IT Solutions and Technologies

IT Solutions and Technologies

Introduction

From the 1990s until now, information technology (IT) has shaped the way companies organize their business process, communicate with customers, and provide products and services. An effective and efficient alignment of IT strategies supporting business strategies and processes becomes a primary factor for a successful company in the highly competitive market. IT solutions and technologies have still been the top issue and also the no. 1 concern for organizational executives and professional IT practitioners (Batra, 2012; Chen, Chiang & Storey, 2012).

IT is a key business function because it shapes and supports business strategy in most of the companies. The companies’ investment in IT solutions expects to gain benefits such as improving productivities, increasing performance, or obtaining a competitive business advantage. While traditional management reserves IT as an implementation tool, recently business leaders believe IT can play a pro-active role in developing a long-term business strategy. IT managers’ activities and business executives’ work must be synchronized towards common IT-oriented objectives.

IT solutions have covered in various technologies such as enterprise resource planning, supplier relationship management, customer relationship management (CRM), social media, mobile technology, cloud computing, and Big Data. However, this document will focus on four hot solutions, i.e., Big Data, CRM, Cloud Computing, and Social Media in this individual project.

Big Data

     1. What is Big Data?

            According to Boyd, Danah, and Crawford, Kate (2011) [1], Big Data is one of the most clamorous topics for study because it is recent challenging and causes a lot of attention and curiosity to industry and academia. In new standard computing, automation and Web technologies recently (Connolly & Begg, 2014), data at the low cost of storage and processing becomes ample and ubiquitous. Data ubiquity with Big Data drives the evolution of data, information into particularly knowledge and wisdom to accelerate spontaneously at ultra-fast speed (Gartner Group, 2013)

Chen, Chiang and Storey (2012) define that  Big Data is a relative term used to describe data that has colossal volume in a variety of form structures at the high velocity of capture and veracity. The academic community considers Big Data as data with four dimensions (i.e., 4 V’s: volume, variety, velocity, and veracity). Other scholars add the fifth dimension, called value, in Big Data. Big Data, which is generated by individual humans, machines, transactions, and sensors in many public and private organizations, cannot be stored, analyzed or processed in the existing standard equipment.

            Figure 1 illustrates Big Data Analytics with three objectives.

Source: Adapted from Techno Software (2016)

     2. Big data’s types

Big Data can be characterized into three typical types (AllSight, 2016). Structured data or relational data can be stored and analyzed in relational databases. Unstructured data is the most difficult to deal with. Data are generated from GPS, blogs, mobile data, PDF files, web log data, etc. And semi-structured data or XML data is data in the form of XML or JSON format.

Figure 2: Typical data types of Big Data 

Source: Adapted from AllSight (2016).

     3. Some statistics on Big Data

According to Bloomberg Businessweek (2011), 97 percent of many companies in Fortune 500 have used business analytics and some forms of Big Data analytics to conduct their business. Big Data analytics that processes data into information and particularly knowledge has emerged as a contemporary business trend in industry and academics (Minelli, Chambers & Dhiraj, 2013). As a result of big data analytics in high motion, Big Data will make a great impact on all fields of business, industry, healthcare, education, and government to people in the next 10 to 15 years (Novemtum, 2015). Big Data Analytics (BDA) becomes part of everyday life. Typical future trends on BDA in IT solutions are:

          - Changes brought by new and better products.

          - Improved ability to meet customer needs.

          - Plan the experience with BDA insights about customers and their interactions.

          - Predict and prevent in every industry: manufacturing, healthcare, energy, etc.

          - Play on new ways of automation in business.

          - New best practices.

     4. Big Data in future applications

According to Cukier (2015), enterprises use information as a foundation for business in thousands of years. Big Data that is processed by IT practitioners for insightful information is changing business, and business will change organizations and society. Three key features to change organizational enterprises in the future are: 

          - Enterprises use Big Data to attain disruptive innovation for radically novel products and new markets.

          - Organizations apply Big Data to identify many tiny improvements or small winds then add these small wins up for competitive success.  

          - Companies embrace data alongside with human values of justice, decency, and common sense to move forward.

Goldman Sachs (2014), the global investment research company, reports that the Internet of Things (IoT) that has generated Big Data as the third wave of the development of the Internet may be the biggest one. Notice that the first wave was 1990’s fixed Internet technology and the second wave was 2000’s mobile technology. Goldman Sachs recognizes the IoT benchmark of five verticals of adoption: Wearables, Cars, Homes, Cities, and Industrials. They focus on:

          - Enablers: Increasing share for WI-Fi, sensors, and low-cost microcontrollers.

          - Platforms: Focusing on software applications to manage communications between devices, middleware, storage, and data analytics.

          - Industrials: Home automation is at the forefront while factory floor optimization may lead the efficiency, productivities. Researchers at Oxford University predict that 47% of work done today in the US will be taken over by computerization.

People also concern issues of privacy and security on Big Data (Buddin, 2015).  

Therefore, Big Data is one of IT solutions and technologies for competitive advantage.

Customer Relationship Management

     1. What is a customer relationship management?

            According to Payne and Frow (2005), a customer relationship management or CRM was rooted from SFA (Sale Force Automation), or information-enabled relationship marketing in the information technology (IT) vendor and practitioner community (Ryals & Payne, 2001). CRM was defined differently among scholars, practitioners, and authorities. CRM can be defined based on three perspectives (1) a narrow and tactical approach, (2) a broad and strategic approach, and (3) a customer-centric approach. CRM is a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. This student defines the CRM as a strategic process used to learn more about customers’ needs and better understand customers’ behaviors to strengthen organizational processes to exceed customers’ expectation in a good relationship.

     2. CRM’s framework

The companies use the customers-centric CRM to manage Sales (telephone, the Web, retail store, and field sales), Marketing (campaign data, content, and data analysis), and Services (call center data, Web self-service data, and wireless data) in a company as shown in Figure 3:

            Figure 3: CRM is used to manage Sales, Marketing, and Services

Source: Adapted from Pearlson and Saunders (2004).

The process-oriented cross-functional CRM includes five key interactive sets of strategic processes that start with a review of strategy activities and end with the improvement in business performance results as shown in Figure 3.

            Figure 4: The conceptual process-oriented cross-functional framework of CRM. 

Source: Adapted from Payne and Frow (2005).

            These key strategic processes sets, that are (a) process of developing strategies, (b) process of creating values, (c) process of integrating multi-channels, (d) process of managing information, and (e) process of assessing performance, interact with them in bi-directions and iterations.CRM manages all ways to handle existing and potentially new customers. It is a business and technology discipline. It uses information system to coordinate entire business processes. It provides end-to-end customer care. It supplies a unified view of customer across the company. It consolidates customer data from multiple sources and provides analytical tools for responding questions (Salesforce, 2017).    

     3. CRM is an IT solution

            CRM use information technology and human resources to gain insight into customers’ value and behaviors to increase the company’s revenue. CRM’s goals are (a) providing products to meet customers’ needs, (b) providing better customer service, (c) cross-selling products more effectively, (d) assisting sales staff to close the deals quickly, (e) retaining the current customers, and (f) acquiring new customers (Wailgum, 2007).

The organizations need CRM systems because the CRM systems manage all ways to handle existing and potentially new customers. The CRM system is a business and technology discipline that uses the information system to coordinate entire business processes. The CRM system provides end-to-end customer care and supplies a unified view of the customer across the company. It consolidates customer data from multiple sources and provides analytical tools for responding questions (Salesforce, 2017). Many organizations utilize the customers-centric CRM to manage Sales (telephone, the Web, retail store, and field sales), Marketing (campaign data, content, and data analysis), and Services (call center data, Web self-service data, and wireless data). Thus, CRM is an IT solution and technology for competitive advantage. 

Cloud Computing

     1. What is cloud computing?

Cloud computing is a practice of data management on the network of remote servers connected to the Internet. Data management as an IT solution on the cloud includes capturing, collecting, storing, accessing, processing, querying, programming, and retrieving data via the router to the Internet. Data is often massive data sets. An individual user can access the data or programs over the Internet (Griffith, 2016). NIST (National Institute of Standards and Technology, 2009) defines cloud computing as a model for enabling on-demand network access to a shared pool of configurable computing resources with minimal management effort or service provider interaction. For example, Microsoft uses cloud computing to distribute a local piece of Microsoft Office 365 or storage Microsoft OneDrive to users. Cloud computing services have grown rapidly from $47.4 billion in 2013 to expected $107.2 billion in 2017 as shown in Figure 5.

Figure 5 displays a fast growth of Cloud Computing.

Source: Adapted from idc.com

Many cloud computing providers offer an on-demand delivery model of information technology for IT solutions such as Pay-as-you-go cloud technology services. The impact of the pay-as-you-go cloud technology services grows rapidly along the fast maturity of the cloud computing and a popular-in-demand trend of big data analytics (Intel IT Center, 2015):

          - Infrastructure: A huge, sophisticated, complex infrastructure is built at providers’ plants, facilities. For providers, it must be operated and maintained by skillful professionals. Users do not have to worry about their infrastructure.

          - Hardware: many distributed clusters of computers, servers to support tools for processing data with 5 V’s (volume, variety, velocity, veracity, and value).

Cloud requires pools of servers, storage, networking resources with scalability and flexibility. Backup systems are also developed, deployed and distributed on providers’ side. Users simply have some servers for their applications.

          - Software: For providers, all advanced Big Data Analytics tools are complicated and in place. For users, they just need to understand application software layers such as installation, panels, GUI, and backup with simpler tasks.        

          - Personnel: For providers, they need a good team of skillful professionals to develop, design, maintain, control and operate the pay-as-you-go cloud technology systems and cloud-based big data analytics in 24/7 operations, proactive response. They also need an efficient communication network and field application team to deal with customers’ demands. For users, they need a few good professional have knowledge of hardware and software of pay-as-you-go cloud technology services for users’ friendly-use applications.

          - Services: Effective, low-cost services with the quick response by providers to users’ requests.

          - Other long-term impacts are customer retention, market share growth and sale increase. 

            Figure 6: Cloud computing is an on-demand network

Source: Adapted from Gulia (2016)

            Cloud Computing is a result from multiple regional networks linking computers evolved in four stages: (a) networks (TCP/IP driven), (b) Internet (Document driven), (c) Grid Computing (Software standards for sharing remote resources), and (d) Cloud Computing (Everything as a service).

     2. Cloud computing is an IT solution

Recently, cloud computing becomes an emerging computing model for processing Big Data for IT solutions due to flexibility, scalability, virtualization,  and lower costs in many organizations. A cloud computing model with various components is shown in Figure 7.

Figure 7 displays several key characteristics and various components.  

Source: Adapted from National Institute of Standards and Technology (2009).

            The IT trend on cloud computing is on the rise of popular demand because of several reasons. One of the reasons is lowering trade capital expense for variable expense such as zero cost to get started and pay as users go. Virtuous cycle decreases cost over time significantly, e.g., more companies, more usage, more infrastructure, economies of sale, lower infrastructure cost, and reduced pricing. Cloud service users do not need to guess capacity needs such that they can speed and focus agility and business core. Furthermore, users can avoid uncertain growth patterns in strategic planning and business strategy. Today, some typical cloud computing providers are AWS (Amazon Web Services), Google Cloud Platform, and Microsoft’s Cloud Platform.

For cloud computing’s applications, healthcare organizations adopt cloud computing in their applications. Columbus (2014) from Forbes consultant firm addressed some advantages from the statistical 2014 HIMSS (Health Information and Management System Society) Analytics Cloud Survey on having health care data in the cloud. Most of the healthcare organizations adopt cloud computing solution because of three primary reasons:
     - The cloud computing-based IT system has less maintenance cost (55.7%) than the current traditional IT system.

     - The speed of deployment is faster about 53.2%.

     - Solving problem of less internal staff and less expertise to support on-premise alternatives up to 51.6%.

Some healthcare organizations do not apply cloud computing solution because three top reasons are shown below:

     - 61.4% of companies concern security problem.

     - 42.3% of companies do not use cloud computing solution because their IT operations have functioned well internally.

     - 38.4% of companies concern uptime and availability of cloud computing services.

     Other issues related to health care organizations and cloud service providers are:

     - 48.3% of healthcare providers have performance and downtime issues with their cloud service providers.

     - 32.5% reports hosted applications and data have slow responsiveness.

     - 23.3% reports downtime and unavailability of applications and data.

     - 3.3% reports slow response rate for data backup in the cloud

Other challenges of using cloud computing based solution are operations visibility (21%), customer service (20%), costs and fees (19%), availability and uptime (16%), migration of services or data (15%), contractual issues (6%).

Figure 8 displays a summary of cloud computing. The blue boxes are controlled by cloud service users. The gray boxes are controlled by the cloud service providers.

Source: Adapted from Dr. Kapoor (Microsoft, 2017).

     3. Cloud computing and security issues

Clouds have major security issues in association with confidentiality, integrity, availability, and privacy of the data and applications outsourced to the cloud. For instance, exploitation of co-tenancy and data outsourcing are typical major features of cloud computing system, but both features are also security issues. Since a cloud is a shared resource, e.g., physical hardware, by multiple users, system vulnerabilities become a big concern due to corrupted data, leaked data, or even unavailable data for access. Data stored in a cloud is often an easy target for cyberattacks by both internal hackers and external hackers. The threats can be passive, active, and sophisticated in five layers of cloud security: perimeter layer (cloud applications), network layer (data transmission), servers (databases, client data), applications layer (programming), data layer (inconsistent data) (Mell, P. (2012). The new decisions related to information security management were changed with new measures and solutions sought from big data analytics techniques. To detect advanced persistent threats such as malware for data confidentiality and integrity, the innovative big data security analytics tools should be developed based on machine learning approach (Elovici, 2014).

Social Media

     1 What is social media?

            Social networks are a new form of informal networks. In information technology, social network is an IT-centric network that connects people to enable them to find experts, meet online colleagues, and see professionals who have related experience for projects. People are linked in the company or in the same field across traditional organization lines (Pearlson & Saunders, 2004). 

            Figure 9 displays various social media.

Source: Adapted from Kister (2016).

Social media are computer-medicated technology that facilitates the creating and sharing ideas, information and various forms of expression via virtual communities and networks (Obar, Wildman, 2015). Social media’s common features are (a) social media are interactive an Internet- oriented application from Web 2.0, (b) social media includes user-generated data and information such as text posts, comments, photos, videos, etc., (c) users create service profiles on the website designed and maintained by social media organizations., and (d) social media organizations provide online social networks by connecting a user’s profile with other users’ profiles or groups. Some popular social media are Facebook, WhatApp, Twitter, etc.   

Figure 10 displays a rank chart of social media by users.

Source: Adapted from Dr. Kapoor (Microsoft, 2017).

     2. Social media technology

            Social media use desktop computers, mobile technologies such as smartphones, tablet computers, and web-based technologies to create interactive platforms for individuals, communities and organizations that can discuss, share, mutually create, and modify users’ contents posted online. Social media provide revolutionary changes to communications between people, businesses, organizations, and communities over time. The changes are the focus of the emerging field of technoself studies (Kietzmann &  Hermkens, 2011). 

            Social media are much different from traditional paper-based media such as magazines and newspapers, or conventional electronic digital-based media such as TV broadcasting in many ways: quality, reaching, frequency, usability, immediacy, and permanence. Social media run in a dialogic transmission system from many sources to many receivers. Some of the most popular websites are Facebook, Facebook Messenger, Baidu Tieba, Gab, Googles+, Instagram, LinkedIn, Pinterest, Reddit, Snapchat, Twitter, Viber, WeChat, YouTube, etc. Facebook and Twitter become much more popular, and usage of YouTube has grown significantly (Pavlik & McIntosh, 2015). Social Media changes relate to overtime usage change on Facebook, Twitter, YouTube as shown in Figure 11.

Figure 11 shows the rapid growth of social media Facebook vs.the flat myspace.

Source: Adapted from Dr. Kapoor (2017).

Using Facebook has some pros and cons. The pros are it is easy to create a central page, easy to check while browsing the site, simple layout, larger potential audience. Facebook provide space for basic information, a variety of post types. However, Facebook also has some cons. For example, there is no control over comments. It is time- consuming for regular updates. It must be checked daily to respond to questions from others.      

     3. Social media is an IT solution

            Social media’s model of generating or consuming data has changed significantly. In the old model, a few companies are generating data for all others to consume the data.

In today model, all of us including individuals, communities, and organizations are generating data, and all of us are using the data. Social media with IoT and Cloud computing contribute to phenomenon data explosion. People face the big challenges in handling with ubiquitous Big Data in terms of massive volume, various formats, fast processing, and veracity as shown in Figure 12.  

            Figure 12 displays Big Data boom.

Source: Adapted from Dr. Kapoor (2017).

            Using social media has both positive and negative impacts. In IT solution, social media can improve customers’ sense of connection with real or online organizations and communities. Social media can be an effective tool for marketing campaign and communication in many fields such as business, politics, or society. Many corporations, entrepreneurs, nonprofit organizations, advocacy groups, political parties, and governments use social media to support their activities. Social media applications in IT and IS (information systems) include marketing research on offline consumer movements, communication between C2C (company-to-consumer approach), sales promotions and discounts, relationship development and loyalty programs, e-commerce (Levine, Locke, Searls & Weinberger, 2012). However, there is some concern of depression, online harassment, cyberbullying from heavy use of social media.   

Conclusion

            This research document presented modern IT solutions and contemporary technologies for competitive advantage. Four top solutions that were discussed in details were (a) Big Data, (b) Customer Relationship Management, (c) Cloud Computing, and (d) Social Media. In Big Data technology, Big Data’s definition, Big Data Analytics, Big Data types, statistics, its future applications were addressed. In CRM technology, CRM’s definition, conceptual framework, and CRM solution were discussed in-depth. In Cloud Computing technology, the document defined Cloud Computing, its rapid growth in everything as a service, a Cloud model, security, and Cloud summary were examined. Social Media technology was defined, and ranked as one of the fast growth in IT solutions and technologies in highly dynamic and competitive market. Notice that many charts and diagrams were included to provide a visualization view of four IT solutions (more than three required solutions) in this document.   

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Managing IT Projects

Managing IT Projects

Introduction

                Today, the landscape of information technology (IT) and information systems (IS) has grown in complexity and sophistication. The information systems are so large and complex that teams of architects, engineers, programmers, analysts, and users must collaborate to build hardware and software driving the enterprises while the cost of the upgrade, maintenance continue increasing significantly. With the high rate of failure, e.g., 67% in IT projects, managing them becomes a big challenge to high-level managers and business leaders (Sauer, Gemino & Reich, B., 2007). This document will discuss IT projects, and project management (PM) that includes PM process and PM knowledge, especially it focuses on the trade-offs between time, cost, and scope in designing a project plan in depth.   

IT Projects

            Business projects, particularly IT projects consist of a set of one-time activities that transform the current tasks or jobs into the desired new ones. Companies usually use new products and processes to compete for market shares and revenues where projects are needed beyond daily operations. It becomes difficult to keep the IT projects aligning with dynamic business strategy and planning (Pearlson & Saunders, 2004) 

            Project Management Institute (2004) defines a project as “a temporary endeavor undertaken to create a unique product, service or result. Temporary means that every project has a definite beginning and a definite end.” Project stakeholders are a project manager, project sponsor, project team, employees, and customers who involve in the project as shown in Figure 1.

            Figure 1: Project stakeholders and the relationships.

Source: Adapted from Project Management Institute (2004)

            Since the business projects are often huge and complex, the project manager may divide the project into smaller subprojects with distinct tasks for quality control, and outsourcing to limit costs. For efficiencies, a general manager can choose to organize several projects from a larger program as a framework to manage competing resources and shifting priorities. IT projects that are a specific type of business project done by IT department include an associated business case with significant amounts of technology.

In general, a project includes four elements:

          a. Project management includes a project sponsor who initiates the project, a project manager who manages project execution and coordinates activities to be on time and within budget,

          b. A project team has members who work together to ensure all activities to be accomplished correctly and efficiently.

          c. A project cycle plan is a methodology and schedule used to execute the project. 

          d. A project dictionary is a common project vocabulary to allow members to understand the project and communicate properly.

    The IT projects, which are more complex, have a higher risk of failure. They are difficult to estimate. Most IT software projects fail to meet schedules and budgets due to poorly estimating techniques, ineffectively monitoring progress protocols and wrong impression that schedule slippage can be fixed by adding additional human resources.

Project Management

            Project management is a process to apply knowledge, skills, tools, and techniques to manage project activities to meet project requirements and provide deliverables. The process used to develop an IT project establishes the foundation for the project itself. A project plan along with the contingency planning must be clear and definitive to address implementation issues, areas of concerns, and the gaps. A strong project plan serves as a project principle and guidelines as a reference document to all involved members who can make vital decisions during activities execution (Pearlson & Saunders, 2004).   

     1. Project management models

            Systems development is a set of activities used to build an IS. To manage the bigger and more complex IT systems, a number of system development life cycle (SDLC) models have been developed and evolved in a few decades. SDLC is typically seen a process of designing and delivering the IT systems.  The SDLC models include waterfall, fountain, spiral, build and fix, rapid prototyping, incremental, and synchronize and stabilize. Most of those SDLC models fail to deliver the good IY systems.

For examples, the traditional waterfall model consists of a sequence of stages where the output of each stage becomes the input of the next in seven stages: (a) project planning, (b) systems analysis, (c) systems design, (d) implementation, (e) integration, (f) acceptance, installation and deployment, and (g) maintenance (Kay, 2002). The waterfall model and others fail to meet objectives because the skills of estimating costs and schedules are difficult to obtain, and scope of the objectives are too broad (Pearlson & Saunders, 2004). However, the spiral model with technology for managing source code that is combined with the synchronize and stabilize method offers project teams to work effectively in parallelism (Cusumano & Yoffie, 1999)  

            Some newer methodologies such as an iterative approach and agile development approach  that tend to be more people-oriented  than process-oriented deliver better IT systems, e.g., XP (Extreme Programming), Crystal, Scrum, Feature-Driven Development, and Dynamic System Development Method (DSDM) (Beck, 2000). Figure 2 displays a better iterative approach for systems development.

            Figure 2: An iterative approach for developing IT systems.

Source: Adapted from Pearlson and Saunders (2004).

The Agile SDLC is at highly collaborative, iterative, and incremental levels as depicted in Figure 3 below:

            Figure 3: An Agile SDLC for developing IT systems.

Source: Adapted from Ambler (2012).

     2. Project Management Process

            A project management process usually is an approach to organize the ongoing activities of the project in an enterprise (Ducan, 1993). There are three basic project management processes: (a) Planning: Devise a workable scheme to accomplish an objective, (b) Executing: Carry out the plan, and (c) Controlling: Measure progress and take corrective actions when needed. A strategic plan can last 5-10 years but a crisis response plan can be used 5-10 days. Planning is a constant, not onetime event.    

            The basic project management process consists of five phases as shown in Figure 4 below:

          - Initiating: A description of the product in a project and project objectives.

          - Planning: A project plan.

          - Executing: Completed project deliverables.

          - Monitoring and Controlling: Check progress, identify problem, plan corrective action.

          - Closing: Acceptance of the project results. 

            Figure 4: A basic project management process.

Source: Adapted from Ducan (1993) - (Project Management Institute).

These phases are iterative and repetitive at varying levels in intensifying throughout the project over time as shown in Figure 5.

            Figure 5: An iterative and repetitive project management process over time.

Source: Adapted from Ducan (1993) - (Project Management Institute).

The interactions between these phases are applied to most of projects at most of the time, but they can be modified to meet project-specific applications. Notice that the IT project can be at risk when additional cost or loss occurs due to the choice of alternatives such as complexity, clarity, and big size (Applegate, Austin, & McFarlan, 2007).

     3. Project Management Knowledge

Knowledge is the processed information among individuals, individuals to

groups, or across groups while knowledge management is a process of coordinating of knowledge. In IT project, knowledge is an understanding of the project management or relationship between project stakeholders with a notion of the idea that is acquired by study, investigation, observation or experience not based on assumptions or opinions (Ahlemeyer-Stubbe & Coleman, 2014). Knowledge is considered as intellectual capital (IC) or at least part of IC, a valuable organizational asset that requires identifying, managing, sharing and protecting for competitive advantage in the marketplace (Erickson and Rothberg, 2014). Nonaka (1990) denoted four knowledge conversion processes in the SECI (Socialization, Externalization, Combination, and Internalization) model as 

            Figure 6: SECI model denotes knowledge creation through organizational sharing.

Source: Adapted from Nonaka and Tajeuchi (1995).

                         (I = Individual; G = Group; Org =  Organization) 

            Project management knowledge is an emerging discipline that draws on ten fields: integration, scope, time, cost, quality, procurement, human resources, communications, risk management, and stakeholder management. For instance, IT project integration requires hardware, software, materials, supply, engineering, schedule, product structure, project control, communication, etc.

Discussion

     This section focuses on two comprehensive questions related to three elements (i.e., cost, quality, and time) when designing a project plan.

     As defined previously, project management (PM) is a process to apply knowledge, skills, tools, and techniques to manage project activities to meet project requirements and provide deliverables. The quality of the project in PM is determined by the project equilateral triangle with the balance of three elements: scope, time, and cost as shown in Figure 7. The scope consists of a description of product’s quality, features, and functions, and project scope. Time is the time required to complete the project. And the cost is a budget to carry out the project. 

            Figure 7: A project triangle with a balance of three elements: scope, time, and cost.

Source: Adapted from Pearlson and Saunders (2004).

     1. Why it is important to manage the trade-offs?

            The PM always involves trade-offs of scope, time, and cost in the project triangle. It is the manager’s responsibility to manage trade-offs in a proper balance. It is important to manage the trade-offs properly because the shift of either element would cause failure in PM. When making the trade-offs, it is unlikely for manager(s) to foresee the unexpected failure. For example, the trade-off of quality at low-grade rivets to build three ships (scope) in a timely fashion (time) by Harland and Wolff of Belfast, Northern Ireland, the Titanic was disastrous (McCarty & Foecke, 2007). In contrast, a successful balance of scope, time, and cost provides a high-quality project in which users’ needs and expectations are met correctly. 

            The skillful PM is about successfully juggling there three elements (scope, time, and cost) by shifting the triangle’s base to keep it in balance. Change in one side will affect one or both of other sides. Notice that most of the projects, only two elements can be optimized, and the third elements must be used to adjust to maintain the balance. The project stakeholders have a right to decide on overriding the key success factors/elements (scope, time, and cost) where the project manager has a responsibility to show the impact on the project of selecting these factors to the stakeholders.

     2. Why does it take a long time before troubled projects are abandoned or brought under control?

            It takes a long time before troubled projects are abandoned or brought under control because the projects, particularly IT projects, are complex, huge, and highly interactive with multiple complex sets of tasks that rely on each other to make a completed system (Sauer, Gemino & Reich, 2007). For example, managing the projects by using the man-months metric is linked to more underperformance than managing projects by using other metric of size (i.e. budget, duration, team size) because managers only know the results for a root-cause analysis after the projects are done. If the project is off schedule, it may be that the project is incorrectly designed in the first place. An option to put additional people on the project just hastens the process to an inappropriate end (Pearlson & Suader, 2004). Furthermore, the project can easily get off track if customer representatives are not clear about what final outcome that they really want until near the end.

            Some other drawbacks that contribute to delay in recognizing the troubled projects are documentation, scalability, incomplete operational version, difficulty in integration across a broad range of requirements, and system design flaws.  For example, the customer may not know that the IT system is not scalable until near to the end of the project.

Conclusion

            The document presented a concept of IT projects in designing of the project plan. Project management was defined along with discussion of several project management models, project management process, and project management knowledge. The project triangle of three elements (i.e., scope, time, and cost) was described in balance for a good quality product with the focus on trade-offs of these elements in IT projects. The writing also responded to the question of why it took a long time before the projects were abandoned or brought under control.    

REFERENCES

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Sauer, C., Gemino, A., & Reich, B., (2007). The Impact of Size and Volatility on IT Project Performance. Communications of the ACM, 50(11), 79–84.

Enterprise Information Systems Sourcing

Enterprise Information Systems Sourcing

Introduction

            Recently, major U.S companies such as GM, Intel, GE, etc. have followed the emerging insourcing or reshoring trend to bring jobs back to the U.S. The trends appear cyclical and related to the changes in market conditions such as bigger domestic talent employees, productive video conferencing on distributed teams, and particularly the overall maturation of the outsourcing market (Staples, 2013). Conversely, many enterprises also turn to outsourcing providers for more new IT activities, e.g., process management, business process outsourcing, or knowledge management (Rockart, Earl, & Ross, 1996). Facing a range of sourcing decisions, many companies are in a struggle to assess insourcing versus outsourcing, onshoring versus offshoring and selecting among offshoring options such as near-shoring versus far-shoring.

            This document will focus on information systems sourcing to discuss (a) a sourcing decision cycle framework, (b) the key decision factors between insourcing and outsourcing, (c) the factors between onshoring and offshoring in outsourcing concept, and (d) far-shoring, near-shoring, and captive center in offshoring approach.

Sourcing Decision Cycle Framework

            According to Pearlson and Saunders (2004), business souring involves multiple decisions in a series and parallel cycle. The key drivers for sourcing are (a) technology, (b) location, and (c) legislation and regulations (Deloitte Consulting, 2012).

Technology in IT and IS consists of gamification (13%), BYOD (bring your own device, 28%), crowdsourcing (35%), open innovation (41%), enterprise mobility (53%), big data (55%), hosted virtual desktop (59%), business process as a service (66%), and cloud computing (69%) (Kapoor, 2017) as shown in Figure 1 below:

Source: Adapted from Dr. Kapoor’s live chat (2017).

            Figure 1: The technologies in an outsourcing approach.

In locations, the developed countries include India, the U.S., China, and Poland; the developing countries include Philippines, Romania, Mexico, Australia, Brazil, and Malaysia (Kapoor, 2017); future opportunities include south Africa, Guatemala, Israel, Ecuador, Panama, Iceland, and Nicaragua. 

            Legislation and regulations are the measures issued by the government to protect data privacy and anti-corruption such as the Sarbanes-Oxley Act of 2002. The regulations

decrease or increase of using outsourcing as shown in Figure 2.

Source: Adapted from Dr. Kapoor’s live chat (2017).

            Figure 2: Legislation and Regulations in outsourcing approach.

The sourcing decision cycle may start at the original decision of make (insource) or buy (outsource) that is branched into insourcing or outsourcing from the company. Insourcing is a practice in which a business decision is made to maintain control of critical production, e.g., information system (IS) services, or keep core competencies in- house. Insourcing of the complexities of IS in-house requires management attention and resources. Outsourcing is a practice in which a company purchases IS services or products from another company. The primary motivation for outsourcing is on reducing costs. For example, Kodak outsourced its data center operations to IBM in 1989. Outsourcing can be done in the cloud, onshoring, or offshoring as shown in the sourcing decision cycle framework in Figure 3 below:

Source: Adapted from Pearlson and Saunders (2004).

            Figure 3: Sourcing decision cycle framework

            The companies, in general, decide to go outsourcing because labor is cheaper; employees’ skills are more available; environmental regulations are lower; tax of products and plants are much less; or in-house work is unsatisfactory.

Key Decision Factors between Insourcing and Outsourcing

            The companies recently face many decision factors in outsourcing or insourcing in the highly competent market in both local and global environment. The process of insourcing versus outsourcing decision can be illustrated in Figure 4:

 Source: Adapted from Dr. Kapoor’s live chat (2017).

            Figure 4: Insourcing versus outsourcing decision process.

     1. Decision Factors in Outsourcing

            Some of the key decision factors that play into the decision for outsourcing versus insourcing are (a) lower costs, (b) ability to handle big production, and (c) the client company’s consolidation of data centers. Firstly, the primary reason for outsourcing is cost reduction. Outsourcing providers derive savings in the large scale of centralized data centers, large pools of expertise, and better contracts with suppliers. Secondly, the outsourcing provider’s larger resources make greater capacity on demand in availability. And thirdly, an outsourcing provider can assist a client company to consolidate data centers that could not be done by an internal group (Pearlson & Saunders, 2004).

            Other factors that support outsourcing are:

          a. The outsourcing provider has specialized in know-how.

          b. Cost considerations are in favor to the outsourcing provider.

          c. The client company lacks of ability to build the IS product.

          d. The outsourcing provider can meet small volume requirements.

          e. The client company has capacity constraints

          f. The client company desire not to add workforce for saving income.

          g. The client company is not sure the volume requirements of the products.

          h. Routine product is available from many sources.

          i. Building requires high capital startup costs.

            Outsourcing has several advantages: greater flexibility, lower investment risk, improved cash flow, and lower potential labor costs. However, outsourcing also has some disadvantages: greater risk of choosing wrong the outsourcing providers and distributors., loss of control over the processes, potential of losing core supportive activities, long lead-times, and hollowing out (competency) (Lacity & Hirschheim, 1993)

Notice that since IS products or services are commodities instead of a core competency, outsourcing brings distinct advantages. For example, client company management pays less attention to IS operations and focuses more on core activities. If the IS product or IS service is categorized as a commodity instead of a core competency, outsourcing is probably the best choice.   

     2. Decision Factors in Insourcing

            Many key decision factors that play into the decision for insourcing versus outsourcing are:

          a. Loss of control over critical aspects of the client company.

            Due to outsourcing, a client company loses control in many areas such as project, scope creep, the technologies, the costs, financial controls, accuracy of financial reports and IS direction. The client company depends on outsourcing providers on its operations.

          b. Failure of anticipation of new technological capabilities

            A client company may not use new technologies because the outsourcing provider loses revenue in process of implementation and support, even of the new technology implementation would serve the client the best. Poor outsourcing planning can be a loss in IS flexibility.

          c. Failure in potential development for competitive advantage

            By surrendering IS functions, the client company is unable to develop new IS technologies for competitive edge. The partnership between a client company and outsourcing provider can compromise the advantage but the advantage can become available to the outsourcing provider’s other clients. 

          d. Dependency on outsourcing provider,

            A client company can be highly dependent on the outsourcing provider. The client company may have little resource in terminating the contract in sour relationship between the client company and the outsourcing provider. The client companies may be locked in the agreement that they no longer want. The outsourcing provider may go out of business before the contract’s end.  

          e. Loss of competitive secrets

            When the client company goes to outsourcing, it must realize that competitive secrets may be lost. The outsourcing provider can access database, sensitive information, customers’ data for its activities. Data security, process skills are likely at risk.  

          f. Incompatibility in culture and operations

            The outsourcing provider’s culture and operations may be incompatible with the client company’s culture and operations. Delivery of the contracted service and system is likely difficult because conflicts between the client’s staff and the outsourcing provider’s staff. The conflicts would delay progress and reduce quality of IT services and products.  

          g. Recognition of the lower cost savings

            Albeit the client companies go to outsourcing because of cost savings, the savings may not be realized due to the complexity of the outsourcing process. For example, implementation of new technologies may fail to generate savings because the in-house process is no longer in use for comparison.

          h. Challenges in working with multiple vendors.    

            There are many challenges when the client companies work with multiple vendors. Having more vendors requires more coordination than working with a single outsourcing provider. In complex IT or IS services, when a major problem occurs, it is difficult to determine the root cause due to a tendency of finger-point.     

            Insourcing has advantages: higher degree of control over inputs, increase of visibility over the process, and economies of scale and scope. Insourcing also has some disadvantages: requirement of high volume, high investment, dedicated equipment in limited uses, and problems with supply chain integration (Lacity & Hirschheim, 1993).

Thus, the decisions for successful outsourcing should be considered carefully with adequate care and deliberation on well selection, good contracting, and great scope. If the IS product or IS service is categorized as a core competency instead of a commodity, insourcing is the preferable choice.  

Outsourcing: Decision Factors between Onshore and Offshore

            In general, outsourcing is a practice in which a client company purchases IS services or products from one of more companies or outsourcing providers. From the sourcing decision cycle framework in Figure 1, an outsourcing approach consists of three options: (a) cloud, onshore, and (c) offshore. Cloud is a separate topic and it maybe will be discussed in another research study (Field, 1997). The document will focus on onshoring and offshoring only.

     1. Onshoring

            Onshoring or inshoring is an option of outsourcing whose work is performed in the same country as the client provider. Onshoring is an outsourcing work performed domestically. The onshoring trend in the U.S. is rural sourcing where outsourcing providers set up operations in rural parts of the country. The factors that lead onshoring are:

          - Rural sourcing companies are competitive due to reduced salaries, lower living costs.

          - Rural sourcing companies’ advantages are closer time zones, similar culture, and fewer hassles.

          - Rural sourcing is more politically correct by restricting offshoring and to protect U.S. jobs (Violino, 2011).

            Some issues with rural sourcing are the rural sourcing firms are usually too small to deal with large scale projects and they do not have the most skillful employees. 

     2. Offshoring

            In contrast, offshoring is another option of outsourcing whose work is performed in a different country. Offshoring or outsourcing offshore is the company, particularly the IS organization, uses contractor services or builds its own data center in other country. The works that are sent offshore include IT transactions, knowledge-based business process (Saunders, Gebelt, & Hu, 1997).

The factors that lead offshoring are:

          a. Labor costs are much lower. Programmer salaries are very low due to much lower living standard at the U.S.

          b. Workforce in many offshore companies is well educated.

          c. The offshore service providers are more willing to provide more brainpower at the problem than the US counterparts do.

            However, telecommunications, travel, process changes, and management overhead are required to relocate and supervise operations overseas with more costs. In addition, communication, languages, and cultural differences are big issues for the offshoring approach.

Offshoring: Decision Factors on Far-shoring, Near-shoring, and Captive Center 

            When the outsourcing phenomenon becomes mature, the marketplace differentiates offshoring approach that can be relatively close, e.g., near-shoring or at the distant land, e.g., far-shoring. Alternatively, offshoring can be a captive center. Far-shoring is a form of offshoring in which service work is sourced to lower-wage country in far away distance and different time zones such as India (for software) and China (for hardware). On the other hand, near-shoring is another form of offshoring in which service work is sourced to lower-wage country in close distance and the same time zones such as Mexico, Nicaragua.

     1. Advantages

            The advantages of near-shoring are geographical, temporal, cultural, linguistic, economic, political, or from historical linkages. The client company faces fewer challenges in communication, control, supervision, coordination, or bonding socially. The short distance, culture, languages, custom, etc. play a crucial role in making decision in a near-shore or far-shore destination. 

            With cost advantages in less expensive economies and managing the risks with outsourcing vendors, captive centers as outsourcing providers are subsidiaries set up to serve the parent companies. The captive centers that are owned by the parent companies have two types: hybrid and shared. The hybrid captive center performs high profile work for the parent company and outsources the commoditized work at lower cost than the outsourcing provider’s work. The shared captive center performs work for both a parent company and external customers. Captive centers can be near-shore or far-shore with decisive characteristics such as less expensive locations, far from the company’s headquarters, owned by parent company (Deloitte Consulting, 2012).    

     2. Decision Factors on Offshoring

            A decision of selecting an offshore destination is often based on attractiveness, the level of development, and cultural differences (Pearlson & Saunders, 2004). Attractiveness of hosting offshoring business is viewed as the company’s geographic orientation in language, war zone, lower rate of crimes, less regulatory restrictions, data security, intellectual property protection, technical infrastructure, and low-cost labor pool.  

            Making decision on an offshore destination is also influenced by the level of development from the host country. The countries at the top tier such as UK, U.S. Japan, etc. are mature software exporting nations. The countries at the second tier such as Brazil, South Korea, etc. are emerging software exporting nations. And the countries at the third tier such as Cuba, Vietnam, etc. are infant software exporting nations. Carmel and Tjia (2005) determine the tiers on the industrial maturity, clustering of software enterprises, and export revenues.  

            Cultural differences are also a decision factor in selecting an offshore destination. Miscommunication in languages and misunderstanding culture often arise and hinder the quality of IT deliverables. It is important to be aware of the risks and manage the differences in cultures to avoid conflicts and labor strikes.

     3. Recommendation    

The recommendation on IT and IS sourcing is described as follows:

            It appears that the outsourcing market is starting in maturity. The conflict between outsourcing versus insourcing is saturated. The companies should find the right combination of best talents and most effective IT services. The best sourcing strategy is to combine both outsourcing and insourcing for complementary with options of onsite, onshore and near-shore in the unique global services model where reshoring is an inevitable outcome of the global services strategy. That means, the companies should consider the right-sourcing for their benefits in IT and IS services (Staples, 2013).

Conclusion

            The document presented the trends of information technology sourcing that include outsourcing, insourcing, onshoring, offshoring, far-shoring, near-shoring, and backshoring in business, particularly IT and IS services in the last few decades. The document also provided the sourcing decision cycle framework based on three key drivers (technology, location, and legislation and regulations). The responses to three comprehensive questions include (a) the key decision factors between insourcing and outsourcing, (b) the decision factors between onshoring and offshoring from outsourcing, and (c) the decision factors on far-shoring, near-shoring, and captive centers from offshoring. The recommendation for sourcing was a right-sourcing that both insourcing and outsourcing, instead of conflicting between themselves, are combined complementarily in the global IT services strategy model.

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Field, T. (1997). An outsourcing buyer’s guide. Caveat Emptor. CIO Magazine.

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Lure_of_the_Countryside?taxonomyId1⁄414&pageNumber1⁄41.