1. Managing International Information Systems
Chapter 15
Managing International Information Systems

2. Compare strategies for developing global businesses
Management Information Systems
Chapter 16 Managing International Information Systems
OBJECTIVES
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

3. Management Information Systems
Chapter 16 Managing International Information Systems
OBJECTIVES (Continued)
Evaluate the issues and technical alternatives to be considered when developing international information systems
Identify the challenges posed by global information systems and management solutions

4. This chapter describes how to go about building an international information systems architecture suitable for your international strategy.

5. 15.1 THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
Moving from decentralized structures to regional global structures.
Localized firms to networked corporations
The growth of international trade has radically altered domestic economies around the globe.
Today,production and design of many high-end electronic products is parceled out to a number of different countries.

6. Global Product Development and Production
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
Global Product Development and Production
Figure 16-1

7. You must have an information system in place that will support the communications, coordination of people and products, and order processing for both domestic and foreign markets (international information systems infrastructure)
How do u Go about building an international information systems architecture suitable for your international strategy????

8. You have to understand the characteristics and individual needs of foreign markets, just as you need to understand your domestic markets.
E.g Walmart learnt it the hard way.

9. Developing an International Information Systems Architecture
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
Developing an International Information Systems Architecture
The basic information systems required by organizations to coordinate worldwide trade and other activities
International information systems architecture:
understand the global environment,including which business driver is most prominent
Business driver:
A force in the environment to which businesses must respond and that influences the direction of the business

10. International Information Systems Architecture /DIMENSIONS
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
International Information Systems Architecture /DIMENSIONS
Understand the global environment in which the firm is operating. Understanding the market forces and business drivers.
Corporate strategy
How to structure ur organization.
Management issues and business processes
Technology platform.
Figure 16-2
How will u sell to the globe e.g (domestic base etc)

11. The Global Environment: Business Drivers and Challenges
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
The Global Environment: Business Drivers and Challenges
The global business drivers can be divided into two groups and are leading to global markets.
General cultural factors:
Global communication and transportation technologies ( created a global village,cost of moving goods have fallen)
Development of global culture
(television,internet now permits different cultures and ppl to develop common expectations).
Table 16-1

12. General Cultural Factors: (Continued)
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
General Cultural Factors: (Continued)
Emergence of global social norms
Political stability
Global knowledge base(widely despersed knowledge base)
Table 16-1 (Continued)

13. Global production and operations Global coordination Global workforce
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
General factors lead towards Specific business factors that affect most industries:
Global markets(global consumers interested in consuming similar products that are culturally approved. American sneakers (made in Korea but designed in Los Angeles)
Global production and operations
Global coordination
Global workforce
Global economies of scale (production done where it can be best accomplished)
Table 16-1 (Continued)

14. Business Challenges inhibit international business
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
Business Challenges inhibit international business
General:
Cultural particularism: Regionalism, nationalism, language differences rejects the concept of a shared global culture)
Social expectations: Brand-name expectations, work hours( diffrences among cultures produce differences in social expectations)
Political laws: Transborder data and privacy laws, commercial regulations
Table 16-2

15. Specific business challenges:
Management Information Systems
Chapter 16 Managing International Information Systems
THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS
Specific business challenges:
Standards: Different Electronic Data Interchange (EDI), telecommunications standards
Reliability: Phone networks not uniformly reliable
Speed: Different data transfer speeds, many slower than United States
Personnel: Shortages of skilled consultants
Table 16-2 (Continued)

16. As it turns out there are significant difficulties in
building appropriate international architectures.

17. Organizing international information system
First you have to decide what you're going to do — you have to choose a strategy. Then you have to organize your business around this strategy. The last step is to build the system that will incorporate the first two.

18. Global Strategies and Business Organization
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Global Strategies and Business Organization
Three kinds of organizational structure:
Centralized (in the home country)
Decentralized (to local foreign units)
Coordinated (all units participate as equals)

19. Domestic exporter strategy:
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Domestic exporter strategy:
Heavy centralization of corporate activities in the home country of origin.
International sales/marketing are sometimes dispersed (e.g:Caterpillar Corporation)
Multinational strategy:
Centralized financial management and control,management and HR.
decentralizing production, sales, and marketing operations to units in other countries
Products are adapted to suit local markets
Decentralized systems can lead to disorganization on a global scale.
(e.g:General Motors and Intel)

20. Transnational strategy:
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Franchisers:
Product designed in home country finished in local country
The product is financed and initially produced in the home country, but for product-specific reasons rely on foreign personnel for further production, marketing, and human resources.
E.g KFC,Mc Donalds,Starbucks coffee.
Transnational strategy:
Truly Global Firm; No National Headquarters; Value-added Activities Managed From Global Perspective; Optimizes Supply & Demand, Taking Advantage of Local Competitive Strengths.One globe one company e.g citi corp

21. Once you've decided which global business strategy to follow, it's time to decide how your information system will support it.

22. Four types of systems configuration:
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Four types of systems configuration:
Centralized systems: Systems development and operation occur totally at the domestic home base.
Duplicated systems: Development occurs at the home base but operations are handed over to autonomous units in foreign locations.

23. Four types of systems configuration: (Continued)
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Four types of systems configuration: (Continued)
Decentralized systems: Each foreign unit designs its own unique solutions and systems.Each business unit has its own systems.
Decentralized systems can lead to disorganization on a global scale.e.g in book
4. Networked systems: Systems development and operations occur in an integrated and coordinated fashion across all units.

24. Global Systems to Fit the Strategy
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Global Systems to Fit the Strategy
Global Strategy and Systems Configurations
Figure 16-3

25. Reorganizing the Business
Management Information Systems
Chapter 16 Managing International Information Systems
ORGANIZING INTERNATIONAL INFORMATION SYSTEMS
Reorganizing the Business
To develop a global company and information systems support structure:
Organize value-adding activities along lines of comparative advantage. For instance departments located where they can best perform
Develop and operate systems units at each level of corporate activity —regional, national, and international
Establish at world headquarters, A global chief information officer position .Total integration of all local, regional and global systems

26. Management Challenges in Developing Global Systems
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGING GLOBAL SYSTEMS
Management Challenges in Developing Global Systems
Agreeing on common user requirements
Introducing changes in business processes
Coordinating applications development
Coordinating software releases
Encouraging local users to support global systems
Table 16-4

27. A typical scenario disorganization on a global scale
E.G of a MNc based in U.S and operates in Europe
would like to expand into Asian markets
Knows it must develop a transnational strategy

28. Global Systems Strategy
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGING GLOBAL SYSTEMS
Global Systems Strategy
Solution
Define the core business processes: Conduct workflow analysis, identify centers of excellence for these processes. Short list business processes.
Identify the core systems to coordinate centrally: Conquer the core systems and define these systems as truly transnational
Choose an approach: Incremental, Grand Design, Evolutionary.Pick up most critical areas to merge first.
Make the Benefits Clear:

29. Local, Regional, and Global Systems
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGING GLOBAL SYSTEMS
Local, Regional, and Global Systems
Figure 16-4
Source: Adapted from Managing Information Technology in Multinational Corporations by Edard M. roche, copyright 1993.

30. Technology Challenges of Global Systems
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Technology Challenges of Global Systems
Computing platforms and systems integration:
Develop global, distributed, and integrated systems to support digital business processes spanning national boundaries
Use of same hardware and operating system does not guarantee integration.
Establish data and technical standards

31. Technology Challenges of Global Systems (Continued)
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Technology Challenges of Global Systems (Continued)
Connectivity:
Overcoming disparate national technical standards, data exchange restrictions and service levels
User of Internet technology to create global intranets, extranets, virtual private networks (VPNs)

32. Internet Population in Selected Countries
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Internet Population in Selected Countries
Figure 16-5
Sources: CIA World Factbook 2003; Computer Industry Almanac; and accessed November 9, 2004

33. Unique challenges for application software:
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Software:
Unique challenges for application software:
Cost of new interface designs
Integrating new systems with old
User interface design
Differences in language and conventions

34. Managing Global Software Development
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Managing Global Software Development
Offshore software outsourcing:
Outsourcing portions of new systems like development work or maintenance of existing systems to external vendors in another country

35. Major cost components of offshore software development:
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Major cost components of offshore software development:
Contract cost
Vendor selection costs
Transition management and knowledge transfer costs
Domestic human resources costs

36. Major cost components of offshore software development: (Continued)
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Major cost components of offshore software development: (Continued)
Costs of improving software development processes
Costs of adjusting to cultural differences
Cost of managing an offshore contract

37. Total Cost of Outsourcing
Management Information Systems
Chapter 16 Managing International Information Systems
TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS
Total Cost of Outsourcing
Figure 16-6

38. Management Opportunities:
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Management Opportunities:
Ability to lower costs through global scale economies by building international systems for producing and selling goods and services in different regions of the world

39. Management Challenges:
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Management Challenges:
Finding the right global business strategy
Difficulties of managing change in a multicultural firm
Difficulties of achieving global connectivity and integration

40. Agreeing on common user requirements
Management Information Systems
Chapter 16 Managing International Information Systems
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Solution Guidelines:
Agreeing on common user requirements
Introducing changes in business processes
Coordinating applications development
Coordinating software releases
Encouraging local users to support global systems