CHAPTER 15 - OUTSOURCING IN THE 21st CENTURY

OUTSOURCING PROJECTS

Basic options to organizations wishing to develop and maintain their information systems:

i. Insourcing (in-house-development): A common approach using the professional expertise within an organization to develop and maintain the organization’s information technology system. It has been instrumental in creating a viable of it professional and creating better quality workforce combining both technical and business skills.

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

Types/ Forms of outsourcing options:

1. Onshore outsourcing: engaging another company within the same country for services.
2. Near shore outsourcing: contracting an outsourcing arrangement with a company in a nearby country and often they will share a border with the native count.
3. Offshore outsourcing: using organizations from developing countries to write code and develop systems as the country is geographically far away.

·         Big selling point for offshore outsourcing “inexpensive good work”

Factors drivers affecting outsourcing growth include:

• Core competencies
• Financial savings
• Rapid growth
• Industry changes
• The Internet
• Globalization

§  According to PricewaterhouseCoopers “Businesses that outsource are growing faster, larger and more profitable than those that do not”

§  Most organizations outsource their noncore business functions, such as payroll and IT

OUTSOURCING BENEFITS:

1. Increased quality and efficiency of a process, service or function
2. Reduced operating expenses
3. Outsourcing non-core processes
4. Reduced exposure to risk
5. Economies of scale, expertise and best practices
6. Access to advanced technologies
7. Increased flexibility
8. Avoid costly outlay of capital funds
9. Reduced headcount and associated overhead expense
10. Reduced time to market for products or services

OUTSOURCING CHALLENGES:

- Contract length

• Most of the outsourcing IT contracts is for a relatively long time period (several years).
• It is because high cost of transferring assets, employees and maintaining technological investment

The long contract causes 3 issues:

1. Difficulties in getting out of a contract if the outsourcing service provider turns out to be unsuitable
2. Problems in foreseeing future needs
3. Problems in reforming an internal IT department after the contract is finish

- Competitive edge

• Effective and innovative use of IT can be lost when using an outsourcing service provider

- Confidentiality

•  Confidential information might be breached by an outsourcing service provider , especially one that provides service to competitors

- Scope definition

•  Scope creep is a common problem with outsourcing agreements

Thank you :) . End ..

CHAPTER 14 - CREATING COLLABORATIVE PARTNERSHIP

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

•  

                                                                        

•          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

–      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

COLLABORATION SYSTEMS

•          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 

2.       Content management system (CMS)

3.       Workflow management system

4.    Groupware 

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

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

Content Management

•          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

•          Wikis - Web-based tools that make it easy for users to add, remove, and change online content

•          Business wikis - collaborative 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 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.

•          Web conferencing -  blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected Web site.

•          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.

THANK YOU :) HOPE  YOUR ALL CAN LEARN ABOUT THIS CHAPTER ....

CHAPTER 13 - E-BUSINESS

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

–      E-commerce 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

–      E-business 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
• Increased customer loyalty
• Improved information content
• Increased convenience
• Increased global reach
• Decreased cost

E-business challenges include :

• Protecting consumers
• Leveraging existing systems
• Increasing liability
• Providing security
• Adhering to taxation rules

 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 mashup - a Web site or Web application that uses content from more than one source to create a completely new service. A Web mashup is 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 Radio ahead 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 

THANK YOU :) 

CHAPTER 12 - INTEGRATING THE ORGANIZATIONS FROM END TO END - ENTERPRISE RESOURCES PLANNING

ENTERPRISE RESOURCES PLANING  ( ERP )

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

ERP system automate business processes

ERP system automate business processes , for example order fulfillment 

• When a CSR takes an order from a customer, he or she has all the information necessary to complete the order 
• Since the company is using an ERP , everyone else in the company will automatically see the information that the CSR types into ERP system
• To determine where an order is at any point in time ,  user only needs to log in to the ERP system and track it down 

BRINGING THE ORGANIZATION TOGRTHER

ERP - The organization before ERP

• In most organizations , information has traditionally been isolated within specific departments whether on an individual database , in file cabinet or on an employee's PC

Disadvantages

• Updated issues
• Redundancy
• Inaccurate information across database
• Different formats of information in the different database
• Inability to access other department information and not being provided with a 360 degree view of the organization
• Different customer information in different database
• Customer contact from multiple departments with different messages

BRINGING THE ORGANIZATION TOGETHER

ERP - bringing the organization together

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

Disadvantages :

• Not as flexible and her more difficult to change 
• Might not meet all department needs as well as an individual specific system
• Multiple access levels increases security issues 
• Ethical dilemmas from accessing different department information such as payroll

THE EVOLUTION OF ERP

INTEGRATING SCM , CRM , ERP

• SCM, CRM, and ERP are the backbone of e-business
• Integration of these application is the key to success for many companies
• Integration allows the unlocking of information to make it available to any user, anywhere, anytime
• Many ERP vendors offer SCM and CRM  components
• These modules are typically not as functional or flexible as the modules offered by industry leaders who specialize in SCM and CRM

A good analogy is to brand-name foods at a grocery store

• A grocery store such as Tesco , maintains all types of products 
• Tesco offers its own, products such as Tesco spaghetti and Tesco's paper towels ( these are known as name brand products and usually offer a cost advantages )
• The store also carries products that are specific to a manufacture , such as San Remo's spaghetti and Scott's Paper towels
• ERP vendors carry SCM and CRM components , but they are usually not as good as the vendors that specialize in SCM and CRM components

SCM AND CRM MARKET OVERVIEWS

General audience and purpose of SCM,CRM, and ERP

INTEGRATION TOOLS

Many companies purchase modules from an ERP vendor an SCM vendor and a CRM cendors 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 application
• Enterprise application integration ( EAI )middleware - packages together commonly used functionality which reduced the time necessary to develop solution that integrate applications from multiple vendors

Data points where SCM,CRM anf ERP integrate

ERP system must integrate various organizations processes and be :

• Flexible

- must be able to quickly respond to the changing needs of the organization 

• 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

• Comprehensive

- must be able to support a variety of organizational functions for a wide range of businesses

• Beyond the company 

- must support external partnership and collaboration efforts

ENTERPRISE RESOURCES PLANNING'S EXPLOSIVE GROWTH

SAP boasts 20000 installation and 10 millions users worldwide

ERP solutions are growing because

• ERP is a logical solution to the mess of incompatible applications that had sprung up in most business
• ERP addresses the need for global information sharing and reporting 
• ERP is used to avoid the pain and expenses of fixing legacy systems 

 

 

THANK YOU :)