1. MIS
CHAPTER 9
GLOBAL INFORMATION SYSTEMS
Hossein BIDGOLI

2. Chapter 9 Global Information Systems
l e a r n i n g o u t c o m e s
LO1 Discuss reasons for globalization and using global information systems, including e-business and Internet growth.
LO2 Describe global information systems and their requirements and components.
LO3 Explain the types of organizational structures used with global information systems.
LO4 Discuss obstacles to using global information systems.

3. Why Go Global? Customers demand integrated worldwide services
Example: shoe company
Produces leather and uppers in Italy
Upper shipped to China
Tested in Ireland
Sold in United States
Supply chain logistics managed and coordinated in US

4. Why Go Global? (cont’d.) 2008 Coca-Cola Company
Generated more than 80% of its revenue from outside United States
Prerequisites to the success of a global information system:
Clear understanding of factors such as customs, laws, technological issues, and local business needs and practices

5. Why Go Global? (cont’d.) Airline reservation systems Global products
First large-scale interactive global system
Global products
Products or services that have been standardized for all markets
Manufacturer might “regionalize” operations
Globalization
Important factor in purchasing and supply chain

6. Global Information Systems at Rohm & Haas
Part of Dow Chemical
Production units in many different countries
Overhauled its global information system
By upgrading the order entry system
Installed a companywide materials management system tied in with a global demand planning system
Can now provide better service to its customers

7. E-Business: A Driving Force
Major factor in the widespread use of global information systems
Builds on the advantages and structures of traditional business
The Internet
Simplify communication
Change business relationships
Consumers can engage in comparison shopping more easily

8. E-Business: A Driving Force (cont’d.)
Small companies can conduct business online just as large companies

9. Global Information Systems: An Overview
Global information system (GIS)
Information system that works across national borders
Facilitates communication between headquarters and subsidiaries in other countries
Incorporates all the technologies and applications found in a typical information system
Stores, manipulates, and transmits data across cultural and geographic boundaries

10. Global Information Systems: An Overview (cont’d.)
International company
Can increase control and enhance coordination of its subsidiaries and be able to access new global markets
Strategic planning is a core function
Defined in terms of two dimensions:
Control and coordination

11. Global Information Systems: An Overview (cont’d.)
Control requires:
Centralized architecture for data, standardized definitions used across the organization
Standard formats for reports
Defined behaviors for different processes
Performance-tracking system

12. Global Information Systems: An Overview (cont’d.)
Coordination requires:
Decentralized architecture for data
Standardization within departments
Ability to communicate these standards to other departments
Collaboration systems
Technologies that support informal communication and socialization
Many advantages of high coordination

13. Components of a Global Information System
Basic components:
Network capable of global communication, including transmission equipment and communication media
Global database
Information-sharing technologies
Large versus small companies:
Custom applications or outsourcing

14. Components of a Global Information System (cont’d.)
Information system manager
Faces design and implementation issues when developing a global network
Determines the best communication media to meet global performance and traffic needs
Chooses the best transmission technology for the global network’s needs
Considers the company’s objectives when determining the network architecture
Keeps in mind that standardized software and hardware are always ideal but not always feasible

15. Components of a Global Information System (cont’d.)
Technical challenges in GIS design:
Designing and implementing global databases
Transborder data flow (TDF)
Restricts what type of data can be captured and transmitted

16. Requirements of Global Information Systems
Must be capable of supporting complex global decisions
Multinational corporations (MNCs) environment includes many variations in different forces
Legal
Cultural
Economic
Political

17. Requirements of Global Information Systems (cont’d.)
Operational requirements:
Global data access
Consolidated global reporting
Communication between headquarters and subsidiaries
Management of short-term foreign exchange risks
Strategic requirements:
Strategic planning support
Management of conflicts and political risks
Management of long-term foreign exchange risks
Management of global tax risks

18. Goals of Global Information Systems
Issues:
Identify business opportunities in global marketplace
Justify investment in GIS
Information systems personnel must have technical and business expertise
Coordinate migration carefully
Categories:
Intelligent systems
Transnational management support systems
Global competitive intelligent systems

19. Organizational Structures and Global Information Systems
Four commonly accepted types of global organizations:
Multinational
Global
International
Transnational

20. Multinational Structure
Production, sales, and marketing are decentralized
Financial management remains the parent’s responsibility
Example: Tyco Corporation
Focus on local responsiveness
Reduces the need for communication between subsidiaries and headquarters
Each subsidiary operates on a different platform

21. Exhibit 9.1
A Multinational Structure

22. Global Structure Highly centralized information system
Subsidiaries have little autonomy
Sometimes called a “franchiser”
Extensive communication network necessary
Difficult and impractical
Heavy reliance on headquarters for new products and ideas
Examples:
McDonald’s, Mrs. Fields’ Cookies, General Motors

23. Exhibit 9.2
A Global Structure

24. International Structure
Operates much like a multinational corporation
But subsidiaries depend on headquarters more for process and production decisions
Information systems personnel are regularly exchanged among locations
Encourages a cooperative culture in geographically dispersed personnel
Example: Caterpillar Corporation

25. Exhibit 9.3
An International Structure

26. Transnational Structure
Parent and all subsidiaries work together in designing policies, procedures, and logistics
Usually focuses on optimizing supply sources and using advantages available in subsidiary locations
Architecture requires a higher level of standardization and uniformity for global efficiency
But must maintain local responsiveness
Examples: Citigroup, Sony, Ford

27. Exhibit 9.4
A Transnational Structure

28. Global Information Systems Supporting Offshore Outsourcing
Alternative for developing information systems
Organization chooses an outsourcing firm in another country
Used for many information technology tasks
GIS plays an important role in supporting offshore outsourcing

29. Table 9.1
Top Offshoring Countries in 2008

30. The Internet and Globalization in Action
The Internet allows entrepreneurs in developing countries to start and expand businesses without making large investments
Muhammad Hassaan Khan, a young entrepreneur, established a design and consulting business called Zuha Innovation that is based in Faisalabad, Pakistan
As Adam Toren, president of YoungEntrepreneur.com, puts it, “The Internet brings all continents, races, cities, and villages together into a global network of trade and communications”

31. Obstacles to Using Global Information Systems
Lack of standardization
Can also include differences in time zones, taxes, language, work habits, etc.
Cultural differences
Diverse regulatory practices
Poor telecommunication infrastructures
Lack of skilled analysts and programmers

32. Lack of Standardization
Lack of international standards impedes developing a cohesive system that’s capable of sharing information resources across borders
Too much standardization can prevent flexibility in responding to local preferences and even time differences
Only 5% to 15% of a company’s applications are truly global in nature

33. Cultural Differences
Include differences in values, attitudes, and behaviors
Views on using technology
Cultural issues
Best addressed with education and training

34. Diverse Regulatory Practices
Applies to policies on business practices and technological use
Many countries restrict the type of hardware and software
Jurisdiction issues on contents of a GIS
Nature of intellectual property laws
Software piracy
Privacy and cybercrime laws
Censorship and government control

35. Poor Telecommunication Infrastructures
Consider telecommunication infrastructures of the countries where subsidiaries are located
Differences in telecommunication systems make consolidating them difficult
Differences in standards

36. Lack of Skilled Analysts and Programmers
Severe shortage of qualified information systems professionals in the United States and Western Europe
Companies must consider the nature of each culture and differences in skills in other countries
Training and certification programs

37. Summary Factors contribute to the globalization trend
Global information systems:
Components
Requirements
Uses in multinational structures
Applications
Obstacles