Four things the bus company did not plan
City Buses runs a ticket app. In one year four things happen.
A new government gives less money for bus routes. Fuel and wages cost more every month. A new law says every app must work with a screen reader. A flood closes the place where the buses stay at night.
None of these were the company's choice. They all force it to change its digital systems.
Key words
| Word | What it means | Example |
|---|---|---|
| External factor | Something outside the organisation that pushes it to change. | A new law |
| PESTLE | Six kinds of outside factor: political, economic, social, technological, legal, environmental. | A way to sort triggers |
| Recession | A time when the economy shrinks. People and firms spend less. | Fewer orders |
| Inflation | Prices rise over time, so money buys less. | A bigger bill for online services |
| Interest rate | The extra money you pay each year to borrow money. | A loan to buy new computers |
| Demographics | Facts about a group of people, such as age. | More older customers |
| Pandemic | A disease that spreads across the world. | Offices close and staff work from home |
| Obsolete | Too old to use or to get support for. | A system the maker no longer fixes |
| Zero-day | A weak point in software that nobody has fixed yet. | An attack on the day it is found |
| Sustainability | Using resources in a way that does not harm the planet. | Less energy used by a big room of computers |
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Quick check: whose choice is it?
Have a go
Quick check: whose choice is it?
3 questionsYour answers are marked here and are not kept. A college account keeps every student’s marks.
Political factors
Politics means the government and its decisions.
A change in government. A new government can change the rules, the taxes and the money for public services. A college may lose a grant (money given for a job) and must spend less.
Conflict (war). A war can stop parts from arriving and break links with suppliers. A firm may need new suppliers and safer systems.
New government priorities. The government may now want green energy. Firms that sell it get help. Other firms must change.
Economic factors
Economic factors are about money.
Recession: people spend less, so a firm cuts staff. Inflation: costs rise, so the firm looks for cheaper systems. Interest rates: when they rise, a loan for a new system costs more. Customer trends: customers start to buy on their phones. New competitors: another business with a better app takes customers. New services: a rival offers free delivery, so the firm must too. New markets: the firm sells in a new country and needs a new site and new ways to pay.
Extra: Worked example: why interest rates matter
| Step | Rate of 5 out of 100 | Rate of 10 out of 100 |
|---|---|---|
| The firm borrows | 1,000 pounds | 1,000 pounds |
| Extra to pay each year | 5 out of every 100: 10 x 5 = 50 pounds | 10 out of every 100: 10 x 10 = 100 pounds |
| Total to pay back after one year | 1,000 + 50 = 1,050 pounds | 1,000 + 100 = 1,100 pounds |
| What the firm may do | Go ahead with the new system | Wait, or buy a cheaper system |
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Social and technological factors
Social factors are about people and how they live.
Demographics: a town with more older people needs larger text and simple screens. Trends: people want to chat with a firm by message. Working from home: staff need safe access from home. Culture: customers want an app in their own language.
Technological factors
Technological factors are about the tools.
New technology: a better tool appears and rivals use it. Obsolete technology: the maker stops giving help, so the firm must replace it. System failure: a key system breaks. Zero-day: a weak point with no fix yet, so the firm must act fast. Attackers may use it at once.