MANAGING INTERNATIONAL INFORMATION SYSTEMS

15.1Copyright © 2005 Pearson Education Canada Inc.

Management Information Systems, Management Information Systems, Second Canadian EditionSecond Canadian Edition

Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems

MANAGINGMANAGING

INTERNATIONALINTERNATIONAL

INFORMATIONINFORMATION

SYSTEMSSYSTEMS




• What are the major factors driving the What are the major factors driving the internationalization of business?internationalization of business?

• What strategies are available for What strategies are available for developing international businesses?developing international businesses?

• How can information systems support the How can information systems support the various international business strategies?various international business strategies?

continued

OBJECTIVES




• What issues should managers address What issues should managers address when developing international information when developing international information systems?systems?

• What technical alternatives are available What technical alternatives are available for developing global systems?for developing global systems?

OBJECTIVES (Continued)



Chapter 15: Managing International Information SystemsChapter 15: Managing International Information SystemsPAUL HARTMANN AG INTERNATIONALIZES WITH GLOBAL SYSTEMS




1.1. Lines of business and global strategyLines of business and global strategy

2.2. The difficulties of managing change in a The difficulties of managing change in a multicultural firmmulticultural firm

MANAGEMENT CHALLENGES




Developing an International Information Systems Architecture

15.1 THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS

• International Information Systems International Information Systems ArchitectureArchitecture – consists of basic information systems required

by organizations to coordinate worldwide trade and other tasks

• Business DriverBusiness Driver – an environmental force to which businesses

must respond and that influences a business’ direction




Developing an International Information Systems Architecture





The Global Environment: Business Drivers and Challenges

• Global Business DriversGlobal Business Drivers – general cultural factors– specific business factors

• Global CultureGlobal Culture– the development of common

expectations, shared artifacts, and social norms among different cultures and people









Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.1 THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS





Business ChallengesBusiness Challenges

• ParticularismParticularism– making judgments and taking action based on

narrow or personal features, rejects the concept of shared global culture

• Transborder Data FlowTransborder Data Flow – the movement of information across

international boundaries in any form

continued






Business ChallengesBusiness Challenges (continued)(continued)

• National Laws and TraditionsNational Laws and Traditions – create disparate accounting practices in

various countries, impacting how profits and losses are analyzed

• Additional FactorsAdditional Factors– cultural differences about technology– different languages– currency fluctuations






State of the ArtState of the Art• Despite business challenges, many firms Despite business challenges, many firms

still do not have rationally developed IT still do not have rationally developed IT systemssystems

• Most companies inherited patchwork Most companies inherited patchwork international systems from the pastinternational systems from the past

• Significant difficulties still exist in building Significant difficulties still exist in building proper international architecturesproper international architectures






• Domestic ExporterDomestic Exporter– characterized by heavy centralization of

corporate activities in home country of origin

• MultinationalMultinational– concentrates financial management and

control out of a home base, but decentralizes production, sales, and marketing

continued

15.2 ORGANIZING INTERNATIONAL INFORMATION SYSTEMS

Global Strategies and Business Organization




• FranchisersFranchisers– Involve creating, designing, and financing in the

home country, then rely on foreign personnel for further production, marketing, and human resources (e.g., McDonald’s)

• TransnationalTransnational– Truly global, no national headquarters, value-

added activities managed with a global perspective





Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.2 ORGANIZING INTERNATIONAL INFORMATION SYSTEMS





Global SystemsGlobal Systems• Information technology and improved Information technology and improved

global telecommunications give global telecommunications give international firms more flexibility to international firms more flexibility to shape global strategiesshape global strategies

• Domestic exporters tend to have highly Domestic exporters tend to have highly centralized systems in which one centralized systems in which one domestic systems development staff domestic systems development staff develops worldwide applicationsdevelops worldwide applications

Global Systems to Fit the Strategy15.2 ORGANIZING INTERNATIONAL INFORMATION SYSTEMS



Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.2 ORGANIZING INTERNATIONAL INFORMATION SYSTEMS

Global Systems to Fit the Strategy




• Organize value-adding services along lines Organize value-adding services along lines of comparative advantageof comparative advantage

• Develop and operate system units at each Develop and operate system units at each level of corporate activity – regional, level of corporate activity – regional, national, and internationalnational, and international

• Establish a world headquarters at one Establish a world headquarters at one office responsible for developing office responsible for developing international systems and a global CIOinternational systems and a global CIO

Reorganizing the Business




Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.3 MANAGING GLOBAL SYSTEMS




A Typical Scenario: Disorganization on a Global Scale

15.3 MANAGING GLOBAL SYSTEMS

• A traditional multinational consumer-goods company, A traditional multinational consumer-goods company, based in Canada and operating in Europe, wants to based in Canada and operating in Europe, wants to expand into Asiaexpand into Asia

• It knows it must develop a transnational strategy and It knows it must develop a transnational strategy and supportive IT system structuresupportive IT system structure

• It has dispersed production and marketing to regional It has dispersed production and marketing to regional and national centers while maintaining a world and national centers while maintaining a world headquarters and strategic management in Canadaheadquarters and strategic management in Canada

• The result: a hodgepodge of hardware, software, and The result: a hodgepodge of hardware, software, and communications (e.g., incompatible e-mail systems, communications (e.g., incompatible e-mail systems, different manufacturing resources planning, different different manufacturing resources planning, different marketing / sales / human resources systems)marketing / sales / human resources systems)




Strategy: Divide, Conquer, Appease

Not all systems need be coordinated on a Not all systems need be coordinated on a transnational basis; only some core transnational basis; only some core systems are truly worth sharing from a cost systems are truly worth sharing from a cost and feasibility basisand feasibility basis

• Define the Core Business ProcessesDefine the Core Business Processes• Identify the Core Systems to Coordinate Identify the Core Systems to Coordinate

CentrallyCentrally• Choose an Approach: Incremental, Grand Choose an Approach: Incremental, Grand

Design, EvolutionaryDesign, Evolutionary• Make the Benefits ClearMake the Benefits Clear





• Cooptation Cooptation – bringing the opposition into design and

implementation of solution without surrendering control over direction and nature of change

• The Management SolutionThe Management Solution– Agree on common user requirements– Introduce changes in business processes– Coordinate applications development– Coordinate software releases– Encourage local users to support global

systems

Implementation Tactics: Cooptation





• Hardware and Systems IntegrationHardware and Systems Integration– Developing global systems based on core

systems raises questions about how new cores systems will fit within existing applications

• ConnectivityConnectivity– Telecommunications is the heart of international

systems, linking systems and people in a global firm into a single, integrated network

– Potential solutions include putting together leased private network, building one’s own network, or creating global intranets over Intranet

15.4 TECHNOLOGY ISSUES & OPPORTUNITIES FOR GLOBAL VALUE CHAINS

Main Technical Issues



Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.4 TECHNOLOGY ISSUES & OPPORTUNITIES FOR GLOBAL VALUE CHAINS




Chapter 15: Managing International Information SystemsChapter 15: Managing International Information Systems15.4 TECHNOLOGY ISSUES & OPPORTUNITIES FOR GLOBAL VALUE CHAINS


• SoftwareSoftware– Developing new core systems poses

unique challenges for software, involves problems of human interface design and system functionality

– Many firms increasingly turn to supply chain management and enterprise systems to standardize business processes globally




• Communicate and Compute Anytime, Communicate and Compute Anytime, Anywhere NetworksAnywhere Networks

– based on satellites, cell phones, and personal communications systems; will facilitate work

• Virtual Private Networks (VPNs)Virtual Private Networks (VPNs)– reduce networking costs and staff

New Technical Opportunities and the Internet

15.4 TECHNOLOGY ISSUES & OPPORTUNITIES FOR GLOBAL VALUE CHAINS




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MANAGING INTERNATIONAL INFORMATION SYSTEMS