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

• Business models 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 models fall into one of the four categories :
• business-to-business (B2B)
• applies to businesses buying from and selling to each other over the internet
• business-to-consumer (B2C)
• applies to any business that sells its products or services directly to the consumers online
• consumer-to-business (C2B)
• applies to any consumer who sells a product or services to a business on the internet
• consumer-to-consumer (C2C)
• applies to customers offering goods and services to each other on the internet

Ebusiness Tools for Connecting and Communicating

• Email
• Instant messaging
• Podcasting
• Video conferencing
• 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 : 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

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

Customer Relationship Management

• Customer relationship management (CRM) is a means of managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability

The Benefits of CRM

• Enables a firm to treat customers as individuals, gaining important insights into their buying preferences and shopping behaviours 
• Allows a firm to ensure that these customers receive the highest level of customer service and are offered the first opportunity to purchase new products
• An organization must track 
• How recently a customer purchased items
• How frequently a customer purchases items
• The monetary value of each customer purchase
• Firm can analyze it to identify patterns and create marketing campaigns and sales promotions for different customer segments

Evolution of CRM

• CRM reporting technologies help organizations identify their customers across other applications
• CRM analysis technologies help organizations segments their customers into categories such as best and worst customers
• CRM predicting technologies help organizations predict customers behaviour 

evolution of CRM

Operational and Analytical CRM

• Operational CRM supports traditional transactional processing for day-to-day front office operations or systems to 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

Operational CRM and Analytical CRM 

Chapter 10 : Extending the Organization - Supply Chain Management

Basics of Supply Chain

• 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 profatibility
• The supple chains has three main links
• Materials flow from suppliers and their upstream suppliers at all levels
• Transformation of materials into semi-finished and finished products, or the organization's own production process
• Distribution of products to customers and their downstreams customers at all levels

The five basic supply chain management activities

A typical supply chain

Information Technology's Role in the Supply Chain

• Information technology integrates planning, decision-making processes, business operating processes, and information sharing for business performance management

The integrated supply chain

Supply Chain Management Success Factors

• Make the sale to suppliers
• Wean employees off traditional business practises
• Ensure the SCM system supports the organizational goals
• Deploy in incremental phases and measure and communicate sucsess
• Be future oriented

Chapter 9 : Enabling the Organization - Decision Making

Making Business Decisions

• Decision making process - plays a crucial role in communication and leadership for operational, managerial, and strategic projects
• Decision making essentials (managerial decision making challenges)
• Managers need to analyze large amounts of information
• Innovation in communication and globalization have resulted in a dramatic increase in the variables and dimensions people need to consider when making a decision, problem solving or appraising an opportunity
• Managers must take decisions quickly
• Time is of the essence and people simply don not have time to sift through all the information manually
• Manager must apply sophisticated analysis technique, such as Porter's strategies or forecasting, to make strategic decisions
• Due to the intensely competitive global business environment, companies must offer far more than just a great product to succeed
• Operational (decision making process)
• Problem identification - Define the problem as clearly and precisely as possible
• Data collection - Gather problem-related data, including who, what, where, when,why, and how. Be sure to gather facts, not rumours or opinions about the problem
• Solution generation - Detail every solution possible, including ideas that seem fart etched
• Solution test - Evaluate solutions in terms of feasibility (can it be completed?), suitability (is it permanent or a temporary fix?), and acceptability (can all participants from a consensus?)
• Solution selection - Select the solution that best solution that best solves the problem and meets the needs of the business
• Solution implementation - If the solution solves the problems, then the decisions made were correct. If not, then the decisions were incorrect and the process begins again
• Managerial
• At this level, employees are continuously evaluating company operations to hone the firm's abilities to identify, adapt to, and leverage change
• These types of decisions are considered semi-structured decisions they occur in situations in which few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decisions
• Strategic
• At this level, managers develop overall business strategies, goals, and objectives as part of the company's strategic plan
• Strategic decisions are highly unstructured decisions, occurring in situations in which no procedures or rules exist to guide decision makers toward the correct choice

Enhancing Decision Making with MIS

• Operational support systems
• Transactional information encompasses all the information contained within a single business process or unit of work, and its primary purpose is to support the performance of daily operational or structured decisions
• Online transaction processing (OLTP) is the capture of transaction and event information using technology to 
• process the information according to defined business rules
• store the information
• update existing information to reflect the new information
• Managerial support systems
• Analytical information encompasses all organizational information, and its primary purpose is to support the performance of managerial analysis or semi-structured 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 courses of action
• Strategic support systems
• Executive information system (EIS) is a specialized DSS that supports senior-level executives and unstructured, long term, non routine decisions requiring judgement, evaluation, and insight

Interaction between TPS and DSS to Support Semi-structured Decisions

The Future : Artificial Intelligence

• Artificial intelligence (AI) simulates human thinking and behaviour, such as the ability to reason and learn
• Intelligence systems are various commercial applications of artificial intelligence
• Expert systems are computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems
• Neural networks (artificial neural network) is a category of AI that attempts to emulate the way the human brain works
• Learning and adjusting to new circumstances on their own
• Lending themselves to massive parallel processing
• Functioning without complete or well-structured information
• Coping with huge volumes of information with many dependent variables
• Analyzing non linear relationships in information (they have been called fancy regression analysis systems)
• Fuzzy logic is a mathematical method of handling imprecise or subjective information
• Genetic algorithms is an artificial intelligence system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem
• Intelligent agents is a special-purpose knowledge-based information system that accomplishes specific tasks on behalf of its users
• Virtual reality is a computer-stimulated environment that can be a simulation of the real world or an imaginary world