15.1 © 2007 by Prentice Hall 15 Chapter Managing Global Systems

15.2 © 2007 by Prentice Hall LEARNING OBJECTIVES Management Information Systems Chapter 15 Managing Global Systems Identify the major factors driving the internationalization of business. Compare strategies for developing global businesses. Demonstrate how information systems can support different global business strategies. Identify the challenges posed by global information systems and management solutions. Evaluate the issues and technical alternatives to be considered when developing international information systems.

15.3 © 2007 by Prentice Hall Think Global, Act Local: DHL Builds a Global IT Organization Problem: Growing complexity of decentralized system, high costs, low productivity, slow response to change. Solutions: Centralizing management, redesigning IT infrastructure, and moving applications off local servers reduces costs and enables faster response to change. Move to three low cost regional centers and strengthening local communications links allows for consolidation of global package tracking and logistics support system. Demonstrates IT’s role in centralizing management in global firms that still have local concerns. Illustrates digital technology being used by global firms adjusting their systems to support rapid growth in world trade. Management Information Systems Chapter 15 Managing Global Systems

15.4 © 2007 by Prentice Hall The Growth of International Information Systems Developing an international information systems architecture The global environment: business drivers and challenges State of the art Management Information Systems Chapter 15 Managing Global Systems

15.5 © 2007 by Prentice Hall International Information Systems Architecture Figure 15-2 The major dimensions for developing an international information systems architecture are the global environment, the corporate global strategies, the structure of the organization, the management and business processes, and the technology platform. The Growth of International Information Systems Management Information Systems Chapter 15 Managing Global Systems

15.6 © 2007 by Prentice Hall Organizing International Information Systems Global strategies and business organization Global systems to fit the strategy Reorganizing the business Management Information Systems Chapter 15 Managing Global Systems

15.7 © 2007 by Prentice Hall Global Strategy and Systems Configurations Figure 15-3 The large Xs show the dominant patterns, and the small Xs show the emerging patterns. For instance, domestic exporters rely predominantly on centralized systems, but there is continual pressure and some development of decentralized systems in local marketing regions. Organizing International Information Systems Management Information Systems Chapter 15 Managing Global Systems

15.8 © 2007 by Prentice Hall Read the Interactive Session: Organizations, and then discuss the following questions: Review Table 15-3 and then contrast and compare the global strategies of Avnet and Arrow. Are they the same or different? Review Figure 15-3 and compare and contrast the Avnet system building strategy with that of Arrow. Has each company made the “correct” choice given their strategies? Identify the risks which Avnet incurs by pursuing its regional strategy. What are the off-setting benefits? Do you believe for this product and market that a multinational strategy is superior to a transnational strategy? Why or why not? Avnet: Developing Systems to Support Global Strategy Organizing International Information Systems Management Information Systems Chapter 15 Managing Global Systems

15.9 © 2007 by Prentice Hall Managing Global Systems A typical scenario: Disorganization on a global scale Global systems strategy Define the core business processes Identify the core systems to coordinate centrally Choose an approach: Incremental, grand design, evolutionary Make the benefits clear Results of the capital budgeting analysis Management Information Systems Chapter 15 Managing Global Systems

15.10 © 2007 by Prentice Hall Local, Regional, and Global Systems Figure 15-4 Agency and other coordination costs increase as the firm moves from local option systems toward regional and global systems. However, transaction costs of participating in global markets probably decrease as firms develop global systems. A sensible strategy is to reduce agency costs by developing only a few core global systems that are vital for global operations, leaving other systems in the hands of regional and local units. Source: From Managing Information Technology in Multinational Corporations by Edward M. Roche, © Adapted by permission of Prentice Hall, Inc., Upper Saddle River, N.J. Managing Global Systems Management Information Systems Chapter 15 Managing Global Systems

15.11 © 2007 by Prentice Hall Managing Global Systems The management solution Agreeing on common user requirements Introducing changes in business processes Coordinating applications development Coordinating software releases Encouraging local users to support global systems Management Information Systems Chapter 15 Managing Global Systems

15.12 © 2007 by Prentice Hall Technology challenges of global systems Computing platforms and systems integration Connectivity Software Managing global software development Technology Issues and Opportunities for Global Value Chains Management Information Systems Chapter 15 Managing Global Systems

15.13 © 2007 by Prentice Hall Internet Population in Selected Countries Figure 15-5 The percentage of the total population using the Internet in developing countries is much smaller than in the United States and Europe. Source: CIA World Factbook, Technology Issues and Opportunities for Global Value Chains Management Information Systems Chapter 15 Managing Global Systems

15.14 © 2007 by Prentice Hall Read the Interactive Session: Management, and then discuss the following questions: Does offshore outsourcing create an ethical dilemma? Why or why not? Should offshore outsourcing be restricted? How? Why or why not? How could the outsourcing of jobs lead to the creation of new jobs in the United States? Explain. Offshore Outsourcing: Good, Bad, or Does Not Make a Difference? Technology Issues and Opportunities for Global Value Chains Management Information Systems Chapter 15 Managing Global Systems