Information technology has changed how businesses around the world communicate, hire employees, conduct foreign trade, market their products, perform research and manage global supply chains. It has particularly opened up opportunities for businesses of all sizes to expand the reach of their products and services, choose the best suppliers from around the globe and take advantage of advanced manufacturing solutions.
Understanding the role of information technology in international business can give you insight on how your small business can leverage technology to improve operational efficiency and gain a global competitive advantage.
Businesses and customers around the world can now communicate easily regardless of location thanks to the use of technologies such as online chat, email, texting, social media, videoconferencing and Voice over Internet Protocol.
No longer do you need to spend time and money to physically travel internationally for a business deal or meeting since you can simply arrange an appropriate time and communicate in the convenience of your U.S. office. You can also stay in better contact with international customers to hear how they feel about your products as easily as reading their reviews or messages.
At the same time, technologies like automatic translation software have helped make communication easier when doing business with professionals and customers who don't speak English. There are even automated chat bots you can use to respond in the local language to common questions your customers might have. Automated options particularly help with providing 24/7 customer service when you and your customers are several time zones apart.
Technologies like cloud computing and web conferencing make it possible to hire employees who live in other countries. As a result, companies have more options for finding key talent and saving money since they won't need to build a physical office for these remote employees.
International employees hired directly can often do their work from home as long as they have a connection to the internet. Companies also have the option to hire remote staff through outsourcing centers that provide a workspace and the common equipment needed.
When hiring a global remote workforce, companies can also benefit when they have employees in a country where they have suppliers, vendors and customers. Not only does a global workforce add to the company's diversity but it also provides the company with some staff who can speak the language and understand the customs there. These remote employees can assist you with meetings and business processes locally as needed.
Developments such as 3D printing and robotics have transformed how companies around the world manufacture products. These technologies make it easier to produce products quickly with fewer mistakes so that global businesses can meet customer demand as well as potentially save money. In the case of robotics, this technology can help produce products as complex as vehicles and gadgets alongside human workers. You can expect advancements in artificial intelligence to lead to even higher efficiency and quality when it comes to 3D printing and robotics-aided manufacturing.
Manufacturing technologies can also influence business decisions about whether to produce products in house or overseas. For example, the need for less labor and the improved capacity with these technologies might encourage a U.S. company to stop producing overseas if it looks more financially feasible.
On the other hand, a business in a country where technological developments happen slowly or where costs run high might opt to outsource its production to a technologically advanced manufacturer overseas. Some companies may find that a mix of in-house and offshore manufacturing gives them the most advantage.
The use of sophisticated supply chain management software has made it easier to manage a global supply chain rather than just source products and supplies domestically. Companies may do this to take advantage of lower costs and improved efficiency as well as to have more variety in what they can purchase from international companies.
Supply chain management software can help companies strategically source their goods internationally for the best value and view real-time inventory reports. Such software also integrates with e-commerce platforms so that global customers' orders get fulfilled seamlessly using the most efficient route and postal service.
Along with being able to easily place and ship orders from around the world, companies also benefit from electronic tracking systems that help with managing the supply chain. These keep them informed of their shipments throughout the transportation process so they can detect and respond to issues like delays.
Thanks to e-commerce, small businesses can now more easily do business with customers and other companies around the world. Rather than having to set up multiple shops for customers to visit, you can take orders from around the world by easily setting up an online store that customers can visit through their web browser or a mobile app. At the same time, you can use e-commerce to order supplies and inventory from overseas where you might save money.
Along with using regular payment systems, businesses can now use technologies like PayPal, Alipay and cryptocurrency platforms. These systems make it easier to handle transactions in different currencies and allow customers and companies to make and receive payments right from their phones or computers.
Another important role of information technology in foreign trade includes how it's made it easier for companies around the world to research each other and make more informed international business decisions. Tech companies in Asia can simply go online to learn about their American competitors' products, financial standing and marketing reach to better assess their strengths and weaknesses. At the same time, American companies can do research about foreign markets for their products and assess where expanding would make financial sense.
In the end, online research abilities can help companies more easily gain a competitive advantage against global competitors. It can also help boost innovation when it leads to ideas on how to improve an existing product or service to meet a specific market's need.
The importance of information technology and international marketing is seen in how the internet allows companies to reach customers in any country. Rather than relying on costly print, TV and radio advertising, businesses can pay for cheaper online ads through global search engines, get listed in global business directories and advertise on social media sites. They can even hire remote marketing specialists in the targeted locale.
Companies can also use tools like customer relationship management software to customize their marketing campaigns to fit each market's culture and customer preferences. This software helps with tracking marketing analytics to understand customers' impressions of products and services, and it can also streamline communications with global customers through automated emails and response tracking.
Information technology has improved how efficiently international businesses can operate across various business sectors. Whether companies need to find the best trade routes, research a foreign competitor, dispense digital services, find remote staff or mass-produce products, they can do so quickly with a search on the internet or a few clicks within some enterprise software.
Tools like supply chain management, customer relationship management and business intelligence software can even help automate common business processes to free up managers' time for more important tasks, such as crafting an international product strategy or seeking new market opportunities.