CHAPTER 15 :OUTSOURCING IN THE 21st CENTURY

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

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.

CHAPTER 13 E-BUSINESS

1. E-BUSINESS 

> The Internet is a powerful channel that presents new opportunities for an organization to;

• Touch Customers.
• Enrich products and services with information.
• Reduce Costs.

2. E- COMMERCE & E- BUSINESS.

> How do e-commerce and e-business differ?

• E- Commerce – The buying and selling of goods and services over the Internet (online transactions).

• E- Business – The conducting of business on the Internet including, not only buying and selling, but also serving customers and collaborating with business partners (online transactions, serving customers and collaborating with business partner).

Industries Using E-Business.

3. E- BUSINESS MODELS.

> E- Business Model – An approach to conducting electronic business on the Internet.

4. BUSINESS TO BUSINESS (B2B)

> Electronic Marketplace (E- Marketplace) – Interactive business communitiesproviding a central market where multiple buyers and sellers can engage in e- business activities. 

5. ELECTRONIC MARKETPLACE (E- MARKET PLACE)

> Electronic marketplaces, or e-marketplaces, present structures for conducting commercial exchange, consolidating supply chains, and creating new sales channels.

> Their primary goal is to increase market efficiency by tightening and automating the relationship between buyers and sellers.

> Existing e-marketplaces allow access to various mechanisms in which to buy and sell almost anything, from services to direct materials.

6. BUSINESS TO CONSUMER (B2C)

> 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- Mall – Consists of a number of e-shops; it serves as a gateway through which a visitor can access other e-shops.

E- Shop

E- Mall

> Business types:

• Brick-and-Mortar Business - Operates in a physical store without an Internet presence. Eg: Bata.
• Pure-play Business - A business that operates on the Internet only without a physical store. Eg include fashionvalet.com. 
• Click-and-Mortar Business – A business that operates in a physical store and on the Internet .Eg: Hijabs by Hanami.

7. 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.

8. 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 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- Bay

9. E- BUSINESS BENEFITS.

> E-Business benefits include;

• Highly Accessible.

- Businesses can operate 24 hours a day, 7 days a week, 365 days a year.

• Increased customer loyalty.

- Additional channels to contact, respond to, and access customers helps contribute to customer loyalty.

• Improved Information Content.

- In the past, customers had to order catalogs or travel to a physical facility before they could compare price and product attributes. Electronic catalogs and Web pages present customers with updated information in real-time about goods, services, and prices

• Increased Convenience.

- E-business automates and improves many of the activities that make up a buying experience.

• Increased Global Reach.

- Businesses, both small and large, can reach new markets.

• Decreased Cost.

- The cost of conducting business on the Internet is substantially smaller than traditional forms of business communication.

10. E- BUSINESS CHALLENGES.

> E-business challenges include:

• Identifying Limited Market Segments.

- The main challenge of e-business is the lack of growth in some sectors due to product or service limitation.

• Managing Consumer Trust.

- Internet marketers 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.

• Managing Consumer Trust.

- Companies that operate online must obey a patchwork of rules about which customers are subject to sales tax on their purchase and which are not.

11. E- BUSINESS BENEFITS AND CHALLENGES.

> There are numerous advantages and limitations in e-business revenue modelsincluding: 

• Transaction Fees.
• License Fees.
• Subscription Fees.
• Value-added Fees.
• Advertising Fees.

12. MASHUPS

> Web Mashup - A Web site 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 - WSYIWYGs (What You See Is What You Get) for mashups.

Web Mashup