Cloud-computing services provide Essay

1. What business benefits do cloud-computing services provide? What problems do they solve? There are many benefits to cloud computing. Businesses of all sizes have the ability to take advantage of these and often find the costs within their individual budgets. Cloud computing environments are able to run on existing infrastructures, which makes the switch to cloud computing minimal from this aspect. Costs are incurred based on the amount of computing power they actually consume. (Laudon & Laudon, 2014) In addition this type of environment enables businesses to scale their needs on an as-needed basis, which helps to keep costs within budgets. Another benefit is the ability to respond quickly due to the portability of the application. With cloud computing businesses have the flexibility in how they utilize applications; this results in better turn around on information as employees have the ability to gain access to data and applications from anywhere. Cloud computing can assist in solving problems such as reducing costs. Since there is no need for additional equipment budgeting dollars can be spent elsewhere. In addition, with much of the infrastructure in the cloud the need for additional IT employees is eliminated. There is no additional need for support and maintenance on hardware and software with cloud computing. Cloud computing solves many problems such as reducing costs, improving efficiencies, providing additional sources for customers, and providing remote access for employees. Examples given in the case study included Zynga – a gaming platform offered on Facebook. When Zynga comes out with a new game, they have no knowledge of the amount of computing power they will need. They are better able to adjust this based on the popularity of any given game via cloud computing. The reliability of cloud computing for them equals revenue. Many other companies have benefited from cloud computing, it enables them to promote and sustain additional Internet traffic without crashing their internal systems. 2. What are the disadvantages of cloud computing? There are some disadvantages as well. The responsibility of storage is in the hands of the provider. This presents potential security risks as users can upload and download information from cloud computing and potentially use it to perform illegal tasks. (I think of the Target issue in November, whereby thousands of consumer’s information was breached.) Since the software applications depend on the provider to manage and support there is also risk if the site were to go down. The customers are dependent on the provider to find and fix the problem in a timely manner. No business wants their system to be down for an indefinite amount of time especially those that seek to gain revenue. Businesses are also reliant on the provider performing the appropriate updates to systems. As with any information switch there is potential for errors to occur. I believe one such occurrence happened recently with an airline company. The rates were entered incorrectly, which cost the airline a lot of money. There is always potential for errors or â€Å"fat fingers† as it is known. Overall the disadvantages are reliability and security. 3. How do the concepts of capacity planning, scalability, and TCO apply to this case? Apply these concepts to both Amazon and to subscribers of their services. Capacity planning is the process of determining the production capacity needed by any given organization to meet the needs of the products being promoted. Scalability is the ability to process and handle a growing amount of need and the ability to accommodate this type of growth. The total cost of ownership (TCO) is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system. (Laudon & Laudon, 2014) The concepts of these apply to the case. Cloud computing uses planning, scalability, and TCO. Amazon is one of the biggest online retailers in the world (I think I personally help them to achieve this ranking), this means they need to provide hardware capacity planning and scalability not just for  themselves, but for their subscribers as well. If they overestimate their needs they risk financial losses, and if they underestimate they run the risk of creating shortages for their own business needs as well as subscribers. As subscribers, if they run into non-availability too often they will lose faith in the ability of Amazon to manager their services and seek out other vendors – again causing potential losses to them as a company. Estimating the scalability for a large diverse consumer base without over or underestimating is difficult, but crucial for their continued success. Amazon has to take on the total TCO of its services, while at the same time ensuring it can maintain profitability. The services subscribers’ benefit from not having to be concerned with these issues and not bearing the brunt of TCO issues. 4. What kinds of businesses are most likely to benefit from using cloud computing? Why? While all businesses can benefit from using cloud computing, it is perhaps more beneficial for those smaller businesses, especially from a budgetary aspect. For smaller businesses they don’t have pre-existing data that needs to be transferred and are able to start their operations directly on the cloud. The ability to scale their operations is another great advantage. As their business grows so can their computing abilities with minimal capital expenditure. The cloud allows these smaller business owners to somewhat level the playing field with those larger companies who often maintain larger IT assets. It is a financially viable solution that doesn’t require large capital expenditures for servers, IT teams, and data system infrastructures. For these larger companies the cost savings are not as easily determined. Many already have â€Å"huge investments in complex proprietary systems supporting unique business processes, some of which have given them strategic advantages.† (Laudon & Laudon, 2014)

Eligibility Rules

An eligibility rule for the Salvation Army is all applicants to have to have children under 18 living with them. HACK does not require you to have children, however, you do need to have a referral from another non-profit organizations. Another eye difference between the two agencies would be the criminal back ground check. The Salvation Army specifies â€Å"anyone convicted of a felony, violent offence or sexual offence will not be accepted into the program. † (testosterone, 2014).Whereas HACK_A merely mentions that they will conduct a background check. The biggest difference between the two is that the Salvation Army is very specific with their requirements. For example, they do not accept anyone who is not practicing sobriety, or at least been sober for 12 months, and requires proof. They also require all children to be enrolled in school, but do not accept home schooling as a form of school. The HACK_A does not mention sobriety as a part of their eligibility rules.A similar ity between both agencies would be they both provide services to help the participants achieve the ultimate goal of becoming independent, and maintaining a permanent living situation. Also, both agencies mention that participants must meet the low income guidelines. However, HACK mentions their applicants have to meet the very low income guidelines which is listed as $28,550 according to their link (1 person). Whereas, the Salvation Army has heir income requirements listed as low income.

Influences of EU Laws on UK Laws Essay Example | Topics and Well Written Essays - 2750 words

Influences of EU Laws on UK Laws - Essay Example The enactment of the Equality Act 2010, which brings together UK’s anti-discrimination laws, was particularly influenced by EU law. This paper critically examines the influences of the EU law on the UK’s anti-discrimination laws. Article 141 of the Treaty of Rome, providing for equal pay for employees undertaking a like job has also influenced the English domestic law1. EU Directives and the EU Treaty continue to play a pivotal role in the implementation of the Equality Act 2010. The Equality Act 2010 consists of Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act 1976, and the Disability Discrimination Act 19952. The statute consists of other statutory structures outlawing discrimination in workplaces on the basis of religion or belief, age and sexual orientation. The recent enactment of the Act was influenced by the EU Directives on Equal Treatment. The Act requires fair treatment in employment, whether it is a public or private organization irrespective of age, physical ability, gender, marital status, ethnicity, sex, and sexual orientation . The legislation also envisages special privileges for expectant women and mothers, since their condition is classified as a protected characteristic. Moreover, the law requires employers and organizations that provide services to effect adequate adjustments at their premises to allow the disabled persons an unfettered access and equal benefits as the not-disabled4. Despite its overarching role in ensuring equality in the UK as captured in the EU law, the Act permits the barring of transsexuals from occupations that require gender-specific qualities for purposes of realizing a valid objective. Equal Pay Act 1970 Equal Pay Act was the first anti-discrimination law in Great Britain. Whereas, equal pay is an important part of EU and local anti-discrimination law, its enactment was not influenc ed by the EU5. The debate as whether equal pay across gender constitutes discrimination may be the result of a lack of a clear pattern by the international influences on this particular issue, and partly due to the joint codification of equal pay and sex discrimination legislation in the English law6. Anyhow, discrimination law both at the EU level and locally has shaped equal pay legislation where ‘genuine material difference’ exists (Equal Pay Act section 1(3)) or where the employers create indirectly biased payment systems. Whereas equal pay across gender and sex discrimination laws were codified separately, unequal pay based on ethnicity and race discrimination can be effectively handled under the Race Relations Act 19767. In light of this, the Equal Pay Act 1970 could be an original body of law whose creation was informed by local concerns because at its enactment, the UK had not yet joined the European Commission (EC) membership8. The subsequent inclusion of the U K in the EC in 1973 arguably served to strengthen the implementation of the law since a similar provision is present in the Treaty of Rome of 1957. Nonetheless, the is no denying that the

Australian Law Essay Example | Topics and Well Written Essays - 750 words

Australian Law - Essay Example â€Å"Decisions of the High Court are binding on all other courts throughout Australia† (High Court of Australia 2010: The High Court of Australia is the uppermost Court in the judicial system of Australia, the Court of "last resort", in the judicial system of final appeal. It has its origins in the Australian Constitution, Section 71 of which affirms: â€Å"The judicial power of the Commonwealth shall be vested in a Federal Supreme Court, to be called the High Court of Australia, and in such other federal courts as Parliament creates, and in such other courts as it invests with federal jurisdiction† (The High Court of Australia n.d: 1). The High Court shall comprise a Chief Justice and also a lot of other Judges, not below two, as the Parliament has laid down. The fundamental functions of the High Court are to construe and support the Constitution, to construe Federal law and to attend to cases referred from other Courts. Therefore, it is the purpose of this essay to d iscuss why a decision of the High Court on the constitutionality of a Statute will be seen by the Government as a further serious setback to its legislative reform plan than a judgment by a Judge of a State Supreme Court in understanding the meaning of an important provision in the statute, in a way contrary to the Government’s goal.... of this essay to discuss why a decision of the High Court on the constitutionality of a Statute will be seen by the Government as a further serious setback to its legislative reform plan than a judgment by a Judge of a State Supreme Court in understanding the meaning of an important provision in the statute, in a way contrary to the Government’s goal. The Australian Constitution states that the power to create laws is vested in the Parliament. At the same time, the power to understand laws and to judge whether they are relevant in individual cases is vested in the High Court and other Central Courts. Actually, one of the important functions of the High Court is to interpret the Constitution. For instance, the Australian High Court can rule a law to be illegal which is beyond the authority of Parliament to enact and so of no effect. Such a condition would be seen by the Government as an obstruction. The Australian Constitution founds the Federal Government by providing for the Parliament, the Judiciary and the Executive, that is identified as the three pillars of governance or as the policy of â€Å"separation of powers† (Clark 2009: 972). Parliamentary Government means that the Executive Government comes from in the Parliament. Accountable Government means that the Executive Government is accountable to the Parliament. The rule of â€Å"separation of powers† is to prevent an oppressive government. The â€Å"three branches of government† constituted by the Legislature, Judiciary and Executive, work as checks and balances on each other (About Parliament. n.d:1). The Judiciary is â€Å"independent† of the other two arms of Government (1). That independence is one of the main critical safeguards of the democratic system of the country. The Executive is the managerial part of

Woven Textile Design Essay Example | Topics and Well Written Essays - 1250 words

Woven Textile Design - Essay Example Tappets are used for simple weaves in which the number of shafts is limited. Dobby systems involve the use of a pattern chain to control the lifting of the shafts. They are the most commonly used for wool. Jacquard systems control the lifting of each individual end to create almost unlimited patterning possibilities. (Wool Web, 2007) In the simplest type of tappet shedding motion, the shedding cams are mounted on the bottom shaft, and the motion is suitable only for weaves repeating on two picks. By mounting the tappets on a counter shaft driven by gearing from the bottom shaft at the appropriate speed, the repeat can be extended up to eight or ten picks. Bobbies are much more versatile and usually control at least sixteen, and sometimes as many as 36, head shafts. Since the lifting of the shafts is controlled by some form of pattern chain, there is virtually no limit to the number of picks per repeat. Jacquard machines are made in a wide variety of sizes to control from 100 to 2000 or more ends per repeat. A common size controls 600 ends, which, in a cloth with 30 ends/cm, gives a repeat 20 cm wide within which the designer has complete freedom. The lifting of the ends is controlled by a chain of punched cards or by a loop of punched paper (Ministry of Science and Technology, 2006). from high-fashion woollens to heavy technical textiles. ... With the yarn friendly, reed-controlled terry equipment a maximum loose pick distance of 24 mm and thus pile heights of over 11 mm are possible. Rapier has special weft brake which decelerates the weft perfectly to the exact length, thus reducing weft waste to a minimum. A projectile weaving machine with a working width of 390 cm, equipped for denim production, weave a denim fabric in two panels, with a weft insertion rate of over 1500 m/min and special yarn waste reduction. The projectile weaving machine's versatility is proved by the wide range of fabrics it produces. The projectile weft insertion system can be used with all types of yarn, from spun yarns made of cotton, wool, man-made fibres and blends thereof, filament yarns, tapes and monofils for simple standard fabrics, to sophisticated, state-of-the-art technical textiles. A particular strength of the projectile weaving machine is the production of broad fabrics, with working widths up to 6.5 metres. This gives unbeatable advantages in the production of technical textiles, agrotextiles and geotextiles. Given the rising cost of energy, the low power consumption of the projectile weaving machine, together with its minimal maintenance requirement, is an increasingly important advantage. Where maximum efficiency in the production of high-quality standard fabrics made from spun or filament yarns is called for, the latest-generation air-jet weaving machine, demonstrates its strengths. A high weft insertion rate of over 2000 m/min, combined with extensive automation, user-friendliness and small footprint result in top profitability for competitive weaving mills. A maximum working width of 4 metres also allows cost-efficient

Anthropology 11 Essay Example | Topics and Well Written Essays - 1000 words

Anthropology 11 - Essay Example He illustrates his stand with the examples of the theories surrounding the evolution of man by starting with the rather shocking theory that we all as humans originate from the continent of Africa This topic is very important to biological and physical anthropology because it explains why we are all so different racially and genetically and seeks to explain with the help of many theories whether Darwin's theory is actually right in saying that as humans we have only recently evolved from apes. He compares the "originate in Africa thesis" with the "out of Africa thesis" where he is trying to explain the origin of our genetics and evolution. The author uses the technique of taking up many hypotheses and theories and assessing their truth and in the end he gives his verdict in the favour of the theory given by Darwin, the Out of Africa hypothesis. " This theory maintains that modern humans evolved in Africa and then spread around the world. Boiled down to its essence, the hypothesis states that modern humans are both relatively recent (100,000 to 200,000 years old) and African in origin. A major prediction of this hypothesis is that the earliest remains of modern humans will be found in Africa, dated to an appropriate time period." The author goes on to discuss the " Multiregional hypothesis" which he argues depicts that we as modern humans evolved from different locations and hence our racial and genetic differences. According to this school of thought "these regional populations evolved along parallel paths and reached modernity at roughly the same time. Because the populations were largely isolated from one another, they developed distinctive regional features, which people recognize today as "racial" differences." ( Multiregionalists believe that Neandertals, originate from the European continent.) He then goes on to say how there are three different recent researches go in the favour of the Darwinian view and oppose the Multiregionalists view which he addresses one by one as: The east african population has been found to be so diverse that the genetic composition of the population" shows that these lineages are very diverse and humans did evolve from these areas.Most of the worlds oldest lineages were found there d 170,000 years ago. Secondly because of the discovery of the "African Herto skullsthe Herto specimens (are) the earliest modern Homo sapiens yet found-direct ancestors of people living today." He concludes that the Neandertals' DNA was not closer to that of the modern Europeans. "The work was a strong blow to the theory that humans evolved in several places simultaneously. "Neandertals cannot represent a regional European transition from Homo erectus to modern Homo sapiens" 4. Did the author address any contrary evidence or the opinions/work of others that run counter the author(s) claims Although he devotes his entire discussion to proving the multiregionalists wrong he does refer to the possibility of " mtDNA contamination from researchers or others who have handled the fossils" but he is quick to provide evidence to suggest otherwise. He does give the multiregional theory its fair share of discussion though.. 5. What were the strengths and/or weaknesses of the author(s) argument

Balanced Scorecard approach to Technology Assignment

Balanced Scorecard approach to Technology - Assignment Example There might also be disrupting technologies that make the entire range of products or business models haywire.   Along with this, due to lack of proper communication, the problems are not looked into or solved in the right manner by the right people. A company would formulate its strategy in such a way that it enables the business achieve its desired goals and it is the path that would lead the company to its success. This is necessary so that the company can translate its innovative ideas to stories of success in reality.Development of the Balanced Scorecard SystemFirst of all it is important to know and understand the stakeholders that of the company and their individual objectives. Then the strategic components of the business have to be identified and their present position has to be analyzed. These components are the vision, the mission, departmental goals, the core values of the organization and the various dimensions of performance and the forecasting of the probable results .Now for using a Balanced Scorecard approach for Reliant Technologies the health of the company can be measured from both financial and Non Financial perspectives (Kaplan and Norton, 1992). This is the advantage of Balance Scorecards measure that it looks into the business beyond the numerical figures of financial statements and exhibits a better insight into the bigger picture. The main areas of the Balanced Scorecard would be as follows (Figure 1).Accurate Financial data and the proper interpretation and forecasting.... Then the strategic components of the business have to be identified and their present position has to be analyzed. These components are the vision, the mission, departmental goals, the core values of the organization and the various dimensions of performance and the forecasting of the probable results. Now for using a Balanced Scorecard approach for Reliant Technologies the health of the company can be measured from both financial and Non Financial perspectives (Kaplan and Norton, 1992). This is the advantage of Balance Scorecards measure that it looks into the business beyond the numerical figures of financial statements and exhibits a better insight into the bigger picture. The main areas of the Balanced Scorecard would be as follows (Figure 1). Figure 2 Balanced Scorecard Figure 1: Balanced Scorecard (Source: Kaplan & Norton, 1992) Financial Aspect Accurate Financial data and the proper interpretation and forecasting are required for the crucial analysis of the financial position of the organization. This data should be available to each and every segment of the operations of Reliant so that all the persons concerned would know how and which factors are changing the bottom-line of the balance sheet. Rigorous metrics on the profitability like EBIT, EBITDA and Operating Income have to be done to understand the real position of the business. Thus centralization of the system is necessary for the managers. Assessment of the Return on Investment The assessment of financial position is not enough. The situational analyses of risky situations that Reliant might face and the costs and benefits of undertaking different projects should be done instantly. Prior calculations of return on investments have to be undertaken before going for any kind of new project that

Summery Essay Example | Topics and Well Written Essays - 250 words - 3

Summery - Essay Example This impetus was followed by a series of strategies with aggravated the situation of Timex, to wit: diversification into electronics manufacturing, subcontracting, employment of Peter Hall as the manager, cost reduction through lay-offs and wage reductions. The ultimate result was the closure of the Dundee plant in August of 1993 after an industrial dispute that lasted eight months. In analyzing the case of Timex, the authors averred that the â€Å"failure to take into account the wider context that relates the present to the past and to situate the conflict in the emergent and interrelated nature of business decisions and human resources policies† The relevant lessons that Martin & Dowling emphasized in this article are as follows: International firms should adapt and adjust to the culture and organizational competencies of the host country. There is a need to evaluate the qualifications of managers who will lead and operate international firms. As required, training and development programs should be undertaken for managers (as well as the rest of the personnel) to be assigned in international organizations. Multinational corporations should have broader efforts to internationalize their organizations in terms of encompassing cultural diversity, environmental scanning, and open mindedness in accepting lessons from each

Role of Roman Emperors in the Spread of Christianity Essay Example for Free

Role of Roman Emperors in the Spread of Christianity Essay The very cruelty and hate of Christianity that various Roman emperors exhibited actually worked in favor of that religion. As it is said, The blood of martyrs is the seed of the Church, for in many ways, persecution was beneficial to the new religion. Persecution gave the Christians a chance to flex their spiritual muscles, which many did, to great effect. The miracles that took place during these martyrdoms converted many of the pagans, which in turn led to more martyrdoms. Persecution served, essentially, to strengthen the faith of those already Christians, and to convert those who were not. By the very cruelties with which the emperors attempted to crush the young religion they actually aided it. But one emperor who supported christianity is the one who played the biggest role among all emperors in spreading christianity. His name was Constantine. Constantine was a hugely influential emperor who changed the course of history and greatly affected the spread and development of Christianity. During Constantines reign, Roman art became less realistic. Simple and massive effects were preferred over classical forms and styles, and so art became more stylised. This culminated in the Christian era of artwork that would follow. For the next twelve years, Constantine and Licenius shared the government of the Empire. Constantine, convinced of the power of his vision and subsequent victory in battle, was the first Roman Emperor to adopt Christianity. Christians were still persecuted at this time, and so in 313 Constantine issued an official edict of toleration. The Edict of Milan not only protected Christians, but granted greater rights to followers of all religions. In 324 the Empire faced many difficulties, and Constantine defeated Licinius and became the sole Emperor. As the emperor, Constantine quickly moved the capital of the Roman empire from Rome to Constantinople (now known as Istanbul). In 325, Constantine assembled the Council at Nicaea with a group of bishops. The counsel debated many doctrinal points concerning Christianity, and created the Nicaean creed to unify Christian doctrine and practices. Some common beliefs of the early Christian church were at this point voted against and eradicated from the Churchs teachings. This was the first time that church and state began to merge, and that the imperial office was used to strengthen a church. For Constantine, his motivations were probably as much political as religious. The number of Christians was increasing within the empire, as was the influence of the church. Merging the two strengthened the power of both. From Constantines rule on, Christianity was the official religion of the empire. The Christian Church was granted tax exempt status, and Roman coins issued during this period have a cross on them. Although Constantine had long supported Christianity, he was not baptized until he was on his deathbed. He died in 337. Constitine, who was the Emperor of Rome was a Pagan. Before going into battle he thought he saw Jesus initials in the clouds and determined it was an omen and had his men put those initials on their shields. Well, Constitine won that battle and subsequently summoned all priests of stature into Rome to create the Bible. They went through the various books that had been written and pared that big pile of writings down into what became the bible. Constitine then proclaimed that christianity was the official religion of Rome and the Roman Empire.

Housing Industry Research Essay Example for Free

Housing Industry Research Essay People would often refer to real estate and housing industry as the best way to build up riches, or possibly the best, easiest and fastest way for anybody to get rich. Most of the time, the terms real estate industry and housing industry are being used interchangeably by people, not knowing the very basic distinctions between the two terminologies. Real estate industry more formally refers to the industry that focuses on simply buying and selling real estate properties. Whereas, the housing industry is more concerned on developing and incorporating improvements to a real estate property. Basically, those that are in the real estate industry are doing much more of retail business, while those in the housing industry are doing much more of service and nonetheless, research, design, and manual work. The housing industry is the industry which is primarily concerned in building and developing houses and housing designs for private individuals, for government housing projects and for a local community. Moreover this is also the industry which provides the basic materials such as the building materials, and hard escape materials for a housing project. When you drive or ride through a community, the variety of architecture often reflects some of the history of the community or the locality. Architectural styles of the past are illustrated in the older neighborhoods but also influence the styles of homes built today. In a community, the housing industry is the one which is mainly concerned in all these. For most communities, there is only one housing industry which can be regarded as the main housing industry of the community. This can be a company, or a group of companies that would generally dominate all the housing projects within the locality, be it a private housing project or a housing project from the government. Mostly, these housing industries would dominate the landscaping industry, hard escape industry, and the hardware, building equipments and materials industry as well. Since most people believe in the logical trend that as one industry goes up the black, a counter industry would fall down the red; this would lead many to believe that the immediate spike in the information technology and communications industry would leave other industries such as the real estate industry and housing industry, to experience its most protracted slump for several years. This is actually the opposite of what’s really happening in the economy, for many years, the housing industry has remained as one of the most stable industries all over the globe. Indeed the housing industry has had its share of downs and suffered greatly from economic destabilizations, inflations and other economic fluctuations, but in spite of all these, it has retained itself as still one of the most promising, and stable industry. With nearly 17 million new conventional homes added over the past decade, the home building industry continues to set new records and standards. In 2005 alone, single-family starts exceeded 1. 7 million—far and away the largest number ever. Thanks to a stable economy and low mortgage interest rates, the home building industry has not seen a significant downturn since the early 1990s. This undeniable stretch of strong, stable growth in the home building industry has ushered-in a period of prosperity for major builders and supported a wave of mergers and acquisitions within the industry. In the early 1990s, the top 10 builders in the country accounted for less than 10 percent of all conventional new single-family home sales. By 2004, their share had risen to over 20 percent in most major metropolitan areas; larger builders hold an even greater market share. There are three major reasons for the dramatic increase in the scale among the home builders. The change in the access to capital is one of these reasons. After World War II, the savings and loan industry was the principal source of capital for the home building industry. With the collapse of many of these institutions in the late 1980s, builders had to turn to other sources of financing. Banks and private funds companies have thus, stepped in to fill the need for capitals and investments. These funding companies gave an edge to the housing industries since their presence meant easier access to capitals. Another reason is the change in the land use regulation. More and more communities are restricting residential development in an effort to manage growth. As a result, the development process in many locations takes longer than it once did, with land assembly and entitlement typically more complex and costly. This again creates a premium for scale of operations, since smaller builders often lack the resources to work with local officials over extended periods to secure the necessary approvals. The third reason is the change in economic environment. This has favored large-scale home builder industries. The strong economic environment for home construction over the past decades has ushered a stable growth and low mortgage interest rates that have prevented a major recession in the home building industry since 1991. This combination of market conditions has produced stunning increases in top-line growth and bottom-line financial performance for large home building companies. Between 1999 and 2004, builders of 500 units or more each year realized inflation-adjusted revenue growth of 135 percent. In addition, their gross margins on homes sold and net income each increased about 4. 5 percentage points. With industry consolidation have come new opportunities. To increase their scale and overall capabilities, larger-scale builders have incentives to reinvest in their operations by adding information systems for estimating, scheduling, and purchasing, or investing in panel plants to save time and costs in the construction process. With such investments, larger home builders continue to improve their operating performance, at a much faster rate relative to smaller builders. Better performance encourages even more builder consolidation, which in turn produces even greater scale economies, creates more incentives for investments to leverage these opportunities, and so on. This cycle would dictate further consolidation and greater efficiency in the home building industry in the years ahead. When asked to name the single most important reason for their recent financial performance, over half of the corporate-level survey respondents attributed their success to strong housing market fundamentals, and nearly a third cited their land assembly strategies. Another 13 percent considered improved customer satisfaction the key to profitability. In sharp contrast, few respondents attributed their success to shorter construction cycles, savings on product purchase, man power, on-site construction costs, and other operational efficiencies. Still, evidence of operational improvements does exist, particularly within the divisions of national and international home builders. Although their homes have become bigger and have incorporated higher-quality materials in recent years, national and international home builders have been cut the construction time to minimal, keep cost increases at modest levels, and significantly improve customer satisfaction scores, in parallel to improvements in the quality of finished products. Local divisions of regional builders have been less successful in improving the efficiency of their operations. Improvements in home building efficiency were the most common results from the implementing of innovative operating practices. Studies from Harvard have cited four general types of operating practices that homebuilders especially those at large scale, have used to their advantage. 1. Coordination with subcontractors. Subcontractors are typically the ones who purchase the materials used in home building, making payments to contractors a major expense category for homebuilders. Innovative builder practices in this area include initiatives such as making scheduling information easily accessible to subcontractors, automatically notifying subcontractors of schedule changes, and frequently updating the job site production schedule. As a result, increased efficiencies in the building process and lower production costs is maintained. 2. Component preassembly. Preassembling major components such as roof trusses allows greater precision in manufacturing and often provides cost savings by substituting semi-skilled off-site labor for skilled on-site labor. The preassembly process is also more efficient when done off-site, thereby creating the potential for shorter construction cycle time, and even so, smaller labor costs. 3. Supplier installation. In many product categories, builders have begun to purchase installation services from the manufacturers or distributors. Supplier installation helps to limit product disputes over the source of any problems. In addition, this practice can reduce construction labor needs since product manufacturers and distributors typically serve broader geographic areas than subcontractors. 4. Supply chain management. Supply chain management covers a broad range of practices from price negotiations for products and value-added services to the implementation of information systems to support purchasing and inventory management. Supply chain management is an area where scale economies give larger builders an obvious edge over their smaller competitors. Innovative operating practices help large home builders not only run their operations more efficiently and use their market power more effectively, but also better manage risk especially financial risks and risks in operations. Builders have reduced their exposure by controlling more land through options, joint ventures, and other approaches that keep land costs off their books until they buy the entitled lots. In this way, builders only incur these expenses close to the time of construction. With more efficient operations and better management controls, large builders typically do not begin construction until a home is pre-sold. Across builders surveyed, 73 percent of all homes closed in 2004 were sold before construction began an increase from 70 percent in 1999. National builders pre-sold over three-quarters of homes closed in 2004, while regional builders pre-sold about two-thirds. Larger builders have incentives to adopt innovative operating practices because they have the market power to implement these efficiencies and can leverage the benefits across a broader range of operating divisions. The financial payback for these improvements, however, depends greatly on conditions in the local market. Over the past years, consolidation of the home builders has dramatically changed the home building industry. In addition to improved financial performance, the adoption of innovative practices and methodologies related to product distribution and assembly line and development, has improved the operational performance of large builders along such dimensions as construction cycle time, efficiency of the building process, stability, style, and overall quality of structures, and customer satisfaction. In generating these efficiencies, builders have helped to streamline processes throughout the entire homebuilding industry. Home buyers have also benefited in parallel to the home building improvements. More efficient builder operations have kept construction costs low and customer satisfaction levels high, allowing builders to offer more model home options and more product choices without any corresponding increases in prices. In addition, greater efficiency has enabled builders to pre-sell more homes, which in turn has reduced the risk of overbuilding, and thus reduced the risk or putting the company financial trend line on the red. By keeping supply in line with demand, home builders have helped to bring greater stability to house prices, since overbuilding has historically been a principal cause of house price declines. Whether these improvements will continue as market conditions change remains to be seen. One encouraging sign is that operating efficiencies, as opposed to financial performance, have increased most in more competitive markets. If the housing market weakens in the years ahead and competition increases, larger builders still have the potential to improve their operations and maintain their strong financial performance. In communities where demand is strong but residential development opportunities are limited, house price appreciation tends to be high. In markets where price appreciation is low, land is generally more accessible and builders face fewer barriers to entry. As a result, construction activity can respond very quickly to changes in demand. As market conditions shift, however, builders can get caught with excess inventory, which drives down area-wide house prices. In these markets, builders must run their operations efficiently to remain profitable. In high-appreciation markets, demand for new homes is generally greater than the number of homes that can be added under existing land use and building regulations. This limits the risk of rapid overbuilding. Given that it takes more time and resources to build in these markets, higher barriers to entry and higher land costs push up the average price of homes sold. Builders working in these communities generally put a premium on their land acquisition and development strategy. Since they are often able to achieve higher margins on homes sold in these markets, they may put less emphasis on operational efficiencies. The market conditions that have helped to create a more efficient home building industry over the past years have also, in turn, favored the housing consumers. A more stable economy, with more muted cycles and low inflation, has produced some of the lowest long-term interest rates in a generation. Low interest rates, together with low unemployment rates, have also provided greater financial security for many citizens and thus given them more initiative to build their own households or improve their current household. Internationally, house prices have raised an average of 127 percent since 1990, with nearly half of this increase coming since 2000. Until recently, economic cycles interacted with housing cycles to produce tremendous volatility in home prices. From 1975 to 1993, house prices rose more slowly than overall inflation in 10 of the 19 years, or over half of the time. In each of the 12 years since 1993, however, house price appreciation has exceeded the pace of inflation. Builders that have already adopted more innovative practices have clearly profited from their investments. New practices related to product distribution and assembly has improved the operational performance of large builders, particularly in terms of construction cycle time and customer satisfaction, and thus greatly increasing their profits. Although being in the housing industry has a lot of economic advantages it is undeniable that there are still various external, economical, factors that can negatively affect this industry. A low economy, and low living standards, would most likely correspond to a decrease in the demands for housing industries. Natural disasters and calamities such as earthquakes, floods and typhoons that would occur at an unfortunate time, would leave home builders hanging in the deadlines for finishing their projects, since building cannot continued during such occasions. Generally speaking, the housing industry reflects the type of economy in a given region or locality. A region with a high economic state, low inflation, and high monetary value would most likely have a high level of housing industry in turn. The houses in the said region would also be of high quality; however, man power for construction would also come at higher rates at such an area. A stable economy in terms of monetary value and inflation would be the most ideal economy for a successful housing industry. Even high-performing builders still have the potential to make more improvements. Given that their strong financial performance has largely resulted from their leading land positions in booming housing markets, builders just have not to focus on implementing innovative practices and on maximizing operational efficiencies. Larger builders are those that would especially benefit from focusing on efficiency. Local builders with closings of 10,000 homes or more in 2004 reported implementing only half of the common innovative practices, while the divisions of builders with sales of 2,500 to 10,000 homes implemented less than 40 percent of the innovative practices. There are many valid reasons why implementation has been relatively weak. The corporate offices of larger builders report above-average development of innovative procedures, but implementation at the division level has often lagged. With the increase in the number of acquisitions in recent years, many of these divisions have only recently come under management of the acquiring builder and may thus need additional time to implement new systems and procedures. Furthermore, given their strong financial performance in recent years, corporate offices have less incentive and reason to develop new procedures for their local divisions, and local divisions have less incentive and reason to implement such changes. Whether builders will seize these opportunities remains to be seen. One encouraging sign, however, is that operational improvements have increased the most where house price appreciation is relatively low and no one builder dominates the market. If the house building industry weakens in the years ahead, house price appreciation is likely to slow and more builders are likely to compete within individual markets, these are exactly the conditions that lead to the development and implementation of operational improvements made in recent years. This means that a crisis such as the weakening of the economy leading to the weakening of the housing market, although has its undeniable negative effects in the housing industry, on the positive side, it would somehow force the home building industry to continuously and further develop and implement more and more innovations in their systems. Nonetheless, this would consequently lead to further innovations and efficiencies in the home building industry, and thus more high quality and affordable choices of homes for the consumers. References What’s next for housing industy CIOs. Retrieved April 20, 2008, from http://www. cio. com/article/134004 Seiders, D. F. (2006, September 19). 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