Challenges of Information Systems1

7/28/2019 Challenges of Information Systems1

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Challenges of Information

Systems


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Multinational Organizations

Increasing number of corporations becomingmultinational

Global information system : servesorganizations in multiple countries Used by multinational corporations

Overseas operations must abide by local laws


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The Web and International Commerce

Web became important vehicle for B2B andB2C commerce

Ratio of non-English speakers to Englishspeakers growing

Internet opens enormous global opportunities

Chinese market expected to be largest infuture Web offers opportunities to save on costs


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The Web and International Commerce(continued)

Manuals prepared with animation/ Videos Presented in many languages

Global businesses must be sensitive toaudiences Glocalization : design global sites to cater to

local needs McDonalds menu changes to appeal to localpalates


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The Web and International Commerce(continued)

Plan Plan the site before you develop it Learn the preferences

Translate appropriately Be democratic Avoid cultural Imperialism


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Think Globally, Act Locally

Businesses that cater to internationalaudiences must glocalize their Web sites


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Think Globally, Act Locally

International companies think globally, actlocally

Be sensitive to regional customs Control must be decentralized Strategic planning should be global

Can be followed with local flavor


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What are the challenges for IS in theglobal arena?

Global information systems face challenges Technological barriers Regulations and tariffs Electronic payment mechanisms Different language and culture Economic and political considerations

Different measurement standards Legal barriers Different time zones


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Technological Challenges

Challenges Not all countries have adequate information

technology infrastructures Unable to build international IS Broadband communication lines needed

Solutions Can offer two versions of Websites to

compensate for slower bandwidth


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Technological Challenges Challenges

Language is technological challenge because eight-bitbytes not sufficient for languages with large character sets(e.g., Chinese, Korean, Japanese)

Fields such as telephone numbers present problems fordatabases in MNFs

Solutions Use double-byte characters (e.g., unicode allows for

65,536 characters) Fields for telephone numbers must be variable length toallow flexibility


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Regulations and Tariffs Challenges

Countries have different importing regulations Executives reluctant because of hassles Even with research there are fears that employees will not know how

to comply with laws of destination countries Solutions

There are programs such as NextLinx to help importers and exportersfor Web commerce

NextLinx is integrated within the firm s systems When an international order is placed the software determines

tariffs, cost of delivery, provides forms, and logistics It builds its applications around a comprehensive database of

international trade regulations that helps determine the mostefficient way of getting shipments from one country to another. Itssoftware also calculates tariffs and automates licensing andcompliance paperwork.


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Differences in Payment Mechanisms

Challenges E-commerce allows easy payment for online purchases Credit cards preferred payment method in North America

Not all countries adopt this preference Japanese avoid using credit cards

Solutions Web sites for international firms must have multiple

payment mechanisms Konbini example in Japan


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Language DifferencesChallenges

International parties must agree on common language Data not transmittable internationally because information must be

translated computers still cannot accurately translate on the fly English considered de facto international language

Solutions Largest companies translate Web sites into local languages

Web site design and translation should be done in overseasoffices although the server may be located in another country;lack of uniformity in languages

Multiple accounting systems in different languages


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Cultural DifferencesChallenges Different countries vary

Tastes Gestures Treatment of people

Ethical issues Conservative groups against Americanization

Solutions MNFs should employ local personnel to design their Web sites

or version of a Web site that will appeal to a particular country


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Cultural Differences (continued)

Some nations are afraid that cross-border information flow promotes cultural imperialism


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Conflicting Economic, Scientific, andSecurity Interests

Challenges Goal of corporate management

Seize large market share and maximize organization profits Goal of governments is to protect economic, scientific, and security

interests of its people

Occasionally interests conflict Drawings related to the design and manufacture of weapons Software packages Encryption software

Differences in treatment of trade secrets, patents, and copyright law

Solutions No easy ones Pressure from America for stronger copyright laws International trade groups


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Conflicting Economic, Scientific, andSecurity Interests (continued)

Weapons manufacturers have technicaldrawings Valuable to both company and security of country Governments may not allow exchange of weapon

designs PGP encryption application was opposed by

government Thought to compromise national security


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Conflicting Economic, Scientific, andSecurity Interests (continued)

The U.S. government controls the export of encryption software


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Political Challenges Challenge

Information is power and some countries oppose policy of free accessto information and limit use of Internet

Governments recognize that software is an economic resource and

require firms to purchase local software to build local industry;problems for firms trying to standardize

Solutions MNFs may have to cut some content from their sites to limit risks of

offending local government Limit use of employee blogs International human rights pressure may help in the long run


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Different Standards

Standards considered when integrating ISsinternationally

Records may be incompatible United States uses English system of weights

and measures Rest of world uses metric system


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Different Standards (continued)

Different standards Communicating dates

Times Temperatures Addresses

United States uses month/day/year format Rest of world uses day/month/year


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Differences in standards pose a challenge to companies that wish to integrate theirinformation systems across national borders


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Different standards very costly NASA lost spacecraft because of measurement unit

discrepancy European Article Number (EAN): barcode that

includes an extra number to identify country Universal Product Code (UPC): American standard

without last extra number

Uniform Code Council (UCC): promoted use of European standard


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Companies must adapt ISs to de facto (formal)standards Support global supply chains

Major push for using RFID tags


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Legal Barriers

Countries have different laws Affects global business in general Poses challenges

International transfer of data Free speech Location of legal proceedings


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Legal Barriers (continued)

Privacy laws Respect for privacy in international business is

unresolved challenge Majority of democratic nations protect individual

privacy Laws reflect difference in approach to issue of

privacy


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Legal Barriers (continued) Data protection laws described by three

criteria Apply to private or public sector

Manual or automated data Concern human beings or legal entities US privacy laws

Both public and private Mostly encompass manual and computerized

systems


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European Union practices may conflict withU.S. practices Personal data collected only for specified

purposes Personal data must be given consent to be

processed

Collecting organizations must identify themselves People have right to object to processing of

personal data


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Legal Barriers (continued) Challenge

American companies collect data for marketing purposes on alltheir customers, but differences between European andAmerican approaches prevent unrestricted flow of information

with respect to data collection on EU customers For example, EU agents monitor US companies that collect data

on EU citizens Solution

The EU has worked with the US Dept of Commerce to enable UScompanies who comply with EUs Directive on Data Privacy tocarry on trade without fear of violating the directive (SafeHarbor arrangement)


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Legal Barriers (continued) Challenge

Suppose you purchased an item from a site located inanother country, and the item has a defect or arrived afterthe time promised. Because your request forcompensation or other remedies has not been answered,you decide to sue. Where do you file the lawsuit?

Solution Country- of-origin principle whereby all legal matters are

confined to the country where the site operates Country-of-destination principle whereby the laws of the

country to which the site caters apply regarding dealingswith the site, regardless of the sites country (EUsapproach)


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Applicable law Free speech laws different in other countries Impacts what can or cannot be displayed online

Other laws Gambling Auctioning Sale of alcohol and drugs


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Different Time Zones

Different global regions require policies forwork and information systems

Teleconferencing available most of day Sometimes 24 hours per day Allow employees from different time zones to

discuss problems Teams in support centers may work shifts


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Different Time Zones (continued)

Different time zones must be considered by all organizations that dobusiness in multiple countries


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Different Time Zones (continued Challenge

MNFs must craft policies that work for employees, customers,and IS for all time zones

Time stamping Solutions

Teleconferencing systems can help; but huge time differencesrequire accommodations for employees in other time zones

Chat rooms and bulletin boards for asynchronouscommunication

Opportunity to work on projects 24 hours a day Enable customer support personnel to be available 24/7 without

requiring night shift work Standard policy for time stamping documents


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Different Time Zones (continued)

Managers must be aware of incorrect timestamping

Systems at both locations can be designed torecord local times of both locations

Or record single time (company headquarters)


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Summary

Companies using Web for business mustaccommodate non-English speaking audiences

Companies must tailor to local preferences Must be aware of cultural differences and

payment preferences Tariff and legal issues Linguistic, cultural, economic, and political

challenges must be addressed


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Summary (continued)

Laws governing collection of data in UnitedStates and European Union are different

Incompatible data privacy laws Restricted flow of personal data between

United States and EU Safe Harbor arrangement enables EU to do

business with US

Documents

Challenges of Information Systems1