managing global systems managing global systems amina tariq room # n111-c-------------------- ext #...
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Managing Global SystemsManaging Global Systems
Amina TariqRoom # N111-C-------------------- Ext # 161
National University of Computer & Emerging Sciences (Islamabad Campus)
04/19/23 NUCES-Islamabad 2
Today We Explore:
• Major factors driving the internationalization of business.
• Compare strategies for developing global businesses.
• Demonstrate how information systems can support different global business strategies.
• Identify the challenges posed by global information systems and management solutions.
• Evaluate the issues and technical alternatives to be considered when developing international information systems.
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• Developing an international information systems architecture
• Understand overall business driver
• Analyze inhibitors/negative factors
• Develop corporate strategy to globally compete
• Organize for Strategy Execution
• Identify Management challenges
• Develop the right IT infrastructure
The Growth of International Information Systems
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International Information Systems ArchitectureInternational Information Systems Architecture
Figure 15-2
The major dimensions for developing an international information systems architecture are the global environment, the corporate global strategies, the structure of the organization, the management and business processes, and the technology platform.
The Growth of International Information Systems
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• The global environment: business drivers and challenges
The Growth of International Information Systems
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• Business Challenges
– Particularism • Corporations and companies must
reconcile these differences in order to allow transborder data flow between merged information systems.
• State of the Art
The Growth of International Information Systems
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Global strategies and business organization
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Global Strategy and Systems ConfigurationsGlobal Strategy and Systems Configurations
Figure 15-3
The large Xs show the dominant patterns, and the small Xs show the emerging patterns. For instance, domestic exporters rely predominantly on centralized systems, but there is continual pressure and some development of decentralized systems in local marketing regions.
Global Systems for Global Systems for StrategyStrategy
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Reorganizing BusinessReorganizing Business
• Organize value-adding activities along lines of comparative advantage
• Develop and operate systems units at each level of corporate activity — regional, national, and international.
• Establish a world headquarters, a single office responsible for development of international systems, a global chief information officer (CIO) position
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Local, Regional, and Global SystemsLocal, Regional, and Global Systems
Figure 15-4
Agency and other coordination costs increase as the firm moves from local option systems toward regional and global systems. However, transaction costs of participating in global markets probably decrease as firms develop global systems. A sensible strategy is to reduce agency costs by developing only a few core global systems that are vital for global operations, leaving other systems in the hands of regional and local units.
Source: From Managing Information Technology in Multinational Corporations by Edward M. Roche, © 1993. Adapted by permission of Prentice Hall, Inc., Upper Saddle River, N.J.
Managing Global Managing Global SystemsSystems
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• Global systems strategy
• Define the core business processes
• Identify the core systems to coordinate centrally
• Choose an approach: Incremental, grand design, evolutionary
• Make the benefits clear
• Results of the capital budgeting analysis
Managing Global Managing Global SystemsSystems
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• MANGEMENT CHALLENGES
• Get the opposition on your side as quickly as possible. Cooptation is the process of getting the naysayers to help you determine the solution to the problem without giving up total control of the change process. Persuading them to help you is far better than beating them into submission.
Managing Global Managing Global SystemsSystems
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Technology ChallengesTechnology Challenges
– Computing platforms and systems integration
– Connectivity
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Technology ChallengesTechnology Challenges
– Software•Trying to merge databases from different countries can be quite troublesome because of the added layer of politics, traditions, and languages
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Internet Population in Selected CountriesInternet Population in Selected Countries
Figure 15-5
The percentage of the total population using the Internet in developing countries is much smaller than in the United States and Europe.
Source: CIA World Factbook, 2005.
Technology ChallengesTechnology Challenges
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Managing Global Systems Managing Global Systems DevelopmentDevelopment
• Latest trend in the technology sector is offshore software outsourcing
• It may appear much cheaper to transfer the work to lower-paid employees in foreign countries, there are hidden costs that may not make it all that less expensive in the long run.
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Hidden Costs of Hidden Costs of OutsourcingOutsourcing
• Contract costs• Vendor selection costs• Transition management and
knowledge transfer costs• Domestic human resources costs• Costs of improving software
development processes• Costs of adjusting to cultural
differences• Cost of managing an offshore contract
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Total Cost of Total Cost of OutsourcingOutsourcing
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Think Global, Act Local: DHL Builds a Global IT Organization
• Problem: Growing complexity of decentralized system, high costs, low productivity, slow response to change.
• Solutions: Centralizing management, redesigning IT infrastructure, and moving applications off local servers reduces costs and enables faster response to change.
• Move to three low cost regional centers and strengthening local communications links allows for consolidation of global package tracking and logistics support system.
• Demonstrates IT’s role in centralizing management in global firms that still have local concerns.
• Illustrates digital technology being used by global firms adjusting their systems to support rapid growth in world trade.
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Suggested ReadingSuggested Reading
• Chapter 15 (Laudon & Laudon)