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16.1 2006 by Prentice Hall

16Chapter

Managing InternationalManaging International

Information SystemsInformation Systems

Managing InternationalManaging International

Information SystemsInformation Systems

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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

Management Information SystemsManagement Information SystemsChapter 16 Managing International Information SystemsChapter 16 Managing International Information Systems

OBJECTIVES

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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

OBJECTIVES (Continued)


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Challenge: Fulfill customer orders made to a networkof forty subsidiaries in Europe, Asia, and NorthAmerica whose systems could not share data with oneanother

Solutions: develop a single corporate database anduse middleware with standard interfaces to connectall the subsidiarys systems

Develop a single worldwide data model with standarddefinitions and codes

Illustrates the role of systems in an internationalenvironment for reducing inventory and business

process costs worldwide.


Drager Safety AG Case

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THE GROWTH OF INTERNATIONAL INFORMATION SYSTEMS

Global Product Development and Production


Figure 16-1

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The basic information systems required by

organizations to coordinate worldwide trade

and other activities

Developing an International Information SystemsDeveloping an International Information Systems

ArchitectureArchitecture

International information systems architecture:



A force in the environment to which businesses

must respond and that influences the direction

of the business

Business driver:

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International Information Systems Architecture



Figure 16-2

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Emergence of global social norms

Political stability

Global knowledge base

Table 16-1 (Continued)

General Cultural Factors: (Continued)

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Global markets

Global production and operations

Global coordination

Global workforce

Global economies of scale

Specific business factors:


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Business Challenges

Cultural particularism: Regionalism, nationalism,language differences

Social expectations: Brand-name expectations,

work hours

Political laws: Transborder data and privacy laws,

commercial regulations

General:

Table 16-2

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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

Specific:


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ORGANIZING INTERNATIONAL INFORMATION SYSTEMS

Three kinds of organizational structure:

Centralized (in the home country)

Decentralized (to local foreign units)

Coordinated (all units participate as equals)

Global Strategies and Business Organization

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Heavy centralization of corporate activities in

the home country of origin

Domestic exporter strategy:

Centralized financial management and control

while decentralizing production, sales, andmarketing operations to units in other

countries

Multinational strategy:

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The product is financed and initially produced

in the home country, but for product-specific

reasons rely on foreign personnel for furtherproduction, marketing, and human resources.

Franchisers:

The value-adding activities are managed from a

global perspective without reference to national

borders, optimizing sources of supply and

demand wherever they appear, and taking

advantage of any local competitive advantages.

Transnational strategy:

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Global Systems to Fit the StrategyGlobal Systems to Fit the Strategy

Global Strategy and Systems Configurations



Figure 16-3

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1. Centralized systems: Systems development and

operation occur totally at the domestic home

base.

2. Duplicated systems: Development occurs at the

home base but operations are handed over to

autonomous units in foreign locations.

Four types of systems configuration:


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3. Decentralized systems: Each foreign unit

designs its own unique solutions andsystems.

4. Networked systems: Systems development

and operations occur in an integrated and

coordinated fashion across all units.


Four types of systems configuration: (Continued)

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Organize value-adding activities along lines ofcomparative advantage

Develop and operate systems units at each level of

corporate activity regional, national, andinternational

Establish at world headquarters

Reorganizing the Business

To develop a global company and information systems

support structure:

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MANAGING 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

Management Challenges in Developing Global Systems

Table 16-4

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MANAGING GLOBAL SYSTEMS

Define the core business processes: Conduct

workflow analysis, identify centers of excellence

for these 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

Make the Benefits Clear

Global Systems Strategy

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TECHNOLOGY ISSUES AND OPPORTUNITIES FOR GLOBAL VALUE CHAINS

Computing platforms and systems integration:

Develop global, distributed, and integratedsystems to support digital business processes

spanning national boundaries

Use of same hardware and operating systemdoes not guarantee integration.

Establish data and technical standards

Technology Challenges of Global Systems

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Overcoming disparate national technical

standards, data exchange restrictions and

service levels

User of Internet technology to create

global intranets, extranets, virtual private

networks (VPNs)

Connectivity:

Technology Challenges of Global Systems (Continued)

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Internet Population in Selected Countries


Figure 16-5


Sources: CIA World Factbook2003; Computer Industry

Almanac; and www.cia.gov,accessed November 9, 2004

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Cost of new interface designs

Integrating new systems with old

User interface design

Differences in language and conventions

Software:

Unique challenges for application software:

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Outsourcing portions of new systems like

development work or maintenance of existing

systems to external vendors in another

country

Offshore software outsourcing:

Managing Global Software DevelopmentManaging Global Software Development

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Costs of improving software development processes

Costs of adjusting to cultural differences

Cost of managing an offshore contract

Major cost components of offshore software development:

(Continued)

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Total Cost of Outsourcing



Figure 16-6

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MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS

Management Opportunities:

Ability to lower costs through global scaleeconomies by building international systems for

producing and selling goods and services in

different regions of the world

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Finding the right global business strategy

Difficulties of managing change in a

multicultural firm

Difficulties of achieving global connectivity

and integration

Management Challenges:


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Agreeing on common user requirements

Introducing changes in business processes

Coordinating applications development

Coordinating software releases

Encouraging local users to support global systems

Solution Guidelines:


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