15.1 © 2004 by Prentice Hall MANAGINGINTERNATIONALINFORMATIONSYSTEMS

15.2 © 2004 by Prentice Hall How can information systems support the various international business strategies?How can information systems support the various international business strategies? What issues should managers address when developing international information systems?What issues should managers address when developing international information systems? What technical alternatives are available for developing global systems?What technical alternatives are available for developing global systems? Define and classify global information systemsDefine and classify global information systems Present the major issues surrounding global information systemsPresent the major issues surrounding global information systems OBJECTIVES

15.3 © 2004 by Prentice Hall Lines of business and global strategy.Lines of business and global strategy. The difficulties of managing change in a multicultural environment.The difficulties of managing change in a multicultural environment. Complexity of building Global systems which are IOS (Inter- organizational Systems)Complexity of building Global systems which are IOS (Inter- organizational Systems) MANAGEMENT CHALLENGES

15.4 © 2004 by Prentice Hall 1.Major dimensions for developing an international I.S. architecture. 2.Global business drivers. 3.Global business challenges. 4.Basic strategies for global firm’s organization structure. 5.Global I.S. configuration to fit the strategy. MANAGING INTERNATIONAL INFORMATION SYSTEMS TOPICS TO BE DISCUSSED

15.5 © 2004 by Prentice Hall 6.Management challenges in developing global I.S. 7.Global I.S. development strategy. 8.Technology challenges of global information systems. 9.Management challenges in creating organizational and technology infrastructure for conducting global business and solution guidelines. MANAGING INTERNATIONAL INFORMATION SYSTEMS TOPICS TO BE DISCUSSED (CONTD.)

15.6 © 2004 by Prentice Hall Figure 15-1 Technology Platform Organization Structure Corporate Global Strategies Management and Business Processes Global Environment: Business Drivers and Challenges International Information Systems Architecture MAJOR DIMENSIONS FOR DEVELOPING AN INTERNATIONAL INFORMATION SYSTEMS ARCHITECTURE

15.7 © 2004 by Prentice Hall Business Driver : A force in the environment : Business Driver : A force in the environment : - to which business must respond. respond. - that influences the direction of the business. the business. GLOBAL BUSINESS DRIVERS

15.8 © 2004 by Prentice Hall GENERAL CULTURAL FACTORS Global communication and transportation technologies.Global communication and transportation technologies. Development of global culture.Development of global culture. Emergence of global social norms.Emergence of global social norms. Political stability.Political stability. Global knowledge base.Global knowledge base. GLOBAL BUSINESS DRIVERS

15.9 © 2004 by Prentice Hall SPECIFIC BUSINESS FACTORS Global markets.Global markets. Global production and operations.Global production and operations. Global coordination.Global coordination. Global workforce.Global workforce. Global economies of scale.Global economies of scale. GLOBAL BUSINESS DRIVERS

15.10 © 2004 by Prentice Hall 1.Particularism ( Judgements/ actions on the basis of narrow characteristics) : - Religious, - Nationalistic, - Ethnic, - Regionalism, - Geopolitical, 2.Prohibition of trans-border data flow. contd. GLOBAL BUSINESS CHALLENGES (NEGATIVE FACTORS)

15.11 © 2004 by Prentice Hall 3.National laws and traditions. 4.Cultural and political differences. 5.Accounting practices, 6.Language, 7.Currency fluctuations GLOBAL BUSINESS CHALLENGES (NEGATIVE FACTORS) (contd.)

15.12 © 2004 by Prentice Hall FOUR BASIC INTERNATIONAL STRATEGIES FORMING THE BASIS FOR GLOBAL FIRM’S ORGANIZATION STRUCTURE BUSINESS STRATEGIES FUNCTION DOMESTIC EXPORTER MULTI- NATIONAL FRANCHISER TRANS- NATIONAL PRODUCTION FINANCE / ACCOUNTING SALES/ MARKETING HUMAN RESOURCE STRATEGIC MANAGEMENT CENT. MIXED CENT. DISP. CENT. DISP. CENT. COORD. CENT. COORD. CENT. COORD. CENT. – CENTRALISED, COORD. - COORDINATED DISP. - DISPERSED (DECENTRALISED)

15.13 © 2004 by Prentice Hall 1.Centralized Systems : System development and operation at domestic home base. (DOMESTIC EXPORTER) 2.Decentralized Systems : Each foreign unit designs its unique solutions and systems. ( MULTINATIONAL) 3.Duplicated Systems : - Development at home base, - Operations handed over to autonomous units in foreign locations. (FRANCHISER) 4.Networked Systems : Systems development and operations are coordinated across all units. (TRANSNATIONAL) GLOBAL I.S. CONFIGURATION TO FIT THE STRATEGY

15.14 © 2004 by Prentice Hall 1.Agreeing on common User requirements. 2.Introducing changes in business processes. 3.Coordinating applications development. 4.Coordinating software releases. 5.Encouraging local users to support global systems. MANAGEMENT CHALLENGES IN DEVELOPING GLOBAL INFORMATION SYSTEMS ( USUAL PROBLEMS – BECOME HIGHLY COMPLICATED IN GLOBAL SYSTEMS)

15.15 © 2004 by Prentice Hall 1.Only core systems to be coordinated centrally. (Core Functions : Critical to organization :- - Define core business processes. - Identify core systems to be coordinated centrally) 2.Choose an Approach: - Avoid peace meal approach. - Avoid grand-design approach (trying to do everything at once) - Use Evolutionary Approach : Evolve transnational applications from existing applications with clear vision for next 5 years. 3.Make Benefits Clear to : - Senior managers at HQ - Foreign divisional managers GLOBAL I.S. DEVELOPMENT STRATEGY

15.16 © 2004 by Prentice Hall Figure 15-3 GLOBAL I.S. DEVELOPMENT STRATEGY

15.17 © 2004 by Prentice Hall 1.Computing platforms and system integration. 2.Connectivity through networks : - Networking standards,- EDI,- VPN, 3.Software : Problems :- (a) GUI(b) Common language, (c) Important software applications : - Global Supply Chain Management, - Enterprise Systems, (d) Hidden costs of offshore software outsourcing :- - Contract cost, - Vendor selection cost, - Knowledge transfer cost, - Domestic human resource cost, - Cost of coordination with vendor, - Cost of adjusting to cultural differences, - Cost of managing contract. TECHNOLOGY CHALLENGES OF GLOBAL INFORMATION SYSTEMS

15.18 © 2004 by Prentice Hall MANAGEMENT CHALLENGES IN CREATING ORGANIZATIONAL & TECHNOLOGY INFRASTRUCTURE FOR CONDUCTING GLOBAL BUSINESS Challenges : 1.Finding the right global business, 2.Difficulties of managing change in a multicultural firm. 3.Difficulties of achieving global connectivity and integration.

15.19 © 2004 by Prentice Hall Solution Guidelines: 1. 1.Agree on common user requirements (core business processes and common language) Introduce changes in business processes : Success will depend on LEGITIMACY and CHANGE STRATEGY (convincing on benefits) 3. 3.Coordinate applications development (follow evolutionary change strategy) Coordinate software releases Encourage local users to support global systems : - Involve users in design creation, - Deal with resistant local units by COOPTATION. - Avoid raw power (forced acceptance) MANAGEMENT CHALLENGES IN CREATING ORGANIZATIONAL & TECHNOLOGY INFRASTRUCTURE FOR CONDUCTING GLOBAL BUSINESS

15.20 © 2004 by Prentice Hall END OF MANAGINGINTERNATIONALINFORMATIONSYSTEMS