IT Outsourcing in a Precarious Economic Environment

With the downturn of the global economy, many companies tend to cut expenditures in IT development. This could potentially have a huge impact on IT companies. However, according to the article Infosys Boss: Outsourcing Will Increase, Gopalakrishnan, CEO of Infosys Technologies, is optimistic about the future. Instead of cutting back the workforce, he is looking to seize new opportunities in the IT industry.

Goplakrishnan admits that the impact of the AIG bailout and Lehman's bankruptcy have hindered business and he does not see this as something the economy will overcome quickly. Many of his clients are looking to outsource more of their businesses especially to India. Total IT spending is approximately 800 billion dollars. Of the 800 billion, 250 billion comes from outsourcing, 5% of the 250 billion comes from India.

Infosys Technologies is encouraging more of its clients to implement a global delivery model (GDM). Ninety percent of business comes from within the US and Europe. Infosys hopes to expand business into healthcare and governments sectors.

Many IT companies reduce spending in R&D during periods of economic slowdown. However this company is putting more into development, specifically for IP solutions and value added services. Not only will this give them a competitive edge, it also provides jobs that may otherwise be eliminated.

Source:http://www.businessweek.com/globalbiz/content/nov2008/gb20081121_592979.htm

Critical Success Factors in Agriculture

The text book for this course defines critical success factors (CSFs) as "the things that must go right in order to ensure the organization's survival and success."

An article by Don Hofstrand found in Ag Decision Maker addresses the possible CSFs when transferring the business of a two generation farm. Some of the critical success factors include:

• The parents or older generation must be ready to share with the younger generation. It is often difficult for the first generation to relinquish control to the second generation. Also, the first generation will most likely take an income reduction.


• The second generation must be committed to farming. Sometimes children are inclined to "try it" to please their parents. They must really be committed. Also, one should consider the marital status of the second generation. If he/she is already married then the spouse needs to also be committed to farm life. If the person is single, the fact that a future family member may not like farm life needs to also be a consideration.


• All family members need to have the same vision for the business.


• The business needs to be lucrative enough to support all parties involved.


• Compatibility is also important. The first and second generations need to work well together. They also need to be able to separate personal issues from business issues. When working closely with family members, the lines between personal and business issues can often be blurred.


• Agreements that unfairly favor one family member over another should be avoided.

The article suggests, in the agricultural industry, to establish a trial period of 2-3 years if the parties have not worked together extensively in the past.

Sources:

http://www.extension.iastate.edu/agdm/wholefarm/html/c4-12.html

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008.

Artificial Intelligence used in Surveillence Technology

article: http://www.marketwatch.com/news/story/Prescient-Group-LLC-To-Introduce/story.aspx?guid=%7B7839A171-D4FB-4100-8A2F-8D4AB3D98B28%7D

Prescient Group, LCC is getting ready to release iSentry, an artificially intelligent video surveillance system. This system could be of particular interest to homeland security, the hospitality sector, defense, energy facilities, and other general businesses. What makes this system special is that it learns normal activities that occur within the video camera's scope. The system displays a black screen until unusual activity occurs. Then depending on parameters set by the system operator, different actions may take place, such as email notification or system lock down. This system is currently able to filter out 95% of normal activity.

According to Prescient's co-founders there are five things that set iSentry apart from most other systems available:

1. It can detect unusual activity.

2. iSentry has multiple camera capabilities. Multiple cameras allow the controller to shift priorities without missing other important activities.

3. iSentry has active pan, tilt, and zoom features. This allows the cameras to automatically track suspicious targets, providing more detailed information.

4. The system has a long memory archive. The cameras use a low resolution which ends up conserving 90% of disc space.

5. iSentry has accurate outdoor detection. It can can pick-up small motion in an outdoor area, in all kinds of weather.

Prescient is currently working with NYC to use this system in traffic monitoring, i.e. in tunnels. The uses for iSentry are vast.

Source: "Prescient Group, LLC To Introduce iSentry, Groundbreaking Artificial Intelligence Video Surveillance Technology, at 15th World Congress of Intelligent Transport Systems Meeting." MarketWatch. 18 Nov. 2008. Retreived on 25 Nov. 2008.
http://www.marketwatch.com/news/story/Prescient-Group-LLC-To-Introduce/story.aspx?guid=%7B7839A171-D4FB-4100-8A2F-8D4AB3D98B28%7D

10.3 Knowledge Management Activities

It is important for information to be organized and accessible, especially in large corporations. Historically, there have been problems with locating information. An example of this is when employees leave a company and it becomes difficult to locate certain information that the employee created or edited. Knowledge management systems are used to organize information. Most of these systems serve one or more of the following purposes:

• to make knowledge visible through the use of maps, hypertext, and yellow pages.


• to develop a knowledge intensive culture


• build a knowledge infrastructure

Knowledge Creation

According to the textbook, "knowledge creation is the generation of new insights, ideas, or routines and it can be viewed as the interplay between tacit and explicit knowledge."

The four modes of knowledge creation are:

• Socialization mode is when new knowledge is created through social interaction, such as conversing with another member in the organization. The sharing of tacit knowledge.


• Combination mode is when new knowledge is created by merging, categorizing, reclassifying, and/or synthesizing explicit information


• Externalization mode, one creates new knowledge by transferring tacit knowledge to explicit knowledge. Example, documenting a process that was used for a client.


• Internalization mode, one creates tacit knowledge from explicit knowledge. Example, gaining an understanding of something through reading a written document.

Knowledge Sharing

Knowledge sharing involves volunteering information including ideas, solutions, and experiences to someone else. This can be done through a middleman, computer, or directly. Due to interoffice competition, some people are reluctant to share their knowledge with others. Some conditions that may encourage the sharing of knowledge include trust, interest, common language. and easy accessibility to experienced employees.

Knowledge seeking or sourcing is when a person intentionally tries to locate and use internal organizational knowledge.

The main purpose of knowledge management is to encourage and facilitate the sharing of information between various individuals and departments within an organization.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 396-398.

9.3 Global Information Systems

Interorganizational systems that are used to connect companies or parts of companies located in multiple countries are global information systems. Airline reservation systems like SABRE and electronic funds transfer (EFT) systems are examples of global information systems. There are three different types of companies that use global information systems:

• Multinational companies operate in several counties. Examples include McDonald's and Coca-Cola.
• International companies conduct business with companies located in other countries. An example is Boeing who contracts work from over 40 countries.
• Virtual global companies are joint ventures between business partners in different countries.

Global information systems offer several benefits which are only possible through the use of IT. The benefits are:

• Effective communication at a reasonable cost.
• Effective collaboration to compensate for distance, time, language, and culture.
• Allows access to databases of business partners which allows them to work on projects simultaneously.

There are many obstacles when designing and implementing interorganizational information systmes (IOS). When dealing with a global company, implementation and design become even more complex. Some things to consider are:

• Cultural differences- Culture refers to the accepted values and characteristics of society. This changes from country to country, so when conducting business away from "home," one must consider the cultural environment that he is in.
• Localization-Sometimes companies alter the logo, color, packaging, or size of product in order to be more appealing in a target area.
• Economic and Political differences- An example of this is the different infrastructure from one society to another, i.e. China limits what can be viewed on the Internet.
• Legal Issues-Legal issues include knowing a country's stance on patents, copyrights, computer crimes, privacy, data sharing, etc.
• Web Design for a Global Audience- It is important to insure that a website can be appropriately translated in various countries.
• Globalization and Offshoring of IT Activities
• Globalization and Personnel Issues- Training employees to work in a global environment is very important in operations and in hiring personnel abroad.

Global Supply Chains

Optimizing a global supply chain can be difficult. However, e-commerce has made sourcing suppliers and customers in different countries easier. The obstacles that arise with information systems implementation, are also the causes of supply chain interference. Because a global supply chain is larger than a domestic one, there is more opportunity for a breakdown in communication. IT has helped smooth out the process utilized in a global supply chain. IT provides :

• Communication infrastructure options
• Online help
• Helps locate business partners
• Solves language problems through machine translation or automatic translation.

Financial institutions are also using global supply chains for the exchange of money via EFT, e-payments. Currencies can be converted on a real-time for the most current conversion rates.

Globalization is becoming a more common practice among corporations. Information technologies support communication, operations, and supply chains. Many companies are now outsourcing logistic services to minimizes problems encountered in the global market.

Source:

Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 352-358.

8.3 Supply Chain Opportunities

In recent years there have been many progressive changes in supply chain management (SCM). It has now become a common practice to share information along the supply chain, this is known as a collaborative supply chain because the various components work together. Companies that use a collaborative supply chain use master data management (MDM) systems to organize all information. Some providers of such systems are SAP, Oracle Corp.and IBM. MDM systems manage a large amount of information form both internal and external sources.

Example: Wal-Mart is known for its collaboration with P&G.

Managing E-Business
The increase in e-business has resulted in the utilization of the Internet in SCM. Using the Internet for SCM has several benefits including speed, it's less expensive, flexibility, and the possibility of shortening the supply chain. Overall, the increase of e-businesses has improved SCM performance and customer satisfaction.

Electronic marketplaces allow identification of upstream suppliers. E-marketplaces also allow for a better dispersion of resources as well as an increase in shared information.

Supply chain participants in e-businesses are also using electronic ordering and funds transfer (EOFT) and advanced shipping notice (ASN) to improve customer service. These transactions are conducted by using electronic data interchange (EDI).

SCM has morphed from a linear form into a "hub." Companies using linear SCM follow a sequence which can take longer. In the "hub" information is shared and steps can be skipped to expedite the process.

Managing Logistics
Logistics involves the movement of materials amongst the supply chain, including shipping, storage, and inventory management. Fixed management systems uses a technology based system to fully integrate all components of the supply chain. E-logistics involves drop shipping that allows the vendor to ship directly to the end consumer.

Managing Inventory
Inventory management is very important in providing timely delivery of goods. Some companies keep inventory on hand as a type of "insurance". However, this can be expensive to maintain. Collaborative fulfillment networks (CFNs) can be used to reduce inventory and transportation costs. Vendor managed inventories (VMI), the vendor is responsible for storing inventory in warehouses for the manufacturer or retailer.

Collaborative management, if coordinated properly can be more efficient and cost reductive.

Managing Other IT-Assisted Solutions

The supply chain hub has resulted into the formation of supply chain teams. Supply chain teams are comprised of several individuals with their own area of expertise. These individuals then address customer issues within their area of knowledge. For example one person may be designated to address delivery issues.

Virtual factories have been developed to let organizations simulate and make changes to their supply chain design before implementing the practice into the actual factory.

There are now more wireless options like RFID that can improve supply chain issues.

Ethical Issues Related to SCM

Collaborative supply chain management involves sharing information. This must be done in a responsible and secure manner. Also, by eliminating parts of the supply chain, jobs are also eliminated. Long-time employees may be displaced.

Source:
Turban, Leidner, McLean, Wetherbe. Information Technology for Management Transforming Organizations in the Digital Economy. 6th ed. John Wiley & Sons, 2008. p. 307-312.

Shop Around

"Shoppers Using Mobiles to Hunt Deals," is an article addressing how the mobile Internet has affected shopping patterns in the the wake of a financial crunch. Internet shopping is no longer something that is done only at home. Many bargain shoppers are using their mobile devices to compare prices and read performance reviews while shopping in stores. Because the online and in store worlds are merging, retailers are being forced to offer their best prices first or else risk losing business to their virtual competitors. Also, as broadband capabilities improve, employers are finding that employees are spending less time on the Internet at work because surfing the web is no longer limited to the desktop.

Review the article....
http://www.businessweek.com/globalbiz/content/aug2008/gb20080818_284802.htm


Source:
"Shoppers Using Mobils to Hunt Deals." BusinessWeek. 18 Aug. 2008. Retreived on 29 Sep. 2008. <http://www.businessweek.com/globalbiz/content/aug2008/gb20080818_284802.htm>