Transcript Slide 1

MIS
CHAPTER 9
GLOBAL INFORMATION
SYSTEMS
Hossein BIDGOLI
MIS, Chapter 9
©2014 Cengage Learning
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Chapter 9 Global Information Systems
learning outcomes
LO1
Discuss reasons for globalization and for 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 structure used
with global information systems.
LO4
Discuss obstacles to using global information
systems.
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Chapter 9 Global Information Systems
Why Go Global?
• Customers demand integrated worldwide
services
• Example: shoe company
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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
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Chapter 9 Global Information Systems
Why Go Global? (cont’d.)
• 2010 Coca-Cola Company
– Generated more than 75% 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
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Chapter 9 Global Information Systems
Why Go Global? (cont’d.)
• Airline reservation systems
– 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
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Chapter 9 Global Information Systems
Global Information Systems at Rohm & Haas
• Part of Dow Chemical
• Production units in many countries
• Overhauled its global information system
– By upgrading the order entry system
– Installed a company-wide materials management
system tied in with a global demand planning system
• Can now provide better service to its customers
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Chapter 9 Global Information Systems
E-Business: A Driving Force
• E-business
– Major factor in the widespread use of global
information systems
– Builds on the advantages and structures of traditional
business
• The Internet
– Simplify communication
– Improve business relationships
– Consumers can engage in comparison shopping more
easily
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Chapter 9 Global Information Systems
E-Business: A Driving Force (cont’d.)
• Small companies can conduct business on-line
just as large companies
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Chapter 9 Global Information Systems
Growth of the Internet
• Part of daily life in most parts of the world
• 2000-2011: highest growth has occurred in the
Middle East; the lowest in North America
• “Localization of a Web site”
• Making a company Web site global
– Language, font, cultural differences, currency, date
format, spare use of graphics and flash features, email, payments, international logistics, listing,
marketing, and local involvement
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
Components of a Global Information System
• GIS can vary quite a bit depending on a
company’s size and business needs
• Basic components:
– Global database
• Designing and implementing is a technical
challenge
– Information-sharing technologies
• Large versus small companies:
– Custom applications or outsourcing
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Chapter 9 Global Information Systems
Components of a Global Information System (cont’d.)
• Information system manager
– Faces design and implementation issues when
developing a global network
– Determine the best communication media to meet
global performance and traffic needs
– Choose the best transmission technology for the
global network’s needs
– Consider the company’s objectives when determining
the network architecture
– Keep in mind that standardized software and
hardware are always ideal but not always feasible
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Chapter 9 Global Information Systems
Components of a Global Information System (cont’d.)
• Transborder data flow (TDF)
– Restricts what type of data can be captured and
transmitted
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Chapter 9 Global Information Systems
Requirements of Global Information Systems
• Must be capable of supporting complex global
decisions
• Multinational corporations (MNCs)
environment includes many variations in
different forces
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Legal
Cultural
Economic
Political
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Chapter 9 Global Information Systems
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 global tax risks
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Chapter 9 Global Information Systems
Implementation of Global Information Systems
• Implementing a GIS is difficult
– Countries differ in culture, politics, social and
economic infrastructures, and business methods
• Issues:
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Identify business opportunities in global marketplace
Justify investment in GIS
Personnel must have technical and business expertise
Coordinate migration carefully
• Using information systems on a global scale is
more challenging than doing so on a local scale
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Chapter 9 Global Information Systems
Organizational Structures and Global Information
Systems
• Four commonly accepted types of global
organizations:
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Multinational
Global
International
Transnational
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Chapter 9 Global Information Systems
Multinational Structure
• Production, sales, and marketing are
decentralized
• Financial management remains the parent
company’s responsibility
• Tyco Corporation
– Focus on local responsiveness
• Nestle
– Reduces the need for communication between
subsidiaries and headquarter
• Each subsidiary operates on a different platform
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Exhibit 9.1
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A Multinational Structure
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Chapter 9 Global Information Systems
Global Structure
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Highly centralized information system
Subsidiaries have little autonomy
Sometimes called a “franchiser”
Extensive communication network necessary
Integration needed to manage production,
marketing, and human resources is difficult
– Heavy reliance on headquarters
• McDonald’s, Mrs. Fields’ Cookies, and Kentucky
Fried Chicken
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Exhibit 9.2
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A Global Structure
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Chapter 9 Global Information Systems
International Structure
• Operates much like a multinational corporation
– However, 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
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Exhibit 9.3
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An International Structure
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Chapter 9 Global Information Systems
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
– However, must maintain local responsiveness
• Examples: Citigroup, Sony, and Ford
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Exhibit 9.4
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A Transnational Structure
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Chapter 9 Global Information Systems
Global Information Systems Supporting Offshore
Outsourcing
• 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
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Table 9.1
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Top Offshoring Countries in 2008
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Chapter 9 Global Information Systems
Obstacles to Using Global Information Systems
• Lack of standardization
– Including differences in time zones, taxes, language,
and work habits, etc.
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Cultural differences
Diverse regulatory practices
Poor telecommunication infrastructures
Lack of skilled analysts and programmers
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Chapter 9 Global Information Systems
Lack of Standardization
• Impedes the development of a cohesive GIS that
is 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
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Chapter 9 Global Information Systems
Cultural Differences
• Differences in values, attitudes, and behaviors
• Views on using technology
• Cultural issues
– Best addressed with education and training
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
Poor Telecommunication Infrastructures
• Consider telecommunication infrastructures of
the countries where subsidiaries are located
• Differences in telecommunication systems make
consolidating them difficult
• Differences in standards
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Chapter 9 Global Information Systems
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
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Chapter 9 Global Information Systems
Summary
• Factors contributing to the globalization trend
• Global information systems
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Components
Requirements
Uses in multinational structures
Applications
Obstacles
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