CHAPTER 19

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

Outsourcing  is an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in house. While, Insourcing is a common approach using the professional expertise within an organization to develop and maintain the organization’s information technology systems. Next, offshore outsourcing is use organization from developing countries to write code and develop systems. In offshore outsourcing the country is geographically far away.

The advantages of outsourcing are :-

·         Swiftness and Expertise: Most of the times tasks are outsourced to vendors who specialize in their field. The outsourced vendors also have specific equipment and technical expertise, most of the times better than the ones at the outsourcing organization. Effectively the tasks can be completed faster and with better quality output

·         Concentrating on core process rather than the supporting ones: Outsourcing the supporting processes gives the organization more time to strengthen their core business process.

·         Risk-sharing: one of the most crucial factors determining the outcome of a campaign is risk-analysis. Outsourcing certain components of your business process helps the organization to shift certain responsibilities to the outsourced vendor. Since the outsourced vendor is a specialist, they plan your risk-mitigating factors better.

·         Reduced Operational and Recruitment costs: Outsourcing eludes the need to hire individuals in-house; hence recruitment and operational costs can be minimized to a great extent. This is one of the prime advantages of offshore outsourcing.

The disadvantages of outsourcing are :-

·         Risk of exposing confidential data: When an organization outsources HR, Payroll and Recruitment services, it involves a risk if exposing confidential company information to a third-party.

·         Synchronizing the deliverables: In case you do not choose a right partner for outsourcing, some of the common problem areas include stretched delivery time frames, sub-standard quality output and inappropriate categorization of responsibilities. At times it is easier to regulate these factors inside an organization rather than with an outsourced partner.

·         Hidden costs: Although outsourcing most of the times is cost-effective at times the hidden costs involved in signing a contract while signing a contract across international boundaries may pose a serious threat.

·         Lack of customer focus: An outsourced vendor may be catering to the expertise-needs of multiple organizations at a time. In such situations vendors may lack complete focus on your organization’s tasks.

Next is insourcing. The advantages of insourcing are :-

o   Research is done by employees who have a deeper understanding and knowledge of your company.

o   Researchers may have relationships with decision makers that promote better communication towards accomplishing the research agendas.

o   Higher degree of quality control.

o   Insourcing gives a company a high degree of control over its research.

o   Insourcing may lower research costs, but only if a company enjoys the business volume  necessary to achieve economies of scale.

o   A company has the ability to oversee the entire research process.

The disadvantages of insourcing are :-

·         Potentially, a company may incur higher research costs due to incompetence and lack of resources.

·         In-house researchers have less focus than market intelligence professionals.

·         Insourcing research reduces strategic flexibility.

·         The high investment required for insourcing research may outweigh its benefits due to economies of scale.

·         Potential professional research consultants may offer superior expertise and services.

·         In-house researchers may lack the experience and knowledge of research consultants.

Last is offshore outsourcing. The advantages of offshore outsourcing are :-

·         Lower cost of labour: When the product is being made in some place were the labour cost is cheaper than the country of companies existence, it really help company to save money by employing cheap labour and even more labour can be hired.

·         High performance: When labour is cheaper it will directly help company in performance by employing or my making labour work in various shifts and work can be done 24x7 and that will give the company high performance.

·         Proper use of time zone: Companies can make proper use of time zone difference. For example as cited in Needle (2010), many USA companies use the service of Indian software engineers when their computer systems are not being used.

The disadvantages of offshore outsourcing are :-

·         Quality of product or service: When the product is produced by some other company in some other place it might not be necessary that they might give the same kind of service to your product or the quality of product might not be the same as the one you are expecting the quality to be.

·         Communication gap: When two different companies of two different origin works on the product, which might arise a problem were communicating to each other is a problem and that create a communication gap.

·         Threat to security: When outsourcing services such as taxation and payroll, the service provider will be able to see company’s important data and this might create threat to security of data.

19.2 Describe why outsourcing is a critical business decision.

Ø  Outsourcing can give the right combination of people, processes, and technology to operate efficiently and effectively in the global marketplace without burdening time and budget.

CHAPTER 15

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

Ø  Companies must be able to collaborate. Without collaboration companies simply would have a very difficult time operating. Companies collaborate in a number of ways including document exchange, shared whiteboards, discussion forums, and email.

15.2  Compare the different categories of collaboration technologies.
          Collaboration technologies fall into one of two categories:

1. Unstructured collaboration (sometimes referred to as information collaboration) includes document ex¬change, shared whiteboards, discussion forums, and email.
2. Structured collaboration (or process collaboration) involves shared participation in business processes such as workflow in which knowledge is hardcoded as rules.

15.3 Define the fundamental concepts of a knowledge management system.

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

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

Ø  A content management system (CMS) provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment. The CMS marketplace is complex, incorporating document management, collaboration and versioning tools, digital asset management, and web content management. One example is www.vignette.com.

15.5 Evaluate the advantages of using a workflow management system.

Ø  Many workflow management systems allow the opportunity to measure and analyze the execution of a process. Workflow systems integrate with other organizational systems, such as document management systems and database management systems.

15.6 Explain how Groupware can benefit a business.

Ø  Groupware is software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing. Organizations can use this technology to communicate, cooperate, coordinate, solve problems, compete, or negotiate

CHAPTER 14

14.1 Compare ecommerce and ebusiness.

  E-commerce is buying and selling using an electronic medium. It is accepting credit and payments over the net, doing banking transactions using the Internet, selling commodities or information using the World Wide Web and so on.

  E-Business in addition to encompassing E-commerce includes both front and back-office applications that form the engine for modern E-commerce. E-business is not just about E-commerce transactions; it's about re-defining old business models, with the aid of technology to maximize customer value. E-Business is the overall strategy and E-commerce is an extremely important facet of E-Business.

  Thus e-business involves not merely setting up the company website and being able to accept credit card payments or being able to sell products or services on time. It involves fundamental re-structuring and streamlining of the business using technology by implementing enterprise resource planning (ERP) systems, supply chain management, customer relationship management, data ware housing, data marts, data mining, etc

14.2 Compare the four types of ebusiness models.

 

•Business-to-business (B2B) applies to businesses buying from and selling to each other over the Internet.

•

•Business-to-consumer (B2C) applies to any business that sells its products or services to consumers over the Internet.

•

•Consumer-to-business (C2B) applies to any consumer that sells a product or service to a business over the Internet.

•

•Consumer-to-consumer (C2C) applies to sites primarily offering goods and services to assist consumers interacting with each other over the Internet.

  The primary difference between B2B and B2C are the customers; B2B customers are other businesses while B2C markets to consumers. Overall, B2B relations are more complex and have higher security needs; plus B2B is the dominant ebusiness force, representing 80 percent of all online business.

14.3 Describe the benefits and challenges associated with ebusiness.

   Ebusiness Benefits and Challenges.

Ebusiness Benefits:

·         Highly Accessible- businesses can operate 24 hours a day, 7 days a week, and 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- Ebusiness automates and improves many of the activities that make up a buying experience.

·         Increased Global Reach- Business, both small and large, can reach new markets.

·         Decreased Cost- the cost of conducting business on the Internet is substantially less than traditional forms of business communication.

Ebusiness Challenges:

·         Protecting Consumers- consumers must be protected against unsolicited goods and communication, illegal or harmful goods, insufficient information about goods or their suppliers, invasion of privacy, and cyberfraud.

·         Leveraging Existing Systems- most companies already use information technology to conduct business in non-Internet environments, such as marketing, order management, billing, inventory, distribution, and customer service. The internet represents an alternative and complementary way to do business, but it is imperative that ebusiness systems integrate existing sytsems in a manner that avoids duplicating functionality and maintains usability, performance, and reliability.

·         Increasing Liability- Ebsuiness exposes suppliers to unknown liabilities because internet commerce law is vaguely defined and differs from country to country. The internet and its use in ebusiness have raised many ethical, social, and political issues, such as identity theft and information manipulation.

·         Providing Security- The internet provides universal access, but companies must protect their assets against accidental or malicious misuse. System security, however, must not create prohibitive complexity or reduce flexibility. Customer information also needs to be protected from internal and external misuse. Privacy systems should safeguard the personal information critical to building sites that satisfy customer and business needs. A serious deficiency arises from the use of the internet as a marketing means. Sixty percent of internet users do not trust the internet as a payment channel. Making purchases via the internet is considered unsafe by many. The issue affects both the business and the consumer. However, with encryption and the development of secure websites, security is becoming less of a constraint for ebusinesses.

·         Adhering to Taxation Rules- the internet is not yet subject to the same level of taxation as traditional businesses. While taxation should not discourage consumers from using electronic purchasing channels, it should not favor internet purchases over store purchases either. Instead, a tax policy should provide a level playing field for traditional retail businesses, mail-order companies, and internet-based merchants. The internet marketplace is rapidly expanding, yet it remains mostly free from traditional forms of taxation. In one recent study, uncollected state and local sales taxes from ebusiness were projected to exceed $60 billion in 2008.

14.4 Explain the differences among eshops, emails,and online auctions

 

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.

Email

·         Email- consists of a number of eshops. It serves as a gateway through which a  visitor can access other eshops.

-      It may be generalized or specialized depending on the products offered by the eshops it hosts.

-      Eshops in emails benefit from brand reinforcement and increased traffic as visiting one shop on the email often leads to browsing “neighboring” shops.

 Online auctions:

·         Electronic auction (eauction)- sellers and buyers solicit consecutive bids from each other and prices are determined dynamically.

·         Forward auction- an auction that sellers use as a selling channel to many buyers and the highest bid wins.

·         Reverse auction- an auction that buyers use to purchase a product or service, selecting the seller with the lowest bid.

CHAPTER 12

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

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.

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

•  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 and reporting

•

•ERP is used to avoid the pain and expense of fixing legacy systems

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

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.

 Integration between SCM, CRM, and ERP Applications.

·         Companies run on independent applications, such as SCM, CRM, and ERP. If one application performs poorly, the entire customer value delivery system is affected.

CHAPTER 11

1.      Compare operational and analytical customer relationship management.

Operational CRM	Analytical CRM
·         Deal directly with the customers	·         Do not deal directly with customers
·         Supports back-office operations	·         Supports traditional transactional processing for day-to-day front-office operations
·         Example: Campaign management, e-marketing, telemarketing and e-selling.	·         Example: Develop customer profiles and analyze customer or product profitability.

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

·   Automation/Productivity/Efficiency

·   Competitive advantage

·   Customer demands/requirements

·   Increase revenues  

·   Decrease costs

·   Customer support

·   Inventory control

·   Accessibility

3.      Define the relationship between decision making and analytical customer relationship management.

The relationship between decision making and analytical customer relationship management is analytical CRM is primarily used to enhance and support decision making and works by identifying patterns in customer information collected from the various operational CRM systems. Analytical CRM also is the solutions that are designed to dig deep into a company’s historical customer information and expose patterns of behavior on which a company can capitalize.

4.      Summarize the best practices for implementing a successful customer relationship management system.

There are several best practices for implementing a successful customer relationship management system.

Firstly, clearly communicate the CRM strategy. This practice started with a clear business objective for the system to provide customer with greater economic value.

Next, define information needs and flows. People who perform successful CRM implementations have a clear understanding of how information flows in and out of their organizations.

Other than that, build an integrated view of the customer can support organizational requirement. This system must have the corresponding functional breadth and depth to support strategic goals.

Plus, implement in iterations. This allows the organizations to find out early if the implementation is headed for failure and thus either kill the project and save wasted resources or change direction to a more successful path.

Lastly, scalability for organizational growth. Understanding how the organization is going to grow, predicting how technology is going to change and anticipating how customers are going to evolve.