small business – Rich Garling

Differences Between Business Oriented and Social Oriented Networks

Introduction

This paper will discuss the difference between business-oriented networks and enterprise social networks. What makes up a social-networking site and what makes up a business-oriented social networking site and why are they different?

Another topic concerns why do organizations need a business continuity plan? Why is it important to determine what business will do if a disaster, man-made or natural, strikes? Three issues that a business continuity plan should cover concern identifying assets, controlling the flow if information, and determining who is in charge, what is the line of succession?

Many companies have created profitable businesses from selling small amounts of products previously sold in bigger chunks. Music and books are two such products. The market started asking to buy single songs and not the whole album; so how do you serve that market and still make a profit? Micropayment systems seemed to have come up with an answer, and it serves more than just the entertainment industry. This paper will discuss how this system works and how it is expanding beyond music and books.

How business-oriented networks and enterprise social networks differ

A social network is defined as a place where people can create a personalized homepage writing about events in their lives, post pictures of the family, short video’s, music, post and exchange thoughts and ideas, and link to their friend’s websites; in essence, they create their space on the internet. They can even tag, or create hashtags (#thisisme) for their content, add keywords, so the content is searchable. Others can comment, like, or share your content should you allow them to do so (Turban, 2012).

Mobile devices play a big role in social networking; enter mobile social networking. Users can let their social network know that they’re checking in at a local restaurant for dinner, or they’re at a favorite watering hole watching a live band. They can even post pictures as well as live videos of the event. Many entertainers encourage people attending these events to share their experience as it is free advertising and helps to increase sales of their products such as music or films. Data has shown that mobile social networking has increased subscribers by substantial amounts; the number of mobile subscribers accessing Facebook increased over 100% in one year from2009 to 2010 (Stackpole, 2012). Two basic types of mobile social networks exist; companies are partnering up with wireless carriers such as Yahoo and MySpace via AT&Ts wireless network, and companies that do not have such relationships with cell companies; they use other means in which to attract users such as mobile apps. Examples of these include Classmates.com and Couchsurfing.com.

Business Oriented sites, also known as professional social networks, primary objective are to foster business relationships amongst its members and subscribers. Examples of these sites include LinkedIn, ViaDeo, and Zing.

Many businesses are increasingly using these sites to increase their business contacts, especially in a global economy. Social networks make it easier to maintain contact with colleagues around the world. Companies can advertise businesses services and products. They can show expertise in their field using multiple media including educational presentations, articles, videos; all at virtually no cost to host. This low cost is especially beneficial to small companies. The small business can contact potential customers on the other side of the world. This type of connection was impossible ten years ago. This type of cross-border networking makes globalization available for the individual and the small business (Turban, 2012).

The need for a business continuity plan

The number one reason for a company to have a formalized disaster plan in place is to ensure ongoing business activities that provide business continuity with the least amount of disruption and costs for the business. Many businesses have failed due to a lack of disaster recovery planning because they could not guarantee business continuity that would allow them to survive an unexpected disaster (Turban, 2012).

Part of a company’s security efforts involve preparing for man-made or natural disasters since these may occur without any warning at any time. It is best to prepare an actual plan that will work effectively in the face of calamity. The most important part of this plan is the business continuity plan. It addresses the question of how the business is going to operate should an unexpected disaster occur. Most likely a disaster will be localized; if it’s a worldwide disaster, a plan would be unnecessary.

A disaster recovery plan confronts two issues: one how does the business recover from a disaster; two, how does it continue to operate should a disaster affect the business. This continuity is especially true for global businesses since, as stated earlier, a disaster is usually a localized event, and the business will want to ensure the rest of the business continues as those operations will help to pay for the cost of recovery. It is imperative for a business to have a disaster recovery plan in place to obtain insurance that covers the cost of recovery from the disaster. Disaster recovery describes the events linking the business continuity plan to safeguarding and ensuring recovery.

The purpose of a business continuity plan is to keep the business running after a disaster occurs. All functions and departments need to have in place an effective recovery plan. Part of that plan includes asset protection and recovery, even replacement. The plan needs to detail who makes the decisions, even to the point of secession. The plan needs to concentrate on total recovery from a total loss. The plan needs to be kept current due to changes in technologies, circumstances, even personnel. Critical applications need identifying. And the plan needs to be kept in a safe and accessible place.

A disaster recovery plan needs to cover many areas sufficiently to ensure recovery. It includes identification of assets and their value; including people, buildings, hardware, software, data, and supplies. A threat assessment needs to be conducted to include man-made and natural threats from inside or outside the business. Conduct a vulnerability assessment, and calculate the probability for exploitation, and evaluate all policies and procedures.

Micropayment Systems

The music and book industries today allow consumers set up accounts allowing them to buy single songs, even individual chapters in a book at very low prices. Accumulation of single-item purchases occurs until the amount makes it cost-effective to submit the payment to the credit card company. These systems are known as closed-loop systems. The credit card companies are not enamored with these systems because it has caused them to lower their fees to capture what is becoming a huge industry. Much of this type of business was unimaginable 15 years ago. Today, transactions worth billions of dollars are being handled daily (Schonfeld, 2009))

The shopkeeper gathers all the purchases subscribers make until they are sufficient enough to submit to the credit card company to be cost effective. It’s much like gathering all the days sales at a cash only business and depositing the money in the bank at the end of the day. The problem is the shopkeeper risks waiting a long time on some low volume customers. By aggregating these purchases together, the shopkeepers lower their costs per transaction to the credit card company enabling to operate profitably.

Other industries that are successfully taking advantage of micropayments include mobile banking and microfinancing to poor, underdeveloped areas of Africa; M-Pesa has been successfully operating in Kenya and Tanzania, and has spread to India and Afghanistan as well. Cell phone technology has allowed people in remote areas to apply for and receives loans as small as $100.00 allowing them to finance business operations and providing electricity to their homes using solar powered generators (Mutiga, 2014).

Conclusion

The difference between business-oriented networks and enterprise social networks occur in the area of concentration addressed by the individual sites and how they meet their subscriber needs. FaceBook addresses the need for their subscribers to interact on a social basis, sharing thoughts, family news and photos, opinions are important to this group. LinkedIn allows for sharing contact information, providing specifications on products, showing expertise, getting a job. Mobile devices have played a big role in both businesses oriented as well as the social networking sites so that people can share and talk with each other at anytime from anywhere.

The need for a disaster recovery plan must include a business continuity plan. With a business continuity plan, the business will find it difficult, if not impossible, to find the resources needed to recover from a man-made or natural disaster. Business continuity ensures that the business has continual incoming resources adequately funding the recovery.

Micropayment of become successful because it addressed a need and demand in the marketplace for services otherwise unavailable without it. The market was demanding the ability to be supplied with goods and services on a smaller scale rather than previously available; especially with entertainment and finance products. Entrepreneur’s stepped up and began to determine that if they aggregated their sales receipts and submitted them in bundles rather than individually, they could cut their costs while also serving their customers. The rest of the market, mostly the credit card industry, had to change to meet the demand.

References:

Mutiga, M. (2014, January 20). Kenyaâ’s Banking Revolution Lights a Fire – The New

York Times. Retrieved from http://www.nytimes.com/2014/01/21/opinion/kenyas-

banking-revolution-lights-a-fire.html?_r=0

Schonfeld, E. (2009, March 25). Spare Change On Track To Process $30 Million In

Micropayments On Social Apps This Year | TechCrunch. Retrieved from

http://techcrunch.com/

Stackpole, B. (2012, August). Business case for enterprise social networks: Better

collaboration. Retrieved from http://searchcontentmanagement.techtarget.com

Turban, E. (2012). Electronic commerce 2012: A managerial and social

networks perspective. Upper Saddle River, NJ: Pearson Prentice Hall.

eCommerce Security & Payments Systems

It’s funny how the supposed secure RFID chips on credit cards are less secure than the magnetic stripe cards are. According to Chase Bank and American Express, the chips are built with 128-bit encryption and Triple-DES (Data Encryption Standard) protecting the data on the chip. Furthermore, the chips, theoretically, send a unique, single-use code with each transaction that does not match the number on the card (Johnson, 2009). And now wallets are available at Amazon that contains shields within your wallet preventing the reading of the card chips by portable readers of RFID chips.

Part of the problem with fighting computer criminals is that once companies have developed the means to fight the latest virus or DoS attack, computer criminals have developed another way to attack. Anti-virus software is only as good as the last known virus. A computer virus, phishing scams, Trojan horses, and DoS (Denial of Service) is used to get information, prevent the use of your computer, gather the information that can be used illegally or sold for illegal use. The biggest threat to computer security has been found to be the user. In the early days, users would write their passwords on a sticky note and post it on their monitors. You may laugh at this notion, but it’s very true. The problem with fighting computer crime is the inability of many people to understand that they’re being spammed or phished. They download a file containing a Trojan horse virus thinking it’s from their best friend, or they’re gullible enough into believing that their child, who is standing next to them, is badly injured in a Nigerian hospital and needs emergency help. The file they download carries a code that will allow their computer to be used in a vast network of other computers to infect many more computers. These computers provide enough power to cause heavy-duty denial-of-service attacks on many well-known companies or government services (Brumfield, 2015)

Grameen Koota set up micro-finance and is part of Grameen Bank in Bangalore, India. It provides small loans to poor or low-income clients. One of the problems that Grameen Koota was trying to bridge by developing a mobile loan and payment system was the inability of the poor to grow their way out of poverty. They didn’t have access to the means of capital they needed to provide even for necessities of life. Grameen Koota had a desire to grow their business. Since business and government were unwilling to set up the needed infrastructure due to the heavy costs of that infrastructure, and the people had a need, and the people owned the means; an abundance of cell phones, the opportunity to provide easy banking and financial services presented itself (Turban, 2012).

M-Pesa has been providing mobile banking and micro-financing to poor, underdeveloped areas of Africa; Kenya, and Tanzania since 2009, and that has since spread to India and Afghanistan. Many people with just a simple flip phone can apply for and receive loans as small as $100.00 to finance providing electricity to their homes using solar-powered generators. And the system allows the borrower to pay the bank using the phone. Grameen Koota had a problem with providing loans when it came time to collect payment; his collectors became victims of armed robberies while returning to the bank with the day’s receipts. One can only imagine the immensity of such a change to a rural area that has never had electricity. And the ability to be able to communicate directly with buyers anywhere in the world, versus just in their local area, allowing these people to sell their products allows them to work their way out of poverty and live a better life (Mutiga, 2014).

References:

Brumfield, J. (2015, April 13). Verizon 2015 Data Breach Investigations Report – About Verizon

Enterprise Solutions. Retrieved from http://news.verizonenterprise.com/2015/04/2015-data-

breach-report-info

Johnson, J. (2009, September 30). RFID Credit Cards and Theft: Tech Clinic. Retrieved from

http://www.popularmechanics.com/technology/security/how-to/a1142/4206464/

Mutiga, M. (2014, January 20). Kenyaâ’s Banking Revolution Lights a Fire – The New York Times.

Turban, E. (2012). Electronic commerce 2012: A managerial and social networks perspective. Upper

Saddle River, NJ: Pearson Prentice Hall.

Starbucks. Netflix and Social Media Marketing

Introduction

Today’s post will explore the success of Starbucks and Netflix on the Internet, particularly with Social Media. It will explore why Starbucks puts so much emphasis on social media like Facebook and Twitter and how these sites compare to their homegrown site. The question for Netflix is whether or not the Cinematch search tool is responsible for NetFlix’s success as a business or is it due to them moving to total streaming of movies and TV shows that created their success?

Starbucks

Starbucks, according to some people, makes great coffee. Their staffs of baristas are friendly, and their stores located just about everywhere in America. They even have stores in China. They’re known for their killer social media strategy (Huff, 2014).

Here are some of the stats:

● 36 million Facebook likes

● 12 million Twitter followers

● 93K YouTube subscribers

Those numbers are very impressive. There’s no doubt Starbucks is big on social media, but, why do they do it? Starbucks focus is on its customer base. Their customers are young, social media savvy, and affluent. They’re into the latest thing. On Facebook, the Starbucks management doesn’t post too often; they let their fans do all the talking. But when management does post, it’s usually fun things like contests, tips on things, as well as low-key sales pitches. Starbucks also allows customers to reload their Starbucks mobile card from Facebook. It’s all about creating relationships with existing customers to increase sales and add new customers. Free advertising from existing customer from their feedback adds on new customers at virtually no cost.

On Twitter, Starbucks connects with followers who want to catch up on the latest news and updates and the staff uses Twitter as a service reaching out to customers who are talking about their experiences with the stores and products. The staff checks out Twitter all day long to help keep satisfied customers satisfied and to settle any problems quickly before they get out of hand.

The similarities between Starbucks homegrown site, http://mystarbucksidea.force.com/, And Facebook or Twitter is that while getting customers is good, keeping them is even better. With over 23,000 stores, the company has reached a point where advertising on TV or radio has only so much impact. It no practices f-Commerce where developing social relationships online becomes critically important to keep customers (Turban, 2012). There are similarities on each of the social media sites that Starbucks has a presence, such as encouraging ideas for new drinks are food, attending social events at a nearby store. But each of these sites serves a different clientele. Facebook, for instance, is more family oriented than Twitter, which is more individualistic. All have a love for coffee which is the commonality of this community. Starbucks needs to use these other social media outlets so that it captures every possible customer. And the relationship needs to be tailored to fit the audience, a time-honored tradition in sales. The message can be the same, only stated differently for each audience (McNamara & Moore-Mangin, 2015).

Netflix

Was the reason for Netflix’s success due to implementing the Cinematch search engine on its system? Yes, it was a major contribution because of its ability to conduct extensive data mining; this software agent uses data mining apps to sort through a database of more than 3 billion films and customers’ rental history. Cinematch suggests different movies to rent to the customer. It’s a personalization similar to that offered by amazon.com when it suggests different book titles customers. The basis of the recommendation is a comparison of the individual’s likes and preferences, comparing them to people with similar tastes. With this type of suggestive system, Netflix tells subscribers which movies they probably would like and shows a comparison of what other similar people are watching.

Netflix has already successfully moved from just DVD rentals to streaming video. They have, in fact, been offering television series shows that has drawn in an even larger audience that has helped to increase their revenues beyond what just renting movies could do (Cohen, 2013).

Conclusion

Both Starbucks and Netflix have successfully moved into the Web 2.0 world using social media and search tools effectively to meet their customer’s needs and demands. Netflix moved successfully from being a DVD movie rental business doing mail-order only business, to becoming the preeminent streaming entertainment company with millions of subscribers. Both companies managed to take current technology and develop systems that meet the customer’s needs and making themselves very profitable with bright futures.

References:

Cohen, P. (2013, April 23). Forbes Welcome. Retrieved from http://www.forbes.com/sites/petercohan

/2013/04/23/how-netflix-reinvented-itself/#61f9c77d74ea

Huff, T. (2014, August 23). How Starbucks Crushes It on Social Media | Social Media Today. Retrieved

from http://www.socialmediatoday.com/content/how-starbucks-crushes-it-social-media

McNamara, T., & Moore-Mangin, A. (2015, August 3). Starbucks and Social Media: It’s About More than

Just Coffee – EContent Magazine. Retrieved from

http://www.econtentmag.com/Articles/Editorial/Commentary/Starbucks-and-Social-Media-Its-

About-More-than-Just-Coffee-103823.htm

Turban, E. (2012). Electronic commerce 2012: A managerial and social networks

perspective. Upper Saddle River, NJ: Pearson Prentice Hall.

Mass Customization in eCommerce

The idea behind mass-customization is to create specific products based on the customer’s needs and to deliver that product quickly. Personalization is where the customer’s preferences are aligned with the products being advertised.

Personalization is quite common on Social Media like Facebook or Google. If you mention on FaceBook that you’re thinking about buying a car, you will begin to see ads for cars on your FaceBook site. Likely you will also see those ads on Google as they see what topics I’m searching. What is interesting about personalization is not that neither Google nor FaceBook really care, nor does the advertiser, who you are, they just care that you’ve expressed an interest in a topic. The advertiser has bought certain keywords from either Google or FaceBook so that when those keywords are used that advertisers ads will appear. The FaceBook user is unknown to the advertiser until the user decides to let the advertiser know their identity.

Knowledge of your interests can be kept in on a cookie that contains as a user profile and is put on your hard drive of your computer, frequently without you knowing about it or without your permission (Turban, 2012). Some sites do it differently. Amazon, for instance, uses your past buying history to determine the ads or suggestion you see. Google just simply relies on current information as you’re browsing. Personalization also extends to cell phones, tablets, and other forms of digital media (Personalization-Wikipedia, 2016).

Mass-customization is where the customer gets to order a product based on their preferences and it is usually delivered within a short period of time (McCarthy, 2004). Dell Computers is a prime example of a company that has mass-customization down to a science (Mass-Customization-Wikipedia, 2016). The customer will place an order for a laptop that contains certain features they prefer. The customer pays for the order via credit card; Dell sends the order to the factory which produces the ordered laptop. The laptop is then shipped to the customer, usually within 1 week. Mass customization aims to deliver customized products while using the efficiency of mass production (Chen, 2009). The idea is to be to control the costs of production while also meeting the demands of the market.

Amazon’s critical success factors are in its basic challenge: How does it sell consumer goods online and show a profit and decent return on investment. Amazon sells in three basic categories: media, electronics, and other products including Kindle, office supplies, cameras, and toys (Turban, 2012). Amazon has to ensure that it is the innovator in the field constantly staying ahead of the competition in offering a broad variety of products, make it easy to buy from them and even allow the customer to easily return products when not satisfied. This is a good strategy as it makes it a one stop shop online. One just needs to look at Wal-Mart or Target to see the success of one stop shopping. By making it easy to do business with them, Amazon makes it the destination of choice whenever one is shopping, wherever one is shopping. The shopper can access Amazon via their smartphone in Wal-Mart and do comparison shopping right on the spot; even buy it while standing in the store. All of this makes it so that Amazon will continue to grow into the foreseeable future (Amazon-Wikipedia, 2016).

Having recently bought an iPhone 6S+ I was able to go to the Apple website and view the phone, see the different features, and weigh various price breaks. From their website I was able to make the decision between the smaller versions versus the bigger versions by viewing the differences online. But full trust in what I was buying didn’t occur until I went to the Apple store to actually touch and feel the product.

One way that online retailers have solved the problem of trust is by allowing shoppers to buy and easily return, satisfaction guaranteed. Zappos is a prime example of where a customer can buy several sizes of the same shoe, try them on, and return those items that don’t satisfy (Zappos-Wikipedia, 2015). Online trust is difficult to achieve due to the fact that a potential customer cannot touch or examine the product. Without a good return policy, many people will simply not buy the product. Another good policy is allowing customers to rate the product. Amazon encourages and publishes customer opinions on their purchases because they know it encourages others to buy.

References:

Amazon.com – Wikipedia, the free encyclopedia. (2016, February 11). Retrieved February 11, 2016, from

https://en.wikipedia.org/wiki/Amazon.com
Chen, S., Wang, Y., & Tseng, M. (2009). Mass customisation as a collaborative engineering effort.

International Journal of Collaborative Engineering, 1(1), 152.

Mass customization – Wikipedia, the free encyclopedia. (2016, January 4). Retrieved February 11, 2016,

from https://en.wikipedia.org/wiki/Mass_customization

McCarthy, I. P. (2004). Special issue editorial: the what, why and how of mass customization. Production

Planning & Control, 15(4), 347-351. doi:10.1080/0953728042000238854

Personalization – Wikipedia, the free encyclopedia. (2016, February 11). Retrieved February 11, 2016, from

https://en.wikipedia.org/wiki/Personalization

Turban, E. (2012). Electronic commerce 2012: A managerial and social networks perspective. Upper Saddle

River, NJ: Pearson Prentice Hall.

Zappos – Wikipedia, the free encyclopedia. (2015, December 15). Retrieved February 11, 2016, from

https://en.wikipedia.org/wiki/Zappos

How can Electronic Commerce be a business pressure and an organizational response?

Introduction

How can eCommerce (EC) be a business pressure and an organizational response? Has EC somehow lost the human interaction or touch? Why do businesses change their business models in the digital age? How has EC affected dynamic and fixed pricing of products or services? What are the risks of using Web 2.0 tools? These questions are the gist of this paper and they will be discussed briefly herein.

Business Pressure and Organizational Response

With ever-changing business climates, globalization, technical advancements, changing governmental rules, and societal factors are creating a highly competitive business environment. Many of these factors can change quickly and unpredictably (Turban, 2012). Business must be nimble and agile in order to respond to the circumstances. Electronic Commerce (EC) can be the means in which a company responds effectively to an ever-changing business environment.

These business pressures are divided into a market (economical), societal, and technological categories. The market or economic, pressures include stronger competition, much from a global economy; includes regional trade agreements, such as NAFTA, and low wages in many third world nations. Societal pressure includes the changing workforce, government regulation/deregulation, shrinking governmental subsidies or increasing subsidies, and rapid political changes including terrorism. Technical pressures are due to the rapid change in technology almost on a daily basis including product obsolescence and rapid advancement.

The question of how EC can be a business pressure and an organizational pressure can be seen in having to respond to the various changes that occur in the marketplace, in society, or in government changes that occur. An example would be when Sarbanes-Oxley Act of 2002 (SOX) was passed by the Federal Government in response to gross accounting irregularities of companies like Enron and WorldCom. The law imposed stringent requirements on accounting reporting and management’s responsibility for the information contained therein. The business pressure was the SOX requirements and how could EC provide the answer to meeting those requirements. Today there are many accounting applications businesses can use that are readily accessible from the cloud such as Intuits QuickBooks.

Elimination of Human Touch

Some claim that digital business eliminates the “human touch”. The loss of human contact with the digital age is likely a tad overblown. While there have been significant changes in manufacturing due to automation, there has also been a significant increase in the number of ways in which we are able to reach out and touch someone. When you get down to it, EC has really created much more ways for humans to interact with the world around us (NSF, 2015)

The coming of digital technology has certainly changed the way people interact and do business. For example, people used to talk with each other face-to-face. We had to go to the local store in order to buy a loaf of bread. Of course, that type of communication took place in a very limited manner and it was with people who lived within your local community. Today millions of people across the world are interacting via Facebook. One can call a friend living in Holland from the US at little to no costs and talk for hours using Skype. Our local community has become worldwide. Just because we use Facebook for better than three hours a day on average doesn’t relinquish the requirement to build trust and lasting friendships (Fuller, 2014). We still need that human contact as a species.

Changing Business Models

Why do companies frequently change their business model? What are the advantages and disadvantages? Companies frequently change their business models when it becomes either advantageous or necessary to do so. Advantageous because the business stands to gain financially from making an EC change that would make them more competitive. Necessary because if the business doesn’t change they will be less competitive and perhaps out of business as a result.

An example would be when many companies like Sears and JC Penney decided to quit producing their old line print catalogs in favor of producing an online catalog of the goods they sell. By producing the catalog online they were able to see huge cost savings and an increase in sales. Plus, each company was able to reach out to many more potential customers by using social media, email, and online advertising to draw people to their online catalogs (Turban, 2012).

Effects on Dynamic and Fixed Pricing

Discuss the advantages of dynamic pricing over fixed pricing? What are the potential disadvantages of dynamic pricing? Dynamic pricing is based on supply and demand of a given product. The pricing is considered dynamic as it fluctuates depending on the circumstances of supply and demand. The process could include a company posting a bid to buy or sell a product, a forward/reverse auction; buyers/sellers see the offers/bids online and they interact in real time competing with the other buyers/bidders but they may not whom they are competing with. Many variables have to come into play in order for the transaction to be completed such as price, time, location and other variables before the transaction is completed (Turban, 2012). The advantages are numerous for these types of interactions. It is easier to conduct an auction online than it is at a physical location; one has to actually secure a location, hire people to help run the auction, bring the product to the location. EBay, for instance, conducts auctions on hundreds of thousands of products daily without a physical structure in which to show all of these products. Everything is shown in the customer’s living room on their computers. These customers can view the products at their leisure when they want to. They can watch the bidding in real time, they know what they’re buying, and thus eBay is not losing customers due to the fast nature of live auctions.

Fixed pricing means the price is set, the only negotiating may be quantity price breaks or sales deals of the moment. Many companies offer the opportunity for the consumer, mostly on the retail side, to do comparison shopping so they can see if they’re getting a good deal at a good price.

Web 2.0 Risks

Web 2.0 tools include social media, wikis, blogs, Business Intelligence Analytics, dashboards, chat rooms and much more than can be listed here. The ability of Web 2.0 to change our lives has been tremendous and exciting. One of the main risks with Web 2.0 is that it has opened us up to the possibility of fraud. Craigslist is an example of where the possibility of fraud exists as there have been numerous complaints of illegal ads and other practices (Wikipedia, 2016). Security issues abound, especially with credit card usage. Hackers have the ability to access transactions as they occur, especially at ATM’s. The government realizes the benefits of using Web 2.0 technology, but they also understand the risks (Uthayasankar, Zahir, & Vishanth, 2015). Today we see the proliferation of anti-virus software like Norton, or the growth of cybersecurity companies like Palo Alto, Inc. Many companies, when considering using Web 2.0, have to weigh the benefits with the risks. They have teams of developers that concentrate on areas that help to secure the benefits being delivered.

Conclusion

Has EC had a profound affect on our lives. Yes, it has, even for those who claim it hasn’t. Everywhere we go we see the effect of Web 2.0 technology being used even if we don’t realize it. Business are constantly changing the way they do business. People are communicating more and sharing more than at any time in human history. Just look at Facebook for proof of sharing. Does it all have its downside? Of course, it does. Jobs have been eliminated due to changes in technology. Just look at the coal industry as an example; in 1920, almost 785,00 people were working in the coal industry. Today around 80,000 are employed in the production or use of coal. The cause of the decline is due to modernization (SourceWatch, 2015). Is it risky to use Web 2.0 technology, yes it is. But the benefits outweigh the risks. Just looking at the effect on dynamic pricing activities shows how much more efficient the whole system works is proof of the positive effect on society Web 2.0 has had.

References:

Coal and jobs in the United States – SourceWatch. (2015, June 26). Retrieved from

http://www.sourcewatch.org/index.php/Coal_and_jobs_in_the_United_States

Craigslist – Wikipedia, the free encyclopedia. (n.d.). Retrieved February 5, 2016, from

https://en.wikipedia.org/wiki/Craigslist

Fuller, E. (2014, March 20). Are we losing touch in this age of digital communications? Retrieved from

http://www.forbes.com/sites/edfuller/2014/03/20/are-we-losing-touch-in-this-age-of-digital-

communications/#13c6589963e7

NSF (2015). The Internet, Changing the way we communicate. (n.d.). Retrieved from https://www.nsf.gov

/about/history/nsf0050/pdf/internet.pdf

Turban, E. (2012). Electronic commerce 2012: A managerial and social networks perspective. Upper Saddle

River, NJ: Pearson Prentice Hall..

Uthayasankar, S., Zahir, I., & Vishanth, W. (2015, October 4). Evaluating the use and impact of Web 2.0

technologies in local government. Retrieved from http://www.sciencedirect.com/science/article

/pii/S0740624X1500076

The effects of activity time variance on critical path planning

A Critique of

Lanny A. Karns and Lloyd A. Swanson

Article

“The effects of activity time variance on critical path planning”

Table of Contents

Abstract

Introduction

Network Analysis: CPM & PERT

Conclusion

Abstract

Critical Path Method (CPM) and Program Evaluation and Review Technique (PERT) are the two most commonly used networking techniques for defining the duration of project tasks. While they have much in common, they’re based on different concepts and both were independently developed. PERT defines a probabilistic distribution of activity time defined using three time estimates which emphasizes minimum project duration while downgrading cost restraints. CPM uses one deterministic time estimate emphasizes cost over time restraints. CPM is the most popular of the two methods as it is deemed easier. Lanny Karnes and Lloyd Swanson in their article “The effects of activity time variance on critical path planning“ advocate combining the two methods asserting they cannot be totally independent due to an obvious relationship between time and cost ( Karnes, 2007).

Introduction

It is well known that there are many techniques Project Managers can use to support better project planning. Critical Path Methodology (CPM) and Program Evaluation and Review Technique (PERT) are two such tools that ae used by many Project Managers. These two techniques, while derived independently of one another, cannot be totally independent due to an obvious relationship between time and cost. While CPM emphasizes cost over time restraints and PERT emphasizes time over costs restraints, perhaps there is a way to bring the two together. Karnes believes the best way to combine these two would be to put CPM’s crashing strategy together with PERT’s probability distribution of activity times come out with the best possible duration and cost for the project (Karnes, 2007).

The three estimates of PERT; optimistic, most likely, pessimistic, are combined to determine an expected duration and variance for each activity. These expected times are used to create the critical path and the variances are added to determine the project duration variance. From these numbers we can develop a probability distribution showing project completion times. The problem here is that if the activity variances lie outside the critical path then they’re not considered when determining the project variance. The fact that they’re not considered can lead to errors in determining total project duration. A similar issue can happen when using CPM’s crashing strategy where multiple paths through the network have similar or close lengths. If we drop the assumption of deterministic activity times and the duration is allowed to vary, a decrease in the length of the critical path may not result in a similar decrease in project duration because of variances inherent in parallel paths. Simply allowing activity times to vary; which inevitably they will do in real life, can result in serious problems with CPM’s crashing strategy leading to wasted time and money (Karnes, 2007).

Network Analysis: CPM & PERT

Using CPM and PERT for network analysis can provide invaluable information for planning, scheduling and executing projects. The main purpose of network planning is to avoid crisis management by using picture representations (graphs) showing the total project activities in a logical order. This aids in determining sequencing and duration of activities and the project. The following information can obtained from such a graphical picture (Kerzner, 2009):

Interdependencies of activities
Project completion time
Impact of late starts
Impact of early starts
Trade-offs between resources and time
Supposing exercises
Cost of a crashing
Performance Slippages
Performance Evaluation

CPM was mainly worried with creating activity prerequisites and determining simple network solutions. It was primarily useful for keeping track of activities and identifying activity conflicts or sequencing flexibilities which could affect project completion. Later on, cost slope analysis was developed as a way to calculate the shortest project time within the constraints of costs and time constraints. This technique was used to determine effective savings in time when it is possible to “crash” or shorten the individual activity times. The time actually saved is divided into the cost increase from compressing the activity to define the net cost slope. The slopes are compared to the costs to determine if reducing project duration will result in cost savings.

PERT was designed to overcome inherent problems in assuming activity time estimates deterministically. By coming up with three activity time estimates it allows the user to develop a probability distribution for the length of each activity. Once this is accomplished the user can calculate sequencing and network solutions in a manner similar to CPM. PERT is a management planning tool that can be used as road map where the activities have been identified along with interdependencies. A PERT chart is usually designed from back to front with the end date in mind (PMBOK, 2013).

Using both CPM and PERT, a Project Manager (PM) is able to determine, with some degree of accuracy, the overall length of the project by determining the duration of each activity. From this analysis the PM can also determine the interdependencies of each activity and thus is able to sequence these activities in a logical order. From this information the PM can determine the Critical Path of the project seeing those activities that have no slack in comparison to those that do have slack (lags and leads). Through network analysis the PM can determine how to better utilize resources more effectively and to track how the project progresses thus keeping effective control on time and costs.

Conclusion:

Combining the best of CPM and PERT can make it so that the PM can accurately estimate the amount of time and cost for each activity in the project. But, we have to keep in mind that these are still estimates. One can reasonably assume, through probabilistic analysis, how accurate these estimates are; it still needs to be taken with a grain of salt by keeping a watchful eye on the projects progress. PM’s have to keep in mind how difficult it is to get PERT’s three activity estimates from the subject matter experts or those who will perform the work. Probably part of the reason why many PM’s choose to use CPM over PERT is due to it being easier to determine duration from past history then to wrangle it out of software programmer.

References:

Karns, L. A., & Swanson, L. A. (2007). The effects of activity time variance on critical path planning. PMI. Retrieved from http://www.pmi.org/learning/time-variance-critical-path-planning-1959

Kerzner, H. (2009). Project management: A systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons.

Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK guide), fifth edition. Newtown Square, PA: Author.

Project Management: 42 processes in order

These are the 42 PMBOK processes all in order of occurrence…in a perfect world…my hope is that this compilation helps someone else who is studying for the PMI PMP test. Please let me know if I missed anything. I will be updating this tool as I move along in my studies. I hope this will be useful to others studying for the PMP certification.

42 Processes In Order Of Occurrence
Process Group	Knowledge Area	42 Processes	Inputs	Tools	Outputs
Initiation
	Integration Management	Develop Project Charter	Project statement of work; business case; Enterprise environmental factors (EEF); Organizational Process Assets (OPA)	Expert Judgment	Project Charter
	Integration Management	Identify Stakeholders	Project Charter; Procurement Documents; EEF; OPA	Stakeholder Analysis; Expert Judgement	Stakeholder Register; Stakeholder Management Strategy
Planning
	Integration Management	Develop Project Management Plan	Project Charter; Outputs from planning processes; EEF; OPA	Expert Judgment	Project Management Plan
	Scope	Collect Requirements	Project Charter; Stakeholder Register	Interviews; Focus Groups; Facilitated Workshops; Group Creativity Techniques; Group Decision making techniques; Questionnaires and Surveys; Observation; Prototypes	Requirements documentation; requirements management plan; requirements traceability matrix
	Scope	Define scope	Project Charter; Requirements documentation; OPA	Expert Judgment; Product analysis; alternatives identification; facilitated workshops	Project scope statement; project document updates
	Scope	Create WBS	Project scope statement; requirements documentation; OPA	Decomposition	WBS; WBS Dictionary; scope baseline; Project documents updates
	Time	Define Activities	Scope baseline; WBS; WBS Dictionary; EEF; OPA	Decomposition; Rolling wave planning; templates; Expert judgment	Activity List; Activity attributes; milestone list
	Time	Sequence activities	Activity List; Activity attributes; milestone list; Project Scope Statement; OPA	Precedence Diagram Method (PDM); Dependency Determination; Apply leads & lags	Project Schedule Network Diagrams
	Time	Estimate activity resources	Activity Lists; Activity Attributes; Resource Calendar; EEF; OPA	Expert Judgement; Alternatives analysis; Published estimating data; Bottom-up Estimating; PMIS	Activity Resource Requirements; Resource breakdown structure; Project document updates
	Time	Estimate activity durations	Activity Lists; Activity Attributes; Activity resource requirements; Resource Calendar; Project Scope Statement; EEF; OPA	Expert Judgement; Analogous estimating; Parametric estimating; Three-point estimating; reserve analysis	Activity duration estimates; Project document updates
	Time	Develop schedule	Activity Lists; Activity Attributes; Project schedule network diagrams; Activity resource requirements; Resource Calendar; Activity Duration estimates; Project Scope Statement; EEF; OPA	Schedule network analysis; Critical Path Method (CPM); Critical Chain Method; Resource leveling; What-if-scenerio analysis; Applying leads & lags; Schedule compression	Project schedule; Schedule baseline;
	Costs	Estimate costs	Scope Baseline; Project schedule; HR Plan; Risk Register; EEF; OPA	Analogous estimating; Parametric estimating; Bottom-up estimating; three-point estimates; reserve analysis; cost of quality; PMIS; Vendor bid analysis	Activity cost estimates; Basis of estimates; project document updates
	Costs	Determine budget	Activity cost estimates; Basis of estimates; Scope baseline; Project Schedule; Resource calendars; contracts; OPA	Cost aggregation; reserve analysis; expert judgement; Historical Relationships; Funding Limit Reconciliation	Cost Performance Baseline; Project Funding Requirements; Project Document Updates
	Quality	Plan quality	Scope Baseline; Stakeholder register; Cost performance baseline; schedule baseline; risk register; EEF; OPA	Cost-Benefit Analysis; Cost of Quality; control charts; benchmarking; design of experiments; statistical sampling; flowcharting	Quality Management Plan; Quality Metrics; Quality Checklists; Process Improvement Plan; Project Document Updates
	Human Resources	Develop Human Resources Plan	Activity resource requirements; EEF; OPA	Org charts and position descriptions; matrix charts; networking; org theory	HR Plan
	Communications	Plan communications	Stakeholder register; Stakeholder Management Strategy; EEF; OPA	Communication Requirements Analysis; Communication Models;	Communications Management Plan; Project Document Updates
	Risk	Plan risk management	Project scope statement; Cost Management Plan; Schedule Management Plan; Communications Management Plan; EEF; OPA	Planning Meetings & Analysis;	Risk Management Plan
	Risk	Identify risks	Risk Management Plan; Activity Costs Estimates; Activity Duration Estimates; Scope Baseline; Stakeholder Register; Cost Management Plan; Schedule Management Plan; Quality Management Plan; Project Documents; EEF; OPA	Documentation Reviews; Information Gathering Techniques; Checklist analysis; Assumptions Analysis; Diagramming techniques; SWOT; Expert Judgment;	Risk Register
	Risk	Perform Qualitative Risk Analysis	Risk Register; Risk Management Plan; Project Scope Statement; OPA	Risk Probability and Impact Assessment/Probability and Impact Matrix; Risk data quality assessment; Risk categorization; risk urgency assessment; expert judgement	Risk Register Updates
	Risk	Perform Quantitative Risk Analysis	Risk Register; Risk Management Plan; Cost Management Plan; Schedule Management Plan; OPA	Data Gathering and Representation Techniques; Probability Distributions; Quantitative Risk Analysis and Modeling Techniques	Risk Register Updates
	Risk	Plan risk response	Risk Register; Risk management plan	Strategies for negative risks or threats; Strategies for positive risks or opportunities	Risk register updates; Risk related contract decisions; project plan updates; project document updates
	Procurement	Plan procurements	Scope Baseline; Requirements Documentation; Teaming agreements; Risk Register; Risk related contract decisions; Activity resource requirements; project schedule; activity costs estimates; cost performance baseline; EEF; OPA	Make or Buy Analysis; Expert Judgment; Contract Types;	Procurement Management Plan; Procurement Statement of Work; Make or buy decisions; Procurement Documents; Source selection criteria; Change requests
Execution
	Integration Management	Direct and manage project execution	Project Management Plan; Approved Change Requests; EEF; OPA	Expert Judgment; PMIS	Deliverables; Work Performance Information (WPI)
	Quality	Perform quality assurance	Project Management Plan; Quality Metrics; WPI; Qaulity control measurements	Plan quality and perform quality control tools and techniques; quality audits; process analysis	OPA updates; change requests; project management plan updates; project document updates
	Human Resources	Acquire project team	Project management plan; EEF; OPA	Pre-assignment; negotiation; acquisition; virtual teams	Project staff assignments; resource calendars; project management plan updates
	Human Resources	Develop project team	Project staff assignments; resource calendars; project management plan	Interpersonal skills; training; team building activities; ground rules; co-location; recognition and rewards;	Team performance assessments; EEF;
	Human Resources	Manage project team	Project staff assignments; project management plan; Team performance assessments; Performance Reports; OPA	Observation & conversation; Project performance appraisals; conflict management; Issue Log; Interpersonal skills;	EEF Updates; OPA updates; Change requests; Project Management Plan Updates
	Communications	Distribute information	Project management plan; performance reports; OPA;	Communication methods; Information distribution tools;	OPA updates
	Procurement	Conduct procurements	Project Management Plan; Procurement Documents; Source Selection Criteria; Qualified Sellers List; Make or Buy Decisions; Teaming Agreements; OPA	Bidder Conferences; Proposal Evaluation Techniques; Independent Estimates; Expert Judgement; Advertising; Internet Search; Procurement Negotiations	Selected Sellers; Procurement Contract Award; Resource Calendar; Change Requests; Project Management Plan Updates; Project Document Updates
Monitor & Control
	Integration Management	Monitor & control project work	Project Management Plan;Performance Reports; EEF; OPA	Expert Judgement	Change Requests; Project Management Plan Updates; Project Document Updates
	Integration Management	Perform integrated change control	Project Management Plan; WPI; Change Requests; EEF; OPA	Expert Judgement; Change Control Meetings	Change Request Status Updates; Project Management Plan Updates; Project Document Updates
	Scope	Verify scope	Project management plan; Requirements documentation; Requirements traceability matrix; Validated deliverables	Inspection	accepted deliverables; Change requests; project document updates
	Scope	Control scope	Project management plan; WPI; Requirements documentation; Requirements traceability matrix; OPA	Variance analysis	Work performance measurements (WPM); OPA updates; Change Requests; Project management plan updates; Project document updates
	Time	Control schedule	Project Management Plan; Project Schedule; WPI; OPA	Performance Reviews; Variance Analysis; PMIS; Resource leveling; what-if-scenerio analysis; Adjusting leads & lags; schedule compression; scheduling tool	Work performance measurements; OPA updates; Change requests; Project Management Plan Updates; Project Document Updates
	Costs	Control costs	Project Management Plan; Project Funding Requirements; WPI; OPA	Earned Value Measurement;(CV & CPI); Forecasting (EAC; ETC; TCPI; EV); Performance Reviews; Variance Analysis; PMIS	Work Performance Measurements; Budget Forecasts; OPA Updates; Change Requests; Project Management Plan Updates; Project Document Updates
	Quality	Perform quality control	Project management plan; quality metrics; quality checklists; Work performance measurements; approved change requests; deliverables; OPA	Cause and Effect Diagrams; Control charts; flow charting; histogram; Pareto chart; run chart; Scatter diagram; statistical sampling; inspection; approved change requests review	Qaulity control measurements; Validated changes; Validated deliverables; OPA updates; Change requests; Project Management Plan Updates; Project Document Updates
	Communications	Manage stakeholder expectations	Stakeholder Register; Stakeholder management strategy; Project management Plan; Issue Log; Change Log; OPA	Communications methods; Interpersonal skills; Management skills	OPA updates; change requests; project management plan updates; project document updates
	Communications	Report performance	Project Management Plan; Work Performance Information; Work Performance Measurements; Budget Forecast; OPA	Variance Analysis; Forecasting Methods (EAC; ETC); Communications Methods; Reporting Systems	Performance Reports; OPA Updates; Change Requests
	Risk	Monitor & control risks	Risk Register; Project Management Plan; Work Performance Information; Performance Reports	Risk assessment; Risk audits; Variance and trend analysis; Technical performance measurement; Reserve Analysis; Status Meetings	Risk Register Updates; OPA Updates; Change Requests; Project Management Plan Updates; Project Document Updates
	Procurement	Administer procurements	Procurement Documents; Project Management Plan; Contract; Performance Reports; Approved Change Requests; Work Performance Information;	Contract Change Control System; Procurement Performance Reviews; Inspections and Audits; Performance Reporting; Payment Systems; Claims Administration; Records and Management System	Procurement Documentation; OPA Updates; Change Requests; Project Management Plan Updates
Close
	Integration Management	Close project or phase	Project Management Plan; Accepted Deliverables; OPA	Expert Judgement	Final Product, Service, or result
	Procurement	Close procurements	Project management Plan; Procurement Documentation	Procurement Audits; Negotiated Settlements; Records Management System;	Closed Procurements; OPA Updates