chapter 19
outsourcing in the 21st century

outsourcing projects

• insourcing (in-house-development) - a common approach using professional expertise within an organization to develop and maintain the organization's information technology systems
• outsourcing - an arrangement by which one organization provides a services or services for another organization that chooses not to perform them in-house
• 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
• factors driving outsourcing growth include:
• core compentencies
• financial savings
• rapid growth
• industry changes
• the internet
• globalization
• accoding to Pricewaterhouse Coopers "businesses that outsource are growing faster, longer, and more profitable than those that do not"
• most organizations outsource their noncore business functions, such as payroll and IT
• outsourcing benefits include:
• increased quality and efficiency
• reduced operating expenses
• outsourcing non-core processes
• reduced exposure to risk
• economies of scle, expertise, and best practices
• access to advanced technologies
• increased flexibility
• avoid costly outlay of capital funds
• reduces headcount and associated overhead expense
• reduced time to market for products or services
• outsourcing challenges include 
• contract length
1. difficulties in getting out of a contract
2. problems in foreseeing future needs
3. problems in reforming an internal IT department after the contract is finished
• competitive edge
• confidentiality
• scope definition

chapter 15
creating collaborative partnerships

teams, partnerships, and alliances

• organizations cretae 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
• 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 organizations alliances and partnerships

collaboration system

• 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
• collaboration systems include:
• knowledge management systems
• content management systems
• workflow managements systems 
• groupware systems

knowledge management systems

• knowledge managements (KM) - involves capturing, classifying, evaluating, retrieving and sharing information assets in a way thta provides context for effective decisions and actions
• knowledge mangement 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 
1. explicit knowledge - consists of anything that can be documented, archieved, and codified, often with the help of IT
2. tacit knowledge - knowledge conatined in people's haeds
• 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
• reasons why organizations launch knowledge management programs

KM technologies

• knowledge mangement systems include:
• knowledge repostories (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 (wether personel or professional) to identify who knows whom and who works with  whom
• SNA provides a clear picture of how emplotees and divisions work together and can help identify key experts

content management

• content managemnet system (CMS) - provides tools 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 mangaement of business processes nd controls the movement of work through the business process
• messaging-based workflow system - sends work assignments through an e-mail system
• databases-based workflow system - stores documents in a central 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 - software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing
• groupware system advantages
• facilitating communication(faster,easier, clearer, more persuasive)
• enabling telecommuting
• reducing travel costs
• sharing expertise
• forming groups with common interets where it would not be possible to gather a sufficient number of people face-to-face
• saving time and cost in coordinating group work
• facilitating group problem

videoconferencing

• videoconference- a set of interacts of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmission simultaneously
• web conference - blends audio, video and document-sharing technologies to create virtual meeting rooms where people "gather" at a password protected Web site

instant messaging 

• e-mail is the dominant form of collaboration application, but real-time collaboration tools like instant messaging are creating a new  communication dynamic
• instant messaging - type of communications service that enables someone to crate a kind of private chat room with another individual to communicate in real-time over the internet

chapter 14
E-business

E-business

• the internet is a powerful channel that present 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-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 models

• business-to-business (B2B) 
• applies to business buying from and selling to each other over the internet
• electronic marketplace (e-marketplace) - interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities

• business-to-consumer (B2C)
• applies to any business that sells its products or services to customers over the internet
• common b2C e-business models include:
• e-shop - a version of a retail store where customers can shop at any hour of the day without leaving their home or office
• e-mail - consist of a number of e-shop, it serves as agateway through which a visitor can access other e-shops
• business types:
• brick and mortar busines
• pure-play business
• click and mortar business
• consumer-to-business (B2B)
• applies to any consumer that sells a prpduct or service to a ny business over the internet
• priceline.com is an example of a C2B e-busines 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)
• applies to sites primarily offerings goods and services to assist consumers interacting with each other over the internete bids from each other and prices 
• online auctions
• electronic auction (e-auction) - seller 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 include:
• communities of interest - people interact with each other on specific topics, such as golfing and stamp 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-on-one with Michael Jordan

E-business benefits and challenges

• e-business benefits include: 
• highly accessible
• increased customer loalty
• 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
• subsciption feees
• value-added fees
• advertising fees

Mashups

• web mashups - a web site or web application that uses content from more than one source to create a completely new service
• appliation programming interface (API) - a set of routines, protocols, and tools for building software applications
• mashups 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 (ERP)

• at the heart of all ERP systems is  aatabase, when a user enters or updates information in one module, it os immediately and automatically updaed throughout the entire system

the evoluation of ERP

• ERP
• materials planning
• order entry
• distribution
• general edger
• accounting
• shop floor control
• extended ERP
• scheduling
• forecasting
• capacity planning
• e-commerce
• warehousing
• logistics
• ERP-l l
• project management
• knowledge management
• workflow management
• customer relationship management
• human resource management
• portal capability
• integrated financials

integrating SCM, CRM, and ERP

• SCM, CRM, and ERP are the backbone of e-business
• integration of these applications is the key to success for many companies
• integration allows the unlocking of information to make it available to any user, anywhere, anytime

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)  middle - packages together commonly used functioanally which reduced the time necessary to develop solutions that integrate applications from multiple vendors

enterprise resource planning

• ERP system must integrate various organization processes and be:
• flexible
• modular and open
• comprehensive
• beyond the company

enterprise resource planning's explosive growth

• SAP boasts 20 000 installations and 10 million users worldwide
• ERP solutions are growing because:
• ERP is a logical solution to the mess of incompatible applications taht had sprung up in most businesses
• ERP addresses the need for global information sharing and reporting
• ERP is used to avoid the pain and expenses of fixing legacy systems

chapter 11
building a customer-centric organization - customer relationship management

customer relationship management

• 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"
• 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 traditioanl transactioanl 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 realtionship 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

chapter 10
extending the organization - supply chain management

supply chain managements

• the average company spends nearly half of every dollar that it earns on production
• in the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains

basics of supply chain

• the supply chain has three main links
1. materials flow from suppliers and their 'upstream' suppliers at all levels
2. transformation of materials into semifinished and finished product through the organization's own production process
3. distribution of products to customers and their 'downstream' customers at all levels
• organizations must embrace technologies that can effectively manage supply chain

visibility

• supply chain visibility - the ability to view all areas up and down the supply chain
• bullwhip effect - occurs when distorted product demand information passes from one entity to the next throughout the supply chain

consumer behavior

• companies can respond faster and more effectively to consumer demands through supply chain enhances
• demand planning software - generates demand forecasts using statiscal tools and forecasting techniques 

competition

• supply chain planning (SCP) software - uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain
• supply chain execution (SCE) software - automates the different steps and stages of the supply chain

speed

• there factors fostering speed
1. pleasing customers has become something of a corporate obsession. serving the customer in the best, most efficient, and most effective manner has become critical, and informaion about issues such as order status, product availability, delivery schedules, and invoices has become a necessary a part of the total customer service experience.
2. information is crucial to managers' abilities to reduce inventory and human resource requirements to a competitive level.
3. information flows are essential to strategic planning for and deployment of resources.

supply chain management success factors

seven principles of supply chain management

1. segment customers by service needs, regardless of industry and then tailor services to those particular segments
2. customize the logistics network and focus intensively on the service requirements and on the profitability of the preidentified customer segments
3. listen to signals of market demand and plan accordingly. planning must span the entire chain to detect signals and changing demand.
4. differentiate products closer to the customer, since companies can no longer afford to hold inventory to compensate for poor demand forecasting.
5. strategically manage sources of supply, by working with key suppliers to reduce overall costs of owning materials and sevices
6. develop a supply chain information technology strategy that supports different levels of decision making and provides a clear view (visibility) of the flow of products, services and information.
7. adopt performances evaluation measures that apply to every link in the supply chain and measure true profitability at every stage.

SCM industry best practices include:

1. make the sale to suppliers
2. wean employees off traditional business practices 
3. ensure the SCM system supports the organizational goals
4. deploy in incremental phases and measure and communicate success
5. be future oriented

SCM success stories

• top reasons why more and more executives are turning to SCM to manage their extended enterprises
• numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of intergrated supply chains
• DSSs allow managers to examine performance and relationships over the supply chain and among:
• suppliers
• manufacturers
• distributors
• other factors that optimize supply chain performance
• companies using supply chain to drive operations
• dull
• nokia
• procter & gamble
• wal-mart stores
• toyota motor 
• the home deposit
• best buy
• marks & spencer

CHAPTER 9
enabling the organization - decision making

Decision Making

• reasons for the growth of decision making information system
• people need to analyze large amounts of information
• people must make decision quickly
• people must apply sophisticated analysis techniques, such as modelling and forecasting, to make good decision
• people must protect the corporate asset of organizational information
• model- a simplified representation of abstraction of reality
• IT system in an enterprise
• moving up through the organizational pyramid users move from requiring transactional information to analytical 

Transaction Processing System

• transaction processing system - the basic business system that serves the operational level (analysis) in an organization
• online transaction processing (OLTP) - the capturer of transaction and event information using technology to (1) process information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information
• online analytical processing (OLAP) - the manipulation of information to create business intelligence in support of strategic decision making

Decision Support Systems

• decision support system (DSS) - models information to support managers and business professionals during the decision making process
• three quantitative models used by DSSs include:
1. sensitivity analysis - the study of the impact that changes in one (or more) parts of the model have on other parts of the model
2. what-if analysis - checks the impact of a change in an assumption on the proposed solution
3. goal seeking analysis - finds the inputs necessary to achieve a goal such as a desired level of output 

Executive Information System

• executive information system (EIS) - a specialize DSS that supports senior level executives within the organization
• most EIS offering the following capabilities:
• consolidation - involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
• drill-down - enables users to get details, and details of details, of information
• slice and dice - looks at information from different perspective
• digital dashboard - integrates information from multiple components and presents it in a unified display

Artificial Intelligence (AI)

• intelligent system - various commercial applications of artificial intelligence systems
• artificial intelligence (AI) - stimulates human intelligence such as the ability to reason and learn
• advantages : can check info on competitor
• the ultimate goal of AI is teh ability to build a system that can mimic human intelligence
• four most common categories of AI include:
1. expert system - computerized advisory programs that initiate the reasoning processes of experts in solving difficult problems
2. neural network - attempts to emulate the way the human brain works
• fuzzy logic - a mathematical method of handling imprecise or subjective information
3. genetic aigorithm - an artificial intelligent system that mimics the evolutionary, survival of the fittest process to generate increasingly better solutions to a problem
4. intelligent agent - special purposed knowledge based information system that accomplishes specific tasks on behalf of its users
• multi-agent systems
• agent-based modelling

Data Mining

• data mining software includes many forms of AI such as neural networks and expert 
• common forms of data mining analysis capabilities:
• cluster analysis
• cluster analysis is a technique used to divide an information set into mutually exclusive groups such that the members of each group are so close together as possible ti one another and the different groups are as far apart as possible
• CRM systems depend on cluster analysis to segment customer information and identify behavioral traits   
• association detection
• association detection reveals the degree to which variables are related and the nature and frequency of these relationship in the information
• market basket analysis - analyzes such items as Web sites and checkout scanner information to detect customer's buying behavior and predict future behavior by identifying affinities among customers' choices of products and services
• statistical analysis
• statistical analysis performs such function as information correlations, distributions, calculations, and variance analysis
• forecast- predictions made on the basis of time series information
• time series information-time stamped information collected at a particular frequency