The International Dimension, Part III Global IS and the Value Chain © 2008 Pearson Prentice Hall, Experiencing MIS, David Kroenke

Study Questions How do global information systems benefit the value chain? Why do global information systems impact functional and cross-functional systems differently? Hoe do global information systems affect supply chain profitability? What is the impact of global manufacturing? Should information systems be the instruments for exporting cultural values?

How Do Global Information Systems Benefit the Value Chain? Activities can be performed anywhere in the world Sales and marketing can be local Manufacturing can be distributed throughout world Service and support functions outsourced to less costly areas Integrated into worldwide system Global virtual companies operate 24/7

Impacts of Global Information Systems Functional systems’ lack of data integration Makes accommodations for language and cultural differences unnecessary Needs adequate data interface to share data Cross-functional integrated systems provide world-wide view Do not readily accommodate differences in language, business processes, cultural norms Lose value of integration Based on ides of standardization Inherent processes problematic

Affects on Supply Chain Profitability Supply chain performance driven by facilities, inventories, transportation, and information Each affected positively by global information systems Facilities can be located anywhere Inventories can be reduced producing cost savings Reduce or eliminate bullwhip effect Support JIT

Affects on Supply Chain Profitability, continued Transportation can be selected to optimize value Select method of delivery Automated systems track shipments Produce accurate and timely information

Economic Impacts of Global Manufacturing Modern manufacturing reduces prices of goods, increasing demand Accelerator effect also increases demand Globally: Buying in another country will generate the accelerator effect in that country, increasing demand for goods Decreases economic activity in purchaser’s country, but may be balanced by increased demand for goods

Instruments for Exporting Cultural Values Information systems export cultural values Best practice dependent on specific culture Double standard China requested that MSN shut down support to certain Chinese sites Google blocked searches for certain terms in some countries U.S. has made online gambling illegal

Active Review How do global information systems benefit the value chain? Why do global information systems impact functional and cross-functional systems differently? Hoe do global information systems affect supply chain profitability? What is the impact of global manufacturing? Should information systems be the instruments for exporting cultural values?