CHAPTER 19 OUTSOURCING IN THE 21st CENTURY

OUTSOURCING PROJECTS

Insourcing ( in - house development ) - is a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems.

Outsourcing - is an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house.

 

 

 

 

Three different forms of outsourcing options a project must consider

1. Onshore outsourcing - engaging another company within the same country for services.
2. Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby country. Often this country will share a border with the native country.
3. Offshore outsourcing - using organizations from developing countries to write code and develop  systems. In offshore outsourcing the country is geographically far away.

 

Influential drivers affecting the growth of outsourcing market

 

• core compentencies
• financial savings
• rapid growth
• industry changes
• the internet
• globalization

Outsourcing benefits

1. increased quality and efficiency
2. reduced operating expenses
3. outsourcing non-core processes
4. reduced exposure to risk
5. economies of scle, expertise, and best practices
6. access to advanced technologies
7. increased flexibility
8. avoid costly outlay of capital funds
9. reduces headcount and associated overhead expense
10. reduced time to market for products or services

 

Outsourcing Challenges  

• contract length

1. difficulties in getting out of a contract
2. problems in foreseeing future needs
3. problems in reforming an internal IT department after the contract is finished
• competitive edge
• confidentiality
• scope definition

CHAPTER 15 CREATING COLLABORATIVE PARTNERSHIPS

WEB 2.0 ADVANTAGES OF BUSINESS 2.0

* web 2.0 ( business 2.0) is the next generation of internet use- a more mature, distinctive communications platform characterized by new qualities such as collaboration, sharing and free.

CONTENT SHARING THROUGH OPEN SOURCING

*Open system consists of nonproprietary hardware and software based on publicly known standards that allow third parties to create add-on products to plug into or inter-operate with the systems.
*Source code contains instructions written by a programmer specifying the actions to be performed by computer software.
*Open source refers to any software whose source code is made available free for any third party to review and modify.

CHARACTERISTICS OF BUSINESS 2.0

1. USER-CONTRIBUTED CONTENT

- user contributed content ( user-generated content) is created and updated by many users for many users.
- reputation systems where buyers post feedback on sellers.

     2.  COLLABORATION INSIDE THE ORGANIZATION

- collaboration systems is a set of tools that supports the works of team or groups by facilitating the sharing and flow of information.
- collective intelligence is collaborating and tapping into the core knowledge of all employees, partners, and customers.
- knowledge management ( KM) which involves capturing, classifying , evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions. 
 - knowledge management systems ( KMS) supports the capturing , organizations and dissemination of knowledge throughout an organization.

Explicit knowledge - consists of anything that can be documented, archived, and codified, often with the help of IT.
Tacit knowledge - knowledge contained in people heads. 

   3.    COLLABORATION OUTSIDE THE ORGANIZATIONS

• asynchronous communications  communications such as email in which the message and the response do not occurs at the same time.
• synchronous communication communications that occurs at the same time such as IM or chat.  

SOCIAL TAGGING 

• Tags - are specific keywords or phrases incorporated into website content for means of               classification or taxonomy.
• Social tagging - describe the collaborative activity of making shared online content with                                 keywords or tags as a way to organize it for future navigation, filtering,or  search.
• Folksonomy - is similar to taxonomy except that crowdsourcing determines the tags or                              keyword-based classification system.
• Website bookmark - is a locally stored URL or the address of a file or Internet page                                                saved as a shortcut.
• Social bookmarking - allows users to share,organize,search and manage bookmarks.

BUSINESS 2.0 TOOLS FOR COLLABORATING

1. Blog is an online journals that allows users to post their own comments, graphics and video. 
2. Wikis - web-based tools that make it easy for users to add, remove, and change online content
3. mashups is a website or web applications that uses content from more than one source to create a completely new product or service.

CHAPTER 14 EBUSINESS

EBUSINESS MODEL
* A business model is a plan that details how a company creates, delivers, and generates revenues.
* An ebusiness model is a plan that details how a company creates, delivers, and generates revenues on the internet.

EBUSINESS FORMS AND REVENUE GENERATING STRATEGIES

1. content providers
2. infomediaries
3. online marketplace
4. portals
5. service providers
6. transaction brokers.

EBUSINESS TOOLS FOR CONNECTING AND COMMUNICATING

1. Email
2. Instant message
3. Podcasting
4. Videoconferencing
5. Web conferencing
6. Content management systems

THE CHALLENGES OF EBUSINESS

1. identifying limited market segments
2. managing consumer trust
3. ensuring consumer protection
4. adhering to taxation rules

CHAPTER 12 INTEGRATING THE ORGANIZATION FROM END TO END-ENTERPRISE RESOURCE PLANNING

ENTERPRISE RESOURCE PLANNING 

•  A heart of an ERP systems is a central database that collects information from and feeds information into all the ERP systems individual applications components, supporting diverse business functions such as accounting, markerting, human resources.

 

 ERP INTEGRATION DATA FLOWS

 

 ERP PROCESS FLOW

BRINGING THE ORGANIZATION TOGETHER.

- with the extended portal capabilities, an organization can also involve its suppliers and customers to participate in the workflows process, allowing the ERP to penetrate the entire value chain, and help the organization acheive greater operational efficiently.

 THE ORGANIZATION BEFORE ERP

 ERP BRINGING THE ORGANIZATION TOGETHER

THE EVOLUTION OF ERP

- ERP has grown over the years to become part of the extended enterprise.

- it has extended to warehousing, distribution, and order entry.

- ERP expands to the front office including CRM.

 

 INTEGRATING SCM, CRM, AND ERP

- integration allows the unlocking information to make it available to any user, anywhere, anytime.

 

INTEGRATION TOOLS

-middleware- several different types of software that sit in the middle of and provide connectivity between two or more software applications.

-enterprise applications integration(EAI) middleware- represents a new approach to middleware by packaging together commonly used functionality.

-if one application performs poorly, the entire consumer value delivery systems is affected.

  

CHAPTER 11 A CUSTOMER-CENTRIC ORGANIZATION-CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT

- Customers relationship management(CRM) - managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.
- for example checking online orders twice daily, shipping online orders within 24 hours.

THE BENEFITS OF CRM

• allows the company to operate more efficiently and effectively in the area of supporting customer needs.
• enables a firm to treat customers as individuals, gaining important insights into their buying preferences and shopping behaviors.
• firm can find their most valuable customers by using RFM formula - recently, frequently and monetary value.

EVOLUTION OF CRM.

 

CRM repoting technologies helps organizations identify their customers across other applications

CRM analysis technologies helps organizations segment their customers  into categories.

CRM predicting technologies helps organization predict customers behaviors.

OPERATIONAL AND ANALYTICAL CRM

Operational CRM- supports traditional transactional processing for day-to-day front office operations or systems that deal directly with the consumer.

Analytical CRM- supports back-office operations and strategic analysis and include all systems that do not deal directly with the consumers.

CHAPTER 10 EXTENDING THE ORGANIZATION- SUPPLY CHAIN MANAGEMENT

BASICS OF SUPPLY CHAIN 

• Supply chain consists of all parties involved, directly or indirectly, in the procurement of a product or raw material.
• Supply chain management(SCM) involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability. 
• the supply chain has three main links:

1. materials flow from suppliers and their upstream suppliers at all levels.
2. transformation of materials into semi-finished and finished products, or the organization's own production processes. 
3. distribution of products to customers and their downstream customers at all levels.

                        

A TYPICAL SUPPLY CHAIN

 

FIVE BASIC SUPPLY CHAIN MANAGEMENT

INFORMATION TECHNOLOGY'S ROLE IN THE SUPPLY CHAIN

Factor driving supply chain management

1. VISIBILITY

 -supply chain visibility-is the ability to view all areas up and down the supply chain.

 -bullwhip effect-  occurs when distorted product demand information passes from one entity to the next throughout the supply chain.
   

  2.  CONSUMER BEHAVIOUR 

- demand planning software-  generates demand forecasts using statistical tools and forecasting techniques.

3.  COMPETITION

- supply chain planning(SCP) software-  uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory.

-supply chain execution (SCE) software automates the different stages and steps of the supply chain.

 

 

4. SPEED

-these systems raise the accuracy, frequency, and speed of communication between suppliers and customers.

SUPPLY CHAIN MANAGEMENT SUCCESS FACTORS.

Seven principles of supply chain management.

 

 

Keys to SCM success.

• make the sale to suppliers
• wean employes off traditional business practices
• ensure the SCM systems support the organizational goals
• deploy in incremental phass and measure and communicate success
• be future oriented.

 

CHAPTER 9 ENABLING THE ORGANIZATION-DECISION MAKING

THREE PRIMARY CHALLENGES MANAGERIAL DECISION MAKING CHALLENGES

 

DECISION MAKING ESSENTIALS.

   

 

OPERATIONAL

• employees develop,control, and maintain core business activities required to run the day-to-day operations. 
• considered structured decisions.
• they affect short term business strategies.

MANAGERIAL 

• employees are continuously evaluating company operations to hone the firm's abilities.
• managerial decision cover short- and medium- range plans,budget and so on . 
•   this considered semistructured decisions.
• situations on which a few establish processes help to evaluate potential solutions, but not enough to lead a definite recommended decision.

STRATEGIC

• manager develop overall business strategies, goals, and objectives as part of the company's strategic plan.
• in political,economic.
• highly unstructured decisions which no procedures or rule exist to guide decision maker toward the correct choice.
• example decision to enter new market or even a new industry over.

ENHANCING DECISION MAKING WITH MIS

1. Operational support systems

• transactional information encompasses all the information contained within a single business process or unit of work and its primary support the performance of daily operational or structured decisions.
• online transaction processing(OLTP) is the capture off transaction and event information and event information using technology.
• transaction processing systems (TPS) is the basic business systems that serves  the operational level and assists in making structured decisions.
• TPS are source documents.

    2. Managerial support systems

• analytical information encompasses all the organizational information, and its primary purpose is to support the performance of managerial analysis or semistructured decisions.
• online analytical processing ( OLAP) is the manipulation of information to create business intelligence in support of strategic decision making .
• decision support systems ( DSSs) model information using OLAP which provides assistanc in evaluating and choosing among different courses of action. 
• there are the techniques:

1. what if analysis- checks the impact of a change in a variable or assumption on the model.
2. sensitivity analysis- a special case of what-if analysis, is the study of the impact on other variables when one variables is changed repeatedly
3. goal-seeking analysis- finds the inputs necessary to achieve a goal such as desired level of output. 
4. optimization analysis- an extension of goal-seeking analysis, finds the optimum value for a target variable by repeatedly changing other variables.

3. strategic support systems

•  executive information systems- specialized DSS that supports senior-level executives and unstructured,long term, non routine.
• visualization- produces graphical displays of pattern and complex relationships in large amount of data.

1. consolidation- the aggregation of data from simple roll-ups to complex groupings of interrelated information.
2.  drill-down- enables users to view details, and details of details, of information.
3. slice-and-dice- is the ability to look information from different perspectives.

 

THE FUTURE:ARTIFICIAL INTELLIGENCE

• artificial intelligence- simulates human thinking and behavior.
• intelligence systems- various commercial applications of artificial intelligence.

1. EXPERT SYSTEMS-are computerized advisory programs that imitate the reasoning processes of expert in solving  difficult problems.
2. NUERAL NETWORKS- called an artificial nueral networks, is the category of AI that attempts to emulate the way the human brain works.
3. GENETIC ALGORITHMS- systems that mimics the evolutionary,survival-of-the-fittest- procss to generate increasingly better solutions to a problems.
4. INTELLIGENCE AGENTS- special-purpose knowledge-based information systems that accomplishes specific tasks on behalf of its users.
5. VIRTUAL REALITY- a computer-simulated environment that can be a simulation of the real world or an imaginary world.