Global Business Drivers What is the chapter’s message? There are several business drivers that impact a company’s IS strategy.

Global Business Drivers GBD force a company towards globalization. The ways globalization occurs: extract information from tangible products replace material by knowledge add value by using information use information to streamline transportation, production, and inventory

Global Business Drivers Use IS to transfer money Use IS to coordinate worldwide production Use IS to connect a dispersed value chain Legacy systems may reduce the effectiveness of GBDs

Global Business Drivers Case Example 1) A multinational company needed tighter control 2) Local management resisted loss of freedom 3) Country-specific accounting practices ere hindrances 4) Lack of the software support in several countries 5) Software need language modifications 6) Operating environments were difficult 7) High telecommunications costs

Global Business Drivers The GBDs 1) GBDs are a communications tool to help CEOs develop a good IT strategy 2) GBDs focus on:customers suppliers orders projects inventory capture information

Global Business Drivers Cont’d. 3) GBDs help define a common coherent data model 4) GBDs help define an organizational structure

Global Business Drivers The GBD Model 1) Globalization 2) Global union and strategy 3) Global Drivers NetworkInformation Technology OrganizationData Application Infrastructure

Global Business Drivers What are the GBDs? 1) Joint resources 2) Rationalized & flexible operations 3) Risk reduction 4) Global products 5) Quality 6) Suppliers 7) Corporate customers

Global Business Drivers Joint Resources 1) Employee count 2) Employee skill 3) Employee compensation Questions 1) Can IT move work to employers? 2) Can IT make employees cooperate across time & space? 3) Can IT manage employees across time & space?

Global Business Drivers Rationalized Operations 1) Plan 2) Schedule 3) Capacity 4) Inventory Questions: 1) How can IT further rationalization of the factors above?

Global Business Drivers Cont’d 2) What is rationalization?

Global Business Drivers Risk Reduction 1) Investment risk 2) Foreign exchange risk 3) Asset risk Questions: 1) How IT helps reduce risk? 2) IT helps process foreign exchange risk? 3) IT helps inventory management?

Global Business Drivers Cont’d 4) IT helps calculate investment risk? 5) IT helps gather political risk information?

Global Business Drivers Global Products 1) Product standards 2) Process standards 3) Legal standards 4) Repair records

Global Business Drivers Questions: 1) How does IT support global products? 2) Global brand management? 3) Synchronize global production?

Global Business Drivers Quality 1) Competitive benchmarking 2) Innovation Questions: 1) IT traces product composition which enables finding faulty products. 2) IT helps construct quality benchmarks.

Global Business Drivers Suppliers 1) IT helps the ordering process 2) IT helps negotiate price discounts 3) IT helps quality Corporate customers; IT helps become a leading edge supplier IT helps deliver investment quality product

Global Business Drivers GBD applications 1) Define global business drivers for each industry 2) Define the importance of GBDs for each industry 3) Construct the IT strategy to respond to GBDs.

Global Business Drivers Networked Organization 1) Historically we had hierarchical organizations 2) Information flows up to the center 3) Instructions flow down to the bottom 4) In a post modern company we have a DECENTERED organizational structure 5) Business clusters 6) Independence, dispersed, cooperation

Global Business Drivers Cont’d 7) Not all nodes are owned by the same company - virtual organizations

Global Business Drivers The new Dynamic Network 1) Decentralized activities - value chain dispersed globally and controlled by IT 2) Brokers coordinate cooperation among different organizations 3) Market Mechanisms Control ??????????? 4) Full disclosure Information Systems Trust in built by openness

Global Business Drivers How to Ensure Success 1) GBDs are the basic for IT structure 2) Partnership Understand local customers 3) Use an international design team 4) Construct a good communications infrastructure