A2 The Role of Technology in Efficiency and Cost Control

Feb 22

Efficiency is a measure of how effectively a company generates outputs from its resources. An effective company maximises outputs while minimising waste and inputs. Businesses that operate more efficiently complete activities and procedures with the least amount of time, energy, and resource waste possible.

Cost control is the process of analysing business spending to identify expenses that can be reduced. Effective cost control reduces spending without reducing quality leading to higher profits.

Ordering

Ordering is the formal request from a customer to purchase a good or service from a business. A range of systems are evolving for businesses to use to improve efficiency in the ordering process. These include e-commerce websites, mobile apps, social media, QR codes, interactive kiosks, chatbots and the Internet of Things (IoT).

Businesses must also make regular orders from their suppliers to ensure they have the resources to maintain their operations. Typical things that businesses order from their suppliers include inventory, equipment, office supplies, cleaning supplies, uniforms, safety equipment and furniture.

Inventory Control

Inventory control is the process of ensuring the right amount of stock is available in the business when it is needed in the production process or when it is ordered by a customer. Having too much stock, overstocking, can lead to waste and higher costs associated with storage. Having too little stock, or understocking can lead to a business being unable to meet demand causing a negative brand image.

Examples of how businesses use technology to improve inventory control systems include bar code scanning and RFID tags, cloud-based software, artificial intelligence, Internet of Things (IoT), mobile devices and automated warehousing systems.

Accounting

Accounting is the process of recording, analysing and reporting financial transactions and information to assess performance and to inform decision-making. Accounting responsibilities include recording transactions, producing financial statements, compliance with accounting standards and communicating with stakeholders.

Examples of how businesses use technology to improve accounting include the automation of routine tasks, cloud-based accounting systems, advanced analytics, integration of systems, improved compliance, scalability and paperless operations.