Managing Global System

7/24/2019 Managing Global System

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15.1 2010 by Prentice Hall

1515ChapterChapter

ManagingManaging

Global SystemsGlobal Systems


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LEARNING !"EC#I$ES

Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems

I&enti%y the ma'or %a(tors &ri)ing the internationali*ation

o% b+siness.

Compare strategies %or &e)eloping global b+sinesses.

,emonstrate ho- in%ormation systems (an s+pport

&i%%erent global b+siness strategies.

I&enti%y the (hallenges pose& by global in%ormation

systems an& management sol+tions.

E)al+ate the iss+es an& te(hni(al alternati)es to be

(onsi&ere& -hen &e)eloping international in%ormation

systems.


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15. 2010 by Prentice Hall

Se)erstal Creates an I# In%rastr+(t+re %or Global Steelma/ing

0roblemNee&e& global pro&+(tion plat%orm e3istingin%rastr+(t+re -as a ho&ge4po&ge o% &i%%erent systemsplat%orms &ata &i& not %lo- bet-een systems

Sol+tions Stan&ar&i*e& on ra(le E4!+siness S+ite 12

an enterprise appli(ation -ith mo&+les %or m+ltiple%+n(tions

6ith integrate& system Se)erstal NA is able to optimi*een&4to4en& pro(esses instea& o% in&i)i&+al pro(esses to&eli)er higher 7+ality an& timelier reporting to parent

(ompany Ill+strates &igital te(hnology being +se& by global %irmsa&'+sting their systems to s+pport rapi& gro-th in -orl&tra&e



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#he Gro-th o% International In%ormation Systems

Global economic system and global world order

driven by advanced networks and information

systems

Growth of international trade has radically altereddomestic economies around the globe

For examle! roduction of many high"end electronic

roducts arceled out to multile countries

#$g$! Hewlett"Packard lato comuter



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An 90 Laptop:s 0ath to Mar/etAn 90 Laptop:s 0ath to Mar/et

;ig+re 1541

9e-lett40a(/ar& an& other ele(troni(s (ompanies assign

&istrib+tion an& pro&+(tion o% high4en& pro&+(ts to an+mber o% &i%%erent (o+ntries.




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15.< 2010 by Prentice Hall

Strategy -hen b+il&ing international systems

1. =n&erstan& global en)ironment

%usiness drivers ushing your industry toward global cometition

&nhibitors creating management challenges2. ,e)elop (orporate strategy %or (ompetition

How firm should resond to global cometition

. ,e)elop organi*ation str+(t+re an& &i)ision o% labor

'here will roduction! marketing! sales! etc$! be located

8. Consi&er management iss+es

(esign of business rocedures! reengineering! managing change

5. Consi&er te(hnology plat%orm




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International In%ormation Systems Ar(hite(t+reInternational In%ormation Systems Ar(hite(t+re

;ig+re 1542

#he ma'or &imensions %or &e)eloping an international in%ormation systems ar(hite(t+reare the global en)ironment the (orporate global strategies the str+(t+re o% the

organi*ation the management an& b+siness pro(esses an& the te(hnology plat%orm.




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Global b+siness &ri)ers

General cultural factors lead toward internationali)ation and result insecific business globali)ation factors


GENERAL C=L#=RAL ;AC#RS S0ECI;IC !=SINESS ;AC#RS

Global communication and transortation technologies

(eveloment of global culture

#mergence of global social normsPolitical stability

Global knowledge base

Global markets

Global roduction and oerations

Global coordination

Global workforceGlobal economies of scale



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Challenges an& obsta(les to global b+siness

systems

General (+lt+ral (hallenges

C+lt+ral parti(+larism

*egionalism! nationalism! language differences

So(ial e3pe(tations

%rand"name exectations! work hours

0oliti(al la-s

+ransborder data flow

+ransborder data and rivacy laws! commercial regulations




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Challenges an& obsta(les to global b+siness systems B(ont.

Spe(i%i( (hallenges

Stan&ar&s

(ifferent #(&! e"mail! telecommunication standards

Reliability

Phone networks not uniformly reliable

Spee&

(ifferent data transfer seeds! many slower than ,$-$

0ersonnel

-hortages of skilled consultants





State o% the art

.ost comanies have inherited atchwork international systems

using 1/0s"era batch"oriented reorting! manual entry of data

from one legacy system to another! and little online control and

communication

-ignificant difficulties in building aroriate international

architectures

Planning a system aroriate to firms global strategy

-tructuring organi)ation of systems and business units

-olving imlementation issues

hoosing right technical latform





rgani*ing International In%ormation Systems

Global strategies an& b+siness organi*ation

+hree main kinds of organi)ational structure

Centrali*e&3 &n the home country

,e(entrali*e&D&isperse&3 +o local foreign units Coor&inate&3 4ll units articiate as e5uals

Four main global strategies

,omesti( e3porter

M+ltinational ;ran(hisers

#ransnational





!=SINESS;=NC#IN

,MES#ICE0R#ER

M=L#INA#INAL ;RANC9ISER #RANSNA#INAL

0ro&+(tion entrali)ed (isersed oordinated oordinated

;inan(eDA((o+nting

entrali)ed entrali)ed entrali)ed oordinated

SalesDMar/eting

.ixed (isersed oordinated oordinated

9+manReso+r(es entrali)ed entrali)ed oordinated oordinated

Strategi(Management

entrali)ed entrali)ed entrali)ed oordinated

Global !+siness Strategy an& Str+(t+reGlobal !+siness Strategy an& Str+(t+re




Global systems to %it the strategy

onfiguration! management! and develoment of systems tend

to follow global strategy chosen

Four main tyes of systems configuration

Centrali*e&3 -ystems develoment and oeration occur totally at

domestic home base

,+pli(ate&3 (eveloment occurs at home base but oerations

are handed over to autonomous units in foreign locations

,e(entrali*e&3 #ach foreign unit designs own solutions andsystems

Net-or/e&3 (eveloment and oerations occur in coordinated

fashion across all units





Global Strategy an& Systems Con%ig+rationsGlobal Strategy an& Systems Con%ig+rations

;ig+re 154

#he large s sho- the &ominant patterns an& the small s sho- theemerging patterns. ;or instan(e &omesti( e3porters rely pre&ominantly

on (entrali*e& systems b+t there is (ontin+al press+re an& some&e)elopment o% &e(entrali*e& systems in lo(al mar/eting regions.




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#o &e)elop a global (ompany an& in%ormation

systems s+pport str+(t+re

1$ 6rgani)e value"adding activities along lines of comarative

advantage

#$g$! 7ocate functions where they can best be erformed! for least

cost and maximum imact

2$ (evelo and oerate systems units at each level of cororate

activity8regional! national! and international

9$ #stablish at world head5uarters3

-ingle office resonsible for develoment of international systems

Global &6 osition




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Managing Global Systems

0rin(iple management (hallenges in &e)eloping

global systems

4greeing on common user re5uirements

&ntroducing changes in business rocesses oordinating alication develoment

oordinating software releases

#ncouraging local users to suort global systems



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#ypi(al s(enario ,isorgani*ation on a global s(ale

+raditional multinational consumer"goods comany based in

,$-$ and oerating in #uroe would like to exand into 4sian

markets

'orld head5uarters and strategic management in ,$-$

6nly centrally coordinated system is financial controls and reorting

-earate regional! national roduction and marketing centers

Foreign divisions have searate &+ systems

#"mail systems are incomatible

#ach roduction facility uses different #*P system! different

hardware and database latforms! etc$




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Global systems strategy

-hare only core systems

ore systems suort functionality critical to firm

Partially coordinate systems that share some keyelements

(o not have to be totally common across national

boundaries

7ocal variation desirable

Periheral systems

:eed to suit local re5uirements only




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Lo(al Regional an& Global SystemsLo(al Regional an& Global Systems

;ig+re 1548

Agen(y an& other (oor&ination (osts

in(rease as the %irm mo)es %rom lo(aloption systems to-ar& regional an& global

systems. 9o-e)er transa(tion (osts o%

parti(ipating in global mar/ets probably&e(rease as %irms &e)elop global systems.

A sensible strategy is to re&+(e agen(y

(osts by &e)eloping only a %e- (ore globalsystems that are )ital %or global

operations lea)ing other systems in the

han&s o% regional an& lo(al +nits.

Source: From Managing Information

Technology in Multinational Corporations by

Edward M. Roche ! "##$. %dapted by

permission of &rentice 'all Inc. (pper

Saddle Ri)er *.+.




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1. ,e%ine (ore b+siness pro(esses

2. I&enti%y (ore systems to (oor&inate (entrally

. Choose an approa(h

Piecemeal and grand design aroaches tend to fail #volve transnational alications incrementally from

existing alications

8. Ma/e bene%its (lear

Global flexibility Gains in efficiency

Global markets and larger customer base unleash new

economies of scale at roduction facilities

6timi)ing cororate funds over much larger caital base




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#he management sol+tion

Agreeing on (ommon +ser re7+irements

-hort list of core business rocesses

(evelo common language! understanding of commonelements and uni5ue local 5ualities

Intro&+(ing (hanges in b+siness pro(esses

-uccess deends on legitimacy! authority! ability to involve

users in change design rocess

Coor&inating appli(ations &e)elopment

oordinate change through incremental stes

*educe set of transnational systems to bare minimum




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#he management sol+tion B(ont.

Coor&inating so%t-are releases

&nstitute rocedures to ensure all oerating units udate at

same time En(o+raging lo(al +sers to s+pport global systems

Cooptation %ringing the oosition into design and

imlementation rocess without giving u control over direction

and nature of the change

Permit each country unit to develo one transnational alication

(evelo new transnational centers of excellence




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Rea& the Intera(ti)e Session Management an& then

&is(+ss the %ollo-ing 7+estions

6hy -as the tra&itional metho& o% allo(ating I# reso+r(es to pro%its

no longer e%%e(ti)eF

6hy is it important %or (entral =.S. management to +n&erstan& the

global &isposition o% I# personnel an& %+n&sF

6hi(h o% the %o+r global b+siness strategies &es(ribe& in this

(hapter is Colgate p+rs+ing an& ho- has this a%%e(te& its sele(tiono% an I# reso+r(e management systemF

6hat elements o% #he Management Sol+tionH &es(ribe& in this

(hapter are mentione& in the (ase st+&yF 6hat elements are

missingF

Colgate40almoli)e eeps the 6orl& Smiling




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#e(hnology (hallenges o% global systems

Comp+ting plat%orms an& systems integration

How new core systems will fit in with existing suite of alications

develoed around globe by different divisions -tandardi)ation3 (ata standards! interfaces! software! etc$

Conne(ti)ity

&nternet does not guarantee any level of service

.any firms use rivate networks and ;P:s

7ow enetration of Ps! outdated infrastructures in develoing

countries

#e(hnology Iss+es an& pport+nities %or Global $al+e Chains



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15.2< 2010 by Prentice Hall

#e(hnology (hallenges o% global systems B(ont.

So%t-are

&ntegrating new systems with old

Human interface design issues! languages

-oftware locali)ation3 converting software to oerate in second

language

.ost imortant software alications3

+P- and .&-

&ncreasingly! -. and enterrise systems to standardi)e business

rocesses

4lications that enhance roductivity of international teams




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Internet 0enetration by RegionInternet 0enetration by Region

;ig+re 1545

#he per(entage o% the totalpop+lation +sing the Internet in

&e)eloping (o+ntries is m+(h

smaller than in the =nite& Statesan& E+rope.

Source: CI% ,orld Factboo- //0.




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15.2? 2010 by Prentice Hall

Rea& the Intera(ti)e Session rgani*ations an& then &is(+ss

the %ollo-ing 7+estions

6hat strategies are (ell phone (ompanies +sing to (lose the &igital

&i)i&eH an& mar/et phones to the poorest segment o% the -orl&:spop+lationF

6hy &o e(onomists pre&i(t that -i&esprea& (ell phone +sage in

&e)eloping (o+ntries -o+l& ha)e an +npre(e&ente& e%%e(t on the

gro-th o% those (o+ntriesF

6hat are some e3amples o% ho- (ell phones might in(rease 7+ality

o% li%e %or resi&ents o% &e)eloping (o+ntriesF

,o yo+ belie)e that (ell phones -ill proli%erate -i&ely thro+gh A%ri(a

an& AsiaF 6hyF

Can Cell 0hones Close the Global ,igital ,i)i&eF




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ermission of the ublisher$ Printed in the ,nited -tates of 4merica$

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Managing Global System

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