1. Chapter 14 Enterprise and Global Management of Information Technology James A. O'Brien, and George Marakas. Management Information Systems with MISource 2007, 8 th ed. Boston, MA: McGraw-Hill, Inc., 2007. ISBN: 13 9780073323091

2. Learning Objectives Identify each of the three components of information technology management  Use examples to illustrate how they might be implemented in a business Explain how failures in IT management can be reduced by the involvement of business managers in IT planning and management Identify several cultural, political, and geo- economic challenges that confront managers in the management of global IT Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

3. Learning Objectives Explain the effect on global business/IT strategy of the trend toward a transnational business strategy by international business organizations Identify several considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global business enterprise Understand the fundamental concepts of outsourcing and offshoring, as well as the primary reasons for selecting such an approach to IS/IT management Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

4. The International Dimension Companies around the world are developing new models to operate competitively in a digital economy  These models are structured, yet agile, global, yet local  They concentrate on maximizing the risk adjusted return from both knowledge and technology assets Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

5. Case 2 Offshoring & Giving Away Technology Only services can provide growth on the scale that IBM needs to make shareholders happy  To combat cheaper offshore companies, IBM is giving away technology In theory, giving away software, patents, and ideas will  Help the entire industry grow faster  Open new frontiers  Create opportunities for IBM to sell high-value products and services To cut costs, IBM is also offshoring  India accounts for the largest number of IBMers outside the United States By the end of next year, IBM Services head count in India will top 52,000  More than one-fourth of all services personnel  About one-sixth of IBMers worldwide Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

6. Case Study Questions Do you agree with IBM’s employment response to competition from software development contractors in India like Wipro that are expanding into IT consulting services? Will IBM’s plan to give away some of its IT assets and intellectual property and increase support of opensource software products be a successful growth strategy in the “brutally competitive marketplace” in which it operates? Do you agree with IBM researchers’ assumption that IT will remain “hard to use, expensive, and labor-intensive, with customers continuing to need help solving business problems” for along time to come?  Should IBM bet its business on that assumption? Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

7. Global IT Management Dimensions Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

8. Global IT Management Challenges Political challenges  Many countries regulate or prohibit the transfer of data across their national boundaries  Others severely restrict, tax, or prohibit imports of hardware and software  Some have local content laws that specify the portion of the value of a product that must be added in that country if it is to be sold there  Others require a business to spend part of the revenue they earn in a country in that nation’s economy Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

9. Global IT Management Challenges Geoeconomic challenges  Physical distances are still a major problem  It may take too long to fly in specialists  It is difficult to communicate in real time across 24 time zones  Many countries do not have good telephone and telecommunications services  It may be hard to find skilled local workers  There can be great differences in the cost of living and labor costs between countries Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

10. Global IT Management Challenges Cultural challenges  Languages  Cultural interests  Religions  Customs  Political philosophies  Global IT managers need cultural training before they are sent on assignment  Different work styles and business relationships Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

11. Transnational Strategies Companies are moving toward a transnational strategy  Business depends heavily on information systems and Internet technologies to help integrate global business activities  Requires an integrated and cooperative worldwide IT platform Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

12. Transnational Business/IT Strategies Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

13. Global Business Drivers Business requirements caused by the nature of the industry and its competitive or environmental forces Examples of global drivers:  Customers  Products  Operations  Resources  Collaboration Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

14. Global IT Platforms Hardware Difficulties  High prices  High tariffs  Import restrictions  Long lead times for government approvals  Lack of local service or spare parts  Lack of documentation tailored to local conditions Software Difficulties  Packages developed in Europe may be incompatible with American or Asian versions  The software publisher may refuse to supply markets that disregard software licensing and copyright agreements Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

15. International Data Communications Issues Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

16. The Internet as a Global IT Platform The Internet  An interconnected matrix that reaches tens of millions of users in over 100 countries  Business environment is free of traditional boundaries and limits Without incurring massive cost outlays for telecommunications, companies can  Expand markets  Reduce communications and distribution costs  Improve profit margins Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

17. Key Questions for Global Websites Will you have to develop a new navigational logic to accommodate cultural preferences? What content will you translate, and what content will you create from scratch to address regional competitors or products that differ from those in the U.S.? Should your multilingual effort be an adjunct to your main site, or will you make it a separate site, perhaps with a country- specific domain? What kinds of traditional and new media advertising will you have to do in each country to draw traffic to your site? Will your site get so many hits that you’ll need to set up a server in a local country? What are the legal ramifications of having your website targeted at a particular country, such as laws on competitive behavior, treatment of children, or privacy? Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

18. Internet Users by World Region Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

19. Global Data Access Issues Transborder Data Flows may be viewed as violating  A nation’s sovereignty because it avoids customs duties and regulations  Laws protecting the local IT industry from competition  Laws protecting local jobs  Privacy legislation Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

20. U.S.-E.U. Data Privacy Requirements Key data privacy provisions  Notice of purpose and use of data collected  Ability to opt out of third-party distribution of data  Access for consumers to their information  Adequate security, data integrity, and enforcement provisions Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

21. Internet Access in Restrictive Countries The struggle between Internet censorship and openness at the national level revolves around  Controlling the conduits  Filtering the flows  Punishing the purveyors Most of the world has decided that restricting Internet access is not a viable policy  Restricting access also hurts a country’s opportunities for economic growth and prosperity Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

22. Global Government Internet Restrictions High Government Access Fees  Kazakhstan, Kyrgyzstan Government Monitored Access  China, Iran, Saudi Arabia, Azerbaijan, Ubekistan Government Filtered Access  Belarus, Cuba, Iraq, Tunisia, Sierra Leone, Tajikistan, Turkmenistan, Vietnam No Public Access Allowed  Burma, Libya, North Korea Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

23. Global Systems Development Key development issues  Conflicts over local versus global system requirements  Trying to agree on common system features  Disturbances caused by systems implementation and maintenance activities  Global standardization of data definitions Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

24. Systems Development Strategies Key strategies for global systems development  Transform an application used by the home office or a subsidiary into a global application  Set up a multinational development team  Parallel development  Centers of excellence  Offshore development Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

25. Case 3 Thinking & Acting Globally Globalization means different things to different people  There’s no single method for how it operates  Too often, strategic motivations for globalization aren’t matched by operational approaches to meet enterprise needs  Operating globally means striking a balance between central and local control of operations To ensure that IT-globalization decisions match the enterprises core needs and approaches  Determine the balance of global integration versus local responsiveness  Align IT’s major processes with the enterprise’s governance orientation  Assign staff, roles, and competencies appropriately Other issues to consider  The diversity of countries in which the company operates  The IT maturity in these countries Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

26. Case Study Questions What are some of the forces driving IT organizations to globalize? What are some of the local forces and challenges facing modern IT organizations? How does a CEO manage the requirement to both globalize and localize the IT function? Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

27. Case 4 The Hard Road to Outsourcing Outsourcing IT work abroad can cut the cost of IT by 39 percent  It carries privacy risks  It threatens U.S. jobs Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology

28. Case Study Questions The law does not provide for companies to disclose to their customers that they have outsourced or offshored access to their data  Is this a potential problem for either the company or the customer? What is meant by the term “best-of-breed model?”  Why has this approach worked for Boeing? GE wants to outsource its entire ERP system based, in part, on its successes with other outsourcing projects  Is it possible to outsource too much? Chapter 14 Chapter 14 Enterprise and Global Management of Information Technology