Friday 15 December 2017

Chapter 15 – Outsourcing in the 21st Century



Outsourcing Project


  • 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


  • Onshore outsourcing – engaging another company within the same country for services
  • Near shore 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
  • Big selling point for offshore outsourcing “inexpensive good work”

  • Factors driving 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

Outsourcing benefits include;
  • Increased quality and efficiency
  • Reduced operating expenses
  • Outsourcing non-core processes
  • Reduced exposure to risk
  • Economies of scale, expertise and best practices
  • Access to advanced technologies
  • Increased flexibility
  • Avoid costly outlay of capital funds
  • Reduced headcount and associated overhead expense
  • Reduced time to market for products or services

Outsourcing challenges

Outsourcing challenges include;
  • Contract length
  • Difficulties in getting out of a contract
  • Problems in foreseeing future needs
  • Problems in reforming an internal IT department after the contract is finishe
  • Competitive edge
  • Confidentiality
  • Scope definition 

Chapter 14 – Creating Collaborative Partnerships

Teams, Partnerships, 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 from alliance 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
  • Information technology can make a business partnership easier to establish and manage
  • Information partnerships – 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 alliance and partnerships


Collaboration System

  • Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management
  • 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
  • Unstructured collaboration (information collaboration) – includes document exchange, shared whiteboards, discussion forums, and email.
  • Structured collaboration (process collaboration) – involves shared participation in business processes such as workflow in which knowledge is hard-coded as rules
 Collaborative business functions

Collaboration systems include;
  • Knowledge management systems
  • Content management systems
  • Workflow management systems
  • Groupware systems
Knowledge Management Systems
  • 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”

Explicit and Tacit knowledge
  • Intellectual and knowledge-based assets fall into two categories;
  • Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT
  • Tacit knowledge – knowledge contained in people’s heads
  • The following are two best practices for transferring or recreating tacit knowledge
  • Shadowing – less experienced staff observe more experienced staff to learn how their more experienced counterparts approach their work
  • Joint problem solving – a novice and expert work together on a project

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 assets 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 allows 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 email 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

Web conferencing

Video conference – A set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously 
Instant message
Email is the dominant form of collaboration application, but real-time collaboration tools like instant messaging are creating a new communication dynamic
  • Instant messaging – types 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

E Business

  • The internet is a powerful channel that presents new opportunities for organization to;
  • Touch customers
  • Enrich products and services with information
  • Reduce costs



  • How do ecommerce and e business differ?
  • Ecommerce – the buying and selling of goods and services over the internet
  • E business – the conducting of business on the internet including, not only buying and selling, but also serving customers and collaborating with business partners
Industries Using E business


E Business Modal
  •  E business model – An approach to conducting electronic business on the Internet
 




Business-to-Business (B2B)


Electronic marketplace (E market place) – interactive business communities providing a central market where multiple buyers and sellers can engage in e business activities.


Business-to-Consumer (B2C)

Common B2C e business models include;

  • E shop – A version of 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)

  • 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)

Online auctions

  • Electronic auction (E auction) – Sellers and buyers solicit consecutive bids from each other and prices are determined dynamically
  • Forward auction – Sellers use as a selling channel to many buyers and the highest bid wins
  • Reverse auction – Buyers use to purchase a product or service, selecting the seller with the lowest bid


C2C communities

  • Communities of interest – People interact with each other on specific topics, such as golfing and stamps 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-to-one with Michael Jordan



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
  • Increased liability
  • Providing security

Chapter 12 - Integrating The Organization From The 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

Enterprise Resource Planning (ERP)
  • 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 partnerships and collaboration efforts

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
  •   Helps sales staff close deals faster
  •   Simplify marketing and sales processes
  •   Discover new customers
  •  Increase customer revenues


Recency, Frequency, and Monetary Value

An organization can find its most valuable customers by using a formula that industry insiders call FRM;

  • How recently a customer purchased items (recency)
  • How frequently a customer purchased items (frequency)
  • How much a customer speeds on each purchased (monetary value)



The Evolution of CRM

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