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

Chapter 8 : Accessing Organizational Information- Data Warehouse

DATA WAREHOUSE FUNDAMENTALS

- A data warehouse is a logical collection of information-gathered from many different operational database-that supports business analysis activities and decision-making tasks.

- The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository in such a way that employees can make decisions and undertake business analysis activities.

- The data warehouse then send subsets of the information to data mart.

- A data mart contains a subsets of data warehouse information

*Figure above show compiles information from internal database or transactional database and external database through extraction, transformation and loading (ETL) which a process that extracts information from internal and external database, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

MULTIDIMENSIONAL ANALYSIS AND DATA MINING

- A cube is the common term for the representation of multidimensional information.

- Data Mining is the process of analyzing data to extract information not to offered by the raw data alone. It is known as 'knowledge discovery'

- To perform data mining user needs data mining tools 

- Data Mining Tools use a variety of techniques to find patterns and relationships in large volumes in information and infer rules from them that predict future behaviour and guide decision making. 

INFORMATION CLEANSING OR SCRUBBING

- Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.

- It occur during ETL process and second on the information once if is in the data warehouse

BUSINESS INTELLIGENCE

- Business Intelligence refers to application and technologies that are use to gather, provide access to, and analyze data and information to support decision-making efforts. 

Enabling Business Intelligence

- Technology

- People

- Culture

Chapter 7: Storing Organizational Information-Databases

RELATIONAL DATABASE FUNDAMENTALS

 - A database maintains information about various types of objects (inventory), events (transaction), people (employees) and place (warehouses).

- Hierarchical database model is information is organized into tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships.

- The network database model is a flexible way of representing objects and their relationships.

-The relational database model is a type of database that stores information in the form of logically related two-dimensional tables.

ENTITIES AND ATTRIBUTES

- A entity in the relational database model is a person, place, thing, transaction or event about which information is stored.

-Attributes called fields or columns are characteristics or properties of an entity class

KEYS AND RELATIONSHIPS

-A primary key is a field (group/fields) that uniquely identifies a given entity in a table.

-A foreign key is a primary key of one table that appears as an attributes in another table and acts to provide a logical relationships between the two tables.

RELATIONAL DATABASE ADVANTAGES

* Increased Flexibility

* Increased Scalability and Performance

* Reduced Information Redundancy

* Increased Information Integrity (Quality)

* Increased Information Security

Increased Flexibility

- Database provide flexibility in allowing each user to access the information in whatever way best suits his or her needs.

- The distinction between logical and physical views is important in understanding flexible database user views.

-The physical views of information deals with the physical storage of information on a storage device such as a hard disk.

- The logical views of information focuses on how users logically access information to meet their particular business. 

 Increased Scalability and Performance

- Only a database could 'scale' to handle the massive volumes of information and the large numbers of users required for the successful launch of the Ellis Island website.

- Scalability refers to how well a system can adapt to increased demand.

- Performance measures how quickly a system performs a certain process or transaction.

Reduced Information Redundancy

 - Redundancy is the duplication of information, or storing the same information in multiple places.

- Redundant information occurs because organizations frequently capture and store the same information in multiple locations.

- The primary problem with redundant information is that it is often inconsistent which make it difficult to determine which values are the most current or most accurate.

Increased Information Integrity (Quality)

- Information integrity is a measures the quality of information

- Within a database environment, integrity constraints are rules that help ensure the quality of information. It can be defined and built into the database design.

- Two types of integrity constraints are :

• Relational integrity constraints- rules that enforce basic and fundamental information-based constraints
• Business-critical integrity constraints- enforce business rules vital to an organization's success and often require more insight and knowledge than relational integrity constraints.

Increased Information Security

- Information is an organizational asset.

- Database offer many security features such as

        * Passwords - provide authentication of the user

        * Access levels - determines who has access to the different types of information

        * Access control - determines types of user access such as customer service representatives                                               might read-only access

- Database can increase personal security as well as information security

.

DATABASE MANAGEMENT SYSTEMS

- A database management systems (DBMS) is software through which users and application programs interact with a database.

Data-Driven Websites

- A data-driven website is an interactive website keep constantly updated and relevant to the needs of its costumer through the use of a database.

Data-Driven Website Advantages

• Development : Allows the website owner to make changes any time
• Content management : A static website requires a programmer to make updates.
• Future expandability : Having a data-driven website enables the site to grow faster than would be possible with a static site.
• Minimizing human error 
• Cutting production and update costs
• More efficient
• Improved stability

INTEGRATING INFORMATION AMONG MULTIPLE DATABASE

- An integration allows separate systems to communicate directly with each other.

- A forward integration takes information entered into a given system and sends it automatically to all downstream processes.

- A backward integration - takes information entered into a given systems and sends it automatically to all upstream systems and processes

Chapter 6 : Valuing Organizational

Organizational Information

• When addressing a significant business issue, employees must be able to obtain and analyse all the relevant  information so they can make the best decision possible
• Information granularity refers to the extent of detail within the information
• Successfully collecting, compiling, sorting, and finally analysing information from multiple levels, in varied formats, exhibiting different granularity can provide tremendous insight into how an organization is performing

The Value Transactional and Analytical Information

• Transactional Information encompasses all of the information contain within a single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks
• Analytical Information encompasses all organizational information, and its primary purpose is to support the performing of managerial tasks

The Value of Timely Information

• Real-time information means immediate, up-to-date information
• Real-time systems provide real-time information in response to query requests

The Value of Quality Information

• Accuracy - Are all the values correct? For example, is the name spelled correctly? Is the amount recorded properly?
• Completeness - Are any of the values missing? For example, is the address complete including street, city, state and zip code
• Consistency - Is aggregate or summary information in agreement with detailed information? For example, do all total fields equal the true total of the individual fields?
• Uniqueness - Is each transaction, entity, and event represented only once in the information? For example, are there any duplicate customers?
• Timeliness - Is the information current with respect to the business requirements? For example, is information updated weekly, daily or hourly?

- Understanding the costs of poor information - wrong information can lead to making the wrong decision that can cost time, money, and even reputations

• Inability to accurately track customers, which directly affects strategic initiatives such as CRM and SCM
• Difficulty identifying the organization's most valuable customers
• Inability to identify selling opportunities and wasted revenue from marketing to non-existing customers and non-deliverable mail
• Difficulty tracking revenue because of inaccurate invoices
• Inability to build strong relationship with customers