Digital Information And Communication Technology Impact Business Models For The New Economy

1943 words - 8 pages

Consider how digital Information and Communications Technologies have provided opportunities for developing new business models

In the era of new economy, the intense change have taken place in enterprise management environment, in order to develop and survive, businesses have to innovate their business models. Digital information and communication technologies have played a crucial role of promoting the emergence and innovation of new business models, and also brings innovation to the management style of business. Information technology has greatly improved the level of information utilization in the management system, improves the work efficiency, optimizing the business processes, hence injecting new strength for the application of new business models. Business model is basically what method a business uses to make profit through. According to Osterwalder (2005), business model is based on many factors and the relation between them. It basically describes how business operates, it is a conceptual tool that used to explain how the enterprise creates cusumer value, how to set up internal structure in the business, as well as expand the market by forming network with partners to deliver value, gain profit and maintain the cash flow.

The key factor for the emergence and innovation of new business models is the arising of new economy. New economy usually refers to the changes on the growth of economic, economic structure and the economic operation rules, caused by the revolution of new technology began from the middle of 1990s. New economy started from the United States, but its wave has swept across all over the world. The characteristic of new economic era is uncertainty since the rapid development of global market and information technology, which has brought business with infinite opportunities and challenges at the same time. Due to the change of business environment, enterprises must continuously improve business models in order to enhance their competitiveness, information technology is the great tool for businesses to create new business models.

One of the major changes of the market is the informatization and networking. As a result of the rapid development of information and communication technology, enterprises start to pay more attention on their survival and development in the network environment. Many real-life business activities are copied into the virtual world, such as Internet banking, online education and e-commerce. The networking based business achieved two-way communication with their customers, with such new business model, the circulation and operation costs can be greatly reduced, which also improves the operational efficiency. Another essential factor is the globalization of market, this indeed brings new opportunities for business, but at the same time it also brings greater competitive pressure. However, digital information and communication technology is an effective tool for enterprises to compete in the...

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