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15.1 © 2004 by Prentice Hall

Management Information Systems 8/e

Chapter 15 Managing International Information Systems

1515

MANAGINGMANAGING

INTERNATIONALINTERNATIONAL

INFORMATIONINFORMATION

SYSTEMSSYSTEMS

Chapter




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

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

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

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

OBJECTIVES




• Lines of business and global strategyLines of business and global strategy

• The difficulties of managing change in a The difficulties of managing change in a multicultural environmentmulticultural environment

MANAGEMENT CHALLENGES




Developing an International Information Systems Architecture

THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS

• An An international information systems international information systems architecturearchitecture consists of basic consists of basic information systems required by information systems required by organizations to coordinate worldwide organizations to coordinate worldwide trade and other taskstrade and other tasks

• A A business driverbusiness driver is an environmental is an environmental force to which businesses must respond force to which businesses must respond and that influence a business’s directionand that influence a business’s direction




Figure 15-1

Technology Platform

Organization Structure

Corporate Global Strategies

Management and BusinessProcesses

Global Environment:Business Drivers and Challenges

International Information Systems Architecture





The Global Environment: Business Drivers and Challenges


• Global business driversGlobal business drivers are [a] general are [a] general cultural factors and [b] specific business factorscultural factors and [b] specific business factors

• Global cultureGlobal culture, created by TV and other , created by TV and other global media (e.g., movies) permit cultures to global media (e.g., movies) permit cultures to develop common expectations about right and develop common expectations about right and wrong, desirable and undesirable, heroic and wrong, desirable and undesirable, heroic and cowardlycowardly

• A A global knowledge baseglobal knowledge base--strengthened --strengthened by educational advances in Latin America, China, by educational advances in Latin America, China, southern Asia, and eastern Europe--also affects southern Asia, and eastern Europe--also affects growthgrowth




Business Challenges


• ParticularismParticularism, making judgments and taking action , making judgments and taking action based on narrow or personal features, rejects the concept based on narrow or personal features, rejects the concept of shared global cultureof shared global culture

• Transborder data flowTransborder data flow is the movement of is the movement of information across international boundaries in any forminformation across international boundaries in any form

• National National laws and traditionslaws and traditions create disparate create disparate accounting practices in various countries, impacting how accounting practices in various countries, impacting how profits and losses are analyzedprofits and losses are analyzed

• Additional factorsAdditional factors: cultural differences about : cultural differences about technology, different languages, and currency fluctuationstechnology, different languages, and currency fluctuations




State 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 – characterized by heavy centralization of corporate activities in home country of centralization of corporate activities in home country of originorigin

• MultinationalMultinational – concentrates financial management – concentrates financial management and control out of a home base, but decentralizes and control out of a home base, but decentralizes production, sales, and marketingproduction, sales, and marketing

• FranchisersFranchisers – involve creating, designing, and – involve creating, designing, and financing in the home country, then rely on foreign financing in the home country, then rely on foreign personnel for further production, marketing, and human personnel for further production, marketing, and human resources (e.g., McDonald’s)resources (e.g., McDonald’s)

• TransnationalTransnational – may or may not have a world – may or may not have a world headquarters, but will have many regional headquartersheadquarters, but will have many regional headquarters

ORGANIZING INTERNATIONAL INFORMATION SYSTEMS

Global Strategies and Business Organization




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

global telecommunications - give global telecommunications - give international firms more flexibility to shape international firms more flexibility to shape global strategiesglobal strategies

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


Global Systems to Fit the Strategy




Figure 15-2

SYSTEMCONFIGURATION

Strategy

Centralized

DomesticExporter

Multinational Franchiser Transnational

Duplicated

Decentralized

Networked

XX

x xX

x X





Reorganizing the BusinessReorganizing the Business• Organize value-adding services along lines Organize value-adding services along lines

of comparative advantageof comparative advantage

• Develop and operate systems units at each Develop and operate systems 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 systemsinternational systems


Global Systems, Reorganizing the Business




A Typical Scenario: Disorganization on a Global Scale

MANAGING GLOBAL SYSTEMS

• A traditional U.S. multi-national consumer-goods A traditional U.S. multi-national consumer-goods company, also operating in Europe, wants to expand company, also operating in Europe, wants to expand into Asiainto 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 the U.S.headquarters and strategic management in the U.S.

• 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




Figure 15-3





• Implementation Tactics: Cooptation -Implementation Tactics: Cooptation - bringing the opposition into design and implementation bringing the opposition into design and implementation of solution without surrendering control over direction of solution without surrendering control over direction and nature of changeand 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

OBJECTIVES

Implementation Tactics and The Management Solution




• 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 heart of international systems, linking systems

and people in global firm into single, integrated network– Potential solutions including putting together leased private network,

building one’s own network, or creating global intranets over Intranet

• 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

TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS

Main Technical Issues




Table 15-5: Problems of International Table 15-5: Problems of International NetworksNetworks– Costs and tariffs– Network management– Installation delays– Poor international service quality– Regulatory constraints– Changing user requirements– Disparate standards– Network capacity





– Communicate and compute anytime, anywhere anytime, anywhere networksnetworks based on satellites, cell phones, and personal communications systems will facilitate work

– Companies use the Internet to construct virtual virtual private networks (VPNs)private networks (VPNs) to reduce networking costs and staff

– As Internet technology spreads outside the USA, it will expand opportunitiesexpand opportunities for electronic commerce and international trade


New Technical Opportunities and the Internet




1515

MANAGINGMANAGING

INTERNATIONALINTERNATIONAL

INFORMATIONINFORMATION

SYSTEMSSYSTEMS

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