Chapter Nineteen

 Outsourcing in the 21st century

1. OUTSOURCING PROJECTS


- Insourcing (in-house-development) – A common approach using the professional expertise within an organization to develop and maintain the organization’s information technology systemsOutsourcing – An arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house

- Onshore outsourcing – engaging another company within the same country for services
- Near shore 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

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

2.  Factors driving outsourcing growth include;
- Core competencies
- Financial savings
- Rapid growth
- Industry changes
- The Internet

- Globalization


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

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

3. OUTSOURCING BENEFITS


 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


4. OUTSOURCING CHALLENGES


 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 Fifteen

 Creating collaborative partnerships

1. TEAMS, PARTNERSHIPS AND ALLIANCES


 a. Organizations create and use teams, partnerships and alliances to;
   -Undertake new initiatives

  -Address both minor and major problems
  - Capitalize on significant opportunities

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

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

Information partnerships with other organizations

c.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

d. 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

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


2. COLLABORATION SYSTEMS


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

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

c.  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 

a.  Collaboration systems include;
- Knowledge management systems
- Content management systems
- Workflow management systems
- Groupware systems


3. KNOWLEDGE MANAGEMENT SYSTEMS


- Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving and sharing information assets in a way that provides context for effective decisions and actions
- Knowledge management system – supports the capturing and use of an organization’s “know-how”


4. EXPLICIT AND TACIT KNOWLEDGE


a.  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


b.  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 

5. CONTENT MANAGEMENT


a.  Content management system (CMS) – provides tools to manage the creation, storage, editing and publication of information in a collaborative environment
b. CMS marketplace includes;
- Document management system (DMS)
- Digital assets management system (DAM)
- Web content management system (WCM)


6. 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 allows users to edit documents, share ideas or monitor the status of a project


7. 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 management of business processes and controls the movement of work through the business process
- Messaging-based workflow system – sends work assignments through an email system
- 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


8. GROUPWARE SYSTEMS

Groupware technologies

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

9. WEB CONFERENCING



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

10. VIDEOCONFERENCING



- Video conference – A set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously

11. INSTANT MESSAGING



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

Chapter Fourteen

Ebusiness

1. The internet is a powerful channel that presents new opportunities for organization to;
 -Touch customers
 -Enrich products and services with information
 -Reduce costs


2. How do ecommerce and ebusiness differ?
 -Ecommerce – 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


3. Industries using ebusiness






4. E BUSINESS MODELS

E business model – An approach to conducting electronic business on the Internet










Business-to-Business (B2B)



Electronic marketplace (E market place) – interactive business communities providing a central market where multiple buyers and sellers can engage in e business activities.







Business-to-Consumer (B2C)



Common B2C e business models include;
- E shop – A version of 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


Business types;
- Brick-and-mortar business
- Pure-play business

- Click-and-mortar business







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






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 stamps 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-to-one with Michael Jordan






5. EBUSINESS BENEFITS AND CHALLENGES


E business benefits include;
- Highly accessible
- Increased customer loyalty
- Improved information content
- Increased convenience
- Increased global reach
- Decreased cost


E business challenges include;
- Protecting consumers
-  Leveraging existing systems
- Increased liability
- Providing security
- Adhering to taxation rules


There are numerous advantages and limitations in e business revenue models including;
- Transaction fees
- License fees
- Subscription fees
- Value-added fees
- Advertising fees




6. MASHUPS



Web mash up – A Web site or Web application that uses content from more than one source to create a completely new services
- Application programming interface (API) – A set of routines, protocols, and tools for building software applications

- Mash up editor – WSYIWYGs (What You See Is What You Get) for mash ups

Chapter Twelve

Integrating the organization from end to end - enterprise resource planning

1. 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.


ERP Integration Data Flow
ERP Process Flow

Bringing the Organization Together 

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

-With extended portal capabilities, an organization can also involve its suppliers and customers to participate in the workflow process, allowing ERP to penetrate the entire value chain, and help the organization achieve greater operational efficiency.


Organization before ERP
ERP- Bringing the Organization Together


2. The Evolution of ERP

-Although ERP solutions were developed to deliver automation across multiple units of an organization, to help facilitate the manufacturing process and address issues such as raw materials, inventory, order entry, and distribution, ERP was unable to extend to other functional areas of the company such as sales, marketing, and shipping. 

-It could not tie to any CRM capabilities that would allow organizations to capture customer-specific information, nor did it work with websites or portals used for customer service or order fulfillment.


3. Integrating SCM, CRM, and ERP

Integration of SCM, CRM, and ERP is the key to success for many companies. Integration allows the unlocking of information to make it available to any user, anywhere, anytime. 2 main competitors in ERP market:
1. Oracle
2. Sap


4. Primary Users and Business Benefits of Strategic Initiatives.
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.


5. 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.


Enterprise Resource Planning’s Explosive Growth:
Reasons of ERP being proven to be such a powerful force:



-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


6. To qualify as a true ERP solution, the system not only must integrate various organization processes, but also must be:


-Flexible- an ERP system should be flexible in order to respond to the changing needs of an enterprise. 

-Modular and open- an ERP system has to have open system architecture, meaning that any module can be interfaced with or detached whenever required without affecting the other modules. The system should support multiple hardware platforms for organizations that have a heterogeneous collection of systems. It must also support third- party add-on components. 

-Comprehensive- an ERP system should be able to support a variety of organizational functions and must be suitable for a wide range of business organizations. 

-Beyond the company- an ERP system must not be confined to organizational boundaries but rather support online connectivity to business partners or customers.

-Everyone involved in sourcing, producing, delivering the company’s product works with the same information, which eliminates redundancies, cuts wasted time, and removes misinformation.

Chapter Eleven

Building a customer - centric organization - customer relationship management


1. Customer relationship management (CRM)

CRM enables an organization to;

-Provide better customer service.
-Make call centers more efficient.
-Cross sell products more effectively.
-Helps sales staff close deals faster.
-Simplify marketing and sales processes.
-Discover new customers.
-Increase customer revenues


2. Recency, frequency, and monetary value.  

An organization can find its most valuable customers by using a formula that industry insiders call FRM;

-How recently a customer purchased items (recency).
-How frequently a customer purchased items (frequency).
-How much a customer speeds on each purchased (monetary value)


3. The evaluation of CRM.


-CRM reporting technologies 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: Why CRM matters more now than ever before.








5. Customer relationship management's explosive growth.







6. Using analytical CRM to enhance decision.

-Operational CRM – supports traditional transactional 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 system that do not deal directly with the customers


7. Customer relationship 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


8. Using analytical CRM to enhance decision.

Operational CRM and analytical CRM

Chapter Ten

Extending The Organization - Supply Chain Management

1. Supply Chain Management
- Companies that excel in supply chain operations perform better in almost every financial measure of success, according to a report from Boston-based MR Research Inc.
- These companies understand that value chain performance translates to productivity and market-share leadership.








2. Basics of Supply Chain

-A supply chain consists of all parties involved, directly or indirectly, in the procedurement of a product or raw material.
- Organization must embrace technologies that can effectively manage and oversee their supply chain.

-Supply chain management involves the management of information flow between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.



3. Information Technology's Role in the Supply Chain

-The notion of virtually seamless information links within and between organizations is an essential element of integrated supply chain.
-Information technology's primary role in SCM is creating the integration or tight process and information linkages between functions within a firm.
-Considerable evidence shows that this type of supply chain integration results in superior supply chain capabilities and profits.

4. Visibility.

-Supply chain visibility is the ability to view all areas up and down the supply chain.
-Bullwhip effect occurs when distorted products demand information passes from one entity to the next through the supply chain.
*Information technology allows additional visibility in the supply chain.


5. Consumer behavior.  

-Demand planning software generates demand forecasts using statistical tools and forecasting techniques.
-Ones an organization understand customer demand and its effect on the supply chain it can begging to estimate the impact that its supply chain will have on its customers and ultimately the organization's performance.


6. Competition.

-Supply chain management can be broken down in"
-Supply chain planning software: uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.
-Supply chain executive (SCE) software automates the different stems and stages of the supply chain.


7. Speed. 

-During the past decade, competition has focused on speed. New forms of severs, telecommunications enabling companies to perform activities that were once never thought possible.
-Another aspect of speed is the company's ability to satisfy continually changing customer requirements efficiently, accurately, and quickly.


8. Supply Chain Management Success Factors

-To succeed in today's competitive markets, companies must align their supply chains with the demands of the markets key serve.
-To achieve success such as reducing operation costs, improving asset productivity, and compressing order cycle time, and organization should follow the seven principles of SCM outlines.
-One of the benefits is to know immediately what is being transacted at the customer and of the supply chain instead of waiting days or weeks for the information to flow.
-Organizations should study industry best practices to improve their chances of successful implementation of SCM systems. The following are keys to SCM success.



9. Make the sale to supplies.  

-The hardest part of any SCM system is its complexity because a large part of the system extends beyond the company's walls.


10. Wean employees of traditional business practices.  

-Operations people typically deal with phone calls, faxes, and orders scrawled on paper and will most likely want to keep it that way.

11. Ensure the SCM system supports the organizational goals.  

-It is important to select SCM software that give organizations and advantage in the areas most crucial to their business success.


12. Deploy in incremental phases and measure and communicate success.   

-Design the deployment of the SCM system in incremental phases.


13. Be future oriented.   

-The supply chain design must anticipate the future state of the business.

Chapter NIine

Enabling the organization - decision making


1. Decision making.

Reasons for growth of decision making information.

-People need to analyze large amounts of information – Improvements in technology itself, innovations in communication, and globalization have resulted in a dramatic increase in the alternatives and dimensions people need to consider when making a decision or appraising an opportunity.

-People must make decisions quickly – Time is of the essence and people simply do not have time to sift through all the information manually.

-People must apply sophisticated analysis techniques, such as modeling and forecasting, to make good decisions – Information systems substantially reduce the time required to perform these sophisticated analysis techniques.

-People must protect the corporate asset of organizational information – Information systems offer the security required to ensure organizational information remains safe.
Model – A simplified representation or abstraction of reality

IT SYSTEMS IN AN ENTERPRISE

2. Transaction processing system.  

-Moving up through the organizational pyramid users move from requiring transnational information to analytically information


-Transaction processing system – the basic business system that serves the operational level (analysis) in an organization.

-Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the 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

3. 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 outputs

WHAT IF ANALYSIS

GOAL SEEKING ANALYSIS

4. Executive information system.

-Executive information system (EIS) – A specialized DSS that supports senior level executives within the organization.
-Interaction between a TPS and an EIS






Interaction between a TPS and a DSS




Digital dashboard – integrates information from multiple components and presents it in a united display


ARTIFICIAL INTELLIGENCE (AI)

-The ultimate goal of AI is the ability to build a system that can mimic human intelligence.
-Intelligent system – various commercial applications of artificial intelligence.
-Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn.
-Four most common categories of AI include;
1. Expert system – computerized advisory programs that imitate the reasoning processes of experts in solving difficult problems
2. Neural network – attempts to emulate the way the human brain works
o Fuzzy logic – a mathematical method of handling imprecise or subjective information
3. Genetic algorithm – 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


DATA MINING

Data-mining software includes many forms of AI such as neutral networks and expert systems

Chapter Eight

Accessing organization information- data warehouse


1. Data warehouse

-A decision support database that is maintained separately from the organization’s operational database.
-A consistent database source that bring together information from multiple sources for decision support queries.
-Support information processing by providing a solid platform of consolidated, historical data for analysis.




2. History of data warehouse

-In the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions.
-The data warehouse provided the ability to support decision making without disrupting the day-to-day -operations, because;

Operational information is mainly current – does not include the history for better decision making
- Issues of quality information
- Without information history, it is difficult to tell how and why things change over
time


3. Data warehouse fundamentals.

-Data warehouse – A logical collection of information, gathered from many different operational databases, .that supports business analysis activities and decision-making takes.

-The primary purpose of a data warehouse is to combined information throughout an organization into a single repository for decision-making purposes – data warehouse support only analytical processing


4. Data warehouse model.

-Extraction, transformation and loading (ETL) – A process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.
-Data warehouse then send subsets of the information to data mart.
-Data mart – contains a subset of data warehouse information.







5. Multidimensional  analysis and mining.

-Relational Database contains information in a series of two-dimensional tables.
-In a data warehouse and data mart, information is multidimensional, it contains layers of columns and rows
- Dimension – A particular attribute of information.





Cube – common term for the representation of multidimensional information.




-Once a cube of information is created, users can begin to slice and dice the cube to drill down into the information.

-Users can analyze information in a number of different ways and with number of different dimensions.

-Data Mining – the process of analyzing data to extract information not offered by the raw data alone. Also known as “knowledge discovery” – computer-assisted tools and techniques for sifting through and analyzing vast data stores in order to finds trends, patterns and correlations that can guide decision making and increase understanding.

-To perform data mining users need data-mining tools
- Data-mining tool – uses a variety of techniques to finds patterns and relationships in large volumes of information. Eg: retailers and use knowledge of these patterns to improve the placement of items in the layout of a mail-order catalog page or Web page.



6. Information cleansing or scrubbing.

-An organization must maintain high-quality data in the data warehouse.
-Information cleansing or scrubbing – A process that weeds out and fixes or discards inconsistent, incorrect or incomplete information.
-Occurs during ETL process and second on the information once if is in the data warehouse.
-Contract information in an operational system.
-Standardizing customer;s name from Operational Systems.
-Information cleansing activities
- Missing Records or Attributes
- Redundant Records
- Missing Keys or Other Required Data
- Erroneous Relationships or References
- Inaccurate Data


Accurate and complete information





7. Business intelligence

-Business Intelligence – refers to applications and technologies that are used to gather, provides access, analyze data and information to support decision making efforts.

-These systems will illustrate business intelligence in the areas of customer profiling, customer support, market research, market segmentation, product profitability, statistical analysis, and inventory and distribution analysis to name a few.

Chapter Seven

Storing Organizational Information


1. Information is stored in databases.

-Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

2. Database models include:

-Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships

-Network database model – a flexible way of representing objects and their relationships Relational database model – stores information in the form of logically related two-dimensional tables

-Entity – a person, place, thing, transaction, or event about which information is stored
The rows in each table contain the entities
In Figure 7.1 CUSTOMER includes Dave’s Sub Shop and Pizza Palace entities

-Attributes (fields, columns) – characteristics or properties of an entity class
The columns in each table contain the attributes
In Figure 7.1 attributes for CUSTOMER include Customer ID, Customer Name, Contact Name
Primary keys and foreign keys identify the various entity classes (tables) in the database.

-Primary key – a field (or group of fields) that uniquely identifies a given entity in a table
-Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

















3. Database advantages from a business perspective include


-Increased flexibility
-Increased scalability and performance
-Reduced information redundancy
-Increased information integrity (quality)
-Increased information security


4. Increased flexibility


-A well-designed database should:
-Handle changes quickly and easily
-Provide users with different views
-Have only one physical view
-Physical view – deals with the physical storage of information on a storage device
-Have multiple logical views
-Logical view – focuses on how users logically access information


5. Increased scalability and performance


-A database must scale to meet increased demand, while maintaining acceptable performance levels
-Scalability – refers to how well a system can adapt to increased demands
-Performance – measures how quickly a system performs a certain process or transaction


-Reduced information redundancy
-Databases reduce information redundancy
-Redundancy – the duplication of information or storing the same information in multiple places

 Inconsistency is one of the primary problems with redundant information


6. Increase Information Integrity (Quality)


-Information integrity – measures the quality of information
-Integrity constraint – rules that help ensure the quality of information
-Relational integrity constraint
-Business-critical integrity constraint




7. Increased information security

-Information is an organizational asset and must be protected
-Databases offer several security features including:
-Password – provides authentication of the user
-Access level – determines who has access to the different types of information
-Access control – determines types of user access, such as read-only access



8. Database Management Systems



-Direct interaction –
The user interacts directly with the DBMS
The DBMS obtains the information from the database

-Indirect interaction
User interacts with an application (i.e., payroll application, manufacturing application, sales application)
The application interacts with the DBMS
The DBMS obtains the information from the database

Chapter Six

Valuing organizational information

Chapter Five

Organizational structures that support strategic initiatives


1. Organizational structures.

-Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.

-Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

2. Information technology roles and responsibilities.

-Information technology is a relatively new functional area, having only been around formally for around 40 years.

3. Recent IT – related strategic positions:

Chief Information Officer (CIO)

- Overseas all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

Broad CIO functions include:

- Manager – ensuring the delivery of all IT projects, on time and within budget.
-  Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization.
- Communicator – building and maintaining strong executive relationships.

Chief Technology Officer (CTO)

- Responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT

Chief Security Officer (CSO)

- Responsible for ensuring the security of IT systems

Chief Privacy Officer (CPO)

-Responsible for ensuring the ethical and legal use of information


Chief Knowledge Officer (CKO)

- Responsible for collecting, maintaining and distributing the organization's knowledge

4. The gap between business personnel and IT personnel.


- Business personnel possess expertise in functional areas such as marketing, accounting and sales

- IT personnel have the technological expertise

- This typically causes a communications gap between the business personnel and IT personnel


5. Improving communications.

- Business personnel must seek to increase their understanding of IT

- IT personnel must seek to increase their understanding of the business

- It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

6. ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY


- Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

- In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security


7. Ethics.


- Ethics – the principles and standards that guide our behavior toward other people

- Privacy is a major ethical issues;

Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent

- Issues affected by technology advances

8. Protecting intellectual assets.


- Organizational information is intellectual capital – it must be protected

- Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

- E-business automatically crates tremendous information security risks for organization

Chapter Four

Measuring Success of strategic initiatives

1. Definition of metrics

-Metrics is a measurement by which is efficiency, performance, progress or quality of a plan, process or product can be assessed.

2. Efficiency and effectiveness

Efficiency	Effectiveness
§  Measure the performance of the IT system itself including throughput, speed and availability.	§   Measure the impact IT has on business       processes and activities including customer satisfaction, conversion rates and self-through increases.
§  Getting the most from each resource.	§  Setting the rights goals and objectives and   ensuring they are accomplished.
§  Focuses on the extent to which on organization   is using its resource in an optimal way.	§  Focuses on how well an organization  is achieving its goal and objectives.

3. Benchmarking

A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance.

4. Interrelationship of efficiency and effectiveness IT metrics

Efficiency IT metrics focus on technology and include :





Effectiveness IT metrics focus on an organization's goals, strategies and objectives and include :

5. Metrics for strategic initiatives  

Chapter Three

Strategic Initiatives for Implementing Competitive Advantages.

1. The four basic components of supply chain management.

-Supply Chain Management (SCM) – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

a)Supply chain strategy – strategy for managing all resources to meet customer demand.

b)Supply chain partner – partners throughout the supply chain that deliver finished products, raw materials, and services.
c)Supply chain operation – schedule for production activities.
d)Supply chain logistics – product delivery process.

2. Customer relationship management systems and how they can help organizations understand their customers.

a)Involves managing all aspects of a customer's relationship with an organization to increase customer royalty and retention and an organization's profitability.

b)Allows an organization to gain insights into customers' shopping and buying behaviors in order to develop and implement enterprise-wide strategies.

3.Business process Reengineering.

a)Business Process

-A standardized set of activities that accomplish a specific task, such as processing a customer's order.

b)Business Process Reengineering (BPR)

-The analysis and redesign of workflow within and between enterprises.
-The purpose of BPR is to make all business process the best-in-class.

c)Seven Principles Of BPR

-Organize around outcomes, not tasks.
-Identify all the organization's processes and prioritize them in order of redesign urgency.
-Integrate information processing work into the real work that produces the information.
-Treat geographically dispersed resources as though they were centralized.
-Link parallel activities in the workflow instead of just integrating their results.
-Put the decision point where the work is performed, and build control into the process.
-Capture information once and at the source.

d)Enterprise Resource Planning (ERP)

-Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make desicions by viewing enterprise wide information on all business operations.

e)How can ERP improve an organization business?


-Many organizations fail to maintain consistency across business operations.
-If a single department decides to implement a new system without considering the other departments, inconsistencies can occur throughout the company.
-Not all systems are built to talk to each other and share data, and if sales suddenly implements a new system that marketing and accounting cannot use or is inconsistent in the way it handles information, the company's operations becomes siloed.
-The issue ERP intends to solve is that knowledge within a majority of organization currently in silos that are maintained by a select few, without the ability to be shared across the organization, causing inconsistency across business operations..

Chapter Two

Identifying Competitive Technology.


1. Competitive advantages are typically temporary.

-Competitive advantage a product or service that an organization's customers place a greater value on than similar offerings from a competitor.
-Competitive is temporary because competitors keep duplicate the strategy.
-The company should start the new competitive advantage.

2. The five forces in Porter's Five Forces Model.

a)Buyer power.
-High when buyers have many choices of whom to buy.
-Low when their choices are few.
-To reduce buyer power to and create competitive advantage an organization must make it more interesting and attractive to buy form company not from the competitors.
-Best practices of IT - based.
 - Loyalty program in travel industry (example: rewards on free airlines tickets or hotel stays)

b)Supplier Power.
-High when buyers have few choices of whom to buy from.
-Low when their choices are many.
-Best practices of IT to create competitive advantage.
-Example: B2B marketplace- private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid Reverse auction is an auction format which increasingly lower bids.

c)Threat for substitute products and services.

-High when there are many alternatives to a product or service.
-Low when there are few alternatives from which to choose.
-Ideally, an organization would like to be on a market in which there are few substitutes of their product or services.
-Example, electronic product -same function different brands.

d)Threat of new entrants.

-High when it is easy for new competitors to enter a market.
-Low when there are significant entry barriers to entering a market.
-An entry barrier is a feature of a product or service that customers have come to expect and entering competitors must offer the same for survival.
-For example, a new bank must offer its customers an array of MIS- enabled services, including ATMs, and online bill paying ( Maybank and CIMB)

3. The three Porter's generic strategies.

Porter's three generic strategies.

a)Cost leadership 

-Becoming a low-cost producer in the industry allows the company to lower prices to customers.
-Competitors with higher costs cannot afford to compete with the low-cost leader on price.

b)Differentiation

-Create competitive advantage by distinguishing their products on one or more features important to their customers.
-Unique features or benefits may justify price differences.

c)Focused Strategy 

-Target to a niche market.
-Concentrates on either cost leadership or differentiation.

4. Value Chain Analysis - Executing Business Strategies.

a)Supply chain.
-A chain or series of processes that adds value to product & service for customer.
-Add value to its products and services that support a profit margin for the firm.