Why Organisations Outsource Business Activities - Assignment Example

Running header: Survey of IS theory Student’s name: Instructor’s name: Subject code: Date of submission: Contents: Title page 1 Contents 2 Contents: 2 Advantages and Disadvantages of web collaboration tools 11 Data Mining 12 The closure of mega upload website 13 References 15 Why organizations choose to outsource business activities; There are many reasons why organizations choose to outsource business activities some of which include; a) The need to concentrate on core business activities- this has the effect of freeing up internal resources thus allowing the organization to concentrate on the more critical activities. b) Reduction and controlling of costs of operation- outsourcing has the effect of turning fixed costs to variable costs which releases funds for investment elsewhere hence allowing the organization to avoid huge expenditures in their early stages of development. This makes the business more attractive to investors since more capital is injected to revenue generation activities. c) Risk reduction- businesses face very many risks concerning issues as markets, government regulations, competition, financial risks and technology (Jane, 2009). The providers of the outsourced activities will therefore assume and manage the risk on behalf of the organization. d) Lack of sufficient resources creates the need to utilize the capital resources of product suppliers or service specialists. e) Where activities such as payroll processing, website management, health and safety training are deemed time consuming and difficult to manage as organizations expand, they outsource such services. f) Organizations outsource in a bid to gain access to world class capabilities especially in the case of consumer support services and logistics since the global capabilities have greatly improved owing to improvement in technology and new innovations by global players. Technology, information technology and information systems Technology – this is the purposeful application of information in designing, producing and utilizing of goods and services as well as organizing of human activities. It is generally divided into five groups as follows; a) Tangible which includes models, blueprints and operating manuals. b) Intangible which includes problem solving, consultancy and training methods. c) High which includes automated and intelligent technologies that manipulate ever powerful forces and finer matter. d) Intermediate which includes semi automated technology that manipulates medium level forces and refined matter. e) Low which is labor intensive technology which only manipulates coarse matter and weaker forces. Information technology on the other hand is simply the use of computers and software in managing information. This involves the study, designing, developing, implementing, support and managing of computer based information systems specifically computer hardware and software applications (James, 2001). It is concerned with usage of electronic computers and software in converting, storing, protecting, processing, transmitting, and securely retrieving of information. Information systems on the other hand refer to the systems that are designed for creation, storage, manipulation and dissemination of information. In other words, information technology is part of information while both information systems and information technology are classifications of technologies. Importance of Databases in modern day organizations Logging, warehousing as well as processing of information on transactions is the lifeline of modern day business organizations’ corporate strategy and is of vital importance to their profitability. Vital records that detail an organization’s user history, product inventory, suppliers’ information, debtors, employee information as well as other important collection of information have to be stored in the database for future reference. This is because databases give a highly convenient means of vast amount of data storage (David, S2005). The data bases allow such information to be sorted, viewed, searched and manipulated depending on the needs of the business. It is no wonder then that modern day business organizations find data bases so important that it is almost impossible to execute their operations without databases. Similarly, non profit making organizations also find databases important as they have to keep track of people such as donors, clients, volunteers among others. Managing such vast information therefore calls for a database. Databases are found important for they are easy to set up, manipulate and use. Core competencies These are the characteristics that help in the assessment of a person’s knowledge and skills. They include; a) Diagnostic information gathering skills- this is the ability for identifying the information required to clarify a situation, seek the information from appropriate sources and use skillful questioning in drawing out the information where there is reluctance to disclose it. b) Technical expertise- this is demonstration of in-depth knowledge and skills necessary for performance of a task. It is the ability to effectively apply technical knowledge in problem solving (Jane, 2009). It may also involve development of solutions to problems which can’t be solved by the use of common methods and approaches. It also incorporates the ability to keep informed about the various developments that happen in a person’s area of expertise. c) Problem solving skills- this is the ability to identify and solve problems with effective solutions. It involves utilization of the available resources in coming up with potential solutions. As such, one has to have the ability to identify the information required in clarifying the situation and gather the information from the relevant sources. Problem solving skills also involve the ability to evaluate options through consideration of implications and consequences, choosing of effective alternatives as well as implementation of the solutions within a reasonable timeframe. Technological issues of importance to business and business managers With the current advent in technology, a number of technologies and technological issues have been found to be important to businesses and also to business managers. This is evident in a number of websites including www.informationweek.com, www.computerworld.com, www.cio.com, www.newsfactor.com. The technologies and technological issues include those to do with new software development, cloud computing, virtualization and operating systems. A number of issues also seem to be of paramount importance to managers. The issues include funding of information technology projects, development of information systems, security of various organization data and disaster recovery or business continuity as well as strategic planning. Challenges of operating in a digital world There various challenges that have come up as a result of operating in a digital world which include; a) Information overload – the globe has been experiencing information overload of late. As such, our lives have become littered with all kinds of information – credible and incredible as well as stimuli which crowd our information processing to a point of breaking. This is associated with the computer age since technology has led to the rise of vast information door ways (James, 2001). As such, we need to develop our mental capabilities in a way that combats this complexity and overload of information in a bid to effectively manage all this information. b) Privacy and security – operating in a digital world has turned the world into a global village hence limiting the privacy of any stored information. Further, the rise of cyber crimes such as harking further compromises the privacy and security of information. c) Plagiarism- this is simply lack of originality and thriving in copied work. With the rise of a digital world, the vice has greatly increased not only in learning institution but also outside the institutions hence increasing doubts on the ability to produce original work. Types of information systems There are various types of information systems which include; a) Transaction processing systems- these are operational level systems usually operated by shop floor employees and provide data required in supporting management of operations. Such systems include payroll systems, reservation systems, and stock control systems among others. b) Management information systems- these are management level information systems used by middle level managers in aiding in the smooth running of the organization in the short and medium terms (David, 2005). They allow the managers evaluate the organization’s performance through comparison of current and previous results. Such systems include the sales management systems, budgeting systems, inventory control systems among others. c) Decision support systems- they are knowledge based systems used by senior managers in creation of knowledge and its integration to the organization. They analyze existing information hence allowing the managers project the effects of their decisions in the future. Such systems include group decision support systems, financial support systems etc. d) Executive information systems- these are strategic level systems which help the executive analyze the environment where they operate and identify trends and hence plan on the course of action. Information systems can be used to gain a competitive advantage in a number of ways. For instance, implementation of the systems will make jobs efficient hence freeing employees to concentrate on more important tasks. This also provides a cost effective strategy of conducting transactions by reducing the time required in processing a transaction. As such, organizations can be able to use information systems to differentiate themselves and hence stand out from the competition by providing services of quality that no one else provides. In addition, the systems can be used in monitoring supply and distribution hence making the organization more efficient and effective in dealing with the customers and suppliers. Information accuracy, privacy and property Information accuracy is a quality of information that helps us in determining the truthfulness and reliability of information. It answers the question whether the information is a fact, an opinion or propaganda. Accurate information ought to be well documented so that it is possible to prove the accuracy. On the other hand, information privacy refers to the relationship existing between how the data is collected and disseminated and whether the information is made available to the public or is reserved for use by specific individuals (Jane, 2009). As such, for information privacy to be assured, information should only be accessed by only the parties that are supposed to access it. Incase the wrong parties get to see the information, then it can not be considered to be secure whether it is accurate or not. Finally information property refers to the value of information. Information being an intangible entity can be owned by a person or even jointly by a number of individuals. Depending on the nature of information held, the owner of the information can decide to use it to his advantage by consuming it, selling it to others or even destroying it. Therefore, information just like has a characteristic that makes it have value and can be owned, given out or sold just like other forms of property. Necessity of risk analysis in information security plan Why it is necessary to conduct a risk analysis as a first step in developing information systems security plan The risk analysis is necessary as a first step in developing information systems security plans since it helps unearthen all the risks that the security plan might be exposed to. As such, one is able to develop the security plan in such a way that the security plan will take care of all the security risks that the information system will be exposed to. Information security risk assessment will enable one to identify and assess risks to security of information. This will also help one come up with risk control objectives and techniques and hence come up with structured policy guidelines on information security for the organization. As such, the risk assessment will act as a prerequisite to formation of strategies to be used in developing, implementing and maintaining the information security plan. As such, one will be in control by leaving the security plan less open to risk. Advantages and disadvantages of Web-Collaboration tools With increased competition in the world of business, many businesses are looking for ways to be the best. One way in which businesses are finding it easy to offer quality services to customers is in the use of Web based collaboration tools. The web based collaboration tools have a number of advantages as well as disadvantages as explained below. Advantages The web based collaboration tools enable organizations to work at ease with distant clients and workers without necessarily having to organize for physical meetings. This is possible through the use of such tools as video conferencing. this has the effect of not only saving on time but also saving on the company’s travel and accommodation costs by organizing online meetings that do not necessarily require one’s physical presence. Email collaboration tools such as gmail have been found helpful in enabling scattered workers access the same mails and messaging services and hence be in touch at all times. In addition, document sharing services such as Google Aps allow for inline storage of documents with options for changing and modifying the documents in the course of meetings (Doyen, 2010). The tools also save time thereby increasing working hours. Network collaboration tools are actually a convenient way of working together for companies that have their workers scattered all over the globe or those that deal with suppliers and customers from many parts of the world despite not being physically present in one place. Despite the numerous advantages, the tools have the disadvantage of relying on the internet and are hence not applicable in areas without internet connection. Furthermore, technical hitches occurring during the conversations may negatively impact the meetings. The tools are also prone to cyber crimes which endanger the security of data while differences in time zones may also affect team meetings if the teams operate in different time zones. Data mining Use of data mining and visualization in gaining business intelligence and improving decision making Data mining is useful in gaining business intelligence especially in the area of customer relationship management. In this regard, data mining is assists the business to concentrate its efforts on those customers projected to have the highest likelihood of responding to an offer as well as being the most profitable as opposed to randomly contacting prospective customers via emails and call centers data mining and visualization is used in optimizing resources across channels so that one is able to predict the channel and the offer a customer is most likely to respond to. It is also helpful in to human resources departments especially in the identification of the most successful employees and hence deciding on how to align the organization’s recruitment efforts (Doyen, 2010). Through data mining, organizations are also able to translate their corporate level strategies into personal level decisions. Informed decision making has been found to be key to organizational success. Businesses therefore need to have highly visual intelligence tools that are helpful in making the right decisions. Effective data visualization therefore becomes a vital tool in an improved decision making process. It enables the organization’s decision making organs to quickly examine large data amounts, expose the prevalent trends and issues efficiently, exchange ideas with major stakeholders and hence influence decisions that ultimately lead to success. Through the use of RBI approach, data mining can help improve decision making by mining knowledge progressively acquired from the decisions of an expert decision maker and then self tuning the decision method accordingly. Closure of mega upload website Property refers to the quality in an entity that makes have value and hence capable of being owned and used for economic gain. Privacy refers to the secrecy of an entity and the right of the entity to be accessed and used only by the authorized parties. Access refers to the right of the owners of the entity and authorized users to have authority to use the entity at any given time without being prevented from doing so. Accuracy on the other hand refers to the quality in information that makes it devoid of errors and fallacies. For this reason, the closer of the mega upload affected mega upload negatively to a greater extent (David, 2005). The fact that the owners were denied their rights as owners to use the website for their economic gain and also as a tool of disseminating information interfered with the property issue of the website. This also interfered with the website’s privacy since external forces are not supposed to interfere with the internal affairs of the website. Closing the website and arresting its owners was the final blow on the accessibility of the website since it not only had a negative impact on the websites publicity but it also prevented the owners and the public from accessing it. In addition, the accusations leveled against the website resulted in a lot of doubts on the accuracy of the information provided by the website. Closing the website portrayed it as a website that spreads lies and hence inaccurate information. References: James, W2001, Information management systems, Prentice Hall, London. David, S2005, Application of technology in business, Light House Publishers ltd, Melbourne. Jane, B2009, Information systems for better businesses, Oxford university press, Sydney Doyen, O2010, Management information systems: An introduction, Cambridge University press: Cambridge. Read More