MIS

CHAPTER 9

GLOBAL INFORMATION
SYSTEMS
Hossein BIDGOLI

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

learning outcomes
LO1 Discuss reasons for globalization and 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 structures
used with global information systems.
LO4 Discuss obstacles to using global information
systems.

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Why Go Global?
Customers demand integrated worldwide
services
Example: shoe company
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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Why Go Global? (contd.)

2008 Coca-Cola Company
Generated more than 80% 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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Why Go Global? (contd.)

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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Global Information Systems at Rohm & Haas

Part of Dow Chemical
Production units in many different
countries
Overhauled its global information system
By upgrading the order entry system
Installed a companywide materials
management system tied in with a global
demand planning system
Can now provide better service to its
customers
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2011 Course Technology, a part of Cengage Learning
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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
Change business relationships
Consumers can engage in comparison
shopping more easily

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

E-Business: A Driving Force (contd.)

Small companies can conduct business
online just as large companies

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2011 Course Technology, a part of Cengage Learning
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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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Global Information Systems: An Overview (contd.)

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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Global Information Systems: An Overview (contd.)

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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Global Information Systems: An Overview (contd.)

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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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Components of a Global Information System

Basic components:
Network capable of global communication,
including transmission equipment and
communication media
Global database
Information-sharing technologies
Large versus small companies:
Custom applications or outsourcing

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Components of a Global Information System (contd.)

Information system manager
Faces design and implementation issues when
developing a global network
Determines the best communication media to
meet global performance and traffic needs
Chooses the best transmission technology for the
global networks needs
Considers the companys objectives when
determining the network architecture
Keeps in mind that standardized software and
hardware are always ideal but not always feasible

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Components of a Global Information System (contd.)

Technical challenges in GIS design:
Designing and implementing global databases
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
Legal
Cultural
Economic
Political

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Requirements of Global Information Systems (contd.)

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 conflicts and political risks
Management of long-term foreign exchange risks
Management of global tax risks

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 Chapter 9 Global Information Systems

Goals of Global Information Systems

Issues:
Identify business opportunities in global
marketplace
Justify investment in GIS
Information systems personnel must have technical
and business expertise
Coordinate migration carefully
Categories:
Intelligent systems
Transnational management support systems
Global competitive intelligent systems

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 Chapter 9 Global Information Systems

Organizational Structures and Global Information

Systems
Four commonly accepted types of global
organizations:
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 parents
responsibility
Example: Tyco Corporation
Focus on local responsiveness
Reduces the need for communication between
subsidiaries and headquarters
Each subsidiary operates on a different
platform
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Exhibit 9.1 A Multinational Structure

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

Global Structure
Highly centralized information system
Subsidiaries have little autonomy
Sometimes called a franchiser
Extensive communication network necessary
Difficult and impractical
Heavy reliance on headquarters for new products
and ideas
Examples:
McDonalds, Mrs. Fields Cookies, General Motors

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2011 Course Technology, a part of Cengage Learning
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Exhibit 9.2 A Global Structure

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2011 Course Technology, a part of Cengage Learning
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 Chapter 9 Global Information Systems

International Structure
Operates much like a multinational
corporation
But 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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2011 Course Technology, a part of Cengage Learning
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Exhibit 9.3 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
But must maintain local responsiveness
Examples: Citigroup, Sony, Ford
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Exhibit 9.4 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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2011 Course Technology, a part of Cengage Learning
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Table 9.1 Top Offshoring Countries in 2008

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 Chapter 9 Global Information Systems

The Internet and Globalization in Action

The Internet allows entrepreneurs in developing
countries to start and expand businesses without
making large investments
Muhammad Hassaan Khan, a young entrepreneur,
established a design and consulting business
called Zuha Innovation that is based in Faisalabad,
Pakistan
As Adam Toren, president of
YoungEntrepreneur.com, puts it, The Internet
brings all continents, races, cities, and villages
together into a global network of trade and
communications
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 Chapter 9 Global Information Systems

Obstacles to Using Global Information Systems

Lack of standardization
Can also include differences in time zones,
taxes, language, work habits, etc.
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
Lack of international standards impedes
developing a cohesive system thats
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 companys
applications are truly global in nature

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Cultural Differences
Include differences in values, attitudes,
and behaviors
Views on using technology
Cultural issues
Best addressed with education and training

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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 contribute to the globalization
trend
Global information systems:
Components
Requirements
Uses in multinational structures
Applications
Obstacles

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2011 Course Technology, a part of Cengage Learning
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