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In recent decades there has been a revolution in computing and communications, and all indications are that technological progress and use of information technology will continue at a rapid pace. Accompanying and supporting the dramatic increases in the power and use of new information technologies has been the declining cost of communications consequently of both technological improvements and increased competition. In accordance with Moore's law the processing power of microchips is doubling every 18 months. These advances present many significant opportunities but in addition pose major challenges. Today, innovations in information technology are having wide-ranging effects across numerous domains of society, and policy makers are functioning on issues involving economic productivity, intellectual property rights, privacy protection, and affordability of and usage of information. Choices made now may have resilient consequences, and attention must be paid with their social and economic impacts ICT company.

One of the most significant outcomes of the progress of information technology is probably electronic commerce on the Internet, a brand new means of conducting business. Though just a few years old, it may radically alter economic activities and the social environment. Already, it affects such large sectors as communications, finance and retail trade and might expand to areas such as education and health services. It implies the seamless application of information and communication technology along the whole value chain of a company that's conducted electronically.

The impacts of information technology and electronic commerce on business models, commerce, market structure, workplace, labour market, education, private life and society as a whole.

1. Business Models, Commerce and Market Structure

One important method by which information technology has effects on work is by reducing the importance of distance. In lots of industries, the geographic distribution of work is changing significantly. For instance, some software firms have found that they can overcome the tight local market for software engineers by sending projects to India and other nations where in fact the wages are much lower. Furthermore, such arrangements may take advantage of times differences in order that critical projects may be done nearly across the clock. Firms can outsource their manufacturing to other nations and rely on telecommunications to keep marketing, R&D, and distribution teams in close contact with the manufacturing groups. Thus the technology can enable a better division of labour among countries, which affects the relative demand for various skills in each nation. The technology enables various forms of work and employment to be decoupled from another. Firms have greater freedom to locate their economic activities, creating greater competition among regions in infrastructure, labour, capital, and other resource markets. Additionally it opens the doorway for regulatory arbitrage: firms can increasingly determine which tax authority and other regulations apply.

Computers and communication technologies also promote more market-like forms of production and distribution. An infrastructure of computing and communication technology, providing 24-hour access at low cost to almost any type of price and product information desired by buyers, wil dramatically reduce the informational barriers to efficient market operation. This infrastructure might also provide the means for effecting real-time transactions and make intermediaries such as sales clerks, stock brokers and travel agents, whose function is to offer a vital information link between buyers and sellers, redundant. Removal of intermediaries would reduce the expense in the production and distribution value chain. The data technologies have facilitated the evolution of enhanced mail order retailing, in which goods may be ordered quickly by using telephones or computer networks and then dispatched by suppliers through integrated transport companies that rely extensively on computers and communication technologies to control their operations. Nonphysical goods, such as software, may be shipped electronically, eliminating the whole transport channel. Payments can be achieved in new ways. The effect is disintermediation throughout the distribution channel, with cost reduction, lower end-consumer prices, and higher profit margins.

The impact of information technology on the firms' cost structure may be best illustrated on the electronic commerce example. The important thing regions of cost reduction when carrying out a purchase via electronic commerce rather than in a conventional store involve physical establishment, order placement and execution, customer support, strong, inventory carrying, and distribution. Although setting up and maintaining an e-commerce web site may be expensive, it is obviously less expensive to keep up such a storefront than the usual physical one since it is obviously open, may be accessed by millions around the world, and has few variable costs ICT company, such that it can scale up to meet the demand. By maintaining one 'store' in place of several, duplicate inventory costs are eliminated. Additionally, e-commerce is very efficient at reducing the expense of attracting new clients, because advertising is normally cheaper than for other media and more targeted. Moreover, the electronic interface allows e-commerce merchants to check on that the order is internally consistent and that the order, receipt, and invoice match. Through e-commerce, firms have the ability to move much of these customer support online in order that customers can access databases or manuals directly. This significantly cuts costs while generally improving the caliber of service. E-commerce shops require far fewer, but high-skilled, employees. E-commerce also permits savings in inventory carrying costs. The faster the input may be ordered and delivered, the less the requirement for a sizable inventory. The effect on costs connected with decreased inventories is most pronounced in industries where the item includes a limited shelf life (e.g. bananas), is susceptible to fast technological obsolescence or price declines (e.g. computers), or where there's a rapid flow of new services (e.g. books, music). Although shipping costs can increase the cost of many products purchased via electronic commerce and add substantially to the last price, distribution costs are significantly reduced for digital products such as financial services, software, and travel, which are important e-commerce segments.

Although electronic commerce causes the disintermediation of some intermediaries, it makes greater dependency on others and also some entirely new intermediary functions. Among the intermediary services that can add costs to e-commerce transactions are advertising, secure online payment, and delivery. The relative ease of becoming an e-commerce merchant and setting up stores results in such a wide array of offerings that consumers can simply be overwhelmed. This increases the importance of using advertising to determine a brand name and thus generate consumer familiarity and trust. For new e-commerce start-ups, this process may be expensive and represents a substantial transaction cost. The openness, global reach, and not enough physical clues which are inherent characteristics of e-commerce also make it at risk of fraud and thus increase certain costs for e-commerce merchants when compared with traditional stores. New techniques are increasingly being developed to protect the utilization of bank cards in e-commerce transactions, but the requirement for greater security and user verification results in increased costs. An integral feature of e-commerce is the convenience of experiencing purchases delivered directly. In the case of tangibles, such as books, this incurs delivery costs, which cause prices to go up typically, thereby negating many of the savings connected with e-commerce and substantially adding to transaction costs ICT company.