CHAPTER 15 :OUTSOURCING IN THE 21st CENTURY

LEARNING OUTCOMES

19.1 Describe the advantages and disadvantages of insourcing ,outsourcing ,and offshore outsourcing.

19.2 Describe why outsourcing is a critical business decision.

1.Outsourcing Projects

    ➜Insourcing -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 service or services for another organization that chooses not to perform them in-house.They hired outside people because did not have expertise and focus on core competency.

*The most common functions outsource is information technology.

*Reasons companies outsource

➔Onshore outsourcing -engaging another company within the same country for services.

➔Nearshore outsourcing -Contracting an outsourcing arrangement with a company in a nearby country such as Singapore,Indonesia ,Thailand,Brunei.

➔Offshore outsourcing -using organizations from developing countries to write code and develop systems .For example ,United Kingdom and United States will invest in Malaysia.

*Big selling point for offshore outsourcing "inexpensive good work"

➤Factors driving outsourcing growth include :

   ➥Core competencies - To fuel revenue growth rather than just a cost-cutting measure.

   ➥Financial savings -Cheaper to hire workers in China and India than workers in United States (offshore outsource).

   ➥Rapid growth -Able to acquire best-practices process expertise .This facilitates the design,building,training,and deployment of business processes or functions.

   ➥Industry changes - Increased demand for outsourcing to better focus on core competencies.

   ➥The Internet -Effective sales channel has allowed clients to become more comfortable with outsourcing.

   ➥Globalization -Engage outsourcing service providers to deliver international services.

*Most organizations outsource their noncore business functions such as payroll and IT.

2.Outsourcing benefits include:

➜Increased quality and efficiency.

➜Reduced operating expenses.

➜Outsourcing non-core processes.

➜Increased flexibility.

➜Access to advanced technologies.

3.Outsourcing challenges include :

➤Contract length

*Most outsourcing contracts span several years and cause the issues discussed above.

    ➥Difficulties in getting out of a contract.

   

    ➥Problems in foreseeing future needs.

   

    ➥Problems in reforming an internal IT department after the contract is finished.

➤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 services to competitors.

➤Scope definition

    ➥Scope creep is a common problem with outsourcing agreements (have to pay more if we ask to do more).

CHAPTER 14 :CREATING COLLABORATIVE PARTNERSHIPS

LEARNING OUTCOMES

15.1 Identify the different ways in which companies collaborate using technology.

15.2 Compare the different categories of collaboration technologies.

15.3 Define the fundamental concepts of a knowledge management system.

15.4 Provide an examples of a content management system along with its business purpose.

15.5 Evaluate the advantages of using a workflow management system.

15.6 Explain how groupware can benefit a business.

1.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 to helps us to compete competitors.

*Organizations create teams ,partnerships ,and alliances both internally and externally.

*Collaboration system: supports the work of teams by facilitating the sharing and flow of information.

➥Organizations form alliances and partnerships with the other organizations based on their competency.

         ➤Core competency :To reduce costs they share expertise with their teams so they did not need to hire or buy it.

         ➤Core competency strategy:They did not have expertise but they focus to someone have expertise that their company did not have.They also ask their partnership to handle nonstrategic business processes.

*Information technology can make a business partnership easier to establish and manage .

     ➥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(different IT systems they integrates to reduce costs).

*The Internet has dramatically increased the ease and availability for IT-enabled organizational alliances and partnerships.

2.Collaboration Sytems

*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(can save time and money).

*Two categories of collaboration :

    ➥Unstructured collaboration (information collaboration): includes document exchange,shared whiteboards ,discussion forums ,and e-mail.

    ➥Structured collaboration(process collaboration):about work process ,it will become difficult if do not have knowledge .Must understand that knowledge is hardcoded as rules.

*Collaborative business functions.

*Collaboration systems include:
➤i)Knowledge management systems 
➤ii)Content management systems
➤iii)Workflow management systems
➤iv)Groupware systems

2.i)Knowledge management systems: supports the capturing and use of an organization's ''know-how''(not do as manually systems will helps)

*Knowledge management(KM): Evaluating that knowledge ,manage knowledge every person have their own knowledge.

3)Explicit and Tacit Knowledge 

*Intellectual and knowledge-based assets fall into 2 categories:

➥Explicit knowledge: easy to get record (eg:Can gain when at the classes by using textbook)

➥Tacit knowledge :Want to remain on organization if the employees retired they will bring tacit knowledge .Difficult to get because based on experience ,to document it difficult.

*The following are two best practices for transferring/recreating tacit knowledge.

➥Shadowing: Observe to get ideas.

➥Joint problem solving:Work together with expert. 

➥Reasons why organizations launch knowledge management programs.

4.KM Technologies

*Knowledge management systems include :

➥Knowledge repositories (databases)
➥Expertise tools 
➥E-learning applications 
➥Discussion & chat technologies 
➥Search & data mining tools

5.KM and Social Networking 

*Finding out how information flows through an organization

   ➢Social networking analysis (SNA)- process of mapping a group's contacts (whether personal or professional) to identify who knows whom and who works with whom.

6.Content Management 

➔Content management system (CMS)- tools to manage the creation, where in involves cooperation between two or more.All document that you want to share information.

➔CMS marketplace includes:
   ➥i)Document management system (DMS)
   ➥ii)Digital asset management system (DAM)
   ➥iii)Web content management system (WCM)

i)Document management system (DMS) ➤ Supports the electronic capturing ,storage ,distribution,archival, and accessing of documents.Manage document in form excel,words and PDF.

ii)Digital asset management system (DAM) ➤Similar to DMS ,generally works with binary rather than text files,such as multimedia files types.There are different format where as more to audio, video and picture.

iii)Web content management system (WCM) ➤Additional layer to document & digital asset management that enables publishing content both to intranets and to public Web sites.Organization have their own web sites where can search,create ,publish to public.

*Content management system vendor overview

7.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

8.Workflow Management Systems

➥Workflow -have steps or business rules ,must follow the steps and share our workflow then partner will do other steps..

➥Workflow management system - controls movement of steps and cannot skip the flow.

➥Messaging-based workflow system - share work by using an email system.

➥Database-based workflow system -put all process at database,the members that want to access will find to database.

9.Groupware systems

*There have four types such as same place same time,same place different time,different place same time and different place different time.

➥Groupware - one of the software to interaction and dynamics including calendaring,scheduling and videoconferencing. 

*Advantages of groupware system.

➨ Videoconference - a set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously.

➨ 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.

*Examples of instant messaging

CHAPTER 13 :E-BUSINESS

LEARNING OUTCOMES

14.1 Compare e-commerce and e-business.

14.2 Compare the four types of e-business models.

14.3 Describe the benefits and challenges associated with e-business .

14.4 Explain the differences among e-shops,e-malls ,and online auctions.

1.E-Business

*The Internet is a powerful channel that presents new opportunities for an organization to:

⇨Touch customers (If did not have Internet we have distance and hard to touch with customers.It also can make can close with the customers)

⇨Enrich products&services with information (If traditionally they use catalog ,brochures to update information).

⇨Reduce costs (It can operate at home ,no need to rent or buy premise .It also no need to hired employees).


2.E-Commerce & E-Business

*E-Commerce :limited buying and selling of goods and services over the Internet (online transactions)

*E-Business :more than e-commerce ,not onling buying and selling ,but also fulfill customers demand& needs (online transactions,serving customers & collaborating with business partner)


3.E-Business Models : An approach to conducting electronic business on the Internet.

➤i)Business-to-business (B2B): Businesses buying and selling to each other over the Internet(one company to one company).

➤ii)Business-to-consumer (B2C):Any businesses that sells its products or services to consumers over the Internet.

➤iii)Consumer-to-business (C2B):Any consumer that sells a product or service to a business over the Internet(from consumer to business.It also more to fashion and hard to sell it alone).

➤iv)Consumer-to-consumer (C2C):Sites primarily offering goods&services to assist consumers interacting with each other over the Internet(eg :Consumers sell preloved to consumer by Facebook group) .

3.i)Business-to-business (B2B)

➥Electronic marketplace(e-marketplace) :There are so many buyers&sellers from different business or industries ,can choose with the cheapest price)

      ➥It also create collaborative and create networking .

      ➥Primary goal:To increase market efficiency by tightening& automating the relationship between buyers& selles.

      ➥Variety of products from raw materials there are not limited.



3.ii)Business-to-consumer (B2C)

➔E-Shop :Retail store that sells their own products only ,customers can shop at any hour of the day(eg: Sugarscarf ,Fareeda ,and Hanami).

➔E-Mall : Variety number of e-shops; serves as a gateway through which a visitor can access other e-shops(eg:Zalora and Lazada).
*Business types:
➢Brick-and-mortar business :operation only at shop not in Internet .It physical store only such as Bata.

➢Pure-play business:operates on the Internet only and did not have store.

➢Click-and-mortar business:Not only have store but they operates on the Internet also such as Sugarscarf .

3.iii)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.

3.iv)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:Normal option where as sellers will choose buyers that bid the highest price.

➥Reverse auction :Buyers want to purchase with a lowest price sellers will bid the lowest price will wins.

*C2C communities include :

⤻Communities of interest :People setup group based on their interest such as group about reading novels.

⤻Communities of relations:People setup group based on experiences such as cancer patients they will share about their experience ,and how to overcome it.

⤻Communities of fantasy :People will setup group with different country to play games ,or their will sell signature of their idols .

4.E-Business Benefits

➜Highly accessible :Businesses can operate 24 hours a day ,7 days a week ,365 days a year.

➜Increased customer loyalty :Easy to contact with customers and easy to deals with the customers.

➜Improved information content : Easy to update and delete information.If use traditionally they use catalog and brochures if there have changes information they have printing again.

➜Increased convenience :E-Business automates and improves many of the activities that make up a buying experience.

➜Increased global reach : Businesses ,both small & large can reach new markets.

➜Decreased cost :No need rent or buy store.It also no need to hired employees.

5.E-Business Challenges

➙Identifying limited market segments (lack of growth in some sectors due to product/service limitation) 

➙Managing consumer trust (must develop a trustworthy relationship to make that initial sale and generate customer loyalty)

➙Ensuring consumer protection (implement Internet security,protect from misuse of customer information)

➙Adhere to taxation rules (Companies have to register and declare the profit because have pay taxation)

6.E-Business Benefits & Challenges

➤Transaction fees
➤License fees
➤Subscription fees
➤Value-added fees
➤Advertising fees

7.Mashups

*Web mashup - A website or web application that uses content from more than one source to create a completely new service .

       ➥Application programming interface (API): a set of routines,protocols ,and tools for building software applications.

       ➥Mashup editor :What You See Is What You Get for mashups.

CHAPTER 12 :INTEGRATING THE ORGANIZATION FROM THE END TO END (ENTERPRISE RESOURCE PLANNING)

LEARNING OUTCOMES 

12.1 Describe the role information plays in enterprise resourse planning systems.

12.2 Identify the primary forces driving the explosive growth of enterprise resource planning systems.

12.3 Explain the business value of integrating supply chain management ,customer relationship management and enterprise resource planning systems.

1)ENTERPRISE RESOURCE PLANNING (ERP)

⇨ERP systems is a database ,when users enters or updates information in one module ,it is immediately and automatically updated throughput the entire system.

⇨ERP systems are integrates database into one.

⇨It also can avoid redundancy and can save time.

➨ERP systems automate business processes.

➨Update the one only then it will automatically updated to all.

➨It more easier than traditional ,it also can save time .


2)Bringing the organization together.

➤It traditional ERP life cycle.

➤It more complicated and hard to get information.

➤It might be have redundancy or duplicate information.

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

Disadvantages :
➤Not as the flexible and more difficult to change,

➤Multiple access levels increases security issues must put passwords.

➤Ethical dilemmas from accessing different department information such as payroll.

3)ERP- The organization before ERP.

➦Traditionally, been isolated within specific departments,whether on an individual database,in a file cabinet ,or an employee's PC.

Disadvantages:
➦Update issue.
➦Redundancy.
➦Inaccurate information across databases.
➦Different formats of information in the different databases.

4)The Evolution of ERP

➨In future ERP they want to integrates as more real time information.


5)Integrating SCM,CRM,and ERP.

➔SCM,CRM and ERP :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 users, anywhere ,anytime.

➔Many ERP vendors offer SCM and CRM components they do not create systems they just buy it from other.

➜Thse modules are typically not as functional or flexible as the modules offered by industry leaders who specialize in SCM and CRM.

➤ERP vendors carry SCM and CRM components,but they are ususally not as good as the vendors that specialize in SCM and CRM components.(Siebel CRM,i2 SCM)

➨General audience and purpose of SCM,CRM,and ERP.

6)Integration Tools

➔Many companies purchase modules from an ERP vendor,an SCM vendor ,and a CRM vendor and must integrate the different modules together.

➔Midleware: different types of software which sit in the middle of and provide connectivity between 2 or more software applications.

➔Enterprise application integration(EAI) software: different vendor and integrates by different modules.

7)Enterprise Resource Planning (ERP)

⧫ERP systems must integrate various organization processes and be:


⇨Flexible:rapid changing and can get anywhere.

⇨Modular and open:update information and the changes that you do must not affect other modules.

⇨Comprehensive:support all activities in an organization.

⇨Beyond the company:Private and confidential must be cannot be access.Make sure external partnerships can reach certain information.

8)Enterprise Resource Planning's Explosive Growth 

➠ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses.

➠ERP addresses the need for global information sharing & reporting.

➠ERP is used to avoid pain and expense of fixing legacy systems.

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

LEARNING OUTCOMES 

11.1 Compare operational and analytical customer relationship management .

11.2 Identify the primary forces driving the explosive growth of customer relationship management.

11.3 Define the relationship between decision making and analytical CRM.

11.4 Summarize the best practices for implementing a successful CRM system.

1)CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

➨CRM enables an organization to :

a)Provide better customer service because focus more to customer.

b)Make call centers more efficient because did not have to pass phone to other.

c)Cross sell products more effectively because many products.

d)Help sales staff close deals faster so service will become more faster.

e)Discover new customers.

2)Recency,Frequency ,and Monetary Value (RFM)

➤How recently a customer purchased items (Recency) .To recognize latest customer.

➤How frequently a customer purchased items (Frequency).To know regular customer.

➤How much a customer spends on each purchase (Monetary Value).To know who customer spend a lot.

3)The Evolution of CRM

⟹CRM reporting technology -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.

4)The ugly side of CRM

➽Customer will viral to Internet if they did not satisfy with products or services it will affect your company image.


5)CRM's Explosive Growth 

*CRM Business Drivers 

*Forecasts for CRM Spending (in billions)

6)Using Analytical CRM to enhance decisions

*Hard to integrates but they try to integrates

7)CRM success factors

⟹CRM success factors include :

a)Clearly communicate the CRM strategy because to communicate with the employees and corporate .

b)Define information needs and flows because organization have many department ,different flows and different systems.

c)Build an integrated view of the customer (operational and analytical integrated customers will be see in one view).

d)Implement in iterations because have divide with steps.

e)Scalability for organizational growth for future growth.

CHAPTER 10 :EXTENDING THE ORGANIZATION -SUPPLY CHAIN MANAGEMENT

LEARNING OUTCOMES

10.1 List and describe the components of a typical supply chain.

10.2 Define the relationship between decision making and supply chain management.

10.3 Describe the four changes resulting from advances in IT that are driving supply chains.

10.4 Summarize the best practices for implementing a successful supply chain management system.

1.SUPPLY CHAIN MANAGEMENT 

⇨From raw material to semi material.

➨It also to solve problems .

➔In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains.

2.BASIC 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 semi finished and finished products 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 chains.

➙Plan : Company must have a plan managing all the resources to meet customer demand for products or services.
➙Source:Company must carefully choose reliable suppliers that will deliver goods and services required for making products.
➙Make:Company manufacture their products or services such as production,testing,packaging and preparing for delivery.
➙Deliver(Logistic):Company must able to receive orders from customers,fulfill the orders via network  of warehouses and implement a billing and invoicing system to facilitate payments. 
➙Return:Customers will return products if there are defect or problem .Company also can return to supplier if there are defect products.


3.Information Technology's Role in the Supply Chain

➤i)Visibility :more visible models of different ways to do things in the supply chain have emerged.Supplier can see and know the down stream.Eg: Nowadays ,if we use Pos Laju services we can know where our products .

    ➥Supply chain visibility: ability to view all downstream and upstream.
    ➥Bullwhip effect :occurs when distorted product demand information from one entity to next throughput the supply chain.

➤ii)Consumer behaviour :Company can respond faster and more effectively to consumer demands through supply chain enchances.If using this system so can predict how much it increase or decrease.

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

➤iii)Competition:

    ➥Supply chain planning(SCP) software :to get accurate number.
    ➥Supply chain executive(SCE) software:What you already plan so it will executive .It also can detect all process and works will be more faster.

➤iv)Speed :To fulfill customer demand and meet customer objectives.It also flow every department different.


4)Supply Chain Management success factors

*SCM industry best pratices include:

➤Make the sale to suppliers.
➤Wean employees off traditional business practices.
➤Ensure SCM systems meet organizations goals.
➤Deploy in incremental phases and measure and communicate success.
➤Be future oriented to create good relationship.

5)SCM success stories

*Top reasons why more and more executives are turning to SCM to manage their extended enterprises.

*DSSs allow managers to examine performance and relationships over the supply chain and among :

➤Suppliers 
➤Manufactures 
➤Distributors
➤Other factors that optimize supply chain performance.