
Advantages of advertising |
To customer: |
Information on products available on ATM
Convenient time while waiting for cash. |
|
To Organization: |
Captive market
Potential for increased sales. |
|
To Bank: |
Revenue from advertisers. |
|
Disadvantages of advertising |
To customer: |
Distracting from main activity of obtaining cash. |
|
To Organization: |
Cost of using ATMs for advertising
Bank customer resistance. |
|
To Bank: |
Negative reaction from customers. |
Case Studies 2 and 3 (FOPP, Radical Travel)
| 3. |
Current stock of each product stored on database.
When a product is sold the sales assistant uses the bar code reader to record the sale.
Adjustment is then made electronically to the stock level for that product on the stock database, reducing the stock level by one.
Thus up-to-date stock records for every product are available to management.
Two advantages:
- Information about stock levels for each product is always available to help assistants inform customers if the item they want is in stock and aid managers in their decisions about when to buy more products.
- Managing stock levels and having information about stock on hand is essential to avoid disappointing customers - management can note the fast-selling items and ensure that stock is always available.
|
| 4. |
Impact on FOPP of downloading: |
FOPP's sales revenue would decline as demand shifted towards downloading rather than buying from a retailer. |
|
Impact of web page: |
Having a web page would make it easy for customers to identify/find the specialised music that FOPP supplies; it might be more difficult to find suppliers who handle this type of music by downloading. |
| 5. |
How does a web page save money? |
Booking of holidays can be made direct at any time and it avoids the cost of having a large staff of consultants in specialised premises. A small staff to answer queries at the end of the phone is all that would be required. |
|
How does a web page make it easier to communicate with customers? |
The web runs 24/7 so customers can access information at any time. Using the web is not site specific and customers don't have to physically visit premises at a particular time.
Also the web can reach customers all over the world and so increases the potential market. |
Intermediate 1 Business Management
Case Study 1 (I design)
| 1. |
Advantages of IT to house builder: |
Information accessible to all through the internet
Virtual tours around house possible
Excellent for marketing purposes. |
|
Advantages of IT to house buyer: |
Information available at buyer's convenience
Can experience the house without actually visiting. |
| 2. |
Advantages of advertising on ATMs: |
To customer: |
Information on products available
Convenient time while waiting for cash. |
|
To Organization: |
Captive market
Potential for increased sales. |
|
To Bank: |
Revenue from advertisers. |
| Disadvantages of advertising on ATMs: |
To customer: |
Distracting from main activity of obtaining cash. |
|
To Organization: |
Cost of using ATMs for advertising
Bank customer resistance. |
|
To Bank: |
Negative reaction from customers. |
Case Studies 2 and 3 (FOPP, Radical Travel)
| 3. |
How can EPOS inform management about stock levels?
Current stock of each product stored on database. When a product is sold the sales assistant uses the bar code reader to record the sale. Adjustment is then made electronically to the stock level for that product on the stock database, reducing the stock level by one. Thus up-to-date stock records for every product are available to management.
Two advantages:
- Information about stock levels for each product is always available to help assistants inform customers if the item they want is in stock and aid managers in their decisions about when to buy more products.
- Managing stock levels and having information about stock on hand is essential to avoid disappointing customers - management can note the fast-selling items and ensure that stock is always available.
|
| 4. |
Impact on FOPP of downloading: |
FOPP's sales revenue would decline as demand shifted towards downloading rather than buying from a retailer. |
|
Impact of web page: |
Having a web page would make it easy for customers to identify/find the specialised music that FOPP supplies; it might be more difficult to find suppliers who handle this type of music by downloading. |
| 5. |
How does a web page save money? |
Booking of holidays can be made direct at any time and it avoids the cost of having a large staff of consultants in specialised premises. A small number of staff to answer queries at the end of the phone is all that would be required. |
|
How does a web page make it easier to communicate with customers? |
The web runs 24/7 so customers can access information at any time. Using the web is not site specific and customers don't have to physically visit premises at a particular time. Also the web can reach customers all over the world and so increases the potential market. |
| 6. |
Costs of installing IT system: |
Capital costs of purchasing system
Training costs to enable staff to use it
Disruption costs of lost business / dissatisfied customers while being installed
Teething trouble costs as the system beds in and has to be fine tuned to the needs of the organization
Opportunity costs of forfeiting other items on which the money to buy the IT system could have been spent. |
| 7. |
Managers' decision-making: |
An IT system should help managers to make better decisions because:
Information should be up-to-date, accurate and detailed Wide range of information available thus making the identification of alternative courses of action easier. |
Intermediate 2 Business Management
| 1. |
How would cash assistant's job change with EPOS? |
With EPOS each product's bar code has to be swiped with bar code reader. |
Higher Grade Business Management
| 1. |
Other IT applications that could be used: |
Spreadsheets for financial management: provides for easy calculation, analysis and adjustment of eg, budget figures, etc.
Word processing for handling mail and filing correspondence electronically. Databases for retaining records / information on staff, customers, suppliers etc.
On-line purchasing through website. |
Other Activities
Standard Grade business Management
| 1. |
Software to be used in School: |
Staff communication:
Storage System:
Electronic Source:
Financial Statement:
HT exchange views: |
email, Intranet
Database
Database of notes, internet
Spreadsheet
Video conferencing. |
| 2. |
Most appropriate software: |
The advantages of any software chosen should be that it provides up-to-date, accurate, fast, clear information for analysis and decision-making. |
Intermediate 1 Business Management
| 1. |
Software to be used in School: |
Staff communication:
Storage System:
Electronic Source:
Financial Statement:
HT exchange views: |
email, Intranet
Database
Database of notes, internet
Spreadsheet
Video conferencing. |
| 2. |
Most appropriate software: |
The advantages of any software chosen should be that it provides up-to-date, accurate, fast, clear information for analysis and decision-making. |
Intermediate 2 Business Management
| 1. |
Marketing advantages of database: |
Identifying particular markets (youth, the elderly, etc.) to target with marketing information
Ability to regularly send target-specific marketing information |
|
Additional Skills: |
Keyboarding / mailmerging skills and the ability to interrogate, amend, add to a database, etc. |
| 2. |
How IT can increase employment? |
Directly: specialist IT staff required that can either be recruited externally or trained from internal staff. Indirectly: if IT provides the organization with a competitive edge and sales increase, more employment will result. |
Higher Grade Business Management
| 1. |
Why is decision-making likely be effective if IT is used to provide the information? |
Information will be up-to-date, accurate, relevant, easily analysed and comprehensive.
Note:information overload - a feature of much of the output of many IT systems - should be avoided. |
| 2. |
Data Protection Act 1984: |
Personal information should be:
Obtained/processed fairly and legally Used and disclosed only for purposes for which it is held Accurate and up-to-date.
An individual should be entitled to:
Be informed if data held and have access to it Have data held corrected or erased. |
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The websites of the various companies featured in the programmes offer some useful information about the workings of the companies.
This web page contains links to other websites that are not under the control of and are not maintained by Channel 4 Television. Channel 4 Television is not responsible for the content of these sites and does not necessarily endorse the material on them.
Programme 3 Information Technology (IT)
www.i-design.co.uk
www.fopp.co.uk
www.radicaltravel.com
www.haggis-backpackers.com
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