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1515ChapterChapter
ManagingManaging
Global SystemsGlobal Systems
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LEARNING !"EC#I$ES
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
I&enti%y the ma'or %a(tors &ri)ing the internationali*ation
o% b+siness.
Compare strategies %or &e)eloping global b+sinesses.
,emonstrate ho- in%ormation systems (an s+pport
&i%%erent global b+siness strategies.
I&enti%y the (hallenges pose& by global in%ormation
systems an& management sol+tions.
E)al+ate the iss+es an& te(hni(al alternati)es to be
(onsi&ere& -hen &e)eloping international in%ormation
systems.
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Se)erstal Creates an I# In%rastr+(t+re %or Global Steelma/ing
0roblemNee&e& global pro&+(tion plat%orm e3istingin%rastr+(t+re -as a ho&ge4po&ge o% &i%%erent systemsplat%orms &ata &i& not %lo- bet-een systems
Sol+tions Stan&ar&i*e& on ra(le E4!+siness S+ite 12
an enterprise appli(ation -ith mo&+les %or m+ltiple%+n(tions
6ith integrate& system Se)erstal NA is able to optimi*een&4to4en& pro(esses instea& o% in&i)i&+al pro(esses to&eli)er higher 7+ality an& timelier reporting to parent
(ompany Ill+strates &igital te(hnology being +se& by global %irmsa&'+sting their systems to s+pport rapi& gro-th in -orl&tra&e
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#he Gro-th o% International In%ormation Systems
Global economic system and global world order
driven by advanced networks and information
systems
Growth of international trade has radically altereddomestic economies around the globe
For examle! roduction of many high"end electronic
roducts arceled out to multile countries
#$g$! Hewlett"Packard lato comuter
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An 90 Laptop:s 0ath to Mar/etAn 90 Laptop:s 0ath to Mar/et
;ig+re 1541
9e-lett40a(/ar& an& other ele(troni(s (ompanies assign
&istrib+tion an& pro&+(tion o% high4en& pro&+(ts to an+mber o% &i%%erent (o+ntries.
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#he Gro-th o% International In%ormation Systems
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Strategy -hen b+il&ing international systems
1. =n&erstan& global en)ironment
%usiness drivers ushing your industry toward global cometition
&nhibitors creating management challenges2. ,e)elop (orporate strategy %or (ompetition
How firm should resond to global cometition
. ,e)elop organi*ation str+(t+re an& &i)ision o% labor
'here will roduction! marketing! sales! etc$! be located
8. Consi&er management iss+es
(esign of business rocedures! reengineering! managing change
5. Consi&er te(hnology plat%orm
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#he Gro-th o% International In%ormation Systems
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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.
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#he Gro-th o% International In%ormation Systems
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Global b+siness &ri)ers
General cultural factors lead toward internationali)ation and result insecific business globali)ation factors
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
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
#he Gro-th o% International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#he Gro-th o% International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#he Gro-th o% International In%ormation Systems
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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
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#he Gro-th o% International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
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Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
!=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
rgani*ing International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
rgani*ing International In%ormation Systems
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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.
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
rgani*ing International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
rgani*ing International In%ormation Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing 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$
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
Managing Global Systems
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
Managing Global Systems
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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 *.+.
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
Managing Global Systems
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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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Managing Global Systems
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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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Managing Global Systems
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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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Managing Global Systems
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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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#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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#e(hnology Iss+es an& pport+nities %or Global $al+e Chains
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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.
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#e(hnology Iss+es an& pport+nities %or Global $al+e Chains
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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
Management In%ormation SystemsManagement In%ormation SystemsChapter 15 Managing Global SystemsChapter 15 Managing Global Systems
#e(hnology Iss+es an& pport+nities %or Global $al+e Chains
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