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In the past trifling years there has been a revolt in computing and communications, and every one gesture are that technological progress and use of data technology will continue at a rapid pace. Accompanying and supporting the dramatic increases within the power and use of latest information technologies has been the deny cost of communications as a results of both technological improvements and increased competition.

One of the foremost significant outcomes of the progress of data technology is perhaps electronic commerce over the web, a replacement way of conducting business. Though only a couple of years old, it’s going to radically alter economic activities and therefore the social climate. Already, it affects such hefty sectors as communications, finance and retail trade and might expand to areas like education and health services. It implies the smooth application of data and communication technology along the whole value chain of a business that’s conducted electronically.

The impact of data technology on the firms’ cost structure are often best illustrated on the electronic commerce example. The key areas of cost reduction when completing a purchase via electronic commerce instead of during a traditional store involve physical formation, order placement and execution, customer support, strong, inventory carrying, and distribution. Although fixing and maintaining an e-commerce internet site could be expensive, it’s certainly less costly to take care of such a storefront than a physical one because it’s always open, are often accessed by millions round the globe, and has few variable costs, in order that it can proportion to satisfy the demand. By maintaining one ‘store’ rather than several, duplicate inventory costs are eliminated.