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Investing in new technology costs money, but businesses often undertake such investment because of the reduced costs that implementing new technology can bring in the long term.

The impact of digital communication systems on costs

A business will incur costs when investing in any digital communication system. However, the initial costs will enable longer-term savings to be made. Examples of how businesses can save money using digital communication systems include:

• The increasing availability of digital communication tools is enabling more and more employees to work remotely, for example from home. This can help to reduce costs for businesses, as they can operate from smaller offices.
• Communications can be sent more cost-effectively in electronic format, such as via email or instant messaging, removing the costs involved in printing and postage.
• Even greater savings may be made where video conferencing is used, since this can remove the costs associated with travelling to face-to-face meetings.

The impact of e-commerce on cost

Selling online is a lot cheaper than having to open many traditional branches, such as high-street shops. E-commerce also:

• requires fewer sales staff
• requires fewer and sometimes smaller premises
• avoids the need to be located in high streets, where rents and rates are expensive
• can automate tasks such as administration and record keeping

However, e-commerce also incurs additional costs, including:

• costs involved in hosting a website
• fees that must be paid for handling online payments
• warehousing and distribution costs for products

The impact of social media on costs

Social media provides a quick, cost-effective way for businesses to communicate and interact with customers. It enables even small businesses to reach a wide audience for a minimal cost.

The impact of payment methods on costs

The development of new payment technologies has enabled traditional businesses to take payments in a more secure and cost-effective way without needing to hold large amounts of cash on their premises. In addition, real-time online transactions can take place, with a business receiving payment almost immediately.

This convenience does come at a cost, though. Businesses that handle card payments charge a small percentage fee for every transaction.