Discussion Case Study 1 – Description and Case Study Questions. Read the article
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Question
Discussion Case Study 1 –
Description and Case Study Questions.
Read the article “Clouds, big data, and smart assets: Ten tech-enabled business trends to watch “written in 2010, available from McKinsey Quarterly. This article includes the authors’ prediction for the coming years in ten information technology trends.
Your task is as follows:
(1) Comment on any one of the ten tech-enabled business trends.
a. Where we are at this time with respect to this trend and the authors’ prediction;
b. How it may affect U.S. competitiveness economically
c. What it means to U.S. knowledge workers, to you and/or, to an organization with which you have dealings - as you see it.
(2) Which of the trends mentioned in the article, that were just surfacing in 2010, are now gathering greater momentum, and for what reason?
Explanation / Answer
1. One of the ten tech enabled business trends was – “Imagining anything as a service”.
a) Technology enables businesses to monitor, measure, customize and bill customers for use of assets with more details and accuracy. Traditionally what was sold as products can have services created around them by the asset owners. In B2B, rather than the companies incurring large capital investments, they can purchase units of a service which will attribute as a variable cost. This is a “pay per use” model, which can help control the cost structure for any business. Also the hassles of buying and maintenance of a product is reduced. Many tools have enabled this – one of the significant ones is the cloud computing, ‘Software as a service’ that is used to access CRM which is growing. Innovation is growing in the industry to service customers for their customized solutions. Businesses are looking at purchasing services that are modular and customized as per their needs.
Not just IT, transportation services and business process outsourcing businesses are flourishing under this. This has become the basis for radical business innovation and new business models. Both consumers and businesses with access to a wealth of information due to growing technology and data. One of the challenges most organizations face is how to manage and access all this data. IT outsourcing greatly benefits organizations by leveraging core functions or services of an organization such as accounting, IT support, repetitive activities that helps the business improve its overall performance.
The current trends show that the rise of cloud computing virtualization and pay-per-use models have increased the complexity of outsourcing relationships. Cloud computing has opened new opportunities for IT outsourcing vendors such as cloud services implementation, integration, management, and support for deployment. Security is of significant importance in the outsourcing strategy. Security risk is may increase as Internet of Things (IoT) becomes more prevalent in consumer and commercial products.
There is a possibility that businesses will leverage the experience they have gained in process maturity as a result of working with outsourced offshore teams and may set up their own shops. This will enable them to reduce costs.
b) Outsourcing is about cost saving. It can increase productivity and competitiveness as the focus needs to be on research and innovation and not on the manufacturing.
Outsourcing is negatively affecting businesses in the United States due to which there is high unemployment, loss of income and hence, and loss of competitive advantage. The belief that the United States would be successful ,if efforts were focused in research and innovation, while countries like China and India would take care of the manufacturing, proved to be incorrect. The United States is not manufacturing the technology they need; rather they are buying it from countries which are leading to a trade deficit.
The practice of outsourcing has significantly affected employment aspects in the United States. American companies have hired people from foreign countries that are highly skilled and willing to work at lower salaries. This has resulted in reduction of consumer spending and tax revenues.
c)There is an apprehension that the offshoring trend, may end with disastrous results on the US economy in terms of not just loss of jobs in short term but a reduction in the long-term growth of knowledge workers and their skill sets. As dependence on external economies for knowledge-worker positions will increase, this may become a permanent dependence. Moreover, the loss of jobs and thus results in a loss of tax revenue will lead to erosion in the U.S. Gov. and state government’s tax bases. A knowledge worker who loses job to offshoring may be forced to take a job at lower salary.
2. ‘Producing public good on the grid’ is gaining momentum. The role of governments in shaping the global economic policy is expanding.Many cities around the world are now wired.Real time sensor systems are being used across the world for route optimization, transportation logic. Crimes are being controlled with the help of technology to create high alert zones. Education has been revolutionized and low cost, online education is now accessible to all. Governments is leveraging technology and internet in all transactions and public policies, such as tax filing and employment services. All Government initiatives are being launched with technology as the backbone. As the pace of technology accelerates, businesses will unlock competitive advantages and identify new market opportunities innovatively.