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CHAPTER 13 : CREATING INNOVATIVE ORGANIZATIONS

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.

Timeline of Web 1.0

 The Move from Web 1.0 to Web 2.0

Assalamualaikum.........

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

Learning outcomes

12.1 Describe the role information plays in enterprise resource 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.

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

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.

                                                    INTERGRATION OF 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:

§         Oracle

§         Sap

 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.

 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

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.

Assalamualaikum ...

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 customer relationship management.

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

Customer Relationship Management (CRM)

CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future.

- A customer strategy starts with understanding who the company's customers are and how the company can meet strategic goals.

- As the business world increasingly shifts from product focus to customer focus, most organizations recognize the treating existing customers well is the best source of profitable and sustainable revenue growth in the age of e-business, however, an organization is challenged more than ever before to truly satisfy its customers.

Recently, Frequency, and Monetary Value

An organization can find its most valuable customers by using a formula that industry insiders call RFM-recency, frequency, and monetary value. In other words, an organization must track:

- How recently a customer purchased items (recently)

- How frequently a customer purchases an item (frequently

- How much a customer spends on each purchase (monetary value)

The evolution of CRM

Knowing the customer, especially knowing the profitability of individual customers, is highly lucrative in the financial service industry.

There are three phases in the evolution of CRM:

1.                               CRM Reporting technology help organizations identify their customers across other applicants

2.                               CRM analysis technology helps organizations segment their customers into categories such as best and worst customers.

3.                               CRM predicts technological help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

The Ugly Side of CRM: Why CRM Matters More Now than Ever Before

Now companies have no choice as the power of the customer grows exponentially as the internet grows. In every case, customers have become an integral part of the action as a member of the aggregated, interactive, self-organizing, auto-entertaining audience on businesses. However, this should no be a surprise, since it was the customers crazy passion and hobbies and obsessions-that build up the web in the first place.

Customer Relationship Management's Explosive Growth

When customers buy on Internet, they see, and they steer, entire value chains.

- Customer web interaction become conversations, interactive dialogs with shared knowledge, not just business transaction. Web- based customer care can actually become the focal point of customer relationship management and provide breakthrough benefits for both the enterprise and its customers, substantially reducing costs while improving service.

- Current users allow allocating 20 percent of their IT budget to CRM solutions.

DISPLAY THE TOP CRM BUSINESS DRIVERS

Using Analytical CRM to Enhance Decisions

The two components of a CRM strategy are:

- 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 systems that do not deal directly with the customers.

The primary difference between operational CRM and analytical CRM in the direct interaction between the organization and its customers.

-Personalization occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person. Many organizations are now utilizing CRM to create customer rules and templates that marketers can use to personalize customer messages.

Customer Relationship Management Success Factor

CRM solutions make organizational business processes more intelligent. This is achieved by understanding customer behavior and preferences, then realigning product and service offering and related communications to make sure they are synchronized with customer needs and preferences. If an organization is implementing a CRM system, it should study the industry best practices to help ensure a successful implementation.

Using he analytical capabilities of CRM can help a company Anticipate customer need and proactively serve customers in way that build relationship, create loyalty, and enhance bottom lines.

Assalamualaikum ....

CHAPTER 10 : SUPPLY CHAIN MANAGEMENT

Learning outcomes

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

10.2 Define the relationship between ecision 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.

 

 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.

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.

- SCM is becoming increasingly important in creating organizational efficiencies and competitive advantages.

- It improves ways for companies to find the raw components they need to make a product or service, manufacture that product or service, and deliver it to customers.

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.

- Information technology integrates planning, decision -making processes, business operating processes, and information sharing for business performance management.

- Considerable evidence shows that this type of supply chain integration results in superior supply chain capabilities and profits.

+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.

+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.

+ 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.

+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.

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.

+ MAKE THE SALE TO SUPPLIERS

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

+ 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.

+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.

+ DEPLOY IN INCREMENTAL PHASES AND MEASURE AND MOMMUNICATE SUCCESS

Design the deployment of the SCM system in incremental phases.

+ BE FUTURE ORIENTED

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

SCM Success Stories

The following picture depicts the top reasons more and more executives are turning to SCM to manage their expended enterprises.

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CHAPTER 9 : ENABLING THE ORGANIZATION ( DECISION MAKING )

Learning outcomes

9.1 Define the systems organizations use to make decisions and gain cimpetitive advantages.

9.2 Describe the three quantitative models typically used by decision support systems.

9.3 Describe the relationship between digital dash-boards and executive information systems.

9.4 List and describe four types of artificial intelligence systems.

                                     MODEL

A model is a simplified representation or abstraction of reality.

-Models can calculate risks, understand uncertainly , change variable, and manipulate time.

- Decision-making information systems work by building models out of organization information to lend insight into important business issues and opportunities.

Each system uses different models to assist in decision making, problem solving, and opportunity capturing. This system includes:

-Transaction Processing System.

-Decision Support Systems.

-Executive Information Systems.

·                                 Transaction Processing Systems

The structure of a typical organization is similar to a pyramid. Organizational activities occur at different levels of the pyramid. People in the organization have unique information needs and thus require various sets of IT tools.

- Online transaction processing is the manipulation of information to create business intelligence in support of strategic decision making.

·                                 Decision Support System

A decision support system (DSS) models information to support managers and business professionals during the decision making process.

Three quantitative models are typically used by DSSs:

-Sensitivity analysis is the study of the impact that changes in one (or more) parts of the model have on other parts of the model.

-What-if analysis check the impact of change in an assumption on the proposed solution.

- Goal -seeking analysis finds the inputs necessary to achieve a goal such as a desired level of output.

·                                 Executive Information Systems

-Consolidation involves the aggregation of information and features simple rollups to complex groupings of interrelated information.

-Drill-down enables users to get details, and details of details, of information viewing monthly, weekly, daily, or even hourly information represents drill down capability.

-Slide-and-dice is the ability to look at information from different perspectives.

+DIGITAL DASHBOARDS

A common feature of EIA is digital dashboard. Digital dashboards integrate information from multiple components and tailor the information to individual preferences. Digital dashboards commonly use indicators to help executives quickly identify the status of the key information or critical success factors.

- Digital dashboards, whether basic or comprehensive, deliver results quickly.

- EIS systems such as digital dashboards, allow executives to move beyond reporting to using information to directly impact business performance.

- Digital Dashboards help executives react to information as it becomes available and make decision, solve problems, and change strategies daily instead of monthly.

Artificial Intelligence(AI)

Executive information systems are starting to take advantage of artificial intelligence to help executives make strategic decisions.

Phili Lumish said that competing in the internet arena is competing with the entire world rather than a store down the block or a few miles away.

- Intelligent Systems are various commercial applications of artificial intelligence. --

- Artificial intelligence (AI) simulates human intelligence such as ability to reason and learn.

AI systems dramatically increase the speed and consistency of decision making, solve problems with incomplete information, and solve complicated issues that cannot be solved by conventional computing. There are many categories of AI systems:

-Expert System

-Neural Networks

-Genetic Algorithms

-Intelligent agents

+ Expert system are computerized advisory program that imitate the reasoning processes of experts in solving difficult problems.

+A neural Network, also called an artificial neural network, is a category of AI that attempts to emulate the way the human brain works.

- Fuzzy logic: It is an artificial method of handing imprecise or subjective information.

+A genetic algorithms is an artificial intelligence system that mimic the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem.

+ Intelligent agents is a special-purpose knowledge-based information system that accomplished specific task as on behalf of its users. A shopping both is simple example of an intelligent agent.

- Shopping bot is the software that will search several retailer websites and provide a comparison of each retailer's offering including price and availability.

Multi-Agent Systems and Agent Modeling

By observing the ecosystem like ant or bee colonies, artificial intelligence scientists can use hardware and software models that incorporate insect characteristics and behavior to:

- Learn how people-based system behave

- predict how they will behave under a given set of circumstances

- improve human system to make them more efficient and effective.

This concept of learning from ecosystems and adapting their characteristics to human and organizational situations is called biomimicry.

+ Data Mining

- Data miming system sift instantly through the information to uncover patterns and relationships that would elude an army of human research.

- Data-mining software typically includes many forms of AI such us networks and expert system.