International MIS The International Dimension

ID-2 Study Questions Copyright © 2016 Pearson Education, Inc. Q1: How does the global economy affect organizations and processes? Q2: What are the characteristics of international IS components? Q3: How do inter-enterprise IS facilitate global supply chain management? Q4: What are the security challenges of international IS? Q5: What are the challenges of international IS management?

ID-3 Q1: How Does the Global Economy Impact Organizations and Processes? Copyright © 2016 Pearson Education, Inc. After World War II, Japanese and other Asian countries increase manufacturing Fall of Soviet Union opened economies of Russia and Eastern Europe N. American and European economies integrated Plentiful, cheap telecommunications Booming economies: India, China, Brazil EU- and U.S.-based companies find greatest opportunities outside own national markets

ID-4 Percent of Cross ‐ Border Commerce: Opportunities Abounds Copyright © 2016 Pearson Education, Inc.

ID-5 Organizational Strategy Determines Information Systems Copyright © 2016 Pearson Education, Inc.

ID-6 How Does the Emerging Global Economy Change Competitive Strategy? Copyright © 2016 Pearson Education, Inc. Impact of Internet Wider range of customers Wider range of vendors Facilitates new entrants Intensifies rivalry

ID-7 How Does the Global Economy Change Competitive Strategy? (cont'd) Copyright © 2016 Pearson Education, Inc. Accelerates flow of data about price, product, availability and service Products localized to language and culture Internet supports unprecedented market size and product differentiation

ID-8 How Does the Global Economy Change Value Chains and Business Processes? Copyright © 2016 Pearson Education, Inc. Value chain activities can be performed anywhere Final product frequently distributed throughout world Abundance of low-cost, well-educated, English-speaking professionals allows outsourcing service and support functions Ability to work 24/7 by moving work into other time zones increases productivity

ID-9 Q2: What Are the Characteristics of International IS Components Copyright © 2016 Pearson Education, Inc. 1.Hardware – sold worldwide 2.Software and interfaces – in multiple, local languages 3.Data – choosing language(s) for data descriptions and remarks 4.Procedures – reflect local cultural values and norms 5.People – job descriptions and reporting relationships appropriate to culture

ID-10 What’s Required to Localize Software? Copyright © 2016 Pearson Education, Inc.

ID-11 What’s Required to Localize Software? (cont'd) Copyright © 2016 Pearson Education, Inc. Localizing programs much more difficult, expensive, and time consuming than translating documents Plan for localization from the beginning When considering acquisition of a company in a foreign country, budget time and expense for localization of information systems

ID-12 What Are the Problems and Issues of Global Databases? Copyright © 2016 Pearson Education, Inc. Commit to a single company language Single database not possible for companies using multiple languages Need applications to export and import data among separated databases Slow data transmission speeds may require distributed, partitioned databases and highly skilled personnel

ID-13 Types of Distributed Database Processing Copyright © 2016 Pearson Education, Inc. Distributed database –Single database resides in multiple locations Replicated database –Multiple copies of a database distributed –Updating requires highly skilled personnel Partitioned database –Database divided into non-overlapping segments

ID-14 Challenges of International Enterprise Applications Copyright © 2016 Pearson Education, Inc. Independent Functional Systems Inherent Processes Unnecessary to accommodate language, business, and cultural differences Differences in language, culture, norms, and expectations Requires adequate data interface Developing and evaluating “as is” models and alternative international processes incredibly challenging Integrated, cross-functional, international system with high-level processes connected by SOA standards and the cloud

ID-15 Advantages of Functional Systems Copyright © 2016 Pearson Education, Inc. Lack of integration can have advantages for international organizations and international systems U.S. order-processing systems operate in English, reflect practices and culture of U.S. Taiwanese manufacturing information systems operate in Chinese and reflect business practices and culture of Taiwan Need adequate data interface between two systems

ID-16 Problems of Inherent Processes Copyright © 2016 Pearson Education, Inc. Some inherent processes may conflict with cultural norms Very difficult to convince employees to follow those inherent processes, or more difficult in some cultures Future inter-enterprise business processes will be defined to document service responsibilities of each international unit The cloud and Web service standards used to connect services into an integrated, enterprise, international system

ID-17 Q3: How Do Inter-enterprise IS Facilitate Global Supply Chain Management? Copyright © 2016 Pearson Education, Inc.

ID-18 Supply Chain Example Copyright © 2016 Pearson Education, Inc.

ID-19 Importance of Information in the Supply Chain Copyright © 2016 Pearson Education, Inc. Global information systems increase supply chain profitability by: Reducing inventories Reducing or eliminating bullwhip effect Producing comprehensive, accurate, timely information Choosing delivery option that optimize value Enabling 24/7 global shipment tracking

ID-20 Example of Walmart Supply Chain Copyright © 2016 Pearson Education, Inc.

ID-21 How Can Information Relieve the Bullwhip Effect? Copyright © 2016 Pearson Education, Inc.

ID-22 Eliminate Bullwhip Effect with True Demand Information Copyright © 2016 Pearson Education, Inc.

ID-23 Q4: What Are the Security Challenges of International IS? Copyright © 2016 Pearson Education, Inc. Legal Environment –Encryption is illegal or highly restricted in many countries –Censorship problems with stored content –Dozens of countries regularly block access to certain Internet companies –Variations in privacy laws –Intersection of international law and technology forcing organizations to carefully evaluate how they manage their information systems and location of their data

ID-24 Q4: What Are the Security Challenges of International IS? (cont'd) Copyright © 2016 Pearson Education, Inc. Physical Security –Threats to infrastructure in the form of natural disasters, geopolitical risks, civil unrest, terrorist attacks –Physical infrastructure vulnerable to outright seizure –Employees who run critical infrastructure can be targeted

ID-25 Q4: What Are the Security Challenges of International IS? (cont'd) Copyright © 2016 Pearson Education, Inc. Cultural Norms –Bribery in some countries is expected –Graft is a worldwide problem  Risks control of separation of duties and authorities  Risk loss of valuable intellectual property –Personal references: may be considered exceedingly rude to talk about someone when he or she is not present

ID-26 Q5: What Are the Challenges of International IS Management? Copyright © 2016 Pearson Education, Inc. International information systems larger, more complex International IT depts. bigger, more cultures, languages More IT assets, risks, greater uncertainty Complex international law, security incidents complicated to investigate

ID-27 Why Is International IS Development More Challenging? Copyright © 2016 Pearson Education, Inc. Hardware Running hardware in different countries is not a problem, especially using the cloud Software Localizing software is manageable, assuming programs designed to be localized

ID-28 Why Is International IS Development More Challenging? (cont'd) Copyright © 2016 Pearson Education, Inc. Data Databases pose more difficulties Single database used, can it be distributed? If so, how will updates be processed? What language, currency, and units of measure will be used to store data? If multiple databases used, how will data be transported among them? Cloud-based databases reduces difficulties

ID-29 Why Is International IS Development More Challenging? (cont'd) Copyright © 2016 Pearson Education, Inc. Procedures Customers in different countries treated differently than in U.S. –Procedures for using a CRM correspondingly different If underlying business processes differ, then specific requirements for information system will differ Options –Either define a set of standard business processes or –Develop alternative versions of system to support different processes in different countries

ID-30 What Are the Challenges of International Project Management? Copyright © 2016 Pearson Education, Inc.

ID-31 What Are the Challenges of International Project Management? (cont'd) Copyright © 2016 Pearson Education, Inc. Managing costs in different countries and cultures paying vastly different labor rates Quality and human resources more complicated for international projects. Quality standards vary among countries Worker expectations vary among cultures and nations –Compensation, rewards, and work conditions vary –Can lead to misunderstandings, poor morale, and project delays Language and culture differences and geographic separation make communication more difficult and expensive

ID-32 What Are the Challenges of International IS Management? Copyright © 2016 Pearson Education, Inc. 1.Conducting operations in different countries, cultures, and languages adds complexity 2.Dozens of different inventory systems used throughout the world to coordinate and integrate 3.Information systems to be integrated with outsource vendors’ information systems, for different systems, all over the world 4.Protecting IS and IT infrastructure

ID-33 How Does the International Dimension Affect Computer Security Risk Management? Copyright © 2016 Pearson Education, Inc. IT assets subject to more threats –Political threats, civil unrest, terrorists, natural disasters Likelihood of a threat more difficult to estimate Uncertainty about risks high Human safeguards chosen and evaluated on a culture-by- culture basis

ID-34 Setting Up Information Systems in Foreign Offices Copyright © 2016 Pearson Education, Inc. Obtain hardware and networking equipment from the local economy Purchase or lease a facility, local vendors supply and set up hardware, a local area network, and access to internet Bring in own IT professionals to install software Use same accounting software and chart of accounts, and same business processes, worldwide Twice a year conduct internal audits to verify compliance Allow transactions in local currency ERP system centralized database in home country

ID-35 Active Review Copyright © 2016 Pearson Education, Inc. Q1: How does the global economy affect organizations and processes? Q2: What are the characteristics of international IS components? Q3: How do inter-enterprise IS facilitate global supply chain management? Q4: What are the security challenges of international IS? Q5: What are the challenges of international IS management?

ID-36 Copyright © 2016 Pearson Education, Inc.