Basic Business Science (C3542AM) Past Paper PDF

Basic Business Science (C3542AM) Alfred Makosa Room X212 X Block 061-206 3810 [email protected] Unit 3 Technology in a digital world Unit Learning Outcomes: By the end of this unit, you should:  Discuss technologies used in business and finance;  Demonstrate an understanding of the fourth...

Basic Business Science (C3542AM) Alfred Makosa Room X212 X Block 061-206 3810 [email protected] Unit 3 Technology in a digital world Unit Learning Outcomes: By the end of this unit, you should:  Discuss technologies used in business and finance;  Demonstrate an understanding of the fourth industrial revolution; and  Demonstrate an understanding of the key technologies that define the digital world. Industrial Revolution An industrial revolution can be described as a rapid and major change in the economy, driven by a shift in the methods and types of work undertaken. Advancements of the 1st Industrial Revolution  This was during the 18th and 19th Centuries in Europe/North America.  Advancements included mechanisation, water power and steam power Advancements of the 2nd Industrial Revolution  Advancements of this period, 1870-1914, included mass production, assembly lines, the light bulb and the internal combustion engine. Advancements of the 3rd Industrial Revolution  Otherwise known as the Digital Revolution began in the 1980’s and is ongoing.  Advancements included the personal computer, the internet and automation. Advancements of the 4th Industrial Revolution  Include decentralised consensus. It surrounds technology such as blockchain. 4th Industrial Revolution  The 4th Industrial revolution is powered by digital technologies such as:  cloud computing,  big data,  data analytics,  process automation,  artificial intelligence,  data visualisation,  blockchain. Features of the 4th industrial revolution  Increased autonomy, for example, self driving cars.  Increased automation, making jobs redundant. This means that new jobs will also emerge. - Accountancy is one profession where adaptation is crucial as artificial intelligence replaces the routine tasks  Greater customer expectation for products and services provided  It will drive positive change as there will be more efficient use of natural resources and potential technological innovations in recycling and re-using materials Other features of the 4th IR The 4th IR is different from the other 3 industrial revolutions because of the following:  Velocity – the speed of technological breakthroughs in the revolution is faster that any point in human history.  Effect – The revolution is disrupting almost every industry in every country rather than specific industries in certain areas of the world.  Scope – The breath and depth of change that the revolution is effecting within industries is greater than ever before. It is causing the transformation of entire systems of production, management and governance.  Other features of the 4th IR – Continued….  Employment – technologies such as automation, digitization and robotics will fundamentally change the nature of jobs and may make many jobs redundant.  Natural assets – Technology will improve natural asset management by making better use of natural assets, increasing the use of renewables and innovating recycling.  Machine led manufacturing – the role of workers will change from being assisted by machines to do their job to assisting machines to do the job.  Fusion – Digital (cyber) and physical systems will; merge and become autonomous.  Other features of the 4th IR – Continued….  Artificial intelligence and machine learning – Products will become customized easily and cheaply due to faster computing speeds and optimized supply chains. Cloud Computing What is cloud computing?  Cloud computing is the delivery of different services through the internet.  It allows a single data source to be maintained and shared with multiple users.  Users can simply log into accounts in order to access, manage and process files and software via remote servers hosted on the internet.  If a business adopts cloud based computing, there will be a big switch from fixed costs to variable costs. Advantages of cloud based service Flexibility and Scalability  Cloud computing allows simple and frequent upgrades allowing access to latest system developments.  For example, currently if an application is only available for one city, it can be extended to other cities easily using cloud computing. Advantages of cloud based service Cost Efficient  There are limited IT maintenance costs and reduced costs of IT hardware. Advantages of cloud based service Security  Disaster recovery and back ups are built in. Additionally, cloud based service providers are generally experts in security so even though a business might have all its eggs in one basket, overall security concerns should be reduced. Advantages of cloud based service Flexible Working  Allows the worker to access his ‘work’ from any location. Advantages of cloud based service Environment  Cloud computing ensures that there is less waste from disposal of obsolete technology. Advantages of cloud based service Other advantages  Improved agility of decision making  Reduced speed of access to information  Better access via independence  Allows collaboration in real time Disadvantages of cloud based service  Requires organisational change  Reliance on provider  Relationship management  Security and privacy Big Data  Big Data is the collection and analysis of a large amount of data  It then helps find trends and understand customer needs Benefits of Big data  Conversion to useful information  Gaining competitive advantage  Driving innovation  Market segmentation  Enhanced transparency The 4 V's Big data has a role to play in information management Volume  There's just more data available nowadays  For example, data captured from social media. The 4 V's Velocity  You can get data much quicker.  This considers the speed of the data that is being fed into the organisation as data systems must be able to process live data. The 4 V's Variety  Modern data takes many different forms - Video, audio, written etc  (Structured data is often numerical data whereas unstructured data may be in the format of email or video). The 4 V's Veracity  This considers the reliability and truthfulness of the data being received.  For example, if a phone / credit card was loaned to someone else, then the data recorded on the phone or the card will appear as though it belongs to the original owner, which it does not, therefore corrupting the data. The 4 V's Veracity can be improved by  The finance function, as it plays a vital role in cleansing data.  For example, by comparing locations recorded from the GPS on someone’s mobile phone to social media updates Forms and Sources of Big Data Structured  This is in a field or data record, so easy to analyse.  This is in a standardised format, so is easy to analyse, store and search. Forms and Sources of Big Data Semi-structured  This is not in a field but can be analysed and organised  Eg. E-mails  These contain structured data such as the date, sender name and email address but the actual content of the email is unstructured. Forms and Sources of Big Data Unstructured  This is not in data fields (such as video, audio and images), therefore difficult to analyse, manage and search. Sources of Data Data has 4 Main Sources  Human / Social  Machine  Processed  Open Sources of Data Human / Social  This is often non-numerical.  It comes from humans e.g. Social media date includes the user's location.  Human/social data can be more difficult for data analysis software to handle, because it's often not numerical Examples  Customer feedback  Focus Groups  Social Media Sources of Data Machine  Devices have inputs which they use for their outputs - the output is the data Examples  Wearable Tech  Smart Phones  Thermostats  Location Trackers Sources of Data Processed  This is data that has been collected, cleaned and sorted in a way ready for further use by a business. Sources of Data Open  This is publicly available data, accessible by all. Data Analytics What is big data analytics?  Data analytics is the process of collecting, organising and analysing large sets of data (big data) to discover patterns and other information which an organisation can use to inform future decisions.  Data analytics relies on digital information.  Big data and data analytics has resulted in finance professionals increasingly occupying a business partnering role acting as an interface between data specialists such as data scientists and the business by making data relevant and commercial.  Areas of impact in an organisation Areas of impact Description Large volumes of data can be analyzed in real Decision making time to help managers make better decisions that improve profitability Analysis can be performed on customer data so Marketing that the organisation can customize its marketing approach to individuals or customer groups Analytics can provide management with a better Risk understanding of the risks that the organisation faces, particularly in the business environment Analysis of the organisation's market and Product development customer needs can help to identify opportunities to develop new products and services. Analytics can create and enhance knowledge. For example, customer buying patterns or trends in Knowledge supplier costs, which the business did not know before, might be identified. Deeper levels of understanding of the organisation's performance may identify Performace management previously unknown causes for poor performance that can be rectified. Features/Advantages of big data analytics  Improves segmentation - Big data analytics enables organisations to create highly specific segments within its markets.  Increased customisation - Enables greater focus on individual customers. There is greater opportunity for personalisation of products for customers.  Targeting - With more specific segments and customization, a business is able to target specific group of customers. Features/Advantages of big data analytics  Product / service development - The data can help businesses understand what the customers like or do not like about their product. This helps with development of better products.  Feedback - Easier collection of feedback provides new insights for companies to improve how they operate.  Provides more accurate and timely information to key stakeholders.  Improves business performance measurement in combining financial and non-financial data. Process Automation What is process automation?  Process automation is the ability of systems to perform routine activities without the input of a human.  Basically, human workers are being replaced by machines and technology.  Five functions that can be automated McKinsey (2016) identified 5 functions that can be automated. % that can be Function Level in finance function automated Managing others 9% Leading the finace team Stakeholder Partnering for value and 20% interactions shaping how the organisation Applying expertise 18% creates and preserves value Generating insights in Data processing 69% specialist areas Assembling and extracting Data collection 64% data, providing limited insight. Advantages of process automation  Repetitive tasks will be constantly dealt with, thus leading to increased speed, consistency and quality  Some redundancy of accounting staff is likely, leading to cost savings  Accounting staff will have to upskill to produce more value adding work Reflection: Havre a think about different types of industry. Can you think of a practical example of practical process automation used by a particular industry? Artificial Intelligence What is artificial intelligence?  Kaplan and Haenlein’s definition of Artificial intelligence is: a system’s ability to correctly interpret external data, to learn from such data, and to use those learnings to achieve specific goals and tasks through flexible adaptation.  It can also be described as the ability of a computer to assist a human operator to make decisions and solve problems.  Artificial Intelligence Machine Learning  Machine learning is part of the world of AI, it is a more advanced level of AI and essentially involves systems that learn from experience and refine the codes upon which they are based. Cognitive computing  Cognitive computing is a collective name for several technologies including artificial intelligence, machine learning and natural language programming. These technologies enable the automation of more complex tasks such as advanced data analytics and report writing. Data Visualisation What is data visualisation?  Data visualisation allows large volumes of complex data to be displayed in a visually appealing and accessible way that helps with the understanding and use of the data.  The most common use of data visualisation is in creating a dashboard that provides a summary of four or five relevant drivers that gives an overview of a business area. Dashboard - example Data Visualisation Examples include  Waterfall charts used to present variance analysis so that the eye focusses on the most significant movements first  Graphic based reports on the times and nature of visits to a home Waterfall chart - example Data Visualization An effective data visualization tool should display the following characteristics:  Decision making ability – must be focused on results and supports decision making  Effective infrastructure – must be supported by sufficient quality and quantity of data  Interrogation capability – must be capable of interrogating the system and overall business.  Prompt discovery of rules and insights – must display results quickly because delays may make insights out of date  Real time collaboration – must allow users to interact in real time with each other and the data Blockchain Blockchain (Distributed Ledger)  This is a technology that eliminates the need for data to be stored and managed centrally.  It allows an accurate, up-to-date, single, trusted and transparent record to be shared between numerous organisations. Blockchain - Example  Bitcoins are created by individuals or organisations processing data and solving problems (known as mining).  Once mined, Bitcoins become the property of the miner and can be traded or transferred.  Every transaction is recorded on a Blockchain.  The Blockchain stores the transaction history of all Bitcoins, enabling the assurance that only legitimate owners of Bitcoins can spend or transfer them. Blockchain For Accountants and Auditors  Distributed ledgers and Blockchains allow for increased clarity and transparency in the recording of business transactions.  This is because transactions can also be posted to a public ledger on a Blockchain.  This extra information means that there are more resources available for business planning and valuation, especially in regards to measuring the value of assets  Distributed ledgers also reduce the need for auditors to audit transactions and verify the ownership of assets because they have a source of information about the assets that they can trust. Blockchain in real life Example of block chain in real life is the Everledger system used by the diamond industry. It helps prevent fraud and transfer of stolen goods. All diamonds have unique characteristics (similar to humans having unique finger print). The Everledger creates an identity for every diamond by recording these unique characteristics. Every time a diamond is bought or sold, the sale is recorded by the system on the Blockchain so that the diamond’s ownership can be traced.  Advantages of blockchain  Anything of value can be transferred  No need for an intermediary  Blockchains can be very useful to verify ownership of assets like land, where historically landowners have had their land taken from them by the state or others. Disadvantages of blockchain  Everyone does not understand it  Not easy for management to override because blockchain technology makes it more difficult to interfere with transactions  Scalability can be a problem if blockchain is developed into the mass market because the volume of transactions will slow down the system. Alternative uses of blockchain  Cross border payments - these payments remain complex, expensive and slow.  Blockchain driven solutions for cross border payments are growing in number and use. Alternative uses of blockchain Smart contracts  These are self executing contracts that use blockchain technology.  Using these, theoretically, money, property or any asset can be exchanged in a transparent manner.  Crypto currency payments can be built into the smart contract.  It can recognise digital signatures.  Security and traceability - the distributed ledger means all network participants involved in a blockchain hold a copy of the full ledger, therefore any attempt to amend a single block will become invalid and the whole network will become immediately aware. Internet Of Things What is the internet of things?  The internet of things can be described as: a network of smart devices have inbuilt software and connectivity to the internet allowing them to constantly monitor and exchange data without requiring any human interaction.  For example smart watches and smart phones generate high volumes of data that can be collected by businesses to understand their customers and products better, this will enable the business to refine future products to better meet customer needs.  Internet Of Things Which of the following are examples of internet of things?  Smartphones  Fitness trackers  Home CCTV systems  Smart gas and electric meters Mobile Technologies  Mobile technology is the technology used for cellular communication.  Mobile technology has evolved rapidly over the past few years.  Mobile phones have transformed into mobile computers that have impacted almost all aspects of everyday life.  Smartphones are basically mobile computers and many industries, such as banking, have been impacted by the growth in mobile technologies. For example, there has been a decline in high street branches due to online banking available from the mobile phone. 3D Printing  3D Printing is a form of additive manufacturing. An object is created using a CAD (computer aided design) system, this coordinates the 3D printing, building an object layer by layer.  It allows complex parts and components to be produced much cheaper, faster and in an entirely customisable manner.  3D printers can be used to print machinery parts and allows for rapid prototyping.  It can also be used for product development, manufacturing, architecture, medical devices and potentially even body parts and construction.  Unit summary Technology in a digital world Artifi Proce Inter Mobil Cloud Data cial 3D ss Big Block net of e comp analy intelli printi auto data chain thing techn uting tics genc ng matio s ology e n