Impacts Of Information Technology On Business: A Case Study Of Air Asia

Abstract

Discuss the impacts of IT on business.

Abstract

Information Technology has become a vital part of the day to day life; every person has become connected to it directly or indirectly. Everywhere we see there has been a technological advancement in every sector that has made our lives not only easy but also worth living with ease. This research paper deals with the aspects of Information Technology and the impact that it has on business, especially in the field of aviation. To fulfil the research objective the researcher has chosen Air Asia as the subject of the study to study the impact of IT in airlines.

Technology has created a fuss in the business sector; every individual has been instilled with the need to IT in some or the other way. People who facilitate the business or people who are taking advantage of a certain business both require technological innovations. Information technology has created a he impact on the economy (Heil and Prieger, n.d.) and all the sectors, be it small or large. The most common use of Information Technology is the use of data entry, accountancy and now a day the most commonly used one is money transfer. Be it the banking sector, tourism, hotel industry, or any other business sector either small or big, it is using IT somewhere or the other. Information Technology has brought innovation in all the sectors.

Airlines are one of the business sectors that too have been an impact of information technology. IT people are being added to the workforce of all the airlines in order to improve their technological advancements which have become the most popular factor for attracting customers towards a particular airline. We will study the impact of these Information technology and the changes that have been taking place at Air Asia Airline.

Objective of the Research

The present research has been conducted in order to find out the affects of information technology on a business sector. The aim of the study is to find out the impact that IT has caused in both positive and negative way on the airlines business, and the study shall be conducted by using the example of Air Asia Airlines.

Research Methodology

The research methodology and philosophy used here is secondary in nature. The data collected is through online sites and research papers and news articles already published. The data so collected is then understood and scrutinised in order to draw conclusions to reach the aims and objectives of the research study.  

Objective of the Research

Literature Review

Information technology is booming across the globe. It has made cross border transactions much easy, but along with ease it has also created various other issues on the economy and the government policies. It is true that IT has made the productivity level higher and has increased the profit making capacity of the business. But the problem that lies with this is that cross- border monetary transactions have shaken the government policies and resulted in to huge losses of tax that creates revenue for the government (Goolsbee, 2001). It has therefore become important for the fiscal regulators to plan policies to apply e-taxes on e-commerce so that the revenue is not lost due to technological innovation (Redpath, Redpath, & Ryan, 2007.  Legal tenders in the primary market, i.e. the treasury and the difference in prices at the secondary market have further increased the problems of electronic payments.

With the advent of technology and the competitiveness so prevalent in the businesses, it is important that the businesses must be up to date with technology and along with that they should also bring in new things and add to technological innovation so that they remain ahead. Ease through technology also results into profit making which in returns adds to the GDP of the country and betters the economic conditions (Willis, 2004).

Information Technology and Air Asia Airline

With the increasing use of information technology, businesses have become e-businesses. The impact is so huge that it has brought the entire business sector under a technological advancement. Some way or the other the businesses have been using information technology, either for payments, production, recording transactions, distribution, facilitate marketing online etc.

Airlines have too adopted the technological advancements; everything is done online from getting tickets, payments, cancellation, refunds, and other facilities that they may provide. Air Asia Airlines are the cheapest and the largest airlines in the Southeast Asia and was also voted as the World’s Best Low Cost Airline in 2009 and 2010 (Worland, 2014). With the change in its management Air Asia rapidly grew from starting with only two planes to be at present a major airline in Asia.

Use of IT

It has been considered to be an important part for the survival of a business. It is to be noted here that IT plays a major role in innovation, which is the most attracting factor for any business to grab the attention of the customers. The use of IT not only attracts customers but also makes the business transaction easy on both the ends.

Research Methodology

Air Asia has recently added new features in its services through information technology. It had an online application that could be used to make bookings and enquiries. Earlier the application was compatible with windows phone 8.1, but now it has created and updated the UWP app for Windows 10 via Neowin, which is accessible by computers and mobile phones both.  Another feature that it has added to it is the intellect feature called ‘cortana’ which is an intuitive user feature (Baxi 2016).

All these innovations through information technology have brought about an alarming change in the technology and has made it easy for the airlines and the customers to conduct the business with ease and hassle free. The application so formed has made it easy for the customers to access Air Asia without taking the pain of coming to the airport or going to a travel agent in order to get their tickets. The application has also made it easy to select the seats and make payments for bookings or get refunds for cancelations. The use of information technology is not only limited to be make the business customer friendly but also in order to make the working of the business internally easy and effective. The employees have biometric system to keep a track on their activities; there is facilitation of communication via intercoms and other devices. There working of the business is done under continuous surveillance through camera and recordings are kept with the IT staff in the IT department. 

Advantages of IT

Information technology as discussed above has created ease and caused innovations to happen, other advantages of information technology are:

1. Cost effective: a lot of cost is cut down from the side of the airlines by reducing staff for manual ticketing, use of paper, time, and also from the side of the customers as a lot of money is wasted on travel agents, transportation etc.
2. Time saving: Information technology has made the business transaction so easy that it saves a lot of time that was earlier wasted by standing in ques for booking, taking refunds and making cancellations.
3. Revenue and productivity(Wen, 2004): the above two factors have increased the productivity of the airlines by enabling easy transactions and working and due to maximum utilisation of time and cost effectiveness, generation of profits has also increased.
4. Specialisation: the technological advancements have led to specialisation in the field of aviation. Now airlines specialise in providing certain services in a particular area. Like Air Asia has specialised in the Southeast of Asia and provides cheaper and readily available flights easily in Malaysia and adjoining areas (Baxi 2016).
5. Connectivity/ flexibility: due to information technology, it has become easy to connect with the airlines all over the world. Availability of seats in other flights, availability of connecting flights etc can be easily found out. Under business to business transactions there has been a connection established sue to which the businesses have become more easily accessible (Lucking-Reiley & Spulber, 2001).

Threat of Information Technology on Aviation sector

Information technology has been a boon to the people and the business sectors due to the increase in revenue generation, flexibility etc. but this same instrument of innovation has been a threat and proved to be monstrous for the people. The disadvantages of IT are:

1. loss of jobs: due to technological advancements, airline businesses are cutting down the workforce in order to generate more profits, as due to technology most of the work can be easily done through various application provided online, therefore there is no use of having so much of a workforce for operating the business (Scott, 2016).
2. Negative Competition: the use of technology has reduced the costs incurred by the businesses, which has resulted into generation of increased revenue, which in result has lead to competition. But this competition has reached to such an extent that airlines have started offering services at such a lower rate in order to compete that they themselves are going into losses and in order to cover those loses they are cost cutting and cutting down the workforce (Scott, 2016).
3. Cybercrime: since, everything has been made electronic, and all the information is vulnerable to hackers and other mal practitioners in the field of cyber technology, there is always a fear of cyber crime.
4. Terrorism: as stated above, there is a fear of the information getting into the wrong hands as the information has become vulnerable. Therefore, in the past terrorist actions have taken place.
5. Confidentiality: as all the information about the airlines is available online, there is no confidentiality. Also because airlines have to disclose information in order to facilitate easy flight bookings that are connecting, therefore confidentiality is lost.

Information technology has its advantages and disadvantages as anything else. But only because there are a few disadvantages of it, its advantages cannot be ignored in the light of the cons. With technology the world has become easy but also at the same time it has lead to vulnerability, but it is important that the fact, that ease is granted should always be considered and the disadvantages should be left behind.

It is recommended after going through the research that there must always be innovation with the help of technology but that should not be done at the cost of the work of other people. Competition is important to bring changes but a negative competition would only lead to be disadvantageous to both the public and the business itself. 

Literature Review

Conclusion

Air Asia being the cheapest airlines in the Southeast Asia have become extremely popular for that region. An additional feature of an online application for booking, cancellation, viewing boarding pass, checking flight status etc., added to the services provided by them has made it more popular and easy to use and customer friendly. The information technology applied by these airlines is not restricted to only making customers accessibility but also has been used to govern their day to day functions within the workplace by use of IT.  Connectivity with other airlines has also been established in order to facilitate the connectivity of flights from one place to another. It is to be noted that IT cannot always be advantageous, it has its own threats to the business and the society at large and sometimes even technology can lead to failures as it is doing at present, but cutting down the workforce due to negative competition and the tendency of businesses to make maximum profits.

Articles:

Subirana, B., Eckes, C., Herman, G., Sarma, S. and Barrett, M. (n.d.). Measuring the Impact of Information Technology on Value and Productivity using a Process-Based Approach: The case for RFID Technologies. SSRN Electronic Journal.

Heil, D., Prieger, J. (n.d). The Macroeconomic Impacts of E-Business on the Economy. SSRN Electronic Journal.

Heenetigala, K. (n.d). Potential Impact of New Technology on Governance in Small Business. SSRN Electronic Journal.

Jain, M., Popli, G.S. (n.d). Role of Information Technology in the Development of Banking Sector in India. SSRN Electronic Journal.

Nordhous, W. (n.d). Are We Approaching an Economic Singularity? Information Technology and the Future of Economic Growth. SSRN Electronic Journal.

Galang, N. M. (n.d). Government Efficiency and International Technology Adoption: The Spread of Electronic Ticketing Among Airlines. SSRN Electronic Journal.

Goolsbee, A. (2001). The implications of electronic commerce for fiscal policy (and vice versa). Journal of Economic Perspectives.

Redpath, I. J., Redpath E. M., & Ryan, K. (2007). Sales and use taxation in ecommerce: Where we are and what needs to be done. Information Systems Management.

Willis, J. L. (2004). What impact will e-commerce have on the U.S. economy? Federal Reserve Bank of Kansas City Economic Review.

Websites:

BAXI, A. (2016). AirAsia gets on board Windows 10 with its new universal app. [online] Windows Central. Available at: https://www.windowscentral.com/airasia-gets-board-windows-10-its-new-universal-app-windows-10 [Accessed 31 May 2016].

Worland, J. (2014). Everything You Should Know About AirAsia. [online] TIME.com. Available at: https://time.com/3647954/airasia-qz8501-need-to-know-missing-plane/ [Accessed 31 May 2016]

Scott, A. (2016). Boeing reduces size of tech workforce amid competitiveness drive – Independent.ie. [online] Independent.ie. Available at: https://www.independent.ie/business/world/boeing-reduces-size-of-tech-workforce-amid-competitiveness-drive-34748082.html [Accessed 31 May 2016].

Press release:

NBC New YOrk, (2016). Why Most Airlines Won’t Use Streaming Technology for Aircraft Data. [online] Available at: https://www.nbcnewyork.com/news/national-international/Why-Most-Airlines-Wont-Use-Streaming-Technology-Aircraft-Data-381253151.html [Accessed 31 May 2016].

Business Standard, (2016). IndiGo, SpiceJet, Air Asia slash flight ticket prices to lure flyers, push sales. [online] Available at: https://www.business-standard.com/article/companies/indigo-spicejet-air-asia-slash-flight-ticket-prices-to-lure-flyers-push-sales-116051701116_1.html [Accessed 31 May 2016].