1. 15.1 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems 15 MANAGINGINTERNATIONALINFORMATIONSYSTEMS Chapter

2. 15.2 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems What are the major factors driving the internationalization of business?What are the major factors driving the internationalization of business? What strategies are available for developing international businesses?What strategies are available for developing international businesses? 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? OBJECTIVES

3. 15.3 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Lines of business and global strategyLines of business and global strategy The difficulties of managing change in a multicultural environmentThe difficulties of managing change in a multicultural environment MANAGEMENT CHALLENGES

4. 15.4 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Developing an International Information Systems Architecture THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS An international information systems architecture consists of basic information systems required by organizations to coordinate worldwide trade and other tasksAn international information systems architecture consists of basic information systems required by organizations to coordinate worldwide trade and other tasks A business driver is an environmental force to which businesses must respond and that influence a business’s directionA business driver is an environmental force to which businesses must respond and that influence a business’s direction

5. 15.5 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Figure 15-1 Technology Platform Organization Structure Corporate Global Strategies Management and Business Processes Global Environment: Business Drivers and Challenges International Information Systems Architecture THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS

6. 15.6 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems The Global Environment: Business Drivers and Challenges THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS Global business drivers are [a] general cultural factors and [b] specific business factorsGlobal business drivers are [a] general cultural factors and [b] specific business factors Global culture, created by TV and other global media (e.g., movies) permit cultures to develop common expectations about right and wrong, desirable and undesirable, heroic and cowardlyGlobal culture, created by TV and other global media (e.g., movies) permit cultures to develop common expectations about right and wrong, desirable and undesirable, heroic and cowardly A global knowledge base --strengthened by educational advances in Latin America, China, southern Asia, and eastern Europe--also affects growthA global knowledge base --strengthened by educational advances in Latin America, China, southern Asia, and eastern Europe--also affects growth

7. 15.7 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Business Challenges THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS Particularism, making judgments and taking action based on narrow or personal features, rejects the concept of shared global cultureParticularism, making judgments and taking action based on narrow or personal features, rejects the concept of shared global culture Transborder data flow is the movement of information across international boundaries in any formTransborder data flow is the movement of information across international boundaries in any form National laws and traditions create disparate accounting practices in various countries, impacting how profits and losses are analyzedNational laws and traditions create disparate accounting practices in various countries, impacting how profits and losses are analyzed Additional factors : cultural differences about technology, different languages, and currency fluctuationsAdditional factors : cultural differences about technology, different languages, and currency fluctuations

8. 15.8 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems State of the Art THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS Despite business challenges, many firms still do not have rationally developed IT systemsDespite business challenges, many firms still do not have rationally developed IT systems Most companies inherited patchwork international systems from the pastMost companies inherited patchwork international systems from the past Significant difficulties still exist in building proper international architecturesSignificant difficulties still exist in building proper international architectures

9. 15.9 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Domestic exporter – characterized by heavy centralization of corporate activities in home country of originDomestic exporter – characterized by heavy centralization of corporate activities in home country of origin Multinational – concentrates financial management and control out of a home base, but decentralizes production, sales, and marketingMultinational – concentrates financial management and control out of a home base, but decentralizes production, sales, and marketing Franchisers – involve creating, designing, and financing in the home country, then rely on foreign personnel for further production, marketing, and human resources (e.g., McDonald’s)Franchisers – involve creating, designing, and financing in the home country, then rely on foreign personnel for further production, marketing, and human resources (e.g., McDonald’s) Transnational – may or may not have a world headquarters, but will have many regional headquartersTransnational – may or may not have a world headquarters, but will have many regional headquarters ORGANIZING INTERNATIONAL INFORMATION SYSTEMS Global Strategies and Business Organization

10. 15.10 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Global Systems Information technology and improved global telecommunications - give international firms more flexibility to shape global strategiesInformation technology and improved global telecommunications - give international firms more flexibility to shape global strategies Domestic exporters - tend to have highly centralized systems in which one domestic systems development staff develops worldwide applicationsDomestic exporters - tend to have highly centralized systems in which one domestic systems development staff develops worldwide applications ORGANIZING INTERNATIONAL INFORMATION SYSTEMS Global Systems to Fit the Strategy

11. 15.11 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Figure 15-2 THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS

12. 15.12 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Reorganizing the Business Organize value-adding services along lines of comparative advantageOrganize value-adding services along lines of comparative advantage Develop and operate systems units at each level of corporate activity – regional, national, and internationalDevelop and operate systems units at each level of corporate activity – regional, national, and international Establish a world headquarters at one office responsible for developing international systemsEstablish a world headquarters at one office responsible for developing international systems ORGANIZING INTERNATIONAL INFORMATION SYSTEMS Global Systems, Reorganizing the Business

13. 15.13 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems A Typical Scenario: Disorganization on a Global Scale MANAGING GLOBAL SYSTEMS A traditional U.S. multi-national consumer-goods company, also operating in Europe, wants to expand into AsiaA traditional U.S. multi-national consumer-goods company, also operating in Europe, wants to expand into Asia It knows it must develop a transnational strategy and supportive IT system structureIt knows it must develop a transnational strategy and supportive IT system structure It has dispersed production and marketing to regional and national centers while maintaining a world headquarters and strategic management in the U.S.It has dispersed production and marketing to regional and national centers while maintaining a world headquarters and strategic management in the U.S. The result: a hodgepodge of hardware, software, and communications (e.g., incompatible e-mail systems, different manufacturing resources planning, different marketing / sales / human resources systems)The result: a hodgepodge of hardware, software, and communications (e.g., incompatible e-mail systems, different manufacturing resources planning, different marketing / sales / human resources systems)

14. 15.14 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Strategy : Divide, Conquer, Appease MANAGING GLOBAL SYSTEMS Not all systems need be coordinated on a transnational basis; only some core systems are truly worth sharing from a cost and feasibility basis Define the Core Business ProcessesDefine the Core Business Processes Identify the Core Systems to Coordinate CentrallyIdentify the Core Systems to Coordinate Centrally Choose an Approach: Incremental, Grand Design, EvolutionaryChoose an Approach: Incremental, Grand Design, Evolutionary Make the Benefits ClearMake the Benefits Clear

15. 15.15 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Figure 15-3 MANAGING GLOBAL SYSTEMS

16. 15.16 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Implementation Tactics: Cooptation - bringing the opposition into design and implementation of solution without surrendering control over direction and nature of changeImplementation Tactics: Cooptation - bringing the opposition into design and implementation of solution without surrendering control over direction and nature of change The Management SolutionThe Management Solution –Agree on common user requirements –Introduce changes in business processes –Coordinate applications development –Coordinate software releases –Encourage local users to support global systems OBJECTIVES Implementation Tactics and The Management Solution

17. 15.17 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Hardware and Systems IntegrationHardware and Systems Integration –Developing global systems based on core systems raises questions about how new cores systems will fit within existing applications ConnectivityConnectivity –Telecommunications is heart of international systems, linking systems and people in global firm into single, integrated network –Potential solutions including putting together leased private network, building one’s own network, or creating global intranets over Intranet SoftwareSoftware –Developing new core systems poses unique challenges for software, involves problems of human interface design and system functionality –Many firms increasingly turn to supply chain management and enterprise systems to standardize business processes globally TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS Main Technical Issues

18. 15.18 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems Table 15-5: Problems of International Networks –Costs and tariffs –Network management –Installation delays –Poor international service quality –Regulatory constraints –Changing user requirements –Disparate standards –Network capacity TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS

19. 15.19 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems anytime, anywhere networks –Communicate and compute anytime, anywhere networks based on satellites, cell phones, and personal communications systems will facilitate work virtual private networks (VPNs) –Companies use the Internet to construct virtual private networks (VPNs) to reduce networking costs and staff expand opportunities –As Internet technology spreads outside the USA, it will expand opportunities for electronic commerce and international trade TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS New Technical Opportunities and the Internet

20. 15.20 © 2004 by Prentice Hall Management Information Systems 8/e Chapter 15 Managing International Information Systems 15 MANAGINGINTERNATIONALINFORMATIONSYSTEMS Chapter