Archive | March, 2013

Is It More Time-Consuming To Develope Or Purchase An Information System?

13 Mar

stock-photo-business-clock-isolated-on-white-background-15401869The compeditive nature of modern day business means that time is of the essence. If you are wasting time you are wasting money. It is of vital importance that a business not only gets a suitable information system installed but it is important that the information system is up and running as quickly as possible. I would like to explore which method of installing an information system is the most time consuming.

Purchasing An Information System

  • The information system is already made out and just has to be installed.
  • less time spent ironing out small details about the information system as it’s development is outsourced.
  • Outsourcing the information system leads to the information system being installed quickly.
  • The company making up the information system such as Oracle will have expertes in this area and will therefore be for efficiant .
  • Less likely to be time wasting internal disputes over what type of information system should be installed when the information system is outsourced .

Developing An Information System

  • Time can be wasted with internal staff arguments over small details of the information system.
  • Will take longer to develop and install than an independant outsourcing company.

 

It is clear that it is more time effective to outsource the development of an information system. This fact makes the idea of outsourcing the development of an information system all the more appealing to companies.

Some Disadvantages of Outsourcing.

13 Mar

In my last post I discussed some of the advantages of outsourcing but it may not always be the best option for a company.

Here I will discuss some of the main disadvantages of outsourcing.

1.  Loss of managerial control:  While outsourcing can be a solution to many managerial headaches, it can also be the cause of some.  If you agree to outsource some of your operations to another company then you effectively put them in charge of that task for the duration of the contract.  Of course a lot of specialists in outsourcing companies will be open to suggestion in order to keep their customer (you) happy but you may not always be fully aware of what they’re doing until it’s too late.

2.  Hidden costs:  We all know that outsourcing is used as a way to minimize costs.  Outsourcing companies know this too and so they will compete with each other on price.  In order to do this they may subtly imply a certain package without actually stating the specifics.  You may later find that you’ve paid for a lot less than you had originally thought you were going to get.  They may start billing you for “additional charges” which you had assumed would be fairly standard and already covered in the agreed contract.  If you choose to fight them legally on this you may find that they have sewn up every loose thread and that you are now cornered.  They are in the business of doing this and so they invest huge efforts into ensuring an airtight procedure.  Unfortunately your legal costs won’t pay themselves either.

3.  Threat to security and confidentiality:  While your business may follow strict policy with regard to confidential information there is nothing that guarantees your outsourcing company will adhere to the same standards.  If they are granted access to personal information of staff, business plans or product ideas it should first be ensured that your contract with them has penalty clauses to restrict the misuse of such information.

4.  Quality problems:  Although expected, they might not use the best tools for the job or necessarily go about things in the best way.  They’re only obligated to fulfill the contract agreed and so they may cut corners in  order to reduce their own expenses and therefore increase their profit levels.

5.  Tied to the financial well-being of another company:  You are now relying on this other company to take care of some task for you.  Should they experience financial difficulties which result in them going out of business you may be left in the lurch!

6.  Bad publicity and ill-will:  Some workers feel very threatened by the thought of jobs being outsourced.  Should they see job losses in one department due to outsourcing they may feel threatened and the morale among workers in your firm may fall.  As well as this, should the outsourcing company you’ve used receive bad publicity in the media and it is widely-known that they supply to you then the reputation of your company could be jeopardised.

7.  Time wasted in securing satisfactory outsourcing:  Lengthy bid-processes along with negotiations can be very time-consuming.

8.Lack of strategic alignment:  As mentioned earlier, the interests the outsourcing company and your firm could be very different.  If these interests are too far-removed then outsourcing simply is not the best fit for your organisation.  Look within your organisation.  These people will have a vested interest in the success of your business and will more than likely be willing to work harder to achieve such successes.  Most analysts recommend that firms do not outsource any key functions which directly affect the products or services produced by the company.

 

 

Sources:

http://www.referenceforbusiness.com/small/Op-Qu/Outsourcing.html

http://operationstech.about.com/od/outsourcing/tp/OutSrcDisadv.htm

Outsourcing? What’s so good about it?

13 Mar

Outsourcing.  It’s a massive opportunity which almost all businesses, particularly medium to large scale businesses, must consider.  But what exactly is it?  The concept of outsourcing can be applied to pretty much all aspects of a firm’s operations.   Essentially it involves paying someone from outside of your organisation to handle a certain operation in which they are usually an expert.  It can often save a firm time, money and an awful lot of stress!
And of course outsourcing occurs in the field of IT with up to 60% of all businesses outsourcing their IT to an IT specialist.

Outsourcing can prove a great way to reduce costs.  You don’t have to hire staff to carry out these tasks so there’s no salaries to be paid, no salary-related taxes, no costs of training new staff, no need to purchase certain hardware and/or software and you don’t need to provide extra work-space.  Not to mention the savings that can be made on insurance!

Some Reasons for Outsourcing

By outsourcing to a quality IT provider you can also reap the benefits of top-level expertise without having to incur some of the expenses mentioned earlier.  With technology changing and improving so rapidly these days it can happen that the new piece of technology you bought last week for your company will be out of date in six months time!  If you outsource then the onus is on the supplier to ensure that they have the latest technology available to them or else they will lose your custom.

Another advantage of outsourcing in this area of expertise is that the organisation to which you outsource will undoubtedly have dealt with tonnes of similar problems with other companies in the past and will be able to recognise a problem and come up with the solution quickly and efficiently.

To sum up, firms who take advantage of outsourcing from a reliable supplier can save costs, ensure the highest level of service, increase efficiency and most of all keep up with or even get ahead of the competition!
It can also offer some managers better sleep.

Outsourcing_tcm18-35208

Sources:

http://www.referenceforbusiness.com/small/Op-Qu/Outsourcing.html

http://www.intrice.com/advantages-of-offshore-outsourcing.html

Constantly Updating Your Information Systems Is Like Keeping Up With The Joneses

12 Mar

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The nature of technology is that it is constantly evolving and breaking new ground. This puts an added pressure on businesses to keep up with these technological advances in order to be competitive. It is often the case that the most competitive firms in the market are the most up to date with modern technology such as Paddy Power the online gambling firm that has dominated the market share in the UK and Ireland with an income of €450 million in 2010 due to its information system’s making it easier than ever for customers to place bets using the well developed company software. Now companies  try to evolve with the technology in order to gain a competitive advantage over rival firms.

 

paddy-power-image

It is now necessary that a company budgets for technology updates to keep up with technology and competitors. Paddy Power invested 20% of their profits in 2011 into developing new software that allows customers to download an app on their smartphones that allows the customer to place bets using their handheld devices. This was a follow on from their launch of online gambling in 2007 which has proved to be a resounding success with profits increasing by 35% in the first 2 years. The success of the software updates of paddy power has transformed the landscape of gambling as the traditional process of going to the bookies has now been outdated by this recent development in information technology. Competitors such as Ladbrokes have followed suit in order to survive keeping in theme with the new keeping up with the Joneses nature of advances in information technology.

Why Business Need Information Systems

11 Mar

Many businesses today do not make use of internet which is very important in this day. Upgrading the computer information system is not an option in this technology-driven era, it is essential. The follow are reasons why businesses need to use information systems.

Operational Excellence:
In order for a business to achieve high levels of profitability, they need to improve the efficiency of their operations. Information systems is a tool that is used in order to achieve high levels of efficiency and productivity in business operations.

New Products, Services and Business Models:
Information systems can be used to create new products and services and also an entirely new business model. A business model describes how a company produces, delivers and how they sell a product or service to create wealth.

Customer/Supplier Intimacy:
When a business provides a good product or service customers tend to return and purchase more frequently which raises revenue and profits. The more a business engages with its suppliers, the better the supplier can provide vital inputs which can lower costs.

Improved Decision-Making:
Many managers who operation in an information bank may never have the right information at the right time to make an informed decision. This can raise costs and lose customers. However, information systems allow the managers to use real-time data from the marketplace when making decision.

Competitive Advantage:
When a firm achieved one or more of these business objectives (operational excellence, new products, services and business models, customer/supplier intimacy and improved decision-making), they may have a competitive advantage. By performing better than competitors, charging less for superior goods and responding to customers and suppliers, higher sales and profits can be made.

Day To Day Survival:
Businesses must invest in information systems and technology as they are essential to doing business. This necessity is caused by the industry level changes and firms need to use information systems and technology in order to provide the capability to respond to these.

Information systems enables companies to react, respond, cater, store, retrieve, disseminate and control their new valuable asset that is information. In the future, a good information system in a business will no longer be an option, it will become a compulsory in determining success.

Reference:
http://www.bukisa.com/articles/20243_the-importance-of-information-system

Real Life Examples Of Failures In Information Systems

11 Mar

An information system can be extremely beneficial to a company, however when an information system fails the results can be devestating and can even lead to the demise of the company. There have been many examples of companys collapsing due to a failure in an information system. I would like to discuss examples of companies and organisations that have suffered huge financial loss due to the failure of an information system.

 

Irish Electronic voting Failure 2004   

This information technology failure is perhaps the most famous in irish polotics and is widely regarded as the biggest waste of the tax payers money ever recorded in irish history with the failure causing the irish economy 55 million euro. It was implemented by Taoiseach Bertie Ahern who wanted to make the irish voting system more efficient.

Reason For Failure: The implementation of the system was not well  recieved by the general public who worried that it would lead to a lack of transparency and also the elections could be open to manipulation if these electronic voting systems were used. It then transpired that the electronic voting machines could be easily hacked and manipulated. The system was never implemented and lead to 55 million euro of the tax payers money being wasted.

Hilton Hotels Information system failure

Hilton Hotels attempted to implement a system that allowed customers to Confirm reservations  for hotel bookings and Car rentals online. This information system was to be brought in with the intention of making the booking system easier for both the consumers and the company.

Reason For Failure: After 4 years and 125million dollars invested the project crumbled in 1992 when it became clear that the company would miss its deadline by 2 years.

 

Tri Valley Growers Information System Failure

A giant agricultural co-operative, Tri Valley bought at least $6 million worth of ERP software and services from Oracle in 1996. This lead to a $20 million lawsuit claim by Tri Valley against Oracle.

Reason For Failure: None of the software worked as promised and some of it could not be installed by Tri Valley. Oracle denied any wrong doing. Tri valley lost the court case and was left with a net loss of $30 million.

 

 

Sourceshttp://www.computerworld.com/computerworld/records/images/pdf/44NfailChart.pdf

http://en.wikipedia.org/wiki/Electronic_voting_in_Ireland

Even Agile can fail!

11 Mar

There is no doubt that Agile software development is an improvement on traditional development methods, but is it perfect? Does every team to implement agile techniques and practices suddenly learn to move mountains, part the ocean? Unfortunately not. While project fail rates have been reduced from the catastrophic pre-Agile rate of 60%, about 40% of projects still fail, and still cost the economy tens of billions of dollars per year, a fact that is not widely reported.

I hope to show in this blog post that in most, if not all cases, when Agile fails it is due to poor implementation of methods rather than any fundamental flaws in the Agile methodology itself.

In a way, Agile ideals are the cause of its problems. The most well-known benefit of Agile is an exponential increase in the speed at which actual working iterations of software are created. Unfortunately (and this will become a pattern throughout this post), in many cases those who chose to implement Agile methods read about them and took away “It’s fast. Software will be finished quickly if we have a lot of meetings and don’t waste time documenting everything.” Job done, right? Wrong. Agile has never placed an emphasis on speed. The truth is that it’s founders know that if you try to do the right thing the right way every time, more than likely once it’s done, it’s done. No changes, patches, bug fixes, and definitely no scrapping the whole project and starting again. This will result in finished, fully functional software that satisfies the needs of the end user and does add value to a business, and the team will get there faster than if they barrelled through for two years, only to find out upon completion
that the end users hate the UI and that the program cannot perform it’s intended function.

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Agile methods are so well documented, intense, and focused on participation and communication that it is quite easy for a team to focus more on how stringently they are following their chosen method than on the ideas being generated, or work being produced. The Agile concept is derived from a very organic situation; Some programmers that work together by choice on a project, and discuss what they are working on very regularly, purely out of interest. The benefits of this organic process are obvious, and while it does take effort to replicate processes such as Agile, in truth, it was never meant to be applied to every software development project or every team in the same way. Agile was created by ‘star’ programmers, those who love what they do. The aim of Agile is to replicate the enthousiasm for a project that creates great software, by highlighting problems affecting a team, like a mother in law constantly pointing out shortcomings. The secret to success is to respond well to these red flags. For example, a team’s work may be affected due to not gathering enough information on business requirements. After their first iteration of working software is released, feedback from the shareholders will show that their requirements were not sufficient, and will help to further define them. This results in an improved performance in the second sprint, and so on. To sum up, good feedback reduces the timeframe of a project, as things will not have to be repaired, or started from scratch. Do the right things, do them right, do them now.

The other aspect affecting the timeframe of a project is the level of craftsmanship or expertise of those involved. This is comprised of two elements: Domain knowledge and expertise. Domain knowledge refers to each team members knowledge of WHY they are developing this project.

‘Everyone should clearly understand what we are doing,

why,

and why it is important at this very moment in time.’

It is hardly surpsising that developers know more about writing code than about, for example, the processes of the insurance providers they are writing a program for, and vice versa. However, in order for good programmes to be written, it is important that developers learn about the business that their software will be supporting. WHY must our program fulfill these requirements? Likewise, the shareholders would benefit from learning a little about the workings of the programs they demand, as this would result in clearer, more understandable requirements. Finally, the project manager must understand why he is implementing agile methodologies. Many ‘Scrum Alliance’ courses offer to certify managers as scrum masters in as little as two days, which is not possible. Managers with this level of experience should consider themselves apprentices, and seek out further guidance. Issues that may otherwise result include too little emphasis on documentation, incorrect sequencing of tasks, or too little emphasis on how problems are solved.

Documentation should be produced as and when it is needed. In waterfall methods, documentation is produced upfront at the beginning of a project. Many teams feel with Agile that documentation is an unnecessary waste of time, which is not the case. It should merely be done at appropriate times, where the cost of producing it is less than the benefit it gives.

Though less effective than face to face communication, it is a key principle that will give Agile scalability, and aid it in overcoming the issue of large or distributed teams.

Regarding task sequencing, while Agile emphasises adjustment over static plans, a general architecture of the project must be maintained, with sprints sequenced correctly to allow feedback, comparison to the overview, and finally, the adjustments that make Agile what it is. This is the main purpose of the project manager, to choose the specific times new or different requirements and feedback are incorporated into the original plan. Agile does NOT mean forgetting about the big picture.

TRIZ is a problem solving methodology which is highly applicable to Agile, and will aid the production of effective software, as it can be used to solve problems with applying Agile methods, problems with developing software, and answering the question of what software to produce. TRIZ is a very detailed idea and so I will provide a link:

http://en.wikipedia.org/wiki/TRIZ

The main issue affecting Agile is how different it is. In order for it to reach full potential, many large organisations would have to make drastic and costly changes such as allowing their basic information support systems to be updated continuously, only working in small, localized groups, and most importantly, being more open and less suceptible to mediocrity. If a team or team member is underperforming in an Agile situation, it is obvious very quickly. The need for excellence at all times may never be achieved. Managers in general do not like this idea. Agile’s supporters (mainly software developers) do not attempt to understand the barriers to changes of this scale in large organisations that are already profitable. It is the gap and resultant lack of understanding of each of these opposing mindsets, one could say a lack of domain knowledge, that stands in the way of Agile reaching it’s potential, and the value that it could add to business as a whole. Perfection is a direction, not a destination.

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