Offshoring and outsourcing are two similar concepts in modern business. Outsourcing is the subcontracting of part of a business process to another company who returns the result to you. Usually this is done to reduce in-house costs of training, labor etc. so that the business can focus more on its core products. Offshoring is where a company moves part of its business to another country to take advantage of lower wages, weaker environmental restrictions, lower taxes, reduced healthcare costs, etc.
The two concepts are not mutually exclusive however. A great example of this is where a company in the U.S. would both outsource and offshore part of its business, such as a customer support call center, to another country like India. This allows the U.S. company to save even more than if they outsourced to another U.S. company and with today's telecommunication infrastructure this is more than feasible. Offshoring, while it usually does reduce costs, it also extends a company's supply lines with results in reduced reaction time. This can be trivial or critical depending on the industry the business is in.
The supply chain is the system by which goods get to the consumers. From innovation to design to manufacture to shipment to sale, the whole process is the supply chain. It involves suppliers who manufacture goods in bulk for purchase by retailers, the shipping companies who move those goods, and the retailer itself who sells to the end consumer. Wal-Mart is the king of supply chain management. Their one-two combo of distribution centers tied to a distributer-accessible IT infrastructure allowed for the super efficient command and control of the whole supply and disbursement system. Since the manufacturer knew how many of item X were being sold, they knew how many they needed to produce to resupply the retail stores.
This Just-In-Time system that I'm assuming Wal-Mart adopted from Toyota's production system is the principal reason they were able to grow from a single store to the global powerhouse they are today. The JIT system is where the components needed in order to manufacture something like a car are delivered just as they are needed for assembly which reduces the need for on hand inventory. Auto makers in Japan sell cars the way HP and Dell sell laptops: they let the customer pick and choose the features they want on their model, and build it to suit for that specific customer.
I'm not sure if Google was the first to do so, but they definitely brought targeted advertising into to forefront of marketing. By targeting ads based on the contents of a user's searches or emails Google generates more hits than blind advertising would. Also by making most of the world's public knowledge easily searchable, Google allows consumers to find a multitude of products, see reviews on them, and locate sellers faster than driving to a local retail outlet who would have a lower selection, no way to determine the quality, and higher price if you did buy.
Google, eBay, and Amazon have made brick and mortar stores for many products, especially electronics and other small volume high value goods, obsolete. I haven't purchased a video game, computer part, movie, anime, or music from a physical store in over five years. It's just cheaper/easier/faster to do it online and Google facilitates that by putting all the information I need at my fingertips. Why drive when I can click?
Wednesday, January 4, 2012
Tuesday, January 3, 2012
Module 2
An essay which doesn't have to be like a book report, hurray!
Workflow software is, in a nutshell, any software which improves the productivity and/or efficiency of an individual or company's work process, usually by automating some or all of the process. When I think of 'work flow software' three things come to my mind: cloud, cloud, and cloud. Hosted solutions for companies such as Amazon's massive datacenters (https://aws.amazon.com/products/) and for individuals such as Dropbox (http://db.tt/KI0kguC) and CrashPlan+ (http://www.crashplan.com/consumer/crashplan-plus.html) are cloud-based. And although it doesn't automate anything, I think that cloud-based Google Docs qualifies as workflow software. Remote, concurrent, collaborative data manipulation definitely facilitates the flow of work. Most "get things done" software like this can fall into this category. Another that just came to mind is Remember the Milk (http://www.rememberthemilk.com/) which is like a super to-do list on steroids that I use to keep track of the many things I have to do daily. I'm not sure that strictly speaking it is work flow software but it makes things easier to get done by keeping track of them for me.
Open source software just blows my mind. What you have basically is a huge number of skilled programmers who write programs and let people download and use them for FREE. Additionally since the source code is available, any other programmer with the skill to do so can modify it to his or her own specific needs or improve it by adding features, functionality, or patching bugs and security vulnerabilities. Also for FREE. Open source has provided the world with the GNU Privacy Guard (http://www.gnupg.org/) cryptosystem, the Linux operating system, Apache web server, and innumerable other applications for use by anyone who cares to search for and download them. For FREE.
Thus far I've used the word 'free' which means "doesn't cost you anything," but open source is tied to the other meaning of free which is "free to do with as you please" and is the what the GNU project is all about. I'm not a programmer but I agree with most of the free software movement's ideals. The reason is that most of the basic ideas of software freedom correlate to those of political and civil freedom.
Outsourcing is subcontracting. My personal opinion of it is pretty negative because I've worked many call center jobs and those are always subcontracted/outsourced. When a company outsources part of their workload, they can reduce costs by not having to train or hire personnel to do that part of the work, and often times the outsourced work is sent to India or China or some other country where wages for trained professionals is just a fraction of the minimum wage in the U.S. The issue I have is that when a company outsources they do it purely to save money, and not to provide better service to their customers or support for their product. In the pursuit of slashing costs outsourcing companies like ACS and Convergys have to put in the lowest bid so to accomplish this little things like training and tools that work for the poor people who are going to be on the phones fall to the wayside.
Outsourcing isn't inherently bad. It's just the execution of it that is. For example since my expertise is in computers, when I my car needs maintenance or has something wrong with it I'm not going to try and fix it myself even though I probably could learn how. No, it's much more effective to pay someone who already knows how to do it for their time and skill. However when a company like HP outsources to India or Convergys and someone who knows as much about their computer as I know about my car calls for support and cannot understand the person on the other end, or the person on the other end can't help them because they have no tools to do so, the customer becomes justifiably angry. When I worked those types of jobs I often wondered if the company ever did a cost-benefit analysis to determine if the money saved by outsourcing was greater than the revenue lost from irate consumers. I always assumed that they didn't do the analysis because that would cost money too.
Monday, January 2, 2012
Module 1
In the first section of his book, Friedman analyzes ten 'flatteners' which are events, technologies, and systems which have dramatically shrunk the world within the contexts of communication and human interaction. These 'flatteners' have also, according to the author, flattened hierarchies and established a new world order where rather than countries and corporations, it is individuals who are the driving force in the world today.
He initially explains this through his concept of 'Globalization X.0' where 'Globalization 1.0' occured from 1492 to the beginning of the Industrial Revolution. That period of time saw countries driven by (religious) Imperialism shape the world on a global scale for the sake of the country. 'Globalization 2.0' was from the Industrial Revolution until the inception of the Internet. During that time period it was companies rather than countries which drove change and innovation and who competed against one another for power and wealth. 'Globalization 3.0' is the era we are in now where the explosive expansion of the Internet and the PC has allowed almost anyone from almost anywhere to design, create, collaborate, innovate, and sell as individuals rather than being forced to join a company or government to do so. The author's concept of 'Globalization X.0' is how he describes the 'flatteners' he discusses afterwards.
The first 'flattener' is the fall of the Berlin Wall. Rather than simply the fall of the Berlin Wall but the whole cultural shift worldwide as a result of (or at least as a follow-on to) its fall towards open discourse, freedom of expression, and the breaking of barriers is Friedman's first 'flattener.' Restrictions and controls stifle innovation, creativity, and progress and the fall of communism left capitalism as the only viable system available. Since capitalism promotes amongst other things expansion, interaction, communication, and merit, a shift to capitalism worldwide broke down borders and regulations which inhibited these.
The second 'flattener' he describes is Netscape. The browser did two very important things. First it caused the explosive growth of Internet usage. It made it easy for anyone with a computer and a connection to the Internet to view the content that people were making available. With more people using it, more content was created, and the more content created, the more people wanted to access the Internet.
The second, and in my opinion more important thing it did was to promote the use of standard protocols for use on the Internet. Protocols such as TCP/IP, FTP, SSL, SMTP, HTTP, and HTML which allow any machine using these open standards to communicate with each other was the true source of the Internet's success. With an open set of standards, even if someone was working on a proprietary system, he or she could communicate with others across the Internet so long as they adopted those standards. Netscapes market share also prevented Microsoft from gaining a monopoly on the browser which would have ment they could have dictated the protocols of the Internet to be Microsoft proprietary ones. That would have crushed any open standards and would require anyone wishing to use Microsoft's protocols to pay Microsoft for that right.
All in all I've found the reading to mostly be boring thus far as I already knew the concept that Friedman describes as 'Globalization X.0' from my history classes and Wikipedia, and I don't think that the fall of the Berlin Wall had quite the effect the author describes. It no doubt changed the political climate greatly, but by this point companies were the global power and it was only a natural course for former communist countries to join the global market afterwards as their companies were no longer prevented from doing so. I also knew about the ironic case where Microsoft brought them to court because Netscape was monopolistic. I did find the story about Netscape interesting because I didn't know how much it had aided the adoption of open standard protocols for the Internet.
He initially explains this through his concept of 'Globalization X.0' where 'Globalization 1.0' occured from 1492 to the beginning of the Industrial Revolution. That period of time saw countries driven by (religious) Imperialism shape the world on a global scale for the sake of the country. 'Globalization 2.0' was from the Industrial Revolution until the inception of the Internet. During that time period it was companies rather than countries which drove change and innovation and who competed against one another for power and wealth. 'Globalization 3.0' is the era we are in now where the explosive expansion of the Internet and the PC has allowed almost anyone from almost anywhere to design, create, collaborate, innovate, and sell as individuals rather than being forced to join a company or government to do so. The author's concept of 'Globalization X.0' is how he describes the 'flatteners' he discusses afterwards.
The first 'flattener' is the fall of the Berlin Wall. Rather than simply the fall of the Berlin Wall but the whole cultural shift worldwide as a result of (or at least as a follow-on to) its fall towards open discourse, freedom of expression, and the breaking of barriers is Friedman's first 'flattener.' Restrictions and controls stifle innovation, creativity, and progress and the fall of communism left capitalism as the only viable system available. Since capitalism promotes amongst other things expansion, interaction, communication, and merit, a shift to capitalism worldwide broke down borders and regulations which inhibited these.
The second 'flattener' he describes is Netscape. The browser did two very important things. First it caused the explosive growth of Internet usage. It made it easy for anyone with a computer and a connection to the Internet to view the content that people were making available. With more people using it, more content was created, and the more content created, the more people wanted to access the Internet.
The second, and in my opinion more important thing it did was to promote the use of standard protocols for use on the Internet. Protocols such as TCP/IP, FTP, SSL, SMTP, HTTP, and HTML which allow any machine using these open standards to communicate with each other was the true source of the Internet's success. With an open set of standards, even if someone was working on a proprietary system, he or she could communicate with others across the Internet so long as they adopted those standards. Netscapes market share also prevented Microsoft from gaining a monopoly on the browser which would have ment they could have dictated the protocols of the Internet to be Microsoft proprietary ones. That would have crushed any open standards and would require anyone wishing to use Microsoft's protocols to pay Microsoft for that right.
All in all I've found the reading to mostly be boring thus far as I already knew the concept that Friedman describes as 'Globalization X.0' from my history classes and Wikipedia, and I don't think that the fall of the Berlin Wall had quite the effect the author describes. It no doubt changed the political climate greatly, but by this point companies were the global power and it was only a natural course for former communist countries to join the global market afterwards as their companies were no longer prevented from doing so. I also knew about the ironic case where Microsoft brought them to court because Netscape was monopolistic. I did find the story about Netscape interesting because I didn't know how much it had aided the adoption of open standard protocols for the Internet.
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