MIS CHAPTER 9 GLOBAL INFORMATION SYSTEMS Hossein BIDGOLI

MIS CHAPTER 9 GLOBAL INFORMATION SYSTEMS Hossein BIDGOLI MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 1

Chapter 9 Global Information Systems learning outcomes LO 1 Discuss reasons for globalization and using global information systems, including e-business and Internet growth. LO 2 Describe global information systems and their requirements and components. LO 3 Explain the types of organizational structures used with global information systems. LO 4 Discuss obstacles to using global information systems. MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 2

Chapter 9 Global Information Systems Why Go Global? • Customers demand integrated worldwide services • Example: shoe company – – – Produces leather and uppers in Italy Upper shipped to China Tested in Ireland Sold in United States Supply chain logistics managed and coordinated in US MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 3

Chapter 9 Global Information Systems Why Go Global? (cont’d. ) • 2008 Coca-Cola Company – Generated more than 80% of its revenue from outside United States • Prerequisites to the success of a global information system: – Clear understanding of factors such as customs, laws, technological issues, and local business needs and practices MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 4

Chapter 9 Global Information Systems Why Go Global? (cont’d. ) • Airline reservation systems – First large-scale interactive global system • Global products – Products or services that have been standardized for all markets • Manufacturer might “regionalize” operations • Globalization – Important factor in purchasing and supply chain MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 5

Chapter 9 Global Information Systems at Rohm & Haas • Part of Dow Chemical • Production units in many different countries • Overhauled its global information system – By upgrading the order entry system – Installed a companywide materials management system tied in with a global demand planning system • Can now provide better service to its customers MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 6

Chapter 9 Global Information Systems E-Business: A Driving Force • E-business – Major factor in the widespread use of global information systems – Builds on the advantages and structures of traditional business • The Internet – Simplify communication – Change business relationships – Consumers can engage in comparison shopping more easily MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 7

Chapter 9 Global Information Systems E-Business: A Driving Force (cont’d. ) • Small companies can conduct business online just as large companies MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 8

Chapter 9 Global Information Systems: An Overview • Global information system (GIS) – Information system that works across national borders – Facilitates communication between headquarters and subsidiaries in other countries – Incorporates all the technologies and applications found in a typical information system – Stores, manipulates, and transmits data across cultural and geographic boundaries MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 9

Chapter 9 Global Information Systems: An Overview (cont’d. ) • International company – Can increase control and enhance coordination of its subsidiaries and be able to access new global markets • Strategic planning is a core function • Defined in terms of two dimensions: – Control and coordination MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 10

Chapter 9 Global Information Systems: An Overview (cont’d. ) • Control requires: – Centralized architecture for data, standardized definitions used across the organization – Standard formats for reports – Defined behaviors for different processes – Performance-tracking system MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 11

Chapter 9 Global Information Systems: An Overview (cont’d. ) • Coordination requires: – Decentralized architecture for data – Standardization within departments – Ability to communicate these standards to other departments – Collaboration systems – Technologies that support informal communication and socialization • Many advantages of high coordination MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 12

Chapter 9 Global Information Systems Components of a Global Information System • Basic components: – Network capable of global communication, including transmission equipment and communication media – Global database – Information-sharing technologies • Large versus small companies: – Custom applications or outsourcing MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 13

Chapter 9 Global Information Systems Components of a Global Information System (cont’d. ) • Information system manager – Faces design and implementation issues when developing a global network – Determines the best communication media to meet global performance and traffic needs – Chooses the best transmission technology for the global network’s needs – Considers the company’s objectives when determining the network architecture – Keeps in mind that standardized software and hardware always ideal but not always feasible MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 14

Chapter 9 Global Information Systems Components of a Global Information System (cont’d. ) • Technical challenges in GIS design: – Designing and implementing global databases • Transborder data flow (TDF) – Restricts what type of data can be captured and transmitted MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 15

Chapter 9 Global Information Systems Requirements of Global Information Systems • Must be capable of supporting complex global decisions • Multinational corporations (MNCs) environment includes many variations in different forces – – Legal Cultural Economic Political MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 16

Chapter 9 Global Information Systems Requirements of Global Information Systems (cont’d. ) • Operational requirements: – Global data access – Consolidated global reporting – Communication between headquarters and subsidiaries – Management of short-term foreign exchange risks • Strategic requirements: – – Strategic planning support Management of conflicts and political risks Management of long-term foreign exchange risks Management of global tax risks MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 17

Chapter 9 Global Information Systems Goals of Global Information Systems • Issues: – Identify business opportunities in global marketplace – Justify investment in GIS – Information systems personnel must have technical and business expertise – Coordinate migration carefully • Categories: – Intelligent systems – Transnational management support systems – Global competitive intelligent systems MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 18

Chapter 9 Global Information Systems Organizational Structures and Global Information Systems • Four commonly accepted types of global organizations: – – Multinational Global International Transnational MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 19

Chapter 9 Global Information Systems Multinational Structure • Production, sales, and marketing are decentralized • Financial management remains the parent’s responsibility • Example: Tyco Corporation • Focus on local responsiveness – Reduces the need for communication between subsidiaries and headquarters • Each subsidiary operates on a different platform MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 20

Exhibit 9. 1 MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning A Multinational Structure 21

Chapter 9 Global Information Systems Global Structure • • • Highly centralized information system Subsidiaries have little autonomy Sometimes called a “franchiser” Extensive communication network necessary Difficult and impractical – Heavy reliance on headquarters for new products and ideas • Examples: – Mc. Donald’s, Mrs. Fields’ Cookies, General Motors MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 22

Exhibit 9. 2 MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning A Global Structure 23

Chapter 9 Global Information Systems International Structure • Operates much like a multinational corporation – But subsidiaries depend on headquarters more for process and production decisions • Information systems personnel are regularly exchanged among locations – Encourages a cooperative culture in geographically dispersed personnel • Example: Caterpillar Corporation MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 24

Exhibit 9. 3 MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning An International Structure 25

Chapter 9 Global Information Systems Transnational Structure • Parent and all subsidiaries work together in designing policies, procedures, and logistics • Usually focuses on optimizing supply sources and using advantages available in subsidiary locations • Architecture requires a higher level of standardization and uniformity for global efficiency – But must maintain local responsiveness • Examples: Citigroup, Sony, Ford MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 26

Exhibit 9. 4 MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning A Transnational Structure 27

Chapter 9 Global Information Systems Supporting Offshore Outsourcing • Offshore outsourcing – Alternative for developing information systems • Organization chooses an outsourcing firm in another country • Used for many information technology tasks • GIS plays an important role in supporting offshore outsourcing MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 28

Table 9. 1 MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning Top Offshoring Countries in 2008 29

Chapter 9 Global Information Systems The Internet and Globalization in Action • The Internet allows entrepreneurs in developing countries to start and expand businesses without making large investments • Muhammad Hassaan Khan, a young entrepreneur, established a design and consulting business called Zuha Innovation that is based in Faisalabad, Pakistan • As Adam Toren, president of Young. Entrepreneur. com, puts it, “The Internet brings all continents, races, cities, and villages together into a global network of trade and communications” MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 30

Chapter 9 Global Information Systems Obstacles to Using Global Information Systems • Lack of standardization – Can also include differences in time zones, taxes, language, work habits, etc. • • Cultural differences Diverse regulatory practices Poor telecommunication infrastructures Lack of skilled analysts and programmers MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 31

Chapter 9 Global Information Systems Lack of Standardization • Lack of international standards impedes developing a cohesive system that’s capable of sharing information resources across borders • Too much standardization can prevent flexibility in responding to local preferences and even time differences • Only 5% to 15% of a company’s applications are truly global in nature MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 32

Chapter 9 Global Information Systems Cultural Differences • Include differences in values, attitudes, and behaviors • Views on using technology • Cultural issues – Best addressed with education and training MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 33

Chapter 9 Global Information Systems Diverse Regulatory Practices • Applies to policies on business practices and technological use • Many countries restrict the type of hardware and software • Jurisdiction issues on contents of a GIS • Nature of intellectual property laws – Software piracy • Privacy and cybercrime laws • Censorship and government control MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 34

Chapter 9 Global Information Systems Poor Telecommunication Infrastructures • Consider telecommunication infrastructures of the countries where subsidiaries are located • Differences in telecommunication systems make consolidating them difficult • Differences in standards MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 35

Chapter 9 Global Information Systems Lack of Skilled Analysts and Programmers • Severe shortage of qualified information systems professionals in the United States and Western Europe • Companies must consider the nature of each culture and differences in skills in other countries • Training and certification programs MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 36

Chapter 9 Global Information Systems Summary • Factors contribute to the globalization trend • Global information systems: – – – Components Requirements Uses in multinational structures Applications Obstacles MIS, Chapter 9 © 2011 Course Technology, a part of Cengage Learning 37