Chapter 19 : Outsourcing in the 21st Century

Outsourcing Projects

• Insourcing 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

Outsourcing benefits

• Increased quality and efficiency of a process, service, or function
• Reduces operating expenses
• Resources focused on core profit-generating competencies
• Reduces exposure to risks involved with large capital investments
• Access to outsourcing service provider's economies of scale
• Access to outsourcing service provider's expertise and best-in-class-practise
• Access to advanced technologies
• Increased flexibility with the ability to respond quickly to changing market demand
• costly outlay of capital funds
• Reduced head count and associated overhead expense
• Reduced frustration and expense related to hiring and retaining employees in an exceptionally tight job market
• Reduced time to market to products or services

Outsourcing challenges

• Contract length
• Competitive edge 
• Confidentiality
• Scope definition

Chapter 15 : Creating Collaborative Partnerships

Web 2.0 : Advantages of Business 2.0

• Web 2.0 is the next generation of internet use

Content sharing through open sourcing

• 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

User-contributed content

• Created and updated by many users for many users
• One of the most popular forms of user-generated content is a reputation system, where buyers post feedback on sellers

Collaboration inside the organization 

• A set of tools that supports the work of teams or groups by facilitating the sharing and flow of the information
• Collective intelligence is collaborating and tapping into the core knowledge of all employees, partners, and customers
• A knowledge management systems (KMS) supports the capturing, organization, and dissemination of knowledge throughout the organizations

Collaboration outside the organization

• The most common form of collective intelligence found outside the organization is crowdsourcing, which refers to the wisdom of the crowd

Networking Communities with Business 2.0

• Social media refers to websites that rely on user participation and user-contributed content, such as Facebook
• Social networking is the practice of expanding your business and social contacts by constructing a personal networ
• Social networking analysis (SNA) maps group contacts identifying who knows each other and who works together
• Social tagging describes the collaborative activity of marking shared online content with keywords or tags as a way to organize it for future navigation, filtering, or search 
• 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

• Blogs
• Wikis
• Mashups

The Challenges of Business 2.0

• Technology dependence
• Information vandalism
• Violations of copyright and plagarism

Chapter 14 : Ebusiness

EBUSINESS MODELS

- An ebusiness model is a plan that details how a company creates, delivers, and generates revenues.

- Ebusiness models fall into one of four categories which is :

Business-to-Business (B2B)

- Applies to businesses buying from and selling to each other over the internet.

- Electronic marketplace (e-marketplace) are interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities

Business-to-Consumer (B2C)

- Applies to any business that sells its products or services directly to consumers online

- Common B2C e-business models include:

• e-shop – a version of a retail store where customers can shop at any hour of the day without leaving their home or office
• e-mall – consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops

- Business types:

• Brick-and-mortar business
• Pure-play business
• Click-and-mortar business

Consumer-to-Business (C2B)

- Applies to any consumer who sells a product or service to a business on the internet

-   Priceline.com is an example of a C2B e-business model

-   The demand for C2B e-business will increase over the next few years due to customer’s desire for greater convenience and lower prices

Consumer to consumer (C2C)

-  Applies to consumers offering goods and services to each other on the internet.

- C2C communities include:

• Communities of interest - People interact with each other on specific topics, such as golfing and stamp collecting
• Communities of relations - People come together to share certain life experiences, such as cancer patients, senior citizens, and car enthusiasts
• Communities of fantasy - People participate in imaginary environments, such as fantasy football teams and playing one-on-one with Michael Jordan

Ebusiness Tools for Connecting and Communicating

•  Email
• Instant messaging
• Podcasting
• Videoconferencing
•  Web conferencing
• Content management systems

The Challenges of Ebusiness

•   Identifying limited market segments
•   Managing consumer trust
•  Ensuring consumer protection
• Adhering to taxation rules

Chapter 12 : Intergrating the Organizational from End to End- Enterprise Resource Planning

ENTERPRISE RESOURCE PLANNING (ERP)

- Serve as the organization's backbone in providing fundamental decision-making support.

- At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

Bringing the Organization Together

- ERP enables employees across the organization to share information across a single,centralized database.

The Evolution of ERP

- to deliver automation across multiple units of an organization 

- to help facilitate the manufacturing process and address issues such as raw materials, inventory, order entry and distribution

Integrating SCM, CRM, and ERP

- SCM, CRM, and ERP are the backbone of e-business

- Allows the unlocking of information to make it available to any user, anywhere, anytime

- Integration of these applications is the key to success for many companies

Integration Tools

- Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together

• Middleware – several different types of software which sit in the middle of and provide connectivity between two or more software applications 
• Enterprise application integration (EAI) middleware – packages together commonly used functionality which reduced the time necessary to develop solutions that integrate applications from multiple vendors

Chapter 11 : Building a Customer-centric Organization- Customer Relationship Management.

Customer Relationship Management (CRM)

CRM enables an organization to:

• Provide better customer service
• Make call centers more efficient
• Cross sell products more effectively
• Help sales staff close deals faster
• Simplify marketing and sales processes
• Discover new customers
• Increase customer revenues

Recency, Frequency, and Monetary Value

Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value

• How recently a customer purchased items (Recency)
• How frequently a customer purchased items (Frequency)
• How much a customer spends on each purchase (Monetary Value)

The Evolution of CRM

• CRM reporting technology – help organizations identify their customers across other applications

• CRM analysis technologies – help organization segment their customers into categories such as best and worst customers

• CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving

Using Analytical CRM to Enhance Decisions

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

- Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

Customer Relationship Management Success Factors

CRM success factors include:

• Clearly communicate the CRM strategy 
• Define information needs and flows
• Build an integrated view of the customer
• Implement in iterations
• Scalability for organizational growth

Chapter 10 : Extending Organization- Supply Chain Management

Supply Chain Management

The average company spends nearly half of every dollar that it earns on production 

In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains

Basics of Supply Chain

The supply chain has three main links:

1. Materials flow from suppliers and their “upstream” suppliers at all levels
2. Transformation of materials into semifinished and finished products through the organization’s own production process
3. Distribution of products to customers and their “downstream” customers at all levels

Information Technology’s Role in the Supply Chain

IT’s primary role is to create integrations or tight process and information linkages between functions within a firm

Visibility

Supply chain visibility – 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

Consumer Behavior

Companies can respond faster and more effectively to consumer demands through supply chain enhances 

Demand planning software – generates demand forecasts using statistical tools and forecasting techniques

Competition

Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

Supply chain execution (SCE) software – automates the different steps and stages of the supply chain

Speed

Three factors fostering speed

Supply Chain Management Success Factors

SCM Stories

Chapter 9 : Enabling Organization-Decision Making

MAKING BUSINESS DECISION

The Decision-Making Process

- The process of making decision plays a crucial role in communication and leader-ship for operational, managerial, and strategic projects.

Decision-Making Essentials

- A few key concepts about organizational structure will help our discussion of MIS decision making tools.

OPERATIONAL

-  At the operational level,employees develop, control,and maintain core business business required to run the day-to-day operations. 

-Considered as structured decisions, which arise in situations where establish processes offer potential solutions.

MANAGERIAL

- At the managerial level, employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change. 

- It is considered semi-structured decisions, they occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision.

STRATEGIC

- At the strategic level, manegers develop overall business strategic, goals, and objectives as part of the company's strategic plan. 

- It is highly unstructured decisions, occurring situations in which no procedures or rules exist to guide decision makers towards the correct choice.

SUPPORT : ENHANCING DECISION MAKING WITH MIS

Operational Support Systems

- Transactional information encompasses all the information contained within a single business process or unit of work. Primary purpose is to support the performance of daily operational or structured decisions.

- Online transactional processing (OLTP) is the capture of transaction and event information using technology.

- A transactional processing system (TPS) is the basic business system that serves the operational level (analysts) and assists in making structured.

- Input for a TPS are source documents.

Managerial Support Systems

- Analytical information encompassess all organizational information, and its primary purpose is to support the performance of managerial anlysis 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 assistance in evaluating and choosing among different course of action. 

- The common DSS analysis techniques are :

• What-if analysis - checks the impacts of a change in a variable or assumption on that model.

• Sensitive analysis - a special case of what-if analysis, is the study of the impact on the other variables when one variables is changed repeatedly.
• Goal-seeking analysis - finds the inputs necessary to achieve goal such as a desired level of output.
• Optimization analysis- an extension of goal-seeking analysis, finds the optimum value for a target variable by repeatedly changing other variables.

Strategic Support Systems

- An executive information systems (EIS) is a specialized DSS that supports senior-level executives and unstructured, long-term, nonroutine decisions requiring judgment, evaluation, and sight.

- Visualization produces graphical displays of patterns and complex relationships in large amount of data.

- A common tool that supports visualization is a digital dashboard.

- Digital dashboard offer the following capabilities :

• Consolidation- the aggregation of data from simple-\ roll-ups to complex groupings of interrelated information.
• Drill-down- enables users to view details, and details of details, of information.
• Slice-and-Dice- the ability to look at information from different perspectives.

THE FUTURE : ARTIFICIAL INTELLIGENCE

- Artificial intelligence (AI) stimulates human thinking and behaviour, such as the ability to reason and learn.

- Intelligence systems are various commercial applications of artificial intelligence.

- The most familiar categories of AI systems are :

•  Expert systems- computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems
• Neutral networks- attempts to emulate the way the human brain works ;Fuzzy logic – a mathematical method of handling imprecise or subjective information
• Generic algorithms -an artificial intelligent system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem
• Intelligent agents- special-purposed knowledge-based information system that accomplishes specific tasks on behalf of its users;Multi-agent systems, Agent-based modelling
• Virtual reality- computer-simulated environment that can be a simulation of the real world or an imaginary world