Lecture 7 Challenges of Global Information Systems

Multinational Organizations An increasing number of corporations are becoming multinational Global information system: a system that serves organizations in multiple countries –Used by multinational corporations

The Web and International Commerce The Web has become an important vehicle for B2B and B2C commerce The ratio of non-English speakers to English speakers on the Web is growing Internet opens enormous global opportunities Chinese market is expected to be the largest in the future The Web offers opportunities to increase revenue and to save on costs

The Web and International Commerce (continued) Online manuals with animation replace paper documents Web sites and documentation are presented in many languages Global businesses must be sensitive to local audiences Globalization: designing global sites to cater to local needs and preferences

Think Globally, Act Locally International companies must “think globally, act locally” Acting locally means being sensitive to regional customs and language nuances Control must be decentralized Strategic planning should be global, but can be followed with a local flavor

Challenges of Global Information Systems Global information systems face challenges such as: –Technological barriers –Regulations and tariffs –Electronic payment mechanisms –Different languages and cultures –Economic and political considerations –Different measurement and notation standards –Legal barriers –Different time zones

Technological Challenges Not all countries have adequate information technology infrastructure to allow companies to build an international IS Broadband communication lines are needed to support today’s graphics-rich Web pages Companies can offer two versions of their Web sites to compensate for slower bandwidth

Technological Challenges (continued) Language is another technological challenge –Eight-bit byte code is not sufficient for languages with large character sets –Unicode allows for 65,536 characters –Must coordinate with databases and applications Telephone number and postal code formats are different in different countries

Regulations and Tariffs Countries have different import regulations and tariffs Executives may be reluctant because of hassles of learning the laws, taxes, tariffs, and regulations of other countries Companies must comply with the laws of destination countries NextLinx help importers and exporters for Web commerce by providing tariffs, customs delay information, license requirements, etc.

Differences in Payment Mechanisms E-commerce allows easy payment for online purchases Credit cards are the preferred payment method in North America Not all countries have adopted this preference –High level of stolen credit cards in Eastern Europe –Europeans prefer debit cards –Most Japanese reluctant to use credit cards

Language Differences International parties must agree on a common language for communication Data might not be transmittable internationally in real time because it must first be translated English is considered the de facto international language Large companies translate their Web sites into local languages

Cultural Differences People from different countries vary in their: –Tastes –Gestures –Preferred colors –Treatment of people of certain gender or age –Attitudes about work –Opinions about ethical issues Conservative groups in other countries may dislike the “Americanization” of their cultures Web designers must be sensitive to cultural differences

Conflicting Economic, Scientific, and Security Interests Goal of corporate management is to seize a large market share and maximize organization profits Goal of a national government is to protect its economic, scientific, and security interests Scientific information is an important national resource as well as a great source of income for foreign corporations

Conflicting Economic, Scientific, and Security Interests (continued) Weapons manufacturers have technical drawings that are valuable to both the company and the security of country Countries treat trade secrets, patents, and copyrights differently Intellectual property is tightly protected in the U.S. and Western Europe, but less so in other countries

Political Challenges Information is power Some countries oppose the policy of free access to information as a threat to their sovereignty Governments may require that only open source software is used in government operations Global corporations must ensure compatibility with software adopted by local governments

Different Standards Differences in standards must be considered when integrating ISs internationally Records may be incompatible United States uses the English system of weights and measures; the rest of the world uses the metric system NASA lost a $125 million Mars orbiter mission due to an error in a data transfer, caused by a mismatch between U.S. and metric measurements

Different Standards (continued) Different standards also exist for: –Dates –Times –Temperatures –Addresses United States uses month/day/year format; the rest of the world uses day/month/year

Legal Barriers Countries have different laws that affect global business in general and e-commerce in particular Differing laws pose challenges to: –International transfer of data –Free speech –Location of legal proceedings when disputes arise Privacy laws –Respect for privacy in international business is an unresolved challenge –The majority of democratic nations try to protect individual privacy –Laws reflect a difference in approach to issue of privacy

Different Time Zones Different global regions require policies for work and information systems Teleconferencing systems must be available most of the day, sometimes 24 hours per day –Allows employees from different time zones to discuss problems that need immediate resolution Teams in support centers may work shifts to accommodate clients worldwide

Different Time Zones (continued) Managers must be aware of incorrect time stamping in different locales Systems at both locations can be designed to record local times of both locations, or record a single time (that of the company headquarters)