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AN INTRODUCTION TO DIFFERENTIATED LEARNING TOOLS


Participants in flexible learning programs have limitations on the nature of the
time they can spend on learning. Typically they are employed fully or partially,
pursuing higher studies or have other social and familial responsibilities.
Availability of time is a great constraint to these students.
To aid the participants, we have developed four unique learning tools as below:

Bullet Notes : Helps in introducing the important concepts in each unit


of curriculum, equip the student during preparation of examinations and
placement interviews
Case Studies : Illustrate the concepts through real life experiences
Workbook : Helps absorption of learning through questions based on real life nuggets
PEP Notes : Sharing notes of practices and experiences in the Industry will help the student
to rightly perceive and get inspired to learn concepts at the cutting edge
application level.

Why are these needed?

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Adults learn differently from B. School or college going


students who spend long hours at campus.
Enhancing analytical skills through application related learning
kits trigger experiential learning
Availability of time is a challenge.
Career success increasingly depends on continuous learning
and success

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What makes it relevant?


Practitioners can use their real life knowledge and skill to enhance learning skills.
Immediate visualization of the practical dimension of the concept will offer a rich learning
experience.
How is it useful?
Through these tools, the learning bytes are right sized for ease of learning for time challenged
participants.
The content starts from practice and connect to precept making it easy to connect to industry
and retain.
They can be connected to continuous assessment process of the academic program.
Where does this lead to?
Helps stay motivated and connected.
Easier to move ahead in the learning process.
Will facilitate the student to complete the program earlier than
otherwise.
When is it useful?
As and when you get 5 to 10 minutes you can read one of these and absorb and comprehend.
Spending more time is your choice.
You can use the time in travel, waiting for meetings, lunch time, small breaks or at home
usefully.

PEP Notes

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IT & Systems

The ICFAI Foundation for Higher Education (IFHE), Hyderabad,


April, 2015. All rights reserved

IC

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No part of this publication may be reproduced, stored in a retrieval system, used in a


spreadsheet, or transmitted in any form or by any means electronic, mechanical,
photocopying or otherwise without prior permission in writing from The ICFAI
Foundation for Higher Education (IFHE), Hyderabad.

Ref. No. ITS-PN-IFHE 042015


For any clarification regarding this book, the students may please write to The ICFAI
Foundation for Higher Education (IFHE), Hyderabad giving the above reference number
of this book specifying chapter and page number.
While every possible care has been taken in type-setting and printing this book, The ICFAI
Foundation for Higher Education (IFHE), Hyderabad welcomes suggestions from students
for improvement in future editions.
Our E-mail ID: cwfeedback@icfaiuniversity.in

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INTRODUCTION
Participants in ICFAI University Programs are eager to apply theory to practice. They realize that
application orientation can enhance their learning and subsequent usage of management precepts and
practices. Picking out the principle behind real world events is critical to this learning. Towards this end the
institution has introduced the PEP Notes.
The PEP Notes (Practice, Experience and Perspective Notes) is a collection of annotative notes on practices,
experiences and perspectives from industry as appearing in articles from reputed sources such as Harvard
Business Review, Economist, Mckinsey Quarterly, Accenture, Bain Consulting etc.

Practice : Organizations follow practices based on their past learning

Experience: Based on changing context, they face fresh experiences

Perspective: Organization learns from the experience and the practice to gain fresh perspective

These notes connect the three dimensions of the real world to key concepts in the subject. Each note is brief
about one to two pages and is adapted from the article referred to in the note. The concept underlying the
note is highlighted in a box. The concept is also connected to the article through an introductory abstract in a
box at the beginning.
The learning outcomes expected are:
Real world Application based approach significantly enhances absorption and retention.

2.

Exposure to the current trends, practices with illustrations connect back to theory.

3.

Thoughts from leading sources.

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The PEP Notes may be used for Assessment.

iii

CONTENTS
Block- Introduction to Information Technology and Systems

1.

SAMSUNG Eyeing Software Side

2.

IT is changing the Face of Auto Industry

3.

Smart Data for Better Decisions

4.

The Advantages of Big Data

5.

How to build Analytics Capabilities?

6.

Little Data is also useful

10

7.

Business Technology Trends in 2014

12

Block-2: Applications of Information Technology in Business

14

8.

Digital Influence on Product Purchase Decisions in India

15

9.

Cloud Computing Insights for CEOs

17

The Growing Creation Nets Increases Open Innovation

19

11.

Improving the IT Yield

21

12.

Digital Transformation Elements in an Organization

23

13.

Software Complexity

25

14.

Business and IT are not Independent

27

15.

The Role of Analytics & Big Data in Business Growth

29

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10.

Block-3: Software and Database Concepts and Networks

31

16.

Open Data as a Type of Database

32

17.

Analytics driving Business Strategy

34

18.

Cost of inaction on Big Data

36

19.

Different Perspectives on Big Data & Data Analysis

38

20.

The Role of Intuition in Big Data and Analytics

40

21.

Growing Pervasive Computing

41

22.

Advantages of Latest Mobile Technologies

43

23.

The Digital Divide across the World

45

24.

Growing Indian Internet & Smartphone Markets

47

25.

Telecommunications Technology Trends

49

26.

Wi-Fi for Customer Satisfaction

51

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Block-4: Management of MIS

53

The Role of Requirements Management in Software Product Development

54

28.

Roadmap for a New CIO (Chief Information Officer)

55

29.

Return on Investment (RoI) of Clinical IT Systems

57

30.

Dealing with IT Risk

59

31.

IT Spending for Organizational Effectiveness

61

32.

On Mission to Develop IT Product Engineers in India

63

33.

The Success Factors of CIOs

64

34.

The Turnaround Journey at Yahoo (2012-13)

66

35.

The ignored Soft factor in Nokia Downturn: Collective Emotions

68

36.

The Growth of Open Innovation (OI)

70

37.

How Analytics Changed the Business Model of a Media Organization?

72

38.

The Pros and Cons in Analytics Outsourcing

74

39.

Growing Software Entrepreneurial Zeal in India

76

40.

Business Models which can be Adopted from Software Industry

78

41.

Innovation Prowess for Growth Leadership

80

42.

Wipro, World No. 3 in Energy & Utilities Vertical

82

43.

Innovative Project Management at IBM

84

44.

The Role of IT in Healthcare

86

45.

Measuring Clinical IT Systems Performance

88

46.

Predictive Analytics to increase Project Success Rate

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47.

Leading Healthcare IT (HIT) Projects

92

48.

Corporate Website for Organizational Effectiveness

94

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27.

Block-5: Enterprise Functions and E-Business

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49.

Major Acquisition of an E-Commerce Company by an Overseas Investor

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50.

Chinas Alibaba Surpassing Amazon and Ebay

99

51.

The Real Value of Data: Enhancing the Organizational Business

101

52.

Challenges in Internet of Things Business

103

53.

The Role of IT in Mergers and Acquisitions

105

54.

IT and Lean Management at Amazon

107

55.

ERP in the Cloud

109

56.

Technology Driving the Indian Taxi Services

111

57.

The Role of IT in Coca-Cola

114

58.

The Growing Need for Unstructured Analytics

116

Block-6: Advanced Topics in IT

118

Cloud Computing Updates

119

60.

Big Data Operational Models

121

61.

Platform is the Core to IT Systems

123

62.

Internet of Things: The Future of Mobile Technologies

125

63.

Changing Dynamics of Contact Center Outsourcing (CCO) Market

127

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59.

vi

Block-1

Introduction to Information Technology and Systems


SAMSUNG eyeing Software Side

2.

IT is changing the Face of Auto Industry

3.

Smart Data for Better Decisions

4.

The Advantages of Big Data

5.

How to build Analytics Capabilities?

6.

Little Data is also Useful

7.

Business Technology Trends in 2014

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1.

1.

SAMSUNG Eyeing Software Side

Samsung is headed for vertical integration with an overview of hardware and software.

About SAMSUNG:SAMSUNG manufactures PCs, TVs, Air Conditioners, Refrigerators, Cameras, Phones, Tablets,
Smartphones and many of the spare parts required in their making. According to Knowledge@Wharton,
Samsung is looking for Vertical Integration of both hardware and software. It has launched Galaxy S4
Smartphone recently. Its Galaxy S3 has crossed the 40 million units sale in January 2013. Samsungs
Power comes from manufacturing of screens, mobile devices and processors.
Its main competitor is Apple, which has capabilities both in hardware and software. Apple also procures
many parts from its vendor Samsung. Apple is the main customer of Samsung. Nokia and Blackberry are
still struggling to find their footing in the Smartphone market.
Now Samsung hopes to make an entry into the Software market, and is developing its own open source
operating system known as Tizen for mobile phones competing with Google Android.

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World Smartphone Market

SAMSUNG Galaxy S4 Features:


5 Screen; both front and rare Cameras; health monitoring software, video controls that respond to eye
movement, tilt to scroll, video pausing with respect to facial recognition, and hand signalling recognition
device. Google Android operating system consists of: S Translate, a language translation application and
S Navigation, a map application similar to Google Maps.
Samsung and Apple thrive chiefly on the success of their Television. Samsung recently demonstrated
using Galaxy S4 as its television remote.

PEP Notes: IT & Systems


World Tablet Market

Future:

Samsung is one among 12 organizations developing the Tizen operating system. This is because,
according to Knowledge@Wharton, Google may start charging for Android in future, or make it less
open.

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Samsung hopes to emulate Apple having both hardware and Software capabilities. It also entered
the Phablet market combining both phone and Tablet. Samsung and Apple are most likely to
remain as key players in Smartphone market for long term.

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Traditionally overview of hardware and software in an organization includes servers, workstations,


desktop PCs, printers, monitors, scanners, photocopy machines, and peripheral devices such as keyboard
and mouse. The current day organizations are using mobile hardware and software technologies for
business purposes by giving smartphones and tablets to its employees. These mobile devices include the
latest hardware, integrated circuits, mobile chips, mobile operating systems such as Android, iOS,
Windows mobile and other open source mobile operating systems. The software applications in mobile
phones support audio, video, chatting, SMS, e-mail and browsing of the Internet.
Discussion Questions:
1.

What were some of the features of Samsung Galaxy S4?


(Hints: health monitoring software-video controls-facial recognition)
2. What would Samsung have liked to do with respect to software?
(Hints: combine phone and tablet-operating system development-vertical integration of hardware and
software)
Reference:Knowledge@Wharton, Samsung: A Hardware Manufacturer seeking its software
side,Knowledge@WhartonManaging Technology Series, March 27, 2013.
Applicable To:
Topic

Course

Unit-1: Computer Systems An Overview;

IT & Systems

Section-1.8: Overview of Hardware and Software;

Block-1: Introduction to Information Technology and Systems

2.

IT is changing the Face of Auto Industry


Automobiles integration with disruptive IT technologies is
changing the face of automobile industry.

Integration of high technology components into automobiles is changing the face of automobile industry. By
2050, there will not be any accidents involving Japanese cars. Japanese auto manufacturers such as Nissan,
Toyota and Honda are working in that direction with many technological innovations and integrations. This
article consists of the insights from the Mach Institute Fall Conference 2013 on disruptive technologies
getting integrated into automobiles.
Japanese car manufacturers together with Asian, European and North American counterparts are
working towards ensuring that vehicles do not harm the environment through electrification or through
the use of different fuels and technological innovations as these cars are integrated with disruptive high
technology components and devices.

The automobile industry has incorporated major design changes since the 1920s.

Very structured high technology components are entering the tightly integrated automobile industry.
Automobile manufacturers, suppliers, dealers and industry are tightly integrated.

The disruptive digital technological innovations are bringing the commonality between auto industry
and ICT (Information and Communication Technology) industry. Batteries and electric motors are to be
integrated into vehicle braking, suspension, steering, safety, heating and AC systems.

The vehicle fueling infrastructure is changing with different fuels such as gasoline, diesel, compressed
natural gas (CNG), lithium ion batteries, ethanol and biodiesel.

Innovations Coming Up:

Innovations Related to Passenger Safety: At Nissan, safety related innovations include a sensor at the
rear end, active engine break, zero gravity seats, direct adaptive steering and lane departure prevention.
These kinds of innovations are present in car models such as Altima and Infiniti Q50.

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Toyotos innovations include rear-end collision, night view detection system, pedestrian accident
avoidance system and lane departure prevention.
Volkswagens safety innovations include park assistant, trailer assist, blind spot monitor, pre-crash
occupant protection system, remote control parking and construction site assistant.

The above innovations are being made by keeping the distinct aspects of intelligence in vehicles such as
recognition of other vehicles and devices, systems to process the gathered data and for ensuring rapid
fire response actions. The ultimate goal is to have driverless vehicles and accident free roads.

Many innovations which eliminate vehicle emissions are also coming up.

Technological Achievements: The cameras embedded in the cars can capture images 100 times faster
than the human driver. Microchips are embedded in each chassis and these interact with cloud based
platforms having customer data, manufacturing data and design data.

Example: Nissan has achieved autonomous car parking, autonomous lane change, autonomous remote
parking, autonomous highway exit and autonomous stop at signal light.

Future Challenges:

Disruptive technologies face challenges from tightly integrated automobile sector as it involves many
integrated stakeholders from the auto industry such as design partners, suppliers, OEMs (original
equipment manufacturers), dealers and customers who participate in product development. The product
has to cross all these stakeholders asintegration requires change management.

PEP Notes: IT & Systems

Legal issues: If an unmanned vehicle meets with an accident or is damaged because of any technical
snag, it is still debated as to who is liable- the human or the manufacturer. Manufacturers are trying to
build systems that make humans liable.

New vehicles with disruptive technologies have to be brought into the market at the earliest.

With disruptive high technologies, Nissan has reduced fatalities and serious injuries involving their cars to
50% since 1995. By 2020, they want to reduce further 50% of the fatalities involving their cars. Sometime in
this century, they want to make zero fatalities involving their cars.
With the increasing number of computing devices, the interaction between hardware and software is
growing in the world. For example, devices such as mouse, DVD player, monitor and key board are the
hardware devices. These devices interact with the software stored in the computer. The software which
interacts with the hardware devices in the computer is the operating system. Operating system acts as
interface between computer and the external devices or actors. The software programs which deal with
hardware devices are known as system programs or system software, which is part of the operating
system. Operating system is also system software stored in the computer. It liaisons between hardware
and software.
Discussion Questions:
How is IT useful for automobile industry?
(Hints: Passenger safety-intelligent vehicles-autonomous driving and parking)
2. What did Toyota achieve with IT?
(Hints: night view detection system-accident avoidance system-lane departure prevention)
Reference:Knowledge@Wharton, The Promise and the Challenge of Integrating IT into the Auto
Industry, Knowledge @ Wharton, 2014.
Applicable To:

IC

Topic

FA

1.

Unit-1: Computer Systems An Overview;

Course
IT & Systems

Section-1.8: Overview of Hardware and Software;


Sub-Section-1.8.1: Interaction between Hardware and Software;

Block-1: Introduction to Information Technology and Systems

3.

Smart Data for Better Decisions

Smart data with quality of information can be used to make better decisions in an organization.
Organizations require smart data in order to take better decisions. In current days, organizations are pumped
with excessive data. Many times decisions are made with huge or sub-standard data. This article highlights
the need for smart data for making decisions by drawing insights from the article published by Ferguson,
R.B. (2014)in MIT Sloan Management Review. This was based on a research survey of 2,500 professionals
done by MIT Sloan Management Review and SAS Institute.
Organizations have to make strategic and operational decisions based on data, facts and figures. There is
huge data in the market and non-market environments. The data could be termed in exa bytes or zetta bytes.
Organizations are not having the required good quality data to make decisions.
In the MIT and SAS Institute survey, 60% of the respondents expressed that senior managers are pressuring
them to use data and analytics for making decisions in the organization. 42% of the respondents agree that
they have the required data always or frequently to make decisions. Making right decisions in the
organization requires data to be smart. Smart data has got certain characteristics.
Smart data is the data from which patterns and signals can be extracted using efficient and intelligent
Algorithms.
The characteristics of smart data are as follows:
Accurate: The smart data should be accurate and unambiguous. It should be quality data and
should have precision.
Actionable: The smart data should be immediately actionable. That action should be scalable as
well. The actions should meet the business objectives.
Agile: Smart data should be agile and it should change according to the changing environment.
What matters most is the flexibility in data. The data should be real--time and flexible.

Smart data should be useful for business intelligence, business analytics and business modelling.
Big data field requires strong theoretical background for decision makers. It is not only the
technologically viable but also requires strong theoretical background.

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Smart data can give implications to organizational structure, organizational design and organizational
strategy. Smart data is useful for better organizational decisions.
Decision makers can make informed decisions at right time and at right place by using smart data. Smart
data is useful in different strategies, processes and structures of an organization.
The quality of decisions in an organization depends on the quality of information they gather. The
quality of information is dependent on sources of data, reliability of data, accuracy of data, consistency of
data, availability of data, trust worthiness of data, MIS system capabilities, processing capabilities and
skills of the individuals in the MIS team. The quality of information can be improved by extracting data
from reliable sources and with reliable and consistent MIS systems. This will have huge impact on the
organization such as profitability, reputation, market positioning, building trust, goodwill, employee
commitment, job satisfaction, customer commitment and market share.
Discussion Questions:
1. What are the characteristics of smart data?
(Hints: accurate-actionable-agile)
2. How is smart data different from big data?
(Hints: gives implications to organizational structure-organizational strategy-organizational design)
Reference: Ferguson, R.B., Better Decisions with Smart Data, MIT Sloan Management Review, February
20, 2014.
Applicable To:
Topic

Course

Unit-3: Fundamentals of Information Systems;


Section-3.7: Quality of Information;

IT & Systems

PEP Notes: IT & Systems

4.

The Advantages of Big Data

Big data can be used to answer many types of questions.

Advantages of Big Data

Pharmaceutical companies can identify the attributes of their best sales executives.

Big Data can identify which songs are going to be hit.

Big data can identify whether Chubby baseball pitches have the right stuff.

Big data identifies the data patterns which are not identifiable through analog approaches.

Bid data identifies significant relationships.

Big data gives the answer to whatever problem one has.

Big data should not be confused with big ideas.

Some Insights about Big data


Big Data does not necessarily eliminate creativity.

Creative people can further find the data relationships using big data.

Advertisers can design their Ads if they understand consumer buying behaviour.

Apple iPod was successful because of its elegant design with MP3 quality sound.

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Data can be in two forms. They are structured data and unstructured data. Structured data can be
managed using Relational Database Management Systems (RDBMS) such as ORACLE, SYBASE, MS
SQL, and my SQL. Unstructured data has to be analyzed using text processing techniques and
mathematical techniques. An example tool which can process unstructured data is no SQL, which stands
for not only SQL. Big data consists of both structured data and unstructured data. The data coming to
organizations from both internal and external sources is growing at astronomical way to peta bytes. The
processed big data can give useful insights to the organization for its decision making and strategies
purposes.
Discussion Questions:
1.

Define big data.


(Hints: huge and continuous-structured vs. unstructured-internal vs. external to organization)
2. What are the advantages of big data for organizations?
(Hints: identify data patterns-identify significant relationships-do not eliminate creativity)
Reference: Finkelstein, S., What would big data think of Einstein?,BBC Capital, June 13, 2013.
Applicable To:
Topic

Course

Unit-3: Fundamentals of Information Systems;


Section-3.8: Basics of Information Systems;
Sub-Section-3.8.2: Components of Information Systems;
Sub-Sub-Section-3.8.2.3: Data

IT & Systems

Block-1: Introduction to Information Technology and Systems

5.

How to build Analytics Capabilities?

Big data with superior analytics can improve the organizational performance.
An organizational survey by Bain & Company shows how big data is becoming critical to business
performance. The top performing organizations are good at capturing data, collecting, parsing, storing,
analytics and drawing implications, insights and conclusions from it. Top management and the CEO have to
explain the importance of analytics in business performance to the employees. The article explains how to
build capability.
The Survey
Bain & Company surveyed 400 organizations whose revenues were more than $1billion each, to find
out the relationship between their data and analytics capabilities and decision making speed and
effectiveness.

It was found that only 4% of the organizations are good at analytics. These organizations combine the
data, people, tools and organizational intent for achieving excellent analytics to meet superior business
performance.

Other companies are using analytics, but not up to this extent. They are using analytics for improving
their products and services.

The elite organizations using the analytics to the maximum extent are

Three times more likely to execute decisions as they thought

Five times more likely to make quick decisions

Twice likely to be in the top 25% of the financial performers in their industries.

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Best Practice in Building Analytics Capability

The top performing organizations build the analytics capabilities by combing quality data, data savvy
people, state of the art tools and organizational intent.

Data: Data collection and organization should be in line with the organizational strategy. The
organizations have to identify the relevant sources of data. For example, gathered data from the queries
put on company website, customer calls, emails and chatting lines can give right insights and provide
direction to deal with the customer.
66% of the organizations do not have the right technologies to store and access the data. 56% of the
organizations do not have the systems to capture the data.

People: A successful analytics team should consists of data scientists who look after the raw dat a,
correlations, statistics and quality; business analysts who look after identifying and prioritizing solvable
problems and understand patterns and anomalies provided by the data scientists; and technical
specialists who look after the required hardware and software solutions and support.
56% of the companies expressed that they do not have the right capabilities to bring out rich insights
from the data.

Tools: Successful companies are using analytics tools such as Hadoop, NoSQL and HPCC (High
Performance Computing Cluster). 38% of the companies are using any one of the above mentioned
tools.

Organizational Intent: This consists of the processes and incentives that support the management
decision making. CEO and top management have to communicate the importance of analytics in
reaching business performance to their employees. For example analytics are used in optimizing internal
processes, improving products and services and transforming business models.
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PEP Notes: IT & Systems


Example: Nest is into home thermostats business. It uses big data and analytics to the maximum extent.
Other thermostat manufacturers provide remote control facility to their customers using web interface to
adjust the needed temperatures in homes. Whereas, Nest went a step ahead and using crowd sourcing
intelligence, collects data such as weather, location, time, type of home and adjusts the home
temperatures.
Application Areas

Analytics are used very much in financial services, healthcare and technology industries.

Analytics can be used in Call Centers.


Example: An Airlines company can attach a suitable call center executive immediately after
receiving call from a frequent flier based on his ID. They can even go a step further and collect
what category of flights he is booking, timing, days and then correlate it with why he is calling. The
main purpose here is to increase the revenues by targeting premium customers and to detect the
customers mood while the phone is ringing.

Organizations that have invested in big data and superior analytics have proved to have outperformed their
peers financially.

Data is vital in any information system. Information systems in an organization make use of data and
generate needed reports, graphs and tables useful for managerial decision making. Information systems
apply complex algorithms on data and generate useful information. Big data is the huge data collected
through both data warehouse and Internet. The sources of big data can be internal enterprise systems or
the external social networking sites.

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Discussion Questions:

What are some of the best practices in building analytics capabilities for organizations?
(Hints: clear organizational intent-proper data collection-use data analytics tools)
2. What are the different application areas of analytics?
(Hints: financial services-call centers-healthcare industry)
Reference: Wegener, R. and Sinha, V., The value of Big Data: How analytics differentiates winners, Bain
& Co, September 17, 2013.
Applicable To:

IC

1.

Topics

Course

Unit-3: Fundamentals of Information Systems;

IT & Systems

Section-3.8: Basics of Information Systems;


Sub-Section-3.8.2: Components of Information Systems;
Sub-Sub-Section-3.8.2.3: Data;

Block-1: Introduction to Information Technology and Systems

6.

Little Data is also useful

Evidence based decision-making is a tool of information systems in a business that


help to improve organizational performance.
Big data gives enormous amount of information and more human resources are required to analyze it. The
best practice is to inculcate the culture of evidence based decision making where in all the employees make
use of the available little performance data in their day to day decision making. It is an efficient and cheap
way of dealing with data in the organization. Currently, not every organization has benefited with the big
data investments. They have invested lot of time and money in data warehouses, data marts, data scientists
and analytical tools. Very few organizations have got returns on their big data investments. This article
brings insights from the three years of research put in byRoss, Beath and Quaadgras (2013) on understanding
the business value of data in the organizations by interviewing executives from 51 organizations and 7 case
studies.
Organizations Benefited with Big Data: There are 3 types of organizations actually benefited with big
data. They are:
Organizations with Fact-Based Decision Making: For example, Procter & Gamble (P&G) used real data
analysis techniques way back in 1920s with the help of door-to-door interviews. Today P&G uses data
models, analytical tools, social media data, RFID data, computer models and simulation. They benefited
from big data.

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UPS started tracking vehicles and goods from 1980s. They have driver strength of more than 100,000.
Today, using big data they have reduced the left-turns of the vehicles in goods delivery. With this they saved
$30 million and avoided the Carbon Dioxide emissions by 11,000 metric tons.
Engineering Organizations: ExxonMobil, in oil and gas industry, has used 3-D analysis for where to drill
for oil in the 1960s. Using big data, they are using 4-D analysis, geological analysis and can figure out
changes in the field over time.

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Web Based or Internet Based Organizations: Organizations such as Google, Amazon, Netflix and eBay
use big data analysis extensively. Google has come up with a model in which they keep a trail web page to
certain users and analyze the feedback, compare it with users using the previous web pages and draw some
insights from it whether to go ahead with the product or not. This kind of tools Google is providing to other
organizations as well.
Evidence Based Decision-Making Practices: Evidence based decision making provides performance data
at finger tips every day before decision makers in the organization. The evidence based decision-making
practices are as follows:
1.

Have a single source of authentic data.


Aetna in 2001 was at a loss of $300 million. The CEO insisted on using single source of information for
report generation. As time moved on initial inconsistencies were overcome and quality of reporting
improved. In 2005, Aetna reported $1.6 billion profit. FoxTel, an Australian Pay-TV companys CFO
insisted to have a single source of data for decision making. The number of reports generated reduced
from 600 to 180, thereby saving lot of time and money.

2.

Give decision makers regular feedback using scorecards


Pepsi America, a $5 billion bottling company, introduced score cards for warehouse workers creating a
healthy competition and thereby increasing performance. This has eliminated the need for checkers in
the warehouse.
Protection One, 6th largest security provider in the US, reported losses for 5 consecutive years in 2010.
CIO started providing score cards to branch and regional managers every morning facilitating them to
decide on who to meet that day, what to ask, what help to offer, etc. With this they could increase
revenues by more than 10% whereas, the industry average revenue growth rate was just 3% to 4%.

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PEP Notes: IT & Systems


3.

Define and manage business rules for the organization


Citrix Systems, a $2.1 billion technology company, that has 250,000 customers in 100 countries
defined the business rules of giving rebate to its 10,000 partners eliminating the earlier inconsistencies
between different rebate policies. This resulted in improved trust and performance.
An Insurance company in US, has locking period of 30 days for claims processing of a stolen car. An
analyst in the organization found that in a certain region, a car that could not be recovered in 24 hours
was never found. It was driven aboard and sold in a foreign country. With this the company changed the
business rule of locking period to 24 hours in certain regions of the country. The customer does not have
to wait 30 days for claims processing.

4.

Train and coach the employees to improve performance


At Seven-Eleven Japan, Counsellors coach the sales clerks on the 16,000 retail stores twice a week.
This increased organizational performance helped Seven-Eleven to be profitable for more than 30 years.

Uses of information systems in business include decision making, communication, information


distribution, collaboration, workflow, business intelligence and implementation of business processes.
Information systems organize the data in an organization and provide useful information for efficient
evidence based decision making. Decisions based on data reduce the destructive conflicts in an
organization. Information systems reduce the customer response time, product development time, time to
market and support time. Information systems are used in manufacturing, retail, construction, utilities,
energy, engineering and consulting areas.

Discussion Questions:

FA

1. What is little data? Explain its characteristics.

(Hints: single source of data-eliminates duplication-eliminates inconsistencies)


2. Explain some of the evidence based decision making practices for organizations.
(Hints: availability of performance data-quality of reporting-overcome inconsistencies)

Applicable To:

IC

Reference: Ross, J.W., Beath, C.M. and Quaadgras, A., You may not need Big Data after all, Harvard
Business Review, December 2013.

Topic

Course

Unit-3: Fundamentals of Information Systems;

IT & Systems

Section-3.9: Use of Information Systems in Business;

11

Block-1: Introduction to Information Technology and Systems

7.

Business Technology Trends in 2014

Social, mobile, community, sensor, robotics and analytics are the top
technology trends for 2014 in information system design.
PricewaterhouseCoopers has done its 6th Annual Digital IQ survey of 1400 companies to find out the
emerging technologies in which the organizations are going to invest in 2014. The percentages of
organizations investing in specific technology areas are shown in following Graph. This article highlights the
top 10 business technology trends for 2014.
Technology Trends for 2014

41%

39%

39%

25%
20%
15%

15%
11%
6%

44%

IC

FA

50
45
40
35
30
25
20
15
10
5
0

i.

Business Analytics: With increased smart devices, sensors and display devices to monitor customers,
events, people, behaviors and entities, organizations are getting large quantities of data. To analyze this
data, organizations are using new analytical, statistical and mathematical techniques. Organizations are
using business analytics to improve productivity, innovation, customer satisfaction and customer
loyalty. They are also using business analytics to derive insights from data useful for organizational
decision making and organizational results.

ii.

Social Technologies: Social technologies are being integrated into the organizational business
processes. Social technologies are not only used in marketing, services and sales functions but also in
HR and sourcing functions. Organizations are integrating business processes with community features
in order to innovate, increase productivity, improve collaboration, achieve efficiency and interact with
external stakeholders. Organizations are integrating social and community features such as gaming,
discussion forums, collaboration and social analytics into the business processes.

iii.

Mobile Technologies: Organizations are coming up with new products and services to address
customer requirements in mobile sector. Organizations are investing in mobile technologies such as
sensors, biometrics, Bluetooth and mobile social media. Individuals are making mobile devices to act
on their behalf.

iv.

Internet Security: Cyber security is a major concern for organizations. Organizations are prioritizing
their cyber security investments. Organizations are assessing the threats to their organization.
Organizations are not only concentrating on threat prevention but also strategizing monitoring, reacting
and identifying the threats. Organizations are collecting intelligence from different stakeholders such as
employees, customers, suppliers, contractors, partners and distributors.

12

PEP Notes: IT & Systems


v.

On-demand Technology Services: Business organizations are procuring technology services on


demand using cloud computing, big data, analytics and social technologies. CIO role is transforming
from procurer to strategic counsellor to the organization. Cloud based business services are going to
grow in areas such as banks, insurance, hospitals, retail stores and media organizations.

vi.

Sensors: Internet of Things industry is picking up. Context aware sensor devices communicate with
one other. Sensor devices are being used in traffic monitoring, parking spaces, governments and
manufacturing companies. By 2020, we will have everything communicating with networks.

vii. Robotics: Many Internet based companies are acquiring robotics companies. Robotics based on open
source Robot OS and Android is allowing manufacturers to concentrate on applications rather than
platforms. Robotics can be used in eldercare, surveillance, remote medicine and cleaning.
viii. Battery Technologies: Battery technologies became major factor in product design. Mobile screens
and power consumption chips need to be advanced in mobile devices. Battery industry is undergoing
new business models.
ix.

3D Printing: 3D printing has become interesting production technology. 3D printing has undergone
drastic changes and is capable of using different materials such as steel, plastic, titanium and
aluminum.

x.

WearableTechnologies: Consumer oriented devices are monitoring physical activity. Health insurance
companies are integrating wearables in their cost and pricing models.

1.

IC

Discussion Questions:

FA

Information systems design should be done before implementation. Design identifies the components
and their interaction. There can be 2 to 3 iterations for design with the help of design reviews.
Information systems design should be done using design methodologies such as Structured Systems
Analysis and Design (SSAD), Object Oriented Analysis and Design (OOAD), Component Based Design
(CBD), Aspect Oriented Design (AOD) and Service Oriented Architecture (SOA). Design can be done at
two levels such as high level design and low level design. Low level design should also think about the
technologies suitable to the design such as cloud, mobile, social, database, web technologies and
distributed technologies.

Mention top-10 business technology trends in 2014.


(Hints: business analytics-social-mobile-Internet-on demand-sensors-robotics-3D-battery and wearable)

2.

Explain how these technology trends are useful in information systems design.
(Hints: anytime anywhere-evidence based decision making-on demand systems)

Reference: PWC, Digital IQ 2014 10 Technology Trends for Business, PricewaterhouseCoopers, January
2014.
Applicable To:
Topic

Course

Unit-3: Fundamentals of Information Systems;

IT & Systems

Section-3.11: Information System Design;

13

Block-2:

Applications of Information Technology in Business


Digital Influence on Product Purchase Decisions in India

9.

Cloud Computing Insights for CEOs

FA

8.

10. The Growing Creation Nets increase Open Innovation


11. Improving the IT Yield

IC

12. Digital Transformation Elements in an Organization


13. Software Complexity

14. Business and IT are not Independent


15. The Role of Analytics & Big Data in Business Growth

14

8.

Digital Influence on Product Purchase Decisions in India

The usage of the World Wide Web is effecting the product purchase decisions in India.
Boston Consulting Groups (BCG) Recent Research (April 2013):
BCG has surveyed 25,000 Indian consumers aged between 18 to 55 living in 26 locations in India to find the
impact of digital (online) activities on a range of product categories. Online activities were found to
influence the pre-purchase, purchase and post-purchase of few categories of products. Digital influence is
higher on product categories such as air travel, computers, automobiles, consumer durables, and mobile
phones, while it is minimal in case of product categories such as cosmetics, and consumer goods.
Internet Users in India
(330 Million) - Estimated
Internet
Users (in
Millions)

(125 Million)

2016

2011

FA

High income Internet users have more digital influence over different product categories and they spend
more than their less connected peers. Online product research, product features and price comparisons
influence purchase decisions.

Digital
Influence

IC

Internet Usage Vs. Digital Influence

Internet Usage

60% of the online purchasers prefer cash on delivery rather than payment using credit cards in India. Cash
on delivery is going to stay in India.
Internet Economys Contribution to Indian GDP

Indian
GDP (%)

5.6% Projected

4.1

2010

2011

2012

2013

2014

2015

2016

Indian market is different from developing economies such as China and developed economies such as US
and Europein ways of Internet using devices, availability of online product portals and method of payment.

15

PEP Notes: IT & Systems


In India, 15% consumers use mobile Internet in Tier-4 areas and 20% use mobile Internet in metropolitans.
Laptop bases Internet usage is only 9% in Tier-4 areas and 25% in metropolitans in India. E-books and
Kindle are very popular in US and Europe and are yet to find a proper market in India.
Online Behavior Influences Offline Behavior

Online Behavior

Offline Behavior

Influences

Internet usage among Indian consumers is impacting pre-purchase decisions, online purchase and postpurchase and support activities. Majority of the people use low cost devices such as mobile phones for
accessing Internet in Tier-4 areas.
Digital Impact on Product Purchase

Pre-purchase Decisions

Online Purchase

Internet Usage

FA

Post-Purchase / Support

Eureka Forbes in India has a successful online customer support system in place

ICICI Bank has successful and widely used Mobile Banking System in India

IC

The World Wide Web is the network of networks known as Internet. Using Internet, the information from
other parts of the world is available in seconds. The information distribution and communication speed
have increased drastically. The behavior of individuals over the Internet is impacting the product
purchase decisions in India. It is impacting the offline behavior in the society. Digital influence is
affecting the usage of the World Wide Web across the world.
Discussion Questions:
1.

Explain how digitization is impacting product purchase decisions in India.


(Hints: impact on product categories-online product research-product comparisions)

2.

Do you think Internet has major impact on product design and development? Justify your answer.
(Hints: crowd sourcing-source of product ideas-innovation in design with user involvement)

References: Subramanian, A., Jain, N., Bajpai, S. and Patodia, S., Digital India: From Buzz to Bucks:
Capitalizing on Indias Digitally Influenced Consumers, Research Report, BCG Center for Consumer
and Customer Insight, Boston Consulting Group, April 2013.
Applicable To:
Topic

Course

Unit-5: Enterprise Collaboration Systems;

IT & Systems

Section-5.3: Internet;
Sub-Section-5.3.1: The World Wide Web;

16

Block-2: Applications of Information Technology in Business

9.

Cloud Computing Insights for CEOs

Cloud computing brings the benefits of improved productivity, enables collaborative


work, applies analytics and hosts applications.
Cloud computing brings lot of benefits to the organizations. Organizations have to judiciously make the
transition to cloud with skilled people. In 2010, IBM has conducted a survey of 1,500 CEOs to find out the
organizational computing systems complexity. 80%of the CEOs responded that their systems are becoming
more complex day by day. Less than 50% of the respondents expressed that they have the needed strategies
and capabilities to handle the growing complexity. Managing this gap is going to be the largest leadership
challenge ever faced. To solve this gap, cloud computing came into picture. This article brings the insights
for CEOs from a Harvard Business Review article on cloud computing written by Andrew McAfee.
Current day organizations access on-premise servers, data centers, applications and infrastructure
through cloud computing techniques. Employees of the organizations do not even know the
locations of their data centers and servers. Organizations are just renting or subscribing to these
facilities.

CEOs and senior executives have to take the responsibility of transition to cloud and they have to
provide the required leadership. This is because cloud computing reduces the time to market,
development time, development costs and operating expenses and improves the organizational
productivity, collaboration and performance.

Cloud service models are such as Infrastructure-as-a-Service, which provides storage and servers;
Platform-as-a-Service, which provides the needed operating systems and databases; and Softwareas-a-Service, which provides the custom off the shelf applications.

Cloud Advantages

FA

Using cloud computing, large enterprises can provide access of their applications to the remote
devices such as tablets, laptops, smart phones and desktops using Internet.

Employees can access organizational applications from anywhere; even from home.

According to a survey carried out by Microsoft, only 11% of the IT spending is on new application
development. The rest of the spending is on infrastructure and maintenance. Using cloud computing
these costs can be reduced and spending can be diverted to new application development.

Cloud computing makes individuals productive. It improves productivity in the organization


drastically. For example, Balfour Beatty, a global contracting company, using cloud computing was
able to share documents, blue prints and architectures easily with their colleagues. Employees using
Internet accessed the documents even on the move, thereby improving the productivity and
reducing the time taken.

Cloud computing enables collaborative work. For example, CSC has used a cloud based
collaboration platform known as Jive. Thousands of employees registered for cloud based resource
known as C3 in a very short time and C3 became their de-facto standard for collaboration.

Analytics are widely used in cloud computing. Data coming from different sources on clouds is
being analyzed and insights are been drawn for the organization. For example, Radiant System has
developed employee theft prevention system for restaurants known as Aloha Restaurant Guard
(ARG), which applies the analytics on data collected from point-of-sale machines. Using this cloud
based system, A California based restaurant could save around $40,000 per year from employee
theft of food services.

Developing and hosting applications is easy in cloud. For example, 3M instead of purchasing the
infrastructure, have deployed applications onto a Microsoft cloud based Azure platform for quick
scalability and capacity building, avoiding the huge capital costs.

IC

17

PEP Notes: IT & Systems


Concerns Over Cloud Computing

There are contradictory research studies from McKinsey and Microsoft regarding cost of transition
to cloud, one claiming higher costs and one supporting lower costs for setting up of data centers in
cloud. On the other side, Amazon Web Services has reduced its prices a dozen times in 3 years
duration highlighting the lower costs in clouds.

Systems reliability and application reliability is a concern for organizations. For example, when
parts of Amazon Web Services infrastructure went down for 3 days, Netflix was able to operate as
usual because it handled the risk using duplication technique. However, in 2010, Google Gmail
services were available for 99.984% times.

Data security is another concern for organizations using cloud.

Compliance to legal and regulatory requirements is also a concern for organizations.

Thus, by keeping the benefits in mind, organizations can transition to cloud using the following steps:

Identify the constraints and grey areas

Run pilot test using Software-as-a-Service first

Execute next development project on cloud

Enquire the organizations enterprise software vendors plans in cloud computing.

FA

Collaborative work management tools provide an environment where in the developers can collaborate
with their work tasks using networking technologies. These tools enable developers to share the
development platforms, development tools, compliers, development frameworks, documents, libraries
and components. Cloud computing enables users towards collaborative work by providing shared servers,
platforms, software applications, operating systems and frameworks. An organization can have its own
private cloud for its collaborative work.

IC

Discussion Questions:

1. What are the advantages of cloud computing?

(Hints: work anywhere anytime-improved productivity-reduced costs)


2. Explain the challenges arising from adopting cloud computing in organizations.
(Hints: system reliability-application reliability-data security)
Reference: McAfee, A., What Every CEO Needs to Know About the Cloud, Harvard Business Review,
November 1, 2011.
Applicable To:
Topic

Course

Unit-5: Enterprise Collaboration Systems;

IT & Systems

Section-5.7: Types of Groupware;


Sub-Section-5.7.3: Collaborative Work Management Tools;

18

Block-2: Applications of Information Technology in Business

10.

The Growing Creation Nets Increases Open Innovation


Creation Nets such as process networks and practice networks are increasing the
knowledge management systems of the organizations.

Open Innovation
Open Innovation has become a buzzword in the industry. Different people have different meanings for it.
The main objective of open innovation is to bring the value to marketplace by connecting with different
organizations. It can be connecting to inside parties or outside parties. Open innovation emphasizes that the
organizations should use external ideas, internal paths and external paths in developing their technology
products. Example: Procter & Gamble, Eli Lilly and Cisco are best successful organizations in open
innovation. These organizations have launched innovative products using open innovation successfully.
Two Obstacles to Open Innovation

Many people lack understanding on what open Innovation means.


Many executives jump to conclusions that open innovation is just like open source software
projects. Some narrow down their thinking. They assume that a product launched out of a joint
venture constitutes open innovation. Such efforts do not have major impact on business
performance.

There is lot more confusion in deciding on management techniques that can be used to apply to
open innovation when there are hundreds and thousands of business partners involved.

Following are some of the open innovation initiatives:

Some Open Innovation Initiatives


Finding an external specialist as contractor to solve an important and complex research problem

Looking towards external environment for ideas

Establishing a joint venture with a business partner

Licensing a technology from a University

Participating in huge networks and coordinating the innovation activities

IC

FA

Hundreds and thousands of participants are coming together in forming distributed creation nets organized
by network organizers. Creation networks represent a strong form of open innovation involving hundreds
and thousands of participants to lead distributed innovation activities. They are designed to bring out open
innovation. These network organizers use different management techniques to create value and keep the
focus on. The creation nets fill the gap of the executives in finding the open innovation real potential and the
actual value generated.
Some of the Characteristics of Creation Nets

The creation nets are usually supervised by an individual or a small core team or a small company.
Example: Open Source Software Projects

The supervisors of a network decide the rules, regulations and norms of the network on ways to
measure performance and how to resolve the conflicts between the participants. These rules are
quite informal in the early stages of the network. No formal contracts are made for participation in
the network.

The supervisors in Creation Nets specify the performance requirements and not the individual
activities in the modules. This allows the participants to innovate and reach the required
performance levels. This is rather a pull approach than the traditional push approach. In a push
approach, the organizers push the activities to the participants. Where as in pull approach, the
participants derive or pull the activities from the required performance specifications.

The participants look for long term benefits from creation nets rather than short term profits. The
creation nets sometime give cash or contracts to their participants. The participants also join
because they are able to complete the activities quickly in the network than when they do them
individually.

19

PEP Notes: IT & Systems


Different Types of Creation Nets
There are mostly common characteristics across multiple creation nets. However there are differences in
creation networks in terms of degree of diversity. The different types of creation nets are i) Practice
Networks and ii) Process Networks.
Practice Networks

Process Networks

These are the networks formed based on the


common practices of participants. They have
common sensibility and set of practices.

These networks join the participants


diversified experiences and practices.

with

Organizers of these networks are known as


Practice Orchestrators.

Organizers of these networks are known as Process


Orchestrators.

Practice orchestrators play less active role in


recruitment and creation activities. However, they
involve in bringing together the participants in
integration of creation activities. They also define
the protocols.

Process Orchestrators play active role and assign


tasks to participants, measure performance and
provide feedback to participants.

Examples of these networks include open source


software networks and extreme sports networks.

Examples of these networks include Design


Networks organized by Original Design
Manufactures (ODMs) in Taiwan and Production
Networks organized by Li & Fung in China

Thus creation nets such as practice networks and process networks help organizations in making open
innovation ssuccessful in product development.

FA

Knowledge Management Systems (KMS) in an organization maintain the understood information, which
is known as knowledge in the organization. They provide search, inference and storage facilities for the
knowledge. Organizations such as TCS, Infosys, and Wipro maintain knowledge bases of the projects
they have executed for further learning purposes. KMS gives useful inferences.
Discussion Questions:

What is open innovation? Give some examples.

IC

1.

(Hints: welcome external ideas-external path for product development-proctor & gamble products)
2.

What are the obstacles to open innovation? Explain.


(Hints: lack of understanding-confusion over management techniques-unclear impact on business)

Reference: Hagel, J. and Brown, J.S., Creation Nets: Harnessing the Potential of Open Innovation,
Journal of Service Science, 2008.
Applicable To:
Topics

Course

Unit-5: Enterprise Collaboration Systems;


Section-5.7: Types of Groupware;
Sub-Section-5.7.3: Collaborative Work Management Tools;
Sub-Sub-Section-5.7.3.5: Knowledge Management Systems;

20

IT & Systems

Block-2: Applications of Information Technology in Business

11.

Improving the IT Yield

Investments in information systems for business operations can make an


impact on organizational business performance.
Organizations have to take different approach in IT investments to have an impact on business
performance.
IT Investment Challenges

Investment Recommendations

2/3rd of the investment goes in nondifferentiating capabilities.

Not all IT investments provide equal


value to the organization

Business Cases fail to mention the impact


a business is going to have after IT
investment

Use IT Financial Transparency

Measure business impact


Performance Indicators)

Use Investment categories such as benefit-driven


and
compliance-related
infrastructure/asset
replacement

Maintain Portfolio of projects

Track each portfolios income and spending

with

KPIs

(Key

FA

2012 IT Spending Ratios

IC

15%

Run
Grow

20%

65%

Transform

According to Gartners Survey (2013), the CEOs felt the following technology enabled capabilities
are very important for their business (in the decreasing order of priority).

E-Commerce

Enhanced Business Reporting

Supply chain traceability and optimization

Cloud Business

Sustainability

Enterprise Mobility

21

PEP Notes: IT & Systems


Stakeholders think that the IT initiatives with respect to business should be handled by:
CEO Innovation and Revenue Growth
CFO Increased Productivity and profitability, cost-efficiency
CIO - Keep IT environment current and updatable
Business Unit Head Look After the Profit and Loss of the business Unit
Obstacles to Wise IT Investment
Sl.
No.

Obstacle

How to Overcome this Obstacle?

Politics (Silos)

CIO should play partnership role with business stakeholders.

2.

Poor IT Financial
Transparency

CIO should make better choices about where to invest

3.

Lack of Accountability for


Investment Results

Orphaned IT systems consume more. This is to be spent


elsewhere.

4.

Inability of Divest IT Assets

Pulling back on IT systems such as cancelling project and sun


setting a project

5.

Low Tolerance for Risk

Invest in sure things that give quick payback.

6.

Lack of IT Involvement in
Business Strategy

CIO should involve in business strategy and execution. CIO should


be involved in business strategy planning process.

FA

1.

IC

Information systems for business operations support the organizations day to day internal and external
business operations. Example information systems for business operations include point of sale machines,
teller machines, customer support machines, and transaction processing systems, etc. These systems are
supposed to increase the productivity and performance of the organization and teams. These are
developed using different databases, technologies, and frameworks. Information systems impact is traced
through response time, customer satisfaction and profitability of the organization.
Discussion Questions:
1. What are some of the IT investment challenges and obstacles for organizations?
(Hints: business cases failure-unclear value to business-investing in non-differentiating capabilities)
2. How should organizations overcome the IT investment obstacles? Explain.
(Hints: financial transparency-key performance indicators-maintain portfolio of projects)
Reference: Barbara Gomolski, Improve IT Yield by investing in the Right things while developing the
Investment Gene, Gartner Research Report, March 29, 2013.
Applicable To:
Topic

Course

Unit-6: Management Information Systems;

IT & Systems

Section-6.3: Information Systems for Business Operations

22

Block-2: Applications of Information Technology in Business

12.

Digital Transformation Elements in an Organization


Information systems for business operations effect customer experience,
operational processes and e-business models in an organization.

Organizations are using technology to improve their performance across the globe. Organizations are using
advancements in digital technologysuch as analytics, social media, smart devices and mobile in addition to
traditional ERP to change the customer experience, internal processes and business models. The best
example is the media industry which changed drastically because of technological advancements in the past
decade. Westerman, G., Bonnet, D. and McAfee, A. (2014) have done research study by interviewing 157
executives from 50 companies having more than $1 billion sales each. 50% of the respondents interviewed
were IT executives and technical leads and the rest were CEOs, COOs, marketing heads and business
managers.

2.

FA

Customer Experience: The major elements getting digitized in customer experience are as follows:
a.

Understanding Customer: Organizations are making use of existing digital systems in market
segmentation. They are using social media to know how to make customer happy. Organizations
are creating online forums and discussion boards to improve customer relationship and loyalty.
Organizations are using analytics to understand the customer better. For example, an insurance
company is using analytics for deciding pricing and portfolio structures.

b.

Customer Touch Points: Organizations are making use of different customer touch points to
improve customer service. Organizations are using multiple channels to provide integrated services
to the customers. Some companies are also providing self-service facilities using digital tools. For
example, one hospitality company has connected Smartphone apps to customer profiles so that
customer SMSs, apps and social media have an integrated look.

c.

Top-Line Growth: Organizations are using technology for in-person sales conversations. For
example, a medical devices companys sales executives turn on an iPad with video and audio and
keeps before doctor before leaving the room to make their product presentation. This gives the
doctor an opportunity to concentrate on the presentation and have a 10 minutes discussion with
sales representative presentation after he views it. This process does not disturb the doctor.

IC

1.

The respondents of the survey expressed that their organizations are at different levels in digital maturity
having different levels of successes. Some of the organizations are at the beginning in digital transformation.
Digital transformation requires strong leadership and change management. Managers need to have the vision
for transforming to digital. They should know what to transform. In the survey it was found that
organizations are digitally transforming mainly in 3 broad areas. They are customer experience, operational
processes and business models. In turn each of these areas consists of 3 elements, summing it to a total of 9
elements of digital transformation in organizations. None of the organizations surveyed have achieved
digital transformation in all these 9 areas. Each organizations is digitally transforming in few areas. The 9
elements of digital transformation are discussed below:

Operational Processes (Internal Processes): The major elements getting digitized in operational
processes are as follows:
a.

Digitizing Internal Processes: Organizations are automating internal processes so that their
employees concentrate on strategic tasks. For example, organizations are automating employee selfhelp and HR activities so that the HR executives can concentrate on HR strategies.

b.

Virtualized Work: Organizations allow employees to work virtually by providing needed digital
technologies. For example, in a financial services organization, employees including CEO do not
have permanent seats to sit in the office. They work one or two days from home and whenever they
have meeting come to office and sit with those they have work with. This is improving employee
relationships resulting in better customer satisfaction.

23

PEP Notes: IT & Systems


c.

3.

Managing Performance: Transactional based systems are allowing employees to compare


organizational details at different times. They can compare the statuses and adjust the production
capacities. For example, a medical devices company using collaboration tools involving 300 of
their business managers instead of 12 in thestrategic planning process, thereby allowing wide vision
to come in.

Business Models: The major elements getting digitized in transforming business models are as follows:
a.

Modifying Businesses Digitally: Organizations are augmenting physical with digital offerings.
They are using digital content to share in the organization. For example, a grocery store after going
digital has got 20% new customers and existing customer are spending 13% more on an average.

b.

New Digitized Products and Businesses: Organizations are creating digital products to
complement physical products. For example, a sports apparel manufacturer is selling GPS and other
digital devices in order to show the customer workout in addition to their traditional products.

c.

Digitally Going Global: Organizations are going global by providing digital shared services such
as finance, HR, design and manufacturing. For example, a manufacturing company can transform
its production to another plant globally within a few days in case of any disturbances.

Information systems for business operations include business process management systems, customer
support systems, performance management systems and quality management systems. These systems are
increasing the customer experience and supporting both internal and external business processes.
Digitization and automation are changing the business models of an organization. They increase
operational excellence, customer support and competitive advantage.

1.

FA

Discussion Questions:

What are the elements of organizational processes getting digitized?


(Hints: understanding customer-customer touch points-top-line growth)

2.

Which elements of business models are getting digitized in organizations?

IC

(Hints: modifying businesses digitally-new digital products-digitally going global)


Reference:Westerman, G., Bonnet, D. and McAfee, A., The Nine Elements of Digital Transformation,
MIT Sloan Management Review, January 07, 2014.
Applicable To:

Topic

Course

Unit-6: Management Information Systems;

IT & Systems

Section-6.3: Information Systems for Business Operations;

24

Block-2: Applications of Information Technology in Business

13.

Software Complexity

Characteristics of MIS such as software complexity can be used to


estimate development and maintenance costs.
Organizations measure software complexity to reduce their software development and maintenance
costs

In Recent years, Organizations are trying to reduce the software development costs

Software Complexity impacts organizational costs, manpower allocation, project and program
evaluation.

Using Software Complexity one can estimate software development and maintenance costs.

Software Complexity is measured in terms of execution time and disk space or storage required.

Software Complexity depends on the program size, different modules interaction and control structures
used.

Experiential factors such as knowledge of programming languages, algorithms, programming skills,


domain knowledge and application knowledge impact the difficulty of task in picture. These parameters
influence the programmer behavior in projects.

Software Program complexity is dependent on non-programming factors such as programming


environment, the programmer, and the task.

The best practice is to specify and follow some acceptable level of program complexity for any software
organization. It keeps the organizational costs at optimum level.

Algorithms

Programming
Environment

IC

Programming Languages

FA

Programming Skills

Program
Complexity

Organizational
Resource
Allocation

Software
Development
Costs

Domain Knowledge

Task Complexity
Application Knowledge

Software
Maintenance
Costs

Characteristics of MIS include complexity, flexibility to modify, and difficult to program. MIS has to be
developed by a team because of its inherent complexity. Communication, coordination and cooperation
are very much required in MIS development teams. MIS systems should be useful in organizational and
managerial decision making. They should be give accurate and reliable output. They should be available,
usable, consistent and applicable to current business scenario in the organization.

25

PEP Notes: IT & Systems


Discussion Questions:
1. Define software complexity in your own words.
(Hints: program size and algorithms-required storage space-execution time)
2. What factors impact program complexity in software projects?
(Hints: task complexity-programming environment-domain knowledge)
Reference: Kearney, J.K., Sedlmeyer, R.L., Thompson, W.B., Gray, M.A. and Adler, M.A., Software
Complexity Measurement, Communications of the ACM, Vol. 29, No.11, November 1986.
Applicable To:
Topic

Course

Unit-6: Management Information Systems; Section-6.6: Management


Information Systems;

IC

FA

Sub-Section-6.6.2: Characteristics of MIS;

26

IT & Systems

Block-2: Applications of Information Technology in Business

14.

Business and IT are not Independent

Making IT and business improve relationships, build trust and make them business
partners can result into information systems for strategic advantage.
The job of IT in an organization is very difficult. It operates under many constraints. Business divisions
complain that IT does not understand the business well. They overpromise and under deliver. IT does not
allow innovation in business. These are the common complaints every growing organization receives from
both IT and business teams. This article brings the insights from Redman, T.C and Sweeney, B. (2013)
discussed on Harvard Business Review Blog Network.

Some CEOs think that IT does not matter and they spend less time in hearing to IT problems and issues.
They think that IT is little strategic opportunity and devote less time to it. Half-hearted efforts do not
result into better outcomes for the organization. CEOs have to look at IT as a strategic function.

Organizations fail to derive better services from IT and make disservice to businesses.

The technological advancements and the growing data in the organizations have made IT to play a key
role in the organization.

Executives expect IT team to modify the data formats easily. This is a tedious task for IT team.

Smart CEOs and leaders try to fill this gap and use IT for its competitive advantage.

Following are the steps for using IT for competitive advantage and to fill the gap between IT and business.
Do not repeat the same mistakes:
In some organizations, IT is asked to improve data quality. It is simply not possible. IT teams are not
provided the chance to explain. They are given applications to work on without being trained. They are
asked to understand the business processes without it being explained to them. Business teams say that
IT has dumped some application on them to use, and they do not like to use it or do not accept the
change. For example, in case of business mergers, the integration of different IT systems is looked at
last, which should be considered at a very early stage of the merger. This puts CIOs and IT teams in
trouble during mergers leading to over spending time and money on integrated systems. To handle this
situation, both sides should acknowledge their mistakes and ensure that it does not repeat in future.

IC

FA

i.

ii. Find out the common ground to work on:


Organizations should build trust in dealing with different stakeholders. They should find out some
common middle ground to work on for both IT and business teams. In an organization, there are
competing priorities such as CEOs interest on going for cloud and legal departments concern over data
security; CFOs requirement of reducing costs and CMOs requirement of coming up with innovative
products; COOs requirement of reliable system versus product managers vision of providing online
(web) interface to the users. The idea is to accept on the commonality and find out all areas of
agreement and work on them initially.
iii. How IT can help organization to compete?:
IT is treated as a cost center and organizations should understand that one size does not fit all.
Organizations should invest in IT for strategic and long term benefits. If the organizational investments
are less in IT, their systems will phase out in 3 to 5 years. Thus, organizations have to invest in IT for
long term and for strategic advantages.
The explained step (i) improves the relationship between IT and business; step (ii) builds the trust between
them; and step (iii) makes both of them as business partners. Technology is changing rapidly and it is
touching every part of life.
Information systems for strategic advantage should be developed by taking feedback from customers,
suppliers, employees, marketing and business intelligence teams. These systems should give strategic
advantage and competitiveness to the organization. They add value to the organizational enterprise
systems and fulfil stakeholder expectations. They include strategic portfolios consisting of products,
programs and projects which give an edge over competitors. CIO, CMO, COO and CEO should strategize
these systems based on market conditions, economy, technological scenario, competition and
sustainability.

27

PEP Notes: IT & Systems


Discussion Questions:
1.

How do you fill the gap between business and IT?


(Hints: do not repeat the same mistakes-have common ground-use IT for competitive advantage)

2.

How can relationship between business and IT departments be improved in an organization?


(Hints: build trust-make IT and business as business partners-transfer of domain knowledge)

Reference: Redman, T.C and Sweeney, B., Bridging the Gap Between IT and Your Business, HBR Blog
Network, October 01, 2013.
Applicable To:
Topic

Course

Unit-6: Management Information Systems;

IT & Systems

IC

FA

Section-6.10: Information Systems for Strategic Advantage;

28

Block-2: Applications of Information Technology in Business

15.

The Role of Analytics & Big Data in Business Growth

Big data and data analytics can give strategic advantage to organizations.
Big Data can give organizations Competitive Advantage Provided they follow certain timelines.
Figure: Big Data Input Sources and Output Reports

Analysis
Reports
Sort, Filter, Model

IC

Social Media

FA

Internet

Big Data can be a big game changer for marketing people because of the analytical tools available
today.

Analysis of data should not stop at What? but it should also ask Why? and What next?.

For leveraging full potential of big data, organizations should go to the basics such as theory based
approaches, develop holistic view of customers and marketers and learn by doing

Starting point for analysis is developing hypothesis regarding the needs of customer

After gathering data, analysis should take place to test the hypothesis

Superior segmentation and clustering customers can help in analysis


Example: one Pharmaceutical company trying to increase the sales of a specific drug reduced the sales
force and thought of utilizing the remaining sales force strategically. In that direction they collected the
data from Physicians prescribing that specific drug with information such as how many times they
prescribe the drug per year, volume of prescriptions, and physicians loyalty to this drug. After analysis
of this data, they could exceed the expectations of sales.

What is required today is to find the customer path to purchase.

It is recommended to organizations to start with pilot analytics projects instead of taking huge analytics
projects all at once.

29

PEP Notes: IT & Systems

Developments in Analytics
Online
Shopping
Behavior
Price Promotions

Bar Codes

Ask People What They Buy

1970

1980

1990

2010 - Present

They should select a product, geography or problem for analytics project.

FA

Example: A Global Energy Company would like to improve their return on marketing investment
through analytics. They have considered 2 business units in 3 countries as a pilot run. Sample includes
operating gas stations in Europe and selling motor oil in Asia. The diversity of data has given them an
opportunity to explore a wide set of approaches for analysis resulting into solutions to handle in
different situations.

Organizations need Socialists to gather this data, find hidden patterns, interpret them and turn them into
insights for organizations.

Further, Analytics become a self-funding way for organizations to position them better in the market.

IC

Current day information systems for strategic advantage include the big data systems which process
huge amounts of both structured and unstructured data using analytics techniques. An example big data
platform is Hadoop which has distributed data processing and analytics facilities. Information systems for
strategic advantage are using technologies such as cloud computing, mobile and social technologies,
business intelligence and data analytics. These IT systems in organization are differentiating the
organization from its competitors by providing market intelligence and usable insights.
Discussion Questions:
1. How is big data analysis useful for current day organizations?
(Hints: market analysis-hypothesis proving-business insights)
2. What is the role of analytics in big data analysis?
(Hints: provide statistical techniques-apply correlation and regression-provides inferences)
Reference: Meer, D., The ABCs of Analytics, Strategy + Business, Spring 2013.
Applicable To:
Topic

Course

Unit-6: Management Information Systems;

IT & Systems

Section-6.10: Information Systems for Strategic Advantage;

30

Block-3:

Software and Database Concepts and Networks


16. Open Data as a Type of Database
17. Analytics driving Business Strategy

18. Cost of inaction on Big Data

FA

19. Different Perspectives on Big Data & Data Analysis


20. The Role of Intuition in Big Data and Analytics

IC

21. Growing Pervasive Computing

22. Advantages of Latest Mobile Technologies


23. The Digital Divide across the World
24. Growing Indian Internet & Smartphone Markets
25. Telecommunications Technology Trends
26. Wi-Fi for Customer Satisfaction

31

16.

Open Data as a Type of Database

Open data as one among the types of databases, can provide insights to the
organization, which is not possible only with internal and proprietary data.
Open data is the publicly available and usable data. Not every data in the organization is proprietary to the
organization. Not every data should be kept as private and internal to the organization. Countries such as US,
Singapore and Mexico are opening up the channels to open data. G8 countries have formed an open data
charter to publish government data. In this article, the sources of open data, advantages of open data,
application areas and the challenges with open data in current days are discussed.
Sources of Open Data:

Organizations started sharing information and data with customers and business partners.

Data aggregators are gathering data from different sources, aggregating it and selling to 3rd parties.

Open data is widely available from social networking sites such as Facebook and Twitter.

Advantages of Open Data:


Organizations can combine their proprietary big data and analytics with publicly available open data and
can get insights which they wont be able to get using only internal data.

Different types of data such as demographic data, health-care data, real-time location data and financial
data from open data can be used in creating new products and services.

Sharing of product data related to manufacturing conditions and materials used can be useful in
premium pricing of the products for the organizations.

Open data can generate different new areas of consumer value.

i.

Application Areas of Open Data: According to a research carried out by McKinsey Global Institute,
McKinsey Business Technology Office and McKinsey Center for Government, the annual worth of
open data is $3 trillion in seven domains such as education, consumer products, health-care, consumer
finance, transportation, electricity and oil and gas (Figure 1).

IC

FA

ii. Oil and Gas Industry: The increasing complexity in reservoirs is increasing the costs and risks at the
rate of 50 to 1. Using open data, it is easy to find the dry holes. Sharing the seismic data among different
companies can help the oil and gas industry. Sharing data between companies in this industry can reduce
the project costs by 15% to 25%.
iii. Consumer Products: Sharing data between manufacturers and retailers can avoid the exchange of
important information with competitors in consumer products area. With open data, new marketing
approaches can be devised which were not possible earlier with companys proprietary data.
Example: Nectar, an UK based loyalty cards company, gathers information from Sainsburys grocery
stores, Hertz car rentals and BP gas stations using its cards. Sharing this information among these three
companies can protect the companies competitive positioning and can provide better understanding of
consumer behaviour.

32

Block-3: Software and Database Concepts and Networks


Figure 1: Open Data Economic Value ($3-$5 billion)

2500
2000
1500

1,180

1,470

920

1000
500
0

280
210

580

510
240

520

340

450
300

720

890

iv. Agriculture: San Francisco based Climate Corporation combined 60 years on data on crop yield and 30
years of data on weather information to provide fee based solutions to formers and agricultural industry
using complex algorithms. This company has been acquired for $1 billion by Monsanto.

Challenges with Open Data:


Open data can give away competitive advantage and there is possibility for loss of intellectual property.

There are concerns about information security and privacy of data.

FA

IC

Overall open data can generate new opportunities and competitive complexities for the organizations in
different industries.
Data can be of two categories such as internal and external or open and closed. Internal data sources are
the organizational enterprise systems, legacy systems, data warehouses and data marts. External data
sources are Internet, discussion forums, journals, trade publications, industrial bodies, public data bases
and social media. Types of databases include relational databases, hierarchical databases and network
oriented databases. In relational databases, data is organized in the form of rows and columns. In
hierarchical database, data is organized in the form of tree like structure. In the case of network oriented
databases, data is organized in the form of connected/linked nodes arranged in the form of a network or a
graph.
Discussion Questions:
1.

What is open data? What are different sources of open data?


(Hints: available from social media-networking sites-customers and business partners)
2. What are different advantages of open data for organizations?
(Hints: competitive positioning-sharing data across companies-new opportunities and complexities)
Reference: Chui, M., Manyika, J. and Kuiken, S.V., What executives should know about open data,
McKinsey Quarterly, January 2014.
Applicable To:
Topic

Course

Unit-8: Database Management;

IT & Systems

Section-8.5: Database Management Approach;


Sub-Section-8.5.2: Types of Databases;

33

PEP Notes: IT & Systems

17.

Analytics driving Business Strategy

Data centric organizational culture combined with analytics can manage big data resulting in
innovation and business strategy improvement for an organization.
General Electric (GE) is a conglomerate, which is into power, water, energy, healthcare, aviation, oil & gas,
transportation, business and home appliances. Oil & Gas business of GE has revenues of $15 billion. It has a
division known as measurement and control working on business analytics extensively supporting the GE
head quarters. This article brings insights from an interview with Philip Kim, former marketing operations
leader of measurement and control division of Oil & Gas business at GE, and published in MIT Sloan
Management Review.
GE has announced its cloud platform which is going to gather, store and analyze the huge data coming from
the industrial Internet. GEs application of analytics is leading to innovation, driving the business strategy
improvements. The model they are working on is shown in the following figure. At GE, analytics are
helping in achieving process innovation and in turn driving the commercial change.

Big Data

Innovation
Business
Strategy

IC

Organizational
Culture

Strategic
Thinking

FA

Analytics

Organizational
Strategy

GE divides analytics work into two major categories.


i.

Big data: It is the massive data coming from big machines and industrial Internet. Data is received from
specified data points of customer assets.

ii. Analysis: How analytics can be used to derive commercial value? The analytics team uses the available
data and makes it useful for commercial purposes. This analysis may be related to cost reductions,
productivity improvements or growing sales.
They apply analytics tools to big data and derive some strategic outcomes useful for the organization. They
make use of data visualization techniques and Lean Six Sigma and drive change in behavior. Data analytics
helped them in innovating and driving business strategy.

The factors such as scale and complexity of the problem impact the data analysis.

Using data, they identify growth segments for GE with the help of data modelling and multivariate
analysis techniques.

They compute the return on investment (ROI) of big data projects. They use very result-oriented
analytics, which helps in sales growth. They prioritize the projects based on return on investment.

The feedback from different departments is to simplify the models instead of complicating them.

Analytics Project Life Cycle:They follow agile approach in analytics project. They have sprint cycles and
sprint meetings, which are used in SCRUM methodology. SCRUM is an agile project management
methodology. It was developed by K. Schwaber, Jeff Sutherland and their team. According to it, entire
product requirements are kept as product backlog. From product backlog, a Sprint backlog is derived. This
Sprint backlog is implemented in a Sprint release cycle. A Sprint is a short release cycle of 2 to 4 weeks.

34

Block-3: Software and Database Concepts and Networks


Sprint meeting happens every day. They take anuser story and implement a Sprint cycle for that story. At the
end of 3 to 4 weeks, they have useful outcomes which can be used by different departments or for
commercial purposes. They do very fast prototyping and delivery. They answer specific questions to check
the feasibility of an analytics project at the very beginning of the project. They follow iterative approach in
analytics projects.
GEs culture of data centric decision-making is helping the organization in dealing with big data. The GEs
culture adopts the analytics in organizational strategy. The organization which makes early investments in
big data can have the competitive advantage over its rivals. The data centric organizational culture combined
with big data and analytics can drive strategic thinking and innovation in an organization in turn improving
business strategy of the organization.
Managing big data involves analysis of both structured and unstructured data. The structured data is to
be analyzed using relational database management systems. The unstructured data should be analyzed
using analytical tools and techniques. These analytical techniques include mathematical, statistical,
artificial intelligence, natural language processing and text processing techniques. Managing big data
involves a discipline and culture in extracting, cleansing, integrating, analyzing and transforming the data.
Analytical tools, RDBMS tools and business intelligence tools can be applied on big data in the
organization for analysis purpose.
Discussion Questions:
1.

How did GE use analytics for its strategic advantage?


(Hints: productivity improvements-commercialization-cost reductions and sales growth)
Explain the typical analytics project life cycle.

2.

FA

(Hints: agile project management-sprint cycle-sprint meetings)

Reference: Kim, P. (2014), GE and the Culture of Analytics, MIT Sloan Management Review, January
27, 2014.

IC

Applicable To:
Topic

Course

Unit-8: Database Management;

IT & Systems

Section-8.5: Database Management Approach;


Sub-Section-8.5.4: Managing Data;

35

PEP Notes: IT & Systems

18.

Cost of inaction on Big Data

Big data projects, which bring specific insights and outcomes for an organization, are distinct
from regular relational database projects or business intelligence projects.
Cost of inaction on big data would be expensive for organizations. They may lose competitive advantage to
its competitors. This article brings perspectives of Phil Simon (2014) on big data discussed on Harvard
Business Review Blog Network. According to him, there is no transformation application of big data which
was taken to masses in the last three years time. Majority of organizations remain at thinking about big data.
According to Gartner, 58% of the organizations were deploying or planning to deploy big data projects in
2012. In 2013, 64% of the organizations are planning on deploying big data projects.
Organizations Having Big Data Projects
64%

58%

2013

IC

2012

FA

65
64
63
62
61
60
59
58
57
56
55

Organizations which are widely using big data include Google, Facebook, Apple, Amazon, Netflix and
Twitter. Otherwise, large organizations are yet to make their mark in big data.

The barrier to implement big data projects in the organizations include noise coming from vendors,
consultants and media.

Some of the CIOs are still confused to go either small or large on big data projects.

Big data is not a just another IT initiative. It is different from regular relational database or business
intelligence projects.

Big data has to handle peta bytes of unstructured data. Organizations just should not think about the
routine return of investment of big data as they think in routine projects. This is because big data brings
entirely different insights and discoveries for the organization.

Example: Netflix, an online movie seller, made use of big data very extensively. It is successful in big
data usage. They even get responses for their 80,000 moves based on certain color combinations from
consumers. One cannot overnight reach the level of Netflix in analyzing big data.

Several organizations are acquiring, storing, and analyzing data for more than a decade. They have the
perspectives and practices such as :

Big data requires a holistic way. It is not same as ERP and CRM projects where in return on
investment can be calculated immediately.

They have invested on database tools.

They deal with their internal structured data properly.


36

Block-3: Software and Database Concepts and Networks

They agree that big data involves everybody in the organization and it requires commitment from
the top management of the organization.

The organizations which cannot analyze their regular structured data may not be able to analyze big data as
well. Hence, the organizations whose decisions are based on data and information and those who can
manage small data well can get into big data. The inaction on big data may lead to loosing competitive
advantage of organization to competitors.
Relational database model is based on relationships between different attributes of an entity. Relational
databases store data in the form of rows in tables. Each table consists of different columns for attributes.
There is relationship between key attribute or primary key and other attributes in the table. The relational
databases are to be designed in such a way that data duplication and redundancy are avoided. The design
process of relational database tables is known as normalization. There are different normal forms
supported by the relational database management systems. Example RDBMS include Oracle, Sybase, MS
SQL Server and MySQL.
Discussion Questions:
1.

Which organizations are using big data extensively. Give some examples.
(Hints: Netflix-GE-Google and Facebook)

2.

What is the cost of inaction on big data for organizations?


(Hints: business loss-losing competitive advantage-lack of right business insights)

Reference:Simon, P., How to Get Over Your Inaction on Big Data, HBR Blog Network, February 24,
2014.

Topic
Unit-8: Database Management;

FA

Applicable To:

IC

Section-8.7: The Relational Database Model;

37

Course
IT & Systems

PEP Notes: IT & Systems

19.

Different Perspectives on Big Data & Data Analysis


Analysis of big data complemented with data warehousing can impact the
organizational strategy.

This article highlights the importance of data, data analysis and big data. It presents the insights from
different perspectives of well-known researchers across the world on big data and data analysis. As the big
data is penetrating into several parts of the organization, there is aneed for understanding of the data and
understanding of the numbers. Researchers and practitioners are focusing on the landscape of data and
thinking on ways to transform knowledge to bottom line improvements. The different perspectives are as
follows:
According to Andrew OConnell and Walter Frick, data is slippery, two-faced and cryptic. The data is
open to interpretation whether it belongs to customers, employees or products.

According to Tom Davenport of Babson College and MIT, organizations should rethink how the data
analysis is going to create value for themselves and their customers.

Scott A. Neslin of Dartmouth College expressed that numbers can tell us many stories; but which one
to pick is what matters most. That is, customers may find that one set of data may give them reasons to
pursue it, while the other set may not. This is a real challenge that customers face with the data.

Susan Fournier of Boston University and Bob Rietveld of Oxyme were skeptical if big data would
serve the purpose of their organization or not. According to them the aggregate numbers are exhaustive.
However, they do not give any information about individual customers when talking about different
products.

Jol Le Bon of the University of Houston expressed that organizations overlook the small source of
information pertaining to competitors strategies, schemes and plans such as sales representatives. He
emphasizes that the organizations should cultivate the culture of intelligence which will have a major
impact on organizational strategy.

According to Jeanne W. Ross and Anne Quaadgras of MIT and Cynthia M. Beath of University of
Texas, if organizations are not changing according to the insights from big data, then paying money for
big data is questionable. According to them, instead of concentrating on quantity and type of data,
organizations should cultivate a culture of evidence based decision making. That is, providing all
decision makers with undisputed performance based database, giving real time feedback, updating
business rules and encouraging every decision maker in the organization to use the data.

McKinsey stressed the involvement of everyone in the organization in making use of big data. While the
business unit heads provide training to the managers and users, they should make use of analytics and
tracking tools which can transform the organization into a data-driven organization.

IC

FA

Going ahead

The organizations should have leadership roles with knowledge of Statistics to lead the consumer data
teams. Otherwise the routine managers will think of ways to get to the kernels of knowledge through
huge data.

Organizations should reflect if they are ready for the Chief Data Officer (CDO) position.

Organization should check whether they need data visualization.


Data can be raw data or structured data. Data is stored in data marts of the data warehouse. Data comes
from different enterprise systems such as ERP, CRM, SCM, legacy systems, other internal systems or
external sources such as Internet and social media. Organizations maintain data warehouses for business
intelligence purposes. Data warehouse extracts, cleanses, stores, transforms, integrates, and transmits the
data to different enterprise systems in the organization. It makes use of data marts. The data mining
techniques are applied on the data stored in data warehouse. The current day terminology for data
warehousing is business intelligence system.

38

Block-3: Software and Database Concepts and Networks


Discussion Questions:
1.

Data analysis adds value to organizations. Justify.


(Hints: customer and product related insights-impact on organizational strategy-decision making)

2.

What roles in organization structure help the organizations in handling data?


(Hints: chief data officer-data scientist-business analyst)

Reference: Andrew OConnell and Walter Frick, Youve Got the Information But What Does it Mean?
Welcome to From Data to Action, HBR Blog Network, November 19, 2013.
Applicable To:
Topics

Course

Unit-8: Database Management;

IT & Systems

IC

FA

Section-8.9: Data Warehousing;

39

PEP Notes: IT & Systems

20.

The Role of Intuition in Big Data and Analytics

Intuition plays major role in big data and data analytics for data mining.
Intuition plays major role in big data and analytics for data mining.
Role of Intuition in Analytics
Intuition plays major role in analytics in data driven organizations. Example: Hypothesis is an intuition. It is
related to what is going on in data.

In analytics, we test the hypothesis to prove whether the intuition is correct or not.

In analytical companies, another application of intuition is the choice of analytical initiatives of the
organization. It works on cases like deciding which analytics projects to take up.

Organizations intuitively think about what areas require rigorous analytics.


Example: Caesars Entertainment is an early user of analytics. Caesars (formerly Harrahs) was
running low on customer loyalty among nationwide casinos. Then, the CEO of Caesars applied rigorous
analytics and service profit chain theory to regain the customer loyalty.
Service Profit chain theory indicates that better financial results can come from better customer
satisfaction.

CEO of Caesars applied intuition to decide which analytics projects to implement first at Caesars. Those
projects gave better return of investment.
Role of Intuition in Big Data
Intuition plays major role in big data as well.

IC

FA

Definitely, when there is massive data, intuition may not be applicable. However, organizations such as
Google, Facebook and LinkedIn having huge data used intuition in their new product and services
development.
Example: Googles self driving car is made of data, maps, infrastructure and the intuition of the project
leader at Stanford.
Example: LinkedIns most successful product PYMK (People You May Know) is also developed based
on intuitive process. According to Principle Scientist at LinkedIn creativity and intuition are very much
important for new product development.
One has to develop their creativity with both data and analysis. The right mix of intuition with data analysis
leads the path to success. Only intuition or only data analysis without the other one may not help the
organizations.
Data mining is the process of extracting the useful data patterns from different data sources such as
organizational data warehouses. It involves discovering the unseen data patterns in the data needed to
prepare useful information. Data mining uses different techniques such as correlation, regression,
association, multi variate analysis and other statistical techniques. Business intelligence tools such as SAP
Business Object and Microsoft Dymanics use these data mining techniques to extract the data from
different databases and data warehouses. Data mining involves extracting structured data and text mining
as well.
Discussion Questions:
1.

What is the role of intuition in analytics?


(Hints: hypothesis proving-which analytics projects to consider-what areas require analytics?)

2.

Explain the role of intuition in big data analysis in organizations.

(Hints: new product development-new services development- automation of mechanical tasks)


Reference: Devenport, T., Big Data and the Role of Intuition,HBR Blog Network,December 24, 2013.
Applicable To:
Topic

Course

Unit-8: Database Management;


Section-8.10: Data Mining;

IT & Systems

40

Block-3: Software and Database Concepts and Networks

21.

Growing Pervasive Computing

Pervasive computing an example of computer network


applications create an Internet of Things.
Pervasive Computing: It is a computing discipline where in microprocessors are embedded in devices so
that these devices communicate with one another using wireless technologies and Internet. These devices
exchange information. The objective of pervasive computing is to make the device smart. Example: Smart
Electricity meters transmit power consumption details remotely to the control center. Thermostats at home
turn on as soon as the owner arrives at home or he is within a reachable distance. Smart Cars can drive
themselves and park themselves.
All the example applications discussed above are already up and running at some place in the world.
Communication and integration between devices is creating the pervasive computing discipline. This article
presents insights from this discipline and from Internet of Things
The Pervasive computing market by 2017 is shown in the following Figure. It could reach $1.4 trillion by
2017. Only direct investments in hardware, software and solutions comprise $70 billion by 2017.
Pervasive Computing Market by 2017 (in $ Billions)

605.7

FA

355
180

50

45

65

68

IC

700
600
500
400
300
200
100
0

Pervasive computing drives a major architectural shift. Pervasive computing solutions may not be
provided by the traditional hardware and software companies. Pervasive computing provides can create
high value solutions to the customers by making use of mobile technologies, cloud computing and data
analytics. They create new sources of value for customers.

Recently Google has acquired an Internet of Things company known as Nest Labs for $3.2 billion.

Application Areas: Utilities such as Electric power supply industry are already using smart meters,
smart grids and smart thermostats. On the other side, healthcare industry has challenges such as data
privacy and industry fragmentation in implementing this pervasive computing.

Designers and developers have to solve complex problems related to multiple layers and multiple
interfaces of thousands of devices.

The organization providing cost effective end-to-end solution can drive this discipline. They need to
provide cost effective and less complex solutions.

41

PEP Notes: IT & Systems

The challenge before these organizations is to acquire the huge unstructured data from thousands of
devices and to analyze it. They need to develop machine-to-machine applications such as Sales force 1
and GEs Predix.

The questions before the senior management regarding pervasive computing are as follows:

What standards are to be followed in developing Internet of Things?

Who can be the partners across different layers of the spectrum?

What skills, competencies and capabilities are required in delivering solutions?

Where does the value lie in? Is it hardware, software or data?

How to provide cost affordable solutions?

How to meet customer requirements while dealing with complexity?

In the coming 3 to 5 years time, pervasive computing and Internet of Things are coming into mainstream.
The organizations have to try for the leadership position in this area. The future can be all devices
communicating with one other. It becomes like general power supply. We just feel the absence of them.

FA

Computer network applications include e-mail, chatting, SMS, discussion forums, Internet, and Intranet,
etc. The modern applications of computer networks include the Internet of Things. That is, devices with
embedded computing processors communicate with each other without wire. They provide guidance and
useful information to the consumers. Devices communicate with each other by transforming both data
and control information. Internet of Things uses wireless technologies to enable the communication
between devices. Pervasive computing is an area where embedded computing devices communicate with
each other, which is an application of computer networks.
Discussion Questions:
1.

What are the different features of pervasive computing?

2.

IC

(Hints: embedded microprocessors in devices-drive smart-remote transmission of data)


Name a few application areas of pervasive computing.
(Hints: utilities-energy and power-healthcare industry)
Reference: Brahm, C. and Pearson, T., Is your company ready for the Internet of Things?,Bain &
Company, February 05, 2014.
Applicable To:
Topic

Course

Unit-9: Computer Network;

IT & Systems

Section-9.3: Basic of Computer Networks;


Sub-Section-9.3.3: Computer Network Applications;

42

Block-3: Software and Database Concepts and Networks

22.

Advantages of Latest Mobile Technologies

Mobile commerce systems using unguided media are useful in omni channel marketing.

With the latest mobile technologies such as Smart phones, seamless omni channel customer experience
is within our reach.

These smart phone devices are used in accessing product reviews, for product purchases such as
mobiles, wallets, access product recommendations, for online chat purposes, for posting pictures and
videos and basically for sharing.

Using these devices, by scanning a bar code, one can get the product details.

Using these devices, we can link all other market touch points such as TV, outdoor, online, print, wordof-mouth and in-store channels.

Four principles to achieve omni channel marketing within our reach are:
Realize that Mobile is Personal

Think three years ahead, but start building today

Dont just advise, activate mobile

Approach mobile as a team sport

Organizations can generate market strategies, spending and segmentation using consumers data

Traditional way of look at organizations is digital first. Now we have to move towards the trend of
mobile first. This is to create integrated customer experience.

Treat mobile as a connector between digital and physical life, not just as an advertising channel.

In Kmart, US, those products which are not available on the shop floor can be ordered using mobile by
the customer from the store itself.

To capture the mobile opportunities, the organizations have to develop capabilities in content marketing,
insight development, technology integration and data analytics.

Every team needs a Coach to provide the vision. Every team needs a general manager to take decisions
on people and resources.

Google in association with Google Shopper Marketing Agency Council has carried out a survey of
1500 US based smart phone owners with over 18 years of age. The research findings are

IC

FA

79% of them are using mobile phones atleast once a month for shopping related activities

50% of them use mobile devices for 15 minutes or more per store visit.

High frequent smart phone owners were carrying 50% more health and beauty products, 40% more
appliances, and 25% more household care products.

53% of the smart phone users are comparing product prices

Smartphone market share in US is 54% among mobile phones

Mobile commerce systems make use of mobile networks such as CDMA and GSM. There are different
generations of mobile networks such as 1G, 2G, 3G and 4G networks. The 4G mobile networks are very
fast, transmit high quality streaming video, audio and data over mobile networks. Mobile commerce
systems are very useful in remote and unreachable places. Mobile commerce systems work without
physical wire between communicating devices. They transmit microwaves over the air.

43

PEP Notes: IT & Systems


Discussion Questions:
1.

What are the advantages of mobile technologies?. Explain few.


(Hints: online chatting-product purchases-sharing pictures and videos)

2.

What were the findings of the Google research survey on mobile technologies?
(Hints: using mobiles for shopping-comparing product prices-purchasing healthcare and household
products)

References:
i.

Egol, M., Seelbach, F. and Sayani, N., Mobile Now, Strategy + Business, Booz & Co.,New York,June
10, 2013.

ii. Froseth, H., Manikas, T. and Madden, K., Smartphone to Aisle Nine, Strategy + Business, Booz &
Co.,New York,June 10, 2013.
Applicable To:
Topic

Course

Unit-10: Telecommunication Networks;

IT & Systems

Section-10.4: Telecommunications in Business;

IC

FA

Sub-Section-10.4.4: Mobile commerce systems;

44

Block-3: Software and Database Concepts and Networks

23.

The Digital Divide across the World

There is digital divide in technology scope in business across the world.

INSEAD and World Economic Forum have jointly surveyed 15,000 executives across the world and
prepared Global Information Technology Report known as Growth and Jobs in Hyper connected
World.
According to this report, it is not about the infrastructure, hardware or the link, it is about how we use
them all together. According to this report, developed economies such as Nordic Nations, Singapore,
Hong Kong, Taiwan (China), and the Republic of Korea are converting IT investments into tangible
benefits in innovative ways. There is a great divide between Northern European and Southern European,
developed and developing nations with respect to making IT investments useful for development,
competitiveness, employment and well-being.
The State of the art infrastructure is also available in developing economies; but the divide is in the usage
of ICT for business purposes, especially the small and medium size enterprises who create the jobs and
help improve the standard of living in developing nations.

FA

Networked Readiness Index (NRI)

10

IC

India, Russia, China and Brazil stood at 50th position in Networked Readiness Index.
Asia, the home to most digitized and innovation economies in world is least connected. Unlike Europe,
Asian governments lead the digital initiatives.
Low investments in Telecom infrastructure is putting at risk the regions competitiveness and also the
consumer benefits.

High digital divide is present in Israel and GCC Countries; North Africa and Levantine nations which are
undergoing some political changes.
The digital connectivity improvement is also slow in Africa and Latin America.
Europe can give more spectrum to operators, reduce the number of operators by giving more price
flexibility, create incentives for investments, and restrict wholesale access.

45

PEP Notes: IT & Systems

Impact of Big Data


Current Unemployment is 200 million people globally and 1.5 billion are marginally employed.
According to Gartners research, by 2015, big data is going to provide 4.4 million IT jobs globally and
each of these jobs is going to create 3 more jobs indirectly in other sectors.
Earlier only organizations such as Google and Wal-Mart used to deal with huge data and collected the
data at enormous costs. Now-a-days majority of organizations are able to do this with the concept of big
data and they are unlocking the hidden information from the data sources.

Technology Scope is wide in business organizations. Business organizations use technology in product
design, architecture, product development processes, online marketing, customer support and customer
contact centers. Business organizations use Internet, mobile and networking technologies for
communication purposes. They manage big data and use analytics for business and market intelligence
purposes.
Discussion Questions:
What is the impact of digitization on different parts of the world?
(Hints: development-competitiveness-employment generation)

2.

Explain the impact of big data on different organizations.

1.

Reference: Jane Williams, Closing


Knowledge@INSEAD, May 07, 2013.

the

Digital

IC

Applicable To:

FA

(Hints: unlocking hidden data-operational cost reductions-4.4 million big data jobs globally)

Topic

Divide:

Connectivity

is

just

Course

Unit-10: Telecommunication Networks;

IT & Systems

Section-10.5: Scope of Telecommunication Networks;


Sub-Section-10.5.2: Technology Scope;

46

the

start,

Block-3: Software and Database Concepts and Networks

24.

Growing Indian Internet & Smartphone Markets

Google chairman Eric Schmidt is optimistic about technology scope in India.


Indian technology organizations should give priority to domestic excellence over global dominance. This
was expressed by the Chairman of Google, Inc., Eric Schmidt in an interview. This article gives insights
from that interview. Google has started its office in India a decade ago. It has experienced an extensive
growth in the Indian technology sector.
Some Insights from the Interview
Technology can play a major role in Indian development. However one has to concentrate on the
regulatory environment.

Indian Internet connections are still behind its real potential.

There are 120 million Internet users in India. This is less than 10% of the Indian population.

What happens if 40%, 50%, 60%, 70% of the population use Internet in India?

India can very much depend on technology and can build powerful 4th generation LTE (Long Term
Evolution) networks. This reduces the Internet costs and makes it mobile. LTE networks come
under 4th generation wireless communication networks. They provide broadband Internet to mobile
phones and handheld devices with roaming facility.

People who do not have televisions and refrigerators use mobile phones in India. If not them,
somebody in their village is using mobile phone.

Technology is reducing mobile phone costs. A $400 mobile phone is available for $200 after 2
years and the same phone is available for $100 after two more years. This is following Moores
law.

FA

Some More Insights

IC

Moores Law: In computer hardware, the number of transistors and integrated circuits double in every
two years. That is, computer processors double their complexity in every two years.

In next five years, we will get Android phones for much less that $50

India has very high data transmission rates. This is because India is proactively addressing the
competition among service providers in the telecommunications industry for more LTE layers.

There is growth for Wi-Fi hotspots in India. Wi-Fi hotspots market is growing at 40% annually in
India.

In 5 to 10 years time, many Indians will have access to Internet. They will have life changing
experience of access to worlds information.

Indian Technology Sector

Local firms will have unique talents and skills. They will pay higher salaries, high growth and
transform the country.

The advantages for India are the quality of people and the education system.

Local culture and local languages drive local solutions.

India has got the talent. Only thing is they need to work on the regulations and the way capital is
formed.

Indian technology sector has made a big impact on the world.


47

PEP Notes: IT & Systems


Example:
1.

Co-founder of Sun Microsystems is educated in India.

2.

40% of the entrepreneurs in Silicon Valley are of Indian origin.

3.

The quality of people and education system in India is helping the Indian Technology Sector.

The growing number of mobile and smart phones in India is increasing the technology scope in India.
The mobile networks in India are heading to the 4G mobile networks. With the reduced device costs, the
cell phone market is growing at a double digit rate in India. The competition is leading the companies to
come up with innovative solutions and products. There are some domestic mobile phone companies such
as HTC and Micro Max which have launched smart phones in India. With the growing economy and need
for access of remote places there is lot of scope for technology in mobile and telecommunications sector
in India.
Discussion Questions:
1.

What was the status of the Internet market in India?


(Hints: 4th generation LTE network-technology reducing mobile costs-growing in rural India)

2.

Explain the impact of the Internet on Indian technology sector.


(Hints: Wi-Fi hotspots-reduced data transfer rates-need to work on regulations)

Reference: Schmidt, E., Reimagining India: A Conversation with Eric Schmidt, McKinsey & Co Insights
& Publications, December 2013.

Topic
Unit-10: Telecommunication Networks;

FA

Applicable To:

IC

Section-10.5: Scope of Telecommunication Networks;


Sub-Section-10.5.2: Technology Scope;

48

Course
IT & Systems

Block-3: Software and Database Concepts and Networks

25.

Telecommunications Technology Trends

The emerging technology trends in telecommunications and mobile


communications can increase the industry scope in India.
2014 is looking very promising for Indian telecommunications sector. The emerging technology trends are
going to have positive impact on the Indian telecommunications industry. The mentioned technologies in
this article are going to generate new value added services to customers in the industry in the coming years.
The technology trends for 2014 are as follows:
Launch of LTEs (Long Term Evolution) Networks: LTE networks provide broadband Internet with
roaming facility not only to mobile phones but also to handheld devices. These are 4th generation mobile
networks. Telecom service providers are going to launch these 4th generation LTE networks in India.
Service operators can provide more bandwidth to customers on both fixed lines and mobile devices.

Smart Homes and Smart Offices: Smart home consists of many electronic home appliances that can
communicate with one another. Similarly, smart office consists of office equipment that can
communicate and interact with one another through wireless or wired technologies. Smart homes and
smart offices are possible with machine to machine communication using IT infrastructure. One
machine communicates with other machines and exchange data and information using IT infrastructure.
This is going to be used widely in agriculture, utilities and consumer electronics industries. Machine to
machine communication can also be used in handhe-1` health devices.

Better Utilization of Spectrum: Utilization of spectrum indicates the different services the customer is
going to use such as SMS, voice, data, and video, etc. Customer service is going to be more effective,
efficient and loyal. It is going to be the revenue generating area by utilizing the spectrum to the
maximum extent and providing better services to customers.

Public Clouds: Public clouds are the clouds in which any organization can access the cloud by
subscribing to that vendor. A Cloud is a logically connected network of computers and devices with
storage and virtualization facilities. Organizations are going to use public clouds for enterprise
purposes. They achieve capacity excellence and operational excellence with lower costs using public
clouds. For achieving cost reductions and flexibility, large corporations may use the combination of
both public and private clouds.

Growing IT Centric Technologies: IT centric technologies are the technologies used in web based
systems development and mobile application development. Organizations can achieve mobility between
HR and customer service using IT centric technologies such as HTML5 and mobile apps. They can also
take better decisions at organization level using these technologies.

Information Security: Information security is providing authentication, access, privacy, and protection
to the data and information of the organization. It can be achieved through firewalls, network security
and data encryption. Organizations are going to use encryption in storing, transmission and retrieval of
data. Data protection is top priority for organizations.

M-Commerce/M-Health/M-Education: Mobile commerce, mobile health and mobile education are


going to grow in India and they are going to reach remote places in India. Mobile commerce deals with
making financial transaction, goods purchases, bank account accesses and online shopping using mobile
phones and handheld devices. M-Health deals with providing patient details, health information and
prescriptions to the remote patients over the mobile devices. M-Education deals with providing learning
solutions to the learners over the mobile and handheld devices. Using this technology learners can learn
from anywhere by connecting to the wireless networks.

Integration with OTT Players: OTT (Over-The-Top)players provide voice and data communication
services over the IP (Internet Protocol) networks without any service providers intervention.
Organizations are going to integrate with OTT players for value added services such as billing,
authenticity, analytics and information security.

Usage of Big Data and analytics: Big Data deals with access to the huge chunks of data available not
only in database but also on Internet using extensive deep search techniques. Organizations use big data
and analytics for finding the right customers.. Analytics applies the statistical and business research
techniques to the big data. They make extensive use of data mining and search techniques to interpret
the data.

IC

FA

49

PEP Notes: IT & Systems


Information technology is going to be the driver from front for the organizational business growth and
efficiency.
The advancements in telecommunications networks are increasing the industry scope in India.
Developments in telecommunications are leading to the growth in areas such as cloud computing, mcommerce, m-education, m-health, smart homes, smart offices and information security. These are the
emerging areas that are using telecommunications and mobile communications widely. The increased
speed of Internet, speed of data, audio and video transfer is enabling the industrial teams to communicate
effectively and quickly with their global partners. The advancements in telecommunication technologies
are reducing travel expenses, saving time and reducing lodging expenses for the organizations.
Discussion Questions:
1.

What were the telecommunication technology trends for 2014?


(Hints: long term evaluation networks-smart homes and smart offices-public clouds)

2.

Explain how telecommunications is relevant for M-commerce.


(Hints: making financial transactions-purchasing products-mobile shopping)

Reference: Pachory, A., Technology Trends in 2014, Business Standard, February 10, 2014.
Applicable To:
Topic

Course
IT & Systems

IC

Sub-Section-10.5.3: Industry Scope;

FA

Section-10.5: Scope of Telecommunication Networks;

Unit-10: Telecommunication Networks;

50

Block-3: Software and Database Concepts and Networks

26.

Wi-Fi for Customer Satisfaction

Unguided media such as Wi-Fi technologies improve employee


productivity and customer satisfaction.

There are over 80 million Wi-Fi networks in US.


In a recent survey conducted by Sapient Nitro and GfK Roper, 63% of the respondents expressed
that providing free Wi-Fi will enhance their shopping experience.
Organizations such as JCPenny, Macys, Target, Sams Club, Saks Fifth Avenue and Nordstrom
have implemented Wi-Fi networks for the purpose of either employees or customers.
Wi-Fi improves employee efficiency and customer satisfaction.

FA

Figure 1: Impact of Wi-Fi on Employee Productivity and Customer Satisfaction

Query

Info
Customer

IC

Wi-Fi

Server

Employee
Productivity

Sales Executives
Customer
Satisfaction

Important Questions to ask before Wi-Fi Implementation:


Whom do you want to locate using Wi-fi: Employees or Customers?
Will the proposed network support simple web queries or streaming high definition videos?
Will the employee network work as VPN (Virtual Private Network) within the public customer data?

51

PEP Notes: IT & Systems


Advantages of Wi-Fi

Employees
Check product
availability
Voice over IP (VoIP)
Find another
employee
Spend more time with
customer on floor
Instant Checkout
Instant call to
inventory

Customers
Find products
Product Information
Product reviews
Usage of Store Map
Check discounts, rewards and loyalty
programs
Order online
Find a sales executive
Check product availability
Price search
Price comparison
Entertainment for Kids

Organization
Single Channel
experience
In-store marketing
Efficient Inventory
management
Customer identification
Personalization of
Service
Catch nearby
Customers
Identify maximum
spent area in store

Questions to Ask while Building Business Case:


What business benefits does Wi-Fi bring?
Will Wi-Fi increase revenues?
Will W-Fi reduce Costs?
Does it increase the sales?

IC

FA

Lessons Learned in Wi-Fi Implementations:


Wi-Fi projects are more complex than expected.
Consider Wi-Fi as business project rather than only as IT project
Wi-Fi projects involve all parts of company such as marketing, IT, business development, legal,
operations, finance, and facilities management.
Take required outside help for skills not available in-house.
Planning mistakes cost millions of dollars
Have Sufficient Project Time: Six months is ideal time for Wi-Fi Planning.

Unguided media is nothing but the wireless communications media. It includes cellular phone systems,
wireless LAN systems, Wi-Fi, communication satellites, infra red systems and terrestrial microwave
technologies. Unguided media works without a physical wire connected between communicating
devices. They communicate through the frequencies over the air with distributed spectrum.
Discussion Questions:
1. What is the impact of Wi-Fi on business organizations?
(Hints: improved customer satisfaction-improved employee productivity-sharing videos and images)
2.

What are the challenges faced in Wi-Fi implementations?


(Hints: support for streaming video-who will locate employee/customers?-project planning)

Reference: Rudy Puryear and Rasmus Wegener, Wi-Fi for Your Customers: The toughest Challenge of the
decade, Bain & Co, March 13, 2013.
Applicable To:
Topic

Course

Unit-10: Telecommunication Networks;


Section-10.6: Telecommunication Network Components; Sub-Section-10.6.1:
Communication Media; Sub-Sub-Section-10.6.1.2: Unguided Media;

52

IT & Systems

Block-4:

Management of MIS

FA

The Role of Requirements Management in Software Product Development


Roadmap for a New CIO (Chief Information Officer)
Return on Investment (RoI) of Clinical IT Systems
Dealing with IT Risk
IT Spending for Organizational Effectiveness
On Mission to Develop IT Product Engineers in India
The Success Factors of CIOs
The Turnaround Journey at Yahoo (2012-13)
The ignored Soft factor in Nokia Downturn: Collective Emotions
The Growth of Open Innovation (OI)
How Analytics changed the business model of a Media Organization?
The Pros and Cons in Analytics Outsourcing
Growing Software Entrepreneurial Zeal in India
Business Models which can be adopted from Software Industry
Innovation Prowess for Growth Leadership
Wipro, World No. 3 in Energy & Utilities Vertical
Innovative Project Management at IBM
The Role of IT in Healthcare
Measuring Clinical IT Systems Performance
Predictive Analytics to increase Project Success Rate
Leading Healthcare IT (HIT) Projects
Corporate Website for Organizational Effectiveness

IC

27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.

53

27.

The Role of Requirements Management in Software Product


Development
Specification of information requirements and requirements management comprises
requirements engineering in software projects.

70% to 85% of the rework costs in software projects are because of requirements errors. If requirements are
not correct, organizations end up in software products which they dont need. It is best practice to have
requirements sign-off by all the stakeholders of the project such as customers, vendors, suppliers, team
members, project manager, project sponsor, senior management, test team, support team and QA team.
Requirements Engineering Consists of Requirements Development and Requirements Management.
Requirements Development and Requirements Management are two different things. Requirements
Development deals with requirements elicitation, requirements analysis, requirements specification, and
requirements review. Requirements Management deals with change management of requirements. That is,
if requirements change request comes from different stakeholders, CCB (Change Control Board) in software
projects does impact analysis and takes accept or reject decision. CCB is a group of experienced designer,
programmers and Project Manager in the project. Requirements should be unambiguous, consistent,
complete, traceable, measurable, modifiable, and testable.
Business Requirements
(Customers)

Analysis
System
Requirements
Specifications
(SRS)

User Requirements
(End Users)

IC

FA

Non-Functional
Requirements

Requirements
Elicitation

Design

Functional
Requirements

RequirementsA
nalysis

Requirements
Specification

Coding

Testing

Software
Product

Requirements
Review

Specification of information requirements includes specifying both functional and non-functional


requirements. Functional requirements of the product concentrate on the features to be developed for the
product. Non-functional requirements of the product include usability, accessibility, performance,
security, localization, authorization, availability, accuracy and reliability of the system. It is best practice
to number the information systems requirements and document them in System Requirement
Specifications (SRS).
Discussion Questions:
1. What are different types of requirements of an IT product?
(Hints: business and user requirements-functional requirements-non-functional requirements)
2. How is requirements development different from requirements management?
(Hints: requirements elicitation- requirements analysis, specification and review change management
of requirements)
Reference: Linda Westfall, Software Requirements Engineering: What, Why, Who, When and How, White
Paper of The Westfall Team, 2006.
Applicable To:
Topic
Unit-11: MIS-Planning and Design; Section-11.4: MIS Design;
Sub-Section-11.4.2: Design Process;
Sub-Sub-Section-11.4.2.8: Specification of information requirements;
54

Course
IT & Systems

Block-4: Management of MIS

28.

Roadmap for a New CIO (Chief Information Officer)


Identifying and establishing relationships among tasks and
expectations can keep the CIO on new job.

Expectations from a new CIO are very high. New CIOs have to balance between fixing old problems related
to legacy systems and building new IT capabilities with social, cloud and mobile technologies. Pressure on
CIO is from fixing what is broken and underperforming in IT systems. CIOs have to spend lot of time
initially listening to sources of frustration and understanding current context.
According to a survey, 85% of the IT budget goes into operating and maintaining legacy systems with 15%
remaining for new IT initiatives.
On the new Job, CIOs have to do
Balance between fixing old problems and
developing new IT capabilities

Legacy systems are not robust

Build the fact base

IT governance does not support quick decision


making

Set Appropriate Expectations

IT is not aligned with business strategy

Handle High priority initiatives

Do SWOT analysis of IT (strengths,


weaknesses, opportunities and threats)

IT organizations strong capabilities are in


legacy systems not in new technologies

Shadow IT

Root causes for IT Underperformance

FA

At one computer manufacturing company, a new CIO found that 60% of the servers supporting the main
business line are obsolete.
At AXA Belgium, new CIO was on a 100-day fact finding machine.
Found dozens of applications running on obsolete platforms.

Carefully documented sources or reasons of cost overruns and schedule overruns

Redirected IT spending from low value projects to high value projects

IC

High impact projects can increase the organizational effectiveness. CIO has to balance between short-term
and long-term IT goals by keeping team capabilities, quality of legacy systems and IT strategies in mind to
achieve IT effectiveness, and thereby, organizational effectiveness.
What is Shadow IT?
Shadow IT, which is the hidden pocket of improved IT capabilities, and quick solutions causes 25% of
the total IT budget. Shadow IT increases the complexity and costs on the one hand and undermines the
already existing in-house IT systems on the other.

55

PEP Notes: IT & Systems

IT Department

IT Team
Capabilities

IT Effectiveness

Short Term Goals


Legacy Systems
Long Term Goals

Organizational
Effectiveness

New IT
Initiatives/Strategies

Identifying and establishing relationships among tasks is very important in the planning and
development of Information Systems. The possible relationships between two tasks of any project or
program can be start-to-finish, finish-to-start, start-to-start and finish-to-finish. Identification of these
relationships is important for project and program scheduling, tracking and execution. These relationships
can be represented in network diagrams.
Discussion Questions:
1.

Explain how IT is impacting the organizational effectiveness.


Mention the root causes for IT underperformance in an organization.

FA

2.

(Hints: balance between short term and long term IT goals-IT strategies-quality of legacy systems)
(Hints: obsolete platforms-spending on low value projects-project schedule and cost overruns)

Applicable To:

IC

Reference:Puryear, R., Cornish, N. and Van Der Vleugel, M ., The new CIOs quick start manual, Bain &
Co, April 03, 2013.

Topic

Course

Unit-12: MIS-Implementation, Evaluation and Maintenance;


Section-12.4: Planning the MIS Implementation;
Sub-Section-12.4.1: Identifying and establishing relationships among tasks

56

IT & Systems

Block-4: Management of MIS

29.

Return on Investment (RoI) of Clinical IT Systems

Very few healthcare organizations have evaluation of MIS implementation to find the
return on investment of their clinical IT systems.
Beacon Partners, a healthcare consulting company, carried out a survey of 300 professionals working in
healthcare industry in 2012 to find out whether healthcare organizations and hospitals use clinical system
performance measures in order to find return on investment of EMR (Electronic Medical Records) systems.
This article brings out the following insights from this research.

Effectiveness of EMR systems is an asset to the organization.

EMR systems performance measures initiate clinical quality improvements.

EMR system performance measures are included in organizational balanced scorecards.

The observations from the research study are as follows:


Most of the respondents expressed that their organizations do not measure the success of EMR
systems.

Performance measures are considered not just to find return on investment.

EMR systems performance measures are taken into consideration by the IT department and Quality
management department.

Most respondents are not satisfied with their organizations measurement of return on investment of
clinical IT systems.

Most healthcare leaders and clinicians are unsatisfied with their efforts of finding return on
investment of their EMR systems.

40% of the respondents expressed that they use performance measures at some stage or other of
EMR system.

Performance measures of EMR systems are used for quality management, in balanced scorecard, IT
systems improvement, budget reports and employees performance bonuses.

Performance measures are implemented at EMR systems planning, implementation or testing


stage.

78% of the organizations collect data from physicians and nurses to measure the satisfaction with
clinical IT systems.

The feedback taken from physicians and nurses is used for planning of further systems, systems
improvement, determine training needs, strategic planning, rollout planning and for cost savings
purposes.

36% of the respondents were satisfied with their organizations efforts on measuring RoI of clinical
IT systems.

51% of the respondents expressed that performance measures are to be decided much early, such as
in EMR systems planning stage.

The challenges faced in EMR systems implementation include the tight deadlines and limited
resources.

76% of the organizations are rated at level 3 or above in measuring the maturity of EMR systems
adoption model. The EMR adoption model and its 7 levels are as shown below:

IC

FA

57

PEP Notes: IT & Systems


EMR Adoption Model
Level

Capability

Level -7

Data warehouse is used. Medical records are fully electronic.

Level-6

Structured templates are used for physician documents

Level-5

Closed loop in medication administration

Level-4

Clinical protocols such as CPOE and CDSS are used.

Level-3

Clinical documentation exists. Flow sheets and error checking is present.

Level-2

Clinical Decision Support System and document imaging are present. Clinical data
repository is present. Common vocabulary is used.

Level-1

Pharmacy, Lab, Radiology are installed

Level-0

Level-1 capabilities are not installed.

Among the 300 executives surveyed, 42% are CIOs and rest are CEOs, COOs, CFOs, CPOs, CMO
and other administrative staff.

The respondents are from community hospitals, multi-hospital systems, academic medical centers,
ambulatory clinics, and multi-specialty practices.

In healthcare organizations, executive members and governing boards are slow in establishing
performance measures to find out the RoI of their clinical IT systems.

FA

Performance evaluation of EMR systems is useful for quality management, IT systems improvement,
employee incentives and for including in the organizational balanced scorecards. Healthcare leaders have to
make use of these systems for long-term strategic benefits and to evaluate organizational performance.

Discussion Questions:
1.

IC

Evaluation of MIS implementation involves finding return on investment, stakeholder feedback, team
feedback, top management feedback, customer feedback and patient satisfaction in case of healthcare
industry. It is important to evaluate the MIS implementation to further direct the funds. This is part of
organizational performance evaluation. Impact of MIS on operations, services, marketing and finance can
be evaluated in an organization.

How do you measure the return on investment of clinical IT systems.


(Hints: EMR systems-clinical quality parameters-balanced score cards)

2.

What are the different levels in EMR adoption model?


(Hints: Level 0 to Level 7-from diagnostic lab to data warehouse-structured documentation)

Reference: Beacon, Finding the ROI in Clinical IT Systems, Research Report of Beacon Partners, 2012.
Applicable To:
Topic

Course

Unit-12: MIS-Implementation, Evaluation and Maintenance;


Section-12.6: Evaluation of MIS Implementation;

58

IT & Systems

Block-4: Management of MIS

30.

Dealing with IT Risk

IT risks as challenges in MIS implementation impacting agility and


access can impact organizational effectiveness.

IT Risk impacts 4 main Objectives (4As):


Agility: Modifying business processes at minimal cost and time
Access: Provide timely information for needed people and keep away the wrong people
Availability: Keep the business running and keeping recovery from failure time minimal
Accuracy: Making sure that information is complete, correct, and timely

In a survey of 258 executives, Business and IT executives agreed on the relative importance of access and
availability. Business executives gave more importance to agility and accuracy than IT executives.
In Best Companies, Information Security people think about all 4As.

When one talks about 4As openly, one can take better decisions and fix wrong assumptions.

Discuss about all 4As when you make a Big IT Decision.

FA

IC

IT System

Agility

Business Executives

Accuracy

Organizational
Effectiveness

Availability
Access
IT Executives

Challenges in MIS implementation include lack of domain knowledge, lack of technical skills of team
members, non-matured technologies, communication gaps, leadership issues, lack of commitment from
top management, funding issues, lack of resources, and third party dependencies. The other challenges in
MIS implementation include rushing to implementation rather than designing the systems, lack of coding
and design standards, lack of knowledge of appropriate design methodologies, incompatible or outdated
systems and integration with legacy systems.

59

PEP Notes: IT & Systems


Discussion Questions:
1.

What are the challenges faced in IT systems implementation?


(Hints: lack of technical skills-communication problems-lack of domain knowledge)

2.

What objectives of IT system get impacted by IT risks?


(Hints: agility and access-availability-accuracy)

Reference:Westerman, G., How to Have the IT Risk Conversation, HBR Blog Network, June 23,2013.
Applicable To:
Topic

Course

Unit-12: MIS-Implementation, Evaluation and Maintenance;

IC

FA

Section-12.7: Challenges in MIS Implementation;

60

IT & Systems

Block-4: Management of MIS

31.

IT Spending for Organizational Effectiveness

Managing information resources and technology efficiently can make an organization effective.

Bain & Co has done a survey of senior managers from 350 organizations. 70% of the senior managers
felt that IT spending is very much needed for their organizational growth. 80% of the respondents felt
that their IT strategy is away from business strategy. It is observed that the difference between IT supply
and business demand is costing the companies 20% more on IT spending.
Organizations whose IT spending is more efficient and whose new IT investments are on high impact
projects follow the following four steps:

Align IT Strategy
with Business
Strategy

Manage
Volume of IT
Resources

Eliminate IT
Resources
Redundancy

Balance between
IT Supply and
Business Demand

Key Questions to Ask for Strategic Alignment of IT


Is there a clear IT strategy which is aligned with Business Strategy?

2.

Are all IT projects mapped to IT strategy and business strategy together?

FA

1.

IC

Steps to manage volume of IT Resources

Use IT Tracking Tools to monitor IT


usage
Reinforce Budgetary Controls

Use actual usage data in making


outsourcing contracts and agreements
Centralize IT procurements which
are not strategic to business.

Key Questions to Ask for Managing Complexity


Are the new IT systems, infrastructure and changes are easy and efficient to implement?
Is there any reuse of IT solutions and is there any work around?

61

PEP Notes: IT & Systems

Key Questions to Ask for IT Governance and Demand Management


1.

Are there any procedures and systems in place being followed and enforced in IT spending?

2.

Does organizational decisions encourage IT usage and IT spending?

IT Strategy
Organizational
Strategy

IT Resources
Organizational
Effectiveness/
Performance

IT Governance

FA

Project
Complexity

IC

Managing information resources and technology is responsibility of project manager or MIS manager.
Information systems resource management includes planning resources, acquiring resources, procuring
resources, allocating resources, tracking usage of resources and releasing resources. Information systems
technology management responsibilities include planning for technology, feasibility studies, technology
assessment, project planning, project execution, project deployment and operational support. IT project
manager is responsible for both technology and resources management. Typical resources include people,
hardware, software, tools and devices.
Discussion Questions:
1.

What are the steps involved in effective IT investments?


(Hints: align IT strategy with business strategy-eliminate resource redundancy-manage volume of IT
resources)

2.

How do you manage IT systems complexity?


(Hints: reuse components-proper IT infrastructure-change management)

Reference: How to make IT spending more effective, Bain & Co, 2014.
Applicable To:
Topic

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.3: Managing Information Resources and Technology

62

IT & Systems

Block-4: Management of MIS

32.

On Mission to Develop IT Product Engineers in India

Grooming IT resources such as people as product engineers is relevant to India.


Some Facts:

More than 3,00,000 people Graduate in Computer Science and IT in India Every Year

Among this only few hundred are suitable for Product Development Roles

Product Companies pay Rs 7.5 lakhs/year on average to Fresh graduates

Services Companies pay Rs 3-3.5 lakhs/year on average to fresh graduates

Product Development companies have shortage of Workforce

Ex-Microsoft India Managing Director (SriniKoppolu) and his team are on a mission to produce
Product Engineers in India. They established Mission R&D, a registered company.
Accomplished

Mission

Trained 41 students in 2012

Conducted Six weeks Summer camp

Students are already placed in companies such as


Microsoft, PayPal, Cisco, and Sethu on campus

This Year they selected 105 students from 2,500 of 12


colleges in Hyderabad.

Would like to expand to Bangalore,


Mumbai and Delhi

Online mechanism from Industry based faculty; Later


Physical Interaction with faculty.

Make them ready for Product


Development Roles.

To make 1,000 students as Product


Engineers, half of them would be
Women.

IC

FA

The modern terminology for People is human resources. Human resources are assets to any organization.
Human resources in IT industry work in areas such as product development, software services, project
management, product strategies, program management, software support, software testing, product
support, product and services marketing.
Discussion Questions:
1.

Mention some of the facts about Indian IT industry.


(Hints: product companies-software services companies-300,000 CS and IT graduates every year)

2.

Explain the highlights of the mission on developing software product engineers for India.
(Hints: make 1000 students as product engineers-online and industry based faculty-expand to major
cities of India)

Reference: Kurmanath, K.V., Mission R&D to churn out product engineers, The Hindu-Business Line,
11-July-2013.
Applicable To:
Topic

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.4: Information Technology and Organizational Needs;
Sub-Section-13.4.1: People;

63

IT & Systems

PEP Notes: IT & Systems

33.

The Success Factors of CIOs

Proper management of needs of people combined with vision and strategic


thinking can make a CIO successful in the organization.
Booz & Company surveyed 60 CIOs of MNCs in 2013 to find out success factors, success trends and career
paths of CIOs. The increasing consumerization, competition and technology are keeping the IT in front row of
the business. CIO role is evolving rapidly and he or she is unlocking the competitive advantage and business
benefits. CEOs should ensure that the IT function and the CIO are positioned properly in the organization and
they are able to respond to the changing needs and demands.
IT department is responsible for digitization in the organization. Digitization is part of the business model,
which effects the marketing, operations, supply-chain, sales, customer interaction and the employee
interaction.
CIO Responsibilities
CIO role is multifaceted and highly demanding. He or she has to coordinate between internal and
external capabilities and resources.

He has to ensure the on-time and on budget delivery of IT projects.

He has to control the IT costs

He has to assess the emerging new IT technologies, embrace and exploit them.

He has to meet the requirements and demands of different parts of the organization.

FA

The Survey Findings

Majority of CIOs came from outside instead of internal promotion.

80% of the CIOs have Bachelor degree and 12% have MBA degree

All the respondents (60 CIOs) happened to be male. Average CIO age is 48 years.

For more than 50% of the respondents, it is their first job in IT

More than 70% worked in management consulting or enterprise system integrator earlier.

More than 50% bring members into their organization from their previous companies/teams

Only 30% of CIOs are recruited through head-hunters. Here, LinkedIn and Other Social Networking
sites are reducing the need for head hunters.

IC

CIO Considerations

Active succession planning takes place in IT function in organizations.

If IT and digitization are in right path in an organization, then they look for CIO internally. Otherwise
they look for CIO from outside.

Majority of the CIOs coming from outside have revamped the industries.

Reasons for CIO failures

The reasons for CIO failures include not proper partnering with business, services failures, failing IT
programs, poor cost control and poor business impact.

What CIOs should do?

CIOs should have strong partnerships in work with stakeholders to ensure that complex IT projects
succeed.

Direction of CIOs focus, energy and IT resources depends upon who they report to, such as, whether to
CEO, COO or CFO.

The IT architecture in the company also decides the CIO reporting structures and reporting lines.

Upon joining, CIOs priorities should be people and skills, major IT programs and the IT function itself.

64

Block-4: Management of MIS

CIO should be a visionary with strategic thinking capabilities for bringing in a competitive advantage
through IT.

CIOs Success Factors


The success factors of CIOs are:

Higher order stakeholder management skills.

Business understanding.

Visionary with strategic thinking capabilities.

Top management position.

Having resources such as people and money.

Having technical background and expertise.

IT Function Success Measures

Cost effectiveness

Flexibility

Scalability

Sourcing and quality

Responsiveness

Innovation

FA

The success measures for IT function in an organization include:

90% of the CIOs moved into the current CIO role because of dissatisfaction in their previous employment
and for taking up new challenges in the current CIO position. Majority of CIOs wants the profit & loss
responsibility in CIO role and some other minority does not want it in the CIO role. Some of the CIOs do
not want to be held responsible for profit and losses made in the organization.

IC

People also mean the stakeholders. The stakeholders for CIO can be business teams, program managers,
project managers, functional heads, customers (internal and external), suppliers, vendors, C-level
executives and the board. The CIO has to manage the expectations of the stakeholders to make the IT
successful in the organization. Stakeholder expectations management is one of the critical success factors
for IT in business organizations.
Discussion Questions:
1.

Why do CIOs of organizations fail? Explain the reasons.


(Hints: failing IT programs-improper partnership with business-poor cost control and service failures)

2.

Specify some of the success factors for CIOs.

(Hints: stakeholder management skills-strategic thinking capabilities-better understanding of business)


Reference:Bahnap, R., Bernnat, R., Roets, M. and Bieber, N., Memo to the CEO: Are you getting the best
out of your CIO?,Booz & Company, 2013.
Applicable To:
Topics

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.4: Information Technology and Organizational Needs;
Sub-Section-13.4.1: People;

65

IT & Systems

PEP Notes: IT & Systems

34.

The Turnaround Journey at Yahoo (2012-13)

Product orientation and organizational need such as culture have helped Yahoo in turnaround.
Marissa Mayer joined Yahoo in July 2012 as the youngest woman CEO in any Fortune 500 company. A graduate
from Stanford with Computer Science and Symbolic Systems degrees, her 13 years stint at Google took her to
heading Search, being accountable for product management, engineering, design and strategy. She was
instrumental in products such as Maps, Earth and Street View.
Key Contributions
Working on Building beautiful products which enhance user experience

Added eyeballs through purchases such as Tumblr (micro-blogging and social networking site)
Summly (news summation site), Stamped (mobile recommend), Ashid (to-do app), OnTheAir (video
chat start up), Snip.it (social content curator), Alike (mobile recommendations app), Jybe (personal
recommendation site), Rondee (conference calling service), Ghostbird (photo app maker), Playscale
(games software provide), Hulu (Online video streaming service)

Broadening the product range rather than shrinking the services

Identity and vision articulation

Setting culture and direction aligned to current trends

Focusing on personalization of the Internet on mobile

Replacing employees Blackberrys with iPhone and Android to


align to current technologies

Free food to employees

Ending telecommuting

Updations/ Refresh of Yahoo homepage, Yahoo mail, search and


Flickr

Yahoo mail apps launched for iOS, Android and Windows 8

Flickr support for high resolution photos and Android application

No more new professional accounts at $25 a year

Focus on the four pillars for generating

Eyeballs: Search Social Photos Mail

Improving user experience

FA

IC

Changes Made

Progress Report
Stock prices 70% since last year
On site interaction 25% in one quarter
New job applicants 100% in a year
Mobile usage 50% in one quarter
Active mail users 30% after launch of

Yahoo mail apps


Attrition rate of top talent 50%
Ex-employees returning: One in seven
new hires

In one year,

The CEOs first Sprint was to Bring Excitement back to Employees

The CEOs Second Sprint was toBuild Beautiful Products

Gave away Terabytes of space to store photographs

According to recent Piper Jaffray survey, among teens fascination with Facebook declined to 33% from 42%
last year. Currently Yahoo and Tumblr together can reach more than a billion users.

66

Block-4: Management of MIS

Technology Trends
Search, Social
Networking,
Mobile

WebPortals

Internet

1990

2000

2010-Present

Yahoo wants to regain its identity as fit to Digital Revolution by Concentrating on Consumer Internet,
Personalization of Internet (Yahoo wants to the leader in this area), going Mobile supporting e-mail,
weather, news, stocks, sports scores, sharing videos, photos, playing games and Focus on User.
Yahoo Mobile Monthly Users (in Millions)
400

100
0

FA

200

300

2013

IC

2012

Is Yahoo attempting to be a great player in advertising, instead of moving to a partial subscription platform? In
a highly competitive market dominated by Google, Facebook and Amazon, the strategy appears to be broad
based rather than cutting down. The excitement appears to be growing.
Organizational culture includes employee values, beliefs, and combined attitudes. Organizational culture has
positive correlation with organizational performance. Better cultured organizations get better customer
satisfaction ratings. It should be driven by top management in the organization. Organizational culture is more
static in nature when compared with organizational climate. Organizational climate is the collective
perceptions of employees on that specific incident. Climate may change according to the situation in picture.
Culture has strong roots.
Discussion Questions:
1. How could the CEO of Yahoo turn around the situation?
(Hints: enhanced user experience-many acquisitions-increased product range)
2.

Explain the Yahoo culture which helped the turn around.


(Hints: bring excitement back to employees-ended telecommuting-free food to employees)

Reference:Wharton,Yahoo continues its search for a new Identity, Knowledge@Wharton, June 19, 2013.
Applicable To:
Topic

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.4: Information Technology and Organizational Needs;Sub-Section13.4.4: Culture;

67

IT & Systems

PEP Notes: IT & Systems

35.

The ignored Soft factor in Nokia Downturn:


Collective Emotions

Factors such as people, culture and structure posed challenges for


strategy implementation at Nokia.
Nokia was having half of the global mobile market share in 2007. However it lost the race of Smartphone
market to its competitors. What went wrong? What were the lessons learnt? What could have saved Nokia
from this downturn?are some of the points discussed in this article. This is based on the research carried out
by Huy and Vuori (2014) by interviewing 50 of Nokias key managers and its former CEO OlliPekkaKallasvuo [2006-2010]. Some have said that software was the reason for Nokias failure and some
others said that it was complacency. However, the lack of management of collective emotions of the
employees in strategy implementation was the main reason for Nokia loosing Smartphone market.
Complacency is a state of achieving satisfaction by ignoring threats, troubles and problems.
Lessons Learned: During 2006-2010, mobile technologies underwent drastic changes. They were integrated
with mobile computers, Internet, applications and media industry. It became a very competitive
environment.
There was a need to integrate hardware, software and related applications.

Nokia faced internal competition from different departments for resources to launch products in
different markets.

Nokia ignored the emotions in competition for resources by different departments.

Individuals were interested in their social status and internal promotion in the organizations rather
than cooperating with other departments.

It was more fear of loss of social status or of competition rather than fear of loss of job for the top
executives.

Middle managers were reporting optimistic status reports and senior and top management ignored
the validity of information provided by the middle managers.

Top managers believed that the company was progressing like Apple iPhone.

There was pressure from shareholders to increase quarterly earnings and sales revenues.

There was fear of losing external sales and internal momentum.

Top managers put more pressure on middle managers to deliver fast and more.

By the time Nokia realized in 2007, Google announced its Android mobile phone operating system.
To this Nokia could not respond because of internal pressures to deliver fast and more from
different departments.

There was an unhealthy emotional climate of fear in the organization.

IC

FA

What could have saved Nokia?

Proper management of employee emotions by top management could have made middle managers
to report the facts and figures instead of optimistic reporting.

Middle managers might have used competitors products extensively to know the features and
usage as is done in Samsung.

Adopting a culture of telling bad things is a good thing might have saved the organization. This
might have avoided the unnecessary fears in the organization.

Middle managers might have interacted with top managers to address healthy external competition.

68

Block-4: Management of MIS

Organization might have built emotional capital by managing collective emotions of employees.

Organization might have inculcated the culture of honesty, integrity, cooperation and humility in
the organization.

Large organizations have resources, intelligence and ideas. However, they need a strategy to execute
complex things. Strategy is 5% planning and 95% implementation. Strategy implementation is 5% technical
and 95% people oriented.
Leaders understand the employee emotions in order to make top strategies a reality. Collective emotions of
the employees determine the success of strategy implementation. Managing collective emotions is one of the
critical success factors in organizational strategy implementation.
Strategy implementation involves change management in the organization. Change management in turn
involves people or human resources in the organization. There should be a well-defined change
management process and the change should be supported by the top management. Also any process,
product or system change in the organization has to deal with culture change in the organization.
Organizational culture has to be changed or transformed to manage change. Organizational culture
involves values, beliefs, collective attitudes and behaviors of individuals. Strategy implementation leads
to change in organizational structure. Again structure and culture are something to do with people.
Hence, people, culture and structure are interrelated in an organization.
Discussion Questions:
1.

What are the lessons learned from Nokia downturn?

2.

FA

(Hints: internal competition from different departments-ignored emotions-need to integrate hardware


and software)
How Nokia might have avoided the down turn situation?

(Hints: proper management of employee emotions-managers to use competitors products-culture of


honesty)

Applicable To:

IC

Reference:Huy, Q. and Vuori, T., What could have saved Nokia, and What can other companies
learn?,Knowledge@INSEAD, March 13, 2014.

Topic

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.4: Information Technology and Organizational Needs;
Sub-Section-13.4.1: People;
Sub-Section-13.4.4: Culture;
Sub-Section-13.4.5: Structure;

69

IT & Systems

PEP Notes: IT & Systems

36.

The Growth of Open Innovation (OI)

Workforce mobility combined with flow of ideas and intellectual property


protection can increase open innovation in organizations.
Open Innovation as a concept originated in 21st Century. A search on open innovation on Internet resulted
into 200 links in 2003 and the same key words resulted into 20,000,000 links in 2011. In November 2013
this key word search in Google resulted into 568,000,000 links. This indicates the rapid growth of the
concept in both research and the industrial communities (Figure 1).
Figure 1: Open Innovation Search Results on Internet
60000000

568,000,000

50000000

40000000

FA

30000000

20000000

20,000,000

IC

10000000
20

2003

2011

2013

In 2003, Henry Chesbrough wrote a book on open innovation entitled Open Innovation: The New Imperative
for Creating and Profiting (Harvard Business School Press, 2003). Later on the open innovation movement
picked up in the organizations and now organizations are managing innovation by managing their
intellectual property and bringing new ideas from outside or from 3rd parties. This article discusses the
insights given by Henry Chesbrough on open innovation in an article of Deloitte Review.
The History of Open Innovation
The initial work on open innovation wasthe result of Henry Chesbroughs research on 35 projects at Xeroxs
Polo Alto Research Center (PARC) in 1980s. He was interested and curious about these projects because the
internal funding for these projects was stopped by Xerox. Among these 35 spin offs, some became publicly
traded companies. This made the professor to reflect on how small organizations, big organizations and
policy makers manage innovations in their organizations.
The Meaning of Open
The word Open has got many meanings. Unlike open source software, when the need arose the software
was developed and business models were changed accordingly by the organizations.I ncase of open
innovation, organizations got involved, invested money and ideas poured in. They have made real social
impact. Open innovation is a two way process and not one-way. That is, ideas flow from both directions.
Open innovation involves flow of ideas, both through inside-going-out and outside-coming-in components.

70

Block-4: Management of MIS


Success Factors of Open Innovation
Following are the success factors for open innovation in organizations.

Mobility of workforce: Workforce mobility is crucial for open innovation. Example: In Japan, fresh
graduates join one organization and work there for the rest of their lives. Outside ideas may come in but
the people are the same, year after year.

Human Resources Moving Between Organizations: Ideas come in when human resources move
between organizations and work as interpreters between insiders and outsiders.

Manage Intellectual Property: Having right strategies to manage intellectual property is crucial for
open innovation. It is very much important during scaling up and making investments. The
organizations or countries without right strategies for intellectual property wont be able to achieve open
innovation.
Example: China has mobility of workforce advantage. However it is facing the challenge of lack of IP
protection. R & D institutions in China have 20% to 25% attrition rates. The R &D team is brand new
for every 4 to 5 years. The same situation was there in Taiwan in 1960s. However with increased IP
protection, Taiwan is well-managed and well-respected in Intellectual Property issues now-a-days.

How to Build Innovation Ecosystem?


When there is distributed knowledge across, instead of building blocks of technology, it is better to
design the systems architecture with the available building blocks. This systems integration skill is
much needed.

We should consider innovation as incremental, radical, modular and architectural and asis the
summation of several parts. We need to join the parts and make an integrated system. In the mobile
industry, new architectures and new models replace the existing architectures and models respectively in
a very short span of time.

FA

IC

So organizations have to reflect whether to retain the current architecture, setup a new architecture or design
an alternative solution.
The important property of an organization is its intellectual property. It includes design documents,
design diagrams, papers, patents, copyrights, trademarks and logos. The organization has to protect its
intellectual property based on the law of the land.
Discussion Questions:
1.

What is open innovation? Explain.


(Hints: need based software development-flow of ideas-inside going out and outside coming in of ideas)

2.

What are the some of the success factors of open innovation?


(Hints: workforce mobility-manage intellectual property-human resource moving between companies)

Reference: Deloitte, Henry Chesbrough on Open Innovation, CIO Journal (from Wall Street Journal),
September 24, 2012.
Applicable To:
Topics

Course

Unit-13: Information Resources Management and IT Governance;


Section-13.6: Ethical and Social Dimensions of Information Technology;
Sub-Section-13.6.3: Property;

71

IT & Systems;

PEP Notes: IT & Systems

37.

How Analytics Changed the Business Model of a Media


Organization?

Businesses can use analytics for customer segmentation and modelling for customer profitability. This
extract focuses on how Extravision used differentiation for adopting glocal strategies.

Extravision Communications Corporation is a Spanish language media company. It is connected to 96%


of the Latino audience in the US through Television, radio and digital platforms. It specialized in offering
localized programs to different cities/regions in US.
In order to provide insights to marketers based on its operations, it created Luminar Insights as a
division. It uses analytics and big data to create value for media buyers, markers and other industry
customers on 52 million Latinos with a purchasing power of $1.5 trillion.
Franklin Rios, President of Luminar Insights has given insights into how analytics transformed the
business model for Extravision.
Analytics developed insights for Extravision and they have transformed their business model. Extravisions
customers were asking for analytics results other than their media purchases. This increased customer
demand for analytics made Extravision to start an Analytics business.

Figure 1: Factors Influencing the Analytical Insights

FA

External Data

Behavioral Insights

IC

New Platforms

New Algorithms

Analytics helped Extravision in transforming their business model, gaining new customers, increased
organizational efficiency and this led to customers asking for more insights.
Figure 2: The Outcomes of Analytics
Organizational
Efficiency
Analytics

Business Model

Market Penetration

Big Data services business is based on technology platforms and professional services. In Analytics
business, data is core asset. Application of analytical models on data creates value. When we look at data
using Cultural lens(See Figure 3), data appears more than insightful, rather than appearing just like raw
figures. Culture lens is getting useful insights from data by using software components and algorithms and
through the seasonality.

72

Block-4: Management of MIS


Figure 3: The Culture Lens
Data

Culture Lens
Algorithms
(Steps in solving a problem)

Components

Seasonality

(parts of a system)

(data under goes


changes)

Insightful Information

Luminar has followed the following steps to get into the big data services business.
Engage the Head of Research into the big data services unit

2.

Make General managers and Sales staff of Extravision to use the big data solutions (Pilot Run)

3.

Choose Couple of Designated Market Areas (DMA)

4.

Do Proof of Concept in Selected DMAs

5.

Prove that the model works in different categories of selected DMAs.

6.

After Proof of concept, expand it to other DMAs.

7.

Continuously Evolve

IC

FA

1.

Glocal strategies convey strategies that think globally and act locally. The glocal strategies should
include the global product development and marketing strategies and at the same time, managing human
resources, organization culture and organizational structure should be according to the local strategies.
These factors impact local socio, economic, political and legal conditions. Glocal strategies include both
global and local strategies in organizing and directing the organizational business.
Discussion Questions:
1. What is the impact of analytics on business organization?
(Hints: organizational efficiency-increased market penetration-changing business models)
2. What factors are impacting analytical insights?
(Hints: new platforms-new algorithms-external data)
Reference: Ferguson, R.B., How analytics can transform business models, MIT Sloan Management
Review, April 16, 2013.
Applicable to:
Topic

Course Name

Unit-14: Global IT Management;


Section-14.3: Information Technology in Global Business;
Sub-Section-14.3.1: Glocal Strategies;

73

IT & Systems

PEP Notes: IT & Systems

38.

The Pros and Cons in Analytics Outsourcing


Analytics as an IT-enabled service can be outsourced or offshored for organizational competitiveness.

The growing big data leads to the need for strong analytics capabilities in an organization. Organizations
having strong analytics capabilities have a competitive advantage and long term benefits over their
competitors. For example, FedEx used analytics extensively to reduce costs and increase its revenues. WalMart, a retail chain, has built its strong capabilities in analytics to become worlds largest retailer. Building
highly skilled analytics teams is very difficult for organizations. Many organizations do not have the internal
capabilities, knowledge and experience in analytics. The lack of skilled analysts in the market or in-house is
driving the organizations to outsource the analytics work. Organizations outsourcing analytics work are
required to build a strong relationship with the vendor. It is a challenge to managers in MNCs to find out the
right analytics BPO which meets their requirements and deciding on what they want from them and
managing inherent risks.

Analytics is the latest addition to the BPOs portfolio. In the early 1990s, BPOs have started as call center
providers for MNC organizations and later on added other services such as IT services, legal research,
application processing, accounting and computer programming to BPOs portfolio. Fortune 500 organizations
are off-shoring work to BPOs in India and Philippines. India is also becoming home for Analytics BPOs. For
example, Dell has established its analytics division known as Dell Global Analytics in India. Majority of
Fortune 500 companies are either outsourcing or off-shoring analytics work to India, which has the core
Mathematics or Statistics strength. This article brings the insights from the research done by Fogarty, D. and
Bell, P.C. (2014) on four multinational customers and four analytics BPOs operating in India.
Two of the multinationals studied have sophisticated analytics capabilities and other two multinational
organizations have challenged analytics capabilities. These organizations have off-shored their analytics
work to Indian analytics BPOs.

The analytically superior MNCs have strong internal analytics capabilities. They out-source low level
analytics work to their off-shore vendors. They hope to expand their internal analytics capabilities and
develop their own intellectual property and capabilities because their competitors are doing so.
Analytical capabilities are critical for their survival in the competitive market. The MNCs outsource low
level work and they concentrate on advanced analytical techniques. With this analytics BPOs providing
offshore services express that their capabilities are not utilized to the full extent. There is also a concern
from MNC clients regarding intellectual property management. MNC clients express that the off-shore
providers provided analysts who are inexperienced, straight from college and with very little business
knowledge.

The analytically challenged MNCs have hired offshore analytics providers for gaining external analytics
capabilities. Having internal analysts is time consuming and expensive process to the organization.
Hence, to gain quick analytics capabilities, to train their internal staff, to compete and for cost
advantages analytically challenged MNCs are off-shoring work to analytics BPOs. In this scenario, the
MNCs are not having any issues with intellectual property and relationships. They are using offshore
providers to build their capabilities to gain competitive advantage.

MNCs have to build relationships with off-shore BPOs to use analytics for their strategic advantage.

IC

FA

Questions to Consider while Off-shoring Analytics: The following questions are to be asked while offshoring analytics work:
i.

Organizations have to decide who does what

ii. MNCs have to ask the BPOs regarding their specific capabilities which they do not have internally or
other BPOs are not providing.
iii. Ensure how intellectual property is protected offshore
iv. Observe the work culture and employee satisfaction at off-shore vendor organizations

74

Block-4: Management of MIS


v.

Be vary about what happens to work, if offshore BPO merges with another BPO?

vi. What is the BPOs analyst retention rate?


vii. Is it possible for the MNC to hire the analysts from BPO after a certain time period?
The benefits of having offshore vendor should go beyond cost advantages and tax savings. If an organization
builds internal analytics capabilities, it can protect its intellectual property. Thus, the organizations have to
calculatedly decide on outsourcing or off-shoring its analytics work for its competitive advantage.
IT-enabled services include outsourcing of business processes, insurance claims processing, recruitment
process, financial accounting, payroll processing, knowledge processing, contract center operations,
analytics services and market research services. IT enabled services outsourcing gives strategic advantage
to the organization. An organization can concentrate on its core competencies and outsource the
supporting services for cost advantages, 24/7 availability and quality. IT enabled services make use of IT
applications in serving the customers.
Discussion Questions:
1.

What are the advantages come with outsourcing analytics for an organization?
(Hints: increased intellectual capital-competitive advantage-reduced costs)

2.

What are the challenges in off-shoring analytics work of an organization?


(Hints :the way intellectual property is managed-offshore provider work culture-retention rate)

Applicable To:
Topic
Unit-14: Global IT Management;

FA

Reference: Fogarty, D. and Bell, P.C. (2014), Should You Outsource Analytics?,MIT Sloan Management
Review, December 19, 2013.

IC

Section-14.3: Information Technology in Global Business;


Sub-Section-14.3.2: IT-enabled Services;

75

Course
IT & Systems

PEP Notes: IT & Systems

39.

Growing Software Entrepreneurial Zeal in India

Entrepreneurial zeal is growing in global management information systems


with support from NASSCOM.
Currently India is producing more engineers than US and China combined. In 2012, India has 450, Israel has
800 and US has 15,000 software startups. NASSCOM wants to encourage 10,000 start-ups over a period of
10 years. NASSCOM had commenced the 10,000 Start-ups program with the support of Microsoft, Google,
Kotak and Verisign. This Year they have invited software entrepreneurial applications from these start-ups.
NASSCOM (National Association for Software and Services Companies) has received 4,000 applications
for their recently launched Start-ups programs. The diversity of the start-up applications is interesting. 70%
of the applicants are under 30 years of age and 15% are women applicants.

IC

FA

Profile of Application Domains

Diversity of Technologies

76

Block-4: Management of MIS


Geography of Applications

Contribution of Emerging Technologies:

16% of applications are based on Cloud computing

11% are from Big Data based start-ups

Software Industry remains as largest employer for fresh young engineers in India.

Building Ecosystem is the key to industry success.

NASSCOM has taken the lead to build the ecosystem

The aim of this program is to fund 20 to 25 start-ups and rigorously mentor around 150 of
them.

Does this create momentum in budding entrepreneurs in India?

IC

FA

With globalization and liberalization, the business of organizations is becoming more global. The
management information systems supporting the global organizations should be available, reliable,
transparent and consistent. They should be useful for decision making at global level. Global
management Information systems are being developed using technologies such as mobile, Internet,
cloud, social, big data and analytics tools. Traditionally global management information systems were
developed as distributed systems. The current trend in global management information systems is cloud
computing, agent computing, grid computing, and parallel computing.
Discussion Questions:
1.

What kind of diversified technology start-ups are coming in India?


(Hints: internet technologies-mobile technologies-diversified technologies)

2.

In what application domains, are start-up ventures coming up in India?


(Hints: retail startups-healthcare startups-education and media startups)

Reference: Madaan, N., Nasscom receives 4,000 applications for start-up programme, Times News
Network, June 24, 2013.
Applicable To:
Topic

Course

Unit-14: Global IT Management;


Section-14.4: Global Management Information Systems;

77

IT & Systems

PEP Notes: IT & Systems

40.

Business Models which can be Adopted


from Software Industry

The software industry offers many strategies for managing IT globally and business models which can be
adopted for competitive advantage.

Hugo Sarrazin and Johnson Sikes (2013) of McKinsey & Co extract the learnings from software industry
for business as a whole and for the IT function in specific.
Over the last two decades, use of software has moved from limited transaction based systems around data
centers to pervading every function.
The challenges include

Faster customer cycle time

Rapid application development and real-time testing

Customer reluctance to switch platforms

Too much data, too little use.

Software Spending Dominates IT Spending


IT Investments (2011)

IC

FA

IT Investments (1990)

What can We Learn from Software Industry?


1.

Platform Orientation instead of Product Orientation: Software product development was


influenced by developers ecosystem, plug-ins, APIs (Application Programming Interfaces), add-ons,
and Developers Kits for a long time. The new trend is to involve consumers and vendors into the new
platform.
Procter & Gamble (P&G) has opened a platform that invited 1000 partner agreements into their
innovation. It created a win-win situation with customers and suppliers in managing budgets,
forecasting, inventory and revising supply-chain processes and production processes.

2.

Quick Revenues with New Business Models: Instead of just traditional licensing models, software
organizations are using LinkedIn and Skype as no cost platforms for organizational purposes. Other
revenue models include as-a-service (Example: Software-as-a-Service), pay-as-you-use and
integrated services.
Manufacturing organizations are embedding information assets into their products. Nike
created Nike+ which embeds Apple iOS devices in to the shoe. Using sensor based technology; the
runner can check running habits, upload data into website and can manage his workouts, connect
routes and connect with fellow runners.

78

Block-4: Management of MIS


Organizations are mining huge data coming from business operations for creating new
products. Intuit is building benchmarking and reporting services for small businesses from the data
it got from its QuickBooks software.
3.

Early Delivery: Software Organizations have reduced learning curves and are fastening cycle times
with simulation, virtual products and mock-ups. Organizations are delivering minimum viable
product to customer quickly. This enables quicker market entry, feature development and
competitive advantage.
Apple launched its first iPhone without Appstore. After one year it upgraded the software. Ford
made an upgrade to its Sync communications and entertainment platform by providing USB keys to
customers without personal visits to retail stores.
Crowd sourcing is the process of involving customers, partners and community into the development
process using social media. Coca-Cola used crowd sourcing in designing their bottle creates in
Germany. It also used crowd sourcing for marketing ideas of its product Coke Zero in Singapore. GE
used crowd sourcing in its green business ideas. Kickstarter provided a platform for budding
entrepreneurs to enter their pre- product ideas so that they can get the required funding for their new
start- up.

4.

Make an Agile Organization: Software companies increased their productivity using Agile
approaches and programming. Agile approaches are based on short release cycles, customer
involvement from beginning, quick return to customer, and people rather than process is important.

Organizations can increase their performance, reduce costs, and make software as their competitive
advantage by inducting business and operational models from software industry.

Discussion Questions:
1.

IC

FA

Strategies for Managing IT Globally include off-shoring, out-sourcing, near-shoring, e-commerce, and
global product development. Global IT management strategies also include global talent management,
differentiation, product diversification, 24/7 services, global human resources and financial strategies. It
also includes customization and localization of products to specific countries. Global relocations and
expatriate management are a part of it. Onsite-offshore model, and global delivery models are some of
the delivery models, which are part of these strategies.

What can we learn from software industry with respect to business models?
(Hints: platforms instead of products-agile organization and early delivery-new business models)

2.

How is crowd sourcing useful for managing IT globally? Explain.


(Hints: involves customers, partners, community-involves in product processes-generates pre-product
ideas)

Reference:Sarrazin, H. and Sikes, J., Competing in a Digital World: Four lessons from the Software
industry, McKinsey Insights and Reports, February 2013.
Applicable to:
Topic

Course Name

Unit-14: Global IT Management;

IT & Systems

Section-14.6: Managing Information Technology in the Global Business


Environment;
Sub-Section-14.6.1: Strategies for managing IT globally;

79

PEP Notes: IT & Systems

41.

Innovation Prowess for Growth Leadership

Organizations with great innovation prowess can balance the strategies for managing IT globally.
IBM, Cisco, Samsung, Procter & Gamble, LEGO, Apple and GE are the growth leaders. What distinguishes
these growth leaders having experienced organic growth with their internal resources from the growth
laggards? Some insights on innovation prowess in firms by Professor George S. Day are:
What Distinguishes Growth Leaders from Growth Laggards?
1.

Growth Seeking Discipline: Growth leaders have the growth seeking discipline. Growth leaders
practice innovation, invest time on it, repeat it and make a discipline out of it.

2.

Innovation Ability: Growth leaders have the innovation ability which combines the experimentation
with risk tolerant ability. Innovation ability comprises of the organizational ability to innovate. Growth
leaders understand the markets in which they operate. They practice open innovation with partnerships
(Open innovation is bringing outside-in and inside-out ideas into the organization.). They try different
things. They start as small units and think big. If they fail, they fail quickly; however they scale up
quickly.
Innovation Prowess is the combination of Discipline and Innovation Ability.
Innovation Prowess = Discipline + Innovation Ability
Going away from Growth Engine: The reasons for going away from growth engine include the need
for short term performance and pulling in the resources from long term investments of customers and
sales force for short term benefits. The need for short term performance leads to lack of leadership
commitment, lack of discipline, reaction and leads to making long-term investments.

2.

Areas of Growth: Technology base and production prowess are the real adjacencies for growth. These
are combined with other adjacencies such as brands, markets and channels for consistent growth of the
organization. Small-i innovations are the new versions, upgrades and next generation technological
innovations. They are required to stay competitive in the current market and in the same business.
Example: Microsoft launching different versions of innovative products. Big-I innovations are blue
ocean break through innovations. There will be 85% to 90% failures in these innovations. Example:
GE getting into Battery projects.

3.

Proper allocation of resources and capital to Big-I vs. Small-i innovations:

4.

IC

FA

1.

Allocating resources to these innovations has to be done both on short-term and long-term basis.

Organizations should not suck investments for riskier adjacencies from funds of Big-I innovations.

Example: Proctor & Gamble was well known for breakthrough innovations historically.
However, they do not have breakthrough innovations in the recent past. That is because P&G has
given the authority of innovation funds to operations managers and divisional general managers in
the recent past. With this pressure on short-term performance increased resulting into fewer number
of breakthrough innovations.

Example: General Electric. GE CEO Jeff Immelt has a vision for breakthrough innovations. He
has established a strategic fund to invest in breakthrough innovations such as big and huge projects.
They have entered into new projects such as batteries which they have never entered before. They
have high level of top management commitment for breakthrough innovations. They provide
needed resources. They do not look at the short term issues. They have the discipline, ability and
focused approach leading to the innovation prowess.

Outside-in vs. Inside-out Thinking: Outside-in perspective brings in ideas from the market place,
competitors, customers needs, wants, frustrations and problems. Apple, Inc. has mastered in it.
Example: Apples breakthrough Innovation I-Pod has replaced the problem of 15 MP3 players with 15
different manufacturers. They have studied the customer experience very well.

Inside-out capabilities include technological strengths, engineering skills, production skills and
supply-chain skills. Just technical skills are not sufficient to reach the solution. Organizations
should have both the inside-out and outside-in thinking in making breakthrough innovations.

80

Block-4: Management of MIS


5.

Organic Growth Vs In-organic Growth: Both organic and in-organic growths are complementary for an
organization. Organic growth is the growth achieved through internal resources. In-organic growth is the
growth achieved though external mergers and acquisitions. Example: Cisco is an example of both
organic and inorganic growths through building the spectrum of offerings and buying the spectrum
through mergers and acquisitions respectively.

Acquisitions are also sources of organic growth strategy. This is possible by entering into new
markets or by getting new technology the organization is not having currently. Example: IBM is
the organizations which has made acquisitions as its organic growth strategy.

6.

Closed Innovation vs. Open Innovation: Closed innovation is through internal resources and it is done
entirely internally. Example: IBM developing Messaging Software (MQ) products. Open innovation is
achieved through partnerships with external venture partners and venture groups. Example:Swarovski, a
jewelry maker in Austria making innovative ornaments through partnerships.

7.

Innovation Pathways: Innovation Pathways include aggressive growth strategy, divergence, and
convergence. They help organizations in driving their innovations. Aggressive growth strategies
comprise of value proposition and business model innovation. Divergence indicates looking for
diversified growth opportunities. Convergence indicates selecting the best and screen out the rest.

Organizations with discipline, innovation ability, outside-in and inside-out thinking can make breakthrough
innovations balancing the organic and in-organic growth of the organization.

Discussion Questions:
1.

FA

Strategies for managing IT globally include global investments, global funding, venture capital, profit
sharing, global positioning, global sourcing, and global delivery. Global IT systems in an organization
should provide benefits to the organization and they should add value to the organizational global strategy.
They should be available anywhere any time to the employees. The CEO, CIO and CTO in association with
other C-level executives prepare the global IT strategies for the organization. It includes IT programs and
projects for the organization.

How are business growth leaders different from growth laggards?

2.

IC

(Hints: closed vs. open innovation-organic vs. inorganic growth-outside-in vs. inside-out thinking)
What are GEs strategies for managing innovations and projects?
(Hints: strategic fund for innovations-top management commitment-focused approach)
Reference:Wharton, Innovation Prowess: George S. Day on What Distinguishes Growth Leaders,
Knowledge@ Wharton, January 01, 2013.
Applicable To:
Topics

Course

Unit-14: Global IT Management;


Section-14.6: Managing Information Technology in the Global Business
Environment;
Sub-Section-14.6.1: Strategies for managing IT globally;

81

IT & Systems

PEP Notes: IT & Systems

42.

Wipro, World No. 3 in Energy & Utilities Vertical


Balanced portfolio as one of the approaches to global IT
management made Wipro successful.

Wipro: Some Facts

Early 2011, new CEO T.K.Kurien took up the job.

3rd Largest IT Exporter from India.

Reported 2%-4% revenue growth guidance for second quarter, 2013.

Reoriented the organization to earn revenues from Healthcare, Banking, Energy & Utilities

Became World No.3 in Energy & Utilities Vertical from No. 9th position
Success Secrets of Energy & Utilities

Balanced the Portfolio

Kept target of being among top 2 players in


any vertical they are in business.

The clients in this vertical make long term


investments.

FA

Growth Strategies

Investment Cycles in Energy & Utilities are


much longer; not like investment banking
sector.

Healthcare is another growth driver.

More Focus is going to be on Healthcare, Energy & Utilities, and Banking.

Insurance, Retail and Consumer Products need some momentum.

IC

Balanced Portfolio

Customer
Commitment

Portfolio
Growth

Long Term
Investments
(by Customer)

82

Organizational
Growth

Block-4: Management of MIS


Approaches to global IT management include managing IT portfolios, programs, projects and other
operational work. It includes the governance using enterprise project office (EPO) or project management
office (PMO) in the organization. The benefits delivered by the IT programs should meet the program
objectives. Global IT management involves assessing existing IT systems, innovation, developing new
solutions, upgrading existing systems and evaluating or appraising the MIS implementations. The return
on investment of IT is evident from increase in customer satisfaction, reduced processing times, increase
in sales and increase in individual and team productivity.
Discussion Questions:
1.

What are the growth strategies of Wipro?


(Hints: balanced portfolio-be top-2 player in any vertical-concentrate on healthcare)

2.

What parameters of project portfolio impacted Wipros growth?


(Hints: long-term customer investments-customer commitment-balanced portfolio)

Reference: N.Shivapriya&Akansha Prasad, Wipro CEO TK Kurien: Weve worked extremely hard in a
tough market, The Economic Times, July 29, 2013.
Applicable To:
Topic

Course

Unit-14: Global IT Management;

IT & Systems

Section-14.6: Managing Information Technology in the Global Business


Environment;

IC

FA

Sub-Section-14.6.2: Approaches to Global IT Management;

83

PEP Notes: IT & Systems

43.

Innovative Project Management at IBM

Innovative project management and manage scope creep can be used as


approaches to Global IT Management.
New technologies, platforms, and integrating business processes and assets are making software
development more complex in current days. IT project success can be defined as a project meeting the given
requirements, and meeting organizational business and technological objectives. The increasing complexity
is increasing the risks of the project and it is making risk management a challenge. According to PMIs
Pulse of the Profession (2011), 1/3rd of the projects did not meet the set objectives. Organizations on an
average are risking $135 million for every $1 billion spending. The risk amount is much higher, equivalent
to 14 times, in organizations having less project success rate. This article brings the innovative project
management approach followed by IBM India in dealing with recently executed huge projects managing the
scope creep. Scope creep is nothing but doing unlimited changes to the project or uncontrolled changes to
the project without adjustment to cost, schedule or quality.
Example 1: Large Automobile Company based in US.
This large auto manufacturer gave a project to IBM India to upgrade their 253 applications to one version
older than the latest version. It was a fixed price and time project. The applications were developed in
multiple languages on multiple platforms. The objective was to achieve the better or same performance,
security, resilience, sustainability while retaining the same functionality.
Project Scope: The project work involved define, plan, architect, design, code, test and deploy the
applications. Application platform was to be re-architected. Test all the applications on new architecture
for performance, functionality, sustainability and availability. System integration testing, performance
testing and user acceptance testing were to be conducted for all the applications. Security scans and
disaster recovery exercises were to be performed. Regulatory requirements were to be complied with.

Challenges Encountered: One of the technical challenges was compatibility issues of operating
systems of different applications. Some Solaris applications were developed with more OS dependency.
These were to be ported or migrated to Linux platform. Conflicts between different vendors, business
initiatives, contract priorities and server maintenance teams were challenges. Schedule delays from
different vendors were a concern. Conflicting responsibilities of the vendors was also a challenge.
Unknown pieces of software were found which were never before encountered.

IC

FA

Scope Creep: Scope creep was the major challenge or risk encountered. Many unknown situations
were encountered. It was difficult to estimate schedules and costs under these circumstances.

Innovative Project Management Devised:

Each application was treated as a separate project under the same program.

A master plan was prepared for the entire program

Both the parties agree to baseline the plan and re-baseline it at a future date based on progress of
work.

Factory model was followed to manage the program. Factory model defines 14 operations or
milestones for any migration project. Critical paths for all 14 operations were found out for each
project.

Applications were rated as high, medium and low complex projects.

Based on the complexity of each project, milestone durations were estimated.

Factory model, which was followed here, became a best practice in the organization.

The applications were migrated to new platform and the customer appreciated the efforts.
Example 2: A Global Consumer Products Company.

84

Block-4: Management of MIS


This global organization gave a project to integrate all their businesses in Europe, Middle East and Africa
(EMEA) to create a global data, European Operating Company (EOC) in 6 countries and 14 plants and
integrated supply-chain management in 41 locations of the company.

Project Scope: was to manage the cost, schedule, scope, quality and communication aspects of the
project.

Challenges Encountered: Managing scope creep, compliance to legal requirements, availability of


resources, travel expenses and sharing different objects among different projects were major challenges
encountered.

Innovative Project Management Devised:

Change control process was made strong

Distinguished between needed requirements and good to have requirements

Accommodated legal requirements

If any existing product issues came up, they were sent to support teams for redressal.

Transition Approach: IBM team took the ownership of the issues. They have conducted training
workshops. IBM team provided support for medium and low complex defects during 3rd week of
transition. By 4th week, customer teams involved as shadow resources in support activities. Thus, in a
gradual approach, entire transition was done leading to the better customer satisfaction.

Discussion Questions:
1.

IC

FA

Approaches to global IT management include managing projects with global teams, project planning,
global delivery, deployment plans, transition plans and training plans. The approaches in managing
human resources should be innovative. Requirements reviews, project plan reviews, milestone reviews,
phase end reviews, product quality reviews and process quality reviews ensure the project and product
success. Training the users in a phased manner is also an approach of delivering solution to global
customers. Taking customer and user feedback at regular intervals is required in iterative and agile
approaches of IT management.

What was the innovative project management approach of IBM?


(Hints: each app as project-master plan for project-factory model)

2.

What challenges were faced by IBM in project implementation?


(Hints: managing scope creep-sharing resources across projects-compliance to legal requirements)

Reference: Thakur, P., At eye for detail keeps surprises at Bay, Manage India, Project Management
Institute (PMI) India, Issue 2, June 2013.
Applicable To:
Topic

Course

Unit-14: Global IT Management

IT & Systems

Section-14.6: Managing Information Technology in Global Business Environment;


Sub-Section-14.6.2: Approaches to Global IT Management;

85

PEP Notes: IT & Systems

44.

The Role of IT in Healthcare

IT can be used in healthcare for clinical and operation


benefits as MIS in non-profit organizations.
IT and Healthcare evolved together at Cleveland Clinic in Ohio. Cleveland Clinic is well known for using IT
in an innovative way. The clinic was founded in 1921. It is known for its research and practice in innovation
and reduced costs. It is a non-profit organization. Since 1990s, it has been rated Number 1 in cardiac care by
US News and World Report. It has an entrepreneurial branch known as Cleveland Clinic Innovations (CCI).
CCI develops products and spins them as separate business organizations. It has developed robots helpful in
heart surgeries. More than 35 organizations have spun off from CCI. Cleveland Clinic has a 41 building
campus and 10 associated hospitals in Ohio. They have newly opened an affiliated hospital in Abu Dhabi
and planning to open a new one in Singapore. Cleveland Clinic sees more than a million patients in a
calendar year. This article brings the insights from an interview with CIO of Cleveland Clinic.
CIO of Cleveland Clinic, Martin Harris also serves as health technology adviser to US President Barack
Obama.

The technology provides useful information to patients, links patient involvement with medical records
and helps in healthcare practice improvement.

The clinic is also experimenting with social media and data analytics.

Adoption of IT is helping the patient outcomes at the clinic.

They are thinking of delivering services to patients in different ways which were not thought about
earlier.

Cleveland Clinics Care Model:


i.

First, focus is on patient.

FA

IC

ii. Second, delivery model is led by physician.

iii. Third, group culture or team work is a key ingredient at Cleveland Clinic.
Physicians, nurses, administrative staff and allied health professionals work as team in order to provide best
services to the patient.
Role of IT in Health Institution: IT plays a strategic role. They focus on providing services over Internet.
IT affects the care delivery model. They maintain Electronic Medical Records (EMR) system. It is accessible
both in physicians office and in hospital. They built tools to access the data generated externally to the
clinic. This data has been generated by the physicians who are not employed by the clinic directly. IT
transforms care delivery model.

They first built ambulatory practice rather than hospital information system as was done by other
clinics. With this the physicians have information about the patient even before the patient is admitted
into the hospital.

They achieved information exchange between different departments such as laboratories and radiology
department.

They have developed tools to collect data about the patient no matter where he comes from. First it
happens at Ohio state level and later at their national level.

They worked with Microsoft to allow patients to upload their records into clinic systems in order to
provide better services.

They maintain confidentiality and security of patient medical records.

86

Block-4: Management of MIS

They use analytics tools in order to find the patterns in patient diseases and to find the better processes
to serve group of patients having same disease.

They are launching self-service model for patients using IT as is available in other industries.

Benefits of IT in Healthcare:

Clinical Integration: Using clinical tools, doctors can write prescriptions in computers, place orders
and see the responses immediately.

Operational Integration: It is beneficial to the patient. Using this, a process is designed based on the
desired outcome for the patient using IT.

Thus, IT plays a strategic role in healthcare providing better delivery models at reduced costs with better
patient satisfaction.
MIS in non-profit organizations are useful in social transformation, behavioral change, community
service, program management, education, governance, social security and healthcare. MIS in non-profit
hospitals, clinics and ambulatory services are used for both clinical and operational services. MIS in
healthcare institutions are useful for storing patient medical and health records, maintaining disease
history and transmit patient data electronically between different institutions in case of need. MIS in
healthcare industry should be in compliance with regulations of FDA (Food and Drug Administration) in
US. MIS in healthcare require accuracy, precision, consistency and reliability.
Discussion Questions:
What are the benefits of IT in healthcare?

1.
2.

FA

(Hints: reduced costs-better patience satisfaction-clinical and operational integration)


Explain the care model of Cleveland Clinic. How did they use IT for strategic advantage?
(Hints: patient focused and team work-delivery model by physicians- services over Internet)

Applicable To:

IC

Reference:Shehadi, R., Tohme, W. and Baker, E.H., IT and Healthcare: Evolving Together at the
Cleveland Clinic, Strategy + Business, August 06, 2012.

Topic

Course

Unit-15: MIS in Specialized Areas;

IT & Systems

Section-15.4: MIS in Non-Profit Organizations;

87

PEP Notes: IT & Systems

45.

Measuring Clinical IT Systems Performance

Performance of clinical IT systems in healthcare organizations and community


hospitals can contribute to MIS in Managing Corporate Performance.
In healthcare, measuring electronic medical records (EMR) drives quality improvement in clinical
initiatives. Beacon Partners has conducted a survey of 300 healthcare leaders in 2012 to find out whether
healthcare organizations are using clinical systems performance measures in order to find the return on
investment of electronic medical records systems. 42% of the respondents for this survey are CIOs. CIOs
are responsible for determining performance measures for clinical IT systems. The types of healthcare
organizations involved in this study include community hospitals, multi-hospital systems, ambulance clinics,
academic medical centers and critical access hospitals. This article brings in insights from this research study
of clinical systems performance measures and returns on investment.
In majority of healthcare organizations, there exist clinical systems performance measures. However,
more than 50% of the clinicians and healthcare leaders are not satisfied with their organizational efforts
on finding return on investment or value from Clinical IT systems.

41% of the respondents expressed that their clinical performance measures are directly associated with
their ROI efforts.

In 40% of the organizations, quality department and in 31% of the organizations, IT department are
responsible for measurement, data collection, analysis and reporting of clinical performance measures.

In 48% of the organizations, determination of clinical performance measures is done at the time of
planning for EMR systems. 51% of the respondents expressed that there is need or urgency for
determining performance measures very much early such as in the EMR systems planning stage.

FA

Why Performance Measures are collected?

IC

Majority of the healthcare organizations collect clinical systems performance measures from nurses and
physicians to find out the training needs, for IT systems improvement, cost savings, strategic planning and
for rollout planning.
How Performance Measures are used?

The clinical systems performance measures are used:

to improve clinical quality

to enhance IT systems

to incorporate in organizational balanced scorecard system

to incorporate in organizational budget and

to give performance bonuses.

Different Stages in EMR Adoption:


It was found that 76% of the surveyed healthcare organizations are at Stage 3 or above in IT deployment or
EMR adoption.
Stage

Cumulative Capabilities

Stage-7

Data warehouse in place; Full electronic medical records;

Stage-6

Templates for physical documentation;

Stage-5

Closed loop administration of medication;

Stage-4

Clinical protocols such as CPOE and CDSS are in use;

88

Block-4: Management of MIS


Stage-3

Error checking, clinical documentation in place; flow sheets are used;

Stage-2

Clinical data repository, clinical decision support systems and controlled medical
vocabulary in use. Document imaging is also in place.

Stage-1

Ancillaries such as Pharmacy, Rad and Lab are present

Stage-0

None of the ancillaries such as Pharmacy, Rad or Lab are present.

Healthcare organizations have to concentrate on measuring their clinical IT systems for better return on
investment or for better value addition.
MIS in managing corporate performance include organizational performance appraisal systems, quality
management systems, customer relationship management systems and audit systems. Organizational
performance appraisal systems evaluate the performance of individuals, teams and divisions in the
organization. Quality management systems in the organization evaluate the organizational product
development processes and compliance to quality standards. Customer relationship management systems
can be used to evaluate the customer satisfaction. Audit systems include financial, project and operational
audits, which also indicate the performance of organizational components.
Discussion Questions:
1.

How do you measure the performance of a clinical IT system?


(Hints: from nurses and physicians-use performance measures-return on investment)

2.

How can the performance measures of a clinical IT system be used?

(Hints: to improve clinical quality-to enhance IT systems-for organizational balanced scorecard)

Applicable To:

IC

Topic

FA

Reference:BeaconPartners, Finding the ROI in Clinical IT Systems: A study on clinical performance


measures and maximizing return, Beacon Partners Research Report, 2012.

Unit-15: MIS in Specialized Areas;

Course
IT & Systems

Section-15.5: MIS in Managing Corporate Performance;

89

PEP Notes: IT & Systems

46.

Predictive Analytics to increase Project Success Rate

Application of predictive analytics on the data from project management information


systems can improve the project success rate in organizations.
Instead of traditional project management measures, usage of predictive analytics can improve the project
outcomes. Decision makers in organizations look for hidden patterns in data which are undetected. They
would like to make informed and responsive decisions. This is possible with predictive analytics. Predictive
analytics provide hindsight, insights and foresight. The foresights which can be provided by predictive
analytics include economic, financial, market and environmental information. This article brings insights
from usage of predictive analytics in increasing the project success rate. By 2010, 74% of the organizations
are either using analytics or planning to use analytics in their organizations. 31% of the organizations are
even using predictive analytics. Predictive analytics help in identifying the key risks of the project, mitigate
them and reduce the project failure. Predictive analytics enable organizations to make decisions in economic,
accurate and objective ways.
Project Success Statistics: In a survey of 5,500 IT projects done in 2010, it was found that:
71% of the projects slipped project deadlines.

63% of the projects were challenged by cost, schedules or scope.

46% of the projects were experienced cost overrun.

37% of the projects were successful meeting time and cost limits.

21% of the projects were simple failures.

FA

IC

The more complex is the project, the more is the probability of failure of the project. The projects in case of
mergers and acquisitions are more complex and face many challenges. The success rate of post-merger
integration projects range from 20% to 78%. Many organizations still did not use previous project data in
predicting the future project outcomes.
Project Failure Factors: The major project failure drivers are related to business, governance, risk,
leadership, contracting, resourcing and delivery. The project common failure factors include risk
management, project complexity, project type and project industry. The reasons for project failures include
unclear requirements, lack of specialized resources and varying project priorities. The project failure factors
impact operational outcomes, project costs, competitive advantage, customer satisfaction and regulatory
compliance issues.
Projects in different industries such as BFSI (Banking, Financial Services and Insurance), Technology,
Energy and Resources, Healthcare and Public sector have different project failure drivers. Predictive
analytics can be used in indentifying the project risks and serves to warn the project teams ahead of time to
take corrective actions leading to better project outcomes.
Challenges in Using Predictive Analytics: The following changes are faced in usage of predictive analytics
in predicting project outcomes.

Resistance from the employees in using past projects to predict the future project success.

Project data may not be valid, verified or authentic.

Project data is not standardized across different organizations. Different organizations have different
formats. Comparing similar projects is difficult.

Project status reports are not prepared from organizational project management information system.

Inconsistent project data requires different analytics techniques.

Benchmarking projects help the organizations in deriving foresights using predictive analytics.
Benchmarking helps in organizational learning and competitive advantage.
90

Block-4: Management of MIS


Adapting Predictive Analytics in PMO: Organizations can adapt predictive analytics in Project
Management Office (PMO) using the following steps:
i.

Identify the resource to lead the predictive project analytics in the organization.

ii. Devise predictive project analytics strategy including governing strategy.


iii. Select set of analytical tools to support predictive analytics.
iv. PMO has to develop supporting processes to deal with data and analytical tools.
v.

Implement the predictive project analytics program.

vi. Educate the employees and communicate the benefits of the program to them.
vii. Continuously evolve the predictive project analytics program.
Example: A large Car manufacturers merger and acquisition integration project could have avoided failure
with predictive analytics. The challenge faced in this project was to develop a common platform for all car
models. They could have dealt with predictive analytics technique such as assumption management. The
other challenge faced was in the management of different cultures from different countries. Project team
familiarity could have been used here. Lack of commitment and alignment with objects could have been
dealt through executive sponsor alignment. Level of executive involvement could have been used to deal
with leadership, vision and strategic direction challenges. Predictive analytics could have avoided the project
failure.

Discussion Questions:
1.

IC

FA

Project management information systems use can increase the project success rate in an organization.
Project management information systems are the software systems which are useful for project planning,
network diagrams, project estimations, cost estimations, project progress tracking, resource estimations,
resource levelling, project fast tracking, project crashing and project resource management. They are also
useful to generate status reports, progress reports, trend reports, earned value analysis, cost projections,
graphs and tables. For example, project management information systems include Microsoft Office
Project, Primavera, Clarity and other open source project management tools. They also provide task
schedules in different forms such as Gantt charts, bar charts and network diagrams. One can find the
critical path in the network and track the critical path throughout the project.

What are some of the project success rate statistics?


(Hints: 21% are failures-63% are challenged-37% experienced schedule and cost delays)

2.

What are the challenges faced in using predictive analytics in an organization?


(Hints: resistance from employees-project data inconsistencies-required different analytics)

Reference: Deloitte, Get out of your analytics comfort zone: Unconventional approaches to predict project
outcomes, Deloitte &Touche LLP Report, 2014.
Applicable To:
Topic

Course

Unit-15: MIS in Specialized Areas;


Section-15.6: MIS in Managing Projects;
Sub-Section-15.6.1: Project Management Information Systems (PMIS)

91

IT & Systems

PEP Notes: IT & Systems

47.

Leading Healthcare IT (HIT) Projects

Successful healthcare IT project implementation requires strong


project leadership and project management.
According to Standish Group Chaos report only 32% of the IT projects are successful in meeting time, cost
and scope limits. Rest of the projects either failed or did not meet the set expectations. It is the same case
with healthcare IT (HIT) projects. In healthcare IT projects, around 70% of the projects failed or did not
yield the set expectations. Healthcare organizations continue to plan, design, develop, test, deploy and
upgrade the HIT systems. Incorporating new technologies and processes, if not handled well, can create
chaos to the organizations. This article highlights the importance of strong leadership and project
management in healthcare IT projects.
Key Stakeholders in HIT Projects: The healthcare IT projects organization should involve the following
key stakeholders:
Executive Board: consists of CEO, COO, CMIO (Chief Medical Informatics Officer), CIO and CFO.

Steering Committee: consists of project sponsor, executive sponsor and medical sponsor.

Project Leader

Technical Teams

Project Leadership Committees: consist of IT, clinical, operations, physician practice and financial
committees.

FA

Key Elements in Making HIT Project Successful:

Setting Expectations: The project leader at the beginning of the project has to set the expectations clear
to all the stakeholders. This avoids the future chaos and risks.

Planning the Project: Every IT project is unique. Hence, it requires separate planning and approach for
development. A gap analysis has to be conducted to find out the needed skill set and competencies
required to execute the project and the project leader has to try to acquire the resources with those skill
sets. There should be some dedicated resources for the project.

Project Governance Structure: HIT project should have a proper governance structure which includes
the project sponsor and key stakeholders. There should be a well-defined project organization structure.
Communication should be effective throughout the project structure. Project leader should act as
interface between project team and the vendors. There should be proper project risk management in
place in the project.

Project Test Planning: It is best practice to involve stakeholders from all levels in the organization in
project test planning. All end users should be involved in project test plan preparation. These practices
enhance the success of the project. It is better to test the entire project product before it goes live.

Transition Planning: Project leaders should have proper transition plans at every stage of the project to
take it to the next level. There should be continuous knowledge transfer in the project involving the core
staff of the organization. Continuous knowledge transfer and knowledge sharing increases the project
success rate.

Strong Project Leader: The return on investment for organizations having strong project leader is very
clear and their projects meet the time, cost and quality targets. The project leader can be an internal
stakeholder of the project or an external consultant who can communicate effectively with all the
stakeholders.

IC

Strong project leadership coupled with proper project planning and risk management can increase the
likelihood of healthcare IT project success.

92

Block-4: Management of MIS


Example: Natividad Medical Center (NMC) MEDITECH System
Natividad Medical Center is a 127 year old and 172 bed acute care hospital in California. It has 230
physicians. Every year 2,700 births and 47,000 emergency department visits take place at NMC. In 2013,
NMC decided to upgrade their MEDITECH system to version 5.66 in order to comply with Meaningful Use
Stage 2 and to improve clinical outcomes. Beacon Partners was the healthcare management consulting
company executed this project for NMC. As part of the project two teams were formed. First team consists
of 70 NMC employees from all departments and second team consists of IT focused NMC analysts and
Beacon consultants. The project was executed in 4 months because of the priority of succeed projects such
as patient portal, CPOE and PDOC. There were more than 7,000 test notes to be tested on MEDITECH
system. All these test notes were broken down into weekly deliverables and other 20 integration test
scenarios were tested on the product. The Beacon Partners provided NMC with dashboard, newsletters and
status reports. Strong project leadership coupled with effective communication made this project a success.
Project Management is about initiating, planning, executing, monitoring, controlling and closing the
project. The project manager has to manage his time, cost, quality, human resources, communications,
procurements, risks ad stakeholders of the project. The objective of project management is to make the
project a success by meeting time, cost and quality parameters and also get better customer satisfaction.
The maturity of project management in an organization can increase its project success rate. Successful
project management contributes to organizational performance and productivity.
Discussion Questions:
1.

What are the key elements in making healthcare IT project successful?


(Hints: setting expectations-project planning-project governance structure)
Who are the key stakeholders in healthcare IT projects?

2.

FA

(Hints: executive board-steering committee-project leader and team)

Reference:BeaconPartners, What should you expect from a project leader?: Keys to successful
implementation, optimization, upgrade and integration projects, Beacon Partners Research Report, 2014.

IC

Applicable To:
Topic

Course

Unit-15: MIS in Specialized Areas;

IT & Systems

Section-15.6: MIS in Managing Projects;

Sub-Section-15.6.2: Project Management;

93

PEP Notes: IT & Systems

48.

Corporate Website for Organizational Effectiveness

Corporate websites serve as MIS in online market places by providing information,


targeting e-customers, and relationship building.

In 2013, IDC has done a survey of Chief Marketing Officers (CMOs) to find out the effectiveness of
corporate websites, the CMOs felt that corporate websites are very important in digital marketing.
60% of the respondents felt that the investments in website content and website maintenance will
increase.

Accenture has done a survey of 15 consumer electronics companies in US. The survey participants
include Smartphone, TV and PC/Laptop manufacturers.
In this survey the 3 most important performance factors identified for websites are
Information: Which enables decision making

Relationship Building: Which brings repeat customers

Commerce: Which enables instant purchasing

FA

Case Studies:

Apple has efficient, simple navigation, clear, engaging, and service oriented approach to customers in
delivering product information, customer support and purchases.

IC

DELL has distinct product information which enables customer to customize the product online. Also
online forums and self help groups are supported in their website.
SAMSUNG, a TV manufacturer provides streamlined commerce solutions which is unique among TV
manufacturers.
Figure 1: Website Success Factors

Navigation
Commerce

Website
Effectiveness

Communities
Information
Organizational
Effectiveness

Customer Service
Branding
Relationship
Building

94

Customer
Satisfaction

Block-4: Management of MIS

Current day organizations are using organizational websites and portals as MIS in online marketplaces
to interact with customers as part of CRM system of the organization. These systems receive customer
requests and queries from organizational website over Internet and respond to customer queries through
e-mail or telephone. The organizational website which interacts with external customers is internally
connected to the organizational databases and enterprise systems such as CRM, ERP and SCM. Thus
organizational websites can be used as MIS in online marketplaces for current day organizations.
Discussion Questions:
1.

What are the success factors of any organizational website?


(Hints: commerce-negotiations and relationship building-customer service)

2.

How has Dell presented its website? Explain.


(Hints: online product customization-online forums-self-help groups)

Reference:Lewren, M, Mitra, R. and Bjrnsj, A., How effective is your corporate website
really?,Accenture Outlook Point of View, No.2, June 2013.
Applicable to:
Topic

Course Name

Unit-15: MIS in Specialized Areas;

IT & Systems

IC

FA

Section-15.7: MIS in Online Marketplaces;

95

Block-5:

Enterprise Functions and E-Business


49. Major Acquisition of an E-Commerce Company by an Overseas
Investor
50. Chinas Alibaba Surpassing Amazon and Ebay

51. The Real Value of Data: Enhancing the Organizational Business

FA

52. Challenges in Internet of Things Business

53. The Role of IT in Mergers and Acquisitions

IC

54. IT and Lean Management at Amazon


55. ERP in the Cloud

56. Technology Driving the Indian Taxi Services


57. The Role of IT in Coca-Cola
58. The Growing Need for Unstructured Analytics

96

49.

Major Acquisition of an E-Commerce Company by an Overseas


Investor
The high value acquisition of Red Bus, a B2C business model is expected to accelerate
the e-business in India. More technical entrepreneurs are expected to initiate ebusiness models as opposed to traditional models.

An Indian Internet Company (e-business) RedBus.in has been acquired by Ibibo Group (for $125
million), which is a joint venture of South African Naspers and Chinas Tencent. RedBus is Indias
largest Internet based bus ticket booking company. RedBus was started by 3 students from BITS Pilani
who were not able to get bus tickets to go to their home towns during vacation from college. This start up
has reached revenues of $100 million in 2012-13. Net Profits of $80,000 in 2012-13.
This is a great motivation for Indian Internet Industry and budding young entrepreneurs.
According to a Credit card companys survey in 2009 in India, Indian Railway Catering and Tourism
Corporation (IRCTC) found to be the biggest ecommerce site in India. Lunch orders over Internet in this site
were around $70 million a month. But its main business is selling train tickets.

Indian has 850 million domestic tourists annually.

IC

FA

Internet Market Growth 2012

Red Bus Revenues (in $millions)

97

PEP Notes: IT & Systems


Online Ticket Bookings (India)

Bus Tickets in India

Air Tickets in India

FA

RedBus is the leader in Online Bus Ticket bookings. It is one among the top e-business companies in
India based on volume of transactions and value of transactions, according to its CEO. Its Competitors are
MakeMytrip.com, travelyaari, and AbhiBus.
The acquired company (Ibibo) has travel company Goibibo.com, auto transaction site Gaadi.com, Travel
Boutique online, online market place Tradus.com, and payment site PayU India.

IC

It is first time a foreign venture capitalist has acquired an Indian Internet Company.

Traditional Business vs E-Business indicates that traditional businesses did not use electronic channels
for customer interaction. The customer support was drastically improved through electronic channels.
Traditional businesses did not use technology for product development. Also in traditional businesses,
organizations manufactured the product and sold it to consumers. The reverse direction was not present,
which is now possible with e-business models. With the increasing number of users on Internet, the
business done using electronic channels such as e-mail, social media, chatting, and SMS is increasing
rapidly in the world. Organizations such as Microsoft, DELL, ORACLE, Amazon, and IBM are earning
significant share of their business through the electronic channels.
Discussion Questions:
1. Explain the growth of Internet across the globe.
(Hints: millions of user across china, Us and India-double digit growth rate in India and china-growing
entrepreneurship)
2. How did RedBus use Internet as part of its business model?
(Hints: online ticket booking-volume of transactions-for e-business purpose)
Reference: Wharton (2013), The redBus Acquisition: A Boost for Indias Startup Ecosystem,
Knowledge@Wharton, July 03, 2013.
Applicable to:
Topic

Course Name

Unit-16: Basics of E-Business and Enterprise Application Integration;


Section-16.3: Evolution of E-Business;
Sub-Section-16.3.3: Traditional Business vs E-Business

98

IT & Systems

Block-5: Enterprise Functions and E-Business

50.

Chinas Alibaba Surpassing Amazon and Ebay

e-business models and organizational culture for e-business create


competitive advantage for organizations.
In 2012, Chinas Alibaba, an online listing services company surpassed both Amazon and eBay combined
together in gross merchandise volume. It operates in both business-to-consumer (Tmall) and consumer-toconsumer (Taobao) markets. Alibaba is dominating Internet retailing in China. It is based in Hangzhou,
China with 24,000 employees,aprivately owned company since itsinception in 1999. Yahoo owns 40% of
Alibaba.

FA

Planning for IPO with expected market capitalization between $55bn to $120 bn. Its competitor Tencent has
$62bn market capitalization. It has potential to cross $1trillion sales through its platforms.

IC

How did Alibaba make a business model which stood competition from eBay and Amazon?

Recent reorganization has 25 separate business units

Mr Jack Ma continuing as Executive Chairman

Amazon with market value $117bn and no profits

Can expand into Finance and Supply chain services

Made all basic services free of cost to both sellers and buyers

Chinese wont Trust strangers. This has made Alibaba to gain trust on online selling.

76% online retailing in America is from individual merchants, which is based on trust. Where as, this
market is just 10% in China in 2011. In China, 90% are sold through market place.

Both Culture and Trust factors made Alibaba to Capture online retailing market in china

To Build trust, It provided third party verification services

Taobao can block Spiders in China, which Google and Chinas Baidu use to find out what is on a
website. This is the major marketplace model Alibaba has incorporated.

Helps Buyers and Sellers overcoming lack of information and reduces the search costs

Chinese e-commerce market is growing; Chinese consumers, companies, tourists are going global
creating new opportunities.

Alibaba turns loans given away to merchants as products which can be sold to investors

Expanding into giving loans to Individuals and Insurance sector

Growing in Chinese Smartphone market, which is the worlds biggest Smartphone market.

99

PEP Notes: IT & Systems

It is not having any warehouses or tangible assets

Recently it was removed from Americas government list of notorious markets

Cultivating Chinese Culture, Values by Executive Chairman who spend 1/3rd of his time in that

Reorganized top brass in the organization into partnership structure

Culture, Values, Integrity, Team work and Making up of performance reviews remain key factors
for Alibabas Success

2012 Revenues ($billions)

2012 Net Profit/Loss ($billions)

IC

FA

2012 Gross Marchandise Volume ($billions)

Organizational culture for e-business should be more responsible, quick, customer oriented and
proactive. They should maintain positive customer relationships. Organizational culture for e-business
consists of trust, integrity, teamwork and core values. The values of the Chairman and CEO impact the
organizational culture in e-business organizations. The culture has to be inculcated by the top
management in the organization. Culture affects the quality, customer satisfaction, response time,
organizational productivity, effectiveness and efficiency.
Discussion Questions:
1.

Describe the highlights of Chinese E-Commerce Market.


(Hints: $283b in 2013-$2b loans to merchants in 2013-e-commerce companies are going global)

2.

Explain the impact of Alibabas culture on its growth?


(Hints: top brass became partners-increased trust-improved supply chain)

Reference:The Economist (2013), The Worlds Greatest Bazaar, The Economist, March 23, 2013.
Applicable To:
Topic

Course

Unit-16: Basics of E-Business and Enterprise Application Integration;


Section-16.4: Organizational Culture for E-Business;

100

IT & Systems

Block-5: Enterprise Functions and E-Business

51.

The Real Value of Data: Enhancing the Organizational Business


Big data stores could create new e-business models.

Many organizations today think of creating new businesses and sources of revenues using Big Data,
Analytics and Content Innovation. This is true in some cases and it is not true in other cases. For example,
the huge data with IRCTC (Indian Railway Catering and Tourism Corporation) can be used as
passenger information for Indian Railways as well as for the product marketing and profiling purposes of
consumer goods and retail industries.
Organizations which understand the real value of data execute properly by avoiding expensive technology
and implementation programs which reduces their revenue potential. The value of real data can be
understood using the following 4 steps.
1.

Organizations should reflecton whether data belongs to them


a.

Find out who are the owners of the data with the help of legal advisors and content experts

b.

3.

4.

Find out the value edition of derived data over the original base data in quantitative terms. For
example, the huge data at Facebook and LinkedIn are useful not only for individual members for
social networking purpose but also for recruiters and different industries as valuable information.

FA

Identify those who value the data. What the value is and why?
a.

The organization has to realize that the target client may be different from the organizations
regular client.

b.

The organization has to identify target clients by using the probable users

c.

Organization has to test the perceptions of the user by giving different datasets

d.

Take potential customer ratings to different datasets and metrics as high, medium and low value
offerings.

IC

2.

Classify the existing data into three types such as data owned by the company, customer and
external third party

Plan the business revenue model.


a.

Organization has to have suitable target to achieve

b.

Devise the strategy to achieve the set target

c.

Check whether data gives better value than the new earnings.

Evaluate the Model and Learn from Experience


a.

Generate and have test programs to assess the revenue model

b.

Organization should define the success criteria for new business

c.

People with given roles and responsibilities should execute the program

The test program results indicate whether to go ahead of big data business or not. A more informed
understanding of the data is more effective than unverified assumptions.
E-business models over the Internet enable consumers, businesses and governmental organizations to
communicate with each other and transact or commerce over the Internet. Some of these systems are also
connected to the financial institutions, banks and payment gateways. The transactions using e-business
models can update the participants accounts instantaneously. The e-business models expect quick and
accurate response from participants. Information security is a concern to many stakeholders in these
models.

101

PEP Notes: IT & Systems


Discussion Questions:
1.

What is the value of data in a business organization?


(Hints: useful for recruitment purposes-check perception of users-find customer ratings)

2.

How to use data for organizational strategic advantage?


(Hints: classify the data-find out value addition of derived data-usefulness for business model)

Reference: SunandMenon, Stop Assuming your data will bring you riches, HBR Blog Network, September
20, 2013.
Applicable to:
Topic

Course

Unit-16: Basics of E-Business and Enterprise Application Integration;

IC

FA

Section-16.5: E-Business Models;

102

IT & Systems

Block-5: Enterprise Functions and E-Business

52.

Challenges in Internet of Things Business


The Internet of Things needs new e-business models.

Google has acquired Nest Labs recently. Nest Labs is an Internet of Things company which has products for
connected homes. Google paid $3.2 billion in cash for this transaction. One year earlier Nest Labs was
valued at $800 million. Currently, many large organizations are trying to get into the Internet of Things
business either through make, buy or partnerships. The Internet of Things is creating new challenges and
changing the business models of the organizations.

Examples of Internet of things include automated homes, wearables, connected cars, refrigerators,
thermostats and connected products and services.

Challenges for the Organizations


Organizations have to design for convergence of both analog (hardware) and digital technologies
(software).

Organizations have to concentrate on the customer who is looking for the better solution.

Organizations have to figure out how to provide integrated solution of both hardware and software.

Example: AAA Club Partners, a roadside car assistance company in US, has developed a
connected car platform known as SMARTtrek. It provides services such as location assistance,
vehicle diagnosis, and trouble shooting. This technology helps in finding their members (customers)
on roadside and provides better needed services for them. It connects the services such as roadside
assistance, insurance and repair.

Developing integrated solution requires entirely different skill set and processes for the
organizations. This is because hardware design and engineering takes a lengthy product life cycle
and software development life cycles takes a modular and loops based approach. Both hardware and
software require good design, for any product to be successful.

Any disturbance in product development leads to three times schedules delays.

Finding both hardware and software skills in one company is very rare.

Business Models

IC

FA

Internet of things is changing the business models of the organization.

Traditionally hardware business model depends on making profits based on costs related to
materials, fulfilment and manufacturing. Software business models are based on service oriented
models with recurring revenues.

Now hardware companies have to think about charging for services and costs of tracking data.
Software companies have to think about manufacturing equipment and distributing physical
products. This can confuse organizations.

Organizations, who would like to get into Internet of Things, have to transition out of their
traditional business models.

One has to remember that the outcome of this effort is business and not the products. Hence, organizations
have to face the challenge of running a robust hardware company along with a services oriented software
company. They face the transition of business models with challenge to integrate both hardware and
software (that is, integration of analog and digital).
E-business models for mobile phone or Internet of Things organizations include hardware business
model and software business model. E-business models are combining these traditional business models.
Hardware business model is based on products and software business model is based on services and
solutions. Now, the e-business organizations and Internet of Things organizations have to combine and
operate these models for selling their products, services and solutions.

103

PEP Notes: IT & Systems


Discussion Questions:
1.

What are the challenges in Internet of Things business?


(Hints: integrate hardware and software-converge between analog and digital-concentrate on customers)

2.

Describe different business models adopted by the Internet of Things organizations.


(Hints: hardware business model-software business model-charge for services and data)

Reference:Hui, G., So You Want to build an Internet of Things Business, HBR Blog Network, January 22,
2014.
Applicable To:
Topic

Course

Unit-16: Basics of E-Business and Enterprise Application Integration;

IC

FA

Section-16.5: E-Business Models;

104

IT & Systems

Block-5: Enterprise Functions and E-Business

53.

The Role of IT in Mergers and Acquisitions


Organizational mergers and acquisitions create need for
enterprise application integration (EAI).

IT integration is the major challenge when two organizations merge. Mergers and acquisitions create two
major challenges for the organizations.
i.

Business teams want the integrated IT systems to be operational quickly for selling combined products
and services to increase the revenues for the merged organization.

ii. IT teams need time and effort by keeping long-term view in mind to effectively integrate the systems.
Both these points are important for a merger to be successful. This article brings the insights from the Bain
& Companys research on the role of IT in mergers and acquisitions. Executives are busy with low priority
tasks such as merging emails, Intranets and web portals during early weeks of merger. They take long time
to decide on critical and priority projects. The organizations have to follow the following process in
integrating their IT systems:
i.

First month, they have to decide on IT goals and hypothesis.

ii. By end of three months, they should decide which systems are to be integrated, which systems operate
independently, future of integrated application platforms and where to invest the money.

iii. By the end of the year, they should have half the value delivered in terms of costs and revenues.

FA

iv. By the end of two to three years, entire systems integration is to be completed.
According to Bain & Company research, organizations, which undergo mergers and acquisitions have
4.8% higher shareholder return than the organizations operated independently (3.3%). In taking key
decisions on integration of IT systems, not only the IT teams are responsible but also the CEO and
senior managementaretobemadeaccountable.CEO and senior management have to make key decisions.

One advantage here is, if one of the merged entities is a dominant partner, then the integration becomes
easy. They can decide on whether one companys systems are going to be used or hybrid systems are
going to be used or all the systems are going to be used independently.

IC

Example: When Kraft Foods merged with Cadbury in 2010, they have decided to continue using Kraft
Foods systems because of their modern and advanced technologies. Kraft Foods systems can operate in
multiple modes. They have platforms specific to North America, Europe and Asia-Pacific.
Characteristics of Successful Integration
The characteristics of successful integration include:

Successful integrations focus on revenue generation rather than cost savings.

Example: In Airline mergers, revenue synergies are more important than the cost savings.

IT teams have to choose best of breed systems from both the organizations. Cost of reconnecting these
systems outweighs the benefits to be gained.

Example: In case of an airline merger, they have decided to retain their auxiliary systems.

Align IT decisions with organizational strategy. The decisions have to be quick.

Example: In one case where a beer company acquired another, they decided to stop multi-million dollar
CRM project because of integration issues.

Organizations have to retain the talent during mergers and acquisitions. People tend to think that they
have limited scope and opportunities in the merged entity.

105

PEP Notes: IT & Systems

Example: When two companies merge, IT executives in merged entity were actively looking for job
opportunities outside. However, the merging company actually would like to utilize them in their
projects instead of their own employees. Thus, top talent has to be retained in case of mergers and
acquisitions.
During merger time, the IT team should not deviate from their long-term journey and the main growth
ambitions of the organization. Instead of all teams concentrating on system integration, it is better to
dedicate one IT team to think beyond mergers and acquisitions and develop applications and platforms in
line with the new merged companys strategy. They should develop applications for growth using new
technologies such as cloud computing and data analytics.

Discussion Questions:
1.

How does IT impact mergers and acquisitions of organizations?


(Hints: business teams need quick integrated IT systems-IT teams need time-decision making)

2.

Describe some of the characteristics of successful IT integration.


(Hints: revenue generation vs. cost savings-cost vs. benefits derived-align IT with business strategy)

Reference: Shah, S., Lino, M. and Padmanabhan, V., IT in M&A: Increasing the odds of a successful
integration, Bain & Co., February 12, 2014.
Applicable To:
Course

Topic
Unit-16: Basics of E-Business and Enterprise Application Integration;

IC

Sub-Section-16.6.2: Need for EAI;

FA

Section-16.6: Enterprise Application Integration;

106

IT & Systems

Block-5: Enterprise Functions and E-Business

54.

IT and Lean Management at Amazon

Amazon defines future of e-supply chain with automation and


lean management principles.
Amazon, an online book seller, now looked as a technology company, has practiced lean management since
2007. Amazon is a customer-centric organization. It follows the lean principle of avoid the wastage. The IT
capabilities at Amazon understand the customer requirements very well. Amazon follows the lean principle
such as look at the lower cost option only if the organization meets the on-time delivery of goods. Thus,
Amazon delivers the goods within the time mentioned to the customer on the website. The goods
transportation method is chosen accordingly. This article brings the lean principles Amazon has followed in
their business with the help of automation (IT).

Amazon involved front-line workers in continuous process improvement.

Amazon has more number of front-line workers in their fulfilment and customer support centers than
they have the number of computer engineers in their technology centers.

They have selectively automated the activities and processes at fulfilment centers. They have not
automated everything as they thought of doing it initially. For example, while packing shoes with
automation, shoes used to come out of boxes. Then, they have limited automation to selected products
and goods.

FA

Autonomation: Amazon has implemented lean principle of autonomation. According to this principle,
human beings are meant to do the complex and non-repetitive tasks and machines are meant for doing
repetitive, low-complex and routine tasks. Machines only support the human beings in doing complex tasks.
A human being works at 3 sigma level. That is, a human being does the work with 93% accuracy and 7%
errors. To fill this 7%, machines can be used in the organization in reaching Sig Sigma level. This was done
at Amazon.

IC

Kaizen: Workers performance was improved using kaizen principle. Kaizen means continuous
improvement. Abnormalities were identified and addressed in the process. For example, Scanners used to
take lot of time while scanning the bar codes of the products when their batteries were low. This was
identified and also how many scans can be done with a set of batteries is also identified. This information
was useful in continuous process improvement and in measuring workers performance.

As part of Kaizen, Founder of Amazon used to sit one day per year in fulfilmentcenters and take the role
of senior management. This helped in making improvements in different packing styles to different
types of products. It helped in productivity improvements in stowing products.

Kaizen teams at Amazon consist of front-line workers, executives and engineers. Executives just ask
open-ended questions without any pre-conceived ideas.

Andon Cord: It is a lean principle. According to this principle, if the customer service agent receives a
repetitive complaint on certain product, then he or she can stop the product from the line and he updates the
information on the website. He puts the product under quality checking list on the website. The product is
sold only after the defect is rectified in the product. This made lot of impact on the customers. They maintain
list of products under quality check on the website. This has increased the trust among customer service
agents and also the customers.
The Challenge: Amazon is facing challenge in implementing lean principles in their software development.
This is because unless entire software is developed, it cannot be tested. However, some of the Amazon
computer scientists are working on this. Writing software code cannot be stopped as soon as error is found in
previous line. Using technology, Amazon could print some of the books in just 4 hours and deliver it to
customer. Thats implementation of just-in-time principle. That is on-demand products are printed and
delivered to the customer.

107

PEP Notes: IT & Systems


Organizational mergers, acquisitions, alliances and partnerships create need for enterprise application
integration (EAI). When two organizations merge, there is a need for integration of their financial, HR,
operational, production and support systems. This has to be done with proper planning. There were cases
of failed mergers because of their inability to merge two different systems. Hence, organizations have to
think ahead on technical aspects before taking a business decision. That is, feasibility of integration of
different IT systems is important for an organizational merger. Otherwise organizations have to invest in
entirely new IT systems.

Future of the e-supply chain is based on lean, on-demand and just-in-time principles. It also includes the
principles such as make-to-stock, build-to-order and continuous replenishment. The supply chains can
also be outsourced. RFID (Radio Frequency Identification) devices, computer based transport systems,
traffic control systems and bio metrics devices are being used in e-supply chain management. Mobile
communication devices are used in e-supply chain management. Scheduling, routing tools and clouds are
also used in e-supply chain management. E-supply chain management is reducing the transport time,
surplus inventory and time to sell the product for an organization.
Discussion Questions:
1.

Explain the features of Kaizen.


(Hints: continuous process improvement-identification of abnormalities-productivity improvements)

2.

What challenges are faced by Amazon in implementing lean principles in its supply-chain?

(Hints: implementation of software-idea generation-different packaging styles to different products)

Applicable To:

IC

Topic

FA

Reference:Onetto, M., When Toyota met e-commerce: Lean at Amazon, McKinsey Quarterly, February
2014.

Unit-17: Supply Chain Management and E-Business;


Section-17.7: Future of the E-Supply Chain;

108

Course
IT & Systems

Block-5: Enterprise Functions and E-Business

55.

ERP in the Cloud

Deploying ERP in the cloud is one of emerging trends in the ERP industry with advantages
of add quick functionality, reduced development and operational costs.
Majority of IT services have been moved to the cloud. What are the benefits, challenges and limitations of
ERP in cloud? This article gives insights from an article of Booz & Co regarding whether to go for ERP in
cloud or not. What are the points to consider and monitor in this scenario. Factors such as industry type, ERP
system complexity, company size and information security requirements effect the decision to deploy ERP
in cloud. This article also discusses the advantages and disadvantages of moving ERP into cloud.
ERP Deployment Models: There are basically 3 types of ERP deployment models. They are
i.

Having ERP on company premises by owning and operating by itself

ii. Hosting ERP off-site the company location. However, this requires installation of software on users
machines.
iii. Deploying ERP in cloud. ERP services are available as online services accessible from anywhere using
Internet browser.
The implementation size, solution complexity, implementation time, capital requirements and operating
costs vary with each deployment model. In case of cloud based ERP, the solution complexity and capital
costs are low and operating costs are medium.

FA

Example: SAP made its ERP based on HANA platform over cloud. Oracle made available its ERP based on
cloud including budgeting and planning functionality.

IC

Benefits of ERP in Cloud: There are several benefits of having ERP in cloud. Cloud based ERP
implementation costs are lower compared with traditional ERP systems. The operating costs of ERP in cloud
are also lower. ERP applications can scale up quickly in cloud environment based on organizational growth.
Cloud vendors provide hardware, software, patches, upgrades and refreshes. Organizations can redeploy
their support staff to the work where they cannot outsource.

Cloud based ERP solution provides basic configuration. It supports rapid deployment of applications.
The cloud based ERP requires changes to the organizational business processes and converts the needed
data.

Cloud based ERP allows the organizations to add quick business functionalities to the system with
availability and disaster recovery facilities. Functionality such as sales lead generation can be added
easily.

Cloud based ERP provides scalability and flexibility to the system. Organizations need not go for
traditional software delivery processes in order to add new functionality. For example, SAP and
SalesForce.com provide applications for analytics, finance management and collaboration.

Limitations of ERP in Cloud: Cloud based ERP systems pose perceived risk to data, limited functionality
and customization. Cloud based ERP provides limited functionality such as accounting, purchasing, accounts
payable and accounts receivable. However, they do not provide specialized functionality such as statistical
forecasting, social media, product management and constraint based planning.

Cloud based ERP provides limited facilities for customization.

Cloud based ERP may not be able to handle the tailored processes of the organization.

It may not be able to integrate with highly customized software packages.

Because clouds are provided by the third party vendors, organizations are concerned about their data on
the cloud such as HR, payroll, customer, sales and financial data.

109

PEP Notes: IT & Systems

Organizations face internal resistance for deployment of ERP in cloud, in organizations where
employees feel pride about ownership of technology and platforms.

Whether to go for ERP in Cloud or Not? : Organizations have to have a comprehensive look while
deciding whether to go for ERP in cloud or not. Because, cloud vendors have invested millions of dollars to
have state-of-the-art security capabilities in their platforms, organizations can take a calculated decision
regarding their data security. Cloud based ERP provides facilities such as business continuity and disaster
recovery. The organizations have to evaluate the decision of going for ERP in cloud based on system
complexity and implementation size. The more the system complexity and the more the implementation size,
the probability of success with cloud based ERP is low. The less the system complexity and the more the
implementation size, the probability of success with cloud based ERP is high.
Organizations such as SAP, Oracle, QAD and Microsoft provide ERP solutions in cloud. Microsoft
Dynamics ERP solution on their Windows Azure cloud platform even meets the requirements of enterprise
level customers. Big companies are looking for standardization and lower costs in order to go for ERP in
cloud.
Emerging trends in the ERP industry includes integration of ERP systems or deployment of ERP
systems on to the cloud. Enabling ERP systems with mobile technologies is an emerging trend.
Connecting organizational ERP systems with social media is getting explored. Applying analytics tools
on ERP systems is also growing.
Discussion Questions:
1.

Describe a few ERP deployment models in organizations.


What are the advantages of having ERP on cloud?

FA

2.

(Hints: ERP on company premises-ERP on off-site-ERP on cloud)

(Hints: provides basic configuration-easy addition of business functionality-scalability and flexibility)

Applicable To:

IC

Reference:Utzig, C., Holland, D., Horvath, M. and Manohar, M., ERP in the Cloud: Is it ready? Are
You?,Booz & Co, 2013.

Topic

Course

Unit-18: Enterprise Resource Planning;

IT & Systems

Section-18.12: Emerging Trends in the ERP industry;

110

Block-5: Enterprise Functions and E-Business

56.

Technology Driving the Indian Taxi Services

Online taxi services companies with new business models using CRM for ecustomers are changing the trend of taxi services in India.
Few years ago, Yatra.com and MakeMyTrip.com have made online air ticket booking possible. IRCTC
made online Train ticket booking possible in 2005. The current trend is online booking of taxi services in
India. For this, many start ups in India are venturing into aggregator model of bringing taxi operators, drivers
and customers on to the single platform through technology. This summary discusses this aggregator model
of taxi services, its advantages, challenges, key success factors and some of the players in this fragmented
segment The Online Taxi Services.
Venture Capitalists Investments

Helion Venture Partners has invested in Bangalore based online taxi services company TaxiForSure.
Earlier they have invested in MakeMyTrip and redBus.

YourNest, an angel fund, invested in Mumbai based startup company Bookmycab.

Some Facts about Taxi Services in India


In India there are around 500,000 to 1,000,000 estimated taxis. Because this is mostly unorganized
sector, there is no exact figure on number of taxis in India. This figure includes cruising taxis, road
taxis, radio taxis, taxis for outstation and taxis of corporate.

Many players have 1, 2 or 3 cars. Or owner-driver cars.

Lack of transparency in taxi charges is a major challenge

This sector is lacking standardization

FA

Aggregator Model of Taxi Business

IC

The aggregator model brings in the number of operators having cars and drivers as partners and provides
services through their website, call center and mobile apps to the customers.

The companies such as Ola Cabs, Bookmycab, YourCabs, TaxiForSure, Savaari, and TaxiPixi have
adopted this aggregator model by connecting the supply with demand through technology. Technology
fills the existing gap and adds lot of value to the business.

Technology used by these organizations is the accurate and affordable GPS technology.

Aggregator model is based on less capital investment and minimal assets. This model suits the taxi
services because the assets in this model are taxis, which are mobile and reusable all the time.

Investment is less because the GPS device to be fixed in Taxi costs $100. This they charge it to the
partner; or aggregator pays for it depending on the business agreement.

For customer, the aggregator appears like a car rental company.

Examples:
i.

Bangalore based Savaari has 150 operators and 3,000 cars in their network.

ii. Ola Cabs having branches in New Delhi, Mumbai, Bangalore and Pune has 1,500 operators and 4,500
cabs in their network.
iii. TaxiForSure having branches in New Delhi and Bangalore has 18 operators and 1,750 cabs.
iv. Bookmycab based in Mumbai has 3,000 owner-driver cabs in their network.
How it Works?
The partner (operator/driver) whenever he wishes logs onto the aggregators platform. The customer who
needs a cab books cab through multiple channels of aggregator. Then the aggregator passes the customer
requirement to the partners online. If the partner accepts the requirement, then the customer and drive details
are exchanged. This business is in addition to the partners owned taxi business. With this, taxi drivers are
getting more business and waiting time is less now.

111

PEP Notes: IT & Systems

Drivers are being given training on soft skills such as maintaining hygiene, customer handling, money
handling and dealing with tough customers.

Advantages for the Aggregator Company

Taxi maintenance and servicing are taken care of by the partners themselves.

The aggregator company can concentrate on technology, marketing and brand building.

It creates a win-win model for operators, service providers and customers.

Aggregators can build strong business networks

Challenges for Online Taxi Services


The aggregator companies have very narrow margins. They get 10% to 20% commission on each trip
from their partners.

The operations have to be very tight in this business because the margins are very thin.

New entrants are entering into the business thinking of replicating the model

In case of local point-to-point services, customers have complaints

Many drivers dont know the routes

Confirmed bookings are getting cancelled

Taxis are not available on demand

Sometimes taxis arrive late

Customers book many cabs and take the first one that comes

Maintaining consistent customer experience while managing scale is a challenge

Finding operations team having experience in robust technology is difficult

Roads, technology, pricing sensitivity and weather conditions are also challenges

The biggest challenge is providing cabs on demand for local point-to-point travels within the cities

FA

IC

Partnerships

To provide one stop solution to customer, TaxiForSure has tied up with redBus and MakeMyTrip to
provide taxi services to passengers coming and going by buses and airplanes so that door to door service
can be provided to the customer.

Key Success Factors for Online Taxi Services

Technology plays an important role.

Identification of partners, terms and conditions and service value addition are key success factors.

Looking Forward

More commitment is required from the operators

In cab, advertising can be introduced if operator is more committed.

More owner-driven cabs can rely on this model, whose waiting time for customers was very high
earlier.

State Governments are giving licenses to aggregators. For example, Bookmycab is a licensed
aggregator in Mumbai who has yellow, black and cool cabs on its fleet. New Delhi government is also
thinking of implementing it.

112

Block-5: Enterprise Functions and E-Business

Aggregator companies are going towards more Analytics with parameters such as variable pricing,
loyalty points, discounts, vehicle upgrades, noting pickup time and drop backtime.

Customer retention with the online taxis service provider comes with the increased services levels

Operators and drivers retention with online taxis service provider comes with more predictable business
for them

There are global players as well in this segment such as Hailo (UK), Uber (UK), MyTaxi (Germany)
and Get Taxi (Israel).
CRM for e-customers stands for customer relationship management system for e-customers using
electronic channels such as Internet, chatting, e-mail, SMS, and social media. It should maintain details
about customer, products purchased and transactions made. It is useful to provide online services to
customers. It can be used to take feedback on customer satisfaction. CRM systems are part of enterprise
management information systems.

Discussion Questions:
1.

What technologies are used by taxi service providers in India?


(Hints: technology platforms-GPS technology-CRM and analytics tools)

2.

Mention some of the challenges faced by online taxi services.


(Hints: very narrow margins-threat of new entrants-experience in technology)

Applicable to :
Topic
Unit-19: CRM and E-Business;

IT & Systems

IC

Section-19.7: CRM for E-Customers

FA

Reference: Wharton, Indian Entrepreneurs are redefining Indias Taxi Service, Knowledge@Wharton,
July 18, 2013.

113

Course

PEP Notes: IT & Systems

57.

The Role of IT in Coca-Cola

IT with e-customer relationship management is transforming the IT function into a


business partner function for the organization.
IT function has grown from a back-office function to strategic business partner function at Coca-Cola. IT
function tried to develop direct relationship with customers. It also managed demand driven supply-chain at
Coca-Cola. Coca-Cola made technology driven innovations in consumer packaged goods industry. This
summary brings insights from an interview with Coca-Cola Vice President and CIO, Ed Steinike published
in McKinsey Insights (March 2013).
Investments
Coca-Cola invested hundreds of millions of dollars on technology driven digital marketing. Their
investment in IT continues to rise.

They started thinking about digital marketing 5 years ago and developed mobile apps and pushed them
to consumers through the social media sites and Coca-Cola loyalty programs such as My Coke
Rewards.

Hired intelligent people in digital and interactive marketing area.

Recruited talented entrepreneurial IT people who could connect better with marketing.

Started recruiting 5 new interns every year who can bring in new culture into organization and who can
make IT as business partner

FA

Steps of Transformation

Initially IT was not looked at as a business partner at Coca-Cola. It was looked as a back-office support
system. For transforming IT function into a business partner and revenue generator function, Coca-Cola
designed the following:
Provided security, hosting and operating services for consumer sites developed by agencies. Coca-Cola
has supported 600 such sites on a single host platform with security.

Increased customer relationships by developing cool mobile apps and interacting with customers.

Assigned experienced people to large system applications and entry level people to software-as-aservice application development.

Developed mobile apps for more than 100 countries for 2012 Summer Olympics and made them
available on iPhone and Android. These are other than the traditional TV and advertising channels.

Now Coca-Cola has mobile distribution systems, content management systems, digital access
management systems and digital rights management systems in their IT portfolio.

2 years were spent on integration of plant and distribution systems to make demand driven supply chain
management in consumer packaged goods industry.

Technologies such as RFID (Radio Frequency Identification) and electronic tagging were used in their
products.

IC

Returns

The CIOs function has transformed from back-office, process oriented CIO converting support functions
to business partner and revenue generator CIO.

Usage of Technology

To know the stock level needed for a store in UK, they used to send the photographs of coolers and
shelves of the retail store to a company in India. Indian company computes and sends the required stock
level with counts of different products in less than a minute time to the UK counterpart. This happens
over the network using technology.

114

Block-5: Enterprise Functions and E-Business

Developed Coca-Cola Free style is an inbuilt computer in fountain dispensers. It works as an inbuilt
complex ERP (Enterprise Resource Planning) system. Using this one can try different combinations of
drink compositions and can come back to the one they like to increase the store sales. Coca-Cola
Freestyle at the retailer can directly send orders to the server system at Coca-Cola manufacturing plant.
It optimizes the order costs as well.

The statistics given by Coca-Cola Freestyles are useful to find what product is moving fast at different
timings of the day and what product is moving fast at different cities, regions and countries.

Going Forward

Coca-Cola has over 50 million fans on Facebook and 18 million customers on their My Coke Rewards
program. They would like to bring these 18 million consumers onto their Coca-cola Freestyle which can
give more insights into their business.
CRM for e-customers stands for customer relationship management for e-customers. The e-customers of
the company use channels such as e-mail, Internet, chatting, telephone, fax and other electronic devices.
The organization should have consolidated information about customer communication to provide proper
customer support. The CRM systems maintain all the customer conversations, customer databases,
transaction details, products purchased, requests and complaints made.

Discussion Questions:
1.

How did the IT function transform in Coca-Cola?

How did IT use in Coca-Colas customer relationship management?

FA

2.

(Hints: from back office and process oriented-to support function as business partner-revenue
generator)
(Hints: knowing stock levels-optimize order costs-which product is moving fast)

Applicable To:
Topic

IC

Reference: Levin, R., Driving the top line with technology: An interview with the CIO of Coca-Cola,
McKinsey Insights, 2013.

Unit-19: CRM and E-Business;

Course
IT & Systems

Section-19.7: CRM for E-Customers;

115

PEP Notes: IT & Systems

58.

The Growing Need for Unstructured Analytics


Unstructured analytics can be used for CRM for e-customers, fraud
detection and stock market prediction.

Unstructured data constitutes 80% of the business today. The unstructured data includes blogs, wikis, call
center logs, surveys and tweets. Ignorance of unstructured data can lead to missed opportunities, uninformed
decisions and inherent risks. The unstructured data can be analyzed to understand the customer, prevent
fraud and predict the future business. Financial services industry is rapidly adopting unstructured data
coming in social media to understand the customer, detect fraud and to predict the stock market. This article
brings the insights from an Infosys whitepaper on unstructured data and unstructured analytics. Financial
services industry is looking for solutions from vendors for combining unstructured analytics with structured
analytics to understand the business well.
Unstructured Data: It is the data which cannot be stored in a relational database management system.
Unstructured data can be text, audio, images or video. Structured data gives information about what
customer has done. Whereas, unstructured data gives insights about why customer has done something?
What he wants to do? What problems he or she has?

Sources of Unstructured Data: The sources of unstructured data can be internal or external sources
such as Internet. The internal or organizational sources of unstructured data include marketing flyers,
sales reports, internal documents, call center logs, customer care representative notes, and trading
rooms. The external sources of unstructured data from Internet include journals, analysts reports, legal
documents, social media, breaking news, weather forecasting and chat rooms.

FA

Unstructured analytics: is the application of analytical techniques on unstructured data to derive useful and
actionable insights for the organization. Usually unstructured analytics include text analytics, audio
analytics, video analytics, and social media analytics. Social media analytics are part of text analytics.
Structured analytics use business intelligence, query processing and reporting tools. Whereas,
unstructured analytics use text processing or text mining and keyword search techniques.

Text analytics for transforming unstructured data into insights is gaining popularity in the industry with
the advent of Web 2.0 and Web 3.0.

Text analytics work on social media to understand the customer sentiments.

Text Analytics Process: It is as given below:

IC

Collect data/text from both internal and external sources

Apply data cleansing and duplication techniques

Select attributes and discover patterns in data using analytics

Report results using dashboards

Store the enriched information

Social Media Analytics Process: The social media analytics process has the following steps.

Select the needed blogs from social media

Find out the sentiments of bloggers

Measure the influence on key bloggers

Measure the authority of key bloggers

Find the topics of interest on the forum

Social media analytics products are available from companies such as IBM, Radian6, SAS and Scout
Labs.

The major vendors of unstructured data analytics tools include IBM (SPSS) and SAS Institute.

116

Block-5: Enterprise Functions and E-Business

The challenges to these vendors include transforming unstructured information into structured data,
integration of text analytics with social media analytics, and combining text analytics with predictive
analytics.

Application Areas: Unstructured analytics can be widely used in Banking, Financial Services and Insurance
(BFSI) Sector. In Financial Institutions, unstructured analytics can be used to understand the customer
relationship management, fraud detection and stock market prediction.
i.

If a bank is having poor public relations, this issue can be resolved using structured analytics (business
intelligence) and social media analytics.

ii. A fraud in insurance company can be detected using combination of structured predictive analytics,
speech analytics and social media analytics.
iii. Stock market prediction can be done using combination of structured and unstructured analytics.
CRM for e-customers maintains details about customers, transactions and purpose. They manage data
coming from different open sources such as Internet and social media. This unstructured data has to be
analyzed using unstructured analytics. They are useful in finding fraud detection, customer intention and
customer attitude. CRM for e-customers should integrate all the electronic channels coming to the
organization. They should have consolidated information irrespective of the channel customer uses. They
should predict customer intention as well.
Discussion Questions:
1.

Describe the characteristics of unstructured data.


How analytics are used in unstructured data analysis in an organization?

FA

2.

(Hints: cannot be stored in RDBMS-can be video, images, audio-analysis provides insights)


(Hints: for text analysis-for social media analysis-along with predictive analytics)

Applicable To:

IC

Reference:Venkatesh, B., Kalmadi, K. and Aggarwal, S., Structured and Unstructured Data: The
Convergence of Structured and Unstructured Analytics, FINSights, FICO and Infosys, 2010.

Topic

Course

Unit-19: CRM and E-Business;

IT & Systems

Section-19.7: CRM for E-customers;

117

Block-6

Advanced Topics in IT

FA

59. Cloud Computing Updates


60. Big Data Operational Models

IC

61. Platform is the Core to IT Systems

62. Internet of Things: The Future of Mobile Technologies


63. Changing Dynamics of Contact Center Outsourcing (CCO) Market

118

59.

Cloud Computing Updates

Mergers & acquisitions and joint ventures are growing in the commercial
cloud sector.
Service Providers are making joint ventures, alliances and partnerships in Cloud computing area to capture
more cloud market. Significant increase in cloud adaption is observed in public sector in US and SMBs
segment in Asia Pacific region. IBM, DELL, and Fijitsu got several contracts in cloud area in 4th quarter of
2012.
Cognizant, Fijitsu and T-Systems are increasing their investments in data centers.

Oracle, Red Hat, SAP, EMC are increasing their efforts in marketing their cloud products and services.

HP, DELL, Fijitsu have major new offerings.

Amazon started cloud services to end-users across different geographies.

SAP and Oracle toped in new cloud offerings among enterprise application providers.

AT&T, British Telecom, Telstra and Colt are expanding their portfolio of services.

T-Systems is going setup Germanys largest data center with cloud facilities.

Oracle acquired Eloqua (cloud based marketing automation software co.) and Instantis (cloud based onpremise project portfolio management solutions co.), agreed to acquire DataRaker (cloud based analytics co.)
and invested partially in EngineYard (cloud development platform co.).

Half of the cloud transactions in the market are related to Software-as-a-Service (SaaS).

FA

Update on New Cloud Offerings:

IC

New Cloud Offerings

British Telecom launched its cloud services to BT Trace.

Red Hat delivered its on-premise PaaS for enterprises having Enterprise Linux and OpenShift Origin.

Deals Made:

US General Services Administration (GSA) has selected Unisys and CSC for providing EaaS (Email-asa-Service).

CGI is going to upgrade John Hancocks data centers and provide cloud facilities.

T-Systems got its contract renewed for 5 years with Shell.

Microsoft is going to serve Toyota in their communications and collaboration Infrastructure.

Fijitsu deployed its cloud services to Watami Co., which connects 71 restaurants outside Japan.

Mergers & Acquisitions, Alliances, and Partnerships:

IBM and AT&T joined together to develop network enabled cloud.

Hitachi is going to open a VMware competency center in Japan.

119

PEP Notes: IT & Systems

DELL acquires Gale Technologies, which is into IT management, orchestration and automation
capabilities in hybrid and on-premise clouds

Microsoft to acquire StorSimple, which is into cloud integrated storage solutions.

Citrix and CA joined together to speed up cloud adaptation process.

Current Trend:

Paas service providers such as Microsoft and Google are moving down the stack to provide IaaS.

IaaS service providers are moving up the stack to provide PaaS services.

IaaS providers are thinking that infrastructure providing is low margin business and would like to move
up the value chain

PaaS providers are thinking of growing into IaaS segment either through organically or through
partnerships
BPaaS (Business Process-as-a-Service)

Cloud
Platform

IaaS (Infrastructure-as-a-Service)

FA

Programming Tools
Programming Languages
IDEs
Loaders
Linkers
Compilers
Operating System

App2

App3

SaaS (Software-as-a-Service)

IC

PaaS (Platform-as-a- Service)

App1

Commercial clouds in the industry include Amazon, Microsoft, SAP, etc. They provide public and
private cloud solutions for the organizations. Small and medium size organizations do not have to spend
heavy seed money on IT infrastructure. Instead, they can use cloud services from these service providers.
They provide platforms, applications, and solutions for the customers.
Discussion Questions:
1.

Describe some of the features of cloud computing.


(Hints: work anywhere anytime-data and storage facilities-on-demand infrastructure)

2.

Explain different service models of cloud providers.


(Hints: infrastructure as a service-platform as a service-software as a service)

Reference: Everest Group, Enterprise Cloud Quarterly Review- Q4 2012, Everest Group Cloud Vista,
Document No: EGR-2013-4-O-0823, 2013.
Applicable To:
Topic

Course

Unit-20: Cloud Computing;

IT & Systems

Section-20.8: Commercial Clouds in the Industry;

120

Block-6: Advanced Topics in IT

60.

Big Data Operational Models

Big data and data analytics capabilities are used to solve operational
problems leading to better performance.
Analysis of peta bytes of big data provides the insights into customer behavior, organizational performance
and supply chain efficiencies. Many organizations are joining the forces of making use of big data and data
analytics. A big question that comes to our mind is: Is the huge investment of analytics worthy for the
organization? To answer this question, Bain & Company conducted a survey of 400 large corporations to
find out the relationship between analytics usage and organizational performance. They found that the
organizations using analytics outperformed their competitors in large margins. It was found that:

The leaders using analytics are 2 times most likely to be in the 1st quartile of financial performance in
their sectors.

3 times more likely to executive intended decisions

5 times more likely to make faster decisions than their peers in the industry

2 times more likely to use data when making decisions

Examples:
Samsung uses big data to power the content recommendation engines in their Smart TVs.

2.

Progressive Insurance uses big data to find out the driver behavior, to decide on pricing and to
determine customer risk profile.

3.

LexisNexis Risk Solutions identifies the individuals and their family relationships using big data and
helps the customers know these details. They have banks and financial institutions as their big data
customers.

FA

1.

Requirements for Big Data

For big data implementation, the organizations should have:


Large Quantities of Data

2.

Advanced Analytical Tools such as Hadoop and NoSQL

3.

People Capabilities and Expertise such as data science, privacy laws and knowing value of data
sources

IC

1.

Big data is not a technology initiative. It is a business program with technology touch. Big data should help
the business units and functions to share the information and insights from data. The senior management
team should have the ambition for big data. They should think how big data is going to help the
organizational performance.
Analytics Application Areas
The analytics can be applied in
1.

Developing new products or services

2.

Improving existing products and services

3.

Improving internal processes and

4.

Transforming business models

Examples:
1.

Progressive Causality, an insurance company, has new Snapshot device useful to observe the driver
behavior and identifies whether the driver is right customer or not to the company.

2.

Hamuna, an insurance company is using big data of claims processing to find out the future
hospitalizations for avoidable reasons and takes early action.

3.

Intuits acquired Mint.com to expand its business from purchased software to ad-supported software.

121

PEP Notes: IT & Systems


Best Practices in Dealing with Big Data

Assign clear owners and sponsors for analytics initiatives.

Organizations work on expanding horizontal analytical capabilities.

Organizations provide incentives for using big data and analytics in their decision making.

Example:
1.

Nordstrom assigned analytics responsibility to senior management and made it part of strategic
initiatives.

2.

Global Consumer Electronics major has given incentives to senior executives for capturing and using
big data capabilities.

Big Data Operational Models


There are four models in which big data capability can be incorporated into the organizational business.
They are:
Business Unit Lead: Independent business units lead their own big data decisions with limited
coordination. Example: AT & T and Zynga

2.

Business Unit Lead with Centralized Support: There is collaboration on specific initiatives of big
data between the business units. Example: Google and Progressive

3.

Center of Excellence: Independent center of excellence provides guidance and support on big data to
business units. Example: Amazon and LinkedIn

4.

Centralized Support: Fully centralized big data support is provided by the organization. Example:
Nexflix

1.

FA

Center of Excellence requires PhD level data scientists, business managers, analytics engineers, team leaders
and legal experts. Scaling up a center of excellence takes 12 to 18 months. An organization has to benchmark
its current position in the industry, access its current big data capabilities, compare with competitors and make
necessary investments in analytics for its better performance.

IC

Operational problems include non-availability of resources, resolving conflicts, processing conflicts,


lacking in data for decision making, not being able to proceed, lack of trust between parties, vendor over
commitment and non-compliance to contracts. Operational problems can be solved with the usage of big
data and analytics in the organization. Big data can be used in business process design (both internal and
external processes). It can be used in decision making, operational excellence, and market intelligence.
Operational problems can be overcome with proper business processes in place and data oriented decision
making from trusted sources in an organization.
Discussion Questions:
1.

Explain the big data operational model.


(Hints: business unit lead-center of excellence-business unit lead with centralized support)

2.

What are the application areas of analytics in an organization?


(Hints: transform business models-develop new products and services-improve internal processes)

Reference: Pearson, T. and Wegener, R., Big Data: The Organizational Challenge, Bain & Company,
September 11, 2013.
Applicable To:
Topic

Course

Unit-21: Business Intelligence and Big Data;


Section-21.12: Big Data;

IT & Systems

122

Block-6: Advanced Topics in IT

61.

Platform is the Core to IT Systems

The platform forms the basis for effectiveness of IT in firms. The choice for
hardware and software acquisition and software design approach depend on the
expectation of support by customers, employees and vendors.

Platform is a collection of common resources that support multiple business IT applications of the
organization.

Platform is more than Service Oriented Architecture.

Platform consists of functions for search, one-click sales, pricing and description presentation. These
functions treat information as their specialization rather than business logic or code.

Financial Services organizations develop new business applications on these platforms without
replacing their existing infrastructure, which is very cost effective.

Digital economy companies such as Facebook and Google also have these kinds of Platforms.

Platform resides on top of Hardware, Communication and Internet Infrastructure.

Platforms make use of diversified digital technologies and can be updatable without disturbing one
another.

FA

IC

IT Infrastructure includes hardware, software, communications, data centers, devices, facilities,


operations and other technical resources.
Digital Technologies

Cloud,

Mobile,

Standards Based Technologies

Mobile Communication Protocols

Internet Protocols

Sensors,

Communication Protocols such as TCP/IP

Big Data,

Analytics,

Open APIs
(Application Programming Interface)

Social

These reduce amount of risk in developing new


and legacy systems.

These are customer facing, front-office, and are


demand creating technologies.

They need shorter Infrastructure and application


cycle times.

These technologies move at competition, market


demand, and customer expectations.

123

PEP Notes: IT & Systems


Figure 1: Impact of IT Infrastructure on Organization
Technology Decisions
IT Organization Structure
IT Infrastructure
IT Budgets
Market Entry

Figure 2: The Platform


Presentation
Logic

User Interface

Presentation Logic

Business Logic

PLATFORM
Pricing

Description
Presentations

FA

Search

One Click
Sales

Service Oriented Architecture


Operating System

Network

Network

IC

Hardware

Software Design Approach involves selecting appropriate design methodology, high level architecting
and low level designing the system. It identifies the components in the system and their inter connections.
The design has to be extendable and modifiable. Some of the design methodologies include structured
systems analysis and design (SSAD), object oriented analysis and design (OOAD), service oriented
architecture (SOA), and component based design (CBD). MIS systems involve hardware and software
acquisitions. Traditionally acquiring hardware and software for the project is through project procurement
process by making formal contracts with the vendors. With the advent of software-as-a-service in cloud
computing, bulk hardware and software acquisitions can be avoided resulting into saving of huge capital
expenditure for the organization.
Discussion Questions:
1. What is a platform of an IT system. Explain its layers.
(Hints: collection of common resources-hardware and OS-service oriented architecture, business logic
and user interface)
2. Mention a few prominent design approaches used in software industry.
(Hints: cloud, social and mobile technologies-sensor technologies-big data and analytics)
Reference: Mark P. McDonald, Platforms are the New Foundation of Corporate IT, HBR Blog Network,
August 01, 2013.
Applicable to:
Topic

Course Name

Unit-22: Current Trends in Software Design and Architecture;


Section-22.3: Software Design Approaches;

124

IT & Systems

Block-6: Advanced Topics in IT

62.

Internet of Things: The Future of Mobile Technologies


`Internet of Things as the future of mobile technologiesis changing the
information security and control aspects of organizations and individuals.

Internet of Things connects different devices including smart devices over the network for scalability and
utility. In current days, Internet is available over different devices and at fingertips. According to ABI
research, globally, the wirelessly connected devices are growing as shown below. According to Internet and
Mobile Association of India (IAMAI), there are more than 20 crore people connected to the Internet in India.
Internet and connectivity is bringing 360 degree change in peoples lives. The article highlights the potential
security risks in internet of things and how to handle those risks.

Wirelessly Connected Devices


(Global)
30 billion

10 billion

2020

IC

2014

Wirelessly Connected
Devices

FA

35
30
25
20
15
10
5
0

Internet is making devices smarter with embedded sensors and smart refrigerators.

Example: A GPS device in a car can get connected to the power controller at home of an individual
using wireless technologies. As soon as the car enters into specific radius of the home, the power at
home can be switched on and the signals can be transmitted to activate the devices at home. The devices
at home can perform the scheduled tasks. This kind of scenario is creating a threat to security both
physical and logical to the data of individuals over the network.

Example: Attackers are attacking the information of energy companies because their industrial control
systems are outside their traditional security walls. Attackers are tampering the valuable data of the
companies.

Potential Risks: Organizations are getting impacted in many ways. The possible risks because of
internet of things include:

Attackers can attack every possible use case of the organization.

The devices are not designed by keeping security concerns in mind.

Smart devices can be used for unplanned tasks.

Employees can become a possible threat to information and become gateways of risk.

How to Handle Potential Risks?


Potential risks can be handled using the following three strategies:

Device manufacturers have to keep embedded security software in devices to handle any intrusion.

125

PEP Notes: IT & Systems

Device manufacturers have to find ways to notify customers regarding security threats. They need to
provide patches for the vulnerabilities.

There should be strong regulatory environment, which includes governments, organizations, homes and
individuals.

Instead of exploiting the technology, it is better to pay attention to information security in the connected
world.
Information security and control is the major concern for organizations in an Internet era. Organizations
using big data, clouds, Internet, external data sources and Internet of Things are showing significant
concern over information security. `Internet of Things became the future of mobile technologies. Many
new generations of mobile technologies such as 4G and 5G networks are coming into the world. Mobile
usage is growing in emerging markets.
Discussion Questions:
1.

What is the Internet of Things? Explain some of its features.


(Hints: connects smart devices over network-for scalability-for utility)

2.

How can the risks pertaining to the Internet of Things be handled?


(Hints: embedded system software-provide patches for vulnerabilities-strong regulatory environment)

Reference:Ghosh, S., Securing the Internet of Things, Business Standard, February 03, 2014.

Applicable To:

Unit-23: Mobile and Social Technologies;


Section-23.3: Mobile Technologies;

FA

Topic

IC

Sub-Section-23.3.5: The Future of Mobile Technologies;

126

Course
IT & Systems

Block-6: Advanced Topics in IT

63. Changing Dynamics of Contact Center Outsourcing (CCO) Market


Communications Enabled Business Proces ssuch as customer interaction is being optimized
through outsourcing of contact management systems or by aggregation to global internal
contact centers. Collaborative technology is pushing such IT- enabled services up the value
chain.

Contact Center Outsourcing (CCO) is about outsourcing of customer service, payments, transaction
processing and channel management to another organization. CCOs are of two types. They are Global
Internal Contact Centers and third party CCOs. Third Party CCO is the external organization providing
contact center services to the global customers.
(Example CCO providers in India: Genpact, Convergys, Sykes, Aditya Birla Minacs)
According to EVEREST Groups Contact Center Outsourcing (CCO) Annual report 2013,
Global CCO spending is around $300-$350 billion

Out of it, Third party CCO market has reached at $65 - $70 billion.

Third party CCO industry has seen 7%-8% growth in 2012.

After a dip in 2009, Third party CCO industry is growing steadily for the past two to three years.

CCO in US and UK markets has stabilized.

The demand for CCO is growing in Europe, Middle East Asia (EMEA) and Asia Pacific (APAC)
regions.

IC

FA

CCO Global Spending

CCO Market

Services of CCO Providers


Value Added Services

Operational Services

Analytics

Customer Service

Performance Management

Payment Processing

Channel Management

Transaction Processing

Retaining Customer

Sales Service (Inbound and Outbound)

127

PEP Notes: IT & Systems


The CCO service Providers participated in the survey include TCS, WNS, Mahindra Satyam, Genpact,
Sutherland, Aditya Birla Minacs, HP, Aegis, Xerox, Sitel, Sykes, Serco, Teleperformance, Webhelp, Alorica,
Teletech, FirstSource, Transcom Worldwide, and NCO-APAC.
The Findings of the survey:

Teleperformance, Atento, and Convergys, emerged as top-3 performers in CCO industry.

The growth of CCO industry in Europe is because of cost advantage. It is expected to grow in Asia
Pacific (APAC) region in coming 2 to 3 years time.

English is widely used language and next is Spanish in CCO segment.

CCO providers are balancing between scale and skills to meet customer requirements.

Full-Time Employee (FTE) model is the dominating pricing model in CCO. However hybrid pricing
models are also present.

CCO industry is highly fragmented with no major top players.

Top-3 Performers in CCO Market


CCO Provider
Organization

Earnings (2012)/
Earnings Growth Rate

Services
Managing customer transactions in Financial
Services,
Government,
Healthcare,
Retail,
insurance, transportation, logistics, manufacturing
and utilities

2,347 Million Euros

Atento

Customer relationship management, B2B sales,


mortgages, insurance, vehicle financing, fraud and
complaints management

7% revenue growth since


2011.

Convergys

Customer care solutions, analytics, Collection


Management, B2B Solutions and Customer
Interaction Technology

$2,005 million

IC

FA

Tele-performance

Communications Enabled Business Processes areused to interact with customers. Contact systems using
these processes include technologies such as Internet, Telephone, Fax, EPABX, E-mail, and snail mail.
They maintain the details of all customer transactions. Some of the intelligent contact management
systems even predict why the customer might have called and respond accordingly. Contact management
systems are part of IT enabled services. They provide voice and non-voice based services to the
customers in providing recruitment services, processing accounts, processing payroll, processing
insurance claims and processing patent applications, etc.
Discussion Questions:
1. What is Contact Center Outsourcing (CCO)? Explain the process.
(Hints: outsourcing customer service and payments-global CCOs-third party CCOs)
2. Describe top-3 performers in CCO market.
(Hints: Teleperformance-Atento-Convergys)
Reference:Bhargava, S., Menon, A., Menzigian, K., Contact Center Outsourcing (CCO) Annual Report
2013: Focus on Customer Experience Management, Everest Group Research Report, July 2013.
Applicable to:
Topic

Course Name

Unit-24: IT and Business Process Management;


Section-24.9: Communications Enabled Business Processes;

128

IT & Systems

The ICFAI Group


ICFAI was established in
1984 as a not-for-profit
society with the broad
objective of empowering
citizens through world class
quality education. Since its
establishment, ICFAI Group
has made a significant mark
in the Indian educational
field with a pan Indian
network and presence.

The ICFAI Group's culture of teaching and learning


supports and fosters intellectual and personality
development among its graduating students. They carry
an attitude of ownership of their work. ICFAI Group strives
to make the students - DOERS. ICFAI Group system,
strongly believes in developing an 'entrepreneurial

FA

Subsequently, there was a


big leap when ICFAI Group
started its chain of business
schools (IBS) across India in
1995 to offer management
program. Since its
inception, IBS has been
consistently ranked among
the top ranked B-Schools of
India providing excellent
academic delivery and
infrastructure to its students
and transforming them into
leaders for the future.

ICFAI practices the value of academic integrity at all


levels.

IC

ICFAI Group has 3 Strategic


Institutional Units, the ICFAI
Universities, the ICFAI
Business Schools and the Flexible Learning Programs
(Distance Mode). In all the programs offered across these
units, the emphasis is on adherence to academic rigor
and differentiated curriculum that bridges the industry
academia gap.
Flexible and tech enabled learning also plays an
important role in ICFAI's teaching methodology. The
delivery takes place with the use of hi-tech learning
management system at campus programs and content
delivery for distance learning through online medium.

mindset' among its


graduating students.
The alumni of ICFAI
Group are working in
renowned companies
world-wide. Collectively,
ICFAI Group alumni
contribute significantly to
the growth story of India.

Awards won by ICFAI Group

FA

IC