Chapter 15 – Outsourcing in the 21st Century

OUTSOURCING PROJECTS

Ø  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

 

Ø  Onshore outsourcing – engaging another company within the same country for services

Ø  Near shore outsourcing – contracting an outsourcing arrangement with a company in a nearby country

Ø  Offshore outsourcing – using organizations from developing countries to write code and develop systems

Ø  Big selling point for offshore outsourcing “inexpensive good work”

Ø  Factors driving outsourcing growth include;

§  Core competencies

§  Financial savings

§  Rapid growth

§  Industry changes

§  The Internet

§  Globalization

Ø  According to PricewaterhouseCoopers “Businesses that outsource are growing faster, larger and more profitable than those that do not”

Ø  Most organizations outsource their noncore business functions, such as payroll and IT

OUTSOURCING BENEFITS

Ø  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

Ø  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 14 – Creating Collaborative Partnerships

TEAMS, PARTNERSHIPS AND ALLIANCES

Ø  Organizations create and use teams, partnerships and alliances to;

§  Undertake new initiatives

§  Address both minor and major problems

§  Capitalize on significant opportunities

Ø  Organizations create teams, partnerships and alliances both internally with employees and externally with other organizations

Ø  Collaboration system – supports the work of teams by facilitating the sharing and flow of information

Ø  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

Ø  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

Ø  The internet has dramatically increased the ease and availability for IT – enabled organizational alliance and partnerships

COLLABORATION SYSTEMS

Ø  Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management

Ø  Collaboration system – An IT- based set of tools that supports the work of teams by facilitating the sharing and flow of information.

Ø  Two categories of collaboration

1.       Unstructured collaboration (information collaboration) – includes document exchange, shared whiteboards, discussion forums, and email.

2.       Structured collaboration (process collaboration) – involves shared participation in business processes such as workflow in which knowledge is hard-coded as rules.

Collaborative business functions

Ø  Collaboration systems include;

§  Knowledge management systems

§  Content management systems

§  Workflow management systems

§  Groupware systems

KNOWLEDGE MANAGEMENT SYSTEMS

Ø  Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving and sharing information assets in a way that provides context for effective decisions and actions

Ø  Knowledge management system – supports the capturing and use of an organization’s “know-how”

EXPLICIT AND TACIT KNOWLEDGE

Ø  Intellectual and knowledge-based assets fall into two categories;

1.       Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT

2.       Tacit knowledge – knowledge contained in people’s heads

Ø  The following are two best practices for transferring or recreating tacit knowledge

1.       Shadowing – less experienced staff observe more experienced staff to learn how their more experienced counterparts approach their work

2.       Joint problem solving – a novice and expert work together on a project

Reasons why organizations launch knowledge management programs

CONTENT MANAGEMENT

Ø  Content management system (CMS) – provides tools to manage the creation, storage, editing and publication of information in a collaborative environment

Ø  CMS marketplace includes;

§  Document management system (DMS)

§  Digital assets management system (DAM)

§  Web content management system (WCM)

WORKING WIKIS

Ø  Wikis – web-based tools that make it easy for users to add, remove, and change online content

Ø  Business wikis – collaborative web pages that allows users to edit documents, share ideas or monitor the status of a project

WORKFLOW MANAGEMENT SYSTEMS

Ø  Work activities can be performed in series or in parallel that involves people and automated computer systems

Ø  Workflow – defines all the steps or business rules, from beginning to end, required for a business process

Ø  Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process

Ø  Messaging-based workflow system – sends work assignments through an email system

Ø  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

Ø  Groupware – software that supports teams interaction and dynamics including calendaring, scheduling and videoconferencing 

WEB CONFERENCING

Ø  Web conferencing – blends audio, video and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected website

VIDEOCONFERENCING

Ø  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 MESSAGING

Ø  Email is the dominant form of collaboration application, but real-time collaboration tools like instant messaging are creating a new communication dynamic

Ø  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

Ø  Instant messaging application 

Chapter 13 - Creating Innovative Organizati

Disruptive Technology

• Digital Darwinism- implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. 

Disruptive versus sustaining technology

• Disruptive technology- new ways of doing things that initially does not meet the needs of existing customers.
• Sustaining technology- produces an improved product customers are eager to buy, such as faster car or larger hard drive.

          - It provides us with better, faster, and cheaper products in established markets.

Disruptive and Sustaining Technologies

• Disruptive technologies typically cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies. 

The Internet- Business Disruption

Evolution of the internet

• Internet- a global public network of computer networks that pass information from one to another using common computer protocols.
•  Protocols- are the standards that specify the format of data as well as the rules to be followed during transmission.
• Internet Engineering Task Force (IEFT) - the protocol engineering and development arm of the internet.
• Internet Architecture Board (IAB)- responsible for defining the overall architecture of the Internet, providing guidance and broad direction to the IETF). 
• Internet Engineering Steering Group (IESG)- responsible for technical management of IETF activities and the internet standards process.

Evolution of the World Wide Web

• The internet was restricted to noncommercial activities, and its users included government employees, researchers, university professors, and students. The World Wide Web changed the purpose and use of the internet.
• World Wide Web (WWW)- a global hypertext system that uses the internet as its transport mechanism.
• Hypertext transport protocol (HTTP)- the internet standard that supports the exchange of information on the WWW. 

           - It enables web authors to embed hyperlinks in web documents         

           - It defines the  process by which a web client, called a browser, originates a request for information and sends it to a web server, a program designed to respond to HTTP requests and provide the desired information.

 Reasons for World Wide Web Growth:

• The microcomputer revolution made it possible for an average person to own a computer. 
• Advancements in networking hardware, software, and made it media possible for business PCs to be inexpensively connected to larger networks.
• Browser software such as Microsoft’s Internet Explorer and Netscape Navigator gave computer users an easy-to-use graphical interface to find, download, and display web pages.
• The speed, convenience, and low cost of email have made it an incredibly popular tool for business and personal communications. 
• Basic web pages are easy to create and extremely flexible.
• Digital divide- is when those with access to technology have great advantages over those without access to technology

Internet’s Impact on Information

• Easy to compile- searching for information on products, prices, customers, suppliers, and partners is faster and easier when using the internet. 
• Increased richness- information richness refers to the depth and breadth of information transferred between customers and businesses. Businesses and customers can collect and track more detailed information when using the internet.
• Increased reach- information reach refers to the number of people a business can communicate with, on a global basis. Businesses can share information with numerous customers all over the world.
• Improved content- a key element of the internet is its ability to provide dynamic relevant content. Buyers need good content descriptions to make informed purchases, and sellers use content to properly market and differentiate themselves from the competition. Content and product description establish the common understanding between both parties to the transaction. As a result, the reach and richness of that content directly affects the transaction. 

File Formats Offered over the WWW.Web 2.0

• A set of economic, social, and technology trends that collectively from the basis for the next generation of the internet- a more mature, distinctive medium characterized by user participation, openness, and network effects. 
• It is more than just the latest technology buzzword; it is a transformative force that is catapulting companies across all industries toward a new war of performing business.