Sunday, 2 October 2016

CHAPTER 15 : OUTSOURCING IN THE 21ST CENTURY

OUTSOURCING DEVELOPMENT


•          In the high-speed global business environment, an organization needs to maximize its profits, enlarge its market share, and restrain its ever-increasing costs
•          Insourcing (in-house-development) – a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems
•          Outsourcing – an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house

•          Reasons companies outsource


•          Benefits from outsourcing include:
1.       Financial savings
2.       Increased technical abilities
3.       Market agility

•          Factors driving outsourcing growth include:
1.       Core competencies
2.       Rapid growth
3.       Industry changes
4.       The Internet

DEVELOPING STRATEGIC OUTSOURCING PARTNERSHIP

•          Business process outsourcing (BPO) – contracting of a specific business task, such as payroll, to a third-party service provider
•          BPO is divided into two categories:
1.       Back-office outsourcing
2.       Front-office outsourcing

SOURCING’S NEW SURGE – OFFSHORING

  • Onshore outsourcing - engaging another company within the same country for services.
  • Nearshore outsourcing - contracting an outsourcing arrangement with a company in a nearby                                            country
  • Offshore outsourcing - using organizations from developing countries to write code and                                                 develop systems

CHAPTER 14 : CREATING COLLABORATIVE PARTNERSHIPS

TEAMS, PARTNERSHIP AND ALLIANCES


•          Organizations create and use teams, partnerships, and alliances to:
–      Undertake new initiatives
–      Address both minor and major problems
–      Capitalize on significant opportunities
•          Organizations create teams, partnerships, and alliances both internally with employees and externally with other organizations
                                                                        

•          Collaboration system – supports the work of teams by facilitating the sharing and flow of information


•          Organizations form alliances and partnerships with other organizations based on their core competency

–      Core competency – an organization’s key strength, a business function that it does better than any of its competitors
–      Core competency strategy – organization chooses to focus specifically on its core competency and forms partnerships with other organizations to handle nonstrategic business processes
•          It is just as important for an organization to form teams, partnerships, and alliances with other organizations
•          An organization that uses a core competency strategy will focus on its core competency and form partnerships with other organizations to handle nonstrategic business processes
•          The most common example of this is outsourcing payroll or accounting functions
•          Many organizations want to focus on the marketing and selling of a unique product or service.  These organizations do not want to incur the expense of maintaining accounting or tax experts on staff, hence they will outsource these functions to a business partner
•          This is a great time to refer back to the opening case
•          Discuss how Levi’s core competency is brand-name differentiation and recognition, while Wal-Mart’s core competency is retail cost leadership
•          The partnership between these two organizations enables cost-leadership selling of a widely recognized brand name
•          Information technology can make a business partnership easier to establish and manage
–      Information partnership – occurs when two or more organizations cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer
–      The Internet has dramatically increased the ease and availability for IT-enabled organizational alliances and partnerships

COLLABORATION SYSTEMS


•          Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management
•          Collaboration allows people, teams, and organizations to leverage and build upon the ideas and talents of staff, suppliers, customers, and business partners
•          It involves a unique set of business challenges that:
•          Include complex interactions between people who may be in different locations and desire to work across function and discipline areas
•          Require flexibility in work process and the ability to involve others quickly and easily
•          Create and share information rapidly and effortlessly within a team
•          Increasingly, organizations are extending their focus from internal operations like planning and scheduling, enterprise resource planning and sales force automation, toward operations beyond their own four walls with external customers and suppliers
•          Collaboration system – an IT-based set of tools that supports the work of teams by facilitating the sharing and flow of information
•          Two categories of collaboration
1.       Unstructured collaboration (information collaboration) - includes document exchange, shared whiteboards, discussion forums, and e-mail
2.       Structured collaboration (process collaboration) - involves shared participation in business processes such as workflow in which knowledge is hardcoded as rules


•          Collaborative business functions


•          Collaboration systems include:


1.       Knowledge management system  supports the capturing and use of an organization’s “know-how”
2.       Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment
3.       Workflow management system – controls the movement of work through a business process
4.       Groupware  software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing

Knowledge management system

Knowledge management (KM)  involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions
Knowledge management system  supports the capturing and use of an organization’s “know-how”
•          Intellectual and knowledge-based assets fall into two categories
1.       Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT
2.       Tacit knowledge - knowledge contained in people’s heads
•          The following are two best practices for transferring or recreating tacit knowledge
1.       Shadowing – less experienced staff observe more experienced staff to learn how their more experienced counterparts approach their work
2.       Joint problem solving – a novice and expert work together on a project



            Reasons why organizations launch knowledge management programs


•          Knowledge management systems include:
§  Knowledge repositories (databases)
§  Expertise tools
§  E-learning applications
§  Discussion and chat technologies
§  Search and data mining tools

•          KM and social networking - Finding out how information flows through an organization
–      Social networking analysis (SNA) – a process of mapping a group’s contacts (whether personal or professional) to identify who knows whom and who works with whom
–      SNA provides a clear picture of how employees and divisions work together and can help identify key experts

Content Management Systems

•          Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment
•          CMS marketplace includes:
–      Document management system (DMS)
–      Digital asset management system (DAM)
–      Web content management system (WCM)


Working wikis

•          WikisWeb-based tools that make it easy for users to add, remove, and change online content
•          Business wikiscollaborative Web pages that allow users to edit documents, share ideas, or monitor the status of a project

Workflow Management Systems

•          Work activities can be performed in series or in parallel that involves people and automated computer systems
•          Workflow – defines all the steps or business rules, from beginning to end, required for a business process
•          Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process
•          Messaging-based workflow system – sends work assignments through an e-mail system
•          Database-based workflow system – stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document

Groupware Systems

•          Groupware technologies


•          Groupware  software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing
  
•          Groupware system advantage


•          Groupware falls into two categories:
1.       Users of the groupware are working together at the same time or different times (time difference)
2.       Users are working together in the same place or in different places (physical location difference)

•          Videoconference -  is a set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously. It has also been called visual collaboration and is a type of groupware. Videoconferencing uses telecommunications of audio and video to bring people at different sites together for a meeting. This can be as simple as a conversation between two people in private offices (point-to-point) or involve several sites (multi-point) with more than one person in large rooms at different sites. Besides the audio and visual transmission of people, videoconferencing can be used to share documents, computer-displayed information, and whiteboards

•          Web conferencing -  blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected Web site. There, they can chat in conference calls or use real-time text messages. They can mark up a shared document as if it were a blackboard, and even watch live software demos or video clips. Perhaps the biggest surprise about Web conferencing is its simplicity. Users only need to set up an account and download a few small software files. The best part about a Web conference is that attendees do not have to have the same hardware or software. Every participant can see what is on anyone else’s screen, regardless of the application being used

•          Instant messaging - type of communications service that enables someone to create a kind of private chat room with another individual to communicate in real-time over the Internet

CHAPTER 13 : E - BUSINESS


•          The Internet is a powerful channel that presents new opportunities for an organization to:
§  Touch customers
§  Enrich products and services with information
§  Reduce costs

•          How do e-commerce and e-business differ?
–      E-commerce – the buying and selling of goods and services over the Internet,
        refers only to online transactions
–      E-business  the conducting of business on the Internet including, not only buying  and selling, but also serving customers and collaborating with business partners
–     refers to online transactions, serving customers and collaborating with business partners

E-BUSINESS MODELS

•          E-business model – an approach to conducting electronic business on the Internet



BUSINESS TYPES


Brick-and-mortar business - operates in a physical store without an Internet presence.
Pure-play (virtual) business - a business that operates on the Internet only without a physical store.                                                     Examples include Amazon.com and poplook.com.
Click-and-mortar business  a business that operates in a physical store and on the Internet.                                                               Examples include Cala Qisya and Barnes and Noble.


E-BUSINESS BENEFITS AND CHALLENGE


•          E-Business benefits include:

§  Highly accessible
    - businesses can operate 24 hours a day,  days a week, 365 days a year.
§  Increased customer loyalty
    - additonal channels to contact, respond to, and access customers helps contribute to customer loyalty
§  Improved information content
    - in the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes.
§  Increased convenience
   - e-business automates and improves many of the activities that make up a buying experience
§  Increased global reach
    - businesses, both small and large, can reach new markets
§  Decreased cost
    - the cost of conducting business on the Internet is substantially smaller than traditional forms of business communication 

•          E-business challenges include:

§ Protecting consumers
   - implement Internet Security, protect from misuse of customer information
§  Leveraging existing systems
§ Increasing liability
§  Providing security
§ Adhering to taxation rules
   - companies that operate online must obey a patchwork of rules about which customers are subject to sales tax on their purchase and which are not

•          There are numerous advantages and limitations in e-business revenue models including:
§  Transaction fees
§  License fees
§  Subscription fees
§  Value-added fees
§  Advertising fees

MASHUPS

•          Web mashupa Web site or Web application that uses content from more than one source to create a completely new service. A Web mashupis a Web site or Web application that uses content from more than one source to create a completely new service. The term is typically used in the context of music; putting Jay-Z lyrics over a Radiohead song makes something old become new. The Web version of a mashup allows users to mix map data, photos, video, news feeds, blog entries and so on.
–      Application programming interface (API)a set of routines,protocols, and tools for building software applications
–      Mashup editor - WSYIWYGs (What You See Is What You Get) for mashups

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



Enterprise Resource Planning

  • Enterprise resource planning system are the organization's backbone in providing 
          fundamental decision-making support
  • The heart of an ERP system is a central database that collects information from and feeds 
          information into all the ERP systems's individual application components (called modules), 
          supporting diverse business functions such as accounting, manufacturing, marketing and 
          human resources

ERP process flow

Bringing the organization together

  • ERP enables employees across the organizations to share information across a single, 
  •        centralized database
    ERP - Bringing the Organization Together
    The organizaton before ERP

    The evolution of ERP
    • Originally, ERP solutions were developed to deliver automation across multiple units of an 
              organization, to help facilitate the manufacturing process and adress issues such as raw 
              materials, inventory, order entry, and distribution

    Integrating SCM, CRM, and ERP
    • Integration allows the unblocking of information to make it available to any user, anywhere 
              and anytime
    Integration tools
    • Integration achieved using middleware - several different types of software that sit in the 
              middle of and provide connectivity between two or more software applications
      • Enterprise application integration (EAI) middleware represents a new approach to 
                middleware by packaging together commonly used functionality, such as providing prebuilt 
                links to popular enterprise applications, which reduces the time necessary to develop solutions 
                that integrate applications from multiple vendors
      Primary users and business benefits of strategic initiatives

      Integrations between SCM, CRM and ERP applications
               Enterprise Resource Planning (ERP)
      •  ERP systems must integrate various organization processes and be:

      1. Flexible – must be able to quickly respond to the changing needs of the organization
      2. Modular and open – must have an open system architecture, meaning that any module can  be interface, with or detached whenever required without affecting the other modules. Some organizations will begin with buying two modules, such as accounting and sales, and then will add modules, such as CRM and SCM, as they gain confidence in their current modules. (Implementing in small pieces or phases – companies do not want to buy the entire ERP and spend years implementing twenty different modules to find that it doesn’t meet their need)
      3. Comprehensive – must be able to support a variety of organizational functions for a wide range of businesses
      4. Beyond the company – must support external partnerships and collaboration efforts

      CHAPTER 11 : BUILDING A CUSTOMER-CENTRIC ORGANIZATION - CUSTOMER RELATIONSHIP MANAGEMENT

      CUSTOMER RELATIONSHIP MANAGEMENT


      •   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:
      1.   Clearly communicate the CRM strategy – ensuring that all departments and employees understand exactly what CRM means and how it will add value to the organization is critical to the success of the implementation
      2.   Define information needs and flows – the organization must understand all of the different ways that information flows into and out of the organization to implement a successful CRM system.  If the organization misses one of the information flows, such as a customer service Web site, then none of that information from that Web site will be integrated into the CRM system and the company will not have a complete view of its customers
      3.   Build an integrated view of the customer – the CRM system must support the organization's strategies and goals
      4.   Implement in iterations – avoid the big-bang approach and implement in small, manageable, pieces
      5.   Scalability for organizational growth – ensure the system can support the organization's future growth