A Strong Partner for Sustainable Development

Module in
PMME 103

E-commerce and Internet

Marketing

College of Business and Management

BSBA-Marketing Management
BSBA-Financial Management
1
 Module No. 1

INFORMATION AND
COMMUNICATION
TECHNOLOGIES

2nd Semester AY 2020-2021

PRINCESS GUY N. JUAN

Faculty

GELLIE S. MANGACCAT

2
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
Faculty

3
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Table of Contents

Page
Title Page 1
Table of Contents 3
Instruction to the user 4
Introduction 5

Chapter 1 6

Information and Communication Technologies 6

Overview 6

Pre-test 6

Learning Outcomes 6

Time Allotment 7

Discussion 7

Activities/Exercises 28

Evaluation/ Post test 29

References 31

4
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
INSTRUCTION TO THE USER

This module would provide you an educational experience while

independently accomplishing the task at your own pace or time. It aims as
well to ensure that learning is unhampered by health and other challenges. It
covers the topic about E-Commerce and Internet Marketing.

Reminders in using this module:

1. Keep this material neat and intact.

2. Answer the pretest first to measure what you know and what to be
learned about the topic discussed in this module.
3. Accomplish the activities and exercises as aids and reinforcement for
better understanding of the lessons.
4. Answer the post-test to evaluate your learning.
5. Do not take pictures in any parts of this module nor post it to social
media platforms.
6. Value this module for your own learning by heartily and honestly
answering and doing the exercises and activities. Time and effort were
spent in the preparation in order that learning will still continue
amidst this Covid-19 pandemic.
7. Observe health protocols: wear mask, sanitize and maintain physical
distancing.

Hi! I’m Blue Bee, your WPU Mascot.

Welcome to Western Philippines University!

Shape your dreams with quality learning experience.

STAY SAFE AND HEALTHY!

5
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 INTRODUCTION

E-commerce is continually evolving and has become a thriving marketplace not only

for products but also for services and content, such as social networks, user-generated

content (video, photos, and blogs), and, of course, entertainment such as movies, TV,

video, music, and games. E-commerce is as much a sociological phenomenon as it is a

business and technological phenomenon. In addition to the social aspect of e-

commerce, two major themes in the text are the full emergence of the mobile platform

and the increasing emphasis on local ecommerce. We weave social, mobile, and local

topics throughout the course into all chapters, because they are increasingly impacting

all aspects of e-commerce.

6
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Chapter 1

Information and Communication Technologies

Overview

This chapter will tackle about the introduction the evolution of information and

communication technology in relation to the general conduct of trade and commerce

along with the telecommunication facilities and computers in relation to the conduct of

the eCommerce/eBusiness.

Learning Outcomes

At the end of the module you can;

1. create a timeline of evolution of information and

communication technology in relation to the general
conduct of trade and commerce
2. distinguish the basic functions and benefits of information
and communication technology
3. explain how information and communication technology
support value chain activities and eCommerce/eBusiness

Pre-test

Part I. (TRUE/FALSE). Write TRUE if the statement is correct and write FALSE if
the statement is wrong.

__________ 1. Information and Communications Technology has nothing to do with

eCommerce.
__________ 2. Information and Communication Technology solely focuses on the
hardware of the computer.
__________ 3. ICT has six basic functions.
__________ 4. Transmission is a function of ICT that allows sending data and
information from one location to another.
__________ 5. Storage function is one of the functions of ICT.

7
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
Part I. (TRUE/FALSE). Write the letter of the correct answer.

___________ 1. What kind of ICT function takes the form of a task that is done by
way of using devices like scanners and cameras thus allowing storage of vital data and
information for future use?
a. Capture function b. Storage function c. Process Function
___________2. This kind of information comes in the form of written information
which may be typewritten, printed or handwritten.
a. Data b. Sound c. Text
___________3. What component part of the computer system include the software
or instructions that enable the optimal use of the component parts of the hardware.
a. Hardware b. Programs c. Procedures
___________4. What component part of the computer system refer to the various
forms that are fed into the hardware to be processed by the people.
a. Procedure b. Programs c. Information
__________ 5. What component part of the computer system include the rules,
policies and protocols that need to be observed and follow.
a. Hardware b. Programs c. Procedures

B. Time Allotment
2 sessions (3 hrs)

C. Discussion

The Changing Landscape of the Earth

Planet earth has changed its face from what was once forested mountains and valleys of
thinly populated human settlement areas to what is now a community of humans and
developed regions as well as cities. While many rural or countryside areas remain
agrarian in character largely dominated by family-size homes, many of them are now
connected to electrical power lines thus allowing the use of electro-mechanical devices,
some of them capable of doing home-based livelihood opportunities. The uses of these
devices and machines make routine tasks and home chores less burdensome or
promote convenience and enhance productivity resulting to the so-called small-scale
industries or micro enterprises.

In the urban centers and other industrial areas, landscape is totally different. Primary
forests are gone and if some portions are made to appear as green, man-made parks
and plants are lined up in redesigned landscape often using architectural and
engineering intervention to allow a symbiosis of the past and the present. More often,
these urban centers are mushroomed with concrete-based structures and skyscrapers
as well as steel-based structures with electrical/electronic cable lines connecting them
for its power and telecommunications needs.

During the last 2000 years, humanity has witnessed a variety of inventions,
innovations and developments that have propelled its growth and have given mankind
the convenience as well as comforts along with the negative effects that come with it.
While there are pros and cons, it cannot be denied that in many ways, technologies

8
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
have played a vital role in developing the utilization of human capacity to use its talent
and skills to contribute in developing its environment. The rapid growth and massive
developments in the areas of computers and convergence with telecommunications
technologies have brought forth what is now known as the digital economy and the so-
called information age.

The last quarter of the 20th century has shown humanity the use of its human talent
and skills leading to a variety of inventions and discoveries. Among these are
inventions and innovation in the area of medicine and mechanical as well as electrical
and electronic communications. In particular, the developments in the area of
electrical and mechanical engineering as well as electronics and communications
technologies led to the development of computers known to be the greatest invention
of mankind during the 20% century. As shown in Figure 1, the world has improved
immensely from the Stone Age era though documentation of its growth commenced in
the agricultural economy era back in the 12% century. From the agrarian era recorded
in the 12th and on to the 16th century, some parts of the world moved on to become
industrialized economies in the 18th century. Eventually, the years in the 1900s
transformed some nations into service and global economies as less endowed nations
lagged behind.

Entry of Various Technologies

The diagram shown in Figure 1 indicates a slow growth of development from the
agrarian economy towards the industrial and service economy. What is astonishing in
this figure is the rapid phase at which the world has moved from global economy to
what is now known as digital economy. While it took about hundred years for the
agricultural era to the industrial age, it took only a matter of years for information and
communication technology to reach a level of development and adoption as evidenced
by Figure 1.

9
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Figure 1. Evolution of Digital Economy
Source: Aldrich (1999), p.6

Radio and television technologies were introduced in the American market back in
the 1920s and 1950s respectively. Cable television was introduced in the 1980s and
the Internet technology in 1990s. However, there is astonishing growth and level of
adoption of cable and Internet technology vis-a-vis radio and television system. The
evolution and adoption of information and communication technology are shown in
Table 1. As shown in Table 1, radio was in the United States market introduced in
1922 and it took a lapse of over 41 years to reach a level of 50 million users. In the
case of television system, which was introduced sometime in 1950s, it took a lapse
of about 13 years to reach a level of 50 million users. Cable TV, which was
introduced in the 1980s, took only a lapse of about 10 years to reach a level of 50
million users. Surprising and meteoric is the growth and level of adoption of the
Internet technology which was introduced only in the mid-1990s as it took only a
lapse of about 5 years to reach the level of 50 million users. Table 1 indicate is that
information and communication technology, and in particular the Internet, has
shown rapid growth and this means a lot of challenges and opportunities as venue
for business options or areas for improving business competitiveness.

Table 1. Elapsed time for some well-known mass communication

technologies to reach 50 million users

Technology First use 50 M users Elapsed Years

Radio 1922 1963 41
Broadcast television 1950 1963 13
Cable TV 1976 1986 10
Commercial 1994 1999 5
Internet

Concept of Information and Communication Technology

In the era of the digital economy or the so-called information age, the words
information and communication technology (ICT) have become a byword or a
comm, terminology. This is particularly true among users and enthusiasts where
computers ang telecommunication systems are part of the provisions of the workplace.

The term information and communication technology (ICT) refers to a

collective, and generic term that
covers the broad range of systems,
devices, hardware, peripheral, as
well as variety of programs or
software used in conjunction with
computers and
telecommunication devices in aid
of doing electronic-based business
transactions. In other words, it
covers a variety of technologies,
systems and tangibles (e.g.,

10
Fig. 2. Information Technology
WPU-QSF-ACAD-82A Rev.(jing.fm)
00 (09.15.20)
hardware) that are used in conjunction with the intangibles (e.g., software) to make the
entire system work or do a certain specific function may it be for a business transaction
for profits or non-profit objectives of service-oriented organizations like the
government bureaucracy or non-government organizations (NGOs).

In many instances, the phrase information technology (IT) is often associated with
and used interchangeably or synonymously with the broader phrase information and
communication technology. The truth is that IT and ICT have different technical
meanings but they have something common in context. The phrase information
technology by itself connotes a narrower meaning limited in context by the use of
information in association or coordination with computer technologies or hardware
with link up and connectivity appeared to be set aside or given not much emphasis.

The IT tandem has grown by leaps and bounds and the advent of convergence has
given more meaning and substance beyond information technology itself as
productivity enhancement option. The role played by the improvement in the
telecommunication systems and the compatibility as well as link of information
technology with telecommunication systems have resulted to the metamorphosis of the
term information technology (I) to information and communication
technology (ICT). There is a lot of difference 2 inserting or fusing the word
communication into information and communication technology owing the concept of
link up that resulted to real-time transmission of data/information and borderless
scenario that ICT has brought forth. The rapid growth of ICT has fired uP the
development and popular use of eCommerce/eBusiness practices in global context for
which reason the author finds it proper or appropriate to refer to ICT as fundamental
of essential for eCommerce/eBusiness transaction.

Basic Functions of information and Communication Technology

Author Senn (1998) categorized the six basic functions of ICT, these include: a)
capture function, b) processing, c) generation, d) storage, e) retrieval, and f)
transmission.

Capture function

The capture function of ICT takes the form of a task that is done by way of using
devices like scanners and cameras thus allowing storage of vital data and information
for future use. Capture function is typified by the following examples and situations:

a. Whenever a book is borrowed and checked out of a computerized library, the

name (or identification number) of the borrower and the title (or call
number) of the book are captured at the stage the librarian points a scanning
device 8 par code information embedded or pasted on the book’s front cover.
b. Using a device link to computer or a much simpler device, pulse, heart rate,
blood and pressure are obtained and monitored among hospital patients. A
more sophisticated device captures and monitors functions of vital body
parts or organs and these include technologies such as magnetic resonance
imaging (MRI), CT scan, and ultrasound devices.
c. When a performer does a live show, the entire performance or a part of it is
captured by audio systems and video cameras then transferred later to a

11
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 cassette or video tape or compact disc (CD) for listening or viewing at a later
time and date.
d. The voice and data recorders in aircraft cockpits capture the pilot’s
conversations and record flight data about the aircraft’s location and
performance.

Processing function

Processing function of ICT made

computers extremely popular as it
is now. It is the most common
activity usually associated with
computers and voluminous
numeric data. Expedient processing
of data is usually the purpose for
which people and business
organizations purchase computers.
It entails converting, analyzing, and
synthesizing all forms of data or
information. One of the earliest
business applications of computers
Fig. 3. Processing Function (pngio.com)
is data processing, which focuses on
taking data (raw numbers, symbols,
and letters) and transforming them into information that is eventually used as basis or
reference for decision-making.

Computer system has enlarged its role from the aspect of simply encoding and
processing numbers to dealing with or processing other forms of data that is now
collectively called information giving rise to the concept of information processing.

Processing function (sometimes referred to as information processing) is a function of

ICT that involves the transformation of any type of information into a different type of
information. Text (e.g., reports, correspondence), sound (e.g., voice, music, tones), and
images (e.g., visual information, such as charts, graphs, drawings, and animated
drawings) can all be processed using a computer and related devices and application
software.

Information processing may come in a variety of ways namely:

a) Word processing
b) Image processing
c) Voice processing

Word processing involves the creation of text-based documents, including reports,

newsletters, and correspondence. Word processing systems allow people to enter data,
text, and images into a computer and transform them into a useful and attractive
format. In the early years of personal computers, word processing is done using early
versions of word processing software like Wordstar and WordPerfect, which were
later overshadowed in popularity of the MS Word forming part of the Windows
produced and developed by Microsoft Corporation of the United States.

12
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
Image processing includes converting visual information (e.g., graphics, drawing
and photos) into a format that can be managed within a computer system or
transmitted between people and other computers. An example of an image processing
function is scanning which converts a print or film image into a form that a computer
can use and further process.

Voice processing aspect involves transformation and transmission of spoken

information. Currently, voice information is most frequently entered into a computer
system through a telephone, but other systems that enable people to speak directly into
a computer system to instruct it to take specific actions are emerging. A practical
example of voice processing is the recording of human voice (or other forms of sound)
using a microphone hooked to a computer and using the sound recorder function built
into the Windows Media Player option of Windows. After the recording session and
saving or storing in the hard disk or other medium, the recorded sound (audio) in
digital format can now be processed, improved or mixed up with other forms of sounds
to constitute later as a harmonic or symphonic music or simply an improved version of
its original state as recorded early on.

Generation function

The generation of ICT refers to the organization of data and information to a useful
form, whether as numbers, text, sound, or visual image. Sometimes, data or
information is regenerated in its original form. At other times, a new form is generated
— for example, recorded musical notes are “played” as sounds with rhythm and pauses
eventually generating a new kind of sound or music.

Some other examples of generation function are the following:

a) Tabulating questionnaire data into processable formats, e.g., in Excel format

b) Downloading data/information from the Internet sources
c) Creating tables and graphs from data on file

Storage and retrieval function

The storage function enables

computers to keep data and
information for later use. Stored data
and information are placed on a storage
medium (e.g. a magnetic disk, compact
disk, diskettes, USB storage devices,
SD/Micro SD) that the computer can
read when it needs to. The computer
converts the data or information into a
form that takes less than the original
source. For example, voice information is
not stored in voice format, but rather in a
specially coded electronic form that
takes less space and that the
computer can manage. Fig. 4. USB Storage Devices
(pngitem.com)

13
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
The retrieval function entails locating and copying stored data or information for
further processing or for transmission to another user. To be able to access or retrieve
data or information earlier stored, the user must remember the file or reference name
and keep track of the medium where the data or information is stored and make it
available to the computer for processing.

Transmission function

Transmission is a function of ICT that allows sending data and information from one
location to another. Telephone devices transmit conversations from a point of origin to
a destination around the world. Computer systems do precisely the same thing, often
using telephone lines. Computer networks can also send data and information through
other media, including satellites and light beams transmitted along plastic or glass
optical fibers. Modern communication networks enable the sending of information
down the hall or around the world in an instant. Personal computers, mainframes, and
supercomputers can be connected electronically to transmit data and information to
and from one another using network to overcome distance barriers. There are two
common forms of information transmission, which are:

a) Electronic mail
b) Voice messaging

Transmission via electronic mail (known as e-

mail) is typified by the acceptance, storage, and
transmission of texts and image messages
between users of computer system. Typically, e-
mail messages are entered through a computer
keyboard and viewed on the receiving party’s
computer monitor (eliminating the need for
sending paper messages). E-mail messages can be
sent between individuals or broadcast to a large
number of people simultaneously.

Transmission via voice messaging (sometimes

called voice mail) is a function of ICT that allows
callers to leave spoken messages entered though
their telephone receiver. Recent models of
telephone gadgets come with chips and add-ons
or provision for link up with computers allowing
Fig. 5. Transmission
the storage of incoming telephone messages
Function (clker.com)
which can be stored and eventually retrieved
and played as soon as the receiver or employee
gets back in the office.

Benefits of ICT

The popularization of the use of ICT among business organizations in various sectors if
the economy is a living proof of the benefits that can be derived in the adoption of ICT.
Users of computers and other devices falling under the ambit of the ICT can attest to a

14
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
wide range benefits that can be derived by using it. Benefits of using ICT are immense
and they include both personal and business benefits in the form of the following:

a) Speed is directly associated with computers and ICT. Depending on the

hardware specifications, speed of computing tasks can be as fast as split-second.
As Senn (1998) has pointed in fact, computers do everything in fractions of a
second. They are very much faster than people could ever do at a variety and
myriad of tasks. They can perform complex calculations, recall stored
information, transmit data from one location to another, and move objects
around a screen almost instantaneously.
b) Consistency is another benefit as compared with what humans can do. People
often have difficulty doing repetitive and monotonous actions. Doing a
particular task exactly as it was seconds, minutes, and hours ago is too difficult if
not impossible for an ordinary or even highly gifted individual.
c) Precision is another aspect unmatched by humans particularly in doing
multitude of simultaneous tasks or a number of products or services at ay given
time. In addition to being fast and consistent, computers are extremely precise
when given specific instructions. They can detect minute difference, beyond
what the human eye can see.
d) Reliability is another benefit that can be expected from computers given the
appropriate work environment the machines deserved. Given logical instruction,
contained in the software/program, consistently and precisely, one can expect
reliable results — that is — one can depend on getting the same results over and
over again.

Types of Information

Given the flexibility of computers and other devices falling within the category of ICT,
the variety of data that computers can process or deal with has given rise to the fusion
of the data in various formats into what is generally called as information. The generic
term information as used in the digital or information age is classified into four
components or types as follows:

a) Data
b) Text
c) Image
d) Sound

While they come in four different types, ICT devices have way of dealing with the
various types of information and integrating them as one that can be composed or sent
over to the other parties anyone wishes to. This option has given much contribution to
the popularization of the ICT particularly in the world of business as exemplified by the
robust growth of eCommerce/eBusiness.

Figuratively, the typology of information is shown in Figure 4 and each one is briefly
described as follows:

a) Data - As a form of information, data refer to raw facts, figures and details.
They can be in form of numbers such as statistical data provided by government
and private institutions. They may also involve letters or symbols or any of the

15
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 combination of the two. Each piece of the data describes a fact, a condition,
event, or results of that event.
b) Text — It comes in the form of written (i.e., narrative) information, which may
be typewritten, printed or handwritten. One is using text information by way o
scanning a newspaper, flipping through a magazine or simply reading a letter
c) Image - It is a form of information in visual form. This type of information m2)
come in the form of graphs, charts, line drawings or photographs in traditional
or digital formats. More commonly, images may come in the form of readily
available clip arts or other pre-drawn figures usually used alongside text data
presentations to achieve better impact upon listeners, viewers or readers of
information.
d) Sound — It refers to spoken information that is conveyed by way of sound. An
example of this is when a radio sportscaster broadcasts the proceeding on the
games played that is covered live on radio. Another example of sound
information is when one makes a telephone call to a credit card company in
return responses repetitively a canned or digitally recorded voice telling the
caller what to do next to attend to his or her query.

The Notion of Computer System

On its own and by itself, a computer is just a hardware or a piece of metal, which may
be considered irrelevant or less useful in a business environment. To be useful as tool
for the conduct of business, computers have to work with other components as shown
in Figure 5. The concept or notion of computer system evolves around the idea of
having five basic components or aspects in parallel with the basic functions of ICT. It is
the confluence of the component parts of the computer system that makes ICT useful
and meaningful for enhancing business decisions and business competitiveness.

A computer is considered useful and meaningful in an environment that includes

component parts shown in Figure 2. These include the following:
a) Hardware
b) People
c) Programs
d) Procedures
e) Information

These component parts that

make up the computer system
are briefly described as follows:

a) Hardware — In context,
the hardware component
serves as the heart and
soul of a computer system
that serves as the unifying
agent to be able to handle
and process data
information in a most
expeditious and accurate
manner. Essentially, it

Fig. 6. Computer System (clipart-library.com)

16
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 includes the computer itself and peripherals or accessories that come with it.
b) People —They refer to the human aspect of the system that use and operate the
hardware including the parties who develop the program or software that make
the hardware (computer) an extremely useful device in the conduct of business x
any process anyone can do in planet earth and beyond it.
c) Programs — They include the software or instructions that enable the optima)
use of the component parts of the hardware (computer) thus allowing them to
deliver output for specific work application in various industries or sector of the
economy.
d) Procedures — They include the rules, policies and protocols that need to be
observed or followed to be able to use the hardware and software in a manner
that makes the functioning of the computer system in an orderly and efficient
fashion.
e) Information — These refer to the various forms or types of information that
are fed into the hardware to be processed by the people (users) using specific
software to be able to arrive at the desired specific output in the pursuit of
business objectives.

Capabilities of ICT

ICTs offer a wide range of capabilities or services that can be used in practically all
sectors of the economy. As cited by Schultheis and Sumner (1998), capabilities of ICT
are categorized into eight broad areas. The eight areas of applications and capabilities
cited by Schultheis and Sumner along with their respective examples and impacts are
briefly described hereunder:
a) Transactional — IT can transform unstructured processes into routine
transactions. For example, IT can support an admissions decision process by
building predefined minimum admission application screening process with the
use of an automated system.
b) Geographical — IT can transfer information with rapidity and ease across
large distances, making processes independent of geography. For example,
application development teams in India can use COBOL and other procedural
languages to create business information systems that are implemented, tested,
and ultimately used by many American firms.
c) Analytical — IT can bring complex analytical methods to bear in a process. For
example, American Express designed an expert system for credit authorization
that capitalizes on the knowledge and experience of expert credit authorities and
applies expert analytical support for the budgetary analytical process.
d) Informational- IT can bring vast amounts of detailed information into
process, For example, in the process of making budgetary decisions, managers
need access to the details of past activity, A budget database can improve access
to detailed historical information and can effectively support the budgetary
analysis process.
e) Sequential — It can enable changes in the sequence of tasks in a process, often
allowing multiple tasks to be worked simultaneously. For example, the
redesigning of new product design and manufacturing process at Xerox was
made possible through the design of a centralized database of product-design
specifications, which could be updated and referred to during various stages of
product-development process,
f) Knowledge management — IT allows the capture and dissemination of

17
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 knowledge and expertise to improve process. For example, the use of group
support systems, including electronic mail, computer-based meeting system,
and electronic conferencing. It provides opportunities for the sharing of meeting
minutes, agenda, and historical information on business plans and activities.
g) Tracking — IT allows the tracking of tasks status, inputs, and outputs. For
example, the use of a project-management reporting system can provide
information on project status, activities, and deliverables to team members and
to management on ongoing basis and as these activities and accomplishments
are updated.
h) Disintermediation — IT can connect two parties within a process that would
otherwise communicate through an intermediary. For example, many
applications in electronic commerce are eliminating the middleman. Using
Internet-based facilities, customers can order computers, T-shirts, office
supplies, and a vast array of other products and services over the World Wide
Web.

Role of ICT in Value Chain

Given the capabilities of the ICTs described earlier, certain specific applications of ICT
find their way to the value chain process and all the way to the specific functional areas.
Examples of the specific applications of ICT, as applied in a business setting, are shown
in the Table 2.

Table 2. Information technology supporting primary activities in the value

chain
Value Activities Use of Information Technology

Primary Activities

Inbound logistics Just-in-time inventory

Operations Process control system
Outbound logistics Online entry to the order system from suppliers
Marketing and sales Laptop for direct sales
After sales service Electronic dispatch of technical support

Secondary Activities

Management communication Electronic mail

Human Resource Online access to personnel’s files with skills
database
Technology Computer-aided design and manufacturing
Procurement Online access to supplier’s inventory files

As shown in Table 2, the primary activities of the value chain can be greatly improved
by employing computers then using commercial software. For instance, inbound
logistics tasks can be made simpler by employing just-in-time system or using process
control systems in the case of production and operation systems in factories.

In the secondary activities of the value chain, communication within and outside the
business organization can be made more expedient by adopting the electronic mail

18
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
function of computers and the Internet. Hiring of employees can be easily done by
posting vacancies in the company’s website and procurement of required office
supplies or raw material inputs to production can be also done using the firm’s website.
There is available commercial software that will allow advertising and marketing of
products and services only and auction schemes can be also done online.

A diagrammatic representation on the application of ICT in a value chain process is

shown in Figure 2. The presentation in Figure 2 is just a simple and basic application
where ICT can play a role in various aspects or functions of doing its business. At the
beginning, the role of ICT in the value chain or value creation process may be as simple
as the use of word processing technologies then transcend to more technical options in
logistics or production system in a manner that ICTs contribution is considered
laudable in profit and money terms.

Support Activities

Primary Activities

Figure 7. Information system supporting value activities

Source: Shultheis and Sumner (1995), p. 61

Concept of Convergence

The fusion of computer technology with telecommunication system provided an

excellent opportunity to expand its horizon resulting to application of computer
beyond the physical boundaries of tabletop or rooms where computer units are
installed. This is a scenario that allowed computers to be connected using
telecommunication lines (and eventually power lines) thus allowing fast transmission
of information anywhere in the world. The electronic link up of various devices in the
context of local and wide area networks (LAN/WAN) gave rise to the concept of
convergence.

Convergence essentially means the integration of computers and telecommunication

technologies. Simply described, it means combining the functions of these two
technologies or systems into a single product. The combination or convergence covers
both hardware and software components resulting to the use of other technologies in
other areas or industries once never considered impractical for computers.

19
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
In some industry circles, convergence is also taken to mean multimedia, as in the case
of the integration of voice, data, audio, and video into a single device or service. More
recently, some business organizations and analysts use convergence to describe the
merging of wireless communication with the Internet, leading eventually to remotely
(or wirelessly) controlled Internet-enable appliances.

Figure 8. Network and media convergence

Source: Rayport and Jaworski (2004), p. 412

Figure 4. Digital Convergence-Uniting various media available on common

carrier
Source: Award (2003), p.6

Impact of ICT in Industry and Business

The enormous powers and capabilities of recent models of computers and the
availability of commercial software for various applications have given rise to the
popularity of the use or adoption of ICT in general in various sectors of the economy.

20
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
The wide range of technologies available nowadays has given so much impact in the
industry at large and the business community in particular. For some businesses, ICTs
have changed the conduct of the business resulting to business closures for some and
new challenges as wel] as immense opportunities for many.

In the view of Schultheis and Sumner (1998), the level of impact of information and
technologies appeared to be a three-tiered scenario covering:
a) Industry level
b) Firm level
c) Strategy level

Sumner and Schultheis (1998) summarized the impact of ICT as shown in Table 3 and
elaborated hereunder.

Schultheis and Sumner also theorized that the industry level impact of ICT has resulted
to changes in terms of the following:

a) Products and services

b) Production economics
c) Markets

With the use of a variety of ICTs in the various industries, a variety of products and
services was introduced resulting to substitutes and displacements among traditional
business concerns. Given the level of productivity and efficiency at which modern
technologies and systems provide as well as applicability of economies of scale theory
and optimal production costs greatly changed resulting to competitive advantage of
technology conscious business concerns. Necessarily, this scenario has further resulted
to changes at the market levels both to the supply and demand side.

The firm level impacts on the use of ICT are an offshoot or driven by changes at the
industry level which every business organization has to face or live with if only to be
competitive or at least to survive. At the firm level, competitive forces referred to in
the Porter’s business competition level have become an important consideration for
business strategists to face the level of competition in the industry or sector each
business belongs. For the buyers, the option to do canvass or buy online as well as the
speed at which potential buyers can access a variety of sellers worldwide is something
that has somehow threatened or scared off traditional businessmen. At the level of
suppliers, the use of ICT has given rise to a new breed of producers or suppliers, which
can threaten their existence.

Moreover, the use of ICT has resulted to research and development efforts that resulted
to new products and services so advanced and meaningful in utility or value to
consumers some of them coming in as substitute hence driving some other businesses
to extinction. Furthermore, the use or adoption of ICTs has given rise to opportunities
to new entrants in the industry and given the offensive strategies and a variety of
marketing efforts they do is something that is disturbing to the competitiveness and
viability of old guards in the business. Finally, the level of rivalry within and outside the
industry is getting fierce and sometimes at cut-throat levels all because of the advent of
computer or ICT-based business level strategies which some business managers have
skillfully used to their advantage as others seemed to be less concerned about it.

21
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Table 3. The three-level effect of information technology

Industry Level Information technology changes an industry’s

 Products and service
 Production economics
 Markets
Firm Level Information technology affects key competitive forces
 Buyers
 Substitute products
 Suppliers
 New entrants
 Rivals
Strategy Level Information technology supports a firm’s strategy
 Low-cost leadership
 Product differentiation
 Market specialization
Source: Schultheis and Sumner (2003), p.62

The impact of the use of ICT felt at the industry and firm level further transcends or
slides all the way to the business level strategies and further all down to the functional
and operation strategies of many business concerns. For instance, the economies of
scale and best or optimum operating system ICT can provide results to a choice of
marketing strategy options particularly the idea of low-cost leadership as a business
level strategy. The flexibility that some production systems and technologies used in
conjunction with ICTs can lead to production differentiation option as another form of
business level strategy. Or, the tandem use of ICTs and modern engineering
technologies can lead to market specialization options like focus or niche strategy.

In a more specific terms and operations at the business level, use of ICTs translates to
changes in the way work is done at the workplace or workstations as exemplified by the
situations shown in Table 4.

Table 4. Business level impacts of information technology

Type of impact How information technology is used

Products and services Computer-based word processing and typesetting
Production Economics Nationwide inventory tracking
Markets ATM’s, Point-of-sale systems

Digitalization of Products and Services

The speed at which technologies have been developed has greatly influenced the extent
of exploitation of natural resources of planet earth to benefit humanity. In particular,
the discovery and development of new product and services brought about by the
natural evolution process as well as market demands itself have resulted to
replacements and substitutes for certain products. As new technologies emerged, new
products are introduced in the market to the delight of some and disillusionment of

22
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
others. As it closed doors of opportunities for some traditional businessmen, it opened
wide doors of opportunities for enterprising individuals and organizations using or
adopting ICT. The rapid development in materials engineering and electrical/electronic
engineering resulted to changes and improvements in many industries as shown in
Table 5. In specific terms, the development cited by Pitts and Lei (2000) as shown in
Table 5 transformed Kodak in the way they conduct their business as partly explained
by Figure 5.
Table 5. Emergence of new technologies

Industry Old Technology New Technology

Electronics Transistors Integrated circuits
Shoe materials Leather Engineered polymer
Appliances Discrete controls Fuzzy logic
Airframes Steel, metal Composite materials
Automobile engines Aluminum Ceramics
Automobile body frames Welded pieces Unibody, single piece
Construction
Computers Mainframes Personal computers
Network systems
Medical equipment Stand alone-X-ray CT Scans, MRI
Tv Manufacturing Handcrafted Automated insertion tools
Cameras Silver halide-film Flash memory cards

Figure 9. Transformation of imaging of Eastman Kodak

Source: Pitts and Lei (2000), p. 137

If Kodak did not innovate its product and services or maintained its usual (traditional)
views in doing business or put aside the challenges and opportunities that come with
digital technologies and convergence or multimedia systems, Kodak may have closed
its business by the end of the 20 century or a vital of history as one of the victims of the
surge of digital imaging and application of IT in its sector.

23
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
Microchip Technology

Advances in the fields of electronics and computer sciences have resulted to the
developments in integrated circuits also known as IC, microcircuit, microchip, silicon
chip, or chip. Microchip is a miniaturized electronic circuit (consisting mainly of
semiconductor devices, as well as passive components) that has been manufactured in
the surface of a thin substrate of semiconductor material. A hybrid integrated circuit is
a miniaturized electronic circuit constructed of individual semiconductor devices, as
well as passive components, bonded to a substrate or circuit board. Microchips vary in
appearance ranging from somewhat like a multi-leg insect to a thin sheet of metallic
material and a much smaller version of it as small as a grain of rice which can be
embedded in the human skin.

The advances in microchip technology have found their way to a number of

applications in the business sector not only to the components of computer product
lines but to a number of product lines used by medical practitioners as well as other
sectors in society including the police and military community.

The Suki Card of Mercury

Drug comes with a microchip that
stores some information about the
cardholder along with the
purchase transactions which are
then converted into “points” which
can be redeemed in the form of
some products or other items.

The GSK Value Health Card issued by a multination drug company

(GlaxoSmithKline) and in cooperation Mercury Drug comes a magnetic strip that
stores some information about the cardholder along with the purchase transactions
made. The card also serves as a discount card for some product items of the drug
company sold at the cooperating drug store.

In the retail business sector, microchips found their way to plastic products forming
part of privilege card, discount card, debit cards, promo cards, SIM cards. A variation
of a metallic-based microchip is a magnetic strip that is embedded in a privilege card
issued by a multinational drug company (GlaxoSmithKline). This particular privilege
card does not only record the purchase transactions of the cardholder but also serves as
a discount card for a particular product which in the long-term: can be also used by the
issuing company for some other marketing or promotions related activities.

Over the long-term, the Associated Press reported that the vision of microchips
technology in the not-so-distant future would lead to the following:

24
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 a) Microchips with antennas will be embedded in virtually everything you buy,
wear, drive and read, allowing retailers and law enforcement to track consumer
items — and, by extension, consumers, wherever they go, from a distance.
b) A seamless, global network of electronic “sniffers” will scan radio tags in myriad
public settings, identifying people and their tastes instantly so that customized
ads, “live spam,” may be beamed at them.
c) In “Smart Homes,” sensors built into walls, floors and appliances will inventory
possessions, record eating habits, monitor medicine cabinets — all the while,
silently reporting data to marketers eager for a peek into the occupants’ private
lives.

The Changing Role of Television

The advances in electrical and electronics and communications engineering have

resulted in the way broadcast media sector is now doing its business — clear, fast
and real-time global. From transistorized technologies among radio and television
sets back in the 1960s, these new gadgets now come in digital designs.

For the radio, television and the movie industry, this development is both a challenge
and opportunity. Given the popularization of the so-called convergence,
telecommunication companies like the Philippine Long Distance Telephone Company
(PLDT) and broadcast media giants like ABS-CBN and GMA Network, Inc., the
potential market is considered immense that these firms are now into a variety of
forward, backward and vertical or horizontal integration strategies.

The digitalization of television system and the concept of the so-called convergence
have resulted to a shifting role of a television set which is normally meant for providing
entertainment at home (e.g., drama and comedy series). In the information or digital
age where eCommerce/eBusiness era has set in, television sets have metamorphosed
from being an entertainment or advertising medium into a vital tool for
eCommerce/eBusiness as typified by the following scenarios:

a) Television companies particularly some cable channels (e.g., CNN, Bloomberg,

ANC Channel of the ABS-CBN group) are more concerned with providing news
and other hard information vital to building competitive strengths of business
concerns instead of simply entertaining its audience or viewers through soap
operas programs.
b) Some television programs are no more monopolies of scriptwriters, directors,
and other studio-based personnel but they are now getting interactive such that
audience participation is possible even on live or real-time programs.
c) The interactivity of the television programs and its capacity to link up with other
ICT gadgets (e.g., landline telephones, mobile phones, computers, personal
digital assistants or PDAs, radios) and other hardware as well as software make
the television a very powerful medium for business operations beyond its
traditional role of advertising/promotions and information delivery.

The Changing Roles of Telephones

25
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
A telephone device nowadays is more than just an audio communication transmission
machine as it used to be. Unlike their traditional role of simply passing on or
transmitting human voice from one person to another in any part of the globe.
Telephones have transformed their image from a human voice transmission device to a
data or information carrier system heavily used in the business doing transactions
globally. Cellular phones are now a mass-based technology used for business
transactions in a variety of ways. The transformation of a telephone device from
handling analog signals to digital signals and taking a major role in the era of
convergence has all the more made it much more relevant and necessary in the conduct
of eCommerce/eBusiness from the smallest entrepreneurs to mega business concerns.

An example of the various roles of telephones other than facilitating transfer or Passing
on audio (sounds) is the transfer of digital signals that has triggered various views or
reasons on having telephone connections such as the following situations:

a) Subscriptions to Internet services have become a major consideration in

applying for telephone lines thus making Internet available not only among
business offices but also at the household level.
b) For enterprising individuals, a telephone line is now a major tool or strategy for
business options such providing commercial Internet services (e.g., Internet
cafés) and other business options.
c) Mobile or cellular phone technology particularly its short-messaging system
(i.e., text messaging) and wireless applications are doing crucial roles in
facilitating the conduct of mobile commerce or more popularly known as
mCommerce.

The Philippine ICT Infrastructure

Vital to the massive use of IT in aid of doing business is the level or development and
growth in the ICT infrastructure in the country. The Philippines’ information ang
telecommunication sector is categorized by Lallana, et al. (2002) into the following
sub. sectors:

a) Telephone
b) Cable
c) Satellite
d) Broadcasting
e) Print media

Lallana, et al. cited that the country had a monopolistic telecommunication sector for
about 70 years and was deregulated only in mid-1980s paving the way for a burgeoning
ICT industry. Since its liberalization, teledensity per 100 people has improved four
times from 1.21 in 1983 to 4.66 in 1996. This number doubled again within a year to
8.07 and further increased to 10.12 in 1999. In 2001, the teledensity increased again to
10.91.

The increased activities in the telecommunication sector paved the way for the
presence of 11 international gateway facility (IGF) operations (i.e., companies that
provide international long distance calls), 7 cellular mobile phone system operations,

26
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
15 paging services operators, 12 inter-exchange carrier licenses (i.e., companies service
carriers’ traffic using their own network), 74 local exchange carriers (i.e., companies
that offer landline services) and over 600 value added service providers (i.e., which
include all the Internet service providers).

Through the Service Area Schemes (SAS) instituted in 1993 designed to address low
teledensity, there are about 6.63 million installed landlines all over the country (as of
2002), cellular mobile phone recorded about 1 million in the year 2000 and several
million subscribers as of the year 2005. Today, there are more cellular phone
subscribers than there are landline subscribers. The popularity of cellular phone
subscribers can be attributed to two factors:

1. the introduction of prepaid services — which made cellular services more

affordable
2. the rise of short messaging service (SMS), more popularly known as texting —
which is even more popular than voice service. A few years after its introduction,
SMS has transformed the Philippines into what is known as the “text messaging
capital” of the world, with enthusiastic cellular mobile phone subscribers
sending millions of text messages a day — a volume unmatched for now by any
country in the world!

Evolving Customer Value

The changes brought forth by modern technologies and in particular the quality and
consistency of product quality offered by technology-driven production system
changed the way products are produced or manufactured or how the way services are
rendered to clienteles. On the supply side, research and development as well as product
and market development efforts of firms either result to introducing a new product or
service to influence the market demand or to provide the market with what it believes
is needed or wanted by buyers. It is a matter of perception or bias as to what specific
strategies business organizations are willing to take at this time when conduct of
business is getting competitive as ever.
Among others, business organizations have to live with the ever changing needs and
wants of the market at large or the consumers in particular. In many ways, ICTs played
a key role in the evolving customer values particularly in the way ICTs are used in one’s
daily routine or how they are used for decision-making process. And this is an area
where various devices or gadgets falling within the ambit of ICT do make sense.
Over time, customer’s value and perception have changed a lot during the latter half of
the 20% century as espoused by Aldrich (1999). As shown in Figure 12, Aldrich (1999)
profounded that while customers’ value proposition is largely price consciousness back
in the 1950s, that view or perception has slowly moved towards quality and brand
consciousness in the last quarter of the 29th century. Towards the end of the 20th
century, the concept of content and time consciousness evolved as the prevailing value
proposition of the consumer and this holds true to date. What this logic means for
business organizations embracing ICTs is that this is the time to make use of ICT
because it is content-based and provides consistent product quality and delivers swift
or quick speed to intended market.

27
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Figure 10. Evolving consumer perception of value
Source: Aldrich (1999), p. 11
Value Creation — A Must for Embracing ICT

Adopting computers as business tools or a variety of ICT in general just for having it is
nonsense but a purely a font advantage over the traditional typewriters or a mere MS
PowerPoint advantage over the usual overhead projectors using transparencies. It is an
underestimation and improper use of computers or ICTs if they are simply used for
word processing or multi-colored and multimedia-based presentation.

As cost of human labor gets prohibitive running in parallel with progress of

communities and amidst human limitations to produce certain products with
consistent quality and at higher levels of productivity and efficiency, the need for
automation and computerization appears a necessity. Nowadays, doing so, however,
without addressing the context of more profitable operations and business
competitiveness is shortchanging the intent and purpose for which ICTs are meant to
be. It is nothing but a sort of digital decoration if at all a variety or hardware and
software is at hand yet the level of business competitiveness and profitability remained
unimproved despite the substantial investments in ICTs. It is believed that any
improvements or advances in technology development in general and ICT in particular
have to be adopted whenever applicable and practical.

As espoused by Professor Ho (2000), value creation is synonymous with adoption of

ICT as shown in Figure 13. At any point or stage of business operations, modernization
in

28
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
technology particularly in ITs should address improvement in the conduct of business,
Necessarily, this opportunity should lead to an improved value creation activity for the
firm. In other words, adopting ICTs in the workplace should translate to improve
production system zeroing in on quality, productivity, efficiency and more value for its
prospective clienteles, which in turn offers or promises more value for its customers
addressing fulfillment of its wants and needs. This logic should translate to better
business competitiveness of the business organization in the market, which will
hopefully redound to market dominance or industry leadership concretely expressed in
income or profit terms.
Figure 11. Creating value with information technology
Source: Ho (2000), p. 22

D. Activities/Exercises

Activity 1. Create a timeline of evolution of information and communication technology in

relation to the general conduct of trade and commerce. Use images to represent your ideas.

Activity 2. Using a Venn diagram. Differentiate processing from voice processing

functions of ICT

29
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
E. Evaluation/Post activities

Part I. In your own words, discuss what are the use of the following in business:

1. Word Processing
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
2. Electronic mail
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
3. Voice mail
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________

4. Computer system
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________

5. Value creation
_______________________________________________________
_______________________________________________________

30
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 _______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________

Part II. Describe the concept value creation in relation to computerization.

_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________

References

Orcullo, Norberto Jr. A (2009) Principles of eCommerce/eBusiness (theories and

applications). REX Bookstore, Inc.

The Internet Marketing Academy (2011) Internet Marketing. The Internet

Marketing Academy & Ventus Publishing Aps

Disclaimer: This module is prepared for instructional purposes only based on the course
syllabus. The teacher who prepared this module does not claim ownership on its contents but
patterned the ideas from different authors.

31
WPU-QSF-ACAD-82A Rev. 00 (09.15.20)
 Congratulations for completing this module!

Privacy Notice for Module

For this Module, we collect your name, program, year and section, contact number,
email address, Facebook and messenger account when you submit printed module for
purposes of coordination and communication
All personal information collected will be stored in a secure location and only
authorized staff will have access to them.

Student’s Information

Name: Program: Year and Section: Contact No.: E-mail address: Facebook Account:
Messenger Account:

WPU-QSF-ACAD-82A Rev. 00
WPU-QSF-ACAD-82A (09.15.20)
Rev. 00 (09.15.20)
 Vision 2020
WPU: the leading knowledge center for sustainable
development of West Philippines and beyond.

Mission
WPU commits to develop quality human resource and green
technologies for a dynamic economy and sustainable
development through relevant instruction,
research and extension services.

Core Values
(3CT) Culture of
Excellence
Commitment
Creativity
Teamwork

WPU-QSF-ACAD-82A Rev. 00 (09.15.20)