• Insourcing (in house development) – common approach using the profesional expertise within an organization to develop and maintain the organization’s information technology system
• Outsourcing – an arrangement by which one organization provides a service or services for aother organization that chooses not to perform them in house.

                         

reasons company outsource

• Onshore outsourcing – engaging another company within the same country for services
• Nearshore outsourcing -  contracting an outsourcing arrangement with a company in nearby country. Often this country will share a border with a native country.
• Offshore outsourcing – using organizations from developing countries to write code and develop systems. The country is geographically far away.

                                                    

• -          Increased quality and efficiency of a process, service or function
• -          Reduce operating expenses
• -          Access to advanced technologies
• -          No costly outlay of capital funds
• -          Reduce time to market for products or services.

• Contract length
• Competitive edge
• Confidentially
• Scope definition

• information has traditionally been isolated within specific departments, whether on an individual database, in a file cabinet, or on an employee's.
•  ERP enables employees across the organization to share information across a single, centralized database.

•  ERP solutions were developed to deliver automation across multiple units of an organization, yo help facilitate the manufacturing process and address issues such a raw materials, inventory, order entry, and distribution.
•  ERP handle document management, such as cataloging contracts and purchase orders.

•  this application are the backbone of ebusiness.
•  is the key success of the company.
•  allows unlocking of information to make it available to any user, anywhere, anytime.

•  achieved using middleware- several different types of software that sit in the middle of and provide connectivity between two or more software applications.
•  enterprise application integration (EAI) middleware represents a new approach to middleware by packaging together commonly used functionality.
•  if one applications performs poorly, the entire customers value delivery systems will affected.

 Supply Chain Management

• The average company spends nearly half of every dollar that it earns on production.
• In the past, companies focused primarily on manufacturing and quality improvements to influence their supply chains.

• The supply chain has three main links :

1. Materials flow from suppliers and their “upstream” suppliers at all levels.
2. Transformation of materials into semi finished and finished products through the organization’s own production process.
3. Distribution of products to customers and their “downstream” customers at all levels.

•  Organizations must embrace technologies that can effectively manage supply chains.

 

Information Technology's Role In The Supply Chain

• IT’s primary role is to create integrations or tight process and information linkages between functions within a firm.

 Factors driving SCM :

Visibility

• Supply chain visibility – the ability to view all areas up and down the supply chain.
• Bull whip effect – occurs when distorted product demand information passes from one entity to the next throughout the supply chain.

Consumer Behaviour

• Companies can respond faster and more effectively to consumer demands through supply chain enhances.
• Demand planning software – generates demand forecasts using statistical tools and forecasting techniques.

Competition

• Supply chain planning (SCP) software – uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain.
• Supply chain execution (SCE) software – automates the different steps and stages of the supply chain.
• SCP and SCE in the supply chain 

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Supply Chain Management Success Factors

• SCM industry best practices include :

1. Make the sale to suppliers.
2. Wean employees off traditional business practices.
3. Ensure the SCM system supports the organizational goals.
4. Deploy in incremental phases and measure and communicate success.
5. Be future oriented.

SCM Success Stories

• Top reasons why more and more executives are turning to SCM to manage their extended enterprises.

• Numerous decision support systems (DSSs) are being built to assist decision makers in the design and operation of integrated supply chains.
• DSSs allow managers to examine performance and relationships over the supply chain and among :

1. Suppliers
2. Manufacturers
3. Distributors
4. Other factors that optimize supply chain performance

 

• 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.

• 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

1. Executive information sysem (EIS) – A specialized DSS that supports senior level executives within the organizatioN
2. Most EISs offering the following capabilities;

•  Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information
• Drill-down – enables users to get details, and details of information
• Slice-and-dice – looks at information from different perspectives 

Interaction between a TPS and a DSS

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

Artificial intelligence (AI)

Ø  The ultimate goal of AI is the ability to build a system that can mimic human intelligence

Ø  Intelligent system – various commercial applications of artificial intelligence

Ø  Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn

Ø  Four most common categories of AI include;

1.       Expert system – computerized advisory programs that imitate the reasoning processes of experts i                  solving difficult problems

2.       Neural network – attempts to emulate the way the human brain works

          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