CHAPTER 19: OUTSOURCING IN THE 21th CENTURY

Outsourcing Projects

Insourcing (in-house-developement) is a cmmon approch using the professional expertise within the an organization to develope and maintain the organization's information technology system.

Outsourcing is an arrangement by which one organization provides a services or services for another organization that chooses not to perform them in-house.

Onshore oursourcing is engaging anbother company within the seme country fot services.

Nearshore outsourcing is contracting an outsourcing arrangement with a company in a nearby country

Offshore outsourcing is using organization from developing countries to write code and develope system.


outsourcing benefit

• increase quality and effeciency
• reduce operating expenses
• outsourcing non-core prosess
• reduce exposure to risk
• increase flexibility
• avoid cosyly outlay of capital fund

outsourcing challenge:

• difficultis in getting out of contract
• problem in foreseeing future needs
• competitive edge
• confidentiality

CHAPTER 15 : CREATING COLLABORATIVE PARTNERSHIP

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 is to support the work of teams by facilitating the sharing and flow of information.

 

-core competency is an organization's key strength, a business function that it does better than any of its competitors.

 

-core competency strategy is organization chooses to focus specifically on its core competency and forms partnerships with other organizations to handle nonstrategic business processes.

 

-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.

Collaboration Systems

- an IT-based set of tools that supports the work of teams by facilitating the sharing and flow of information.

categories:

- unstructured collaboration (information collaboration)

-structured collaboration (process collaboration)

Explicit and Tacit Knowledge

-explicit consists of anything that can be documented, archived, and codified, often with the help of IT.

-tacit is knowledge contained in people's head.

Content Management

- provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment.

Working Wikis

-wikis is web-based tools to make it easy for users to add, remove and change online.

Workflow Management Systems

-workflow defines all the steps or business rules, from beginning to end, required for a business process.

-workflow management system is facilitates the automation and management of business processes and controls the movement of work through the business process.

Groupware Systems 

-groupware is software that supports team interaction and dynamics including calendaring, scheduling and videoconferencing.

Web Confrencing

-blends audio, video, and document-sharing technologies to create virtual meeting rooms where people "gather" at a password-protected website.

CHAPTER 12 : INTEGRATING THE ORGANIZATION FROM END TO END

Enterprise Resource Planning (ERP)

 

· It serves as the organization’s backbone in providing fundamental decision making support.

· It enables people in different business areas to communicate.

· ERP system helps an organization to obtain operational efficiencies, lower costs, improve supplier and customer relations, and increase revenues and market share.

· The heart of an ERP system is a central database that collects information from and feeds information into all the ERP system’s individual application components (called modules), supporting diverse business function such as accounting, manufacturing, marketing, and human resources.

· ERP automates business processes such as order fulfillment- taking an order from a customer, shipping the purchase, and then billing for it.

 

Integrating SCM, CRM, and ERP

Integration of SCM, CRM, and ERP is the key to success for many companies.

·      Integration allows the unlocking of information to make it available to any user, anywhere, anytime.

·      2 main competitors in ERP market:

       #oracle

   #sap

 

 

Integration Tools

·    An integrated enterprise infuses support areas, such as finance and human resources, with a strong customer orientation.

·   Integration are achieved using:

§   Middleware- several different types of software that sit in the middle of and provide connectivity between two or more software applications. It translates information between disparate systems

·    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.

CHAPTER 14 - EBUSINESS

• Ecommerce: the buying and selling of goods and services over the internet. It refers only to online transactions.

• Ebsuiness: derived from the term Ecommerce. It is the conducting of business on the internet, not only buying and selling, but also serving customers and collaborating with business partners.refers to online exchanges if information.

Ebusiness Models

Business-to-business (B2B)

Applies to business buying from and selling to each other over the internet. Electronic marketplaces represent a new wave in B2B ebusiness models.Electronic marketplaces or emarketplaces are interactive business communities providing a central market space where multiple buyers and sellers can engage in business activities.They represent structures for conducting commercial exchange, consolidating chains, and creating new sales channels.

Business-to-business (B2B)

Applies to any business that sells its products or services to consumers over the internet.

Eshop

Sometimes referred to as an estore or etailer. It is a version of a retail store where customers can shop at any hour of the day without leaving their home or office.These online stores sell and support a variety of products and services.The other online businesses channeling their goods and services via the internet only, such as Amazon.com, are called pure plays.

Consumer-to-business (C2B)

Applies  to any consumer that sells a product or service to a business over the internet.Example is Priceline.com where bidders (or customers) ser their prices for items such as airline tickets or hotel rooms, and a seller decides whether to supply them.

Consumer-to-consumer (C2C)

Applies to sites primarily offering goods and services to assist consumers interacting with each other over the internet.The internet’s most successful C2C online auction website, eBay, links like-minded buyers and sellers for a small commission.C2C online communities, or virtual communities, interact via email groups, web-based discussion forums, or chat rooms.

Ebusiness Benefits and Challenges.

•  Highly Accessible
• Increased Customer Loyalty
• Improved Information Content
• Increased Convenience
• Increased Global Reach

Ebusiness Challenges:

• Protecting Consumers
• leveraging existing system
• increasing liability
• providing security

 

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

Customer Relationship Management (CRM) :

• provide better customer service
• make call centers more, efficient
• cross sell products more effectively
• help sales staff close deals faster

 

THE EVOLUTION OF CRM

Knowing the customer, especially knowing the profitability of individual customers, is highly lucrative in the financial service industry.

There are three phases in the evolution of CRM:

1. CRM Reporting technology help organizations identify their customers across other applicants
2.  CRM analysis technology helps organizations segment their customers into categories such as best and worst customer
3. CRM predicts technological 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

 

 

 

 

 

CHAPTER 10 : EXTENDING THE ORGANIZATION - SUPPLY CHAIN MANAGEMENT

SUPPLY CHAIN MANAGEMENT 

• Companies that excel in supply chain operations perform better in almost every financial measure of success, according to a report from Boston-based MR Research Inc.
• These companies understand that value chain performance translates to productivity and market-share leadership.

BASIC OF SUPPLY CHAIN

• A supply chain consists of all parties involved, directly or indirectly, in the procedurement of a product or raw material.
• Organization must embrace technologies that can effectively manage and oversee their supply chain.
• supply chain management involves the management of information flow between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.
• SCM is becoming increasingly important in creating organizational efficiencies and competitive advantages.
• It improves ways for companies to find the raw components they need to make a product or service, manufacture that product or service, and deliver it to customers.

INFORMATION TECHNOLOGY'SROLE IN THE SUPPLY CHAIN

• The notion of virtually seamless information links within and between organizations is an essential element of integrated supply chain.

• Information technology's primary role in SCM is creating the integration or tight process and information linkages between functions within a firm.

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

• Considerable evidence shows that this type of supply chain integration results in superior supply chain capabilities and profits.

 

VISIBILITY

Supply chain visibility is the ability to view all areas up and down the supply chain.

Bullwhip effect occurs when distorted products demand information passes from one entity to the next through the supply chain.

*Information technology allows additional visibility in the supply chain.

CONSUMER BEHAVIOR

Demand planning software generates demand forecasts using statistical tools and forecasting techniques.

Ones an organization understand customer demand and its effect on the supply chain it can begging to estimate the impact that its supply chain will have on its customers and ultimately the organization's performance.

COMPETITION

Supply chain management can be broken down in"

Supply chain planning software: uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.

Supply chain executive (SCE) software automates the different stems and stages of the supply chain.

SPEED

During the past decade, competition has focused on speed. New forms of severs, telecommunications enabling companies to perform activities that were once never thought possible.

Another aspect of speed is the company's ability to satisfy continually changing customer requirements efficiently, accurately, and quickly.

Supply Chain Management Success Factors

• To succeed in today's competitive markets, companies must align their supply chains with the demands of the markets key serve.

• To achieve success such as reducing operation costs, improving asset productivity, and compressing order cycle time, and organization should follow the seven principles of SCM outlines.

• One of the benefits is to know immediately what is being transacted at the customer and of the supply chain instead of waiting days or weeks for the information to flow.

• Organizations should study industry best practices to improve their chances of successful implementation of SCM systems. The following are keys to SCM success.

MAKE THE SALE TO SUPPLIERS

The hardest part of any SCM system is its complexity because a large part of the system extends beyond the company's walls.

WEAN EMPLOYEES OF TRADITIONAL BUSINESS PRACTICES

Operations people typically deal with phone calls, faxes, and orders scrawled on paper and will most likely want to keep it that way.

ENSURE THE SCM SYSTEM SUPPORTS THE ORGANIZATIONAL GOALS

It is important to select SCM software that give organizations and advantage in the areas most crucial to their business success.

DEPLOY IN INCREMENTAL PHASES AND MEASURE AND MOMMUNICATE SUCCESS

Design the deployment of the SCM system in incremental phases.

BE FUTURE ORIENTED

The supply chain design must anticipate the future state of the business.

CHAPTER 9 : ENABLING THE ORGANIZATION - DECISION MAKING

MAKING BUSINESS DECISIONS

1)  Managerial decision-making challenges are analyze large amounts of information, apply sophisticated analysis techniques and make decision quickly.

2) There are six decision making process :

-          Problem identification

-          Data collection

-          Solution generation

-          Solution test

-          Solution selection

-          Solution implementation

THE DECISION MAKING ESSENTIAL

1)  Operational decision making – employees develop, control, and maintain core business activities required to run the day-to-day operations.

2) Structured decision – situations where established processes offer potential solutions.

3) Managerial decision making – employees evaluate company operation to identify, adapt to, and leverage changes.

4) Semistructured decisions – occur in situations in which a  few established processes helps to evaluate potential solution but not enough to lead to a definite recommended decision.

5) Strategic decision making – managers develop overall strategies, goals and objectives.

6) Unstructured  decisions – occurs in situations in which no procedures or rules exists to guide decision makers toward the correct choice.

DECISION SUPPORT SYSTEM (DSS)

1)  Decision support system (DSS) – models information to support managers and business professionals during the decision making process.

2)  There are three quantitative models used by DSS

-   Sensitivity analysis where the study of the impact that changes in one or more parts of the model have on other parts of the model.

-   What-if-analysis where checks the impact of a change in an assumption on the proposed solution.

-   Goal-seeking analysis where finds the inputs necessary to achieve a goal such as a desired level of outputs.

What is Artificial Intelligence (AI) :

 

is the intelligence of machines and robots and the branch of computer science that aims to create it. AI textbooks define the field as "the study and design of intelligent agents" where an intelligent agent is a system that perceives its environment and takes actions that maximize its chances of success. John McCarthy, who coined the term in 1955, defines it as "the science and engineering of making intelligent machines."AI research is highly technical and specialised, deeply divided into subfields.